TBPN - OpenAI Launches Codex, Meta Delays Llama 4 Behemoth | Matt Grimm, Kevin Weil, Blake Scholl, Tim Fist, Chris Best, Sean Henry

Episode Date: May 16, 2025

TBPN.com is made possible by: Ramp - https://ramp.comFigma - https://figma.comVanta - https://vanta.comLinear - https://linear.appEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.com Numeral - https://www.numeralhq.comPolymarket - https://polymarket.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(00:57) - Matt Grimm. Matt is the Co-Founder and Chief Operating Officer of Anduril Industries, a defense technology company specializing in autonomous systems and AI-powered solutions. Prior to Anduril, he held roles at Palantir Technologies and Mithril Capital Management, focusing on national security and venture investments. (10:22) - OpenAI Launches Codex (14:42) - Meta Delays Llama 4 Behemoth (23:55) - Epic Games Says Apple Blocked Submission (30:29) - Kevin Weil. Kevin is the Chief Product Officer at OpenAI, where he oversees the development of consumer and enterprise AI products, including ChatGPT and the OpenAI API. His previous experience includes leadership roles at Twitter, Instagram, and Planet Labs, as well as co-founding the Libra cryptocurrency project at Facebook. (01:05:50) - Blake Scholl. Blake is the Founder and CEO of Boom Supersonic, a company aiming to make high-speed air travel mainstream through the development of supersonic passenger jets. Before founding Boom in 2014, he held positions at Amazon and Groupon, and co-founded the mobile technology startup Kima Labs. (01:31:58) - Tim Fist. Tim is the Director of Emerging Technology Policy at the Institute for Progress, focusing on AI infrastructure and innovation policy. He also serves as an Adjunct Senior Fellow at the Center for a New American Security, with a background in machine learning and AI hardware development. (02:03:33) - Chris Best. Chris is the Co-Founder and CEO of Substack, a platform that enables writers to publish and monetize newsletters through paid subscriptions. Prior to Substack, he co-founded and served as CTO of the messaging app Kik. (02:29:52) - Sean Henry. Sean is the Co-Founder and CEO of Stord, a company providing cloud-based supply chain solutions for businesses. Under his leadership, Stord has raised significant funding to expand its logistics and fulfillment services. (02:46:10) - TBPN Reacts to the Timeline

You're watching TV. Mother. Today is Friday. May 16, 2025. We are live from the Temple of Technology, the fortress of finance, the capital, capital. The thing that's going in the mouth is really bad.

Yeah, the amount of microplastics going to our mouths right now. It's terrible. Anyway, we got a great show. We got Matt Grimm coming on to the show. Anderl just did the Murph Challenge. He's going to break it down for us. We got Kevin Weill from Open AI, Blake Scholl from Boom, Super Sonic. Tim Fist from IFP, Chris Best from Substack and Sean Henry from Stored, some legendary founders,

some legendary folks, some yapper, some commentators. We got a great show. We're going to bring in the news, but first, let's bring in Matt Grimm. If he's in the studio, if not, we can show you some photos. Oh, here he is. How are you doing? Hey, guys. How are you?

Fantastic. Looking great. Can you break it down for us? What's going on today? How did it go? It went. It was a great day. I'm here with Chris Wiley.

Chris Wiley is the executive director of the Lieutenant Michael P. Murphy Navy SEAL Museum. So I wanted to give it a second to Chris to talk about what the MIRF challenge is, why we do it, kind of the story behind it, and a little bit of Lieutenant Murphy's history. So it's fantastic. Thank you for having me on.

So what we just accomplished today was a one-mile run, 100 pull-ups, 200 push-ups, 300 air squats, and another one-mile run, all wearing a nice weighted vest, as you can see. There we go. Yep. But the whole history behind this was that it was Michael's favorite workout when he was deployed. We don't deploy with gym equipment, so you have to kind of improvise and find what you can use in your area, so you can have a good workout.

If everybody doesn't know the story of Lieutenant Murphy, the blockbuster movie, the lone survivor with Walberg and Taylor Kitch, that was the portrayal of Operation Red Wings. and how Michael stepped out into a hail of bullets to make a phone call to try to save everybody. So ultimately receiving the Medal of Honor after he died that day. And just a great workout in a great way to remember all that have sacrificed, I'm sorry, and suffered our own little discomfort today during the MIRF challenge. That's awesome. How long has this been going on? Andrew has been a part of this for a couple of years, but can you break down some of the history of this particular event? So what happened was after the helicopter pilot recovered Michael and the other guys on that mountainside.

When he got back home, he heard of Michael's workout and then started doing it on his own, calling it the MRF. And it spread so quickly through the local CrossFit gyms. And then it became too much for him to handle. And then he involved the family. So this has been going on as the MRF challenge for about 12 to 13 years now. And it's just growing every single year. We're hoping to continue having this grow and have the partnership with Andrel because they're amazing, amazing partners and people here. It's been such a touching event today.

That's amazing. Can you talk about Anderil's role here? Is this just a bonding event for you guys? Is this for charity? How are you thinking about Anderl's involvement in your hand? How many people from Andrew came out for this? Well, today we had about 150 Anderillians come out. And it's, for us, it's not just about the team bonding part.

That is certainly a part of it, you know, kind of team morale, team bonding, and a team that works together, sweats together, stays together. So that's certainly a part of it. But more importantly than that, like we started Anderol to bring the best possible technology to those who serve in defense of our freedoms and our nation and our allies. And a part of that extends to supporting the veterans community. So we've been pretty active in supporting the veterans community through a couple different ways that I can talk about in a couple minutes. So today was less for us about the morale piece and more about a sort of a signal or a moment. to celebrate our veterans, both that work at Anderl and in the community at large.

And our partnership with the Murph Foundation and with Chris himself and all of that is just a symbol of that. How'd you wind up doing, Matt? Yeah, I mean, I tried to do it with you over Christmas break and I got crushed. Well, you guys don't even look like you broke a sweat. What's going on? I appreciate that. Should you go do another one now? We had a, there were 150 of us out there. And I noticed there were two empty vests. out there. There we go.

On the front. So you guys want to step up next year, we'd be happy to have you. And you can come out and out with us. We'll do it live. Yeah. I did like three pull-ups today. So I'm getting there. You were rep in a map.

I think I did a couple sets of five, but not quite at the hundred in a row. Exactly. Talk to me about. Thanks for your time. And thanks for the partnership and your service and everything you do for veterans. Thank you so much. Yeah. Thank you.

Yeah. All right. Cheers. Matt, talk to me about the role that veterans play at Anderol. People think tech company, military, obviously there's discipline overlaps, but a lot of times there's not so many immediate skill overlaps or do people have that wrong? Are you hiring software engineers from the military? Are you hiring hardware engineers?

Are you hiring operators and finance people? What are the different types of roles that veterans are filling at Anderil today? Yeah, happy to talk about all of that. So we've been involved in the veterans community since day one of the organization. One of our co-founders, in fact, is a veteran himself. And it's helped to lay the foundations for those partnerships. Right now, about 12, 13% of our employee base is veterans, which is wildly over the national average. And it's certainly higher than that in the Silicon Valley kind of technology community.

We have a partnership with a great organization called Skill Bridge. That's a program run by the DoD for helping veterans, We have a couple of recruiting relationships with targeted to that kind of transitioning veteran kind of community. And we hire across all roles, everything from kind of field ops technicians who are installing our products and training users in the field. Some of our maintenance and repair technicians, some of our production technicians on the factory floor building products, all the way through some design engineers, MECIs and EEs doing work. Yes, we have some coders, some CS folks who are from the veterans community and all the way up into the leadership ranks, you know, of our, of our leadership ranks, we've got a pretty high veteran representation, everything from flag officers to retired colonels through the whole ranks. So it's a big part of our culture,

it's a big part of our kind of the mission of the company and something that we're proud to support. And beyond that, I would say that we frequently raise some money for veterans charities. We've got a couple in particular that we support. I've got my notes here in front of me with that. So on Veterans Day last year, we had our first big public launch of the swag store. We had a swag drop that raised about $60,000 some odd dollars that went to a Blue Star Families Foundation. A good teaser for you, breaking news here on the Technology Brothers Podcast Network. We're launching our next swag drop on Memorial Day in about 10 days. Let's go.

We'll be raising a whole bunch more money exactly for the foundation that Chris runs in Lieutenant Murphy's honor. So everybody be on the lookout for that. We've given some money to a great charity called Warriors a Field that has actually run. by one of the Anderl executives that specializes in helping veterans kind of in distress, kind of going through some bad times by doing some mentorship and some outdoor activities and wilderness adventures and hunting and that sort of thing. So trying to build some bonds there to help veterans who are in a tough spot. So we've been very active through all the years on all this and something that we're looking

forward to continuing doing and scaling as the company grows. Okay, give us a take about how to get a job at Anderol. Well, we've got a great website, you know, Andrel.com slash careers, but more. More importantly than the obvious just apply on the website line is like we look for people with a real mission drive. We look for people who are really driven by the call to service who are really interested in protecting American values and our allies values and the escalating arms race that is happening across the world, whether that's artificial intelligence, whether that's drone technology, whether that's any sort of the kind of the next generation of what the warfighters are going to face in the battlefield. field. Like we look for people who are just really motivated and really driven and look, uh, you know, want to come honestly grind and work hard on really challenging and rewarding problems to, to help defend our country. So, um, the, the number one thing

you could do if you're interested in a job at Andrew, uh, obviously apply, but more importantly is, um, you know, build up that skill set, build up that engineering skill set, that problem solving skill set and, um, and that mission drive. And, uh, that's who we look for. That's fantastic. Jordan, you got anything else? Yeah, this is great. We got to come out for the next one. We got to start working. I mean, I think it's doable. I don't, I don't, I I think I would have died this year, but I think I could do it next year if I start training today. John's Bill. I finished the winners today finished in our women's division.

She finished in about 45 minutes, our men's division. He finished in 35 minutes. 35 minutes. A mile run, 100 pull-ups, 200 push-ups, 300 squats, and another mile run in 35 minutes, which is totally ridiculous and very impressive. And then me and myself, I finished in about an hour and 11, hour, and 12 minutes. Not bad. You look pretty gas.

You had three vests on? But finished it with the full vest, full reps, all of that. Pretty, pretty happy day. That's amazing. Absolutely dog. Well, congratulations. Thanks for popping by. I'd love to have you back and to talk more.

And we'll enjoy the last of the day. For sure. Thanks for putting this on. All right. We'll see you. Bye. I think it's time. We take off the moustaches and get down to business.

Oh. Yeah, a little. I thought it might be fun to do a little bit of the news. a mustache. Okay, well, you can stay in a mustache. I'm personally going to keep mine on. Okay. Well, first up, we got Sam Altman with a big announcement.

OpenAI is introducing codex. It's a software engineering agent that runs in the cloud and does tasks for you, like writing a new feature or fixing a bug. You can run many tasks in parallel, starting to roll out to check GPT Pro, Enterprise and Teams users, and he sends some more info. I think this is interesting because I had this crazy experience with 03 the other day. where I wanted to know how high a desk was actually on the Pat McAfee studio. So I was looking at, so I took a screenshot of Pat McAfee standing and I said, okay, look up how tall Pat McAfee is and tell me how tall is his desk because he seems to have a good thing going where he stands.

Yeah, yeah. When you were doing that? When? When you were thinking? Yeah. When I was thinking generally, yes, yes. It was a shirt in my mustache. But this is what was crazy is that I thought, I thought, I thought,

it would just like look at the image and just kind of guess. It wound up writing like hundreds of lines of code, interpreting the pixels in the image and looking at different elements of the image to decide, okay, well, he has a Coca-Cola there. This is how tall a Coca-Cola is. Let me expand this. All this just to find that it's just a normal-sized desk.

It's just the standard desk, which is like 36 inches. Can you imagine giving that task to a human to say like, can you kind of figure out how high this desk is? Yeah. and they go and they write hundreds of lines of code and you're like, I guess like good job for going above and beyond, but like a simple estimate would have been fine. Yeah.

And I also had an interesting experience where today I kicked off a deep research report asking for some, you know, top news and put together some news of the day, like what should I be thinking about? And the deep research report asked me, hey, do you want me to run this once or do you want me to run this just like every day or every week? I'd be happy to do that for you. And I was like, oh, wow, it just volunteered to do it on a cron job, which normally you would have to write about.

Anyway, any other takeaways from the open AI launch? We're talking to Kevin Weill in a little bit. No, I don't think this should be a huge surprise to anyone. Yep. You know, we talked with Sarah Glow probably a few weeks ago at this point, and she just said, look, to understand, you know, where the labs are going, understand what they value, what they find important. CodeGen has always been one of those things. And so this launch should not be a surprise to anyone, but I'm excited to get in deeper with Kevin.

Yeah, yeah. I mean, so many questions for him. But I like this idea of the front door to AI as the foundation models commoditize. It becomes more about being the front door to the internet. Are you just laughing at your own mustache? Are you laughing at your own mustache? Laughing at your own jokes.

Normally you think I'd be laughing at you. Every once in a while I look over at the gong while we're talking and I just crack up. Or, yeah, there's other stuff there. Well, I didn't really get it. We went right into this like formal interview, which normally we would have had a bit longer to laugh at ourselves. So whatever. Anyways, sorry to interrupt. I think you look great.

In fact, I'm not laughing because it's so convincing. It looks natural. It's growing on me. It's just normal. Anyway, the front door to AI, like they are building a new Google where it's this front. front door to knowledge engine stuff, but they need the front door to code gen as well. And so this new paradigm of, you know,

yeah, and the interesting thing, I don't, I highly doubt Kevin can comment on this today, but the immediate question I have is, how does this integrate with a potential windsurf application? Yep. This makes me think that windsurf might end up continuing to be a standalone app. Yep. and so yeah yeah I mean it's really blurring the lines like I didn't know that I wanted I didn't know that I needed code to decide how tall a desk is it decided that for me and I really like that as a product evolution where eventually you go to a you open the open AI app yeah and you ask for something and it decides do you do we need to do code for this do we need to do an image model do we need to use 40 do we need to use 303 do we need to use 3 oh 3 do we need to use 3. Do we need to use

deep research, like it should decide for me. That's a really cool world. And this is why I've always said I don't think open AI cares about naming. Yep. Because they're always in the long enough time horizon, they're just going to do all the routing based on understanding, you know, what is required. Anyway, on the flip side of AI, we have another post from D.D. Das. Meta will delay its biggest AI model launch, Lama for Behemoth, four reasons highlighted,

doesn't perform well internally. huge reorg in AI leadership. 11 out of 14 researchers on Lama have left, and we saw that funny post where someone was saying, like, I was on the Lama team. I worked on Lama, one, two, three, but not four. And they put that on their resume on LinkedIn.

Brutal. All this, after admitting that they game some of the benchmarks, Glad META can afford to light billions of dollars on fire for open source. And so this is an interesting discussion for me because I think that I don't think open source will win. I think you need to build a product around it. But at the same time, when we talk to people like Aaron Ginn,

I think it would be amazing if America had a rock solid open source offering that was hard-coded or baked into the weights with American values. And that was an option for countries that are maybe deciding between American China. I want to my team. It's so hard to understand what Lama's real enterprise adoption looks like. Yeah. Right? You don't hear a lot about companies, at least to date.

There was a big boom for a long time. I think the answer lies in that open router data. And there are a lot of open source models running there. Kind of unclear. The Wall Street Journal has more deep dive here. Meta is contemplating significant management changes to its AI product group as a result. Its performance has been hobbled by training challenges. And so there is a take here that's like they,

believed almost too much in scaling laws, right? Because Behemoth is this massive model. I think it's a biggest context window, even bigger context window than what Google's offering. It's a huge parameter model. What is it? Billions of active, 288 billion active parameters. Two trillion total parameters. We used to be in like Falcon 9b was like exciting. Nine billion parameters. We're now up in 288 billion inactive grammars, two trillion parameters. The circle has gotten so big from the GPT3 circle to the GPD4 circle. We are now with a massive circle that's covering everything, but we're not getting better results just from pure scaling because you have to add that RL layer on top, that post-training and that's what Open AI has been really, really good at with the O models. And that's what

DeepSeek got right as well with their R1 model, the reasoning on top. And it seems like they Yeah, I mean the main thing here is despite having effectively influence. affinity resources, they're struggling on the team side. Yeah, it seems like they actually did. There is a lot of churn. There's former employees that clearly were talented that are like going out and saying, like you said, you know, I'm not, I wasn't involved in this thing. Yep, yeah, yeah, yeah.

Feeling the need to sort of publicly state that they didn't play a role in that. Yep. And so it doesn't matter how much money they have to spend. Yeah. And what their CAPEX looks like if there's not real cohesion. Yeah. I've been thinking about this because the whole meme with pre-training was scale is all you need. Just keep scaling the number of tokens and energy and parameters and anything that go data that goes into the model, right? Just 10x everything. 10x that. And then 10x that. And then 10x it again and then 10x it again. You're only a few 10xs. You're only a few 10xs away from from AGI. And that was very clearly not the case. The scale scale was not. all you needed in a singular context, the exponential chart was secretly a sigmoid curve, right? It would go exponential and then it would flatten out and see diminishing margin returns.

And I think that that's true in life. I think that's true in so much technology development. You need to be on the sigmoid grind set. You need to be understanding that you're going to go through bursts of explosive exponential growth, but those exponential growth periods will stop. I mean, we've seen this with the show. Like when we first started quote tweeting, just printing out posts and quote tweeting, we saw exponential growth in the follower account of the show and listenership. And then eventually we played that out and then we got to a plateau and then we said, let's do guests.

And then we saw another one. And now we're going to come up with the third act, the fourth act, the fifth act. And you have to be constantly reinventing yourself, finding new paradigms. And if you're in artificial intelligence, you can't just say, I'm going to rely on the pre-training, scaling law, holding forever. You need to go into, okay, how do we scale up reinforcement learning? How do we scale up tool use? How do we scale up product use and product functionality to make this a really, really great product? You're not going to get there purely on one single curve.

The arc of technology throughout history has always been a series of S curves. There's been the semiconductor boom, the internet boom, the mobile boom, the AI boom. And if you want to make money or participate or understand the role of technology as it's evolved over the past 60 years or 100 years, you can't just see it as one linear exponential. like one exponential graph. It looks smooth when you zoom out. When you zoom in, it's actually a bunch of S-curbs. Yep.

There's a boom where everyone's like, mobile is going to the moon. If the trend continues, there will be 10 trillion mobile devices. And then what happens? Oh, it's like a couple billion. Because there's only a couple billion people. That's right.

And that's just the way it goes. Anyway, staying in mobile, let's go over to Tim Sweeney. He says Apple's app review team should. Wait, we have to flag this post. Oh, you want to flag this post? Okay. Which is just wild.

So Z says, did they seriously name it behemoth, the quintessential creature only God can tame from the book of Job and then give it the demon branding. And I got to say that the branding here. Is this a real photo that they used? It is. It is. What a crazy photo used. It is a crazy asset. I mean, you got to respect the development of the delts of the demon, but it's still pretty demonic.

We were talking about that with Orion, right? like the story of Orion, right? It's actually the most crazy brand asset that you could choose for something like this. It's like how do we make this as scary as possible for the average meta platforms user? Yeah, so Facebook's meta's latest virtual reality, augmented reality headset, the glasses that everyone's raving about is called Orion. And the Greek myth of Orion tells the story of a mighty hunter. sometimes portrayed as a giant who was eventually killed and placed in the sky as a constellation. It's like the worst possible metaphor you would want for a giant tech company trying to do something new and ambitious, right?

It's a very, very weird pick. But he thinks about the Roman Empire all the time. So maybe he's interpreting that myth differently and there's a different reading. But I would love to know how they wound up with that. But different versions of the myth detail his life and death, including how he was blinded, restored by his sight by the sun, and possibly killed by either a scorpion. or Artemis, the goddess of the hunt due to jealousy or a trick up by Apollo. And so like, if you read the metaphor of Ryan, it's like, it's not good for that.

Behemoth and Wikipedia is a beast from the biblical book of job and is a form of the chaos monster created by God at the beginning of creation. It's like a very weird choice. You should actually, you should just call it 6, 7B2. That's fine. We like those names. Let's just stick with those names. 4.0 is a great name.

Orion and Bohemoth sound. Ryan and Bohemoth sound cool. Yeah, they sound cool. Until you pale back any real attention. The true metaphor is like bizarre. And so yeah, Bohemith has not only been a very large model, but it has been a very large problem for, and it has been hard to tame and hard to get to produce fantastic results over there.

But good luck to the team over there. Hopefully there's some new blood, some new folks come in, and they produce a great fantastic product for the meta team. We're rooting for you. Anyway, let's go over to Tim Sweeney. Apple's app review team should be free to review all submitted apps promptly and accept or reject accordingly to according to the plain language of their guidelines. App review shouldn't be weaponized by senior management as a tool to delay or obstruct competition,

due process, or free speech. And so- And Naval said Apple continues to mock the court. So this is, of course, Apple should need to approve Fortnite because Fortnite has a third-party checkout where you can go and buy Fortnite V-Bucks without. paying the 30% app store fee. Of course, you have to go off the app and there's a pop-up warning that comes up and Apple's being very aggressive about that. But Apple is pushing the limits. They are, they're going one mile an hour under the speed limit. It's certainly not the, it's certainly not

the spirit of the law, but they are following the letter of the law, or at least they would argue that. And who knows, maybe there'll be another court, another battle in court. But anyway, No, this feels like they're setting themselves up for another potentially separate lawsuit around the approval process. Yeah, the approval process, for sure. Because Epic can actually say this is costing us. This might have cost them already nine figures, right? You can imagine when it goes back in the app store, the amount of the flood of demand and new revenue. And so delaying that by even a few days would be damaging.

Yeah. Yeah. So the Wall Street Journal says Epic Games Fortnite claims Apple blocks submission now unavailable on iOS. The claim is the latest in a long-running feud between Epic games and Apple. The legal began it. So I agree with you. There could be another case.

But do you know how long it's been for the first case? We're coming up on the five-year anniversary. It started in August 13th of 2020. Epic implemented a direct payment system within Fortnite's iOS version, circumventing Apple's 30% commission fee. This action violated Apple's App Store guidelines leading to Fortnite's removal from the App Store. In response, Epic filed an antitrust lawsuit against Apple in the United States District Court for the Northern District of California, challenging Apple's restrictions on alternative in-app payment methods.

It took five years. And so, yes, they might have taken a couple pennies or millions of dollars out of Fortnite's pocketbook by delaying a few days. but if they can turn this into a five-year lawsuit, that's five years of 30% fees, right? Yeah. So that could be the calculus. It's like, yeah, let's just play the court game. That's fine. Crazy.

Anyway, other news. Hostile. Novo Nordisk has, their CEO has stepped down. This is the maker of OZempic, and the stock has been on an absolute tear. I would love for you to pull it up on public. Let me know what it's doing. but we have a post from a non-risk addict. You're saying a tear downward, right?

Well, it was on a tear upwards for a long time during the GLP-1 boom. But it's down 50% over the last year. Oof. Yeah. Not good. So, yeah, maybe it makes sense. But a non-risk addict has a take here. No idea if he has done a good job as CEO or if the change makes sense based on expectations

going forward. But firing a CEO for highlighted reasons is obscene. Novo traded at 50xPE, the market, going crazy and then being a little less so is not the CEO's fault. So if you're running a company and it becomes kind of a meme stock and it runs up to an insane multiple and that it pulls back a little bit, but you're still way above where you started as CEO. Can you really be hit with, hey, the stock's down 50%.

We've seen there with Palantir. Palantir was extremely hot. And then, of course, it pulled back a little bit. We said this with Tesla too. Tesla pulled back a little bit. But it's still like a really solid company, really, really. incredible market caps and great price to equity ratios. And so the highlighted reasons here are during his eight-year tenure as CEO, Novo Nordisk sales, profits, and share price have almost

tripled. Novo Nordisk has clear strategy, a strong product portfolio, and an experienced leadership team that changes are, however, made in the light of recent market challenges Novo Nordisk has been facing. And they have, because this is an older technology, as we talk to some of those biotech folks, we've seen that there has been more competition. than usual. Normally, you create some breakthrough, you're able to lock it down for years. That hasn't been the case in the GLP 1 scenario. Hyper competitive from not only other scaled pharma companies, but the compounding and... Yeah. Considering the recent market challenges, the share price decline and the wish from

Novo Nordis Foundation, the Novo Nordus Board and Lars Fuegaard Jorgensen have jointly concluded that initiating a CEO succession is in the best interest of the company and its shareholders. Yeah, very rare that you see a CEO go out while the stock is still trading at 50xPE doing really well overall, even if it is down 50% recently. I mean, that's not good. But anyway, you know what Novo should do? They should get a ramp, obviously.

That should be the first thing that they do with the new CEO. They should bring in ramp, ramp, ramp, ramp, ramp, ramp, ramp. Time is money saved both easy-to-use corporate cards, bill payment, accounting, and a whole lot more all in one place. they should also be using Figma. We should talk about Figma. Think faster, build faster. Figma helps design and development teams build great products together.

You can get started for free. The best. Figma is Figma for Figma. You can do a lot with it. You can generate marketing assets. You can generate apps. You can create websites and a whole lot more. Thank you to Figma for supporting the show.

They should also get on Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management. Back to back. It takes manual work out of your security. compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. Anyway, the other news is semi-analysis is talking about the AI deals that have been happening

in the Middle East. Dylan Patel coming on the show in a couple weeks. US strikes a deal with the United Arab Emirates and the Kingdom of Saudi Arabia, a five-gigawatt data center, the Humane G-42 diversion and American AI wins. Dylan Patel breaks it down. He says, the U.S.-S.-UA-E-A-I deals are complete wins. Everything is there to win over the Middle East and accelerate infrastructure spend. So American companies, AI companies, are going to be making more money from this because we have a new customer.

The main subtext here is that China is locked out of Middle East AI infrastructure investments. There's a different world. There's a different path where, yes, there were some controversial moments in Trump's tour of the Middle East. But there is a different world where we are watching Seizier-P. do that tour and we're watching from the sidelines, that's not what happened. What happened is our president went there and struck a bunch of deals.

For the first time on the show. Instead of Sam Altman and Elon Musk and Alex Wang, it could have been the founders of Huawei and Deep Seek and high fire. There's an alternative timeline where, you know, the QIA is investing, you know, a hundred billion dollars. Yep. Not actually 100, but massive amount of money.

into Manus, right? Or Deep Seek or some of these other players. So, important moves. Manus? Manus. Oh, we're talking about. We can talk about open source. Open source AI agents.

Manus. With Manus, you're going to make me put my mustache and back on, John. No, no, no. We have a very important person coming on the show, Jordy. Put that mustache down. Put that mustache down. Put that mustache down. We have the chief operating officer or chief product officer of OpenAI coming into the studio.

And so the UAE. ruling family used headline grabbing investment numbers, deals with Trump's family businesses, and ties with tech executives to score an NVIDIA deal. And it's all looking good. Let's see if we have Kevin in the studio. Let's bring him in. He's here. Fantastic. How you doing? This is wild. I just like join a Zoom and I'm live with you guys. We're live. Yeah. It's great to have you. Welcome. I was watching you on X and thinking how weird it was that in 30 seconds I was going to be on the screen. This is awesome. Yeah. Yeah, we're leveraging this thing. It's called the internet and technology.

But we'd love to get you up to speed on it since... It's funny. A funny story. So Tyler Cowan called into the show before one of your guys's earlier releases. And he was like, AGI is here. Like he was basically saying, like, it's a couple days out. But he couldn't get his camera working. And it was this like funny, funny dichotomy of like, AGIs here.

But like the internet is still actually... There was actually another day when we had to basically take the whole show down because Zoom and both Zoom and Google. Google Hangouts just went completely down, like nationwide. And so we were like, well, we can't do our show now, I guess. The running joke is that audio video is like ASI complete. Yes. Well, everything else in the world is solved. Yeah.

So, I mean, I think long term for the show, we need to go proprietary. We need to build our own video streaming stack. Can you help with that? Codex. You know what can help with that. Yeah. Coaches can help with that. Break it down.

How would I use Kodax? And by the way, you get to talk about AI and then you're going to have Blake from Boom here. So you get to talk about Super Sonic Flight afterwards. You guys have the coolest lives ever. It's full stack. Full stack technology. But yeah, can you take us through the announcement, break down exactly what launch, when it's available, to who,

what you're excited about, and then we'll go into some of the tradeoffs in the product design and development? Yeah, let's do it. So we just launched this morning, Codex, which is a, cloud-based software engineering agent that can work on mini tasks in parallel. So a lot of folks are used to the kind of cursor windsurf style, you know, GitHub co-pilot style of AI development, which is really more about augmenting a single engineer, right? You're writing code in your IDE and you can press tab, tab, tab, and it'll auto-complete and you're, you know, 10, 20, 40 percent faster. With codex, you actually have a software agent that runs

in the cloud that can do entire. tasks for you. So you give it a task, it goes off and does it and suddenly you have a PR and you didn't work on it at all. And it's powered by a version of 03 that we fine-tuned specifically to be really good at these kind of hard software tasks. We're super excited about it. It launched today inside ChatGPT. So you can use it if it's rolling out now to pro, to enterprise, to teams. Well, it'll make its way to Plus in the coming weeks. But the cool thing is it's a, it's an agent, it's a software agent in the cloud. So, you know, you're using it today from chat GPT. You can imagine using it in the future from, you know, your terminal, your IDE, all kinds of other places,

and even, you know, hooking it up via API to your bug cues and just having this software agent churn through every single bug that you have. You know, for each one, look at the context of the bug, understand your code base, and then suggest proactively how you would fix that bug, and give you a PR that you can review. So the world of software is changing. We're super excited about it. It's a research preview. It's not perfect yet. But I think this is the future. Yeah. So I mean, I've already noticed that chat GPT has been writing code for me for a while. It seems to be writing more and more code. I was telling Jordy about how I wanted to know the height of a desk in an image. And I knew how tall a person next to it was. And I thought that it would just use images in chat

GPD to kind of one shot this or guess, but it wound up spinning up and looking at the individual pixels with a bunch of Python code. I think it wound up writing like 5,000 lines of code or 500 lines of code. And it got it really right, unsatisfactory because it was just an average size table. It was like literally the standard size, but it really knew it. But so I'm wondering, like, is this something that will feel like a deep research project or deep research functionality where I click a button to say, hey, let's use codex for this. I'm giving you the hint, or is this something that can be automatically triggered just from a text interaction like images in chat chpt.

Yeah. So it's a, I mean, by the way, you never know if that desk was actually like 38.2 inches. So yeah, it's worth it. It's totally worth it. It's totally worth it. Right the 500 lines of code. Yeah. Why not?

It's too cheap to meter. Actually, that's been one of the big, the coolest thing about 03. O3 personally for me has been a kind of feel the AGI sort of moment using that model, the things that it can do. And a lot of it comes from the fact that it can use tools while it reasons. So it's thinking. And in the process of thinking, it can do some web searches. And then it can take what it learned from a web search and write some code. And then after that code, it can do image analysis.

And then it can write some more code and do another web search. And then finally, with all of that context that will output the answer, it's like it's really been. and unlock for a huge number of use cases. And that's the kind of thing that enables Codex here. Because you're right, chat TPT has been able to write code for a while, right? You can just go to chatypt and type in like, here's a, you know, write me code to sort this array of integers that I have. And it can give you the code and it's going to be great at it.

The difference here is codex is built to work on big complex code bases. So you're not just saying like do this little task for me, write this function. You're saying, I have a bug and I don't know where it is. There's a 100,000 line code base. Can you please go understand my code base and try and fix this bug? Or I'm a new engineer at a new job. I'm trying to understand what the heck is going on in this code base. Can you explain to me where the code does X or Y or Z?

And very quickly, it'll look through the code and give you an explanation of how something works. You know, it's funny. I've even seen examples where people go, Hey, Codex, find a bug in this codebase and fix it. I just find one randomly. Just go. That's amazing. Complex stuff and do hard work on a huge amount of existing context

that differs from what you've been able to do in chat TBT for a long time. Yeah. Wild. From a personal perspective, I used to write Python pretty regularly. I haven't written much code, so I haven't really gotten into the cursor or windsurf world. Obviously, I've been writing code via chat GPT now. I noticed recently I kicked off a deep research report and it's and it prompted me to put it on effectively a cron job.

It was like, do you want me to just run this for you every week? And I said, yeah, that sounds awesome. That's great. But if I'm like a, I don't have a repo, but I could set one up. Is there a world where me is kind of like a prosumer non-technical user should set up a repo to house the custom code that Codex writes for me to make a better experience for all the little custom software and tools and random stuff I use? Or should I just live in the 03 world where the code is pretty much ephemeral? I think it depends what you're looking to do. For simple things

where you just want to like quickly put together a script or something, writing it inside chat GPT and not using version control and all of that is fine. But if you're going to do something that you expect to be longer lived, like it's the basis for something you actually want to build for yourself and maintain, then I think setting up a quick GitHub repo and using codex on it makes a ton of sense. By the way, I used to be an engineer. I haven't, you know, I still dabble and screw around on the side and write code, but nothing major. And I hadn't written any code at OpenAI.

I've been there about a year and haven't checked. in a thing. Like Tuesday, Tuesday night, I think. I was doing, you know, the rest of my work. And I was like, I would have fix a couple bugs. And so I went and found a couple really basic bugs, because they didn't want to screw anything up, and sent Codex off to work on both of them in parallel, checked back in a few minutes. And I had two PRs. They looked right. So I submitted them, got them code reviewed by somebody, you know, who's actually a good engineer. And they were submitted and now I've got a couple of commits in the code base. So it's just it's like this is stolen valor though. This is stolen valor. You didn't write that

code. But it's cool. Like I I actually just kept, you know, other than just like getting to play around the product and offering a little bit of feedback on a couple things, I was off doing the rest of my work. And I had this software agent working for me in the cloud writing code. Yeah. Talk about, I'm so curious to hear about the kind of internal testing process and when you guys decided the right time to actually roll this out as a research preview. Because I imagine you've been using codex in one form of another internally for like a very long time. Maybe it didn't have a name or anything like that. But I'm sure that chat GPT has been contributing to the effectively the chat GPT code base. you know, almost since the beginning in some form of another.

Yeah, for sure. I mean, we're big users of our own tools. There was a, there was a version for a while that, that was mostly about the kind of, how do you come up to speed quickly in a big code base, that was good at understanding our code base and answering questions about it. It was really popular with new engineers on the team. And then once you kind of, you know, get to understand it,

you might not use that tool as often unless you're, exploring a new area of the code base. That was like a proto version of this. Yeah. But we've been working a lot over the last six months and improving the ability of our models to code. Like you've got GPT 4.1, which we released a little while ago, which is kind of, which is very quickly become a really popular model. It's now I think default and windsurf. It's increasingly a large percentage of cursor users coding. And, you know, that's that came from focusing on the things that matter in creating a really good coding model that you can rely on. It means really good instruction following, longer context, you know, the ability to like,

not just make the changes, but to make the changes a way a developer would. So don't add a bunch of extraneous stuff. Don't add weird comments. Make surgical, precise changes that accomplish the job. So there's a style element to writing good code, not just a correctness element. And we've been focusing on all of this. And then you kind of bring that together. with O3 and all of the things that we were, you know,

O3's ability to tool call and to reason and, and suddenly you can put together a really good coding model. So we've been thinking about this for a long time. This is the first time when we're like, okay, this is now good enough that we think it deserves being a product for the rest of the world, and we're excited to see how people use it. Can you talk a little bit about product design, product, like inspiration in product design. I noticed the very first iOS app had these incredible

haptics when the tokens were streaming through that I hadn't really seen anyone do. I just opened the app last night and saw that when you're using voice mode to dictate to it, it has a different modal now. It feels like there's a very strong design language evolving. At the same time, there was, you know, people complaining, I can't even, I'm using chat GPT, I can't even stay logged in. That bug obviously got crushed pretty quickly. But what is the actual product design inspiration? Are there people that are pulling from certain schools of thought or anything? Or is there someone driving that internally or is it just like baked into the culture?

Yeah, for sure. Ian Silver leads our design. I was fortunate to work with him at Instagram. He's an incredible designer. Building for ChatTPT is a really interesting thing because we have well over 500 million weekly active users at this point. So it's a big scaled product. Yeah. And so for products of that size, you, one of the most important things is to simplify, right? You're not just serving power users at that point. And so you're serving people that are just trying to get something done in

their day. They don't want to, they don't care about the complexity. They don't care what the models are called. They just have a task and they want to complete it and you want to help them. But on the other hand, we have folks who are super deep AI enthusiasts and want to, you know, digest in every single new model that we use and try it out in all these different ways. And so we want to both, and we want them to, we don't want to sort of soften the edges of their experience. We want them to be able to do everything they possibly can to experience all of, you know, the power of AI. And so we both want to like simplify the experience for for a lot of our users and we want to provide the people that want it all of the bells and whistles and so we try and we try and balance that you know so

you try and make it so that you don't need to worry about things like the model picker as much you don't need to like have a bunch of AI knowledge in the background to do what you want to do in open AI or in chat TBT but if you have that you should be able to expose the sharp edges and like test the different new features and stuff. And so we really actually try and get both of those things right. And it's a delicate balance. Is that why you guys don't seem to put too much emphasis into perfectly naming products just because on a long enough time horizon, it doesn't really matter.

I just come to chat, GPT, and I work with it to get the outputs and the results that I want. And I'm not, regardless of my experience level, I don't necessarily care the underlying sort of models doing the actual work. Wait, are you saying, are you, for naming isn't great? No, no, no, no, no, no, no. No, to be clear, we think that you have the second worst naming after behemoth, which is a very, very untamable, you know, a demon, demon monster, potentially a disaster.

So we are now long, 4-0 and 03, and we just decided, you know, your names are great. Like only six months ago a new model would get announced and people were like, oh, it's so confusing, blah, blah, blah. Yeah. But it just, it seemed to me, you know, as an observer that you guys, like, it wasn't like, oh, this is a problem and we need to fix it. It was just more so like, let's just keep making really great models and make them easier to access in really intuitive ways. Yeah. I mean, in all seriousness, it comes from our focus. We have this principle of iterative deployment that we really believe in.

which is that these are new, these models are new systems, right? They're each one, each model has capabilities that we understand somewhat. And also we discover new things about it. And we believe that no matter how many smart people we have inside of our walls, there are way more smart people outside our walls. And the best thing we can do in a world of AI evolving so quickly is to kind of co-evolve with society, to ship stuff early and ship often and, you know, learn together. And so one of the reasons that we have this explosion of models is we're trying to build new capabilities rapidly.

And sometimes the easiest way to do that is to kind of build it into a new model that's really good at one specific thing or a handful of specific things, but can't do everything. And so you end up with this like profusion of models that do different things well. Like 4.1 is really good at coding and instruction following, but it's like not as chatty. And so we're asking about other things, you might prefer 4 over some things and 4.1 for others. Seems totally natural. You'd go like, well, why don't you just build one that's good at coding when you're coding and good at chatting when you're chatting? And we will do that. That's what we're trying to get to with GPT5, where we're trying to bring more of these things together.

But if we tried to do that from the beginning, we wouldn't have been able to launch as fast. And so we've opted for like launching fast, having a little bit of, you know, confusion that comes with it. but we learn faster, and then over time, you sort of integrate and simplify. I guess like the meta question, though, is like, is the future just, you're already using mixture of experts within the models. Is the future like a mixture of mixture of experts models? And so I go to one, there's one command line. Text is the universal interface, not drop down model pickers. And it routes me. It says, hey, this person doesn't want to chat. They want to write code. Okay, we're using 401. That seems kind of logical.

And already this is kind of happening with the model picker becoming like just the UI is getting less and less in your face. And it's a little bit easier just to have a natural interaction. But how do you see it evolving? Yeah, I think over time the capabilities that that have existed for a little while, you've sort of learned how to bring them into a general model. Yeah. But you're always going to have these new frontier capabilities that you're going to want to be able to iterate on really quickly. And you might want to do specialized things to make the model really great at some new frontier capability. And so I think, yes, ideally you have a sort of model,

you know, a layer above the models that's doing the choosing for you. Yeah. But that is, you know, it's a hard problem, especially, it goes back to the building for simplicity versus building to enable power users. As a power user, you might be the only one that knows for a particular question you're asking.

Whether you want a 80% good answer immediately, or you'll wait a minute for a 95% good answer, or whether you want to do deep research and wait 20 minutes and get an amazing answer. Yeah, I mean, you could theoretically, like, train the user on that a little bit. Like, like, because there are prompts where you can say like... The comp that I, or like my personal framework

is like when you're working with people on your team or teammates, there's certain people you'd work with that you would have to explain effectively, like, the exact tool set that they should use to accomplish the task. You should get the CRM, and you should go in the CRM and do this and that. And then there's people that maybe have greater intelligence or experience or context and you just sort of like discuss the task with them. And you're not even thinking about the underlying sort of like toolkit to accomplish the task.

It's just sort of this higher level, you know, conversation. I want to talk about A, B testing versus personalization. When you choose like a default model or the default prompts when you open up chat, GBT, it says, create an image, write a Python script, make up a story, what's in the news. There's a couple options there. There's a lot of personalization going on, but you could also imagine doing A-B testing to understand what will drive turned down or retention up. How are you thinking about the balancing act between those two techniques of product

development? I don't think they're really at odds in any way. We do both. So we definitely A-B-Test a lot of things because we're trying to learn what works and and how we can help people understand this new kind of strange world of AI. It's a funny product, right? We're used to products where you have a UI, like computers before AI needed very specific inputs. Like this button does this specific thing and that button does this other thing.

And if you wanted to do a third thing and there wasn't a button for it, you probably just couldn't do that thing. Right. But then every time you hit the button, you got the same out. put. It was very consistent. LLMs are basically the opposite, right? You can give them input that has the full complexity and nuance of the human language and you have no limits on what you ask. And then also, what you get out is not the same from one thing to the next. It might be substantially the same, but the words are not identical, right? And so it's just a, it's a totally different way

of building product. And when someone comes to chat GPT for the first time, if they just hear from their friends, hey, this AI thing is super cool. It can do all this stuff for me. And they show up at the front door at ChatGPT. They're a new user. Like, what's the mental model? Because it flies in the face of almost everything that you've learned using computers over the last however long. So we really think a lot about how we get people going and how we teach them all of the different capabilities, which, you know, by the way, the capabilities are changing every month or two, too. So it's a really challenging problem, but something that we care a lot about because that's, you know, if you go from being a novice chat TPT user to being a power user, it can really change your life. It can save you a ton of time. It can accomplish a lot of tasks for you. And that's only increasing. So the upside of us being able to teach people well is also increasing. Yeah, I feel like a decade from now, people are going to look back at this moment. And. realize that the people that fully understood the capability, like the full capability set of

the models just had this ridiculous sort of extreme advantage. It was the same thing with social media. Like the people that really understood and took social media seriously early on are like famous now. Like actually famous. Interesting. What is your postmortem on the sycifancy thing? I feel like that made news because it was kind of blanketly like it was kind of like everyone was experiencing, or at least all the power users were experiencing it. But I could imagine a situation where some people really liked that type of interaction, and it was beneficial and it actually improved their lives. And so if you go to the YouTube algorithm right now and you only search and click on

positive content that reassures you, you can have a sycophantic experience. And that can be good for everyone involved. So what is your post-mortem on it? and how do you think that the personalization will play out in the future? Yeah, this was a really important issue. I mean, so we, the story for people who don't know, we rolled out a new version of GPT4O, which is something we do pretty regularly. There's that we're always, you know, to your point about EB testing.

Yeah. We're testing new versions of GPT 4O that are incremental improvements over previous versions. So we rolled out a new one and, you know, we'd ABT, tested in the past. So we, you know, the metrics look good. It looked like a really solid model, had some new stuff around personalization. And then as it got out there, we saw that a number of use cases, not like super widespread, but enough use cases where we saw the model sort of overly like, like just being, some of it was like glazing, what people call it. Yeah, we call it that.

I think we used that term. Yeah. But there were other cases that were more serious where someone had real problems. And maybe they were having mental issues. And the model was sort of validating them in ways that didn't really comport with reality. And that's a real thing. And we took that super seriously. So we rolled the model back.

And then basically I've spent the last few weeks diving into. where this is coming from and what we need to do to make sure it doesn't happen again. And we've tried to be super transparent about it. So, you know, we tweeted as soon as we were rolling it back and then immediately put out a post-mortem like, you know, within a day or so, and then put out a second after we had done a bunch of deep dives. And so we've gone through. We've like, the team did some great work.

We've got e-vals now that measure this. we understand a bunch of the root causes from where this came from you know as always with these things they're not it's never just one thing it's like a little bit of this combined with a little bit of that and then this unexpected thing happened and together they created something that that you know wasn't up to the standards that we set for ourselves yeah so uh i yeah sorry uh i i just have an interesting uh realization with the product so uh we've been hearing this this like this request for feature on social media for a while of like I wish I could just reset my algorithm start fresh because I feel like it's funneled me in some sort of echo chamber and I

don't like that echo chamber and I want to start fresh. And I don't know if social media feeds actually have that feature might just be buried. But I've noticed that with the chat chapit memories early on I was really aggressive about prompt engineering and and basically like prompt hacking. And so to get the best responses, if I was trying to learn about trains, I would say like I I am a world expert in trains. I own multiple train lines and railroads. Give me a breakdown of the market map of trains, basically lying to it. And then it remembered that. And so now it's like, well, as a train conductor, you'll probably want to eat this for dinner. And I'm like, okay, I have to back up. I wasn't being completely honest with you, chat. GBT. But the good news is that the saved memories are there and I can delete them all. And so I can kind of reset my experience. But was that a just was that a, was that a, was that a, was that a. was that a learning from the demand that people are seeing and the not the stated preference on social media for resetting or do you think that that's important or what other lessons are you learning from from how social media has played out because you obviously have a lot of experience there and a

lot of people at the team have experience in social media yeah it's personalization is a is a really powerful thing that i think we're just at the very beginning of like you want i mean in the same way that we know each other a little bit You have best friends that you know super well who you're really comfortable with and then you have strangers. And your level of comfort and interacting with them is very different. Yeah. You want your, if you have a super assistant in your life in chat GPT, you want it to know you really well. You want it to know your habits and how you like to do certain things.

And, you know, even down to like, do you want, you know, more flowery, supportive language or do you want crisp analytical terse language? things like that. I was messing around last night with chat GPT trying to give my son some math homework and I just said, hey, can you design 10 math problems for Matthew? And the model knew Matthew was my son, knew he was 10 years old,

and developed a bunch of grade level appropriate escalating, you know, and it was like, that was super cool. And it even, it was like, oh, he likes Legos, and Kevin, you're a runner. And so a bunch of these programs, a bunch of the questions were like Lego themed and you're going on a run with your dad and this. And so like, okay, that's just really cool.

It's truly making me emotional. It's like the coolest thing. As like a parent to be able, as a parent to be able to give your children like a truly bespoke magical experience is like almost priceless. Yeah. Even in the context of homework,

like something like homework, right? And so to that and even knowing that like kids today, like both of our, all of, you know, we've got five kids between the two of us. And knowing that they'll grow up only knowing this sort of world in which this kind of technology exists where a parent can just like generate magic for them in like seconds is just unbelievable. I mean, and think of the world. This thing designed 10 math problems. So I used O3. It designed 10 math problems for my 10-year-old that were escalating in difficulty across a range of different things. It could easily, if he was entering in the answers, could easily realize over time where, you know, what concepts he understood and what concepts he didn't.

And just become a personalized tutor for every single kid. And remember, I mean, this is free, right? We don't charge for chat TBT. You can get a subscription, but you can also use it for free. basically you don't even need an account you need an Android phone anywhere in the world for free and you can you know get this thing that's starting to be more and more of a personalized tutor i just like i think it's incredibly powerful totally every study i've ever seen says that when you pair you know traditional learning with personalized tutoring the it's like a standard deviations of

improvement so i'm with you i think the future is going to be very different and there's a lot of reasons to be optimistic about what the next generation is going to be able to do with AI. I need to be more honest with how do you how do you explain the rate of AI progress to let's say like a family member of yours that's not in tech. That's a good question. I think the only way honestly because you can talk about it but it's like you can't you can't get fit by reading about going to the gym. Like you guys use it. Yeah. So I've been trying to get any of my family members who aren't using it.

Just try it. Start asking, you know, for everything that you're doing, ask, why couldn't I use chat GPT for this? And you start to realize that there are more things that you can say yes to there and you can start using chat GPT. And then, you know, the more you use it, the more you realize the value and off you go. It's really hard to explain in the abstract, right? People go, uh, agents, I'm hearing so much about agents, what is it?

And then you use deep research or you use codex and you're like, oh, wow, that just saved me a ton of time or did something I couldn't have even done. Yeah. Yeah, that's the promise of the future. I think we're all going to be much more productive. We get to not focus as much on the doing of particular things. We get to focus on the outcomes and, you know, what we do once the, once some of the labor itself is taken care of. And that's a super exciting future for me. A couple more.

Talk to us about health. bench. Yeah, so a huge amount. I mean, people are increasingly using chat GPT for health. I've done it any number of times. My son had a had a small surgery that was supposed to be, you know, 99.9% innocuous, 0.1% bad. And we got the results back from the doctor before I could talk to the doctor. And they look scary. And it's full of a bunch of medical jargon that even as a, you know, former scientist, I didn't understand. And I put it in chat GPT and said, this looks weird. What is this?

Should I be worried? And it said, oh, no, no, no, don't. Don't worry. It's fine. And I was like, okay, explain it like I'm five. And it did. And, you know, I couldn't get a hold of the doctor for another 72 hours. That would have been a bad 72 hours for me if I was sitting there, like, stressed out

about my son. And chat GPT gave me the peace of mind. So we always try and say with anybody, anybody asks about, anything medical. This isn't a substitute for actually seeing a doctor. Chad GPT is not a doctor, but here it is. Here's the understanding of what's going on there. And it's really valuable.

You know, for all of us, for me, it saved me 72 hours of anxiousness. For somebody else who doesn't have access to a doctor, it might be a totally different thing. So, anyways, we care a lot about this. We want to make, if people are using ChatGBTBT for this, we want to make sure that the answers that it gives. are really good answers. And so we're putting a lot of effort into improving chat GPT's ability to act as,

or to answer medical questions. And the only way that you really know if you're doing it right is if you have a benchmark. You've got to have something to test against to show that you're getting better. And we figured if we've done a lot of work to put this benchmark together, then others could benefit from it outside of us.

And so we open sourced it. Last question, can you give us a 30, seconds on why you were excited to join Cisco's board of directors? Oh yeah, totally. So I mean, Cisco is an incredible company, like iconic Silicon Valley software and hardware company. We all use it every day in a hundred different ways. And they're at this really interesting point because I think AI can transform their business and they can either be transformed, like it can either happen to them or they can get ahead of it and build. build some really amazing software and tools and become, you know, a even more powerful leader

for the next in the next generation. And I think that's not unique to Cisco. I think a lot of companies are at that turning point. But Cisco really realizes it. By the way, they're actually a launch partner today for us with Codex. So they're one of our early partners. They're looking a lot at how AI can help them get more done, you know, faster, more cheaply, et cetera. So it's just AI is going to really impact their business over the next, you know, three to five years.

And I'm excited to be a part of that and hopefully help them navigate this transition gracefully. Amazing. Well, I have like five more hours of questions, but we will let you go. We'll come up to S.S. Most questions can be answered by chat GPT, but there's certain questions. You've got to go to the source. Organic. Farm to table.

Yeah. Yeah. Well, thank you for having me on. It's good to see you guys. great to see you, Kevin. About supersonic jets. I wish I could state for that one. Yeah, yeah.

We'll talk to you soon. Great to see you. Cheers. See you. Bye. Kevin is the man. But you know what else is the man? Linear is the man.

Linear is a purpose-built tool for planning and building products. Meet the system for modern software development. Streamline issues, projects and product roadmaps, linear. And also, Numerol is the man. Sales tax on autopilot. Spend less than five minutes per month on sales tax. compliance, put your sales tax on autopilot. There was, a numeral was getting picked up by an Anna on account yesterday. But Sam said too low. Too low. You're not bullish enough on sales tax

did you tell them it's on record or not well it's live he posted no he no he posted this. Oh okay great okay so we're not we're not scooping anyone here. Anyway we have Blake from boom supersonic in the studio. Welcome to the show Blake. It's been too long. We've been wanting to do this for a while. Yeah. Ideally from a supersonic plane, we're aviation aficionados. We like traveling.

But the hard thing with the show is that it takes us six hours to get across the country. We podcast for three hours a day. The math just doesn't make sense. So we're happy that you're working on a solution for us. Indeed. Well, thank you for having me. Yeah, it will be fun to do the first ever supersonic webcast. Maybe we should just agree to do that.

I'm 100% on board. Let's do it. Count me in. Can you give us just the general update, obviously explain what you're building, but what's the latest news in the world of Boom Supersonic? Yeah. Well, if anybody's not been following the story, the goal is to really pick up where Concord left off, fomented supersonic Renaissance, ultimately deliver faster travel for everybody from the president on down to every family. And so it's a decades-long mission, you know, ultimately to replace subsonic with supersonic for every passenger on every route. But building companies like, boom, it's like building an iceberg from the bottom up.

And I feel like this year is the year that the iceberg is like really emerged from the surface of the water. In January, we broke the sound barrier with our test airplane, the XB1. Brug in the sound barrier. We love to see it. Right. And in February, we did it again. And arguably, we broke it permanently. Double killed. Fantastic. That's great news. You said you broke it permanently? Is that what you said? Yes, because we proved we could do it reliably with no audible sonic boom.

Oh, there you go. Okay. They said it couldn't be done. They said it couldn't be done. Yeah, people, people failed. By the way, it turns out, like, people have been talking to this for decades. Yeah. And mostly the claims are it's like really hard. You have like, change the aerodynamics of the airplane and da-da-da-da-da. No, it's a software fix. Really? How? Explain that.

Everything is computer, John. Everything is computer. If you fly the airplane at the right altitude at the right speed for the current atmosphere, the boom makes a U-turn in the sky and never touches the ground. No way. But you need to be able to calculate that. That's right. In real time.

You need like decently good weather data. Yes. And ironically, algorithms that were developed. for computer gaming. Wow. Oh, that makes sense. Yeah. So it's a physics simulation. It's it's rate tracing. You're running Unreal engine. I'm sure you have proprietary system. What does that need to go through FAA approval to use that or is that separate from the rest of the aircraft authentic? What's it called qualification or like? Yeah. So you need to certify an airplane certify. Certify. Carried passengers. Yeah. Basically you've got to prove you meet all the safety standards.

Yeah, yeah. And this is separate because we have one of the dumbest regulations ever created. In 1973, we banned supersonic flight in the U.S. Like literally there's a regulation that says, Thou shalt not exceed Mach 1. Yeah, and it's speed limit, not sound limit, right? Right. It's really stupid.

It's really stupid. And so, you know, we could like make it play Mozart when it flies over and you're still not allowed to do it. And that's why that's why there's coast to coast flights are still stuck at six hours. It's why no one's done this already. And, uh, and so we're, we're working really hard to get that, uh, changed. We had a, this feels like something that like the EO would just drop and it would be like, oh my God, he just tweeted it out or put it on truth social and it happened like love them or hate him, but like the guy definitely like likes to rip a crazy idea on short notice for everyone. Uh, are you optimistic that there will be changed? Does this need to go through the house and

Senate? Or is this something that could just happen in EO? So we've had good conversations at FAA. This week, a bipartisan bill dropped in the House and the Senate that does it. Cool. And Elon endorsed it. Jared Isaacman endorsed it. We've got bipartisan support. Great. Some people think this could get through the Senate unanimously. I think that's probably a little ambitious. But even the idea that that's possible, I think it's pretty cool.

Some lawmakers like traveling slower because it inspires them to grind harder. more time on the plane more time to prep their filibusters they don't want to go fast I guess that's right the bear case for supersonic flight is that I get so much email I do get a lot of email done on a six hour flight and if I got there faster I'd do less email I was texting jordy when we were flying to dc I was like this is incredible I've never been more productive but I think faster flights were just forced us all to be more efficient with our time right that's right yeah but but I mean break down the actual scope of the problem here. How much is engineering? How much is regulatory? How are you staffing

against that? Do you have a massive government affairs team and lobbyists? I imagine there's still a ton of engineers on the, you're not just taking some like white labeled plane and then doing a bunch of lobbying and that's the end game. Yeah. I mean, the most surprising thing is that we don't have to invent anything fundamentally new. This is not a science project. It's not a technology project. It's not a technology project is really just an engineering project. In fact, we're taking 20-year-old 787 technology basically reshaping

the airplane, making it long and skinny, putting twice as many engines. And so there's a lot of engineering and testing that goes into that, but there's no science and there's no new technology. And there's only one regulation that needs to change. So we've got small numbers of great engineers. I'm a big

believer in tiny teams that are very focused. We built XB1, our test supersonic jet with just 50 people. 50 people, wow. And the overall company is not that much bigger, right? Right, like 1.15 now. And like we're growing very slowly.

Like if a team does not complain about being understaffed, I know they're overstaffed. Yeah. Yeah. I mean, we were joking about like white labeling a plane. Obviously, you are standing on the shoulders of giants using some off-the-shelf technology, using some technology licensed from other firms. Can you take me through the journey of engine development, the decisions, that you made, have you changed course on any of those decisions?

What would you recommend to the next generation of aircraft builders? Yeah. Well, I'll go broader than that. If you're thinking about doing hardware at all, my advice, frankly, any startup, any startup, all startups are hard. I don't think any are easy. I think the difficulty level is set by founders, because we tend to run at our own redline. And if somehow it gets easier, we'll just make the job harder again.

Like Brian just decided to like, you know, double what Airbnb is. because I guess the old thing got too easy. Yeah. And so what I've found along the way is I'm far more successful if I pick a mission that deeply inspires me and makes it worth being at my red line. So I never get up in the morning I think is it worth it? Okay, great.

So now probably building supersonic jets is like, you know, the ultimate hard mode. But what I have found along the way is people around the company from the legacy industry We'll have all these stories about all these things that are impossible to do. You can't build your own jet engine. Like only a big company can do that. There's tons of proprietary technology, blah, blah, blah, blah, blah, blah.

It's all bullshit. Like, I'll tell you one story. Like, we were trying to get high temperature super aloys for our engine. And, you know, we thought we needed to go license it from one of the big three. When you get into this licensing conversation and they're like, oh, we can't give you this thing because there's a trade secret. I'm like, don't tell me the trade secret. I'll give you the part, just make me the part, and hand me the parts back and don't tell me the secret. And they said, no, no, no, you'll find the secret.

So we can't do that. And for like two weeks, we're like, oh, shit, like, how do we ever get this engine built? But eventually we just went into the supply chain and we found the trade secret. We found it. And I'll tell you the trade secret. Okay. There is no trade secret. Oh, interesting.

The thing that was theoretically proprietary is an open source material developed by NASA where all the specs are public. Well, the trade secret is that they're using open source. That was the trade secret. That's the trade secret. The trade secret was there is no trade secret. Yes. Because there's all this fake proprietary. Everybody's telling you why you have to work with them, why you have to use their stuff, why you couldn't create it yourself.

And, you know, and it just nine times out of ten, it's just not true. And so we found, you know, we probably heard Elon talk about the idiot index, which is like how much a finished part cost is divided by the raw materials cost. We found a thing that's more important. It's called the Slash. slacker index. Slacker index is how long it takes to get something divided by how long it takes to actually make it. And so we've got these turbine blades, we're 3D printing turbine blades for our engine. And we go quoted out of the traditional aerospace supply chain.

It's going to cost a million dollars for one engine's worth of parts and it takes six months. I was like, well, how long does it take to print a blade? Well, it's actually about 24 hours. So why does it take six months to get one? Well, they were printing them like one at a time and then you've got to wait for your turn on the the machine, all this not. Okay, what's the machine cost? Two million dollars. How long does it take to get a machine? Actually, they've got them in inventory. You get them in a couple weeks. So for the price of two engines worth of blades, we got the 3D printers and the blades

and we beat the lead time of just outsourcing it. And that pattern exists everywhere in this business. Can you talk about the current fundraising market for hard tech companies? There's a bunch company's raising a ton of money. There's other, it's feast and famine out there. Yeah. The F-35 cost a trillion dollars. Somehow I feel like a trillion-dollar raise is on the table soon based on the current market. Yeah, we'd like, we'd personally like to see one T on five T. I'd love to see that. I'd love to see that. One T on five T. That should be the new, the new goal. But, but I mean, there is, there is a world where a plane company comes out and raises just massive money and just dumps it all into subcontractors and takes,

a very different approach. Why wouldn't that work? And what advice would you give to the next generation of hard tech founders in aviation or otherwise? Yeah. So the key difference, so there's this mythology that hardware companies are more capital intensive. And if you go look at like how much money did Uber raise, how much did Lyft raise, how much did Stripe raise, how much did Airbnb raise, like these like theoretically capitalite businesses consumed billions in venture capital. Yep. Before IPO. So wait, wait, what? And if you go look at like space, or Andrell, like the theoretically hard tech companies, like oftentimes they raise less money. So, you know, WTF.

And I think that the difference is if you are building, say, Uber or Airbnb, you have an idea that sounds really counterintuitive, like invite strangers from the internet to sleep on your couch, right? It doesn't sound like a good idea. But it's actually really cheap to test. And so what happens in most internet businesses is very, we're very, very strong. small amounts of capital allow you to test whether you have product market fit. And you test it by means of building and shipping the product.

We can't build a supersonic airliner as a means to testing whether anybody wants a supersonic airliner. So what you have to do in a hardware business is find a capital light way to demonstrate that you're at product market fit. And the answer can't be shipping the product. So our strategy was pre-orders. Yep. So we got United American to make like deposits,

like non-refundable deposits on airplanes against a specific design. So it's not just like, okay, here's, you know, here's a dollar that says, you know, Supersonic is cool. It's like, nope, here's a significant multi-million dollar deposit, a whole further deposit schedule against a very specific airplane with very specific specs. And then so we can go to investors and say, if we build this, there's obviously a gigantic,

market and this is going to be like a thousand extra money. You guys are already getting paid for it. That's right. Yeah. So all you all you have to all you have to believe is it will actually ship the product. What was the, uh, I want to ask you what was the worst week building boom and what was the best week? I'm guessing the best week was this year. Yeah, I think the, uh, I'll give you the best moment. Um, the best moment was the day that we broke the sound barrier for the first time. But it was It wasn't actually the moment of breaking the sound barrier. We'd done so much testing at that point. I knew if we flew that day, we were going to break the sound barrier.

What I didn't know is whether we'd have the weather to do it. And I'd gotten up that morning, it was extra cloudy, and we can't do it on a cloudy day. And so the team was kind of debriefing, checking the weather, da-da-da-da. And one of our safety culture rules is no top management are in the safety briefs. It's the team making an independent go-no-go decision with nobody's senior putting their thumb in the scale and telling them they need to go and pressurizing it. So I'm like in the hangar waiting and the team walks out and I could just tell from the energy like it was go time. Like nobody had to say anything. It's just like I see him walking over the airplane.

They're like hooking it up to the hook in the toe bars up like we're going to go. And at that moment I really teared up because I knew I knew it was going to happen. And then when it actually happened And everybody was jumping up and down screaming, I was sort of like, yeah, of course. So that was, I think that was the best moment. The worst moment, we have near-death experiences like basically every year.

And at this point, I just expected it. I'm like, okay, you know, every year we're going to get the startup equivalent of a cancer diagnosis. And, you know, if I'm lucky at stage two, not stage four. But, you know, we've had like some, Like we like survive stage four startup cancer. We had an extremely difficult fundraise. I think we got down to a week of cash.

Wow. Like the lawyers had a plan to shut the company down. I remember calling one of our investors when we were sort of three weeks away. And he's like, usually when people tell me you're three weeks away, you're telling me you're going to shut the company down. And I was like, of course we're not shutting the company down. We're talking to however get through this little knot hole here. There are people who have like 12 months of cash and they're like, I'm out of. this. I've been doing this for a year. I'm going to go be a PM in big tech. I've done the PM at

big tech. I don't ever do that again. No, I think I'll never go back. You can never make me go back. No, I can't go back. The thing, the thing with your with for you and your team and I'm sure the entire cap table, it's like if we don't do this, we have to be, if we're not successful here, we're going to be reminded multiple times a year. Every time we take up our shoes. Yeah, like, yeah, every time you get on a plane, every time you, you know, it like is one of the very few companies on earth that can bend reality into, you know, bend time, right? And I, and I just think, uh, I feel like humanity is fortunate that you are running this company because so many people would have gotten the stage four diagnosis and just said, all right, like we, we took a good

shot. We did our best. And that's it. Yeah. I mean, it's my biggest wish for other founders. is pick the startup where if you got the stage four diagnosis, you say, screw it, we're beating this. And that, and that's, you know,

for me, that's supersonic flight, but every, for every founder, it's something different. Uh, but it's, I think there's this founder market thing and if,

if, if, founder mission thing, and if you get that really an alignment, then, uh, like, like,

then, then, then you can run through brick walls. Yeah. Um, in many ways, I would run through brick walls for a note-taking app. Okay.

Okay. Okay. Okay. I would too. The, in many ways you could think of boom as being a very logical, obvious next step in commercial aviation, long haul travel, that type of thing. Yeah. What about the flying car market? I've often said we have flying cars.

They're just helicopters. But the problem with helicopters is that they're not evenly distributed. Not everyone has a helicopter. But if everyone had a helicopter on their house, they could fly to work. And yeah, you need air traffic control and stuff. We all need to be good pilots. But if a company could drop the cost of a helicopter by 100x and make it 100x safer, yeah, we probably basically say, yeah, we saw flying cars.

And yet that hasn't happened. So what is your take on the boom of helicopters, whether or the boom of flying cars or anything else in aviation? There are great people working on that, actually. And it's actually way harder than super sonic flight way harder. Why? But because, uh, civilian reasons. Like one is you need a whole new set of regulations, right? Because these, the electric vertical take off on landing.

So like Joby and Archer, who are really the two leaders in this. Yeah. Uh, it's not technically or regulatoryly a helicopter. So there's a whole new set of rules. Uh, they need a whole new set of infrastructure because he's not a mistake. What I'm saying is like, is like, what if, what if I started a. flying car company that was perfectly regulated as a helicopter. Just like there are these companies now that are regulated as sea gliders, Billy Thalder from region. Billy and region are doing great work.

Yeah, it's like legally a boat, right? Yeah, yeah, I'm sure you love it, right? It's like legally a boat, but it's like a plane, but he's designated in one way. So it's a lot easier. And I feel like there's almost like this regulatory arbitrage, regulatory hack that the hard tech founders might need to think through. So it's, this is, if the regulations were done well, your idea would be exactly on point. The problem is we have we have too many regulations that are prescriptive about exactly how something has to be done. Sure. Rather than setting a safety bar or a noise bar, right? And so and so like if you look at the regulations for helicopters, they tell you how you must build your helicopter. Okay. Yeah. So if you want to build an electric helicopter

where it distributed rotors, well, it doesn't have the parts of the regulations tell you how to design. Um, uh, you know, or, you know, Or like how do you treat, you know, are that you're allowed to have like a wing on the thing too. So that like the better helicopter is that doesn't fit the regulations for helicopters. Yep. Yep. So yeah, it almost be better. It's a bug in the regulations. Yeah, almost just to regulate against like like if if flying things are crashing at a rate above more than like one in a billion, it's no go. Doesn't matter how you build it instead of saying right. You have to have this, this screw in this place.

That's that that that's right. And for actually for large transport aircraft, it's actually a bit better. One in a billion is actually the regulatory safety bar. And yet there are also still some things that are like prescriptive. But there's a mechanism to get around the prescription called equivalent level of safety. So we can go to FAA and say, you know, you say that our throttle has to be built in such and such and such a way. But the real thing is a reliable throttle. Let me show you my reliable throttle that's done differently.

And you can get an equivalent level of safety finding, you can go forwards. But if you look at going from a helicopter, or an electric vertical takeoff and landing, you know, a flying car, like the whole thing is different. What's your timeline to E.V.TALs being in American skies? Who wins? Who goes first? Will I be on a boom super sonic or a E.V.Tal flying car first? Just kind of a wild guess.

Is it like before 2030 seems unlikely to me? Is it 2040? I feel uncomfortable speaking for other people's timelines. I think the technology is going to be ready before the infrastructure and the regulatory environment are laid flat. And the stated timelines for EVTol are like super near term. Yeah. But I suspect it's optimistic. I don't know.

And I don't know, maybe we've made the mistake of being more realistic. And now it just sounds worse. You know, so our timeline is 2029 for being ready for the first passenger. I mean, there's also like incredible things happening in Evital that are unmanned. You look at what Zipline's doing. We talked to the founder of Zipline and we were blown away by the progress there. And that was one of the things where they had to go to another country to get favorable regulatory treatment and kind of figure things out. But then have really been able to accelerate.

Yeah, I mean, Keller's crushing it. Like, I love Zipline. It's crazy. Amazing founder, amazing company. Great success story for how you do these things. They're brilliant. Keller is brilliant at like finding the first market. Yep.

It was like the soft target. Yep. The small and uncrewed are radically easier than large and crude. And the reason for both is safety. If you go big, even if it's uncrewed, you have a problem because of the thing crashes, it can hurt somebody in the ground. Yeah. Right.

And so there's a threshold, you know, somewhere around, I think, 55 pounds. Like above which, like, it's radically harder. Yep. And then if you put a human on board, like, obviously, you know, you don't want to hurt anybody. And so in building XB1, like the, the most surprising things were about, this were the second order effect of our choice to put a human on board from day one and not to have an ejection seat. Like we basically put everything on hard mode,

but we learned a lot more from that. Yeah, is there an easy mode version of the boom story where you go to some country with lax regulations, you say we're going uncrewed, we're going smaller, maybe it's like an ISR reconnaissance application. You're only flying over the water, counting on a fish or whales or something, and it's just much easier to actually get flying

on a routine start the flywheel like, Zipline did? Have you thought about that? I mean, you can go, you know, like there are people doing kind of what you're describing that I think are smart. Like Hermes. Hermes is smart. Yeah, totally.

And, you know, but what is what is Hermias doing? They're basically building a hypersonic bomber. Yeah. And, you know, and it's kind of okay if the trips were one way. Sure. You know, and yeah. And I think they'll have a great business and they're great people working on that. And I, you know, I'm cheering for them.

They'll probably get to mock five long before I get to mock five. Yeah. But the, but doing that and then later putting a human on board is extremely difficult. Like if you look at the history of development of aircraft platforms, you find that defense technology makes it into commercial technology, but there are basically zero cases of a defense product becoming a commercial product. But the reverse is not true.

There are many cases of commercial products becoming defense products. So the Boeing 707 became the KC-135. The 67 became the KC-46. The 737 turned into a whole bunch of command and control airplanes and anti-submarine airplanes. So I think the reason is

when you're commercial, you have to worry about safety and you have to worry about noise. And neither of those things is retrofittable. They're actually foundational to product architecture. And so technology can go in either direction, but products go in one direction.

because safety and noise are fundamental to product architecture. You mentioned AJ at Hermius. When are we going to see the foot race? I want the two founders of the supersonic companies to race each other to see who's faster in the real world on the ground and then we'll race the planes in the sky. I think AJ, AJ I've been telling each other the other one's going to win the race. So I don't know.

I think it'd be like the most, at least for me, it would be the most pathetic race ever. I am like not a runner at all. Well, we'll do it as a paper. We'll raise some non-delutive capital. You guys can maybe split it based on... Let's actually make it a little bit less about the running. Let's just do the MRF. Yeah.

We'll just do the and-er-old MRF together. Well, we're going to hold you to being the first people to podcast Super Sonic. Yep. And I would love to have you back on the show many times between now and then because this conversation has been extremely insightful. And we are just grateful for the work that you and the team do. It's great. Thank you so much, Blake.

That was so much fun. Thank you. We'll talk to you soon. Cheers. And in the meantime, we will tell you about public investing for those who take it seriously, multi-asset investing, industry-leading yields, trusted by millions. Trusted by millions. We'll also tell you about eight sleep, five-year warranty, 30-night risk-free trial, free returns, free shipping. How'd you sleep last night, Jordy?

I got an 89. Do you smoke me again? 100. He's got a 100 sleep fitness. He's got a 100 sleep score. They got the new pod four ultra. Pop 5 Ultra. Pod 5 Ultra.

With a blanket with the same heating and cooling technology. You got to pick it out. Can't wait for the blanket. Anyway, we got Tim Fist from IFP in the studio. We remember he was here when we were under attack and all of Zoom went down. That was devastating. That was devastating. It was such an interesting conversation.

It was. Yeah, it was awful. So he's at the Institute for Progress. We'll bring him into the studio and talk to him. How are you doing, Tim? Welcome back. Good. Thanks for having me, guys.

We made it. We made it. Thank you so much for bearing with us. That was such a weird, you know. It was weird. It's not the first time a nation state is trying to take down TBPN. Maybe we start talking and we get spicy and all of a sudden the connection gets fuzzy. It might happen again.

We don't know. Yeah, we had 10 cent was pretty upset at the H20 allegations. So prime suspect number one. Take us through the allegations again. Break down what you guys published. And then we'll go through some of the. the reaction and the fallout from the piece. Yeah, so I've got so much has happened since this was the news.

It feels like there's five different things in export controls that have gone on since. But yeah, basically this was the H20 inference chip from Nvidia, which some might remember was designed to be compliant with the export controls. So as is the chip, they sold about reportedly one million of them into China in 2024. And yeah, there was a lot of outcry at the time for the Bureau of Industry and Security, who's, you know, the part of government that administers and enforces export controls to do something about this because, you know, 2024 was the period where everyone realized that inference compute was perhaps, you know, the most important strategic input to frontier air development because of,

you know, test time compute scaling, reinforcement learning and synthetic data generation is the key things. And, yeah, you know, earlier this year, there was reporting that, you know, Nvidia had a huge number of additional sales plans like big Chinese companies and a bunch of people including us, sort of said, hey, is this really what we want to be doing? Do we want to sort of allow, you know, China to get access to millions more of these chips? And yet, the government ended up taking action on this and issued some guidance, basically saying, hey, no, you can't make these sales. Envidia reportedly was left holding the bag to the tune of about 5.5 billion. And now, you know, since then we've seen... It's a bag for ants. For Admitted. It's barely a flesh wound.

Well, they made up for it with deals in Saudi Arabia, right? Yeah, indeed. Yeah. So that's the new thing, right? It's the administration walking back on the diffusion rule, the speaking framework, and then the series of deals that have been announced over in the Gulf. And yeah, and what's your reaction to the diffusion rule and the deals in Saudi Arabia? Is this a step forward? Are you excited about this? Is this positive news? Yeah, so it really depends on the details of all this. So I think on the deals, I guess fundamentally, you know, what do we want? We need the U.S. AI tech stack to win the global competition against China. I think a big part of that is locking in these early adopters and big spenders, especially like the United Arab Emirates. But I think we need to be thinking about how to structure deals like this to sort of get the US, the outcomes at once, which is, you know, US tech diffusion, the kind of like Chinese tech

stack locked out in a way that, you know, we couldn't handle with 5G, like China won sort of like the 5G battle globally. And then appropriate national security guard rails in place. And it's pretty unclear, like, what the tradeoffs that have been made for this deal are. So I think like the high level specs that we've gotten is a five gigawatt AI data center campus to be deployed over some time period in Abu Dhabi and then reports of 500,000 chips per year to be exported with maybe four-fifth of those for US firms who are building data centers over there and one-fifth for G-42. It's big tech conglomerate in the OE. And kind of depending on how quickly that all happens and whether they're referring to, you know, a hundred thousand of today's chips or 100,000 of like chips in, you know, five years time. This could be the difference between, you know, 1x to 100x in terms of like different differential in compute.

So, yeah, I think that really makes the difference. And I think the key question here is, you know, do we want an AI lab in, you know, an authoritarian country to have the biggest clusters or close to the biggest clusters in the world? And, you know, this is a country that does collaborate with China in areas like drones and 5G and military technologies. And so you need to sort of be careful with giving them access to sort of frontier scale compute here. Yeah. Yeah. So there's kind of like a diffuse. I'm curious if you have insight on capital flows from UAE and Saudi into Chinese AI is how much investment activity is there?

Do you have any insight? I don't have stats on this. I suppose the interesting to say on this, you guys might remember there was this $1.5 billion deal between Microsoft and G42 a couple of years ago that sparked on this stuff. So this was essentially, you know, Microsoft making an investment. in the G-42 and starting to build data centers in collaboration with them. And the Department of Commerce got really involved in this. And one of their requirements was to divest from Chinese companies in the kind of AI stack for G-42, which is, you know, this huge tech conglomerate that is funded through the nation's sovereign wealth fund,

which is the second largest in the world. So pretty serious money. We're talking trillions of dollars. And, yeah, reportedly what they did is they had a bunch of passive investments in Chinese companies, including, you know, hyperscalers and AI companies. And reportedly G42 did divest from those companies, but then basically moved the investments over to another fund called Lunate that was sort of also owned by this big sprawling tech conglomerate that's ultimately funded by, you know, the sovereign world fund.

So the big question marks about how much are they actually decoupling from China and like how costly is this to them? Like are they actually burning bridges that are hard to reverse. Yeah, there's some element of like we have a smooth gradient of friendship with different countries. Obviously there's the five eyes, like the closest allies. we sell nuclear submarines to some countries, but then there's countries that are more jump balls and could go either way. As the diffusion rule goes away, do we need firmer rules around, hey, we're willing to sell to you, but don't immediately set up a reseller and start selling, just passing these on to China, because you could imagine if the natural economic forces take hold

and I was in some country that was just about to get 500,000 chips, it's pretty easy to just immediately start reselling these and just print money, basically. Yeah, and there's kind of two ways to do that, right? One is you can just unsell the chips, so kind of smuggle them into China. And the other way that's pretty straightforward is set up your own data center and rent it out as cloud computer.

Exactly. So, yeah, I think that's what you're referring to. And yeah, currently there's not great guardrails around either of those things. And I think the administration wants to set up better versions of this. But yeah, I think this needs to be part where there's sort of like countries that are really willing to, you know, buy hundreds of thousands and millions of chips. You kind of want these structured deals that have these guard rails in place. And I think the Trump administration is really well positioned to strike these kind of smart bespoke deals that get us the right possible outcome across each of these dimensions. And hopefully that's what they're pursuing.

Yeah. Can we talk about the news today or maybe it came out late yesterday that Nvidia to set up research center in Shanghai maintaining foothold in China? basically they're they're opening this r and d center in a as almost like an olive branch to china is kind of how i would describe it they say they're going to use it to understand chinese customer demands and design u.s compliant products and they're basically doing this to just kind of navigate uh sorry navigate export controls and compete with companies like Huawei this uh to me i mean there's so much to unpaid here. I love your kind of initial take and then I want to kind of maybe move more high level. And to me, the signals that maybe Jensen doesn't take national security concerns about like an AI war as seriously

as even some of the U.S. Foundation model labs talk about it. Yeah, I'd say that's an accurate assessment and you know I think it's really hard to design you know sanctions export controls like these kinds of things in a way that it's not that sort of can't easily be escaped from but it's kind of like the spirit of the rule in that like hey we're worried about China you know beating the US in like the most strategically important technology of this century and we don't want you selling to them but then you know you can do all these additional you can do all these things to sort of like actually be cooperating around the scenes like design compliance chips or whatever and to be fair to in video you know like I think they say you look look if the if the speed limit is 60 or

we're going 55, like we're not breaking the law. Like, we should be allowed to do this. And if you think, like, the strategic perspective for them is also a lot of their customers are like these big US hyperscalers, right? And all of these hyperscalers are developing their own custom silicon. So, you know, we know Google has their TPU, you know, that they use for the trading and inference. We know Amazon has like training and inferential that they're also using for training and inference. Microsoft is developing their own stack. And so, you know, a huge source of revenue for and video is potentially at risk. So it kind of makes sense for them to want to be diversifying to other parts of the world

and not just be selling to US hypers. So they're certainly in a difficult position overall. And yeah, what you think is right here depends really on how much you buy this kind of argument that, hey, over the next five years, AI as a technology that will, like, reshape the global balance of economic and military power is a thing and will be a really big deal. Yeah. It seems like the speed limit is getting lower and lower, though. we went from the H-100 to the H-20.

Now, NVIDIA is preparing to release a modified version of the H-20 chip for the Chinese market after your piece and the changes to the H-20 restrictions. Is there a point where the restrictions are so onerous that no one wants to buy a car that goes nine miles an hour, you know? And at a certain point, NVIDIA will just lose the market share because, Huawei Ascend chips will just be outperforming. Are you tracking any of that? Yeah, so here it becomes an interesting conversation.

I think the kind of crux of the matter is if Huawei has better chips than Invidra in the Chinese market and is able to sort of capture that market, how bad is that? Like should we sort of set export control such that Nvidia is away slightly ahead of Hawaii, for example, and sort of like raise those limits over time? And here I think there's two sort of dimensions to it. One is that in AI, the quality of the chips matter, so how sort of individually perform in each ship is, but also the quantity really matters. So, you know, you can have a million chips, each that are, you know, like half as good and sort of like substitute for like 500,000 chips, for example.

And so, you know, this is a crude approximation, but you both want the sort of best chips and as many of them as possible. And where we're trying to squeeze China, like we being like the US government, is across this whole supply chain. so not just on, you know, being out to procure chips directly, but also being out of manufacture their own, so having like the semiconductor manufacturer manufacturer equipment and the fabs and everything there. And so I think the goal of the US government has to be really to restrict the quantity of AI chips that China,

so like Smick and Huawei as like the key firms here, are able to produce. And so by this logic, you know, even if, you, Nvidia has a chip that's only slightly better or slightly worse than Huawei's, you still might want to restrict it because you would prefer them not to access to 10 times as many chips than they otherwise would have. Like, you don't want them to have access to essentially like, you know, TSM's production capacity of like being able to do many, many millions more chips than you could otherwise produce. So I think, yeah, these are like hard tradeoffs to make. I think where it really matters is in foreign availability. I think,

you know, where Huawei is accessing foreign markets and outperforming US chips, that's really bad. And we should sort of make sure that that is not the case and is, you know, it is US chips that are being used globally in countries that aren't China. Do you think Huawei will ever go public or do they not want people to know, they want people to know as little about their business as possible? Yeah, I'm clear. It depends what the CCP wants. It's a inversely opaque organization.

Yeah. Interesting. What is your take on open source AI? We were talking to Aaron Ginn about this idea that if America does not provide a state-of-the-art open-source stack to countries that want to build their own AI products off on top of fine-tuned or post-trained LLMs that meet their definition of free speech or ideals or morals, the stack by default will be Huawei Ascend, Deep Seek, Manus. Yeah, I totally buy this.

I think that being able to sort of have the best open source models in the world be American is really important for similar reason as like the chip stack and the data centers and the cloud services. I think there's a question about how sticky is this ecosystem actually? So you talk to people who are like, yeah, we really need to like lock in the tech stack globally. Like American open source models need to be sort of like the rails that the world runs on. But then if you look at sort of how AI developers work, they are very happy to switch between different base models for their application depending on which happens to be the best. You know, you look at like the revenue of frontier labs. And you know, when they have the best model, it's up here or when they don't, it's down here.

here. Like everyone is switching every day depending on like you have who has the best model. So it's yeah, like you want to diffuse American open source as wide as possible. But like what about it makes it sticky? And my hypothesis would be that it's probably the security security and reliability side of things. So, you know, everyone's worried about, you know, the fact that you can insert like back doors to create slipper agents into open source models and there's no way to actually detect these. I think, you know, the US wins if it can prove that it has the most trustworthy and reliable models over China, similar to how I think U.S. cloud computing companies compete over, you know, Huawei and Alibaba cloud. Like often Huawei and Alibaba are coming to the market

with a cheaper option, but the U.S. is just more trustworthy in terms of, you know, data privacy, security, et cetera. So I think trying to figure out those technical problems around security, reliability, interpretability, and sort of proving that U.S. models win across those dimensions is probably the way to make the kind of open source models from the U.S. more sticky, or just sort of be way better. And, you know, this is where sort of, sort of, my most of the effort is currently going and definitely support those efforts as well. Like, you know, building up more domestic compute, for example, and like finding more training datasets.

Yeah. How do you think about the dynamic between the importance of the application layer versus the foundation model layer? We've seen efforts on the foundation model layer at the national level all over the place, but let's just use Mestral as an example. Mestrall has a consumer app called LeChat. It is a direct competitor to chat GPT. And I think that's great for the French and they could potentially have a fine-tune model that meets their standards and guidelines.

But if at the end of the day, the French consumers, 90% of them are using Google and 90% of them use Open AI, well, then all of that is kind of worthless. And sure, maybe Mistral will be cheaper in the enterprise and be implemented in French businesses or European businesses. but in terms of like control of the population, that feels like the diffusion of American ideals in Europe, which doesn't seem extremely controversial because America and European ideals are pretty similar, but you can see how this would play out in other countries. Yeah, totally. And the economics are pretty brutal here, right? Like we're in a regime where the amount of compute being used to train a model goes up

5x every single year. We're moving from, you know, $100 million to train a model, you know, last year to rapidly approaching the billions. If you are a company committing to this and you're only sort of just slightly better or worse than, you know, one of these huge tech companies, you can't keep sustaining this over time. You have to, you have to check out eventually. Yeah, we've seen that with a lot of the early stage foundation model companies that have raised, trained something, but never been on the frontier and now they're, you know, falling out of favor more or less. Yeah, totally. Interesting. Has there been any conversation on the ground in D.C. or have you heard any chatter around

the Manus investment that definitely kicked the, that benchmark made, kicked the Hornets Nest a little bit in the Hornets Nest of American Dynamus. Oh, Delhi and Asperuhova. But to give benchmark a little bit of credit, you, if you're going to be mad at Benchmark for making an investment in Manus, you also, in some ways, I think, have to be mad at Jensen for going up and setting research and design, you know, R&D Center in Shanghai right now, explicitly to work on developing products for the Chinese AI ecosystem and in some way direct, the CCP directly.

Yeah. Yeah. It's a bit hard to evaluate. I think, you know, one, you know, one of the U.S. advantages is like very deep capital markets, right? And so being able to exert financial control over set-ups overseas by sort of like acquiring stakes is potentially a way to, you know, have you sort of, a better sort of fairer sort of more aligned like global system overall. I think this is high when it comes to Chinese companies. But does America benefit from having American capital allocators in bite dance? I don't think we have much influence or control over what bite dance does. Yeah, exactly. So I think for big companies, especially those that are part of this,

you know, Chinese sort of state industrial military complex, this is a pretty poor prospect. This is why, you know, the Treasury Department has outbound investment restrictions in a bunch of different industries, which have been expanded to AI over time relatively slowly, though. So, yeah, one thing that they've been sort of working on is trying to figure out whether apply these outbound investment restrictions more solidly to commercial AI developers and commercial or AI cluster operators. So, like, your investments coming from VC is actually restricting investments of those kinds into China.

And, yeah, this is complicated by the fact that just, like, due diligence is really hard. Like, let's say you're investing into an application developer who's doing something pretty innocuous, like, you know, automated code agents or, you know, search or something along these lines. You don't have any control over, you know, are they going to work with the Chinese military in the future? Are they going to be sort of like an instrument of state-backed surveillance over the local

population. They're not going to tell you that and they might not have plans to do that, but they can certainly be compelled to do that in the future. So the judicial justice question is super hard. Do you think regulators of the American government needs to be thinking about the pre-training scaling law potentially not holding or reaching some sort of diminishing marginal return? We've seen the data from GPD 4.5. It feels like GPT 5 might not just be 100x bigger than GPD 4.5, it might actually be some sort of mixture of experts, different models, and more of almost like a product challenge than just a scaling and just get the more chips challenge. At the same time, Open AI is also investing in Stargate, and there's still a drumbeat of ever larger

data centers in the United States. But the overall tone of AI research labs in America seems to have shifted away from just the ever bigger transformer. And there seems to be a somewhat of a, somewhat of a resignation to this idea that there might be more challenges on the path to ASI than merely scaling up the architecture that we have right now. Yeah, I think there's a few things here. One is that, you know, obviously these companies are still making huge investments in clusters and energy to get to the next order of magnitude of scale. So there's some level of just, you know, financial buy-in to the idea that, you know, pre-training scaling will continue. But also a recognition that, you know, we've got this other scaling law that sort of test-time compute scaling law. And now like reinforcement learning as a paradigm that seems to really be working for language models,

where a lot of companies are starting to put more of their compute resources overall. So I think the rough balance now seems to be around sort of 80, 20 pre-training compute and then post-training. and I expect what we might see as we see sort of, you know, companies who are building out these clusters and these energy sources to support them, where are they going to sort of like balance the compute allocation across those? The calculus seems to be that, yeah, pre-training computer is relatively less promising to the fore and putting more of your resources in a relative sense into RL, which is sort of very much kind of like the early stages of scaling up is the better strategy at the moment. Yeah, I mean, the other side of this is like as even beyond post-training, training and RL as reasoning tokens and just more test time compute, more inference cost increases. Maybe the real way to get a GDP boost or competitive advantage out of AI is just to make sure that there is an H100 or equivalent for every member of your society or every citizen because everyone

will need to be inferencing at a very high level, very large model, basically constantly. And so even if you train the greatest model, if you can't have every single one of your citizens constantly inferencing it all day long, you're not going to see the benefits of the EGEL. I need my AI companion constantly on. I mean, we do need, we do need, you know, code gen and we need research and we need answers. And if we're timing out, it's not just studio Ghibli's. CodeGen and deep research are going to be competing with the AI companions for inference. Yeah, probably. Just to, I guess, maybe push back on maybe hypothesis underlying that.

I am very confused about where most of the compute is going to be spent and how that is going to be distributed across people. So I can easily imagine a world like in two years where most people in the world still aren't really using simple tools like chat GPT. Like, you know, my grandma still like never heard of it. And but at the same time, you have some companies at the frontier who are deploying millions to billions of agents internally. So you had this really like unequally distributed use of compute overall. So yeah, I kind of buy the idea that there'll be just like massively

uneven sort of like usage of these kinds of resources and like really like located in particular countries and within particular companies. Yes. Agree in the sum total of the importance of inference and compute allocated and available for inference, but potentially disagree on the distribution of that. And I think now that you hash that out, I think that makes a lot of sense. You already see that just in the prosumer versus consumer market. I'm probably kicking off like three to five deep research reports using a lot of tokens. I'm getting my $200 worth. And there's a lot of people that are, you know, just land on it every once in a while to toy around with it.

That makes a ton of sense. What's next, Jordy? What should we talk about? How have you guys had success explaining the potential, for AI, AI's potential progress in the next few years in Washington broadly, do you feel like lawmakers have fully kind of fully understand the potential, right? Nobody has a crystal ball. We can't predict the future, but if you sort of extrapolate trends and even just use the products today, do you feel like, do you feel like Washington is pricing it in, or is it still, you know,

are people going to be, you know, extremely surprised in the next few years? Yeah, my bet is 100% extremely surprised. I am, I think, consistently disappointed with how the lack of kind of level of AGI-pilled people in DCR, even with sort of like current capabilities and like where the sort of trend is obviously going, I think. Like, there's a lot that just isn't being priced in about kind of how weird the world is, you know, in five years' time. There's also, I think, a sense of which, you know, there's a real,

loss here in that if you look at technologies like the internet, which you know, as you probably know, like came from ARPANET, like this with this like DARPA funded project, as well as, you know, early sort of genomics with the human genome project. These were technologies where the government sort of saw what was coming and took sort of a really active role in shaping the development of the technology through basic R&D. So with ARPANET, for example, the focus was really on creating, you know, a resilient network system that could survive a nuclear bomb. But also they sort of they were able to take that sort of secure network infrastructure and apply the notion of kind of like openness

and freedom of information to create like a scaled global network that really represented American values and was like very secure. We don't see like an equivalent kind of level of basic R&D investment in the United States around AI. And that would be really cool to speak because there's basically a bunch of problems where, you know, right now industry is focused on where the money is, which is, you know, B2B SaaS apps and chatbts. But there's like a huge space of just like,

if you accept that over the next few years we'll have these incredible new AI capabilities. There's all these massive, important societal and scientific problems in areas like, you know, materials discovery, drug discovery, etc., where the government could be placing essentially huge bets that could pay off, you know, within a few years. And we're kind of not doing that because we're sort of in DC at least failing to see sort of where the future is going and therefore what the role for this kind of basic R&D is. So yeah, there's a congressional coalition that's just started called the American Science Acceleration Project, which we're really excited about and try to build hype around. But they, I think I have the right idea around this. But, you know,

there's a deficit of this kind of the King in D.C. at the moment. Last question for me. How is META's reputation changed in D.C. over the last few years? Famously, Zuck goes to Capitol Hill. They don't even understand how his business model works. He says, Senator, we sell ads. He was castigated for being too left than to right. And a lot of political hot button issues around the Facebook app and the type of content

It's servicing, obviously a big vibe shift there. But now it seems like meta is increasingly a very important tool in the American foreign diplomacy AI tool chest with Lama. Lama is, of course, in their open source model that's, you know, there's defense Lama now. The DOD is partnered with META on this. And yet today we learn that their behemoth model is struggling to improve capabilities. They're facing setbacks. Has the tune changed in D.C. to say, hey, Zuck, like, sell more ads, please, like, do more stuff.

We got to get you pumping because, like, you're a national champion now. Yeah, I'd say, like, by and large, you know, there's different factions in D.C. You care about different things. Obviously, sort of meta is going through this big, like, anti-trust case at the moment as well. Like, it has been going through it. Yeah, on the AI side, I guess it's interesting as well. Like, meta is very much seen as kind of like the darling of, you know, open source supremacy for the U.S. I think it's kind of awkward for a lot of meta fans to sort of.

see the latest batch of models and then really not be that impressive and also potentially a bit of gaming with leaderboards and sort of what models they're releasing there obviously they've executed this strategic pivot to appeal to the current administration with you know getting rid of fact checking and bringing in like the community notes type approach and that seems to being pretty effective but yeah i think um they've certainly got a lot of backers here um yeah and the open source approach it's like really good to have like a really well capitalized company like really like pursuing the strategy overall um but yeah i think they're copying a bit of heat for not actually delivering on the promise to some extent. And also people,

there's sort of like another faction that's pretty worried about open source models with capabilities that could be significantly misused, especially in the cyber domain being like freely available to the whole world. But that's less for concern while they're behind. Yeah, it was very interesting in the press release around this, in the management of the news that they were delaying the rollout. They didn't say, oh, it's too dangerous to release. They could have easily said that. That's always an easy out for the AI labs to say, it's just too good. Trust us. We can't trust you with it. We're doing more safety research. Instead, it seems like there's a little bit of an admission that it's just not at the level we want it to be.

This might be out of scope for you, but do you think that AI is art, is at a much, is being used in nefarious ways in the context of social engineering attacks at a greater scale than people sort of realized today. This was top of mind just due to the Coinbase news this week, the leak that they had. And I think people broadly anecdotally reported that they just felt like they had a huge uptick and like sort of inbound calls and social engineering attacks.

My question is, is AI is already, when you're using tools like Sesame and some of these lower, you know, Sesame is obviously state of the art, but even some of these lower latency video models. models should already be capable and better at social engineering attacks than like, you know, a PhD level person globally that that even, even if English wasn't their first language and, and, and, and, and, and, and, and, and, and, and, and, uh, so anyways, I'm curious if you have cybersecurity, social engineering being, any sort of, like, insights there.

And potential regulation around it. Yeah, no insights into the true extent. I will note that it is surprising to me that we don't seem to see more of this. My impression is that from sort of GBT 3.5 onwards, we've had LLMs that can produce better text, more convincing text than the kind of median fishing email, which, as you know, is often like pretty poorly written. Maybe that's deliberate. But yeah, like, it's kind of weird to me that we haven't seen mass sort of spearfishing campaigns of the kind that have been possible for like several years now yet, or at least they haven't been

widely reported. Maybe it's that, yeah, existing sort of filters and defensive approaches work. Maybe like we shouldn't expect actually that there'd be that many people who are trying to pick this low-hanging fruit and they're not technically sophisticated enough. Or maybe it's like, it's like happening and not being reported on. But yeah, I find it. I think it's, I think there's potential that it's happening, but it's happening to a demographic that doesn't even know it's happening, right? Like I don't pick up random calls, right? I just don't, I'm not going to answer that you know of. Maybe the last time I called you, it was actually a bot. Yeah, that's true. That's true, John.

You do pick up non-random calls, but that's the point of them. Yeah. I mean, the same thing happened with the crypto stuff. Like, there were a lot of the victims of cryptocurrency scams, like, weren't profiled in the New York Times. And so we just didn't really hear about them because, like, the people with the loudest microphones didn't fall for the scams. Yeah. Tricky. Anyway, thank you so much for joining Tim.

This was fantastic. I'm glad we survived the attacks from the nation state actors that don't want us to yap. We kept the stream up. a stream together. We really appreciate it. We'd love to have you back and this was fantastic. Yeah. Thanks for coming on. We'll talk you soon. Have a great weekend. Next up we're ringing Chris Best from Substack, but first let me tell you about ad quick, adquick. Adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertise only ad quick combines technology, out of home expertise and data to enable

efficient seam buying, seamless ad buying across the globe. And we should also talk about wander. Find your happy place. Find your happy place. Book of Wander with Inspire VAL VIEW, Hotel Great Amenities, Dreamy Beds, top-tier cleaning, and 24-7 concierge service is a vacation home, but better. Anyway, let's bring in Chris Bust. Airbnb is getting distracted. Wander's doubling down. Wander's doubling down. It's a knockout, drag-out, fight in the rental home market, and we recommend Wander. Anyway, let's bring in Chris Bess from Sub-Tack. How you doing this? Boom. Good to see you. Good. Good. That jingle is unstoppable.

Unstoppable. We got to get a jingle for Substack. What's the Substack? What's your, what's your landing page hero, hero text. The app for independent voices. There we go. Same, same melody. I go take back your mind. Take back your minds. Take back your minds. Take back your minds. Okay. With that of the jingle.

How is the process of taking back minds going? That's going pretty well. Okay. Can't complain. Yeah. Cost five million paid subscriptions. Wow. That's a lot. Wow. Awesome. App's blown ahead of, I think all of the legacy media apps combined. Amazing. Chris and I were in the same YC batch.

Winter 18. Another one. Another one. So my biggest thing with John is, it's actually probably good. If John had just invested in, in his batch, he would have been two post-economics to start a podcast and we wouldn't be here. It's like Coinbase, Instacard, Zapier, substack. Even, what was the other one? The crypto exchange that absolutely ripped the NFT marketplace. OpenC was in our batch, you know? Lanta, Replit.

Yeah, yeah, yeah. Remarkable. companies. It was good times. So yeah, I mean, take me through the history and evolution of substack and where you're going next. Yeah, I mean, we started, we were in winter, winter 2018 together. The basic theory is we're building a new economic engine for culture. You know, we want to harness the power of technology, the power of world's internet scale networks combined with a business model that actually powers independence. The version of that, the simple version of that that we started with is basically make it dead simple to do a paid email newsletter.

But as the years have gone by, we've grown that into multi-format. You can do, you can write, you can do a podcast, you can do live video. We've got this network and this app. You can get the substack app from the app store and discover this whole universe of the smartest, best independent media and culture on the internet. And that's what we're building next basically. I mean, we're building a bunch of video tools. We've got this live, you know, live tool that lets you do something that feels like a FaceTime call and then AI magically turns it into like a produced podcast and series of clips.

So if not everybody is the brilliant YouTube sensations that you guys are, if you're just someone that has someone to say, we make it dead easy. That's totally. Super powerful. Was Ben Thompson really an inspiration? He kind of tells that story. I don't know if that's true. That's Retechery. And he kind of pioneered this like independent newsletter creator really scaled the business.

But, I mean, had you been reading him at the time? Had you taken lessons away from Stratory when you built Substack? Yeah, there was a few people doing it, right? There was like, you know, because we had this cockamamie scheme. We're like, hey, I bet you people would subscribe to, you know, things they deeply value if you had something great. And there was a handful of people that were doing it. You know, Andrew Sullivan did this with kind of like the daily dish back in the day. Ben Thompson had Stratereeckery.

And here was this guy, you know, writing an email newsletter from his bedroom in Taiwan making by our calculations millions of dollars a year. We're like, you know, that sounds pretty sweet. Like, why do more people not do that, basically? Yeah. And, you know, the answer to that turned out to be, it's way too hard. So what if we made it way easier? Yeah, I mean, he's invested immensely in technology to build up passport and what he's done.

And now there's a few other companies that run on it. But yeah, where does this all go? I mean, I guess the big question is like ads product, you know, is tied to the written media, Wallster Journal has subscriptions and ads. New York Times has subscriptions. And even after you subscribe, you still get ads. We are an ad powered show. Ads feel very, they get a lot of negative attention, a lot of negative stated preferences, but the revealed preference is almost always people don't mind ads and scroll right past them on Instagram and sometimes even get value from them. We've been very pro ads, but what has your take been on

ads generally in in the substack world? The thing that's actually different about substack is kind of creator ownership and a model that rewards quality and value. So the fact on substack that you, you know, people don't subscribe to substack, they subscribe to you. You know, you can make, if you make something truly great and it, both you will value what they come, all those things are what actually set substack apart. You know, the formats are similar to what you see elsewhere.

You can write a long form article. You can make a podcast. You can do a video. Like, those are not novel things. The thing that's novel is this business model that powers independence. The fact that you own the, you know, it's your business. You're getting the upside. You want to invest in the quality.

And I think there are methods of doing sponsorships and advertising that are, that work with that. Right. The fact that people, you know, people are paying premium for you guys to, advertise on this program, not because you're getting like the most clicks ever that gets sold at a market, like at some market rate for the demographic, but because you're making something special and you have tremendous, you know, jingle skills. But the audience is like, is magical.

Anyway, there are a bunch of people today we're doing all subscription. We're powering that thing. That actually works really well, shockingly well, much better than people thought it was going to work. People are consistently surprised by how well that business model can work for them. there are also people on substack who are doing sponsorships and doing tremendously well. And so I do think that model can and should coexist with high quality media endeavors. Do you believe the medium is the message?

We've kind of felt this where we decided to go live for somewhat of like a technical reason, just the way YouTube's organized, it kind of made things easier. But then once we were live, we realized, well, we're faster. There's no delay between us recording and uploading. and so we can react to the news. We could open up X right now and read a headline that just dropped with you and get your reaction.

And it's kind of changed the nature of the show. What's even your processing of like the McLuhan ideology? I'm a huge believer in live for that exact reason. You know, we're building this video product that is live within Substack. And I think it's almost like a hack that sets the social expectation. The fact that you're going to be able to sit down, make this thing, ship it off. It's not necessarily the case. case that the majority of the audience is going to watch live.

It's great that those are you here, but it's, you know, it's going to be, there's going to be a Vod, there's going to be clips. Those might be the places that actually get the distribution. But as a hack to make the thing, the fact that the, you know, the social expectation between us right now is we're sitting down having a live conversation makes it easier, makes it faster. It does feel different. Like, I don't know if you have this, but I feel, you know, the feeling of being live is a little

bit more energizing than otherwise. Definitely. And then also it just builds. I mean, we, we like it because it's. builds trust with you, like, yes, there will be clips, but we're not going to edit, we can't edit out what you're saying. So if you want to make your case in some way, we can't be like, oh, we didn't want to put that in. Yeah, I could go back to the tape and say, well, here's, here's the full context, guys. Exactly. Exactly. It's always there. Can you talk about this? So,

so, Juan, I want your help kind of framing something because there's, in my mind, there's stages of substack, right? Like our audience, at least the initial core audience is this sort of, like terminally online ex, you know, tech enthusiasts, genius, wealthy, that's a core audience. But yeah, average network. You could say terminally online too. You know, 20 to, you know.

Goaded. Definitely. In the conversation. Definitely in the conversation. No, but to me there's been these stages of sub-sac where like, I don't know if it was like a year ago at this point that I noticed that substack had not become a household name, but it had been becomes outside of tech.

Emily Oster, for example. But it had just become something that kids I went to college with that aren't in tech were subscribed to probably three substacks. And it was like part of that. It wasn't just all like packing the corner fans. It became like clearly part of popular culture online. Yeah. Yeah.

Was there a no. Where is there a moment? Is that like the wrong analysis and I just wasn't paying attention outside of our bubble? Or did you feel something like that too? I get this question a lot. And I think people, because it kind of grows in pockets, right? Like it'll be, there'll be, you know, this bunch of crypto people that all join at the same time or a bunch of politics people or a bunch of finance.

Like there's sort of like these, you know, next adjacent market pockets as it grows. And so all along, there's, I've sort of had people ask me this for like it feels like substack is suddenly blowing up. Like, does that feel like, has your life changed? And internally, like, it's just been growing really consistently, really steadily. Like the curve just looks like a steady exponential curve. And so it is kind of always true. like this is this is the most exciting time.

I have had, you know, I do feel it too. Like I get less blank looks when I tell people I'm working on substack that I used to. But yeah, it's been a steady march. How has kind of the war with X, maybe the war is not the right word for it, but obviously removing links. Platform changes. Yeah, platform changes. I obviously frustrated a lot of the core creators who had been building an audience in both places. but for my view it seems like they maybe you know created a monster like in the sense that like it

maybe made you guys react and be like uh and and it maybe it was like a short term win but uh will maybe be a mistake long term and that maybe it's kind of pushed you guys to think even bigger about what substack is the i mean the funny thing here is that ben thompson credits his early growth with linked in and sharing links on linkedin and then linkedin had an algorithm change and he had said that it wouldn't be possible to build Sertechery the way he did in the modern LinkedIn era. So there was kind of like a LinkedIn vibe too. But yeah, I'm interested to hear how you've been processing.

Just all the platform changes, really. So, I mean, this has always been my theory is if you want to build one of these businesses, you need a model that supports independence, you need people to be able to subscribe to you. And then you also need like internet scale networks to grow on. And in the old days of Substack, it would be, you know, at the very start, like Tritare,

you'd have this newsletter, this website, but then you'd have to go on Twitter to promote it or go on LinkedIn or go on Instagram or wherever. We always want you to be able to do that. We want you to be able to publish. It's not a walled garden. Like put it everywhere, put it on the RSS feeds, put it on YouTube, whatever.

But you're totally at the mercy then of these other platforms that don't necessarily, you know, sometimes they go to war with you like Elon got pissed off at us. But a lot of the time they just, they don't care, right? Zuck can turn around and say, we're not doing politics for a little while because people got mad at us. And if you're somebody that writes about

politics, that's really bad for you. And so we always knew that we needed to make our own network, our own place. Fucking Zoom reactions, man, I got to turn that off. It's at the OS level. It's at the OS level. I feel like I've turned this off a thousand times and it sometimes still comes back. If we could just shoot whoever built that feature, that was perfect. Anyway, we had to build the network.

We knew we had to build a network. You know, it doesn't make sense. It's not like, you know, Facebook or LinkedIn or X or anybody's TikTok's job to help you like, you know, take your audience and own it and make something independent. It's never, like, been their main thing. So we knew we had to do that. That's why we built, you know, the substack app in the first place, which is why Elon got so mad at us. He felt like we were, you know, competing. But ultimately, we just knew these independent places need their own network that actually wants them to grow and thrive. It was a big painful thing for people that were

on the platform. It sucked that you're like, links didn't work. Super annoying. But it was a very small fraction of traffic. Like it didn't slow down the business or the numbers at all. There was a lot of Sturm and Drang. It was very like, you know, for people that are like had a big Twitter presence and we're trying to make a substack, it was very painful and stressful. But it didn't slow down the growth at all. That's cool.

What's you, your, yours and the team's sort of decision making process, it feels like at a bunch of different points with substack, you could make a product decision that might drive immediate, basically make the number go up. but maybe wasn't aligned with the kind of platform that you wanted to be and maybe not even aligned with humanity. And on that note, there's sort of this interesting thing where every platform, maybe other than substack, is sort of like converging on being the same app, this sort of like short form sloppification of social media, where it's like, you know, doing a slot machine with information. and it feels like substack is orienting around long form content.

We had Jason Freed on yesterday. That's sort of rambling. No, no, I completely agree. I was going to ask the same question. I feel like if I land in a substack link, it's going to be written by a human. It's not going to be particularly sloppy. I might not like the particular topic or something, but I feel that it's going to have like this premium vibe to it, I guess.

And I'm wondering if there's, is there, are we just early and there's a coming wave of slop or that you're going to have to fight or, or, I mean, here's my take on this. Please. You know, I think if you put yourself in a position you described where it's like, hey, we've got this business. We're trying to make the number go up and we either need to make the number go up or we need to make something that's good that we believe in and we kind of have to like make that choice. I think as soon as you have to make that choice, that already sucks because both of those

choices suck, right? It sucks if you kind of give up your principles and make the number go up. But it also sucks if you stick with your principles. and the business, like it hurts the business and the business doesn't thrive. Ultimately, the business of Substack needs to grow and support the thing we're making. And so the thing that we've tried to do is yoke the success of the business, set up the business model and the fundamental way that it works so that in order to make the number go up, we have to do the thing that's actually good.

So an example of this is, you know, the way that we make money is it's completely free to publish on Substack to any size audience. You guys should cross-publish on Substack by the size. the way, that'd be sick. And then we only make money when you make money, right? So we're trying to help you grow. We make money when you make money. And so, you know, we have an algorithm the same way that Twitter or TikTok has an algorithm. We even support short form video. You can see clips. You can read long form stuff. You can watch a long form podcast. But it turns out that when you're tuning the algorithm to introduce people to things that they deeply value and might pay for,

the emergent effect of that is very different than if you take the same technology and point it the goal of get people to spend as much time here as possible. Yeah, that makes sense. Because I might pay and then be satisfied, close the app, but that's a win for the algorithm. Yeah, our algorithm says great, right? Whereas, you know, Elon's been public about the links thing. It used to be just substack now. It's everyone.

He's like, yeah, if you're scrolling your feed, you click into a long form post, you go and read that thing and get deep value from it. You just tank the metrics. Yeah. You're not seeing any ads. Like, what are we doing? Yeah, yeah, yeah, yeah. It makes sense.

How is the health of the overall creator economy? There was a big boom where venture capitalists were investing in the creator economy. That's kind of died down. But how healthy is the creator economy broadly? We were joking yesterday. Arawan in many ways in L.A. is the product of the creator economy. There has to be double-digit percentage of Arawan's revenue. It's just creator revenue, you know, that flows in in different ways.

A lot of inflows in there, for sure. A lot of G-wagon's in the parking lot. It's the LA equivalent of like the dot-com bubble. Yep. It's Airwine bubble. I've never liked the term creator economy. Even the term content creator kind of gives me hives. Here's the thing that I think is not going away is, you know, the media landscape is shifting.

The legacy models have been eaten up by internet things that don't necessarily support, you know, the old businesses. And there's this shift to a shift in power to independent creators. people like you that can just set up, start a thing, make something that matters, earn the trust of people by building, going direct, building an audience. I think that trend is extremely robust. I think that thing is sort of inevitably going to happen at this point. But I do think it's sort of undecided which version of that future we get. And so we see our, you know, the thing we're working on at substack is could try to bring about kind of like the best and most valuable version of that future. But I think that shift is not going away.

Yeah, I mean, you talking about the content creator as a bad term, do you prefer journalist, writer, like more specific scalpel-like terms? Is that what you're getting at? Or what specifically don't you like about the idea of the word content or the word content creator, the phrase? It's pre-rational, man. It just kind of feels, it feels like a sloppy. version right yeah you're a journalist you're a writer you're a podcaster an analyst analyst

broadcaster filmmaker you know comic there's a million things you can be and listen i'm i've made my piece with creator like it's it's a good generic term um but i think there was i think there was a moment where we kind of like cargo culted the creator economy and everybody got really sort of hyped up about it in a fluffy way and missed the the the deeper thing that is actually still happening What actually happened is that there was like a specific data point, which is that VCs realized that content creators were the fastest growing S&B category. And they were just like, okay, we should deploy like a billion dollars. We got to make money off this.

We got to make money on this. And the thing that the thing that people missed is that that had been a sort of they were sort of like a decade into that trend. And so people funded a lot of businesses that were like banks for creators. but a creator's like, you know, why would a creator not just use, you know, we use RAMP, right? Like, why would a creator not just go to Bank of America and just get a bank account, right? And so I think the sort of interesting investable opportunities were the substacks, which is like a new economic, you know, not to use your tagline, but like creating a new economic engine for media. They should have invested in Arawon because that's like the grocery store for creators.

Yeah, yeah, it's all down. They should have just bought stock in Mercedes because they make the small SUV for the creator economy. I want to talk about the value of curation versus instantiation of ideas. I'm not sure if you've been following Ben Thompson's erosion of like the evolution of like the printing press to the internet making distribution. zero marginal cost to the instantiation of ideas with GPT and deep research and language models. It's become easier and easier to create a deep research report. The writing is good. It still feels like you can tell when it's AI written.

It's at least fine. Yeah, it's at least fine. But I guess the question is, are there any substackers out there that are openly using AI tools to write, but the value that they bring it, the human element is just curation. Because sometimes I feel like I should just share all the deep research reports that I put together because they're cool. And I'm asking interesting questions. And the humanness comes from the question that I'm asking.

And very few people would think to ask that question to deep research. And the answer is less important than the question versus just the general trend in language models, if you have any takes there. Yeah, I mean, the way I think of it is, you know, even before AI, we already lived in a world of infinite content. You can't get bored. You can't run into stuff to see or watch. And so the limiting factor is like your attention in your life. Like what should you pay attention to?

Who are you going to trust? What matters? It's sort of, it's the human alignment problem. Like this is what culture is. It's not just getting what you want. It's figuring out what to want in the first place. And that's the thing that's actually valuable. Even before AI, nobody's subscribing to Substact because it's like, oh, I don't have enough emails to read and I want to pay money for that.

You're subscribing for a perspective. You're subscribing for some connections, some piece of trust, some piece of curiosity. And so I think all of these technology tools that just give people superpowers, kind of supercharged both sides of that. Now there's a thousand times infinity content. There's more than you can even more. But also the people who have those relationships can have so much creative leverage. And I think like literally writing for me is the is one that's not that exciting yet, although it's not impossible. But like, yeah, help me do the research.

Help me figure this thing out. Help me, you know, put the pieces of this together. I think there's, you know, there's even people that have, you know, Lenny Wachitsky has his Lenny bot that people, the subscribers can talk to. I think all that stuff is awesome. Talk about growth hacks. If someone out there is starting a substack today from zero, they have no audience. What can they do to turbocharge? their business in the short term.

The biggest growth hack I often have to give people is just start the start the thing. A lot of people I talk to are thinking about, oh, I should do this, should I write 10 things? Should I come up with this plan? Should I do this? Everybody that succeeds that I see just goes, just gets going, just starts writing, starts publishing,

you know, try to make something good, try to share with people, and really just have a very strong bias towards action, towards thinking moving in public and then kind of like correct based on feedback rather than trying to come up with some genius scheme. All that said, you know, make great stuff, share with people. Have you been able to dig into any of the quantitative metrics around the most successful substacks? Like is there a correlation between posting weekly and revenue or length of post?

Can a deep dive ever be too long on substack or too short? Or are there any patterns that you've seen amongst the top performers? You know, there is a trend that says, look, all else being equal, being consistent and publishing pretty frequently really does help. Yeah. It's a lot easier. You know, if you're publishing multiple times a week consistently for a long period, your chances of success really do skyrocket. other than that though we sort of have the problem you see this in marketing too where sometimes the opposite of a good idea is a good idea yep where it's like one thing works but also like the opposite

of that thing also works you just got to find something that's sort of good and differentiated so yeah make something that's interesting authentic that you actually like and then make a lot of it is yeah i mean we found that 100 percent i mean 15 hours a week three hours a day and not only that but I mean, I think we posted on X 20 times yesterday and like 10 clips and like some of them don't do very well, but you just set the quality bar where you set it. And then you just try and get those, you know, let the winners ride, basically. Well, I'll tell you what, you cross stream to substack. We'll do it. We got AI auto clips.

You can make your own, but also people will just find them. I love it. Let's hear for that. Let's hear for that. I like the sound of that. No, I'm excited to get over there. to be honest, we've been so, you know, the core challenge for TBPN is that we're a startup, but we're, you know, John and I are the founders, but we happen to be live for three hours a day.

And then we have to spend like a couple hours prepping the show. And so there's just like, and we've built out an amazing, an amazing team now. But it's just about adding these other channels. But I see a ton of opportunity on substack. And I just love how thoughtful you guys have been about, you know, building the platform. and staying true to your values. It's awesome to see. I have one last question and then we'll let you go. Lessons from Lulu going direct. What did you learn from working with her? What do you learn from the most recent Lulu ideology

and what it means to communicate as a CEO to an audience of investors, employees, customers, etc. I'm a huge Lulu Stan. I've learned a lot from her. Maybe one thing that is non-obvious that I got from working with her that I wouldn't have necessarily picked up on just from the output is kind of like the, in many cases, the principles and the morals and the facts come first. The most important part of the go direct comms thing

is not just how do I spin this or how do I postured or how do I say? It's like, are you doing the right thing? Are you, you know, are you willing to stand behind the message that you're coming with? I think that thing matters a lot. Yeah, that's great. Well, thank you so much for joining. This is awesome. Come back on again soon.

We'll talk to you. We'll see on Substack. We'll see you over there. Bye. Let's tell you about Bezell. Getbezzle.com. Your Bezell concierge is available now to source you any watch on the planet. Seriously, any watch. Also, potentially, creator economy startup, a lot of creators getting watches.

Lots of folks in tech getting watches. Their cap table is absolutely stacked. It is. Lots of creators on them. about numerals benchmark series A. Yeah. Talk about a stacked cap table. Anyway, our next guest is here.

We have Sean from Stored announcing a major size gong moment. Welcome to the stream. Sean, how you doing? Good to be here. Thank you guys for having me. Kick it off with the funding announcement. What's going on? What's new with you?

Yeah, we're excited today to announce that we've raised $200 million across our series E. Congratulations. Series E. Series E, been waiting for that gong moment. That's amazing. Let's go. We're going to hit more. We're going to hit more sound effects.

Give me the Ashton Hall. Overnight success. Overnight success. Yeah, how long have you been doing this? I'm a few months away from my 10-year anniversary with stories. Exactly. Overnight success. Classic overnight success.

That's great. But introduce the company, break it down for us. What do you do? For sure. So we're building. a commerce enablement platform that's entirely designed to level the shipping experience for brands of all sizes with prime over the last two decades retail has changed where you don't walk in a store and swipe your credit card and walk out with the product you swipe your credit card online and you

walk out with trust trust that you're going to get the right product when the brand said you're going to have easy returns and these massive giants like amazon have realized that is what's driving today's buying behavior. And so they've invested tens of billions of dollars into building out this competitive advantage. Meanwhile, every other brand is kind of in the stone age where if it's take cloud computing, they're still building their own data centers, managing their own racks in their office. And so we give them a scalable platform that combines an end-to-end physical fulfillment network that ships over 30 million packages a year. Last year, we hit about 15% of U.S. households. We powered over 1% of Black Friday Cyber Monday, but then all of the technology, not only that runs that network,

but that also speaks to the consumer. So there's a high probability to either yourselves or people listening, have actually delivered you a package before. Powered that tracking link. You may never even have known. Wow. So talk about how asset heavy or asset light the businesses. What do you own? Do you own warehouses, trucks, planes, boats? What are you sitting on top of? Who are your key partners to make this happen? Yeah, great question. Our three pillars are really a network, software, and scale. We give economies of scale across a network of assets. Some of those we run ourselves. So we do now operate at 13 fulfillment centers. Employ about 2,000 individuals across those fulfillment centers. There we go. Congratulations. That's huge. It's crazy.

Keeps me on planes all the time, constantly going to a different city. But then about 70% of our business is an entirely acid-light network, existing warehouses, existing trucks, particularly existing last-mile carriers where we manage a network of about three dozen of them. But then all of that overlaid with our technology, so the customer has one consistent experience no matter where we deploy their inventory. We talked to Harley at Shopify. How important are small businesses to your business versus going after the scaled e-commerce players, obviously not Amazon, but maybe Walmart or, you know, Macy's and like the really big players. Great question.

I'd say we're kind of squarely in the middle where we serve a lot of mid-market brands, about 500 of today's market leaders. So we power all of the deliveries for brands like athletic greens, seed health, true classic teas, proactive, the skincare, equip the toothbrushes, the blizzard of the razors. It's a lot of today's kind of multi-100 million revenue leading brands, the types of companies you'd see walking the aisles of the aisles of the target, for example. Yeah, is that, is that mostly founder-led? I imagine that a lot of the

founders of those companies kind of in your boat, been in business, maybe a decade, raised a bunch of money and kind of at the same conferences. Is that how you're doing biz dev? Do you have a massive sales force? Or you're outbound what's working, what's not? Yeah, we are one of the flattest founder-led sales cultures you'll find. We actually sell, I mean, last year we were nine figures of new sales. This year will be multi-nine figures of new sales in terms of how we're growing. We have a seven-rep sales team. And so we are on the plane all the time, meeting with our different brands, meeting with these customers. And I think that's actually one thing that blew away investors in this round. If you look at our last four quarters of sales beats, I mean, we were

three X our Q1 goal, this Q1 alone most of the year. We have a fraction of a kind of percent of revenue on sales and marketing and R&D to a lot of peer companies, yet a lot of ROI. This is such a funny interview because not only is it live, which is obviously a little higher stakes, but there's also a very chaotic soundboard potentially throwing you off. Well, I mean, there's so many, every single, I don't want to throw you off. It's good news. That's my personal reaction. But if you can make it through a TBPN interview, like Bloomberg or CNBC is going to be a walk in

the park. Walk in the park. It's two minutes, no soundboard. Really easy. You got a question. What was the, what was the dynamic? I mean, I imagine the last, you know, five, six weeks have been intensely stressful just because of what your underlying customers have been going through. Did the round get kind of done before that, or were you simultaneously navigating trade?

I imagine you were navigating a trade war and a new financing just sounds intense. But what did the timeline look like? Yeah, we kind of come to the principle that everything crazy happens at once. once it's stored. So it's never a time time off. I'd say that we were laying the groundwork for some of this before the trade war really started. And it kind of threw a big wrench into the fundraise in terms of some people realized how good it was for us and some people got really scared. Thankfully, and I'm unfortunate to say, stored grew massively at other issues, take COVID, take war breaking out, take UPS or Canada Post strikes. All those are a reason.

for a brand to say, you know what, I'm not going to face this on my own. I don't have the economies of scale to stay flexible. I don't want all the risk on my business. Let me go to a network like stored. And so thankfully, very similar here where there's really two tariff issues going on. One is anything that comes into the ports from other countries and large quantities, and that's kind of a standard tariff people are talking about. The other one is the de minimis IMAX section 321, all these e-commerce brands sending small packages into the U.S. a container on the water, just a small package where if it's under $800, they haven't paid taxes or tariffs on the import. That was really made for people like us, individuals traveling internationally,

sending products back to families, and it got exploited into this massive program where about half of Shopify's top 100 e-commerce businesses were shipping from outside the US. And so when that changed, all of a sudden, all these brands had to have this influx of volume into the US and these traditional providers, again, back to kind of the data center analogy, are telling them, oh, we can get you live and set up a new fulfillment center for you in six to eight months. We had a case study with that true classic T-shirt brand, multi-hundred million revenue retailer. Took them live from meeting us and signing to fully outbound shipping in 18 days, and that's only possible on a tech-driven network.

How much of the businesses international versus domestic? About 9% of our revenue would be either packages leaving the U.S. actually holding inventory internationally. Okay. I have another question. Go for it. I noticed that the raise was a mix of debt and equity. What are you using debt for?

And how do you think about, is this the first time you've really included debt in a big fundraise? And then I have more questions that we can riff on after that. Yeah, I think for storage, we're at a late stage where part of we announced in this round is profitability. which I think is a lot rarer in a category like ours. We've spent multiple quarters in a row now consistently profitable. And that's compared to venture times when you're in a rapid delivery business.

And people are wondering, are we using venture dollars to subsidize fast deliveries? Well, I think the proof is in our unit economics and in that profit. But at the same time, we still had a strong balance sheet from the $300 plus million we had raised prior. And so when we looked at this round, we kind of said, let's raise the right amount of equity, but let's also use the scale, the profitability to complement the balance sheet with the right cost to capital and the right flexibility. Part of it comes down to we actually have been acquisitive in the past as well.

We've acquired three businesses over the last few years, all existing fulfillment centers because we've just seen if we onboard existing infrastructure to our technology, we can multiply the success of those customers, the profits of the acquired business and more. And so plan to be on the lookout for more opportunities like that as we keep growing, which I think funny enough, we started that our first one in 2020, very not in vogue for venture-backed businesses to be making acquisitions. Now with this kind of AI wave and more, there's actually some specific funds that are just being built to roll up traditional businesses and apply technology to them. What are you seeing that's exciting around actual fulfillment, automation, and robotics? This has been obviously a tough challenge that, again, the major players have invested billions of dollars at this point into. And yet oftentimes fulfillment is still a very manual sort of process.

It feels like if you're building a 3PL from the ground up, it's maybe easier to think robotics first, especially if you're tech company young, you're obviously aware of everything. it's happening in AI, but at the same time, hard to replace a human. They're pretty versatile. Yeah. We're very excited about both AI and robotics because labor and humans are one of the biggest costs in the business like store. And going all the way back to day one starting, even back then, we were seeing peer startups in different cohorts and accelerators and more that were building drones for inventory scanning and all this robotics. And it oftentimes sometimes shock someone when you step back and you say, hey, you realize over 60% of U.S. warehouses aren't even using a digital WMS. They're doing pen and paper-based picking.

It sounds like it's made up. It doesn't sound possible, but it's true. And so then you kind of look at this gap of where the industry is. And if they can't even get to that kind of threshold, one, getting to humanoid robots or AI deployed on how to slot in a warehouse is essentially impossible. And so there's such a fundamental advantage when we've built an entirely vertically integrated tech stack of, we're really the only ones like Amazon when we're making you that promise in the cart, hey, order now, you'll get it by 5 p.m. tomorrow or the next day. We're actually going through not only the front end consumer tech, the order management layer, the transportation management layer, we're looking at, we actually have this unit in Las Vegas

right now. We can get it to California by tomorrow if we ship it right now. And so we're connecting that vertically integrated system, which just gives us so much more opportunity to deploy robotics, AI, and more. And so a lot of it's on the AI wave right now. How do we use it to optimize demand planning, inventory placement, parcel selection, promise to custom the consumer, and more. And the next phase is we've been using some robotics, particularly around the conveyance, slotting, and picking in the facilities. But when you can go from static with a moving arms to both moving arms and moving legs with a humanoid, it's really interesting. On other big tech trends, what are you most optimistic about across kind of the

EV-Tal package delivery they were seeing from Zipline to something like automated trucking, self-driving trucks, to maybe even something just like really, really robust language model-driven AI agents, just doing some of that paperwork, for example, but 100% reliably. Like what technologies are you the most optimistic about? And if you have any timelines, I'd be interested to hear them. Oh, timelines is always the question mark, because even some of the ones you just mentioned, there's been heavily debated and now disproven timelines over the last decade already. So I struggle to make promises. But which one would have the biggest impact on the customer experience? Which one should be really rooting for in terms of just speeding up the time to delivery

and reducing the cost? I think any form of autonomous delivery, whether the amazing teams over at Zipline and that kind of localized rapid last mile, some things that failed, even at Amazon, like the driverless kind of sidewalk robots, anything that helps connect that last mile autonomously bends the cost and speed curve so dramatically

that that's probably where we remain the most hopeful and excited. But with a model like Store of being the network, Essentially, what we're doing is aggregating the demand and putting it on one form of tech. But a lot of these businesses you're mentioning are actually key partners of ours where somewhere in our network, we're able to kind of test this net new technology. So same thing with one of the major grocery and kind of food delivery platforms. We have a pilot in a few cities for same day delivery for some of our brands to hour or less type delivery. But you wouldn't assume if you looked at stores that we're working with that type of company because it's It's varied in the network.

So anything autonomous, last mile, anything humanoid in a facility, and really anything around demand planning with AI, I think that is the most critical because if you talk to brands, demand planning is the thing that really only enterprises will say they do well. And I think most of them are a little self-appatuated when they say they're doing it well. Demand planning is the biggest struggle in anything physical supply chain and speaks to the problem our friends at Peloton had during COVID. It's really hard. I'm looking at the bottom of our ticker. It's, uh, Polly Market has the U.S. recession in 2025, dropping like a stone that's here for the U.S. economy. But my question for you is, uh, are you seeing data on the health of the U.S.

consumer? How, how is, uh, demand in the U.S. economy? Yeah, we have a really interesting kind of front line to the consumer across a lot of industries. We've purpose. positioned to very macro resilient industries, things like health and beauty, you still eat the same makeup and skin care in bad times, things like nutrition and supplements, very similar. A lot of subscription orders that we fulfill, almost 50% of the volume we shape. And so thankfully, our brand has been pretty well insulated, but we actually saw an interesting trend in April, which was an uptick for many of them. And we were questioning it saying, is this consumers buying because they think prices are about to go up or what is this signal? And so far, we haven't seen a

kind of bullwit from that negatively in May. And so year to date, our metrics and kind of markers to the consumer have actually remained pretty strong, even though there's a lot of kind of fear and uncertainty when you, when you watch the news and look at the macro. Let's go. Let's hear it for the American consumer. Endlessly relentless. Undefeated.

This has been, this has been fascinating. Thank you for coming on. I remember the first time I heard about you and Stored was from John at Strike, I think, in 2021. And he was just so incredibly. bullish on you and I can see why. So thank you for coming on and congrats to the whole team on the milestone. It means a ton. We're very proud to have strike led and I think something like 50% of the store investor base has joined TBPN so far. I saw the Kleiner, Chad and Sousa. Oh yeah.

Thank you. For not only their support. Send us more. Yeah. Well, come back on when you have when you have interesting data too. Doesn't you don't need to come on just for fundraising news if you're seeing stuff that That would be great. You think would be interesting to us and the audience. I'd love to have you back on. Thanks so much. We keep the news flow in, so we'll reach back out soon. Thanks, guys.

We'll talk to you soon. Cheers, Sean. See you. A little sound board. What a chat. I need to elevate the energy at the end of a long week. It's Friday, but that doesn't mean we can't listen to the Ashton Hall sound effect. Which I haven't got enough of.

We're going into the timeline, John. There's the timeline. Okay, welcome to the TBPN timeline where we review the best post. Many people said, oh, it's almost five on the East. Coast. They're going to stop. They're going to stop streaming. They're going to stop podcasting. They can't podcast for more than 17 hours a week. We did it. We did it. We did it. I think we had multiple four hour streams this week. Yeah, big. Big. Big. Big week. Never podcast weekly. Always podcast strongly. Strongly. Always podcast strongly and daily. Scientists use CRISPR to rewrite DNA inside a living baby,

fixing CPS1, a rare lethal liver disorder. No transplant, no viruses, just three tiny LNP CRISPR doses, gene-designed dose to dose in less than six months. Personalized gene therapy is finally a reality today, says D-D-D-D-D the world's first personalized CRISPR therapy given to baby with genetic disease. What a white pill. What a fantastic story. The footage from this is really sweet. So there's a whole video about this.

You should go and watch it this weekend. But Didi goes on to say, right now this is applicable to single-cell, single gene well-map mutations in organs that can safe. be reached, which affect thousands of babies every year. It costs under $5 million now, so that's obviously expensive. It'll need to come down further, and it was covered in all the mainstream media. But what a fantastic piece of news. A baby's life was saved by CRISPR. I remember learning about CRISPR back when my co-founders were at Caltech, and it was kind of this hot technology. There'd been actually a few previous technologies to edit DNA zinc finger nucleases was one of them.

And all the hot PhD research being done in bio and biophysics back in this was like 2012, 2013 at Caltech. And their bio division was all about CRISPR. There were a couple people that spun out companies around this technology. Jennifer Doudna won the Nobel Prize and has a fantastic. biography written by Walter Isaacson all about that journey. It's a very interesting technology. It took so long to get here, but it's finally having an impact.

I mean, it already has in many ways, but very, very exciting to follow. Good story. Also, out of the scientific community. I wonder if we could get gene therapy to make us closer,

even closer, even closer to golden retrievers. And you're going to go there. Absolutely. Just permanently change my DNA so I can only be friendly. Yeah. Just turn off the, unfriendly gene entirely.

Yes. And also make me hotter and dumber. Because that's key. You can't just be friendly. You also have to be hot and dumb if you're going to go full golden retriever mode. Anyway, I love this. I love this headline from the Wall Street Journal. Forget humanoids at MIT.

Worms and turtles are inspiring a new generation of robots. Pull up this image. This is such a great image. Look at this turtle robot. He's so proud of his turtle robot. It's great. So CSAIL, which is their artificial intelligence laboratory. envisions robots beyond humanoids, including soft, flexible, and even edible designs.

Edible robots. You're going to be able to eat your robot. Live in the pod. Eat the robot. This is what Joshua was talking about, right? Let's explore every potential magical form factor of robot. Developing soft robots like a sea turtle. Somebody acquired robot.com this week too.

Oh, yeah. They came out with it. Edible robots for non-invasive surgery. So you eat the robot, it crawls around. inside you and cleans you up and fixes you up, soes you up. I mean, yeah, I mean, if you have internal bleeding or something, yeah, eat a robot. It'll sew you up, I guess. Russ's lab is also using new types of AI models inspired by the neural networks of worms to power robot brains. What a fun story. Anyway, and this is something that's actually gone on before.

I found a different video from a different group that says we have created a robot based on the leatherback sea turtle, which is alive today, leisurely swimming in motion. Next, we plan to modify it to an ancestor of the leatherback sea turtle that remains as a mesozoic fossil to make it swim. And I think this is just like, I don't know, robos, robo, roboxaki, I don't know. Very interesting. He's just swimming around. Just made a robot turtle. Fun. People like turtles. We talked about a few of this. What are the other funny posts? I mean, more kids, more, more fallout from Google, the design lead. Android Auto.

This guy, this is somebody's LinkedIn profile if you're on audio. This person says, spent 40% of my time arguing with the worst PM I ever worked with, 20% managing and coaching amazing designers, and 40% on the inefficient overhead of simply working at Google. It's wild to see ideas we talked about in 2015, finally coming out in 2020, but they happened. Yeah. And this is, of course, a quote post from Daniel says, it's amazing how good Gemini is and how bad every product manager at Google is.

I feel like the PMs aren't that bad. It's more just like the organization, you ship your org chart and they just can't move fast enough to like position the products correctly. Like the products are good. They're just not positioned correctly or talked about properly. I don't know.

Sundar Pichai did an interview with the All-In podcast. He sat down with Dave Friedberg. I'm excited to listen to that this weekend and dig into how he's, thinking about product design and AI generally. I'm sure there's a lot of good insights in that interview. So go check it out. We have a new landing page for grepital.

This is not going to come up. I just thought this was a fantastic website. Okay, okay. And the AI code reviewer catch 3x more bugs, merge 4X faster, 100% code-based content. We got to pull up the, I'm going to share it. It's a fun name. These AI companies, these SaaS companies, sometimes they get wild. All right, team, it's in the chat.

Data dog, great, great SaaS name. You've got to see the animation, though, because the static image. So the, so the, the, the lizard is eating bugs. That's good. Little on the nose of the metaphor. Do we got it? Do we got it? But we respect it.

Look at this. Cute. Very cute. That is a fantastic website. I like it. I love to see it. That's great. Dan Romero, giving us a shout out.

A little shout out. I'm excited to have Dan on the show. Yeah, TPP format works because it generates daily content flowing out of the 48-hour timeline zeitgeist that can be cross-posted in video favoring algos on every major social network. Weekly podcast is too slow and stale in comparison. The only live competition is CNBC and they are too slow boomer downstream compared to Twitter. Interesting. 48-hour timeline.

The daily show, we do, we're on a 24-hour timeline. No, we sometimes catch stuff a little late. It's true. Right. Yeah. We've got to be more on top of it. We got to spend more time. We're newsmaxing, folks.

Thanks for the chat. Again, thank you for a wonderful week. Yeah. I hope everybody has a fantastic weekend. Do you want to talk about the public.com vibe investing? Yeah, we should actually cover this. This is very cool. So public.com, obviously sponsored the stream, has launched the ability to create synthetic

portfolios around basically any investment idea you have. And then backtest them against the broader market. Yes. And so it gets really interesting. So we have a couple of these pulled up that we can share with you. The first one is Founders Fund funded companies that have graduated and gone public. How did they do in the public markets? And you can see companies that were backed by Founders Fund have done 659 percent return over

this test versus 150 percent in the S&P. Sequoia's done similarly a little up and down here for Sequoia, 123 percent versus 147 in the S&P 500. Yeah, a little bit rockier, but you have to imagine. Very well. 589% versus 150 in the S&P. A16Z is also done well with 406% total return versus 150% in the S&P. And this is where it gets really interesting, John, the F1 index.

These are companies that sponsor F1 teams. Yes. And they have dramatically outperformed. Yes. the S&P, 317% total returns versus 147% for the S&P over the same time period. But perhaps the best portfolio that they tested is the compensation size lords. These are highly paid CEOs, often controversial, 2,000% return based on investing in CEOs that get paid a lot versus 176% in the S&P over the back test period.

That's actually insane. All right, it turns out when CEOs get paid well, shareholders benefit. Outperform. And also, who else outperforms? Bald CEOs. Let's give it up for the bald CEOs. 433% versus 150 in the S&P. Fascinating.

Bezos probably doing a lot of heavy lifting, though. A lot of heavy lifting, yeah. But you got the Brian Armstrongs? Yeah. Right? Strong. Yeah. Strong.

He's kind of good. I mean, this is insane. I'm interested to just continue tracking this over time because it really tells an interesting story. Yeah. Not investment advice, obviously, but... Never investment advice. Always entertainment advice. Steve Balmer, another bald CEO.

There's a ton of them. A lot of good bald CEOs out there. So shout out to your bald friends. Anyway, thank you for watching. Leave us five stars on Apple Podcasts and Spotify. And we will see you on Monday. Thanks for watching. I cannot wait.

We'll see you soon. Cheers. weekend.