TBPN Live - Trump-Musk Fallout Recap, Circle IPO Post-Game with CEO | Dylan Patel, Jeremy Allaire, Kat Cole, Dana Settle, Anastasios Angelopoulos, Patrick Blumen, Blake Scholl

Episode Date: June 6, 2025

(05:24) - Elon-Trump Crashout Recap (27:59) - Timeline (43:34) - Patrick Blumenthal. Patrick discusses his experiences at New York City Tech Week, highlighting the diverse range of industry events and sponsorships. He provides insights into Ukraine's recent military operations, emphasizing the strategic impact of targeting Russian airfields to degrade their nuclear triad and the challenges posed by Russia's porous borders. Blumenthal also shares his perspective on the evolving landscape of drone warfare, noting the rapid advancements and the complexities involved in counter-drone technologies. (01:00:05) - Jeremy Allaire, CEO and founder of Circle, has a background in building internet software platforms and infrastructure. He discusses his journey from founding Circle in 2013 with the vision of creating a protocol for digital dollars on the internet, to the company's recent successful IPO, which he views as a significant milestone for mainstream adoption of digital currency. Allaire emphasizes the importance of trust, transparency, and compliance in Circle's operations, highlighting the company's role as a market-neutral infrastructure platform that enables other institutions to build upon its technology. (01:20:35) - Anastasios Angelopoulos, a Ph.D. candidate at UC Berkeley, discusses Lumarina, an open platform for evaluating AI models through human preferences. Users can input prompts to compare responses from leading LLMs like Google's Gemini, OpenAI's ChatGPT, and Anthropic's Claude, voting on preferred outputs to generate leaderboards across various tasks. Angelopoulos highlights Lumarina's recent $100 million funding round, emphasizing its role in guiding AI development by capturing diverse human opinions. (01:32:49) - Dylan Patel, Chief Analyst at SemiAnalysis, is known for his sharp analysis of AI chips, compute infrastructure, and global supply chains. He explores the technical and political forces shaping AI—from OpenAI’s scaling bottlenecks and China’s industrial edge to the risks of centralization and the potential of decentralized, open-source alternatives. (02:32:23) - Dana Settle, co-founder and managing partner at Greycroft, discusses her extensive experience in venture capital since 1998, highlighting early investments in networking equipment and semiconductors. She emphasizes Greycroft's focus on AI infrastructure and applications, as well as their sustainability fund in partnership with companies like Coca-Cola, addressing the intersection of AI and energy consumption. Settle also shares insights into the evolving IPO landscape, citing the recent public offering of Mountain, a company Greycroft invested in back in 2011, and discusses the impact of celebrity partnerships, such as Ryan Reynolds' involvement with Mountain, on business growth. (02:48:28) - Kat Cole, CEO of AG1, has a rich background in the consumer industry, having previously served as President and COO at Focus Brands, overseeing brands like Cinnabon and Jamba. In the conversation, she discusses her journey from starting as a hostess at Hooters to leading global brands, emphasizing the importance of customer experience and operational excellence. Cole also highlights AG1's strategic growth, including expanding manufacturing to the U.S., investing in clinical trials, and entering retail partnerships like Costco, while maintaining a focus on product quality and customer trust. (03:15:33) - Blake Scholl, founder and CEO of Boom Supersonic, discusses the recent reversal of the 1973 ban on supersonic flight over land, highlighting that technological advancements now allow for supersonic travel without disruptive sonic booms reaching the ground. He explains that Boom's XB-1 demonstrator achieved supersonic flight without generating audible booms, paving the way for their Overture airliner to operate over land. Scholl also shares plans to build the first full-scale pre-production prototype of Overture next year, aiming to revolutionize air travel with faster, more efficient flights. (03:29:45) - Timeline TBPN.com is made possible by: Ramp - https://ramp.comFigma - https://figma.comVanta - https://vanta.comLinear - https://linear.appEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.com Numeral - https://www.numeralhq.comPolymarket - https://polymarket.comAttio - https://attio.comFollow TBPN: https://TBPN.comhttps://x.com/tbpnhttps://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV

You're watching TBPN! Today is Friday, June 6th, 2025. We are live from the TBPN Ultra Dome, the Temple of Technology, the Fortress of Finance, the capital of capital. We have an exciting show for you today, folks. We're going to be continuing to react to the Trump-Elon breakup. I haven't seen a ton of new news, but we'll cover anything that's popped up most recently. There's no facts, but there are vibes.

Yeah, there are definitely vibes, plenty of them. But I wanted to give a little recap on what's happening, what happened this week on TBPN, because we are launching a new product. Every week we will be doing a recap video, trying to boil down the 15 hours that we produce into something that's one hour, two hours, something like that.

Yeah, more digestible TVPN. And so this week, what were the top stories? What were the most interesting things that we learned? One, the Ukraine drone attack, that was huge. Operation Spider Web, a whole ton of drones were smuggled into Russia in shipping containers. They emerged and went out and attacked bombers. We had Sorin Monroe Anderson from Nero's on the show to break that down for us. We also talked to Connor Love at Lightspeed who does a lot of in defense tech investing. And of course,

a couple weeks ago, we had Eric Prince on the show, the founder of Blackwater. And he had kind of predicted that the Ukrainian military was perhaps underrated. And and we might be seeing like something like this in the future. And so that was interesting to see to see play out. So will take you through those kind of interviews recap some of those then obviously we had the absolute meltdown between Between President Donald Trump and Elon Musk that unfolded on X and truth social the two ruling dueling social social platform And although it's a highly political story. There are big business business implications talking about what's gonna happen in space between NASA Boeing different launch providers. Yeah, the implications for Tesla SpaceX Neuralink even the boring company, right? There's a lot of stuff that many of the launch businesses are heavily regulated

Yep, and the potential impacts are substantial. Yeah, then we also had had some earlier stage founders on the show Roy from Clueless came on and went pretty viral put on a show Hold your position Clueless is a is a service help you cheat on everything We got to actually try the app. Someone was pushing us to try it and see how good the product is. But regardless of the product, he's also a phenomenal marketer and he came on and put on an absolute show.

And he's printing, apparently. Yeah, he's doing great. He can't spend all the money that they're bringing in. And so we'll give you an update on Roy and see where that business is. And then Kian from Nucleus came on to launch Nucleus Embryo, which he calls the first ever genetic optimization software that helps parents give their children the best possible start in life.

Quite a lot of controversy there on the timeline this week. A lot of people hate it. A lot of people love it. And we'll let you kind of decide for yourselves. And then we had a whole bunch of AI experts on the show, from Google, OpenAI, and Anthropic, got to the front leading edge of the debates around AI, AI, LLMs, deep research. Poor John, yesterday. You were fighting as long as you could.

You didn't want to talk about drama. You got dragged into it. But we did get some great coverage from Mark Chen at OpenAI as well as Sholto over at Anthropic. Yeah, it was a lot of fun. Anyway, let's go into ramp. Time is money. Save both.

He's used corporate cards, bill payments, accounting, and a whole lot more, all in one place. No, let's go into the secondary reaction to the Trump-Elon melt There's not first we can call out Tesla's up 5% today after being down They were they were down 17 or still down 12. I Mean they're down. They were 12 and a half percent over the past five days. Okay, still not a great week Okay, just hovering on that hovering under that one trillion dollar market cap got it but could be worse. And there's, you know, the timeline is still filled

with Trump Elon post Jason Calacanis from the All In podcast. It's a must listen episode this week. This is what they were built for. He posts just a dejected meme. Although I don't even know, is this for Mountainhead? Is this a screenshot from Mountainhead, this post by J Cal Yes, it is that I think is the character that J Cal most sort of sees himself

The friend in the group that It's funny. So this friend in the group has like a meditation app Yeah, and one of the other characters acquires it for two billion to get him into the billion dollar club wait It is an investor in call Wow, that's awesome Congrats to them Fred delicious says reminder that this all started with him carrying a sink Shows Elon carrying the sink into X and then he Other I gotta say he looks younger and happier in that photo. Then we've seen him in a while.

It was a crazy time. Politics will wear on you. Definitely ages. You've seen those photos of like Barack Obama before and after. It's like eight years and he's like gone cray. He's like 40. Absolutely brutal.

This was a fascinating, this was genuinely a fascinating discussion. Yes, when we were live yesterday, we were covering, in light of the president's statement about the cancellation of my government contract, SpaceX will begin decommissioning its Dragon spacecraft immediately. We had Deleon react to that.

And some random tiny account that just looks like, I guess they're verified, so it's a real account, says, this is a shame. This back and forth, you're both better than this. Cool off and take a step back for a couple days. Elon says, good advice. OK, we won't decommission Dragon. It's so great that he's just reacting to this.

I mean, the funniest thing about all of this is that it was like, this is the only new story. You have to react to this. This is the most important thing. And I was like, oh, we get the Financial Times every day. If this is a business story, it should be on the cover, right? It's not.

The top story in the Financial Times today is Trump and Xi Jinping dial down rhetoric and agree to new round of trade talks. US presidents' meeting will be soon, state invitations extended, investors remain cautious. And then also, there's a story in here from the failed startup builder AI owes cash to intelligence firm and litigation lawyers.

And so, you know, the global economy marches on while... Yeah, I mean, there was something else. The kings of drama in America. I mean, the fact that somebody was calling this, I forget the account, but they said, we effectively had the political equivalent of a tactical nuke yesterday, and the S&P is up almost 2% over the past five days.

So we're wearing white suits for it, and we're celebrating some IPOs today. Let's give it up for the stock market. We have two individuals coming on, two guests coming on to talk about the IPOs. We didn't even talk about our white suits Yeah, the circle IPO circle. I mean tremendous success but

You know very very excited IPO window is open at least if you're a pure play stable coin company I believe circle is now valued at about a third of coinbase. Yep, which is Fascinating considering that a large amount of Circle's revenue actually goes to coinbase. Yeah, but That's a great for Circle and the whole team and good for the market and I'm very Excited to talk with Jeremy a little. And if you're designing the next product that you plan on taking public, go to figma.com. Think bigger, build faster.

Figma helps design and development teams build great products together. Get started at figma.com. Simone Said says, deeply hope someone remembered to put Luke Faradour on a chopper out of Saigon. Let's hear it for Luke. ScrollRESPECTer, you know he's gonna be on

to something bigger and better soon. Out of the for Luke scroll respect her. You know, he's going to be on to something bigger and better soon out of the swamp into the valley. This point, I think he could do a hundred on 500 out the gates. Like I think he could get that round done. I think he could get that round. Somehow like, I don't know, too humble to do that. No, I know. I'm a humble guy, but he could, all that matters is that he could. Yeah, it would be amazing. And so there's a couple of polymarkets

that we should pull up. I have a screenshot here. I mean, the bigger. But I'd like you to pull up the bigger news. We've got to give it up to the team. Polymarket is the official prediction market of X. Very exciting. We had heard something like this was in the works,

but I didn't. Well, it went back and forth because there was the Kal-She rumor, and then it wound up. Well, no, it wasn't a Kal-She rumor. Kal-She preemptively announced something. Just said that they were going to do it. That's a crazy move. And then X retracted it.

OK, OK. And X from the main accounts said, we are not partnering with Kal-She. OK. And then a week later, they announced this big partnership with Polymarket. So congratulations to the Polymarket team. I'm super excited to see how this gets integrated

into the product. So I want you to pull up, will Elon Musk on unfollow Donald Trump before July? That's an interesting market. Also, there's a market on will there be a reconciliation by the end of the week, I think? And then the other interesting one is does this make it more likely that Elon

becomes, stays CEO of Tesla or less likely? I saw the market spiking yesterday to above 20%. Seems like he might have more time on his hands to focus on Tesla, so we'll see how that one goes. So pull up some of those polymarkets and I'll read some more posts. There's a whole bunch of silly posts in here. Elon Musk rushing home to have a generational crash out

in the, somebody put a cyber truck, I guess, in the GTA or something, that's fun. Who gets custody of Joe Rogan? I think he's the perfect moderator for all of us. I mean, if you, there were so many of these that went extremely viral. You had who gets custody of David Sacks, who gets custody of JD Vance. JD Vance actually came out yesterday, you know, and was pretty clearly picked aside, which I think is yeah is

good right you should probably yeah you know side with the guy that you're in the White House with course and then work behind the scenes to kind of massage yeah improve the improve the relationship I mean the coverage of this has just been fascinating to me so the Wall Street Journal has an entire entire article dedicated to just one quote post quote quote yeah thank you guys let's let's look through some of these poly markets will Elon Musk create a new political party by December 31st 24% I wonder I mean he could put up the same amount of capital as some of the major parties, right?

But when was the last time America had a third party? Like it seems unfathomable. And also, I was talking to somebody about this who had, one of my friends was predicting that the Elon Musk and Trump relationship would sour. And I was like, I don't know, maybe it'll wind down soft. I was kind of, I was a soft landing guy. I look really stupid in hindsight.

But I was wondering, just in terms of, not necessarily political capital, but popularity, who's more popular, Trump or Elon? I think it would be Trump, right? Wildly more popular. Wildly more popular. Just generally, right? And they do polling on these things.

Because yes, you have the tech people that like Elon. But that's a much smaller segment of the market than. I think there were a lot of folks, like one of the weird things about the election was that you would have a tech guy voting alongside like a MAGA supporter from 2016 who was probably very deeply skeptical of Elon back then. But you have to remember,

Trump is a very successful social media entrepreneur, right? He has a billion dollar, multi-billion dollar social media app. He has two and a half billion in Bitcoin treasury in that company now, I think. I mean, you called this morning or texted, I don't even remember at this point, but your big question was, who's more AGI-pilled? And you had a pretty clear answer.

You said that your thesis, if I can spell it out, is that Trump is not concerned with the deficit because he read AI 2027. He's a vast takeoff guy. And in his mind, he's like with AGI, just a quarter away, it's very likely that the 2028 deficit and the federal sort of debt broadly just won't.

It's immaterial. Yeah, immaterial. And you just play it out, right? So yes, there's a huge increase in spending and there's not a commensurate increase in massive in tax returns right and so the government is going to be spending more money than it's making and that's going to result in in a budget deficit and over time that grows and grows and grows and we're gonna be spending trillions of dollars on interest but if you truly believe in AGI, in super intelligence, you're going to see

10% of electricity being used on AI, you're going to see an incredible amount of economic value created by these AGI's, and the government will be able to tax that like any other income like the rest of the economy. That will drive Sachin Adela said, hey, I'm waiting for GDP to grow 10% a year. If that happens, if you believe that happens, if you're AGI-pilled, you don't need to worry about the deficit. And so I think that what this is to be- And remember, Trump's the Stargate guy, right?

He is, he's big in the Stargate. He announced Stargate, right? And so I think what this reveals is that potentially Trump is more AGI-pilled than Elon. It's very possible. Which, you wouldn't expect that to have been the result of this dust-up, but I think that's what we learned

Totally is that definitely a big takeaway definitely a big takeaway The Wall Street Journal has a whole has a whole write-up, but we've covered most of this once allies They had a public flaring out after Musk criticized Trump's legislative agenda Musk attack attacked Trump alleging his name appears in the Epstein files and suggesting he should be impeached. Trump responded by threatening to cut off government contracts to Musk's companies. Just six days ago, senior Trump aides swallowed their irritation with Elon Musk and planned a chummy Oval Office send-off to him. They briefed the president on

allegations of Musk's drug use, so Trump should be ready to defend the billionaire if reporters raised the issue at his goodbye event. As late as Wednesday evening, Trump played down any conflicts with Musk in a meeting with Republican senators, according to people familiar with his remarks, even though the billionaire had spent the past few days disparaging the president's legislative agenda over the weekend

after Trump dumped Musk's ally as the head of NASA. So that feels like maybe one of the turning points in this whole kerfuffle. The president made it clear that he wasn't planning a high-profile confrontation with his former advisor according to a person who talked to the president. That goodwill disappeared on Thursday. 13 minutes into an Oval Office meeting with German Chancellor Frederick Mers the poor German Chancellor's just sitting there and being like About Germany I'm here to pitch Germany and now you're talking to me about No, no, you're talking to me about Elon Musk drama. Like I just want to talk. I just want to talk about German stuff

Cars Mercedes or how are you gonna say more Mercedes in America? Yeah, let's keep it focused. Let's not put the attention on Tesla Let's talk about the tycon How are we getting more of those over here? How we do how we get an EQ s is over here, yeah Yeah Anyway, Trump laid out his frustrations the mosque marking the start of a whirlwind day in which two of the world's most powerful men went from friends to foes.

By Thursday night, Trump had publicly toyed with cutting off government contracts to Musk's companies, said the billionaire, went crazy and suggested that he is suffering from Trump Derangement Syndrome. It was very hard as an ex-user to actually understand what Trump was saying because the truth social screenshots were so easy to fake and the community notes was like a little bit slower.

And so it was always hard to understand. You kind of had to read for it and kind of read through the lines and understand, okay, this is clearly a joke. But Elon Musk kind of closed it out by saying, "'Whatever, keep the EV solar incentive cuts in the bill, "'even though no oil and gas subsidies are touched very unfair But ditch the mountain of disgusting pork in the bill the in the entire history of civilization

There has never been legislation that both big and that both big and beautiful. Everyone knows this You either get a big and ugly bill or a slim and beautiful bill. Slim and beautiful is the way, and so Elon's kind of closing it out with what he wants it to do. It's kind of a adapting Donald's posting style there. Yeah, yeah, yeah. I do wonder how big of a deal is the government spending thing?

We've just been hearing rattling about these, the deficit hawks have been pushing on this for decades. Going back to the Bitcoin people, right? When did Michael Saylor start talking about this? And so it's a little bit of, whenever I hear tech people say this, it's always a little bit of, boy, who cried wolf. I get convinced very easily by Joe Weisenfall saying like,

we issue debt in dollars, we print dollars, like we can inflate the debt away. There's like a million ways out of this and like America's still the number one economy and I'm just kind of like, okay. But I understand that like- Yeah, still the chart is deeply concerning. It's the kind of chart you wanna see in an investor update.

Yep. Not, you know, tracking debt, right? It's exponential and Yeah, it's rough anyway Anyway, let's tell you about Vanta automate compliance manage risk improve trust continuously Vanta's trust Platform takes the manual work out of your security and compliance process give it and replaces it with continuous automation Whether you're pursuing your first framework or managing a complex program continuous automation, whether you're pursuing your first framework or managing a complex program.

The Wall Street Journal goes on to write, the Trump-Musk blowup was long predicted. Even people close to both men privately believed that their relationship was destined to implode, but the fast-paced ratatat escalation still came as a shock to a White House that has grown used to curveballs and a president who often defended Musk as his aides grew frustrated

White House officials and other allies of the president spent the day refreshing their social media feeds watching as the situation escalated and Texting musk's post to each other It was a matter of time before all this shattered because two giant egos can't be there together said mark short who is chief of staff To vice president Mike Pence. It's hard to imagine Seeing it collapse as fast as this, but you can't be surprised by this. Mike Pence, what do you think? Yeah, the only person that had the truly perfect call on it

was that guy working analyst. I got in trouble once before for calling a 24-year-old a kid, and I believe he's exactly 24. Oh no. So. I mean, wise beyond his years. He clearly has the chops of a grizzled 60-year-old political analyst.

And so congrats to him for the perfect call. The perfect call. Really fantastic. You didn't see it yesterday. I think it's working. The account is workinganalystx. And he crushed it. John, production is asking you to move that out of your screen,

by the way. Sure. Thank you, guys. And he basically called back in October of last year that the partnership would result in the largest Twitter battle in history. And yesterday it was. It was a very chaotic, crazy day on X.

It certainly was. It's very entertaining times. The Fisher has reverberated inside the White House. Musk's top aide, longtime Trump advisor, Katie Miller, left the White House with him last week, according to people familiar with the matter, and now works with Musk. Miller, who held special government employee designation,

was with Musk at almost all times in the White House. She didn't respond to requests for comment. Her husband, Stephen Miller, is one of Trump's most loyal, invisible aides. He has defended Trump's legislative agenda and from Musk's broadsides in recent days, and Musk unfollowed him on X this week. The Millers had spent extensive time with Musk

even outside the White House. The public clash between Musk and Trump also jeopardizes the Department of Government Efficiency, the billionaire's trademark cost-cutting effort. Doge-affiliated staff, some of whom were responsible for pushing out thousands of federal workers, texted one another on Thursday about whether they would be fired next,

according to administration officials. The blow-up Thursday caught top White House aides off guard. Shortly before noon, Trump sat down in the Oval Office with Murders to chat about predictable topics, the NATO alliance, the war in Ukraine, and really so much else going on too. It's a chaos. It took about 13 minutes for the president to unload about his billionaire benefactor, expressing irritation that Musk had been critical of his legislative agenda as too costly. It started gently. I've always liked Elon, said Trump when asked about Musk's criticism of his big, beautiful bill.

I'd rather have Elon criticize me than the bill. But before long, Trump ratcheted up his rhetoric. Elon and I had a great relationship. I don't know if we will anymore, Trump said. And yeah, there's this interesting take that Elon says. I can see them recovering. It's bad right now. But they've dialed it back. I'm glad I'm glad they've both at least dialed back the posting today Yeah, yesterday. It's yesterday. You could basically refresh. Yeah, you're getting one of those firing but today is the

81st anniversary of D-Day of the landings And and we got a fantastic poster from and Earl We should share a picture And we got a fantastic poster from Anderil. We should share a picture once we take a good one, but they sent us one, and so thank you to the Anderil team for sending that over. Anyway, let's tell you about Linear. Linear is a purpose-built tool for planning

and building products, meet the system for modern software development, streamline issues, projects, and product roadmaps. Go to Linear.app. Is that a golden retriever right here? Nothing makes me bark like efficient product management and product planning. And that's what you get out of linear.

I love linear. That's great. Yeah, when John's using linear, this is all you hear. Ha ha ha ha. Ha ha ha ha. The sound effect is getting crazy. It's amazing. There's some posts from Donald Trump here.

Elon, these are from Truth Social, and they've been posted in the Wall Street Journal, so I believe that they're real. I'm very skeptical of the screenshots I see. I was actually pretty disappointed with people just making, I guess I shouldn't be too disappointed with fake news. But yeah, nothing really new, But yeah, it's good.

Elon was wearing thin. I asked him to leave. I took away his EV mandate that forced everyone to buy electric cars that nobody else wanted, that he knew for months I was going to do. And he just went crazy. The easiest way to save money in our budget, billions and billions of dollars,

is to terminate Elon's governmental subsidies and contracts. I was always surprised that Biden didn't do that. Is there an EV mandate that forced everyone to buy electric cars? Like, I don't remember that ever being a thing. I mean, I thought it was just subsidies and you would just get like $7,500 if you bought an electric car, but I don't remember there ever being a mandate. There's a bunch of state and local subsidies at the city level across a bunch of the different companies.

Yeah, and I guess there's like EPA stuff where automakers need to have a blended MPG across their entire fleet. And so you see that funny, there's that Aston Martin smart car that they made. So I can give a quick breakdown of the different companies. So with SpaceX, they have 10 different NASA awards,

a bunch of DoD launch, and then Lander Awards through 2031. There's $22 billion roughly under contract. Trump could put pressure on the Pentagon, NASA to kind of slow roll things, right? There's a bunch of, or, you know, push them to give contracts to rivals like Blue Origin, ULA, et cetera. Tesla, they have clean car credits.

Apparently it's about 1.2 billion a year and potential lost EV tax credits. Trump's saying that like, I always was surprised that Biden didn't do it. I thought that Biden was very much in the process of doing it. And so part of the reason why Tesla stock mooned so much after the election was that there was the expectation

that those wouldn't be canceled. But that was in the plan before. Yeah. Starlink already has up to $3 billion in rural broadband subsidies. Oh, really? That are kind of pending. And then this is smaller, but both Neuralink

and The Boring Company, obviously, are in highly. FDA regulated. Yeah, FDA, and then Department of Transportation, and then a bunch of other So you don't exactly want enemies in the in the way It's like basically Elon has some more exposure than anyone on earth. Yeah a hostile government. Yeah Which is why I just I seriously hope it doesn't matter if you like either of them You know, I hope they can work it out because I would hate to be sitting here doing moments of silence. Yeah. Any of these companies or their shareholders or their shareholders.

That's right. For sure. Trump was taken aback by Musk's escalation. According to his advisors, Trump told advisors he didn't believe he was harsh about Musk in the Oval Office. advisors, he didn't believe he was harsh about Musk in the Oval Office and he was surprised at how aggressive Musk became. Trump's aides spent some time Thursday trying to figure out what Musk's goal was. The president told advisors Musk was just being a child according to White House aid, according to a White House aid. Around the same time Trump walked into a White House meeting with the federal Fraternal Order of Police and made remarks. He ignored reporters questions

and didn't mention Musk. White House staff huddled with Trump in the early evening. Yeah, I remember that. I remember seeing a clip of, he's there to celebrate the police department and they're immediately asking him about Elon and he has to move on. As of late Thursday, the shiny red Tesla

that Trump purchased during a high profile photo op with Musk was still in its parking lot, just yards from the Oval Office. White House aides joked Thursday evening that they hadn't decided what to do with the vehicle. So interesting to see where that goes. What a saga. What a saga. Back to work, back to build. it's time to build, baby. I will remember yesterday forever because we were live sitting exactly like this and I could tell you had no real idea of what was going on and I was coordinating with like 50 different people on the production team, other people were texting me.

I'm too AGI-pilled for this stuff. We were getting angry messages. I'm so AGI-pilled. People that I care about being like like I do not care about AI and I'm like I do But a GI is This is the situation of the of the the steamroller and these guys are now it now it's Elon and Trump picking up pieces of Legislation in front of the steamroller that is artificial intelligence.

Yeah, well, in other news, any sphere, the startup behind AI coding tool Cursor has surpassed 500 million in annualized revenue and has raised 900 million in series C funding from Thrive, Excel, Andreessen Horowitz, and DST. Absolutely huge week for Cursor. Very interesting media rollout here.

Well this round has gotten announced like five times by now. That's true. Okay, so that's why Kate Clark at Bloomberg is writing about the revenue instead of the raise because the revenue milestone is the new data point and we already kind of knew about the raise. But there were a bunch of stuff.

I mean, there was this Bloomberg piece. The CEO of Cursor went on Ben Thompson and did an interview that was fantastic and Ben spends half the time just marveling at how young the founder is and trying to kind of relate. Because- No, it's so crazy. Think about, it felt like six months ago,

we were talking and people were saying, Sam Altman should be Gen Z, right? Like where's our sort of Gen Z? I said that. Where's our Gen Z Decacorn CEO? I mean, Alex Wang, but there just aren't as many and it just, it did feel like Gen Z was taking a while to find its footing in the in the private markets

Find their footing Get to a billion dollar revenue run rate. Let's go That's the expectation The other data point there's two other data points They're already being used by more than half of the fortune 500 including Nvidia Uber and Adobe and they say this scale will help us push the frontier of AI coding research. I mean, I want to know what's going on at the other half.

Are the other half on Windsurf, or are the other half just raw dogging their IDs? I mean, they could be using, I mean, there's so many different options. GitHub Copilot. But they better be using some. Somebody, Swix, was saying earlier this week that GitHub Copilot is also at a $500 million.

That's crazy, yeah, that's a public company. If it was out in the market, it's pretty remarkable. But yeah, Ben Thompson was talking to the cursor CEO and they're talking about how he got into software engineering, he's like, oh, well, I was a kid and I wanted to build, I wanted to build video games, specifically mobile games. And, uh, and Ben Thompson's like, I'm like, this is a huge mark for like how young you are because there's tons of

entrepreneurs that got into programming through video games. Oh, I was playing, you know, like this was me. I played Counterstrike. I played Counterstrike, I built a PC, and then I would like modify the levels and modify the skins and the spray paints and edit some config files and then eventually scale up from there. No, Cursor's CEO started with mobile games. And he actually built one that was really, really viral

and really successful among software engineers. And so he's got a storied career. He's got a check that really Stripe account. Yeah, killer. What was the activity in their Stripe account when they were in high school? Yeah. That's the investment thesis.

I mean, yeah, it would have been a good one. Who was the first investor in Cursor, I wonder? We've got to figure that out. But great deals. I was saying, Neo was early. Oh, yeah, Neo. That's right. But Thrive, Excel, Andreessen Horowitz, and DST

are all in this Series C. They raised $900 million. David Tisch was also super early. David Tisch, let's hear it. Let's give it up for David Tisch. Let's go. Round of applause. He loves to hear it. He's not going to post about being early as much as the rest,

but we're going to talk about it. Absolutely. And of course, Sam Bankman Freed, also early into cursor. I thought it was Windsor, but it's cursor? No, it's cursor. Oh my god. Wow, SPF. What a picker.

What a stock picker. I really wonder. So yeah, FTX had a stake. Had invested, I guess, $200,000. Yeah, we heard about this. It had like insane valuation, right? Or insanely low valuation. But it was kind of rumored, and the deal

might have changed hands a few times, or like the stake might have changed hands. Yeah, no, they invested 200K, and they sold the position for 200K. Yeah, I wonder how well those FTX. Which is probably going to get relitigated or something. That was a fund. That probably would have been like a 5X fund, right?

If you just looked at the FTX private markets like startup investments as a VC fund, they probably did pretty well. What was the other one? Oh, the Anthropic, yeah, they had a huge stake in it. They were also in WorldCoin. Oh my God. Wow, Sam.

Should have just raised a fund, not had to deal with any of the dealing with crypto. Should have just gotten out of crypto, pivoted to crypto to AI. Yeah. Could have done it. Yeah, or told FTX users, do you want to be part of Sam's slush fund? Yeah, that was rough.

Instead of... Anyway, I think the story with him is not over. We'll see as it evolves. Apparently he did get in a ton of trouble for that podcast he did from jail. Apparently you can't just podcast from jail. Yeah, that was wild. Crazy, he did that.. Apparently you can't just podcast from jail. Yeah, that was wild. Crazy, he did that.

Anyway, Numeral. Did you see this post? Says sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. NumeralHQ.com. The golden retriever gets on Numeral. That's true.

You wanna get a Will or? Yeah, I just thought this was hilarious. Well, obviously of open AI fame says, this was the motivation I needed. Thanks, SFO Airport. It's just like billboard. Win the AGI race. Dominate the leaderboard.

Win vibes. He's just standing seriously in front of it. Yes, this is great. Win the AGI race. Don't care about the budget. Don't care about the pork. AGI does not concern itself with pork. The lion does not concern himself with deficit spending.

Absolutely not. Absolutely not. We can skip this semi-analysis post because of course, Dylan Patel from selling semi analysis coming on the show today. And we will ask him about Jensen's new math rules and have him break it down for us. This is a very fun post.

But anyway, let's move on to Uber is evaluating stable coins potential for payments, CEO Dara Koshrashar he says. Yeah, I wanted to throw this in here mostly so we'd remember to ask Jeremy about that. Oh yeah. Like all these different massive companies looking to adopt stables.

Yeah, yeah. Apparently, payroll companies might be adopting stable coins for like all of these different wire transfers that they do, both to speed up payroll, which is already pretty fast, but there's also a whole bunch of stable coins that if you put stable coins inside a payroll company, you should be able to earn yield on the on the the like the, the all the dollars that you're holding. Now you don't actually hold that

many dollars just from running payroll because it comes out of the company's bank account goes for like one day into the payroll company's account and then it goes out to the employees, right?, goes for like one day into the payroll company's account, and then it goes out to the employees, right? It just gets split up. So there's not actually that much float there, but for tax withholdings, there actually is a ton of float because every paycheck you're taking out $1,000

and you're gonna send it to the IRS, but you send it to the IRS nine months down the road or six months down the road on average, right? Because you're waiting, you only pay taxes once a year. So then, you know, half the year you're like on average, sometimes it's, you're holding it for 12 months. Sometimes you're holding it for one month, but on average that's like six months of cash and it's a lot. And so, so right now that's, that's held in the counts, but, um, with stable coins, you could potentially get more direct exposure to the underlying treasuries.

And so there could be some sort of boon for stable coin or for both stable coin providers and payroll companies. So B2B SaaS undefeated, another beneficiary of modern technology. Just wait until quantum computing hits. Once quantum computing hits, everything changes in payroll. Every payroll company, especially global payroll companies, are really at the forefront of quantum. Oh yeah, this is another thing.

So what does the Elon Trump desktop tell us about Elon's quantum computing timelines? Because as you probably are familiar, quantum computing can break encryption. So guess what happens when quantum computers are ubiquitous? Oh, there's Epstein files Everyone's gonna have access to them. And so and so if he really believed it quantum socks should be down Yeah, endlessly today

This is the trade Stay out of Tesla stay out of stay out of Rivian and Ford got to look at the second Or got to look at the second and third order effects. What does this tell us about quantum timelines? Probably that they're further out than we think. Because as soon as they crack those, boom. Who's the, what's the first file you're decrypting? The Epstein files, obviously. Of course, of course.

Of course, of course. I liked Mike Solano's post about that. He's like, I honestly can't believe that we didn't know that It just felt like internet lore that like of course Trump was in there because there's like pictures But I guess like it's a good thing to be in the files than being a picture But the picture I got a damning when I got home yesterday. Yeah Sarah was like hey, how was your day? It was like Did you see the news and she was like no?

I've just been with the kids, like all afternoon, just been bouncing around swim lessons, music class, all that stuff. And I was like, Oh, well, like, Elon, you know, accused Trump of like being in the Epstein list. Wait, like, I thought like, there's a bunch of everybody's seen the pictures of like them hanging out. Having you know, there's video there's pictures of them hanging out. There's video of them having a party together. It was just kind of assumed, I thought.

But anyway, anything to get the internet riled up. Elon's master, master poster, he owns it. Anyway, regardless of your view on quantum computing, you can express your view on it on public.com. Investing for those who take it seriously. They got multi-asset investing, industry-leading yields. They're trusted by millions. Go to public.com.

Let's go to Naval. He says, the majority of voters are retired either by age, disability, or make-work jobs. Paying for mass retirement requires crushing taxes, mass immigration, or rampant inflation. The only way out of a risky bet is on tech-driven growth. AGI will save us. But yes, the make-work jobs is interesting.

The AGI-pilled lion doesn't concern himself with deficit spending. Or unemployment. True. I mean, this is one of my questions for most of the truly AGI-pilled people. I try and formulate it as US unemployment over or under 10% by 2030.

Because the US has rarely had higher than 10% unemployment, but AGI seems like something that could do a lot of jobs. And so even in the Tyler Cowen model where, yes, medicine is resistant to AGI seems like something that could do a lot of jobs. And so even in the Tyler Cowan model where yes, medicine is resistant to AGI. Yes, like farming and land and plumbing and all these different things are maybe resistant to just like LLM based agents, right? But even with that scenario,

you should experience some pretty significant dislocation. And this is what that latest Dwar Kesh debate with Shalto was all about how quickly can white collar work be automated some people are very aggressive timeline some people don't but I always try and formulate it in like let's put it in a concrete something that's measurable 10% by 2030 and a lot of the AGI people when they go when they really unpack it they start thinking about, well, wait, we're really good at creating fake jobs.

We could just have 10 more TSA type programs, and all of a sudden people are still employed, and it's like, yeah, my job is pretty chill. I mostly just watch YouTube and oversee an AGI that does my job, but I still get my paycheck that way. You did a speed run to leadership in the census here in college, right? This is some incredible Kuggen lore.

Yeah, this was, I mean, the government's fantastic at this. So during the 2008 recession, there was a desire to pump money into the economy. More in the modern way we do that is basically with UBI and just sending checks to everyone, but it wasn't always that way. We used to have to come up with an excuse. Schemes.

Schemes. And so. So this scheme was basically counting. Counting. It was a counting scheme. It wasn't a counting scheme, it was a just a counting. It was a government backed counting scheme. Operation.

Yes. And so the census in 2000, the economy was ripping. It was the dot com boom. And so all the census in 2000, the economy was ripping. It was the dot-com boom. And so all the census workers were basically volunteers. My mom actually volunteered, went around and asked people in the neighborhood. It's actually kind of a nice thing to go meet your neighbors and ask them, like, hey,

fill out the census form. We'll be able to get more votes for the upcoming election. And it's very nice to use people, and people are happy to do it. But in 2008, the economy had just crashed. 2010, the economy was in shambles after the recession. And so they decided to pay everyone like $20 an hour to do a job that people were previously doing for free,

and throw like way more resources at it to get like better census data. But of course, you can only spend so much. And so I wound up getting like a management job there and getting paid a ton of money to do like basically nothing. You were managing hundreds of people. Not quite hundreds, but dozens. And it was actually my 21st birthday.

And I remember going out and being like, yeah guys, like I can't really like fully take advantage of this and like drink that much tonight because I have to go to work tomorrow. You gotta look after your team. And do an orientation for 40 people that range from five years older to me than 50 years older than me. Yeah. Like there was truly no one even close to me. It's still in school. I would pay a lot of money to have a video of you up in front of all of them talking. It was a wild time, wild time.

Learned a lot about the government. Anyway, we have Patrick Blumenthal in the studio. Let's do one more ad read. Let's talk about out of home advertising. Adquick.com, out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only Adquick combines technology, out of home expertise,

and data to enable efficient seamless ad buying across the globe. Wrong screen share. Wrong screen share. But we can talk about 8 Sleep 2. Get a Pod 5 Ultra. Pod 5 has all this. I had a brutal night's sleep.

It's been chaos. I think the two one-year-olds took the Elon Trump breakup really, really hard. I think the four-year-oldolds took the Elon Trump breakup really really hard Yeah, I think the four-year-old as well very very difficult. Yeah, it clearly like He can't really articulate if he's a Trump guy or an e-con guy, but he didn't let that on but it was it was a dark Moment for him. Well, they're all America guys exactly exactly America guys exactly exactly so it was kind of like anyways it was an embarrassing moment yeah the twins first two words China one yeah they're disappointed dad China one yeah but rough night of sleep I got like a 64 he crushed me I mean I didn't do much better if you want to get on the

official matchers of TBPN go to acelot.com slash TBPN they got a five-year warranty 30 night risk free trial free returns free shipping let's bring in our first guest Patrick Blumenthal I've been on a podcast with him before we went it we were we did tire wires together good to have you here in the studio welcome to the show long overdue how you doing so much? Break us down actually first. Let's kick it off with an intro. What are you doing? Where are you? Are you in America? Finally the last time I was on a podcast with you. I think you were halfway across the world I am in New York City right now cool for the illustrious

Decadent incredible New York City Tech Week. Oh fun Fun fact I created New York Tech Week co-founder right here. Oh, fun. How is it? Fun fact, I created New York Tech Week. Co-founder right here. Yeah. Yeah, years ago. Passed it off to Andreessen after the first year. But yeah, the very first New York Tech Week was by yours truly.

One of the biggest still on the domain. Yeah. Yeah, bring it down for us. What have the best events been? Is it mostly VCs, entrepreneurs? Is there a lot of pitching? How are the ads? Are there good sponsorships?

There's a lot of ads, and I think the attendee to event ratio has shifted massively compared to previous years. I only went to two events, by the way, so everything that I say, take it with a grain of salt. I'm actually just in New York, and then it happens to be during Tech Week. There's a lot of events, a lot of sponsors,

virtually for every single industry. Like there's a million not sec events, there's a million tech events. It's like virtually every industry, every type of person. What's the reaction? You seem a little tired, Patrick. Were you up a little late last night? I've been up late a lot this week,

and the previous week, and the week before that, to be honest. New York is an exhausting city. It's not quite the same as San Francisco. Do you sleep more when you're in Ukraine or New York? Dude, I actually sleep really well in Ukraine. I find the food to be so much better, too, so you can somehow smoke a bunch of cigarettes and drink a lot and still sleep really well.

It's a true meme. The meme is real. Nice. What's the reaction been in at these cocktail parties to the Trump Elon news? That's a good question. It came up a lot last night. It wasn't actually a tech week party, but, um, you know, part of the, it was a, it was a couple of dissident, right? Events. We might call it that. Um, I think, I think, uh, people don't care as much as Twitter, to be honest. No one really had any strong takes.

No one's taking sides, I guess. Yeah. There's just not that much to go on. It's still like crazy, but then in and out in a few minutes. But certainly something to track. But let's move on to the reason we wanted to have you on. Can you give us your reaction and breakdown to the Ukrainian operation

that I believe happened last weekend? We covered a little bit on the show, but I'd love to get your take and maybe just introduce exactly what happened and then we can go into some of the history and implications. Yeah, so at a high level, what happened? Obviously, you haven't heard about it, but specifically, Russia had a high level what happened, obviously you haven't heard about it, but specifically

Russia had a very, very big part of its nuclear triad get degraded. So they lost like 33% of their kind of air launch cruise missile capacity. It's a bunch of strategic bombers that they manufactured during the Soviet Union, completely irreplaceable. And so one of the kind of big asymmetric advantages of Russia during the war has been that they can just launch a massive amount of stuff from really far away, like way beyond the range of Ukrainian fighters, Ukrainian air defense systems. They use cruise missiles, which obviously have a propulsion on the munitions, so it

goes much further than it otherwise would. And they also have glide bombs that they've been using for the last three years of the conflict, which is basically just taking dumb bombs and making them fly much further than they otherwise would. And so really all Ukraine has been able to do is destroy the platforms. Like there's just no way that they're gonna shoot down

every single cruise missile, they're not gonna shoot down every single she-head. And so this is essentially the best thing they can do. It's just like go to their airfields and blow things up when they're still in the ground. You mentioned the nuclear triad. So these bombers that were destroyed, we're actually capable of carrying and dropping nukes, even though that's not directly relevant in this conflict.

They're all nuclear capable or a lot of them. Yeah. And so, um, you know, you have ballistic missile submarines, you have strategic bombers, you have ground launch ICBMs. And ideally, you want all three, because the idea is essentially that you have too many nuclear assets in too many different places that, you know, you want essentially deterrents. So even if the US were able to first strike with, you know, hypersonic missiles, every single ground silo that the Russian Federation has, they'd still have a bunch of strategic bombers on station, a bunch of submarines on station,

so we would still be screwed basically. It's crazy to think of Russian nuclear submarines like just trolling around the ocean. I feel like they've been so pushed back, so contained, but of course that's obviously a- Well that's the point of nuclear submarines, you can go- Yeah. To the zone and just hang out for quite a long time. What do you think the,

is this type of attack a one and done? They operated it on cellular networks, which was a surprise. Do you think that Russia will make changes that make that a lot harder in the future? What's your kind of reaction there? I think the reality is that Russia is a very porous country. Like it's exceptionally easy to get things in and out

to their advantage and to their disadvantage. Like people don't realize how many Western components are in like every single Russian drone. Like, they're still heavily, you know, using Western companies and components for virtually everything. They get in through a wide variety of ways. But to our advantage, obviously, the Ukrainians

can do the same thing as they've demonstrated in this case. I think, you know, the future attacks are gonna rhyme. They're not gonna be exactly the same. Like, what Russia is probably going to do is improve their jamming operations at airfields that traditionally have not been subjected to Ukrainian drone strikes. They're going to change their procedures around daytime

operations. So generally, one-way attack munitions, both on the Russian and Ukrainian side, happen at night. It's kind of random that on a Sunday morning, basically, there were a couple hundred Ukrainian drones hitting all these airfields. That's quite uncommon.

And we don't know where the failure was on the Russian side. Were the jammers online? And the Ukrainians just knew what frequencies the jammers were working on. And so they just operated outside of that. Was the Russian jamming guy who just sits there with the big red button just not at his station at the time because he wasn't expecting it. There's kind of a lot of open questions around that and I'm sure there's going to be like

procedural changes but when you when you kind of step back from the specific attack of like big trucks with garden sheds that are containing all these drones near air bases. And you just look at the basic kind of formula there, which is civilian infrastructure near military assets. The attack surface is just really wide. So like it could be a rail car, it could be a truck, it could be a van, it could be a ship in a port, right? The military facility doesn't have to be an air base. It could be a factory, could be the Kremlin, could be any logistics depot, could be a base. And so when you multiply all that complexity, basically, across the 11 time zones that Russia has territory

with hundreds of critical facilities, it's kind of unstoppable, to be honest. Yeah, that's interesting. How are you thinking of investing in drones as a category? You've been on the ground in Ukraine. You've seen, I'm sure, a lot of the stuff that they're doing, which is evolving constantly. I'm sure you've met a lot of the American drone startups.

And obviously, there's a huge range of players from Niros to Anderol to counter drone startups like ACS. But how are you looking at the category and where do you think it's investable? So I think Ukraine is interesting specifically and then I'll answer your question. Ukraine is interesting specifically because you have a lot of like consolidation around the same exact ideas so like I've seen a lot of drone factories spread out around Ukraine they're all making generally the same stuff within FPVs at least and like you have different components like oh this FPV

We're gonna use fiber cable for it because this area is jammed But at a high level every FPV in Ukraine is like exceptionally attritable It's like 3d printed very cheap components from China or now some sometimesically produced, but very, very cheap. Those are not really what I think of as venture backable. You also have obviously all the added unique risks of their factory might get blown up by a cruise missile. The founders in many cases are also active duty soldiers, so you have to kind of underwrite the additional risk of them getting killed on the front.

Not to be so morbid, but it's true. In the US ecosystem, more like a traditional startup, obviously. There are no founders who are active duty in the U.S. There isn't exactly the same set of risks, and they're much more focused on selling to the creme de la creme customer, the DOD. So the capabilities are just much more exquisite. And so there's a lot of stuff to bite off because the US, similar to Russia operating in 11 time zones, the US operates in every time zone because we have bases literally all over the world. And so every single climate,

every single potential adversary, Iran, China, North Korea, Russia, et cetera, they demand different solutions in each theater. They demand different solutions for different operations during different times of the day, different weather, like all these different things. And so the reality is that there's actually a lot to invest in.

Specifically with drones and counter drone stuff, I think the future of like the integrated air defense system like, you know, we think of as like the Iron Dome, it's gonna be much more heterogeneous, right? So like Israel now has like five or six different types of missiles they use, they're testing lasers, they're testing a kind of other couple stuff. But it's like a much more stationary and static type of system. The integrated air defense system in the future is going to be like three or 400 different things like this is going to jam this one thing. This is going to intercept this one thing. This, you know,

it's just hitting an FPV. So it can be a small gun, like in the case of ACS and then other things, you know, you need a ballistic missiles to destroy other ballistic missiles. So you basically are going to have this system, like a command and control system that senses all these different things. And then essentially triages. What is Russia doing on the FPV drone side? We've heard that Ukraine is producing I think millions a year.

Now it seems like really, really mega scale. Has Russia been able to match that at all or do they take a different tact? I don't know where the official numbers are to be honest, but I would be surprised if Russia was producing less to be honest. I mean, I think certainly within the same order of magnitude, obviously there's very poor fidelity on the Russian side. But one thing that you can just look at, and this isn't just FPV drones, this is just drones broadly, one of the things that you can look at is how many sheheads are attacking Ukraine

every single night. It's in the hundreds. They're literally just lobbing hundreds of shehead drones at Ukraine every single night of the week. And so I don't know if you guys saw, but they did their quote unquote retaliation last night. It was basically like any other night. They just lobbed a bunch of drones at Ukraine. The Russian economy now is literally entirely a war

economy. I don't know what it would look like as defense as a percentage of GDP. Yeah, that's one of the big issues with peace, Like, I don't know what it would look like as, you know, defense as a percentage of GDP. Like, That's one of the big issues with peace, at least on the Russian side is what happens to the economy if you no longer need to be producing, you know, huge volumes of tanks and drones and missiles

and all these other things. It's so depressing. So many great mathematicians there. They should just be building hyperscale data centers and racing for AGI. They have the talent and they're focused on kinetic warfare. Death itself. Fighting the last war. Well, that's probably got to end the war so that we can do joint AGI development with

Russia. Exactly. Exactly. And the war burst. Yeah, or maybe just more brain drain. I wonder if there are more Russian scientists that are leaving because of how crazy the war effort is and if that'll make it easier to recruit brilliant scientists. There's a lot of people just hiding to,

mostly on the Ukrainian side, because Ukraine obviously has the draft, but a lot of Russian scientists left in the first few days of the war through Georgia and Armenia, and now they're just like refugees. And then a lot of Ukrainians within AI and tech, um, obviously a tremendous amount of them have joined the military and they're now

developing drones, but there's still a lot of Ukrainians. They're just like hiding in their houses basically. And their wives just do all their errands for them. Like they're, they're not allowed to leave the house cause they're going to get conscripted. So their wife gets groceries and everything. Can you talk to me about what is actually involved in visiting Ukraine right now? Is this something where you need to fly to a different country

and take a train in? Is the airspace dangerous? Do you need a visa? What does the State Department think about visiting Ukraine right now, if anyone in the audience is considering going? What's the vibe on the ground? Where do you stay? How do you actually get connected?

Can you walk me through your experience visiting Ukraine? Yeah, it just kind of depends on what you want to do. So I don't know how specific I should be about my next trip. But the more east you go, the more difficult things become, obviously, both in terms of getting approvals, but also just transportation. And then also, your risk tolerance would have to go way up.

So like, hypothetically, if I go to Kharkiv, which is very close to the Russian border, it's basically on the Russian border, the risk considerations are just very different, both in terms of what to expect every night from Russian strikes, what to expect in the context of the war, like there is always some kind of an offensive

going on around Kharkiv. And so you do have to be careful. You know, what I would say is that I obviously have a high risk tolerance. What I would say is it's not as dangerous as people think statistically. So like, you know, the likelihood that you're going to get killed even in a drone strike when like if you're in, if you're in Kiev, let's say, or Harkeith and they're striking at hundreds of times per night. These are big cities, you know, so likely that you actually get hit by anything is pretty low. Um,

in terms of getting it in the country, you have to fly in through Poland, basically. So you go into Poland and then you drive into Ukraine and it's a big country. So it's like 14 hours from Poland to, to keep. Yeah. I mean, we've heard, I've heard we saw during the global war on terror, like there were plenty of journalists that made it in and out. Obviously it's extremely dangerous, but it is it is doable if you're, if you're careful enough. Uh,

can you talk about the public relations strategy around the Ukraine attack on Russia? I found it interesting that we were getting like high fidelity video, really detailed analysis. It felt like- Yeah, first party video. Exactly, and the sentiment in the early war was very much like support Ukraine. Then there was recently some pushback about are we spending too much on this? Is this even our war to be fighting?

And that was a kind of political football that went back and forth, both on the left and the right in some ways. This makes, this feels like, it feels like the takeaway is that the Ukrainians are innovative and they're adapting and they're not letting down and so maybe it's not time to back down and supporting of them.

Is that deliberate? Where do you think this goes from here in terms of support from America? I think there's like different groups of people that the Ukrainians want to kind of attract or get attention from. These kinds of attacks and the reason why they're so public about it, including posting footage, is that they're trying to basically convince the rest of the world that they're

worth supporting in a very pragmatic way. It's like forget about the fact that Russia started the war, that Ukrainians are being killed, any of that's kind of irrelevant. The main calculus is, hey, yes, we are, you know, one fifth the population of Russia. We have a much smaller economy. You know, we have manpower issues. All these things are true. You know, Russia, historically, you don't want to fight a land war against over an extended period of time.

We do these operations, the Ukrainians do these operations because it's a way of showing that they've essentially found asymmetric ways to offset it and that if you send them money, if you send them weapons, if you provide intelligence support, they're going to keep finding new ways to do it. So it's just them basically showing every six months really, we're going to find a new way to reinvent ourselves and keep Russians on their feet basically. Very cool. Well, good luck on your next trip.

Stay safe out there and enjoy the rest of New York Tech Week. Appreciate it. Very cool. Well good luck on your next trip. Stay safe out there and enjoy the rest of New York Tech Week. Appreciate it. I will. Thank you guys so much. Be safe. We'll talk to you soon. Great talking to you. Bye. Next up we have Jeremy from Circle. I'm so excited for this. I'm still learning about quiet periods and when folks can talk but we certainly not in a choir We're so excited to have Jeremy on the show. Welcome to a TBPN. How are you doing? How are you feeling? I have you congratulations. Thank you. Thank you. I'm feeling good. It's it's been a it's been a really intense couple weeks and obviously a Really exhilarating last couple days. You got any sleep last night?

I did. I did. I managed to. My family was able to join me for the ceremonies here in New York and got dinner with my family and got some rest. Yeah. We talked to Brian Armstrong about the initial rollout of the Circle partnership years ago.

This has been a classic overnight success very clearly. Probably your overnight success, yes. Yeah, but. Overnight success. We love an overnight success on the show. But can you give us a little bit of the history and the story you told about the company when you were taking Circle Public?

Yeah, absolutely. I mean, look, my background had, prior to this, been building internet software platforms and infrastructure from like programming language, developer tools, digital media platforms. And I was always interested in sort of how the open internet and open networks could change the way different parts of society work.

That was what animated me. And in 2012, I got deeply into the technology behind crypto. In 2013, really formulated this idea that it would become possible to build a protocol for dollars on the internet, where you could issue what I thought of as a full reserve dollar digital currency that could be made accessible in a protocol like HTTP.

So you could have a protocol for dollars on the internet. And I believe that we could do that on these blockchain networks, which were super nascent at the time, and there was no legal framework for any of this. And it was totally crazy. But we believe we could do it. And I think the belief was that over time time these networks would become scalable, the infrastructure would work, we could come up with laws and regulations, and that once we achieve that, that basically the storage and transmission of value would become like a commodity-free

service on the internet, and money velocity would explode. Then in particular, I was really excited at the founding of this idea of programmable money and smart contracts, which was like ideas on napkins at the time. And that ultimately, not only would you just sort of have this explosive way and low-cost way to move value around, but actually the utility of money could increase dramatically and that you could actually rebuild the financial system into an internet financial system, which is how we founded the company at Circle Internet Financial originally and and so You know, we've just been pursuing that and and now like it's actually happening like the infrastructure works

There's laws and regulations We have these full reserve digital dollars that have like central banks and prudential regulators looking at them And and the technology is starting to go into the background. It's no longer crypto, it's stable coins and it's digital currency. And we've built, I think right now, a really interesting business to bring that.

And so that's sort of the origin of it. And so it's been a long road for sure. Congratulations. I have like 12 more questions. I know. We don't have a ton of time. I want to get into two angles, how you're thinking about partnerships on a go forward

basis with institutions and partnerships with other large public companies, it seems. We saw Uber in the last 24 hours in the headline talking about exploring stablecoins. We were talking about payroll companies, potentially. 100%. And I feel like this gives every, you know, my last company was a fintech company.

We enabled stablecoin investing with USDC. And so I've been a big believer for a long time. But you guys being public now, the market reaction to it, it feels like it gives every single institution in the world permission to say, hey, let's adopt this technology in a meaningful way. And so it truly feels like you guys are on day zero. Yeah. I mean, look, I think this is like a mainstream moment for the adoption of this technology. We're classically crossing the chasm, right? From early adopters to mainstream acceptance, the technology usability, the laws and regulations.

And having a publicly traded company like this, I think it really does matter to trust transparency, compliance, governance, things that really matter when other major companies wanna figure out who to build with. But at the core of our business, our whole model is we're a market neutral infrastructure company. We're like a platform that people can build on top of. We have banks and neobanks and

payments companies and fintechs and exchanges, custodians, like every type of institution we work with already. And they face us as a market neutral platform. And that's really, really important. We're not competing for end users. We're not competing for businesses. We want to let other people build on top of both the kind of public utility that we put out on the internet, like our public protocols, and like the kind

of market infrastructure of the money issue inside of it. And so it's now, it's definitely getting to a point where, yeah, I think major public companies, commerce firms, internet firms, financial institutions of all types really can build on this now. It works. It's liquid. You can connect to it around the world. And we have the ability through innovations like CPN, a recent product that we launched, to abstract away from an end user perspective, a lot of the things that tend to be barriers to entry and make it work compliantly as well.

So it is a really, I think, significant moment. I do think that lots of mainstream companies can now really feel like they can do this, and there's a great platform company to work with I'm wondering about other real-world assets on change programmable money a lot of the Conversation around I want something that's low cost high speed programmable and stable supply that makes me think Gold stable gold coins basically. Yeah, I'm sure you've gotten this before, but why didn't the market evolve that way or even that original like 1999 Peter Thiel talk about yeah, I'm gonna be able to transfer one dollar worth of S&P 500

right to someone else and there seems to be some demand for that type of stuff, but the market didn't just break that way And so what's actually yeah? Well, I mean look I mean the the dollar itself itself has extraordinary network effects. 65% of trade is settled there. And frankly, a huge driver in our business right now is demand for digital dollars around the world. People, households, firms want to hold these safe, full-reserve digital dollar instruments

that have the utility of the internet. It's like when people woke up and said, hey, I can use WhatsApp and I can communicate with others. I don't have to pay my carrier these SMS fees and it's over the top internet money. And so people have figured that out and people want dollars, even though there's a sell America trade

or whatever you wanna talk about, or there's a fiscal cliff or whatever it is, like all these things that are there, people still want a unit of account and they want the power of the internet as a medium of exchange. And relative to almost every other fiat currency, the dollar still remains super preferred.

And so I think that's certainly gonna be the case for a while. And so I think that's there. But the programmability piece is the really exciting next step, right? How can you intermediate financial arrangements, commercial arrangements, labor arrangements, arrangements between AI agents,

like all of these things that can be machine mediated with provable code, tamper-resistant provable code on the internet, which is what smart contracts give us. We're just starting to see the unlocks there, and it's gonna be an entrepreneur and developer-driven phenomenon for sure. That's amazing. You mentioned AI agents.

Ben Thompson was reacting to the MCP standard and the lack of a payments layer in there, at least in this version of the specification. Do we need a V2? Is this something we saw? You know, it's a great question. We're working with all kinds of teams on agentic payments. And I'll tell you, we worked on a new standard.

Actually it's reusing an old standard. We worked on it with Coinbase and a couple of others, which is X402, which is essentially an, it was a protocol extension of HTTP, which was originally a protocol extension to support payments native to HTTP. No one ever did anything with it. And so it is essentially the payment request like a feature of HTTP. So that's been reincarnated

and where stablecoin is the payload. And so now you actually have built into HTTP an extension which is a stablecoin payload. And so it's like literally designed for AI agents that need to basically, you know, handle these and, and it kind of abstracts away what chain you'd use underneath. And so it's, it's pretty cool. And we're pushing it into our dev products, so is Coinbase and others. And so I think actually, like that was part of like on Mark Andreessen

complaint. I was about to say. That's the famous thing. Hey, we had this thing there. No one did anything with it. Well, now we have something to put in there. And now we have the demand, which is machines that talk to each other.

And so it's interesting how a lot of these things come together at the same time. Yeah, do you have a view on that idea of micro payments on the web? It just feels like we have micro transactions that happen across APIs. They just get bundled and reconcile at the end of the month. There's still a ton of value in stable coins. I'm not saying that like the narrative is bust because that might not be the end game. But we saw this with Bitcoin where people were saying, oh, there's four different ways

that this could break privacy, blah, blah, blah. It wound up in having a very strong narrative. It kind of narrowed down the focus, but it's still a wildly successful technology. Well, I mean, look, at a high level rate, we think about the TAM here as legal electronic money. And then narrowing that down a little bit, you have cash and non-interest bearing demand deposits, which globally is like $60 trillion of the money supply. And so if you can have a digital cash instrument

that has the superpowers of the internet and the like, that can basically move and transact at almost no cost, there's an enormous amount to grow into. Now the other part of the TAM is all of the different utilities that we have for storing it, moving it around, and those are being reconstituted on chain. And so you start to think about like, okay,

cross border payments is one that we talk about a lot and we're seeing a lot happen there. The kind of point I like to make is like, when's the last time you sent a cross border email? And so it's like, whoa, that doesn't make any sense. We're like, we're entering that era with money, right? Where basically like stable coin money, and that could be a business that's got a $10,000 payment

to buy something from someone in Asia to get product in Latin America. It could be an investment, right? I wanna make a $10,000 investment in a startup, in an emerging market or in the US, or it could be, and as we see today, like the biggest electronic trading firms in the world are moving hundreds of millions of dollar transactions

over blockchains using USDC to settle bilateral trades. The exact same transaction is being used to buy a 25% digital object in a Web3 game. And it's the same, right? Just like if I send you an email with a picture of my breakfast, and you send me an email with a CAA dossier, it's the same payload. It's whatever it is, 25 byte or a byte of data or whatever.

It's the same thing. And so that's the cool thing about this. Very, very scalable. And so you don't need streaming payments or micro payments as a killer use case. You just need to be able to support all these different kinds of value exchange just in an internet native architecture. Can you talk a little bit about the geopolitical environments internationally that are most receptive to stablecoin adoption?

You could see demand for crypto products track or correlate with authoritarianism, but then you have the pushback of a lot of authoritarian countries might want to ban or restrict or make something illegal. So will we see more account almost counterintuitively or like as a second order effect? Will we see more stable coin adoption in more democratic countries first? Yeah. Well, what's interesting is the demand for stablecoin money is very global. And we do see it, for example, in countries where there's weak regimes or the banking system isn't as adequate or there's not as effective access to dollar banking.

And so that's a valuable thing for the people and businesses in those markets. But it is sort of this, again, this over the top phenomenon, like WhatsApp came over the top and all of a sudden everyone was a Facebook customer and then you're dealing with Facebook for whatever issues in your country. Or the Arab Springs were an example of like, hey, everybody could share media with each other and like, whoa, we just lost control of things. And so I do think there are geopolitical dimensions to this. I think when the very first- But then you guys have partnerships in Japan that allow you to launch USDC there, which is more direct.

We do. And that's our philosophy, right, is if a government is going to have rules around stable coins in their society, we want to make sure that those rules are fair, obviously, and we want stablecoins that are allowed to be used to be held to really high standards, right? High standards of trust and transparency and compliance and governance and things like that. So that's important.

And what we're now seeing is in markets where stablecoins have exploded, Korea, Brazil, Turkey, South Africa, Kenya, like all of those governments are working on stable coin rules right now. And so I think it's a space where that's intersecting. And so, yeah, we've dealt with this in the history of the internet, right?

When the internet started, like you needed a broadcast license to have a radio show in Italy, right? Or there were national monopolies that were the only entities that could actually do radio shows in Italy. Well, now here we are, right? So I think there are these kind of transformations in society, ultimately votes on what they want to adopt, but it is still a political economic negotiation. And monetary sovereignty is not something that the internet has really faced off against

in a big way. But people talk about Bitcoin as doing that, like as this non-sovereign store of value, but then when you have kind of exportable digital fiat, then it does become a slightly different issue. Can you talk quickly about the competitive dynamics on a go-forward basis? This IPO was massively successful.

It seems like they're, right now from my point of view, infinite excitement for Circle and USTC. That's obviously going to inspire a lot of different groups, whether it's early stage startups to other institutions to compete. And I can imagine myself why you guys will continue to dominate. But I'd be curious to hear from you. I mean, look, I think the way we think about our business is that we've built a stable coin network and it's an internet scale platform and network utility. And we take very much like an internet scale platform and network utility.

And we take very much like an internet platform mentality. We wanna build open public infrastructure. We want developers to build on it and developers build applications that integrate to it, which adds utility, which then expands interoperability. And so you create these really great classic developer flywheel effects. And that's what we've done.

And we've done that with liquidity as well. Like it's gotta be available, the digital dollars, et cetera. So this is a, you know, it's a business that haswheel effects. And that's what we've done. And we've done that with liquidity as well. It's gotta be available, the digital dollars, et cetera. So this is a, you know, it's a business that has network effects. And those are, I think, strong network effects. And then it's a business that there are these very significant hurdles we've had to work on for 10 years to become licensed, to become regulated,

to become supervised, to become trusted, to integrate into these different government regimes and and the like and that's a lot of work and it's definitely work other people can do. So I have no doubt that given the TAMs that we're talking about that there are gonna be a lot of great you know companies and what I've sort of said is I think this is a winner-take-most, not a winner-take-all market. And you sort of see that in the market structure a little bit today. And I expect that market structure to persist.

And I think three to five years from now, within that market structure, there's probably a couple players that don't exist yet, but will exist, and will be double-digit players, right? So it's just hard to know exactly who that's going to be. But I think at the end of the day, we want to build things that are useful for end users, for developers, for businesses, and provide that and keep innovating. We're a product-led company, a technology-led company,

so we want to just keep doing that. As long as we do that, I think we can continue to grow and thrive. Yeah. You guys are in an incredible position. Personally, John bought a car this week and were the dealer able to accept stables he probably it would probably be getting delivered today but it'll be Monday I look for people internationally with stable coins years ago is fantastic experience it was in

Argentina I have one last time once you once you once you've had stables you'll never go back right it's like oh wait and I can was in Argentina. I have one last question. Once you've had stables, you'll never go back, right? It's like, oh wait, I can't believe this. Yeah. I have one last question and then we'll let you go. Sorry for going too long. But I want to understand the shape of your business. I'll give you some examples.

There's the Silicon Valley muscle. There's the Washington DC muscle and there's the Wall Street muscle. And when I think about the Bitcoin project originally, it was almost entirely technology, no regulation, no financial work. The gray scale Bitcoin ETF was very little technology, almost all lobbying and regulation and Wall Street financial.

Are you a perfect blend of all three? Is there some focus? Has it shifted over time? Are you out of the woods on the DC stuff and now it's just finance from here on out? Well, I mean, look, I mean, you know, the best way to look at a company is to look at its OPEX and within its OPEX, you know, the largest piece of it is labor.

And so when you look at the labor OPEX of Circle, like approximately 45% is product and engineering. So we are very technology driven and that is leadership from amazing, you know, engineering and product leaders, mostly out of Silicon Valley, mostly based in Silicon Valley. And so that's by far the biggest

because we're operating this infrastructure and platforms and software and the like. And then the second biggest, which is maybe 20% is what I'll broadly call our control functions. And so that's risk, governance, compliance, financial controls, because we're like this digital currency market infrastructure, right?

So the control piece is really, really key. And then you have, yes, we have a legal policy and regulatory team that is much larger than a tech company and is expanding because we're now needing to work with and collaborate with governments all over the world. So that part doesn't slow down I think as this scales, like the work that we need to do with governments only increases. The control infrastructure, the product engineering should kind of chug along. But yeah, that's kind of. Yeah, I think about the compounding advantage of,

yeah, you can compete with us, just hire a team that can interact with every government on earth. Make sure it's perfectly regulated and perfectly custom-made. Sure, you're welcome. You know what though, I say this, which is like, you know, I've done the yee-mans work of like legal bills for like a decade. And so, like, you know, everyone gets to ride on top of all the legal and regulatory work

we've done. Yes, the Toshi had it so easy. Sure, but relationships still matter. You just did an elegant algorithm. The Toshi had no legal bills. Well, thank you so much for coming on. Congratulations. I'm so excited for you and the team.

Yeah, this is fantastic. Classic 10-year, 12-year overnight success. Overnight success. much for coming on. I'm so excited for you and the team. Yeah classic 10-year To see it. Thank you. Have a great rest of your day. We'll talk to you later Thank you, Jeremy. Come back on soon. We have Anastasios from LM arena We're gonna get to the bottom of what the best LM. I'll let you kiss what the best LLM is. Welcome to the stream Anastasios, how are you doing? Pretty good. How are you? I'm great. Congratulations, you have news. Can you first introduce the company,

the news and everything that's going on in your world? Sure, so LL Marina is an open platform for evaluating AI via human preference. What it is is you can go to the website, LLMarina.ai, and you can type in your prompt, and what you'll see go to the website, LLMarina.ai, and you can type in your prompt. And what you'll see is responses from two anonymous LLMs. And the LLMs are some of the best.

Ask Gemini from Google and ChatGPT from OpenAI and Claude from Anthropic. And they're sort of randomly sampled from a pool. And not only do you see the responses, but you can also battle them against one another to see which one sort of win sample from a pool. And not only do you see the response of it, you can also battle them against one another to see which one sort of win for your vote. And then if you choose, you can vote for the one that won, and then we use that data

in order to construct leaderboards. So we have a leaderboard of the performance overall, but also in subcategories like math, coding, instruction following, creative writing, and so on. And we sort of see it as like the people's voice on AI progress, right? Because you can go there, you can express your opinion. A lot of the tasks AI is doing is subjective.

And by doing so, you can sort of guide the field. Yeah. So you raised money recently, is that correct? Yeah, we raised 100 million. Wow, congratulations. In a round that was, yeah, thank you so much. It just speaks to the strength of our community and our duty to continue to improve the product for them.

So the ripple work starts now. Yeah, what is the business model? Because I think people might not be so familiar. There's a lot of benchmarks out there, but you're actually building a huge business around this. Absolutely, the business model is to help, one of the biggest problems that we see with AI-driven software today is people just don't

know how to build it reliably. They don't know how to pick the right model to use for them. They don't know how to build an agentic system with multiple subcomponents in such a way that they're going to be able to ensemble it together into a piece of software that's reliable and performant. It's hard even to define what these words mean because a lot of the job of AI is to interact with humans. When you're interacting with humans, a lot of the job of AI is to interact with humans. And so when you're interacting with humans, a lot of the responses people give are subjective.

So how do you make sure that you are using your models in a way that ends up satisfying your users, ends up making your product better and better? We're hoping to be able to address that problem because we have such a big community, millions of people coming to the site and giving their preferences. And we have a whole competition landscape of all the different models against each other on all sorts of diverse tasks, not just in tech, but also in medicine, and real estate, and school, and so on.

Yeah, so talk to me about the death of traditional benchmarking and the rise of big model smell. Have you been able to quantify the unquantifiable yet? Sure, so I wouldn't really describe it as the death of traditional benchmarking. I would just say that benchmarking is entering a new age where there are different types of benchmarks that are needed.

So what does a traditional benchmark do, just zooming out? What you do is you say, hey, here's like a particular vertical that I want to evaluate. Let's say I want to evaluate image classification. Well, then I'm going to collect a bunch of images, I'm going to classify them, and then I'm going to basically give models a test. I mean, engrave them based on how well they do on

like a held out set of classified images. So, what is the problem with this in the current day and age? Well, these days the way people are using AI is like so broad that you could never annotate all of it with data sets. Like you could collect a data set. It's going to evaluate that thing, but not everything. And you could collect 20, and that's

going to evaluate 20 things. But really, there's like a million different things that you should be evaluating. And arguably, even every individual has their own point of view on all these subjective tasks. And so that's why things like Elmerina come in as sort of a different orthogonal signal. Yeah, maybe it's still useful to say,

how well is my model doing on image classification or multiple choice question answering? But maybe I also want to know whether people like this model, why they like this model, whether they're using it in the ways that I intend it to be used, and which parts of the space is it good and bad? And our perspective is, those are the questions

that we can answer by gathering a massive data set of human preferences and then going backward, basically inverting the problem and saying, let's mine that data for all the analytics that we can get so that we can tell you which model's best for you and for your use case. And that's where I think the power is in this sort of new age of benchmarks.

What about humor? Can we expect any type of benchmarking from Al-Aam Arena around just making the user laugh? That's a great idea. We should have a leaderboard for that. Actually, I think it's really a good idea. I think that that's like a potential trap that humanity can fall into is Al-Aums get so good that you just refresh the button

and laugh over and over and over and over. And then all productivity is lost, and it's just the laugh button. Yeah, if you're making people happy, making people laugh, that's not a bad thing. Yeah, what are you? Sometimes I also scroll YouTube, like looking at my favorite comedians.

And I think they provide me value. Totally. Yeah, I have a post here I want your reaction to. I said, now that AI can beat every intelligence test, we need new evals for the other human traits. Specifically, I'd like to quantify courage, fortitude, gallantry, mirth, equanimity, yearning, stoutheartedness, gravitas, panache.

This would help me pick what LLM to use how close are we to being able to being able to quantify courage in an LLM I love that so much we need your vision yeah I don't know how close we are to courage maybe we need them we need to up the stakes yeah our being the real arena where they have some risk we have some chips on the table you know yeah yeah our intern said you could probably do this using control vectors and I said I don't want to put the courage mask over the show goth I want to understand the base level of courageousness for the show goth as a whole is that so we went back and forth

on that we're good we're getting biblical here I love it yeah how where you guys gonna be you obviously raised $100 million. Where are you going to be investing? What are some things coming down the pipeline that you're excited about? Well, the majority of our effort these days is going towards taking the platform that we already have and making it a lot better for our community.

Basically, inviting more people in. Because as you can imagine, how does our platform work? People come to the platform. At this point, millions, but we're hoping tens of millions or more of people will come to the platform and vote for the AIs they like best. And then we take those votes and turn them into a number. So what's the most important ingredient here is getting people into the platform and loving the platform to play with all these different AIs and like ranking them and toying with

them and so on and so forth. And we want to build great product features for them so that they continue to love it and come. So just investing in Elamarina.ai, that's where we're really targeting a lot of our energy. We have Dylan Patel coming on next. He recently dropped the AI Mandate of Heaven tier list. He's got OpenAI up at the top, followed by Anthropic, Deepsea, Google,

XAI down at B tier. Meta and Apple are struggling a little bit lower down in D tier and L tier. Does that track with you? What have you been most excited about in the recent developments out of the foundation model labs? What do you think is underrated right now amongst the various foundation models Well, I think

In general the thing that excites me most is that there's a lot of competition these days And there's also a lot of new modalities that are coming out. So like, you know all the time We're seeing that the models are improving improving improving and the pace is not slowing down Yes These things are getting way way better and there's a lot of the most brilliant people in the world that are just here, like in the crucible developing like the best AI models. And then we're going beyond text, right? It's going from text to people are now doing audio and people are doing video.

And I don't know, there was a, you know, a big video model release, you know, last week with VO3, that was huge. Are you already doing tests against the different video models? Because right now, I mean, I put the same prompt into Sora and VO3 and it wasn't even close at this point. Obviously, the next iteration will be maybe more competitive, but it feels like we're kind of too early

to do those types of evaluations where people would just immediately identify a VO3 video, but then there are some other labs out there like Runway that are doing cool stuff in video and maybe it's harder to tell than people think. So we have an initial cut of a video and arena that we're going to continue improving that was built by some awesome graduate students at Berkeley. So we have that and we're going to continue building it. But I think one benefit of some of these strategies, like arenas,

is that they can actually provide kind of a touchstone for the field to come together and say, hey, here's what we're going to try to improve. Let's go. And then maybe it would motivate some labs to actually continue to build better and better media models because they want to be winning the game What What has been your take on the the the llama journey? There was some accusations of like benchmark hacking a lot of people have been saying well It's you know, like never been against Zaki

He has a he has a capital cannon and a huge incentive to stay in the game. And so we could be seeing some exciting things out of meta in the coming weeks or even coming months. I mean all this stuff moves so fast. The leaderboards are constantly shifting. What's your reaction been there? So I would just say that we should all be gunning for Meta. We should all be rooting for them because they're releasing open models. And so I think open models are really great for the ecosystem. So I think I and everyone else should want them to succeed.

Now there was a little bit of weirdness in the last release. I think it's OK. They have a big group of really talented people, they're gonna move on, and the models they released, they're good, they're getting better. And I hope the trend continues for them. Yeah, how has the AI safety debate shifted recently?

It feels like Meta almost could have had a little bit of an out by, you know, in years past when a model wasn't performing up to standard you could never really tell if the foundation labs were really worried about safety or they just didn't want to release the product yet that it was an easy kind of out we didn't see them take that this time that we didn't see them say hey we're delaying because of of safety concerns has that kind of melted away from the

discourse in your community or do you think there's a world where what you're building could be used to evaluate safety? Because there's so many different dimensions of safety now. I completely agree. And we definitely want to make safety a priority in evaluations. We have a red team arena now that, you know, has been out for a little while and it's still, you know, still a little bit prototype, but we're going to keep working on it. And I think it's really critical. I don't know about the initial question about whether or not that's used it as an excuse or not. That's kind of, I don't know, that might be above my pay grade.

I don't hear a lot of those internal conversations. But I certainly think that subjective evaluations are going to be important for safety. Jordan, anything else? No, this is great. I'm excited. Yeah, thanks so much for coming on. This is fantastic.

Congratulations on the milestone. Excited to meet the two of you and keep in touch. Yeah, come back on again soon when you have news. See you guys later. Cheers. Really quickly, while we have our next. I feel like humanity has a duty to everybody should be required, it should be forced.

You got to go on Elm Arena daily five minutes a day Yeah, every every person on earth. What do you got John? We got bezel get bezel comm your bezel concierge is available now to source you any watch on the planet Seriously any watch and our next guest is here Dylan Patel from semi analysis. We'll bring him in welcome to the show Dylan How you doing? Boom? What's going on? Yeah, this live audience is fantastic Yeah, I mean we actually do have a bit of a live audience with four people in the studio today But we also have a soundboard going

Let's go. You want to drop a big? Yeah, if you have any big numbers to throw out we'll hit this gong Why don't you just hit it John? Just tell us on a generational? Yeah. Yeah, just hit it Hit it for semi analysis. There we go. We got the god cam. It's so loud. I'm sorry. What's happening? How are you? Good to meet you. It's fantastic. I'm having a fantastic day. That's awesome. I really enjoyed your China Talk episode, the update to the AI lab tier list I wanted to I asked some folks about that. I have I have some follow-up questions. So maybe that would be a good place to start Open AI, I mean it sounds like they're they're they're not backing down from bigger and bigger training runs

But can you give me a little bit more? but can you give me a little bit more insight into what it means to do a big training run now, because there's still pre-training, like the RL stuff is scaling up, like what is the shape of the next big run, if that's even the right term to use in this era? Yeah, so there's efficiency gains on multiple layers, right? So pre-training, you're not simply just going to scale it larger and larger as your only avenue of spending resources, but you are constantly getting efficiency gains. Something that lets your model be 10% more efficient to run or train, but involves changing the algorithm.

So people are still doing pre-training constantly, but they're not. constantly. efficiency gains. crazy things or cool things, right? In terms of more compute spent on RL not necessarily model size, right? Because your model size is baked in at pre-training. Yeah With Stargate coming online is like is there really no other way around that? Like I feel like AWS is really big There's like other big clusters out there Can they just not get access to those or they do they truly not exist and will Stargate be like for first of its kind? You know, I think it's it's funny that my little like autistic obsession became the most political thing in the world. Right. Um, and so like, you know, you have, you have, you know, obviously us China and now middle East,

like there's all these geopolitics here, but of course, like the politics are between the companies too. Right. So there's the whole like opening eye, Microsoft breakup, right? There's a reason Stargate is not in Wisconsin. Microsoft had a huge data center they're building in Wisconsin, that's where it was gonna be. But now Stargate is in Texas, and it's not being done by Microsoft

because OpenAI and Microsoft had all these politics, a lot of which were really well reported, but a lot of which have been sort of silent. And it's like, okay, well, is Amazon gonna give OpenAI compute? Absolutely well, is Amazon gonna give OpenAI compute? Absolutely not, right? Is like Google gonna give OpenAI compute? No way, right?

You know, it's like, there's companies getting bought by OpenAI, the deal hasn't even closed and they're cutting, and Office cutting off access, right? You know, sort of with the whole Windsurf thing. So it's like, you know, it's like, these things are so political, and little nerdy autistic boys don't know what to do with politics.

Yeah. Yeah. How much of that dynamic is driven by just like true AGI pilling at the top level of the hyperscalers versus just this is potentially a multi-trillion dollar. Yeah. This is potentially multi-trillion dollar outcome. And like, we need to have a player, we need to cut off a competitor, is there a dynamic there? I mean, I don't think those things

are mutually exclusive, right? Like, whether you're truly AGI-pilled, open-air, anthropic type people, where you want it for the benefit of humanity, or you're like Andy Jassy, or like Sacha Nadella, or whoever it is, right? Whoever you are at the hyperscalers, at the end of the day, profit is AGI. If you have AGI, you hope you can profit off of it. The people at the labs would be like, well, I don't know if AGI would let us profit off of it. But in

the meantime, as we're building towards AGI, that is a trillion dollar, 10 trillion dollar, multi-trillion dollar thing that you have under your control. Yeah. Do you think we'll be able to tax the profits of AGI, even if we can't reap them? Because I was looking at the Trump-Elon breakup, and I was wondering, what does this say about their AGI timelines?

Because if you really- Yeah, the AGI-pilled lion does not concern himself with deficits. Yeah, if you believe AGI 2027 or AI 2037, the budget deficit doesn't matter. We're going to be printing 20% GDP growth. We'll be able to pay back trillions of interest in just a couple of years.

So I think it's quite funny. This opening, sorry, this Elon and Trump sort of drama, you know who's sitting there like, yes, yes, it's Sam. Sam Altman is like, yes, let's go. Because he's like, for a long time, Elon was like, I'm not gonna allow Open AI to become a for-profit, right?

And he's suing them, right? And part of his, I'm sure part of his calculus for going all in on Trump and saying he loves him more than a man can love any other man, I'm sure part of his calculus for like going all in on Trump and you know saying he loves him more than A man can love any other man like, you know You know four months ago was like him thinking he could you know convince Trump and the IRS to not let them convert, right? Now like it's like very obvious like what's the impediment like they're gonna get a gonna be able to convert at the same time Trump was always a stargate guy. He's a big stargate guy. He announced Right a Stargate guy. He's a big Stargate guy. He announced the project. He loves Stargate.

Is that speaking to the big things? Trump is a big number guy, right? Big number guy. You get the $100 billion, and he's like, hell yes. Hell yeah. Just because this is what it's about, right? Yeah. Before we move on from the OpenAI, the next big run,

how real is the narrative of they're going to pull ideas from DeepSeq? I think it was like FP8 was one of the innovations. There were a bunch of other innovations. Some of those were specific to the restrictions of chips, but it felt like some of them might be generalizable to just more efficient training runs. Are there real learnings for the American labs that aren't GPU poor or GPU restricted from DeepSeq? So I think I think there's certain things that poor or GPU restricted from DeepSeq? I think there's certain things that DeepSeq did that the rest of the industry had already done in terms of the OpenAI.

FP8 training was one of them. OpenAI has been doing FP8 training since at least 2023, perhaps earlier. Now, on the flip side, there are certain things that DeepSeq did that were a bit beyond what the labs had done. things that DeepSeek did that were a bit beyond what the labs had done. One of those things is how sparse a model is. You have a mixture of experts model, you have so many experts in the model, but you don't activate all of them for every forward pass of the user. GPT-4 was 16 experts, two of them active, so that's a 1 to 8 ratio. GPT-4-0 ended up being like a one to 32 ratio, but DeepSeq actually went even further. They were one to 64.

I wouldn't say that that's something that the labs weren't planning to do, but definitely DeepSeq did leapfrog a little bit, right? Went a little bit further as far as publicly available models. And I know Google's models aren't as sparse as OpenAI's, and so everyone is headed that direction, but DeepSeq definitely went a little bit further. Google's models aren't as sparse as open AIs. So everyone is headed that direction, but DeepSeek definitely went a little bit further.

So I think it's like, I think some of the more interesting stuff that DeepSeek did was around sort of like, making it open what the reinforcement learning, verifiable reward paradigm is. Making it open how to do really efficient inference systems. These are the sort of things that I think DeepSeq did that a lot of people can learn

from. Also, there are special attention mechanisms. There's some interesting work there. Even as far back as mid last year when DeepSeq released a paper, everyone was like, wow, this DeepSeq company has really good research. I think there's things people can learn, but also there's a lot that the labs had already done. They just weren't like, maybe they didn't go as far or they did it, but it wasn't like they were passing on all the cost savings to the user because they

like to have margins. How much of the deep-seek narrative around it happened because China banned high-frequency trading is real? And should we ban high-frequency trading in America if we want to pull AGI timelines forward? is real and should we ban hyper-quizy trading in America if we want to pull AGI timelines forward? This is great. I think some of the most cracked people I know at Anthropic and OpenAI are ex-quants, right?

Yes. Anthropic's best performance engineer who writes all of the, improves the performance of their, whether it's Tranium or TPU or GPUs, he's from Jane Street, right? And it's like- But they're missionaries. They're still mercenaries over in the high-frequency trading bucket. With a few laws, we could move those mercenaries over.

I'm not saying we should do it. I'm just saying I want to know your take. You there? Yeah. You there? Yeah, I think that the mercenaries, it's like, well, the labs can just pay more money, right? And they do. They're luring over the people they want with these crazy salaries. I think we're kind of going back and forth on the, can you hear us okay? We good?

Yeah, I can hear you. Okay, perfect. Let's, maybe let's move on to Google. What was your reaction to the Google I.O. news and I mean, you put them in A tier. They have this incredible VO3 model. How much of that is due to the cornered resource of YouTube? Is that a durable advantage?

We kind of saw the open web get scraped by every single LLM foundation model company. We saw all the code in GitHub kind of get exfiltrated one way or another. Is that something that is going to be a sustainable advantage for them, at least in video generation? So to some extent, it's like everyone trains on YouTube, right?

Like every company takes YouTube and makes it into transcripts, trains on it, or even takes the videos and trains on it, right? Every video model company is ripping stuff from YouTube. This is like very well understood and known. trains on it or even takes the videos and trains on it. Every video model company is ripping stuff from YouTube. This is very well understood and known, but there's limitations on how much you can steal from YouTube. I think my favorite clip of all time, one of my favorite clips of all time is when someone's like, hey, Mira, did OpenAI train on YouTube? And she's just like, You know the beam, you know the beam. There's definitely some data that got out, but there's the scale of data.

Like with YouTube, it feels like just if you were to tokenize it and then compare it to GitHub's tokens, like you're looking at orders of magnitude and that seems important in terms of just general data law. Right, right. I don't think you can just rip all of YouTube like that, right, like they have protections against that, right? Sure, you can engineer ways around like pulling some videos,

but like YouTube gets 500 hours of video uploaded every is it like every minute it's like it's like it's something it's insane yeah and I mean just the storage costs alone like you would be able to see the storage center for the copied YouTube like from space well speaking of scraping I'm curious so so reddit and entropic are in a lawsuit right now around entropic scraping reddit I was surprised that they didn't have a deal in place do you So Reddit and Anthropic are in a lawsuit right now around Anthropic scraping Reddit. I was surprised that they didn't have a deal in place. Do you think there was, you know,

meanwhile Gemini has a deal, OpenAI has a deal with Reddit. Do you have any insight into why Anthropic would, you know, not even make something happen when clearly it's sort of a valuable and important platform to train on? I mean, like the data's the vote, right? And if you can get away with using it, getting the data without paying for it,

then you're gonna do that, right? And I think like, you know, I don't know about the legalese, but like, isn't OpenAI's deal with Reddit like a hundred million dollars, like a year or something insane. Yeah, yeah. Gemini is like 60. Yeah, they're like, they're both around a hundred million a year and that makes up about

20% of Reddit's overall revenue. But of course that revenue is super high. Margin 70 million, 70 million a year. Yeah. From both. Google is 60. Yeah. Okay.

Right. So, so like if that's the case, like what is, what does that like lend you? Right? Like 70 million dollars a year is, is a ton of either, you know, it's that's the case, what does that lend you? $70 million a year is a ton of either, it's 70 researchers, right? Or it's thousands of GPUs, right? So it's like, would you rather YOLO and just not pay for the data? And now Anthropic can probably just fight it out in court for a couple years the data. So the view of like, well, it's not actually like stealing data because it's like training on it, you know, whatever.

Yeah. Yeah. Totally. That's on X AI. You put them in beats here. Uh, there's a world where Elon being on the outs with Trump draws more scrutiny to some of his companies like Tesla and, uh, and space X X AI feels like completely off of the political agenda in Washington.

So maybe this is a bull case for X AI because they have, Elon has more time to focus on it if he's not spending less agenda in Washington. So maybe this is a bull case for XAI because they have, Elon has more time to focus on it if he's not spending less time in Washington. What's your view on that right now? I have a fun anecdote, right? Please. I have a buddy who works in manufacturing optimization at Tesla of specifically how they press the steel parts

and make the body, right? And he's like, dude, I've had a meeting with Elon in nine months, I'm fucked. I'm just like, what am I going to do? He's going to come in. So the thing is, Elon's amazing because he comes in and he's like, why are you doing it this way? Why, why, why?

Do it this way. And then you have to either do it that way or come up with a really freaking good reason why not. And he's just such a first principles thinker. But for nine months it was like, well, I'm going to continue to drive down the path do it that way or come up with a really freaking good reason why not. And he's just such a first principles thinker. But for like nine months it was like, well, I'm going to continue to drive down the path that I think is best. Yeah.

Ideally you want that rapid iteration, right? It's like you want him to come and just get angry at you every day instead of once every nine months. It's actually better. I mean, it depends, right? Maybe it's not every day, maybe it's not every week, but there is a level of like he comes in, he resets all your priors, and you reset your roadmap, kind of.

And the flip side is, for the employees, it's like, well, I might now have to go back to working 100 hours a week, whereas when he was gone, I could work 40 to 60, and it was great. So I know Tesla definitely had a lot of neglect. I know Neuralink a lot of neglect. I know Neuralink had a little bit.

XAI some, but XAI still had quite a bit of interaction from Elon, but obviously that's just going to grow more. And so I think it's probably a good thing that these companies have Elon coming back and devoting all his time and effort. The flip side is that XAI does have a government facing sales, as does Anthropic, as does OpenAI, and now XAI is gonna lose out on those sort of government sales. But at the end of the day, government sales are pretty small relative to private industry.

Where do you expect most of XAI's revenue to come from a year from today? That's, that's a great question. Um, I don't think it's consumer, right? Cause probably most of their revenue today is like the Twitter subscription, right? Um, I guess cause XAI is X now, right? So the categories that matter, it's like consumer developers, and then traditional enterprise. People don't seem to be plugging Grok into Cursor or Windsurf,

and we haven't seen people then Grok, but it's just so early that maybe they could win in certain, you need an anti-woke receipt processing or something. Yeah, so it's just at some point, there's gonna need to be a lot of revenue on the XAI side. X, the Everything app, can do a lot of work. Maybe they add payments and things like that.

I'm curious if you think that the merger is actually net good for X, the social media platform, in the long run. Because my concern is that it's actually X, the social side of the product that will really suffer over the next few years. But I'm curious what your read is. I think it was clear before the acquisition that X had a lot of debt. They didn't generate enough profit to pay it off. So their EBIT was bad. Not EBIT, sorry, just their earnings period. Obviously, before interest in taxes, it was fine, but they just had so much interest payments. to pay it off.

and the fastest data source out there, right? X is way faster than any other data source out there. So I think that's hugely beneficial. But as we think about what is the highest value ways of organizing the world's information and acting upon them, and it's like today everyone's sort of highest revenue thing is code, right? cursor just hit 500 million ARR. Windsurf just got bought for this crazy amount of money. Even copilot at Microsoft and GitHub apparently isn't doing 500 million a year in run rate. Yeah, but code is where all the money is being made today. I think all of the labs, at least OpenAI, Anthropic, especially Anthropic,

believe that like code agents, software agents is where the most money and most progress is going to be made over the next six months. I think XAI also believes this to a large extent, but they also believe some other things, right? But I think automating businesses and helping them become more efficient is going to be where most of the money is made, not consumer. So, yeah, I mean, I guess you kind of, I can maybe guess your answer, but do you think Anthropic needs a dance partner or any dance partners? Cause you could see them going out and getting Pinterest or Snapchat. I don't know if that would be valuable, but they're kind of the one LLM that

doesn't have a huge consumer front door to their product? And maybe that doesn't matter on the revenue side, but maybe it matters on the data side? Yeah, so I think they're just too AGI-pilled to think consumer matters at all. They don't care about like image generation, right? So it's like, do they need a dance partner? There's a really good Mexican song called Asia by La Solo, and so like, I don't know if you know it,

but it's like got a freaking trumpet and everything. It's such a good song. And it's like, no, they're gonna dance alone. They're gonna dance alone. Ari, staying in the Elon verse, are you worried that cheap robotic arms They're going to dance alone. Applications that I think are automatable in the next two three years do not require legs Right, like if I go to a warehouse if I go to a data center if I go to a factory

The floor is a flat slab of concrete. Yep, right I do not need to spend all this weight and energy and power on legs when I could just throw wheels on it, dude Like come on and so like that's that's like one side of it. And the other side is like human manipulation. It's actually funny. AIs are going to be way better at us than software. Then they are going to be at just manipulating, picking things up. Hands are freaking incredible.

We aren't even close to human level hands on a physical basis, let alone the AI that we have in our brain that's developed over thousands and millions of years versus the sort of language capabilities which have only evolved over the last 5,000. So I think it's going to be hard for humanoid robots to take off immediately, but there's tons of applications where humanoid robots will still be able to do basic things, low risk of getting it wrong so you can try again. What about I cut the cost of a humanoid robot in one tenth

because I have wheels and so I cut weight down dramatically and it's way more efficient. And instead of having fully formed hands, I just have like three gripper fingers, right? And that's all I need for like data center automation. I just gotta plug in things and take them out, right? Unscrewing things, maybe my arm is just a screw and then the other one is like a three finger, right? And it's like this is way, way cheaper and specialized to the task than a humanoid. Not that I'm like against humanoids,

but as far as like robot arms, yes, that's part of it, right? Like a lot of tasks, It could be a stationary robot arm But the important thing to consider here is that literally all of this will be made in China and none of it will be made in America Why is that? the supply chain for Chinese robotics is Yeah, the audience is very America-pilled. It's sad, but the supply chain here is like China makes more robots. If you go back five years ago, China made as many robots as roughly Germany, South Korea, Japan, and the US.

Now China makes more robots than all of them combined. And the cost that they do that at is way lower. in the US. Now China makes more robots than all of them combined. And the cost that they do that at is way lower. Will the Japanese companies argue that the Chinese robots are shit? Yeah, but you speed run up quality faster than you speed run down on cost. And the same applies to Germany, although Germany sold some of their best robotics companies to China and all the tech got transferred. But like, you know, it's like, we don't have the manufacturing supply chains to turn, you know, raw goods into motors or into actuators. And if we can, you know, or when we do, it's like it costs 10X as much.

And so it's just like, it's impossible, at least without like some huge industrial policy for the US to compete here. So, I mean, it seems like there's almost an analogy there to the semiconductor industry where China has been lagging there for decades, but has done a lot to at least catch up to the lagging edge. Are there any policies that, or investments,

or industrial policy that China did to at least stay in the game to the degree that they did that we should be stealing from them and doing here for robots and manufacturing. Ten five-year plans back to back. Yeah, we need ten five-year plans. I think the funny thing is that when you look at industrial policy, the way China does it sometimes is more capitalistic than the way we do it. Now, obviously, giving a bunch of money to an industry is not capitalistic but the exact policy mechanism of the CHiPs Act versus what China does is like so much

better, right? So like China does like, oh you just get like x subsidy for manufacturing a certain amount, right? Rather than like, oh it's a company by company deal and this company gets this money for this plant, right? Or like, hey we're just going to subsidize the land this money for this plant. Or, hey, we're just going to subsidize the land in general for this. Or, hey, if you build a fab that is 28 nanometer, you don't have taxes for 10 years.

Stuff like this is what China's done, and that's had them dramatically increase their semiconductor spend. You have things like the National Railway Company is now making power semiconductors, because they make profit and they're like, well, if I make fabs, then I can blow all my profits from the railway in that, and then all my fab profits will just be profits without tax. And so now, their largest railway company is like the third largest power chip company in China and like top 10 in the world, and over the next few years, they're gonna be top five, period, across the whole world. There's a power chip company in China

automation, like these mechanized things to get them to get start pushing into robotics, right? Because like BYD is pushing into robotics and like obviously everyone knows about unitree but like you know Xiaomi is making cars and getting into robotics, right? Like all these companies are getting into robotics in China because of industrial policy and they did the same with autos, right? EVs, they went into EVs because of industrial policy or they went into semiconductors because of industrial policy. they went into semiconductors it because of industrial policy like America doesn't have that right like we just have maybe you know we have the startups who are Mostly just buying Chinese equipment and repackaging and pretending like they make it here like figure or

You know like we also we have we have American VCs who put American flags in their offices. That's got to count for something Yeah, I mean, I'm not saying flags in their offices. That's got to count for something. I mean, I'm not saying it's not noble. It's just like... No, I'm just joking. On Unitree, what do you think the perception of Unitree is in China? Because if you're a believer in the wheels

and the different actuators, it feels like they could be more like China's Boston dynamics where it's like oh bunch of cool videos but not a lot of actual applications but the reaction in America to unitree videos is oh my god there's this crazy wave coming but every video of them is just like doing war things like you really want to scare the West. Totally. Why don't you just have it like petting bunnies like you know trust us the Chinese robots are not dangerous.

They should be doing that. Yeah I was wondering like I fully expect that there will be one of those like North Korea style military marches with a hundred like a hundred thousand humanoids and it will just be terrifying even if the capabilities aren't actually there for real war fighting just the Did you see the humanoid marathon? But anyway, so to answer your question, right? Uni tree yes, we see the like the humanoids the robot dogs But they've actually released a robot dog, but with wheels and so it's just like two, it's like sticks and has wheels.

And they're releasing a humanoid with wheels, actually they just showed it off at this conference in Singapore that one of the guys on my team was at. And so like, they're coming with the mobile manipulators, but also you have to recognize like, for the cost that they make in $10,000, Western companies make in like 75,000 or a hundred thousand dollars, right? So like the quality of hardware they can make so that's also like an important consideration. Yeah

Said you said something earlier around all the you know, the next value in Models coming from automating businesses is the right framework for that agents Is that how you how someone should conceptualize it or is it an entirely new paradigm that that's less about you know agent human kind of collaboration and more so just like full autonomy yeah I mean I mean the the dream is always multi agent systems right many different agents working together and just doing the job and then but today you know the time horizon for human model interaction has been growing many different agents working together

If you use Claude code, the time interaction is minutes, not seconds. And it can even extend to tens of minutes. I think these agent systems, it won't be a hard hit. Everyone's expecting, oh, we have chat bots, now I have agents. But really it's going to be a blended blended curve of like yeah You know like just like the amount of interaction the human has with the system it becomes less and less and less over time Hmm. That's a good framework. Uh Sorry to move back to China, but Alibaba quen what I Mean, it seems like they're just pumping out like a million different open source models

What's the reaction been to the American research labs? Have we actually learned anything from that? We've had some folks on the show have been just generally excited to play with so many different research tools, but are they trying to commercialize that? And I guess my big question is like, what is the actual chat GPT of China right now? Like what is the consumer front end?

So on the on the latter point the consumer front end is DeepSeek offered through the clouds right so some of the cloud companies like Baidu Tencent etc. offer DeepSeek the model but through their own platform rather than through DeepSeeks and some of them will offer it through DeepSeek themselves directly. But the interesting thing to note here is that we sort of have a very big dichotomy here. Part of the reason DeepSeek costs so much less

on inference than US models is because the speed of DeepSeek's models, right? And there's this curve, right? Of like, how fast does the model respond to you versus how many users you can batch together, right? So if I have like, and it's a system and I'm only serving one user, how fast does the model respond to you I get 100 tokens per second. on, hey, I want to serve as many users as possible. And so the chatbot-style applications are actually very bad. And that's why Chinese people tend to use OpenRouter a lot

to access open-air and anthropic models in China, even though they're not supposed to, or accessing other companies' models through other methods. So I wouldn't say that there's truly one consumer front front, front end rather than it's, it's that the, as soon as deep sea came out, the government started pushing all the companies to offer deep seek. But there still isn't a good consumer experience, right? In China, moonshot is probably the most popular one, but their models aren't that good.

Right? So it's like, I don't think it's one out yet. Yeah. How much of an issue is owning the application layer if you're an independent country that doesn't want to rely on American or Chinese foundation models, like what we've seen with Mistral and Let Chat. There's this world where you spend all this money to build this data center in your country, you spend all this money to train a model,

maybe you're not at the frontier, but you're you're you're close. You're in the game But everyone just by default in your country just goes to chat comm and so unless you're willing to ban chat GPT And you're not going that far like you haven't truly won in terms of deploying your model with your View on free speech into your populace Yes, I think I think that's that's gonna be challenging for like there are there are sovereign AI efforts in all these countries view on free speech into your populace? Yes, I think that's going to be challenging. There are sovereign AI efforts in all these countries, but like you mentioned, Le Chat is not that successful in France. And Mistral is the closest of any sovereign AI besides China and the US.

You're going to get all these models, but people are just going to use the consumer. It's like, am I going to use... Google's models are so popular in India, or Perplexity is ridiculously popular in Indonesia for some reason. I don't know why, but these are just frontier models from American companies rather than the domestic model that could be made. And so I don't expect any sovereign AI efforts to truly succeed on the model level. I do think that sovereign AI can mean many things.

It could mean I'm making a bunch of data centers. It could mean I'm making a big NeoCloud company. Or it could mean I'm gonna make the full stack with the model, but at any point, if it doesn't get economical, you can always just rent out, most of the costs of the GPUs, you can just rent them out to someone else, right, and then try and recuperate your cost. But you can't really do that with a foundation model

that you've trained that has mediocre weights, right? So that is kind of- Right, it's like you burned all this money and flopped on something that's effectively useless because Meta's open source model and DeepSeek's open source model and Alibaba's open source models crush you. Yeah, yeah.

Speaking of Meta, uh, I'm try, I've been trying to work through what's going on there. There's obviously kind of the dust up around llama four launches, but, uh, somebody asked me like, what is the bull case? And everyone always says like, Oh, recruiting or, you know, some beneficial thing or benevolent thing. But I was wondering if there's a reasonable case to be made that if you try and just project out what Meta's LLM spend would have been on other vendors in five years it would have been so big that even if they're constantly on the lagging edge they're still recouping the investment

in training llama just because they will be able to serve it internally. Is that a reasonable like thesis or is there something else going on there? Like what do you think of like the motivations and problems with that project? I mean they have like internal llama models too that are trained on their internal code base that they can use internally right? So that sort of stuff is like something they could just never get elsewhere. But I think it's a multifactor thing. The bull case is obviously a personalized AI assistant on my glasses, and that's just always on my head, always serving me up slop. So truly waiting in the consumer use case.

That's the real work start. That seems to be what Meta is actually going for. But as far as like, today they roll out WhatsApp, Instagram, and Facebook models, Meta Llama models to everyone. And they claim they have 500 million monthly active users, right, which is a lot. Now imagine if they didn't offer that. Would people start using chat GPT instead, and now they're out of that Meta ecosystem. And their screen time goes down, and they get less ads. Would people start using chat GPT instead

and now they're out of a meta ecosystem? And their screen time goes down and they get less ads. Or does Apple intelligence become more powerful? People go to Apple intelligence for their AI because all of the like more and more of the data keeps going to Apple and there's no way for Meta to get access to it. So it's like there's an existential threat here too, right? And so I don't think, I think it's like prudent that Meta spends on these models. I'm also like a lot more bullish on Meta long term than like most people are.

People are like looking at Llama 4 as like a single point in time of like wow this really sucks Yeah, but there's like two models there right there's like Maverick and their scalp One of them is really bad and one of them is pretty good All right, what about the he myth isn't that another they don't have a third rough. Yeah, they didn't really name really, but yeah, yeah Yeah, it is a weird name because it's like very demonic and it's like you're unleashing this demon But well the funny thing is the architecture is super similar to gpt4. Oh really like yeah, it's uh, it's like extremely similar It was just like a very funny naming scheme because like the behemoth is like the untamable beast and like they couldn't tame it to Get it out the door and so like the name really mimics like what what happened with that project, but um

So yeah, I mean what are are, are, are they, uh, gated by, uh, scale or they're, I mean, the cap expense seems to be growing, but similarly to all the other hyperscalers, uh, is there anything that's unique about, uh, meta over the next couple of years that could kind of give them a compounding advantage there and allow them to kind of come from. I do think they are still spending less on gen AI than other hyperscalers. Um, that could give them a compounding advantage there and allow them to come from behind.

I do think they are still spending less on Gen.ai than other hyperscalers. Note that 60-70% of their GPU spend is on recommendation systems and standard business. Nowadays that means creating Gen.ai ads and those have more click-through rate. That's the holy grail for the next six months for them. A lot of it is on their classical business. They are a player to be reckoned with. I don't know if there's a fancy name for it. Everyone has their big projects. And so when we get to 26, 27, everyone's going to have these gigawatt scale data centers with close to a million chips.

And the game continues to fight on. I don't think that, like, this is a temporary setback for Meta, but they continue to recruit. They continue to have good talent. They'll be reorganized, right? Without pain, you don't get better, right? So this is a learning experience for them. So on Meta and Scale, they partnered with Constellation on this sort of basically agreeing to purchase nuclear energy from Constellation for the next 20 years. What's your updated take on nuclear? We obviously have these new EOs to help support it,

yet it still feels pretty far out, at least for bringing new energy online. How are you thinking about the category? Yeah, so even in general, building new nuclear reactors is still gonna take a really long time. And if you're a believer in AI 27 or AI 2032, whatever the number is, that's too top-long of a time scale to matter, right?

This is still in the deficits can be large as possible timeframe. I think with regards to nuclear, that's the case for standard Gen 4 reactors. But when it comes to SMRs, they didn't ease the most important regulation, right? Which is that like the concrete containment zone, you know, this containment zone for the SMRs still has to be like monumentally big, right? Even though it's like a much smaller, much safer thing. And so they didn't ease that regulation. So I'm not that bullish on SMRs yet either. And basically like, yes, you can sign these deals for nuclear power, but that's nuclear

power that was already being used by residential, and now those residential or industrial, whatever it was, just turns to gas. Or on the flip side, if you look in Louisiana, Meta's data center uses gas. Or if you look at Stargate, it uses gas. Or if you look at Memphis, Tennessee XAI, it uses gas. You look at Amazon's Indiana facility, project Rainier, it uses gas, right? Like everyone just uses gas and like, that's the ESG commitments that the hyperscalers made in kind of the prior era,

uh, like informing any of like, are they acting as like handcuffs or shackles or like leg weights going into this next energy build out? So, so the funny thing is some of them have backed off a little bit, like Meta and Microsoft have backed off some, but the other thing you can do is just like pretend like you're still green. And so what you do is you do this thing called a PPA, right, which is a power purchasing agreement.

So you can set up like solar panels like 100 miles away and they'll generate power only during the day, but that power generated during the day is enough to cover the entire night of the data center as well. But the actual electrons being consumed are not from the solar panels, right? The solar panels are just selling it to the grid, but you purchased it and sold it to the grid. Whereas the power that you're buying from the grid is like coming from a gas plant and the actual electrons you're consuming are from there. So then you're pretending to be green because you have this solar PPA backing it up or you

have this wind PPA backing it up or you have this wind PPA backing it up. But in terms of actual electrons being consumed and new plants being built, it's gas. Yeah. And so I think this is their regulatory ESG stuff is like malleable enough that this is allowed. They're working through it. Let's talk about some of the other sci fi concepts for energy generation. People are starting to talk about data centers in space. People are talking about data centers in the middle of the ocean with tidal energy.

Basically, go where the energy is basically free or you get something for free. Maybe you get cooling for free or land for free. Is any of that relevant to what you've been focused on? So Microsoft's tried putting a data center in the water before for cooling, right? And that didn't work. And it's the same reason why space data centers won't work anytime soon. And as far as tidal energy, tidal energy is interesting. I think it could work. But it's a bit of a waste. The main thing on why data centers don't work, whether you're sticking them underwater or you're sticking them on a barge in the middle of the ocean or you're sticking them in space

is that GPUs are really, really unreliable, right? So we've done a bunch of testing of GPUs. We reviewed 40 different clouds, up to thousands of GPUs, in fact, in some cases, but hundreds usually. And many times, it was called Cluster Max, right? Where we tested 40 different clouds Cluster Max, right, where we tested like 40 different clouds, including like Amazon, Google, et cetera.

Everyone's GPUs are unreliable because they're inherently unreliable. And what happens when a GPU is unreliable? Sometimes it's as simple as, oh, turn off the server, turn it back on. Sometimes it's unplug an optical fiber, you know, a transceiver, and plug it back in, right? Sometimes it's like, take the GPU out of the socket,

put it back in. This is like the vast majority of fixes. I don't know why you need to do this, but that's how tech works, right? You unplug it, you plug it back in. And you need people to do that, right? Yes, robots could potentially do it, but we're not there yet.

The space of a data center, the physical size of it isn't that large, really. They're big in an individual basis, but they're not even covering a basis point The space of a data center, is like how does heat get removed, right? Heat gets removed because like you have atoms contact the heat, you know, whatever's hot, they take the heat away and they're more excited as they leave, right? You're taking cold stuff, you're making it hotter

and you're sending it away, whether it's water or air, right? But at the end of the day, you're radiating that heat out of an evaporation tower or chillers or whatever into the general air around you on land. But in space, there's no medium for you to like, how many particles are hitting your spacecraft and carrying away heat? And also those particles that are hitting your spacecraft are generally quite excited

anyways, but there's just like very few of them. And so like there's no way to radiate heat away and these things consume tons of power. So like they're unreliable, they consume tons of power. Power is cheaper in space, right? Solar panels, you can have them constantly having sun, but it's like, what about the fact that you gotta radiate the heat away? Like, people try and put tiny little computer chips

in space and satellites, and they have a hard time cooling those, right? So it's a problem that I don't think is feasible. It's something that's feasible in the next sort of, within the deficit spending is okay timeframe. I like how you keep going back to that. Good joke man, that was a really good joke. Are you bullish at all on new consumer hardware,

dedicated hardware for AI? Johnny Ive joining friend.com. You might be calling in from a Rabid R1 and we don't even know. Are you excited at all about kind of a third device outside of the phone or the computer? Yeah, I think the Johnny Ive Sam Altman video is so cinematic, it's so good. I'm excited for the product simply because the It's so good, I'm excited for the product

simply because the video's so good, the quality of it. But like, I don't know, I've seen this Apple device that has like a, it's basically an AirPod with a camera. And like that's pretty cool. Or like the AR glasses, right, with the cameras on them, like the Meta Ray Bans, or all the other iterations of that. I think that a new device is definitely coming. With how good AI is getting,

it means that the form of human computer interface can change, and it can be more natural and more seamless. It's not gonna be typing on a computer in front of a desk. It's not gonna be, you're still gonna have that. You're still gonna have your phone, right? more natural and more seamless. Yeah, I like Friend, the founder's really cool. Will they be a runner at all? It's a hard space, but I think there's three companies that seem to have a shot, and it's Apple, Meta, and maybe OpenAI, Johnny Ive. And Avi, of course. for the domain. Friend.com. Friend.com. You gotta appreciate it. He spent a fortune, it's worth every penny. On Apple, you put them in L tier.

If Warren Buffett can learn to love Apple at age 75, can we AGI pill Tim Cook at age 65 or however old he is? Is it possible? What needs to change for Apple to become dominant? They have so many advantages, they have tons of line time. They're dominant in humor. It's the AI that's made me laugh more than any other.

That's true. The tech summaries that go crazily wrong and hallucinate weird things. Very entertaining product. Seriously underrated as a consumer product. But what's your experience? Break down what's happening at Apple? What changes you predict? What changes you would recommend? They're clearly not that PGI-pilled. They haven't spent a ton on data centers and things like that. Now, they do have hundreds of megawatts going online in the next two years versus the hyperscalers have gigawatts. So it's like, okay, there's still an order magnitude off in how much they want to fume.

The flip side is that Apple has started building an accelerator that hired some of the best people from Google. They already had a good chip team anyways because their chips for their phones and their Macs were good, but it's like getting the talent they didn't have. They hired some of the best people from Google, a possible scenario for like thinking machines is that they just get acquired by Apple, right? Like, because at some point Apple will realize, oh God, we need talent.

And it's like, there's no talent out there for us to hire. When we try and hire, they're like, no, screw this. And Tim barely makes 70, he doesn't even make 75 million. He makes 74.6 million, which is like a junior open AI researcher if they joined two years ago. So it's like, how can they compete? Dude, that's OpenAI's janitor, bro.

Yeah. Is Lisa Sue Cooking? She acquired Briam earlier this week. Can you break down that acquisition? Was it exciting to you? What's going on over there? Yeah, so they actually acquired two companies this week. They acquired Briam, which is more like

a little VM compiler people. I think it's more of like an aqua-hire. It's like 10 people or something like that, I think. It's not that crazy, but it's more a commitment that they care about acquiring software talent. What's funny is when they acquire aqua-hire a company, the people at that company are getting paid a fair salary, right? about acquiring software talent. What's funny is when they acquire, acqui-hire a company, the people at that company are getting paid a fair salary, right? Like a very good salary. Whereas sometimes their hiring process, they don't pay people enough,

which is why they don't always get the best talent. Which is something that we've sort of mentioned. So, Briam's like an ML compiler and things like that. And then Untether is another one, which is making an AI chip, and they aqua-hired them as well, mostly for the staff on the hardware side, I imagine. Because they just need to move faster to be able to release chips as fast as NVIDIA's. Because NVIDIA's just like clockwork, So I think Lisa Su is waking up to how important this opportunity is

and that she needs to spend a lot more. But note, they're still spending a ton of money on buybacks when they could be spending. I mean, so is NVIDIA, but NVIDIA is also making godly amounts of money. AMD is making good money, and then they could turn around and reinvest that but they're not reinvesting as much as they should. I think these are good acquihires both on Tether and Bram which are both acquihires. They also bought Not AI a while ago. Not AI is where AMD's sort of like god of GPU AI software is. Anush, he came from there. He's the king.

And that acquisition was really good because they have like, again, like really good software talent that they were able to pick up. It's just, you know, we need them to move faster if we want to take them like, you know, super seriously. But the right direction. What was your read on the Nvidia earnings and kind of the lack of guidance around the training to inference switch over?

Do you have a better idea of what's going on? It seemed like they quoted a 40% number earlier They didn't include a new number But this seems like an important narrative or maybe it's not around The actual workload shift and then I want to know if that's like relevant to AMD at all. Is there an opportunity there? Yeah, so I think that Nvidia is gonna have a hard time knowing. Mm-hmm. Oh really how much compute is going to have a hard time knowing. Oh really? How much compute is going to inference versus training?

It's actually just like hard for them to know. Sure. Right. They don't get to know what workload their customers running. They can gas. They have the most data to gas, but like they can guess. Would people not want to tell Nvidia? I feel like if you're buying, you know, a hundred million H two hundreds, you might just be like, yeah, sure. I'll tell you what I'm doing with them right now. Like no problem. I'll fill out your survey. Here's my NPS.

I think these companies are very secretive, right? Like, you know, people like OpenAI won't tell Nvidia what their model architecture is, even though if they just told them what their model architecture is, Nvidia could optimize their next generation ship to it way better, right? And so Nvidia just has to guess, right?

And like hope that they know what OpenAI is doing, but they don't, right? Like they have a good idea, right? And so like, I think that's one aspect of it. Yes. reinforcement learning with verifiable rewards. One interesting thing is that traffic is not usual, right? It's like, it oscillates. And actually on the weekends, chat GPT is used very little relative to weekdays. During work and school hours, chat GPT usage is huge.

During night, it's not really, right? Except for when like Ghibli slop is like trending. And that's the only time you have like usage higher during non-peak hours, which is like work day. So what's interesting is that these clusters have lower utilization, but now I can turn around and start using these clusters at night. For example, I can spin down a percentage of them and I can turn them to reinforcement learning to verify how it works.

I can generate a bunch of data, verify it, see if it's good or not, whether it's math them to reinforcement learning to verify how it works. of that, put the normal model on there and start doing inference. That can take a minute or less. There is a blurring of lines of what is training versus inference. The other aspect is can AMD get in there? What's interesting is that AMD has generally taken this approach of like, hey, we're like 80% of the cost and we're the same performance, right? That's sort of where MI300 sort of shakes out. Some scenarios it's higher, some scenarios it's lower, but we're like 80% of the cost.

Now, when you look at this new generation of GPUs they're launching, I think next week, MI355, it's two thirds of the cost of Nvidia's Blackwell, but performance-wise, is it twothirds or is it less, right? Or is it more, right? And so this is going to be a challenge. It's going to rely a lot on their software. Meta's really excited about it, but not too many other customers are. And so the question is, can AMD get in there? They're targeting inference mostly, but Nvidia's moving the game really fast, right? They're coming out with these new software libraries

that don't just like, it's not just CUDA, right? It's like they're building the entire inference engine, right, and AMD can't plug into that. It's called Dynamo. So what Nvidia's doing around Dynamo is really locking AMD out from inference at the non-hyperscalers and labs, because it just doesn't make sense for anyone else

to try and replicate the software that Nvidia's giving away for free on Nvidia GPUs. What do you hope to see out of companies like Prime Intellect over the next one to two years? I believe you're an investor in Prime Intellect, is that correct? But so I'm sure a little bit conflicted, but yeah, talk to me.

Yeah, I mean, I invested in the seed, but to be clear, I'm pretty impartial, right? We had this Cluster Max review, and we didn't give them the best review, but yeah, talk to me. I'm pretty impartial, right? We had this ClusterMax review and we didn't give them the best review, even though I invested in them personally. But I think what they're doing, I'm really excited about. AI is super centralized. This is the only path I see forward mostly. AI continues to be more centralized. There's fewer and fewer players.

They have more and more control over our data, over automation of the entire world's economy. This is potentially quite scary for someone who likes decentralized power systems and capitalism and such, tyranny. the cool thing. You can just go look at what they open source. They have some pretty good software. I'm hopeful that there's a path to all AI and power not just continually being centralized until we are enslaved by the machine god. Except if semi-analysis were to centralize it, I feel like people should be able to trust you, benevolent dictator, world leader. I feel like, you know, that'd be an exception to the rule. And people should be able to trust you, you know, benevolent sort of dictator, world leader. I could see that. Call me the Lee Kuan Yew of AI.

Sure. I wanted to go more into those like Studio Ghibli moments. When people say, quick, quick, fire off. Would you hire somebody with a Studio Ghibli profile picture, or is that a negative signal? That's good. In our Slack, someone has a Studio Ghibli profile picture is that a negative signal? No, that's good in our slack someone has a studio Ghibli profile. Okay. Yeah, okay Public his public profiles are also a studio Ghibli. Okay. Wow, that's good Wow, but you know whenever there's like these big me moments like they everyone says the GPUs are on fire

Obviously, they're not literally on fire. But what is breaking? Because is it is it that there's actually more unplugging and plugging it back in in the data center like like when when we see studio give it a go out and like you know the queries are clearly failing what's what is it what do you think is happening internally is it just too much load because I feel like the chips are under incredible load during training right so like that that, they're used full times, but why are we seeing so much failure during these spikes?

What's actually going on there? With training, we know what's happening, right? We're saying, hey, in this iteration, you're gonna process this many tokens, you're gonna update the weights, you're gonna exchange them all, okay, here's more data for you to train on, right? And you just keep iterating many, many times,

every 15 seconds or 30 seconds or 60 seconds You update the weights and you do it again and you know how much data you're sending with inference You know you have these clusters and it's like it's that curve again Right if I just have one user it happens really fast great user experience. I have tons and tons of users happens really slow And while I am serving more users and I'm getting more output, each individual's user experience is worse. But at some point, it gets so bad that you either run out of memory or hey, a GPU does break and all of a sudden you're dropping requests constantly. So not only does the user experience get bad because it goes from fast to super, super

slow. Look at how fast Ghibli is processed now. It's a crazy fast compared to what it was initially. But also, when something bad does happen, you can't just be like, oh, take all these requests, route them to these other GPUs. It's, oh, all these queries fail. Oh, I got more requests than I'm able to handle.

Well, these users, I'm just not going to start processing their requests. I'm going to say, sorry, it doesn't work. And so that's sort of when the GPUs are on fire, that's what happens. Now also, I think it's mostly that dynamic of you add that incremental user and things break. Or if something breaks, all those users

now have their stuff broken. Well, thank you so much for coming on. Everyone in the audience should go to SemiA semi analysis.com if you're not already subscribed and We would love to talk to you again. This is fantastic conversation super fun a million a billion a trillion I want a billion. Hey add a add a yeah hit the size Add a add a new plan on semi analysis five million a year, and we'll ask some of our VC buddies that just have a bit too much management fees.

We will shame them into, oh, you're not on the pro plan yet? You're not on the max tier? The presidential plan. You're not on Semi Analysis Ultra Max? Wow, you must not be serious about artificial intelligence. Oh, you don't really invest in AI much. Oh, you're not about the AI thing. You're. Oh, you're not about the AI You're more Tourists I get it. Yeah more of a tour. Yeah, yeah, you're b2b sass guy. Yeah

Good living sure you make a good living Anyway, this is fantastic Thank you guys for having me on super fun Bye All right. You're going to love this, John. I think you're too locked in. We're going to have Blake from Boots Supersonic calling in

at 2 15, 45 minutes to talk about the new EO. Oh, oh, is it political? You know I can't pay attention to politics when I'm talking to an AI person. You know, I just get too locked in. But that is fantastic news. Very exciting. I see your post.

Blake will be joining TBPN live at 2 15 p.m PST to discuss the new supersonic EO very excited to talk to him and We have Dana subtle from Greycroft coming in the studio. How are you doing Dana? Good to see you Hi, great to see you too. What's going on? Thanks so much for joining very exciting times The IPO window is is is squeaking open and it's open more every day We talked to the founder of circle today very good showing would love to talk to you about that What's going on in the markets what you're investing in today? But would you mind introducing yourself for the audience members for anybody that's been living under a rock?

Yeah living under your data center as you like to say. Yeah Yeah, Dana subtle co- center, as you like to say. Yeah. Yeah, Dana Settle, co-founder, managing partner at Graycroft, been a venture capitalist for a very long time. Started out in 1998 on Sand Hill Road. So I've seen a few cycles. Yeah. What was the first big deal that you really, really tracked or invested in or followed?

Like, were you tracking like? Yeah, what deal allowed you the right to be a VC for more than maybe four years? Yeah. Because it's, you know, the first four years, it's kind of like, you know, fair game. You can make some bets, but eventually, you know, there needs to be some results.

Yeah, what was the story? Yeah, it's a good question. So, you know, when I first started Inventure, we were investing in all kinds of things, but more it was like networking equipment and semiconductors and storage and sort of that was building the last, really the first generation of the internet. And so some of the companies from that era are no longer exist. They're actually bought by much larger networking equipment companies, et cetera, but a similar dynamic

where we would invest. I wasn't expecting this question, so I'm basing it on the name of this company, but literally, it was like, oh, Qterra, god, that's a funny optical equipment company. And it was, in like 18 18 months sold for two billion dollars. Yeah Wow Wow There we go. Yeah, I was you know, I was the number two on it course, but yeah, yeah, but that's great

It is fascinating how much the networking equipment space has kind of come back into focus with the AI boom We talked to Kevin wheel over at open AI. He's on the board of Cisco now, right? Yeah. And so, and we've talked to another founder who is working on optical cabling in the data center because as we scale these models, and so everything old is new again. Totally.

But what is most new for you? What have you been focused on? What's been in the news in the last couple weeks? Yeah, well, I mean, in terms of what's new and what we're investing in is certainly in all of the, you know, sort of AI, everything from infrastructure up through applications. So that's not nothing terribly surprising there.

But it is interesting to really look back to the history, you know, sort of history of the internet and see how much things are repeating right now in terms of what's being built. The other thing that we do is we actually have a sustainability fund and we've done that in partnership with some strategic partners, so Coca Cola and eight of their largest bottlers globally. And what's been so interesting about that is we are, there's such a huge intersection essentially between AI and sustainability. People

don't really think about it, but you know, if you look at energy consumption doubling by 2050, I mean, something's, something's gotta give. It's all oil and gas right now. But I think that's where we see a lot of, a lot of opportunity, not just in renewables, but actually in like the, you know, software and hardware for sort of re-imagining how all of that's consumed. Yeah. You imagine that all the hyperscalers are going to need to kind of reevaluate the ESG the software and hardware for sort of reimagining how all of that's consumed. Yeah, you imagine that all the hyperscalers

are gonna need to kind of reevaluate the ESG mandates. There's already a lot of companies in the space like Crusoe Energy started by flaring natural gas plants. There was wasted energy and there's obviously a ton of news in solar and nuclear and all sorts of stuff. The energy landscape has been fantastic. Would you mind taking us through the latest IPO experience? How was that?

I'd love to hear that story. Kind of from start to finish because it, like there's so many VCs that have been in the game for a long time and not actually been through that process because the companies love staying private. Well, other reasons too. There's probably more bigger reasons. For too. There's plenty of other reasons. For sure.

There's been a lot of pressure to stay private, right? Well, it's really interesting. I mean, I don't know. That's like a whole other tangent, and I'm kind of obsessed with it because it is really interesting if you look at what the public markets are today, which I think is really interesting. It's just really different.

It's almost going back to potentially what it used to be, where it was like smaller IPOs and it was actually access to growth opportunities to more retail investors. So anyway, but our most recent IPO is a company called Mountain. And it's a pretty amazing story, incredible founder, serial entrepreneur, technical background. And, um, really, you know, he essentially started the business. I mean, we invested actually in 2011. So this gives you a little bit of a sense of success. We have a soundboard here. It's every founder we talked to, I mean,

we talked to the Circle founder and it was the same thing. He's like, yeah, I've been doing this for a decade. You know, today's the focus. It's amazing, actually, well it's funny to see Jeremy Allaire talking about, I mean I remember when he had a video search startup in the last generation.

And so it's really interesting to see these things sort of come full circle. Incredible entrepreneur. No pun intended. Yes. Sorry, I didn't mean to. But anyway, back to the story of sort of come full circle. Incredible entrepreneur. No pun intended. Yes. But anyway, back to the story of Mountain. Back to the story of Mountain. So, so Mountain, Mark Douglas, um, you know, really again, incredible founder. Um, he had started one type of an ad tech business essentially, um, back in sort

of the display days and when we first invested, just to give a sense, it was a $4 million Series B. Wow. No way. Just think about what that means today. Now it's like $4 billion. It's a series that's around for ants. It's around for ants.

But you needed the capital, and it worked. Yeah. And really, that market changed pretty dramatically when all of the regulation around cookies, et cetera, happened. And Mark had the foresight to take what was $100 million plus revenue business, super profitable, and essentially build

an entirely new business, saw that connected television would be the next major ad platform. I mean, and again, seems very obvious now, but wasn't. Definitely wasn't consensus at the time. And he essentially just built that out of cashflow from the old business, sunset that business and built this one up to now the company that went public. Yeah. We're talking to the founder of AG one next. I'm interested to hear your take on celebrity partnership.

There's so many different configurations, whether it's just the celebrity investing, just like any other investor, and then maybe they've added some value to co-founding the company, incubations. What is your view on the roles of celebrities or people that bring differentiated value add in the startup ecosystem? Well, I think what you just said is the key, which is differentiated value add. And in the case of Mountain, we did partner with Ryan Reynolds and his marketing agency.

And that was sort of a fortuitous connection. But it really just, I actually was introduced to Ryan and his team as they were sort of thinking about what to do with their agency. And it was just in this moment where I was like, wow, what you guys are trying to do with their agency. And it was just in this moment where I was like, wow, what you guys are trying to do in terms of really making ads that sort of move at the pace of culture. I have the perfect platform for you. And really Mark and Ryan just sort of saw eye to eye on really how to build this business.

But again, that was so really authentic to Ryan and his team. It's just like what they want to do. They want to make really cool ads that really resonate with people, not to just make ads, but really to sort of make them at the pace of culture. And Mountain is the perfect platform for that. And that's why I think it's worked so well. And we saw literally, I mean, the crazy thing is when you think about, I think about celebrity

or influence as being largely marketing. I mean, it's, and so if you sort of look for like a dollar for dollar replacement, is when you think about, I think about celebrity or influence as being largely marketing. I mean, it's, and so if you sort of look for like a dollar for dollar replacement, Mountain's inbound leads went from like 2% to over 60%. Wow. That's crazy. Well, it's also interesting to think

in a B2B business like Mountain, like somebody like Ryan Reynolds effectively acting as a sales rep and just like messaging a CEO and being like, Hey, I'd love to set up a demo with you. And it's like that just that impact alone in terms of bringing spend on the platform. I mean, we've been kind of joking about this. We talk about ourselves as like enterprise influencers, because all of our sponsors are basically B2B companies for the most part. And, and, and, and it's just like,

it's kind of a new era, but it's working and Ryan's clearly carved out just a very unique position. It's, he's not of a new era, but it's working and Ryan's clearly carved out just a very unique position. He's not just somebody you just pay to show up for an ad. And there are celebrities that have built great businesses on that, but he's taking a very different tact. I'm curious, when you made the Mountain Investment, was there any, was there people maybe

in the investment committee or other investors that were friends that sort of were writing off TV at the time digital was exploding. And now, you know, looking back, it's like TV advertising has exploded, it's continuing to grow, even in the U.S. I think in 20, sometime past 2030 it'll be well beyond, you know, $100 billion in spend just here in the United States. So TV advertising is clearly not going away, but I could imagine 10 years ago, a lot of Facebook PM that became an investor

would probably have written a memo that said like this market is gonna go away or at least shrink. Yeah, and I would clarify a couple things. I think 10 years ago for sure, I think TV advertising has changed. I mean, this is largely advertising on connected television, streaming television. So really, the distribution has fundamentally changed.

But yeah, I mean, we actually had investments in some companies that, you know, like 15 years ago, that were actually, you know, improving the process for television ads. And we sold those businesses, gratefully, and made a profit on them. So, but, but so when Mark proposed this, I think what was counterintuitive is all of those businesses were subscription. I mean, the idea was not to have ads in those streaming services, right? And so what's happened in the last five years is now all of those streaming models have moved to where the majority of subscribers that are coming on. I mean, if you look at the public earnings from Netflix and Disney, et cetera, that the majority of

new users are coming onto their ad platforms. Yeah. Yeah. Do you have, I mean, I'm sure investing and being in LA often, there's probably celebrities that come to you with like, hey, I want to get into venture. I want to have exposure one way or another. And there's so many different models.

Do you have any recommendations for all the celebrities that are listening for the best way to get exposure to tech or just patterns to avoid so that they don't get over their skis. Yeah, I mean, look, I think it's like anything. Like whatever you're truly really curious about and you really wanna dig into, I mean, that's where you should spend your time, right?

I mean, I think if you're just sort of dabbling, I mean, I guess if you wanna have investments to sort of talk about, because you think it's like just in the zeitgeist, then great, like invest in some funds, you know, exactly. I was saying to say more, more so as you just LP. Yeah. It's either LP or like be deeply involved in the company. But yeah, exactly. Or if you just want to, you know, kind of learn about investing,

like that's a great way to do it. I think if you want to actually be, you know, direct investing, angel investing, you investing, I think actually, again, just following your true curiosity and the areas also where you can really make an impact. That's why I think with, again, going back to Ryan and his team, they're amazing marketers, best in class. I think that's where I would just encourage I would just sort of like encourage any celebrity to do what they're truly passionate about. And I think if you, you know,

look at where things have really worked outside of Ryan, I mean, I think, you know, what Gwyneth has done with Goop, I mean, I think it's just, these are just very natural to, I mean, there are things in Goop Kitchen, which is another, you know, sort of spinoff fromop I mean, it's it's the food side of it And it's again, it's just what's so natural to her it's what people expect her to be You know sort of recommending an excellent at right? Yeah. Yeah. Yeah, totally. Um, what about What's your how what are your thoughts around the evolution of LA's?

Ecosystem on a personal level. I think my last five LA County investments were in the gundo. And haven't done haven't done much outside of that. But I'm curious, are you are you disappointed? Are you accepting? Are you still excited? Do you do you see a lot more growth here? It seems like San Francisco has certainly sucked a lot of the oxygen out of LA if you want to be I had one portfolio company that was, you know, consumer AI business that I know that was in LA and just like had to bail almost within two months, just because of the talent, A $350 billion company popping up in San Francisco

will do that, but yeah, what has your been, give us the temperature check on Los Angeles. Yeah, I mean, look, I think there's no question. I think there's a sucking sound back to the Bay Area and again, it's sort of like early days of any major technological shift. I think that's naturally gonna happen. It's Silicon Valley.

We actually opened an office up there for the first time last year. We've hired a new partner up there, a team up there, and we're all spending a lot of time up there. For us, I love LA. I moved here. I did spend 10 years in Silicon Valley before moving here, but I moved here almost 20 years ago. I think LA is an incredible market, and I think having access to this market and really having

a deep understanding of a lot of the industries and network here is super valuable. But the talent density from a, you know, just technology standpoint right now, Silicon Valley is just a super important place to have a strong network. And so we're spending time both places. We've also, I mean, we are spending time also in the gundo and in other, and on other things, which are certainly big growth areas in LA. We also led an investment that we think is super exciting

called Whatnot, which is LA based company, fastest growing, largest live streaming shopping platform in the United States. So, I mean, we think that there'll always be great companies here and continue to be, but there's definitely a AI talent density in the Bay Area. I think we were talking to Gary Vee and he told us to put it up.

Yeah, when Whatnot exits, it'll be like, LA's back, LA's back. And then people will be like, oh, I never lost faith. I never lost faith. Yeah, that's hilarious. Well, we had Scopely also last year. Yeah, Scopely was fantastic. That's a pretty great story and continue

to have a good theme here. And Snapchat, and Service Titan, and Pandora. Mountain, and Space Hero. SpaceX. Yeah, there's a couple. It's not the worst place in the country. We're doing OK. But I think LA kind of surprises people

when you dig into the numbers as opposed to, it's not as loud because Hollywood is the thing. It's the Hollywood town that happens to be above expectations in tech and hasn't made as much noise about it. Anyway, this has been fantastic. Thank you so much for hopping on. Super fun.

Congratulations on the big win. We'll talk to you soon. Great to see much for hopping on. Yeah, super fun. Congratulations on the big win. We'll talk to you soon. Great to see you guys. Cheers. Have a good one. Any other breaking news that we need to cover in between our guests? No, let's bring.

No, we're good. No politics? Yes, we're so back. Let's talk about AG1. Let's talk about consumer packaged goods. Let's bring in Kat from AG1. How are you doing, Kat? Good to see you.

Welcome to the show. Boom, welcome. Hi, hi. Jordi, I'm gonna let you take the intro. Thank you so much for joining. Well, it's happening. How are you? I'm great.

How are you guys? We're doing great. It's Friday. We wish it was Monday. We like podcasting a lot here, so the weekends are always tough, but how are you? Oh, sorry for your wind down I know I know we're soon enough I know I know I'm sure you feel the same way why

don't why don't you give a quick intro a brief history we don't like to do make this you know biography but but I would love to have you kind of give your background for the audience door I'm Kat I Kat. I'm the CEO of AG1. I have spent several decades in consumer. I started opening franchises around the world when I was a teenager and had incredible opportunities in restaurants, food and beverage, and franchising for the first 20 years of my career.

By the time I was in my early 20s, I was in the 20s. Teenager, gotta back up. What were you doing as a teenager? You just sort of sprinkled that in there, but I'm sure it's a good story. Yeah, I started working at Hooters restaurants as a hostess when I was 17, putting myself through school. I'm the oldest of three girls. We left my dad when I was nine, putting myself through school. I'm the oldest of three girls.

We left my dad when I was nine, helped to raise my sisters. And so restaurants are a very common place for young folks who need to work to start to work. And I grew up in Florida. I used to pick my first real job after soccer refereeing was picking up cigarette butts at a nightclub in the morning. I would get there at like 6 AM and that was my job. So very familiar with the sort of restaurant grind.

And it certainly allows you to bring, it's easy to bring the sort of service culture mentality into startups when you're responding to like tickets online if you got your start in restaurants. Yeah, I mean that closeness, right? That proximity to the transaction, to the customer experience. If you're paying attention,

it never leaves your bones and your soul. And so I stayed in that industry for many years. I was with Hooters for 15 years, helped grow that business around the world, and then moved on to O'Rourke Capital, really big private equity firm and restaurants and franchising owned portfolio company called at the time called Focus Brands. Took over Cinnabon when I was 30 years old as president to turn it around out of the

Great Recession and then built that business into a billion dollar global revenue business. Then built a licensing CPG division out of that parent company and eventually ran focus brands, the parent company, a couple billion, eight brands, 80 countries for four and a half years, so 10 years at focus total. And all throughout that time, I was just becoming more passionate personally about nutrition and fitness. I had kids later in life, I'm 47, I have a five and seven year old, my mom had breast cancer when I had my second, my daughter. And so health became this personal obsession. And so while I was running these big mass market brands, some of them were sweet

treats and fun for you, but some were better for you. Jamba, Mo's, Schwarzschilds, McCallister's, I wanted more like more bleeding edge of health and nutrition. So I started angel investing in better for you businesses quietly on the side. That eventually coincided with when I left Focus after a 10 year career running those global franchise businesses, I was introduced to the founder of then called Athletic Greens AG1. I had been a customer for a few years and you know, here we are. That was four years ago. Amazing. What was your personal process, diligence in AG1 given that I'm sure you know, you know, here we are. That was four years ago. Amazing. What was your personal process

diligence in AG1, given that I'm sure, you know, you looked at hundreds of businesses around these sort of massive organizations. I guess what were the qualities? Because I think if I remember correctly, the time you joined AG1 was when almost everybody was writing off direct to consumer as a category broadly. They just said it didn't work,

the economics weren't there, you were giving all of your margins. You would eventually have to pivot to retail and then that would just completely change the business model and you couldn't really get to scale. Yeah, there were a few things. One, I did similar diligence to some of our investors, which is we were customers.

I was a customer for two years. And when you have a personal experience with a product and real passion, for me it was energy, immunity, got health support, it made a big difference for me as a busy professional mom. So I was a bit of a fan girl of the product itself. But that's just one layer. The second was I actually advised the founder

for half a year before I joined. And so talk about diligence. I had the opportunity to get inside the business, get close, meet the team, understand product. And as every layer I listed, what I learned was even better than I could have expected. And I had a bit of an ego moment where I'm like, oh, this company is so much smaller than the other ones that I've run. Is this really what's right and best for me, even though I love it? And very quickly I got over that too.

This is actually a brilliant time to jump on a health and nutrition rocket ship that's better than anyone knows and has incredible upside. So after advising, I joined in November of 21. So what were the first challenges when you came in? It sounds like a lot of things were going right, but there's probably some area that you were focused on. Yeah. I mean, there was a ton going right on the outside. Everyone said, Oh, you guys are crushing it. We did this fundraise, right? 120 billion,

120 million raised at a 1.3 billion post. It was still the end of the frothier era, like end of 21, beginning of 22. It was still the end of the frothier era, like end of 21 beginning of 22. And the business had done 160 million that year in revenue and bootstrapped up to that point. So the founder was an incredible capital allocator, incredible subscription business, 90% subscription, growing at, you know, multiples, not percent. So that's what was good. That's what was great. Fresh round of capital, the only round of capital we've ever raised. And a lot of tailwind in the category, in the industry, and a clear leadership position. What was wrong is that we had scaled so quickly and we only had one manufacturing plant in New Zealand. So all of that green powder was being blended in New Zealand and most of our business had grown in the US. And so job one was Gale the operations to support growth. I wanted to launch a few additional products sooner. I wanted to go into retail sooner, but we had no business doing anything new until we

really built the infrastructure and that was expanding manufacturing to the US, which we did immediately to support the US business. So now New Zealand supports the rest of the world. We own our source, highest quality ingredients globally, then blend in those countries and certainly that's helped us in the tariff volatility moment. And so that was job one. The second was then it was very clear pretty early on that even though there were there was so much energy and tailwind and growth in the supplement category of wellness. And a lot

of that was getting piped up and promoted on podcasts and with influencers and creators. And we were certainly a part of early, very early in that trend. We were fortunate that some of our early customers became thought leaders and had famous podcasts. But it was very clear that science was going to be a critical part of marketing for this category where it historically had not been. So a few years in, first, shore up operations. Second, actually pull back marketing a bit and reinvest millions into double and sometimes triple blind randomized placebo

control clinical trials, which take years to build a PhD team, to scope the trials, to conduct, to analyze, etc. And so those were the first two things. Site operations, supply chain in particular, which includes like QA, maintain our NSF or support third party certifications. There's a lot of like high quality standard we needed to protect as we move manufacturing and expanded it, which was a little scary as we put our product in the hands of other blending facilities,

but the team did it beautifully. And then make massive industry leading investments that would take an annoying amount of time to be completed and pay off. And then use those two things as the foundation once we got them in place to then innovate. So we wrapped up last year 600 million in annual revenue, one product, one channel. Yes, all of God's. John's going to hit the gas.

Crazy. Congratulations. Yeah, the scale is just wild. Let the gong have its waves. Yes, we deserve it. Our customers deserve it. That's fantastic. But it is time, and it was time a year ago, to make some thoughtful, large, focused moves outside of that single product,

single channel model. So just this last week, we announced a direct to national partnership with Costco. So we are now a multi-channel company, went straight from no retailers to all of the largest. And it's been great. I don't think people realize how significant winning in Costco is, because I'm an investor in a company that expects Costco,

like in the first, I think, 18 months to add 50 million revenue to the business. It's like extremely significant. It could easily be into the nine figures. And so it's great if you can just go from one channel to adding retail as this individual channel that you can really focus on. If you're running a small CPG company,

our recommendation is just go into Costco. And win in Costco. Just win in Costco. It's easy. Is that easy? For anyone out there with a $2 million CPG business, just win Costco. Is that easy? For anyone out there with a $2 million CPT business, swing cost. I'm curious if you think most of the issues in D2C

and consumer brands broadly are just operational. Because when I think of the stuff. Versus structural? When I think of, yeah, versus structural, where it's like, hey, you have a good product. It'd be a good brand. Or a brand that could be good. Yeah.

And it's just a lack of pure leadership abilities internally because we're very close with the Ridge Wallet team. And that's a business that shouldn't be a multi-hundred million dollar revenue business, right? The original product was a, you know, the LTV. In the early days, the LTV was like the LTV was like the first, the value of the first purchase, right? And so you would think there's no way

this business could really scale or be massive and they have against the odds. But I'm curious as you look at other DTC businesses, how often are you thinking this could be great, but it's just not, it's actually just like a operational lack, effectively. You know, it's interesting in D2C, is I've seen both ends of the spectrum

where something is actually demonstrating outsized growth, but there's not a lot of there there underneath, and it's a window of time before they hit their cack wall, and they end up having a lot of their their underneath and it's a window of time before they hit their cack wall and they end up having a lot of unit economic challenges and it doesn't mean retail will solve those challenges in particular and then you see others that have beautiful products incredible retention but just haven't mastered the art of e-commerce marketing and so for, at least early on, I think people gave us way too much credit for being amazing V2C marketers. We were not. We had a phenomenal product that it didn't matter what type of marketing we use to have people learn about it. Any marketing is just

awareness and trial. What keeps people ordering months and years, I've got over 500 customers that have been with us for a decade, a decade. They've been drinking AG1. That is not because a podcaster told them something. It's not because of a billboard or sponsoring a sports team. It's their experience. And so I don't think we can remove consistent quality and that compounding resulting both growth from those customers individually, but we call it the referral quotient. Our number one driver of customer acquisition, our post purchase survey, how did you hear about us? How did you first hear about us, friends and family? Number one, by a mile, bigger than podcasts, bigger than influencers, bigger

than television. We're full funnel. We're pretty well distributed from our marketing strategy. I was just listening to you guys talk to Dana. She's amazing and our portfolio is phenomenal. And whether it's television or community and activations, it's all a part of our approach. But D2C really has to have that incredible experience to have its chance. I mean, we were rewarded for our focus, right?

Pretty unusual to get to 600 million with a single product. And we weren't even on Amazon. This is just drinkag1.com. And that's unusual. And I do think that might be part of a challenge for some D2C businesses is if they don't get traction or they're not seeing that retention or the LTV they want, then they go wide.

Excuse and offerings and you get distracted. But if you can focus and really differentiate, then that traction is there and the unit economics perform to the best that they can as the algorithms change and as the structure, to your point of structure of digital marketing changes. On the other side, retail, yes, it's a revenue channel, but it's brutal, and your product is in the hands of someone else, but it is marketing, right? It is eyeball, the shelf is a billboard.

And so if you can do it well, I believe it is synergistic with D to C, not the maybe predicted or feared cannibalization that some might think going into retail. I'm glad we didn't go in early. This is our time. This is the right time for us. But we have an unusual business and that people stick with with a G one for so long. Yeah. Do you have a reaction to the news this week or last week that Nike is going back on Amazon, sort of a pivot away from their direct consumer strategy.

I think Nike got a little too inspired by you guys. I think they might have been trying to copy you guys. They saw you putting up phenomenal numbers. They're like, AG1 was the last holdout. They're the last holdout. If they're there, it all bets it off. Yeah, exactly. Welcome back, Nike.

Yeah, but it gets to. They seriously said, we're not going to do Amazon. We're going to focus on our own Nike.com and direct response marketing. And that's the other thing. You guys have blended. You guys do, I'm sure, the vast majority of your budgets around direct response.

But when you came on board, suddenly the AG1 brand was aspirational. Totally. It was like, cool. And it was leveled up. It felt like almost like fashion. And that's been a critical part of the Nike brand is putting the celebrities front and making

the athletes the heroes. And that kind of fell by the wayside during the direct response era. Hopefully, they're getting back to it. People were talking about Caitlin Clark has signed with Nike. But most people don't even know it, because the particular shoe that she wears is like a limited release.

And so they've gone this like very odd strategy. So just general lessons from Nike or reactions to the relationship with Amazon there. I mean, look, it's similar to us and may we be a Nike one day, what a phenomenal brand. Seems like you're on the way. But they've had their bumps as all skilled companies do. And we several years ago, as part of that pullback in that lower funnel marketing and

investment in human clinical trials to raise the standard in research, we also moved the marketing spend we protected to more upper funnel, right building brand brought an incredible CMO recently former CMO of Yeti. He's a creative genius and really deeply believes in community. He always says niche to be mass, like go to your people, be deep, be there for them. And we have a lot more ground game happening now. And so that investment in full funnel marketing, you get a greater return if you're in workplaces,

including the world's largest e-commerce retailer being Amazon. So for us, and I know this was a part of Nike and even some other brands calculus and either going off or never being on, for us there was so much tailwind in organic search and growth. We didn't need to be there to grow the way we grew and we could barely keep up with the growth that we had. It got to a point where three things changed for us and I can't speak for Nike but I'm assuming this is a piece of the pie. One, there was a growth of counterfeits and resellers.

To protect our brand at scale, and this isn't a shoe, it's something people put in their bodies. That's a safety issue. That's a brand issue. When part of our thinking of getting back on was being the programs that Amazon in particular, Transparency and others that they put in place to take down either those fraudulent products, people infringing on IP or, you know, unauthorized resellers, that was critical for us. We would not have come back on in the way that we did as in as big of a way if those

programs were not in place for this category in particular. It's about quality. We added, we had to add holograms to our box with randomized unique numbers on all of our packaging. We did this pre-Amazon because the, you know, it wasn't just Amazon, all the marketplaces. There were, I'm talking real counterfeits,

like weird typos, and Grinch green powder, dark green powder, getting caught by customs. And imagine getting a phone call from your general counsel. And she's like, we just got a call from the feds, customs, something that says NSE for sport. So there's brand. You're being a very, like a politician about this, but when I talk to

portfolio companies in the supplement space about Amazon, it is just their number one, one of their biggest pain points and just a massive source of frustration around counterfeiting, around, you know, all the sort of issues that you're playing at. When we got that gone, it was gone. Yeah. Gone. And now we're meaningfully scaled business, right? So they really, this is not being diplomatic. I had a ton of risks to my brand

and it is now gone on that platform. That's, those are the facts. The other issue was that because the resellers were there, even if it was real product being resold, I couldn't tell you how old it was, the shelf life, the stability. So I still had a quality concern, but as big of an issue for e-commerce marketing was it was driving my ratings into the ground. So our brand ratings on Amazon were awful.

And so if you would search AG1 on Google, you'd get these great ratings from our site or other sources. And then Amazon, who starts? I mean, it's horrific. And so as soon as we got back on, resellers are gone, counterfeits are gone. We have a limited product assortment there so we can be there meaningfully, but keep D to C as the place for expansive skews. Ratings went through the roof because customers are having a better experience. So it's search, it's about search and discovery as well for us. Where is your team getting the most leverage from AI? There was news this week from Metta talking about wanting

to basically help advertisers actually generate ads. Dylan Patel was talking about that. Yeah, and in general, when you talk to brands, the number one thing holding back their growth, oftentimes, in efficiency is creative. So it's very exciting. It feels like we're finally there with VO3, where it's at least a drop-in replacement for some B-roll

or stock footage that you might pull off the shelf. So yeah, that's a fascinating question. It's, god, the technology's unbelievable. It's unreal. For us, the first place I showed up in the business is our customer service and customer happiness. We partnered with Sierra. We were very early with them.

And I have no affiliation with them otherwise being a happy customer. And they partnered with us to craft what we needed. And what we got out of efficiencies, we redeployed into human resources for concierge programs, for loyalty programs, which we were actually very late to develop as a subscription business. So I used, there was a financial benefit.

There was a speed benefit for, like we learned that 50% of our customer inquiries were things, we already knew this, we just didn't have the solve that Sierra helped us with. 50% were just manage my account. That stuff can be odd. That's prime for AI. So for us, AI was first there. Then we have tools that our team or supply chain team have brought in on transparency and tracing for ingredient sourcing since we own our sourcing. And so it's really helped us track and monitor and enable all because we have pretty rare high standard specifications of our ingredients and have unusual

levels of testing of ingredients. And so to manage that through the supply chain has been very manual. And so AI has helped us there. Then to your point, marketing. We have some interesting thoughts on AI. We are using it for, as you said, digital background, digital B-roll, anything that isn't supposed to be real product and real human. Because the supplement space has both good actors and not, we are holding ourselves to

a standard of if we're putting a person on camera or if we're showing our product, right or wrong, it's gonna be real. But everything around it, the enablement, the editing, we are bringing every AI tool we can to make that more creative and more efficient. Yeah, we were talking to a food photographer earlier today who was very nervous about artificial intelligence

and AI image generation, but was hoping that some of the rules around the way food is photographed from the FCC. Basically marketed. Yeah, marketed because you've seen those famous pictures of like, here's the burger. I wouldn't say the name of the company that does it, but here's the photo and here's the actual burger

and they don't look anything alike. And you can imagine that being being a big issue even if AI can be used in the post process, there's probably still value to show the customer exactly what they're actually getting. Last question from my side for now. Do you think that people should be significantly more concerned with the supplements that they choose to put in their bodies? I there's this Obviously in the Silicon Valley the tech world people will take any supplement if that's like hey This is gonna make you 1% more focused today they're like I will buy this from some sketchy website and take it today and and

You know you keep coming back to this sort of traceability testing. We've seen this with the creatine gummies. Yeah, well that's an issue too, but there's no creatine in it. But I mean, if you test supplements, it's like, yeah, you could be supplementing lead and not knowing it. And so I think that not every supplement company

has the same standards and I don't think people fully appreciate the potential consequences of that today. Yeah, you know, the very fast answer is yes, people should be incredibly discerning while there are truly so many companies doing the good work. Third party certifications, publishing certificates of analysis like us on their site, all kinds of third-party labs. There still are so many who, whether intentionally or not, in the mildest form of the issue, what is on the label is not what's in the product, right? So you think you're supplementing with X amount of this ingredient and whether it degrades

because of the shelf life and they are blissfully unaware or their Manufacturer pulled one over on them and they are unaware. I would say irresponsible in those cases if you're gonna sell a product That that could be happening and in that case It's just an it you're not getting what you pay for on the other side to your point There could be ingredients that you don't want or don't know are in there And so what I would encourage people to do, whether they're in Silicon Valley or anywhere, is recognize this is a huge industry and where there is growth, there will be both good and bad actors. And the great news is there are ways to know who and what to trust. You got to look for

third party certifications and don't just take the words that someone types, third party certified. What third party? NSF for sport is the gold standard. They're incredibly expensive and a pain in our asses. Because if I change one thing in this formula, it has to go back through their process, through shelf life testing to prove what's on the label is what is in that bag. Yeah, you actually have to go, you have to really verify too.

I helped start a company in the water filtration space and we went through the full NSF certification process, it costs hundreds of thousands of dollars, and then we have competitors that will put the NSF badge all over their website and they're like actively getting sued by the NSF or in legal battles, but they just keep it up because it increases conversion rate. But if you go below the surface, it's like there's just nothing. That's right. I think the other piece for people to think about too is this is unfortunate. Another layer of confusion is you also then have people doing what you just described starting their own labs and then they are testing product with some unknown methodology and then creating viral content around whatever they find.

And that just makes it harder for the customer to know. So I would just say, this is not, and anything you put in your body should not just be a listen to someone and click and buy and put it in your body. Go to the website, look at the ingredients section, look at the research section. Do those supplement companies have any research on human beings at all? And I mean, you can imagine, you know, because you've got investments in the industry, having four double-blind randomized placebo-controlled clinical trials with over 100 people proving the same outcomes of supporting gut health,x gut bacteria, beneficial gut bacteria, covering

nutrient gaps in four different populations. That's not cheap. And but we have to write where the leader, we don't make claims, we can't substantiate, I could have done two studies. And that's enough to say clinically backed, we did for right, we're just, we have to lead, because there is so much to be questioned with those in the middle. And I will offer if anyone is starting a supplement business and if they genuinely want to know how to do this right, I will help them. My team will help them. It is bad for the industry for people who don't take this stuff seriously.

That's amazing. Well, thank you so much for hopping on. This is super fun. Fantastic. Congratulations on the massive revenue numbers, all the progress. Yeah, it's amazing. Classic overnight success, we love to see it. Yep, come back on next time you have news. This is super fun.

Love to, thank you guys. Have a good one. Great to see you. See ya. We are shifting gears over to the supersonic world. We have Blake Scholl from Boom Supersonic. Is the speed limit lifted? Are we post speed limit?

I wanna go 2,000 miles an hour tomorrow. There he is, smiling. He's smiling, something must be good happening. What happened today? We've been live for the last few hours, so. We got a text message, we got to have you on. Yeah, nothing big. We just actually broke the sound barrier today permanently, because the super-signet band is reversed. No way. Let's go. John's gonna hit the gong. That's for you Blake. Congratulations.

We've been hoping for this for a long time. So the rules are gonna change and you can go supersonic as fast as you want so long as the sound is a gong. Yep. That's great. I would happily let gongs ring upon the fields of America from sea to shining sea. I'd love to see it. I mean, I know this news is breaking, but how did you find out about this? Was there expectation that this was gonna happen?

Who are the folks who have been working on this and then break down what actually happened Yeah, I mean it's certain since people have been working on this for decades You know since 1973 when it first went in place and we've been working on it very intensely since February 10th Which even we announced we could do we could fly supersonic without an audible boom. I think it was that that night I left LA where our test flights were and went to DC. And by the way, it's horrible flight would be much better supersonic. It was like, like left at 11 p.m. got in at like 430. am it's awful. It should totally be supersonic. And then by the time I landed, they had an invitation to the West Wing.

So since then, what we did, what to me felt like a very long, frustratingly slow campaign. But what everybody tells me in DC is actually supersonic. So a bipartisan bill dropped three weeks ago in the House and the Senate called the Supersonic Aviation Modernization Act, which by the way I think we should still pass because locks in all of today's goodness And you know, and we just sort of continue to educate people and by the way, we don't have to have the boom anymore By the way, not all booms are created equal not all are bad and That's something a lot of people can get excited about

So I mean I know a lot of the technologies about flying at very specific speeds at specific altitudes, doing all the math to make sure that the boom bounces back into the atmosphere, something like that. What kind of speeds does that actually work at? What are we expecting? Because supersonic goes well past, it goes basically infinite, right?

Right, yeah, exactly. So there's sort of two ways you can kind of tackle sonic boom. And one is what you're just describing. Make it go away entirely by making it make a U-turn and go up to space. And the great thing about that is there's nothing to argue about whether it's too loud.

The less great thing is it only works up to about Mach 1.3. You can go about 50% faster, but you can't go 100% faster or 200% faster. Put that in terms of like a commercial airliner. If you're like, I fly at like 500, 600 miles an hour, you're talking about like 700, 800 maybe? Yeah, let's talk about in terms of flight times. So with a 50% speed up, which is what's achievable routinely, you can leave New York at 9am and be in San Francisco at 930am. So it's a three and a half hour flight. Okay, wow. Which is like, that's a W, right? Yeah. Now, you know, if you want to go higher than that faster than that, you have to convince yourself that some way or other the boom is

not a problem. Yeah, okay. And I don't think, people don't agree about the answer to that. You know, I wanna get out there, fly the airplane, I wanna hear some real booms. I've heard a bunch of booms in Mojave, by the way, we were doing our test flights, booms are commonplace down in the Mojave Desert, and military makes them all the time. And there's some that kind of get your attention,

you're like, wow, we probably shouldn't do that, at least not at nighttime. That would be, at most that's a daytime thing. You know, but there are others that like, wow, we probably shouldn't do that, at least not at nighttime. At most, that's a daytime thing. But there are others that sound like somebody dropped a book on the floor. And so think of it as like the wake of a boat. The bigger the boat, the bigger the wake. The closer the boat, the more the wake you feel. And so if you have a right-sized boat at a sufficiently far away distance, it really

ought to be considered an on issue. So I think we're still kind of taking in exactly what's the language of the EO, but my expectation is that this will be a one-two punch, where if there's no boom, there's nothing to argue about. If there's a boom, there should be a way to sort of demonstrate that it was an acceptable one. Yeah, yeah, so specific flight corridors where people are opting in or something like that. Yeah, I mean, it's just really a quarter.

Because you will hear if you're in kind of boom full mode that the boom corridor is actually like 50 or 100 miles wide. Very wide. I mean, we can't build a railroad in this country. Yeah, yeah, yeah. So the very wide. I mean, you know, we can't build a railroad in this country. Yeah, yeah, yeah. Like, you know, which is like, Well, so the positive thing is like, I imagine when you're traveling over oceans,

we can, you know, have a little bit more flexibility. Yeah, there has never been a restriction over ocean. So that's the, fortunately there's nothing to do there. So the way our first airplane Overture will do this is it'll fly boomless over land at like plus 50%. And then when we get to the coastline you know you gun the throttles and then you go to full 2-act speed. Yeah yeah yeah and I'm sure that the economics change when you can do 1.3 Mach over land

because that's just a there's so much more over land air travel generally so it's just a bigger market so it justifies everything over the investments. It does. And the economics are actually really interesting. If you fly sort of lightly supersonic, it's worse for fuel burn, but you can do so many more flights with the same airplane, you save a bunch of money on other things. And so on overture, going right under the speed of sound and going boomless supersonic is actually the same dollars per seat mile. Interesting. Right? And the fuel dollars per seat mile. Hmm. Right?

Like the fuel size gets a little bit bigger. And then the cost side, the cost side, the revenue is going to be, I'd pay 10 times as much to get from New York to SF. Oh yeah, obviously. Three, three. Yeah. Time is money. Save both ramp.com.

Also boom, boom Super Sonic. You can go to both times. Money. They're both there. Everyone's going to save you time. If the boom comes down, reflects, bounces back up, and I'm in a plane there, is that going to break my plane's windows? What's the risk there? Yeah. Okay. So a few people asked that question. It's a good question. The answer is Concorde

did that for 27 years and nobody noticed. Oh, interesting. And one time they tried to test it. We know the pilots that were doing this they arranged for like a 747 to be here what concords kind of passing overhead? And they had told everybody on the 747 that they might get to hear something They didn't hear anything and everybody was super disappointed Okay, so it just doesn't really like maybe you feel something that feels like turbulence. I don't know It's like it's like a it's a nothing burger But it's not gonna blow the windows out which is like the worry, of course

No, I mean if that was gonna happen, you know it concord have knocked out every other airplane in the sky Yeah, of course airplanes fly above. Yeah airplanes fly below so conquerors booming for 27 years over the Atlantic and like Nobody got hurt Yeah wild and like nobody got hurt. Yeah. Wild. I want to look at this by the way, it's like the energy intensity

and some of the physics of sonic boom are very similar to thunder, right? So you could be like, oh my gosh, like, you know, could boom over the water like disturb the mating habels of like, I don't know, the aquatic spotted owl or something. Sure. Well, anything that was going to be put out of commission

by a sonic boom was long ago put out of commission by a thunderstorm. Sure. Yeah. Sure. Well, anything that was going to be put out of commission by a sonic boom was long ago put out of commission by a thunderstorm. Sure. Yeah. Sure. Was there anything to you that was surprising about the EO? What did you maybe not anticipate? I admit I haven't read it word for word yet.

Yeah. I read the fact sheets and kind of partied. And I need to like calm down't read it word for word yet. I read the fact sheet that I've partied and I need to like calm down and read it word for word. There's a lot of stuff in it that appears to sort of like not just say great, you should be able to fly supersonic, but it advances R&D and I got to read all of it. I want to say what it says when you read it. Yeah, yeah, yeah. I'm sure there's a ton of work to be done on the licensing and approval and everything that happens with certifications.

Some of those things might need to change or just speed up. Some of them might need to stay in place if it's a safety issue, of course. But what's next for the company? What's the next milestone that you're tracking? Let's go. So we're building our first engine. Okay.

And that thing is like 60% the parts are in the manufacturing process. And we'll go run that bad boy later this year. You know, the skeptics always say a startup can't build a jet engine from scratch. So we'll find out. Yeah. And then we'll start building the first full scale pre production project over to next year. So it'll be roughly three years from when we were today to being back and like there's a bird in the air. But you know, last time that what we flew it looked like a fighter jet. Next time it's the Overture, which it looks like a,

it kind of looks like a Concorde and a 747 had a baby. It's got this little hump up at front, you know, it's not a double decker, but it's a really unique airplane. Not yet. We have to get the gold-plated 747. Those are really hot right now. Lots of people giving them to their friends. And so I could imagine handing these out to world leaders being pretty effective.

I have to ask, did you get a chance to watch the rehearsal by Nathan Fielder? You're giving me a blank stare, so I'm assuming you're too locked in. I don't, this sounds like a pop culture thing of which I'm ignorant. Yeah, well the reason it's relevant is because this sort of comedian, Nathan Fielder, has this show called The Rehearsal. He learns how to actually fly a commercial aircraft to demonstrate to the FAA some of the issues they have around safety.

Specifically on pilot communication. He identifies that the vast majority of commercial air crashes that have happened over the last few decades have been the result of a captain making a mistake and the second in command not having the kind of energy or confidence to stand up to them because they're meeting for the first time and so he dissects this in a bunch of hilarious ways. My main takeaway from your answer is that it's

extremely bullish that you have no idea. There's a certain class of hard tech founder, I always notice Scott Nolan, he'll post, he'll repost their announcement like four days later because he's so in the trenches. I'm like, Scott, you know you launched three days ago. You should be retweeting at least a post because he's so offline. But anyway, I have one last question about being online. You've been learning from Elon about manufacturing online.

You had an interesting back and forth where you were talking about manufacturing parts. I barely followed it. Can you explain what did you learn from Elon about manufacturing? Yeah. And yeah, break that interaction down. So Elon has this thing he talks about

called the idiot index. It's a beautiful Elonism, right? Yeah. Where it's sort of a you've got a final part, and you divide it by the part cost like it's a turbine blade, it costs I don't know, a real world example, we've got the set of turbine blades cost a million dollars for a set of turbine blades. What is the raw material cost $1,000. What's the index 1000 x thousand X. Like the cost goes up a thousand fold in the manufacturing process. And so it's a sort of measure of like, what's the money efficiency

of the manufacturing process? There's another thing that I think is actually even more important that we call the slacker index. And the slacker index is how long it takes to get something out of the supply chain divided by how long it takes to get something out of the supply chain divided by how long it actually takes to make it. Oh, so more time-based. Right? Like, so we were getting these 3D printed turbine blades for our first jet engine and we go quote them in the stupid old aerospace supply chain.

And the quote comes back and it's like, it's six months and a million dollars. Yep. And I was like, wow, okay, well, how long does it actually take to print the blades? Oh, like 24 hours. So what How long does it actually take to print the blades? Oh like 24 hours So what's going on the other 179 days? You're like waiting for you know it must be that the machine is like really hard to get and there are only a few Well, no turns out the machines are off the shelf. They've got them in inventory You can get one in two weeks and by what do they cost two million dollars?

So for the price of two engines worth of blades, we were able to buy a 3D printer and print our own blades. And so what happened, by the way, it compounds from there. Is if engineers can only make a new blade every six months, they like really work the blade design, because they don't want to get it wrong, because if they get it wrong, it takes six months to fix it. But I think print it the one the next day,

then all of a sudden the rate of iteration goes up and there is an engineering hand wringing and trying to get it right the first time goes away. Yep. You want low idiot indexing, you want low slacker index. I love it. I love it. Well, hopefully this EO unlocks a lot of that and we can bring down the idiot index,

bring down the slacker index. And yeah, the supersonic flight band definitely had a high idiot index. So I'm glad I'm glad that's been deep six. Well, fantastic We are one step closer to a supersonic podcast. I love it and I cannot wait Yeah, I haven't forgotten what you're on. I know It's happening. It's happening. Well, congratulations Enjoy the weekend. Hopefully you can advance the technology but also celebrate a little bit and we will talk to you soon Blake Thanks so much for jumping on

Bye Give a little air horn for supersonic flight. Yeah I love it. I can't wait to hop on a boom supersonic take it to an exotic locale stay at a wander Find your happy place find your happy. Book a wander with inspiring views, hotel great amenities, dreamy beds, top tier cleaning, and 24 seven concierge service. It's a vacation home, but better folks. Any other posts we need to go through,

we talked about Polymarket partnering with X. That is fantastic news. Shane Copeland has the news. He says, proud to announce Polymarket's partnership with X and XAI as their official prediction market partner. I'm very interested to see how this actually integrates. Obviously, PolyMarkets has gotten very good at sharing images with a very catchy image and then the market, not just the, like the PolyMarkets screenshots have been kind of a staple of X for, since the election. But they've gotten better at that. I'm wondering if we're going

to see the data actually hydrate live like community notes, so you can attach a polymarket to a post and it will stay updated, that would be very cool. So you could be tracking it on the post. It'll all be very interesting to see where that goes. What else should we talk about today before we leave? I think we covered a lot of it.

Scott Belsky's coming on the show next week, very excited for that. He has a post that I was just enjoying because it's about product leadership. He said, underrated characteristic of top product leaders compulsiveness, obsessively capturing decisions, ideas that need to be taken, baked that would otherwise be fleeting.

This is how I felt about reading this post. Incessantly iterating over options in mind morning till sleep This is what the the golden retriever does the golden retriever incessantly iterates over options Should I get the ball should I get the snack should I should I roll over try and get a belly rub? My energy trying to be efficient not always getting it right, but doing their best. World class products are crafted via compulsion. There's no better example than the golden retriever.

Golden retriever never says, nah, I don't want to get the ball today. Yeah, no, never. So go out, get that ball, enjoy, be a golden retriever this weekend. Fantastic week, timeline in turmoil, lots of chaos in tech, but we're still here. We had an incredible IPO. We had an incredible IPO. The IPO window is open. Yep.

We had some drama. Some drama on the timeline. But who knows? It's a new week. We might see completely new things. And the relentless march of techno-capitalism and artificial intelligence, well, it marches on. And as always, we're Newsmaxing.

Ben is standing behind the camera right now, giving us a threatening look. He says, go leave us a five-star review. Spotify, Apple Podcasts, it does help the show a lot. Thank you. And we hope you all have a fantastic weekend. We'll see you Monday. See you Monday, goodbye.

Market clearing order inbound.