TBPN - Diet TBPN: October 30, 2025

Episode Date: October 31, 2025

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Meta missed earnings. Meta reported record revenue in the third quarter, but the technology company warned of accelerating capital expenditures around artificial intelligence, sending its stock down 7%. Now a $1.7 trillion company. Not bad, but we are in the age of three, four, five trillion dollar companies now.

Stand out for me, reels at north of a $50 billion run rate. Crazy, which is more than all of TV combined. In 2024, television advertising spending in the U.S., was expected to amount to approximately $60 billion. I mean, they're within striking distance. So there was this one-time tax charge of $15.9 billion that crushed net income. Spending on AI researchers has also been crazy recently. So in between two stories, you can get up to five individual ads.

So got to pay for all that CAPEX somehow. 51.2 billion in revenue this quarter. They were up 26% year over year. My bigger question today is what happens to the advertising cash machine once you're two decades in? I don't think these businesses, at least most of them, would exist if they hadn't grown up in a cash-rich environment. Like, it's just so hard to predict in 2009, how much capital is it going to take us to build a self-driving car network that we'll be able to launch in San Francisco and barely be profitable and then we'll probably need another decade? You know a strange comp here is YC, I don't know, some years ago at this point, was trying to understand what the factors that contributed to the breakout successes.

And one factor was founders having wealthy parents. So the founders felt like they could just take these really massive high-risk swings because they weren't going for a base hit. The founders, like, if I make a few million dollars, it doesn't change my life, right? Trust is well beyond that. I got to go big. And so I got to go big, willing to look silly. for a long period of time willing to, you know, just stumble around as long as it takes to

hit it really big. Google was able to just hold on to Waymo from 2009 to today 16 years. They're probably still losing money on it. I wanted to look at some parallels between what's going on with Google, who's been on a tear and now has this like all of a sudden pretty diversified business. The search giant, the cash machine of the of the ads business is taking the other bets as their children and now as search becomes less relevant potentially in the age of AI well what does alphabet have they have google cloud they have waymo they have maps gmail chrome deep mind google i i like it's a stack lineup and so yes even if search does get older i love how youtube is doesn't even isn't even deserving of its own ninja turtle right now you're seeing more ai content on youtube

but it's still created by independent channels you know youtube pays out a huge amount of its revenue today to the creators on the platform. There's a world in the future where YouTube just generates the video, the content itself through, you know, its various AI products. It never actually has to pay out a creator. The Google story is very interesting. For the last decade since 2015, when they rebranded as alphabet, I feel like they were not getting a lot of credit. Now everyone's waking up to this idea that it's like, whoa, they have like four monster businesses. And yeah, there's a ton of gravestones in the graveyard from various note-taking apps and chat apps and Google readers over there. But overall, they wound up building a very diverse, very valuable business where

even if Waymo's not cash flowing a ton, is it worth $100 billion? Facebook rebranded to Meta in October of 2021. People, I think, were overly narrow about framing that transition about, specifically VR, specifically virtual reality, the metaverse, everything that Mark Zuckerberg was investing in. I feel like the name meta has aged pretty well. I agree. Even though it was ultimately embarrassing overinvestment at the time. It was just important for Mark Zuckerberg to send the message that... We're not any single app.

We're not Facebook, yeah. Yeah. And we're not even just social networking. People are using LLMs in social ways. And so as people spend more and more time talking to LLMs, that is time that they are not in meta. I'm just saying like Mark certainly like sees ramping attention. and user minutes on Open AI products. Totally.

And it's a concern. It's a risk. On the face of it, Google and Facebook have similar backstories, similar cultures, young founders who built up these tech companies, only seven years, eight years apart from each other when they started.

But Google had a very different culture. You know, it's a PhD research project, sort of an academic campus when you're walking around. The mission is organizing the world's information. It's like very nerdy. And that obviously translates to, hey, how do we organize the world's information?

Let's create a mapping product, Google Maps. Okay, what do we do when we have all the maps? Let's try and drive around a car on it. And then they get self-driving cars, right? And it's like it's a little bit harder to jump from like our mission is to bring people together. So we're generating AI or VR, which feels like the opposite direction. What's meta's mission monetize the world's attention? I would love for Mark to just go super.

villain mode again. Update on Halloween? Spooky. I like that. Are any of the side projects are going to become monsters because you're kind of in the side project era now that you're 20 years old? In the second quarter of 2022, Reels was at a $1 billion run rate by the third quarter of 22 at $3 billion run rate, second quarter of $23, $10 billion, and the third quarter of 2025, so the growth is absolutely incredible. Google's parent company reported a 16% surge in third quarter revenue with growth in its digital advertising and cloud computing units helping to finance robust artificial intelligence spending sales reached a record 102.3 billion. Is that good? Hey, we did our first $100 billion quarter. Net income was $35 billion, a 33% increase from the same period a year ago.

Like other large tech companies, Google is pouring tens of billions of dollars into AI development. I mean, what a remarkable result. Let's move on to some timeline. Let's move on to some news. Tyler, what's new in your world? I mean, most of the big news, I guess, was the Open AI IPO. Yeah. Open AI lays the groundwork for juggernaut IPO at up to a $1 trillion valuation.

The company has looked at raising $60 billion at the low end and likely more. They cautioned that talks are early in plans, including figures and timing, could change depending on business growth and market conditions. Depending on where meta's market cap is at the time of the OpenAI IPO will be, like, potentially, it will be an interesting comp because you're going to be able to look at a business that's, like, very, you know, at scale, like profitable, still growing very quickly versus Open AI, which we know will be losing, you know, tens of billions of dollars at the time of the IPO. Makes no sense what the F meta is spending all this money on.

You've spent $70 billion on reality labs to make the Rayban Vision. Are you serious? I don't know. He does have one of the biggest cash machines in the entire world and the entire history of business. Google has all this money. Why do they have this growing cash pile? Why can't they find something to do with it? They truly had too much cash to do.

They invested so much in Waymo and so much in deep mind. and so much in Google Cloud, and at the same time, they still had money left over. Meta Platforms is one of the greatest businesses of all time. And the CEO is a little crazy. He's a bit of a wildcard. Like, he has, like, obviously has an incredible... That's true for all of the big tech companies. And the last time that Mark invested this heavily in something, it did not deliver R.R.I.

People were calling for Sundar to be basically fired for, like, a long time. I know. Until, like, basically, this year. Yeah. So I feel like you're exaggerating how much like Google has been like this like winter the whole time. Breaking news. Yes. This is going to rock your world.

No way. Taylor Sheridan and Peterberg, team on Paramount and Activision's Call of Duty movie. Let's go. Let's go. Hit the gong for that. The creators that made Yellowstone, Hell or High Water and Lone Survivor and Sicario. Basically, Taylor Sheridan left Ellison's new empire, left Parenthood. Paramount and said, hey, I'm out and I'm going over to NBC Universal.

I'm riding with the Comcasters. This AI stuff is so dumb. Zuck is repeating the 2022 sinking of a great money machine in meta with wasteful spend. The Metaverse sucked and AI is nearly as dumb. I think part of the blowback here is that the first AI product that Meta announced was MetaVy. That does not inspire confidence, right? because it was, if they had launched SORA, people would have been saying like, wow.

It's not like you walk down the street and you were like, oh, wow, like this is actually breaking through with just like everyday random people in the way that threads has. I don't know, maybe in a year we'll be like, oh, wow, they actually figured it out. They funneled a ton of people to meta vibes and it's as successful as threads. It seems like a tall order. Yeah, it won't be. The Jensen video is only seven seconds, so look at this. He's having beers with some absolute dogs.

He's hanging out with the CEO of Samsung, the CEO of Hyundai, hanging out in South Korea, just having some beers, crushing some beers of the boys. This is how you do it. People will call it a top signal. I mean, this is going to go so hard in a top signal vibreel that we will definitely create when the time is right. Korea has the best fried chicken in the world, taking shots of Colonel Sanders. I don't know why Korea has the world's best fried chicken, but Korea has the world's best fried chicken. Let's go.

My best fried chicken in America is Korean. Vios and VityA investors. That's why Korea's so rich. He's got bits. He's feeling good right now. I mean, on your $5 trillion day, I mean, let him have a little fun. The first trillion took him 6,138 days. The second trillion, they did it in 180 days.

The third trillion in 66. days. Then the fourth trillion was in 273 days and then the fifth trillion in 78 days. So from 6,000 days, it took him 20 years to make that first trillion. They say that. The first trillion is the hardest. But they do say that. Amazon will sue me for leaking this. He says, worth it. New, new. This is so funny. Putting the tiny Amazon package in the missile watcher. That just flies it. Me after loading the dishwasher. instead of paying a robot $20,000 to do it for me. And I wonder...

I put in Chrome hearts all over my... Yeah? He says 20K to simulate the experience of a roommate with a ketamine problem. It's ridiculous. No, this is what we were saying that the... We were saying on the show yesterday. It's like, hey, Neo, you know, clean up all those wine glasses. And it's just like...

Yeah, just smashing everything. Neo, got the Glock out. Now tell me where the seed phrase is. got to make sure that the just another reason why they put the experts locally. You definitely have to arm them. This is important. Every day, I'm more bullish on 1X.

They have a great understanding of the internet. They've been focused on like a specific use case the home for a while. They're focused on teleoperation, which is the right thing to be focused on. Because even if it only is good at teleoperation forever, that still could be valuable. Wait till you find that MF 20K

clanker in your kitchen acting too friendly. That's ridiculous. Damn. After so long. Oh, that's funny. I got caught following it. But I did like this post and I was like, I got to follow this. There's a dev. Eric Katana has a less not so PC post in here. Is it gay to have sex with a female robot teleoperated by a man? Elon Musk comes in with a crying emoji.

I don't know. We'll leave that to the philosophers, I suppose. My sense is that selling Blackwell chips to China would quite possibly be the most unpopular tech policy move of the Trump admin, especially on Capitol Hill. It's plausible that the long term, really even near-term result will be much more compute regulation. I like this guy, Dean Ball. Tyler, do you know Ball? I think you've already made this joke. I don't think the capabilities right now merit the nationalization. But I think a lot of people still think that it's like two more years, then we'll be at a point where, like, like it would make sense for there to be like major geopolitical conflict just over the AI question.

The people who were super like bullish on that idea, I think are still, I don't think they've been fully like disproven yet. Yeah. Even if we wanted to sell Blackwell to China, would they even buy it? The more you buy, the less incentive you have to build local. Zero hash. We talked about this briefly yesterday. MasterCard is set to acquire crypto startup zero hash for nearly $2 billion. Zero hash powers most crypto fiat on-off ramps holding money transmitter licenses and MSB licenses across the U.S.

Most on-ramps you use today likely run through zero hash. This is a pretty big deal. So MasterCard getting into the game. Please vote your Tesla stock. There is no one remotely close to my brother and no CEO on Earth that would accept this package. It is a massive win for you as a shareholder every way you look at it. Elon says, thanks, bro. These are the original technology brothers.

What is it? Oh, you're true. CEO gets 10% of the incremental value creation if they 10x the stock with a 2x hurdle. So shareholders get a 900% stock increase and the CEO gets an incremental 10%. The first Tesla plan incented Elon to 10x the value of Tesla. He achieved all the milestones and may never be paid for this. There is no one remotely close to Elon for Tesla. Like I'm totally in on that. I'm in on the idea of incentive packages.

I like that as a structure. It's just that the targets are so aggressive that most CEOs don't. think they would achieve them. If I go to the CEO of Target or something and say like, okay, you won't make a dime unless you 10x the stock, they're going to be like, what are you talking about? No way. He was the senior vice president, iPhone software. 13 years ago, he was apparently fired from Apple after the disastrous launch of Apple Maps.

I am an Apple Maps guy. Apple Maps was this kind of disastrous launch where it really, it really, you know, it really, really didn't work anywhere near Google Maps, but eventually they turned it around and Apple Maps became a really great product for the iPhone. As someone with a bit of insider info, sorry for baiting, I can tell you that the current trajectory for Apple would likely have been better off if he ended up CEO. I wonder what he thinks about iOS 17. I keep getting ads for cocaine on Facebook. Oh, yes. Just using link tree as a cloaking page. Kind of surprise this works. And to that, I would say, who's going to pay for the CAPEX, right? We got to look it out. We will see you

tomorrow. It's Halloween. We have a special show for you. Please tune in. Tomorrow's going to be spooky. And I can't wait. Goodbye. Have a great idea.