TBPN - LIVE FROM HILL & VALLEY: Jacob Helberg, Delian Asparouhov, Christian Garrett, Josh Wolfe, Eric Glyman, Karim Atiyeh, Mike Solana, Keith Rabois, Qasar Younis, Shaun Maguire, Sampriti Bhattacharyya, David Friedberg, Joshua Steinman & more

Episode Date: May 1, 2025

TBPN.com is made possible by:Ramp - https://ramp.comLinear - https://linear.appFigma - https://www.figma.comEight 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.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(00:00) - Zach White (07:54) - David Friedberg (15:15) - Jacob Helberg (19:57) - Keith Rabois (28:35) - Zachary Perret (33:02) - Zak Kukoff (40:17) - Mike Solana (01:00:12) - Michael Eisenberg (01:12:57) - Shaun Maguire (01:25:37) - Josh Wolfe (01:43:02) - Delian Asparouhov (01:50:57) - Christian Garrett (01:58:24) - Eric Glyman (02:06:54) - Karim Atiyeh (02:16:14) - Joshua Steinman (02:26:26) - Fil Aronshtein (02:35:27) - Aaron Slodov (02:44:03) - Sampriti Bhattacharyya (02:51:19) - Jared Madfes (03:01:36) - Qasar Younis (03:15:13) - Justin Fishner-Wolfson (03:23:43) - Cornelius Schmitt (03:28:53) - Ryan Peterson (03:41:47) - Augustus Doricko (03:48:49) - JC Btaiche (03:55:35) - Erik Torenberg

You're watching TBPN. It is Wednesday, April 30th, 2020. We are live from the Temple of Technology, the Fortress of Finance, the Capital of Capital. We're here with Zach White from 8VC at the Hill and Valley Forum, 2025. In the Capitol building. We're in the literal capital, which is great. We're normally in the Capitol of Capital. Today we're in the Capital of America.

Many people call this the Capitol of America because it is. It is. It is. We are here with Zach. Can you introduce yourself? What do you do? What's your takeaway from Hillen Valley so far? So my name is Zach White. I work at a fund called 8BC. We invest in everything from defense to biotech, health care. I spent a lot of time doing defense stuff. Yep. And the Hillen Valley has been a crazy vibe so far. We had Hamas protesters. Oh, yeah. We've had, you know, a variety

of different things happening here. So it's been great. Talk about the difference between this year's Hill and Valley versus the last, you know, a couple years. From our understanding, it's been, you know, almost a order of magnitude more people here. Yeah, I think there's like 10x people here. There's like random influencers here, which is awesome. We have people wrapping Teflin. Like it's, it's an amazing vibe.

It's like Coachella for, you know, people with G550s. Yeah, yeah, I'm sure the tarmacs are absolutely stacked right now. Have you listened to any of those speeches yet? Is there anyone that you're excited to hear? Who do you think is the best, like, pitch for an actual concrete plan. Because there's a lot of people that are just like, we want better communication between tech and DC,

but then there's other people that come with concrete things. We need to fund this. Yeah. I mean, I think Jensen, he was talking about how we need to just be like onshoreing all of these like fabs and stuff. And, you know,

everybody wants to be in and, like, in is crazy around Jensen. Yeah. So, you know, I think that he has like a really good plan on like what we need to do to make sure that we're not relying on China for all this stuff.

Yeah, yeah. He was doing, great and then Brian Schimp also he killed it at Anderil you know there's um there's a lot of stuff that they're doing right now and it's just really exciting to see yeah building the arsenal right that is the most reindustrialized pilled project right now there's like a bunch of generals here and stuff yeah and they have the you know an actual factory not just hype videos right it's going out um i think it was cool to hear from jensen personally i mean we've seen these headlines around nVIDia's investment in the United States. And our big question historically has been, you know, how much

of that is like really real. And it seems like he is, you know, extremely. Yeah, I have a few questions for Jensen. We want to follow up with him is like, is he a customer of reindustrialization? Or is he truly a reindustrializer? Because Nvidia is an American company. They bab with TSMC. TSM now investing very heavily in America and Arizona. And we could see that go a lot further. In which case, I don't know why Jensen wouldn't want to buy chips from Arizona, TSM. That seems very logical. American Chips. Like, he's going to be very happy with that.

But is there something that he can do personally to bring back jobs or create more manufacturing infrastructure in America? I don't even know if he has the tools or needs to do that, but that was kind of interesting. Yeah, it's interesting how Foxconn is always doesn't seem to be in the conversation. It's so associated with China despite being a Taiwanese company. Totally, totally, totally. That they have the same incentive to, in many ways. We got to get the CEO Foxcon. Yeah, Terry.

Yeah, that'd be sick. I mean, I think he just needs to start pushing demand here. Sure. There's so much demand. And if he starts reshoring it here, all of a sudden, there's going to be a lot of work that people need to do here. Yeah. And I think that that's kind of just like what he was talking about at Hill and Valley today.

Yeah, the other line that stood out to me, he was like, some people, there's going to be new job creation. Some people are going to lose their jobs. And then everybody's job is going to change. So it's like, you know, basically embracing that change, I think, is important. Except, I don't know if you guys saw the, Mark Andreessen clip this morning. Apparently, VCs are the only things that stay. We've been saying this actually.

I mean, I think it's actually, the job of an investor is somewhat, somewhat in this, you know, I would actually compare it to, just to come to Mark's defense a little bit. I would compare it in some way to the job of a lawyer or a doctor where just because a computer can do something well, you still want a human to sort of like sign off on the investment and have responsibility. Yeah. Because it's just not as satisfying to sort of like fire. a, it's not as satisfying to fire a, you know, a robot as it is to say, like, you know,

you have, you had responsibility over the capital, you know, et cetera, et cetera. So the other big question I have is on the robotics side. I know you've done some AI investing. There's a big question in my mind. Obviously, we've scaled up on the pre-training side and these massive data centers have been built out. X-AI famously bought a ton of Nvidia chips. When does that start to happen with robotics companies?

because robots are generating a lot of data. At a certain point, you need to build the big transformer and you need to crunch all that data down. And I haven't seen any of the robotic companies. They're still early. And you see Boston Dynamics. You don't hear about the Boston Dynamics data center. You don't hear about the physical intelligence data center yet.

But it feels like it's coming. Jensen kind of put it as like a five-year timeline. I think anything that we can do to get more sightlines on how that grows is going to be really, really key to NVIDIA. Because everyone needs the second act. And NVIDIA is like the king of the second third. fourth act. It was scientific computing, then gaming, then AI, and robotics, I mean, after LLMs could be the thing that really drives like massive, massive GPU demand. What's your take?

Brett Adcock might be the guy here, but I actually, I really think that like you have to be like really talented at fundraising. You just need such an insane amount of capital. You need tens of billions of dollars to do this well. And so it's really going to come down to the people who can actually raise the money very well. And that's like a very small handful of people. Maybe Adam Newman could do it. Maybe Brett Adcock. I don't know who else. But I was, I was kind of, I was hoping for a surprise Elon appearance today. I don't know if it's, I don't know if it's happening, but, uh, it's probably around here somewhere. He's probably close by, yeah, he's probably proximate to where we are right now. We should see he'll pop in.

Yeah, that makes sense. Um, what, what else is top of mind for you, uh, this week? I know, uh, in many ways, eight has placed so many bets in this sort of broad category that's relevant to where we are today that I, I imagine a lot of it's just kind of like, you know, being a part of this, watching it play out. Um, Where do you, where do you, anything specific you're hoping to learn from today? I don't know. I just think that like this was like this weird heretical space for so long. And now you see like hundreds of people here all just like sort of reveling in the fact that, you know, it's cool to do this now. I'm just kind of like taking it all in and I don't know.

Joe from our fund has been doing this for so long and he always has this like pithy thing where it's like now this is the cool thing. What's the next sort of contrarian thing to do? I don't know. It doesn't seem that contrarian anymore, which is like really. interesting. We see people who are doing all sorts of things, you know, five years ago that are now here doing defense. Is there more like practical, like tactics that you can do as a founder in an event like this? Maybe not just looking to get a feel for the vibe of DC, but actually understand, okay, there are dollars going towards this. We can make this happen. We can go after this pool of

capital. Is this a place where you can learn that? Is that a reasonable strategy? I think this is something that you should have like done some pre-training yourself and learned a little bit about like who are the deal makers here who are the people's with the pools of money where the programs are records like who are the guys and they're all walking around here right now and so you should have basically done your homework before and walk up to the people that are actually in control of where this money's coming from well we got Dave Freedberg coming in for a couple minutes thank you Zach nice to see you guys congratulations thank you guys great to have you on Dave welcome to the show let's hear it for Dave Friedberg we will

We're on a We're on a mission to get every single all-in podcast host on the show. How many have you had? You're the first. You're the first. Might be the last. Let's see how it goes. We're on camera here.

Yeah, we're on camera here, there, everywhere. We are live. What's your audience like right now, anything? How many people are?

Probably a few thousand growing. It grows over time. The more longer we stream, the more people flow in. Yeah. Yeah, yeah. You mean the live stream this very moment.

Yeah, probably a few thousand. Same in the thousands. But now that you're here, it's probably going to 10x, maybe 100 acts. I'd go to 120. Yeah. Yeah. That'd be awesome.

What are you talking about today? So it's the same topic for everyone. Okay. America leadership. Yeah. America strength. Yeah. China bad.

America good. America good. I like this one. Technology reigns supreme. Yes. We must win. Yes. So that is the topic.

Yeah. Every one of the topics is I think worded a little bit differently, but they all have the same. end up in the same spot. The same spot. Can you talk a little bit about O'HOLO and how you interact with the government? Because it's very different than what we normally hear with like, DoD, I got to get a program of record. The government's going to buy my stuff. But it does seem like it's important for you to interface the government in some way.

What does that look like for you? The seed industry has three regulators. It's the USDA, the EPA and the FDA. So there are regulators, regulatory frameworks and bodies in those. agencies and it's a pretty well kind of tried and true, but there's not a lot of procurement. You're not servicing the government. So DOD is very different. There's a massive industry here that services the government, but like a lot of other industries, agriculture is regulated to some extent. It is regulated. So there are regulators that we deal with, but we're not building

a business selling into the government and supporting government action. Are we over-regulated? Are we under-regulated? Everything's over-regulated. That is a matter of fact. I was talking with someone last night who I dinner with who works in the government about his observations coming in to the government and just how insane it is. We were talking about why that is. And I think like every organization has a fundamental incentive to grow from a couple of different points. You as an individual start out as an individual contributor in a company. Then you get promoted to be a manager. Now you're managing two or three people. So your career progression ultimately is I want to manage 20 people. I want to manage a department. Totally, totally. So when you have a manager,

that incentive model within any organization, whether it's a school, administrative bureaucracy, or a startup, or the government, there's an incentive for people to want to get more resources. So every year, everyone says, not what can I do less this year, everyone says, how can I do more this year? And the answer is always, I need more people, I need more budget. So the natural flow of any organization, non-profit, school, government, company, over time, get more money, grow, add more people, and ultimately, you end up seeing all of these things that don't necessarily map to the mission of the organization, but they're created to meet those incentive models. So in the government, we have a lot of regulatory overhead, like the guy I was talking with,

he's like, I cannot believe the regulatory processes that we've created for no reason. It's just stuff that came out of the blue. So this is true in energy. It's true in agriculture. It's true in drug testing. It's true in so many different markets. that I think it's starting to become apparent to a lot of these outsiders who are now stepping into the government that there's an opportunity. Now, last year, the important point that there was a Supreme Court case where they struck down what's called the Chevron doctrine.

And the Chevron doctrine basically vested authority to the agencies to regulate their industry however they see fit. Meaning the courts always said, hey, whatever the agency says is the way we need to regulate, we're going to rely on that. And that was the Chevron case from years ago. And what they ended up saying is like, no, that's actually not true. That agency does not have legal authority to just regulate everything however they want. They have to have a law passed. Congress has to pass a law that says these are the regulations that need to be enforced. And if that law doesn't exist, the agency can't just make up regulations, regulatory process.

So what we're seeing now is a lot of attempts and it's going to all go to court and there's going to be years of court battles of attempts to unwind and deregulate. And as they do that, they're going to cut people, they're going to change the rules. that's going to lead to people that are regulatory capture people saying, hey, wait, those regulations are awesome, we need them, or we got to keep them in place, and then that's all going to get adjudicated. And hopefully that Supreme Court decision is referenced and holds up as this goes forward.

So I think deregulation is a big theme. It's going to take a while. It's going to take a while to work through the courts, sort of like all the Doge actions. They're all going to go to court. And you believe that's a trend that we can see carry out across admins? Do you think it's a decade plus long trend, or is it going to be sort of oscillating back and forth?

I think what happens is it's such a sharp tack right now. Yeah. My personal belief is that the response to this is a sharp tack towards more socialism, bigger government, more kind of principles of everyone working for and living off the government. And I think that what we're going to end up seeing in this midterm cycle is candidates and policy proposals

that look like they're diametrically opposed because that's how you're going to get elected because people are going to be pissed off about how quick these changes were, how quick these actions were, how bad they're going. So the storyline will be, let's do the opposite. Let's put everyone back in. Let's spend more money.

Let's do blah, blah, blah, blah. And so I worry a lot that this is actually going to be now a flip-flop back the other way. There's so many people in Washington. The American people are going to decide, yeah. There's so many people in Washington today that have lost their jobs in the last three months. And I don't think they're going anywhere, right?

There's just sort of like, you know, circling around in many ways. Find the next thing. If you've seen all the homes listed on Zillow and Roe's crazy? It's crazy. There's like a million homes. The prices are down like 30%. There's a lot of talk, especially with the Maha movement of like comparisons to Europe, comparisons to Japan.

On the agriculture side, are there any other countries that you look to as examples for what America should be doing? Or are we already kind of like the least bad regulatory? regime for agriculture? So there's a couple of aspects to that. One is the ingredient supply chain and food. Where a lot of stuff is being addressed and talked about and there's issues there. And that's independent, I would say, of agriculture.

So there's a lot of technology and innovation happening and needs to happen in agriculture to grow things more efficiently. That's the work we do at O'Halo, for example. And we have these incredible tools that didn't, exist using AI to make predictions and take actions in the field and so on and so forth. So the U.S. today is the most advanced agriculture technology adopted market, but we're still very far behind its potential. And when it comes to food supply chains, yeah, that's where things are. Okay, great. I'm going to go on stage. We'll see you guys. Perfect. We'll talk to you soon.

Bye guys. Thanks for coming on. Enjoy your talk. Enjoy your talk. Is Keith out there? Yeah, yeah. Jacob can come on. We'd love to have you. Jacob, you got five minutes. You have a bit? Sit down. We're here with the man himself. The man who organized Hill and Valley and has championed and grown it by a thousand acts, I think. It's been fantastic to watch. Last year I was here, I was able to find a seat. Now it's standing room only.

What has it been like growing this? Can you give us kind of the general overview of what the mission and goals are for Hill and Valley? So the Hill and Valley was always designed to be a bipartisan. bi-coastal alliance between technologists and policymakers. On the basic premise that builders and policymakers are both in the business of building the future, they just use different tools to do it. Builders use the laws of science and nature, and policymakers use the laws of man. And ultimately, it was very clear through conversations with Dalyan Christian

that there was a huge amount of distrust between Silicon Valley and Capitol Hill. But also there was this cliche that had taken home. hold on Capitol Hill that our best and brightest people were focused on advertising technology, not building paradigm shifting technologies. And so ultimately, it was clear that from the vantage point of the tech industry, we actually as a country do have a really deep ecosystem of builders working to solve really hard problems. And so we thought it was incredibly important to actually bring them to Washington, give them the attention that they need so that policymakers.

actually knew this existed, but also thought of them as a toolkit to solve some of our hardest national problems. That's great. How does it feel being here today? Everybody senses that you guys 10x year over year. Does it feel that way? And I know there's like significantly more demand. I heard a rumor about the waiting list being, you know, well, well beyond probably even like the actual people here. What is Hill and Valley turn into over time? It's really interesting because, you know, way, I think the success of the Hill and Valley Forum actually reflects a lot of the Peter Tealisms about, you know, high-growth startups where at first, you know, it's an invention that you can't really give a name to because if you're really going from zero to one, it's something

that by definition doesn't really exist. And then you start out with something that it's a small community that's really hyped up about it. And all of those principles have actually applied to the Hillen Valley Forum. I mean, we started out, and it was kind of this opaque dinner that was totally behind closed doors, and we were initially planning four tables of 10 people. It ended up being 100 people, and it just, the growth has actually been exponential. Now you have random live streamers here. And you know you've made it when you draw the pro Hamas crowd. Yeah, totally. Next year, the goal is Code Pink. I'm surprised they got in. It was remarkable. They impersonated press badges. Impersonating a journalist. Well, we,

We impersonate in some way. We do our best journalist impression. I know you're waiting for confirmation so you can't talk about much else. Is there anything else that folks should be aware of or take away from Hill and Valley other than, I guess, in terms of like what the audience is getting out of this, do you have any advice for founders who are in attendance, anyone who's watching online? What is the best way to engage? I think it's really inspiring to see so many bright,

talented people actually make the effort of flying across the country to come here and show up. You know, they say there's the old saying that so much about life is about showing up, especially in politics. Yeah, totally. And the fact that people actually spent the money, took the time to come here and engage in these policy conversations really does make an impact. And there isn't a single year where we've had the Hill and Valley Forum where there hasn't been legislation that's actually come out as a direct result of.

people having conversations here. So it's gratifying to see people show up, but it's also really inspiring to see people talking about reindustrialization this year. This has been the plague of our country is that we deindustrialized 20 years ago. And it's inspiring to see so many bright people working hard to reverse that. Yeah, cool. Well, we'll let you get back to it. I'm sure you have a million more panels to host and hands to shake. But we'd love to have you back. Thanks for the next Yeah, look forward to doing this again. Fantastic. Cheers.

Cheers. Thanks for doing this. You want to do this now? Zat, can you come in 15? Are you good in 15 from now? 10 minutes. Yeah, let's do 10 with Keith and then 10 with Zach. 10 with Keith and then we'll have you on.

Is that great? Yeah, Keith, come on. Sweet. Welcome. Hey, how are you? What's going on? I love this live studio. Yes, yes, yes.

We are lives, but we're very fortunate to be graced by someone who's not going from confirmation and maybe can give us a little more hot takes, you know? Oh, yeah. First question. Do we need a Department of Government Efficiency for confirmation hearings? Oh, yeah. They seem like they're going slow. Absolutely.

You know, I think this should be simplified at some point, which is basically the president should nominate you for the Constitution and the Senate should provide advice and consent, and we don't need too many other steps in the process. But that said, you know, there's lots of room improvements in the government. First, saving money is probably more important. Yeah, yeah. Making it more attractive for talented people, as we talked about,

to serve and Doge is setting. a good example for this is being a magnet for talent. The best people in America want to improve society through the government would be great. Those are much more fundamental. So there's details that can be improved at the margin, but I wouldn't confuse the details with the strategy. Yeah. Are you doing more investing in companies that touch the government now?

Because this feels like Hill and Valley is like the floodgates are open. DC's kind of open for business in some ways, willing to do business with startups. We've seen success with the big defense tech companies. But now we're seeing energy and agriculture and a lot of kind of like hard tech companies or hard tech adjacent. Yeah, I mean, the big issue is it's a feel, you know, being here, nothing about investing in these categories feels contrarian. Any more. No, no, exactly. But it was for a long time.

Well, if you look at like the hot sectors, AI still is the most, you know, over-over-duty founders here. And defense tech is the second. Yes, yes, yes. And so I think that that is a structural problem. I don't think, I agree more with Delian's comments about. that there's not going to be many successful defense companies. I think the one thing that is a positive change and is structural and, you know, can improve the odds of success for many founders and entrepreneurs is

moving into federal revenue, earlier than usual. So many companies have historically had a federal revenue arm. They may not talk about as much publicly for variety of reasons, but usually that comes after significant commercial success. You might see the sequencing change. I mean, the government runs on Microsoft often. Scale a scale.

Scale AI, for sure. Federal revenue, it has federal revenue, that's meaning Varda, significant federal revenue early in the trajectory. So that may be more normal and more common. Interesting. But I don't think government only revenue is gonna lead to a lot of successful companies except for very, very small sliver.

And so we as a fund are not really investing very actively in government-oriented solutions. We do have, I just did make a defense-oriented technology investment, but that's like an outlier. Yeah, yeah. So we have lots of companies that have meaningful federal revenue and continue to scale. And this feels like a category, last time we had you on the show, or maybe it was the first time, you talked about how most, like a lot of people just shouldn't be like, oh, I want to be a founder,

I'm going to start a company. They should go work for a great company. And if you're trying to, if you're excited about spaces that are going to require federal funding early, you probably shouldn't start that right, you know, when you're 20 years old, maybe, unless you're, you know, truly one of one. I understand the sales process in the federal government, which is different than the sales process in a commercial environment, and there's probably a limited,

there's probably more scarcity on quality salespeople that can sell successfully to the federal government. Yeah. And maybe there's 40 of them. And so unless you have an angle to be able to attract one of those 40, so do you have a better product that the salespeople think, oh my God, I can sell this? Yeah, yeah.

The best way to attract salespeople is make their life easy. I've got something cool differentiated and I know the buyer. Second, you have a missionary zeal that's off the charts. Without the ability to attract one of the top 40 people who can sell into, let's say, defense-oriented stuff, three-letter agency stuff, I think it's really dangerous. So I think that's more critical sometimes than the technical breakthrough. You know, the government is decades behind as Saffir-Cas is talking about, like, you know, Oracle started serving CIA and NSA.

There are examples like that, but there's very few. And so, you know, one every decade. Yeah. So that seems to me to be a bad strategy, unless you have a reason to believe you're the once every decade, you know, company. And that should be part of your initial seed deck. Yeah. Talk about what you're talking about today. You're doing a talk with Eric Lyman, correct?

Yeah. We just finished. Eric and I were on stage with Senator Ernst from Iowa talking about how we can make the federal government's expenses. Yeah. You know, more streamlined using programmatic expense reporting like that RAMB offers the commercial sector. Commercial products, commercial customers of RAMP saved between 5% and 15% on expenses. And the federal government probably would be able to save more. So there's 4.5 million cardholders in the federal government.

There's only 2.something million employees. So there's clearly a lot of waste, fraud, and abuse. The senator studied a bunch of examples of 80,000 charges on federal credit cards at Kempark. casinos, clearly most of those 80,000 charges are not doing official business on behalf of the federal government. To hopefully, you know, that's the easy savings. It doesn't require cutting programs that people care about. It doesn't require this big controversial debate.

But every dollar we save was back to the American family and they can spend it on raising a family successfully. Secondly, if we can cut 1% from the federal budget, just 1%. The Federal Reserve can lower interest rates by 1% safely and allow people to afford mortgages, allow the economy to grow without triggering inflation. So it's a very big deal to save one or two percent. I think a lot of people miss that. Do you have any good stories from visits to Washington

during the PayPal days? It was different time. It was different. I was actually just mentioning, I don't know if I'd been back in the Capitol before today since 2003. Wow. When I was lobbying.

That means we're officially back. America was back. But yeah, we spent a lot of time to energy. I spent a lot of personal time to energy. using the federal government to help protect payball from a lot of people that didn't like us. He's an extra card, eBay,

and then later the Treasury Department, post 9-11, the Treasury Department wanted to issue these regs that would have imposed significant burdens on consumers and small businesses. And we were able, using a lot of connections on the Hill and messaging about not interfering with e-commerce

to put a lot of pressure back on the Treasury to draft much more reasonable, regulations. They really wanted everybody to put in their social security in the number on every transaction, which is crazy. Intense. Last question, Jensen was saying SF is back because of AI. What's your take? Well, he stole my line. My version of the line was slightly narrower, but you obviously can expand it. Mine was Open AI saved SF. Without open AI success, SF would be dead and still dying.

You get another power law company and that drives a ton of innovation. And you know, that people who are favorable to SF would say, oh, that, well, that happens every 10 or 20 years. The Internet saved SF too. Yeah, yeah. You know, when I graduated Stanford before the Internet, SF was like a 12th to 15th ranked city in the United States. Wow.

Nobody, there was no business going on. Oakland was actually a better commercial city. Oakland, no way. The only people who stayed in SF to work at, like, Bain or BCG were like for lifestyle reason. Totally. It was a dead city. Then the internet revolution happened.

And although a lot of the best internet companies, the best technology government, ways were in Palo Alto and Mountain View and Sunnyvale. There was enough spillover at SF to sort of save the city. Well, it was just cheaper in some ways, right? Yeah, no, and well, cheaper and you need large floor plan, like a floor plan, floor, floor print offices, like, and there's, doesn't exist in the city. The city's culture was really never great for building companies. Like, when we considered moving the PayPal office to SF in 2001, Peter asked this

question, Peter Taylor asked a question of, name a successful, company. And the largest S.F company at the time was like CNAC or something incredibly mediocre. So we didn't. We stayed. We moved to Mountain View. Interesting. Wow. Well, thanks so much for joining. This is fantastic. Great day. Great to see you. And we'll see you out. Enjoy the rest of the conference. Cheers. Ben, do we need to shift the microphone a little bit? Have Zach maybe sit at the end of the table point towards us. Yeah, we're going to shift around. Yeah. We're going to go. Yeah. But come on in. Welcome. Repeat guest. Yeah. We're going to go right here.

that you're kind of aiming at us right here. So just kind of sit right here. Thank you. And bring into the mic as much as possible. Look at this. Doing your own AV setup. Yeah. I'm going to get two of the best in the business here.

Yeah. But, you know, it helps when everyone's an individual contributor when you're running a startup, right? Totally. I've got to say getting into this room is the hottest ticket here. The line out your door is just like, impressive person after impressive person. Were you an early, like an individual contributor in the early days? At flat? Yeah.

Oh, yeah, of course. Yeah, who else would do the one. Yeah, exactly, exactly. So, yeah. Remember, fintech wasn't always, you know, one of the hottest categories. Yeah, yeah. The first, like, four years of the business

were me telling VCs, hey, financial services, we could innovate here. Like, this might be a thing. Yeah, yeah, yeah. 2016, someone came up with the word fintech and then finally cut on. It turns out. Crazy story from Keith, you wouldn't have heard,

but he said the last time he was in the Capitol building was in 2003 fighting for PayPal's life. Oh, my goodness. After 9-11, there was like a lot of regulation Bushback, yeah. But speaking of financial regulation, is like everyone here is obviously, you know, super aware of what's going on with the DOD. There's a lot of DOD budgets and every defense tech company is looking for their next program of record or SBIR. What is the mood in Washington around financial regulations? Are there, is there low-hanging fruit? Is there a

meme that everyone talks about? Are people talking about it enough? It's a good question. Right now there's probably three things that are top of mind for everybody. First is the Genius Act, which is the Crypto Stable Coin regulation. That is, as far as I can tell, moving. I don't know the day-to-day details of that one. Second is there's Section 1033 of Dodd-Frank, this is the Open Banking Regulation, that was put into place under the last administration. This administration, we'll see what happens, but there's some talk of making a few modifications to it

before it fully goes live. And then the third big thing is the conversation somewhat kicked off by Doge, somewhat not about payments modernization. So can we move the payment system of the U.S. to not send out paper checks to everybody in all these places with old addresses and so on and so forth

that actually make it a little more modern? Do you have any type of estimate of how many of those paper checks just never, ever even get, you know, have basically been paid but just sort of sit in the ether? Well, they don't get cash. That's money back in the taxpayer. Maybe we don't want to move off paper.

This is free money for the taxpayer. You've got to give you mind the cost in the system. You have people that are writing the check to you. People that are mailing the checks. It probably costs you know $5 to $10 to send out the check to each person. Then you get it, you bring it to the bank because of the bank $5 or $10 to actually cash the check. So getting that out of the system would be in that way of the thing. Plus getting people payments a little faster is not a bad thing.

Talk about the difference in your experience this week versus maybe your first trip to D.C. for Plaid. For Platt ever. What was your first trip ever? I think it must have been seven years since the first trip here. We were lucky. We hired our first head of business development, had worked in the previous administration. At some point she said, hey, Zach, we should go to D.C. and meet some people and talk about it.

There's some things that are relevant to Plaid. We've known that this open banking rule was going to come eventually. So even seven years ago, you were thinking about this new open banking. Oh, yeah. I mean, the concept of Plaid has always been to kind of build open banking for the world, to build infrastructure that enables people to link their bank accounts really easily. We've, of course, created a ton of stuff on top of the network that came to that later. But we knew that this regulation was a thing that would be written at some point.

So we started spending time here. We hired a policy team in D.C. I think we probably still have four or five people that are just based in D.C. full-time. And right now, just the conversation is totally different. The size of this conference, the number of people that are here, the number of other tech CEOs that I'm seeing in DC, even just casually, I was here about a month ago and was walking into a building and out of the building was walking a kind of big public company CEO. Yeah, nice. Yeah. Say hello. It's like that run it would not have happened seven or eight years ago. Yeah. So it is kind of a testament to, in some sense, Silicon Valley for people being willing to come out here and have these conversations. in a big sense it's a testament to the administration

and to a lot of the people that have put together forums like this to bring the two sides together. So it's been an awesome event so far. That's awesome. Well, you've got to get to your next panel, I think. I do, yes. It's been great having you stop on. Thank you, so much for shopping on.

We'll see you out on the floor later. Yeah, see you soon. Let's bring in Zach. You want to come on? Who else is out there? Welcome to the stream. Let's play this song. Let's play a sound effect.

A sound effect, a song. Like I'm on morning radio. I'll scoot in as much as possible. We want to get your mouth right up close to that. All right. You have me all the way on it. There we go. Thanks for having me, guys.

Can you introduce yourself? By the way, I just got to say you look very comfortable in a suit. Yeah. That's a horrible insult. I appreciate it nonetheless. I'm not calling you a suit. No, I appreciate it. It looks like they haven't put it on a long time.

That's what Will was saying. Wilmanitis on the stream yesterday was saying, you know, it's Hill and Valley when you can't, when you don't need to put a new business car. because they're still in there for the last hill invalid. That's the standard of the tech person. I will say when I first moved to D.C., I'm a lobbyist. Short version is I'm a lobbyist.

I was a venture capitalist for a long time, general catalyst, the emergence capital before that. I work here now. I lead the tech and venture capital practice of a lobbying firm. And I also hang out of the think tank called FAI, the Foundation of American Innovation, where I'm a senior fellow too. That's the short version. Yeah, yeah, yeah.

The long version, it is a suit. I am a suit. You are a suit. I wear a suit now. It comes out. I have ties. You're still a technology brother. I am at my heart, a technology brother.

This feels like a safe space for suits, to be honest. This feels like you guys rock a good suit. We wear suits every day. You guys brought back suits, actually. On the lobbying front, you know, Lulu's talked about going direct in the comms world. Going to an event like Hill and Valley feels like going direct for lobbying. I agree. Talk about the compliments or substitutes of founder-led lobbying, essentially.

Well, the best founders are the ones who are building the relationships themselves. The truth is, by the way, I guess I'm talking myself out of a job in some ways. But the truth is if you outsource, if you are building in a space that is key to regulatory work and you outsource your regulatory relationships, your government relationships to somebody else, you're not doing your job. I mean, think about it this way. If you're raising money, you wouldn't hire a banker if you're good, frankly. You wouldn't hire a banker to go out and organize your fundraise for you, right?

But if you come to D.C. and your attitude is great, I'll have my lobbyists do everything. I don't need to go meet these people. That's a problem. And in fact, the biggest people, do you guys have Blake on the show from Boom? Has he been on? Not yet. Not yet. One of these days, though.

Yeah, yeah. He's somewhere back there. But Blake's on a great job of this, right? He came in here. Five, seven years ago, the idea of Supersonic Flight was totally outside the Overton window. But he's done such a good job getting into the D.C. establishment. And I actually say that as a compliment, not an insult. So to put this all in venture terms, the job of a lobbyist is to make great intros.

much like a VC does and then back channel. That's exactly right. It's like part shrink, part Ari Emanuel, right? You sort of do the like, you're a little bit of an agent selling somebody downstream. You're a little bit of a shrink because they complain bitterly about government. They've every reason to do so. So you hear all of that out

too. And then your job is to help actually in some ways, I think about it as you are teaching people in government who don't know about what you do. You're an educator to them because it's not that they don't care or they don't have any whatever. You're just not high enough in the priorities. stack and they don't have the background to understand it.

I mean, I met a congressman a couple of years ago who was like, thanks for telling me about and or. Yeah, exactly. Exactly. How do you not know about that company? How do you feel is new? Is the average, is part of the best lobbyists are selective on who they work with? Oh, hugely.

You're not going to be successful if you're not a solid underlying sort of company. How much are politicians reading into who a company is working with? on the lobbying front in terms of understanding the quality of the underlying sort of like, you know, potential. It's a really good question. The best lobbyists are tremendously demand constrained, right? So you're, sorry, supply constraint. Which I mean like an infinite amount of people more who want to work with those lobbyists

and they have room to work with. The compliment that I love to get is when somebody says to us, hey, you don't feel like other lobbyists because when you actually you come in and you bring the client with you, we actually have a real relationship with them at the end of the day. And it's not just, oh, I've come in and I've done my briefing book and I've given you, your one pager, and so on and so forth. So there is a step in primitore. You're totally correct. And because the lobbyists who are smart, proactively think about organizing the opportunity, right? Like, I had dinner with two members. They can't be. They're like, great, I would love to meet folks in the Valley. I don't know anybody in tech.

Is there a holy trinity of lobbying firms? You know, we talk about McKinsey, Bain, B.CG. We talk about Goldman, Morgan Stanley. It's a really good question. Sequoia, Andrewson, Founders Fund. Yeah. It's only a Trinity. It's more of a single firm, and it's mine, obviously. Yeah, there's not really much of a long tail. You have a coupon code we can share? Yeah, you can tell them TBPN send you. Yeah, exactly.

We want our cut. Give us 10% of the ongoing revenues. Oh, 10% of ongoing revenue. I mean, Athletic Greens does that all day long. Athletic Greens does that? What's the average order size of athletic greens? Because I bet you it's a little lower than a lobbying contract. No, but that's the media of the Athletic Greens deal.

You use the coupon code and you get paid every month. That's a nice plug, by the way. That was very well done. Very, very unique. Do you guys have specific? sectors that you're most oriented around or things that you avoid? We do a lot of tech and science. As a firm, we do a lot of tech and science.

I lead the tech component of what we do. We avoid things that don't feel values aligned. So there are some folks in the world who are doing interesting work, compelling work. Cambling, yes. Sin, vice are probably outside of the scope for us a little bit. Anything with a foreign government is outside of the scope for us a little bit. But when it comes to things that are around American dominance, around American. and dynamism around global resilience when America comes first.

That's the sort of stuff we focus on. But lobbying is pretty fragmented. The truth is it's not a great comp for the Bain-Bakenzie BCG. Because there's a huge, like anybody, any Schmoe who has one rich friend can say, I'm a lobbyist now, right? Because they can get one contract and put up a shingle and say, okay, great, I'm going to service as one person. It's hard to have great 50, 100, 200 clients and do that at a really high caliber way.

How damaging can the wrong lobbyist be? I imagine it can kill your company. Yeah, yeah. Yeah, well, they're your representative. Like, you shouldn't work with somebody if you don't feel comfortable with them telling your story when you're not around. Yeah. Because part of the gig is when you guys go back to SF or you go back to L.A. They're the ones that are talking about.

Yeah, yeah, yeah, yeah, talking you up all over town. That's right. That's right. Well, we're in the market. So. Yeah, yeah. Yeah. We're trying to, we're trying to put really, really harsh bans, ideally, but maybe tariffs on foreign podcasts.

Yeah, I think that's great. That's great. And we want significant subsidies for American Made podcast. That's right. You guys should be getting a tax break. We should have a tax break. We actually want it to cost a million dollars a year to host a podcast. Yes.

Barriers to engine. We have a license. It's very dangerous. You guys are familiar with a taxi medallion system. It's a very similar for podcasts. Podcast safety. Let's play them off with the sound. Thanks for having me, boys.

I appreciate it. Thank you for coming on the show. Thank you for having me. This has been great. Hey, have fun out there. Would you mind grabbing Mike Solana? I think he's right out there if he can. Great having you on, Zach.

The sound board is a work in production. We are actively looping the short. But hopefully. No, no, no. Mike Salana is coming into the street. Mike Salana. Welcome to the studio, the Temple of Technology. What's up, guys?

We got the sound effects. We're on cameras. We are live. We are live. We are lives. What's up, guys? Thank you so much for coming on the show. Great to have you on.

What's been your reaction? And also, I'd love to know, like, I know you're writing a piece. I'm sure it's churning in your head. But like, what is the, what is the angle? What is the interesting thread to pull on here? I mean, I don't know if I'm supposed to say this. Okay, yeah. The thing that I thought was the funniest was getting out of Union Station.

The first thing I see are a bunch of sort of failed bureaucrats and shirts that say federal workers matter. Oh, no. It's just the overall circus vibe of, of DC, I think is funny. Yeah. And then I'm paging through the Washington Post this morning. It's just like horrifying headline after horrifying headline in D.C. They're talking about D.C. They're like, things are tense.

People are losing their minds. No one is at ease. And it's just like I'm in this beautiful hotel overlooking the White House. And there are all these people going to work. They're laughing and drinking coffee. People are happy. I don't know what they're talking. I don't like what you're reading is not what I'm experiencing in D.C.

Every time I'm here, I'm just like, did I actually move home? Well, it's a momentum thing. The people at this event feel like they have real momentum, an opportunity right now. And then if you just lost the job you had for 20 years, then obviously they're feeling, they're not accelerating, right? I don't know,

but I hate to be Tom Freeman about it. But I was in a car today, and the driver was like, things change here. These people have to, we're looking at these protesters. We're outside, and he's like,

they've got to get over it. Yeah, they got to get over it. That's what DC is. I mean, we're reflecting on this with the tariffs. Like, there's all these crazy headlines about,

like, the global economy is destroyed. And yet, like, the stock market's kind of flat this year. You know, it's not really like COVID-level, We'll see after tech earnings. We'll see. We'll see what happens with the earnings tonight.

I mean, Nick Zucker is predicting a recession, 70% chance. Yeah. But even then we had a recession a couple years ago. It was very mild. Like, we seem to be better than ever at just maintaining the status quo. Like, America is somewhat Lindy in this case. Yeah, I just got to decide what you want to do and work on that. And you can't truly, the reason I brought up the noise was because also with those

federal workers, they were just standing there. Yeah, yeah. But then Jack Posovich gets out there and starts a fight with them. And everyone's like, D.C.'s in chaos. I saw it's not that bad. It's a lot of theater. Everything's fine. You gotta just ignore the noise and focus on your own shit.

Yeah. And that's what I'm trying to do. It just so happens that the shit that I focus on is noise. That's my art. Running at the noise. The noise is my signal. The noise is my muse. Is there a good metaphor for DC?

Is it like, you know, lunchroom tables in middle school or something? Like, I feel like it's very clicky, maybe even clickier than San Francisco Tech. I don't know. I'm trying to like understand. What's the mindset of DC?

I think it's a little more sociopathic. I think it's sort of like all the people care about here is power. And they're willing to happily head over to the other table if they're in power, generally speaking. And then you have the exceptions, but mostly industry town. This is why I felt like kind of out of my element in DC because in tech, there's still a lot of like power games. There's a lot of status games. And you can be like a famous founder. But at the same time, there is the concept of locking in and actually going and building something.

but in D.C., there's nothing really to build. No. There's no, like, oh, yeah, this person was heads down for six years and then produce, like, a beautiful piece of legislation. Like, that's not how it works. You're trying to make stuff happen, and sometimes that means a lot of dinners. Exactly, a lot of dinners.

Anyway, can you talk about kind of your, I mean, obviously you've been Silicon Valley forever? How has just the mood around Silicon Valley and Washington changed over your career? What was it like when you first got to Silicon Valley and how has it changed? Yeah, maybe talk about your first trip to D.C. too. Yeah, that'd be interesting to hear.

Ever? In the context of work. Or in the context of work and tech. Well, my first work trip to D.C. would have been, I wasn't in D.C. ever. We didn't do things here. Right? The first time I came out was for pirate wires.

Oh, no way. Because I was invited out by a congressman, and then I realized that, or maybe it was comfortably smug. That might have been the first time I came out. Effectively a congressman. And then I realized there were all these people here who were reading pirate wires

because they were interested in tech. Totally. interested in like the sort of tech center right maybe perspective or let's say heterodox perspective within tech. It's very different than what it was what 14 years ago. No one thought about government at all. In fact, it was considered like, I don't know, a red flag if you cared about government. Sure. Yeah. And then the business has changed and now, you know, the most exciting businesses, a lot of them are working with the government. Yeah. And you have to understand how it works. Yeah. And so there's a lot of excitement here and also

in Silicon Valley. Yeah, I always think that that's like an underrated thing. I mean, a lot of people in tech, kind of criticize media, tech media when they start talking about politics or whatever. But I think that's like incredibly valuable because it's very hard for DC to get the tech perspective. If it's not from us, it's from, you know, somebody else. Yeah, Caras Fisher, right? Are you, do you have that in the back of your mind when you're writing in terms of like the avatars that you're writing for, the messages that you want to send? Or is it just like, you're going to write and they're going to read. I just get on the page

and just let it rip. Like spit out what I'm thinking. That's great. And I hope it resonates. Yeah, yeah. It certainly has been. Yeah. So,

so I mean, coming out of this, are you trying to interview the politicians and get their perspective and kind of bring that back to Silicon Valley? Well, I'm here with one of my colleagues,

Blake, Blake. Yeah. It was a new writer at Pirouars. So she's doing a bunch of interviews right now and kind of sleuthing around she said, gathering facts for our takedown. Take down.

Hit peace and coming. Yeah, no, so she's just, she's exploring now. That's great. We'll probably collaborate on something. Cool, cool. The interesting thing is it does feel like, this is my experience, but it does feel like it's hill and valley, but there's not a ton, not as much overlap maybe as you would like, right? There's like a lot of people from the valley, a lot of people from the hill.

And like, technically we're in the same space, but like, it's like tech people. I mean, I just don't think they know how to talk to each other. Like, I think, even myself, and I know that, I know better, but I showed up today without a suit. And I rolled up, I didn't, I don't, I've been following the facts at all. I didn't even know where I was going. I did not know I was going to the Capitol building. I just have gotten used to just looking at my calendar and doing things. So I got here and I was like, oh, no, I cannot be back to us.

So I head back. But I, that's a cultural divide. Yeah. I've never had to wear a suit in San Francisco. I didn't even own a suit until a few years ago. I think I'd won for our LP meeting But that's it, that's it Today you're wearing Furentino label, is that correct?

You're right. Oh, there we go. Good friend of the show. Jack, you love him. Yeah, we love him. A true craftsman. He is, he is. Were you surprised at how much press was allowed

to come today? Oh yeah, we went to the press briefing yesterday. We saw your name tag there. There was like 30 people. We were too big. We were sitting there looking around. We were like, we are the fish out of water here. Yeah.

It's funny. I don't think so. I think that journalists are looking for things to write about. And there are a lot of people here that they would want to write about. My question was more like, obviously they would like to be here. Just because there's so many ways that you could spin what's going on.

I was just surprised that Delian and Jacob that they got the invite instead of saying, hey, no. Yeah, I think that broadly text relationship with the media is very different than it was five years ago. The war is over. And there are actually plenty of writers who are not unfair. Even in the New York, Teddy Schleifer, I just went out there.

Nice. That's a guy who's just reporting on wealth, and he reports what he sees in both directions. And I think that there are people who have integrity now. I think it's just the environment's different. They're going to be hit pieces, but you have to just read people's work and see who they are and what kind of interview they run

and then make an educated guess. Every once in a while Teddy shows up with the telephoto lens and goes TMZMO, outside of a party, but, you know, for most of the time, he's just writing, you know, good write-ups. Are you, obviously, you know, manufacturing, reindustrialization, defense tech are sort of, like, dominating the narrative here. Is there anybody that is kind of flying under the radar that you're, or any, like, industries specifically that you're, that you're seeing? Yeah, I feel like you've written a lot about, like, the sperm racing stuff and some of the,

like, the Zainer stuff is crazy. Yeah, where is the sperm race representation? Yeah, yeah, yeah. Infuriating. Yeah. Exactly. Yeah. Yeah. Maybe do we need a subsidy or do you need a tax on foreign? No, I think I was having a conversation yesterday, and what's actually interesting is they've really expanded beyond tech, or defense tech. Yeah.

There's a energy. There's a much broader interest in the technology industry now, which is pretty cool. People are open. Who was it? Oh, it was Delian. It was talking to me about how senators and congressmen were just really excited to even talk to ramp or something, which a few years ago was just not on their radar.

Totally. Yeah. Keith was saying there's about four. times more federal corporate cards than there are federal employees. And there was 80,000 charges at casinos, like last year or something like that. I mean, gambling is the most American thing in the world. Federal workers matter. Yes, yes, even if they're gambling.

It could have been team building activities. Yeah, yeah, yeah. Team building, you take them to the gambler. Yeah, yeah. Slots. Anyway. Slot. Yeah.

What's the difference? So what's next coming out of here? how do you think about covering this from the PirateWire's perspective? Is it just meeting people doing interviews downstream or is there supposed to be like a definitive write-up or new angle? You're just still on the hunt, right? I think we're still looking. I think probably a lot of people are going to do the just, here's what I saw,

Hill and Valley. Maybe what would be more interesting is to find some sort of meaningful interaction between someone in tech and someone in D.C. I completely agree. Yeah, yeah, yeah. there's all these big budgets and you see 150 billion in defense, but then you get down into like, okay, what is the actual mechanic of a seed stage or series A founder, like actually getting a $10 million contract? That's something that's really important.

Jacob was talking about this too. Every Hill and Valley so far there's been some policy or like some major sort of business activity that's come out of it. So it's clearly working. The question is like if we've 10x the size of Hill and Valley, are you going to get in order to 10x the output, right? Yeah. Yeah. I mean, last year's theme, yeah, last year's theme was TikTok. Have you been tracking that?

Do you have a TikTok take? Or have you evolved at all since last year? Shut it down. Shut it down. Shut it down. Don't even sell it? Shut it down. I don't even believe that you can sell it and have it still not be backdoored in some way

that I don't understand. But I also just think that we're in Trump era now and nothing matters. And the rules change every day. So it's like, why am I going to sit here and be like, the right policy for TikTok because we're not playing those rules anymore. It's a new set of rules. The rules are it's like Trump says some shit and writes executive orders and then a bunch of wizards and coats in D.C.

fight back with like their random pen shit. And it's like everyone is searching back to pass court cases for, I guess, justification for what they're doing. And it all is just to me quite chaotic, but also I don't care. My intention for this administration was to be calm while others were crazy.

Okay. And I am trying my best. to maintain the calmness through the storm. Yeah. It is a great time to be in media. Does it feel like it's the best time possible to be in tech media? Or is it like the war is over where the dog that caught the car?

Yeah, it depends on what kind of press you're doing. I think right now what's happening in the tech press is people are trying to figure out who they are in the context of a very different culture. Totally. And how they're supposed to navigate that. You see this sort of center left, like Atlantic type people

who have pivoted wildly, to just anti-Trump, anti-TECRO stuff. But more so than I would say your standard issue left it. Yeah. Like, I think there's like this strange thing that's happening where people are just trying to find a lane. Yeah, yeah, yeah. And I'm trying to be, I just want to take my time

and write the stories that matter to me. There's also that interesting development with the Ezra Klein, abundance thing. That feels like very near, but you're rolling your eyes. I roll. What's your abundance take? Because they just ripped it off of like your standard issue tech bro. from five years ago. Or, yeah, like, EAC or what about

anatomy of next? Like, I talked about all of these things. All of them. All those anecdotes came from you. In fact, Derek, the author, the co-author of that book, I saw at Founderspun for a charter city's conference years ago, many years ago,

which we hosted. But I would describe that as finesse. It's like, we took your best ideas, we rebranded them, and now we're selling it ourselves. Yeah. I mean, you incited. You just say it's inception.

I'm not saying they haven't, they've definitely successfully created something that they're now selling. The question is whether or not the conclusion is the right conclusion. Their whole thing is like, we've taken all of these ideas and we blame the fact that we don't have them on the people who created those ideas.

Yeah, yeah, yeah. And I think the reason that we don't have, for example, you know, housing in California is just the people who are in charge of the government in California. It's very simple. At what point do you expect tech's sort of, you know, basically

attention to shift more towards California given that it's the home of our industry. We've seen that in the Gary, and San Francisco's so back. Yeah, you know, the Gary Tans of the world, obviously kind of were, took a big stand now probably a couple years ago.

I would argue that he's suffered in some ways because of that, just given how much negative attention he's drawn locally. But at some point, tech seems so focused on Washington that at some point you're just going to look around your backyard. It'd be like, actually, we have some pretty big problems here.

I think a lot of people are, I think more people, I just recently slightly, I think more people are focused on local politics in San Francisco within our industry than any other point in life. I would say San Francisco is different than broadly in California though. Because we're in Southern California and I would say most of the people in the gundo, again,

have much more, partly as the nature of the industries. LA is a lost cause. I think it's just like, you're never going to save Los Angeles. We are saving Hollywood. We're bringing media to Hollywood. We're bringing media to the Hollywood. That's our big push. I think that your best bet is San Francisco.

I really think that's tactically that you have. That's the best chance you have at fixing anything. And if you could save even one city, maybe you could do something else. But I think that Gary actually has made a lot of progress. And I don't think it's hurt his brand. I think that it's, he's, I mean, people are asking for his help online. Totally.

I wasn't saying it's hurt his brand. I was just saying like acceleration of like death threats and like people saying that. Yeah, just frustration. Oh, yeah. Stuff like that. That's the. price to play, unfortunately. Yeah, it's kind of like raised the standard deviation of his experience.

Like he's had some really great experiences and then some really negative ones as opposed to just the anonymous VC who flies on the radar doesn't get tagged. Switching gears a little bit. Did you have a reaction to benchmark investing in Chinese AI? Did that feel? That was very contrarian in some ways. But I was trying to, I was personally trying to understand the decision of like, okay, Hill and Valley is happening next week.

We should invest in this company while TikTok is like, probably should be banned, maybe he's getting banned, maybe selling. I mean, if their job is just to make money, and they think that's going to make money, it's, there's a moral question about it, but then are we going to break down every single investment that everybody, I mean, what is, I don't know, this is a much longer conversation.

I guess I didn't feel the way that other people felt. I don't, I have a much bigger problem with what they did to Travis Kalanick than I do with their investment in a Chinese country. Are you, are you digging, in at all this idea that feels like there's a divide right now. It's like if you're a foundation model company, you want to tell people that we're in an AI war, an AI race, like we have to win the race. And that's a good narrative if you're needing to raise a lot of capital and sort of

solidify significance. The other side, and this is a real side, and this is actually Gurley's position, which is that we're not in it. The idea that you can win the AI war or race in this technology is not just going to disseminate anyways. And he believes it's flawed. In conversations that you've had this week, do you feel like, you know, everybody sort of understands we are in an AI race, we need to win it? Or do you have what, and kind of maybe what side are you on?

I don't think anybody knows anything. I think AI is so, like, we're waiting for a paradigm shift, and we're trying to all. make really firm predictions about what happens after the paradigm shift. Yeah. And so I think that all I kind of know is that it's obviously really powerful. It's obviously improving really fast. But if something is fundamentally changing society, then it's anyone's guess.

I don't think that we know if it's centralizing. I don't think we know if it's going to be decentralized. I don't think we know if it's a race. I actually just, I don't think we know. I think all that anybody knows is that it's powerful and everything else is just people. I don't know. I saw Tyler Cowan announced that we had. reached AGI the other day and I felt like, you're just saying shit.

Like, I don't, you don't, do you even believe that? Like, I don't think he believes that. Like, I think that, I think that people are just, I think that, yeah, I think that a lot of people are just saying shit. That's kind of how I feel about the Trump administration. Did you think there was an overreaction then over the weekend when, when 4-0 rolled out and it was just saying, like, Solana, like, you might be the goat, like a lot of, you know, like, you're one of the greatest, Blaisgate.

So, so, so the latest chat, GPT, 4. release, they fine-tuned it. Basically, any question you asked would be like, that is so brilliant. Mike, you are, you are one of the best writers of all time. Yeah, I am. I am. I was like, these just accurately reading the landscape. I felt different.

A plus. Yeah, yeah, keep it up. I love it. Well, then you got to call it back. But I do think there's a story there potentially for pirate wires around that. That was the first time I felt like a model could be dangerous where if somebody is having, you know, significant. Delusions of grandeur.

Delusions of grandeur. mental health issues, they think they're God, they think they're on some, you know, divine mission. It confirms all of that and says, yeah, you should go and try. And you're like, you know, if I went to you and I was like, Mike, you know, confidentially, like, I think that I'm God. Right. And I'm on this thing. You might be like, hey, Jordy, like, let's talk about it bit more. It's dialed this back. Why? Like, that's not quite right. That's not what I would do. That's not what I would. I would. Someone shows up and is like, like some old kind of guy and he looks at me and he says, I'm you from the future. Yeah.

I'm leaning in. I'm like, all right. Like, I'm listening. Like, prove it. I'm here. Give me the other. You said you were God. I'd be like, all right.

Like, do some God shit. Okay. Cool. That's amazing. All right. Well, thank you so much. We need you to do some reinforcement learning. Yeah.

Yeah. This is amazing. Dial it in. Thank you so much for coming on the show. Thanks for having me. Yeah, great time. We'd love to have you back. Looking sharp.

Glad you got your suit back. And there's more news and stuff. I'll see guys later. Have a great rest of you day. We'll talk soon. I, I texted Sean McGuire told him we are ready. Hopefully he can swing by.

In the meantime, why don't I give you a little, we should just literally read some, hey, how you doing? What's up? We are on air. You can feel free to introduce yourself. Sit down. Tell us about yourself. What's your story?

Who you are? What did you do? Michael Eisenberg, general partner at Olive, before that at Benchmark. Fantastic. Yeah. An original member of the Hill and Valley Forum. Really?

Yeah. For the very first one. Yeah. Four years ago. It was just a dinner in the library of Congress rotunda. Yeah. Was it better, was the dinner, you know, more intimate? Was it more, you know, what was your read on it then?

What's your read on it now? This is overwhelming. Yeah. Yeah, it's big. You know, for a guy like me, it's like super overwhelming. Yeah. You know, I used to be under the other side of the microphone. I'm my own podcast.

Oh, yeah. I interview other people. This is kind of fun. Yeah. It's fun. Yeah. Well, yeah, what are you trying to get out of the event? Are you specifically looking for founders

that you could potentially invest in here? I'm not. So we invest only in Israel. Okay. But you come to Hill and Valley, why? Because politics and intersection of geopolitics and technology is perhaps the most important issue of our time.

Got it. And where there's enormous opportunity. Maybe a little cap by the size of in general the defense establishment. The M&A side won't be as big as Google, Cisco, Microsoft. Sure. Yeah. So is that an angle here where you kind of act

as part of your value at as a vendor capitalist is a de facto lobbyist until they can, can afford a lobbyist where you're not a lobbyist i i want to be personally but you can make introductions i can make you know at the first hill and valley you know yeah at the first hill and valley you know senator cotton was here jdd vansson now the vice president of the united states was here i remember josh will here yeah and you know this is where people here i should be here i should be here in a minute you should have josh will find he's coming on in uh 20 minutes he's a great

guy yeah best you and i'll be together in teliv next week also uh oh is so we're having john mcguire jump on in just a minute he told us about how talpio has become a pie pipeline for great founders. Can you give us more insight there? Have you backed any Telpeo founders? Yes, we've backed many Tapio. I haven't noticed for 30 years. Well, yeah, yeah. What is Tel Pio? Why is it such a hotbed for entrepreneurial talent? Everybody knows about 8200 unit, which is like the cyber unit of the Israeli military. Tupio is a unique program takes about 30 kids a year who are the best and the brightest. Yeah. The Israeli genius goes there. It's a 10-year program. Wow. In which you get a couple of degrees along the way.

Okay. And then you get a budget to go do a big weapons program or military program. And so we give these 22, 23-year-old kids the most immense responsibility. Yeah. They grow up, they deliver, and they know to build essentially companies. That's awesome. In a box. Can you give some examples of alums that you think are worth digging into or understanding their history?

Sure. So we back to a company called One Step. It's actually three topio guys, which is like hitting the jackpot. There we go. Led by Tomer Tosz. They just took this little telephone device. Yeah. And turned it into what's called a gate lab.

Okay. And it turns out that how you walk is. predictive of your health. Oh, interesting. In many ways, it's like a blood test. Literally like a blood test. I can tell if you're going to have dementia or Alzheimer's, by the way, whether your hip and knee replacement works. Interesting. That's what I mean, only guys who are literally rocket scientist could turn the phone into what's called a gate lab. That's very cool. Use it to measure everything. That's one example. What's the business model? Sell to the customer directly or then that into Apple Health or something? No, they're actually selling to facilities that do rehab.

Sure. For elderly people or people of hip and knee replacements, they sold to medical device guys like Zimmer. It's growing extremely fast. That's great. you know, incredible genius. And, you know, then there are others. There's a guy out there. He might have met him Michael Kaufman. He was working with a bunch of guys who come out of that place. Cool.

I think you met him last night. Talk about collaboration with this group here and, and your company is back in Israel. What does that look like? Usually the thing about Israel is there's no local market, right? 10 million citizens doesn't make much of a market. 400 million, on the hand, is big. And so if you assume that U.S. defense spending is going to go up. Yeah.

This is a good place to do defense technology. And we've backed a bunch of companies in the area, a company called ore, which makes rocket fuel and explosives using natural and biological means. And another company called Dream. It's like it is actually a chemistry company using biological means, a specialty chemicals company. Our co-invest are there as standard industries, you're on W.R. Grace. And we've backed a company that's in the kinetic defense area. And another company called Dream, you may have heard it was founded by Sebastian Kurtz, the former Chancellor of Austria and Shalev Julio, that is doing national level AI protections, one of the fastest growing companies, I think, in the world right now.

What's your read on whether or not we are really, we're clearly in an AI race. What is, is that something that can be one, or is it like any other industry where it's just sort of a perpetual race? There's no ending. You know, do you have a thesis around? Do you agree or disagree with Bill Gurley? I agree with Bill Gurley. Okay. My former partner, Venture, of Bill Gurley.

I agree with Bill Gurley. It's an infinite game, but I'm not sure the question is framed right. Sure. So AI is going to impact just about everything we do. It's a super accelerant of many things. I think the question becomes, because the clock gets sped up, you could fall really far behind in every iterative game you play. Right.

If you're not at the head of the game, you know, if you're not winning the game. It's not that you win in order to defeat the other person. You win in order to stay ahead. One of the, I've written a bunch of books. One of the core theses of the books is that the Civic Society runs on, iOS and AI and runs really quickly. And government runs on the fax machines. Yeah.

And that's inevitably creates friction. And the society pulls ahead and it creates tension with the government. I think that's part of the loss of faith in institutions. So if you don't accelerate the clock on absolutely everything, what you just have is unending friction. Society kind of collapses on itself. So you need to stay ahead of the race in order for your society actually to be healthy. And then also to deter others from doing other things.

But you know, science accelerates with AI and weapons development. It can be trouble. it can be troubling. I give it talking Abu Dhabi about, it's about a year and three months ago, where I showed that there's correlation, we can argue whether there's causality, I think there is,

between the increasing compute power and cyber attacks and interest in bio-weapon attacks online. I think it's not an accident. There's agents of chaos in the world, and now they have access to super tools like AI. So if we don't stay ahead, these people get emboldened,

then you can't kind of keep in a box. What? You know, there's a lot of talk today around just efficiency in government, specifically around payments, things like that. Does the U.S. have anything that we can learn from Israel in terms of do you think Israel has done a better job at terms of

modernizing the way that governments actually run, or is it still fax machines all the way down? The really interesting thing about Israel is not the government. What Israel has is the most incredible civic society on the planet. If you look at what happened October 7th, the government was absent, but the civilians all turned up.

They turned up to evacuate people, turn up with their own weapons and their own cars, and took care of business and one needed to be done. In fact, the evacuees were taken care of mostly by civilians. The government didn't turn up. And what I think Israel is a model

for the 21st century, which is it's almost impossible for government to catch up on so many of these technology things. It's just going to take them a while. What we're doing now is devolving this to citizens to take over more control of the economy, emergency response,

and everything else. I chair the largest volunteer organization Israel. There's actually wildfires going on right now in Israel. They've been set on fire by terrorists There's 20 places that the fires are. My civilian organization that I chair called The New Guardians is out there with thousands of volunteers stopping the fires and stopping people from lighting more. So the lesson from Israeli society is how you leverage technology and civic society to take over more capabilities from the government.

Now, you can't defend people like that. That still requires the government and policing should be done by the government. But the Israeli government, I think, is like every government right now, which is there's lower trust in institutions. they're still very, very slow. Yeah. And they're kind of coming around to this very late. But because of the force of the public, I think it'll get there faster than most other governments. Yeah, that makes sense.

What do you think about different GEOs to invest in? Bench workers obviously in the news for the Manus investment, which is kind of controversial, but you could see a world where, hey, they're just great founders. They want to get out. And so, you know, American capitalism is like the path out. are there more, are there other GOs that are you think are interesting or more on this continuum of like East versus West narrative? I'm pretty bearish on Europe broadly.

I said that Harris-Davings podcast and other places. I'm super bullish on the U.S. and Israel. Sure. You went on the king of Europe's podcast. That's true. I did. By the way, I just said, I'm an LP of Harry's too. But, you know, he feels the need to disprove me right now.

Yeah, yeah. It was super bearish on Europe. He's going all in. He's all in. He's dying on the hill. He's got to make it work. He's got to be young and ambitious like Harry is. Yeah, yeah, yeah.

I think there's interesting things going on in pockets, but still Mecca is, by the way, it's not the United States per se. It's Silicon Valley and New York. And maybe Austin and a little bit of Miami and Tel Aviv. It's cities around the world. I think the most interesting thing going on right now is actually in Abu Dhabi and Dubai. They've become a massive magnet for the talent fleeing Russia and Ukraine. It's really easy to come there.

More and more companies are setting up facilities. Just here, I met three people who've set up in Abu Dhabi. Yeah. And so. Well, they have a lot of incentives, too. I've heard that they'll basically say free space, free energy. There's a lot of, you know, they'll basically like massively reduce the cost, for my understanding of operating things like manufacturing, any type of like hard tech, you know,

projects. They're also really good of building big projects and they have low-cost energy. So they're going to build big data centers. They're building big data centers for the U.S. giants. And Microsoft has a partnership, you know, an M.GX. with Mubalala and Abu Dhabi. I think there's interesting things going on in the Emirates more broadly.

Not as much entrepreneurship coming out of there, but places where you can kind of build infrastructure and deploy. I think the really, really big question facing the West right now. I'm a fan of Alex. I think we're here to defend

the West is how do we create a secure and resilient supply chain for the infrastructure we need to stay ahead in AI and not just an AI, AI, robotics, defense, whatever the next generation of bio is and chemicals, as we've talked about. Yeah.

That requires real infrastructure and a secure supply chain for the West to win, and we've got to focus on that. Yeah. Yeah. What is your post-mortem on the bricks narrative that I don't know, I grew up with? Brazil, Russia, India, China, Goldman was calling these the next major markets. And the way that's bifurcated, if you invested in Russia and China, it's really rough. but Brazil and India, they've developed, but not fully. Are there still, like, jump balls on the geopolitical, like, chess board

that can be pulled towards, like, the broader definition of the West, even if India is not in what we traditionally think of as the West? It's funny you should ask this question. I was just remarking to somebody a couple of days ago, there was bricks and now there's IMEC. I'mic. What's that? Ah, the India Middle East corridor.

Okay, sure. So we assumed that India would go with Brazil, China, and Russia. If you look at China and Russia, in particular in some level, Brazil, these aren't real democracies. In India is a democracy. I think it turns out, by the way, if you invest in a non-democracy, you actually don't own what you think you own. They take it from you. You don't, you know, free markets is very rough. Freeman said, you know, create free societies.

Yes. It turns out the opposite is also true. If you don't have a free society, you actually don't have a free market, you don't own what you think you own. And I never thought India was actually a part of that. But this IMEC thing, what's the IMEC corridor? India, Middle East corridor. Yep. It's the alternative to the Belt and Road Initiative.

And this is a, you know, people don't understand this, find you a political point. So Turkey, which is kind of on the side now, Turkey, Pakistan, which is now warring with India, are part of the Belt and Road initiative that China has initiated to try to get to Europe via land. I'ma, India, India, Middle East Corridor, it's alternative to that, where you go via India, via the sea to Dubai, Abu Dhabi. You cross through, you know, Saudi Arabia, Jordan, Israel, and out to the Mediterranean. Yep. And then in there.

And this, I think, is a big deal. I think bricks fell apart because democracy doesn't belong with these people. But I think there's a giant opportunity for the West and for the United States. If we can bring India on board and make them a core part of the supply chain across the Middle East and into Israel and Europe. Yeah. And more and more companies testing the waters. But these things take more time. It takes a long time.

These things seem more time. They don't believe the supply chain created in Shenzhen, in China and Taiwan is 30 years in the making. It's not going to happen overnight. Yep. Well, thank you so much for going on. Sean McGuire's out there waiting. Can you go grab them? I'm like a warm-up for Sean McGuire.

That's like, you know, life goal unlocked. Yeah, there we go. Yeah, yeah. Opening for Sean McGuire. This is great. Hey, thank you. Yeah, good to meet you. Thanks so much for stopping by.

Fantastic. I think Jordy has to send a tweet or post promoting the feed. We're going to bring in Sean McGuire from Sequoia Capital. Welcome to the stream. Third time appearance on TBPN. How are you doing? Let's go. I think we have a question.

By the way, he's, like, leaning down. These guys are much taller in first and then you're doing. Oh, yeah, yeah, yeah. Yeah, we'll do six minutes, then we'll bring him in. Great. Great to see you. Who's the VIP at one? Josh Wolfe is coming on in six minutes.

Good buddy. You guys could share a mic for a bit. I think that'd be entertaining. Yeah. What's the initial reaction? Is this your third Hill and Valley? Fourth Hill and Valley? Something like that.

Third. I actually met you for the first time at the last one. Yeah, yeah. I missed the first one, which is a big mistake. Got the invite. I think I got food poisoning. or something right before. Yeah.

The thing is grown. Every year it just gets crazier and crazier. Yeah. Are you, do you like the framing of like reindustrialization being the focus? Last year was a lot of like TikTok stuff. Is there something else we should be focused on or is reindustrialization really the heart and soul of the agenda with Hill and Valley now? Whatever the agenda is, I think the conference is focused on how tech meets Washington and like how we play nice and together in the future.

And I think that's the right focus. And it's what technologies are going to matter in the future, what policies can happen that will help us get there. And I think reindustrialization is critical. But I'm already hearing, there's a lot of talk of a lot of other things too. Yeah, yeah. Like energy, you know, all sorts of things.

Yeah, yeah, yeah. It does feel like even defense tech, if defense tech ends up being involved in anything, it ends up overshadowing it, because it's just exciting. You have these planes and drones. Great videos. Like great videos.

Great videos. Even better demos. Even better demos. Yeah. The nearest demo is wild. It's pretty good. I got that one early on. Soren's a champion drone pilot.

So sort of great drone. Great demo. In terms of energy, should every venture capitalist be on the hunt for the Elon of Energy? It feels like there is a power loss CEO. I think the Elon of Energy might end up being Elon. You think he's going to go into it?

I can't read his mind. No. If he does, you just tell me where to wire the money, Elon. Is there any limit? Elon is Elon. That's kind of my logic. Reshoring semis. But there has to be an upper limit to like, you know, how much industrial work he can do at some point.

I mean, look, on. So there have been, to the credit of the tech industry, there have been probably 10 to 20, pretty promising vision startups in the last five, six years. Sure. and probably five to ten fusion startups. I haven't invested in any of those, which means I'm not doing my part to just raise the tide of all.

And the challenge for me is been even though I believe so much in the category, I believe in the macro, I have to get the micro right. I made that comment before. And it's been hard for me to pick who's going to win in that category. and I think this is something that we kind of struggling with. I think some sectors, there should be a lot of government support.

For all these, if one ends up as, you know, number 10 in the space, but it's still like a public good and is a positive payback for the government. Anyways, I think we need more government. I just feel like there's an opportunity for a startup that's like, yeah, SMRs are cool. People are building those. There's new designs that are great, but our startup is just copy pasting Diablo Canyon. We're going to copy paste it a hundred times. 500 times, exactly.

But that does seem hard to get done. We've had a lot of people on from the valley side of Hill and Valley. Who on the Hillside have you been excited about talking with that you think really gets it? I mean, I was just on a panel with Senator Todd Young, and I think he deeply gets it. And for example, one comment he just made was, like, he doesn't want to re-onsure everything. only like a small number of very strategic industries. It doesn't want to on short garments. And he's fine with things that are not,

there's different levels of like how strategic something is. And, you know, it's fine if the medium strategic things go to friendly nations. Yeah. And so anyways, I think Todd has had very nuanced opinions. I think up right now or next is Richie Torres, who is someone on the left who I've generally admired and felt like has very, even though I disagree with him a lot of times, I think he's a very principled person who really deeply cares about America

and is willing to say unpopular things that he believes in. And for me, anyone that is willing to be bipartisan, like not just purely tribal, but take on like some topic that is core dogma of their party and they're willing to go against that dogma, Like that's someone that I generally admire. Yeah. I mean,

it should be a good fit for Silicon Valley. Like the whole search for contrarianism is like pervasive in Silicon Valley, right? Pervasive in Silicon Valley, a little less pervasive in Washington. Yeah, but it still exists in there's pockets of it that you have to seek out. Seek out. What is your read on the new defense budget? We're hearing this $150 billion number. For a while, it seemed like there was going to be a freeze,

maybe very bad for Challenger defense tech companies. Then it seemed like the floodgates open and there's all these huge numbers. for even just small series A companies are throwing out, oh, there's a billion dollars hanging out for my thing. How optimistic are you about that and how optimistic are you about not just like the SpaceX's of the world,

but the actual up-and-comers, the next generation of Defense Tech? Unpopular opinion. I simultaneously believe that Defense Tech is one of the most important categories in the world. But I also believe that there's going to be a very small number of winners. You know, call it in the West, this is including Europe and Israel and America, roughly 10 companies.

They go on to be really big next generation companies, call it, companies the 10 billion plus market caps. And I think there will be multiple with greater than a hundred billion dollar market cap. And I think that the defense tech companies of the next generation are going to be way better businesses than the last generation. So I think it's kind of... Is it focused on efficiency? Focus on efficiency, focus on vertical integration. If you go look at, like, I think one of the core things people got wrong about Tesla in the public markets going back to like 2017, 2018, is they were comping it to auto companies. And they were coming to GM or Ford or whatever.

And people didn't realize that GM and Ford don't really make anything anymore. They basically design cars and our, you know, customer acquisition channels and maybe some financing. But they subcontract out everything. And so they would look at, oh, GM or Ford have these market caps and Tesla's already. here, but they would ignore NXP and ignore all these supply chain companies. And I think we've kind of been doing the

same with the defense prime. Interesting. You know, Boeing, Lockheed, they subcontract out almost everything. It goes into their product. So you only get a slice of the market cap. You only get in a slice of the market cap. And I think these next generation companies are going to have way more vertical integration, higher

margins, and actually think that we're going to see a change with how procurement happens to move away from cost plus. I think we're already starting to see that. But basically the reason it's unpopular is I think there's going to be a very small number of winners that win mega hard and then a lot of You know losers or companies get rolled up into the big you know the big winners Were you surprised that I think the number was five hundred million dollars was earmarked for autonomous systems and when you compared that to some of the other categories it felt pretty low Do you have any insight into into into how they got around to that number or you know general reaction So, like, different philosophies.

I think one philosophy would be that, like, we're trying to push a boulder up the hill in terms of, like, changing the defense budget and moving budget towards next generation, emerging industries. And if that's something worth, like, every year it's predictably getting bigger and bigger and bigger. And if 10 years from now, 40, 50% of the budget is going towards kind of next generation strategic technologies, then I'll be very happy. What would be very bad is if it was like 500 this year and then zero next year. That's a really great take.

It's like if a company raises $100 million in VC and they have to spend it all in the first year, they're going to probably spend it really inefficiently versus like, hey, let's like stage this out based on certain milestones. And so, yeah, I think that's a right take. And this has been the, look, I learned this less than the hard way with my cybersecurity company that focus on defense, our first big contract, we got awarded a $10.5 million contract, and then government sequestration happened. They couldn't pass a congressional bill.

And we basically got told, like, either we accept the contract with 60 cents on the dollar or no contract at all. So obviously we took the 60 cents on the dollar. And we were lucky this was actually our first big contract because it taught us from day one how unpredictable government funding can be. But is that predictability, like if you know it's going to be 500 this year and a billion next year,

et cetera, you can invest strategically. If you have no idea what it's going to be in the future, it's just very hard to plan. Totally. Yeah, you guys get Josh. Last question.

60 seconds. Do you have a, you know, a take on this idea of whether we're in an AI race, but is it an infinite game? Is it just sort of a perpetual game? Or is it, Is an AI war even the right framing, right? I feel like this has been a debate.

Oh man, I'm so glad you asked this. I've been obsessing over this for a couple of years. I have a pretty strong opinion that the foundation model companies are going to capture way more value than people realize. I think it's a combination of operating systems plus cloud, which means this would be incredible businesses. Let me just make this point. So, like, if you think on the operating system level, there's Windows, there's Apple, there's Android by Google, there's, you know, Linux and open source. And these companies, like, the value capture of Microsoft or Apple, it's not on the operating system, it's on all the applications that they control and built on top, and same with Android. But by control, I think that the operating system are going to be the foundation models themselves.

I think there's incredible kind of capex and development to get to the point where you are the, like, one of the top operating system that has eyeballs. But then I think the lock-in and the value capture will be with the applications that are kind of verticalized on top. And I think there will be an additional moat, which will be, like, the moat of cloud. Cloud has done a very poor job of the application lock-in, the way the operating systems did. but they've done a very good job of having a hardware mode and a CAPEX mode. And I think these AI foundation model companies are going to have both. They're going to have like a CAPEX lock-in mode, and they're going to have like the usage and application mode plus value.

And then just the last thing I'll say on this. And like if you look at Linux, Linux probably has five times as many installs as like Windows. But the value capture of Linux is like 100th of Microsoft. But Red Hat's still a big business. Red Hat's still a great business, but I personally think this is where we're going to go with AI. Yeah. Like the open source, deep-seeking all this stuff will be great, and it'll be more open-source models used in the world. I think the value capture will be lower by that than X-AI, OpenAI, Anthropic, some Chinese income, etc.

Get Josh Wolf on here. That makes sense. Hey, guys are the best. Let's go. Yeah. We got to do a whole deep job on that. We'll see you back in LA. Peace, guys. Let's bring in Josh Wolf.

got a post that we are live. So much to dig into. 60 second question, Jordy. You hit him with the deepest possible question. The deepest possible question. I wanted to take more on this idea of, you know,

should we be investing in Chinese AI companies? Yes, yes, yes. Well, we have Josh Wolf, the man himself. Good see you. Great to see you.

Welcome to the streams. How you doing? We've been wanting to have you on for a while. I've been wanting to be on for a while. Yeah, yeah, yeah, I'm glad you can make it. I'm going to disagree with everything that Sean said. Okay. Perfect, perfect.

Line by line, line. Love Sean. Yeah, he said AI is valuable. What about that? You're in front of a camera. Can you, yeah. I think you're good right there. Yeah, yeah, you should be good there.

Yeah, yeah, that's great. How's it going? Is this, is this, I'm wearing a tie. I love it. You're wearing a tie. It's been exactly one year since you put on the suit and tie for Hill and Valley last year? Break down your first. business trip to Washington because I feel like I've been coming in D.C. for a very long time. I feel like you

been banging the you know public private partnership you know drum for a long time. A long time. And many of the companies I feel like you know oftentimes I see a new fundraise announcement from a new you know sort of hard tech company and I'm like I feel like Josh invested in like this exact company like six years ago or something like that. Well hopefully it's the same company and they reach a lot more money. Yeah yeah yeah no we've been in this for a long time. I think we really started with a lot of like intel community facing things. So sure. Most of the that was sort of software, maybe sensor, Sigint, data collection.

That was a lot easier to work with. Then we started working with soft, special operations, which basically had rapid fielding so they could deploy stuff, and it wasn't at the scale that you need to, like, win a big army contract. Sure. We started doing stuff in space with satellites.

And then I would say, like, really the first pure play non-quote dual-use thing, which was unapologetic, was first round of Vanderil. And, you know, I wish that there was, like, some sophisticated analysis we did for that, but it really was me and Trey at Balthazar are in New York. And he's like, I'm going to start this company with Palmer Lucky.

I'm like, I'm in. I'm in. That's great. That was the diligence. How have you found, you do a first round in Anderol, but then, and then you're like, okay, this category is going to be really important. You want to invest more, but then there's this issue where the Anderol of Anderol is probably an ardull.

Right. Yeah, it is. And so have you had to hold back in a lot of instances where you're there are venture funds, and we compete with them and we partner with them that are sort of a little bit more polymers and they're doing lots of deals with lots of different people. We try to be really monogamous. And so there was one company in particular,

I'll say it out loud, was dive technologies and they came to pitch us and they were doing subsea, which is sort of complimentary to our company sale drone, which is doing autonomous fleets of on sea. And I said, you know, I think you would really be better off as a part of a platform that has the muscle and the mechanisms to be able to win

contracts and scale and manufacturing and think about this as part of a portfolio. And so at first I think they were a little bit hesitant, but then they ended up going to Anderl. And I got to say, I think it was like 60 or 90 days. We then won the big awesome deal. And that to me is just like proof positive of high tech in the right platform, able to execute. Matt Grimm, credit and props to him. I mean, he picked up his family, moved to Australia, set up this operation, 60 plus people, billion dollar plus contract. Like very, you know, but clear sign of winning. So we love that. But yes, it is harder. Yeah. To do something that is in a

category as Anderol expands because we really want Anderrol to just be, you know. Is there a different type of underwriting that investors could be thinking about not necessarily, hey, I'm trying to back the next Anderol and I'm underwriting to a 1% chance of $100 billion outcome or is there a world where, yes, we're building something that might get acquired or might go through an M&A process. Is that even the purview of venture at that point? You go back to Sequoia. Sequo fund at Cisco, you know, Cisco. Yeah, yeah.

But then Sequo made a fortune selling company after company to Cisco in the late 90s, right? So if Anderil, you know, ends up being a 50, 80, 100, $200 billion business, the ability for them to buy a company for a billion is venture making for a lot of funds. So I think that the ecosystem is growing the right way that it should. Yeah. We will have a bubble in aerospace and defense. It will happen. And it will happen in part because of capital formation, which is really interesting.

So you've got venture funds like us and us and Sequoia and founders and KP and KP and KP and a handful of people that are doing, you know, these kinds of investments. Then you got dedicated specialist funds. Yep. Yeah. And then you got fund of funds. And the fund of funds are interesting because you have a bunch of universities and endowments and hospitals that are like, we won't invest in the defense category because we are not

comfortable being part of the kill chain. We as a partnership bar, right? They might not be. But we would invest in a fund of funds that is investing in a venture fund that is investing in a company. So you have this moral remove that is going to provoke more formation of capital, but there won't be enough companies in the first few years. So you're going to get a bubble.

There's going to be a bunch of frauds. There's going to be a bunch of crashes and disasters. Is that an argument against building like a dedicated defense tech fund? Have you ever done a segmented fund? I know a lot of big, big VC funds have. No, we have like a little opportunity fund for some of our best defense companies, but not a carve-out. We are generalists. We like to have one pocket, one pool. You can do a $100,000 check. You do a $100 million check. That's great. And you can go sort of all sectors. But I don't think there's anything wrong with it.

If somebody's a specialist and super passionate about it, like go for it. Yeah. What was your play? What was your kind of DC playbook? What advice would you give to your portfolio maybe five years ago and how is it different than today? You know, five years ago, I think you were working with a lot of lobbyists to try to get meetings on the Hill. You'd be lucky if you can get a senator. You're mostly getting congressmen or staffers. You know, with that. Today, I think everybody wants to be in the conversation because they don't want to be ignorant.

You have a lot more alliances between red and blue Republicans and Dems on things like shared adversaries. China, you know, that's a question, which everybody converged upon. So American competitiveness, thinking about the scientists, the engineering. People are going to debate some of the policy stuff. Should we be cutting science funding? Should we be partnering with South Korea or Japan? or UK and these kinds of things. But everybody wants to be in the conversation,

so your access today is evidenced by this conference. I mean, what Jacob and Delian and Christian have done here is just really amazing because it started as this napkin sketch. It became a crowd. Now the crowd has become sort of a movement, but the caliber of the people that you're getting is both extraordinary. And the politicians sort of keep getting older, but the people that are doing the tech companies

that we're looking at fun to keep getting younger. And I think that's a beautiful thing. Are you taking, would you say you're taking a lot more pitches today? I mean, I imagine. In the halls here? In the halls here. No, no, no. Just in the context of, I know you guys have all, you know, been focused for a long time on, like, you know, finding, like, researchers that we're developing, you know, things that could be commercialized.

But I imagine, like, just the scale of inbound as hard tech, manufacturing, defense tech, all these categories, like, became, like, hot. Oh, the number of get heated. I'm assuming, like, the number of pitches just gone through the roof. I mean, the number of entrepreneurs. And, by the way, the best entrepreneurs, frankly, are the people that we backed at Anderral. We've done two people that have vested and, you know, sort of with blessing, have gone and left and started their own company. And so being able to find these fountains of talent that have seen success,

have seen rapid scaling, have seen valuations, they understand the venture game, they can raise money, they can attract as a technologist, they can in-license IP or develop it themselves. Those are the people that you can back time and time again. So I think we have a decade-long run of amazing talent in this ecosystem that isn't going to be just Silicon Valley, right? It's going to be SoCal, and it's going to be other parts of the U.S.

down in Texas and maybe even in Florida. How do you think about... And by the way, sorry, and international too. We did our first two ever Israel investments, both are defense companies. Yeah. We did a company in Japan, company in the UK. So we're interested in not just American defense also, but American allied defense. Totally.

How do you think about VCs as a conduit to D.C. It feels like potentially low-hanging fruit for some sort of value ad. You know, a lot of VCs and say, oh, we'll help you find your first VP of engineering or we'll help you with some comms puzzle, but almost like light lobbyist, just making some introductions to the senators and congresspeople that you might know. Is that a more modern form of value ad that's coming out of venture funds these days? I think partners at firms like ours and others have relationships and their authentic relationships and you spend time with these folks and you admire them.

There's congressmen who I deeply admire and I think are the future leaders, both Republicans and Democrats. People like Richie Torres and Jake Alkencloss and then on the Senate side, young and slotkin. I mean, these are like real patriotic Americans that are smart and savvy. Might have been in the CIA, might have been a Marine, but quite savvy. And they are tech savvy and they're young and they want to know these companies. And

you know, they want a future donor base too in their own self-interest, as Ben Franklin said, would you persuade appeal to interest, not reason? But I think understanding that game and also understanding tech moves at this crazy velocity that is hard to compete with. It's why tech wins because they out-compete because they move faster. Government does not move that fast. And so you have to be a

realist. Government is moving faster. than it has in the past, particularly in defense. You look at this appropriation bill, this reconciliation bill, $1, $47 billion, plus going to be going towards shipbuilding, autonomous systems. That's going to be a big boon for Anderil, for Hadrian, for Varna, for Sail Dron. How do you think about founders that are trying to time some of these broader structural changes if you're in shipbuilding at all, the best time, if you want to take advantage of this new bill to start your company was maybe a decade ago because you're sort of ramped and failed and you have a great team.

and you have some credibility, but how do you think, what's your advice to kind of early stage founders that are seeing the world change and trying to kind of navigate and see opportunities? An example being like, you know, I'm not convinced that like every manufacturing, you know, automation company is like going to do, is the right time to start it as now,

because we don't know very, the future is like murky, right? Like a lot of these things are unfolding. How do you help founders kind of understand market timing when there's so much in flux? The honest answer? A lot of it is luck. Yeah. I mean, honestly, like, I always say that there's a five-year psychological bias that you want to be invested today where you should have been five years ago.

Yeah. Okay, but I'll just give you a few quick examples. You think about the people that were doing modular reactors. Oh, yeah. You're not a personal great believer, and I think it's great for society. We're not invested in them. I did a lot of nuclear waste cleanup. You agree with Sean on that.

You guys doesn't sound like you guys. I hope it happens. Is it more solar bowl or? It's happening and it's getting cheaper. I'm not crap it on solar, but it's just it's not super excited. But I'm a huge nuclear boom. I've renamed it Elemental Energy. Oh, yeah, yeah, yeah.

But if you were developing modular reactors, you might have been like, okay, it's large baseload power, it's better than intermency, but you weren't anticipating that there was going to be this data center buildup, which is at least part of the narrative. And now you need gigawatt scale. Correct. And whether or not that will actually see the light of day,

today they're able to capitalize and draft off the hype of that. So that's number one. They're thinking about bringing back Three Mile Island, Diablo Canyon, potentially. There's a lot of big opportunities for a large-scale nuclear. You look at people that are doing minerals and mining, which is not a really sexy area, but suddenly you're thinking about supply chain, geopolitical conflict with China. You're thinking about robots and magnets and things that have to go into magnets and orders.

My question is like, you know, if you're doing anything in mining or rare earth, obviously great if you started a company three years ago and then you get to capture this momentum. But do you see potentially enough explosion of sort of demand and new markets that you could still start something today? You can always start something today, but you've got to remember that I think some of the best successes are not just like execution and you follow this playbook, but it's luck. 15 years ago, we started a high-tech nuclear waste cleanup company to go after the defense nuclear waste from pre-imposed coal lawmaking. All of a sudden, earthquake, tsunami, Fukushima disaster, we become the only U.S. company picked for the cleanup to clean up this nuclear disaster, right? That became a boon for this company. It was a total black swan for Japan, a negative one, a total positive black swan for this company.

Today, sail drone, autonomous fleets of boats, they started oceanographic research and all this kind of stuff, bright orange ships. The guy that's here, I don't know if you've seen him, Hondo Gertz, he's a big hulking guy. The two of us are together. It looks like the old poster of Schwarzenegger and DeVito. And he's like, you know, I got a big strategic idea for you.

What if you paint these things gray? Yeah. He's got a bright orange. And all of a sudden, you open up to this defense market. Sure. But that wasn't in their founding thesis of we were going to make a fleet of autonomous systems protest. Force 59 and Bahrain and expand to the rest of the world.

Yeah, yeah, yeah. Yeah. What do you think, I mean, you mentioned some of the other countries that you're investing in, Japan, I think you mentioned Australia. What do you think the future of partnership between the United States and Middle East allies looks like? Huge. You know, we call this SIEC diplomacy.

We brought on to our team maybe six, seven years ago, Tony Thomas, T2, head of SOCOM, 90 people, 90 countries, 90,000, you know, all special operations, incredible guy, a great entree into aerospace defense. Yep. A guy that was on a board of one of our early intel companies that we were focused on intelligence community was Brett McGirk.

Yep. Brett just left the administration. He was in Bush White House, Obama White House, Trump White House, left the Trump White House because he had put together the counter ISIS coalition. And when Trump surreptitiously

sort of pulled out from Syria, he abandoned the Kurds, and he had built that allied nation with the Kurds and said, that allied force with the Kurds and said, we're going to supply you militarily. He then resigned. Came back in for Biden.

His capstone deal was the Gaza, Hamas, Israel, the hostage deal. John 20th left, joined us a few weeks later, company in Middle East. We met with NBS. We've met with Tannoon and A.BZ, Abdull bin Zayed. I am so bullish about UAE. Yeah.

UAE is so ideologically righteous on being coexistence. All three major religions. You know, the Abraham Accords, major signy. Tech Forward, Cleveland Clinic, NYU, Johns Hopkins, the Guggenheim, the Louvre,

make your cultural institutions. It's incredible. And they're building it super fast, but they're building it thoughtfully. And the ability to make a decision very quickly. High tech, you think about G42 and some of these other things, they've decided we're not going to cast our light with China.

We're going with the U.S. We're going to build data centers. We're going to partner with the U.S. and it's going to be at, like, gigas scale, hundreds of billions of dollars. Super bullish about UAE. Saudi, I think, is next, both for normalization with Israel.

They want to be in the defense umbrella of the U.S. They are going to spend a lot of money on AI infrastructure. Sure. And compute. Very big player. Falcon 9B. Huge. Yeah.

So, so UAE, Bahrain, Saudi next, I think, in the region, but of course, Israel. I mean, it is a tech mecca. Many of those countries realize it's really far to fly to Silicon Valley, but if you can go to Israel, it's a big deal. Tel Aviv is right there, short of flight. Our first two deals, like I said, defense-focused, Hamutal Meridor, who ran Palantir in Israel. We backed her with Sean in a company called Kella.

Oh, great. So Lux and Sequoia teamed on that. And just really bullish on the region. How do you think about how quickly information spreads to? It feels like a category, you know, a decade ago, you'd have a category that could be under-hyped for a long time. Now, if somebody enters a space, they release a video and suddenly, like, a bunch of new people are pouring in. Where are you looking at this point, just besides your own network for the next founder that you're going to fund? So I have this as a flaw in my personality, which is, you know, I want to know everything that everybody else is talking about,

but then I need to understand what's the white space, like Sherlock Holmes, what's the curious incident in the dog in the night, the thing that people aren't talking about. So I'll give you one because it's unsexy. and I've talked about it publicly. Maintenance is the most boring thing you can think about, but here's the simple logic that I had. It wasn't reactive to a quarter or even a year. It was the basic idea that the cost of capital is going to rise.

Okay, if the cost of capital rises and you're not funding low interest rate stuff, if you think about CAPEX on a financial statement, you've got growth and you've got maintenance. Everybody's been funding growth. New data centers, new satellites, new military installations, new HVs, new HV fleets, everything. Now, if you're a CFO or your capital allocation committee or you're a board, and you're like,

do we really need to spend another hundred or billion on that? Do we need another data center? Or can we maintain the stuff we have? So I think that there's going to be a demand shift from buy the new shit to how do we maintain the old shit. And that is going to be demand for preventative maintenance, early maintenance detection, robots that can go out into certain things and repair them.

So all of that, I think, is going to be a big wave. That's the kind of thinking at locks that we're thinking about orthogonally. Everybody else might be tacking here, but how do you find something? Start making some bets, and then in three, four, five years. Everybody wants to be in that space. Yeah. Fantastic.

so much for joining this is great triple j love it hey come on the show again yeah yeah we'd love to go way deeper on a proper so much to talk about thank you so much and we're bringing in uh deli and asperuha from founders fund a co-host and co-creator co-founder of hill and valley forum very excited to have him on the show for the what seventh time uh so let's bring him in geordie is posting amplifying the stream pumping it up pump up the numbers uh how we doing ben can we get a little review of the stream is up, the internet's working. It was a fascinating, I'll give you a little inside baseball here. We brought in something called pop-up Wi-Fi to do this stream, and it does not look like something that would normally get through security at the Capitol. It's locked,

and only the TSA can unlock it. Capital Security Police do not have the key that TSA has. And so it was very tricky to get in. They had to x-rayed a bunch. We couldn't get into this locked Pelican case that has a Wi-Fi router and a bunch of cell phone, like modems in there. But we got it through and we are live streaming. And we're very excited to have Delian coming in later. We also have Christian Garrett hopping on to break down the other third co-founder of the Hill and Valley Forum, 2025. And Jordi is tagging madly all of our guests getting us into the timeline promoting the stream.

And we have an absolutely stacked lineup. We got Delian and Christian coming on, then Eric Lyman. Lulu should be coming on. A lot of repeat guests breaking down what's going on in D.C. Today at Hillen Valley. And here he is, Delian. Welcome to the stream. TBPN, Hillen Valley.

Let's do it. Let's fucking go, baby. Let's go. How are you feeling? Good. You know, made sure to arrive here on Monday. Got a little accustomed to the East Coast. We always haven't switched time zones in like three months.

It's tricky. It's hardly the most brutal times. Yeah, it is. Yeah, it's tough. It's tough. You know, we started off the day strong. Hamas protesters from the gecko, that's how you know you've made it as a conference.

This is the first time you've been protesting. This guy's as a journalist. First time, yeah, and that's when you know you really made it. If somebody is disguising themselves as a journalist to sneak into your conference. Pretty crazy.

And protest on behalf of terrorists. Yeah. What was Karp actually saying? Was he being particularly controversial at time? He had to anything. He didn't say anything. Literally he was like, you know,

he was like talking about his book. And they were like, You're killing Palestinians. Okay, okay. Yeah. As Trump was, I asked you. Oh. But other than that, how's the reaction been?

What of the most important messages been? Obviously, reindustrialization is the theme, but what else is popping up today? Yeah, I mean, I think what's cool is like this is a week where, you know, we talked about this in a couple prior segments around the, you know, continuing resolution. Yep. So this week, the, you know, sort of big bill in Congress is the reconciliation. Yes. Transferred from basically, you know, sort of leadership into now, you know, sort of congressional

language that actually goes and gets appropriated to individual program offices. And so I think it's like a really fascinating week to have this conference because, you know, a significant portion that bill was around shipbuilding. And then today we have panels on shipbuilding with some of the appropriators that are literally, by the way, on the other side. I've been bopping back and forth between Capitol Hill briefing congressmen and then Congress. And so it's just like, there's something magical about it where this stuff is happening on like the perfect, you know, sort of week. And then the other thing that's been fun is even for congressmen that weren't aware or not even attending the event, They've been like, so do you know what's going on?

Like, I have like a lot more Silicon Valley tech companies on like my briefing counter this week than like ever before. And I was like, well, sir, like I'd like to describe to you about this thing called the Hillen Valley Forum. We'd love to have you. Yeah, that's great. So I don't know. It just feels like an institution. And then the other piece of feedback that's been fun is like, um, congressmen have even said that like this is a place where they get far more casual time and especially on a bipartisan basis. Like tonight's dinner.

Yeah. We have 17 Republicans, 17 Democrats. Wow. And it's extremely bipartisan. and it's totally off the record, completely casual. If one person misses the dinner, somebody will write an article. Oh, it's not way. It's right away.

Exactly. We get it right down the middle. We guarantee it's 17 and 17. It's got to be equal. On the $150 billion appropriation, is that an update to what we talked about? I think the first or second time you were on the show where you said, hey, maybe there's not more money coming. Maybe it's not going to be a jump ball for a bunch of startups.

Has this updated your thinking? Yeah. I mean, I think it was sort of, you know, the February bill. were clearly like a pause. I was just like, look, we're not just going forward with what the prior administration did. And even though we're very late in the game on passing this year's budget,

we're just going to pass a continuing resolution to put everything on pause. And then let's instead, you know, sort of set it from the top. So it's definitely, you know, sort of a step in the right direction. Obviously, you know, so CECDF is talking about the first trillion dollar, you know, sort of defense budget. Yep. Since we last chat, it also, they pushed out the executive order

on basically analyzing all the contracts and programs that are behind schedule and behind budget. And, you know, sort of, you know, looking at canceling those. So, yeah, I think. generally trending, you know, sort of all in the right direction, but I'll always continuously reiterate of just like, this doesn't mean that there needs to be like unbridled optimism. All of this is default going to Silicon Valley companies. Like a significant amount of that reconciliation package has a bunch of line items that are currently only possibly be served

by traditional defense contractors and like the primes. And so, you know, is there anything to read into when you see a really round number versus a very precise number? The round numbers are when leadership are doing it. The precise numbers is when the program office is actually saying like what they actually need. But it's one more bullish than the other. If I see a if I see a very precise number and I'm like, oh, that's definitely happening versus the round number is just like, oh, they just threw something

out and they're going to figure it out later. Oh yeah, the precise number is one to be more bullshod. The reconciliation package is like great. Yes. But it's leadership saying like there should be approximately $150 million sort of sent towards sort of this package. And it's like okay, but like is that really? Is that really the right number? Like it happens to be exactly

$150 million. Exactly on the dot. It's like what's necessary. There's out. There'll be some fine zero. Early in my career, VC was like, oh, we had our whole team run like a DCF. We know exactly. And the value of your company came back at $100 million. And I was like, there's no way that you actually have a spreadsheet that's been

perfectly seven zeros or whatever. No way. Well, you know, according to leadership, it happens. It happens. It happens sometimes. How do you think about sort of forecasting government demand? One of the things that was top of mind this week was $500 million allocated. for like autonomous systems broadly.

Felt low for a lot of people when you compared it to other categories. Yet, Sean McGuire's point was like if you kind of just, as long as that number is going to go up over time, maybe it's good and it's a more efficient way to kind of deploy budget. Because if you were like, you spend $5 billion this year, it's going to be spent pretty poorly. But how do you think about kind of like forecasting government demand and how should teams think about it? Yeah, I think you can sort of use the reconciliation package as you're sort of like combination of Tam and Kager, right? Yeah. It gives you a sense of like what the current Tam is, but they're

clearly indicating also what the Kger of that is going to be. And so I think in some ways for defense startups and startups in general, you know, to go back to like the Peter Thiel's year to Wonder philosophy, you want to monopolize a small market first and then grow from there over time. And so in some ways, if they were forced to spend $5 billion in a single year, probably inefficiently, and probably zero chance that happens to be one provider. There's no way that any startup, no matter how great you are, is ready to spend $5 billion in a single year. Yeah. So by default, it's super disparate. There'd be a bunch of different places. which you might not necessarily want 15 shipbuilding players.

Like, you know, probably what's best for the country is like probably not one, probably not 15, but probably like three that are constantly competing against one another, right? I think that's probably what happens in like the launch provider world, right? If you look at last week, they announced the latest phase of national security basically, you know, launch contracts and, you know, SpaceX and ULA won as per, you know, sort of usual. But they did introduce Stoke Space and, you know, sort of rock the lab. So it's like, yeah, I think that's probably like an appropriate size pool and the equivalent on like, you know, sort of shipbuilding.

So I think you can think of it as a TAM, but it's not guaranteed, just like in any TAM in technology, you're not necessarily immediately going to capture it. It's like, you know, Varda had equivalent, you know, sort of areas where there was some language around nuclear weapons monetization, reentry testing, et cetera, of, you know, sort of budgets that were in that same, you know, sort of dollar range. But again, that's just like literally the first step of, okay, now that's going towards that program office. Now you have to start thinking about what do the contract look like, what are the actual missions that you're going to be providing for them, the hardware that you're providing for them. But, yeah, I think generally, you know, bull for defense tech. that there's a whole set of, you know, sort of budgets now that in particular are very uniquely tech forward, right? So if you look at like the concept of like unmanned fighter jets

and unmanned surface vessels, this reconciliation package is by far the biggest budgets that you've ever seen for those types of activities. And obviously that is a particular area. There's some in there that's like ammunition and like, you know, army barracks, like, you know, refurbishment and things like that. I'm not sure that like Androll's great at like Army barracks refurbishment. Sure.

But like, I think they'll probably be pretty great at some of this like unmanned surface vessel your entire activity. And so it's really exciting to see some of these TAMs be pretty big that are very clearly only servable by like this next generation of tech companies. We got to get to Christian. So last question or we want to let down to get back to it.

Yeah, just congratulations. I said this is the highest density of absolute killers that I've set foot in in a long time. I'm glad after I saw you guys is YC thing. I just like texted Tugat afterwards and I was like, this at Hillen Valley,

it's going to be sick. We pull it off. Here we are. Good to see you, boys. We'll see you out. We don't need any more part-time podcasters. Let's bring in Christian Garrett from Hillen Valley 137. How you doing?

Let's break it down. How's the day going? What's the latest with you? Is that your third or fourth coffee or are you on tea now? Because you're losing your voice. I'm a tea guy. You're a tea guy. I'm half European.

Okay. And any way that I can dig at Delian by showing how strong the Europeans are. I think one way I can do that is by drinking a lot of... And you're also wearing a European watch today. We got the Parmius Santos on. I can either confirm nor deny anything that you're saying. It looks fantastic. How's the day so far?

I'm sure it's been more. Yeah, it's been awesome. I'm sure you've heard from folks all day. You'll hear from more from founders, investors, folks in office. I know you guys will have elected reps in and out over the next few days and today. The enthusiasm and excitement

is really, really special. This is the fourth year, and just to see how big it is, is a testament to how much our ecosystem has changed. I talked about earlier, it was less than a decade. Nine years ago that Palantir sued the Army for commercial preference and violating

Title 10 U.S. 2377. And today, Palantir is seen as one of the greatest partners, and the Army particularly is seen as one of the greatest partners to Palantir and to our ecosystem. It's incredible. Apparently, SpaceX sued as well, and they use the same lawyers as Palantir. So whoever that is, there's a lesson in that. He's got a good business going.

I know that the theme is reindustrialization. What are the other conversations that are happening here? What are the other subtopics that people are digging into? Yeah, yeah. I think within that, right, you can go all the way. down the supply chain or value chain to rareth elements and minerals. Sure. We just had a panel recently with, you know, James Littinsky from MP Materials,

Rape Scully from Lyrac. Think about right place, right time with MP materials. Oh, right time. He's awesome. When did that company start years ago, right? Years ago. Oh, the top is around for decades. Decades.

It's one of the oldest minds and they took it over and it's a great turnaround story. Oh, wow. One of our partners, Lower Carbon Capital and Clayton has moderated that. Congress from Richard Torres is in that. Yep. That was incredible. We then went all the way up to, you know, we had a panel with Friedberg and Sean McGuire and are Todd Young on manufacturing, which we hit on everything. We actually talked about how energy and education are the key unlocks there. And then you go up to defense, right? And Andrew, obviously, is hit on this and you'll see more talks from Serronic and others talking about the work that all these defensive companies and the existing primes are doing to assure up our industrial capacity. So I think you've just seen the full gambit. I know Jensen hit on semiconductors as well. Jensen's interesting because I was asking this question of like is he a customer of reindustrialization or is he truly a reindustrializer? Oh, he's both.

And I think you see where Nvidia is going right. They're now selling full systems, right? They're moving. They're manufacturing that, right? Just the GPU. I mean, they're doing the networking, the cooling. So if you extrapolate where that company is going and you look at where they are today, 100% you're right, they're on both sides. You can't really be a trillion dollar company with just, hey, we just designed some stuff and then let you.

TSM handle the rest. There's so much more about that company. Yeah, fascinating. Dordy? Yeah, I'm interested more on who on the on the on the on the hillside really gets it. Richie Torres his name Yeah, come up quite a bit. How many people like that does the valley need to or in order to you know continue to be successful, right? Because I feel like a big a big part of what's exciting about this event is is it because it's you know, bipartisan. It's about this admin, right? It's about the next 10 years, it's about the next 15 years, the next 20 years. And so how many people are, you know, we talk about this in Silicon Valley, it doesn't

take that many great CEOs to like transform an industry, right? And sometimes just takes one, right? Yep. And so how many, how many true allies do you think we need? And are those people today, or are you hoping, you know, next year we get more? Well, I mean, one piece of that, which is more a meta point, but I think it would be great for government to have its own version of founder mode, right? We need to get back to that within government. Sean Stancard talks a lot about this and how that's something that's been missing. And if you look historically, when we've had success, when we were really great at building, it was because we empowered individuals within government to own these programs and see them through. So I think that's a meta point.

And no one knows the name of the person who's responsible for high speed rail. I mean, we always talks about, Admiral Rickover, right? It's a great example of this person. I mean, like, we need these people again. Now, I will say, today, Congress, there's a lot of champions in Congress, there's a lot of people that get it. They provide support. They obviously draft policy. They provide cover. But what you really need more of are these kind of founders at the individual level,

from the program officers, the folks running these departments. And so, you know, I think that will be a big unlock. And then starting back on your question, right, within Congress, you look at the folks here today. You have Senator Shaheen. You have Congressman Ritchie Torres. You have Congressman Gabe Amo. you have Senator Todd Young and then you have

House Speaker Mike Johnson speaking later I mean you really see across the board both Democrats and Republicans there are folks that understand the importance of this and you know the last panel said this like this is as bipartisan as it gets right like we want to have a critical mineral

and rare element dependence we want to get rid of our dependency on China there we want to have redundancy there in a strong supply chain we want to have energy abundance yeah right and we want to have a strong deterrent strategy and a strong military. And so Democrats and Republicans align on that.

And the tech industry is preaching something that is in of itself aligning and unifying. And so I think that puts us in a very good spot to try to build bridges and be successful. Yeah. I know you work with a lot of later stage companies, but can you share some best practices for government relations, lobbying, that you're seeing tech companies get it right?

What are they doing? Yeah, you know, I think what's interesting is, and I've talked a lot about this, Mark Andreessen has a lot of great stuff on this. Tech doesn't have a trade association. And that's actually a very good thing. So it is on the onus of individuals, founders, entrepreneurs, operators, the companies and the investors, I think, as well,

to spend time within government educating policymakers on various subjects where they're experts in. A lot of the work that you see here are from folks that do not sell to the government, right? There's no revenue to be had here, right? There's just educating and making sure that their industry is a recipient of good policy, good regulation, and good support. And I think that, you know, from the first part, I think the best thing is like making sure you have these relationships with folks, they're willing to take the meetings.

It's incredible. It's, it's, and so I think that would be the first step. Yep. I think the second is also figuring out, like, where is the highest leverage thing that you want to focus on? You don't want to come here and just take meetings for the sake of meetings either, right? You want to be focused on something very specific. You want to care about something very specific. Sure.

And that makes it easier for folks to digest. And so I think that's the other piece is like figuring out where your business should be focused on, whether it's a, a potential. contracting opportunity or something you want in a budget. Or whether it's just a specific policy or regulation that you care about. So I think it's like first, go build the relationships. Go rely on your investors. Go do this directly. Like that's the way to do it.

And that's how our ecosystem is going to do and always has done it. And then number two is figure out what the high leverage thing is. And quite frankly, don't go take the time in D.C. until you have that. Interesting. Okay. Cool. Well, we'll let you get back to it. Thank you guys.

Yeah. See you guys. Later. Yeah. We'll see you later. And let's bring in Eric from R. ramp. Welcome to the stream. It's here for Eric Kleiman. Has your panel already happened or is it coming up?

It happened this morning. It happened this morning. It was a ton of fun. We were locked into the stream. Yeah. But give us the overview. Revoi was fired up. Yeah, give us the high level. What is the pitch and how do we go? It was fantastic. Look, I think for private companies, startups, whatever it is for a lot of years, Getting more from every dollar spent is just obvious, right? You know, a dollar saved is not a dollar earned. The average American business has an 8.5% profit margin,

so a dollar saved is 12 earned. Yep. You know, the government is thinking about this. Of course, there's a lot of tax dollars in, but the deficit is growing every year. And so whether it's Doge and the folks there or other parts of the government, everyone is starting to think about

how can we start to apply modern tools to drive savings. And in many ways, ramp is at the forefront of it. A lot of the payment systems that are used by the government from the Treasury, which doesn't require, at least in the past, who was sending the payment? Why did we send it? What was the purpose and attestation on payment? Now they're starting to get put into on credit cards. They're still using old antiquated designs where you have one system for cards, but your actual expense policy doesn't drive how these cards behaved. And so there's people who are able to go and use cards for purposes that are not really advancing tax.

fair interest. And so we talked about this, both, you know, at a high level. So Senator Joni Ernst talked about how she, she's approaching it, how the Doge team's approaching this. And then Keith and I shared a little bit from the ramp context, how we work with private companies. Is there a story that you're particularly drawing from of a more recent tech company selling into the government that's not in the defense tech? Obviously, we all know the SpaceX Palantir and Earl stories. But at a certain point, Microsoft must have said, hey, we're going to try and sell windows into the government, or we're going to try and sell Outlook or Excel into the government.

But that's a long time ago. It's a huge company. Are there other companies that aren't maybe government first, but have developed best in class government sales functions that you look to or as like interesting anecdotes? Are there other case studies that you've heard about that are interesting? Is there anyone out there? I mean, I just think, I mean, a couple things.

I don't like people realize the scale of how large the U.S. government is. Yeah. Between federal, state, local education, one of the most mind-blowing stats that I learned is one and six Americans who work work for the U.S. government. That's wild. It is huge. And I think at some scale, if you want to go and be a scale technology provider, financial service provider, health care provider, you're going to work with the government.

I just think so. And so one of the openers this morning was the secretary of the interior, Doug Bergen, who, you know, he had started an accounting software company called Great Plains. He sold it to Microsoft. I think Microsoft is a great example of it. Yeah, totally. That's probably the best example that I can do. Yeah, yeah. And interestingly, they're one of the big tech companies that never really blinked in their support of the government when there was that era in 2015, 2014, where a lot of the companies were saying, hey, maybe we want to stay away from the U.S. government for a variety of reasons. So it's good to see that there's,

like, a resurgence here. In terms of, like, technically, or not even technically, but just, like, the sales process, is that wildly different than a normal sales process, or is it somewhat like just selling to a Fortune 500 company? I look at it, I mean, not to interrupt, but I think the dynamic, if you're a scaled-up, you know, fintech company, and you plan to be in business in 50 years, like you said, you know you're going to be working with the government at some point. So it's more about figuring out the right ways to do it early on and also not being, you know, understanding, like always having urgency because I think that every American can get behind, can get behind efficiency, right? It became political over the last, you know, 90 days due to

Doge and stuff like that. And like you said, one out of every six people works in some way for the government, then obviously that's going to get political. But when I look at it, you know, it's just about how do you defense, if you're dual use or you're primarily serving the private market or private companies, you can think I feel like a lot more long-term versus the defense, tech companies that are here and they're like, if I don't get their government this year, I'm done. So I think having that, I'm sure that sort of like long-term thinking around partnership with the government has driven a lot of your decision-making.

Oh, for sure. I mean, look, it's, I mean, maybe a couple things. I mean, first, I actually just think there's like a very, I think some of the story of technology, I think about, you know, Steve Jobs' old famous quote of, you know, a computer is almost like a bicycle for the mind. It allows you to go faster, do more, think in an accelerated rate, and ultimately achieve more. And so I think it's not, well, it's great that people are trying to modernize defense. I think that there's a lot of people doing many types of great work.

They're departments of veteran affairs, departments of whether it's like it's education, there's people doing important work. And I think one of the examples that often, I think just makes clear and connects with people is, you know, there are, I think, about a million folks serving in armed services and they're doing expense reports too. Yep.

And you take, you know, some America's most courageous, people who were serving, sacrificing a lot to do this. And then you say, you know what, I'm going to make you do hours of expense reports. I had a person on a nuclear submarine for years. And I was like, what was that like? Yeah. And he was like, a lot of paperwork.

A lot of paperwork. I was like, I can't believe your 30,000 leagues under the sea doing paperwork. But he was like, yeah, that was my mind. Don't get me wrong. Like it's like, it's important work. You should explain why. But it's like, actually, like, it would be great if a lot more of the work was to, you know, defending the country, going in the VA, serving our veterans, whatever it may be.

So I think that there's like a human and moral side of it. But to the other question you ask of working with the government, in some ways, this was all like pretty organic. I mean, there was a tweet put out, I think, in February that, you know, I think there was 4.7 million credit cards issued for, I think there's about half the number of federal employees and people were running, where are all these extra cards. And so a lot of cards were turned off.

And at the time, you know, we reached out to someone who was a former customer, put us in touch. And so it's early. We're involved in the same process as everyone. And I think, no matter who does it, I just think that the way I would almost describe it is people would find it ludicrous if our Air Force is flying with propeller planes in a jet age. And yet that's kind of what's happening with the tools we use. to make expenses, do our accounting, make sure attestation is clear. These are old disparate systems that, you know, I think private industry has adopted tools like

ramp leading the forefront of it's integrated. Your expense policy drives that you can buy. It does your expense report, your accounting. And so however it goes, I just think countries can be a lot better off using modern technology. Yeah, I mean, the thing that I thought was fascinating is they couldn't actually turn extra cards fully off. It was a dollar limit, which is like, okay, there's, and even speaking of that, like, you know, you'd think, okay, let's go and turn a limit, you know, to zero or $1 or whatever handy. I've heard stories of individual people because of the way the portal was designed,

spent four days going one by one. Oh, they couldn't even run a crime job. No way. It's not as, because no one has done something like this, but it's like when you look into these things that you think should be trivial are very hard when you hold systems like this. Well, we'll let you go and we'll bring you your co-founder to dig deeper into the balance of the financial system. Oh my gosh. Welcome to the stream. Kareem.

First time. First time. Man himself. Yes. Good to see you guys. Good to have you. Welcome. Nice.

Welcome. We get to see supplies. Yeah. Yes, we do. So we, yeah, so obviously we're talking about getting the entire government on ramp and then getting every country in the Western world on ramp, one at a time. I was talking to the Anderol guys about some of the integrations that they have to do into these antiquated systems just to do communications because they want their drones to play into the modern systems.

Have you started even digging into like what the technical standards are that are running? We've talked to folks about like the SWIFT system and, you know, stable coins, but then there's also like the overnight payments thing. Like where do you even do? start with that, is it a GPT query or do you start talking to people? Like, how do you build your knowledge as a technical mind in how the government runs? Because I was telling Jordie, I want to talk about the running the government on a ramp more just because, like, I don't think most people know how expense reports work in the government. Like, I don't think it makes sense. So yeah, what was your journey to kind of digging into this as seeing like, is it technically feasible?

Yeah, yeah, yeah. I mean, it was crazy. Even yesterday, I was hearing a story of someone who spent three years of the government and filed an expense report on their first week and only got the check back after they left. So, it's kind of crazy. I mean, think about it in the, you're at a company and you file an expense report and the company says, yeah, we're going to pay you back for this. But you don't get it for three years. You would be, you would be, yeah, yeah, yeah, interest, but also it's just offensive, right? It's not, it's not nice to an employee who's, you know, to basically take. take their funds for such an egregious amount of time.

It's kind of crazy. It's basically companies and government in some cases using their employees as a bank. That's kind of what a bank is supposed to do. Yeah, yeah, yeah. Front the cash so they could do your business and eventually you pay them back. Yeah.

And to your point on the complexity of those systems, I mean, one of the first thing I did when we started on the ramp is trying to understand how ACH works. Totally. And it is like absolutely mind-blowing. Yeah. It really boils down to very bad. basic CSV files, Excel files almost, that every single entity puts together, constructs,

and at the end of the day they get shared through some system, and there's some computers sitting somewhere that's reconciling these files together. That's why it takes so long to send money. It's like all these systems run in batch, take a full day to get access to that, to get access to information and be able to reconcile it. And you've got about eight of those, You got one for like bank-to-bank payments. You got some for... I mean, really the way people used to file expenses is they used to submit their credit card statement

that doesn't connect at all to the receipts that they have and their inbox. And then you have to wait an extra day before you find out that you actually forgot to submit the receipt that you wanted to submit for the restaurant that you were at. But, I mean, I think if you connect these systems, obviously you can move a lot faster.

talking to people in the government, I don't think they even know what they're supposed to do. So a lot of them just end up either not filing expenses or they get a card with no controls and they're lucky if they have it and they share it with their friends and who knows what the money is being spent on. But yeah, one step at a time.

Do you know much about like the counterparty? Obviously Palantir, pioneer like the forward deployed engineer because Shamsankar was telling us the first time they sold Palantir for on-prem installation. The team on the other side, a software developer, tech person,

IT person that worked for the government, installed Palantir on a box with like four gigs of RAM and they needed 16 or something like that. And we've seen with Doge folks like Luke Ferretore are going in, you could see Luke Ferretor in another world like working at RAMP or working at Palantir or working at any of the high growth,

very strong engineering culture companies. Do you think that there's a need for America's best and brightest to kind of do a tour of duty as maybe just an insane IMO level software developer in the government, even if that takes away from your pipeline, I'm sure. 100%. That would be great. I mean, this is a company that we all have a stake in. Yeah, of course. The equivalent would be like that. Yeah, that's a good point. We're all American, right? Yeah, yeah. Equity stake in the government. Like, you want the government to run well. We all win if we're operating more efficiently. We're making better decisions

and we all pay less in taxes. Yeah. No, it's funny. Efficient spending, which, you know, Ramp is focused on non-payroll spend, right? And so payroll spend gets political really quickly, right? We talked about this with Eric briefly where, yeah, if you're on the government's payroll, you don't,

most people don't want to be off it, right? Like they have a job, they've maybe been doing it a long time. But non-payroll spend should be the least political thing ever, right? It should be like, we should spend as little as possible, and the dollars that we do spend should, every single one down to the penny should be spent efficiently. What are your other kind of reactions? How much are you spending time here at the event versus meetings around town?

Yeah. I mean, the event is taking another forum this year, it seems. It's a lot bigger than it used to be. And the level of excitement is incredible. I think it's the first time that I felt that government is really trying hard to modernize, build bridges with companies in Second Valley, New York, and other places. So I think people are on the same page. Yes, we do need to spend less.

We do need to introduce technology to help us. And look, with a lot of the advancements in AI, some of the problems that seem too intractable, now you could just throw your massive database into an LLM and you can wrangle it that way. So we got better tools now to do the work. A lot of people are excited about it. We'll see what we can do. I mean, frankly, there are a lot of founders that are here thinking about very specific regulation or deregulation.

Obviously, like nuclear energy is the biggest one that is very concrete, speed up the time to get a new reactor design approved. Is there anything like that in finance? What is it? Give us some of the history. What's the good and what's the bad? I mean, it's everywhere. Like money transmitted licenses is the most basic one.

To move money around, you need a license. but you not only need a license, an American license, you need a license in every single state. Which is kind of crazy. Yeah. Because they're all looking at this same things and making sure that you're abiding by the rules and the rules are quite similar,

but it's kind of crazy. I remember having to sit down in a room with Chora on our team who helped us do a lot of that work, and there was a stack of papers this thick and just had to sign one at a time. No way. I read the first one. I know what this is about.

I read the second one. They're very similar. And at some point I'm just like, I'm already all in, yeah. You're trapped me in a room, there's a cup of coffee as I go, sign. Yeah. How has it been, when you look at sort of incumbent financial services companies, a lot of them have had, I imagine, a large presence in Washington for a long time.

You imagine Ramp ends up with a fairly big office here at some point? How do you look at that? I imagine you've been taking trips here. I know you've been coming to Hill and Valley, but is this a place that you and the team, expect to be a lot more. We'd love to. I mean, we're great to put our best resources forward and try to help.

But I honestly think about it the same way I thought about a lot of the products that we build. I think it would be a win if people spend as little time as possible in them. Yeah. And more of the work as being automated. I think part of the problem that you have in and around Washington right now is like the incentives are so misaligned that you have incentives to drag projects on. and they cost massive amounts of money.

Any little change that you want to do is also like another massive bill. And our hope is to build great technology. And hopefully if we do that, if we do that well, we don't need massive sort of like time and people investments to get them to work. Yeah, technology is just doing the job. I was talking to Eric, too. The thing that stands out to me is ramp is playing in decades. And there's a lot of founders here that are like,

if I don't get a program of record in the next two years, like I'm done. Yeah. And I think Ramp's position is being able to think long term. There's very pressing problems that we have right now, you know, spending being one of the biggest. But how do you kind of zoom out and be like, you know, in the fullness of time, I imagine Ramp and the government will have a, you know, very meaningful partnership. And it's about finding the kind of right ways to do it in the beginning without understanding that you have tens of thousands of happy customers.

and you've got to make sure that they're, like, you know, continuing to get resources and attention. Well, that's fantastic. We'll let you get back to the conference. Thank you so much for coming on. Nice to come on again soon. We'll have ARA on probably next week at this point. Hell yes.

Great. The rotation. And let's bring in Josh Steinman. You got a minute? Come on down. There is. Look at it. Look at that.

It's fantastic. It looks fantastic. It's right. What's up? Yeah, so Steinman, we ended. up on the same flight. Yeah, for those of fantastic.

And Simon didn't plan it. Simon spotted us because I had a huge ramp logo on my back. Jack is outstanding. It's fantastic. Yeah.

It's great to see you. Yeah, great to see you too. Where'd you get that, though? Oh, we made it. This is a one of one right now, but we will be multiplying them soon. Our people will talk to your people. Yeah, every guest

will get one for sure. That's the thing people understand the L.A. streetware scene. Yes. Like so far away from tech. Yes. You can get super. high quality stuff very well made.

Totally. So I saw that and I was just like, it was perfect. Yeah. Yeah. Yeah. Yeah. Awesome. So, yeah, how's the conference been? You're probably one of the few tech founders here with real DC experience. When did you first go to D.C.? When did you first get into politics? Take me through your journey a little bit. Yeah. So, you know, I started my career doing

expeditionary stuff as a military officer. Yep. So two tours in Iraq. Wow. One, my first tour, I was at a unit down in Virginia and southern Virginia. And then my second, I came up here to an intelligence agency here in D.C. And honestly, it was 20, I think I showed up in like 2011. And it was like peak Obama. And as a military officer in D.C., you kind of, you were definitely to help.

You know, you'd like go out to a bar and like girls would be like, oh, what do you do? Oh, you're not some like staff director on the hill. Like, you know, thanks. Get out of here. Yeah. But it worked out. You have a family now? It worked out, yeah.

Someone liked you. That's true. It's great. It's true. No, it was good. So did that, got out, went to Silicon Valley. Yep. And then, yeah, got a phone call from an old boss after President Trump won election the first

time during the transition. He's like, come help me out on transition, White House transition. Sure. And I came and just didn't leave. He asked me to stay. I was a National Security Council staff from the White House for four years. Fantastic.

What were the top issues then and how have they evolved? Yeah. So I think the biggest issue in the unclassified space was telecom technology. This is Huawei. Yeah, exactly.

So 5G. So this was like one of the big issues that I, you know, owned for four years. So yeah, think of it like if you were in the middle of the Cold War to go to the Russians and be like, hey, can you build out the electrical grid?

Yeah, yeah, yeah. Oh, Of course, my friend, yes, we'll have the best electrical grid for you. That's a fantastic Russian impression. Don't worry. Yeah. And you know, it's very clear that like, and there's Wall Street Journal articles about this. Yeah.

Like the Chinese in Africa with Huawei, they just use it as a spying tool. Yeah, yeah, yeah. So it's like, why would we have those people build the American telecom infrastructure? Yeah. Why would we have them build the telecom infrastructure of our Five Eyes partner? Yeah. Like London, Australia. Other places.

So yeah, I think that was probably the biggest. And where do we? Where do we stand today with 5G? I see a 5G icon on my phone sometimes. Is it real 5G or are we behind? So interesting, you should say that. You know,

a bunch of the companies kind of race to brand 5G as like here. Yeah. And actually the infrastructure. It wasn't quite there, right? Exactly. So I think a lot of that stuff's been rolled out and being rolled out. You know, the big challenge is that America's a big landmass.

Yeah, yeah, totally. So I'm guessing we're probably mid-rollout. You'd have to talk to, actually, you guys should have brand and call. the FCC chairman. Oh yeah, yeah, yeah. I met a few times. Yeah, that'd be great.

He's great. Yeah. So he'd be able to tell you like what percentage if you put a gun on my head and you're like, take a guess. I'd say like 65% or something. Because it's a race. Yeah, so the themes reindustrialization,

but in terms of what you do, what are the more interesting sub-themes going on? I'm sure you're excited about reshoring manufacturing, but there's other stuff top of mind. Yeah, Spain, power outage and explosion of Northrop Grumman missile. manufacturing and testing facility in the past week. Okay.

So like there's this. Oh yeah, you think that was an attack. So here's the thing. Do I think it's an attack? I'd say it's like 50. We got a tinfoil hat? Yeah. I'm kidding. I'm kidding.

Here's the problem. Yeah. You look at the top five, like you list out like the top 10 facilities that the United States and our allies use to manufacture weapons. Yeah. Half of them have had catastrophic events in the past two years. Yeah. So I don't know.

Does that seem like a. coincidence to you. Yeah. In the military, you used to say, like, once is a tragedy, twice as a coincidence,

yeah, three times his enemy action. So, like, the number's big. Yeah. And yeah, they're like, oh, these things go boom.

Yeah. But like, let me tell you, like, it is 10 plus years old, unclassified. You have cyber actors going out

and modifying safety systems to tell operators that things are operating within the right parameters so that they blow up. Yeah, it's well established

that Western, you know, uh, groups have tried to metal with bronze, uranium enrichment. Why would the adversaries not want to do the same thing back? It's just common sense. This is what warfare looks like. And the fact that we don't know, and I'm not saying it is or it isn't.

What I will say is every single person out there building these types of facilities today or running them now, like needs to have the capacity to monitor them 24-7. Otherwise, you're not going to know. And so it's like, what do you actually building for? Like you're building so that on the day that things actually kick off, you'll finally figure out if you build a defense company or not if it survives. I want to talk a little bit more about the shape of your business today. I embarrass myself as a podcaster. You know, we try to be experts in everything.

But I completely botched the understanding of your company. And so how much of it is consulting driven, how much of it is product driven, how much of it is SBIR, program of record, the stuff we hear in defense tech. Give us a rundown of where you are today and where you want to go. Zero consulting. Zero government. 100% private sector. Interesting. It's a SaaS offering.

We come in and protect an industrial facility against cybertas. So we do that by installing sensors in the facility. And then we've got a software layer that's collecting essentially anything that generates data. Got it. These things are already generating data on like a big, like, you're looking for patterns, right? We're looking for patterns. We're looking for the absence of certain things. We're seeing like, hey, what process is running in this place?

what's talking to what? Yep. And we're basically the first company to actually take every single thing that's generating data on an industrial infrastructure and take that information and look for threat. Yeah, we talked to the founder of Chain Guard looking at maybe supply chain attacks. Yeah, yeah. Is that something that's completely complimentary or in some ways competitive to what you do? Yeah, we're trying to do a deal with them, right?

Okay, cool. Yeah, we're live by the way. It's all good. But we'd love to see it. We love companies working together. I literally think my co-founder's meeting with them like right now. Fantastic. So, hey guys.

Switching gears a little bit. How important is it that Hill and Valley is bipartisan? That's been something that we're Delian and Christian. Your feed typically isn't not really bipartisan per se. But in the context of if you're a serious technology company and you want to be around crushing it the next four years and the four years after that and then the 10 years after that, right? Totally right.

I feel like, and you I'm sure got to experience the sort of back and forth nature of Washington, but when it comes to, you know, talk about how you think Hill and Valley can kind of evolve from here, from your perspective, as somebody's spent so much time in Washington. Yeah, here's the reality, is that obviously, like, I spent four years, first day to last day in the Trump, in the first Trump admin, and was never going to be befriended by people on the left, just because of that. They didn't have to know me. All they had to know was that piece of information and like I was just never going to have an opportunity to even talk to them. Sure.

I do have friends. I wouldn't dare mention who they are that are on the other side of the aisle. I wouldn't want to, you know, I wouldn't want to put them in a, in a, in a, in a, in a crosshairs. Yeah, exactly. But like, there's good people on both sides. Yeah. And I've done a lot of good work with folks, you know, in the, in the Democrat Party.

And so I think that you want to find people that want to solve the problem that you're solving, right? And that can be any number of reasons. It's because you're going to put a factory in their, district is because they care about an issue, because they're on a subcommittee, and like you hope, and I would encourage folks to just look for those folks. I'll be on both sides. Obviously, you know, part of it is just like the brand that I've built coming out of the place that I came. I'm talking to folks that I know, and that's what my feed looks like for that reason.

But yeah, I mean, it's part of it is just, that's, you know, that's how I've been. I mean, you mentioned you're entirely B to B, no B to G. yet or are we properly resourced on the cyber security government? Huge fight. Because, you know, we know about Palantir. We know about some, I mean, Microsoft sells to the government, but is there a cybersecurity champion that sells to the government right now? Who should we be looking to?

Yeah, not really. I mean, some of the solutions in the space are, okay, they're not great. Sure. You buy them and then you have to, like, put a bunch of people on top of them. Sure, sure, sure. But yeah, look, we're in some talks with some interesting folks. I'm hoping they'll be able to announce something soon with some of the folks here in this space about building secure facilities, secure factories.

And I just think that that's probably the most critical thing for us to think about from a security perspective because I want us to be able to sustain operations on day one or day two or day 10 or day 50 of a conflict. Because that's going to make it more likely that we're going to be able to stay in the fight and win. And if we can't, like, it's a huge problem. Yeah.

Yep. That makes sense. Well, should we let him go? We have a question. It's fantastic. Jump it on. Thank you.

See you back on the flight. See you back on the floor. Yeah. Bill, come on. Give us an update. You haven't been on the show in weeks. It's been far too long. We got Phil from Dirac in the studio in the Temple of Technology in the capital of the capital.

Great, great tie, by the way. Is that a fantastic time? No, no. I thought it was a unicorn. Actually. it is Mughal Conquerors. I was recently in London. Okay.

Took a trip down Salvo, walked into breaks, and said, you know what, that six of six, you know, only six made, tie?

You got to have one. There you got to have one of six. You got to meet the other five guys who wear the same tie. So true. Let's get a group check. Let's get a group. No.

In 1990s, you know, Patrick Bateman's style, like, you know, let's see Bateman's card. Yep. Popular in the 90s,

I'm thinking we're going to be bringing back ties. I love it. Let's see Bateman's. We've talked about your business for it feels like mostly B2B selling into defense tech companies, selling into hard tech companies. What is top of mind for you here? Obviously, it's a great event. Good to meet people.

But is there a particular agenda item that you think is important to highlight at Hill and Valley this year? Absolutely. So, yes, we sell into aerospace and defense, automotive, ag and construction, maritime recently. To be announced soon, but closed the maritime deal, which is very exciting. Congratulations. There is a very, very critical lack of discussion around the American worker. Sure. You know, we, the average age of the American manufacturer is 55.

Yes. In the next five, ten years, we're losing a lot of those folks. And with that, critical tribal knowledge. Yes. That without writing down, institutionalizing, capturing in some way, we are going to see an immense loss of our ability as a nation to produce. Yes. And so there, you know, I've said this before.

I'll say it again. You know, we have spent billions of dollars on environmental conservation, we have spent $0 on tribal knowledge conservation as a country. This is something I'm advocating for from a policy perspective. You have a hot take on AI not disrupting your business or not really disrupting the, I guess like the American worker. Can you unpack it a little bit and take me through how you see AI changing the way we design and manufacture things in America? So a little bit of a complex perspective, I guess. When you look at what LLMs are,

useful for generally, right? People will throw them at generative tasks, but when you look at what LLMs have been trained on, is more broadly like the internet. The internet, full of forums and all of this context. And context is key, right? And what you do not have in those LLMs is the context of what you need made, the specs of it,

and how to actually do it. Because kind of like what I mentioned earlier, it's tribal knowledge. And by that virtue, it means it wasn't written down anywhere. And even if you, like, even if it was written down, your scan is probably private. It's not just out on the internet, not callable, like, you know, some sort of private database. Interesting. Exactly.

And so while LMs are useful as a technology, you need to put them in a position to aggregate, contextualize, and then leverage critical information that is not, you know, in a LLM that OpenAI might have been able to train on. So, you know, I think if you were ever going to see AI actually disrupt manufacturing, you're going to have it. you're going to have to have a way to embed it within the workflow and infrastructure of an existing manufacturing facility and make sure that you are able to well integrate it into the flow of folks who are not super tech savvy. Where are you bullish in terms of AI and manufacturing? I can imagine you've seen those reports that like, oh, I emailed a Chinese manufacturer,

a European manufacturer and an American manufacturer, and the Americans and the Europeans didn't even get back to me for a week. That feels like at the very least you could just have a chat bot that takes your order and gives you some data. Yeah, what's about that? That specific problem is the problem of quoting. Complex, not really AI, LLM. People have been doing quoting software for a while.

Yeah. It's really computational geometry intensive, generally pretty complex. And so companies like, you know, paperless parts will, or zometry will, like, help you with this. What we're describing there isn't really like an AI problem. It's a, like, work culture problem, generally. Like, we as Americans work very, very hard. But the Chinese have the underdog mentality. They've been hungry for 30 years.

They've been on the come up. What we're running into is that 1991 was a 1776 moment for China. What specifically in 1991? So basically for 50, 60 years from 1945 to 1991, we were in the Cold War. And so we have this global battle of the West versus communism. But is 91 different than 89 follow the Berlin Wall? Why 91? I say 91 generally.

Either one is just sort of like that marker of when we basically said the West is one, global American, you know, hegemony has won. You know, we can sort of like rest in our liberals. Yeah. Very similar to...

Beginning of the Clinton era. Yeah, exactly. You know, NAFTA and all that stuff. We basically said, let's pick a couple of nations to offshore our production to. Globalism is going to win. Let's pick China, Japan,

Korea, offshore oil production, you know, fund all that infrastructure and then, you know, just trust that they'll have our best interest in mind. Very much like this industrial colonialism. our own version of it. So if you look at historically, you know, you had the global power do that, set of colonies,

and then get very, you know, comfortable and think, you know, it's the end of history. We've won. What's happening with China is exactly what happened in 1776 now, where we, you know, have basically seen China say, you know what? You know, Japan and Korea, you want to play with the U.S. fine, you know, just like Australia and Canada. You know, pay ties to the vassal state or to the mothership. fine, right? But China is now saying, you know what? We're not going to play ball. We are going to go, you know, 1776. We are on the come up. So there's that underdog mentality of one generation, two generations of 30 years of that baked into the culture of the Chinese manufacturer. That's what we're fighting against. Not talking about, do you think there's enough conversation at Hill and Valley around just labor in general? Because I imagine like part of your thinking is like, who's going to be using my product in 20 years? Right. Like that's a big question. And it's one that's interesting. because it actually does feel like

there's less direct ways for private companies to develop the next labor force for manufacturing, right? It's like, yeah, individual companies can train people. You can try to, you know, coach people from legacy firms, but it does feel like an area that the government can have a tremendous impact.

Are you hearing conversation so far throughout the event on that? Or it should... Certainly a little bit, but I would like to see more. A lot of technology brings the, top up. And so you see this distribution of technology at manufacturing companies. This has always been the case. And so the companies with the most money, all the enterprises, the Lockheeds,

the Toyotas, the Fords, you know, all the big guys can just dump money on the fanciest, you know, AI-LM stuff. But the key to saving the American industrial base isn't just making the top most, you know, wealthy companies have more and more advanced technologies and having like a 99% one percent split of that distribution technology. It's bringing the bottom up. And so when you talk about the labor base, what I'm starting to hear folks get is, you know, this is something that I deeply agree with. We don't want cheap labor. Like, we don't want bug man cheap labor. We want smart labor.

So that's why, you know, tools like us, tools like a bunch of other things out there are geared towards saying, hey, we are not just going to radically improve quality life for the modern manufacturer. We're going to build something that makes people want to go into this job because of how cool and modern it is. Like, you know, people love building, software engineers, love building tools for us. other software engineers. Yep. And there's this flywheel effect and positively reinforcing feedback loop of cool tool,

cool tool, cool tool. When you start doing that for production, you end up having younger folks saying, that looks super cool. SpaceX has all these cool tools. That sounds awesome. Let me go work in that facility. And so government...

Yeah, SpaceX is an interesting example because didn't their warehouse management system like spin out as an independent company or something? No, not exactly. It is, people have, it is like very, very common. for like somebody to work in this like

thousand plus software engineering org they have this internal software they call warp speed warp speed warp drive it is you know fairly sophisticated and you'll often have like somebody who is at SpaceX fairly early on that team say like I'm going to do this and productionize it and then they're like spinning out

and there's been like five six of them yeah they're fine but you know yeah anyway Jordi any other questions now this has been great to the conference thank you so much for stopping by if Aaron's out of there you want to send him in or anyone else i think i just saw him okay great yeah yeah grab him because i think he was hanging out for a little bit and we got to bring him on we got four more people maybe five more

people on the guest list ben is sweating he needs a bathroom break should we take five can we go to can we go to a break uh we are going to take a five minute break folks thank you for watching five minute we'll be back in five minutes have a good one we're live gbpn we just took a quick break got another coffee. We are in the capital of America today. This room is the capital of the capital today. That's right. That's right. It's the center. And we're here with Aaron. Been on the show before. Great to have a person. Camera was a little shakier last time. So I don't know. Oh yeah. You were walking around your factory floor. I don't know. I don't know the team to shake the camera a little bit. Sorry, guys. Walk around the floor to simulate what it's like to be in the trenches. Yeah, there we go.

Just so everyone's familiar. Big moment. Big moment for you. You've been banging the reindustrialized drum. years and it's the theme of the entire event. Why don't we start with your reaction to Jensen's speech earlier on high-level AI, but then AI factories and how you're thinking about that. I mean, it's amazing, right? Like, he's obviously, like, he's obviously, oh, you got to do a little holding, all right? Yeah, just as close as possible. Okay. There we go. No, it's, it's amazing, right? You have the most powerful man in AI sitting up there talking about bringing American manufacturing back, right? And like the role of AI converting electricity to now like tokens for everything. It's a really phenomenal way to kind of like wrap the story, I think.

And converting that into real outcomes, right, no matter what the industry is with the focus on obviously like manufacturing, right? And yet you've often said that AI is not a one-shot solution for manufacturing. Break that down. So, all right. Yeah. When people get a chance to, like, go through the transcript, watch him talk or whatever, right? Like, there are key things that he kind of mentions he can pick up on, right?

Like, we can do this stuff in anything that has to do with, like, text and images today, right? Like, you might not want to diagnose a disease because there's no room for error there. Yeah. Manufacturing and like all of his talking about like getting to physics faster. This is kind of like how we do these things eventually, right? Like it's a matter of computing accurate real-time physics for something. Not just, you know, like a bottle falling, but like if I'm trying to design a mold, right, for like mass production, I need that thing to be five micron tolerant or better.

And right now, you know, there's no way to do that with current architectures and models and stuff like that. This is why, not blackpilled on it, but like the horizon is longer. Okay. Yeah. So a lot of work to do. Can you talk a little bit of some of the work you're doing with reindustrialize? Yeah. So last year, you know, incredible show of force from this community, right?

It grew from like, wait, was last year the first year? Yeah. Because it grew from like an idea to like a massive, massive conference. Yeah. Give me the stats. Break it down. So last year we had about like 4,000 RSVPs in like 800. attended. Wow, that's a lot. And yeah, I mean, it snowballed from like, I wrote that

techno-industrial manifesto. We threw together like two and a half months. Yeah, yeah. And it was crazy. It just all came together magically, but, you know, it was obviously... And so going back to Detroit for this one? Yes. Or DC. Yeah, so we're going to be back in Detroit. We have an amazing benefactor who, you know, was pretty impressed, I guess, by the first one. That's great. And they're giving us a brand new skyscraper that they just built. Fantastic. It has a beautiful.

I'd hit the size gong for that. Beautiful, beautiful convention center attached to it. And yeah, it's going to be wild. It'll be very, very high quality. More than 800 this time?

What does it take to get in the, off the guest list then? That's hard. Just DM me. Okay, yeah, yeah. But yeah, it'll probably be around the same. And is it a similar Hill and Valley Mix,

founders, politicians, or are there other folks? Is this a place where someone can, go and just find a job or talent, everything in between? This is like a, it's a good champagne problem to have because you want all these different facets from everywhere to be there. But at the same time, I think ultimately what we're going to struggle with and need to refine over the years when we do this is

we want high-quality decision makers there, right? Because the whole community has to move forward somehow. So that might just be day one eventually. And then day two, we can kind of go into startups. and like, you know, maybe a trade show kind of thing like that. So there's, you know, it's all in motion. Very cool. We'll take all the feedback.

When is it? How can people learn more? Give us the plug. Is there a TBPN coupon code yet? If not, can we get one set up? Yes. We will have a TBPN coupon. Thank you.

I want to kick back on every sale. It happens. Golf stream 50. Golf stream 50 will be. Yeah, yeah. Just send the jet. That's all. Yeah, yeah.

July 16th. July 16th. Yeah, we're super. Mark of California. excited for reindustrialize. Yeah, we'll be out there. Yeah, how, how, where, where do you think, where do, what do you think people are missing this week around reindustrialize when you look at kind of like the guest lineup and everything

like that are there areas we were talking to Phil? One area that I kind of identified is something that doesn't feel like it's a huge part of the conversation is labor, right? It's like who's going to, uh, even if we're building automated factories, uh, we still, you know, need to upskill, uh, just due to how many people, within manufacturing or retiring. Right. Yeah.

Education technology has always been hard. No, this, it's insane, right? Because in Jensen's talk, right, like he was talking about trades, right? Like elevating trades. If we want to be able to accelerate these things faster just because the gap has grown so large and we don't have time. Yeah. We don't have another 20 years to teach these people, right?

So yeah, that's kind of like where my company comes in, right? Like we're trying to encode tribal tradecraft into technology. And then maybe it doesn't take you 20 years to learn how to make a a mold anymore, right? It takes like a year. So, yeah, how much, how much, so, so. I've taken people, you know, forklift operator and pretty soon he's like, just CNCing stuff, it's cool.

So yeah, how, can you break down? I'll give you an example. I saw somebody take, they were working on their irrigation in their backyard, seemingly a very complicated system that like one person had kind of designed a long time ago. They were able to take a picture of it, plug it into grok or 4-0,

and the model was able to spit out like an completely on point analysis of the situation. Aaron's about to put you in the truth zone. It thinks it's impossible. And so is that, is that, you know, clearly for a simple consumer application, it works, are we going to see that in manufacturing

in the same way where an individual might not have that, you're talking about ingraining tribal manufacturing knowledge into AI? How bullish are you on that, or what's the timeline? So, again, just go back to the mental model of, like, how much precision and accuracy do you need to accomplish the end task? So, like, in manufacturing, there's some room for error depending on the process. So ultimately, I'm super bullish on this, right?

Yeah. But factories have to be rebuilt, literally, like, from the ground up with a software nervous system, right? And, like, AI will play a huge part, not in just the SG&A kind of stuff, right? Like, doing invoicing or whatever. Get rid of that. the actual skill encoding is the thing that becomes this like weird, you know, physics-driven deterministic model. Like, if you need to engineer something, that's a really out-of-distribution problem.

Yeah. Right? Like, you need to understand the physics behind it. I mean, like, does a tradesperson? No. But, like, they sit there and do it for 20 years. They've done it 10,000 times. So, like, their brain is a physics simulator.

So it's just, like, how close are we getting there, you know, with, like, each task as it gets more and more refined and, like, accurate, I think. Yeah. Fantastic. Well, we'll let you get back to it. Thanks so much for stopping by. Thank you. Very excited for reindustrialize.

And, yeah, good work on being ahead of a massive wave. For sure. For sure. Thank you, but. Awesome. Well, we have Sampretti coming on from Navier. Aaron, would you mind grabbing her? Navier, we're talking boats, talking maritime.

She is a roboticist. She was formerly at NASA. And she also was working on subcritical nuclear reactors at Fermilab. And fun fact, I filmed a two-person podcast with Jason Carmen, where Jason Carmen was on one of your boats. Welcome. Let's go. Sit down.

Sit down. Welcome. Here you go. Great to have you. I was just reading off your bio, absolutely cracked. MIT, mechanical engineering, PhD. You can be as close as possible. Yeah.

And you can grab the microphone. It's a little bit heavy, but you can hold it. Great to have you on. This will be fantastic. How has your hill and valley been so far? It's been great. It's really incredible people. Is this the first one?

This is my first one. Yeah. Yeah. Are you hoping to be a beneficiary of all like the momentum around shipbuilding broadly? Or is this more just about meeting folks in Silicon Valley and the hill as well? I think this is an incredible time, you know, to build hard things. I mean, something that, you know, I feel like for years, people were holding back. and suddenly you see the momentum everywhere,

and you feel it here. Yeah, yeah. They've done an incredible job. I don't think I've, you know, been in any conference where you're seeing builders, policymakers, everyone coming together and just saying, let's build, let's do it now. And it's awesome to see that energy. Speaking of building, what, can you describe exactly what you're building,

what design tradeoffs you made that put your product standing out from the pack? Correct. So, you know, the, the foundation. behind building Navier is building Next Generation Maritime Fessels. And when we are thinking of next generation marine vessels, you have to think about like, you know, why suddenly now, right? So America is number 11 in maritime and you know, very small number of vessels. China is putting out thousands of them.

So the goal is just not to think about, okay, how do we outnumber China? To really win, you have to out innovate China. So that means, when you think of building marine vessels, what does out innovating mean? It means that how do you build vessels that are just not a little bit better, but a step function better? What that means is not just automation, software, and all that, how do you reduce per unit mile, right? Per unit payload cost of moving things on water. The world moves, the whole world, right? It moves on the terms of, you know, what is the cost and speed at which goods and people move.

If you tap into that economy, if you tap into that problem, suddenly you're controlling how the world economy moves. That's a trillion-dollar market. And functionally in terms of the actual design of the vehicle, is it a hydrofoil that makes you stand out? Electric-hydrofoil? Yes. I mean, the one that is out in the market is electric. We feel more than just a thing. Yes.

So, yeah, what were some of the design tradeups? What are the specs? And how do you pitch that to the eventual customer? Who is the customer? Well, so the focus, as I say, is to build a maritime company. When I started this company, we were amid COVID, actually, right? And, you know, nobody's he was interested in maritime. And there was no excitement around it.

I'm just going around and saying, I'm going to bit of maritime. And it's like, what? That's not venture back. And then the first application, when you think about goods and people, and you're thinking electric, the first application is moving people in coastal cities. I mean, that's a good demonstration of the use case, operational efficiency, and cost, right? But it's COVID, everybody is like working from home. And no VC would believe that people will ever, ever take a ride and go to work.

But people have commuted across the bay for years. Yeah, but suddenly. Sosolitos or San Francisco. Again, remote work is forever, right? Sure, sure, sure. So to do that, but for me, it was important, let's get the tech out and let's get money to get the take out. So what we did is that, well, you know what?

The first problem we had, water doesn't have a brand. Let's build something that gives that awe-inspiring magic, you know, that emotion and put it out in the water. Like you feel when you see a rocket. So that's why we started with like this super cool, sexy, Hydex Navia 30 and 30 Pioneer Edition. And the initial customers, and who backed us are like, you know,

tech entrepreneurs and what's not. I mean, they bought recreational boat buyers, watch these boats. Then we also had, like, you know, hospitality and so on. But now we have, you know, the recreational part is a small segment. Sure.

Our major customers are defensive. So we work with our, you know, our patrol systems. Our technology is with the U.S. Navy vessels right now. How does the DoD think about maritime kind of fuel sources long term? Are EVs a part of like how they're thinking or is it more traditional sort of fuel sources? It all depends on your use case, right? So EV when you make it all electric boat, it has certain use cases.

So when you're thinking of low heat signature, certain kind of like noise and there are certain applications where you're looking at electric, all electric applications. But, you know, the other ones that you're really looking, I mean, what is the pros of a hydrofoiling boat, right? Forget electric or a gas. Like, compared to a conventional piling hull, you're taking out the hydrodynamic drag. As a result, you're getting like three times longer the range. When you're thinking of long range, evil platforms, so you're putting a payload that you don't want to be like, you know, bouncing around. You want a steady platform. So so far you would need like large platform,

Gimbals and whatnot, right? So that's for payload but also for crew, because crew, you know, CTVB, crew transfer vessels, people can get injured when you're always slamming against them. Yeah, makes sense. That kind of. Last question, or should we move on to Jared?

I know he's waiting out there. No, I'm just curious how, like, talk about the reaction, you know, what it's like being in Washington, you know, today versus even a couple years ago. I imagine the response has just been completely different in so many ways. It feels like, you know, the ocean is becoming, I think in a year it'll be overheated. Right now it seems like it's getting the right amount of investment. It's 70% of the world, and I hope there are more and more maritime company.

I mean, we need to build, you know. And, I mean, it's a huge economy. I mean, people are, you know, all of these talks about jobs getting taken over and we want to have jobs. And I'm thinking, wow, we are going to unlock a whole. new kind of economic opportunity. I mean, there will be so much jobs, so many things that will spin out and the secondary effects of it. That to me is exciting. I mean, there's a whole industrial revolution that will happen around maritime, and I think it's awesome to be a part of it. Amazing. Amazing. Well, thank you so much for coming on the show.

Yeah. Thank you. We have to record a stream from the boat. Yeah, yeah. Jason already filmed on one. It was extremely cinematic. Yeah, we can be nice and stable. Yeah. No, he actually was really stable. He was on the phone and we recorded the whole thing. It was amazing. banking turn and the tramping doesn't spill. That's amazing. If you, if you don't mind, can you grab Jared? He's out there in the suit with the Marlboro pin, I think. But yes, fantastic.

Jared, welcome to the stream. Look at that. He's normally in a racing jacket, but you look fantastic. He dressed up first time since last Hill and Valley, or you throw on the suit every once a while? I wore a toxic inauguration. Okay, that's about it. That's great.

There we go. Well, what's top of mind for you? I want to hear about stable coins. I want to hear about the stuff that's less about re-industrialization of manufacturing, maybe more on the crypto side. What is the most interesting to you today? Yeah, so the crypto industry obviously showed out extremely heavy for the... You can hold it.

For the incoming administration. Yes. Crypto ball and like $250 million donated. Like lots of crazy stuff, but also lots of reasonable stuff. Yep. So since then, we effectively have a few pieces of legislation that is going to be delivered. Yes. So there's currently two stable coin bills, one in the Congress and one in the Senate, one in the House, one in the Senate. Yep. One is called Stable. That's the one in the House. Okay. And genius is the one in the Senate. Genius. So the main difference between the two. Yes. Appears to be the treatment of non-U.S. issuers. Okay.

Now, there's only one significant non-U.S. Is that by name? Tether. It's Tether. It's Tether. Okay. Yeah. So Tether has roughly, God, I'm going to butcher the number. A lot. It's over 150 billion issues. circle is number two. Isn't it the most profitable on a per employee basis, something like that? Yeah. I mean, I don't know how many people work on the medallion fund at Rent Tech, but it's not that. Like, this has got to be it. They claim they've made over $20 billion in profit over the past two years. Wow. It's an absolute monster of a company. It's crazy that you can make, I mean, medallion fund makes sense because they're doing such complex stuff, but stable coins seems simple to me. I don't know. Maybe I'm underselling them. I need to talk to the founder. If you're someone in a country like Nigeria, you have double digit inflation rates. Yeah, yeah, yeah. Your country desperately does not want you to be able to access. U.S.

Capital markets or even like, you know, things to hedge against inflation, you want dollars. Yep. And so the demand for dollars has been so strong that, you know, people all over the world go through a bunch of extremely complicated UI processes. You know, they use random blockchings. Yeah, it's like who will use a bunch of these swapping functions? Who would possibly do this? Not an American consumer.

Well, it doesn't matter. Yep. And it's like most stable coins from Tether are issued on a blockchain called Tron. Okay. Those people here have probably never heard of Tron. Yeah, yeah. So it's a very international user base. The poll of the market, you know, we talk about product market fit, product

market fit of stable coins is so insane. And the fact that there's a debate between, you know, the sections of the House on should we write legislation that potentially kneecaps the one group that is doing the most to export the dollar abroad, I think is extremely interesting. Yes. Interesting. And this is on the heels of, you know, Circle's trying to IPO right now. Yep. Yeah. We saw that prospectus. So compared to the $20 billion profit over the past few years, I believe the EBIT on Circle's $62 billion issuance was like $258 million. Yeah. People did not like the S-1. It was not. not, and, and they have, they're leaving along the table.

Their distribution costs are high due to the coin base relationship, I think. Yeah. But yeah, that makes sense. It's like the, the, the, the, the, the, the, the, the bill is arguably the America's greatest export, right? Like, it's, if you, if you count the tea bill into trade deficits, it would be, like, a much, very general. Different story at that point.

But, but, but, yeah, I think your point on, hey, we're, you know, Tether, regardless of your opinion. of them is exporting the dollar and getting more people on ramp to the dollar, which does have some benefits. Yeah, so we'll see who ends up winning out in the reconciliation progress. I think enough people are going to recognize the tether's probably doing that good for the U.S. Like genius will probably win out a little bit overstable, but I mean, it's still the early days, we'll see.

Who on the hill are the biggest proponents of crypto? Who are the names that crypto founders need to be following? Who's the one politician? about the laser eyes. Is that based Mike Lee? Yeah, yeah, Mike, Mike. That's his account, I think. Yeah, no, basically, he goes by online. Extremely based. Ted Cruz was one of the first guys to understand how Bitcoin mining can actually help secure energy grids. Sure. He was extremely early to that. Of course, Gillumbrand, alumnus, in the House, French Hill, you know, the chair of the Financial Services Committee. These are all people you need to pay attention to. And then there's,

you know, a whole crop of new freshman, Congressman and Senators. Richie Torres. is extremely on the money, and he's not even, you know, on the right. So this is very much bipartisan issue. Almost every single person has brought up Richie Torres. Yeah, yeah, lots of people. That's great. How much time, have you been spending a lot of time in Washington the last few months? I've been spending a little bit of time in Washington. Look, so much money was given by so many different groups in crypto that there are a lot of us on the ground. So the people actually writing the language, working with the White House, that is extremely saturated. Where I have been spending a bit of my time is I'll meet with junior staffers. You know, I don't have any

face to lose. So I'm happy to sit down with, you know, the lowest of the low. Everyone's actually really fantastic. But no, I'll go and I'll make sure that everyone around a certain elected official knows at least what are the range of opinions that they should probably have. I'm not going to say, hey, you should think this, but it's, you know, these are the arguments for one thing, these are the arguments against it. Is the crypto industry and somewhat of a, what was the example you gave with Tech, it's like the dog that caught the car. Yeah. Is that, is that a good analogy here? That's the very negative take on tech's relationship with DC right now is that like tech kind of came in, you know, made a lot of connections, but now it doesn't really know what to do. Yeah, look, I think

you're seeing a lot of headlines saying things like Coinbase is trying to tank the stable coin regulation, the fourth market structure bill. I think it's of course going to be more nuanced than that. I think that there are groups that say, hey, we've won huge, we want to be able to go really hard, let's get everything we asked for, and then there's others that want incremental wins. I will say that Sacks and Bo Hines, who is kind of his deputy helping run many of the crypto operations out of the White House, they're incredible. Like, Sachs was a direct crypto investor. He was an LP in a bunch of crypto funds, founders that know him, love him. And Bo Hines, not a lot of people knew him from before, but I mean, he like, in law school he wrote, I believe, one of his thesis on, crypto regulation. He was a big investor. He worked with a lot of companies. So they're really

on the money. And yes, maybe the dog caught the car caught its own tail. But I'm actually extremely optimistic. And then, you know, out of Treasury, dissent and commerce, Lutnik, you know, both these guys are extremely pro-Bitcoin, pro-cropto. So, yeah. What are you seeing in terms of U.S.-based, or sort of crypto companies generally feeling more comfortable coming back to America? Are we seeing that now? Are we seeing more offices being spun up? Or is it a little bit more like, well, we already did the work to set up infrastructure internationally?

We want to wait to see how this stuff plays out. Yeah, there's a few things. So the first is if companies don't come back, the founders are starting to. There was a class founders that wouldn't step foot in the U.S. It's like Paolo, the CEO of Tether. He literally would not come to the U.S. because he didn't know. Maybe he just gets seized at the airport. So the fact that, one, they're coming back,

they're being public about it, They're showing their face or meaning with people that's big. Other things that, like, you might not think of. Crypto conferences, companies would be scared to sponsor U.S.-based crypto conferences. Wow. Because they're like, oh, if we sponsor this conference in New York, maybe we'll get the attention of the wrong regulator.

That's over if you talk to the conference organizers. They'll be like, okay, no, our business is back better than ever. That's great. So I think, you know, the next stage is offices open up, headquarters open up, and the market structure bill that hopefully will come later this year will be a real catalyst for that. And the other thing that's really important is a lot of trading activity has moved to the international offerings of these exchange.

When you look at spot volume, which is just, you know, if I buy Bitcoin directly versus perpetual futures volumes, which are derivative products. The majority of crypto trading volume is all in perps. Yeah. And perps are not really clear if they're legal in the US. Yeah. There's some guidance that will hopefully come from the CFTC. They just did a request for information a few days ago earlier this month.

CoinBiss has said that they plan to offer futures contracts with a settlement date very far in the future. So you can theoretically do like a hundred year future contract. It live rebalances and it fills the role of the perps without new regulation. It's illegal for futures contracts, not of settlement dates in the U.S. Sure, sure. So hopefully that all gets addressed and we can move the liquidity back to the U.S. because every U.S.-based crypto hedge fund has to set up offshore accounts

to be able to trade their profits. Are you expecting any legislation around real-world assets? I mean, stable coins in some way are taking a real-world asset, even if it's, you know, a number in a database, and bringing them on chain, what do you expect on that front over the next couple years? A lot of people get really excited

about real world assets, RWA's, it's a horrible name for something. RWA's in finance is another thing. But I think that the way that the stable coin bill is written is that if something is directly redeemable as a receipt, you might be able to issue a tokenized version of it. There's some specific language around, okay, if it's a payment coin

or a payment dollar issuer, these are the reserve requirements, but you could extrapolate that and issue smaller things. Interesting. Most of the time when people talk about real world assets, they talk about it in the lens of either A, we want to bring more liquidity to an asset class or we want to be able to use something as collateral.

I am far more interested in something being used as collateral, which in a sense is bringing liquidity to it. The problem is if I was to tokenize a share of, you know, if we start a company tomorrow, we raise a 10 at 50 round, and I want to tokenize that and say, oh, I want this to trade at 50, there's no buyer for that, right? Sure, sure, yeah, sure. You need a buyer of last resort.

No, and that's the interesting thing. I think the lending aspect is fascinating, but illiquidity is such a feature of private markets, and everybody's realized that at this point, right? You don't want a company to be, you know, a company to be on chain. They have a bad, you know, news cycle, and then suddenly it's trading at like, you know, 90% less. Yeah, totally. And I think there's some companies that I imagine we'll see get tokenized in some form. Maybe it's out of trust in Sweden, or sorry, Switzerland. Yeah. Or maybe, you know, UAE or maybe even in the U.S. And the ones to expect are, did you see that Yahoo Finance has secondaries tickers? No. Yeah, they have charts now where they show where secondary transactions are reported to have traded. We need to add that. We do. Well, this has been fantastic. Thanks so much for stopping by.

It's great to see you. Come on the show again. Yeah, yeah, we'll have to have you back for a deep dive. Yeah, we're doing crypto day. Can we bring in Case for Eunice when we have a second? How are you doing, Christian? Okay, yeah, yeah, yeah. Let's bring you in next.

If you don't mind waiting 10 minutes, thank you so much for stopping by. I know you have a crazy schedule, so we really appreciate it. Thanks for coming on. Yeah. Thank you. And congratulations on all the success. First off, would you mind introducing yourself for those who might not be familiar? I'm a short man.

You can have to hold the mic. It'll be more comfortable. Whatever worse. Some people are just doing this. What is the best for you? I am clearly not. So my name is Kasser Eunice. I'm the co-founder and CEO of a company called Applied Intuition,

late-age company based in Silicon Valley. We do vehicle intelligence, broadly speaking. Let me explain a little bit of what that is. Sometimes people think we only do autonomy, but as I was just talking on stage at Hill and Valley, like imagine you work on a mine and there's these giant dirt movers that move like, you know, their size of a house.

Your mining operator, you go up to it, you know, that machine should be intelligent enough to understand who you are, what you're trying to do as you get into, you talk to it. This is this teaming concept. Yep, yep. So we think about AI is like on, you know, in your screen. Literally on your phone.

Chat box. Maybe you talk to chat box. So we're the next kind of generation of AI, which is this AI that's all around you, but specifically on moving machines. Cars, trucks, tanks, planes, and that human AI teaming, that's the company. Can you talk about the path to full autonomy

and what AI means in the context of just, I guess, vehicles broadly? We've seen teleoperation. Full autonomy, even the right thing to be aiming for when teaming is clearly like, you know, like the more natural way to collaborate with the- So within vehicle intelligence, the broad umbrella, their subgroup is autonomy. And within autonomy, you can break that up into kind of two subgroups in itself.

Just for a simplification, because you guys are not, autonomy engineers, right? No. For broadcasters. All right, all right. We won't bust out any software tests for you. But most of the audience, they're much better than we are. Okay, please. Dumb it down for us, not them.

Exactly, exactly. So instead of talking about like society of automotive engineers, like autonomy levels, just think about autonomy as, is there a person in the driver's seat or not? Sure. The Waymo, there's nobody in the driver's seat. In a Tesla, there's somebody in their driver's seat. And that rough analogy applies all the way to tanks to planes to drones or whatever. Is there a human sitting there, a human not sitting there?

So in the human sitting there, that's the assistance version. And really, in the warfighter example, that can be one to many machines. Sure. Right. It's collaborative autonomy. It's multi-mode, right? in the, there's no human, in the Waymo example, then it's a pure level four autonomous system and that's the Robotaxy. Both of those things exist.

So then the question is, well, why would you use one versus the other? The Waymo version, broadly speaking, is way more expensive. Tesla is already a functioning business model. You can go buy a production Tesla that has FSD and it works pretty damn well. And it's profitable. Yeah, and it's profitable. Waymo hasn't figured that out. Sure.

And it will. And just the nature of the actual machine, it's more expensive. The compute is way more expensive. The sensors are more, the entire operations are more expensive. But what you get is you get that last 5% of scenarios that Waymo will take care of, that the Tesla requires your intervention. Because I can't do this. And so then you can take that into other domains like, let's say, construction.

To get that last 5%, it's generally not possible right now because in those domains, they're more, let's say, open than, something like a road. And so then you need a human teaming. Take, for example, you're in a fighter jet or you're in a tank and you have to make a lethal decision. That's where teaming becomes

really important. The beauty of a car is a car can just stop, right? It's not like moving something that's very heavy. It can't always land. And it could be damaging. How much has here? But the answer to question, autonomy is here. It is here. And it's just

like, a lot of times people ask us like, oh, when self-driving going to be a thing? It exists. Yeah, totally. It's just now, it's like mobile phones. Like, when did mobile phones happen? Yeah. Let's ask that simple question. Between the 80s and 2007 when we had the iPhone moment. But even then, like the iPhone, it's not like the iPhone, everyone got an iPhone. No, no, no, it was really expensive. It took a long time.

And even then, the iPhone actually isn't the thing that consumers care about. Yep. They care about the Instagram. Yeah, the app store. What's that? They care about Uber. Yeah. And like, if you try to think about like an Instagram, like you can't even think about Instagram on an iPhone. No, not at all. Yeah.

But the first iPhone, by the way, no app store. No front facing camera. Yeah. So you couldn't even, there's no such thing as Instagram. No selfies. So the macro point is autonomy is the spectrum. Yep. Yeah. So you should think about autonomy as like it's going to come and drips.

And it's going to be, it's unevenly like the old Peter Thiel saying. Yeah, yeah. It's here. It's here. It's unevenly distributed. Yeah. How much is your vision expanded, right? I imagine early on, you know, even in the last few years, I'm assuming that people came out seeing your success being like,

we're going to do applied intuition for XYZ. And then you're probably sitting there being like, well, applied intuition is applied intuition. I think that's the normal competitive situation. But has your vision always been the same? I pity our competitor. We're not a meek company. We're like street fighters.

How long are you doing this? Don't let the suit, don't let the suit, you know, I come from Detroit. You're a brawler. Yeah, exactly. No, but how much, how much? Eight years, overnight success. Yeah, yeah, yeah. I'm assuming your vision always was massive, but now, you know, seeing the technological advancement,

are you discovering new markets every month? Yeah, I think the core hypothesis that we had, the core, like, you know, quantum of idea that we had was we saw Tesla emerging. This is 2016, 2017, and it's like, oh, the car is going to be a software thing. Yeah. And we just don't know what that means, but we ultimately want to participate in that. So I grew up in Detroit, my co-founder grew up in Detroit. We're a family of automotive folks. My parents in factories, his parents and engineers.

I went to the General Motors Institute. So we saw, you know, I worked in factories a bunch of years. And so you just see the car business and you're like, this business is going to change. I think that was the very vague, rough idea. And then the product strategy over eight years has been, let's build all these products to make cars more intelligent. We got into defense about a year after we started. so now seven years ago. You know, it's not random like general dynamics and general motors.

Yeah. Their technical headquarters are like, you know, five minutes from each other. How worried, so you were dual-you-you-you-you-er-use from almost early. How worried do you get for founders that are here that aren't dual-use, given your experience, working with the government? I'm just trying to eat. I don't know about their businesses, man. Yeah, yeah, yeah.

No, no, but I'm good luck. Good luck. But I imagine, like, if you had started out and you were just doing defense and you was autonomy and it was, you know, whatever. Eight years ago, you may not have made it. Right. Yeah. We're doing just automotive. I think, I think it's, you know, it's that there's a, our company values, these values that run the company, but they can all be reduced to two words.

Radical pragmatism. Yeah. The automotive, specifically, and defense are anticyclical. Sure. Yeah. So, you know, it helps. Like, that's not random. So, so I think, I think it's positive.

I think just for us, the problem space in a car and a tank. are actually surprisingly similar. They're both human-operated. They both are large machines that are electromechanical and then now we're becoming more software. I think if I'm a defense-only company, I think it's,

I think it might be easier to be a commercial company to come in defense than a defense company to go out to commercial. Sure. The main reason is in the commercial ecosystem, you've got to fight the globe. You gotta find everybody. And it's not about, I know the DOD procurement methodology

and therefore I get a big contract. It's like I have to have the best product and has to be priced at the cheap. cheapest that it can be bought globally. Yeah. Because otherwise I'm not going to, I'm not going to win. I think for us the transition into defense, being from Michigan, I mean, take home, you know, the tank and where they built tanks and the Detroit Arsenal, literally a mile from where I grew up.

Wow. Crazy. General Dynamics, three, four miles. I mean, Detroit is a defense ecosystem. It's the building. How do you, so you're clearly much more focused on existing form factors, right? Cars, tanks, things like that. drones.

Drones. When, when, I'm sure you've been approached by humanoid robotic companies. Yeah, we have. Look at this.

This guy. Are you a plant by one of our investors? No, I just, who is Josh Wolf or who? No, we have John earlier.

No, but I'm curious to get here. I'm curious to think, you know, hear about how you're thinking about these new form factors. We don't know at all how they're going to play out. Yeah.

So we have been, we have been approached by, I would say, I have three humanoid companies now who said, hey, can we use the tooling? Can we use the tooling? Can we use some of the technology?

I think for us, we like to enter markets where there's a bit stability and maturity because you don't want to build a bespoke thing for company A and then it's, you know, a bespoke company. We're a product company. We're a product company. Humanoids will get to that. The macro thing that you're tugging on is actually this abstraction from hardware or software. There is a company actually that's like applied in the past, which is Microsoft.

Microsoft started as a tooling company, then got into operating systems, then got into applications. but they did it all on the PC in the 80s. We're doing it on the vehicles in the 2020s, but it's the same thing. You're abstracting away from the hardware that exists in a car or whatever truck, commercial truck. The humanoid is similar. There's a hardware software bifurcation that's going to happen.

How do you balance that wanting to be a part of the sort of evolution of these new form factors but not overinvest too early? It's like that's the challenge. you know, a billion dollar question. Yeah. I think most companies, we have, Mark Andreessen's our first investor and our largest shareholder

and he's our sole official board member. Oh, nice. So Mark's been with a company a long time. And Mark has this great line, which is companies are almost always too early. Yeah. And that's super counterintuitive because you always think,

don't be late, don't be late. Actually, the mantra everyone should be saying is, don't be early. Don't be too early. Interesting. Don't be early. And so I think that I say,

right now is the best time to get into self-driving. Interesting. Yeah. Because all the technology is kind of figured out. So now you're going to enter against a Waymo or against a Tesla with none of the cost of the 15 years. And you take all of these engineers who are at Cruz and Argo and a Waymo and a Tesla and you recruit them and you build some drugs.

With all the tribal knowledge of what works, what doesn't work. And they get to work with you. Yeah. And it's like tribal knowledge. It's like actual hard tech. Yeah. And so they now know. So, you know, it's like building the first web application in the mid-90s, that's a miracle.

Today, junior high kids build web apps as a part of their class project. Autonomy is going to be the same way. Human and robots are going to the same way is just the time factor. So if you're trying to monetize, that's what the business we're in. That's what commercial world is, private business. You have to find where's that meniscus line? And as soon as something becomes mature enough, because you also can't be too late. If you're too late, then there's a bunch of players in the ecosystem.

Actually, you talk about defense tech. My actual fear for a young defense tech company isn't, can you make it a commercial? I think you can build a very viable, vibrant defense-only company. Yeah. It's just there's a lot of defense-only companies now. Yep, totally. And suddenly, you know, the pricing pressure goes down because you're the fourth company that's doing the same thing.

Yeah. Yeah. Well, I can't wait for the next season of Battlebots. I'm sure kids will be building all sorts of crazy autonomous solutions because there's so many open source packages that they can piece together. Were you surprised, by the way, the new spending. bill allowed for like $500 million of autonomous systems. A lot of people said that felt low.

Yeah. But we had Sean McGuire on the show earlier and he was like, well, it's not low if that's the starting point. And we go up from there, which is, I don't generally use proxy. I don't use dollars as a proxy for importance. The deep seek outcome is a very clear example that you can do a lot with limited resources.

Yeah. I think the more important. message, broadly speaking, is autonomy is where AI meets the warfighter. That message, I mean, I keep saying that again and again, I want, you know, trademark copyright, whatever it is. But the point being is like, it's the thing, the teaming aspect of the warfighter with the machine, that's the future. How we get there, that's all details.

But we all have to agree that that's what we gotta get to. If we agree to it, then we can figure out the, you know, reconciliation and this specific Well, all that will get shaken and shaken out. Totally. I don't think enough people still agree that that of that vision of the future. Yeah, it really does feel like of the other, there's probably 20 other line items where autonomy will be stuffed in, but it won't be headline autonomy spent. Yeah, exactly.

And I think like, you know, even applied for our company, we don't cast ourselves as an autonomy company. We cast ourselves as an intelligence company. Sure, sure, sure. A vehicle intelligence company, right? And so, like, why do we do that? Etonomy is a component. It's a component.

Yeah, of course, of course. It's kind of like saying the, you know, is the government funding enough engines? It's like, well, the car business that we're really talking about. The engine is a very important aspect of the car, but you're funding actually the larger industry. Well, thanks so much for stopping by.

We'll let you get the next thing. We've got to run. This is a lot of fun. We'd love to have you back for a much deeper dive on the company. This is great. We'll reach out. Cheers. Talk to you soon.

Bring in our next guest. Welcome to the TVPN live stream. How are you doing? How is your, how is your, Hill and Valley experience, Ben. Hey, what's the latest? Welcome to the show. Nice to meet you. John, pleasure.

Would you mind introducing yourself for the stream, for the viewers who are watching? Justin Fisher-Wilson, one of the founders of 137 Ventures. Fantastic. How would you describe your fund, what you do for anyone at home? So, I mean, we started the business back in 2011. I used to be a founder's fund. Yep.

Left when we sort of had this belief that companies were going to stay private longer. and that if that happened, you know, founders, executives, all the early employees, we're going to end up wanting some liquidity. Yeah. Because, you know, your life is different when you're 35, when you're 25, when you're 45, when you're 45, like, people's needs change. And so we kind of built the business on that premise.

And we've continued to expand. Like, once you've got great relationships with the founders, you can do some primary investing, help people run tender processes for all the employees and kind of where we built it. Hot take is. It's a finance with a, deep understanding of venture and the founder. Absolutely, right? I mean, ventures finance.

I mean, I'm not sure all the venture people necessarily. Yeah, but it's not, it's sort of, it's a different product in the sense of like, okay, we're going to give this entrepreneur money set and forget, you know, kind of bet on them versus like running like a firm and like built, like it's financial services at the end of some way. I think, I think you're right. Like we're trying to build long-term relationships with people, right? Like we were early investors in SpaceX and like we've continued to invest with them for

the last 15 years. years, right? I mean, we've done something similar with Andrel, right? Like, we're just, we're trying to build long-term relationships with great companies and continue to invest in whatever way we can. So, a bit of a hot take is, is the Lina Khan effect on M&A markets good for your firm because it leads to companies staying private longer because they don't get acquired? I think, well, so I think there's this like misperception that U.S. government policy is the thing that drives the M&A markets. It definitely is part of it, but like, like, go back. It was a good excuse for the last couple, you know, a few years.

That wasn't what blocked, like, the Figma deal, right? Like, that was the Europeans. Yeah, yeah, yeah, yeah. So, like, just because America's like, great, anyone can buy anything. Like, the companies that are buying other companies are global and they're regulated globally. Sure. And so, like, just solving it in the U.S. is not going to actually solve the M&A problem that you're describing. Yeah.

So, like, do I think less MNA is sort of good for us? On the margin, sure. Right? I mean, like, it's, you know, like, it's, but even the ideal market's kind of closed. Totally. So companies saying private ultimately means they end up taking more investment in the private markets. Yeah. And I think at some point the great companies, they mean they get cash flow positive.

They don't need primary capital anymore. Yeah. Right. So that leads you to these liquidity events, tender events for employees. And like, that's how we've scaled over time. Do you buy that idea that like Elon Musk kind of ran the AB test with Tesla and SpaceX, had a great experience at SpaceX, didn't have a really great experience in the public markets as Tesla? I mean, fantastic stock performance, but like headaches.

And so the takeaway was, hey, maybe stay private longer, and then other founders kind of learn that lesson as well. Is that reasonable? I mean, I certainly think Elon had a better experience in the private markets than the public markets. Sure. But, I mean, personally, I think, I don't want to speak for him, but I get the impression that he really appreciated all of the retail investors who supported him and the company and his vision of where the company could come from. And that's actually like an incredible thing. Like, there's so many small investors across the country who believed in the company. And then because of that actually made huge sums of money by being an investor.

So like I think he actually really does care about those people because they were there for him when in Somerset's other people weren't in the private markets. In many ways, your guys' model is not, you're not like, oh, I'm so annoyed this company that was in our portfolio went public. It's like you win in kind of either situation. Yeah. I mean, look, ultimately I think LPs do need dollars back, right? You can't have a system where like all you do is take money from people, give it to other

people and then like it's worth a lot more but no one ever gets any money back. like that, that system will ultimately break. Yeah. But, you know, I think if you're right about the companies and you're compounding over a long period of time, like, that's ultimately the goal. So you get a little more leeway when that happens. Yeah, yeah. Do you have a take on the new permanent capital vehicle that Thrive put together? It's kind of an interesting story that we haven't seen a lot of VCs do that.

But obviously Warren Buffett's famous for it. There's a lot of other folks that have built these holding companies. Yeah. We've seen more just different strategies in venture, I would say. You have continuation vehicles. You have growth stage, almost private equity type deals happening. Like, what is exciting about the new era of VC in 2025? I mean, we've looked at some of these permanent capital vehicles.

I think they're interesting. I think they solve certain problems. I think they create other problems, right? Going back to the liquidity point, it's permanent capital. Yeah, you need liquidity. It makes it hard to get the money out. But they do solve certain issues. And I think it's really nice as an investor to be able to take a really long-term view on things.

and not get caught up in the market cycles. Like, the trick is like just, like even your conversation about applied intuition, it's like if you can just be in this company for a really long period of time, like, who cares what multiples are today? Yeah, it doesn't matter. I care whether or not the fundamentals of the business

100x over the next 10 years. Yep. Who cares? Even the multiples are terrible then. It won't matter. Yeah, yeah, yeah. Right? Like, so that's, it does seem like there's a shift.

I mean, I don't know who came up with the idea of a 10-year life cycle for a fund. It seems arbitrary. It seems like they were just like, eh, like, make. it double digits, make it a nice round number. But now it does feel like VCs are starting to think, oh, well, like, there's extension periods, there's continuation vehicles.

Maybe we should be thinking in 20-year cycles, 25. Look, it turns out everything is historical and structural. Yeah. The reason it was 10 years is that the, so you go back to like when we started a business in 2011, right? Yeah. The first company that really kind of stayed private for a really long time was like Facebook. Yeah.

Like that was sort of the, that was sort of the... That wasn't even not long. It wasn't the time. But back then, right, the average time... with Google and these companies went public so fast. Time to liquidity was like, you know, I think probably four or five years back then. When we started 137 and 11, it was like six or seven years. It's now like 12 or 13 at this point.

So like people pick 10 because they couldn't conceptualize that companies would still be private 10. And they like doubled it and rounded up. Right. And so now what's happening is like. No way this company is going to be private 10 years. This is super safe. Exactly. And then and that's, and that obviously that broke the system.

How early do you try to identify these companies, right? Because once you have a generational company in the portfolio and you plan to help support all the shareholders over numerous years, it doesn't matter exactly when you get in, but I'm assuming that other now even gross stage investors are looking for you guys for signal in some way or another to kind of just given the track record of 137. And for us, I think we're looking at companies that are kind of post-product market fit and that are scaling the business.

And the thing that's sort of changed, if you look at the last 20 years or so, is that there's really no cap, right? Like, it used to be that a billion-dollar company was like an incredibly huge outcome. And, like, honestly, there's hundreds of those companies in the private markets now. And so, like, for us, it's really just this question about what, you know, can the investment hit our cost of capital? And if you have, you know, you have an opportunity to invest, even like take SpaceX at 350, it's like, if you can believe that's a trillion dollar company, like, that can still be a great investment. Sure, it's a big number or whatever, but like, it doesn't really matter where you are. It matters where you're going.

And that's, I think, the thing that is different in the private markets or really even the public markets. I mean, look at the valuations on Nvidia. I mean, that's an incredible growth story in the public markets. Yeah, you don't see that at that scale usually. I mean, look at Google, look at Apple, right? And look at all of the major tech companies. Like, it's, yeah. The opportunity is much bigger than people imagined.

Yeah, that's true. Any other questions? No, this is fantastic. We'll let you get out of here. Thank you so much for putting this whole thing on. We're happy to help make this thing possible. And you guys have done quite the job this year. I hope you make it back next year.

Oh, absolutely. Thank you so much. This is great. Cheers. Thanks so much. Let's get Ryan Peterson in. Yeah, well, yeah, we have Zellerfeld. I think we should bring in Cornelios really quickly.

minutes. We need to go into lightning round folks. We got a bunch of people. Yeah, yeah. Lightning round, Cornelius. We got to talk about. Let's talk about the chain real quick and the fit because it is one of one. Every time I see him, he's dressed fantastically. Here, pull this up. This is happening. Zellerfeld. Thanks. Yeah, obviously as I'm from Zellifold. You can put your shoes on the desk if you want, if you want to put it up for the audience. And since you are in the shoe business, there we go. There we go. Right on the desk. Look at this. Made it made it shoes 3D printed shoes. Yes. In the US.

Yeah. So so far we have done most of our production in Hamburg, Germany. Okay. So that's where we started. Yeah. Obviously, like a huge part of our market right now is West. So we're just bringing that back. We had 200 printers in Hamburg, Germany, and now we're bringing 2,000 printers here to the U.S.

printing millions of pairs a year. Amazing. Insane. Insane. Where's all the, where's the demand coming from outside of the tech community? It's mostly fashion guys. Yeah, sure. I don't know if you have seen, but we are printing shoes now for Nike, for Louis Vuitton, for Leibre.

Even like lots of celebrities are wearing our shoes. Drake did a huge cowboy boot with us because he just bought a Texas in Texas a ranch. Sure. There we go. And he needed some cowboy boots. Just make it, make it. What have you learned from, I mean, we read a story in the Wall Street Journal recently that Nike was having trouble. Nike was having trouble

using robotic automation to assemble shoes and meld the upper with the soles because there's so many different sizes. It feels like a unique case for 3D printing, but is there any hope to iterate on your product to a point where there are multiple materials?

Yes, also multiple colors. I think previous experiments often failed mostly because everybody is trying to make the same product as before, just essentially, assembled by robots kind of. Yeah, yeah, yeah.

But you need to think about it from first principles. A hundred percent. That makes sense. And then you can do even crazier stuff that traditionally wasn't done in performance footwear or so. So all of a sudden with 3D printing, every shoe can be custom made. So when you think of performance, you know, everybody talks about, I don't know, I think Nike's mission statement is goes something like making every athlete's dream

come true. Yeah. But like if you think about it, lots of those brands, like they have custom-fitted shoes for those performance athletes, but what about the kid on the school yard that just wants to kick some soccer, for example? And all of a sudden with 3D printing, you can get those kids the same custom-fitted experience

like a pro soccer player. And when you think of not just performance footwear, but even anyone, I think what will happen is, I mean, I wear this this is happening, Cap, because printed shoes will be on every foot. Yes, yeah. And a big reason is because all of a sudden you can do stuff like, I don't know, every shoe fits, whatever design. So talk about the time today shoes are made in factories far away from the end consumer.

They get made, they get sent. Eventually they get to the consumer, whether it's through retail or online. Talk about kind of like what is the actual activity, you know, where is the printing going to happen long term? Could we get to a point where Nike... It's fully decentralized. Yeah, could Nike in a retail store, could somebody design a shoe and print it in real time? Is that where we're going? So basically what's going to happen is you will have farms all over the world.

Maybe a little bit like Coca-Cola has bottling plants all over the world. And then what's going to happen is you buy a shoe, for example, on Zellafeld.com, and depending on where the end consumer is, that's where the production job is going to get through. And then what I fucking love is that people are now buying shoes on Zellafeld.com. and basically a few seconds later the printer starts printing and you can have a custom footage

through, I don't know, two days later and that is completely changing the game and without, you know, usually in footwear you have cycles, production cycles and marketing cycles of 18 months and longer. So you need to make the commitment in the factory in Asia 18 months before but you don't even know

how many will sell. So what's great here is that on-demand production basically changes that completely and it can still be as quick as Amazon. Yeah. No, it's such an interesting story just given, you know, we've studied how Nike just struggled to bring back shoe production with one of the most advanced manufacturers in the world. But again, it was because they were just taking the traditional way.

Shoes has like 14 parts or something like that, trying to make it with a robot. And I think what you're doing was shoes, we can apply to so many other categories in terms of... Well, thank you for stopping by. We'll let you get back out there. Yeah, yeah. Come back on the show soon. Whole deep dive. Should we bring in Augustus, Ryan Peterson? Let's do Ryan Peterson because I told unless Augustus was on the schedule.

Augustus, do you have to go or can we do Ryan for five minutes? Okay, wait, hold on for a minute. We got Ryan because I think he has a call. We'll bring you in 10. Man. Sorry. Yeah, yeah. Oh, yeah, we're still live.

Ryan Peterson. Welcome back to the show. Third time. It's treated like cattle. Yes, I know. It's really rough. Sorry about that. We're not a plus of the scheduling.

We're iterating. We're learning. But how has your Hill and Valley experience been? how's your time at DC been that's great it's great to be in the Capitol yeah I haven't been here since January 6th no I'm just kidding bad joke but yeah I mean you're you're in a very interesting business obviously in the news everyone has called you you've done mad money Wall Street Journal's calling you the most boring business that we need to know about or something like that what is top of mind what are you telling lawmakers that could change or could you know

improve to like what does a great outcome here look like in the next couple of years. What's your stump speech right now? Yeah, yeah. I mean, once we get to the case, you worry about the next couple weeks. What's on your mind? I don't think anyone cares what I think. I told them tariffs should come way down. Okay.

Yeah. Well, we've seen in our data is a 60% decline in freight from China to the U.S. Yeah. Can you unpack that? I heard something about like the freight rates are actually high because they're not even, their ships aren't even moving. Is that right? No, rates are pretty reasonably low right now.

There's a risk of it going higher. Like, I think it will be a first-class problem. If they undo the tariffs and a lot of volume comes through, then it goes high. Then you'll see this spike. But if you're willing to pay the tariff, you have a really high margin, you can get stuff out of China right now. Yeah, there's a little bit.

So, like, so you've had a 60% decline in bookings of ocean freight from China, the U.S. Okay. That's resulted in 25% decline of sailings. Sure. Ocean carriers pulled 25% of the ships. they're not sailing. So like it's a little bit harder to get service. Got it. Because like chips are getting canceled. It's actually made like sport more valuable because if you're booking directly with an ocean carrier, they might cancel the sailing. Yep. Yeah.

We'll find you a different one. Yeah, yeah, yeah, of course. We'll solve your problem. So at some level, some of this like helps us a little bit. But I'm very worried for our customers that those are their businesses. Yep. 60% decline. There's a lot of companies just deciding opting out of the system. Yeah. And they can't they can't necessarily move to a new manufacturer immediately. They didn't spend enough at the inauguration to get the exemption. Yeah, yeah, yeah, yeah. What's been, what have you been hearing on the ground in China?

It's hard to, 60% reduction in freight coming out of China is very bad for China, right? Like the sort of, the party can kind of spin that however they want. They have a lot of control over. Very bad for China, you're saying. Yeah, yeah, very bad, very bad for China. in an economy that was already bad, in an economy that had extremely high youth unemployment, have you heard anything from the, you know,

all the different groups that you interact with on that side of the pond? Definitely bad. I mean, it's bad for both parties. You know, you kind of have a game of chicken and there is an outcome where the cars crashing each other and everybody dies. And so you hope somebody swerves and gets solved.

my view of it I don't have a lot of like inside Intel here it's certainly bad for factories I just think China can withstand a lot more pain than America just due to the way it's like the last 100 years of Chinese history they like they would have a couple percent of GDP decline like oh my God

look at the history they've been through they're ready for the worst of that warlord era yeah like all these different famines and things that like pain is built into the culture these are kind of yeah this be a pretty small amount of pain for them to bear. American side were kind of soft. There's a lot more feedback mechanisms here.

Trump, I had to say, it's like an iron will. A lot of people are broken. I don't like any of the tariff policy. There's other policies I, you know, not what we're going to talk about right now, but I don't like anything about the tariff policy. And yet, you've got to have respect for this guy.

It's like the whole world is, it's everyone against Trump. And he doesn't care. Yeah. I would have this power. We've, you know, heard rumors that there's, you know, that there's obviously just been a constant rumor mill. Rumors moving the market, trillions of dollars, you know, in seconds. But is there any sense of optimism on the ground with the politicians that you've been seeing this week?

I've, there's, let's just say, there's a sentiment that tariffs, The tariff with China at 145 is not sustainable. It's not where they meant to be, not where they want to be. That it will come down. But there needs to be renegotiation around that. Unclear to me what they think the triggers are, so therefore the timeline for when it would come down. Or what it comes down too.

Because on the day of the reciprocal tariffs on April 2nd when it was announced, China was at 54%. And that was already a shocker. Like, that was the top of the list and the worst. And that's going to be. And that's on top of the prior Trump administration. And the oil stuff that you mentioned. Venezuela.

So like, now that seems queen. You're like, oh, let's get 504. But 504 was also really bad for companies. If we play this out and there does wind up being a re-industrialization, more American manufacturing, maybe it's an automated facilities. What does the future of flexport and logistics look like? Is it more trucks and trains and automated trucking? What are you thinking about in like five, ten years just to power a more efficient logistic system in the domestic lower 48?

Oh, in domestic side, yeah. I mean, we acquired convoy. Sure. So we have a truckload business. We do about 200,000 truckloads a year. Yeah. That is 98% automated. Really?

Really? Wow. 98% of the loads, nobody does anything on the same side. 2% need to have an exception managed. Yeah. Yeah. So that is probably going to scale that thing like crazy. But by the way, the truckload business, if the tariffs keep going where they are, that's going to collapse too.

I mean, it's not really a counter. You're trucking. You're trucking stuff that came off a boat. Yeah, exactly. And this idea that's going to lead to this manufacturing boom is kind of fake. Like, you know, I heard from a senator yesterday that said they do a lot of, they have a lot of auto manufacturing in their state. All the auto manufacturers have told them that if they don't get an exemption on parts, they're going to go under. Well, they got an exemption on parts this morning. Okay.

Or yesterday. So, well, hopefully these feedback loops are working and we don't just, like, kill... I knew that what's going to happen because you're like, they're not going to let all the auto manufacturers. Yeah, yeah, yeah, yeah. Yeah. Yeah. I mean, it's a bad situation. Chaotic time.

If you have your, you know, team in Washington, you can get stuff done. And if you're, you know, even if you employ 100 people, you can't, it's hard to get your... You're still a tiny business in the eyes of everyone else. I mean, we were talking, Sean Frank had an interesting, kind of policy, you know, recommendation or idea, which was like basically take what I would have to pay in tariffs and make me invest it here in the U.S. Sure. So I can basically buy some time.

Don't just come down with a, you know, just absolute hammer because I can't, like I can't set up a factory in three months even if I wanted to spend, you know, a billion dollars. Yeah. They announced today that they would do, allow you to expense 100% of CAPEX. if you're building a factory. This could be really big. Like first year, straight line depreciate the entire amount of the build out. So, you know, more policies like that might get into industrialization.

Can you paint me a picture of who the major power players are in D.C.? Are there trade organizations that are doing stuff here? We've seen some of the different, like the Longshoremen's Union. Do they have a view on this? Are there different organizations and leaders who are. championing these causes. Representing business? Yeah, it seems like you are honestly one of the champions of like the e-commerce

community. Trying to do that in many ways. On behalf of our customers. Yeah, on behalf of your customers. But are there other more official organizations? I'm sure there are. NRF, National Retail Federation is typically the main channel for this. There's a few others.

I'm not that familiar with. Sure, sure, sure. The big CEOs are going direct when you've seen they say they were all at the White House. Yeah, yeah. But yeah, not really much of a voice for small business out there. So we're trying to do that. I'm sure there's all kinds of lobbyists. You mentioned longshoremen.

So the ILWU is the West Coast Sports Union. They came out opposed to tariffs last week. ILA endorsed Trump. Yeah. And they have not come out against this. Yeah. So ILA is the East and Gulf Coast Sports Union. The ones that went on strike last September.

Yeah. But much less affected. The guy, I will cripple you. Yeah, yeah. Yeah. But isn't there, aren't they much less affected because it's not. trade with... A lot of trade...

A lot of the East Coast trade... Comes through the Panama Canal. Yeah, sure. Or through the... It used to be through the Suez, but around the Cape of Africa right now. So, yeah, I mean, they gotta be opposed to this. It's bad for their business, but Trump, you know,

help them get paid. Is the talk around the Panama Canal beneficial to trade long term, if that happens? Whatever Trump was talking about, like taking more control there, not letting China grab it? That is...

So, I felt like it kind of fell out of the news because the tariffs are so much bigger. The crazy thing about Trump is that a lot of these stories of things that he's done or said or actions would be like the story of the year for like a normal presidency. We're jamming so many current days before the next time. Yeah, we have 20 current things at once. Yep. The media can't keep up.

Certainly the Democrats simply can't keep up. None of us can keep up. Yeah, it's wild. The Panama one was they're trying to get them to the two port, the ports on either end. It's not the canal itself, but the ports on either end. owned by Lee Kha-Shing, Hong Kong-based billionaire, which is manned Hong Kong.

He went to sell it. The Chinese blocked the sale. Interesting. Which I think I've seen that the Trump administration argued that the very act of the Chinese being able to block the sale is a potential violation of the treaty by which the U.S. handed over the canal zone

to Panama. Now they're threatening. Maybe we'll invade Panama again and take it over. I don't think anyone wants to see that happen. Okay, that's interesting. It doesn't, I don't think from an efficiency standard that's like really relevant. I'm sure there's national security reasons.

Stuff's going through. What have you heard about, even, I saw a story about iPhone suppliers not being able to get equipment out of China. Did you see anything about that? Oh. Is that not even surprising to you? I didn't follow it very closely. Yeah. Yeah.

No, just kind of an interesting, you know, there's, you know, the idea that we would decouple even the iPhone supply chain from China without sort of inward pressure from China. A couple of things I heard here in D.C. is that they like senior people shall not be names have said that

145% is a decoupling rate. If they understand that that at that tariff level these economies will decouple. And that's evidence now with the 60% decline in bookings like basically instantly. And that that's not where they want to be. They do not they intend to do a decoupling. It's more

strategic decoupling in a dramatic fashion on such a short time scale, etc. So I think that that speaks to like, and Trump has said as much that they're going to lower the tariff rates. It's just a question of when and how low do they go. Yeah. Those are massive variables. My view is that when it needs to happen almost right away. Like if they last a couple, if they wait a couple months, I think you're going to have huge fallout and damage to the economy and small business getting wiped out in employment and all that stuff, inflation. How low, I don't really have a good read on that, like, at what level is, no one's

going to tell you honestly. Yeah, of course. I don't like, Bloomberg asked me this morning, what level I'm like, zero percent. Zero percent. Don't ask me. I'm a pretty drink guy. You know my business. So I don't know what level it needs to be for business.

I don't think anyone really knows, though. Like, these models are super complex. Yeah, totally. And there's all these second and third order of facts. Yeah, like, it's really hard to predict. We'll have to keep tracking it. And then you have, like, what's the dynamic by which. Trump can walk this back.

Sure. Like, I think he needs to escape go. Yeah. He's to find someone and blame them. Blame them. We should find somebody from the event. Yeah, yeah. There's got to be one guy.

There's got to be one guy. They're probably here. Yeah. Delian, it's your fault. You got to do something for the country right now. I'm only interested in space, actually. Anyway, thank you so much for coming on.

This is fantastic. I'm, uh, I want the tariffs to end so you can get a good night's sleep. Yes. Yes. You deserve it. Anyway, let's bring in Augustus. DeRico, welcome to the stream, Augustus. Third time, another third timer on the show, Augustus.

How's going to? Welcome, how you doing? First of all, the hair is looking amazing. Thank you for the weather. It's fantastic. Not too hot, not too cold. I feel like you pulled some strings. Pleasure's mine. Yes, exactly. We got here and we were like, I was making a joke. I was like, wow, our politicians, the swamp would set up in one of the nicest climates I've been in a while. I was like, it's normally terrible. I'm here on like, we're here on like the one nice week of the year.

Yeah, yeah, yeah, yeah. With a big, fluffy cumulus clouds, beautiful cumulus clouds. Yeah, yeah, yeah. Have you been, you've been here in D.C. a lot less than random state legislatures. Yeah, yeah, yeah. Yeah, I mean, for those that don't know, there were, we're up to 33 states that are supposed to weather modification. Wow. However, 18 of those bills were either dropped.

amended to carve out cloud seeding and still ban chem trails, which is going to be crazy. Because those bills will pass and then people will still see chem trails. Sure. Yeah, yeah, yeah. Or Montana, a great case. We showed up there. We're like, hey, cloud seating's pretty cool, huh? And then they funded

a program. Oh, that's great. So yeah. Okay. We'll be expanding there. But the folks in D.C. that we met with, they all are way more level-headed and just say, like, hey, we're not going to concern ourselves with the whole Q&ON thing. Cloud Seating seems like a great water supply tool. I'd love to start working on report language, et cetera, et cetera.

Yeah, that makes sense. How much is water scarcity a factor in reindustrialization? I mean, even last week we were talking about how the water demands of oil production and just how absolutely insane they are, not to mention they end up with a bunch of water that they don't really know what to do with or trying to evaporate, but how much is that kind of a fast? actor and what kind of conversations have you been having here at the event? Yeah.

You know, Jensen gave his speech earlier today, right? And I think a lot of people intuitively... Yeah, sorry. A lot of people intuitively talk about how energy is this, like, fundamental primitive in all industrialization, so are critical minerals, so is now intelligence and human capital. Water, because nobody has ever had any ability to, like, work on it and provide new supply, has kind of just been this assumed limitation. It's going to be necessary to produce more.

Should we want to build up this industrial base? Should we want to increase ag production? Particularly, like, the TSM plant in Arizona, nobody knows where the water for that's going to come from. Really? Yeah, yeah. Like, you need it to come from either the mountains and Flagstaff or the Colorado River.

And the only way to get it, there's cloud seeding. There are crazy stories about the water at TSMC. If it's slightly saltier, it affects, like, the yield of chips and stuff. It's like total alchemy. Oh, yeah, no, it's magic. It's like there's all these aerospace parts. CP talks about this all the time. Like, yeah, like, there's some parts made in Michigan.

Chris Power? Yeah. Okay. That people. C3P. Yeah. Anyway. And it's like, yeah, there's like a little bit more of whatever in the water in Michigan.

And without it, then you can't make like lubricant. Same thing with the tap water in New York. Makes the good pizza and bagels, right? Exactly. George won't touch it, but. Oh, the tap water in D.C. is rough. Yeah, he's not a fan. Not a fan.

He's not a fan. Anyway. Yeah. Yeah, bring us into some of the other conversations that you've been having here at the event. What's exciting? Yeah, walk us through that. Yeah, I mean, I think for one, deepening our collaboration with the Middle East, right? Like, it's no secret. People talk about the Trump admin and how close they are to MBS, to the Emirates, and otherwise.

I think that because that country is very seriously, like, enacting this vision for a crazy future, for greening Saudi Arabia, for billions and billions poured into AI. One, they're a great capital partner for a lot of the tech ecosystem that wants to grow out of its nascenty and deploy, but also I think they make us look in the mirror about what's possible. So talking to people that have been doing work there, that's exciting, talking about how we're collaborating in the Middle East. That's a big deal. What's the name of that regulatory portal? You submit a paragraph and it's like, get rid of this regulation, please.

Oh, doge. No, no, no. It's like the FTC has something. And you just go like, yeah, get rid of this. And if they accept your... I think you just tweeted Elon actually if you want to. Yeah, yeah, yeah.

Please fix. Gary Tan. Please get Gary Tan. That doesn't usually. Exactly. If you get it approved, they name the like new regulation after you. Okay, so you want to do that. That's good.

Speaking of like national regulation, is there any, obviously, the first time we met, you talked about China, planting trees and terraforming the gobi desert. Is there any world where that becomes like a national policy or do you still do you go state by state? No, dude.

So Secretary Bergam gave these great remarks this morning about how all of our federal lands should be considered a national asset. That makes sense. Totally makes sense. And we probably have, I think of federal lands as like the forests and like you know, Yosemite. But there's probably federal land that's desert, right? Yeah.

No, there's tons of, tons. Stons. Yeah. Millions upon millions of nature. Why don't we just convert this into the next Yellowstone? Exactly. Create a Yellowstone club. Dude,

like next Yellowstone, which would be sweet or also more timberlands, which you can harvest. Farmland. Yeah, exactly. So like all of that, or just give it to Teddy and have him tear it all up and strip mine it or something.

That's also fine with me. As long as you have a proportionate amount of new yellow stones. Wait, who's Teddy? Feldman. Oh, Feldman. Okay. Yeah, yeah. Yeah.

Sorry. Gundow brain. Yeah. Yeah. Everyone's on first name basis. C. Really not doing a lot for the listeners at home. I'd not be familiar with the inner workings of the Gundow politics.

Where are you headed next? Back to the Gundow? I get on a midnight flight back to Gundow. I'm going to interview a bunch of scientists. And then I get on a midnight flight tomorrow to Florida. And then on Sunday, I go... By the way, most brutal flying midnight. Because you landed like 3 a.m.

It's the worst. And then you're back on an overnight. And the overnight to Florida is terrible because it's only five hours. Yeah. Can't even get a full night's sleep. You get cooked. It's terrible. I did Salt Lake to D.C. this morning.

First of all, flew into Dulles. Huge mistake. But on the flip side, my row was empty. So I laid down, slept like a baby. That's great. Good. Well, hopefully you can get some sleep. Hopefully you can make it through those flights.

We appreciate you stopping by. Thanks for coming on. It's great to see you. Always good to have you on. Sure, of course. Thank you. You can take this whole tin. There you go.

What a guy. Yeah, yeah. I'm sorry. Anyway, should we bring in the next. guest who do we have i know we got a couple folks here let's bring him down how you doing i met you the last hill and valley uh welcome welcome to the stream would you mind uh doing an intro for the for the viewers uh introduce yourself the company what do you do how you grab the microphone hill and valley yeah grab it just you can pick it up and then just hold it like you're given a speech at the most

important event at hill and valley awesome well thanks again for having me good see again uh so i'm Cepation, the founder and CEO of Fuse, are a fusion company working to accelerate the worst transition to fusion energy, while also safeguarding humankind. So it turns out if you try to create an artificial sun on Earth in a bottle and use a lightning bolt to implode a pellet of fuel, that's really useful also to ensuring the safety, reliability of our nuclear arsenal. And so we're very committed to continuing to help the US modernize its nuclear arsenal and and being, offering radiation as a service.

Yep. Yeah, when we talked, it was fascinating because you were much more commercialized than most other nuclear founders that you talked to who are more in the, let's get all these approvals, let's build a big thing. What has that commercialization been like? And can you concretize the actual product that you're selling and to who? Yeah, yeah. So we have customers both in the U.S. government and two, you know, public companies.

Sure. And we've built two machines that are operating today. one is the word's highest power energy delivery system. We call it Titan and we publish it's one terawatt, but for a billionths of a second. One terawatt, wow. But for a billionths of a second, it's 20% of the whole word power production.

But it's just for billions of a second. And it's not a fusion machine. It's just an energy delivery system. Sure. But it creates it creates pulses of radiation that are so intense. And then you can expose electronics or materials. and see how they behave. So you're creating hostile environments

similar to what would happen in, you know, human-made hostile environments and expose electronics, materials through those types of radiation, whether it's x-ray neutrons, and see how they would behave. That's really critical to ensuring, you know, reliability, safety of critical assets in space.

Interesting. As well as now conventional systems. Okay. And I don't know if you saw last week, but there was an announcement and the US will be spending $946 billion over the next 10 years to modernize the arsenal, and it's 25% increase in budgets since 2023. So it's a big deal.

Yeah. And by, you know, producing this radiation and reducing the dollar per rad and, you know, the availability of radiation, we can, you know, save taxpayers billions of dollars while offering radiation as a service. Yeah, talk about the energy requirements of reindustrialization, which is the theme of Hill and Valley. I think a big question is like, okay, where's the power going to come from, even if you're not looking at AI,

or a lot of the conversations that you're having here around with some of these bigger companies that want to come back to the U.S., but want to make sure that they're able to have the energy and infrastructure to actually thrive here. Yeah, it's a really challenging problem. I love the quote from Jensen today, where one gigawatt is like $60 billion. And it's the annual revenue of Boeing.

Yeah. That's really not going to work out very well. The good thing about fusion, the first thing I'll say, which may be a bit controversial, but fusion is still, like, we're still far from commercializing it. So it's still probably going to take a decade or two to actually put electrons on the grid. But it's still really important, and we can't afford for another country to get there first. Yeah. But the good thing about fusion is that it's location independent.

So you can put it anywhere you want, right? The fuel is hydrogen, which can be found in seawater. Sure, sure. So you can literally take a data center and build a fusion plant right next to it and not have to integrate with the grid. And I think fusion being safe, clean, abundant on demand makes a really appealing case for industrials, because you can build a power plant right next to your industrial plant, whether it's data center, steel factory, glass factory, etc. And when you think about the changes that have happened over industrialization, there's been no new nuclear facility built in decades. So the workforce that actually knows how to build is gone.

Whereas China is building dozens of plants and we've seen satellite imagery recently that's become open source on exactly our footprint of our facility being built. And so we just cannot afford for China to become for fusion, what Saudi Arabia has been. and what Saudi Arabia has become for oil. Yeah. And that's a really critical. Is that the long-term business plan for you? Like find commercial applications today that advances the R&D pipeline for ultimately Q greater than

one fusion production that can be grid scale? Yeah, great. So you know Q greater and one, all these stuff, it's great like Pat on the bag. Good for you. You may do it. But ultimately is how much does it cost? Yes. And Q engineering or any of those terms.

Q commercial. Q commercial, I guess. Right. And also reliability. If fusion is not a base load power, which means it's running 99.9% of the time, how is it really competitive with other sources? So you're doing one billionth of a second now, and you need to get to 24-7. Yeah, which means...

You're just 10 doubles away, I guess. Well, we just need to increase the rep rate, so we'll still be pulse, but just increasing the repetition rate. And that's a thing with fusion, because even Helion is like pulsed, right? That's the idea. And our pulsar today actually operates at 0.1 hertz frequency, but we still blow up the chamber, and that's still something to work on. But a good thing is, you know, the way we say it is radiation as a service

is we're getting paid to date to produce more radiation. The cheaper the radiation, the higher our margins. And the more we fire, the more money we make. So we're getting paid to optimize our radiation service. And radiation is ultimately energy. Yeah. And so we're getting, you know, we're building a sustainable business to get to the sustainable future that we all want.

And there's a massive multi-billion dollar business to be built along the way, which is what a lot of our investors under road. Does that make sense? Yeah, where is the business now? How many employees? How big? Yeah, so we have around 50 people now. We've got a couple millions in revenue.

Awesome. We're on active contracts supporting. It's very rare for fusion companies. Congrats. It's very cool. Yeah, thinking outside the box. Fantastic. We're still humming.

Well, good luck to you. Thank you so much for stopping by. I hope you have a fantastic rest of Hill and Valley. We'll see you out on the floor. Yeah, thank you. We'll see you later. Anyone else? Yeah, Eric Torrenberg wants to stop by.

Eric, group chats. Eric, get in here. Get over here. I have a bone to pick with you. I saw you, you posted that you started a new group chat and I'm not in it. Don't worry.

I was so looking forward to getting added to something where a bunch of people are yapping and I have to put it on mute. I wanted to be one of the smart people. Yeah, no, I learned my lesson. The next one, I'm yapping so egregiously that I definitely get in the hit piece. You will be, you will be invited.

You know, they can kill Chatham House, but they can't kill. the idea. It's going to resurge again. Of course, it's still running. Even if the world had a nuclear war, Mark Cuban and Brian Goldberg would still be there every day. Yeah, yeah. Yeah, yeah. Do get it out. Have we gotten to the bottom of who Ben Smith is? It sounds like a generic name. Sounds like a fake alias. It's something that you see on a lot of fake IDs from, you know, high school students that are trying to buy beer. I'd love, I don't want to, I'm not a big fan of

doxing, but I'd love to get to the bottom of this man really is. Ben Smith, who, you know, docks the group chat. Yes. He is. That doesn't mean that we should dox him, but I want to know personally, I'm not going to share. Yeah, I know who is Ben Smith really? I think he's saying Anon for now. Okay.

I want to respect that. Yeah, I want to respect that. You know, I want to respect that. That's very kind. I follow the paradoxical commandments, you know, even if people don't, even if people dox you, don't dox him. Don't talk to him. We'll keep his identity private.

But I do know that as in Anon, he did publish a Steele dossier while he was at BuzzFeed. And I also know that he apologizes. Okay. Or he almost regrets it. Okay. Which to me is as good as an apology. And I believe that people can grow and change. And so I'm proud of him.

Okay. Because. Yeah. So, yeah, any other lessons from the story, from group chats, where's the future? What's next? Well, I think, you know, I got a lot of people emailing me being like, you know, people like I play pickup basketball with or don't even know being like, how could you platform Tucker Carlson?

Oh, yeah. Like, how could you do it? And I'm like, I'm sorry, you know, first off, I regret to inform me to Tucker Carlson's pretty big already. And also, it's a private group chat. So I'm not sure exactly how I'm platforming Tucker Carlson. But so a lot of people are angry that people are getting together and having conversations. But, you know, we're going to keep doing it. Yeah.

We're going to keep doing it. I'm not leaving. The goal was to have a left-right exchange and we're going to keep. There was the original debate was trying to make it together. I invite more of my friends on the left and the right to be a part of it. You haven't gotten any emails? How could you platform Mark Cuban? I didn't email is that, but I got DMs every day while Chatham House was going of like,

why is Mark Cuban here? It's good. It's an anti-echo chamber. And how does he have so much time to chat every day? And my theory is that the pinnacle of Maslow's hierarchy of needs is being a poster. Once you've truly made it, then you could just post all day. We have this ongoing fight with Antonio Garcia Martinez, who now we should call Antonio Gracias, the valor guy,

because he's always getting mistaken for him. Oh, yeah. I know. It is. It is funny. He should just own it. Oh, yeah. Just renamed Antonio Garcia.

Because they're like, great speech today when he did the Doge thing. Oh, he's like, what? Talk to him? Yeah, you should have him on and just like talk about that. Yeah, yeah. We should have them both on. Yeah. You know, you get both of the, you know, both apologies on.

Both the Sri Rams are. There's four Kevin Jangs. We're going to get all that. So we have this bit with Antonio where he's like, as soon as I'm rich, I'm getting out of this. Like as soon as I'm richer and he just holds up as soon as I'm like, you know, much richer, I'm getting out of group chats. I'm getting out of Twitter.

And of course, you know, Mark Adresson's in the group. All these other people who, you know, have done phenomenally well and are just posting all day. And he's like, they're like, you'll never leave. This is the best. In fact, you'll step it up. You'll step it up. So I think the demand is there.

I think the supply is there. And we're going to keep doing it. Yeah. Do you think these groups, yeah, I have to say, I mean, I think people don't realize, like, how much work everybody, whatever, four years ago was like, everybody should have a community. And then you had companies making slacks or discords or things like that. And it just takes, like, a massive amount of work to sustain chats. Like, we talked about last time you're on the show, this sort of, like, admin lift. Like, there's software solution. But then there's, like, cultivating and there's, like, selecting, like, who should be in a group and all these different things. And it actually makes so much sense to have a third party, like, do that. not have it just be on one member who one day they might wake up and they don't want to do it

anymore but should the group die it's like no the group should be able to live on and so having a what's the ideal size are you uh uh Dave Morin had path it was 150 what's that Dunbar's number I think Chatham House got up to like 330 yeah yeah what are your best what are your best practices Chatham got too big I think you know dozens of spin off groups have formed sure and it's like 10 20 30 yeah I think it's a it's a good question I will say I'm a bit of a street group chatter. Shriram and Acese, these are academic. You know, they have a rigorous operation. They have community managers.

I'm excited to co-lead this operation with the niche now that Shariaum is left. And so I'm excited to get support on the moderation side and to come back out, you know, this is a blow to Chatham House, but we will be back. You'll rebuild. No, it's still there. You still see Mark, you still see Brian.

They pop up. They pop up. Yeah, yeah. I'm doing the show. I'm like, what are they fighting about. We should probably talk about it on the show. Exactly. I'm willing to say publicly that, you know, so nobody killed, except this an on guy, Ben Smith,

who I, um, get to the bottom of the minute. Exactly. We got to the bottom at some point. But, um, outside of that, you know, um, but I will say even before that, it was getting too big. You sure. And I will also say that on the record that nobody killed Chatham House, but Brian Goldberg did kill Chatham House. A little bit. I love Brian Goldberg. Yeah, I actually learned a lot for him, but he's very active.

I'm kind of sharing like his business experience. And I, I was unaware of him as a founder or a business operator before. And the other names were kind of, okay, I already know their bit and I know their shtick. No, no. So it was interesting. I love how it's spoken he is. He's also a media tycoon. Exactly.

Yeah. In the women's space. Yeah, I own fashion magazines. I don't know. I was like, how to tariff inspect your business? He's like, well, we have some advertisers. Yeah, yeah, yeah, yeah. He broke that down very interesting.

He's brought a lot to it. And, yeah. Very cool. Anything else? What is what's exciting so far about? Hill and Valley. It must be nice to be in an event or like a social community thing that you didn't put together yourself. Yeah, yeah. And I was just at the American Diamond Summit last month. That was fantastic too. And this is also fantastic. I mean, I think it's just amazing how big this space is. I will say it's like,

and you guys have covered on this show, but it's like this is like the new Silicon Valley. And I feel like when Paul Graham made that Palantir tweet, it was like a clash between sort of old Silicon Valley and new Silicon Valley. And it's interesting to just sort of see not just the new people that have emerged, but sort of the new ideas around building companies. Like it's not just sort of make something people want and just talk to customers and just build something in a day. And maybe he's right. Maybe there'll be a cracked founding team X Anderal X Palantir, digital ads. Digital ads start up.

One thing that comes to mind, we had Mike Solana earlier on the show. And he was basically talking about how like Ezra Klein's whole abundance theory and ideas. is like a lot of the stuff that he had, you know, was like, oh, these are Silicon Valley ideas. Yeah. Like this idea of charter cities and, you know, energy production and all these things. So I think we're all on the same team. That's what I just appreciated about Hill and Valley.

Like the number one person on the hillside of the event that gets brought up is Pritchie Torres. Yeah. I guess. And I think people associate, you know, a lot of these different characters with the right. so many of these issues are just American issues. 100%. Matt Iglesias, who was a Chatham House member for, I think, a week before he just decided to leave. And I'm a fan.

He tweeted a platform for the Democratic Party, and David Sachs, quote, tweeted and said, this is conservatism. So there does seem to be a lot of convergence. I love what Derek and Ezra doing with abundance, sort of bringing free market economics to the left in a way that is palatable and accessible. It's more nuanced than that, of course. But yeah, yeah, yeah, there seems to be a converges happening. And if we have sort of both parties, you know, being more moderate, moving to the middle, you know, that all that.

I think the future of American politics is something I'm calling like far-centrism or alt-center. I like that. Just the most extreme centrism. This is the future. Yeah. Just being really extreme about it. Unless there's representation by both houses, we have a split house and Senate. I'm not happy.

Yeah, it is really interesting. How much time are you expecting personally to stay in Washington? A lot of places you're spending time as an area that... Well, we, we, I'm, you know, is my second week on the job. We have a robust D.C. operation. And I want us to tell that story a bit more and help. So we're going to do a policy podcast. And so I want to spend more time here.

And also bring on people who are really at the intersection of... It does seem like it fits really, like we were talking on this, like, lobbying adjacent VC activity, introductions to people on Capitol Hill. That feels like it definitely fits into the injuries and machinery. Totally. Of like, hey, if you're doing enterprise sales, like they'll set you up with a bunch of people. PR was often something they were very, very good at, even hiring, you know, find your VP of engineering. Totally. Doing some light lobbying, maybe not being a lobbying firm, but introducing to the right things.

Making sure if there's a government relations organization, you know how to build it. And I love that we're also collaborative on this because it just moves the whole industry. Like we have sane crypto policy, sane policy, saying AI policy, it just helps everybody. So that's a place where we all get to bring them together. One thing I also just want to say is Gavin Newsom is another example of somebody trying to move to the center. Yeah. And, you know, bringing on Charlie Kirk and another people on this podcast.

Let's make that thing. Bar center. And I hope that it works out. I hope that it helps him in the primary. Yeah, it seems like he's better off for every American if there's more like unity across the aisle. I just want to know, I just want to know what, what, uh, pointing next. Yeah, the next pointage leak it. Announce it on TVP. Always be pointing. Always be pointing. Always been law. It's very important. No, but I mean, I think, I think American dynamism is, is no longer

contrarian. Yeah. We saw this. I remember Hereticon this year was like the least contrarian person I saw was wearing a like, uh, make America greater again. Yeah. Yeah. Beyond that, everybody was doing nuclear. That was like no longer contrarian. And so it's just like a big thing I'm trying to figure out while we're here is like, you know, what is the thing that nobody's talking about today that will be, you know, maybe the entire subject matter of the Hill and Valley or the, or, you know, the next American dynamism summit in a couple years. 100%. Well, just chat with yourself. Group chat dynamism. Exactly. Well, whenever, uh, whenever, uh, whenever Catherine or whoever on team has it, we'll be on

TVPN for it. You know, my last, my last thought here is, is, is, is it feels like group chats with people that you don't know that have differing beliefs are the antidote to GPT 40 agreeing to whatever you're going to say. Totally. Totally. It's like you go on chat GPT and it's like, you know what, boss? Like you were 100% right. Everyone else is wrong. You are right.

And then you go into group chat and it's a way to get. It's like fuck you. Yeah, yeah. Yeah. Yeah. You're wrong. No, no. Yeah.

Make disagreements great again. And yeah, hopefully we can continue to be in these spaces. That's a great place to end the show. Thank you for watching. Thank you for tuning in. We hope you enjoyed the stream. We'll be posting a ton of clips and we will see you tomorrow or Friday, depending on when we get back to LA. Talk to you soon. Bye.