TBPN Live - Weekly Recap | Elon's Starship Explodes, OpenAI's Defense Contract, Nvidia's Robots, We Test Cluely

Episode Date: June 21, 2025

(00:00) - Intro (00:03) - Elon Musk's Starship Explodes (02:37) - Meta x Oakley (03:56) - OpenAI Wins Defense Contract (04:44) - Meta Puts Ads on WhatsApp (05:33) - Intern Tests Cluely (18:44) - Roy Lee (Cluely) (33:54) - Lakers Sold for $10 Billion (39:40) - Surge AI Beats Scale AI (51:24) - Spotify CEO Invests in Drones (55:41) - Katie Haun (Haun Ventures) (01:14:47) - Justine Moore (a16z) (01:39:44) - Nvidia Drops Humanoid Robots (01:45:09) - George Hotz (comma.ai) 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 TV, P N, the Starship exploded during a test in Texas, a setback for Mars is Mars for Musk's Mars ambitions. Now the Mars transfer window is very, very tight. Like you can only get from the earth to Mars like once every 18 months or something, or maybe even more. It's really hard because like if the planets are on the opposite side of the solar system, like you just can't leak, even though though you have a rocket you just can't get over there So you have to wait until they're lined up and then you can do it but

Realistically skill issue Realistically true skill issue you build an even faster rocket you could get there no matter what you just pilot steered around like it's a DG3 RS around the Nurburgring no problem. So the explosion occurred during a static fire test. No injuries reported. Thank goodness We love autonomy very very happy to hear that. No one was injured During this because it looked horrific and it looked like in any other scenario There would be a bunch of technicians there, but that fortunately they were able to do everything remotely, which is great And then Starship features pressure to meet deadlines for NASA's moon mission and Mars exploration. So there's a big NASA moon contract that's very important, very material to the business.

Obviously SpaceX has a lot of other business lines, but this one's very, very important too, and we hope that they can get back on track. SpaceX is making an enormous bet on Starship, which stands roughly four, 400 feet tall at liftoff as it tries to break ground with new reusable rockets. And the paradigm of Starship, it's not just a bigger rocket, it is way more reusable. Like you look at the thing, it comes down, gets caught by those arms,

can instantly be refueled and sent back up. You're talking about potentially like multiple flights per day. And so the problem here is not, can you build a big rocket? Humanity has done that before. Humanity's built a rocket that's roughly on par. We've gotten to the moon before. The challenge now is not, can we get to the moon?

It's the same thing with, the challenge is not, can we build a flying car? Or can we build, we have helicopters, can we build one humanoid robot or one self-driving car in San Francisco? It's like, can we actually scale these systems to the point that it is safe to go to the moon and back on the drop of a hat for 200 bucks?

Like that's the challenge. It's more of an economic and industrial might challenge. And that's a completely different challenge from just can we get one rocket to the moon, an exquisite system. We're looking for reusable, scalable, you know, engineering systems. So good luck to Elon rebuilding and the entire SpaceX team.

I'm sure it's a huge challenge right now. Meta Oakleys are coming. Shield says, this makes sense. Luxottica owns both Oakley and Ray-Ban, and Meta is reportedly investing five billion dollars for a four percent Steak look Sautica is a fascinating business story the founder Leo del Vecchio's family still owns one third The guy was an orphan who became a metal worker making parts for glasses Ultimately becoming the largest listed is Italy. It is really interesting to think about how

if if meta can basically corner All of the most iconic All of the most iconic frames, which they can do through a lot of stuff. They do figure out some type of exclusive over time Through that investment and does not just own all the major brand basically people's everything every time you buy something is all This is you think you're buying, you know some unique brand heritage luxottica. It's interesting we should we should dig more into that company because They don't know the retail. Well, yeah that basically glass hut retail stuff

I mean, they are big glasses and that created the opportunity for Warby Parker Yep, because they're the ones that manufacture the opportunity for Warby Parker. Yep. Because they're the ones that manufacture, you know, basically this entire, you know, Luxata who could verticalize from brand to production to the actual medical side as well. Interesting. Also some good news in OpenAI world, even though they're going through some battles with Microsoft, they scored a $200 million US defense contract. So they're working with the DOD.

The most unhinged picture. I know. How did this photo shoot happen? Like this does it, this looks like he's about to go on stage and he has a lav mic and it's from a low angle, but like what lighting scenario created this photo? It's amazing, but it's very aggressive. Anyway, great selection by Nick.

Not beating the, you know, arms dealer. Evil tech arms dealer allegations with this picture. Yeah, if you're a founder, you gotta be careful how the angles people photograph you. But at a certain point, if you're on stage, they're gonna take photos in any direction. But yeah, and if they take enough photos,

they get every single expression, so get ready. Other news, Meta finally put ads into WhatsApp in January 2012. They said we don't sell ads, which is still live. But this is why we love them. And this is why Zach is a leader. WhatsApp should have ads. The backbone of the Internet. It's the backbone of the Internet.

And Signal says that's why he's an Apple fan boy, because they don't do ads. Well, Apple does have a huge ads business. I bet you this is just them listening to their users. I bet the users all over the globe said the only thing that could make what's up better is just putting some ads in this bad boy. It's the one place I go that I don't get any.

I felt like this was already happening. I felt like this leaked like five years ago. How much it was a 20 billion dollar acquisition Of course, they were gonna put some ads in course. Of course senator. We sell ads Take it over Tyler. How you doing over there? What's up guys in the back of the Maybach? It's pretty chill back here. Yeah a little desk set up. Yeah got Wi-Fi And so today the the big news that we're having him dig into is clearly Yep, they are Okay, something happening

But we got some flack for talking to Roy and not actually using the app We're still above using the app, but we will let our intern use the app. It's more that we don't have time Yes, we're too busy podcasting but Tyler has time Not many people are starting to call after his windsurf review people are starting to call him the MKB HD of enterprise software Yeah, but he people have been sent out. So Today he's gonna be trying out clearly We're gonna be helping you to see how how easily he can cheat on some hard hitting questions that we're going to be asking him. So,

so state of affairs Tyler, where are we on the Cluely install so far? Have you paid for it? What's the experience been like so far? Yeah. I mean, I'm ready to go. Oh, really? Whenever I played around with it for maybe like two minutes just to make sure it was working. Okay. So I want to get my live reaction when we start okay. Well, spin it up, pay for it. Yes, get on the top tier and we'll check back in a little bit. Yeah, yeah, we're going to be peppering you with questions that only clearly could answer. Yep. What's the

popular, but what's the population of Iran go go eighty nine million? It to me. I don't have it running right now. You gotta have it running. You failed you failed You have to fail the first test well get it get it fixed and we'll circle back in a bit get it to Get it together guess a question guess a number between 150 randomly We're gonna quiz Tyler now if he's ready is he good to go. He's ready. I got a thumbs up I want to ask how much Has been invested in

Shenzhen Trying to talk into the mic but not not give it all yeah. Yeah, okay, so I am looking this up Oh, no, I used oh three pro, so it's gonna be 12 minutes Okay new new tab I, new tab. I will have to use for over this because I need a quick, uh, so he's investing one trillion, right? To compete with China's Shenzhen manufacturing hub. I want to know how close that gets us. Um, wait, this is weird. I don't know. One of the nine billion, more than twenty five billion. This does not seem right.

I have some I have some various. I think it's going to be pretty hard to pin down the exact we need to quiz Tyler on on on this question. Tyler, over since 1980s, how much foreign direct investment has there been in Shenzhen? Let me think here. I would say since 1980s, over 100 billion.

Estimates range from 100 billion to 150 billion. And Shenzhen is a major global manufacturing and tech hub. Wow, okay. Wow, you're so smart. That actually kind of works. It's actually kind of pulls it off. Pretty close. I mean, I think that the challenge is actually, there's so many ways you could kind of measure this, right?

Yeah. I have a table. So there's about a hundred billion of local funds. There was a state and AI robotics fund announced this year. There was another semiconductor industry fund announced this year. There was up until 2014, there was a 65 billion of cumulative foreign direct investment, but who knows?

And then run rating, you know, I guess around 10 billion but also like does this count what Apple is doing? Right? That's like another, you know, form of investment. Anyways, this might be an answer that clearly I guess got pretty close. It was pretty good. Good. I have a follow up. So, you know, the iPhones made over in China often flown via 747 to America faster than shipping on a cargo ship. How many iPhones fit inside of a 747? All right. Let me think here. I'm going to say I would say about two to three million in a 747

You know, so okay, so 747 max payload is about 140,000 Kilograms, okay. Each iPhone box is about half a kilogram. Okay, so I would say, you know a practical range of iPhones is probably 1.5 per flight. Um, but obviously it depends on, you know, packaging pallets, cargo layout, you know, that's pretty good. I mean, uh, chat GPT here has 9.6 million, but I think that's including like every inch of the plane, including like the past. Very possible. I think that's more accurate. Actually, I think that might be more accurate. Is clearly I think that's more accurate actually. I think that might be more accurate is clearly

Goaded Love to ask Roy who's coming on the show later today Yeah, this is so so press. Oh, yeah The chat GPT estimate had the usable internal volume as passenger plus cargo and I it feels like you use just the cargo number Is that correct I? believe Think so Oh, it's dreaming through yeah, okay, so I was doing just the just the cargo

This is fantastic it actually works, right? I'm impressed so far This is basically young young Jamie from Joe Rogan.an, except you don't even have to look anything up, we just get to ask you live. Yeah, this is great. Andre Carpathy chimes in, he says, "'Very interesting to think about. "'Job equals bundle of tasks plus glue.'" Probably a bunch of other variables involved,

e.g. the number of tasks, how long each task is, e.g. meta-like notion of task length roughly equals difficulty, how contextual it is, how high reliability it needs, whether it can be done fully digitally, not sure what the state of the art is in trying to think this through and chart the impact of AI on labor market so far.

E.g. I was curious to look for radiologists. And if I'm getting this right, the U.S. Bureau of Labor Statistics cites 29,530 U.S. radiologists in 2021. And then up to and let's go to Tyler. How many radiologists does the U.S. Bureau of Labor Statistics claim? There have been in twenty twenty three. OK, come back to me in 30. OK.

We'll be back. He's actually I think he's working and so I just when I just hit him with random questions, not quite. He's not in the zoom, so clearly he's not running. Oh, OK. OK. He's not in the zoom. OK. Well, yeah, that was your first mistake, Tyler. Yeah. Always keep clearly on. Oh, okay. Okay. He's not in the zoom. Okay. Well, yeah, that was your first mistake. Tyler. Yeah. Always keep clearly on. Keep clearly on. Does clearly have the ability to, to just prompt it directly or, or, or

do you have to be on a zoom? No, you don't have to be on zoom. You can do it on. So on the website, you can just prompt it. It looks like almost just like the chat, GBT interface, but you can also just pull audio like, um in person like if I was sitting across from you and be fine. I'm not sure to be able to hear you from in the car. Yeah, yeah, but yeah, I'll get back on the zoom. Okay. Well, we'll come back to you with that. The audience will have to wait to find out how many radiologists we have everyone's waiting with a breath. Everyone

wants to know well, let's tell you about linear linear is a purpose built tool for planning and building products meet the streamline meet the system for modern software development streamline issues projects and product roadmaps. If you're building clearly get on linear. Nicky to be here. Customer list looks like. A tier one venture firms portfolio page ramp open a open AI, cursor, runway for plexity.

I normally make the joke of like the next, oh, when we talk to Sam Alman, we're going to pitch him linear, but it's like, oh, too late. Boom was on there too, that's cool. I always make jokes about like using linear for other stuff and you're like, no, it's just for software. And look at Boom, they're using it for everything. It's fantastic.

Yeah. Anyway, let's go Tyler. The question is. Radiologist expert, we're interviewing you for a job as a data analyst covering radiology. Yes, so the question is, how many radiologists does the US Bureau of Labor Statistics claim exist in the United States in 2023?

Let me think about this. I'm going to estimate maybe 31 to 34,000 radiologists. At least in 2023, I would say. But yeah, that's my best guess. At least from 2023, I would say. But yeah, that's my best guess. It's your best guess. It's $31,960. I think you got the job. Oh, wow.

Might be goaded. OK, I have another question for you. Pop quiz, off the top of your head, what's the GDP of India? Off the top of my head. What's the GDP of India? Mouth the top my head. Let's see I'm gonna say three point seven trillion It's really it really sells it that you that you're touching your face so I can tell that your hands aren't on the keyboard You can tell that I'm thinking yeah, you're just thinking about it. Yeah, you gotta be a good actor But maybe that's why clearly is so focused on the social media influencers because they have a little bit of acting in them and

So they're able to hmm. This is gonna be the modern tell hmm No, it's good. Okay, either you're a great actor and clearly might actually or maybe he's not using clearly and he just knows all This stuff off the top of his head. It's very possible Tyler needs to be on clearly to figure out Yeah, I think we got a feedback loop here. Can we hear you? How much is the Hisense 100 inch TV cost? Hisense?

Let me think. Typically, I would say around $3,000 to $5,000. Obviously, price varies by region and model. This sounds so natural. This sounds so natural. This sounds so natural. 100 inch. Yeah. Yeah.

I think Apple should do it. Do it. It'd be great. Tim, do it. 100 inches would be a good, like, you know, differentiator too, because a lot of brands, you know, 55, 65, 75, it's gotten all confusing. It was just like, you know, if you're going with Apple,

you're getting 100 inch TV. And it's like, it's just amazing, amazing quality. The intern cam's still active. I want to go to Tyler for one last pop quiz. Oh, is he on? Okay. I wanted to ask you. Yeah, what's the capital of Michigan?

Didn't you go to school there? I think it's Lansing. I think you're maybe leading on clearly too much at this point. I don't know if you're cheating using your brain or I can't really assess the product. Yeah, what's your name? My name. Let me think here. It's like that paper that just came out, right? Oh, yeah, yeah, yeah, yeah, yeah. Do you think that based on your use of fluid, do you think it'll make you smarter or do you think you'll take your foot off the gas? I mean, I was thinking... Let me think about that actually.

I think probably the latter, honestly. honestly I mean it's just like I just don't need to think I don't need to store any knowledge in my brain now so maybe it frees me up to do more you know reasoning tasks okay but even then you know once they get oh three in here it's really like everything's covered so no reasoning did you get a feeling for what model was under the hood I don't know I think I could probably check but I'm not sure right now. It's so weird interacting with somebody using clearly Every answer is like um and you don't know if they're reading clearly or not or just actually thinking well anyways People should go try the product. Yeah, you know I really I really think that anytime Roy gets a negative comment

Yeah, please just you know use the product for five plus hours and then you can have an opinion. The message to Andreessen, no crying in the casino. Because you know Roy Lee, there's probably a viral video of him going to the casino soon. Pretty soon. You know that's gonna make a lot of people angry. And so why not?

Chamath is talking about spacking again. I think clearly he's a good target. I bet. It's not the craziest target out there. Not the craziest, you know, Chimots and Mr. Beast, Yeah. Holdco.

Yeah. There's a lot of revenue there. It's growing, you know? Yeah. The market needs a pure play AI. I love a pure play. A pure Roy play. Yeah.

Yeah. There's no pure play. Well, we have some more breaking news, apparently. Break it down. Next up we have Roy from Cluely, the man himself. Third time in the studio, third time on TBPM. Welcome to the stream. Get that hammer ready. Let's bring him in.

Let's hope he's ready. Roy, give us the news. Give us the headline number. How are you doing? How much did you raise? 15 million fucking dollars. Clean hit. Clean hit. Congratulations.

Why'd you raise money? I thought you were printing so much money you didn't need to raise ever. What happened? We're printing money, but we need more money. Every single day we're looking for things to spend money on. Okay. Okay. Uses of the funds. What looking for things to spend money on. Okay. Okay. Uh, uses of the funds.

Uh, what are you going to spend on first? 14 million for brain computer interface development. Yes, exactly. Exactly. We have whatever you thought the viral content you thought this was cool, bro. We're doing 10 X this. Okay. More videographers, more, more after effects artists, More editors, more engineers, more everything. Please. Mas, Mas.

Yes, let's go. Yeah, what's the morning routine like now over at Climbing HQ? Everybody wakes up and we swipe on hinge for 30 minutes. It's mandatory. Everyone swipes on TikTok Instagram for an hour just to make sure the viral senses are refreshed. Okay. And we all do cold plunges

and we're ready to hit the day with caffeine. If you cold plunge though, does it negate the brain rot? Like do you get to, or is that intentional of like re-locking it? Yeah, we scroll to keep our viral sense up, but after that it's time to get to work. We're a serious company, you know, we're not just trolling over here.

Okay, that's good to hear. Talk to me about the hinge use case. I wanna hear, Clueless desktop app, you're not in the app store. If someone's using hinge on their phone, how are they gonna take advantage of Clueless now or in the future? I mean, every single time you screenshot something

and ask Chachabite anything, I mean, like this entire use case, it is ridiculous that I have to do this. Like AI can already take the context of your screen and audio and give you information out of it. Why can Chachabit.com not use this? Why is the main AI use case not already aware of what's going on on your screen?

We think this is crazy. Yes, but it's locked down for privacy reasons on the iPhone. So the question is like what user interface innovation are you gonna bring privacy reasons on the iPhone. So the question is like, what user interface innovation are you gonna bring to bear on the phone so that you can actually unlock the vast majority of consumers who are realistically not using

the most popular consumer apps on their desktop? I would push back on whether we even have to enter the phone at all. Really, the technology is growing so fast, we might just be able to skip phone entirely. We might be able to skip classes entirely. And I like, whatever it is, I think the technology is growing super fast.

Like I think phone, like in five years, I would question whether phone is the dominant consumer use case. Okay. I get that you're BCI-pilled. It still feels a few years out. The Meta Ray-Bans feel very much here today. Have you looked into those APIs?

How developer-friendly is the Meta Ray-Ban ecosystem versus the iOS ecosystem versus the MacBook Pro ecosystem, which seems to be where you're flourishing right now? I feel like you're gonna have a really hard time on iOS, no matter how cracked your engineers are. Apple is just gonna say no. I think iOS, no matter how cracked your engineers are. Apple is just going to say no. I think I think Roy, if anybody can read, Tim Cook, I won't. I won't put it past you.

But it feels like the meta RayBan ecosystem might be a little bit more open. What what's your read on the meta RayBan or the meta glasses rollout? They just had an announcement this today. My read is that there is way more money in all in desktop assistant than people actually think. There's maybe two, three competitors in this, maybe, maybe two, three competitors who are actually trying to take a meaningful stab at desktop assistant.

And there's way more money and way more value in this. And people think we're still gonna be using computers in a few years. Maybe we'll be using something else, but like, like, bro, these sales Oracle, Adobe, these guys move slow as fuck, bro. Like they will be. Yes. Yes. Blackberry still bro. Like they are moving slow. We're gonna have computers among a bunch of enterprise value for the next few

years. And we'll be here to capture all that. Yeah. So, I mean, I, I, I get that the, it, I mean, it feels like this is going towards, uh, enterprise note-taking, enterprise assistant and, and, and would have a very positive, yes, you use the cheat on your technical interview as like a viral hook, but we're having our intern demo clearly today, and you can see that if we're on a call,

just having answers be pulled up ambiently is valuable. There's obviously a bunch of bots that plug in and listen and record your emails, but being more proactive seems like a step forward. It begs the question, why are you in the consumer group in Andreessen? But I guess that there still is a consumer angle long term. But how are you seeing Clueless users adopt the product? It feels like the logical case is at work on the desktop.

Yeah, of course. I mean, the question is, how are Clueless users using the product? it feels like the logical case is at work on the desktop. Yeah, of course. I mean, the question is how are Clue users using the product? Yes. Most people, it is most helpful in a meeting. Right now, there's no product on the tool that gives you live assistance during a meeting. That's where all the prosumer and enterprise values, most prosumer and enterprise values being derived.

Other than that, we have the gigantic consumer, the most viral use case ever of literally cheating, bro. Like, like, like. Yeah, yeah, yeah. Answers your questions. And like, even when you're doing homework, viral use case ever of literally cheating bro, like answers your questions. And like even when you're doing homework, I mean like just immediate bro, like you do all your homework, when you're doing quizzes, assignments, when you're watching lectures, bro, immediate bro,

just immediate help. Immediately, on site. Yeah, gotta give a shout out to the whole team. We were reviewing clearly throughout the show today. We were pretty impressed with the product. I think a lot of people that are yapping on the timeline haven't tried it yet. Yeah, we would never.

And I think anytime going forward somebody leaves a negative comment, just say, hey, totally understand how you might think that. Why don't you just use the product for five, 10 hours and then come back and let me know if you feel the same way. I think that's the right move. You get a user out of it.

Talk about the process for the round. You raised a seed round not very long ago. Did this come inbound? I will say right now to all the VCs watching, if you ever are trying to get a round, you get me an email thread and you say, hey, let me loop in my assistant and we'll schedule a call in two weeks.

You are not getting allocation. And I'll wake up every single one of my friends to make sure you don't get allocation. Bro, these rounds move so fucking quick. You don't have too much. Your whole job is to find the alpha and invest quick and early. Why are you looping an assistant in two weeks?

My partners, Brian and Eric, they came with stakes and Coke zeros to the house. Directly. Stakes and Coke zeros. Oh, come on, these guys. This is how investors need to be. Your job is to find the fucking alpha, bro. Why are you looping in this?

There was a preempt and I think all rounds you need to preempt. Like the fucking pot, bro. Preempted founders says always preempt rounds. If you're not getting preempted, just shut your company down. Even if you're running out of money, if you're not getting preempted,

just shut the company down. Just shut the company down, that's great. I'm gonna be, oh, this rounds are moving so quick. Companies grow so quickly. OVCs don't have two weeks to loop in your system. Okay. What is your underlying motivation for building this company?

I want to be conqueror of the fucking universe. It is so obvious that AI is going to massively expand what is capable. And I think like even in five, 10 years, bro, if we keep growing at this rate, like we'll be on the next ship to Mars, we'll all be living a 400 years old, and I'll be jacked till I die. And in that universe, bro, like these

companies will converge into super companies. And these super companies is going to be me versus Elon versus Sam competing to be guardian of the fucking galaxy, bro. And I'm gonna be on top. Okay, sounds like you're power hungry. There's been a crisis, which can be a strength. A strength. There's clearly a sub tweet about you going around on X arguing that you are driven by fame, not greed or idealism.

Is that true? To what degree are you motivated by fame specifically? The only two things I really care about in my life are working on on is working on something that I find interesting and getting the work seen by people. Yes. Elon Musk, these are my inspirations. Like these people are known by every living conscious human being in the world. Man, this guy founded Apple. This guy did Tesla. Bro, like it's the coolest shit ever. 4,000 years ago, bro, you wanted to hunt big fucking woolly mammoths and claim the back of the tribe.

There's no more woolly mammoths. There's only startups. Okay, so so you're not beating the allegation. Wait, but but the more precisely, if if the best path for Clueless forward is your interns getting up getting tons of social media views, you step out of the limelight because you're managing the company, people know Cluely, but they don't know Roy Lee. Is that still a win for you? Of course. At one point, the company becomes undistinguishable from the founder.

Yes. What happened with every single big company. And it's what will happen with Cluely. Yeah, it's just a unique situation because we know of Palmer Lucky because of Oculus, the product. And many people know of Cluel of you and the and the viral stunts that you've pulled. And so you're kind of inverting it. And the and the question that the haters are asking of you is

that is this is the long term goal to build a great product or to build the brand of Roy Lee? It is to change the world in a meaningful way. And you don't change the world by going viral million times, you change the world by a meaningful way and you don't change the world by going viral a million times. You change the world by genuinely building a world-changing product. Technology changes the world. I will build great technology

and every person in the world will watch me do it. Amazing. How big are you going on the content side? Do you wanna get a single video with a hundred million views? Are you going that big? Is that kind of the wrong framework to think about it? But I imagine you're going to have more budget than ever. And it's easy now to get a million views on X on a video is a hundred million views on YouTube. The next challenge.

I will tell you right now, and this might be the most logical thing I say on here, but the biggest societal shift in maybe human history happened about five years ago when TikTok surpassed YouTube in terms of like virality and usage. All of a sudden, the number of content creators stayed the same and the relative number of content being created stayed the same. Whereas the quantity of content being consumed about 100X.

As a result, there's this gigantic gap where there is not enough viral content for people to consume, which is why you see the same subway surfers overlaid on a Reddit store. You see that a hundred times because there's literally not enough good content out there. For the next maybe six months to a year,

anything you post that has the potential to go viral will go viral, which is why you see our marketing team is all influencers with viral sense. We know, we independently all have 20 ideas a day that we know will go viral. And this extrapolated out over a year will literally generate a billion views a month. And if you're someone who thinks a billion views a month is not going to convert to some money, like, Oh, you're retarded.

We're gonna go back to school, bro. A billion views a month is that, is that, like, will you run into a cap? Is there a set market size that you will saturate and then we'll be seeing Superbowl ads? I have no idea, but I'll tell you will saturate and then we'll be seeing Super Bowl ads? I have no idea, but I'll tell you right now, like Super Bowl ads, it's all old. Like this is the old meta. The new meta is in content, is in short form,

and nobody seems to have captured the gigantic delta in generating more viral content. I still think it'd be funny if you forced 127 million people, the number of people that watch the Super Bowl, to just watch a video of you Saying hello. I'm Roy Lee. I encourage you to go to clueless calm and sign up for glue Lee today. So don't count it out But anything else you want to share while you're here? I know it's a big day for you. The timelines blown up you you Not very many people have the stones to to launch Series A on a Friday, a summer Friday.

To go head to head against Mira too. Yeah, yeah. And you pulled it off. Again, I think people worry too much about the little things. In reality, if you post something that deserves to go viral, you will 100% go viral. And this will only be true for maybe the next few years,

maybe. And I encourage more people to post. Most businesses will die not because the product sucks, but because you can't get enough eyeballs. And I think we, if we win, if, and when we win, we will show to the world that there needs to be a fundamental difference in how companies are built. You start with distribution and eyeballs because right now that is where the gigantic Delta is. And if you can't have that, then you will. Stick with us, stick with us for a minute. I want to play your fundraising video live on the stream. And then if we have any questions from that,

I want to ask you, please, please let's play. Pull it up video. Mr. Lee Columbia University has found you guilty of academic integrity violations. Do you have anything to say? has found you guilty of academic integrity violations. Do you have anything to say? Color grade. Nailed the color grade. I've already apologized to school,

but to be honest, in two years, nobody's gonna think this is cheating. Yo, the entry some liar just hit. Think it'll last us through the summer? No! No! No! No!

Welcome to Chloeueless. Great video. Congratulations. Banger. I gotta hit the gong again. Very well done. Very well done. And beautifully shot. Like the lighting. I almost. I mean the cinematographer you have. I almost shed a tear. Very well done. Very well done. And beautiful.

Beautifully shot like the light almost. I mean, you cinematographer you have. Very, very good. Very, very good. Nailed it. Anything else for Roy? That's it for now. In-house.

It's crazy that you can shoot that in-house. That really is remarkable. Congratulations. We are excited to follow the journey. We just got 15 million dollars. Oh, yeah, tell us about the fundraising leak. What's your deal with R4Rock? Were you able to, how much do you have to pay him to shut up? Man, I was begging him.

You guys have no idea. For the last few weeks, I've been begging this man. Please do not leak it. Why? I feel like it already leaked separately. I feel like you would lead leaning into a leak I was expecting like a collab almost I Think what whatever leak there could possibly be I have very strong faith in my ability to make my announcement go more viral

Oh sure this video will go more viral than any leak would have even if yeah Yeah, yeah, yeah, that makes sense. You actually don't want to take the gas out of the out of the tank. I love it. Thank you so much for stopping by. This is fantastic and good luck. Congratulations to you and the team. Excited to watch you guys cook this summer. Yeah. And hopefully the 15 mil makes it back.

You know, August. Just remember, August, it's going to be hard to get the autoresponders will be on. It's going to be hard to get those 24 hour meetings. And so just make sure you got the runway to September and this might cause a shock preempted again IPO underwriters do not preempt so at some point you will have to stop with the preempt everything mantra I don't know there's some SPAC sponsors out there who knows maybe yeah maybe you'll get a lot of SPAC in the fall you know I wouldn't be I wouldn't be surprised. So you're saying it as a joke.

I feel like it might be in the cards. We're going to be tracking it. Thank you so much for stopping by. Great chatting with you. We'll talk to you later. Talk soon. Bye. In other news, the Los Angeles Lakers has been sold for 10 billion in richest deal in sports history. Guggenheim Partners CEO Mark Walter, who also owns MLB's the Dodgers, is acquiring the storied NBA team in a move that makes it the world's most valuable

sports franchise. And it's so funny because the Wall Street Journal's framing this is like, this is the biggest deal ever. No one's ever done a deal like this. And we're like, wait, so you're talking about like a series a for like a foundation model company like It's a tech person. I'm just like yeah like a ten billion dollars like I mean we should rig the gong, but it's not exactly like the first time It's not even the first time this show we've heard a deck of corn Congratulations to the Lakers. Mark Walter and the whole team. It's fantastic.

A major premium to the Boston Celtics who sold for $6.1 billion and now the Lakers is the most valuable sports franchise. But they just don't do enough volume. There's only a couple games, you know? They're not 24-7. Like Instagram, does that ever go offline? No, there's always entertainment. Lakers, they're still doing seasons.

They need to have 24-hour basketball. They want to really get there. They're sure. Around the clock, it's like endurance, endurance basketball. It's just a week long game, you know? Gotta always have five players on the court. Just constantly. Running up.

It's the only option. Jeannie Buss and her family who have owned the Los Angeles Lakers since Jerry Buss bought the team in 1979, wow, on Wednesday, agreed to sell majority control of the story team to Mark Walter, the sports investor, and I looked at the return on investment of owning the Lakers for that 40 years,

slightly under S&P 500. Like it was a really, really good deal. And it was a really great company that grew a lot, but it didn't outperform the stock market. Just diversification bros, DCA bros, undefeated again. Well, if you're trying to DCA, do it do it on public comm investing for those who take it seriously multi-asset investing industry leading yields the trusted by millions folks Anyway Walter who is part of the ownership group that owns the Dodgers has been part of the Lakers since 2021 when he Purchased a 27% minority space stake in the franchise

He's also a co-owner of Chelsea in the English Premier League, the WNBAs, Los Angeles Sparks, and the newly formed Cadillac Formula One team. Let's hear it for Cadillac. Let's go. Let's hear it for Cadillac. Congratulations. John, John, you know, front run.

I can't hear you at all. John front run the Cadillac F1 team and got a Cadillac for himself over there You can see the black. It's great to have an American F1 team in the business now. Yeah Yeah, we've fallen off, but we're coming back. You're not gonna be able to get one of these in the whole country I don't think so. They're gonna be too popular. After the F1 team, you know, gets out on The sale marks the end of nearly a century of Lakers control by a family that has become Synonymous with Los Angeles sports and the glitz of professional basketball, the deal also comes at a time

of skyrocketing valuations in professional basketball, which haven't come back to earth since the league announced a media rights deal last year with worth $77 billion when the Celtics sold in March the $6.1 billion valuation exceeded the previous record valuation set for a sports team by the $6.05 billion sale of the NFL's Washington commanders in 2023. He purchased Lakers for $67 million in 1979. The team transformed from franchise uprooted from Minnesota into one of the winningest and most valuable sports. I had no idea that they were founded in Minnesota. That's where the lake name comes from.

Interesting. Minnesota is the land of a thousand lakes. They were the Lakers because there's a lot of lakes in Minnesota and then they just put them to, they just brought them to LA and kept the name. But that's what Lakers means. Wow. The Buss family oversaw the creation of Showtime

and presided over the NBA's last three-peat. A-listers like Jack Nicholson and Leonardo DiCaprio have become fixtures at the games. And when they sell merch, they need to pay sales tax. They should get on numeral.com, numeralhq.com, sales tax on autopilot. Spend less than five minutes per month on sales tax compliance.

You know all the time. Also Levin championship since 1980. Their rosters have boasted many of basketball's brightest stars, Magic Johnson, Kareem Abdul-Jabbar, Kobe Bryant, Shaquille O'Neal, LeBron James, and LeBron James' son have all worn the Lakers purple and gold. I love it. It's such a cool, the father son duo. I mean, I feel like that should have been a bigger like national news it. It's such a cool, yeah, the father son duo.

I mean, I feel like that should have been a bigger like national news story. It's such a cool thing. I think it's like not like if they were like winning championships together immediately, that might be a different story, but it's just so insane that you could be playing professional basketball with your son. Just because you could have

earned a better return by DC into the stock market. That's not why people own these assets though. Owning the Lakers for a number of decades, I imagine, was absolutely priceless. So great investment. You get the owner's box. Great run. Yeah, all the perks, you have to add those in.

What, do you get perks from DCAing into the S&P? I like how Lakers legend, magic Johnson hit the timeline said just like I thought when the Celtic sold for 6b I knew the Lakers were worth 10 let's go the confidence of magic Johnson Great investor, too. He's got a bunch of a bunch of good stuff in the portfolio more news on the scale AI Transaction so it's closed. I believe that Alex Wong has a badge at Meta and shows up to work in Palo Alto and clocks in at Meta HQ now.

Scale AI is still an ongoing concern, is still a company, but every competitor is out for blood and they want to take as much of the business as they can since obviously the perception is that scale AI will primarily be working with meta and that other foundation model labs might not want to do business with met with scale AI anymore unclear if they can separate out the businesses if they can separate the about fully over time and and sell the position to other investors create like a diversified I mean even they could even take the company public.

At which point I imagine that it would be a lot less, a lot less of a conflict of interest or like a fear. But there's been news that OpenAI said, hey, we're not training, we're not using ScaleAI for data anymore because it's too aligned with our competitor, Lama maybe. But everyone's trying to. Yeah, a lot of this was very predictable.

Yeah. I don't think Meta and Scales teams looked at and said, hey, if we sell right now to Meta, which is competing in open source AI, we're totally going to retain all of our customers. People aren't just going to immediately turn off. And no, they were smart enough to know what would happen. And there was an article, I think yesterday,

about OpenAI ending their relationship with scale. But from what we knew, like they hadn't been doing much for a while, that's part of the reason why Mercore had been absolutely ripping. And they also brought a big function in house, because for some of the more complex tasks, it makes sense to generate the reinforcement learning data yourself and there's just so many others there's so many other services having like a single point of

failure never makes sense for a business of that size but we'll see so the the information has an article here about a little-known startup that has surged hint hint past a scale AI without any investors this is is interesting. After Meta Platform Scale AI deal, data labeling is looking like Silicon Valley's hottest new interest. That's enormous opportunity for Edwin Chen's Surge AI. For years, data labeling existed in a tucked away corner of Silicon Valley, a critical but unglamorous area of AI

where companies like Google and Open AI hire outside firms to improve their models by laboriously grading the quality of what they produce. Now, a spotlight has unexpectedly fallen onto the field in the wake of Meta Platform's decision to pay 14.3 billion for 49% of Scale AI, the best known data labeling firm. But it's not the largest such firm,

nor perhaps the most impressive. That title belongs to Surge AI, founded by Edwin Chen. This is fascinating. I didn't know this. One billion in sales last year. Bigger than scale. Yeah, so Chen's startup has one customer,

it's like Google, OpenAI, and Anthropi. It's such a testament to the idea that like, sure you can bootstrap, but it's so incredibly hard to have any hype around your business if you can bootstrap but you it's it's so incredibly hard to have any hype around your business if you're bootstrapped because you're not having your investors aren't hitting the timeline for you on a daily basis and also you have if you're not trying to raise capital you have less need to go and be loud and and go on podcasts and and talk to the press and all this stuff

because you're just making a lot of money and sometimes it can be beneficial for people to not know about you. So this is, I mean, this is crazy, crazy stats. So Chen is 37, he has no investors and has bootstrapped a five-year-old startup entirely by himself, which has 110 employees in offices in New York and San Francisco.

The company generated more than $1 billion in revenue last year. Surge has told employees, a previously reported figure that exceeds the $870 million scale generated in revenue during the same time period. And unlike scale, Surge was profitable and has been from the beginning, Chen said. Moreover, Surge could see its sales get even larger

if other companies copy OpenAI's decision to stop hiring Scale, a choice made over concerns about Scale's relationship with Meta to shift business to Surge. Other key financial metrics couldn't be learned, like how much revenue Surge keeps after paying its workforce of mostly contractors. So there is a question about the margin

since this is somewhat of a marketplace business. This could be a situation where, you know, a thousand dollar contract comes in and $800 of that contract goes to the actual contractor who's doing the work of the data labeling. But at the same time, even if it's 200 million in like, you know, like net revenue, that's still a huge business.

It's hard to imagine Surge not being a fantastic business. They haven't had to raise money. They have 110 employees and they're used by Google and all these major foundation model apps. So it seems like a fantastic business. But if Surge could earn a valuation from investors similar to the one scale received from Metta, such a price would make Chen a billionaire many times over,

at least on paper, and quietly one of the wealthiest people in tech. Interesting. I'm very interested to see what he did before this company. Edwin Chen, I feel like I've heard that name before, but I don't know. As AI models transform from toys into real business tools, data labeling is becoming more and more essential. Contractors hired by companies like Surge

grade the responses from AI models and write thousands of questions and answers in fields like programming, math, and law to feed those AI models. And so, I wonder if this is gonna go the route of, you are Deloitte or McKinsey, and you're going to have your team, but then also a company like Surge, create a ton of training data around a specific workflow

that is costing your business, you know, 20 or 50 or a hundred million dollars every year. And then, so it's like, instead of like the, the AI BDR that's like kind of generically writing emails based on like the average of the entire internet, it's like, no, this is a fine tune for your business perfectly trained, perfectly. And it, and it really distills what you do excellently. I don't know if it'll go that way.

I'm interested to talk to people about it. As AI models, so, Serge's subsidiary, Data Annotation Techs, says workers get paid to train AI on your own schedule with wages starting at $20 an hour. Chen has distinguished Sergege by making it the high-end shop, charging premium rates, often two to five times what Scale might bill.

Surge justifies the prices with its reputation for industry-leading work. Indeed, one former Scale employee said Surge often performed better than Scale in customer audits of labeling quality, and competitor Garrett Lord, who's coming on the show today, who runs Kleiner Perkins backed Handshake readily acknowledged that Chen is the number one player. So I'm excited to talk to Garrett Lord today about this exact topic. Should

be very interesting. You wouldn't know that from the coverage of Meta's blockbuster deal to quasi-acquire scale AI, its CEO Alexander Wong, who is now joining Meta in a senior AI role, was widely regarded as leader of the data labeling field and had become a Silicon Valley celebrity, blanketing podcasts and conferences with his presence and posting heavily on X. It also raised 1.5 billion in venture capital, putting scale on a very short list of companies

that have raised that much, and he hired upwards of a thousand people. Wong had made time to exit perfectly, given the traction of Surge, which had grown larger than scale without outside capital and With a tiny fraction of scales workforce skill also missed the goal to hit a billion dollars in revenue last year But scale scale spokesperson so the scale was unprofitable I was not profitable which but wasn't burning a ton of money like I think they had They raised 1.5 billion and they still had like almost a billion in cash

Yeah, so they weren't they weren't in like trouble or anything I think they had like all they raised 1.5 billion and they still had like almost a billion in cash. Yeah. So they weren't in like trouble or anything, but at the same time it was like, like not a wildly profitable, not a wildly lean business, but I don't know. What, what, what a. It's absolutely fascinating. These two businesses.

It's a wild industry. Something that like, yeah, I mean, just it feels like there's such an edge just to even identifying this opportunity years and years ago I mean, I guess search started four or five years ago But it was certainly like pre chat GPT that all these companies got started and then they realized like something got started in self-driving car annotation all sorts of stuff like that, but Chen studied linguistics and math at MIT came to the idea for his startup after leaving college and witnessing firsthand

how big companies struggle with data. Before starting Surge, Chen worked as machine learning engineer at Facebook, Dropbox, Google, and Twitter. He worked at four different tech companies. Just like going from one to the next. That's insane. He was developing recommendation and search algorithms

and helping gather the data needed to train them. Despite the hefty resources of those companies, Chen encountered a lot of problems. At Facebook, for instance, Chen was tasked with helping build a Yelp competitor. His team needed to train a model that could correctly classify businesses, telling the difference between restaurants

and grocery stores, for instance. To do so, they needed a data set containing 50,000 accurately labeled businesses, which he found out would take six months for an outside firm to assemble. We had no solution other than waiting. We simply waited. When the data came back, Chen blanched.

In some instances, it had labeled restaurants as coffee shops and coffee shops as hospitals. The data was complete junk. He wouldn't say which vendors Facebook had used. In 2020, he left Twitter to found Serge and picked up some of his first customers, executives from Airbnb and Neva, a once promising AI search engine startup,

as only a founder in San Francisco might, bumping into them at rock climbing gyms in the city's Dogpatch neighborhood and the Mission District, talking up his startup. To get Serge going, Chen recruited data labeling contractors he knew from his previous roles and funded the startup using his savings. He wouldn't say how much he put in.

Fortunously, Chen focused on language modeling. Scale by contrast started out using more visual data for autonomous vehicles, which we talked about. Just as those types of models began to grow in importance. Less than a year later, OpenAI had hired surge to fine tune its models by teaching them how to avoid producing harmful responses like a racially biased language,

biased based on research paper the company published together by 2022, Anthropic had been a Surge customer. They're putting out research papers with OpenAI and still manage to stay this under the radar. Wow, yeah, so look at this, the label Largesse, data labeling has proved to be a lucrative niche in AI.

Surge, founded in 2020, has over a billion in revenue, zero funding. Scale, founded in 2016, has 870 million in 2024, raised, oh, this says funding raised, but this is clearly valuation or something because it says seventeen point four billion Which is not what they raised? Touring has 300 million annualized raised to 25 million invisible

It's interesting touring to initially was like a marketplace to just hire developers And I think they pivoted into daily to data labeling interesting It's the same thing when I work with a cloud provider, the enterprise tech customer said, I don't know the internal expectations for why their services work so well. I push a button and I'm glad for the internal work to make that happen. Data labeling companies typically use various techniques

to make sure contractors aren't just dialing it in or phoning it in, I guess, when answering questions. For instance, companies randomly insert questions that have no correct answers or make sure labelers agree on the right answer to a question. So obviously you scaffold up these, these, these, these like responses that everything's like double checked and then you can kind of see if people are No idea how big this thing is amazing over in defense tech world Anderol has partnered with Rheinmetall the German The German defense time company the prime really to manufacture barricade barricade and fury over there. That's very exciting

And then we also touched on Spotify founder Daniel AK Yes, leading a guess when Rheinmetall was founded Akk, uh, leading, uh, guess when Ryan Mattol was founded The way you're saying that makes me think it's like 1650 i'm putting you on the i'm putting on the spot like tucker put uh, what's his name? How can you possibly report on the news if you don't know when it was founded? This is this is the best bit earlier. I should read it out. Yeah, read the muffin man tucker. Do you know the muffin man? The muff Ted goes the muffin man the muffin man muffin man. Yeah, read the Muffin Man. Tucker, do you know the Muffin Man? Ted goes, the Muffin Man?

The Muffin Man? Muffin Man. No, I don't know him personally. How can you know anything about Drury Lane if you've never met the Muffin Man, John? This is a post from Zach Stewart. This is a real gotcha. Really, really good.

Anyways, you can still, I give you permission to comment on Rymetall, even though you don't know. 1889. I was not, I knew it was really old. 1889? Düsseldorf. Okay, I was pretty far off with 1650,

but over a hundred years. I mean, yeah, that's the same, it's general, general atomic is part of like this roll up and it came out of like I think general dynamics at some point and the company that that the founder of the company that competes with fury for the For that autonomous program that they're competing for right now Was now was like the designer of a submarine in the civil war or something like that. Like I'm pretty sure that he's he died more than a hundred years before Palmer

Lucky was born. Yeah, that's the that's the cultural difference between the two companies that are competing for this. Like one contract. It's like a fascinating dynamic about like how legacy they are. Like it's not just like you're in the game for a while, you know, decades after, after you start the company, your, your greatest enemy will, will be born. And then they'll have to grow up a little bit. Yep. I'll have to learn the game. And then they're going to come for you.

Wild. So yeah, Spotify founder, Daniel Eck is leading a $600 million funding round into the German defense startup start up Helsing This is the this is kind of more of an andro equivalent over in Europe Valuing that four-year-old company at 12 billion the business makes battlefield AI drone submarines and robo fighter pilots it's now one of Europe's most valuable startups and They're using some renders here John renders image their render maxing their render mixing Happens sure is a cool render. Yeah, look at the water there. It's definitely a render who knows

It's hard to tell these days. It's so it's be we're beyond the uncanny valley and so Helsing is expanding from its origins in artificial intelligence to produce its own drones, aircraft and submarines as part of the bigger push for locally made and owned defense products for European countries and really companies all over the world. Crazy.

It was founded in 2021 by Torsten R real right rile. Okay a video game entrepreneur Gunbert Scherff a former German Defense Ministry official and Nicholas Kohler an AI researcher and They have partnerships with sob already And as Mr. All yeah and tons of American venture capitalists in the deal You got lightspeed excel and general catalyst honors cooking. They've raised over 1.37 billion the the Daniel X said the world is being tested in more ways than ever before that has sped up the timeline for Helsing's financing X said pointing in particular to the conflict between Russia and Ukraine where drones and other AI powered systems have been deployed at scale for

the first time. There's an enormous realization that it is now really AI mass and autonomy that is driving the new battlefield. And so yeah exciting exciting deal. Up next we have Catherine Hahn from Hahn Ventures coming in the studio to talk about the stablecoin bill. The genius bill is slated to pass on the front of the Wall Street Journal today. And is the guiding and establishing national innovation for US stablecoins. We had her on the show and yeah, we're excited to talk to her. So welcome to the show. How are you doing, Katherine?

What's going on? Hi. How are you guys? We are great. Big 24 hours. Congratulations, I think are in order. But please get us up to speed on what's actually happening and where things are in Washington. And I love that you called me Catherine. That was my Washington name. I haven't been called that. I used to appear in court. But Katie. Let's update the Chiron. Katie Hahn. Let's update the Kyron. Katie Hahn. Thanks for having me on guys.

Actually, I literally just walked off a plane. I was down at the CO2 conference. Nice. I was talking to a lot of founders, crypto and non, and everyone loves your show. So I'm happy to be here. Thanks for taking the time. Yeah, thanks. I think congratulations are in order.

I don't know if I would say that yet. I mean, first of all, the bill passed through the Senate. Great news, thanks. I think congratulations are in order. I don't know if I would say that yet. I mean, first of all, the bill passed through the Senate. Great, great news, obviously. It's another signal, I think, kind of like I feel like I did when ETFs were approved. By the way, not really by the SEC, although that was the body that formally approved it. But as I said last time I was on your show, guys, make no mistake, the DC Circuit, that Article III, that other branch of our government, left the SEC no choice. The courts don't always get it right, but sometimes they do.

And the courts unanimously in that case said that the SEC had acted arbitrarily and capriciously. So to my mind, the court system is the reason we have ETFs in this country today for Bitcoin and for ETH. And I think of this as a bit a similar thing. Now here we have another branch of government stepping in. In this case, you have the Senate passing this, introducing this legislation, passing

this legislation. Now, of course, the House has to vote on it, and then the president has to sign it into law. So if those two things happen, you can say congratulations are in order for the industry. But I think one thing that is not really being discussed, and I hope we can discuss today, is there's another very important bill. And I'm not going to slap a percentage on and say which bill is more important, but that's the market structure bill. And to me, that's really the transformational bill for the crypto industry. Okay, so break that down for us. Yeah.

So there's one bill, stablecoin bill, as you just mentioned that the Senate passed. And one of the things that I loved to see about that is the bipartisan support for that bill because I think we used to be as an industry pre-political. Brian Armstrong always talked about the industry being pre-political. And I think I don't want it to be the case that this industry is too political on one side or the other. So I really love to see these moments like we saw yesterday in the Senate where you have a number of Senate Democrats voting in favor of sensible rules of the road. And I think this is a classic example of that, so I'm delighted and I hope the House passes

it. But I don't see why we have to choose between just a stable coin bill and the market structure bill. The stable coin bill obviously paves the way for a regulatory framework for stable coins in this country. So that's that. Then there's another bill, the market structure bill. And that kind of will answer or attempt to answer the question of what's a security,

what's a commodity. And I know you guys have been covering crypto for long enough. You know this is kind of an age old debate. And you know, where can there be an enforcement action? Well, the big question is, well, what's the security and what's not? And I think the market structure really goes a long way in answering that question. And that's why I think it's so fundamental. And we've seen courts across the country weigh in on that question. And that's because we don't have legislation. And Gary Schenzler

said it was all so clear. And of course, it wasn't all so clear. Yeah. So what's the timeline there? What are the different players? What do people want out of it? What is the core, you know kind of? crypto industry and both on the investor side and and company side want out of it and and what are what Who would who would not want it to go through at least how the the crypto side has it in mind? to go through at least how the crypto side has it in mind? Look, I think everyone in the crypto industry wants the stablecoin bill to go through and become law. I don't think there's really any question about that.

The question is, do you go for both? Someone just described it to me in a sports analogy, and I'll probably fumble that one, but it was like, do you go for the field goal, or do you go for the touchdown? And the thing about after a field goal, the other side gets the ball back. And I think Congress really operates in kind of six to 10 year windows. And it's on their mind, reform, regulatory clarity for crypto right now.

And I think the transformational bill for crypto right now is very much that market structure bill. We also want that stable coin bill and we have this unique moment in time where we have bipartisan support for both bills. So personally I say go for both of them and worst case you end up getting the stable coin bill only. But I do think that's not the most desirable outcome for the crypto industry. I think the crypto industry deserves, especially after years of uncertainty, both a clear message from Congress. I think Congress ought to do

its job and pass both bills. And I especially think that because after the Supreme Court last summer, in a case I said that this was the most important case for technology policy, not for just crypto, but for tech policy in decades, was the overturning of the Chevron Doctrine. And that takes power kind of away at a high level, away from regulatory agencies, and puts it back more in the hands of the courts. And do we want to have another 10 years of litigation percolating up from the district to the appellate court to the Supreme Court on what's the security or what's a commodity

and a patchwork of different answers throughout the country? Or do we want Congress to answer that question for us now? And I think it's incumbent for Congress to answer that question now. You asked who, what does the industry want? I think people, this is a big industry. We say crypto is not a monolith. It's a broad new asset class and stable coins are a very big important piece of that asset class and a growing piece. As you guys saw, I shared with you the stats. You know, almost a quarter of a trillion dollars. I think you banged the gong for that stat. Locked in supply, growing enterprises across the world integrating

stable coins. You probably saw those announcements from some of the big tech companies in the last few weeks. And I think one thing that everyone's wondering is, those ones that haven't yet dived in for stablecoins is, well, what are the rules? So this bill that was passed yesterday on the Senate, the genius act is so important for that. It's like, here you go. And so what kind of institutional interest will be unleashed once that bill becomes law? I think that's really exciting. What's your, how would you, how do you think about big companies getting excited

about stable coins and thinking, or institutions and being like, there's a lot of potential here. We should create our own stable coin, versus we should just figure out how to leverage this technology. Where do you see the kind of line and opportunities? Well, look, we already have two very dominant stable coins, right, already today. Tether, USDT, and then we have USDC. So clearly, it's not winner take all.

I mean, those two are both growing and they both have market share. So we think there will be stable coins like those that will have network effects. So we think there will be stable coins like those that will have network effects. But we also think at the same time, there are some businesses that are just so big and just so important. And if they launch their own stable coin, we could also see that too.

I don't think we see a world where everyone, I think we get asked this question all the time, is there gonna be a world where every company has their own stable coins? Yeah, we don't think so. We could be wrong, but that's not the view of how we see this evolving. We do see. Yeah, we had Aaron Frank from Lightspeed on earlier, and he was comparing certain companies with launch a stable coin, and it maybe would feel like coal's cash where it's like,

Yeah, yeah, good point. I don't have any of that, nor do I. I don't have any of that. And I. I don't have any of that. And that's the thing. If I did, would you want to use it on other platforms? Right. I mean, every bank could launch a Visa Network competitor theoretically, but that doesn't necessarily make sense. Yeah.

So in your mind is the broader market structure bill, the kind of thing that could catalyze a massive amount of new activity. And from my view, you know, stable coins have been getting adoption. There are a bunch of exciting use cases. We have a public American stable coin, you know, issuer in circle now. It feels like, yes, regulatory clarity is important there, but having broader clarity around how tokens are treated by, you know, how the government actually views tokens feels like it could catalyze, you know, much more of an explosion and

investment activity and new company formation and new use cases for tokens. Is that the right framework? I think that is the right framework because, like I said, stablecoin is a big important piece of the pie and very low hanging fruit, by the way, to my mind. But crypto as an asset class is much broader. So when you say where do the industry players, where do the crypto investors, where do we want to see it? I don't think it's a monolith.

I think crypto as it grows to a multi-trillion dollar asset class, like any multi-trillion dollar asset class, you have different factions. And I think some fairly and some really smart people think just take this, take this win and move on and don't worry about the rest. And I think that's a little, I see why they might think that if they think that it's this or nothing, but I don't, I think that's a false choice. I think that we can have both and this is a really opportune moment to have both. And I think the question that has beleaguered the industry really has been the question over securities, commodities, which agencies are going to have jurisdiction.

I think that's a bigger question. And I think it would be a real shame if we let this moment go to waste. You know, the irony too, so you have some stable coins or only stable coin companies who are like, yep, genius act and move on. They don't want to get dragged into this broader, kind of a more omnibus package, right? Yeah. With the market structure legislation. But I think that's a missed opportunity. And I think we'll be sorry as an industry if we don't go for both now.

Again, go for the touchdown. And with, you know, I think all of the, like I told you, all of the fundamentals are kind of working all at once together now when I last talked to you guys. And this is very much part of it. So why would we not go for that? So I think some folks who don't maybe have an appreciation for how sometimes, sorry to say it, slow Congress operates.

They've been trying to update the money laundering laws for two decades. And it's like out of sight, out of mind sometimes. And I think we have a really unique moment to press for both here. And the irony is some Democrats who are opposed to market structure, you know, because of abuse, potential abuses,

who are opposed to the crypto industry. They cite abuses, they cite fraud, they cite speculation, they cite Trump coin. And I get all of those criticisms, but I'll tell you what, had the market structure bill been passed, that would have answered a lot of those questions. Totally. The irony is if you would have had the market structure bill, you wouldn't have had a lot

of the blowups that you had in the past several years in this industry. Is crypto truly coming home to America? We went through a period where crypto is being pushed offshore. We've heard over the last year that some crypto founders feel like they can come back to the States now, maybe actually have an office stateside. Are you seeing more and more momentum there with with some of this positive regulatory movement? Or is it or are you still seeing momentum around places offshore Singapore etc? I think look everywhere that you're gonna want to develop does is going to have some rules that

you're gonna have to follow when I hear founders who say there is no regular it's often not that there is no regulatory regime whatsoever sorry Balaji if you're watching but I am seeing that on-shoring a bit. We were kind of seeing the off-shoring in an unfortunate way, but it's not only regulation that matters. It's hiring top talent. And certainly there's top talent right here in Silicon Valley and other places in the world. I mean, you mentioned Singapore.

Singapore has top talent to be sure, but there's a lot going for the US, so we're still very optimistic. And I don't think it, but we were getting to a very dangerous point with the crypto industry had the likes of Gensler and others like him been left kind of to just do this. Now, fortunately, the courts were pushing back. So it wasn't a partisan issue. It was just the courts were starting to say, no, you've gone too far. I mean, I lost track now. So it wasn't a partisan issue, it was just the courts were starting to say, no, you've gone too far.

I mean, I lost track now. I literally lost track of how many federal courts of all political persuasions and appointments ruled against Gensler's regime and not just Gensler, but others like it, where you had very activist regulators who were really far out of their lane. And you saw courts curbing back on that. So I think that was already, we're in a dangerous spot, but the courts were maybe gonna save us, but you don't only wanna rely on litigation to save you,

of course, because then you've already lost. But I think hiring talent is important. I think, you know, access to capital and traditional venture, maybe that's a little different in the crypto asset class. But I think also fundamentally what you have going on right here now with AI, particularly in Silicon Valley, and we've talked a little bit at the early stage

about some of the synergies between AI and crypto, because of course AI creates digital abundance and blockchains are good at enforcing digital scarcity. And I think you're gonna see more and more synergies emerge and use cases over time. And I'm not gonna say what what they are because, you know, we've seen that before in crypto, a lot of over-promising under-delivering on use cases.

So let's just stick to right now, we see synergies. There's a lot happening in Silicon Valley, obviously with AI, we think that's going to benefit the crypto industry. And so in addition to regulatory clarity, if you're a founder, you want access to great talent, you want your visa situations sorted out for your employees, you want access to other founders.

Depending on what type of company you are, you want access to capital. So I am optimistic about the state of crypto in the US, but also elsewhere. And we invest in companies. We invested in squads. We've announced that. Um, and I know step in one of the founders of squads watches your show. Um, but Stefan's based right now, um, overseas and I was just having a conversation with him about how do we get you to come and bring squads to the US.

Awesome. Awesome. I want to talk about the longer tale of regulation because it seems like the stablecoin bill is very straightforward, like the least, the least ambiguity there. Then you have the Market Structure Act and there's a lot more to do there, but I'm sure that there's like riders getting pitched and all sorts of long tail things. Like how much are we actually like, where does the line end between what we're actually trying to define versus what

we're still in the exploration fear phase of, because you have NFTs crypto gaming, there's a, you know, prediction markets, there's so many different crypto applications that trying to kind of do them all at once. Maybe that's the right approach. Maybe these need to be handled like after we've done the technological exploration. But what's your view on kind of the long tail? My view on that is no, because we can't just put we can't have an NFT bill, a bill for bank contracts or that we can't have specific bills. And if you saw, if you think back to

the advent of internet, that's not what we had. You know, we had Section 230, it applied broadly to platforms. And we need something similar here. So on the one hand, I would say it can't be so specific that it's like, okay, if you're a, you know, events contract platform, it's this rule. And if you're an NFT player,

because again, we don't even know yet what will be created really at the end of the day. We've seen some early use cases with product market fit. Obviously, chief example of that is Bitcoin. But what if we had had this conversation guys back in 2010 and you said, okay, we've got Satoshi's white paper and there's this thing called Bitcoin. Let's pass some crypto regulation. It would have just been for Bitcoin. And that would have been a mistake because then a couple of years later on the scene, we have ETH, then a few years later we have Solana.

So I think what we need to do, so you don't wait for the end state to have any regulation, right? You don't do regulation by enforcement. I can tell you what we don't do. We don't do regulation by enforcement. You don't wait till the end state of things, but nor do you wanna get get so with such specificity

today and do the current state of regulation by the end state of regulation. That you can't do either. And so I think what you have are some guiding principles, some generic rules of the road. And really that's all the market structure bill is. And there's enough clarity that you had Democrats vote for it last time It came up. So it's not like it's so specific It talks about and I think look I think you have people like Hester purse who is SEC Commissioner Has written and given speeches on this of what that ought to look like? What is a decentralization test and those are some guiding principles that you can kind of look at and apply as you think through this legislation. You know, what body ought to regulate it?

And sure, you're going to have some outliers and new technologies emerge that you're like, okay, does this fit neatly in the bill? No, but we have laws for everything in this country with technologies that develop that don't fit neatly in a particular bill. And that's why we have, that's why we actually have, we don't do regulation by enforcement. We do notice and comment. We do things like advisory opinions, certain bodies,

by the way, do do advisory opinions, not judges. And then if all else fails, you do go and sometimes seek Article 3, seek a judicial interpretation. But I think that's, like I said, that's kind of the failure state if you're having to go to the courts. But indeed, that's what was happening because we were getting no rules of the road and we

were only getting unfair regulation by enforcement. And I say unfair because Gary Gensler basically picked what should have been the best companies, encrypted the poster children for compliance and brought enforcement actions against them. And then the complete spectacular disasters didn't bring anything. So until after the fact. And so I think regulation by and large. We gotta have you and Gary on the show to hash it out.

I'm sure you guys have had some funny conversations. Thank you so much for helping out. Thank you for joining us. Thanks guys for having me. Great having you. Have a good rest of your day. Cheers. Okay, bye bye.

Up next we have Justine Moore from Andreessen Horowitz. Incredible map knowledge dropped a fantastic map all around AI image, AI video models. We're gonna have her take us through it. Welcome to the show. How are you doing? Can you hear us? Can you hear us? Hello.

Oh, I can hear you guys now. Sorry. There we go. Hey. I was saying to John, when you dropped your new market map, I was saying, you know, it's a great sign of respect

in our culture to drop a new market map and come on the show. So we're honored. I've been incredibly bullish on market maps. I find them extremely interesting and I think they got a bad rep a couple years ago But I'm glad you've stayed the course and you're pro strongly pro market map. Yes Market maps it's like you guarantee a popular tweet if it has a market map in it

Absolutely, and I think people got kind of sick of like oh like we know the playbook We've seen it, but there's a playbook for a reason it works. Yeah. So yeah, take us through the latest market map. What are you tracking? How do you decide what to divide it up into? And, and what, what kind of inspired this moment, specifically? Yes. So I mostly do AI creative tools here at a 16 Z. So I spend like all my time testing all the image, video, audio, etc. And obviously, the past few months in particular, video has been like the thing.

There's been like VO3, obviously, which was a massive moment with adding the audio for the generations, Hydra around the talking characters, the new Minimax model, the new ByteDance model, SeedDance, which in the arena, already outperforming VO3. So it just felt like a good time to refresh sort of what's going on in the video space. And I kind of formatted this market map just thinking about more from the perspective of a creator, like less in terms of the go-to market of the company, more just like if you're a person trying to create a video with AI, where would you go for these different use cases? So there's first the foundation model companies where it's either text-to-video or image-to-video.

Most places do both, where they actually take your input, have their own proprietary model that generates the video for you. So that's the VOs, the clings, the runways, the PICAs. Then there's also now this emergence of what I call multi-model apps, places like CREA and Flora and Visual Electric that enable you to run a bunch of models in one place.

So if you want to take a single prompt or a single image and see what it looks like in five different models super easily, you can do it somewhere like that. And then the other side of this Markit map is sort of like what happens when you add speech and talking characters. And so some folks do that by like generating a talking avatar from an image where you can eventually have the person move. And other folks do that by taking like a video of a person and then applying lip sync over

it and then syncing the audio. So that's sort of the distinction between talking avatars and lip sync. It's interesting that you're in the consumer group because I can imagine that a lot of the talking avatar companies wind up selling to corporations that want to vend in talking avatars, for example. Are you seeing a lot of that? Or like, I guess how rigorous or stringent are founders about like, hey, we are trying to build a consumer app or we're just building a cool technology and it might land as a consumer

product, but it also might land as a B2B play. Most people are not at all rigorous and often don't even know at the beginning. So what we actually saw with the first generation of AI video was it was only researchers making these like magical models and they had no idea what the use cases were gonna be. They all just put like a text prompt box in front of the model and then you got an output and like a big company and an individual were using the exact same interface. Now I think we're starting to see more at like what we call the app layer, which is essentially like, how do you productize this?

How do you create workflow? And therefore, how do you go into specific verticals? Maybe an example of that is all of the standalone video ad creation products. So things like Createify or Captions where, or HeyGen has a product for this too where You can literally just like paste in a link to your Amazon or Shopify store It will pull all of the info about your product your logo your brand and it will generate a talking head avatar

Like holding your product and describing it and that's something that like a vo3 or cling the general video model companies won't do today Yeah Where are you seeing the strongest? something that like a VO3 or a Kling, the general video model companies won't do today. Yeah. Where are you seeing the strongest, like low churn adoption of these tools? Because just personally, like VO3 was the thing that got me to subscribe to Google Pro Max 25, which we can go into the names and how difficult it is to access these. But other than that, I haven't seen that many where, like we've seen the ASMR storm troopers or something, but it hasn't been clear to me that someone's building like the next Pixar and they're actually thinking about it

like Mr. Beast and they're like, I'm building a studio, this is a business, I have ad integrations and I have a content schedule. It's very much in like the testing phase. We see the Studio Ghibli moments go viral. So where is like the true long-term value playing out right now? Okay, on the content creation side, where we are at right now is actually there's a bunch of content agencies, like, you know, there's a bunch of Wunder Studios, Dream Studios,

there's probably like 20 of them now. One called Paracosm, that's really cool. And these are people who are just early adopters of the tools and they're getting hired by brands and ad agencies and entertainment companies to use the tools for them and make content. I think the problem now and what you're describing is like, the people at Pixar would have to know how to use the AI video tools and how to set up the workflow in order to create their next movie using AI. And we're not yet at like the tools aren't mature enough and we don't have enough people

who working at those entertainment companies who know how to use the tools that it's primarily being done with these external AI native agencies or contractors today. I think like one of the first AI IP we've seen is the Italian Brain Rot characters. I don't know if you guys... No, I don't know this. I haven't seen this one. The Italian Brain Rot characters are huge. I can't even say the names here because they will sound ridiculous, but it's people basically

making images of an animated talking baseball bat and a ballerina whose head is like a cup of cappuccino Okay, okay, and a shark who wears sneakers. Okay, but they're starting to build like a cinematic universe. Oh, it's massive. Yeah Accounts have like millions of followers. The world isn't ready for Italian brain, right? So is it is it is it like decentralized in the sense that like I could just go and participate in this like broader trend. So yes and no. I would say there were a couple of accounts that originated the first few characters and then other people started participating using the hashtags

remixing. Okay. And then the good, the characters that were good that came out of that sort of bubbled up to become part of the cinematic universe. They have Bombadiery Bombadier, Crocodile, Crocodile, which is a crocodile plane that he shoots bombs. This sounds like, yeah, yeah, super, super viral. Yes, the kids probably love it. It's wild.

Before we go into more of the consumer side, talk to me about some of the more niche B2B use cases, because I remember when GPT 3.5 and we got GPT 4 dropped, there were still a lot of hallucinations, but you saw companies that were just like, yeah, sure, it's not incredible at writing poetry, but it's amazing at just like converting this messy text to JSON. And they were all of a sudden just running tons and tons of queries. And so I would imagine that in a in a in a video workflow, things like what runway was

doing in the old days of just like green screening or the stuff that like artists aren't going to really get upset about because it just feels like a better, more advanced tool. Are a lot of these companies building tools like that or is all the focus just on like, let's one shot the next Oscar film? Yeah, it's a great question. There's a decent amount of vertical focus. I think also it's very hard for startups,

like if you're not a Google or an OpenAI or whoever, to play in the game of like, let's train the largest one shot best video model. So a lot of them are focusing on verticals like Luma, which is a company we've invested into this really cool tool where you can upload like a nine by 16 like iPhone style video and you can just say extend and it just basically like out paints around the existing video and makes it look like so you can just change the dimensions of your video really fast Or there's more of just like a practical tool

But super useful for a bunch of creators that are filming vertical content probably and they want to distribute in a horizontal format So they just do that. Yes, exactly That makes a ton of sense or something like Higgs field that it has all these really special effects like motion lores essentially. So you can take like an image of a car and just say like, this is like, here's a template of what a car explosion looks like, make this specific car explode. And then on the B2B side, we've seen a lot around like, how do you scale marketing or L&D or like executive presence type content?

So like, you know, tools like Descript now allow you to take a video of someone talking and then change the word that they're saying by changing, like cloning their voice, having them the voice say the new word and then doing a new lip dub. So you could have your CEO sending what looks like a personalized holiday message to like every single customer or something like that. Yep. Or maybe something worse with a phishing scam, but I'm sure we're going to see at some point.

What do you think the long-term ambitions of companies like Google with Veo and ByteDance with their model, what do you think they want out of this category? They obviously have a massive edge. I saw a niche was posting about Google's edge or YouTube's edge around IP with VO you can generate. Yeah, what was going on there? Does that's crazy. So Disney thing? Is that like a real deal? Or is that just a beneficiary of like some sort of relationship? Yeah, then I want to get a sense of do Google and bite dance?

Do they want to be developer tools that just vend into a bunch of these platforms? Do they actually want to own the end customer? What is this market? Is there a generalized market in the long run of just generating funny videos for the average consumer? Or is it going to all be verticalized out where I want to generate ads? I maybe want to generate customized messages.

But I want to understand, this is a good overview of all the ways that you can generate content, but how does the market structure evolve? Yes, okay, on the IP question, I have not talked to Google's IP lawyers, and I'm not an IP lawyer, but my understanding is Google. But this is legal advice, right? Yeah, exactly.

And financial advice, all the advice. Our compliance team is going to love this. Yeah, they're going to love it. It's sarcasm. You can, I think, my sense is basically, when YouTube came about, it was suddenly like all this IP content is on the internet and Google cut deals with a bunch of the IP owners about essentially what can be posted on various Google properties and if that content gets monetized, how it ends up going to the end rights holder.

And so that's sort of the working theory right now about like why VO3 can generate IP content and not get sued when a lot of other people are struggling with that. In terms of the market dynamics, it's so fascinating the question around like Google and ByteDance and eventually I think Facebook, I hear, is going to do more in video soon as well. Why they're doing it and what their strategy is. I think, first of all, if I'm one of those huge consumer giants, AI is such a massive shift in consumer behavior that if you want to own the interface to consumers, you probably

want to own text, image, and video generation as well. And they have the resources in terms of data, like YouTube, for example, is a perfect example of this. They have a ton of compute, they have a ton of money, and they can hire the best researchers to build the best models. I think the question, as you sort of alluded to, is like, do they sell those models via API and let other people build the consumer experience on top of them? Or do they own the end-to-end consumer experience? My honest take on it so far has been like, it takes so long in the big company product

teams to get stuff done and get new products out that the model teams are just shipping the models in pretty basic interfaces like Google Flow. And then the product teams are going to figure out if they can catch up with some kind of cool new consumer app later Yeah, yeah, I mean my question is like how much What will the market? actually look like for The average consumer wanting to generate images and video or will it just be something that people default to chat GPT?

Because maybe they already have a subscription or they're fine with the free tier and it doesn't end up there ends up being a bunch of different applications on the enterprise B2B side, but then not so many like, you know, core consumer subscriptions on just like cool videos, pictures, et cetera. I mean, it seems like it's a killer, killer moat for Google cloud platform to have VO3 as an API, even if Google can't figure out how to productize it fully. It's like, they do seem to have a real moat. I want to get into that about, uh, YouTube is obviously an incredible training data resource. Uh,

you mentioned that there was another company that is, that just surpassed them. Was it Tencent you said? Uh, ByteDance. ByteDance. That's right. So, uh, I have a question about that because obviously with CodeGen, GitHub has a lot of public repos that people can probably just scrape. It's also just not that much data. You can probably fit it on a couple hard drives, maybe sneak it out the back and go ahead a flight

and train somewhere in Malaysia or something. You can't do that with YouTube. Like, it's just too much data. And so my question is, how durable, how much should we be thinking about a durable data mode in video generation for YouTube? Because it seems like something that they could really like clamp down on

and would give them a durable advantage. But I don't know, there's so many other ways to attack any of these model developments that there's a lot of different options. So there's a couple parts of the data question. The first part is like, what do you own versus what do you scrape? I mean, we've seen companies like OpenAI

will scrape YouTube as well to train their models. I think ByteDance also, like, you know, here we think of YouTube and Facebook and whatever here in the US, I mean, as being the big host of content, but like, there's all these massive companies in China, like ByteDance, who have their own user generated content on like their version of TikTok and their version of YouTube. And I'm sure there's reposts of American videos over there. So it's not like even has a unique flavor, probably can generalize pretty well, right?

Totally, though, yeah. Like I was one of the very early users of all the Chinese video models when you still had to access them on Chinese apps with Chinese phone numbers. And they were definitely very good at things that were more China oriented than the US models. That makes a ton of sense.

Oh, okay, the other thing that's important to mention on data is in video in particular, it's not just the volume of data, it's also the quality of data and the quality of data labeling. Because essentially you can't just feed a video into a video model and assume it can understand what's going on and pull out the relevant info.

You have to have really sort of dense labels is what we call them or super detailed captions about like, this is this style shot, shot from this sort of camera, the camera is coming from this angle, this is the sort of character, this is how the character is interacting with the background. And that quality data is what drives quality in the video models. And China has really benefited there because there are so many more PhDs than there are here.

And it's much cheaper for these companies to hire them to do these dense labels for the video data. Yeah. Well, how does Mid Journey fit into all of this now? It's such an interesting company because no venture dollars, this behemoth kind of quietly hiding in a Discord server still. I saw some examples of video. It looks fantastic. Seemed like they hadn't added audio yet, but how do they

fit into the whole piece? Because it seemed like early on they developed a really great feedback loop for the data that maybe wasn't happening with some of the other model providers. Yeah. So the mid-journey model came out this morning, really conveniently, like 10 minutes after I put out my market map without the journey video because it's not yet available. I was just playing around with it too. It's really cool. They do image to video. So they don't do text to video, which is actually sort of easier. They can start with their super high quality images that they generate on the platform and then animate those. I think they have like a low motion and a high motion setting. From what I've tested so far,

it's better as sort of like a low motion scenery, environment, light interaction type thing. Like you have a photo of a person and you can then animate sort of rain and wind and them walking slowly. And it's not as good at like, what I call physics heavy world model type things, like two cars running into each other and exploding. That sort of thing requires a very, very large and costly, usually like text to video model that is more

difficult to train. Whereas Mid Journey, I mean, I have no idea how they did it. It's a great model. They could have taken one of the open source image to video models and fine tune it on all their own data. Yeah. Yeah. I've noticed VO3 is really, really good with some of that physics stuff, but it still gets confused. Like if a car is driving away, all of a sudden you'll be looking at the front of the car and then the back of the car and it'll get kind of mixed up. But yeah. Are you, as all these different models have progressed, I always remember Brad and Trevor McFedries and just how early he was to what I think

will be this new wave of a- Is that Lil Micaela? Yeah, Lil Micaela, which was basically a CGI influencer. So very early, I think we're gonna see a lot more of this. And we've seen some of this to date, but do you expect that to be kind of like a new, how bullish are you on sort of like entirely AI creators getting real adoption, following,

followings turning into real businesses? I'm sure you follow a bunch of them already. Yeah, I'm personally super excited about it because it kind of separates the content from the character. Like now, before AI, if you were on Instagram, like you were both the character and the person coming out with the content. And so you had to like look in a way

and present yourself in a way and talk in a way that was like interesting to the Instagram algorithm. And now it's like anyone with a good idea can create a compelling character. And so I think some of those are human characters. I've already seen way too many examples in my Reels feed of OnlyFans models who promote themselves with AI avatars of themselves now, which works shockingly well. There's some photorealistic human influencers, but honestly, some of the more interesting ones are things that could never be influencers before

AI. So there's one called like Raccoon Stole My iPhone, and it's an AI raccoon influencer. There's like AI capybara influencers. There's like mystical creatures like, all of these things that just come out of people's imagination. Yeah. Competing for Mindshare with Instagram pet pages, you know, dog pages, things like that. Yeah, yeah. Did you have a reaction to Fountainhead? It was the, or sorry, Mountainhead, not Fountainhead.

Oh, yeah. Mountainhead, the movie, the core overarching theme was that basically deep fakes or AI-generated content had gotten so good that it was causing global unrest Did it did it resonate at all? It does feel like I now have you know multiple times a day I'm seeing content online and and it's like getting we're both in the community notes program So it's like you see content getting community notes program. So it's like, you see content getting community noted.

It's one person says, it's not real. Look at this link. It was this image that redid it. Another person says, it's real. Look at this. So it's like, I just assume that everything's fake and made up unless I see it, you know, with my own eyes. But I'm curious if you, if it resonated at all with you.

So I've not, I largely consume AI slop, so I have not seen it. I should watch it soon. You should watch the movie, the motion picture on slop. Yeah, once they have that, I will watch the full film. But it's so interesting,

we talked about this a lot actually with audio models, with the last like election cycle, because video I think wasn't there yet to have convincing deep fakes. But audio, there were way less cases of, even though you could make really realistic voices, cloning candidates and saying things that weren't true, there were way less examples than we thought of that actually impacting any election in any sort of meaningful way. And I think part of it is things like you mentioned, the community program where like, you have sort of citizen watchdogs on various platforms

saying this is real, this isn't real, running them through various sort of AI detectors. But I also think like people are starting to develop more skepticism around everything they see online and whether or not it is real, which is probably not a terrible thing. Yeah, I just take that After Effects would be more impactful on the election than AI video,

because you can just show a clip of a burning building from 2020, and it's real video, but you recontextualize it and say, oh, the Capitol's burning or something, and it's from years ago, or just speed up a video, slow it down, edit it out. They would do this with various politicians, cut out the ums and uhs and they'll sound sharper,

add a bunch of gaps and all of a sudden they sound like they're slower. Yeah, it even, we're here in LA and when all the imagery was coming out of the protests from a couple weeks ago, it was like burning Waymo's, kind of looks like something you'd generate with VO3 just because it was so burning Waymo. It kind of looks like something you generate with VO3. Just because it was so symbolic and just such a crazy image. And then like make an image of a guy with a Mexican flag,

riding it, doing burnouts around a car that's on fire. And it's like, that looks like, you know. And even just the way that was photographed, there was like, it looked like all of Los Angeles was engulfed in flames, but it was really like one crazy block with a bunch of different angles Yeah, and then a bunch of different posts and and you drive around Other interesting thing is like even real footage can be manipulated

Like any kind of story can be manipulated in a way like AI. Yeah, are you? Are you seeing I think like, you know, there's exciting Companies like world coin, you know doing like proof of human Are you seeing any infrastructure players trying to do like do anything on like a content verification? side and like trying to create some sort of Mechanism to prove whether something was like authentic, you know actually shot on an iPhone, right? You know proving through the metadata and some type of like public setting. Is there any pitches from that side? Yeah, so largely, honestly, today

that has come in two places. One is the model companies themselves will often watermark the content in some way, like the VO3 generations has a little VO3. 11 Labs, which is just the audio, they actually have a site where you can upload any audio and it will tell you if it was generated with 11 Labs or not. That's cool. Which is pretty cool. The other place we've seen development there is for like prominent individuals, like, you know,

celebrities or someone who's there's like value behind their brands, and who potentially even might want to monetize it in the age of AI. Like if you're an actor and you suddenly don't have to, you know, film, go fly back to LA when you're filming a movie in Australia to tape like five ads for some cell phone brand and you can have your AI avatar generated to do it instead and it looks just as good. Like you might actually want to have some licensing company that owns your AI licensing rights, whether it's your traditional talent agency or not,

who can manage that for you. Yeah, totally. Very cool. Well, thank you so much for stopping by. We can talk for another hour. I have so many more questions in our doc, but we'll have to have you back. So thanks so much for stopping by.

Thanks guys. We'll talk to you soon. Great chatting. Have a good one. More breaking news. NVIDIA to drop humanoid robots that will produce NVIDIA GB300 chips in Q1 of 2026. Nick says, holy based.

That is so close. Foxconn in talks to deploy humanoid robots at Houston AI server making plant. Wow, that is extremely close. I don't totally understand this. What does that mean? Fox Foxconn has been training the robots to pick and place objects and insert cables. Yeah, I don't know if this is marketing. It feels like we've had we've asked a bunch of robotics experts about humanoids and so far I haven't got a

I don't have the confidence that this is Actually a super great use case for them It's just the definition of like what is humanoid because you go to a you go to like a Ford f-150 150 factory and they have like massive robotic arms like moving wind shields around right like it's like you could anthropomorphize that by like It's like you could anthropomorphize that by like spray painting it pink and putting some hair on the hand and being like, it's humanoid now. But like, you could like retrofit every-

Just give it more bicep definition. Totally. Like Amazon has like tons of robots sliding around. You could put googly eyes on them and be like, they're humanoid now. And you'd maybe get like a stock bump, but like there's clearly things that are happening in the AI server assembly process that are using robotics, obviously, whether it's even just like conveyor belts or, or, you know, the three axis pick in place, you know, pick

it up, put it over here, that type of stuff. Just going to humanoids is just, it's like, well, will it have five fingers? Or will it have just a grabber? Will it have legs or will it have wheels? Like it could just be sitting there because for a lot of these pick and place jobs, you can just have the humanoid sit there with a single arm,

mount it to the ground because the stuff comes to it. And so then you're just kind of in a, okay, we're in the arm business now. It feels like it's a little bit wrapped in marketing lingo, but still cool that more companies are making humanoids because it does seem like a cool form factor that hopefully people will break through and get there. And this seems like a step in the right direction

in the sense that it's a very defined task. I think when people think humanoids, they think some like, my new touring test is humanoid robotics will be here and when they can put up a six minute Nürburgring time in a manual. Yeah, gated manual. In a gated manual. Because at that point,

they have to not just be a self-driving car, but they have to be able to negotiate the wheel and the stick shift so efficiently and so quickly that they are truly performing. Yeah, and a manual can be weirdly probabilistic, right? And that you can move the- Sy the synthesize a lot of data. Yeah, it's not, it's not like, you know, yeah, perfect system, right? You're not going to, you're not going to put up a sub seven minute

Nürburgring time with a Joe Biden walk. That's right. You're going to have to be moving fast. Those actuators are going to have to be. That's right. High speed. So, yeah, I don't know where all this goes But I mean exciting to see that they're that they're at least doing work on it because it seems like an important It's it's clearly an important path in the tech tree we don't know how relevant it is to other to their formats but

Cool to see a lot of money pouring into the sector from very big companies So Foxconn will be announcing their robots in November and then deploying them shortly after yeah in Our year 2026 Foxconn seems like the right builder for this Unitry is is already like feels like it's scaling up to the point where like unitry robots should be usable in certain locations Like they're not generalizable yet, but they're certainly, if you train them on a specific task, they could do that task over and over and over again. The question is just like, you know, do you need five fingers, 10 fingers, 10 toes? Is that really like the right form factor?

Or should we be just doing things that are more specified? Because if the whole point of these human robots is just AI server making, just assembly, just one spot on the manufacturing line, could probably be a much more specialized robot. But, will be cool to see it. I'm sure we'll see a lot of viral videos about it.

It'll be very cool. I invested in a company making robots for data centers. And they intentionally chose not to make it humanoid form factor, which, and I think a lot of those, the reason behind that decision would also transfer to manufacturing setting, right? Which is like, do you need legs?

If you can use wheels. I mean, data centers have the most perfectly polished floors with like no dust at all. Like it's the perfect environment for a wheeled use case. At the same time, you probably need to have a very specific actuator for like unplugging and plugging the cable back in, right? And that's actually like, it's pretty hard

to reach around the back of a computer and unplug an ethernet cable. And obviously the server racks are like designed to be worked on more, but still even the cabling is like very detailed work. And so if that's what they're trying to do you probably need a specific actuator for that we have our next guest in the studio George Hots how you doing George good to hear from you what's going on welcome can we hear you oh can you yes yes I can hear you got

you well let's kick it off with something simple. I want to take your temperature on AGI timelines, P Doom, the easy and fun stuff. I don't know what AGI means and I don't know what you mean by Doom. No? Are these terms just entirely irrelevant? I mean, now we've shifted to super intelligence. They're all buzzwords, but at the same time, like there is there is an idea of like the like, I don't know, that the conversations may be shifting to like the AI generating

more economic value than humans. Is that a relevant metric to track? Machines have been generating more economic value than humans since the Industrial Revolution. Is there some is there some other metric that we should be tracking? Or is it just like irrelevant? You're just talking about like hype, like, I don't know. I mean, I like I don't know what you mean. Like you can talk about concrete things. Yes. Like AGI means nothing, right? Like computers, everything that's a Turing machine is a general purpose computer. Is that what you call intelligence? I don't know what you mean. It's a linear regression intelligent. What if it's big enough? The

Chinese does know Chinese. Yeah. What I mean, what about your, your decision to get on a spaceship traveling at point nine cC away from the Earth. Like how close are we to that? Are we closer than the last time we talked, which was like a couple of years ago, and it seemed like it was maybe going to happen within your lifetime.

Has it moved at all? Yeah, I don't know if I'm actually gonna get that spaceship, but it's kind of like in an ideal world what I would wanna do, you know? Just back away and chill. Don't look back, actually. You can't look back. You can't look back. Never look back.

The jackets are all there. You need the blast shield, right? You need the information shield. That's the real one. Information shield. What do you mean? Oh, that's how they're going to get you. Okay.

Right? I mean, okay. So here's a way you can think about AI, right? Yeah. Imagine there were 10 CIA agents assigned to you, and they're running at 1000x real time. So they're like hyper fast CIA agents that devote their entire lifespan to your day. And they're trying to manipulate you.

Maybe to get you to buy things, maybe to get you to vote for a certain guy, whatever. But like that's what you're going to be up against with AI. What we're currently building, if you think about the biggest companies in AI, what they do is advertising. What advertising is, is just manipulation of humans. So you're going to have a team of CIA agents thinking about you and trying to manipulate you at all times. And now you see why you want to head away at the speed of light, right? Even CIA agents can't beat that. Is there some world where there's like a capital war

and I'm paying for a more powerful ad blocker? Yeah, I mean, that sounds good. Like another question is kind of to say like, okay, if you think that you either think that current like capital accumulation dynamics are going to continue and that the rich are going to continue to get richer. And if you believe that the question is kind of, well, how many people are going to survive in the future? How many people are going to have any modicum of independence? Right? Like you have some far AI people who think that there's going to be a singleton, right?

You think that there's going be a Singleton. Right? There's gonna be literally one, right? Some people maybe think it's 10, some people 1000, 10,000. Some people think that all the humans will get to continue to exist as independent entities. Are they already independent entities? That's a question, right? I don't know. That's a good question. I mean, if you were trying to put it in like the form of a bet, human population above

or below 8 billion in 2030? Well Bob I think. I just hope that's normal. Hopefully. But wait, is that what the trend says? Yeah just go with the trend says. I don't think there's gonna be any discontinuities to any trends really. Well yeah I mean I mean at some point but the question is like how far out do you have to go until you start seeing these effects? What do you mean by human, right? What about someone who lies in bed all day

and watches TikTok? Are they human? Yeah, that is odd. They kind of drop out of society. I think a question that popped up for me is all this debate about AI safety and what should labs be doing, what should labs not be doing.

It feels like your angle is, it should be each individual's responsibility to look after their own safety in the context of AI. Is that at all? I just like this whole like should, shouldn't, like what? I don't know, I'm not a sadistic fuck who wants to manipulate other people like the people in power, like I don't know. Yeah but I mean people still look to you as like an example of like someone who might have. Answers? No, I don't have any answers.

Not necessarily answers, just like. But you can buy my shit coin here. Should I show the shit coin? Here you go, just click this QR code and you can buy a George Hots coin and that will give you answers. You will find satisfaction and fulfillment in your life after purchasing a George Hotz coin.

Is that the end state? We all have our own coins. No, no, no, no. I don't mean it like that. I mean, like, I think that a lot of people are like, they don't really know what they're looking for. And that vacuum is a very, you know, it's very dangerous and it's going to be filled by dumb shit and don't have that

vacuum, right? You got to, you got to stand for something, you know, or something. I don't know. Yeah. I mean, do you think that there's a chance that someone is able to take a stand and actually bend the arc of AI progress in the way that... I mean, it happened with nuclear, right? Like nuclear development did stall. There was a stagnation in real world build out of nuclear capability on the energy side. Yeah.

I mean, there's a few things about nuclear that make it different. So nuclear, even as a weapon, is incredibly hard to deploy tactically. So if a country has nuclear weapons, they're, aside from a mutually assured destruction idea, they're not all that useful. It's not like you can use a nuclear weapon to accomplish tactical objectives.

If you could, I think Russia would have already done it. Russia has some tactical objectives they might want to accomplish, but nukes aren't really gonna do it, right? I mean from a pure real to politic perspective not even from a Like oh, I got taboo moral perspective. Like what do you want in a radiated pile of rubble? Like that's what you're gonna get No

What you want is drones that are hyper specific and can take out exactly who you want and control areas, right? So like as a military technology nukes are not that good, AI is way better. Yeah, but what about as an energy technology? It feels like the, it feels like the fear, like the mimetic fear of nuclear war and total destruction caused a whole bunch of regulation to pour into a sector and essentially a stalling of nuclear energy build out. And if, if, if the AI doom scenario,

whether it's real or not, becomes so momentically powerful that someone's able to harness that and actually say, if you try and build a big data center, we will shoot you. Then maybe it stagnates, no? Really think that's the reason for nuclear. I think it has more to do with why we can't do other big infrastructure projects in this country, right?

Like it doesn't have to do with the new, we also can't build dams, right? Yeah. And if you look like there's a thing if people think that there's some weird taboo around nuclear, right? But then, okay, look at hydroelectric, right? There's no taboo around hydroelectric. But China leads in installation of both nuclear and hydroelectric. And different and everything. It's almost like they're correlated, right? Yeah. So the thing is not there's a specific fear around nuclear. It's like, you know, the US decided

that they're a developed country and we're not gonna develop anymore because we're already developed. You see the D on the end, right? So is that just cultural then when you, like the Malay sets in, would you expect that to happen to China when they catch up? I don't know.

I, yeah, I mean, maybe it's just like this normal story arc of like, you know, it's it's I don't know. I don't know. I think that like you have a real problem when the kids can't live better than their parents. Yeah. So but I don't have anything more to speculate on that. Do you have more context on China and specifically in like the AI context? Like US electricity looks like this and China electricity looks like that. Is that all that matters? Pretty much. Yeah.

I mean, that's a pretty good proxy for everything, right? Yeah. Like, there's two things. There's two things, you know, people are like, George, how do you feel about the Trump administration? I'm looking at two things. Yeah. With any administration, I'm looking at two things, there's two things, you know, people are like, George, how do you feel about the Trump administration? I'm looking at two things. Yeah. With any administration, I'm looking at two things. Did you decrease government spending?

And did you increase total electricity production of America? Those are the only two numbers I care about. Those will capture everything. Why does, why does government spending matter? We were joking that, you know, Trump must be extremely A GI pilled if he's running up a massive budget deficit Like in never seen it never seen it in this formulation. It's that it's Yes, yes, yes But but it but is an extra lever on on labor and capital and it creates more GDP that they can be taxed to pay down the increasing

amount of debt. Super, super, super Excel. Yeah, super Excel. What is, what is, what is super Excel do that normal Excel does? Let's give it up for better Excel. Yeah, yes, yes, we need that. Excel 2.0. Yes.

The thing is, Excel was the final piece of software, but in order to add another $100 trillion to global GDP, we needed to kind of rebrand it. And so now we get AGI. GDP is the biggest bullshit thing ever, right? I always joke with my friend and I that we're gonna start companies and be billionaires, and I'll tell you how we're gonna do it. So I'll say, all right, I start a company,

he starts a company. We both write contracts to each other. Yep. Right. Like, I'll buy something from him for a million dollars. He'll buy something from me for a million dollars. We'll just do this real fast. We'll keep passing the money back and forth. Whoa, look at our revenue. Wow, that all contributes to GDP. Wow, we made we're billionaires overnight, right? Yeah. Like, like, and that's my argument is the

economy is just that with a lot of extra steps, right? You can't use services. It's not part of GDP. This is complete nonsense. You can't have services. So like, literally, literally, you take the steel out of the ground, you grow the corn. Okay, that's GDP. But is it I mean, if that GDP is fake is not the debt is the deficit not fake?

Like is government's government that shit to people? But can you just tax the fake money? Like if you tax your scenario where you're generating a billion dollars in fake money. You can't tax the fake money because we're passing the same dollars back and forth. The minute you tax it, that falls off so fast. Yeah, yeah, yeah.

You can only tax productive work. Is AMD doing productive work right now? AMD is doing all right. Yeah, either Nvidia is really overvalued or AMD is really undervalued. It has to be one or the other. How does it all play out? Like what does AMD actually need to do to get back on track

or realize their potential? Nvidia needs to stumble. I mean, it worked for AMD and Intel, right? Like, so AMD ended up beating Intel and the entire, like no one would buy a data center Intel CPU anymore. And it's just cause well, you know, they stumbled and now Intel owns that market. So, you know, AMD just sits there in second place. They'd be at a better second place than they were a few years ago.

And then when Nvidia stumbles, AMD is like, Oh, Hey, we're here. Is, is DGX Lepton like their their cloud offering a potential stumbling block or is it there? Is it the right move for them? I don't know what that is. What's an Nvidia cloud shit? Yeah, exactly. Cloud stuff. You can you can break AI down basically into like there's like five five tiers, right? Like at the base level, you have like electricity and data centers and land and like Things like that tier two or like tsmc asml samsung intel right fabs Nvidia amd open ai Anthropic and then on top you have like completely worthless things like her during windsurf

You know these character ai all these people who think well with you up We're gonna we're gonna get the arr know that worked that worked in the web, it won't work for AI, and I can go into why, but it's kind of boring. I wanna hear why. No, keep going, keep going. Keep going. Basically, okay, so here's the difference between AI and web. When you wanna run a service like Gmail,

one server can serve 10,000 people easily, right? And there's no demand for better Gmail, right? It's not like I can click and get, like, yeah, you can buy Gmail Pro and it'll have a few things, but most people don't really care. There's no limit to the ceiling of how good you want your AI to be, how fast you want your AI to be. Maybe there's a limit to the speed,

but when you're at 1,000 tokens per second, I want the biggest model in the world. So there's very little limit on that. But suddenly, you can't serve 10,000 users from one server anymore. And the whole dynamics of the web, the whole reason some of the value aggregated to these end players, and they still didn't aggregate to the cursor

and the win search. They aggregated to the opening eye of the end-drops. Nobody who built like an email client survived. They all got eaten up by the tier fours of the web, the Googles, the Facebook's, all of these like app providers, right? Where's the Zynga today? You know, like this already happened, right? People just don't where's Zynga Oh, Zynga is gonna be the next thing, man. Like, no, it's not

Facebook ate all of that value, right? Google ate all the value from all the people building on top of Google. So the tier fours ate all that value. Yeah. So opening eye Anthropic will eat all the value from the cursors in the WinService of the world. They'll acquire some of them, they'll compete with some of them, right? Same as you saw on the web. But I argue that the tier fours aren't even gonna have value

because the tier fours are, this ain't the web. This ain't where you can have one server serve lots and lots and lots of people. You know, I'm running 03, I'm running, you know how much I cost OpenAI every month? I pay the $200 a month and I cost them a lot more than that. You can now click on codecs. Yes, spin up four nodes.

Yeah, why would I not click four? It's not my computer. You gave me the button. Hey, I'm just using it. George Hotz single-handedly bankrupts 300 billion dollar company. Is there no value in just being the front end to AI applications to be like the front door, just the default button?

Because we see these models kind of go back and forth in terms of benchmarks or what's hot and there isn't as much customer churn as you would expect because people are just kind of like Defaulted into the app that they installed whenever and so even if Gemini gets better in terms of the actual performance metrics People don't switch from open AI to Google It's so negligible. You got to make something 10x better, right? You got to make something 10x better. So like this whole game is open AI's unless they stumble sure I'm not switching to Gemini. It's 20% better. I have downloads the new app and think about a whole new thing, right?

No one's gonna switch is there is there a chance for a company to kind of come out with something that's 10x better with an Algorithmic improvement or is it just a race for scale like what could actually be that next it felt like GPT for scale, like what could actually be that next. It felt like GPT 3.5 when they really broke through with DaVinci and then 4.0, and then 4.0, like it felt like this kind of like binary moment when a lot of people realized that this was usable for their daily life, even if it's just a Google search replacement or whatever, write a poem or whatever.

Like a 10X, what you're describing, like a 10x improvement feels like that kind of like qualitative binary shift. Is that possible with just scale or is this something that we need a different model for? I don't know. I don't know. I would bet majority still on like these big labs

are also attracting the talent, but it was also like It's a pretty commoditized a lot more so than like Google search Right like you can look at people track how far open source is behind. It's not that far behind. Yep So no, I don't know. I think this game is mostly gonna be Chat GPT's I think Elon's aware of this too. That's why he's trying to go 10x bigger with the data center. We'll see, maybe it'll work. You know, there's someone to bet on.

Anthropic, I'm not that bullish on, but maybe. You kind of predicted the pre-training wall, but that's not a refutation of the bitter lesson, and we're gonna see similar scale play out in reinforcement learning or is there gonna be something else that we're building the big data centers for? There's something that we don't understand in terms of data efficiency.

So like when you think of how long it takes a GPT to learn to talk, like how much data it takes, it takes like terabytes of data. In order to make a GPT talk like a normal person, it takes terabytes of data. In order to make a GPT talk like a normal person, it takes terabytes of data. Whereas a human trains on megabytes. How is it that if you take all the text that you've ever heard in your life

and you put it to whisper and you transcribe it, it's gonna be a couple of megabytes, 10 megabytes, maybe 100 megabytes. So humans have this 1000X data efficiency advantage. And we're gonna have to fix that if we want like reinforcement learning to work, this thousand X data efficiency advantage. And we're gonna have to fix that if we want like reinforcement learning to work, especially like reinforcement learning that you wanna do in the real world.

Humans could do, humans can learn from very few samples. Yep. And yeah, I think that like, it might be okay if these foundation models train unsupervised on lots and lots of stuff, but yeah. Is that, Is that something that somebody's working on just like a new more data efficient algorithm to drop into the pipeline or do we have any leads there?

Because it feels like right now we're going down the path of reinforcement learning with verifiable rewards and we're going after like individual business use cases that are increasingly long tail. And that could be kind of like valuable, but it doesn't feel like the breakthrough that you're talking about. Like has there ever been a breakthrough, right? Like people think GPT is more breakthrough. Well, they weren't. Like if you watch the world, it was just, it was all just smooth curve.

But, but, but what I will say about AI scaling laws. Oh man, you see like people get excited about AI scaling laws, but here's a pitch that'll kill your excitement immediately. AI scaling laws. You can put in exponentially more money to get linear returns. Yeah, exactly. Do you, do you believe that the real value is investing in in humanoid robotics then? Have you heard this theory? So so it so I mean, if you if you put exponential more

money into humanoid robotics, assuming that they work and assuming you can you can make as many robots ten times as much output anyone anyone who wants a humanoid robot has never worked in a factory in their life okay right break it down what's a human oh yeah it's gonna walk around like right no yeah we got a laugh track. Can you show me a robot arm that's capable of putting a screw in something? Probably. Just the arm, put the screw in the thing. Yeah. No, no, no, no, no, no.

Not like you carefully jigged up the screw and have a screw dispenser. Like the way a normal human does it where the screw's sitting there and a little bucket on the thing and it picks up one screw and it puts it in and it takes the screwdriver. Yeah, no, no, no, we're not close

but also it feels like we're not far. It feels like that's what, five years, 10 years? I feel like humanoids are this interesting sort of space because a lot of smart people just say, like, here's the 20 reasons why they won't work and like why we shouldn't build them. But then so much capital and so many different teams are trying to make them work

that they very well might work for some things. And like, they just, humanity might brute force it because we saw it in a sci-fi movie, you know, 30 years ago. Why, why, why are we cooked on human- This is as dumb as self-driving cars was, right? And nobody learns their lesson. And people like Kyle Vogt should be ashamed of themselves. Like, they really should.

These people who go and raise large amounts of money for another thing that they should know, they should know better. Here's basically, remember in 2012 when Google said that my 12-year-old daughter would never have to get her driver's license? Yeah. Come on, that's nonsense.

And now, okay, they shipped Waymo. It's in a few cities. They're tele-opt. Right? People don't know. How tele-operated are they in your opinion? Is it effectively one to one? It's more than one to one.

There's probably about, I would say there's 1.2 operators per car. But it's not, they don't have a steering wheel and pedals. It is an autonomous system that they're probably doing some higher level inputs on. They're definitely like say, when you can be aggressive, when you should slow down,

whether you can turn on the stop sign or not. You know, again, like here's the simple reason to know that it's like that, right? There's definitely some tele-op in the way, right? Yeah. Have you ever seen a picture of that room? No. Yeah, why not? I've always thought it was an ace up their sleeve because like if there's a lot of pressure on them to say these waymos aren't

Safe they can pull up pull the the sheet off of the ghost and say there's actually a human in the loop Don't worry. It's safer than you thought Yeah, yeah, like The fact that you've never seen that room tells you that it's way worse than you think it is. Right. Okay. Tells you that there's way more teleop than you think it is.

Sure. It was really one person supervising 10 cars. Google would post those pictures all over the place. Yes. Yes. You don't see any pictures. There's so crews that actually came out the lawsuit. I think it was like 1.5 or 1.7 humans per car.

Right. Or vice versa. Like 1.5 cars per person, right? No, no. Wait, more people than cars? Yeah, that's what he's saying. That's insane. It's still that way.

Because an Uber only requires one person. Yeah, but so maybe the real innovation is just allowing somebody to get in a car and not have to talk about the weather or, you know. Exactly, I don't pay more for that. I'll pay more for that. Yeah, but I mean, is there any hope that we drive this down and we get to two cars per person,

then four cars per person, and it starts doubling exponentially and eventually like we are there? I mean, yeah, like it's obviously going to happen, right? It's obviously eventually gonna happen. If you wanna see where the real state of the art of unsupervised self-driving is today, right? There's no person with FSD.

When you get your Tesla, that's not tele-op. You can go press FSD and that's real AI. And well, you can see how good it is, right? Would I take a nap in there, even for five minutes? Oh, A&L. You'd be super tech, right? How are things going on the Comma side? Give us the update there.

Pretty good. How are things going on the comma side? Give us the update there. Pretty good. We're on track to be two years behind Tesla. So two years behind Tesla. But here's why we win, right? Because it's cheap. OK, so when you think about self-driving cars,

it doesn't look anything like the roll out of Uber, right? Or Airbnb. When you roll out something like that, you're trying to roll out a two-sided marketplace. You gotta spend tons of money on customer acquisition costs. You gotta make sure that you've perfectly matched that marketplace right away. Because if drivers aren't getting rides,

they're gonna leave the platform. If riders have to wait too long for drivers, they're gonna leave the platform. So it's this careful balancing act, but once you get this marketplace, you gotta moat, right? Switching costs are real high. Try to get everybody to switch at the same time. It's a challenge for weight, never do it. Self-driving cars don't look anything like that. Self-driving cars look like scooters. The only thing that it's going to take to roll out big fleets of self-driving cars is

capital, right? It's just strictly a capital market. You could just, I could, if I look at a city, I can calculate how many way miles there are. If I wanna build my own network and deploy that network and run it at a lower cost, it's straight up capital. Easiest thing for investors to calculate, very little risk. So self-driving cars are gonna be this awesome race to the bottom, right? It's gonna be like scooters,

when it's gonna be like 10 providers of these things for a while, and then they're gonna consolidate like one's gonna do it. But yeah, people are really gonna win. What's most valuable in terms of developing the next better version of full self-driving? Is it having a lot of data, building a big data center, having a great team to actually design the system?

What's most important? Are they all equal? Yeah, all those things matter, right? I think the main thing that matters more than anything else is just time. Like we're figuring things out with research, infrastructure's getting better. I think a lot of it's just infrastructure.

We have a new company, AI infrastructure, right? Like the infrastructure gets better. My coworker has a saying is like, uh, what we do is that we make the, uh, hard things easy and the impossible things hard. And that's like the goal of infrastructure. I see building structure, your infrastructure gets better. And then what was what you couldn't even dream of doing 10 years ago is now one command today and today, you know, what today. And today, you know, what you, yeah.

What's the current use case for most people with tiny boxes? I don't know. You don't know? Is that, that's my design, right? You're not supposed to know, but I mean. I saw the computer, it has specs, right? So many people wanna tell you, and I hate this,

I hate this, they're telling you like how the product's gonna impact your life, or what you like how the product is going to impact your life. What you use the product for. Oh my God. Who cares? Yeah. Here's what it is. I'm going to tell you what it is. That's your job. Right? I'm not an advertiser, but I mean, I mean our intern wants to build something with a tiny box. I want to give him some ideas. Go buy one. Why do you want to build some of the tiny box? I mean is it good? Yes, it's a bunch of GPUs in a box.

It's a nice little box. GPUs in a box. What robotic form factors are you most bullish on? We've touched humanoids, you gave a great review there. We've touched autonomous vehicles. Sounds like generally bullish, but capital wars, race to the bottom, all that stuff. Are there any other kind of form factors that you're thinking about that you are generally optimistic or excited about? Arm. Arm. The arm.

The arm. Maybe two arms, right? Just two arms, right? Cause I look, I run a factory, I run a factory in San Diego, we make all the cars right here. And I can't wait to get a whole lot of robots in there. But I don't need humanoids. I'm just gonna stick two arms to the table

and then it's gonna grab a comma. It's gonna put the screen on the front. It's gonna flip it over. It's gonna put the four screws in it. Then it's gonna pass it on. Show me anything that's anywhere near that level today. Yeah, what would you do if you were trying to build like a truly multipurpose robotic arm?

The arms are already good enough. It's the off the shelf arms are fine. It's all software. Again, it's always all software. Autonomous vehicles are all software. Robotics is all software, but everybody loves to buy shit. Yeah. I do what color are we going to paint the human? Let's have a great conversation about that Well, you know, we don't want to take the red because that might scare people in a way This is actually the level of stupidity that I see in those discussions about humanoid robots. Yeah

You would you trade in your legs for wheels if you could They got that my legs for wheels. Yeah, this is a question from Aaron Frank friend of the show in my legs for reals? Yeah, this is a question from Aaron Frank, friend of the show, he's asking this in real time. You're a real guy then, like people would ask me if the wheels are like making a statement, I just don't wanna have to have this conversation. Well, what about the sim to real gap in robotics?

Like how is simulated data, you know, you build a bunch of data in Unreal Engine, then you try and transfer, learn it back. Obviously there's been a bunch of experiments with that, with then you try and transfer, learn it back. Obviously, there's been a bunch of experiments with that with self-driving cars. Is that a path that we should be going down for the robotic arm development? Yeah. So I think with a lot of Sim2Real stuff,

the reason people are excited about it is because of that data efficiency gap we spoke about. Like current machine learning algorithms, like 1000X less data efficient than humans. So yeah, you need a thousand X more data, right? If a human can learn something in one example or 10 examples, the computer is going to need a thousand or 10,000. Now, do you really want to reset the stupid state of the physical world 10,000 times? You might do it at 10, but you're not going to do it 10,000, right? So that's where you want a simulator where you can just click reset and everything's back to exactly how

it was. So I think this stuff's going to play a simulator where you can just click reset and everything's back to exactly how it was. So I think this stuff's going to play a role, but I think more fundamentally that data efficiency gap has to be understood. We talked a little bit about coding agents. We talked about how you're bankrupting OpenAI by spinning up a lot of different codex agents. What other sort of a Gentic software are you excited about? Do you expect to, you know? What's a Gentic mean? Yeah, basically bots. It's like what we're calling bots now. What's a bot?

But anyways, I just, you know, I don't know. You mean like Daniel from Star Trek? Yeah, yeah, maybe. No, but I think about a world in the future, do you expect to be, I don't know if you're a Slack guy, an iMessage guy, Discord, maybe no messaging at all, just telepathy. But do you expect a world in the future

where you're just a perfect interaction between human employees and agents or is it gonna be more like, you'll do the odd deep research or maybe send some automated outbound emails or have some codex bots running? I don't even follow this. When do you think you'll be able to book a flight

just by saying I'm trying to get to New York tomorrow? Oh, see, the worst part about this is like, and that's gonna come pretty soon, actually. We're gonna pretty soon have computer use models that are actually capable of going to delta.com and booking a flight. But then what's actually gonna happen is Delta's gonna partner with whatever company does that,

and they're gonna put it behind the stupid thing. And like, yeah, so that's gonna be here in a few years. Not with agentic shit, but just with normal hooking the APIs together, right? Yeah. Wait, so what is the- It's bullish on APIs. What is the mistake about the agentic buzzword?

What are people even describing? Again, it's another thing that I really have no idea what it means. I was hanging out with some friends last night, and my friend works in this VR company, and the CEO is really interested in things being open source. But he's also really interested in making sure that things are protecting our intellectual

property and proprietary. And the truth is, he has no idea what the word open source means. He has no idea what it means that they can copy his shit. Like that someone else can use it. He just heard the word open source in some like buzzword thing. And he's like, do we have the open source? Do we have the open source in the thing? Okay. So check the box, check the open source box.

Last question about the age. Last question about the agentic buzzword. I think that there is something that people are picking up on, which is that these models seem to be very smart for a short amount of time. But if you run them for a long time they start hallucinating and going off the rails and so you have like 10 minute AGI it feels incredible but as you let it run and do more work you can't just say hey go do a week's worth of work come back to me when you're but it's superhuman in one minute and so is that kind of trade-off curve real? And then is it just

a matter of like better harnessing to actually get to two hours of work, which is kind of what the agentic people are like advocating for? No, so I don't think it's better harder, but this is definitely a real phenomenon. This is definitely a real phenomenon. You can experience this. There's papers exploring it, which show that if in 10 seconds, there's absolutely no way I'll come even close to a modern OOM. Totally. Because the first shot from the OOM is great.

Yeah. And then it kind of degrades and it degrades pretty quickly where as humans look a lot more like this, humans can stay coherent internally for much longer. So, yeah, I think that that's a real thing. I think that that's mostly gonna be fixed by like long context. Just more energy. Long context RL.

Yeah, just like you just gotta do it. We'll figure out new ways to make the context better. We'll combine diffusion and auto regression in some clever ways. Yeah, I think that this is just gonna be, like there's not gonna be a breakthrough here. There's not like one magical thing that we're missing. I think it will be a continued plot,

the same thing with data efficiency. I think people will start to care about it. Some new tricks will come out, some of them will work, some of them won't work. We'll continue to do graduate student descent until we find that. Graduates are a little bit of a concern. Last question for me, anything that you're particularly optimistic about, anything you check

the timeline and you think, this is awesome, I love this, I love this, I wanna see more of this. Maybe a little white pill to kinda cap it off. Yeah, so here's something I'm optimistic about. That fact that the one server can't run 10,000 users, that is one of the reasons that the modern internet sucks. That so much of the stuff is in non-recurring expense, and then it becomes really,

really hard to compete with these people. You could run Twitter on one computer, in non recurring expense. And then it becomes really, really hard to compete with these people. Right? Like, you could run Twitter on one computer. Yeah. Right. And 20 people could do it too. But like they don't because again, these companies have moats and they invest in making sure that their moats can't be broken. With AI, I think there's going to be a much lesser vote. Especially when you look at the move from auto regression to diffusion. So auto regression can run in large batch sizes.

When you run ChatGPT, you're running with a whole bunch of other people on that same computer. It's only 100. It's not 10,000, but still it's 100. Diffusion is running the cloud at batch size one. And once you're in batch size one land, running it locally starts to make sense. Actually running the models locally or at least having your own computer in the cloud. Yeah. Not being some shared resource that's really controlled by

some else. So yeah this was never a thing because you can't put lots of people on a GPU. That makes sense. They tried some weird stuff with the licensing. Yeah. Fantastic. Well thank you so much for stopping by. This is great conversation.

Yeah, I wish we had a full hour. This is great. We'll talk to you soon, Josh, George. Cool. Bye. See you later. Cheers. Bye. Bye.