TBPN Live - The Experts Weigh in on Intel, Big Family: The Ultimate Status Symbol | Wade Foster, Dan Wang, Nicolas Sharp, Shan Aggarwal, Vikas Enti, Bryan Pellegrino, Logan Kilpatrick, Rylan Hamilton

Starting point is 00:00:00 You're watching TVPN! Today's Tuesday, August 26, 2025, we are live from the TBPN Ultradome. The Temple of Technology, the Fortress of Finance, the Capital of Capital. Thank you to the team at X. Thank you, Elon Musk. Thank you, Nikita Beer. Because in the latest app store graphics package for the X app, that's the Everything app on iOS, who's featured? None other than yours truly.

Starting point is 00:00:28 The technology brothers. Yes, both of us are there and... Tight-mogging me as usual. I don't know. I mean, it's... I'm just joking around. I like how the brand kind of fits in because we have some green in the background and they have green little accents in the design. Looking good with the liquid glass, whoever screenshot of this clearly on the next version of iOS.

Starting point is 00:00:52 But you wrote on X... The account Swift Dev on X. Oh, it was from them. Oh, interesting. Provided the screenshot. That's great. You said number one on the charts, number one in our hearts. I mean, it's great to see X number one in the news.

Starting point is 00:01:05 Oh, yeah, they are number one. Oh, that's what you were talking about. Okay, so they're number one in the charts. Yeah, that's great. Very, very cool. We love having grown the show, and people are having fun today. Couldn't have done it without X. Because we hit 100,000 followers on X.

Starting point is 00:01:21 Thank you to everyone who supported us along the way. They said it was impossible. There's actually two, two clips or hyper-reels have hit the timeline. We have one showing the evolution of our introses where they get more and more aggressive every day. Should we throw up this one? Yeah, let's watch this. Quiet. This is great. Welcome to Technology Brothers, the most profitable podcast in the world. Welcome to Technology Brothers, the most profitable podcast in the world. Welcome to Technology Brothers, the most profitable podcast in the world. I mean, our house brothers is a profitable podcast in the world.

Starting point is 00:02:00 Welcome to Technology Brothers, the number one live show. Well, I mean, I'm in a tie there. The number one live show in tech. You're watching TVPN. We're live from the Temple of Technology, the fortress of finance, the capital of capital, the dojo of the dollar, the shrine of shareholder value. You're watching TVPN.

Starting point is 00:02:19 You're watching TVPN. You're watching TVPN. You're watching TVPN. You're watching TVPN. It's so much more extreme. Well, thank you to Mehmed for putting that together. Only months apart from the first clip to the last incredible growth. Yeah, it's been a lot of fun.

Starting point is 00:02:38 And then can we pull up this vibe from James Fodrill? This podcast has been growing like wildfire. Recently, we've become the fastest growing podcast in the world. We're going to be doing a bottle of Dom every thousand followers. Every thousand followers. We are live from the palace. Party rounds. Well, that was the first time you popped that one.

Starting point is 00:03:01 I didn't realize we were so experienced. We are live from the New York Stock Exchange. One of the most, I think, important things happening in broadcasting, it's your show. You guys saw it. What you guys do is great. I also think that you're transforming the way that media is dispersed each week, and it's awesome. John and Jordan are gifted. They're going to fucking blow.

Starting point is 00:03:20 I don't know anything. I know about podcasts, and I know how history is greatest entrepreneurs think. I don't know anything about anything else. I promise you, there should just be like. here's a fucking pile of money and next time you have come with idea do it almost everything that i don't like is un-american we get into producing ballets a model that would basically use AI to basically use AI to make AI we are going to win the temple of technology the fortress of finance the capital of capital you're watching tv b yeah wow what a great edit thank you uh

Starting point is 00:03:55 Jason. Fantastic edit. That's really funny. Fantastic edits. Thank you. Thank you for making that. That's amazing. They beat us to it. We were working on something to do something like this, but you guys did it for us. So thank you. Thank you for being a part of this. Thank you to Ramp for making all of this possible. They took a shot on us very early, and so you should take a shot on them. Ramp.com, time is money saved both. Easy use corporate cards, bill payments, accounting, and a whole lot more, all in one place. They did. I think we had something like a thousand followers when Ramp. any committed to working with us for the year yeah and uh we are forever grateful yeah it's been been a fun run um anyway the uh the real top story is of course uh intel the experts

Starting point is 00:04:39 have weighed in um we have some amazing breakdowns from uh john at asianometry ben thompson at stratechery and doug o lawflin at fabricated knowledge semi analysis um the true experts have weighed in. We've obviously been following the story on this show, but these folks really know the details and we're able to put together a bunch of great analyses mapping out what might happen next. There's a really good video from John at Asianometry that we should play to hear a little bit of what happens next. The quick recap, as I understand it, is Intel was dominant, right up until mobile. Not only did they manufacture the best chips, but they also had an incredible brand from their Intel Inside campaign. These stickers were all over every PC, Intel Inside. It was on

Starting point is 00:05:37 every PC that every kid wanted. And I can still hear the Intel sound in my head. If you, dun, dun, dun, you know that sound? Wow. Extremely offline. Before my time. Tyler, do you know the Intel inside sound? That sounds like the Xbox sound. No, no, no. Pull up the Intel inside sound. We need this on the on the sound board. This is the only sound we need. I'll just play it here. I think you can play. You've never heard this before? Let me play this. Oh, come on. I do know that sound. You know that sound. That's an iconic sound. I take it all back. Everyone knows that sound. So incredible brand right up until 2007, the iPhone drops and. And did they used to play that sound when you would be booting up a Mac?

Starting point is 00:06:26 I think that was a different sound. But it was just all over TV. So you couldn't turn on the TV. They were just wall to wall. And it was interesting because you wouldn't go and buy an intel. Like medium for a hundred percent. They have not been taken advantage of fully in the internet era. I mean, what did I say about the Super Bowl ad that ramp ran?

Starting point is 00:06:45 I was like, that song at the end is iconic. And like this one. I was like, there's something he. that you could double down on. Switch your business to ramp.com. Switch your business to ramp.com. Thank you for sake of one, Berkeley. So it was a fascinating time

Starting point is 00:07:01 because Intel was making the chips but also designing the chips and then also marketing the chips and people would buy the computer because of the chip, not just because of the brand and that just doesn't happen anymore really. And so in 2007, the iPhone launched

Starting point is 00:07:13 and it did not include an Intel chip. And this was a bombshell. Instead, Apple selected a Samsung manufactured system on a chip based on ARM, which is a design firm that designs chips and has an architecture that is incompatible with X86, which is Intel's architecture. So the reason was chips from Arm were far more energy efficient than Intel's X86 processors at the time, and the iPhone needed to optimize for long battery life. There's a debate over whether or not Apple ever had a chance to go with Intel, but it almost doesn't matter because

Starting point is 00:07:50 They went with Samsung, and then eventually they did Apple Silicon, and they stayed on arm, and they went for a more efficient chip, less power, less power-hungry. And so Intel was just too power-hungary, and Intel as a company underestimated how important the mobile market would be to remaining dominant in semiconductors over the long term. Ben Thompson identified. Missed AI. Yes, but they didn't miss cloud, and that's where it gets interesting. because so 2007 they start missing mobile because of the iPhone but the iPhone was small

Starting point is 00:08:21 and it was a small portion it was unclear how much computing was going to be done on mobile a lot of people weren't taking it seriously a lot of people weren't taking it seriously Ben Thompson comes up with and there was real reason for that if you if you were just comping it to the PC market and saw Apple's like market share within PCs was a tiny fraction yeah yeah 100% that and then also just the idea of like what am I going to do my work on a tiny phone. Like that's so, it's such a stretch. Even if, yeah, the, okay, I can text a little bit better, but, but I'm not going to be doing

Starting point is 00:08:51 a lot of work on here. And now it's like, the, it's like the device of CEOs. Like, like, don't even open computers anymore. So, Ben Thompson came up with this thesis in 2010 that Intel needed to pivot and really double down on going into foundry mode, not founder mode, but foundry mode. They needed to get other customers to design chips that were supposed. specific for what those customers needed, and then Intel would make the chips and act as a foundry. He launches the blog Sertechery in 2013. It's one of his first posts.

Starting point is 00:09:24 Intel needs to build a foundry. Legendary call. Now, interestingly, he, by his own account, says that wasn't a good trade recommendation because for the next eight years, Intel ripped because of cloud computing. Because as mobile was growing, cloud was also growing, because what does your phone need to talk to? It needs to talk to a server in the cloud. So the cloud was growing. AWS is growing, GCP, Azure is growing, and so Intel's selling a lot of CPUs into EC2 instances on Amazon, AWS, and Intel's business is doing fine until AI comes around and they miss that as well, and now they miss mobile and AI and they're just falling, falling behind. And then now the cloud is starting to look at, hey, well, actually, the power tradeoffs of Arm now are actually pretty good. And so maybe we should do, you know, different chips in the data center. So they are facing pressure in a lot of different ways.

Starting point is 00:10:16 Now, that type of pivot would have been really antithetical to Intel's culture. They would have had to build a customer service organization. And Intel was so dominant. It was like this center of excellence. It had the best people. And so they weren't used to saying, oh, yeah, like, let's do what the customer says. It's like, no, we know what's best. We make the best thing.

Starting point is 00:10:37 And you decide to buy it. When you're on a role, that works really well. Exactly. Exactly, exactly. And so who knows if they could have done it. They actually did, as we talked about yesterday, they did try and spin up a little bit of a foundry for these FPGA startups, but it was always a small piece of the business. But basically, like, if you need a very specific chip to do, like, networking or encryption in a data center, it's like a special chip, they would do that, but with a small startup, and they never really pushed into it. They never went for, like, the big wins, like Apple. And so because of the cloud boom, Intel performed quite well throughout the 2010s, but the AI boom's a different story. Intel's far behind now in Camps simply and simply cannot afford to build their new cutting edge manufacturing facility without external customers, and no one wants to work with Intel right now. But big companies do want to stay in the good graces of the U.S. government. And that's the bull case for Intel here.

Starting point is 00:11:30 If big tech companies get art of the deal into putting large enough orders into Intel to underwrite the completion of their new 14-8. boundaries. That's the big Ohio plant that is estimated to cost something like $40 billion in orders to kind of make it math out. They don't need to go head to head with NVIDIA. NVIDIA, they don't need to win the GPU market necessarily. And we'll get to this with the video. John at Asianometry argues that NVIDIA should buy CPUs from Intel. So, Nvidia sells a CPU called Grace that they pair with Hopper, which is Grace Hopper, which is the name the namesake of the system. And that's not an X-86 chip,

Starting point is 00:12:13 but there's no reason why NVIDIA couldn't license Kuda and the design to Intel and say, hey, Intel, you're going to be our manufacturer for that because Intel's not a manufacturer. So realistically, Intel should be able to say, hey, yeah, we'll go to Intel, we'll go to TSC, whatever gives us leverage. That the government and Trump have a stake in Intel,

Starting point is 00:12:35 you can imagine Trump really leaning on Jensen to make something like this happen. And Trump also has some leverage over Nvidia because he's taking this 15% kind of questionable export tax. And so you can say, hey, Jensen, like, how about I make that go away and you give Intel a little bit, a bit of business? Or, oh, like, I'm going to threaten a really crazy tariff and I'll pull it back if you work with Intel. And so that's kind of the bull case here that people are kind of. of coalescing around the experts who I trust on this issue. And so if Trump was able to strong arm Nvidia with a somewhat legally dubious 15% export tax, getting Jensen and Liputon in the same room today to hammer out a deal,

Starting point is 00:13:18 doesn't seem like the craziest idea. And there are other tech companies that might play ball too. This is an expensive gambit. Ben Thompson estimates Intel needs $40 billion in demand to make the Foundry play pencil out. But big tech companies are spending almost 10 times that collectively, and they all still take the president's phone calls. So let's play the... The Asianometry video right here, perfect, he's going to be in California, by the way,

Starting point is 00:13:40 or Arizona. So what seems most likely about to happen is that the United States government and a few aligned investors first take a stake in Intel. The government puts up money to finish the fab in Ohio, then raises tariffs to a high number with some carve-outs to satisfy the crowd. That's the $20 billion. And then they will apply pressure to the tech giants to get them to throw some orders at Intel Foundry. There's a comment on the Wall Street that's thread on the story that succinctly lays down the sentiment. Dude is 100% going to nudge, quote unquote, Apple and NVIDIA to use their 14A foundries. This is going to skyrocket by EOI 2026 in the hundreds. Doug O'Loughlin of Fabricated Knowledge agrees and adds that pressure might

Starting point is 00:14:25 also be applied onto the semiconductor equipment companies too. Additionally, forcing semiconductor companies like KLA, applied materials, and lamb research to invest and give resources in exchange for approved licenses is another example of a carrot and a stick. A few companies have already started to turn on this perceived trajectory. For instance, just as I write this, Intel has announced that softened a need to make a $2 billion in the studio for sure. Considering how Masa invests, I'm not surprised he's first through the gate. There's news that he was in talks to buy Intel's fabs. will happen by the time you see this. As I said before, this seems

Starting point is 00:15:05 to be what the plan is. Coalition of the Unwilling. Okay, we can stop it there. It's a great video. You should go subscribe to Asianometry on YouTube and get a... I think it's part of the Stratory Bundle. If you go for the bundle, you get access

Starting point is 00:15:19 to John at Asianometry's blog posts as well, which are fantastic. And I've been going deeper into the Asianometry YouTube, and there's so many good Intel videos. And the guy really understands the history. Apparently, this isn't the first time that the U.S. government has tried to re-shore manufacturing of a particular technology.

Starting point is 00:15:42 He highlights the DRAMs, like this memory gambit that happened in the 80s, and it didn't really work out, and he kind of draw some analogies there. Anyway, John, next time you shouldn't just upload that YouTube video. You should stream it on Restream, one live stream, 30-plus destinations, multi-stream and reach your audience, wherever they are. Go to restream. Anywhere. So Saga and Jetty is quoting Ben Thompson on the Intel 10% stake.

Starting point is 00:16:08 Quote, the single most important reason for the U.S. to own part of Intel, however, is the implicit promise that Intel Foundry is not going anywhere. There simply is an incredible way to make that promise without having skin in the game. So it's not just a lender of last resort. It's actually just a commitment that there will always be some level of U.S. manufacturing on the leading edge, which is what Intel's trying to do here with this Foundry and what they have been so far unsuccessful at drumming up customers for. So Sager shares some screenshots from the Stratory article.

Starting point is 00:16:44 Given all of this acquiring 10% of Intel terrible, though it may be for all the reason Linsacom articulates, and I haven't even touched on the legality of this move, is I think, the least bad option. In fact, you can even make the case that a lot of what Linsicum views as a problem, has silver linings. Intel deciding to stay in manufacturing is arguably making a political decision, not a commercial one. However, it is important for the U.S. that Intel stays in manufacturing. It is a political issue. Intel prioritizing government interests, which are inherently focused on national security and the long-term viability of U.S. semiconductor manufacturing

Starting point is 00:17:19 over their fiduciary duties could just as easily be framed as valuing the long-term over the short term. Had Intel done just that over the last two decades, they wouldn't be in this position. So America is setting Intel up to be able to make that multi-decade decision. It's going to be a lot of pain, but then eventually, hopefully they'll be back on the leading edge. Yeah, remember it felt like two or three weeks ago, Leputon was just focused. Like you could imagine the morale at Intel just being absolutely abysmal because it was just cut after cut after cut versus, you know, any type of obvious long-term strategy of getting back on the leading edge.

Starting point is 00:17:55 Yep. Other companies being pressured to purchase Intel products is exactly what Intel needs to not just be viable in manufacturing, but also to actually get better. If TSM and Samsung are disadvantaged by not making chips in the U.S., that's a good thing from a U.S. perspective, both companies are investing here. The U.S. wants more. Private capital prioritizing U.S. manufacturing is a good thing. I remember when the chips act was first breaking, Ben Thompson was advocating for something that looked a little bit more like Operation Warp Speed, where basically the government, And this is what they do in China too, where instead of saying, like, okay, we're just going to give $20 billion to Intel because, like, we pick them and they're good. It's more like, hey, the U.S. is going to be a buyer at this price. So if you make it in America, we'll buy it. And this is what's happening with MP materials right now. The DOD invested, I think, $500 million, but then also said, hey, we will buy all the magnets at this price. If you can go sell them at a higher price to somebody else, do that, but you got us and we'll just build a stockpile. And so you can imagine the U.S. being like, yeah, we'll build our own data center. and we'll try and lease it out, and maybe we take a loss if there's like an overbill or something, but it could very well pencil out. And if demand for these chips is actually higher, then you'll just sell them to someone else, and we won't even need to buy them. So just acting as like that stopgap actually makes more sense, maybe, but like so many of these decisions were already made that this is probably in this moment in time,

Starting point is 00:19:18 what made the most sense. And then private capital prioritizing U.S. manufacturing is a good thing. Ben Thompson closes this little quote out. by saying the single most important reason for the U.S. to own part of Intel, however, is the implicit promise that Intel Foundry is not going anywhere. There simply isn't a credible way to make that promise

Starting point is 00:19:34 without having skin to the game, and that's now the case. So, of course, go subscribe to Sturtecary, go subscribe to Fabricated Knowledge. Doug O'Loughlin is saying, not going to lie, a lot of people who are mad at Trump for everything, can't see the genius of the Intel investment. I mess with it massively.

Starting point is 00:19:51 I love the way he posts there. It's great. Doug, messes with it, everyone. Yeah, I'm messing with it, but I'm mostly deferring to the experts on this one. Trust the experts. Anyway, if you are designing not a chip, but something else, get on Figma, think bigger, build faster. Figma helps design and development teams build great products together and get started for free, figma.com. David Senra, you saw him in the Vibreel.

Starting point is 00:20:19 He just dropped a fantastic episode called How Elon Works. interesting process. He outlined it for us on the show. Basically, uh, the latest book on Elon, uh, is more of like news. I think it's Walter Isaacs and it's more of like, uh, news articles minute by minute. Um, and so it's a play by play. It's a play by play. Less of a playbook. Yes. And so Senra wanted to transform it into a playbook. And he did that by, I think he read the book like seven times or something insane. But he like turned it, he took notes on it. And then, read it seven times, and then, you know, he does his process. He did real actual deep research, not just the problem.

Starting point is 00:21:00 Seriously. But I really enjoyed it, and I think you'll enjoy it too, so you should go listen. But the interesting thing that I liked about it was that it helped me understand a little bit what's going on with Starship, because we've seen so many setbacks with that program. And when you actually listen to how, like the risks that Elon takes, It is crazy. So first one is that he is not interested in achieving any sort of short-term goal. He only wants to develop a system that can do something a million times.

Starting point is 00:21:40 And so that says that that has a much higher bar than building like one exquisite rocket that gets there and has like, okay, yes, we spent five years and we made sure that every screw was in the exact same place and the perfect place and everything was designed. flawlessly so that we could get up there, and then the next time we want to do it, it's going to take another five years and another $10 billion. He's like, no, like, the thing that we're going to design needs to be able to go every single day. So it needs cheap and fast and copy and paste it. And so I think the manifestation of that is that, like, you're going to have a lot of failures early on.

Starting point is 00:22:18 But then once it gets polished up enough, it's going to start churning and you're set up for much more scalability. The other example he gave was like, Elon would go around the manufacturing line and just be like, why are you using four screws there? Do you think you could use two? Like, save a little weight, like do something.

Starting point is 00:22:36 And the person would be like, well, like two screws, like the thing might fall apart. And he's like, we'll try it. Like, just try it and we'll see how it goes. And if you imagine that manifesting in the Starship program, it's like, how many of those experiments are there? It's like, yeah, that one, you actually need three screws at least.

Starting point is 00:22:51 You definitely can't do it with two screws. and so I imagine that there's tons and tons of those little decisions that like once you get like instead of instead of starting with like the exquisite system and then tearing stuff down with this it definitely seems like he's starting with like the bare minimum and then just like adding things back to like keep it stable so that it actually will work but when it works it should it should be very um very very cheap very reliable and actually solve economic equation this starship launched the timing with everything that's been going on in exit AI world recently. This launch feels more important than the last few in the sense that Elon and the SpaceX team don't want to give the haters material. Totally, totally. So this current launch has been delayed a couple times. It's currently slated to, they're going to attempt it as of now in five hours later today. So hoping this one gets off the launch pad and does well, right? Because if we get another one of those, you know, fireworks shows. Yep.

Starting point is 00:23:57 I think that Elon is going to want to log off X for a little bit. Yeah, people are going to be talking trash, talking trash. Or at least pause the ony posting for at least 24 hours. Yeah. Well, if you're building and business that's going to space, you've got to stay compliant. You've got to get on vanta.com, automate compliance, manage risk, prove trust continuously. Vantas trust management platform takes the manual work out of your security and compliance.

Starting point is 00:24:22 process and replaces with continuous automation whether you're pursuing your first framework or managing a complex program. In other news, Taylor Swift is getting married. The private jet enthusiast. Well, I feel like most of our audience would know her for her Wall Street Journal op-ed in 2014, where she said for Taylor Swift, the future of music is a love story. Where will the music industry be in 20, 30, 50 years before I tell you my thoughts on the matter? You should know that. you're reading the opinion of an enthusiastic optimist, one of the few living souls in the music industry who still believes that the music industry is not dying. It's just coming alive. There are many, many people who predict the downfall of music sales and the irrelevancy of the album as an economic entity. I am not one of them. In my opinion, the value of an album is and will continue to be based on the amount of heart and soul an artist has bled into a body of work and the financial values and the financial value that artists and their labels place on their music when it goes into the marketplace. Piracy, file sharing, and streaming have shrunk the numbers of paid

Starting point is 00:25:30 album sales drastically, and every artist has handled this blow differently. In recent years, you've probably heard the articles about major recording artists who have decided to practically give their music away for this promotion or that exclusive deal. My hope for the future, not just in the music industry, but in every young girl I meet, is that they all realize they're worth and ask for it. Music is art and art is an important is important and rare important rare things are valuable valuable things should be paid for it's my opinion that music should not be free and my prediction is that individual artists and their labels will someday decide what an album's price point is i hope they don't us to

Starting point is 00:26:06 underestimate themselves or underestimate or underestimate or undervalue their art so did she get this right to date not really i think she i think she got the thing that she got right is that what an album is can be extremely monetized if you continue to think about what the like the album is scarcity like you either have it or you don't and the internet kind of reduce that scarcity to zero because you could stream it you could pirate it but there is still scarcity to be created if you are an artist, if you are a musical artist. And so the way she does that now is when she releases an album.

Starting point is 00:26:49 She goes on a tour that becomes so big that, again, there is scarcity because there are only so many tickets at SoFi Stadium and you have to be there. Because it's a moment. One of the best monetized recording artists of all time. Yes, yes.

Starting point is 00:27:04 And so she gets the long tail eventually. And eventually her music is essentially free and played in grocery. So I'm going to read you something from their, Instagram caption announcing the engagement. It's not just a marriage dash, M-Dash. No way.

Starting point is 00:27:22 It's the perfect love story. No way. It's back on X is calling this out saying, claiming that Taylor or Travis are one-shot it. No way. What did you got, Tyler? What was that? No.

Starting point is 00:27:34 I was going to say something about her monetization. Kyle Scannon has this good post. She said, Taylor Swift's engagement is actually very relevant to monetary policy. because she is the most powerful stimulus tool we have. Oh, really? How so? Well, I mean, her tours are like massive. Like you can see the like rise in consumer spending.

Starting point is 00:27:53 Yeah. Ooh, interesting. Especially like smaller countries, it's like very good. Yes, yes. But how does her being married, like she could just go on tour and be single, right? Is she going to sell more tickets because she's married now? Does it allow her to tour more? You could also see it in a lot of people are talking about birth rates, right?

Starting point is 00:28:11 So maybe a new boom, baby boom. Catherine Boyle just posted a picture and just said with the captioned their pictures just said American Dynamism I do think this will be good for the birth rate it's also going to be some for anybody that's in a longer

Starting point is 00:28:29 term relationship in their late 20s early 30s pressure is now on these photos are going to be getting sent around they're setting a new bar right quite the floral display by Travis got to give them props there How many, how many kids do you think she'll wind up having?

Starting point is 00:28:46 She's 35. She's 35. She's got to get going. Oh, yeah, 1980. And hopefully a ton, right? I mean, I think we'd like to see. It is the last luxury status symbol, apparently. I'd like to see at least 10.

Starting point is 00:28:59 Yeah, it'd be great. Well, if she wants to manage her family's plans, she should get on linear. Linear as a purpose-built tool for planning and building product. It's a family planning tool. You can make it work for it. For modern software development, streamline issues, projects and product roadmaps,

Starting point is 00:29:22 start building. I don't know. She could probably use linear. She's probably developing software and websites and stuff. Anyway, what we should talk about is this post from Robert Sterling, the only form of wealth that's ever mattered, screenshoting the financial times, the ultimate status symbol, a big family.

Starting point is 00:29:38 So the Financial Times writes, A flex of Uber wealth in 2025 is multiple children, all the while preserving pre-parenthood, lifestyle, interests, and physique. What is the ultimate luxury status symbol, Jordie Hayes? Once upon a time, it may have been flaunting a rare handbag, sports car, or flashy watch. But with the soaring costs of living and shrinking household sizes and depreciation of Tycons, Sports cars are now, are now... They're given Taekons away.

Starting point is 00:30:10 The only thing that you need that you can flex your wealth with is having kids, specifically lots and lots of them, says the financial times. For most working parents, quote, and particularly those living in cities, even to have one child comfortably is a major economic calculation that requires considerable financial stability, says Eliza Philby, author of Inheritocracy. It's time to talk about the bank of mum and dad. Well, that was also true historically when having an enormous brood was bolstered by a need for labor, religious imperatives, and preserving family legacies in the face of high infant mortality.

Starting point is 00:30:48 Children today aren't a source of positive household cash flow. They are a drain on it, but I think they've got to put these kids to work. We've got to put them in the mines in the Minecraft or get them on if you if you got once your kid hits three, you should set them up. with a WAP account and said, pay for college. Yes. Do it. Don't make mistakes. Actually, make some mistakes, but figure it out.

Starting point is 00:31:14 Hey, I mean, in the Stevens household, you have to pay the bills making tech tax. Start making courses for other three-year-olds. How to be a three-year-old. Yeah, don't expect the official course. The Anderil chairs to pay for your college, buddy. There's only so many of those to get around. We're not selling. You're still long.

Starting point is 00:31:34 you've got to pay for those with with skateboards. The reality is that middle class parents do not support kids to 18. Philby says that for families who can afford to, it's often closer to 30. With costly child care, a lack of family support systems

Starting point is 00:31:50 and a global trend of women. Parents hiring child care for their 25-year-olds? I guess, yeah. In some cases. Conceiving children later, there is a feeling that one child is increasingly the norm for dual-income households, Philby says.

Starting point is 00:32:03 two is a bit of a push and three or more is just an is not just an anomaly you need to be super rich officially official birth rate figures in many countries have hit all-time lows in the u.k the office for national statistics says that the fertility rate is 1.4 children per woman while in the united states that figure is 1.6 in some Asian nations such as japan and south korea the rates are 1.2 and 0.75 respectively. I was talking to somebody who was very bullish on South Korean tech because of AI and a lot of the companies

Starting point is 00:32:37 that they sell. S.K. Heine. Yeah, and there's a whole ton. I think there's, there's, there's, like, they have their own, like, S&P 500 of, like, really, really great companies. They have their own TPPN. They do, they do.

Starting point is 00:32:49 But I had no idea that the birth rate was so low. That's great. 0.75 is really, really low. So they've got to turn that around. but while one and done may be booming as a cornerstone of modern middle class parenting culture so too has a fetishization of the opposite end of the spectrum in other words ogling extremely wealthy figures in the public eye whose picture perfect families never seem to stop growing Behold the fixation of frazzled millennial working women and others with the tradwife movement, a social media phenomenon that glorifies homesteading, milkmaids, and taking care of your husband and offspring.

Starting point is 00:33:23 Its brightest star, Hannah Nealman, a ballerina farm, has attracted a 10 million strong following on Instagram, thanks in no small part to her eight immaculately disheveled blonde children with her husband, Daniel Neelman, the son of JetBlue founder and airline mogul David Neil Hopefully they sold before JetBlue became a pennystock. Oh my God. Yeah, get out. Get out.

Starting point is 00:33:49 Get out. In the celebrity orbit and beyond the trials and tribulations of the ever-expanding Kardashian clan, Alec and Hilaria Baldwin sent the internet into meltdown earlier this year with a TLC reality television series called

Starting point is 00:34:04 The Baldwin's. I had no idea this was a thing. Which documents life between their Manhattan apartment. Try to pull up this picture. East Hampton Mansion with their seven children and eight pets. I had no idea. Alec Baldwin had seven children, eight pets.

Starting point is 00:34:18 I wonder what pets he has. Huge families. You know that Haley Bieber is Alec Baldwin's daughter? No. Is that right? Am I right on this, guys? Wait, what? That's true?

Starting point is 00:34:30 No way. Okay. Learn something new every day. Pretty sure that's true. Yeah. Might need the truth on it. No, no, no. Uncle and niece.

Starting point is 00:34:38 Uncle and niece. Okay, so they are. Okay, okay, okay. Yeah. Got it. Interesting. Interesting. But here's the picture of Alec Baldwin and his family, still just pumping him out.

Starting point is 00:34:47 Looks great. Looks great. Take those kids to a wander. Find your happy place. Book a wander with inspiring views. Hotel great amenities, dreamy beds, top tier cleaning, and 24-7 concierge services. It's a vacation home, but better folks. Anyway, huge families are increasingly visible among the ones.

Starting point is 00:35:08 1%, especially in some of the world's wealthiest and most competitive enclaves such as New York City in her widely read, if controversial, book, Primates of Park Avenue, Wednesday Martin memorably observes that massive families, they were everywhere on the Upper East Side, a neighborhood with some of the most expensive real estate, schools, nannies, and hobbies in America. Jordy, what were you about to say? I was about to dive into that. Four is the new three. Previously conversation stopping, but now nothing unusual, she writes.

Starting point is 00:35:32 Five is no longer crazy or religious. It just means you are rich, and six is apparently the new townhouse, or Gulf Stream. According to a study by Forbes of more than 700 American billionaires, at least 22 have seven or more children, often from multiple marriages and adoption, including perhaps most famously Elon Musk, regularly named the world's richest man. Musk has become a poster boy for billionaire procreation in a vocal proponent of pro-natalism, which he sees as vital to humanity's survival and declining birth rates. Fascination with the Uber elite with how they live their lives and run their households is not new. A raft of high-end fashion and consumer

Starting point is 00:36:09 lifestyle brands have turned to notions of parenting with almost unlimited resources and incorporated them into their product offerings and marketing efforts. Art of Pop offers $800 velvet and cashmere baby carriers that have been heralded as the burkin of mom gear. Heralded. Heralded. Heraldo. Rebranding, wearing a baby as an ultimate. It is the ultimate luxury accessory. Much like having graphite in your software development team. 100%. It's kind of the burkin.

Starting point is 00:36:42 It's the burkin of code review. Graphite.dev.comcode review from age of AI. Graphite helps teams on GitHub ship higher quality software faster. You can get started for free. If they don't mention Pavel Derovin here, I'm going to stop reading. When I'm walking around with my one-year-old and my three-year-old, people often

Starting point is 00:37:03 assume that I'm the uncle and our surprise because you're young yeah oh just it's still sure sure yeah wild even though if you go anywhere slightly off the coast yeah yeah yeah it starts to become commonplace yeah super normal um yeah it is interesting that um if you if you actually look at if you look at birth rate trends by income bracket um for a long time the higher the the the the the income cohorts would have more kids. And so technically, I think from an economics perspective, having children was an inferior good. It was something you did more.

Starting point is 00:37:43 It was like the equivalent of Costco. It's like the opposite of what they're saying here. But really what we're identifying is like there's a barbell effect where at the high end you get a lot more kids and at the low end you get a lot of kids. But in the middle, there aren't that many kids. And this is, oh, I'm going to make a movie reference that you haven't seen. so I won't even try. Hit me.

Starting point is 00:38:04 Hit me. There's a 1% chance. Idiocracy. Nope. We should pull up the intro to idiotocracy because it is hilarious. John Ross in the chat says Nick Cannon has 12 kids. That is crazy. That is a big number.

Starting point is 00:38:19 Wow. Very good. I think, I mean, it's also, I'm guessing that's across a number of different relationships. It is. It is. Yeah. Nick Cannon. Okay.

Starting point is 00:38:31 So, Mini Me, Designer, Colleges. collections and $600 high tops allow an army of children to dress like their parents as well as one another and white labels such as Patec Philippe and Dolce and Gabana have long placed glamorized visions of family at the heart of their advertising campaigns

Starting point is 00:38:46 of course you never own a Patec you merely hold on to it for the next generation or Patec as they say newer efforts from Patega Veneta and Burberry Oh yes you want to play this? I think this is the intro to to idiotocracy. Let's play this. It was at a turning point. Natural selection,

Starting point is 00:39:08 the process by which the strongest, the smartest, the fastest, reproduced in greater numbers than the rest, a process which had once favored the noblest traits of man, now began to favor different traits. Most science fiction of the day predicted a future that was more civilized and more intelligent. But as time went on, things seemed to be headed. in the opposite direction, a dumbing down.

Starting point is 00:39:34 How did this happen? Evolution does not necessarily reward intelligence, with no natural predators to thin the herd. It began to simply reward those who reproduce the most and left the intelligent to become an endangered species. Having kids is such an important decision. We're just waiting for the right time. It's not something you want to rush into, obviously.

Starting point is 00:39:59 No way. Oh shit, I'm pregnant again I got too many damn kids Thought you was on the pill or some shit Hell no Must have a thing to Brittany There's no way we could have a child now Not with the market the way it is, no

Starting point is 00:40:18 That just wouldn't make any sense Come on over here, bitch You don't care about you Yeah, well there must be something he likes over here That's me, baby Oh, shit. It wasn't me! It wasn't me!

Starting point is 00:40:33 Well, we finally decided to have children, and I'm not pointing fingers, but it's not going well. And this is helping. I'm just saying that before I have in vitro, maybe you should be willing to... It's always me, right? Well, it's not my sperm count. Yeah! I'm gonna fuck all you! Okay, okay, we gotta cut this off.

Starting point is 00:40:56 You get the idea. I got the idea. Decision fatigue from the 138 IQ. Simply too smart to have kids. Too smart to have kids. Anyway, let's continue. Yeah, this is an interesting line. So there's been, you know, other brands,

Starting point is 00:41:15 Buttega Veneta has had a campaign with ASAP Rocky, which has been cool. I thought this campaign was brilliant. There's a line here. Healy thinks these campaigns coming at a time. time when the luxury industry is struggling to maintain its cultural relevance reflected in a cooling appetite for products as social signifiers and a fall in global sales focusing on family reflects an attempt to move into the realm of behaviors and values and away from physical things

Starting point is 00:41:42 you can't dupe having a family healy says it's uh you know you get a dupe of a of a burkin or something like that oh that's what dupe is or yeah or something from the row or whatever every luxury brand gets knocked off immediately. Healy says it's a very long-term commitment, not to mention one of the most significant and transformational that you can make in your life. But it's not just having kids that is venerated by brands and vaunted

Starting point is 00:42:07 as a status symbol. It's about how you are having kids and to what extent you can maintain your pre-parenthood lifestyle. For many celebrities, this means an army of child care support. Kim Kardashian is said to have 10 nannies on a 24-7 rotation for four children, while the Baldwin family have two on staff.

Starting point is 00:42:25 That feels low for how many kids I saw in that picture, to be honest. Child care positions in the U.S. of this nature can easily command annual salaries of more than $200,000, though he's more standard wage would be closer to $85,000, still paid support of any kind remains, an unobtainable luxury for the majority of families. Yeah, for me, I noticed this, I noticed the jump in, you know, how I was living at 25 pre-keptial. kids realizing as soon as you add kids everything that you do whether it's where you live and how you travel becomes travel instantly becomes you know if you're staying at nice hotels and now you're traveling and you got to get a hotel for your nanny you got to get a hotel for your kid then a hotel

Starting point is 00:43:11 room for your kid then you add a then you add a then you add nannies you need three extra room one for the nanny one for each kid one one for the couple and so the actual like cost of something as simple as a weekend trip can four racks pretty quickly. And it certainly inspires you to grind harder in my experience. 100%.

Starting point is 00:43:35 This version of parenthood doesn't mirror the experience of most people. Healy says there's a version where you are still constantly meeting friends returning to your pre-baby body, showing up the club or late-night event, not being tired all the time, moving out to the suburbs or wearing clothes with milk splattered over them.

Starting point is 00:43:52 Fashion has always traded on allowing us to project something a little bit better than we are, but having a large family also sends a signal of confidence in the future. We're also the generation that grew up with suburbs being bad and something to avoid. And as an adult with kids, I realize the suburbs are incredibly underrated. Yeah. He heard it from Dr. Drew yesterday. He lives next to a golf course. It's amazing. A demographic that may feel more secure than most, those with more money. Musk paints his pro-natalist vision in stark terms and has some highly unorthodox personal family values. But among the traditional conservative right, whose social media sway is growing and who

Starting point is 00:44:33 champion Americans having a large household. The question of who should be having more babies is an uncomfortable one. A sizable portion of the extremely wealthy pro-natalists say they want us to use breeding to fashion a better human race, Philby says. But the current fetishization of being a mother of multiple children can reduce women to a kind of birthing machine, fulfilling her social societal duty and demonize women working incredibly hard and contributing economically toward society who are having fewer or no children, whether by choice or necessity. I think Nadia Asperuha had a good rebuttal to that, which is that tech can certainly embrace and kind of invalidate this false dichotomy by creating a more welcoming ecosystem

Starting point is 00:45:15 and not like noveling when a woman shows up. Yeah, I mean, it's interesting to note that a lot of the, technology that we take for granted today makes parenting like a little bit easier but not dramatically easier right the sort of uh I think people uh people tend to judge you know the the family out to dinner with the kid on the iPad yeah and if you haven't had kids you don't realize that that many kids could be so would not be able to strap the VR headset right on yeah and just bolt them down to the lock them in to the kid seat yeah and then just fully locked in

Starting point is 00:45:51 No, when I go out to the... The high chair. Yeah, when I go out to the restaurant, I bring the full racing rig with the wheel, the steering wheel, and the pedals and the VR headset. And I'm just like, lock in, brother. Lock in here. You've got to beat this time on the NERBRIG.

Starting point is 00:46:08 Otherwise, we're not going to. And I don't want to hear a peep out of you. No, I'm not wasting time with an iPad. No, but I mean, we, you know... Step it up. We've tried the iPad here and there. We don't do it. anymore, but the kid is just, the kid has just, you know, my three-year-old will just run laps

Starting point is 00:46:29 around the restaurant for like two hours straight. And it's cool because he likes to socialize a walk up to other tables and like try to grab a French fry or something. Yeah, oh yeah, that's a little bit. Yeah, no, I love it. I love with a runner on the restaurant just being crazy. It's so funny. Nothing brings me more joy. Yeah. Because I'm like, that's what I want to do. Yeah. I want to get some, stretch my legs right now. I don't want to sit in here. Um, My little guy was stood up, we were at Little Beach House in Malibu, and he's just stood up. Last time we were there was a Sunday, there was a DJ playing, he just put his chair up next to the DJ stand and just stood on it. Yeah, the iPad thing is like an endless source of trolling for me.

Starting point is 00:47:13 So the four-year-old's like, oh, for my next birthday, like I think I want like a tablet. I'm like, oh, like what? Like you want it like, because, you know, some kid like told them like that they're the most incredible. thing in the world, of course. And I'm like, yeah, like, let's make one, like out of cardboard. Yeah, I'll buy you a CPPU. Six hours into a crafting project where you're like, what do you want on the screen? Let's draw it on with crayons. We're just six hours into this thing. Oh, you want to have a, he was like, I want one for my birthday. I was like, oh, so you want the, you want the theme to be like tablet-based technology. Like, we'll bake you a cake that's the

Starting point is 00:47:47 shape of an iPad. And he's like, no, I want the actual thing. I'm like, iPad, cake coming your way buddy don't worry about it don't worry i got you paper machet ipad uh pinata that you will smash and get candy out that we will make by hand uh but i think you'll have to wait you'll have to assemble one on your own with a box of scraps in a cave that said following trad wives or billionaire spouses with lots of children on social media isn't necessarily a retreat into the home and history as with many objects of aspirational focus sometimes these trends are rooted in a type of parisocial cosplay, exploring styles of life and livelihood that are far removed from or will never be our own, nor do we really want them to be.

Starting point is 00:48:31 Much of the internet is consumed as if it's a type of speculative fantasy fiction, Healy says. The ballerina farm family, for example, represents a vision of economic security. It's just so much diet code. Clearly defined gender roles in a certain degree of purpose. People might engage with it as a type of entertainment or escape. but many will also look at it and think in the real world in 2025. In no way do I actually want that. Why not?

Starting point is 00:48:59 I, yeah, I want to the farm. I don't know. The more the merrier. More the merrier. Within reason. Within reason. No, I do think that anecdotally from what I've seen in my social circle outside of work, I do think that kids are 100% a status symbol.

Starting point is 00:49:20 I also think it's incredibly unfortunate that it's gotten to that point. Yeah. I wish there was a polymarket on the birth rate. I don't know if there is. We are, of course, sponsored by Polymarket, and you can see the polymarket's on the ticker. We will need to spin up something. I want to see if something. I mean, there's a polymarket on the Swift's.

Starting point is 00:49:43 I guess it would be Taylor Kelsey. Okay. And who is she marrying? Travis Kelsey. What does he do? He is, I think, from what I can remember, he's involved in, like, the pharmaceutical industry. Okay.

Starting point is 00:50:00 As a spokesperson? I can't quite remember, but I think he also played some sport. Okay. We'll have to look into it. Well, I'm sure he'll be more popular now that he's marrying Taylor Swift. Like, people probably dig into his backstory and, like, learn about him and stuff. For sure.

Starting point is 00:50:19 It'll be interesting. We'll be following it. For sure. Anyway, let's go to this post by Young Macro, one of my new favorite posters. He's been on an absolute tear. He has been on a tear. And he highlights the dynamic that he's experiencing right now. He says the hyper-reality version of the bedridden industrial magnet envying the dashing young socialite archetype

Starting point is 00:50:40 is that basically every one of your billionaire idols, Elon, Teal, P. Marka, Sama, et cetera, feels intense jealousy every time they witness an Anon-Zumer, surf the cutting edge of the Algo purely organically. Donald Boat. Shout out of Donald Boat. I bet you every I bet you every other day they see a random Zit that makes them

Starting point is 00:50:59 ache to have once experienced being the guy to have posted it. Enjoy every second of it, Anon. You're the Nubile Maiden bathing at the Village Creek as the laboring brutes admire from behind the bush. This is actually sort of tied to what we were just talking about.

Starting point is 00:51:15 This is great. I love it. So if you're, if yours Anon Zumer out there, surfing the cutting edge of the algo, just know that you can parlay that into a $50 million series A if you do it right. Yeah, that's great. Well, we should move on to this story

Starting point is 00:51:30 in the Wall Street Journal. A billionaire, a psychic, and a bad investment. The friendship breakup from hell. Of course, you want to stay away from these bad investments. You want to get on public.com investing for those that take it seriously.

Starting point is 00:51:42 Do not take it casually. Take it seriously. They got multi-ass investment. I think we're allowed to do that as advice. yields. It's not financial advice. It's not financial advice. We just say take it seriously and don't be a casual. Anyway, a woman convinced her best friend, an heiress to the Thompson Reuters Empire. We've, of course, had the CTO of Thompson Reuters on the show. Didn't get to talk to him about this. I need to have him back. I'm back on. To invest tens of millions of dollars into a crypto meme

Starting point is 00:52:09 coin created by a psychic. It went to zero of course. And this is in the Wall Street Journal magazine. So over a decade, Taylor Thompson and Ashley Richardson were inseparable, a fight over money destroyed it all. Oh my God, said Taylor Thompson, clapping her eyes on Ashley Richardson for the first time. You have those fabulous heroin chic arms. In 2009, both women were lounging in the backyard of a Malibu home of Bo St. Clair, a film producer and mutual friend, Richardson wearing a muscle tea over her bikini, bast in the sun. muscle tea like a stringer, you know? Kind of like that.

Starting point is 00:52:49 Gold gym enthusiast. I literally don't know the name for the non-bodybuilding version, but it's like a tank top, a tank top. A tank top. A tank. Yeah, tank top. Richardson wearing a muscle tea over a bikini bass in the semobileson sat carefully covered in a flowy outfit and hat. Her then 10-year-old daughter clutched a hot pink mini Burkin. Richardson, a lanky six-foot-tall blonde was a free spirit who went on to build a career designing social media campaigns for companies like Ford Motors and McDonald's.

Starting point is 00:53:14 Thompson was an heiress to Canada's wealthiest family and eccentric with a self-deprecating sense of humor. She went to dinners and party with parties with wild hair and drapey distress clothes by California designer Rick Owens. Give it up for Rick. She was a subversive secret billionaire, says one mutual friend. But a few crucial commonalities, assured silliness, the love for animals, and a deep spirituality drew them together. Thompson liked that Richardson had spent five years in India working with a spiritual leader named Amma, the so-called hugging saint. Richardson bonded with Thompson's daughter,

Starting point is 00:53:47 whom she recalls as precocious and a quirky little being. Taylor is Holly go-litely, adventurous bohemian spirits, says Richardson. She has this big, beautiful heart when she lets her guard down. Both women have ADHD, she adds. Because of that, I think we got each other. Richardson soon became part of a small Los Angeles friend group that Thompson called her inner sanctum. Whenever Thompson would land in L.A., says Richardson,

Starting point is 00:54:11 her phone would blow up. The women, often with Richardson's girlfriend, would order no-bu takeout and pair it with tequila at Thompson's beach house. Richardson made Sunday dinners and frittatas at the heiress's Ballard Mansion. When Thompson had staffed there, her assistance chopped onions.

Starting point is 00:54:27 When she didn't, Thompson was the first to do the dishes, and Richardson taught Thompson's eager-then-teenage where... Daughter, how to roast potatoes for New Year's Eve. They planned a menu that included chocolates and truffles, also an onion to chop for caviar reminded thompson in a text message of the time i can see the problem here already yeah they were not doing enough data analysis on julius yeah julius could have changed everything in this equation totally what analysis do you want to run chat with your data get expert level insights in seconds the story would have ended here absolutely yeah if they were running

Starting point is 00:55:03 yeah if they're just become data analysts powered by julius but instead we're forced to continue here over the next decade, the friends traveled to Italy and London, bought the same via life, vegan, feta, and stocked up on right-aid hand cream. This is very random. Richardson remembers the insanely unhinged article. Remembers the duo peeing in the bushes at a Rolling Stones concert. It was Thompson's first ever. What is this writing?

Starting point is 00:55:31 I can't even read this out loud. We got to get to the part when they start slang and checks. Okay. Let's scroll down. grown up in an affluent part of Monterey County, California, where she attended elite prep school and was skiing by age two. There we go. But Thompson's wealth was a different ballpark.

Starting point is 00:55:49 We would go somewhere for a few days and she'd be buying houses like other people buy mugs, though there was a lot of it. Money didn't interfere with their relationship. The reason we'd be friends because there was no financial connection. Richardson could be defensive about the way people used Thompson at the freeze art fair in London. Richardson recalls attendees descending on the heiress. People know who she is and that she will drop millions, says Richardson.

Starting point is 00:56:09 It was nauseating. There was one time, then there were one-time friends who Thompson later assumed were reusing her for her money. She had a nickname for them, taker. Don't be a taker. Now, the relationship between Thompson 66 and Richardson 47 has exploded into an epic battle that landed the pair in court. But this time, the billionaire is accusing her one-time best friend of doing the taking.

Starting point is 00:56:34 The story is based on interviews, blah, blah, blah, blah, blah. What went so wrong? Okay. By the time Thompson met Richardson. The heiress had spent decades trying to prove herself to her family for the Thompson's control of the empire passed down the male line, according to people familiar with the family. Taylor, the middle child and only girl felt less favored than her two brothers and her efforts to forge her own path led to occasional periods of estrangement. But much of the tension with her brothers revolved around money. Thompson family in 2024 was the world's 10th richest.

Starting point is 00:57:02 Wow. Let's give it up for the Thompson. Let's hit the gong for the Thompson family. There we go. Uh, 10th Riches family, according to Bloomberg and Taylor wanted equal access. The family holding company Woodbridge owns a majority stake in media and technology company Thompson Reuters. Her older brother David is the chair of both companies. Thompson pursued a career in acting, training at the American Repertory Theater in Cambridge.

Starting point is 00:57:25 She performed with Shakespearean theater companies in Massachusetts and Los Angeles and had roles in the TV show Matrix. What? Canadian drama forever night about a vampire working as a detective. Okay. That's very cool. So... big into TV. Maybe you should go. No, no, I'm not big into TV. I'm a cinephile. Thompson often suspected people were trying to use her for her money, according to people that know her.

Starting point is 00:57:48 She insisted that those around her signed non-disclosure agreements from assistance to an ex-boyfriend of her then 20-year-old daughter, and she could get aggressive if she thought those terms were breached. Thompson even hired an infamous Hollywood private investigator, Anthony Pelicano, to spy on her former nanny, who she's suspected of sharing personal information with her daughter's father during a custody battle. I want you to do whatever you can to get information on Pamela, said Thompson to Pelicano on a recorded call played during Pelicano's 2008 wiretapping trial after which he was convicted. Just get it. I'm not going to ask questions. Crazy. By the fall of 2015, Thompson and Richardson's friend St. Clair were losing their battle with ovarian cancer. Her closest friend

Starting point is 00:58:29 surrounded her in her final months. Richardson and her partner at the time had weekend slumber parties at St. Clair's Ranch Home, St. Clair's producing partner, Pierce Brosnan, then came by, wow. Thompson decorated for Christmas with Dr. Seuss' original green sketches from her personal collection. Okay, we got to get to the crypto stuff. There's some crazy stuff in here. Let's just keep, keep scrolling. Keep scrolling, keep scrolling. Thompson's poxed that this is all false, blah, blah, blah, blah. With the pandemic. Richardson's work was drying up in a fit of anxiety. She Googled a burning question. Had anyone predicted any of this? She stumbled upon Michelle White Dev, a celebrity psychic. She dropped $25 a month for White

Starting point is 00:59:08 Dove's newsletter, then largely ignored it until the spring of 2021 when she noticed the psychic had recommended a new crypto token. Persistence, White Dev wrote, this is another dark horse that's going to come up on everybody and be a big dog. Get it and sit on it, which is what I would tell myself. The value of persistence's token called XPRT quadrupled from less than $3 in April to as high as $13 by the next month. That summer, Richardson brought up white devs predictions to her friend. What is the link to that website of the channeler Thompson texted? She followed up with Robert Sabella, an astrologer and intuitive, she regularly consulted.

Starting point is 00:59:49 Combining astrology and crypto is so good. It's a magic in heaven. Absolutely. More do you need? An intuitive, she regularly consulted for advice, both personal and financial. Once, when Thompson tried a Xanax after a panic attack, she asked Sabella for his thought. He replied, I'm getting that Xanax is not good. for you right now. Stop taking it and find another, I mean, fair, fair advice. He also weighed in

Starting point is 01:00:14 on her investment. No glazing there. Those answers I promised you. He said, but other coins show promise. Data has a very high reading on it, a 10. Persistence does as well, even higher. Oh, no. And so they're using the astrology readings for as financial advice. So with Richardson's help, Thompson invested more than $40 million in messaging. after the initial purchase, Richardson cheered persistence's early success, but at times she pushed back at Thompson's request, including when she suggested buying 60 million of the token. Are you sure you want 60? I will try. Still think you should diversify, Richardson wrote her. That same day, Thompson told Richardson that she would seek access to what she viewed as her share

Starting point is 01:01:00 of the family money. I'm going to write to my brothers directly. David and Peter Thompson wrote, as you know, as you, as I know you both are more than aware, our family branch, Thompson and her daughter, has been completely locked out of our, any voice of control of stewarding our future financial wealth. She acknowledged having always been one for riskier investments like the rest of the family, but said she had been exposed to valuable opportunities like crypto. She accused her brothers of discrimination, the 2020 infrastructure around my family branch, and the inherent restrictive compliance, which was put into place, completely removed any opportunity of me stewarding meaningful investments. To be blunt, it is no longer acceptable.

Starting point is 01:01:49 For the next several months, Richardson spent as many as many as 20 hours a day hunched over her laptop research and cryptocurrencies and executing trades for Thompson. Richardson says Thompson provided instructions over daily hours-long phone call. calls and messages. They just become a hedge fund. They're just day trading. This is crazy. Richardson, they get into physical custody. Look, Richardson stored physical wallets, like USB-like devices holding millions in crypto around her home, including at one point in her then-partner's underwear drawer. Richardson, whom Thompson didn't pay and who has no financial background, says that moving that money was exhilarating and stressful and then debilitatingly scary. So at this point, they're managing $140 million.

Starting point is 01:02:32 in crypto based off of astrology. I looked up the chart for XPRT, the one they tried to put 40 or 60 million into. At the time that they were investing in it was about, I guess, $3. Okay, yeah. Now it's sitting at less than $0.3. Less than $0.3.

Starting point is 01:02:53 Yeah, but. Wow, that is like a complete and total loss. Like, wow, they had $140 million. They probably walked away with like $140,000. That's really. bad. Today, Richardson is driving an Uber up and down, California, Central Coast, a job she took to make ends meet. I had this charm, magnificent life. She sounds ejected and wistful. Her life wasn't charmed because of Thompson, she now says, but in spite of her, she had a lively

Starting point is 01:03:20 community of friends in Los Angeles, a partner she loved in a thriving career. There were dinners and parties, she says, a chosen family that included Thompson and her daughter. I don't look at them and say bad people. I look at them and say, this is the catastrophe of having. having money. Now she lives in her childhood home in Monterey County. A private investigator's unannounced visits to the home of her mother and stepsister this August has led her to worry for her family. She said, I was hired by Taylor Thompson, says Richard's mother of the woman, a former FBI agent who now works for the consulting group Guidepost Solutions. Richardson has applied for food stamps. She can't afford paid medication for her dog Jasper. She is buried in

Starting point is 01:03:55 legal work. Wow. This story has been a disaster. She lost more than $80 million in crypto associated with Richardson's involvement, Thompson did, asked about the private investigator, a Thompson spokesman said guidepost was making continued efforts to recoup the tens of millions of dollars from, of Mrs. Thompson's, of Ms. Thompson's Monday under Ms. Richardson's control because, of course, any one of those thumb drives could still have, like, a bunch of Bitcoin on it that you, like, forgot to sell or trade into something else. And so whenever a crypto deal happens, there's always a lot of, like, exhaust, knock, non. sense going on. Persistence apparently rewarded Richardson by giving her a secret

Starting point is 01:04:37 kickback of $783,7702 worth of XPRT, the lawsuit alleged. So they were like, you're bringing us a whale. We'll kick you back. Yeah, that's not good. Which is not good. And you need to disclose that, obviously. If you're getting commissions or something like that, you're not acting as a fiduciary. You're also not licensed or trained or, you know, have any reason to be doing this. But what a mess. the lesson is clear. I would have hoped there was a white pill in here, but I think it's just total disaster. Total disaster. Should have gone long tea bells instead. Wow. A friend of the show just texted me something very funny about the story that I cannot read off without completely

Starting point is 01:05:23 doxing someone. But this goes deeper than we thought. Okay. But anyway, let's move on to the next story. This was a total black pill. But anyways, if the, I guess, moral of the story, don't day trade crypto, don't day trade your friends crypto based on your astrological readings. Yes. And yeah, just stick to betting on horses. Trust the experts, really. Go down to the track. I mean, it seems like stick to real estate. Like, you know, if she was known for just like buying houses on a whim. And that seems like kind of ridiculous and silly. You can overpay for something, but hard to have total. I bet almost all of those have been, yeah, very, have done very well even since the real estate market's been booming. Anyway, Pavel Asperuhov, a friend of the show,

Starting point is 01:06:14 says Travis, Travis Kalanix, corporate catering services is insanely good. This is a brilliant, by the way. Cloud Kitchen faux Chipotle is better than Chipotle. Delivery is the exact same time. Every day without fail. Cheaper than competition. T.K. is a beast, man. TK. I mean, we got to get on this. This would change. This would fix us. This would fix us. This would be the thing that gets us from 100K to a million.

Starting point is 01:06:41 Devastating for many technology brothers out there that used to be able to rely on on a whole life for quality meal. Yes. And it has just gone down the train. You know, the problem is with Cloud Kitchens, not very good name recognition very much under the radar. They need to get, Travis needs to get on profound. He needs to get his brand mentioned in ChatchipT. He could reach millions of customers who are now using AI to discover new products and brands. We've got to try this out. There's another post from Polymarket in here. Breaking Bitcoin

Starting point is 01:07:17 is now predicted to crash below $100,000 this year, 67% chance before 2026. Currently, I mean, Bitcoin's 110. I remember this of this. this viral video of, like, Bitcoin goes up and then it crashes down to $100. And then it crashes down to $1,000. And it crashes down to $10,000. And then it crashes down to $100,000. It's like, we're kind of using, like, silly terms for, like, what is, like, a pretty remarkable rise over a very long time.

Starting point is 01:07:49 Yeah. Anyway, I'll leave it to my estraller juror to decide whether or not it should buy or sell Bitcoin. Just kidding. Not today. that. Nick here has a very funny post there was a new

Starting point is 01:08:03 Google image generation product released today. It's very cheap, it's very good. And Nick is always taking advantage of the moment to post a funny picture of Sam. He loves it. But this is a good meme for that. Where did he get this? Where did he get this? From Sun Valley or something? Yeah. He went deep in the

Starting point is 01:08:23 archives. Yeah, in some paparazzi uploads a bunch of photos. and Nick finds the most ridiculous one. But it is interesting to see the cost of these different models. You know, if you're doing high volume image generation, probably makes sense to check out Google's offering. And we will have Logan joining two today. Talk about the release, state-of-the-art image generation editing,

Starting point is 01:08:47 incredible character, consistency, lightning fast, and available in AI Studio and the Gemini API today. Fantastic. In other news, Alex Wang has unblocked Yaxine. This is shaking up the timeline. Maybe we need a trading card unblocked. Unblocked.

Starting point is 01:09:04 It is huge news in the tech world. So, the big things are going to come from that. Can someone tell Alex Wang to unblock me? The reason I was being annoying was because of the whole M-E-I thing, because the whole M-E-I thing was sensitive to me. But now that Zuckerberg crowned him the king of AI, I actually think it's really bad for my career that he doesn't like me.

Starting point is 01:09:27 And so, and so, we got to get a yesine up. You got to get it back on the show. Yeah. So Bone GBT messages Alex Wang and says, please unblock Yaxine. He's very sorry. Thank you for your attention to this matter. And Alex Wang says, unblocked. L.

Starting point is 01:09:43 Oh, well. I love it. And Bone says, you must send a raven to ruin for me. What I mean that means. Good post here from high yield, Harry. Do we have the video? We have to pull up the video. So in the meantime, let me tell you about numeral sales tax on autopilot.

Starting point is 01:10:00 Spend less than five minutes per month on sales tax compliance. Go to numeralhq.com. And I got the video here. This is in the timeline. This is, of course, Mike O'Hern, the famed bodybuilder and known for memes and video reactions around the internet. And here he is. We need the audio, too. Is the audio.

Starting point is 01:10:24 Are you following generally accepted? Accounting Principles? Giga, Chad. I'm just smiling. I just look good. What are you asking me? I don't care. Just look at the chart. Yeah. Just look. It's fine. It's all good.

Starting point is 01:10:46 Stop asking me questions. Yeah, this guy is just born for the internet. Absolutely fantastic. Anyway, in other news, Mark Zuckerberg gifted noise canceling headphones to his Palo Alto neighbors because of the non-stop construction around his 11 homes. So thoughtful. This is awesome. Chris, he says, this is so funny. I'm deeply sorry I've been jackhammering the concrete of my old wave pool to build a new wave pool for the last few years at my 120 million home, which is next year, $18 million home, in order to remedy the situation, I've gifted you these

Starting point is 01:11:17 $199 headphones. Who knows? I think it's a thoughtful gift. I think, yeah, it's the least you can do. It's a thought that counts. He's like, it is the thought that counts. Eventually, the jackhammering and hey I mean are you is it time to build or not yeah throw it on the gauntlet yeah just say I mean if you're angry about this just say it's not time to build yeah just say it's not time to just say you're anti-reindustrialization your anti-growth yeah you're degrowther you're degrowther if you're not into growth uh anyway in other news this has this is Cadillac is coming to F1 this is the most important story this is huge this is huge Sergio Perez is returning to F1 to drive for the capital team joining the grid in 2026, along with Valtri Botas.

Starting point is 01:12:01 And this is particularly important for John, who daily is a Cadillac. I do. Blackwing, much like Zuckerberg. Been waiting. Does yourself. Yes. Yes. If you want an American-made, if you just have a few, like, you know, requirements in your daily, you want it to be American-made, you want them to have an F-1 team, you want

Starting point is 01:12:20 to have a supercharged V-8, like, there's really only a few cars that fit that, that fit those those basic criteria. You don't have a lot of options. And so it eliminates a lot of other options. Pretty much everything. Yeah. So you kind of force my hand on that one. Totally.

Starting point is 01:12:35 Totally. And the different, Sergio Perez had like this very like serious announcement. And Botas just just posted him in a tuxedo with an American flag. The tuxedo with the American flag is fantastic. Yeah. Looking very sharp. He has a water bottle or something.

Starting point is 01:12:50 But it's like, it's a green can of beer or something. But it's like, it's unbranded. It's fascinating. interesting stance on the on the I have to admit the first time I saw this picture of Sergio Perez I thought it was the guy from their festival back no I thought I thought it was Billy McFarland why did you think that Billy McFarland looks kind of like that don't you

Starting point is 01:13:10 think interesting I don't know maybe I'm maybe I'm crazy anyway fin dot AI the number one AI agent for customer service number one performance benchmarks number one in competitive bakeoffs number one ranking on G2 all eyes on 2026 their driver lineup is locked in I can't wait to see an American team. And they're going to be working with Tommy Hilfiger. Oh, really? And so this team is going to be very, very American. Ooh, very fun, yeah.

Starting point is 01:13:36 This is a good opportunity for, you know, Trey was taking shots at Pallenteer, his former employer, because Pallentere sponsors an F1 team, Anderl sponsors a NASCAR event. This is the chance. If you're a reindustrialist company, if you're an American dynamism company, getting your logo on the Cadillac F1 car feels extremely high ROI.

Starting point is 01:14:01 It's probably not going to price like Red Bull, like Ferrari, but it will certainly get a lot of attention, especially online. And then you'll fill up the top of the leads bucket. You'll be able to put everyone's information at Adio. It's customer relationship magic. Adio is the AI Native Sea Arm that builds scales and grows your company from next level. And Nick, the founder of Adio, will be joining to talk about their new round later today. for that. What else? And we have a post here from Mike Anutsia. He is highlighting an article from

Starting point is 01:14:33 Bloomberg, data centers to propel infra securitizations past $110 billion by 2026. We had been joking about data centers crashing the global economy. Was it last week or the week before? Hopefully it doesn't happen, but the tech lash. Someone was saying that that Mark Zuck has the ability to crash the economy with how much he's spending on on CapEx, but I don't, I don't know, yeah, I think that's Derek Thompson take that the economy is data centers and dialysis. It's kind of an interesting take, but the, I don't know, the data center build out, like the CapEx numbers are growing, but they're not 10xing yet. I mean, even the most AGI-pilled folks are like, the training runs will

Starting point is 01:15:19 increase by three-axis size per year. Like, that's a ton. But, We're still early, and, like, all the KAPX numbers are growing, but the cloud bills are growing as well. Like, there are some crazy deals out there, but it's certainly not the size of the mortgage market yet. Yeah, and the big question is how quickly will these assets depreciate? There's some conservative estimates. There's some very extremely bearish estimates. Bloomberg is reporting the market for securities backed by various digital infrastructure, including data centers, could grow by 46% by the end of next year to roughly $115,000. billion. Data centers account for 61% of the current $79 billion market for digital infrastructure

Starting point is 01:15:59 securitizations, according to Business Bank of America. Fiber infrastructure makes up another 20% while cell towers are at 18%. The estimates take into account both asset-backed securities and commercial mortgage-backed securities. Companies have been developing large data centers to help support demand for AI, and banks as well as private lenders have been competing to underwrite such deals. Meta platforms picked Pacific Investment Management and Blue Owl Capital to lead a $29 billion deal for its data center expansion in rural Louisiana. J.P. Morgan Chase and Mitsubishi Financial Group, meanwhile, are leading a loan of more than $22 billion to support Vantage data centers plan to build a massive data center campus.

Starting point is 01:16:42 Investors' concerns about the development of data centers, cloud adoption, and the path of investment and AI have been, have been, sorry, cut off, the four big data center developers in particular, Microsoft, Alphabet, Amazon, and meta platforms discussed higher cloud business revenues and reiterated plans for capital spending increases. Risk premiums on all three types of digital infrastructure, ABS, data center, fiber, and cell towers have tightened significantly over the past two years, while B of A strategists expect limited spread tightening going forward. They see such securitizations as offering attractive relative value compared to other types of ABS. Okay, so there's a post that I found through a Martin Scarelli quote tweet.

Starting point is 01:17:32 Congratulations again to Martin. I'm becoming a father. But it starts with this Cuppie's Corner Post. Global Crossing is reborn, and it's a picture of Mark Zucker. I got a fever, and the only prescription is more data center built. out. Microcap, David says, this is insane. I had no idea. It's this bad. Shares this post, which leads you to the first shocking revelation. The AI data centers to be built in 2025 will suffer 40 billion of annual depreciation while generating somewhere between 15 and 20 billion

Starting point is 01:18:00 of revenue. The depreciation is literally twice what the revenue is. Global Crossing was started in 1997 and it's like it's the textbook example of like the dark fiber overbuild. So, uh, The main business was a global fiber optic network. They wanted to sell wholesale bandwidth to telecom companies in the 90s. It completely moaned. The market cap was over $47 billion, around 2000. Didn't really have that much profit, but it was like key infrastructure for the new economy. The bubble burst.

Starting point is 01:18:33 And they had already spent a lot of money to lay cable. But the demand for bandwidth is far lower than expected. The company filed for bankruptcy in 2002. And so a lot of people lost a lot of money. but people are, that's what people are meaming around. Martin Scarelli has a take here. He says, so this assumes $400 billion spent on AI data centers. So much of this math is wrong. A100s have depreciated 50% after five years, not 10% after 3 to 5. A B200, which will depreciate over 8 to 10 years, costs roughly $62,000, 500K for 8. You can produce some amount of human

Starting point is 01:19:13 like intelligence with this machine. Would you pay for around the clock always improving human level intelligence for $8,000 a year, $8,000 a year? Chips are a much bigger percent of the cost than implied here. So this breakdown says like it's a third depreciation, a third energy, a third GPUs or something like that, which I think is not quite right. So Screlli's putting it in the truth zone. But obviously it is worthwhile to like reality check the overbuild. You don't want to get over your skis too much, but at the same time, bubbles are important. Bubbles are important. We get a lot of, a lot of capacity to build the next thing. Joe, Wisenthal hit the timeline at 3 a.m. this morning, I guess, or no.

Starting point is 01:19:58 He wasn't sleeping on AIDSleep, but you can be. Go to 8Sleep.com, get a pod five with a five-year warranty, 30-night-risk retrial, free returns-free shipping. Back in the game, yeah, what were you doing, Joe? I have to assume 630 East. Okay, he's up So he's just up early, Post. And he said, rather than take equity positions, and he's talking about the Intel deal, rather than take equity positions in private companies, perhaps the government could confiscate 20% of pre-tax earnings. And then when it comes to control, Congress could pass laws governing corporate behavior. There could be something here. Gregory replied, that is just the beginning. Your scheme could be expanded to confiscate a quarter

Starting point is 01:20:43 of any increase in the value of those companies when people sell their share. Whoa. Okay. Interesting. Another potential play here. Yeah, this is interesting. I think we're getting somewhere. There was an interesting post here earlier. Dan Pramak highlighted that Trump's Pentagon is thinking about taking equity stakes in defense contractors according to Lutnik. So, um, they're going all over. They're doing, they're, they're, they're, they're, they're, they're, they're, they're, they're, deals mode, deals mode, uh, Lutnik was on, uh, squat box with Sorkin earlier and, and someone, apparently the team put up, uh, breaking news of TBPN, Taylor Swift engaged and somebody

Starting point is 01:21:31 quote tweeted Kana, co-tweet, never in my life did I think I would find out about Taylor Swift getting engaged via TVPN notification. I mean, she's a bean air and she's a private jet enthusiasm, right? Why would we not be highlighting that? This is fantastic. She's an incredible entrepreneur, an artist. This is great. Anyway, should we do this five-span stake in the New York Times, this activist investor? It's kind of interesting. Bloomberg has a story. So the financiers that led a high-profile activist campaign at the New York Times three years ago, I've now taken a stake in the iconic newspaper via a new investment firm, five-span partners. New York Times, Mike Isaac, your favorite activist is back. They missed you guys.

Starting point is 01:22:20 Yep. So the activist investment firm started last year by Dylan Haggart and Sarah Coyne has built the position in the Times and is pushing it to use artificial intelligence to expand its subscription base, according to a letter. The pair led value. They're just like every VC. Write a check. Hey, you guys should be using AI. I've heard a lot about it. I think there could be something here. AI is a clear tailwind for the New York Times. Our work shows it can more than double the company's long-term revenue and profit potential enhancing growth by reaching broader audiences, converting more readers into paying subscribers and unlocking new lucrative profit pools. What's the steel man for this? I think that if the New York Times goes AI slot mode, it's very bad. It's a very short-term win. long-term pain. They're saying they're talking about

Starting point is 01:23:07 using it to more, I guess, more efficiently convert non-paying. They're saying the Times can use AI to broaden its international reach, low-cost text and audio translations. That makes sense. Develop more dynamic paywalls

Starting point is 01:23:22 and optimized pricing. Low-cost video offerings could also boost revenue per user according to Fipe fan. Yeah, and so AI doesn't necessarily mean LLM's generating text of articles. But translation, nailed, audio, nailed, and already, I don't know why you're laughing. Well, I just, I think it's, I think it's pretty funny to just, we should do this bit with, with, with TB, T.B Nation, where we collectively take a stake in something like a Google and tell them that AI, we think AI is very important.

Starting point is 01:23:58 We think it could be good for your business. We sent a letter. I'd like you to take this seriously. Yes, yes, yes. Hey, Satya, we're going to take a position, we've taken a position in Microsoft, our whole team. Yeah. And we want you to take this seriously. The ask, if we're, if we're being activist investors in Microsoft, I know the ask.

Starting point is 01:24:15 Bring back Clippy. Bring back Clippy. Glippy. Is Glippy still around? Can you find them anywhere? I think there's some merch out there, but Clippy is not productized. Clippy needs to be. That is a billion dollar IP. It's locked in. Imagine a billboard campaign on ad quick.com. centering Clippy as the new spokesman for Microsoft.

Starting point is 01:24:37 Out of Home Advertit made easy and measurable. SIGABETH out of the headaches of out of home advertising. Only ad quit combines technology, out of home expertise, and data to enable efficient, seamless ad buying across the other. Clippy should become CEO for a day as like a little stunt. Give Sotty the day off. Like Clippy run the show for a day, just one day. We got to bring back Clippy.

Starting point is 01:24:54 It's so good. It's such good lore. It's so fun. It's cute. It's like inoffensive. It's the perfect mascot. Clippy is going to get canceled. So we've been joking around.

Starting point is 01:25:03 Five Spans asked, but I think it is, I'm happy to see that they're not saying, you know, lay off, you know, to... AI will definitely not be able to do the fact-finding that the New York Times does. Like, journalists are particularly good at that. And it requires, like, building a relationship over time, getting someone to share a piece of information that you can then verify. That's really intractable for AI. And then even the instantiation, you know, Teal has that line about, like, like AI will hurt math people more than writers, which is kind of counterintuitive because you'd think that, well, AI is really good at writing, but AI is not actually

Starting point is 01:25:46 that great at writing and you can still clock it when there's the MDash and it's not this that, that Travis Kelsey Taylor Swift announcement. Go into chat. It's not just a marriage. It's a love story. It's a love story. That is full-z-out. The problem is like people do write like that every once a while, but now you just

Starting point is 01:26:03 can't, you can't use those, it's not this than that. They hit Chap, they, you think so? You're convinced. But on the tinfoil hat, Georgie, if you're going to make that strong. We got to keep it closer. We do. We need the, you need a hat rack over there. A representative from San Francisco-based five span declined to comment.

Starting point is 01:26:18 That's the most boring line I could possibly read this article. Today, we believe AI represents transformation opportunity. There is something interesting here about instantiating low-cost video. So the New York Times will occasionally take a story if it's really big and turn it into a video, like a video essay, and they could probably do that for more content where they take the video, or they take the facts that have been found by human,

Starting point is 01:26:40 and the writing that's been found by human, and then use an AI voice, and then use AI to select different stock imagery or generate images. So five spans, saying they could slop it up. Yeah, they would be slopping it up, but it would probably be, like, value additive to just like get the stuff.

Starting point is 01:26:56 You know what they should do? They should do the Clooney strategy. You should take a position in the New York Times and be like, you need 500, hundred thousand clippers you need to just be clipping everything you just need to clip it all over this is the this is the thing maybe that's the strategy for clippy clipy clipy will clip your content clippings so so you do a campaign for for clippy and then you have wop clip it all over tic talk and then and then you buy ticot anyway um we went through the family stuff let's go to

Starting point is 01:27:26 this uh this gentleman over at waymo ethan i love the waymo team posting Everyone in Google feels like they're getting more comfortable on the timeline right now. I don't know if they're just emboldened, but they were cooking now they're posting. Exactly. They've been sort of building in silence, but now they're getting out there. So there's a video of a Waymo on the 101 driving from San Francisco to San Mateo, rider only doesn't touch the steering wheel. Very impressive.

Starting point is 01:27:54 Congratulations to the team. And Ethan at Waymo says, multiple sensors together is a fool's errand. What do you do when the sensor? Disagree. Surely no one has solved that. Anyway, here's one of our freeway rides that don't count in our one million plus fully autonomous paid rides per month because freeways are for employees only for now. Interesting that they're not doing freeways because the risk of serious injury is much higher on a freeway because you're going much faster. So Mercedes has done the same thing with their level three autonomous system that only works in like stop and go traffic, I think, or like under 40 miles an hour. Because with the modern seatbelts and airbags, like it's really, really hard to get into a serious, serious like injury accident if you're just going 35 miles an hour.

Starting point is 01:28:40 So the Waymos can kind of drive around. It's much lower stakes. but they're testing it and they're going to be bringing them onto the freeways. Yeah, that's a cool video. So congrats to everyone over there. On the COGS debate, Tane shared a chart of marginal differences, AI startups, recent gross margins. This is where high-yield Harry pulled that video of Micahe-Harn, for sure. So Anthropics at 60%, perplexities at 60%, open AIs at 50% gross margins, stack blitz at 40, lovable at 35, and replate at 23.

Starting point is 01:29:11 And there's an important note here. There's a note here. Perplexity, Replact, Lovable, and Stack Blitz do not incorporate the cost of running AI models for

Starting point is 01:29:18 non-paying users and calculations while Open AI does. I think it's a little... Oh, Anthropics accounting couldn't be learned. Interesting, so that's why...

Starting point is 01:29:29 Which I think is fair. They don't need to... I mean, it's not Anthropics job to tell journalists what their approach to accounting. Well, you know, know what we have the perfect guest to talk about building a business without burning a ton of

Starting point is 01:29:47 cash because we have wade foster from zapier zapier here in studio french pronunciation i you know you were in my yc batch in 2012 and and i called it what did i call it i called it zapier like a rapier for a long time and then and then people were telling me that's wrong and so i started calling zapier and then i learned that was wrong but it's zapier like snappier right Yeah, Zapier. It's funny. Snapier was actually what we called it first. Oh, no way. Yeah, we had to switch to Zapier because there was, you know, copyright issues. Oh, of course, of course. And of course it was one snappier with one P. And so we just doubled down on the mistake. Okay.

Starting point is 01:30:27 It went Zapier with one P as well, too. Well, it certainly hasn't heard the business. You've been on an absolute tear. We've enjoyed talking to your co-founder a ton about Arc AGI and that stuff, but we'd love to get just into the rest of your world and what's going on with the business. And do you have any advice for current generation startups who are maybe playing it a little bit fast and loose with the accounting? Did you ever have gross margin problems? Was there ever a moment where you were like, okay, like we have customers that are actually making so many calls to our APIs that we're losing money on them? Or was that just never an issue? We became profitable in 2014. So basically two years in.

Starting point is 01:31:09 Congratulations. When we raised the, yeah, when we raised our seed round at O.C, we said, hey, we want this to be the last money we ever get. And so I, like, looked at every expense on our P&L and approved everything and was just, like, vigilant about not spending money if we didn't have to. And, yeah, I think in 2010, like that decade, we were looked like as crazy. Totally. And now it's very trendy. Like, in fact, I heard this term popularized out. six months ago, seed strapping.

Starting point is 01:31:41 Or it's like, yeah, one round and then, you know, don't raise more. Okay, so did you believe it? And I was like, no, that's what we did. Yeah, did you believe it at the time? Were there specific entrepreneurs that you were looking to as like mentors? Like, where did that idea even come from? Because the meme in Silicon Valley at the time was much more on the, on the Reed Hoffman, blitz scaling, raise a ton of money.

Starting point is 01:32:03 And every venture capitalist would echo that because they want to put dollars to work. And so there was definitely like a mood in Silicon Valley. Valley of like, hey, it's more than okay to raise an A, B, C, D, burn, burn, burn, burn, win, win, win. Like, did you believe that when you said it or did it come from somewhere? Like, talk to me about the thinking at the time. We had two examples. So we founded the company in central Missouri. All three of us worked at Veterans United. This is a company owned by two brothers, 50-50. They never raised a dime. I was employee 500. And when I left 10 months later, there was a thousand employees there.

Starting point is 01:32:38 So this company, scaling like crazy, with mortgages during the financial crisis. Wow. And so we see that and are like, well, clearly you can build a successful company this way. Then one of our favorite products, MailChimp, they were one of like our earliest partners that was most successful, entirely bootstrapped. And then coming from the Midwest, we're just, we just don't know anything about like this Silicon Valley world for how to build companies. Yeah. Yeah. And so it kind of makes.

Starting point is 01:33:06 a skeptical of any time, you know, venture capitalist is, yeah, I remember one said, no important company has ever been built this way. And, you know, when you make grandiose statements like that and you have counterfactuals, you're just like, well, what other advice are they saying that might just be wrong? Yeah. And it doesn't mean that all the advice is wrong, but I think we just ran it through a thicker filter than most people who are like, well, I guess we're going to raise an A and a B and a C. But I think it's important. It doesn't. And my read, and I guess what I've heard over the years is it's not like you said, we will never raise another dollar.

Starting point is 01:33:43 It was more so we hope to just make a great business and not be forced to. And I think the issue when I hear people talking about seed strapping, it's like seed strapping, I don't know if it's like the right goal. It can be something that you hope to be able to achieve. But if you're raising a $5 million round and you're telling everybody, oh, yeah, we don't want to raise more money, it's just like not the right. oftentimes not the right thing to be fixated on it's like be fixated on like we want to use this money to find a really sound business model that will allow us to scale efficiently and we will tap capital markets as needed is like a better goal than we just don't want to raise more money and because I usually feel like that comes from founders that are like you may as well just say I don't want to dilute myself anymore and that's not necessarily the right thing because ultimately if you want to create value you should just make the share price go up up and like there's some companies that needed to loot a lot in order to create more value.

Starting point is 01:34:42 I think the exercise to go through is to look at your growth and really understand where is there a bottleneck in your business. What is the long pole in the tent that is holding you back from achieving your goals? And every time we did that exercise, we came back with an answer that wasn't more money. It was management horsepower or, uh, you know, we, We need this particular feature to go launch, which we can go build. Like, there was just other things that were the thing to go address to help us grow faster. And the place where I see folks making mistakes is they get caught up in the noise.

Starting point is 01:35:22 And the logic will be like, well, so-and-so raised a lot of money. Or what if something, what if this happens? Or what if that happens? Which are not actually grounded in factual truths of reality. What you do know is, this is where my company is. this is what it'll take to get there. And if my bottleneck is money, great, go get money. But if the model neck is something else, you as the CEO, like, it's incumbent upon you to

Starting point is 01:35:45 spend time on the most important thing instead of go chase another thing that actually is, is not the most important thing. And so that's kind of how we always thought about it. And, you know, I think it raising more money never was the most important thing. And so we spent our time differently. Was there ever a moment where you blinked like, you know, halfway in or a few years past being profitable where you were like, oh, like this idea, maybe it's worth, you know, dipping in raising some money, getting back on the train? Or was it just like, okay, now we've

Starting point is 01:36:16 been going for a few years. We're good. Well, once you get it going, it actually gets harder to want to raise more money because you start to look at your growth rate and going, you know what? Like, why would I raise at this valuation when I can just wait six months? Yeah. And, you know, my revenue will be up by 50% or 100% like the valuation just never makes much sense now obviously and this is I think why you see a lot of like really runaway valuations right now because the founder kind of just looks at the math and says well there's no there's no sense and so a venture capital has to come in and be like well I'll give you a 40x or 80x or 100x to get them to go well okay maybe for that I would do it. Yeah. Yeah, it's very funny that we're seeing in the market right now, like,

Starting point is 01:37:06 like tough margin stuff, crazy burns, crazy valuations. And then simultaneously, we have another company in the AI space mid-jurney, David Holes, that hasn't raised any outside capital and is just growing, growing, growing. And so it's not like it's something unique to the, to the, like, the fundamental structure of AI. Like, there is, there's clearly a way to do it without raising an incredible amount of money and yet not everyone's on that path everyone seems to be on the path of like burn burn burn yeah well and i think it depends you know like some of the the foundation models obviously have huge capax and expenditures and so that's a different beast you know whereas if you're at the application layer your cost structure obviously looks a lot different so

Starting point is 01:37:47 you know this this advice this way of building obviously has to be filtered to your your context it doesn't make sense for all companies yeah was there something about your particular business or where you fit into the landscape where you, it wasn't, it wasn't positioned as a product where on, on day, you know, 200, AWS is like, we're competing seriously. Or you had like a million competitors immediately. Like, was it less competitive because of the position in the market and kind of like how you, how you shape the product? I like the product felt like I don't know somewhere in between like a developer tool it was almost like a new market that felt less competitive but I don't know what your experience was it definitely was an odd product like we had folks like comment to us like how exactly did you come up with this idea and I think partly what made it so defensible was integrations middleware is just inherently sloggy like there's not a lot of secret hacks to do that. You know, now with AI, it's getting easier, but it's still not easy.

Starting point is 01:39:00 You still just have to like, you know, just kind of chunk away at this stuff. Like I would put us, plaid, others kind of in this category where it's not actually easy for a big company to just decide, oh, we are going to go compete in this. And most of them just don't have the fortitude to kind of keep chipping away at a bunch of like really boring engineering work. Like they are hiring all these engineers that want to work on more sexy things. versus chip away at integration code all day, every day. Yeah, now you kind of have like such a platform that you're in, I feel like you're just like a natural beneficiary of the AI wave because you're already plugged into so many customers,

Starting point is 01:39:41 so many integration, so many data sources. There's already so many primitives that AI can take advantage of. There's two areas that stand out to me as potentially valuable. I'd love to know which one's more valuable to you, And then if there's a third that I'm not thinking of, let me know. First is just having AI co-pilots help write new integrations, help accelerate your software development, just do more with the team.

Starting point is 01:40:07 I doubt you've done like massive AI layoffs or anything like that, but you're probably being more productive. That's maybe one area that is interesting. And then the other is just AI as a product that can be drawn on in the midst of moving data around. So if I have one connection over here on Zapier, and then I want to have an LLM transfer, form that data and then send it to another integration.

Starting point is 01:40:26 That feels like a really, like really amazing use case. Have those both been equally beneficial as one been, has one stood out to you as particularly greater? Is there something else that I'm nothing to you? They're both really valuable for different reasons. Yeah. So the first, this idea of like a co-pilot or text to workflow is really valuable for helping people build new types of workflows.

Starting point is 01:40:53 Sure. inherently like these no code workflow editors have a fair amount of configuration involved with them you we always invested a lot in design and making that experience good yep but it's still a lot to configure and co-pilot just gets closer to how humans think about this stuff most humans are not great systems thinkers they don't break the task down bit by bit by bit and so as a result a co-pilot can be a really good way to attract folks into the market that may be struggled in the past. But it doesn't fundamentally change the use cases that folks can do, which is where the second one gets really interesting. And I think this is where we've had some really interesting learnings because

Starting point is 01:41:36 we have launched Zapier agents, which is a purely agentic experience. And we have our classic workflow editor where you can now inject AI steps. Now, both have been successful, but the ladder has been far more successful. And I think it's because when you look at the and the ladder, sorry, to clarify the ladder is in this case is workflows. Workflows. Yes, exactly. And I think the reason why is because agents inherently just don't quite have the reliability yet to get you to solve like sophisticated use cases. Yep. You know, you think about it where it's like, well, if you're asking it to do anything complex, call it like 10 tasks in a row, 20 tasks in a row, But the error rate is 10% every time.

Starting point is 01:42:20 Well, by the time it, you know, rips through 10 or 20 tasks, like it's messed up on a handful of these things and it's way off and left field. Whereas within a workflow, you can put it in a harness and say, hey, mostly, I want this thing to be deterministic throughout all these parts of the steps. But right here, I need to summarize something or I need to analyze the sentiment of this or I need it to generate an email. And you can put the agent part. the AI part in the spot where it does the thing best. And then you wrap it back in, fold it back into a deterministic workflow. And that has opened up a huge amount of usage.

Starting point is 01:42:59 We have like a quarter billion, more than a quarter billion tasks that have run through Zapier with AI like that alone. And I think that's the, honestly, I think it's kind of a sleepy category. Yeah, when did you guys realize what a good position you were in here? Because you basically spent before a gentic workflow,

Starting point is 01:43:17 were like a term that people were throwing around every single day. You guys spent a decade basically building out all the really hardcore integrations with hundreds or thousands of different services and getting just simple workflows dialed so that you can just slot in, you know, reasoning or slot in LLMs at different steps. But have you been surprised at how many people are coming in to kind of like compete in this space? because it feels like I've just seen a lot of pitches over the last 12 months that are, I just look at it and be like, okay, this is like, this is Zapier, but just like, you know, pretending that Zapier doesn't exist, right? But AI first, right?

Starting point is 01:44:01 Yeah, yeah, yeah, AI first. And it's like, well, it's Zapier, but you can buy the stock in the private markets. It's, yeah, it's Zapier, but we're doing a series B. There you go. Zapier, we sell software. We're Zapier, but we sell stock. Yes, exactly. There you go.

Starting point is 01:44:18 Yeah, you know, I do think it kind of surprised us that we were as well positioned as we were. You know, we had started to dabble with generative AI a few months before Chat Chapti had come out. And I had started to see some customers building workflows on our private developer platforms. We have a developer platform where folks can build their own stuff. And so we'd started to see some of that happen. And as the models advanced, in particular when GPT4 came out, we were like very unsure if workflow was durable. Like we started to think like actually this like pure agentic experience is probably going to be the future. Now, I still actually believe that it will be the future.

Starting point is 01:45:08 I just don't think it's going to get there as fast as we think it will. And, you know, over the course of the next year, we just kept seeing AI use cases on the traditional workflow builder grow and grow and grow and grow. And then we started to realize, huh, like maybe what we need to do with our product roadmap is actually help people surf the wave. Like help them go from just old school, classic deterministic workflows and move steadily into purely agentic ones and allow them to kind of mix and match these experiences along the way. Take it back to gross margins for me. How important is offering the full suite of

Starting point is 01:45:49 Pareto Frontier models within those deterministic steps? And is there a world where you want to offer even smaller and more focused and cheaper models? We talked to one company that's training transformer-based models, but just for sentiment analysis, just for for censoring bad words, just for JSON to CSV or something. Like something could almost be done deterministically in many cases, but just like you need a little bit of AI there

Starting point is 01:46:24 and they train them on GPUs or on like gaming graphics cards and they run like super, super cheap. And I'm wondering like if you're in a high, if you built out, if you build out Zappier workflows that are high volume, the cost per inference feels

Starting point is 01:46:42 relative there, and it feels important, and I feel like you would have a good insight into how some of these, like, bigger models can kind of blow up on you if you're not careful. Yeah. Well, this is also where it's nice. If you can encode your workflow into something that's deterministic, you get reliability, you get cost advantages, you get speed. You get a lot of things that are really, really nice. And then, you know, insert AI only where you need it. Now, the way we've thought about this is we really want to abstract as much of this a way. from the customer as possible. You know, we sell predominantly to folks in GTM orgs and GNA orgs

Starting point is 01:47:18 and folks that are not paying attention to the subtle differences between, you know, which model is best for coding, which model is best for writing, which model is best for this, that, or the other. So we're trying to abstract away a lot of those choices, and that extends into how we price for this stuff as well, too. So we want to make it a little bit more like you just buy it, we charge you for tasks,

Starting point is 01:47:39 it doesn't matter if it's an AI task or another task, we'll just sort of, it all, the math will kind of all work out for you in the end. But I imagine if you were selling for, do you guys have a lot of, do you guys have a lot of learnings from like pricing on, pricing based on outcomes versus traditional SaaS? Because that's, again, so many of the ideas that VCs have gotten excited about with agenetic workflows and just agents broadly. I feel like our ideas that you guys have explored. You've basically always been consumption based, correct?

Starting point is 01:48:10 We've always been consumption-based, yeah. And I think the challenge that we have seen... Sorry to interrupt, but the other way to look at that is like you've been pricing based on work done. Yeah. Is like the sexier way to describe that at least in 2025. We do a task. Like you pay for tasks.

Starting point is 01:48:30 And I think the challenge that exists for horizontal products is the way in which folks use the software they get variable value from it and high usage doesn't necessarily correlate with high value and low usage doesn't necessarily correlate with low value and so that's where you know if you're building horizontal usage-based software you run into a trap where you're like hmm how like where along this spectrum are we going to price yeah are we going to pick one credit system where everything is going to cost one and we're trying to figure out, well, is it a premium thing or is it a more commoditized thing? Or do we risk making our pricing more complex and start

Starting point is 01:49:18 to say, we're going to have a credit system that's tied to different value. But now your customer is having to do a bunch of different calculations in their head figuring this out. This is where I think vertical agents have an advantage right now, where they can say, hey, we are hyper-fixated on one use case, and as a result, we can maximize the value that we are going to sell for. We're going to say, hey, you know, if you're in customer support, we're going to charge you if we close the ticket. And you can do very direct math to say, well, today I have a support wrap that I got to pay this much money every single year to answer this many tickets. If I can turn that into an agent, and they can answer those questions just as well, then I'm willing to pay, you know, this is sort of like the maximum I'm willing to pay for this. so that's where these vertical software do have like pricing advantage whereas if you're charging

Starting point is 01:50:05 horizontal you have a much trickier challenge because you have so many variable use cases at the end of the day yeah are there new new markets that you're noticing open up that are uniquely available to you because of AI I think the thing that has surprised me is the certain like more traditional or like industries have been fairly quick to jump on this. And I think my hypothesis is partially that their use cases are well suited for this. So if you have, if you're working a lot with like PDFs and like paper documentation, the SaaS stack was like kind of tough for you because it had to be structured. And there wasn't tooling that could turn all this unstructured data into structure data for you.

Starting point is 01:51:04 However, LLMs are uniquely good at that. And so as a result, these companies have seemingly jumped on this stuff pretty quick. The second thing that's been interesting is we've watched particularly media companies be relatively fast at this, which also surprised me. In some ways, I felt like they were faster at it than certain tech companies we've spent time with. this. And I have to wonder, like, how much of this is because they saw so much disruption in their business model during the internet craze that they were like, we are not going to let that happen to us again, whereas technology companies have kind of had it pretty cushy.

Starting point is 01:51:43 Yeah. And so, like, yeah, we're doing the AI thing. It's fun when you're doing the disrupting, but getting disrupted. Yeah, and not so exciting. And so they're like, act two, we're going to be on it this time around. Where do you stand on? on estimating the impacts of AI on the job market, because I feel like a decade ago around the time when you were getting Zapier off the ground, Zapier, or we said it both ways. I'm sure people were saying, like,

Starting point is 01:52:14 automating business processes will lead to, with software, will lead to job loss. Did people say that, I guess, yeah. I mean, people said that with the internet. They said, you're not going to need sales reps anymore. everybody's just going to be able to go and you know you're just going to be able to go to a website and I just yeah I'm curious like there's two data points that we've been pointing at one is the Wall Street Journal had an article today saying that new grad unemployment is is not tracking as

Starting point is 01:52:45 well as it should and there might be a real effect of of AI not driving companies to hire less new grads and then but then on the flip side there was this report that came out that that said that, you know, 95% of AI tests at Fortune 500 companies did not make it past the test phase. And so AI as an installation into these large companies is not going as well. So there's kind of evidence on both sides, but I'd love to know what you think. Yeah. You know, when I think about this, my take is that capitalism is largely undefeated. And it's, you know, it's easy for us to spot the disruption. We can see the jobs that are disappearing easier than it is for us to see the new opportunities that are being created. Sure. But history will tell us that there is always

Starting point is 01:53:40 new jobs created. And this is what we see play out in our customer base. I talked to small businesses over and over where they're like, I never could have hired somebody to do this work. And now, because I'm doing it with automation, I'm actually getting more done. I'm generating more revenues, and now I'm reinvesting that. And when they go to reinvest that, yeah, some of it's being reinvested in AI and more automation, but some of it's being invested in people. So that's kind of where I think this plays out. And the second thing I think will happen is there's this meme that goes around where it's like, well, all these software companies are just going to have crazy high margins now like we just don't need that many people but again capitalism is undefeated if someone looks

Starting point is 01:54:28 out and sees like wow you're generating so much value how about i just come in i'm willing to tolerate or if everybody everybody has high margins and they're like we should just spend three times as much on user acquisition and just get more yeah exactly exactly and well how are you going to get user acquisition well some of that's going to be invested in advertising some of that's going to be invested in people and like I think at the end of the day it nets out where hey we're all we're all going to still have jobs but what jobs we do have that's where it's going to shift and I think those reports are kind of telling that story where new grads the requirements are shifting what's what's needed inside the workforce is is changing and so there's kind of a shift going on there

Starting point is 01:55:10 and that's always what's really challenging in these moments is time is the skill sets required to be successful what if they're not static yeah what about a job creation or around the implementation. Like I'm sure there's been a cottage industry around Zapier for a long time now, people that just help integrate Zapier and companies. And we were talking probably, at the beginning of this year, thinking that what,

Starting point is 01:55:37 in the same way, there used to be a big opportunity to just help companies run Google ads or help companies run Facebook ads, and there's still opportunities there, but it feels like right now taking Zapier into a company and just saying like, I'm going to save you guys, you know, $250,000 a year if you pay me 20 grand to like set this up properly. It just feels like that is extremely repeatable.

Starting point is 01:56:00 And there's so many businesses that, as for as many that are coming on and using Zapier or other platforms, there's probably a multiple of those that just aren't even fully aware that these tools exist yet or how to implement them. So 100%. We're seeing the rise of the AI automation engineer. We have some of these internally where for our. enterprise customers. If you want us to do it for you, we will come do that for you. And to your point, we're seeing this cottage industry starting to blossom. And it's particularly effective when you can combine that skill set with domain expertise. So if you have somebody in HR who has

Starting point is 01:56:37 this capability, they're able to work magic on this. Same thing in legal, finance, marketing, sales. If they have this systems thinking, this ability to break down tasks to use the tools, they're often able to work wonders inside the stack and it's been pretty exciting because we this this person has kind of existed for all of our this is who we've served for all of our 15 years but in the last couple years they're starting to get more um credit inside these organizations they often were like the underappreciated person who just kept all the plumbing working yeah um but now like they're like the automation engineer like i'm making magic happen um can you give me your take on mc and just explain it and how it just explain it and how it fits in and is it a tailwind or a headwind

Starting point is 01:57:26 an alternative something that you're just benefiting from immediately how does it all fit into your landscape yeah so mcp model context protocol it's it's a protocol much like ht pp or rest or something like this that allows it focuses on how agent to agent communication letting agents talk to each other um i think right now there's obviously a lot of hype around around it, whether it's a tailwind or a headwind or both, you know, we're still figuring it out. Like, I think there's a lot that has to be figured out with the use cases and whatnot. I think the most important thing is to actually get the use cases really dialed in. And the place where we're seeing it be most effective is in, like, Claude, we're seeing a lot of

Starting point is 01:58:17 folks that set up Claude projects, they give it access to various tools, and then they go deploy that tool like an internal tool for their organization. So, for example, if you wanted to create like a sales briefing tool for your sales reps, you might say, hey, I'm going to set up a project, I'm going to give it a list of a template for how I want the brief to be created, and I'm going to give it access to HubSpot, I'm going to give it access to Zoom info, I'm going to give it access to like deep research through chaty pt or perplexity or something like that. And now my sales reps can just come in and say, hey, I'm talking to, you know, uh, Sam Altman tomorrow. Like, what do we know about our deal with open AI? And it goes and does

Starting point is 01:59:00 deep research. It affects everything you have from your internal CRM. And it generates a brief for you. So you come in way more prepared. So those types of like internal tools in the past, those are like kind of hard to build. And MCP is like making it really easy for folks to build those kind of like chat style internal tools really effectively um that's the use case that we're seeing pop up most frequently but i have to imagine that as time goes on we're going to see a lot more like we very much feels like we're in the very early innings and we haven't you know seen these like new user experience paradigms like launched yet or popularized yet yeah yeah it always it always just felt like to me with uh just the just on a on the basis of inference cost if you're

Starting point is 01:59:45 hitting an MCP server a million times, you would rather just have your agent, like, write an API integration and just go direct to the database for most of those things. But there's probably specific use cases where it makes sense, especially if you're, like, dancing around a lot of different points. I think that's, I think you're correct there. Like, at the end of the day, there's going to be some use cases where you want, you know, an API call and deterministic code because it's faster, cheaper, more reliable. And then there's other use cases.

Starting point is 02:00:10 Yeah, we saw this with chatypte pretty early. It was like, yeah, it's pretty good at math. It can memorize a lot of math. but like why not just give it Python and then it can get the math 100% right I don't care I just want the right answer you don't need to like stunt on me by memorizing every number of pie you can just go look that up on Google if you want anyway it's fine that worked out pretty good in the past yeah exactly let's stand on the shoulders of giants as much as possible anyway this was fantastic thank you so much for hopping on we will talk to you soon great to chat thanks guys thank you guys cheers right in the meantime let me tell you about bezel your bezel concierge is available now

Starting point is 02:00:45 source you any watch on the planet. Seriously any watch. You can go to getbezzle.com. And we have Dan Wang in the Restream waiting room coming in to the TVPN Ultradome. He is releasing a new book today, I believe. It's already being reviewed. You've got to ask him how many pages it has. Is that the question you want to ask? And hit the gong. Okay. Yes, yes, yes. Definitely. So what everybody's been waiting to hear, how many pages is your new book? Yes, yes, yes. He's a research fellow at the Hoover Institute. the book is breakneck China's quest to engineer the future. I saw a video of him going viral talking about the difference between China's government officials and America's government

Starting point is 02:01:27 officials talking about how they have an engineering society. We have a lawyer society. It's fascinating. Can't wait to talk to him, so we will bring him in from the roosteroom waiting room. Dan, how are you doing? Welcome to the show. Welcome to the show. Really well, guys. Thanks so much. Big day for you. Huge day. Well, a huge day. I get to be on TBPN. This is a nice. nice day indeed. Welcome, welcome. We've been waiting for this moment. How many pages are in the book? Less than 300. Wow. Less than 300. I think this should be a quick read. Quick read. Talk about the background. Was that, was that intentional, by the way? Were you going for something? Like,

Starting point is 02:02:04 could you have written, you know, 700 pages and you want to condense it down or? To condense it down? Yeah, I think it's, I think it's much better to write a book that is, that people feel was too short and could have been a lot longer than it is to write a book that everybody feels should have been a hundred pages shorter. So that you want to err on that side. Yeah. Yeah. Give me some background on the path to writing the book, the type of research you were doing, what inspired it, and a little bit on your background. I was in China from 2017 to 23, working as a technology analyst, mostly for hedge funds, thinking about semiconductors, clean tech, China and science, trying to figure out what's going on. So I was living in China,

Starting point is 02:02:44 at the start of the first Trump administration. I was in Hong Kong, then Beijing, then Shanghai, trying to figure out what China's going to do on Huawei, how it's going to respond on the trade war. And so I ended up living through the first trade war, the trade war that morphed into a tech war that really hurt Huawei. I lived through the entirety of zero COVID, and I was just trying to make sense of all of this experience.

Starting point is 02:03:07 I was thinking that, you know, you use these words like socialist, capitalist, capitalist, neoliberal, democratic, whatever that means, to describe the U.S. and China now. These are all words from like the 18th century or something. And let's just come up with a new framework. And that's why I came up with the engineering state and the lawyerly society. The lawyerly society.

Starting point is 02:03:27 It's a great framework. It really stuck out with me. Remind me where your family comes from within China. It's somewhere somewhat far away from Beijing. Is that correct? Yeah. It's in the southwestern periphery named Yunnan. So it's really far away from Shanghai and Beijing.

Starting point is 02:03:44 That's right. And you said that the distance from the government was relevant to the political culture there. And I was wondering if there was a similar dynamic that you saw in the United States. Like, is being in California or Silicon Valley, is there a distance from Washington, D.C. or Mara Lago or Trump Tower in New York that is at all relevant? Or do you think that that distance from the center of government power, unique? to the geography of China that your family grew up in? I think I'm an outsider, both the U.S. and China. Well, I'm Canadian, so I'm not exactly American.

Starting point is 02:04:26 Sure. Now I'm in Silicon Valley, but I've never quite felt like this is exactly where I'm from. This is exactly where I need to be. And also in China, I didn't grow up in these hyper-competitive Chinese cities like Shanghai or Beijing, where everybody owns a bunch of property. You liquidate one of these properties, and you can send for a kid to, UCLA and give her a Mercedes as well. So I feel like my strength, looking at both countries, as an outsider, not really, you know, buying into everything that D.C. or Silicon Valley thinks

Starting point is 02:04:57 about itself. Yeah. How, how, when you, when you, when you try and define, like, the, the structure of China's government or the United States government, you've obviously coined these terms, the engineering and lawyerly society. I was looking at data to try and quantify the difference between the Chinese economy and the U.S. economy. And the U.S. has, I think, higher taxes and potentially a higher share of the population working for the government. And I'm wondering if there's this world where you can look at the United States as a socialist country that's trying to be capitalist and China as vice versa. I wonder if you could like toy with that at all where where you know the U.S. is actually you know like the government is huge

Starting point is 02:05:56 and yet it is the country of like oh yes the government is not involved at all and in fact it is extremely involved. Yeah well I think the best line I've heard on this is that the Department of Defense is America's answer to central planning and the communist party gets just so big. My view of China is that it is 1950s Eisenhower America. Giant manufacturing sector, they're building highways absolutely everywhere, very little immigration, very traditional gender roles, pretty low taxes, very minimal transfer payments. Eisenhower had more transfer payments because he embraced the new deal. But there is a sense in which I think China is the most right-wing country in the world for all of the reasons that I've just outlined. And the U.S. is kind of a capitalist country that's

Starting point is 02:06:43 a little bit embarrassed about it and trying to get to a bit more socialism. Yeah. I heard you mentioned that like imperialism was somehow like the final form of capitalism or something like that. Can you explain what you meant by imperialism's relationship to capitalism? Well, that wasn't me. That was a, that was a much balder thinker about Vladimir Lenin who said that. You were quoting it. Yeah, that's right. I was quoting Lenin. Yeah, that's right. So imperialism, the final stage of capitalism, which is one of his big pamphlets. I recommend it. Okay. But unpack the

Starting point is 02:07:16 thesis there, because I don't immediately understand intuitively the relationship between imperialism and capitalism. Like, what was his argument, and then what's your take on his argument? Yeah. Well, I think maybe we don't need to get too deeply into Marxist thought here, but they have something about class struggle

Starting point is 02:07:32 and how the proletariat really needs to rise up because the people at the top have all the resources, and the capitalists in order to maintain their capitalist expansion, really just have to go overseas and conquer Africa and Asia and Latin American in order to maintain their expansion. That's the idea. Yeah, and then like the white pill of like America avoiding that? What was the, what was the bull case for American capitalism not

Starting point is 02:08:01 devolving into imperialism? Well, imperialism, I think, was a thing of the past when, you know, you really need a lot of rubber in order to power your cars. And we don't need this natural rubber anymore. You know, we can synthesize it through petroleum. And so I think the U.S. doesn't need to be imperialist. That doesn't mean that it doesn't have any other sorts of problems. But it hasn't needed to conquer a lot of territory, in part because it's built this wonderful structure of alliances that you don't really need to conquer them because

Starting point is 02:08:30 the elites kind of do what you already want to do. And I wonder if the Trump administration is still going to value all of that. Yeah. How much do you think Trump? is actually inspired by the Chinese approach? Well, every time he talks about his buddy Xi, he compliments Xi for his great head of hair. And this is like something that they talk about pretty often.

Starting point is 02:08:53 I've always felt that Trump never said a bad word about his buddy Xi Jinping up until COVID. Trump always kind of hated the Japanese and the Germans more, which were the enemies of the 1980s. I think there is an aspect in which the U.S. is becoming like China. The U.S. is nationalizing Intel. Intel is now going to be a stay-down enterprise with American characteristics. There's a lot less data probity, I think, with the statistics not being perhaps quite right.

Starting point is 02:09:25 There's a lot of interference inside the economic agencies. I think there is more construction, but there is more construction around gilded ballrooms and detention centers. And I just want Trump to take a leave from China and build a lot more mass transit, build a lot more subways in New York where I'm chatting with you from, build a lot more housing for people. Let's make Silicon Valley

Starting point is 02:09:47 much more livable mass transit friendly place. Is there any hope for the federal government building anything? Really? I feel like all of that is the domain of the state and local governments when I think of the roads and the bridges and the high-speed rail in California. Like that's not a federal project.

Starting point is 02:10:04 should it be? Well, the interstate highway system is a federal project, and that was something really built by Eisenhower. Sure. Manhattan was a federal project. Apollo was a federal project. There is a lot of local building, that's for sure. A lot of maintenance, a lot of highways need to be built locally.

Starting point is 02:10:23 But I think there's no reason for the federal government not to be much more muscular and take over California high-speed rail. Rather than nationalize intel, let's nationalize California high-speed rail. and do a much better job at it. This feels like something that Trump could get on board with, like for sure. You would love to pop over to Newsom's backyard.

Starting point is 02:10:42 He loves building stuff. He's a builder. He's a real estate guy. What about on the energy side? What do you think America can learn from China's approach to increasing energy production? Well, Trump has this policy

Starting point is 02:10:56 of all of the above. And I think China is actually the one that is much more all of the above because they're building most of the world's coal plants still today. They're building all of the wind, they're building all of the solar. So they don't have that much natural gas, but they're building much of everything else, including all the nuclear. So the Trump administration is doing more nuclear now, but they're getting rid of wind projects that are almost completed.

Starting point is 02:11:17 They're not really building much more transmission. I guess they're favoring coal as well. But China is doing all of the clean technology, all of the new stuff, as well as some of the old stuff, too. One question I haven't like press freedom in China is just why isn't China does the repression of the press in China reflect a lack of confidence in how good things are over there? Because you think if you're confident about what you're doing, if you're happy, if you're successful, you'd be like there are no skeletons in the closet, let the press run free. they will, by default, report positive things. I think that is a sign of lack of confidence. A Communist Party is super thin-skinned

Starting point is 02:12:03 about any sort of criticism. But I think the other aspect of that is that there are a bunch of engineers, and you've spoken to engineers. They're not really good at talking. They don't even want to talk to any of us, right? So they like to just sit with their projects and design a new bridge or something.

Starting point is 02:12:21 Whatever they don't understand, they tend to censor. they're also really prickly skinned about any sort of criticism that they have. And so I think that it is a manifestation sometimes of lack of confidence in China's system. They're really nervous that any criticism will somehow topple the Communist Party. And then whatever sort of jokes or any sort of humor they don't understand, they simply censor it. And so I think the engineering state is also kind of an explanation for why China has been relatively weak at producing soft power. It's not like the Koreans. You know, we're all listening to K-pop.

Starting point is 02:12:52 We're all watching Squid Game, the Japanese with Nintendo and the Game Boys and Mario and Mario Kart. They've been amazing. Chinese have not produced quite that much. What about the Labou? Labou is the first, yeah, the first attempt, I suppose. I think this is kind of a new thing. China's been getting richer for nearly five decades now, and this kind of a weird doll is, is that the best they can do?

Starting point is 02:13:15 I don't know. Well, TikTok. TikTok would be the other, TikTok feels like it. But even TikTok is, it's not its own cultural power. It's not its own brand. It's like a bucket that people put different brands into. It's like the hoverboard, the anonymous hoverboard that came. That product was developed in Shenzhen.

Starting point is 02:13:33 And it never had a brand around it. It was just five different front brands on top of a technology that was engineered. I don't know. It was an interesting phenomenon. Yeah, I mean, mostly on TikTok, all I'm watching are short clips of TBPN, not the Chinese propaganda, right? I'm only watching American propaganda from me. I mean, that is really proof that they're not putting their thumb on the scale. If we have any traction over there.

Starting point is 02:13:56 If we have any traction. Have you been surprised to see Elon engaging in lawfare with the apples of the world, the open AIs, feels like, you know, if anybody represented the engineering state in America was Elon, you know, creating these mega projects, massively impactful companies. Even more broadly, just like, it feels like the lawyerly. society kind of had organ rejection from having an engineer in the room. That was like, I don't know, if I'm trying to apply your frame of thinking to the Elon Trump, like there were other people that were successful in Washington, David Sachs has a law degree, Peter Thiel has a law degree,

Starting point is 02:14:37 Keith Rubei has a law degree. Elon goes in. J.D. Vance. Elon goes in. He's in the same crew. He's in the PayPal Mafia. And yet he is, you know, ejected pretty quickly. Yeah. I mean, I think this is one of the tragedies of Doge. I feel like we could have had engineers building a really big mega project inside government, as we used to do. We had Robert Moses built a lot of projects in New York, sometimes not very well. We had Hyman Rickover, father of the nuclear navy, build this giant Navy project powered by nuclear reactors with some ships as well. What did Elon do? Well, he wasn't really trying to build anything inside government. He was kind of destructive to a lot of aspects of government. And I really wish he applied his talents

Starting point is 02:15:20 more to build 30 big nuclear reactors for the U.S. instead. And that's not what happened. Would those need to be net new projects? Like is that a more fertile ground for government projects as opposed to say take over Intel, take over the high speed rail initiative, like take over something? It just feels like there's a lot of stuff that's not working both in the private sector and the public sector, and that seems to be where we focus as a society in America. Just, there's so much that's going wrong. The government is kind of the lender of last resort that can step in. When I agree with you, I think I like the idea of another Apollo project,

Starting point is 02:15:57 another Manhattan project, another project that's like completely new and no one would underwrite it in the private sector to begin with. Yeah, let's have both. Let's have a functional high-speed rail project out of California. Let's have many more nuclear reactors because I think we had only, one new nuclear reactor in something like the last 40 years. And that's kind of pathetic. I'm talking to you now from New York. New York is trying to fix up Port Authority bus terminal. It's going to take something like five years and six billion dollars to make a new bus station.

Starting point is 02:16:27 Every mile of subway that New York builds cost something like $2 billion per mile. This is just the highest costs in the world. And we can't even build something as simple as a public toilet in San Francisco. And so, you know, we need to get better at every sort of thing. You know, we need to do the public toilets. We need to build the bus stops. We need to build the nuclear reactors. Let's go to the Mars. Yeah.

Starting point is 02:16:48 Yeah. Is one possible path here, the wolf in sheep's clothing, the engineer with a law degree that they acquired online or something? They passed the bar in their free time. Like, can the lawyerly society be hacked in the way that, you know, an engineer, my social engineer, a job application? or reverse engineer and API and hack a website? Yeah, I want Peter Thiel to hack all of that and be the lawyer that actually is actually the real engineer. I think that would be great if something like that could happen.

Starting point is 02:17:25 But I also feel like the U.S. used to be an engineering state. You know, it built a lot of, in the 19th century, built canal systems, built the train systems. It built a lot of skyscrapers in Manhattan and Chicago. go. And then in the mid-20th century, we built the highways, we got Apollo, we got Manhattan, we built the Hoover Dam. And that heritage is out there. But right now it feels like we're walking amidst the ruins of a fading industrial civilization. And we need to at least renew this and hopefully build more too. Yeah. Trump yesterday said we're going to get along good with China.

Starting point is 02:18:01 I hear so many stories about how we're not going to allow their students. We're going to allow, it's very important, 600,000 students. It's very important. where do you think that's coming from feels like a little bit of a pivot? And do you think there's that much demand on the student side for opportunities at U.S. universities? Yeah, Trump is now the most pro-China member of the White House. And as I said, I think I've always, every time I saw Trump, and I was living in Beijing in 2017, 2018, when he was visiting China, he visited the Forbidden Palace once. He's always said nice things about China up until COVID. His real enemies are like the Germans and the Japanese.

Starting point is 02:18:46 That's been long the case. And that's not always going to be true. But a couple of months ago when a journalist asked him, does the U.S. want so many Chinese students? Trump said it's our honor to have them. It's our honor to have them. And I think that's a really ringing endorsement of Chinese students. They think there's still a lot of Chinese who are really keen to move to the U.S.

Starting point is 02:19:06 They're attracted by some aspect of working without censorship. If they're in the arts, if they're working in journalism. They're attracted by some aspect of pluralism. New York is a great place. San Francisco is a great place. They want to come. And I think more American students should also go to China. Take a look at what Shanghai is like.

Starting point is 02:19:25 Take a look at what Shenzhen is like. Let's just have more exchange and let's have more mutual curiosity, too. I studied abroad in Shanghai in 2016. and what do you think within a week of arriving I decided to stop studying Mandarin and I was excited to go home

Starting point is 02:19:46 I think that's what I was part of partly because I was born and raised in California and I like clean air and healthy food and things like that which are not in large supply over there but I was still shocked it was overall a cool experience it was interesting because I was working at a interning for a company that was at a Chinese startup accelerator and I got to experience the

Starting point is 02:20:11 how hostile the sort of local market was to external uh external kind of startup players in the ecosystem um you also got paid to be in a promotional film about teaching english which you weren't doing right yeah yeah it's a little like local government fraud yeah yeah no can we pull up that clip? I think it'll be tough to find. I still don't have it. One day Jordy gets paid to go out to some like province where the official was clearly cooking the books on like how much English was being taught. Yeah, there was there was a there was a local some state government had like really bad test scores and they they wanted to bring English teachers which anybody any student in China can become like an English teacher or whatever. But anyways, it was a very weird, very weird

Starting point is 02:21:00 experience. This was also during the election cycle, which was just absolutely wild. But I'm not surprised now that I think there's like only 800-ish American students currently studying in China, which is just such a wildly inverted from how many Chinese students that we have here. Switching gears, what do you think of, I like the take about like the quantitative nature of Chinese policies, zero COVID, the one child policy. It's very quantitative. My kind of take on the Chinese birth rate decline was that if you can effectively put a gun in someone's face and tell them they can only have one child, you can put a gun in someone's face and tell them that they have to have three children. And so is there actually cause for like nervousness or fear

Starting point is 02:21:59 around true population decline if you are and if you do have the authoritarian playbook in your back pocket and you can just upregulate fertility essentially i doubt it i think it is you can stop a lot of births by putting a gun to people's heads um it is really difficult to you know coerce some measure of copulation how are you going to get to people in bed to and put a gun to their their head. I think that's, it's not the best conditions. It's much harder. It's much harder. Is population decline, like, overrated, underrated? Is it, is a serious threat to China in the long term from an economic perspective or population perspective? Yeah, Peter, Peter's, Ihon loves to go on and say how cook. Yeah, yeah, he's been saying that for a long time. But yeah, what were you saying?

Starting point is 02:22:52 Overrated in the short term, correctly rated in the long term. I mean, the curve is not. The curve is not that steep right now. The population is really gently declining. Sure. You don't need a giant population in order to have a semiconductor industry, right? The global population of semiconductors is not that large. Yeah. And so this is really going to bite something like 20 years from now. Yeah. But that's still 20 years when, you know, 20 years is a plenty of long time. 20 years ago, you know, we were dealing with some sort of a housing bubble and the U.S. was bumbling around in Iraq and Afghanistan. 20 years could be a long time. And it could be that China fully deindustrializes Germany and Japan and maybe even the U.S. over the next 20 years,

Starting point is 02:23:31 and that sounds pretty bad. Yeah. What is your frame of thinking around the Chinese semiconductor industry? It feels like they've been investing consistently for decades, never really hit the leading edge, but they've always been there in the conversation. They've never stopped investing. But how do you think about China's play? in the competition against TSM, ASML, the rest of the Western semiconductor supply chain? They've never caught up, but they're closer and closer. And as they get closer and closer,

Starting point is 02:24:08 the profits among the leaders are going to shrink because they're going to be out-competed by China. You've already seen this happen in memory chips, which is simpler, but Micron has been kind of struggling for quite a while. Intel struggles have almost everything to do with itself and nothing to do with China, but it could also be that once China,

Starting point is 02:24:25 that gets much better at Foundry, then a lot of orders will shift to SMIC, which might be able to offer a lot of cheaper alternatives. So I don't think that China will catch up to TSM in the next, let's say, 10 years. It might never catch up. China also might never catch up to ASML. But if it is just consistently following behind

Starting point is 02:24:45 and it's good enough, maybe that extra quality level is not worth triple the prices. And that's always been China's success, right? They make 80% as good. at half the price, and that's good enough for most people. And once that shifts, then a lot of the leaders stop having profits, too. Are there any moves by the United States in the competition for semiconductors with China that you would like to see America avoid,

Starting point is 02:25:12 or you'd like to see America particularly go down a particular path in terms of the semiconductor competition? I think that America should import a lot more Taiwanese engineers, send them to Arizona, send them to California, wherever it is, and then just bring all of their process knowledge and to manufacture in the U.S. instead. The U.S. hasn't done a great job supporting Micron, hasn't done a great job supporting Intel. I'm skeptical that nationalizing these companies is really going to be a good solution. But the U.S. has everything it needs to succeed in chips. Intel hasn't been good, but Nvidia and Apple could shift a lot more of their

Starting point is 02:25:52 orders to, let's say, a better Intel or a better TSM, import a lot of ASML equipment, and then just become a lot better at that. It has a lot more resources and much more capabilities than China does now. Yeah, the yields in Arizona seem particularly good. I'm not sure where I heard it, but someone was saying that there was potential, the potential of TSM spinning out the Arizona assets, which I think might be quickly made a meme stock, but certainly would be an exciting development. How do you agree? I expect the trade war to resolve between the U.S. and China just given Trump's more up-to-date messaging around signaling that, you know, we're actually, we actually might be friends after all. Every time it gets close, there's always the chance that it falls apart.

Starting point is 02:26:41 And I've seen that the trade deals fell apart several times when I was living through the first trade war in Beijing. And so I want to be optimistic that these two countries come to some sort of agree. so that, you know, we don't have the world's two biggest countries at each other's throats, two biggest economies at each other's throats. But I'm not really optimistic. Trump is erratic, and sometimes he wants to make a deal, and sometimes he doesn't. And even if Trump and Xi come to some sort of agreement, I'm not sure if that's really good for the world. What if Trump decides that he's simply going to gift Taiwan to Beijing?

Starting point is 02:27:18 You know, I don't think that would be good for the world. And I think there's a lot of European countries and other Asian countries who are really nervous that they do come to some sort of a court. So I don't have a good sense of what is the right move here. How do you think China is thinking about Taiwan? There's a, I think America comes to the Taiwan conflict with a very Cold War mindset, a very kinetic warfare mindset where I've heard more interesting theories of, around sort of like slowly shifting the population with propaganda and political influence and just creating a more pro-China, Taiwan over time.

Starting point is 02:28:01 Being very patient might be something that's like more in the direct playbook of China. What's your current thinking on how China would like Taiwan to play out if everything went according to plan over the next decade or so? China has had this patient strategy for really long time. And then it tried to shift the population with propaganda. And it was on course to work until they blew it up themselves by being really mean towards Hong Kong. So China promised

Starting point is 02:28:32 Hong Kong that it's going to have essentially 50 years of freedom. And it did have about 20 years of freedom. And then Xi went back on basically Deng Xiaoping's word and they crushed it. And so after that, you saw that the Taiwanese population don't have faith that China would actually respect any of their wishes. And so I think what we're thinking about now is I don't think that a kinetic action, a big conflagration in the Pacific is the most likely. I think the most likely path is just some sort of status quo, which to, you know, U.S., Taiwan, China don't really try to do anything big. And if anything, more likely than a kinetic action would be some sort of a blockade to surround Taiwan. And then the U.S. would be in this kind of a tough position to have to be the initiator

Starting point is 02:29:17 to break the blockade rather than, you know, being the defender of Taiwan. And so I think that that is kind of the challenging, politically challenging thing that Beijing would like to put the American position in. Yeah. Well, hopefully it's resolved peacefully. We'll continue monitoring the situation. Thank you so much for joining the show. Yeah, congrats on the lunch.

Starting point is 02:29:38 Thank you very much. Get our copy. This is fun. Yeah, we'll talk soon. Have a great day. All right. We'll talk to you soon. Bye.

Starting point is 02:29:44 The book is Breakneck. You can go and check it. out, Dan Wayan. Send it right up the charts. Yeah, send it up to the top of the charts. Our next guest is in the stream waiting room. We have Nick from Adio coming into the studio. It's Sharp. What do we got? Fantastic name. Give us the news. What's happening? Welcome to the show. Hey, guys. How you doing? Great. Late for you, right? Yes, it is. Especially when you are, you've got two toddlers of sleep in the house.

Starting point is 02:30:17 This is well past bedtime. Yeah, yeah. Well, I know how that goes. And I'm glad you were able to, always good to get them. It's good to have like a meeting set for, you know, somewhere around bedtime. It's like extra incentives to have bedtime. Yeah. And also dodge the duties of putting them to bed.

Starting point is 02:30:34 So it's all good. Thank you. Good, good. Well, big day. Big day. Congrats on the raise. I have the gong mallet here ready if you can give us the details. Okay, absolutely. So we are very, very excited to announce our $52 million series B, led by Google Ventures with

Starting point is 02:30:55 resistant investors. Sorry to interrupt. Fantastic. Breakdown, give us, I mean, first time on the show, give us kind of the whole, kind of abbreviated, but full history of the company and how you guys got to this point, because it hasn't, there's a big milestone, but certainly been at it for a little while now. Yeah, absolutely. No, a big, long journey. So, you know, fundamentally what we do is we build an AI-native CRM. And what that means is a very, very flexible data model. It allows businesses to mold Atio to go-to-market motion rather than having to do it the other way around, which has been the way software has worked for a while. And then a massive amount of data ingestion,

Starting point is 02:31:45 which gives us all of the context to automate action, essentially. CRM is a big product to build, a very big product to build, and there's not really an MVP of a CRM. It's a big ask for a customer to adopt it, and we've got about 5,000 companies that have now adopted at you. But to get there is a lot of engineering. And so we did three years. of engineering in a you know in the sort of startup desert pre-launch and uh yeah so we did three

Starting point is 02:32:19 years pre-launch of just hard engineering grind and launched by two years ago incredible what uh yeah i guess like maybe talk about kind of the inflection points at what stages kind of uh kind of where lLM started to really unlock value for for customers and kind of where you had those initial sparks because I think like when people yeah for better or worse every CRM provider now says that they're AI native so I also want to understand like what does that actually what does that actually mean in practice and what kind of advantages do you have as a new player that that hasn't you know been in the industry for a couple decades at this point yeah I think I mean I think fundamentally we have two really big advantages so

Starting point is 02:33:06 So one is the quantity and resolution of the data that we ingest, and building a data model that can do that. So LLMs work great when they have lots of context, and you need to feed them that context. And so one of the things that, you know, we worked, one of the first things we worked on was this data model and being able to instantly ingest the companies, you know, emails, calendar, product data, et cetera, et cetera. So that was a bit that really took a long time to build, especially when you need to do it at the scale.

Starting point is 02:33:40 You have to do it for CRM. The other thing that is a big difference between Artio and legacy products, is that we think that we have a thesis that code is becoming the new no-code. So the idea of no-code and these very complex UI that you have to learn. and very steep lining cars.

Starting point is 02:34:06 You're not learning how to code, but you're learning something pretty complicated. And especially when you start to hit up against edge cases, et cetera, then the UI has become extremely complicated. And so one of the things that we've sort of engineered into Atio from the offset was the ability to execute code inside of your CRM. And if you think about what has made Salesforce successful

Starting point is 02:34:28 is this infinite flexibility through very, very complex engineering processes with a, you know, with a, you know, with Apex and the language not many people know and huge amounts of difficulty. But what we do with that here is build in this native code execution very early. And LLMs are brilliant at generating code, especially in these kind of safe, somewhat constrained environments.

Starting point is 02:34:53 And so that's another thing that we think is going to, especially as this plays out, it's going to be a really, really big deal. The idea that software becomes so much more malleable because code is so much easier to generate. right how do you think about the right like where where's your focus on on the customer side again CRM has so many different applications within different companies and it's yeah in the long run you can serve everyone but what's the focus been to date in the in the kind of 5,000 you mentioned yeah so the focus

Starting point is 02:35:25 really is is on you know what we would consider builders so so people who like to get stuck in to building things that there's a rise of their GTN and go-to-market builder is pretty apparent now. And so about 50% of our customers are tech companies. And even the 50% that aren't tend to be people who really want to get stuck into building something. But as you said, CRM has a huge range of users. And we think deeply about the consumer of the CRM,

Starting point is 02:36:01 that's the AE, the SDR, et cetera, all the way through to someone in RevOps, or, you know, building out really complex, go-to-market motions. And so we have to serve all of those customers. And, you know, we focus a lot on making the consumption of the CRM super seamless as well. And obviously, AI has been incredible for that, you know, massive reduction in data entry and stuff like that. Talk to us about gross margins. They're in the news with a lot of companies sort of like just reselling inference. obviously your business is very different than that.

Starting point is 02:36:37 It doesn't feel like I'm just paying you for tokens or just output. But are there any examples of like customers where you've looked at their usage and you've been like, wow, this person somehow triggered like a million different calls and ran up a big bell? And are there any lessons that you've learned from just like building an AI product that is on the back of inference and does have real costs that are somewhat variable? Yeah, yeah, absolutely. And, you know, the, like all good startups, the, the sort of approach we took to this initially was, it's not our focus right now. In the last sort of six months, 12 to six months, we've actually made incredible, you know, incredible gains there, and we're in a very, very good place now. And that has been a combination of, I mean, that's a combination of models getting more cost effect. and us learning to use them better.

Starting point is 02:37:37 But one of the things that we can do, for example, is we can decide at runtime which model is best suited for a task. So I think this is now becoming a relatively mainstream strategy. But if we're digesting an entire cool transcript, we don't need to use the best reasoning model. We can do sort of compaction first on a faster, cheaper model, and then put less tokens into a better reasoning model. And so it's a, exactly, yeah.

Starting point is 02:38:04 And so it's been a big engineering effort, but with a combination of all of these techniques, we have very, very good margins there. The other thing is a lot of the value that the LLM provides is very apparent to the end user. So it's work done. And that's changing the way that we think about pricing as well. And so CRM has historically been just a seed-based product,

Starting point is 02:38:31 but I think increasingly we'll see that that will change, And, you know, we now have a hybrid pricing model, which is there is a seat-based aspect, and we give sort of very generous automation and sort of AI credits to those seats. But if you want to go really wild and you want to replace a lot of work, then you can buy credit to do that. Yep, that makes sense. Well, congratulations on the round. Thanks so much for having on the show. We will talk to you soon. Have a great rest of your day.

Starting point is 02:38:59 I'm back on anytime. Yeah. Absolutely. Thank you, guys. Yeah, nice to see you. See ya. Up next, we have Sean from Coinbase joining. I want to get his reaction to this front page news about stable coins.

Starting point is 02:39:12 Wall Street calls for stable coin rethink is friction with crypto industry builds. There's a loophole on industry yields, apparently. We're going to dig into it. He's in the Restream waiting room, and now he's in the TDPN Ultrodome. Welcome to the stream. How are you doing? Good to see you. Hey, guys.

Starting point is 02:39:26 I'm doing great. Good to be here with you. The chief business officer. It's the coolest title. That's the coolest title. It's the best. Anyway, give us a little of your background and what you're working on. What's the most interesting thing in your world these days?

Starting point is 02:39:40 Yeah, first off, congrats on 100K, pump for you guys in under a year. That's huge. You know, we're just trying to keep up with the crypto charts here. Yeah, my background, so like you guys mentioned, I'm chief business officer at Coinbase. I oversee the broader company's strategy, partnerships, MNA investments, and a handful of other things. I actually started out my career wanting to be a brain surgeon. So I studied neuroscience at UCLA, realized late in college that I had a big enlightening moment, which was that I fainted when I first saw that much blood up close.

Starting point is 02:40:19 And I realized, like, hey, this isn't going to be the thing for me. I ended up working in strategy consulting. I know you guys have been talking a lot about Intel and some of my conductors today. Those were, like, some of my early clients there. We're doing a lot of due diligence for private equity firms and the like. Were you pounding the table saying go Pure Play Foundry in 2013? You're like, Ben Thompson just wrote about it. We got to implement this.

Starting point is 02:40:43 Yeah, exactly. I don't know if you had the same clout back then. Well, fortunately, you're the good stuff. Yeah, after the consulting thing, you know, I wanted to get more on the right side of the table in terms of allocating capital. So I worked in venture at a fund called Greycroft. We were actually based down in the arts district, John, down the street. Oh, yeah, I've been to the office. So, yeah, we were early movers there to the east side of L.A.

Starting point is 02:41:06 But, yeah, and then I jumped on Coinbase in 2018. Yeah, so take me through the recent history of your work at Coinbase, what you're focused on, what is moving the needle for Coinbase in kind of this next phase. It's obviously a very scaled company. but it's one of the, it has to be one of the largest founder mode financial institutions now and I'm starting to stop thinking, I'm thinking about it less as like, yeah, it's the place where you buy Bitcoin and more just like it is a financial institution that does a lot of things and potentially we'll do kind of everything in the financial world over the next decade. And that's been extremely inquisitive. Yes. So yeah, yeah, give us a whirlwind tour.

Starting point is 02:41:48 Yeah, totally. I think two primary dimensions. So historically like you mentioned, I think Coinbase has primarily been known as this place where we make it really easy and secure for people to buy and sell crypto assets, right? And people know us for the first-party applications, the Coinbase Blue App, which has been great. But we're broadening that out now to support a wide range of different assets. I think fundamentally it's driven by we think that all assets are going to get tokenized and be on-chain in some capacity. It just provides better infrastructure for financial transactions. And so we announce that. pretty recently that you know for the first time this is going to be building

Starting point is 02:42:25 what we call the everything exchange and supporting things like equities prediction markets we opened up through the Coinbase app now that you can trade assets directly on Dexes so in general what we see is basically the blurring of these lines between what was off-chain and on-chain and we want to make a very simple and seamless user experience for people to access the all of these assets that are going to be on chain. So that's, yeah, go ahead. Yeah, yeah. I mean, in general, super on board, I feel like liquidity just lowers cost of capital allows businesses to do more impressive things. It's good. Obviously, there are areas

Starting point is 02:43:08 where I'm particularly thinking of like stocks on chain. There's situations where like I don't know that I'd want someone to be trading shares in my company all the time. So how are you thinking about that market evolving, obviously there's a huge benefit to getting access to capital without some of the over, like the cumbersome nature of the reporting constraints of going public and all the different issues with floats and IPOs. But how are you thinking about the path to bringing more assets on chain? What's the most logical and then what's further out on like the long time horizon? Yeah, I think it starts with the regular. regulatory front, and that's where we see like the biggest uphill battle.

Starting point is 02:43:54 So, you know, right now it's sort of like in vogue to talk about tokenized stocks and the theme of tokenization. tokenization isn't really anything new. You know, when we co-founded USDC in 2018, that was, it's a tokenized dollar, right? Like it is a dollar on a blockchain. And at that time, people were sort of like, what is this thing good for? But now they realize like, hey, you have all these benefits that are just come with the asset it's on chain. So you get programmability, interoperability, global access, all those types of things.

Starting point is 02:44:26 So public stocks, this is like the new thing that people are really excited about. And we're really excited about it too. Actually, you know, in 2021, I was helping take the company public through our direct listing. And we actually explored issuing a tokenized version of Coinbase simultaneous with the exchange listed version of coin. And, you know, that was always the dream where you could basically have a user that holds the asset on chain. And if they wanted, they could redeem and hold the asset on NASDAQ

Starting point is 02:44:56 or go vice versa, depending on their preference. And we just ran into a number of different regulatory blockers in 2021 where we realized that wasn't possible. And so I think the regime change in 2025 makes it much more collaborative. There's a very healthy bidirectional conversation that's ongoing around, you know, what are the rules and requirements

Starting point is 02:45:19 for an asset that's traded on chain? Do you need to be, does it need to live in the environment of a broker dealer and a national securities exchange or does it not? So we're really excited about, um, the regulatory environment progressing with, uh, the benefits of the technology. Is there a great argument right now that you've heard for, uh, how like your average American benefits from stable coins? Because I, I've literally paid people internationally in stable coins.

Starting point is 02:45:47 It is amazing. And if they don't have access to dollars otherwise, like in a high inflation country, I totally get that. But is there a way to contextualize it for somebody who isn't doing any international business and is an American? Like what are the benefits besides like, you know, programmability abstractly? Yeah, I would say right now most of the benefits are really cross-border transaction oriented. But like, you know, the one that I think will resonate with a lot of people who are Americans even is, you know, if you're hiring freelance, or contractors around the world, like how do you get them money? These are people that you might need for like a one-time job or for like just a few weeks.

Starting point is 02:46:27 It's a lot easier to do that. And, you know, we have a partnership with Stripe where Stripe is enabling stable coin payments through USDC on base. And one of Stripes keep customers is remote.com and they start to see that this is just a naturally native better way for small startups and founders in the US to pay freelancers. freelancers, regardless of where they are in the world. Do you think that, like, the freelancer, are they more just excited about getting dollars, or do they actually care a lot about, like, the yield that comes from treasuries and all of that? Because it feels like they're both important, but I have trouble waiting them.

Starting point is 02:47:05 Like, what do people care? Well, one obvious benefit is just getting the money immediately versus having to wait days, potentially 10 days, just get your money, even after the client has hit pay. Yeah. Yeah, I think the thing that has become clear is there is just insatiable demand for U.S. dollars around the world. Like, everybody wants U.S. dollars, but it's really difficult to access U.S. dollars. So, John, I think to your first question, the pain point is really, I want dollars or a safe, stable currency. And then Jordy, to your point, it's like, I want it as quickly as possible, in a form factor that I know and I trust. And, you know, we started to see this kind of organically a couple of years ago where a lot of people in Argentina and a lot of other countries were just like natively finding their way into dollars stable coins and in those countries you know we spoke with a lot of customers and it's it's normal right like you look for different stores of value whether that's you know

Starting point is 02:48:06 buying real estate in the US or gold or Bitcoin and stable coins are just a natural and more relatable form of store of value for a lot of these people yeah can you talk about the significance of the Deribit acquisition that you guys just completed? Yeah, we're really excited about it. We just closed it for context. Deribit is the world's largest crypto options exchange, specifically. They've had about 80% market share in crypto options for the last eight-ish years or so. So kind of like up and down through the various crypto cycles. And in the crypto markets, derivatives are orders of magnitude larger than spot markets. Coinbase kind of grew up and got its foundation and its roots in helping people seamlessly

Starting point is 02:48:53 go from fiat currency, primarily U.S. dollars in euro and GVP into crypto, and the derivatives markets have just sort of like ballooned in size. So over the past year or so, we've made a big push into the derivatives markets. We have exchanges in the U.S. and internationally that support a handful of products. But Deribit really, for us, brings us market leadership in this options category that we think is going to grow tremendously. It's also a differentiated capability that will basically pull together spot options and futures as different trading products together into one exchange platform. And what that does for users is really two things. One is

Starting point is 02:49:37 it creates new trading opportunities. A lot of people will like buy spot. and short features, and you can do that now across more instruments just on one place. And then the second thing is it unlocks more capital efficiency. And this is really a key one, is whenever you put on... Let's give it up for unlocking capital efficiency. Love to see it. It doesn't get better than that. Yeah.

Starting point is 02:50:02 Whenever, as you guys know, it's like, how do I get the most bang for my buck quite literally, right? So if you can trade across all those different assets, you hold $1 or $1,000. one crypto asset with Coinbase, then you basically can get margin and cross-margin across all these different products without $1. So it's just a better trading experience overall for people who move in size. Very cool. I love it. Let's hear for people that move in size. Let's hear for people that move in size. Let's tell you about eagle sound. There we go. Thank you. Thank you for hopping on. You're always always welcome. Yeah, anytime. We'll talk to you soon. And congrats on the new title.

Starting point is 02:50:40 Well, deserve. Thank you. Well deserved. Up next. We need to make somebody the chief business officer here. Yeah, it's up for grabs. It's simply too good. Tyler, you're going to take it? You're the chief. I'll take it.

Starting point is 02:50:52 Chief intern officer, the CIO. CIO, but any day now, you can get promoted. Anyway, in the Restream waiting room, we have Brian Pellegrino from layer zero. Oh, sorry. No, we have. Okay, sorry, we have a switch. We are. We have Rylan from Bucas from Reframed, right?

Starting point is 02:51:12 There we go. Sorry. We have a technical difficulties over here. Welcome to the show. Good to meet you. I'm glad you guys have Ryland on, too. We did. Old colleague mine.

Starting point is 02:51:22 Oh, no way. That's amazing. From what era? We were both at Kiva and Amazon robotics maybe 10 years ago. That's very cool. Awesome. I had a friend who just got a tour of an Amazon facility. They said like on site, just on this one facility, they had like 10,000 robots or something.

Starting point is 02:51:39 And they built the whole facility, like, six. months ago, they said there were already two versions out of date from like what the next stage of Amazon's build out is. It was like the most impressive tours every time. Anyway, we're not here to talk about Amazon. We're here to talk about you. Take us off with an introduction on yourself and what you do. Wonderful. Well, it's great to be here. I'm Avicasse NT, CEO and co-founder for Reframe Systems. We're on a mission to build climate resilient homes for everyone. And we're doing this by applying some cutting edge robotics and algorithms with micro factories that we can deploy within a hundred days.

Starting point is 02:52:12 We've got to build pretty impressive, good-looking homes in neighborhoods all around the country. Incredible. And the news today? Give it to us. We've raised a $20 million series A, super pumped.

Starting point is 02:52:25 Not as pumped as us. Not as pumped as us. Congratulations. Incredible. When did you start the company? And I guess what was the initial catalyst? Yeah. We started about three years ago.

Starting point is 02:52:39 go with the pitch deck and the catalyst was as simple as me becoming a dad. My twin daughters are four years old now. Oh, you're twins. Yeah, so they were, yeah, the catalyst to kind of take a step back and think about what else I should be doing in my time besides getting boxes to people's doors faster. And I decided I'll get bigger boxes to people's doors that boxes people can live in right now. You're committed to making boxes go faster. Yeah. I'm what you love. That's my superpower. What kind of, yeah, I mean, obviously, Reframe is trying to provide a solution for one of the biggest problems, I think, facing our country. Where, how have you thought about kind of narrowing in and focusing, go to market, what markets are important and what does success look like in the, in the early days?

Starting point is 02:53:31 Yeah, maybe we can go to talk from what the big picture is for us. We want to build a million homes by 2045. That's twice as fast as well. but how long it took DR Horton, the largest home builder in the US to build a million homes. But the places we're going to be building homes will look vastly different. If you think about where homes are getting built today, they're out and farmlands that have been converted.

Starting point is 02:53:50 They're far away from existing communities. That's the only place you have land available for large-scale optimized builders. We believe that by applying software and robotics, we actually change that equation. We can actually be just as efficient as them, but in infill neighborhoods. How do we actually build 100 units, not on a single lot, but on a bunch of scattered sites,

Starting point is 02:54:08 in a neighborhood in Palo Alto or a neighborhood out in Somerville or Cambridge, Massachusetts. And we believe that by leveraging software, we actually get to a wall that we defined as mass customization. How do you convert existing building designs to have it be compliant with any site? But make the marginal cost of this change go down to zero because software's in the loop, robotics is in the loop.

Starting point is 02:54:29 And whoever can achieve that end state can get the same efficiencies of a production builder on Scadred sites. And we believe that's our path for actually getting, and creating a type of housing that people actually want to live in, in neighborhoods people want to live in. Ideally, at price points that are also significantly better than what's out there today.

Starting point is 02:54:47 So we're currently focused in markets that are building homes are over $400 a square foot. So there are markets on the coast, so New England, so we're currently based in Massachusetts. As part of the series, they will also be launching capacity out in Southern California to help with the LA Wildfire Rebuild. So LA is also a target market. And then we have markets out, so Salt Lake City,

Starting point is 02:55:08 Utah and then Denver adjacent, and then Seattle and Washington, D.C. adjacent would be other markets in the future. How does, is, what is the process to start working with somebody that ultimately wants to buy a home? Are you working with developers that are developing entire neighborhoods, or can somebody just go to your website and say, I want one house, please? Yes, so today we're very focused on working with developers, so it's still a B2B sales motion for us. We believe that the best customer is a repeat customer, and this is that we're

Starting point is 02:55:40 trying to build a pretty long-term multi-year pipeline. We have sold to individual customers, but the experience for them doesn't resemble that of a custom home builder. Like, you're still building off of our product portfolio. We will customize our product to meet the site. We're not going to design a ground-up custom building, and if customers are fine with that. And that's the experiment we're testing out with LA because now we're working with homeowners who've had their previous films burned down and we're trying to help them rebuild and we're able to make good progress

Starting point is 02:56:07 with customers who realize they're going to get a better product significantly faster working with us but they'll have to make some tradeoffs on what the product is and what their expectations are and that's been an education process and we've actually been surprised that people actually just want limited set of choices

Starting point is 02:56:23 if they can give them choices on things like cabinet colors a few different arrangements of windows etc they're actually pretty happy with the process versus saying, right, you can only get one color as long as it's black, right? I think that doesn't work out here. Doesn't fly in a house, and the whole aspect of mass production doesn't work for construction either, which is why we've had to embrace customization. Yeah, that makes sense.

Starting point is 02:56:48 What, do any of these stick out as factors for your business, self-driving cars, potentially making it easier to people live in farther away suburbs, or just, just the adoption of technology in cities, you can live in a smaller house because you can put on a VR headset and you don't need a home theater anymore, or you can go to a local gym instead of needing a home gym or a library because you don't need a home library, or even like the ADU thing in California, the idea of building more smaller houses on existing plots of land, or any of those factors that you think about? Yeah, so the ADU factor has been great, right, I think is actually spurring a whole bunch

Starting point is 02:57:28 of up zoning. You can actually add more units into existing properties. It changes the calculus even for developers trying to develop new properties. They get to add additional density. And we're also seeing this trend where people are actually OK living in smaller spaces, which also results in us being able to build homes that are more space efficient. But the place that we're also keying off of in right, I think from the practical standpoint of self-driving cars, solving the logistics challenge, well, that is true. We're also noticing a generational shift taking place. If you actually look at buyer sentiment for what zoomers are coming into the market eventually what we expect gen alpha and vision there is a loneliness pandemic they're looking to build more connection and community

Starting point is 02:58:07 and i think their desires are actually vastly different than what was true for the boomers all the way through the millennials and gen virus so i actually think we'll see a migration of people coming back into cities or pockets of communities there are more denser and more connected than what they were for how development took place for the last 20 to 30 years and the only way to be successful in that space is how do you actually embrace scattered side development infill development and not build the 300 unit apartment building people only live there because it's the only choice people don't live there because they want to live with 300 other people who are complete strangers right i think so this is a place where we get to refactor what housing of the future looks like it's not

Starting point is 02:58:44 just the form but just the connection of how it's connected to neighborhoods but the only would unlock that is again you said you said a million homes by 2045 when do you want the first home to be built? Well, we've already built our first home. It's occupied today. So we built our first home about 18. Thank you. Fantastic. I need to get, I need to get one of those buttons here. We'll license you the TVPN air horn every time you guys have completed new home. But congratulations on the progress. It's tremendous. We'll talk to you soon. Have a good day. Cheers. Take care. And our next guest is in the Restream Waiting Room. We will bring them in to the studio.

Starting point is 02:59:28 I believe we have Brian from Layer Zero. Welcome to the stream. Play that sound ball, Jordan. There we go. Look at this background. There we go. How you doing? How are you guys doing?

Starting point is 02:59:41 I'm good. You got the news for us? What's you got? Yeah, I got lots of news. What do we want to go through? Kick us off. What's the biggest news in your world? Biggest news in our world is we just wrapped up

Starting point is 02:59:53 the largest Dow acquisition in history. about a hundred and twenty million dollars uh yeah congratulations okay uh break break that uh break that down for the audit what does that actually mean in practice uh and and kind of what why why did it make sense for for layer zero and um yeah basically to combine these two businesses yeah so i mean there's a little bit of context here that's originally we built layer zero we actually built stargate as well and spun it out and sort is running as this independent entity, and we now have, like, re-folded it back in with this acquisition, right? So it's coming back home. There's been kind of me, the bridge is coming

Starting point is 03:00:34 home finally. So for us, layer zero already today, you know, 86% of all dollars that move across chains happens through layer zero. Largest stable coin in the world is built on us, largest wrapped Bitcoin asset, largest synthetic yield-bearing asset, like, first state issued a dollar with Wyoming. All of this is already there. So we're doing. doing that set of things. You have on the background of Larry Fink saying, listen, every stock, every bond, every asset is going to be tokenized.

Starting point is 03:01:03 So like we're already sitting there. Stargate is the consumer touchpoint, right? Stargate is where the end user facilitates, where we've sat in the background. And so for us, this was just purely a verticalization of the entire stack. It's roll up the whole thing, have a single touch point, single offering to both developers, merchants,

Starting point is 03:01:20 and end consumer and have it in one single place. That's awesome. So breakdown, like, what did the, what did the entity that was Stargate prior to this acquisition, actually? This was... The Dow? Dow was thrown around. I think our audience, some people in our audience are more crypto-native, but many others aren't. And so they may have heard about Dow's back in 2021, 2022, but are less familiar.

Starting point is 03:01:48 Yep. Tao is sort of fascinating idiosyncrasy within crypto itself, right? So Dow is decentralized autonomous organization. We built this protocol. We launched it and then we basically said, hey, governance is going to be left up to all the people who hold the token, right? So there's a bunch of people who hold the token. They have the ability to stake and actively vote on all kinds of things,

Starting point is 03:02:10 how things get priced, how the dollars that the protocol owned, to the protocol had accrued about $95 million worth of, with their assets itself internally, like all kinds of things within it. And it was just running. And naturally, as you can imagine, something that gets run by, you know, 50,000 people as opposed to a small group of very agile, fast-moving entrepreneurs runs very differently, right? And so what's meant is a lot of things are slower than you would like them to.

Starting point is 03:02:38 Innovation is sort of like slow in that side. So, I mean, it was very dominant from a bridge perspective. That's what Stargate does, just move assets around. It's done about $80 billion of assets transferred, so by the largest bridge in the space. But purely on the innovation side and to keep moving forward, much. slower than kind of you would hope. And so the offer from the layers of our side was listen. We're going to basically buy out these SDG,

Starting point is 03:03:03 this governance tokens, STG. We're going to pay a premium on top of what exists. So we're going to pay an offer above kind of what's there. And the Dow gets to vote on whether or not to basically accept this or not. And so we paid again close to about $120 million at current market price. And so what happens is they get rid of their old token. They swap it for this new one. They now have this $120 million, so they're made a whole.

Starting point is 03:03:26 They're invested in the future direction of the new thing. And now universally that stack those assets, everything drives in a single direction. So what was Stargate, what it was accruing value internally, revenue streams internally, now all drive directly to layer zero. How does it on-chain acquisition happen? Is that the largest, like, take private in crypto history? Yeah, largest Dow acquisition ever in history. really like really not uh definitely not common i think might might become more common but definitely very unique yeah yeah are there like lawyers in the room is this all executed on chain is this is this is

Starting point is 03:04:02 everything everything on chain through the dao so it's not like uh you know we don't have an agreement that we can sign with the tao it's it really was an offer so in acquisition is sort of how the industry is uh internalizing it because i like to make sense what it really is is hey the Dow is going to vote to sunset their own token, take this other asset in place of that, and basically migrate the whole system over, and they're getting a premium for doing that. So it looks more like a GitHub PR than a traditional, like, filing from a legal. Has to be one of the most, yeah, one of the most efficient acquisitions from the sell side from a, from a cost and legal standpoint. Check in on the bank. What should we be looking out for in the back half of this?

Starting point is 03:04:47 year, I mean, four months, I guess, at this point, but in terms of assets coming on chain and tokenization broadly. Yep. Yeah, I mean, like right now, what we've become most well-known for and where we sit is stable coins. Almost every, you know, the large majority of stable coins are built on top of us. PayPal, USDT, all of this stuff built, moves through layers of error, right? So stable coins have been a broader butter. That has been the focus of really what we're trying to do is the cleanest and most efficient money technology ever, right? That's really our pitch internally is the way that value moves. And what you're going to see in the coming months, and then accelerating very quickly from

Starting point is 03:05:29 there is, you know, hundreds of tokenized equities, stocks moving on chain, all of this again, moving out of these same rails. So like the layer zero, what makes it so special and what has, you know, we're talking hundreds of billions of dollars of assets moved is you can move today, you know, five million $50 million for, for, you know, cents or low dollars, right, like incredibly efficient to move extremely large amounts of capital around all of these ecosystems. So when you talk Stripe and Coinbase and Robin Hood and Circle, all are launching their own networks, right?

Starting point is 03:06:03 And all of these platforms are racing for tokenization, for issuing equities on chain, again, all of, you know, this entire sort of Larry Fink 2025 mandate of like, this is the way that the world is moving. of those have the ability to talk to each other, right? None of them, there is no way right now that you're going to settle between Coinbase and Robin Hood or that you're going to be able to move these assets to anywhere. So that is where we sit. All of this flow that again has been historical stable coin flows, these hundreds of billions

Starting point is 03:06:32 of dollars of stable coin flows, now you're talking every asset that exists. And so very, we're very directionally focused on that. Fantastic. Incredible. See what you're set up for success. Yeah, come back on again soon. There's going to be a lot more here. here and we should have a longer conversation and congratulations on on the take private the acquisition

Starting point is 03:06:51 whatever we want to call it but uh very cool to we'll talk to life soon have a good day we'd love to thank you guys so much thanks for coming on our next guest is in the restream waiting room let's bring them into the studio i think we got to get the gong ready again rylan what's happening great to see you hey guys good to see you guys sorry to keep you waiting uh give us the news welcome back to the show thank you it doesn't seem that long ago that was on the show but we raised our series a today led by google ventures and davy nekello 50 million dollars 50 boom uh gv's been busy today busy today they haven't they're not taken they're not taking they're not taking august off yeah yeah that's true um incredible uh yeah give it give us the update since uh since the last time you're on

Starting point is 03:07:39 it must have been probably two two three months um i'm also interested i think i'm an investor in this right you are yeah yeah i didn't know you guys have been moving you guys have been moving very quickly you know you never um but uh but yeah what's the update um so we announced our sort of seed round came out of stealth in the spring uh that round was just to get the company going get the team together and start developing some of the key tech for what we're building and we're building and designing autonomous ships for the navy and now with the series a we're actually able as one of our investors said we've left the reservation we actually build a full prototype ship, which will launch next year for the Navy.

Starting point is 03:08:17 So when I say full prototype ship, talking about half a football field and length. So where there's a lot of unmanned service vessel that the Navy is working with today. Some are smaller inform factor, a little of toral. They're great for choke points. But we're building ships that are meant for like the open ocean that can operate all the way across the Pacific.

Starting point is 03:08:34 And they can fit like basically a full shipping container on board, if not multiple. And then so you could put potential weapons system in there. So in half a football field, that is what the ultimate. size will be but you can't be starting it's the it's the Goldilocks so like sure we want to carry payloads that matter for the Navy and so we think about the payloads that today's guided missile destroyers carry you can actually disaggregate them and take one or two of those payloads whether

Starting point is 03:08:58 the radars or the equipment look to hunt for submarines or even missile launchers and put them on these smaller size ships yeah so they're big enough that you can operate across the ocean you can carry the payloads that matter we have the range and endurance for the Pacific but we're not so big that we cost an arm and a leg. And so we're making ships that are tradable. They're reusable so you can send them out and they come back. But if you lose them, it's okay and it's relatively inexpensive compared to like a $2 billion destroyer. Yeah, we talked to Dan Driscoll about the Army Modernization Project. What's going on with the Navy? What does it look like to

Starting point is 03:09:34 sell into the Navy now as opposed to maybe five, ten years ago? I would even talk about a year ago. So a year ago when we started this company, we had a thesis around building the sort of Goldilike's type ship, sort of a medium, Navy would call it the medium unmanned surface vessel. But it wasn't on the shipbuilding plan. There wasn't a ton of money around it, but we thought there was a need. And so we started the company with just a, you know, a small check to start the company. But what's happened is there's actually $2 billion now for this program. And so there's a ton of investment. There's a ton of activity and a ton of attention around the space.

Starting point is 03:10:14 And so right now, it's us and a couple other companies that are with our own dollars building what we think the Navy needs. And there's just an AI that went out. We submitted for it, so we're super excited to see all the progress in the space. How does the Jones Act fit into your business model? Does it affect you?

Starting point is 03:10:28 I've heard of talk to some folks who've said that it's making it difficult for them to source certain pieces if they're building in Europe or something. Obviously, Europe has a long lineage. of shipbuilding, but how does the Jones Act fit into your strategy or benefit you or is it red tape? That's a good question. I don't know who gave that one to you, but that's a little bit spicy. So in a good way, because of the Jones Act, we have mid-tier shipyards either on the West Coast, the East Coast, or the Gulf Coast that actually can build our ship. So we don't need

Starting point is 03:11:01 to start from scratch. We don't need to go find 100 acres of Greenfield and try to go build a shipyard, which to take years to go launch. We'll announce later this year, a partnership with the shipyard so we can actually build and launch our ship next year. And if it weren't for the Jones Act, I'm not sure if that industrial base would be around today. But I think in some ways, we're not as competitive as other countries in shipbuilding. And so because of that, we've had to go source some of our long-lead items from other countries that have a sort of a deeper base around sort of shipbuilding. But we think we can bring shipbuilding back to the U.S., and I think it's not by necessarily trying

Starting point is 03:11:38 to compete directly with countries like China or Japan or South Korea, but it's about out innovating them and sort of taking a lead on the tech side. And so we believe in maritime autonomy, not only for the Navy, but also for the commercial sector. And we think there are a ton of different use cases that are out there. We're already getting comfortable, and you've seen in LA, like, hopping in a Waymo, has zero drivers in the front and just taking that. And sometimes it's a preferred kind of method versus having sort of a manned vehicle that's out there.

Starting point is 03:12:07 can apply that same technology for the maritime industry and we're super excited to do that that's very exciting incredible very exciting thanks so much for taking the time to hop on congrats to the whole team congratulations and uh yeah well uh at some point i i assume we'll do a podcast at sea oh can't wait for that on on one of your ships the next time i'm on i don't want to be a funding announcement i want to like do uh interview from like a shipyard and show you all the cool stuff we're doing that's what people can call in from your phone it's a zoom link so anywhere exactly if you want to see welding and steel and all that cool yeah i want to see sparks flying that'd be great yeah we'll talk to soon congrats have a good day cheers up next we have Logan kilpatrick from google coming in I think I have it right this time

Starting point is 03:12:49 we got a little next up my calendar we're caught up to speak Logan great to see you congratulations give us the news what's the launch is there a number we can associate this so we can ring the gong for looking for any reason to hit the gong number of parameters number of cost per token cost per image or something 0.39, 0.039 cents per image. There we go. There we go. Step back. It contextualizes for us.

Starting point is 03:13:20 Give us the actual news, the actual update. Yeah, super exciting day. So we launched, I think folks are probably seen online this whole nanobanana thread. We should have gotten y'all in banana suits or something for this. Yeah, we launched this new model, state of the art, image generation. editing model. I think what people are losing their mind over is just this character consistency of like how well you can do all of these like prompt-based edits and like transform whatever people have. I've seen all these great examples online already of what people are doing.

Starting point is 03:13:52 So it's awesome to see and it's a model that's available for free for everyone to go and play with and try Gemini app AI Studio. You can vibe code some cool stuff with that. I was working on a TBPN announcement card generator earlier. Oh, that's amazing. We need. need that it's like i'm putting your media team out of work no no no i mean the biggest thing there is speed i mean it's just about the ideas matter that's amazing yeah yeah yeah i love that uh what's the story on the on the research side that unlocked this is this uh new algorithm is it just more scale bigger data center big training run is it some sort of unique advantage to google on the data side like what went into achieving this?

Starting point is 03:14:37 Because I think people are tracking this stuff very closely these days. Yeah, yeah, that's a great question. I think there's three things quickly that I'll mention. I think one of them is there is this interplay between image understanding capabilities and image generation capabilities. And it's actually, I was just talking to the VO team two weeks ago as well. And it's a similar story on video as well, which is like if you have stayed-to-yard video understanding, it tends to be that that actually really helps you when you want to generate

Starting point is 03:15:03 really great videos. And there's a bunch of dimensions of why that's the case. But so I think that's part of it, which is from the ground up Gemini was built to be multimodal. So it's been like the core focus from a modeling perspective for a long time. So I think we've see that now in the generation capabilities. I think another one is like this, this iteration flywheel that we had.

Starting point is 03:15:25 So we initially launched, this was actually before open AI launched the GBT image model. We shipped the first like native LLM. image generation model and got a ton of feedback of things that like didn't work and people were uh you know you know wanted it to be better along a bunch of dimensions and i think so this this launch was a culmination of like looking at and like spending a ton of time with folks in the ecosystem who've been giving us all the feedback of like what would they actually want this model to do in order to build a bunch of like real production use cases and use it to support whatever their work is um so i think that's another angle of this i think the last one is just this like

Starting point is 03:16:03 continued model train that we have, which is like the, there's all of this like infrastructure that's being built in order to make it so that Google can ship models and bring them to the world and have them scale up on day one like we are right now and all this other stuff. So I think the new capabilities of image generation, I think benefits from like this huge amount of momentum and inertia that's happening inside of Google to like get this stuff out the door. So I think it helps. And we see this on like every other model benefits by like how much momentum there is on the core model progress standpoint. I've two follow questions. One is, are you thinking about some sort of Pareto Frontier? Do we need a benchmark for

Starting point is 03:16:49 image generation that then we can comp to put on a beautiful X and Y axis so we can go viral here with cost to quality tradeoffs because I haven't I haven't really seen that pop up we're still in the age of just like there's like the state of the art's great and then everything else I wouldn't want to use and so people aren't really making those tradeoffs but you can imagine that as people start to implement this into business processes if I'm just like oh yeah I'm just generating like an icon and you know like a previous generation model can basically one shot it because I'm not trying to do anything crazy. I want to be very cost conscious versus this super frontier. I'm going to be using this as a poster and VFX and a Hollywood movie. It's got to be the best. And whatever the

Starting point is 03:17:35 cost is, let's do that. Are you starting to think about a paradeo frontier kind of emerging in image generation? Yeah. I mean, we should collaborate in this because I feel like y'all will do a great job on it. So that's maybe an action item. But I think one of the cool takeaways for me on this launch is actually the cost per image didn't change between 2.0 and 2.5. So if you see, I think we released a graph of like the level of progress from 2.0 to 2.5, it was literally like almost like doubled in quality across certain dimensions. The same zero point. It's like the pricing is annoying. It's like four cents. Well, we're going to have to switch to like cost per million images at some point because just like cost per million tokens. If we tried to say cost per token, we'd be in like 0.000 zero. zero.

Starting point is 03:18:21 zero zero zero zero four cents per image four cents per image or 40 dollars for a thousand images that makes it that makes it there we go now we're talking yeah 40 bucks to do yeah yeah I think it's just crazy though there's there's so much that you could build that like you wouldn't have thought about building before at that price point like 40 dollars is like not for a thousand images customized for whatever you want it's like actually not that crazy totally yeah how what was the reaction been from some of your guys's partners on the on the API side in terms of this I mean I'm assuming they got early access and exposure to it because I see a lot of them are already rolling it out to millions of users. Yeah, I think a great example of this and something that I'm super happy about

Starting point is 03:19:00 is OpenRouter, which I'm sure you all have covered some of the stuff. They have a bunch of like actually cool leaderboards that show like their leaderboards are all usage base. So it's like Alex on the show, the CEO. Alex is awesome. He's, he's, he's an incredible founder and entrepreneur. He joined the day that he raised like a hundred million dollars and didn't mention it at all. he's a super low-key dude too it's crazy yeah he's awesome but so we are the first image model that open router has actually ever released and i think there's like a bunch of philosophical reasons why from a platform perspective but i also think it speaks to like the level of quality and the progress that's been made on these models that open router wanted to like actually take the first

Starting point is 03:19:40 step in and have like a model that they felt is like conversational enough for their customers to just like embedded into a bunch of their existing workflows so um i think the reception has been super positive and we need to get like a live type coding segment and show some of the cool stuff that you all can do. There's literally so much. It's incredible to see what people are building already. I want to talk about naming version numbers and all of this. It's good for releases. It's good for showing that there's some sort of binary change that you should pay attention to and actually see the jumping capabilities at the same time. Eventually, this stuff just a uses into everyday workflows and Google has a bunch of products that don't really have version

Starting point is 03:20:24 numbers. Big query just gets better. Google Sheets, I mean, there might be some version numbers under the hood that I'm not aware of, but like for most people, they just open it up and, oh, there's a new feature today, or maybe there's release notes. Are we close to entering that era? Are you, are you going to miss the era of constant name changes? Banana emojis hitting the timeline. There are benefits and there are costs. Like, there are high expectations when there's a new big number, but it also draws a lot of attention. It's a reason to talk because something happened as opposed to just, you know, big query is growing and it's better and it's good and it just keeps getting better. It's less exciting. So how are you thinking about that in terms of like

Starting point is 03:21:02 messaging all of Google's products here? Yeah, I think this is a super fine line to walk. I hear like, I talk to lots of customers who have this feedback, which is like it's there, there's so much exhaustion with the pace of releases and they're keeping up with, you know, something point one, version update and it's just like all this stuff to keep in your head just like please stop making technological progress like we've had enough please i don't think that's not what people this is the challenges it's not i don't think that's actually what people want they just don't want to have to like stay on top of it um so i i do think there's a point at which like this stops being uh the thing that everyone is talking about and there is this like what's the like there's a bunch of good

Starting point is 03:21:42 sayings that i'm sure you both know better than me which is around like the arc of technology and how it like transitions from actually being technology to just being like something that is a part of a product like a car we don't look at as this like science thing anymore it's just this like object that we use to get around and i think i will sort of eventually go on that arc where it's just like diffused into everything that we're doing and we don't think about it and it's it's part of every product experience and therefore you don't look into like all the nuanced details of the small version number but i do love the my takeaway is you need a good mascot I love the nanobanana thing really took off.

Starting point is 03:22:20 And I think if it wasn't something that was like easy to attach to that had an emoji that like all this other, like there's all this like subtle weird marketing lessons that you, I feel like I relearn every time something like this happens. That's great. Talk about jailbreaking bug bounties. Is there some benefit to the flywheel of people trying to jailbreak stuff? It actually helps improve the models. There's some there's some post out there. figured out some jailbreak the chat wants to know but uh i've always thought that the the nature of social media kind of encourages like if you can get the models to do something weird or funky or rude

Starting point is 03:22:57 then it goes viral very naturally and of course there's like the negative like oh this is bad but it's actually pretty helpful but how are you thinking about that side of the world of getting these models out to the world yeah one of the things that we're always trying to like again walk the fine line of is all the like safety parameters so i think i i i already saw a bunch of folks making comments around like what are we over blocking on what are we under blocking on there's the the global legislation on a bunch of the stuff is extremely complicated so I have a bunch of empathy for the teams that have to like think about this more deeply than I do but like it is it's actually not easy there's a lot of open questions it's not easy to

Starting point is 03:23:36 it's super hard especially on I was thinking about like the trademark infringement side because I was like well well I want to be able to use my own trademarks I want to be able to go and generate my own my own de-fakes of myself, but I don't necessarily want everyone else to be able to do that necessarily without it's something. So like, it's such a complicated. We've run into that

Starting point is 03:23:53 trying to generate images of ourselves. Yeah. And it's a, oh, no, you can't do this. And it's like, you've kind of arrived, but now you've got to prove to the model, no, I'm John Coogan. Yeah. I am.

Starting point is 03:24:04 I really am. This is a very, I think this is like a non-trivial problem that, like, will end up getting needed to be solved. So I don't, like, I don't think there's any good experiences to solve this right now. But, you know, to the extreme of this is like the future of you, you orb scan your iris to like IV to the model that like you're really John. And then that's how this sort

Starting point is 03:24:26 of you unlock this capability. That's the extreme version. But yeah. Yeah. Yeah. I mean, yeah, there's a bunch of ways to to make sure that the stuff works. But I mean, also just like like like Google's been particularly good with releasing like the thinking behind the decision making in both like a blog post and a technical paper like Jeff do we cover Jeff Dean talking about the amount of energy and water used by various queries and I just I love that because it was it was written in a way that was accessible to the person that just wanted to see a viral post on X the everything app which is kind of like you know it's a it's a it's a mud fight on there every day and then and then you also the blog post which was like you know a press person could show up there

Starting point is 03:25:10 And there was also the technical paper, so if you're scientists, you could go in there. And it wasn't phrased as like, you know, this counterweight to like all the pieces that have come out saying it's really bad. It was just like, here are the facts in three different tiers of complexity so you can kind of get the answers at whatever level you want. And I thought that was well handled. Anyway, Jordi, anything else? Absolutely. Now, congratulations on the lunch. Always great to see you and have fun out there on the timeline.

Starting point is 03:25:35 Have fun out there on the timeline. Let's go vibe some stuff. I can't believe you think the timeline is a mud fight. I'm like, people in your replies must be horrible. I feel like everyone's very kind in my version of X. But you're always just one, one quote tweet away from getting from war. From war. The timelines and turmoil a lot.

Starting point is 03:25:50 We monitor the situation every day and we see the timeline in turmoil nonstop. Someone puts out a bad take. There's going to be a pile on. They're always, always. But it's a good content. It's good for business. It's good for business. Sure is.

Starting point is 03:26:03 Great to see you, Logan. Thank you. Thank you so much for talk to you soon. And on that note, you got to hop on. We've got to get on with London. With Pyongyang. One sec before. Oh, we have one more thing from producer.

Starting point is 03:26:13 We have a special guest here. We have a special guest. Who is this? Okay, let's bring them in. Moments away, let's bring them in. Okay, who is this? Who's this? This is a surprise.

Starting point is 03:26:23 What's this? What's this for you? This is a joke or something? This is a prank. Are you pranking us? I'm genuinely not prepared for whatever's going to happen. Who's this? Oh, wow.

Starting point is 03:26:36 Oh, wow. No way. What is this? Oh, thank you. Oh, we have a cake in the studio. Come here. No way. That's so cute.

Starting point is 03:26:51 A bottle of Dom. Wow, it's amazing. Thank you. Thank you. Welcome to the show. Amazing. Look at this. Can you say into the microphone, you're watching TBPN?

Starting point is 03:27:05 You're watching TV. Amazing. Well, thank you, folks. Fun show today. Can you say, see you tomorrow, Technology Brothers? Said you, Joe Tomorrow, Technology Brothers. Say See you tomorrow. See you tomorrow. Technology Brothers. See tomorrow. Check tomorrow. There we go. Yeah. Awesome, folks. We will see you tomorrow. Thanks for tuning in. Thanks for tuning in. Goodbye.

TBPN Live - The Experts Weigh in on Intel, Big Family: The Ultimate Status Symbol | Wade Foster, Dan Wang, Nicolas Sharp, Shan Aggarwal, Vikas Enti, Bryan Pellegrino, Logan Kilpatrick, Rylan Hamilton

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