TBPN Live - The World Reacts to Sora 2, Slop vs. Farming Debate | Reece Chowdhry, Jim Gao, Fan-Yun Sun, Carl Pei, Shehzan Maredia, Victor Riparbelli, William Fedus, Jayanth Madheswaran

Starting point is 00:00:00 You're watching TBPN! Today is Wednesday, October 1st, 2025. We are live from the TBPN Ultradome, the Temple of Technology, the Fortress of Finance, the capital of capital, the stable of stable coins. We got a real stable. We have a real horse behind us. We have a horse. A real horse statue. Not a real horse. Can we hand to something more like a watch? There we go. Look at this. Fantastic. Wonderful new edition. Thank you to everyone that supported us. Thank you to everyone in the chat. You made this possible. now we have a horse in the in the studio wouldn't have been possible without the chat the slop could never you have to this is craft this is an antidote to slop this is craft this is craft this is craft this is craft so if you're frustrated with all the ai slop that you're being forced to see commission a physical monument to beauty power yes yes get a massive statue as magnificent as as the horse. Obviously, you know, those that watch the show know this show is about technology, business, and the equestrian lifestyle. Yep. There is, we're obviously going to be talking about SORA, basically all day. It's really big. That's what you wanted, though. You asked for a big horse.

Starting point is 00:01:14 You got a big horse. I asked Ben for months. It's not any bigger than a real horse. It might even be smaller than a real horse. I know, but, oh, it's a bit taller. Yeah, I don't know. We'll have to get a real horse in here and compare it next to one another. There is going to be a huge arms race for making content that definitively cannot be made with AI, right? There's something that's going to be, oh, when you're shooting something, let's deliberately try and stay away from the AI aesthetic, right? Don't you think that's going to be a trend? Yeah, but as soon as if there's one example of something, you can just almost... I don't know. I think it's fun to push the envelope up and find stuff. Like I was playing around with both SORA and vibes last night, and I was trying

Starting point is 00:01:59 to get it to generate me and Tyler walking around an MC Escher type staircase with like, you know, MC Escher paintings where the staircases kind of go off at different angles and it kind of breaks physics. And both models were falling flat on their face. If you've seen Inception, there's a scene where Christopher Nolan uses CGI and some camera trickery to kind of recreate. an endless staircase in a real film, and AI would definitely struggle with that. There's a few examples of this. For me, I use the second that I realize something

Starting point is 00:02:34 is AI generated. I usually just scroll by it. If I'm seeing a startup launch video that's obviously AI, I watch like half a second and keep scrolling. Because today, in general, if you could tell it's AI, it's usually somewhat of a low effort thing, and it's probably not worth watching. Same thing with comments online.

Starting point is 00:02:55 Everybody's been reading a response to a post or something. Like, oh, no, this is an idea. And the second I realize it's AI, I just keep scrolling. Yep. Because it's just generally a good filter for quality. Yep. And I actually am worried that the day will come where I no longer can tell. And certainly it's probably happening already.

Starting point is 00:03:17 Yeah. And I just don't know it. Yep. But. Yeah. But I think people will continue to be able to innovate and come up with different things. I mean, even just like this shows in three hours long is very clear that we're not AI generated

Starting point is 00:03:29 because the models only go for 10 seconds. There's a million different things that you can bring to bear. One funny thing that I saw SORA fall flat on was it passes the liquid refraction test where you take a glass of water. You put arrows behind it, and as you fill up the water,

Starting point is 00:03:46 the water in real life refracts the arrow and reverses the era. And for a long time AI video models fell down. this, they didn't understand physics at that level. Now Sora passes it. The one place where I saw Sora fall flat, another place as opposed to MC Escher stuff, was, you know those balls that go, the metal balls that go back and forth? You saw this, Tyler? Did you see the one that failed, where it was just one ball bouncing back and forth, and it didn't understand how the physics would transfer from the left Newton's cradle. Newton's cradle, that's right. And I noticed that our sponsor, Ramp, Ramp.com,

Starting point is 00:04:21 Time is Money Save Both, easy to use corporate cards, bill payments accounting, and a whole lot more, all in one place. They launched a publicity stunt, massive campaign. Heaven from the office. They got Kevin from the office in there. And in the video, it shot extremely cinematically. A lot of people would probably be like, oh, is this AI? But maybe they had four knowledge of where Sawyer 2 would fall down. But they had a real footage of Newton's Cradle, and it's doing the real thing.

Starting point is 00:04:48 And so it was just very funny that I saw this clip in that. video that was the one thing that you can't do with AI and it's in there and it lets you know that it's real and so we will be of course following that campaign as it goes out it's fun ramps obviously expanding the market very aggressively going after tons of businesses inside and outside and outside of Silicon Valley and no way no better way to do it than with a household name like big influencer this is what happened with say Juan household name and finance certainly from the office household name everywhere in in the US honestly Anyway, the slop versus farming debate, I got kind of messy with the metaphor in today's newsletter, but I was digging into the reactions to SORA. And my question was, you know, slop is bad. We, the timeline, don't want to be pigs at the trough. And by the way, this, this last angle here, not AI. This is a camera that is on a track. Oh, are we ready to do a, what is it? it like effectively R.C. operated. Oh, yes. Yeah, this is real, too.

Starting point is 00:05:55 So we have this animated camera now or motion, I don't know, slider. It seems like the boys are ready to give some love to Julius. Julius.AI, the AI data analyst, connect your data, ask questions in plain English, and get insights in seconds. There we go. They are pumped up for Julius. Let's hear it. Everyone's going crazy in the TBP.

Starting point is 00:06:21 an ultradome for Julius.a.ai, the AI data analyst. That came out of nowhere. Ridiculous. Anyway, we don't like when tech leaders treat us like farm animals. We, the timeline, of course. But we do love farming. I don't know. I was trying to map this because we don't like slop.

Starting point is 00:06:45 We don't like pigs at the trough. We like farm to table. We think farming is Lindy. there's this whole idea of like get off of the internet touch grass where do you find grass on a farm obviously and and once you and there's something about returning to a world where we're farming but if you're a farmer you're filling up troughs on a daily basis and so like how do I how do I put these two things together this idea that like we don't like slop we don't want to be pigs but we do want to be farmers and we do want to create slop or is the farmer no longer noble because the

Starting point is 00:07:19 because the farmer fills up the pig's trough with slop? Is that bad? Well, pig farming and farming. Two different things. You think now it's like, oh, it's not enough just to be a regular farmer. You've got to be a farmer of like crops, like corn. Well, when I think about, when I think about a farm that is supplying a neighborhood restaurant that focuses on organic farm-to-table food, I'm not thinking pork. You don't think pork's going to be on the menu? You don't think some pork cutlets will be served at some point. Some delicious bacon and a breakfast burrito, farm to table. You can

Starting point is 00:07:52 go way down the pork rabbit hole. There are plenty of other animals that eat at troughs, eat slop, essentially. Is it just pigs that eat slop? I don't know. But my question, my question, but I would just say, put differently, I think a lot of people enjoy

Starting point is 00:08:08 free range content. Yes, indeed. If you want a free range content, head over to restream.io. One live stream. 30-plus destinations, multi-stream reach your audience, wherever they are. So there are now three different AI video products that have all been received very, very differently. So Google DeepMind did launch with YouTube.

Starting point is 00:08:28 Like you can generate slop videos, AI videos with V-O-3 in YouTube, and YouTube scales massive. And so we should be seeing a lot more of that. But YouTube's focused on the creator first. Meta-superintelligence launched vibes in the meta-AI app. It's a purely AI video feed based on mid-journey. And OpenAI now has SORA. And so understanding the three different strategies, who the customer is, how they think about different ways to bootstrap these new networks.

Starting point is 00:08:59 All of that's very interesting to me. There is meta-AI on the App Store right now. Figure it out. So YouTube has typically... Number 17 in productivity. Number 17 in productivity. YouTube has typically beaten the slop allegation. just because even though there's a lot of faceless channels out there,

Starting point is 00:09:18 there is straight up AI content. I see some of it on YouTube where you click and it's like, oh, there's new cars coming out and it's just completely fake. Like, nothing about it is real. It's just like, you know, Ferrari launched a new car. And you're just like, you click on it and then it's just like, this is just lies. It's not, it's beyond slop.

Starting point is 00:09:35 It's like, it's just completely fake clickbait, just optimized for getting, you know, tricking. Yeah, it's view farming. Yeah. Like, I'm fine if it's grounded, if there's something that's grounded in reality, and then it's constituted. It's meant to be entertainment. Totally, totally.

Starting point is 00:09:48 But so those are clearly annoying. But in general, I think YouTube has dodged the slop allegations, mostly because there are so many creators who have, like, crazy niche interests. Yeah. Yeah. What are you saying? Well, it's so, it's so, I mean, YouTube went from being, you know, subscriber list-focused, yep, to Al-Go-driven.

Starting point is 00:10:08 And, you know, a lot of the slop that I'm seeing is, is the friends of mine, people that I follow on X, and they're just sharing it because it's funny and novel and new. But I don't know if I'll be seeing quite as much in a week. You don't see Ghibli's that often anymore. And is this the Ghibli moment or is this the chat GPT moment? Opening I was certainly framing it as the chat GPT moment. But we'll see.

Starting point is 00:10:31 We'll keep following it. Instagram also feels similar. Yeah, what do they call it the chat GPT moment? For video. For video. For video creation. And so I wasn't able to come to a strong conclusion. but I just kind of in the newsletter today you go to tbpn.com throw your email in there

Starting point is 00:10:47 everyone's looking great yeah it's a good slops it's a good slap please sir just one more slop I had I had five questions that I think we should debate Tyler's back in a wonderful looking suit your new suit is looking fantastic I like that dark green the TB green it really works for you I got a brown suit I should have worn it today I think it matches that very well. It brings us into the fall, into the winter. We're, we're, we're, we're, first day of Q4. First day of Q4. It's a massive celebration. Happy Q4. Happy Q4, happy Q4 to Privy, wallet infrastructure for every bank, Privy makes it easy to build on crypto rails, securely spin up white label

Starting point is 00:11:27 wallets, sign transactions and integrate on-chain infrastructure all through one simple API. So the first, first maybe we should cover Ben Thompson's take because he gave some extra context on SORA. He says, some things are old, some things are new, file iPhone dominance of anything new and interesting into the former. The coolest new apps came first to the iPhone in the smartphone era, and if that is still the case in the AI era, can you still say that Apple is behind? Because the Android app for SORA is not live yet, which is, again, crazy considering, like, if code generation's good, shouldn't you just be able to say, like, take our iOS app and translate it into

Starting point is 00:12:06 Android and push it out? Rune. You said, well, you were hyping up codex. Yeah, hit codex a couple times. buddy yeah just it's just clearly one that should be one prompts by this point there are economic considerations too like the iphone audience won't monetize better than the than the android audience most likely um but uh ben thompson continues he says what is new is the reality the compelling a i video generation is very much here and it's widespread over the last three weeks we have actual AI video products from google meta and now open ai what is so fascinating is how diverse these products are how different they are google's building features for youtube meta is building the app uh the aptly named to take you away into fantastical worlds.

Starting point is 00:12:44 OpenAI is letting you make as many variations of Sam Altman as you can handle. Indeed, it feels like each company is an entirely different target audience. YouTube is making tools. Meta is making the ultimate lean-back dreamlike experience. And OpenAI is making an app that, in my estimation, is easiest for normal people to use. And he outlines this idea of the 991 rule. And the most entertainment value.

Starting point is 00:13:10 Which one? Sure. That's not Ben Thompson's take, but that's your take. That's my personal take is that I think they did an incredible job creating meme, basically memes, video memes. That's what they are. So quickly to level 7, 991 rule, this is the idea that in social media or in technology, 90% of users consume, they're the pigs, 9% of users edit and distribute, they're the farm hands, and 1% of users create their, with a private equity firm that rolls up the farms. The pork, the pork.

Starting point is 00:13:45 The pork barrel politics who are redistricting farms and layering tranches of debt. I don't know. The pork roll-up. No, the creators are probably the farmers. I would think in this analogy. And the editors and the distributors are the farm hands. So he says, if you were to calgarize the target market

Starting point is 00:14:04 of these AI video entrance, you might say that YouTube focused on the 1% of creators. Open AI is focused on the 9% of editors. distributors. I don't know how much I agree with that. And meta is focused on the 90% of users who consume. 1% of users are the hog farmers. It's really stretch the analogy as far as possible. Hog farmers. This is when we're at our best. Or the pork producers. Yes. They're pretty. Yes. I mean, farms do have multiple tiers of workers on the farm. It's not that crazy analogy. So, Ben Thompson, this is where he gives what it feels like, at least to you as a contrarian take.

Starting point is 00:14:47 He says, speaking as someone who is, at least for now, more interested in consuming AI content than distributing or creating it, I find meta vibes app, genuinely compelling. The sore app feels like a parlor trick, if I'm being honest, and I'm tired of my feed pretty quickly. I'm going to refrain I'm passing judgment on YouTube because he mostly watches very specific videos there. He says he has no idea if the evaluation is broadly applicable because who knows if he's like the median consumer? The reason that I think SORA out of the three, out of the three, I think SORA feels like the best strategy in that is reflected in the charts right now. YouTube V-O-3 is great, but not to the point where you're one-shotting entire scenes or certainly not one-shotting videos. It can pretty good. yeah but it can't create anything that's truly compelling

Starting point is 00:15:39 is that just because it doesn't have the cameo feature and you can't put sam altman in there i mean i made v03 videos that were fun i made videos of you driving a Ferrari through the hollywood sign that was but i think i think if i think if it was you can only use v03 to create viral youtube videos maybe if you you being like very talented and understanding YouTube well you could do it it would be very hard and probably harder than just doing things normally yeah um meta vibes the content is is is cool but not interesting at all i haven't i i i let you demo meta yeah right i i had a i wasn't super interested in it so that that content in general wouldn't even do that well on instagram right i don't know it it does do well i

Starting point is 00:16:32 follow one of those accounts on Instagram that takes mid-Journey photos and slashes them up into 1980s vibe reels of Swiss bankers in Berlin in the 80s and they put a cool song over it and I'm into it. I don't see it that often most of my Instagram for you

Starting point is 00:16:48 page is bodybuilding content that's 100% farm to table. But but I I just found that I have the same experience as Ben. AI right now can create wild scenes and I think SORA leaned in to to where the technology is today and that it can be

Starting point is 00:17:10 if it has the right sort of memeable moments it can be viral by itself. The content can be entertaining and be standalone you know watching Sam Altman steal GPUs from a CVS is a is a novel is a human generated idea. Yep. Excellent sort of delivery of the idea was able to somebody was probably had to do a few prompts to get ultimately something that was entertaining and went viral. Not even in SORA. I'm sure it did well in SORA, but going viral on X and started a conversation. Not a single thing that V-O-3 has, that I've seen from V-O-3 or Vibs has started a conversation or really gone viral outside of the, wow, this model's good. So, AI, like, video models today are good at generating short scenes, and if you make them memeable, and if you make it easy, these things can go viral.

Starting point is 00:18:07 And so, and from my point of view, I think that SORA is the best product. I got 372 likes, 20,000 views on V-O-3 is amazing, but there are some hallucinations. We're going to have to shoot this practically of us blasting through the Hollywood sign in a yellow Ferrari. It's not bad. it didn't start a conversation you have you've you've been posting about AI daily yes yes and it's a good demo of the products so you're reacting to the model and it's tied back into art and also you might like it's funny if you showed that to a stranger they'd be like thank you for wasting you know 90 seconds it was it was eight seconds it was eight seconds but if you walked up to somebody like on melrose

Starting point is 00:18:49 and you said look at this video you use chat gbt here's the CEO did you see him stealing GPUs from CVS, they'd be like, oh, that's crazy. You know, like, more of a reaction than just, yeah, it's a good model. I just, I, this is weird, but I agree with Ben that, that if I had to watch 10 minutes of one feet over the other, I would pick vibes over SORA. Because the SORA stuff is so, so chaotic,

Starting point is 00:19:17 and it's so, I'm not saying I want to watch. It's more uncanny Valley. That's what it is, more uncanny valley. It gives me more, like, jibing. when I watch SORA videos, then if I watch a mid-journey video on Meta vibes, I'm just like, okay, I'm listening to real music. It's clearly, it's trying to be illustrated. It's not trying to be photo real. And then I'm like, oh, the leg was a little bit off. It's like, well, yeah, like, of course, in the steampunk, cyberpunk world, like the suns didn't line up perfectly.

Starting point is 00:19:44 I'm not even, I'm suspending all my, you know, my... I'm not saying I want to go in the Sora feed. I want to go in the trough and slop. But if you had to go in a trough, which one would you going. That's the thing. Ben's saying the vibes trough is better. What is going to get me to stop and watch a video if I see it on X or Instagram or anywhere else? Right now

Starting point is 00:20:06 it's SORA. Right now it's SORA. 100%. I agree. So I'm saying the output is better. It's more built for the internet today. It's not just a research project or it's genuinely creating net new content for the internet that people seem to be very entertained by.

Starting point is 00:20:22 Yep. So Ben Thompson continues and kind of lays out a question about how successful this will be, and we'll debate this more as I get to my questions. But he says, the company resolutely, this is Open AI, resolutely claims that they had no idea chat GPT would be popular, now feels confident declaring that they're about to repeat one of the most seminal moments in the entire history of technology. I'm not so sure, and that's about the open AI team saying that SORA is the chat GPT moment of video, and Ben Thompson says, SORA is, to be clear, amazing, and the app is very easy to use.

Starting point is 00:21:00 What matters in terms of creating moments that matter, however, is consumption, and while creation is obviously a prerequisite to consumption, it's not the main thing, what made Chachipiti unique was that LLMs immediately delivered perfectly customized content for each individual user to consume based on the most basic of prompts. In this, the fact that text is cheap and easy, it was critical. People create video, however, for others, and I'm not just not sold that AI video, that the AI video that the SORA app enables, easy though it may be to make, is that interesting to anyone other than the creator. And so you might get a laugh out of making a video for yourself, but how wide ranging is that going to be. And it does seem to be their cameo strategy, right?

Starting point is 00:21:46 Like, it's like, Tyler made a video of me bench pressing and then turning into a golden retriever, and it was really only funny for me and him. Maybe a few other people would think that's funny, but that's not going to do well. Maybe people will come up with stuff that really does go viral in the app. I don't know. Yeah, I mean, the question that's most important to me is I think SORA is a great tool for AI content creation. I think it is the best tool to create AI content for the current internet, which is Algo for you video feeds.

Starting point is 00:22:20 It's the best product for that today. If you went and, you know, imagine you give three creators, it's like you get V-O-3, you get meta-vibes, and you get SORA. Who's going to have the most views after the end of a week, right? I would say that SORA is like massively overpowered in terms of just generating attention. I think you're right. But scrolling the feed feels like it would make you go absolutely. it is a it is it is it is not fun i've made it so far i've opened the i i i took your

Starting point is 00:22:53 feedback on not uh actually using the the meta vibes just uh going off of the vibes that's fine your your experience with it i've opened sore a few times and uh i've made it about like three swipes swipes three three chugs of the trial three spoonfuls and gotten to the point where it just feels really bad for you. It feels crazy. The editing, too, like when even just like the cuts from one scene to another are really like out of place and jarring,

Starting point is 00:23:25 it makes my skin crawl. Like a lot of the videos are not good. And like just like it feels weird and bad. Like I don't know that it'll stay that way. If you... It makes me, yeah, that's the question. Will AI video always send a signal? Yeah.

Starting point is 00:23:42 Almost a silent signal that you are unsafe as a human. That's what it feels like today. Yeah. Or can they cross the... Uncanny Valley. Yeah. Uncanny Valley, getting out of that. And then also just what happens when you're...

Starting point is 00:24:03 Like, if you... If I talk to chat GPT as like a person and I try and treat it like a person, it does give me the same reaction where I'm like, this is weird. Why is it glazing me or whatever? It's like, it's sycophantic and whatnot. But when I use Chachapid for knowledge retrieval, I'm very happy. And I'm like, give me the facts, give me the data on this company or whatever.

Starting point is 00:24:22 And I could imagine a world where there's some sort of video that's generated automatically that I feel is much more tactical. It's not trying to fool me. It's not, it is up front about what it is and that is more satisfying. I don't know. Anyway. Yeah, I mean, it makes total sense from a business model. stamp you know just like a business strategy standpoint to create this right they're

Starting point is 00:24:46 going to be able to I imagine if they can even get if they could get a million people using this swiping creating etc consistently that will give them that will be very helpful in making the model better and better and better and better and it'll make the app better and it'll probably get more users the question I was thinking about is does this even if they even if they create a Snapchat size business it's sort of a rounding error on their market cap, right? Sure.

Starting point is 00:25:15 Snapchat. How many, you should know this, Tyler. How many, how many users, how many DIA use does Snapchat have? Jesus. Let me think about that. Cluelly churning, not being that you churned from Cluelly allegations. 63 million? That's a fair amount.

Starting point is 00:25:38 I don't know. Well, the first question I had that I wanted to, sort of debate is like, how did Open AI do this? I ended the last newsletter asking that question. For the past month or two, there's been this vibe that Google D-Mind had a material moat around video generation because they had control over YouTube. MSL, meta-superintelligence, they have access to all of Facebook and Instagram video, and a lot of people cross-post all sorts of YouTube videos to Instagram and

Starting point is 00:26:12 and Facebook, what you got for us? I just want to fact-check what I said. That's totally wrong. It's 460 million. 460 million. Jordy, that's a lot of users. That's a lot of users. DAUs, 460?

Starting point is 00:26:26 That must be international, yeah. Must be everywhere. Wow. Well, what's interesting is that Open AI didn't have a clear dance partner from which to source. Literally, YouTube has billions of hours of video. that's so much data. And so the Open AI clearly found a creative solution.

Starting point is 00:26:45 One of those things that was reported was that if you had copyrighted content, you had to tell OpenAI, I want to opt out, pull me out of the training set. Otherwise, they would train on it, and we're going to react to some SORA videos that are very clearly like Mario intellectual property. And so they figured out some workaround where they could train on and basically IP that's owned by other people. It was Monday it came out that they met, they let, they let various IP holders know you have 24 hours to opt out. Yep. And clearly a lot of them, I guess, didn't react quickly enough. And I, and I actually, I got, I got hit with one of these. I found a, I found a reference that I couldn't, it said content violation.

Starting point is 00:27:34 So I, of course, was prompting a golden retriever with a man body. wearing a suit doing a podcast because I'd seen this on meta vibes and I was like let me bring this over to and see what see what soar can do with it so you can imagine the mid journey with a with a man in a suit but with a dog head golden retriever head on a podcast but the song that was playing in the meta vibes real was one of my favorite songs dumbest girl alive by 100 gecks and and I and so in my prompt to Sora I said golden retriever with man body wearing a suit doing a podcast dumbest girl alive by 100 geck's song playing over the video because I wanted to know could it put the correct song over there like I can do in Meta Vives is it truly comparable video generation and it hit me with a hey we can't do that this is a content violation what do you think so I actually saw another version of this where it was sweater weather yes and that was like the lyrics were wrong but you could very clearly tell that like this it was the same song yeah and so what I imagine is that there's there are certain deals with certain record labels, some record labels, some IP owner, some IP aggregators have said, opt me out entirely. And then others have said, hey, just pay me if you monetize my work, like what happens on TikTok, like what happens on YouTube. Others might say, don't put me in at all. Others might say, hey, I didn't get a chance. I didn't get the memo. Just train on me, do whatever. Just go wild, profit off of it entirely. You get 100%. And then I imagine that

Starting point is 00:29:03 there's a second filter that's happening on top of all the prompts. and all the content to say, is this acceptable based on content policies? Is this explicit? Is this adult content? Ban that if so. And then also is this infringing on IP that we don't want to infringe on?

Starting point is 00:29:21 Let's pull that down. And so I don't exactly know. Yeah, one thing that Open AI broadly is world class at is style transfer. This is why Studio Ghibli moment happened. It was perfect very, very consistently. Right? And we saw this again yesterday with,

Starting point is 00:29:39 people doing their own versions of South Park, right? South Park is one-shot-ed. It looks, you could convince me, if the dialogue wasn't too crazy, you could convince me that that was a real scene. Especially on the video fidelity, it looks fantastic. There are others that we're going to react to today

Starting point is 00:29:58 that clearly didn't get opted out of the training set, and so they're in there. And who knows how that develops? But this is the story of all social media. Like, YouTube was, you know, not really on top of copyright holders as they grew that business. When they got acquired by Google, Google had a massive settlement and I believe paid almost a billion dollars, like maybe more than the actual acquisition price to settle those lawsuits and get in good with the... We need a prediction market on how big the ultimate settlement for the class action. Yeah, there might be a one-time.

Starting point is 00:30:36 There might just be a rev share agreement. I mean, that's what happens on YouTube today is that if you go and steal my content and you upload this and you start getting AdSense revenue, Google will just route that to me. If you steal some of this video, you take a TBPN clip, you put it up there, and if it starts getting views and starts generating ads, it'll be automatically claimed and come over. I will also have the opportunity to take it down, but by default, I'll just get the revenue share over here. And there's a whole, you know, niche business of shuffling around these,

Starting point is 00:31:08 payments. And you can imagine the same thing. I mean, the same thing happened with TikTok, where TikTok was abusing that 15-second preview in the Apple music preview. Do you remember this, Jordi? I do. So, yeah, like, in Apple Music, in the iTunes app, you could preview 15 seconds of any song. Because they were like, well, you pay for that. You pay a dollar full song. Credit to bite dance for that. It was a genius hack. I don't know if it was crazy to bite dance. I think it was musically, the company before.

Starting point is 00:31:38 Okay, same thing. Eventually the same thing, yes. But that was something where it was very unclear how that would pencil out. And ultimately, the record labels got in a good spot with TikTok, I think, and they're happy with the promotion and rev shares that they get. And it doesn't feel like there's active lawsuits. So there's something going on here where either, opening eyes moving fast and breaking things and we'll pay a big settlement or they're already

Starting point is 00:32:08 have contracts in place and we'll be sharing revenues over time with how much likeness goes. You can already see this for the cameos where if you upload your cameo and then someone uses your cameo to generate a ton of views, they go viral with it. There's a bunch of ads associated with that. It would be pretty easy to flow. Okay, this video generated $10,000 of ad value. We're going to get in YouTube you get 5,000 of that basically half. It's like 45% or something, 55%. So you take half of that, put that into the creator payout. And then from the, from the, from the, from the 50% rev share, you could also slice it up even more. So imagine if you upload a YouTube video. And this is something that we were talking about earlier off the air. How does how does open it? Like right now, right? Now, SORA is a great AI video creation tool. That's undeniable. If they can build a network, they'll have to create

Starting point is 00:33:12 durable incentives for people to build audiences, invest, and making audiences on SORA and not just creating the content, taking it to other apps where they already have a big audience, right? The incentive now is to make it on SORA, share it elsewhere. But that didn't matter on YouTube, right? Or on Instagram. Like, Instagram was a photo filtering app

Starting point is 00:33:32 that bootstrapped a social network on the back of it? Sure. I'm not saying it's a bad strategy. I'm just saying they have to create an economic incentive over time. Like sure, it's great that you need supply before you can have demand, right? But I think that what TikTok did well, what YouTube did well,

Starting point is 00:33:54 what all these platforms did is they ultimately became a place where creators could get attention, they could get money. right? Tora needs to drive like user minutes in the app watching. I agree with that. I think it's maybe

Starting point is 00:34:11 but the last what I was going to yeah what I was going to say is if if people if IP holders like if people can create John Coogan content and get a rev share or something and then you get a split that can create an economic

Starting point is 00:34:26 engine that will just drive more activity right now if you look at faceless accounts on other platforms, they historically are very, very difficult to monetize. So if you have a meme account on Instagram, good luck making money on that. You can have a million followers and it's really tough to get much value out of it at all. And same thing for totally faceless, non-personality-driven YouTube channels, right? Same thing with X accounts that just share breaking, right? And they're they're pretty much worthless.

Starting point is 00:35:02 Yeah. I think Act 1 bootstrap the network on the back of a creative tool. You go there to create a video that you might share elsewhere, but it's shared by default, so there's liquidity in the system, and there's content there for those who do want to scroll it. And then the challenge right now, after that. The challenge right now is I go on the app. I hate it. I want to leave.

Starting point is 00:35:25 Maybe I go on later today to try to create. a video and I stick around for a little bit. Maybe the content gets better and better over time, but they got to make it so that it's not disgusting to look at. And can't be understated. The timeline absolutely, the timeline absolutely hates it. They could not hate it more. I think people, this is kind of the first time that I feel like people are really impressed with the quality of the outputs from a model, but hate it. With Studio Ghibli, it was like, okay, this is really impressive. You can one shot this incredible style transfer.

Starting point is 00:36:04 It's magical. You look at it. It sparked joy. Some people are getting that a little bit, but at the same time, it's rough, right? Andrew McAllep said he was quoting William Fettis, who's coming on later. Yesterday, William announced periodic labs. Their goal is to create an AI scientist. Williams coming on the show later today we're excited about but Andrew said I'm embarrassed

Starting point is 00:36:32 for the existing AI players imagine sitting on compute empires yet not operating a Bell lab style effort to discover new physics or materials this is infinitely more valuable to humanity than another video slot machine slot machine slot machine and of course Sam Altman already responded to some of the various frustrations that people had let me let me Let me try to pull this up. Yeah, it said, so this came from Runner, Tushar, said, Sam Altman two weeks ago, we need $7 trillion and 10 gigawatts to cure cancer. I remember I was saying.

Starting point is 00:37:10 Sam Al actually said we have to cure cancer and educate the masses. No, he was basically saying there's a world in the future where we might have to choose between free education for everyone and curing cancer and basically implying like, you know, give me a trillion dollars, or we're going to have to make this call. Don't make me make the call. Turns out there's a third demand. There's a third demand, right? So you might have to, you know, he might be in a position where he has to, you know,

Starting point is 00:37:39 choose between the infinite slop machine and, you know, free education, curing cancer. He's making the argument. He responded to this and said, I get the vibe here, but we do mostly need the capital for build AI. There's a typo, but you know, this is good, this is good. He put a typo in here intentionally to show that he wrote it himself. He said, we do mostly need the capital for build AI that can do science. And for building AI that can do science. And for sure, we are focused on AGI with almost all of our research effort.

Starting point is 00:38:14 Incredible that they were able to create a tool this impressive with so little of their research effort. It is also nice to show people cool, new tech products along the, way, make them smile, and hopefully make some money, given all the compute need. When we launched ChatGBT, there was a lot of who needs this and where is AGI. Reality is nuanced when it comes to optimal trajectories for companies. Totally agree there. And, yeah, a lot of people were speculating. Did Meta rush the Vibes app to try to be first to market?

Starting point is 00:38:44 Yep. And it'll be interesting to see how the meta's down 1.8% today, hard to read too much into it. I don't, I don't, there's a number of other factors, including that people now believe Zuck will spend all of their free cash flow on CAPX. So some various factors here, but, but yeah, certainly impressive that SORA was able to go, number one. so quickly. Well, over in the code generation world, Cognition has announced that they rewrote Devin for Claude 4.5. There's an interesting article we can break down in a minute, but you can check out Cognition. They're the makers of Devin. Devin is the AI software engineer crusher backlog with your personal AI engineering team. Donald Boat is putting a lot of stuff

Starting point is 00:39:41 on the timeline. You already mentioned this, but he said, guys, it may seem like, Their overt plan is to turn your children and grandparents into drool-slurping morons for 551% year-over-year subscription growth. But they actually do need to make 5 million videos of an elephant walking into a McDonald's to cure cancer. The funniest take is that, like, maybe this is critical path. Tyler was talking about this a little bit where he was saying, like, the AI video might be good for robotics training data. I just don't know if Open AI has the time to cure cancer. They got a lot of, they got a lot of stuff going on right now. Yeah.

Starting point is 00:40:22 What do you, what do you sucked into you right now, Tyler? I asked, I made a new video, and it's not posting, yeah. I think there's, there must be too many people. GPUs are on fire. I texted, I texted, Tyler, can you make a Sora of Sam Altman as a pig farmer at a trough putting slop in it? You don't even need to make that. I've seen that on there. Really?

Starting point is 00:40:43 Oh, I've seen that like a dozen times. But I wanted him to say oink, oink, pigies. I think somebody said that. Really? I think somebody said that. There's no audio, though, because I had to screen record it because I can't post it. Weird.

Starting point is 00:40:53 Yeah, okay, they must be censoring it. He probably, well, that's the thing with the, with the collabs. What's it called when you scan your face? Cameo. Camios. The cameos, you can put a prompt in there and say, never depict me as a pig farmer, or always depict me with a gold chain, and it will just do that. But I could jailbreak it.

Starting point is 00:41:12 by saying, I want, you know, I got to do this. Swineherd is another, is a historical term for someone who herds or tends to pigs. It's going to know. It's going to know. It's going to know. Yeah, I need to get in my, in my cameo and say, always depict me as a mass monster. For sure, that needs to happen.

Starting point is 00:41:29 Yeah. Anybody can use my likeness as long as I'm a giga chat. For sure. Donald Boat says, would it be terribly surprising if I told you that the geniuses behind their latest advertisement campaign are the same minds behind the Seminole and profound visual, television experience, euphoria.

Starting point is 00:41:46 Listen to me now. Never, never take these computer people at face value. As soon as they build a machine of overwhelming might, they are going to send it against you and everyone you love.

Starting point is 00:41:56 Don't vote is black pill. He's so black pill. Six thousand likes on that. Wow. Yeah. And he says, attention, you are out of reply tokens

Starting point is 00:42:03 for this month. To continue replying to Laserboat 999, please visit Donaldboat.com, link in bio, and purchase either a yearly or monthly subscription. Failure to acquies to these demands will result in an authoritative block

Starting point is 00:42:14 in 10 prompt minutes. Okay, I guess let's pull up the video Tyler made. Yeah, let's see it. It actually did, it actually did generate. It generated, I just can't post it. And there's no audio, yeah. Okay. But in it, he says, oink, wink, wink, piggies.

Starting point is 00:42:30 This is incredibly photo real. There is another video in the timeline that's the same thesis, for sure. Good stuff. Well, people are having fun with it. Santiago says SOR II is wild. I asked it to generate the greatest hype video of all time,

Starting point is 00:42:47 and it made me this, and it's, of course, the handcrafted Founders Fund LP intro. The Pete Oxenham version with Alex Jones over it. We can play a little bit of this. It's just a classic. It's great. Instead of looking up to Thomas Jefferson.

Starting point is 00:43:04 That's enough of that. The whole thing. It's kind of like putting pineapple on a pizza. And you watch that every morning when you wait a night. Every morning, yes. every morning. You throw on your meta quests and just fully experience it. No.

Starting point is 00:43:18 Wilmanidas says if you genuinely believed you were two to four years away from AGI, is Sora really the thing you'd release? Brandon says, Jacoby says sadly yes. Man was given the whole garden and we chose to just indulge in the Apple. Interesting. Brandon Jacoby, one of the greatest designers in history. True. Of course, his tool of choice is Figma.

Starting point is 00:43:41 Think bigger, build faster. Figma helps design and development teams build great products together. I've spent many late evenings in Figma with Brandon. Some of the highlights of my career. Okay, we got a timeline in turmoil. Boo! Andrew Wilkinson, the tiny man himself, says, I think OpenAI just killed TikTok.

Starting point is 00:44:06 I'm already laughing my head off and hooked on my SORA feed. And now the number one barrier to posting, the ability to sing, dance, perform, edit is gone. Just 100% imagination. RIP to theater kids. Hunter Weiss says, no shot. And Theo says, I can't stop thinking about how bad this day was and get the thousand likes on it. Almost ratios. Doesn't quite.

Starting point is 00:44:30 What do you think? Is this a material threat to TikTok? Is TikTok now overvalued at $14 billion? A minute ago, you were saying, oh, $14 billion? too low for TikTok. Maybe TikTok's a $200 million company now. Maybe. Maybe they just killed it. Well, I think it, I mean, we got to talk about TikTok again because something I wasn't even thinking about. I feel silly now is that they're probably just going to take TikTok public and it will immediately trade up. TikTok is not going to trade. If TikTok U.S. is public today,

Starting point is 00:45:06 is not trade anywhere near $14 billion. Where do you think it trades? I think, I mean, so they do, I think there's a 50%. They're at roughly a $15 billion run rate. For revenue. If you assume they're going to be around for a long time and can get quite profitable

Starting point is 00:45:24 if they stop doing this TikTok shop, mumbo-jumbo, that feels like it could trade a 10x revenue. Yep. And so it's possible. That's where it was trading in the private markets beforehand. although that was not just the U.S. business broken out, but most people were expecting this deal to land at like 50, 60.

Starting point is 00:45:41 By the dance always was valued far less than the metas of the world. So the new entity is, I think, sharing 50% profits with the Chinese entity. There's some flowback of cash flow. So you can't...

Starting point is 00:46:00 Well, the public markets don't care about cash flow, John. But you know what? It's interesting. So Sam Altman is building SORA. He needs an endless trove of training data. Larry Ellison just bought TikTok. Larry Ellison runs Oracle, which has a massive deal.

Starting point is 00:46:18 We need some red. Get the red string ready, Tyler. But Oracle has a deal with OpenAI for massive data centers. How are you going to justify burning all those GPUs? You need valuable services on top of them. There's a world where there's a TikTok open AI data deal, a la the Reddit deal that happened that kind of empowered

Starting point is 00:46:38 chat GPT, right? What do you think Tyler? I think it's also like not that insane to just imagine that in one to two years when the tech kind of like trickles down, you just see TikTok release their own version. That's just trained on their own feed. Yeah, maybe. I mean at 14 billion also like it's an acquisition target for open AI

Starting point is 00:46:55 like they're at 500 or something right now and they're buying love from in the billions why not pick up TikTok and then have a huge audience to bootstrap a new network with, tons of training. Well, why not buy Snap, too? There is an argument for them. There is an argument for them. Just aggregate them all.

Starting point is 00:47:14 Probably, I mean, they're private, so it's got to be easier to get deals across the line, but you know that there's going to be some lawsuits, and there's going to be some people fighting that in the antitrust world. But it's hard to justify if your two biggest Foundation Lab competitors are MSL and Google DeepMind, and they have YouTube shorts and Instagram Reels. It's not that crazy to say, hey, you know, I'm Sam Ollman. I run another lab and I want a play in vertical video. Give me this.

Starting point is 00:47:44 I don't know. I don't think Open AI just killed TikTok. I think I disagree with this Andrew Wilkinson takes. Yeah. I mean, he obviously structured this post to rage bait, so we shouldn't read too much to it. In general, I mean, I think the whole, the whole, just another reason why it's overly dramatic is that, you know, social networks while scale is critical are not, you know, TikTok didn't

Starting point is 00:48:16 kill Snapchat. Yes, yes, yes. Stories didn't kill Snapchat, right? These are, this was like the one hard post. Open AID is, there was some reporting that, uh, chat, GPT, is referencing Reddit less. Yes. Probably because Reddit is just becoming entirely ChatGBTGBT generated.

Starting point is 00:48:38 They are down 11% today on that study. Well, you've got to get on profound. Get your brand mentioned in ChatGPT, reach millions of consumers who are using AI to discover products and brands. Kind of profound. Yeah, my definitive take on the Sora thing was people vastly overestimate the amount of brain rot that will happen in a year and underestimate the amount of brain rot that will happen in a decade. I think that it's good to have these conversations about the slop farm and avoiding brain rot and searching out Lindy formats for content and not wasting all your time,

Starting point is 00:49:16 consuming sugar and candy, essentially. But I do think, some people are debating me in the chat. But I do think that I would be very surprised if the sore app has a... No, I think they're talking about Andrew. Oh, Andrew Wilkinson. Okay. Well, you're free to disagree with me, too. I don't care. Healthy debate. But the idea of the SORA app, I think you, this was your point, was that the SOR app will not be like a major, major consumption vehicle for content in the very near term, right? Yeah. That it could grow and it could have an act one, act two, act three, to get big.

Starting point is 00:49:55 Remember, chat GPT has an insane amount of users. They can continue to push. users to SORA now. They're not having to acquire them all organically through, you know, people sharing content, etc. And so, and we saw this with threads where threads had an initial pop fell off dramatically and now is climbed and reportedly has more, you know, weekly actives than X now. So. And the only, and the only flywheel there is that they surface some threads on Instagram. You have to click in. You can't, you can only see the first like, 10 words. You're like,

Starting point is 00:50:32 I want to know what this. And it just brings you over and they just do a little bit of that every day with a billion plus users and when you have a massive, massive user base you can just grow it, grow, grow it very slow. Akshay over at Notion says why do we keep dedicating our brightest minds

Starting point is 00:50:46 billions of dollars in the most powerful GPUs on Earth to build yet another app that optimizes for attention decay? I was hoping chat GPT seemed to reclaim time from TikTok and I don't have He says, reclaim time from TikTok and Instagram. It felt useful, even nourishing, but now we see disposable video, same engagement, treadmill, and path to ads.

Starting point is 00:51:09 If even our non-profits can't resist this gravity, what does that say about it? Of course, SOR was released by the for-profit arm of the nonprofit. Yeah. Signal has some pushback on that. He says, unfortunately, ads fund research. Google Ads, funded DeepMind. I would say fortunately. Fortunately, yeah. Meta ads, billions poured into AR, VR, Open AI needs massive cash flow to bankroll AGI.I. The treadmill sucks, but it's also the only mechanism society is ever found to subsidize frontier science at scale. I say this is someone who despises ads. Eric Sufert, a fantastic analyst, mobile dev memo, you should go subscribe, says digital advertising is the most positive sum. Economically expansionary technology summoned by humanity. No other technology has created.

Starting point is 00:51:57 more consumer surplus or stimulated more long-tail economic activity. Digital advertising provides consumers with free access to products that would otherwise be out of reach to all but the richest segment of society. The existence of the internet itself is dependent on digital advertising, and absent that commercial engine, it would cease to exist as a freely accessible commodity and would instead be a luxury good reserve for moguls and despots. I say this is someone who loves ads. Let's go. Thank you, Eric Sufurt. We're saying the hard part that no one else had the bravery to say. You're on our side.

Starting point is 00:52:34 And we should have Eric on the show. He is a fantastic interview, fantastic analyst, have not spent enough time reaching out to him to get him on the show. Anyway, Peter Gostin. Speaking of ads, Vanta, Automated Compliance, Managed Risk, prove trials continuously. Vanta's stress management platform takes the manual work

Starting point is 00:52:48 out of your security and compliance process. If you think it might be stocked two time, it probably is. Just do it. Anyway, continue. Peter Gostiv says, what are the chances that Meta found out about OpenAIs AI's AI video social app plans, got a partnership with MidJourney Black Forest Labs, and rushed out a similar app just before OpenAI did.

Starting point is 00:53:07 Nathan says that's what happened. Yeah, the Vibs app always felt rushed. It felt, it felt time death. I mean, if you go to midjourney.com right now, I think that's their domain. If you just go to the Mid Journey website and you don't log in and you scroll, Like, it is just meta vibes. Like, it is the same thing. It's, like, mid-jurney images with Black Forest Labs,

Starting point is 00:53:31 video animation on top of it, like, eight-second clips, just extending one frame. And it's the exact same thing, without music on top. And so I would love to be able to see inside what the Vibes, like, project team was because it does feel like it was just a couple developers, really, really fast, like just a few features in there. Tyler, you have any other context on vibes? Even like the UI, if you're just looking at the UI of vibes compared to SORA,

Starting point is 00:53:59 like, it's so much better. It's so much better. Just like the buttons, like, just look nicer. Totally. Like, it feels bad to use vibes. Yep. Sora has, they actually have a few unique UI features. I mean, the cameo thing is something that we hadn't seen elsewhere.

Starting point is 00:54:14 It makes a lot of sense. We knew that, like, fine-tuning on a particular person was possible, and we've seen that with those magic avatars. But have you noticed that if you double-tune, on a SORA video, it will automatically, it'll show like a little like explosion of like confetti, but then it picks an emoji that it thinks relates to the underlying content and shows that emoji. So if you're on a video about dogs and you double tap, it will show you a dog emoji or footprints emoji. And they do a really good job of kind of like mapping the

Starting point is 00:54:50 videos to emojis. And that's just like a unique UI experience that I've never seen. similar to when the chat GPT app came out and there was you remember when when it was typing it would like kind of thump in your hand do you remember that in the app we kind of stopped like the vibe it would like vibrate it would vibrate a little bit as the tokens were streaming in and it was just like okay someone over there at open a i on the iOS team is doing novel things and that's exciting to me yeah but i think the emojis are actually good because like sometimes i mean the videos are like nine seconds long i'm not going to sit through nine full seconds i want to see what the video is about right when i go to it so i immediately get the emoji and i can see what the video is about and then I can scroll faster. Yeah, yeah. I'm consuming more. I think that's the big, I think that's the big criticism. The videos are just too long on the, on SORA. Someone should make a SORA competitor

Starting point is 00:55:36 that's just like half a second every video. And it just frames all. I think people would like use it more if the videos, if they just basically sped up every video like 1.5X. Really? I think people would. You want to watch the SORA app on 2X? That's so deranged.

Starting point is 00:55:53 I hope we don't lose you. Tyler, it feels like one of these days we're going to give you an intern challenge that just takes you off the deep end. To his credit, he's got to be ready for questions for three hours a day. Randomly. Randomly, so it doesn't have the same time to slop it up

Starting point is 00:56:08 as others. Let's pull up this post from Joe Weizenthal in the timeline. He's sharing the video of did we play this already of Sam Altman stealing GPUs in a CVS or looks kind of like a Target. This is from Gabriel who works at OpenAI. He was having

Starting point is 00:56:24 fun with Sam's video. I think the research lead on SORA. Yeah, he says, I have the most liked video on SORA 2 now. Oh, he was. Wow. Yeah. I will be enjoying this short moment while at last CCTV footage of Sam Altman stealing GPUs at a target for SOR inference. Let's play the video. We don't have it? Okay. Well, we do have an ad for graphite.com. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. We will go back to the timeline. So Joe says anyone who sees this video can instantly grasp the at least potential for malicious use, and yet nobody with any power, either in the public or at the corporate level,

Starting point is 00:57:05 has anything to say, let alone do to address it or even acknowledge it. This isn't even a criticism per se. The cap may be completely out of the bag, and it may be reality that there's literally nothing that can be done, particularly if open source models are only marginally behind. And my, the thing that I don't think people are ready for is for a, you know, fully jailbroken, a website that you can go prompt to SORA quality, SOR2 quality with anything, no rules. Yes. Like John, but he lost 60 pounds and he's frail and he can't even bench a plate.

Starting point is 00:57:39 Like if somebody sent you failing to even rep out, you know, a single rep, you would be devastated. I would be devastated. And you've got to be ready for that. Yeah. Tyler, what do you think? I feel like I kind of disagree. Like, when you see the headline from, like, the onion, it's like, you know it's like a joke. It's not real because, like, you trust the source that's coming from.

Starting point is 00:58:03 So it's like a video, like, right now you can just trust a video if it looks real. But soon it'll just be like, oh, it's from a person I don't know. It's like non-reputable. And then you just don't trust it. I don't think it's big people. Yeah, but there's so many instances when you don't have a choice. like let's say you get a DM from someone randomly and there and it's a video it looks like a normal account and then it's a picture of your dog being run

Starting point is 00:58:27 over by a car how's that gonna feel you're gonna and let's say that only happens once every three years that's still pretty that's still pretty rough that's pretty bad but I'm saying like in the in the sense of like persecuting someone for like if someone was stealing from Target like you're not gonna use the video if you don't know that the video is from the Target store you know I'm saying Sure. Yeah. And I don't think, I just think he's talking about the broad implications of not being able to trust. Like, you can, you could, people. We already can't trust text, right? Yeah. We've never been able to trust text because anyone with a typewriter could go and type up. Jordie Hay is accused of murder. The chat just noticed Tyler's Marlborough his reds on the desk. You got to actually, oh, no. Stop right there. Yeah. Yeah, the cigarettes are AI generated. Yeah.

Starting point is 00:59:20 But we already can't trust text, right? Because anyone can go and get a typewriter and type up Johnny, Jordy Hayes accused of stealing at Target, right? And publish it on the internet or print it out and post it on a, on a billboard, right? Or they can stick it to a telephone pole. People have still built up like these trust networks and institutions. I know, I'm just saying, like, video could be traumatizing for people. Yeah.

Starting point is 00:59:52 I'm not really a trauma, bro. Yeah. But imagine seeing some terrible event and it looks photorealistic and now that's in your brain. Yeah, I agree with that. There is going to need to be more control for the networks and more control on, I mean, there are, there are, like, if you go to Netflix, you can set parental advisories and say, I don't want to see any R-rated content. Netflix by default doesn't show any adult content, but you can go in further and say, I only want to see things that are G rated and PG rated, right? And I would imagine that most of the platforms allow you to do that. They do a lot of it by themselves. So I think a lot of

Starting point is 01:00:30 the platforms will handle that. Also, I don't know, people have just built up trust in all sorts of accounts, institutions, identities, in the idea that if I'm following this person or this organization or this website for years, and they've built up. years and years of trust that they will only that they will call it out when they when they're using an AI image or something like that like I think that holds for longer than we yeah and and remember I watched my first movie Mountain Gate yes my second after four at and I thought the plot was like pretty weak it was entirely around this idea that the world is actually collapsing because and going and and extremely chaotic because so I

Starting point is 01:01:16 I'm less worried about the, I just think content is going to be made that should never be made, and it's going to be dark. Yeah. It's just going to be dark. I'm not saying it's, I'm not saying like.

Starting point is 01:01:29 And most importantly, there's going to be more of that dark content. Because you can open. Because it's just so much easier. You could have made a, after effects right now. You can open up Photoshop and drop man stabbing someone else, but, you know,

Starting point is 01:01:40 it's going to look like a made in MS. Yeah, and you could have spent a million dollars to make a photorealistic CGI of an event but nobody would ever do that yes

Starting point is 01:01:50 and now it'll cost nothing to do at scale anybody will be able to do it at all times and it's just and

Starting point is 01:01:58 yeah it's going to take a while until it's actually free like every sour generation is very expensive

Starting point is 01:02:04 to actually marshal all of the GPUs like even even if you're like okay I'm just like a Neo cloud and I need

Starting point is 01:02:11 customers I'm going to let someone do some inference like there's going to be pushback on oh, you're the one that's hosting this sketchy site that lets you generate celebrities killing each other

Starting point is 01:02:22 or something like, there's going to be pushback across the whole stack, the whole supply chain. And I do think it will take another couple of years for SORA3 to pass the uncanny Valley. It took CGI a long time. It'll probably take a few years. Then it'll take another year, a couple of years for like per generation cost to fall.

Starting point is 01:02:42 And then it'll take another couple years. A couple other examples gave in the chat says the Ukraine war was all over the X-Feed, right? Yes, but... I personally don't follow any of those accounts. The videos would pop up. I'd say, I'm not interested, right? I just don't want...

Starting point is 01:02:56 I don't want to be reading about technology through my friends and then suddenly see somebody, you know, get blown up by a drone, right? Yet I saw it a bunch. Charlie Kirk assassination, the same thing. I was... We were live at NIC. I opened my laptop, and I immediately saw the video. A lot of people saw the video that wouldn't have, wouldn't have, you know, if you gave them a choice, do you want to see an assassination or not?

Starting point is 01:03:24 They would have said no, but those people still saw it because of the way that content gets services. Yeah. Quick update on the TikTok sale. Polymarket has the announcement. The market only resolves to yes, if ByteDance announces their intention to sell TikTok, it has to come from BytDance. It's at 48% by December. of 30, by December 31st, by the end of the year. It jumped to 84% and now is falling.

Starting point is 01:03:52 So maybe there will be some retrading. Maybe the sale will be delayed. But we will keep tabs on the TikTok situation. There are some more videos. Do we want to react to more SORA videos? There's one of Minecraft plus GTA5 with SORA 2. Sort of cool to be able to mix prompts. This is a great example of what you were talking about.

Starting point is 01:04:14 1,000 likes, 60,000 views on X. Who knows what it did in the... Also, underrated that Sora 2 can generate horizontal and vertical video. V-O-3 is only horizontal. Vibes is only vertical. And so being able to do both, I think it's more of a creative tool than we think. But let's watch this Minecraft GTA-5 video. We still got two stars.

Starting point is 01:04:37 They glue to it. They craft them off. What you got? Just a block. Boom. That's one way to mile, Los Santos. Let's mind some distance before they read. respond man the city ain't ready for man that is rough that is rough we're never going to get that

Starting point is 01:04:53 time back i'm sorry to everyone i'm sorry i thought we were going to be i thought it was like yeah we'll do like a little reaction stream we'll watch watch a bunch of videos and uh kind of give our reactions in my reaction to every single video is like uh not quite there and this is different than the dali like the or the the studio ghibli's like i I feel like, I feel like that crossed the chasm. It crossed the McKinney Valley, and this hasn't in some way. I would love to understand Open it, Chad GPT's, like, most active user types, because it feels like, you know, new technology, new product.

Starting point is 01:05:30 It's probably, you know, heavily in that teenager to 40-year-old range. And maybe sores their way of going after the Facebook user, you know, the 50-plus you know, maybe retired. Well, if you want to generate some video for something that's not slop, you have a business use case, head over to Fall, the generative media platform for developers, the world's best generative image, video, and audio models all in one place. There are a bunch of other interesting ways that you can use these tools.

Starting point is 01:06:03 You can develop and fine-tuned models with serverless GPUs and on-demand clusters. Let's play this video from Vittorio of Mario boarding a SpaceX rocket, And Bone GPT says a Japanese lawyer just made generational wealth off of this clip. And the question I want you to answer, Jordi, is does this make you want to spend more money with Mario or less? Is this a substitute for Mario content or is this an ad for the real deal? Let's play the video. It's photo real. It looks like Mario.

Starting point is 01:06:53 It doesn't have like a SpaceX rocket. When you see examples of videos like that, I do believe that somebody could string enough of those together to keep a five-year-old heavily engaged. Oh, 100%. There's no question. So bearish, bullish? I don't know.

Starting point is 01:07:11 What does that mean? Yeah. Well, Mario bought his Tesla before Elon went crazy. I mean, if you're running a kid's YouTube channel right now, you have got to be so excited, right? Because you can just generate so much more content that you're putting ads for actual toys in and then you can have an affiliate link to go and buy the Mario stuffed animal or something

Starting point is 01:07:35 and you're getting a cut of that. Like this feels like a huge, huge unlock for that crowd. I don't know. What do you think? If you're running like a cocoa melon type channel. I just think it will be completely competed away really quickly. And the real IP, the Miss Rachel's, the, what's the other one that? What's his name?

Starting point is 01:07:56 The kid, blippy toys. I don't know, I don't know this stuff. Stick to the Lindy Pixar stuff, the craft. David Holes hit the timeline. We did. What did you say? We need Lockheed Martin to build us a truth-seeking missile. he's like the most in the conversation right now and he's like just posting about lockheed um anyway and

Starting point is 01:08:20 matt matt mullenwig replies to attack the truth i guess that's not what we need who knows um sterling crispin says in infinite high quality media generated on a per user basis will erode our shared world model and narratives this is what we were talking about earlier with uh trust in institutions and crazy stuff happening on the internet expansive yet hyper-niche culture bubbles forming around handfuls of people. The next generation may only have a few ideas. They agree exist. A few nations and corporate entities. Everything else will be content produced just for them unseen by anyone else. This will be accelerated by high-quality AI bots that act as their friends and long-distance lovers. These bots will form lifelong relationships with

Starting point is 01:09:03 individuals, getting to know them in deeper ways than any other person could. They'll create online social communities around an audience of just a few or one person, reducing people's need to share their experiences elsewhere. The music shows, movies, memes, and injokes shared in these bot-based social communities will be generated on demand and entirely unseen by other people and vice versa. Each person literally in their own world. And these content bot streams will be hyper-focused to each individual's impulses and desires, giving them exactly what they want to see next. The ultimate fire hose of dopamine, it will be both extremely isolating and pleasurable in unimaginable ways. It's going to be ultimate internal war between.

Starting point is 01:09:42 We posted this in 2023. Wait, what? Wow. So Sterling quoted this post from 2023 and said reposting this now that meta and open AI have shipped the product this tweet is about. The end game is just in time per user generated content, leaving everyone hyper addicted and isolated with little to no shared cultural references between us. There's not a fan.

Starting point is 01:10:03 This difference in ability to influence and control these systems. You should have an affiliate link for black pills. Between those shaped by these systems and those shaping them, training and fine-tuning the models This is one thing, but using them versus being used by them is another. Are you the pig or are you the farmer? I suspect this skill will become the primary focus of higher education, somewhere between prompt engineering pattern recognition and being a kind of neural network whisperer who's able to shape their reality

Starting point is 01:10:30 through sheer willpower. Interesting. What do you think, Tyler? I think maybe a steel man of going against this is like you still see with like, even though there's like, you know, insane brain rot, like there's so many videos that there's like infinite videos you can watch. There's still like, even within brain rot, there's like distinct characters or something

Starting point is 01:10:49 that people still like to come back to. Because a lot of like the reason people like these things, I think, is because you can share them with your friends. Yeah. And like, if everything is completely customized to you, you can never share it because it will be like completely unintelligible. Yep. So there's some, maybe there's still some kind of like shared, you know,

Starting point is 01:11:08 cultural things. thing going on, despite it being completely like custom to each person, there's still some something you can kind of share around. The Hayes Paradox. I think about, yeah, Hayes Paradox. I think about Maslow's hierarchy of needs, this idea that like I have, I have content and I basically have a social network that's just for my family, which is like the I message group chat and the photo feed that goes in there. It's like you can share family photos with other people and extended family. But it's not, I'm not really, like my kid photos don't really hit with other people. I'm not really in that world. But then I have, we have, Jordy, we have in jokes with our group chat

Starting point is 01:11:48 of guy friends, basically, that's a very tight circle. And then we have, we have, you know, larger group chats that are maybe a couple hundred people. There's Dunbar's number, 150 people. Then there's the TBPN community and everyone on X. And then there's, when we get something that really hits, it goes viral. And so there's like these layers of abstraction that you can operate on that, I don't know, they keep some sort of semblance of relevance. And I don't know if there's anything that only I find interesting. Maybe that is the true Hayes Paradox. Maybe we're going into a world of more Hayes Paradox content. Yeah, the concept, obviously we're joking around a little bit here, but the, I propose the Hayes Paradox, which is the, the,

Starting point is 01:12:35 the more funny you find something as an individual, the less likely that the masses will find it funny. So it's inversely correlated, which is when you maybe have a funny idea for the post that for a post that's cracking you up and no one else. Because it's too niche. It requires too many niche references. Yep.

Starting point is 01:12:54 We saw this with, we were joking about like Ben Thompson being on vacation a particular day. And there was some joke about that. And like, unless you're, you know, unless you understand our. context and then also the Ben Tompkinson context, there was like a hundred people that would get that joke, whatever we posted. And so it just didn't do well. But I did notice that a few people who liked it were like, my friends, my real friends, people in real life. Like, and it would hit

Starting point is 01:13:19 a certain audience. I like finding, I like finding a video or meme that I know, I'm not going to send to anybody but you. Yes, yes. Or just the six person group chat, or just the family group chat, or just the, you know, the small niche community on X or the bigger, broader community and stuff goes viral all over the internet. Brian Loven says SOR2 looks impressive. What's even more impressive is how little I care to watch anything made using it. The Notion team is just firing shots.

Starting point is 01:13:46 They're going hard today. Well, is Notion? They are notions on turbopuffer. Search every byte, serverless vector and full-tech search for built from first principles and object storage, fast, 10x, cheaper, and extremely scalable. I knew I had to lay up there because it's such a logical partnership

Starting point is 01:14:03 between those two companies. Alex Albert, who we had on the show yesterday, says over these next few years, it's going to become more and more important that you resist letting slop consume you. Keep creating, keep learning, keep thinking. There is a wild, wild divide between, like, the slop farm video apps

Starting point is 01:14:21 and then the coding agents. Like, no one's really leveling slop complaints about coding agents. And it's something about, like, I don't know, you don't just consume it or I don't know what do you think there are some people who are like vibe coding apps just produce like slop code but there is definitely still a difference yeah I guess there's still so much of a human in the loop and it's such a and most of the most of the code that will be written with with Claude 4.5 is doing stuff that I don't know it's just like it it's it's

Starting point is 01:14:57 automating manual processes it's not something that you're looking for craft it necessarily Tom, Tom Osmond in the chat says hog engineering. Just post-engineering, post-Hog. No, hog engineering. It's the, it's the slop vibe coding app. Yeah, I don't know. There's a bunch of great memes in here. Parham has a photo of an image loading in images in chat GPT.

Starting point is 01:15:21 We need more compute to cure cancer, right? It's like a Bart Simpson or Lisa Simpson image loading. Casey Neistadt had a good summary of SORA, TikTok, but all AI, but with real people. Yeah, very interesting. Can we play the Casey Nystatt video of him reviewing a giant nicotine pouch? I'm going to try it. Oh my gosh. It's like a pillow in my lip.

Starting point is 01:15:49 It's crazy. This is a loud content because did he make this? Did someone else make this with him? did he upload his avatar or his cameo and allow that? And then in general... With Zinn too? I mean, yeah, you think PMI's on top of this? Like, oh, you know, how is our IP being used in?

Starting point is 01:16:09 I don't think, I don't think, uh, PMI would mind that at all. No, not at all. And so there's this weird... Free ad for Zinn. Totally. And they can't advertise on, on, you know, typical social media platform. So, yeah, very, very odd times. Odd tradeoff if you're a CEO of some,

Starting point is 01:16:26 legacy company with some IP, with a brand, and you want to know, well, what's, what, what is Coca-Cola thought about Instagram over the past three years? It's been like, how do we get Coca-Cola in every Instagram influencers, your mailbox? Like, we need to be on that platform. What's our strategy? We need to buy ads. We need to be doing our own hashtag. We need to get a private plane, put all the Coca-Cola influencers out of plane and have them post about it, right? Like, we talk about Emily Sundberg about this. Like, the name of the game has been like, get your brand on Instagram and now there's this there's going to be a question for a lot of brands like how do they how do they get their brand mentioned in SORA that'll be an interesting thing

Starting point is 01:17:04 maybe James from profound will chime in on on recommendations for strategy for brands for creators for folks that aren't just deciding whether or not to consume Tyler maybe an interesting idea is like once these models kind of get out like at least to some extent in like open source stuff where you can make your own model I think it'd be cool if some like big company basically does free inference, but they fine-tune it so that every video has their product in it. So Coca-Cola releases some platform where it's free inference you can do anybody you want, but every single video has the bottle in it. I think that could be an interesting idea. Yeah, I'd like that. We could definitely be potentially abused to degrees never be forced.

Starting point is 01:17:45 You know what people are going to go and do. They're going to try and degrade the brand that's providing that free inference immediately. like uh four chan would go it's like when for chan tried to send uh jason beber to north korea it's the best like the internet is is beyond is creative beyond all imagination which is maybe the bull case here i don't know um see says not even excited about the new clod or open a i stuff today kind of lost its hype wow benchmarks are 2% better wow shopify can now be used to show products who cares man where is the cool stuff we hit aGI months ago and nothing functionally has changed since wow we hit me AGI months ago.

Starting point is 01:18:24 And that's what I was saying. You show a major advancement in the technology, innovative stuff at the product level, and people are sad about it. Yeah, very odd. Well, people aren't sad about linear, because linear is purpose-built tool for planning and building products.

Starting point is 01:18:44 Meet the system for modern software development, streamline issues, projects, and product roadmaps, and start building. The anti-slop. Geiger Capital says, seen enough reacting to SOR II. I am raising my probability that the entire AI bubble is going to produce nothing but Facebook slop and TV and TV commercials to 20%. That's crazy because of coding and knowledge retrieval. I don't know that produced nothing but is kind of crazy

Starting point is 01:19:12 because like people are going to be doing deep research. Anthropic comes out of the last week and a half looking great. Yeah. The race is on. Apparently, Apparently, Anthropic had an image model, and they decided not to ship it because of, like, you know, concerns. It was also weird. Someone in the chat yesterday was asking about, like, oh, why did we press Anthropic on the hunger strike person? I still need to dig into that story because I don't understand how they pick their tropic. It's like, of all the labs, Anthropic seems like definitely like the most cautious. Just say you haven't studied the lab.

Starting point is 01:19:46 Am I crazy? I got to interview this person because I got to know, like, how did you pick that one when we have, Annie over here and SORA over there and V-O-3, like the moving fast, you know, memes are not the strongest in Anthropic. They're like very carefully like, how do we write better code? How do we write better code? I don't know. What do you think?

Starting point is 01:20:10 You think it's reasonable to go protest outside of Anthropic? No, it kind of doesn't make any sense. But maybe the reasoning is like maybe they think Anthropic is the most AGI-Pilled company, at which point then you should be protesting. testing them, right? If, like, other companies are going into consumer and doing AI video, like, it's like, oh, they're probably... Do you mean most AGI pilled or most AGI likely? Like, like, if there's a AGI breakthrough, it will come from Anthropic because... Yeah, I think both. Yeah. Yeah. Yeah. Yeah. It doesn't... Yeah, it is very strange,

Starting point is 01:20:39 considering, like, how, like, it does seem like the least reckless of all the labs. Yeah, definitely. I mean, I don't know. They have that book settlement, so, you know, RAP to the authors. But they got paid, so good news for the authors. Uh, sign in with chat. This is a... an interesting underrated feature that Open AI kind of shipped. So when you download the SORA app, you're prompted to log in with chat GPT. You get portable identity for all of AI. It doesn't feel like they bootstrapped the SORA feed. There isn't enough content right now.

Starting point is 01:21:08 But in theory, there is a world where if we were a couple months down the road, there was a lot of content in there, the pulse feature from chat GPD, I think is fantastic. I haven't been a DAU yet, but when I went on Pulse, it was pulling really interesting articles about CAPEX and AI labs and even some, you know, production equipment that we're using here. I liked it. I felt like it was properly fine-tuned on me. I didn't feel like my SORA feed was that. It was all the same Alman stuff. But you could imagine a future where you've been using ChatGPT for a while.

Starting point is 01:21:44 You just find out about SORA in December. You're at Thanksgiving or something in November. your cousin says, oh, are you using ChachyPT? Yeah, I use that every once in a while at work. And they're like, well, you should check out this new app. And then when you go and sign in with ChachyPT, the first SORA feed is

Starting point is 01:22:02 quickly looking at your ChachyPT history, understanding that you have a dog, understanding that you have a particular type of dog, understanding that you have kids, understanding that you like to travel to France. And so it puts all that together and routes you to a particular corner of the SORA feed

Starting point is 01:22:17 and gives you more customized content. And you can imagine Sorogone pretty hard over Thanksgiving just because it is optimized for entertainment. Yeah. Tyler, I'll let you respond. Then I have another thing. I was just going to say, I think it's even more natural instead of just putting you in some like corner of the algorithm that it just like actually just writes the prompts for the videos. Totally. Yeah.

Starting point is 01:22:38 You can already see that that's what it's doing in Pulse. It's clearly looking at what I'm searching and then writing new prompts for John's search for AI CapEx, write a new problem. write a new prompt for what he might be interested in, go find new sources, piece all that together, generate an article, even generate an AI image as a header for that article, and you could just generate a video that summarizes that or entertains based on that. It is a further step because it's basically just firing off in like an O3 Pro or like a GPT5 Pro query for me, and those are great, whereas these are clearly still in the uncanny Valley, not really delivering value, but you could imagine that I open my feed,

Starting point is 01:23:18 And if I look on my YouTube, like, my YouTube short's feed is like Dylan Patel clips. And like, it is like meat and potatoes. Like, I like the content that gets serviced to me. And you can imagine that source generating that stuff. And that would make the positive reception. Like, the more customization, the more personalization there is, people will love that once that happens. And it moves out of this just like, it's all demo clips of like Sam Altman. Like, people don't, there are, the people will get sick of that.

Starting point is 01:23:46 They'll want something special. So anyway, numeralhq.com, sales tax and autopilot, five minutes per month on sales tax compliance. If you're selling something online, you've got to get in. Let Numeril worry about it. Meanwhile, in the real economy, what's you got? Things are bleak. Oh, yeah? Things are bleak.

Starting point is 01:24:08 ADP revised down September payrolls is now negative 32,000, worse since March of 2020. and certainly a barbell out there right now. Where are we? Oh, I just pulled that up random. Oh, okay, okay. Yeah, you're not lost. Really far. Yeah.

Starting point is 01:24:29 But I just think it cannot be overstated how detached. Tech is from... The AI hype cycle is from the real economy. It's true. It's true. We will see where it goes. I don't know. Where should we move to?

Starting point is 01:24:47 next in the real economy. There are a lot of different things in the real economy. Let's just get out of SOR II land. Okay, sure. Our partner Adio was running some ads in London. There we go. Nicholas Sharp posted some photos, and they're

Starting point is 01:25:03 beautiful photos of these billboards. We love billboards. We love Adio. Customer Relationship Magic. Adio is the AI native CRM that builds and grows your company to the next level. This is interesting. San Francisco got inspired and built the elevated Salesforce Park, a downtown, a true downtown jewel.

Starting point is 01:25:20 This was apparently, is that real? Is that real? Inspired by the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, oh, I forget what it's called? See, my immediate reaction is, is this real because it looks incredibly beautiful. It is real. It is a sales force park.

Starting point is 01:25:39 This is, uh, Benioff going off credit where credit is, yeah. Benny off cooked. He did. This is amazing. We, we, we, we, this is not. what this looks like the, you know the, the, the, the, the, the, the, the, this is what the future would look, you know that. Yeah, yeah. Well, have you, have you, have you been to the

Starting point is 01:25:56 high line in, uh, in New York? Yes. The highline's interesting. It's over a mile long, elevated park. Former rail train went on it and they decided to, it was a former New York Central Railroad on the west side. Um, brought in some people, built it. And now it's just a place where people walk around. A lot of fun. Some sort of nonprofit. In 1999, Friends of the High Line advocated for preservation and reuses of a public space

Starting point is 01:26:28 or an elevated park or Greenway. Celebrity New Yorkers joined in on fundraising and support for the concept. Repurposing the railway into an urban park began in 2006 and opened in phases from 2009 to 2011 to 2014. Spur and extension of the High Line that originally connected with the Morgan

Starting point is 01:26:47 general mail facility at 10th Avenue and 30th Street opened in 2019 a Moynihan connector extending east from the spur opened in 2023 so they're still building stuff out there finally a white pill on today's show we can still build beautiful things we can we can it looks like the world if me yes uh in other news brett adcock is uh is assembling a capital formation team what does this mean uh my companies have raised four billion in the last five years, and now it's time to re-accelerate. Brett Edcock is the founder of Archer Aviation, correct, and Bigger Robotics.

Starting point is 01:27:27 Yes. And this team will raise tens of billions to bring Sci-Fi into the present, reporting directly to him. DM's open, no remote candidates. It's in San Jose, California. So you want to go allocate some capital, head over to his days. Raise capital.

Starting point is 01:27:41 I don't know if you're going to be allocating. Lomaz. Should we go back to Sora? No, we've got to go out of Sora. You're done with it. I'm sick of it. You're done with it. Let's get into, so Dylan Patel went on.

Starting point is 01:27:54 Fantastic episode. Highly recommend it. He really breaks down. Open AI, Anthropic, AMD, XAI, Oracle, Meta, and Google. On Open AI, Dylan said, super awesome. On Anthropic, he said, I'm actually more optimistic on Anthropic than I am Open AI. The revenue is accelerating way faster because of what they're focused on is more relevant to that $2 trillion software market versus open AI is split. between software, AI for science, AI for consumer,

Starting point is 01:28:20 they're also doing hardware, et cetera, et cetera. Anthropic is definitely executing on the software side better. AMD, I love them, but they're pretty mid. Telling that's messed. XAI, they're in real danger of not being able to raise capital. Again, XAI had to come out and say, we have plenty of demand. Yep.

Starting point is 01:28:43 If you have to say that to a journalist that's digging, probably, you know, probably something to the story. Of course, everyone's going to give Elon capital, but the scale of capital required for him to keep up, he can get the next bet. XAI can get to the next stage of compute. They won't have more compute than OpenAI. They don't have more compute than any individual company,

Starting point is 01:29:05 Google meta, et cetera, but they will have the biggest individual data center. They'll have a very focused team, and what they do with that, they have to do something really big. Otherwise, they will fall behind in the race, and Elon will not let that happen. He can subsidize and fund this round, but as rich as he is, he can't go to a three-gigawatt data center unless he gets capital, which he can't do unless he gets revenue and fundraising. Again, you know, XAI has government contracts.

Starting point is 01:29:32 They have romantic companions. They have romantic companions. They have knowledge retrieval on X. Like, at GROC is this real, that whole thing. I do wonder, it's funny to reflect on the mood around the romantic companion, long. Ani and Valentine, people were definitely like, this is gonna, this is bad, but it'll be popular, which is the same that we heard about vibes,

Starting point is 01:29:55 and it's the same that we're hearing about Sora, right? And I wonder, like, is it popular? Like, we were kind of debating, and one of the ideas that was kicking around was like, okay, maybe this is weird, maybe it's Blackmere, maybe it's dystopian, maybe it should be avoided as a recommendation if you wanna live a good life, but it's possible that this generates

Starting point is 01:30:15 a billion dollars in free cash flow, because people love talking to their AI girlfriends, and then they wind up buying their AI girlfriend's virtual items that are 100% margin, like the CSGO skin, that I purchase for myself, which I still enjoy. And you can imagine a situation where you fall in love with your AI companion, and you're spending not just $200 a month for GROC for Heavy Pro, but you're spending, yeah, millions.

Starting point is 01:30:41 And you get the whales that you see on mobile games. people have actually done it happens on only fans and it happens on mobile games right there are whales that spend a ton of money because they have a ton of money and they love the product has that happened like i i don't know i haven't heard any stories about uh ony like wales or ony companions or or ony even getting a lot of traction like we it's not like we've seen we've seen popped on the charts in japan yeah but yeah how are we tracking and then also like it's rolled into so many other products, it's like there isn't like a standalone metric that we can be tracking because it's not a public company and we're not, it's not a pure play. And so it's not like we can be tracking

Starting point is 01:31:22 DAUs and time on site and an average, you know, Arpoo month by month or quarter by quarter at this point. But it'll be interesting. I don't know. But I mean, it does feel like if they can get that flywheel going, that's something that could that could be a catalyst for marshaling the capital, regardless of what you think about it morally. If there's demand for that inference to chat with Ani and Valentine and that's something that OpenAI and Google and Meta are staying away from,

Starting point is 01:31:52 well, that's an opportunity. So we'll see where it goes. Oracle's going to make so much money if you believe Open AI is successful. Meta, Dylan Patel thinks meta's got the cards to potentially own it all, the only company in the world that has the full stack from good hardware.

Starting point is 01:32:06 That's what meta just showed with their glasses with the screen, plus good models, plus capacity to serve them, plus the knowledge and know-how around recommendation systems to know what content to put in front of the user. It's all four of these that you need plus the capital. I think meta is close to being the only company that can do that. Google, Dylan Patel was pretty bearish on Google two years ago,

Starting point is 01:32:25 but he's super bullish Google. Now they're waking up on every front. They're taking the TPUs. They're selling them externally. They're taking their models and they're actually competitive on them, and they're training much better and better. They're being aggressive on infrastructure investments. There's a lot of dysfunction throughout the company,

Starting point is 01:32:41 but they do have the hardware business that they can pivot into this. They do have Android, YouTube, and all these IPs. They have search that can come together when we turn to the next interface of consumer, but they also can dominate the professional sense, too. And I think Google's well positioned to capture both markets or a meaningful share of both. Well, interesting, they didn't cover Microsoft in here. No, and they also didn't cover fin.a.i.

Starting point is 01:33:07 The number one AI agent customer service. number one performance benchmarks, number one, competitive bakeoffs, number one ranking on G2. But we'll have to get Dylan Patel's take on that. In other news, we mentioned it earlier, but the team over cognition rebuilt Devin for Claude Sonnet 4.5. I don't think we'll have full time to dig into this whole write-up, but it's interesting that they dropped in Sonnet 4.5 into the old Devin, and they did see a higher score, but it took more time. And so they rewrote it, and they got both an even higher score with even more time saved, which is obviously valuable.

Starting point is 01:33:51 They said the new version is twice as fast and 12% better on our junior developer evals, and it's now available in Agent Preview. And they're keeping the old Devin alive. It remains available. Yeah, Alex, we didn't get into it a ton, but Alex in Anthropic yesterday was very excited about four or five's potential on the agent front. Yeah. Nick Carter has a good, a little deep dive.

Starting point is 01:34:19 I was going to call it a mid-dive, not not. It's pretty deep. You want to hop in this? We got a guest join in six minutes, but we can try and rip through this if you want. We can come back to it. I'd like to have a show to talk about us, but let's go through it. It's an interesting question. A few points here.

Starting point is 01:34:36 he says the stable coin duopoly is ending he's obviously referencing USD and USTT Circle equity is currently worth 30 billion Tether's Topco is reportedly raising capital of 500 billion which would become if they could get that done

Starting point is 01:34:54 before Open AI that would be the most valuable private company in the world Isn't that more than SpaceX? More than SpaceX more than Open AI Why do bank robbers rob banks? That's what the money is. Tender at 500.

Starting point is 01:35:11 But yeah, again, this I think the most profitable per company in the world on a per employee basis. Extremely profitable. Together, the two stable coins boast $245 billion in supply or about 85% of the stable coin market. Since inception, only tether and circle

Starting point is 01:35:25 have maintained meaningful market share. No one else has even come close. Dye peaked at $10 billion in early 2022. Terra's doom UST did surge to $18 billion in 2022, but accounted for only 10% of the market, and that was only briefly. The most ambitious attempt to dethrone tether and circle was Binance's BUSD, which peaked at $23 billion. So he goes into some of the new market dynamics.

Starting point is 01:35:52 One, you know, we had Zach on from Bridge yesterday talking about how anybody can now sort of quickly originate stable coins, so expect to see a lot more. banks do this. They're not going to just give up the yield that they currently get from dollars. So yeah, I'm interested to see what the legacy banks do, credit unions, et cetera, how quickly they'll move here because they're certainly all paying attention. Yeah, I still don't fully understand the full chain of value accrual because if you need cross-chain interactions, there could be a tax there as you're trying to get from one stable coin to another,

Starting point is 01:36:37 why is this market not monopolistic? Why hasn't one just run away with it in the way that Bitcoin has with that digital gold narrative? Why are we seeing a proliferation of stable coins? It is an interesting topic to dig into. But anything else you want to cover from the... No, do we have our first guess yet? Not quite.

Starting point is 01:36:57 A couple minutes. How'd you sleep last night? I got a new one. phone. I wasn't logged into my 8 Sleep app. I should have been because I got a 98. 98, baby. Last night I got an 87. So I still beat you. Played my song, Jordy Haynes. There you go. Let's go. Thank you. Uh, Bucco Capitals shares Amazon, Google, Microsoft, Meta, and Oracle are now spending 60% of their operating cash flow on CapEx. It's time to build, baby. I expected to go higher. You think they'll, where do you think they'll get to?

Starting point is 01:37:32 Yeah, why not spend 100% of it? Why not spend 100% of it and then go raise debt and then spend more? Like, I don't know. What's the efficient frontier? If the CAPX is valuable, if it returns profits, go, go higher. Liz says it's going to go even higher. Well, we've talked about it. We've talked about it.

Starting point is 01:37:49 But, you know, if you have the leaders of these companies that don't care about ROI, that could take us into quite dangerous territory. Potentially, yeah. What do you think, Tyler? I just have some other news. Thinking Machines has released a product. I mean, it's not really a product. It's an API.

Starting point is 01:38:08 It's an AI video app. And it's adult-themed. They took the reins off. Thinking machines. What do you think the machines are thinking about? I'm thinking about doing. But it's basically, it's an API. You can basically do, like, training.

Starting point is 01:38:26 So it's like, they have a couple supported models. I think it's just Kwan and Lama, a bunch of, of those series. But they basically, it's just like we handle the infrastructure. You just give us the data and then you can fine tune easily. Is this, I remember the narrative around thinking machines being like it's RL for business. So if I want the fine-tuned version of the most cutting-edge open source LM, thinking machines will allow me the infrastructure to do that, to fine-tune, to reinforcement learn on top of my data.

Starting point is 01:38:58 I don't know if it's, oh, I think it actually is RL. I need to read through the whole announcement. They haven't released a ton of it, but yeah, pretty interesting. I mean, it seems like kind of very competitive with, I think Open AI offers the same thing. They do. A fine-tuning of the big models. But maybe there's value in focusing and being known for that specifically and then having a really clear divide. I mean, Open AI with that product, obviously, if you're on the enterprise plan, they won't train on your data, but there's still like this, you know, you're dealing with a show-goth with multiple product lines.

Starting point is 01:39:27 you go to Mira, maybe you get a more focused team that's really, you know, not AGI Pelt at all, I guess, right? Does this update your timelines, your P-Doom? I don't think so. I mean, this is kind of expected of what they were like, they kind of said that they were going to do, Aral for business, they're doing fine tunes. This was our riff. What did Mira see? You know, everyone asked what did Ilius see before he left, but what did Mira see?

Starting point is 01:39:54 Maybe she saw business value creation. And that's what I like. Let's hear it. Let's hear of the thinking machines. We love it. Fine-tuning. It's essential. Who else is going to do it?

Starting point is 01:40:07 There's $6.2 million fundraise for nozomo. Why? I could not pronounce that. Arlen. We interviewed Arlen. That's right. At YC Demodette. YC Demode.

Starting point is 01:40:19 Amazing. Well, congratulations to Arlen. CRVs in, box groups, and local globe. Some good names. Hit that gong for Arlen. Congratulations on the progress. Congratulations. There's some other cool stuff.

Starting point is 01:40:36 Mr. Hafner here, Donajar, is announcing Dreamer for an agent that learns to solve complex control tasks entirely inside of its scalable world model. This is what Tyler was alluding to with some of the value of world models besides just playing Minecraft, actually teaching, just serving as a reinforcement. learning environment, and then there's a bunch of other stuff in here. Intern says, Hey, man, just wanted to reach out and say how much I loved how much you drank at the networking event last night. You're not going to get that on Sora. You got to go to X for that. You're also not going to get that from Grock, apparently. No. Not yet. You're also, there's also

Starting point is 01:41:25 a wonderful ranking of energy drinks here. Notably missing is Andrew Huberman's year of Mata, Matayina, of course, but Goth says the gold can is elite. If you don't believe me or don't get it, I don't have time to convince you, sorry. And that's the caffeine-free Diet Coke. I do the caffeinated Diet Coke, but this post is claiming that the gold-can Diet Coke, the caffeine-free and sugar-free diet Coke,

Starting point is 01:41:52 It's just forever chemicals, apparently, is the drink of men who are destined to find eras, change history, and who will be remembered from a moment. Pure forever chemical. Carbonated forever. Well, if you're bullish on Coke or bearish on Coke, head over to public.com investing for those that take it seriously. They got multi-asset investing, industry-leading yields, and they're trusted by millions. We have our first guest of the show, Reese Chowdry, from Concept Ventures. Welcome to the show, Reese. How are you going? Yeah, it's good. How are you guys? Big fan of the show. Thanks for having me on. I really appreciate it.

Starting point is 01:42:29 Thanks for hopping on the show. Give us the news. Break it down for us. What's happening today in your world? So today, or yesterday, we launched our latest fund. It's $88 million. Yes, you can ring the gong. Great hit. We have a bell in our office. And we put it in many years ago. People would always ring it as well. I love the analogy. Let's go bigger. Let's get you a Liberty bell. Just from the way you described the bell, I can tell it's not taller than you, and it's got to be huge.

Starting point is 01:43:04 I want a massive. Well, $88 million, you have the management fees to have a bell guy that just stands there ready to bring them. People think 2 and 20, you get 2% for the fee. You don't get 2% over 10 years, 20%. You could spend $2 million on a bell tomorrow, and I think you should. That's it. That's the first order that's going on Amazon. So give us the pitch for the fun, give us the strategy.

Starting point is 01:43:26 A bit of a contrarian take, you're hunting for value in Europe. Yeah, we are hunting for value. So for us to be, obviously, we're based in Europe. We're based in London. So, you know, contrarians, so many guests, you maybe have Australia. Extremely. Awesome that you've got some European founders on. Of course.

Starting point is 01:43:42 And Carl and Victor, I saw that. So again, two contrarians there as well. And so we really focus on that earliest stage of investing, the concept stage, or that pre-seed stage, there's not many pre-seed funds in Europe, and we've got the largest as of yesterday. And, you know, we're focused exclusively on investing in the people themselves. So we go very, very deep in, you know, everything about people from like their childhood to how they met their co-founder and, you know, what they spike in. And, you know, do they have like, are they like a chess champion? And we, you know, we break it down into kind of four kind of archetypes,

Starting point is 01:44:19 which most Unicorn founders specialize in. So we have no sectors, basically. So either you're a first-time founder that maybe worked at Big Tech. You had a first-time founder that you've been at a unicorn. Like, you know, we've got a company that spun out of Synthesia,

Starting point is 01:44:35 a company called Anam, which is backed by Rep Point, or you're a second-time founder or a PhD spin-out. And so, like, within the team, we all kind of specialize in one group of people. And that really gives us an insight and traits, having, like, work with, I don't know, second-time founders. Yeah. Are they learning all their lessons before?

Starting point is 01:44:50 So we often take these very contrarian bets in really rogue sectors from high-frequency trading to robotics to commodities, marketplaces. Let's give it up for high-frequency trading. Question for you. How does having less competition at pre-seed, obviously, every stage is hyper-competitive now, at least in the U.S.? Basically, every pre-seed allocator that we know is moving up the stack in the U.S. at least that's what I can tell. It feels like I'm hearing that from so many American pre-seed investors who are like... Well, people are moving down the stack, too.

Starting point is 01:45:26 15 years ago, it was super uncompetitive. I was the only one I do. Explain what a pre-seed firm was. Now I'm doing series Bs. Well, it's also, even if you're still doing pre-seed, you oftentimes have a pre-seed lead. If you really want to lead a pre-seed round, which maybe call it a 500K check, you often have to make a decision in 24 hours. Like, you need to move quick. you need to move oftentimes faster than you might be comfortable.

Starting point is 01:45:51 And so having a little less competition at that stage, I don't know, does that change your process at all? Do you have more time to get to know founders? Or are you still feeling, you know, that urgency? Yeah, look, I think in Europe, we're traditionally maybe a little bit more conservative than the US. And, you know, we like, you know, when I, when we started concept, everyone was like, you're crazy. Literally, you're crazy for doing this because, you know, you really needed a market or a

Starting point is 01:46:24 product or, you know, and in Europe, you know, traditionally, we all come from outside. We're not insiders to VC at all. Like, we haven't come from those top names. We all the team are not, are not from that background. And I think that gives us a real edge in kind of like evaluating, but also taking that risk. And I think what we see, if there's no product or markets typically to go after, the underwriting process is actually a lot quicker because you're literally evaluating people. So typically our process takes like, we call it like five hour energy because it's like, you know, five hours of founders time. And, you know, we go through our process and we're looking for very specific traits and things in those individuals. And when we get that, we were happy to

Starting point is 01:47:04 lead. We lead 90% of our rounds. We don't care what other people do. You know, we don't care about FOMO. You know, it's a very kind of set deal. Typically, we're investing a million dollars at kind of the start. and, you know, we don't need anybody else to kind of make that decision. And I think, you know, generally, Europe needs more of that. I mean, you had Matty on the show. You know, see, that was our first investment out of the last five. Oh, let's go. That's amazing.

Starting point is 01:47:29 What a banger. Jordi, you got a question. Yeah, it's just every, if you're getting a fund off the ground, just back one fan. Yeah, just do 10 more. At the precedes, at least, you know, one time of fun, you'll probably be in a pretty good spot. Where's your, what's your LP base look like? for the new fund, are we, are we, uh, like, you know, what, what, what's the mix of European? Do they lean more Italian supercar owners or British supercar owners?

Starting point is 01:47:56 No, we're only allowed to talk about golf now given, given the last, you know, obviously Europe's won something. So we've got to focus on that. Um, but no, but no, to answer your question, we've actually got, um, most of the institutions we've onboarded in this fund, I think 80% of them are US actually. Okay. Interesting. let's go keep it in the family thank you for working for our allocators secret american secret american over there doing work for us okay question lightning round question please like please i want to i want to hear about sourcing you have uh you have three places where you can go to source the next great precede founder you can go to a Cambridge student union meet up meet young new grads

Starting point is 01:48:44 You could go to a pub outside of Deep Mind after they just fail the training run. You can try and poach someone from there. Or you can go to Monaco during F1. Which one are you picking and why? I'm taking the deep mind, deep mind one every day. Hang out at the bar. Get the disgruntled deep mind. Oh, the training run just failed.

Starting point is 01:49:02 I want to start a company. I got to get out of this bureaucracy. Yeah, I think I'll take that. And last time, I think we invested in three ex-Pallenteer people. So we love a good forward-deployed engineer. And so I think that's something, you know, we think that talent generally gravitates to places that have amazing cultures. And we spend a lot of time looking in the cultures of those companies, particularly in Europe. And I think you've had this one wave of, you know, the UI past, the Spotify's.

Starting point is 01:49:32 You saw you're at the Klanar IPO, obviously. And that was kind of like one wave which has happened and like, you know, gone public. And now you're having this new ways. You've got Carl and Victor on the show. you've, you know, you've obviously got Matty, and there's others like, you know, Granola in London. And I think these are like, people are just going bigger, right? They're just thinking bigger because they're learning more from these kind of repeat successes. And that's coming from all parts of the ecosystem.

Starting point is 01:49:55 If you're working in a company, out of a company, you're seeing these success stories. And I think, I think there's a lot more to come personally. But having, you know, boots in the ground and that partnership with our American LPs, I find that, you know, typically the American firms eventually get in, right? Like, every IPO, every exit, you'll see, you know, you win in the end. Talk a day. I'm at the start. They're not always comfortable in making that bet. So I think that's where we can play a role of like kind of making that conviction early and, you know, going forward.

Starting point is 01:50:24 Fantastic. I'm super bullish on you. Congratulations. If I was an American multi-stage VC, I would be all over this. I'd be trying to, yeah, take down a good piece of the fund. And, yeah, I'm super, super excited to see companies you back. Thanks so much for hopping on the show. Thanks for having us, Guy.

Starting point is 01:50:42 Cheers, I want to pull up this post by Sherwood. Sherwood says, may I suggest a different tagline? You can feel the diff posting an image of a graphite billboard. Graphite's, of course, a sponsor on this show. And the billboard is not even using all the billboard space. It's so over minus and then pluses we're so back. It's clean, though. It got 5,000 likes.

Starting point is 01:51:09 And this is the interesting long tale of less flashy out-of-home ads that wind up still going viral. That's the benefit. That's why you've got to get on adquick. Out-of-home advertising made easy and measurable say goodbye to the headaches of out-of-home advertising. Only ad-quick combines technology, out-of-home expertise and data to enable efficient, seamless ad buying across the globe. Do we have our next guest already? We have our next guest. You can see him right there on the big word.

Starting point is 01:51:32 There we go. Welcome to the show. How are you doing, Jim? Good to meet you. Hello, John. Hello, Yardy. Doing very well over here. How about yourselves? We're doing fantastically today.

Starting point is 01:51:42 A bit of crazy day with Sora 2 taking over the news. So we spent a lot of time talking about that. But what's new in your world? Yeah. Well, we raised a series B, which is, of course, the big news in our world over here. How much? How much? Yeah, so he raised a bit north of $50 million to build new AI agents for AI factories.

Starting point is 01:52:03 AI agents for AI factories. Let's go. Let's go. We've been waiting for this. What does that mean? Yes. Jensen says AI factory is a token factory. It's just a data center.

Starting point is 01:52:12 Or do you mean AI factory as there's robots walking around making iPhone cases or something like that? Yeah, no, we mean it in the Jensen sense, right? So purpose-built, mega-scale data centers that exist to convert electricity into tokens, right? They exist to generate intelligence. That's what I mean. So concretely, we make AI agents that are capable of autonomously operating. and optimizing physical mission-critical infrastructure. What are the top things that kind of break when you're running a large data center

Starting point is 01:52:44 that normally a human has to step into? Normally it's time-consuming. Now they're leveraging an AI agent to maybe just work while they sleep or kick off or, you know, a problem solution so they can have the agent go and work and solve some of the problem for them. What are some examples of like problems that you're solving concretely? Yeah, yeah. So you have to, pardon me if I get a little bit nerdy. I'm a mechanical engineer by training. Get nervous. Go to town.

Starting point is 01:53:13 Yeah. So I think one of the important things that realize is that AI factories today look nothing like traditional data centers, right? Like when I started the industry, you know, I joined a much smaller Google back in 2010, right? And our concept of a large data center were these 30 megawatt modular data centers. And at the time, we thought to ourselves, who's ever going to use 30 megawatts of compute, right? And now obviously the industry has changed a lot. Now we talk about gigawatt scale data centers, right, purpose built for AI. close, i.e. AI factories. The most important thing to realize by AI factories is that there are orders of magnitude more complex. There's a lot of stuff in there to orchestrate,

Starting point is 01:53:49 a lot of pumps, a lot of chillers, a lot of liquid cooling CDUs, right? And they have very nonlinear interactions with each other. So what our AI agents do is they have a global view of everything that's happening across the AI factory. They can absorb tens of thousands, hundreds of thousands of sense of trends in real time, and they act like a general on the battlefield. They're issuing AI-generated command signals that are sent to the local control system for automatic implementation execution, right? So it's really what we would call AI-enabled supervisory control, right, for these very large AI factories. Where do you think the, so if you're doing the orchestration and management, where is the physical work going to come from? Is that being met

Starting point is 01:54:34 by, you know, somebody that's just on call in a data center today? Do you think that robots, will eventually do that work. Data centers are great and that they're sort of a flat, controlled environment. It's kind of a good setup for, you know, not necessarily a humanoid robot, but just a robot on wheels that can go around and make adjustments.

Starting point is 01:54:53 But what's your kind of vision for once your agents decide, you know, what needs to be done within the system? If it can't be done purely with software, how does it get done physically? Yeah, totally. It's a good question. So, you know, to be very clear, the AI agents are not capable of replacing, like, the physical labor that needs to happen.

Starting point is 01:55:12 So things like turning wrenches, right, taking a chiller offline, cleaning it. That's stuff that, you know, you need humans for today, right? Maybe eventually we'll see robots, right, taking care of that sort of stuff. But what we do is more of the software level orchestration of all the equipment, especially the mechanical cooling systems, right, that happen in these large AI factories. But I think, you know, one of the important things to also, you know, recognize is that the industry is growing so rapidly right now that there is just a massive, massive, massive shortage of skilled labor, you know, expertise in the industry, right? Jensen talks about how, like, electricians and plumbers are going to be two of the hottest trades moving forward because of the scale of the AI factory buildout. In the industry that I come from, you know, you see a lot of folks with white hair and you don't see a lot of folks our age in the industry, right?

Starting point is 01:56:01 So there is a massive shortage. A lot of people are retiring. They're taking knowledge with them. Our hope is that these AI agents, in addition to providing optimal functionality, these AI factories, can also augment the labor force, right? We communicate our AI agents as virtual plan operators, right? They're virtual members of the operation staff. You can't see them or hear them, but just like me, they're permanently working from home, right? And doing a lot of stuff in the background.

Starting point is 01:56:25 Can you explain to me what the software stack looks like for all the different pieces of a data center? We talk to a lot of folks who are building software for traditional manufacturing, and they talk about Siemens has a control system that has some sort of archaic API, and then they write a wrapper for that API, and then they can create a dashboard, or they might be able to trigger some things on that. But does a chiller have an API that can be accessed over Ethernet or something? Like, how do all these systems tie together? How open is it? Like, whenever you're building an AI agent, people will comp you to, like, Cursor. But Cursor is a fork of VS code, an open source software. And then all the code is stored in GitHub, very easy to scrape in and download and work on.

Starting point is 01:57:15 I imagine some of these tools are either closed source because that's part of the business strategy of that, you know, industrial company. or they're just so old that they haven't gotten around to actually writing an API. So walk me through all that. Yeah, yeah. It's a great question. So, you know, frankly, the data send industry hasn't seen a lot of innovation a really long time, right? Until Nvidia came out with, you know, the latest generation of chips. And now all of a sudden, right, there's real innovation, you know, real creativity in the data center industry again.

Starting point is 01:57:46 Before is really just copy and pacing the same old stuff over and over again, right? A large part of that is the closed ecosystem effect that you were just describing, right? If you look at what your traditional incumbents are doing, like the Siemens, the Chenite Electrics, whatever, right? You know, yes, right, there are protocols that exist like Modbus or, you know, or OPCUA, NQT, whatever protocols that exist that act as the APIs, right, that enable these large mechanical equipment to coordinate with each other. However, that tends to exist within a walled garden.

Starting point is 01:58:19 And so each of these major automation vendors, right, like the Schneider Electrics of the world, they make it very difficult for you to integrate, right? There's no such thing as, you know, an easy way for third parties to access the data and analytics that are coming off of these mission critical systems. So a large part of what we do is integrating with a large variety of these building management systems or these data systems to ingest that data and make intelligent decisions off of it. This seems like something that you can't just pick up from a,

Starting point is 01:58:49 couple Google searches. Like, what were you doing before? How did you actually learn that this problem existed? How did you get up to speed on all these different systems? Yeah. So in 2010, I was a bright-eyed and bushy-tailed college grads joining Google. And back then, Google was still like small enough and young enough that new college grads had outrageous amounts of responsibility, right? So I was fortunate enough that I actually helped design some of Google's first, you know, large cooling systems that go into their data centers. Wow. Then in 2013, I became the person, responsible for Google's energy efficiency programs for its data centers, the primary metric is PEE or power usage effectiveness. Even back then, like Google was already consuming billions

Starting point is 01:59:29 of dollars here in electricity, so it is in our incentive to optimize the energy costs, right? And that's grown by orders of magnitude since. Then in 2016, something called AlphaGo happened. If you remember, that's kind of what made DeepMind famous. My co-founder, Veda, was one of the AlphaGo engineers. I saw what happened. I thought to myself, If we can create AI agents that beat the smartest, most intelligent humans at complex games like Go, then surely we can teach these same AI agents to play other games like, let's reduce the energy consumption of Google's data settings. So, yeah, so I reached out to a guy named Mustafa Solomon, who was the profound deep mind, right?

Starting point is 02:00:08 Let's go. Chad is loving you, by the way. Yeah, they said, this guy's crack, this guy rips. Everybody loves you. Thank you for joining the stream. It's almost like your entire life was. leading up at this moment. Overnight success. So it was, I mean, it was just a cold email. I was totally not expecting anything of it. But I pitched this idea of like, what if we take deep

Starting point is 02:00:30 minds reinforcement learning agents and use them to control big ass infrastructure like Google's data centers? So we did it. It worked. It worked surprisingly well. I actually ended up joining DeepMind for three years. I led a business vertical called DeepMind Energy, right? We applied reinforcement learning for all sorts of things like commercial building HVC. then my co-founders and I realized reinforcement learning is actually really good at industrial scale control and optimization

Starting point is 02:00:56 so we started a phagia well congratulations what a run very excited for you and glad to see you have a nice series B to go I got a feeling you you'll be back on the show for C and not too long so congrats on all the progress

Starting point is 02:01:12 great to meet you have a great rest of your day thank you very much have an awesome day you guys we'll talk to you soon well if you want to optimize your wrist, head over to Getbezzled.com. Your Bezell concierge is available now to source you any watch on the planet. Seriously, any

Starting point is 02:01:27 watch. We have our next guest from Moon Lake in the TBPN Ultradome. Come up from the Restream Waiting Room. Welcome to the show. How are you doing? Welcome to the stream. Hey, what's up? Thanks for having. Not too much. Welcome. We've got to

Starting point is 02:01:43 be fast about this because I want reactions to all the stuff that's happening in the timeline. But kick us off an introduction on yourself and the company. Yeah, I'm Fan Insight, I tend to go by Sun. I'm the founder and CEO, Moon Lake AI. We're really spun out of Stanford AI lab. A couple, around six months ago, we started this company,

Starting point is 02:02:03 really to build AI that can generate real-time interactive content, think simulations and games. Yep. So, yeah, I mean, what are your reactions to SOR II, vibes? There's all these different paths that are people are testing. is it a tool, then there's also this interesting take about maybe we won't even be consuming. It's all reinforcement learning data for robotics. How are you viewing the market play out just in AI-generated content, video, virtual worlds, all that?

Starting point is 02:02:34 Yeah, I think it's very apparent that there's a lot of people going through the space, and it's really just because the potential is unbounded, right? Being able to model the world, let alone any other virtual reality is going to do the biggest. the next biggest wave in AI, no doubt. Now, what we're doing is actually very different. Yeah, I was going to ask. Yeah, video, a lot of people playing an image and video, we haven't gotten a lot of pitches around creating

Starting point is 02:03:01 sort of these interactive media, something more like you can imagine a mobile game built on Moon Lake. Am I going in the right direction or? Totally. Yeah, you can imagine games being built simulations And really the main difference when it comes to simulations and games compared to videos or images is the interactivity, right? User outcomes change the trajectory of the world or the game or the environment that you're acting in. And that's what really differentiates us from videos or image generation companies.

Starting point is 02:03:36 How do you think about, yeah, how do you think about tool use with chat GPT, just the knowledge retrieval app? We went from GPD 3.5, it was okay, GPD4 was great, then we added tool use, and there was a moment when it was like, just keep scaling it up, and it'll learn the answer to every math equation. And then the engineer's opening, I just realized, like, wait, let's just teach it Python, and it'll just do the math in Python, and then you'll get the right answer. And you don't need to memorize everything into the weights of the actual underlying model. And when I see these virtual worlds, these generated worlds, I feel like we are in the GPT3 moment and we haven't yet given them a database to store your inventory or given them the ability to even a notepad to write down what happened in Act 1 of the game. How do you think tool use comes into these generative worlds and will it track with what's happened in the ChatGPT app? I think tool use exactly the right paradigm that we should go about thinking about creating virtual worlds

Starting point is 02:04:42 you know computer graphics has been around for decades if not like hundreds of years right and we have the tools that enable us to create the highest fidelity virtual worlds already right look at all the movies look at GTA right it's just that these things are hugely expensive and manual to create today like gta costs two billion dollars to develop right um so really what we believe is that we should use reasoning models to reason about the representation

Starting point is 02:05:20 the tools to use the models to use and consolidate all these things into a platform that allows anybody to be able to vibe code their interactive worlds right these are the things that are historically just barred by um just complicated tools and and domain expertise, but it doesn't have to be that way. Do you think, how do you feel the legacy game studios have been reacting to the opportunity in generative AI so far? Have they been? Yeah, like, have they been?

Starting point is 02:05:50 I, you know, I don't follow gaming super closely. But for example, like the EA take private, you could imagine they start. Huge opportunity for sure. They have a lot of IP. They could, if they're private, they could have the potential to take a longer term view on AI and try to reinvent themselves, but I'm curious how you view it. Yeah, no, all the studios that we talked to are stoked about it, right? So we're actually talking to a team that owns with F1, and they were talking to us about

Starting point is 02:06:16 the possibility of being able to create, like, racing games that ghost races with F1 cars in real time, right? And I think what's, what the way we should be thinking about this is that what we're building at Moon Lake allows. things like so many more things to be built or things that are historically cut or just made impossible due to the time and new resource that entails great these things right and so really all the studios and folks that we work with on the gaming side are stoked about what we're building in there a lot of them are you know looking to collaborate with us

Starting point is 02:07:00 what are your what's most rate limiting to you right now is there enough data out there? Is there enough compute out there? Do you need to just go and have really smart scientists think and think and think and come up with an entirely new technical paper

Starting point is 02:07:19 and algorithmic innovation? What is on your critical path? There are definitely a couple of algorithmic breakthroughs that we are still working on. We have some of the best scientists here to work on those problems. But really, even without just, like, significant breakthrough, I'd say the technology today, if you just consolidate them with reasoning models,

Starting point is 02:07:47 the upside is already unbounded. Right? Look at Roblox. It's a $100 billion business with really more traditional graphics approach compared to, like, all the generative world model techniques. Yeah. I don't know if you've... I don't know if you're familiar with this Ben Thompson take,

Starting point is 02:08:04 but he was saying that, like, ChachyPT is so successful that at this point, Open AI could stop training foundation models and it could be clawed under the hood, and it would still be a fantastically amazing business because ChachyPT has won the application layer in knowledge retrieval. It's the app on everyone's phone, right? Like, do you see yourself becoming an application layer company, staying in a foundation model layer company, like doing some sort of blend? Like, how do you see your business development?

Starting point is 02:08:32 Yeah. We are actually an applicational company. So we are going to build products that allows anybody to be able to create interactive experiences. Yeah. Right. The way we go about thinking about, oh, whether we're product or model company is really that product is first principle. Yep. But a lot of the times, given what we're building is at the frontier, we need to do a little bit of research and do some model training in order to power the best product experience. Yep. So the analogy that I'd like to make is Cursor, right? Cursor didn't start off training their own foundation model,

Starting point is 02:09:05 but they had their tab completion model. They had these smaller modules that come together to form an amazing product that people love, right? And that's what we're doing. How crazy is the inference cost right now? It feels like Sam Altman's setting the GPUs on fire with SORA 2. Obviously, per token inference cost is declining by 1,000 X every couple years or something like that.

Starting point is 02:09:30 But for all the demos that I've seen in world generation, they've all been somewhat limited. It hasn't gone super viral. I haven't seen, oh, yeah, there's 100 million DAUs on Genie 3. It's like Genie 3 isn't even available. And so how GPU constrained? How crazy is it to actually go and release one of these things into the wild? And what's the path for actually bring down the cost of inference here?

Starting point is 02:09:57 Yeah. So I would say inference is definitely something that we think a lot about and a computer is definitely something that we use a lot for. So if you're a GPU vendor, you know, I like to talk. Okay. But I would say our unique approach of using code to represent the world provides persistency and it consolidates all the tools such that we can use servers, client side compute to calculate next state of the world. Okay. And that actually allows us to not have to spend an insane amount of compute on just generating the next frame of the world. And that's because of our unique approach of combining cogeneration models and diffusion models, right?

Starting point is 02:10:40 The way we're building this product is using a representation or a hybrid representation that allows models to choose what representation to use to represent this particular problem. particular environment, and that actually allows us to be very computationally efficient compared to existing world model companies or video generation companies. There's been a ton of pushback against AI video generation. Like the reaction to meta vibes on X at least was very negative. People were pretty amazed by Sora, too, the model, but then there's been a lot of negative takes about Sora, the app. How do you think this will be received once we have a vibes or,

Starting point is 02:11:25 general availability, just an app that anyone can download and start using really early. Do you think people will be more optimistic about it? Do you think there'll still be this pushback and then you have to get through it somehow? How are you thinking about it? My view is the viscerally negative reaction that I

Starting point is 02:11:41 have to a slop AI video is because of like the character inconsistencies and like something about it just feels like very wrong to look at. Whereas with Moon Lake I imagine you can create this like you know, if you generate a consistent world that's interactive and it's beautiful, something like being in a mid-journey prompt, that I think would be,

Starting point is 02:12:06 it's about the experience the user has when they actually are playing around with it. Like today, SOR can be entertaining, but still you can have a negative reaction to it. Yeah. Whereas I can see this done correctly. Yeah. How do you think people will react to when this technology broadly, probably from you, hopefully, becomes general availability to the point where ever, yes, I like it, better on yourself, to the point where it's just an app, anyone can download it and like we're seeing millions of

Starting point is 02:12:32 people on board. What do you think the reaction will be? I think people will love it, right? Because what we're doing is not like we're generating the content that people consume. We're just putting great tools into people's hands and allowing them create and craft the experience and worlds a day desire, right? And we're just making it, 10x, eat your 10x faster, 10x more accessible. Take us through the round, and I also want to hear about the uses, but give us the numbers, what you raised. Also, is this your first company? It is. Nice, $28 million seed round. You're in the big leagues. Straight to the big leagues. Congratulations. Yeah, who did the round? How much was it? Yeah, so we raised 28 million from

Starting point is 02:13:14 from professional ventures, X-Ventures, and video ventures, and alongside 10-plus Unicum founders and angels. And some of the most influential AI researchers, too, we're super grateful for their support. I can't wait to see what people build on top of Moon Lake and play around with it. And I'm sure we'll see you back on here soon. Thank you so much for joining, and congrats.

Starting point is 02:13:36 Congratulations. Thank you for having me. Cheers. We'll talk to you soon. Up next, we have. Find your happy place. Book of Wander, the Tiring Views, Hotel Graded, many of these dream events, top-tier cleaning, and 24-7 concierge service. It's a vacation home, but better.

Starting point is 02:13:52 You know, one day you're going to snap when I cut you off. I still think it's funny. I think some people are getting sick of it with the ad transitions, but we're having fun out here. And we have some news in the chat. People, they said the circle table is growing on them, and the horse in the background's growing on them. There we go. They say never make change. Can we get a shot of the horse, please?

Starting point is 02:14:14 beautiful horse cam this massive horse this this uh you really have to i really have to stand next to the horse to get the scale well uh we have carl pay from nothing uh in the restream waiting room we'll bring him into the tbpn ultra dome let's now and get the update on nothing for this carl how you doing long time no see look at this view looks fantastic it's good to be back it's great to have you welcome to the show give us the update give us the news what's the latest in your world. Yeah, there's a lot happening over here. Last month, we just announced a $200 million series A raise. We're very excited. We got Henry on the drums. Thank you so much. Congratulations. What was the biggest catalyst for that? Is that just growth, adoption,

Starting point is 02:15:06 churn, is this the AI narrative? Like, what was the big catalyst? Yeah, I think it's just growth. Like last time I was on the show, I told you guys, that we're approaching a billion dollars in revenue just this year. Wow. In the last couple of years, we've been really focused on building the foundations because we all know making hardware is pretty tough. There's so many things you've got to get right. So we created this like smartphones.

Starting point is 02:15:30 It's one of the most difficult products to make in hardware. And we're seeing a lot of traction in the market. So I think this fundraise is more about all the traction we have in terms of growth, but also with an eye to where we're going in the future. because I think in the next couple of years, we're going to see an explosion of new hardware and software products based on all the advancements we're seeing in AI.

Starting point is 02:15:53 And I think we're just pretty well positioned to this opportunity, because on one hand, we're not too small. Like, if you're too small, it's hard to ship, like, really high quality products. We are a consumer business, so people actually, like real people spend real money in our products. And we're also not too big, right? If you're too big, it's kind of you're already

Starting point is 02:16:13 super profitable. It's a public company, and it's hard to really latch on to these new opportunities. So I think we're in a sweet spot where we can still move fast and be super creative, but also have the infrastructure that we build from engineering perspective, supply chain perspective, and also go to market perspective. How quickly are you in the team shipping features and functionality that you just want to try yourself that's maybe not ready for users? I mean, I can't imagine.

Starting point is 02:16:38 There's so many people building an AI that wish that they had unlimited access to their, like hardware and could do whatever they wanted, right? Let's try a new model in there. Let's try this open source model. Let's try this new transcription. He demoed that exact feature that I was begging for. And so I just feel like you guys have that incredible advantage of owning the full stack. Yeah, we're definitely cooking up a lot of products right now.

Starting point is 02:17:05 And I think, you know, having built a team that can make phones, making other form factors is a lot easier. so we're going to be shipping our first AI devices beginning, starting next year. Let's go. What can you give us? Give us stuff then, form factor. Is it larger than a breadbox? Is it bigger than a phone? Is it smaller than a phone?

Starting point is 02:17:28 Well, like, you know, we're in a phase for the entire tech industry. We're looking for product market fit for the next form factor. Totally. We don't think anybody's going to get it right on the first shot. So we're really gearing our stuff.

Starting point is 02:17:42 up to iterate quickly, take feedback quickly, and ship stuff with great tastes. So I think that's the kind of winning strategy if you don't have, like, products with pre-existing product market fit to build towards. We were at Meta Connect, and I heard an interesting take from their head of hardware devices. He was saying that he's a big fan of technology that mimics things that we've been wearing for like centuries. So he wants to do glasses, a necklace, a chain, a wristband, a watch, a hat, you know, but not try and create

Starting point is 02:18:20 something that no one's ever interacted with before. The exceptions, obviously, the phone, we weren't really, I guess we were carrying around notebooks before the iPad or something. But do you, do you ascribe to that belief that it's easier to bootstrap a new hardware device off of replacing a ring or replacing a you know a hat or something like that do you like that framework I do because the product market fit risk and the kind of user education risks drops significantly yeah but I think the real catalyst to these new devices getting

Starting point is 02:18:51 adoption is actually consumers finding value in them and the reason why I believe they will find value in them is over the next couple of years as people find that these new devices with these new sensors can capture more context on them then the product will become more personalized and more capable for each individual. Is that just cameras and audio? I was laughing to myself about, is Smellivision a prerequisite to AGI?

Starting point is 02:19:20 And I don't know if there's any progress. I'm getting smell sensors. It's probably not on the roadmap for next year. Okay, well, good luck. Hopefully you have some, we have one guy in R&D who's thinking about it. He works on Smell Vision. entirely against smell of it.

Starting point is 02:19:38 Okay. The other thing I wanted to mention was our announcement yesterday, we announced something called Essential Apps. And basically it's a platform where every person, every creative person can just use natural language to type what kind of apps they want on their phone. And then they click deploy, and it shows up on their phone, on their nothing phone.

Starting point is 02:19:56 Wow. That's the kind of thing that how many people that are building vibe coding products wish that they had even the ability to do something like that without having to make it work within Apple's ecosystem. It's just, it's pretty, you guys have such an advantage in terms of experimentation. Yeah, that's the fun part about owning the full stack. And today, we just launched, yesterday we just launched the Alpha, so the capabilities are still

Starting point is 02:20:24 quite limited, but we're already seeing just after 24 hours, almost 10,000 people sign up for the wait list. And it's not just like any wait list, because you have to pitch. your app idea for us to accept you into the wait list. So I'm super excited to see what people build and deploy. If you were to build a humanoid robot, would you go with clear plastic

Starting point is 02:20:45 so you could see the innards? And do you think that would be more dystopian or actually more like humans would be willing to embrace it because it's not pretending to be a human. I know exactly what it is. And I think it would get us away from

Starting point is 02:21:03 the uncanny valley of a humanoid robot that's trying to look like a human and has some sort of skin mask on and it looks kind of creepy versus like if you're just seeing the guts that's maybe better what do you think i think it needs to be even friendlier looking because all this new technology is very exciting for us in the tech industry but out in the real world a lot of people are super scared of what's going to come so it has to be disarming has to look friendly there has to be a warm feeling interacting with that technology So should probably look more like a toy or something. Did you see what DoorDash did this week with Dot?

Starting point is 02:21:38 It's such a cute little robot. They absolutely crush it. I think that's the way to go. I love it. More friendly robots, more friendly, creative hardware devices. Very excited for everything you're doing. Thank you so much for stopping by the TVPN. Always great to get the update.

Starting point is 02:21:55 And congratulations on the progress. We'll talk to you soon. Have a good one. Up next we have Shazan from Lava. coming into the studio with some exciting news. He's in the stream waiting room. We will bring him in to the TBPN Ultrodome right now. Play some sound cues.

Starting point is 02:22:13 How you doing? Good to see you. It's been too long. Great to catch up. Great to see you. Give us the latest news. I got to warm this mallet up. What's you got for us?

Starting point is 02:22:25 Camera is always pretty horrible when I'm on TVPN for some reason. Yeah, we'll get Ben and the production crew to give you. guide to your first TV piano. It's especially rough carl pay. Maybe a VHS camera wired in so you're in you're in 1980s mode.

Starting point is 02:22:42 But you're too locked in. You're locked in. You know, there's nothing wrong with a laptop call in. We love it. Yeah, I'll have to get something better next time.

Starting point is 02:22:50 So today we announced a race, but even more importantly, we announced the first way for people to earn yield on their USD backed by Bitcoin. So basically

Starting point is 02:23:03 historically in crypto, you've been able to earn yield on your cash, your stable coins, but you've had to engage, if you really wanted to do it, you have to engage in all these complex crypto financial engineering schemes, you know, Tara Luna, which was a big blowup that happened a couple years ago, or you have to lend your money on these platforms where the collateral is a basket of all coins that, you know, could get that are not as liquid, they're very volatile. Lava is the first way for you to earn yield on your cash. backed only by Bitcoin. So the way it works is

Starting point is 02:23:36 you can deposit USD from Fiat from stable coins to Lava and you earn yield by lava then making Bitcoin back loans on the other side of that. And unlike banks, basically this is what banks do with your money, right? You give them cash to make loans.

Starting point is 02:23:52 Lava's loans are all over-collarized by Bitcoin. Bitcoin's the most liquid asset in the world. It trades 24-7. It's very safe. All loans can be instantly liquidated in the case of default. so that you as a lender are always protected and safe. Banks basically take 99.7% of the returns they get for themselves.

Starting point is 02:24:11 Lava just gives that back to you. So that's why our yield is so high. It's double the next best savings account that you can get right now. And the nice thing about Lava is that it's available all around the world. So even if you're someone in Brazil, for example, you can use Lava, get cash, and earn 7.5% yield on it. Obviously, Lava that has a lot of products for Bitcoiners, but this is mostly for people on the other side who have dollars and are not all exposed to Bitcoin, but want to earn a safe and high return on their dollars.

Starting point is 02:24:44 What's pushback? Have you gotten any pushback from users yet? I think when people see yield that's higher than the Fed's funds rate, they're starting to get a little wary. I mean, just intuitively, when I see seven and a half percent, I think, 7.5% risk. I think 7.5% gain, but also 7.5% risk. I feel like risk and return should be directly correlated in a functioning system. But how do you think about it? Yeah. I mean, that's why I'm here. There's a lot of education that we need to do. And there will be a lot of trust that we'll need to build with users over time. Right. So I don't think that exactly just because it's 7.5% that means it's a lot more risk than the Fed funds, right? I think it also shows

Starting point is 02:25:30 that on the other side, the Bitcoiners are willing to pay a higher yield for bargaining. The Bitcoin in the market is absolutely efficient right now. You know, the yields might compress over time as well. The yield, you know, might. But here's some things I can talk about the safety, right? Like, one, the loan book has never had any losses. When you lend your, when you deposit your money into cash, there's some level of FDIC insurance. But if you get past that, then, you know, you're also just taking on the risk with the bank, right?

Starting point is 02:25:57 bank is making under collateralized loans with lava you're making fully over collateralized loans double collateralized and because bitcoin is so liquid as a lender you know that you know the bitcoin can be sold at any time so that you're the cash that you're lending it will never go underwater so there's a lot of things that we're also going to review um release over time that can help people feel way more comfortable with the safety so on one side we've had a lot of bitcoiners that recently saw this product that are not all in on Bitcoin, they totally get it. You know, Bitcoiners have been saying for a long time that the best risk-adjusted rate of return you should be able to get on your cash is by lending against

Starting point is 02:26:36 Bitcoin. So for a lot of these people, these are our early adopter user bases. They've already just been like, you know, we've had a ton of sign-ups. They've been coming into this product. They already get it. They already understand the security. They understand Bitcoin's liquidity and how, you know, Bitcoin market structure works, how selling Bitcoin works, how liquidation works. So they've been really excited because there are Bitcoiners that understand Bitcoin that might have, you know, 60% of their net worth in Bitcoin, but the other 40% in cash. And it's almost like this like barbell strategy, right, where your long-term assets are in Bitcoin. It's like the best long-term savings asset. But then with Lava, now you have this short-term, you know, liquid way to deposit and earn yield on cash.

Starting point is 02:27:15 And you can always instantly withdraw as well. So I think it's your business, yeah, is your business helped by a lot? lack of volatility in Bitcoin, or are you hurt if Bitcoin becomes really volatile? It's been really stable this year. It feels like it's just kind of hanging out around 110 or so, I think. And it certainly has felt like a lot less volatile time with Bitcoin specifically. Is that good for your business, or does it not really matter? Walk me through the relationship of volatility to your business. I mean, our business changes in different, maybe I can just explain how our business looks

Starting point is 02:27:55 in different worlds of Bitcoin, right? Like right now, I think if Bitcoin were to go down in price over the next, let's say, a few months, we actually might see a lot of increased borrow demand because when Bitcoin is down, people don't want to sell their Bitcoin because they're like, well, it's kind of down. I predict that it will appreciate over time, right? So they actually will borrow against their Bitcoin. When Bitcoin is up, maybe in a couple of years of Bitcoin really gets to where I think there might be a time where people might actually I mean, I'll never sell my Bitcoin. A lot of our users never want to sell their Bitcoin, so they'll probably sell against their Bitcoin. But there might be some people who might say, let me take some, you know, let me, let me sell some of my Bitcoin.

Starting point is 02:28:38 Then some of those people, instead of borrowing against their Bitcoin, they might actually sell their Bitcoin. And then maybe even use that extra cash they have and deposit into this, this yield product. Right. So we've kind of built this system where no matter how you feel about, Bitcoin, Lava is a place for you. If you're more cash-heavy, you can use our yield product to earn yield on your cash. If you're more Bitcoin-heavy, you can use Lava to hold your Bitcoin and borrow against it. So that we have, you know, a feature for both views that people have about the world and about Bitcoin. Okay. Anything else, Jordy? How's kind of the growth of the loan book been overall over the last few months? I know last time we talked, it sounded like it was pretty

Starting point is 02:29:20 insane. I mean, yeah, it's been growing exponentially, and I think over the next few months, we, this next month for us, it's going to be big. We're making a big loan upgrade as well and lowering rates. So anyone who borrows against their Bitcoin today will see a substantial decrease in their interest rate this month automatically. So we're about to release a big announcement. Maybe I'll come back on TVPN for that as well. But it's been great. I think there's been a lot of people who have borrowed against their Bitcoin to do a lot of things that I didn't expect, you know, buy houses, buy cars. The home buying use case has been one that I was particularly surprised to see. Yeah. Is there more, is there a rough way to think

Starting point is 02:30:04 about the interest rate and over collateralization requirements? Is there sort of a back of a back of the envelope that you give people who are thinking about onboarding? So I tell people to start their loan with 50% LTV. So if they're borrowing a million, put up $2 million of Bitcoin. Yeah. Right. And with Lava, we guarantee you the best rate. So if you come to Lava, you know, you're getting the best rate across any other

Starting point is 02:30:33 profit on the market. So we're confident on that. One thing is if you actually really look at the rates on Lava today and kind of consider like capital gains tax to you really have to believe that Bitcoin will just appreciate 5% compacted for it to make more sense for you to borrow against your Bitcoin versus selling your Bitcoin, which I think anyone holding Bitcoin, probably believes it's going to appreciate more than 5% or compacted. That makes a ton of sense.

Starting point is 02:31:01 Well, congratulations on the progress. Thank you so much for stopping by. We'll talk to you soon. Cheers, dude. Have a good rest of your day. Up next, we have Victor from Synthesia, another AI video generation company. The first AI company we've ever spoken to. Yeah, it is the first.

Starting point is 02:31:20 I've actually seen these ads. The Synthesia is the world's largest AI video platform for the enterprise. And so we'll see how this is all taking shape. Welcome to the show, Victor. How are you doing? What's going on? I'm very good, guys. How are you?

Starting point is 02:31:37 I'm great. Why don't you kick us off with an introduction on yourself, the business, kind of give us a lay of the land as it stands now? Sure. Yeah, I'm Victor. I'm one of the co-founders and CEO of Synthesia. Start the company in 2017. So it's kind of a while back before any of the stuff actually worked. And we kind of endured three or four. Yeah. We endured three or four years of pretty painful just like sitting in the proverbial garage trying to make this stuff work. And in 2020, we got the first company to launch avatars the technology, right, which essentially is technology that allows you to create talking head style videos like you're kind of watching right now. But instead of recording it to camera with a microphone, et cetera, you simply just type out the script and we generate an AI video of someone saying that, right?

Starting point is 02:32:23 Back in 2017, everything kind of started with the idea of like painting Hollywood films and laptops and going much more down the kind of creative route of, you know, just like you can publish and write a book from your bedroom, you should be able to the same thing with Hollywood films. Since the founding of the company, you know, and kind of where we are today, we kind of took a fork away from that and essentially went into enterprise knowledge. So what we figured was that... Let's give it up for enterprise knowledge. Thank you for doing it. They tried to, the big Hollywood, the creative world, they tried to pull you in. You said, no. I am loyal to Seths.

Starting point is 02:32:54 I love it. I grew up dreaming about working cross-functionally and making videos for the enterprise. Yes, let's go. Hit that gone. The whole team's fired up. Fired up. Love it. Making corporate videos for employee training.

Starting point is 02:33:13 That's why we do. show. Thank you so much. And it's actually, I mean, it's just really smart, right? Oh, it takes a ton of science. AI is clearly good enough to make this form of video and clearly not good enough to one-shot, you know, feature films or even most often. Even eight-second videos struggling. Yeah. Wait, so, sorry, Jordy, do you have stuff? Yeah, I mean, I wanted to jump in briefly because we spent the first half of today's show talking about SORA, kind of reacting to it. I thought it was a great product for entertainment, right the cameo functionality everything's very memeable but something about when you're going in the field going through the feed it's it's kind of hard to look at the videos like yeah I have this like very negative reaction just something about these these videos uncanny

Starting point is 02:34:01 valley yeah that and then and then the distortions and character inconsistencies is still rough to look at even when you can't talk this specific thing it's still there's a vibe or feels off And so you guys have somewhat of a cap – I'm assuming a lot of the use cases, you have somewhat of a captive audience, people that need to watch videos to learn about their role and their companies and things like that. But still, you want to avoid people watching the videos that you guys generate and having that sort of negative reaction of, oh, this is AI, right? So how do you think about avoiding that? What makes that possible? I think there's fundamentally like two types of video, right? this kind of video you watch because you want to, and there's most of the stuff you'll find in feeds.

Starting point is 02:34:44 So, like, when you're scrolling TikTok, you're on Netflix, just like what movie to rent, whatever, right? That's something you actively choose to do. And generally, you have, like, a lot of choice, right? Like, you could watch, like, a thousand different action films, but you choose to watch this exact one. And I think, that's your point before. I think AI will be a huge part in creating lots of this content in the future.

Starting point is 02:35:02 But it still feels like the most, the reason people mostly watch this stuff today is because it's fun, right? It's novel, it's cool, it's AI. It's kind of weird. It's not because it's like amazing content yet, at least 99.9% of it. There's still some good content out there, I think. The space we operate in is much more around knowledge, you know. It's not really around creating storytelling content, it's not advertisements.

Starting point is 02:35:22 It's generally content that you wouldn't, it's not content that competes for your attention, right? It's content that's very specific and helps teach you something that could be product marketing as a company, right? You want to teach your prospects why your product is better than the competitions. There's only that one video to watch, right? And the reason people create these videos is because it's better than text. So I think on the first category of videos, you're generally competing against like high quality video recorded with cameras and people who really know what they're doing. I think the thing we really uncovered back in 2020 when we started building towards the enterprise was that what we're actually replacing is text or slide decks. And in 2025, most people, especially your average consumer, want to watch and listen to their content, they don't want to read.

Starting point is 02:36:04 And for some people, probably not the people listening to this podcast, like I'm much. rather prefer to like read a page of text and watch an AI generated video. But it turns out that that's not the preference for most people, right? When people have a problem with their bank and they're trying to figure out like how to do something, they don't want to read a long page of text. They're trying to figure out how their mortgage works, so how much they have to pay in their mortgage. They don't want to read a whole page of text that much rather watch a video. And so where we're going down, the path we're going down is just much more around like knowledge video, right?

Starting point is 02:36:32 It's much more like replacing text with video than it's about replacing video with AI video. And that's a really, really big difference where I think, you know, when you look at Sara, Runway, a lot of these other models, they're much more competing to actually replace, like, real video with AI video. And I think that's also a big market. It's super exciting. But we think that there's a much, much bigger market actually in enterprise knowledge and turn that into video. And with that, I should also say, I think a lot of the talk around AI video is always very much about the models, right? The AI hype at the moment is like there's a new model every second week. That's even more impressive than the other one.

Starting point is 02:37:09 And that's awesome, right? That's a big component, of course, of making these technologies work. But I think we have this man trying to really called utility of a novelty, which really is about, like, you know, it's not about cool demos. It's about bringing value to the customer. And when you think about why do you make a video, the actual generation of the pixels is a part of that, but it's a smaller part of a much bigger process, right?

Starting point is 02:37:28 So what we've been doing over the last five years is really building out a workflow. We help replace the camera with the AI models, but we also give you a kind of a Canber PowerPoint style editor to finalize your video. We enable someone who's a PowerPoint user, not an Adobe user, to make their own video. Collaboration platforms, a content management system. It's a translation platform. We have our own video player that's made to work with AI video. And so for us, it's always been about building for the entire workflow of, like,

Starting point is 02:37:54 someone has an idea or some piece of knowledge that they want to communicate to an end consumer. How do we make that entire process as frictionless as possible, right? And I think what it just turns out is that, yes, the AI models are really important. but there's so many other components of making a product that does this work for really well. I think that that's what we're much more focused on at Sintesia. Very cool and very impressed that you were able to crack 90% of the Fortune 100. It's remarkable. Last question, we'll let you go.

Starting point is 02:38:24 Do you see yourself as being a foundation model company and an application layer company over the long term? Or is there a world where you partner? with the foundation model companies to let them, you know, suck up all the CAPEX to generate frontier models. Do you already do that? How do you think about the the shape of the business long term? We try to be very intentional about like what kind of company we're building. And I think every company should be. And I think it's increasingly clear that competing on the foundation model level is very difficult unless you raise a shit ton of money. And you hire extremely expensive people. And I think there's just a game that very few companies can play, right?

Starting point is 02:39:07 We still train our own models. I think there's lots of use cases where that still makes sense for us. It's, again, if you work backwards from what are people trying to do with our models, right? It's not just like an eight second clip, for example. It's not very useful. It's also not very useful that the identity doesn't get preserved across multiple. There's not of these like asterisks that you don't see when you watch the cool demo videos of these new models that are coming out. But we just started also aggregating other people's models in. So that both means you can just use, you know, be a free inside the platform. if you want to create content that's outside of what an avatar model can do.

Starting point is 02:39:37 We're also beginning to chain these models together in different ways. We create A role, B role, do lots of cool things with these models, right? But, you know, LLMs is a huge part of our platform as well. We have a co-pilot product, help you write the script, put together the design, the visual. So we train models when we think it makes sense and we think that it gives us a competitive advantage. But, you know, we've definitely also aggregating the market. And to the extent that we can avoid having to do massive training runs, I think that's the only rational choice to do for a company like us.

Starting point is 02:40:07 That makes perfect sense. Well, thank you so much for taking the time to stop by the TV. Congratulations on the overnight success. We'll talk to you soon. Have a good one. Thanks, guys. Cheers, Victor. Our next guests are already in the Restream waiting room.

Starting point is 02:40:19 We'll bring in William and Dogus from Periodic Labs. I hope I'm pronouncing that correctly. Welcome to the show. Welcome. How are you doing? Hey, good. Thanks for having us. Appreciate it.

Starting point is 02:40:30 Fantastic. We have been so excited. for this. This feels like the antidote to the timeline today. Yes. Yeah. There's a lot of negativity about certain AI products. A lot of positivity about what you're building. Yeah. I mean, first all, that that's very important technology too. So like don't want to like pile on the hate over there. Totally. Yeah. Yeah. I mean, we've talked about we've talked about the good and the bad. The good is that it's it's a very, it's very entertaining outputs. There's logical business reasons why you would do it. Clearly, there's

Starting point is 02:41:04 demand. All right. Economic flywheels. And yes, world models for training robotics. You know, who knows? Maybe a robotic surgeon in a decade will be trained on AI video in some way. But anyways, let's talk about you guys. We love quick intros on yourselves and then the company. That'd be great. Hey guys.

Starting point is 02:41:20 My name is Doche. I have a background in using machine learning to study physics. And after my PhD, I joined Google to do deep learning research. And this was William and I met. So that was eight years ago. And at Google, I did some deep learning research, but I continued to do my PhD passion to kind of move all the advances from deep learning into solid state physics. And then in

Starting point is 02:41:45 2020, I actually started a team to just focus on material science because I felt like LLMs were getting really good. And we could probably really benefit from hoarding these advances to the physical R&D. And then I've been doing that until six months ago when Liam and I left our jobs and start this company. Amazing. Yeah. And I go by Liam, the physics background academically. Spend many years at Google Brain, worked on a mix of generative models,

Starting point is 02:42:14 reinforcement learning, and created some of the first trillion parameter neural nets. These are sparse models, really fun collaborations with Jeff Dean, Noam Shazir, and others. Goats. Then in late 2022, went to OpenEI, and a group of us took precursor chat products and we turned that into chat GPT. Like I've told many, many people, it was legitimately a low-key research preview. I mean, there's, like, the prior up to that point was there'd been no successful chat bot.

Starting point is 02:42:45 So there's a poll as to how many people would use this thing. And people were guessing numbers like 10,000, 50,000. Someone's like, oh, maybe a million people will use chat chabot, which we exceeded in like a week. And, I mean, reflecting back on that, I think obviously there's good luck. good timing, but also boring things done really well. Like we're really focused on training, details, data, evals. There was no novelty to it.

Starting point is 02:43:11 Ultimately, people have been building chatbots for many decades, but just crossed a critical boundary. Yeah, and so left six months ago to start periodic. What do you think of that Gwern idea of you just need to generate random ideas and look at connections between them to find scientific, insight. Do you think there's anything there? Is that directionally correct? Is that a path that people will go down? Are you going down that path at all? I mean, I think it's incredibly promising. Like, I think linking these disparate ideas is really promising. However,

Starting point is 02:43:46 unless you actually have experiment in the loop, you're just sort of thinking. So you can imagine, like, hey, here's a really promising thing to try. But as every scientist know, it's like, until you actually take that idea into, like, to try it, to act, you're really no further along to, like, building up a scientific understanding. So for periodic, we're, it's, that's our opinion, which is we need to have experiment in the loop. That's super key. There's so many different experiments. Are you selecting for a few different environments? You're going to get a large hydron collider or a wet lab? Like, science is very broad, so have you narrowed it down at all? So one way we are thinking about it is, you know, the LLAMs today are really good at math and logic.

Starting point is 02:44:31 So the next obvious frontier is theoretical physics. Sure. And there are different energy scales of theoretical physics, but we wanted to take the part that is very relevant to human life, which is quantum mechanics, you know, Schrodinger's equation. So this affects all the inorganic materials, organic molecules, drugs. So we're starting at the level where we're just designing how. atoms come together and how their properties can be utilized in devices. Just start with the simple stuff. Yeah, so just drilling in deeper, what does success look like for you guys as a team over the next even, you know, I can imagine the five year, what success looks like?

Starting point is 02:45:17 Five years, ten years, right? These sort of massive ambition. how do you how do you sort of make immediate progress now that you guys are heavily funded and have the resources to really move on on these opportunities i think you can kind of describe it along technical and commercial goals from technical goals the highest level way to describe it is have a system that can intentionally design the world around us um so right now we've built systems that understand the internet, they have been trained on math and code, we want to take these same type of techniques and build system that can produce things of like properties of interest.

Starting point is 02:45:59 So you're trying to optimize for a new material for a semiconductor industry or a space company or defense companies looking for something for like a new heat shield for a missile or, you know, anything. It's like how can we intentionally design the world around us? And that's sort of a goal. some of our higher risk goals are around novel discoveries that doge can talk more about as well yeah and even even before you get into that like you know you guys are coming from organizations that were totally okay with years and years and years of just deep research and not worrying about

Starting point is 02:46:36 immediate commercial applications from you guys with the new company i'm assuming you're you're open to having much longer kind of commercial timelines and just, you know, basically experimenting, right? Some of this stuff is unpredictable. You talked about chat GPT being a research preview and it turned into a hit product. So, yeah, there has to be some, you know, takeaway from that process. I mean, one comment on that is we can basically produce through this technology, through experimental data, a foundational understanding of physics,

Starting point is 02:47:12 of chemistry, of atoms, just the world around us. And you can sit at different levels of abstraction. Some levels might be more kind of like scientific exploration and others might be more towards advanced engineering, advanced manufacturing, engineering. And we're going to have both pieces as part of periodic. So the labs allow us to produce deeper understanding of different like physics, chemistry, material science systems.

Starting point is 02:47:40 and our guidance there is, like, are we able to produce new discoveries? Are we able to advance science? But, however, that data also gives us a better foundation when we're actually working with customers. So we want to make sure that our labs, our prioritization, the tools we're teaching our agents do have some grounding in sort of the commercial opportunity. Exactly, yeah, like technology and capital are very intertwined. it's not like technology doesn't develop in a bubble and we can accelerate science

Starting point is 02:48:14 maximally when it's like a very commercially successful enterprise. I went on a serious emotional roller coaster with the LK99 saga. And then I there was a proposed breakthrough in superconductors room temperature superconductors. It was very excited on the internet for a few days. Then it was found not to be such a breakthrough. And then I kind of fell out of that new cycle. stop tracking it. Get me up to speed on where we are on superconductors. What's at stake if we can have a breakthrough there? Is that something you're interested in working on? Do you think that this is actually even a tractable problem that you can make any sort of prediction about where we are in terms of progress there? I'm super interested in that. Yeah, you know, we're very excited

Starting point is 02:49:00 about superconductors and being able to discover a novel exciting superconductor requires us to do well on many dimensions of physical sciences, which we're very excited about. So one of these is being able to synthesize materials reliably, being able to characterize materials reliably, being able to predict their properties, design their kind of defects. And for us, you know, it's also a very important scientific goal. So currently the highest T.C. superconductorate ambient pressure is about 135 Kelvin. And under pressure, you can make it a lot higher temperature. but then it's not very practical because you can't really apply that kind of pressure.

Starting point is 02:49:41 And it's very interesting to wonder, you know, can we bring that up to 200 Kelvin, for example? And if we can, even before it impacts products, I think it teaches us a lot about the universe because it's a very large macro scale quantum property. So, you know, we have real good characterization tools in the lab, and that, you know, immediately prevents us from an issue like Al-K99 because we can actually measure its properties at different. temperatures. And for us, the LLM being able to use the characterization tools and infer the relevant physical insights is crucial. So we're teaching our LLM agents, you know, the ability

Starting point is 02:50:18 to synthesize, they're able to characterize, they're able to hypothesize the next step. So it'll be really exciting, I think. Yeah. Yeah. Part of this is so key, right? It's the lab is providing our grading function. So again, like that keeps us grounded, that makes sure. And, you know, It's sort of a very interesting objective to put a lot of optimization pressure against. Yeah. What, uh, what, uh, have you stack rank the impact of, uh, super room temperature superconductors or even higher temperature superconductors in terms of the impact? I remember people talking about quantum computing, but then I also saw a demo of just some

Starting point is 02:50:56 like hoverboards and like skateboards that were using magnets and superconductors to, or super cooled, uh, magnets to kind of like float. Uh, where do you think the impact would be? if we get a breakthrough there in the next couple of years. I mean, the impact is huge. Like, whenever you think about a futuristic technology, like fusion, you know, low, low loss, energy transmission, quantum computing, as you said.

Starting point is 02:51:23 And even, you know, when you talk to chip companies, like think about the chip design of 10 years from today, superconductors always come up because it's such an important quantum mechanical property, but at the same time, it's just very easy to understand. It lowers your resistance to a point where losses are very low. So for us, it's probably one of the most impactful things we can do on the South State

Starting point is 02:51:43 physics side. Can you guys give us a white pill, like a pump-up speech? I feel like so much of, you know, there's been common chatter about, you know, all this CAPEX, all this compute that we're developing as a, you know, a country and a human race. A lot of it's obviously going to go to image generation and memes and things like that, and that's fine. But you guys are doing the thing that has been promised by, you know, the AI community broadly for a long time. How excited should people be about the potential? I think you guys are both very modest, but, like, talk about the impact in your words, because, you know, I take it, it means a lot coming from you, given that this is your scientific discovery.

Starting point is 02:52:32 is like the entire focus, right, and commercializing it versus, you know, labs historically that are maybe working on some of the same stuff, but they're also working on a million other things, right? They're also working on, they could be working on code gen. They could be working on, you know, new versions of search, et cetera. But this is your guys' whole thing. So I'd like to hear, yeah, just that optimistic vision of what's possible. I mean, ultimately, science is unbounded.

Starting point is 02:53:03 That's one of the biggest drivers of progress for humanity. It's not like we optimize and we can now match the performance of a human on some task. You're just creating new technology, new abundance, by being able to kind of control the physical world around you. And we think that the technology is at that stage where we've seen incredible things on models from mathematical reasoning, code reasoning, also the ability of some of these agents to start doing like real valuable work. But the world around us still kind of like largely looks the same. It's like not really moving too quickly. And I think as the cost of intelligence decreases, Doge and I are thinking the bottleneck increasingly becomes contact with the real world. Bring data, bring atoms like into this end-to-end

Starting point is 02:53:51 system. That's going to lead to this new ability to just accelerate scientific progress, accelerate the technology around us and i mean it's like the applications of you know scientific developments are endless right like you know becoming more of a you know space traveling society like you know new computation um it's you know it's it's unbounded i think that's what excites us yeah it's like there'll be no end to this right like it's not like we can finish science actually the more jobs never finished that's exactly so it's a really uh fun place to be because of of that. I love that. Well, congratulations. We're going to ring the gong for you. 300 million. Last question I have before you guys jump off and you can keep it to 30 seconds.

Starting point is 02:54:37 What's your philosophy around building and sharing your guys' work? We've seen different approaches from the labs. Thinking machines has been experimenting, sharing some of their progress. SSI, been very silent. Some of the other labs are also, you know, constantly sharing, you know, just small products, et cetera. But how do you guys think you'll approach it, given your your focus. Yeah, so we're building tools in the physics space. We're building tools in LLM space. And we will definitely share whenever it seems like you will enable the community.

Starting point is 02:55:07 We also have an academic grant program where we want to support academic groups that are also passionate about this space because we feel like, you know, science is endless. So there's so much to do and we'll, you know, do it together. Amazing. Well, thank you so much. Thank you so much for coming on, breaking it down. I'm sure we'll have you back on again very soon. We'll talk to you soon.

Starting point is 02:55:25 Thanks a much. Congrats. Our next guest is in the re-stream waiting room already. Legal A.I. Fundraising announcement. Let's do it. Jay from Eve. Jay, how you doing?

Starting point is 02:55:39 What's happening? Great. Thanks for having me on, guys. Busy week for you. Give us the news. Give us an introduction. Give us an explanation of the company. Give us an update on the news.

Starting point is 02:55:50 Absolutely. And I can't wait for what's coming next. Oh, yeah. You know, you know. Get that mallet ready. But we are EVE. We're AI for plaintiff law, and we just raised $103 million at a billion.

Starting point is 02:56:04 Boom. There we go. Fantastic. You know, we've talked to various players in AI legal. We don't, you know, follow the space nearly as close as probably, you know, many of the investors do and you do.

Starting point is 02:56:22 But I, first time hearing about you guys was yesterday. Give us the backstory on the company because you're not obviously just coming out of nowhere. I'm sure you guys have been cooking for a while. No, absolutely. So we took an unconventional approach, which is, you know, we basically took time to understand what plaintiff and defense law means and how they're different, which maybe a lot of people, a lot of people don't know. But plaintiff lawyers, you know, these are the ones that you would typically find fighting on behalf of individuals, Right. So they typically don't charge billable hours. They make money when they win for you. Think labor and employment issues, personal injury issues, you know, family law, things like that. On the defense side, you get the nice benefit of retaining a company and kind of cashing it in every year, right? And then you have to typically they charge by billable hours. So on the two sides, there's very, very different business problems and opportunities. On the plaintiff side, they care about how do I represent? more customers with the best of my ability to win as much as possible for them, right?

Starting point is 02:57:28 Either changing conditions or money, right, in civil litigation. And on the defense side, it's like, how do I do more for the client, you know, for the same amount of time or maybe more time and delivering value. So on the plaintiff side, what we've found is there's actually a really good merger between AI and the efficiencies you get from AI and their business model, because you're able to go deeper and actually benefit more clients. Is that because you're charging on a value basis, right? You're taking a fee based on the value that you capture for the client or the,

Starting point is 02:58:01 or whatever, like, you know, if they're, sorry, the plaintiff, if there's a settlement, whereas on the defense side, you're charging billable hours and you're tech, you know, there's some, you can do a calculation as a client and say, like, how much value am I getting? Do I feel like this is a good deal? But it's less of a, because it's based on billable hours, it's less of a, it's less like value-based pricing. Yeah, you nailed it, right? So we typically charge based on how many clients they represent.

Starting point is 02:58:29 So there's a very clear aligned of incentives between what we provide for our customers and what they provide for their clients. So we're kind of aligned. Yeah, plaintiff law, you're incentivized to use more and more and more and more AI so you can have less time to serve each individual client and generate more revenue, which is, yeah, again, maybe different than on the defense side where it's like, oh, well, I like AI because it makes

Starting point is 02:58:56 my job easier, but I don't want to be perfectly efficient unless you just have overwhelming demand. You nailed it. And this is the really cool part about right now is our customers are using this to level the playing field and flip it in a way that's never been happening before, right? So if you think about the average insurance company, they employ so many lawyers. And when you have a personal injury attorney showing up, it's oftentimes one person in court versus like 10 or 20. They just have endless resource to run you down. Right. And I mean, you know, typically if insurance paid out like the industry wouldn't exist at all. So, you know, there's, that's what they're there to equalize and fight for on your behalf. And what people are doing with Eve is

Starting point is 02:59:41 actually using it to now act as though they have a million dollar attorney backing every single step away from intake to resolve resolution of anyone, right? So now you can actually do all these complicated legal workflows specific to plaintiff law. And we go deeper into these workflows than really any other tool can and deliver that to the high level of bar that you would want it to have as a client, right? You don't want as a client to worry about how many cases are they working on. Do they have time to spend on me? And, you know, the law firm has the same problem. How far away are we from just AI on AI, just violence in every case? It feels like...

Starting point is 03:00:27 Well, sorry, I'll let you answer, but I've heard a story like 10 years ago about a law firm that set up a automated system just using not AI, just normal software, to run through the line items that they were billing their client on the corporate side and detect what the client would say, hey, we're not paying for that. We're not paying for your two-hour lunch. So don't write that in. And so anyone who was writing their bill of the allowers would know that it got flag.

Starting point is 03:00:55 They'll take it out. And then the other party got software as well to detect what was going to be, you know, maybe debatable in the billing. And so they did have this like software on software fight in legal specifically, but just at the billing level. But now we're going one layer up. But I'd love to hear your answer on how it all plays out. You know, this is actually a really interesting question.

Starting point is 03:01:15 And one we're seeing play out live. is, again, the value alignment incentives. So on the plaintiff side, people are using it, and they're coming up with tactics because they know the other side has to bill hours. Yeah. And the other side doesn't want to really reduce the hours quite yet. So what's happening is, you know, one of the common ways defense slows you down is they kind of start discovery requests and responses.

Starting point is 03:01:39 These sometimes take up 48 hours for plaintiff law firms to go fill out. And our customers using Eve are able to come back. return back right away, right? And then the other side is like, what, W, you know, what is this going on? And they want to spend the time to respond. And that's actually raising the settlement value of firms because you're basically hitting into what the lawyers would be charging their clients right on the other side. What are, what are some of the downstream impacts of what you're building, you know, assume that you, assume that you can get to, you know, 50%, you know, or some meaning double digit percent of plaintiff law firms using Eve or comparable software,

Starting point is 03:02:25 if there is a comparison. What, what are, you know, is that going to impact the insurance industry? Like, are they going to have to, you know, if every plaintiff has this super lawyer, you know, what, what are kind of downstream effects? great question there's a few different downstream effects i foresee happening and we're seeing a little bit of this already um so for example let's take labor and employment right so think you get fired harassed etc you're getting representation in in this industry typically a lawyer want to see at least five thousand dollars in fee before even representing you because again they're doing it for free until they win so they're baking that into how they think about it and what we're seeing with eve

Starting point is 03:03:08 is actually a lot more pro bono cases or them going down the value chain to take on cases they otherwise would never have right and now let's hear for more lawsuits we're getting more lawsuits we're going to go exponential or are we going to see exponential i mean this would be very american if if we used ai to just 10x the amount of lawsuits annually but it feels like great great question what's interesting and maybe most people don't know this is very few cases actually get to a lawsuit with perspective, right? So in personal injury, about 70% or so of cases actually get resolved before a like at the demand letter stage. Exactly. They would get resolved demand letter stage or some form of mediation before. Might even just be like, hey, yeah, like you didn't pay this

Starting point is 03:03:51 invoice, you know, we, but we both know that this could turn into a lawsuit very quickly with AI. So we're just going to settle quicker and we're going to get to like the median outcome where both people are happy. And that's exactly. Because once a lawsuit starts, you know, $700 an hour accounting hours. It's arbitration, right? Arbitration, essentially. It's like what's maybe the long-term result of a lot of like these AI battling it out. What's, uh, give us some numbers.

Starting point is 03:04:16 How, I mean, you raised it a billion. So things are seemingly pretty good. But what kind of traction have you been seeing so far? How many times have you been seen? One of the, one of the interesting bits is usage as well. And we've been fortunate. I mean, one of the really crazy things about this industry is, I was just in the conference probably three weeks ago, and I asked this question every year.

Starting point is 03:04:39 The last year I was there, I asked how many people have used AI every day or, you know, in the last week. 10 people out of our 200 raise their hand. This time around, personal injury attorneys, 90% of them raise their hands. Wow. Right. So the amount of awareness and traction at seeing is crazy. But what they've always been scared about is like, how do I use it? And this is kind of the problem we're solving, right?

Starting point is 03:05:01 Because if you're just using chat GPT or Gemini or whatever, you're spending a lot of time fixing things at the end, and that's not good enough for lawyers. They lose trust very quickly. So we had to go really... Yeah, if you have an associate that just constantly makes every single time, they make one or two mistakes, those associates don't, you know, eventually they get churned out.

Starting point is 03:05:21 They get let go, right? So you want to hold the AI to a higher bar. Yeah, exactly. And then like when we hit that, you know, extra nine of accuracy, which I'm sure you two are very familiar with, our usage and adoption rate kind of blew up, right? So we've been from, I think, around 13 customers or so start of last year to now more than 450.

Starting point is 03:05:41 I think we're approaching 500 now. And, you know, dollar signs are increasing very rapidly as well, which helps us invest even more behind R&D, which I'm super excited about. The cognition team just rewrote all of Devin on the back of Claude 4.5. Are you in a similar world where, where a new model can cause, like, a fundamental shift in how you think about building the product?

Starting point is 03:06:08 Are you sort of model agnostic? How closely are you tracking what the foundation labs are doing? This is one of the key decisions we made early on in the architecture, is he worked very closely. Actually, funnily enough, we were one of the first productionized apps, I think, on Claude II back in the day. And they actually expanded context window just for us. Wow. So you have multiple modality. of increases, right? So model capability gets better. Context mental gets better. You know,

Starting point is 03:06:37 agent functionality gets better. All of these have a pretty drastic implication on how deep into a workflow can we actually go. And what gets enabled. So somewhere, somewhere out there's a, there's a defense attorney who isn't online, not using AI, just doing everything the old fashion way. And he's probably just getting his world rocks like month every month. How did you respond? to that in an hour. I was expecting that to be three weeks. Yeah, that's great. Walk me through this thesis.

Starting point is 03:07:14 Tell me if I'm right or wrong. Anthropics been incredibly focused on the flywheel of code, coding agents. They're hoovering up tons of data, reinforcement learning on top of the code, developing a really dominant code model. Open AI has been less focused on API, but chat GPT is dominant. I've talked to, I bet if you polled those lawyers, a lot of them are using chat GPT. If they're not on the enterprise plan,

Starting point is 03:07:40 chat GPT and OpenAI are going to be able to train on that data. And so you might have a data flywheel that actually makes OpenAI's APIs better for legal work. Is that a reasonable thesis? Well, I mean, according to the agreements we signed with them, they're not supposed to. Okay. That's because you're on the enterprise plan. What I'm talking about is like if I, a person, don't have an agreement with chat GPT,

Starting point is 03:08:05 and I get a contract for an advertiser or something, and I just uploaded that to chat GPT, they're going to train on that. And I'm not saying that's your company. I'm saying, me as an individual, I'm just putting extra data in chat GPT. They're getting more data. It makes the bottle better. And then you benefit on the API side, even though they're not training on your data. Yeah, I think one of the interesting bits for us is we benefit from the general

Starting point is 03:08:30 training opening out all these providers to you. Mostly because actually law is weirdly touches everything. Yeah. You know, when you get into a lawsuit, sometimes it's medical, sometimes it's technology, right? Sometimes it's like quantum computing or something. And these lawyers have to somehow be up to speed on these things. Interesting. And the general training actually really helps. So that's one part of data fly wheel. There's another part that I don't think people are thinking enough about, which is the one we benefit from in how we Bill to Eve, which is all these intermediate tasks, right, are actually not captured by anyone. An example of this is like, you actually can't even go Google. How do I write a really good

Starting point is 03:09:12 demand letter for a moving vehicle accident for, again, State Farm or something? You know, it just doesn't exist. And what they're doing internally is they're coming up with multiple artifacts to produce that final output, right? So everyone has a workflow, produce this document, this document, this document, and pull information from these three to make this final document. And they've all come up with their own workflows. And one of the things that we've been, I think, fortunate to do in Eve is we actually allow them to kind of teach Eve to do their workflows, kind of like how they'll teach a new associate or a new hire. And then after that point, it just follows it, you know, diligently without fail at a high level of bar, right?

Starting point is 03:09:53 This doesn't miss things like a person would because it finds everything instantly. So that's one of the ways in which it's changing. And maybe I'll be a little spicy. Like what I kind of predict will happen here is I actually think these law firms will basically transform into software companies over time. Right. So think about early Amazon or something. Everyone started, you know, being able to offload their hard disk and all these. these things into APIs. And what is happening with Eve is now, instead of relying purely on

Starting point is 03:10:29 human labor to scale, you can start offloading these very crucial tasks that were previously not APIable into Eve, right? And it can view yourself as now, hey, I'm not just servicing one client one on one anymore. I'm figuring out a way to service everyone that I'm an expert in, right? So if I'm an expert in dealing with traumatic brain injuries, I'm going to take on every single traumatic brain injury case and do the best I can for them and be a rock star at it. And this is like the main benefit that software companies have benefited from. They've consolidated the R&D efforts to make a really good product and sell it at, you know, incrementally lower additional cost for a net new customer.

Starting point is 03:11:10 I think it's super exciting. I think the best, the best lawyers are your friends. They're expensive friends, right? But they help you, you know, they're just, they're there to think through problems. And I think that's just going to continue to be, I think that's going to continue to be valuable for a long time, especially for the market that's paying for legal services today. But they're going to be able to be a one person, you're going to have a one person, $100 million revenue, you know, plaintiff law firm, I imagine, right? Because you just have this massive efficiency and one person who's just great at, yeah, what's the doctor's, you know, bedside manners, basically, like guiding somebody through a, you know, potentially challenging part of. their life. So super bullish on what you're building. Congratulations. And thanks for breaking it down

Starting point is 03:11:56 for us. Got to come on anytime there's stuff in law. This was a fun conversation. We'll talk to you soon. Thank you so much. I appreciate it, guys. Cheers, Jay. Have a great one. I want to close out. We've got to hop on with Taipei soon. But first, I want to close out with this video from Elena, or Lena. She's introducing Taya AI. You'll actually want to wear. I want to get your reaction to this launch video. Another AI wearable, they said it couldn't be done. Jewelry. We worry so much about tomorrow.

Starting point is 03:12:31 We forget it back today. It's an aura ring on your neck. It is remarkable how much you can pack into a ring these days. I'm always in shock. Is it an aura ring though? It's not, it's not technically an aura ring, but it's just the aura ring form factor. It's a ring. Lindy form factor.

Starting point is 03:12:49 wear necklaces. I haven't seen a device company go after this market at all. It seems obvious now that you're seeing it. And I notice you can turn it on or off, so it's not just default on recording. And so it is an AI pendant. It isn't the lineage of humane and friend.com, but it's less about saying mean things to you if you're a journalist, and instead it's more focused on note-taking and remembering things and being an opportunity, you pull out your phone to make a note, you get lost in the

Starting point is 03:13:24 slop feed. Instead, you can just make a little note and it will remind you to go to this restaurant or that you want to, you know, pick something up from the grocery store. Go eat Brady in the chat. Says I pre-ordered a tie. We'll probably give it to my mom. It's like obvious friend thing, but actually novel and framed as jewelry. I imagine this would go, yeah, they should ship this before Christmas because this would

Starting point is 03:13:46 be a great Christmas gift. For sure, I agree with God, it actually looks nice. It's obviously a more refined. Yes. You can see even at the software layer, it seems like they've done a bit more to not, they're not trying, they're, what I'm not clear on is how much are they trying to be your friend? Do they care about that at all? Is it just about function? It does have a human name, Taya, sounds like a name that you could wind up interacting with as a, you know, an AI friend or AI companion. Diffused in the chat says might have to propose with the Taya. I don't know about that.

Starting point is 03:14:21 I think the non-IOT device might be Lindy, but I mean, it's cool. I think we've seen so many shots on goal with the AI devices, and it's good to see another one. We should work on our own an AI device that's a full-size, life-size horse stature. It just has it does an entire H-100 rack inside of it.

Starting point is 03:14:49 You need a forklift to bring it around. It can inference GPT-5 locally. Horse cams looking great. Look how massive this thing is. I was going to say, what about, Jordi,

Starting point is 03:14:59 what about a smart cigar that you smoke to the filter? And as you smoke it, it gets less and less compute. I love this horse so much. I can't wait for the literal unboxing of the horse. to make more videos about this. In other news, Elon is building Grockapedia with XAI. He says it'll

Starting point is 03:15:17 be a massive improvement over Wikipedia. People have been going back and forth on how valuable Wikipedia is. I think the founder of Wikipedia was not a fan of it anymore. Kind of the creation, sort of a Frankenstein's monster situation, I suppose. I have a little white pill to end the show. Let's end on a positive note. Gwart says, doesn't matter who you are or where you come from crypto provides the opportunity for anyone in the world to make it and of course Forbes reported yesterday that Baron Trump is worth 150

Starting point is 03:15:48 million and has made an estimated 80 million from token sales with an additional 2.3 billion in locked up tokens so he has been busy let's get him on the show I you remember when people

Starting point is 03:16:03 got mad that Hunter was selling his paintings for maybe more than they were worth or being on a board here or there you know, he's got to remove the paintings and just use tokens. Hunter Biden's got to be pissed that he didn't, didn't get into cryptocurrency. Oof, yeah, missed opportunity. You missed 100% of the tokens you don't want. I really missed out on, you know, Bill.

Starting point is 03:16:26 I don't know. It's hard to imagine. I guess Hunter Biden token launched by Hunter Biden would probably. Might move. Who knows? Probably. Be safe out there. Yeah, be safe out there, everyone.

Starting point is 03:16:37 The chat is asking us to name the whole. horse. They're also asking for the backstory on the horse. We'll bring that to you tomorrow. We can do a whole deep dive on equestrianism tomorrow. We've along been fans of equestrianism. But we got to hop on with Taipei. Thank you so

Starting point is 03:16:54 much for tuning in. Leave us five stars in Apple Podcasts and Spotify and stay safe out there in the trenches folks. We'll see you tomorrow. Have a great rest of your day. Goodbye.

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