TBPN - Sama's BG2 Appearance, Ilya Sutskever Deposition, Porsche 911 Turbo S Reactions | Mark Gurman, Daniel Roberts, Erica Brescia, Benjamin Witte

Episode Date: November 3, 2025

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You're watching TVPN. Today is Monday, November 3rd, 2025. We are live from the TBPN Ultradome, the Temple of Technology, the Fortress of Finance, the Capital of Capital. The timeline has been in turmoil over the Brad Gersner podcast

with Satchin Adela and Sam Altman. Interesting dynamic, lots of hype. You know, people continue to call tops on bubbles and there's a whole bunch of other stuff. On the top, topic of bub talk.

You know, if you want to get ready for the collapse of the bubble, you've got to save time and money. You got to go to ramp.com. Easier's corporate cards, bail payments, accounting, a whole lot more, all in one place. Get started for free. There was this article in Bloomberg. The AI buildout is so big, even a haunted house owner wants in. The co-owner of Pennsylvania's Pennhurst Asylum has big plans for a data center.

About an hours drive northwest. He's like, we got to get through Halloween. And then I'm all in on AI. It is funny that Halloween is... We've got to get through spooky season. I mean, that's basically what's happening. Because what's that famous Halloween store? Do you know what I'm talking about?

Spirit Halloween? Is it Spirit? Yeah. It pops up. It pops up. It comes into town for like a day or a month and then it disappears. And it's always like, how do they even set up a store so quickly? But they're clearly just really good at like short-term leases.

You ever been to a Spirit Halloween like at like six people? on Halloween. No. It's an absolute nightmare. Oh, it's probably crazy. Because they just let it get destroyed, basically. Like the employees are just like, all right, it's basically over. It's over.

We're just going to pack it up and leave tomorrow. It looks like a stampede of horses just running through it. It's interesting that they can't ride that into like Spirit Thanksgiving, Spirit Christmas. They just got to get in and out around Halloween. But apparently haunted houses are converting into data centers. We actually heard this. We heard of this. We heard of rumor.

through the makeup artist that did the makeup on the Friday show, that there are a number of Hollywood sound stages, studios that have been set up in Atlanta, I think she said, Georgia, and they're not monetizing well as studios, and so they're converting them into data centers. And it's sort of the same crypto-boom. She basically said she knew somebody that was walking around one of these lots and poked her head in the door.

And he was all server racks. server racks. Or maybe they were filming the social network too. You know, no, or the open AI movement. But the greater conspiracy theory there is they were using the tax incentives provided to the film industry in order to just...

Well, I mean, if they're generating Sora, that should count as film. Maybe. Tax deductions. You're like, we need to film it. We need to film the social network too.

I do hope that a lot of the Open AI documentary takes place in a data center. I hope it's about, the minutia of racking the servers to do the GPT3 training run. I want to know that's the core drama. I want to know were the GPUs seated properly? Were the racks working? Was the power continuous? Was the delivery continuous?

Or were their brownouts? What was going on in the data center? That's where I want the most of the tension to occur. And then I want them to take the movie and restream it. That's right. To put it on restream, one live stream, 30 plus destinations, multi-stream, reach your audience, wherever they are.

So it's here where real estate developer, Derek Strine, has been scaring locals for years. His haunted attraction, Pennhurst Asylum, every fall hosts tens of thousands of visitors for a well-controlled fright. But Strine has a new idea for the property, one that some locals even more, that has some locals even more disturbed. He wants to turn the nearly 130-acre grounds into a world-class data center, the kind of mass service server facility that is central to the artificial intelligence boom never mind that his first foray into never mind that this is his first foray into such an investment one that would require more

cash than any of his past projects he's also not fretting about corraling the necessary electricity which would be enough to power as many four as as many as 400,000 homes and he can even see past the so i was a little bit skeptical of people just hardcore pivoting. And we're having the CEO of Iron on today, who was doing Bitcoin mining, had a lot of energy. And now just signed a nearly $10 billion deal with Microsoft

that got announced this morning. Stock's way up. The CEO will be on the show around in about an hour. So I'm excited to meet him. Well, let me tell you about Privy. Wallet infrastructure for every bank. Privy makes it easy to build on crypto rail, securely spin up white label wallets, sign transactions,

and integrate on-chain infrastructure all through one supply pay. I think he knew that people were going to take shots at him. Oh, what are you doing pivoting from a haunted house to a data center? And he said, how do you eat a whale? One slice of the time, right? Is that a common phrase? It's a real quote. What I've heard is, how do you eat a dinosaur one bite at a time?

That was the SpaceX motto when they were saying they're going after the leg, industries, and it's going to take a huge amount of time to actually unseat NASA, or if you're Anderol, to unseat Lockheed. Like, it's just, it's not just going to happen over, like, it's not like the internet distribution where you're trying to displace all of these systems and structures and, and political incentives and voting blocks in certain, and contracts. And, and manufacturing prowess. Like, it's just, it's just not an overnight. It cannot be an overnight success, even if you have a Stacks team. We're still going to play for you.

So you have to eat the dinosaur one bite at a time. But I just think it's funny. Eating whale one slice at a time. One slice at a time. It's much more visual. It's very funny. A horde of investors, developers, and speculators are racing to put picks and shovels in the ground for a technological revolution.

They are betting is here to stay. Artificial intelligence infrastructure spending could surpass three trillion dollars in the next three years by one measure. Trump hailed more than 92 billion in AI and energy deals. from the likes of Blackstone and Brookfield during a visit to Pennsylvania this year. Many say there's too much money flooding in, but our intrepid,

haunted house proprietor sees the challenge as part of the value proposition. His bet is that if he does the grunt work, getting a grid connection and securing the town's blessings, another developer will pay a premium to come in alongside him. That, he expects, will bring in new equity and expertise. We're going to de-risk for the deep-pocketed guys,

he said. the big value play is getting this ready for a hyperscaler to go vertical in less than a year. So he's just setting it up. He's just setting a little layup. I've seen enough. He should spack based on his Halloween revenue. For sure. And then use that capital to go all in.

Some of this stuff's crazy. Anyway, very, very fun story. He should also be vibe coding. He should also. He's going to need to get over to Google. Google. AI Studio. He should.

He should head over to Google AI Studio. Create an AI powered app faster than ever. Gemini understands the capabilities. You need to automatically wires up the right models and APIs for you. Get started at AI. Studio slash build. Let's go through the timeline. Google Capital.

Yeah, did you want to read your post to give some context? Yes. So my question was, how sticky are these deals. So the timeline's going pretty crazy on the BG squared, although is he going to rebrand the Brad Gursner? BG. Yes.

Maybe just BG. Or he could mirror, he could just have two videos of himself. And then I guess. It was good that it feels like a sequel. He can do the prequel, just the BG one, maybe. But he had Sotanadella and,

Sam Altman on the show, and everyone is debating whether or not a $14 billion revenue company, Open AI, can afford to pay $1.4 trillion. And Brad asked this question directly. And it was kind of a crazy moment because a lot of people were saying, like, well, he's an investor. This should be like the softest ball interview possible. It's like deeply conflicted. Like a lot of journalists were like, how is this happening? Like, how is it that Sam Altman's like getting, it's like a harder interview with a direct investor than with.

a traditional media journalist, which is just interesting. But, yeah, and I don't, I don't think it was, I don't think Brad meant, meant for it to be a tough question. Yes, I agree. Like, the whole interview was a layup. You could argue, you could argue that it was, it was, like, Brad is, like you said, he's heavily aligned with Open AI. This wasn't meant to be a gotcha. And Sam just might have woken up in a bad mood that day because the answer that he gave was absolutely horrible. Yeah. Well, so what's interesting is that I think that, are you familiar with that story of JFK and Nixon, the debate? No. So there's a presidential debate between JFK and Nixon, and it was right around the time. Tyler, do you have the actual date or details of like when this happened? But it was right around the time that they first started televising presidential debates. And so- So this was 1960. 1960. So 1960, JFCK and Nixon, JFK and Nixon are going at it at the presidential debate. But what happens? Nixon didn't want makeup or something? Yeah. So, yeah, it's like one of the first televised ones. Nixon doesn't want to wear makeup because like I think maybe he's like anti- makeup. He's anti- makeup. But he like looks really bad because he had been doing, he had some speech that like that day and he was like. So he's tired.

So he, like, looks not great. Okay. And then JFK is, like, this very, like, preppy guy. He, like, looks very nice. Yep. And then so it's, like, the whole thing is, like, some people hear the debate just on the radio or just, or on TV. Yep. And then their ideas of who won is, like, totally different based off, like, JFCK, like, looks way better physically.

Yep. And so it was this famous moment where, like, JFK mugged in the visual medium, but Nixon mogged in the audio medium. And when I first listened to the BG squared podcast, I was just listening to the audio and I was like, oh, like, that's like a totally reasonable answer. But when you watch the video and you see the body language and you get

into all that, I feel like... Issue is Sam. Right when Sam got pressed, he went... See, you don't, you don't hear that on the audio. You don't hear that on the audio. And so you see what I'm saying, how like you can win in one medium but lose in another? Anytime I'm...

Anytime I don't like something you're saying, John, I'm just going to go... Well, the audio listeners won't know. Yeah. Well, no. Shout out to the people on Apple Podcast. And the timeline was also fixating on this fact that at some point, Brad takes a step back from the microphone.

They were reading into that. Like, that's something that just doesn't come across in audio. And so you hear it and you're just like, okay, yeah, this actually sounds like pretty reasonable. And Satya, Sautja is just sitting back laughing. Yeah, yeah, exactly. It was like the, it was one of the most strange. I was actually surprised that they released it.

I was surprised that like nobody basically caught, or at least like they could have easily edited it or killed it. I think it's good that it was released. Yeah. Because this is the question that is on everyone's mind. Yes, yes. Everyone's mind, right? And Sam's answer, I summed it up by saying his answer, he says, how will you afford

$1.4 trillion in spending with only $12 billion of revenue? And Sam was like, actually, we have more revenue than that. that. Of course, they lost $10 or so billion last quarter. So they have a lot of revenue. They have a lot of losses. Sam's answer was basically sell your shares. We're automating science. And we're going to release a hardware device. And we're going to need a lot of compute for that. Yep. Which was like, you know, obviously I'm summarizing and he was more drawn out than that. But I can't think of a more poor answer when people deserve to have, I think, a bit more clarity around it. It does feel like it's getting to a point where it's systemic. And then the timing of that

with the new deal with Amazon that got announced this morning, right? I think the question that even all these different partners are running the calculus on is like how real are these commitments, right? Yep. Yep. Because I don't think that like Sam is smart enough to not sign up for $1.4 trillion of like liabilities, right? He, yeah, there, there is a world where he can thread the needle. Yep. And, and spend all this money that he's sort of soft committing. But everything has to go perfectly. Agenda commerce has to be massive. Ads need to be massive. Yeah. Subscriptions need to keep growing at the same rate. people need to not turn off of their $200 a month plan because they realize they can get a very similar product experience for $20 a month elsewhere or free elsewhere.

And so a lot of things need to go right. And it was just a really weak answer. Yeah. And here's the other thing. The only person that I saw defending the answer and the whole interaction was Brat. and one of his colleagues. Two people at Altimeter. Yeah, not a lot of people.

I did not see, there was not even a single other opening eye investor that was like, that's willing to stick their neck out and say, like, here's how we actually can. Okay. Well, you know, it's that time. We got to steal man this thing. We got to steal man this thing. It's the only way. This is how the show works.

We can't, we can't be one-sided. This is a, this is a, this is a bull and bear show. Can you bring me the tinfoil hat? We're strapping this in. Okay, so, so first off, uh, cognition, makers of Devin, the AI software engineer, uh, crush your backlog with your personal AI engineering team. Um, okay, so I really need to get a better, like strap because this thing just flips back like this. The more I put the strap on. I guess I could, oh, if I balance it, maybe it feels better.

Okay. Anyway. So, first off, okay, so Sam said that the revenue is incorrect. It's not $14 billion. It's higher. That's point one. Point two. Okay. And Sotia said that Open AI has never missed projections. It never missed projections. It's worth noting that the losses are dramatically greater than the revenue. Yeah, but that doesn't matter for the deals because you pay the deals from the revenue. like like the the when you bring in the revenue yeah yeah sure that's what you need to pay

factoring in stock based comp well the losses are from the are from the contracts like like like you you you don't need to find new money to pay your cloud bill because like that's the reason there are losses the losses exist because they're paying these deals like so it's not really fair to be like yes of course if your shareholder you want higher you want profits obviously that makes total sense yeah but i think but if you're amazon like or or if you're you're if you're Azure and you're like and you're like how are you going to pay me a billion dollars it's like well if they bring in two billion of revenue like I'm at the I'm at the top of the capital stack I'm at the top of the I'm higher than the debtors I'm higher than the

equity like I get paid out first because I'm I'm a supplier I'm sending you real live invoice I'm cogs yeah I'm cogs so I'm above everything so so so I think that that that matters a lot last genuinely sotidenaed adela said that opening eyes never missed projections they've never They've never put a projection forward that they haven't beat. So if history repeats, you're good. Also, Open AI's revenue growth has been insane. Look at this ramp. Look at this ramp.

In 2020. This is the thesis that I like. This is the most bullish thesis. A bullish thesis is just extrapolate. Extrapolate. Extrapolate. So look, in 2020, how much did Open AI make in revenue? 3.5 million.

What they do next year? 28 million. What they do the next year? 200, then 1.6 billion, then 3.7 billion, now north of 14 billion. What are they doing? They're tripling revenue every year. Do you understand the value of compounding? I do, John. So what happens if you compound Open AI's revenue at 300% for a decade? They get into the quadrillion. They get into the quadrillions. That's right. And so the question you should be asking is not, how can a $14 billion company pay for $1.5 trillion of contracts?

The quadrillion revenue business not pay for a simple 1.4 trillion. Oh, yeah. 0.1% of the revenue will go over there. It's not a big deal. It's not a big deal. If you get into the quads, you're good. And they're automating science. And they're automating science. And they're going to launch a hardware device. But truly, like, the revenue ramp has been insane. It really has been insane. And so it's not that crazy to actually think that, like, it will continue to grow. And so a lot of it is like, how fast will it grow relative to how fast do these contracts grow? And so if the growth continues, like the cloud deals really can work out, but the question is how perfectly do the next few years have to go?

Because interestingly, revenue growth right now is accelerating. They are growing faster, at least according to these basic numbers, like 2025 will be higher growth revenue-wise than 2024. Because in 2024, they went from 1.6 to 3.7. That's like 200. percent growth or like they basically like a little over doubled now they're more than tripling and so they've actually in they're actually accelerating revenue now if that if they're they're expecting continued acceleration forever and there's a hiccup could be an issue um but it's not that crazy because they have so many irons in the fire there's a whole bunch of things that could hit you got chaty pt could grow API business can get big it already is can get

bigger. SORA, Agentic Commerce, scientific discovery, new hardware. Some of those feel crazier than others. Like the API business, you're not going to like, oh, there's no way that can make a billion dollars to have an API. It's like, yeah, they're going to, no problem. They're making more than that now. New hardware. It's like, that could be three years out and it could be very slow. It could be a complete flop. Yeah, I just, I didn't like the, saying we were going to have a hit consumer hardware device is not, doesn't make me feel that comforted. Totally. When you're becoming too big to fail, right?

When you have so many different businesses where their market caps are riding on their partnership with you. Yeah. And you're just saying like, yeah, we're going to just hit a grand slam with a new consumer hardware device. And every other attempted it so far has not managed to make anything even really that useful. Yeah.

And so I'm excited to, I'm excited for opening. AI's hardware device. I think it will be, I expect it to be somewhat like SORA and that you're taking not necessarily the most transformative, like, SORA was an app, but at least it had, and it was a feed, and you could create content with it, but at least it had some like novel, some novel things about it, specifically the cameo feature was like novel and great and viral and cool. And I expect their consumer hardware device to be like a fresh take on on on an exist somewhat existing form factor and I expected to be cool. The hardware but saying like oh yeah.

Don't worry about a $13 billion, you know, given the benefit of the doubt, like $20 billion revenue run rate company committing to $1.4 trillion of spend. Don't worry about it because the product that we haven't launched yet is going to be such a smash hit that we're good for it. Yes, yes. If there really is a scenario where all of these other bets have to hit in some epic parlay, like that is extremely nerve-wracking. I agree with you. But the question is, how solid are these deals? Like, I remember, we were live on Liberation Day. Remember April 2nd of this year? Like, it was the largest global market decline since the COVID-era about 2020 stock market crash.

And at the time, it seemed like a complete disaster. Remember Jordan from China talk coming on being like, this is the end of the world, basically? And I was like, but what if Trump just reverses it? And he was like, oh, no, this trade war is going to be way worse. And like, he was kind of right. Like the trade war was more significant this year than the previous administration. But at the end of the day, it really was possible for Trump to just roll back a lot of

the tariffs. And he did that. And so the question is, if, if, if, if, if, If Open AI doesn't accelerate to a trillion dollars in revenue or quadrillion dollars in revenue, and all of a sudden there's a whole bunch of folks who are like, wait a minute, like, how are you going to pay us for our cloud stuff? And they're able to say, okay, well, let's actually wind this back or let's stretch this contract out. Let's make this five-year contract.

Let's make it a 10-year contract. Like, if all of that can happen smoothly and efficiently with just the stroke of a pen, like, it's not that big of a deal. It can. Except if you're Oracle and. you spend tens of billions of dollars building infrastructure that you ultimately can't monetize in the way that you thought you were going to monetize. And if you have that too.

And they have massive debt. And so the reason I'm wearing the tinfoil hat is I would like to propose the glut theory, which is that I believe there's a chance that Sam actually wants to create a massive overbuild. So he can ultimately. He predicted a glut. Because he controls a demand. He said glut on the show. He's glut piled.

He's glut piled. He's glut-pilled. He said, and he's gonna- know if it's gonna happen in 26 or 27 or 28 or 29 or something, but he was like, it's coming.

And I would just say, like, I think Open AI will be a beneficiary of a compute glut. It certainly seems like that. It doesn't seem like they have a lot of debt. It doesn't seem like, I,

we don't know. That's the thing is that we don't know how these contracts are written. Like, there could be an easy mutual out. It could just be like, for convenience. These contracts can be revocable for convenience.

Yeah. And it's like, okay, well, then it's a completely different conversation. Then if you don't pay your AWS bill, OpenAI, there's $37 billion. If you don't pay it, we own the company. You go into receivership. You go bankrupt. They're wildly different contracts.

And we don't know. There hasn't been any reporting on where it actually exists. Sam is smart enough to know that he's like, I'm going to give you this commitment. Yep. And your stock's going to pop massively. Yep. And you're going to be able to use that to raise more capital, more debt. Everyone loves press.

And because I know what I'm going to do for you, you got to give me an out. Yeah. And everyone loves press releases. That just doesn't, it doesn't tell you. Press release economy. But it doesn't actually tell you anything about where the risk sits. So we don't actually know. We don't actually know.

We just know that like, you know, if the revenue, if AI revenue slows down, it's going to be bad for some. But it's worth noting that opening eye, I believe, will be a massive beneficiary of a glut and an overbuilt. Maybe. Not in the case where they're on the hook. Yeah, where, where they go into receivership and Oracle and. Yeah. And I just, I think every, I think the people around the table are smart enough to know how much leverage they have right now and wouldn't be signing up deals that require the company to burn a hundred to two hundred billion dollars a year and not have any way to get out of that. Like, like eventually. I don't know. I don't know. It's, it's, I mean, Sam has a lot of leverage. So these could be, these could be very favorable deals for Open AI.

At the same time, it could just be, you know, a very rough deal. And it could wind up being a situation. I think, I think Sam went from having low leverage pre-chat GPT, which is how you get these. And, you know, needing $10 billion, needing to do a $10 billion training run. You had low leverage. That's how he gets into this deal with Satya, right, where he's giving, not only is he's going to spend $250 billion, or says he's, he's going to spend $250 billion with Microsoft. He's got to give Saja 20% off the top first, right? So that was the interesting. This interview was just absolutely wild because they're both,

they're both, you know, you have Brad in the middle who's like, I'm friends with both of you guys. I'm sure he's invested in both companies. Clearly one of them. Someone in on that podcast is the crying WoJack with the smiling WoJack face. And it was Sam. Maybe. I mean, it certainly wasn't Satya.

It might be Brad. You don't know. It all depends on how it plays out. And Satya said... It could be Satya. I mean, the Ben Thompson take is that it is Satya. That's the Ben Thompson take right now. The Ben Thompson take is that Microsoft should not be winding down this partnership.

They should not be getting out of it. They are getting out of it. They have all these clauses that allow them not to have access to the technology in the future. Post-AGI or post-2032. Like, they can just wait. Like, even if, even if the tech just plateaus and, and there's no AGI and expert panel never says AGI, like, in 2032, it just becomes open AIs property. And once they pay their 250 billion cloud, which is crazy, but let's say it happens,

then Microsoft is just a shareholder on the cap table. And from Ben's perspective, he's like, there is an opportunity for Microsoft to have a much deeper relationship with this company and have them be like a really solid R&D arm for the business, like, forever. That was on the table and that was not taken. So, yeah, remember that was a scenario during the, during the, during the, during the, during the coup, which we'll get into. Oh, yeah, we're going to be doing a table reading of, of some of the deposition. Yeah, yeah.

But that was an opportunity, that was a scenario where it seemed like a lot of the opening I team and Sam were going to land at Microsoft and just keep working on a lot of the same things. Oh, yeah, that was a crazy moment. The, a couple of the things that stood out, Satya had a quote. I wrote it down. it may not be perfectly accurate, but it was something to the effect of how he was deciding which of OpenAI's compute kind of wishes they would prioritize. And he said something, he basically was like, there's certain requests that make sense for OpenAI

that doesn't make sense long term for Azure. And so these are, he gave the example of, you know, building a data center for a specific, training run, which he has done in the past. But as you scale these things up, he's like, I want fungibility of the fleet. I want diversity across geographies. Right? He's trying to set up Azure for the long term. He's clearly extremely ROI focused. And what I read into that is like there's a very real scenario where Oracle is massively levering up doing things that are to get in the AI game. Because they were somewhat sidelined. And they, they were somewhat sideline. And

they're going to do things that are really good for Open AI and maybe not so great for Oracle over the long term. Yeah, it's the job of the CEO to be the Fox, not the hen. This is the job. Should we play any clips from the actual podcast? I realize we should keep this up. Let's pull up this post from Bucco Capital right at the top. That's just a reaction video, right? What does this guy say?

He says, Sam Altman, if you ask him how I'll afford one point four. trillion is spending with only. This is rude. Let me go to an ad read. Figma, think maker, build faster. Figma helps design and development teams build great products together. You can get started for free. Let's play the actual clip.

I want to play the one that compound, compound 248. How can the company with 13 billion in revenues make $1.4 trillion of spend commitments? You know, and you've heard the criticism. Also, there's $1.4 trillion. I'm doing well more revenue than that. Second of all,

that's not such a red flag. I'll find you a buyer. This is sort of a, I just laughing. You know, people are, I think there's a lot of people who would love to buy open-A-I shares.

I don't think you want to sell. Including myself. Including myself. Who talk with a lot of like breathless concern about our compute stuff or whatever that would be thrilled to buy shares. So I think we could sell, you know,

your shares or anybody else's to some of the people who are making the most noise on Twitter, whatever, about this very quickly. We do plan for revenue to grow steeply. The step back is growing steeply.

We are taking a forward method. It's going to continue to grow. So pause, pause for a second. One thing is, I think it's possible to still have a lot of questions on the 1.4 trillion of spend and not be bearish on a open AI at $500 billion. Totally. And so I think when I, Sam is entirely right. He's actually smart to say, focus on, let's focus on demand for the stock. Yeah.

Right. If you want to get out, I'll help you get out. Yep. And I think there's some people on the timeline that are seeing this answer and they're bearish on OpenAI 500 billion when I don't think that's, I don't think that's necessarily I mean, if you comp Open AI to Palantir, it's like remarkable just on terms of top line growth and market cap. Like you get to 500 billion, no problem. No problem. Yeah, and Palantir's trading at 666 times earnings. and opening eyes losing money, so infinity P.E.

There we go. It's like, it's terrible. But, I mean, it's just like a crazy, crazy revenue ramp. And I think that's what has everyone like so excited. And there's like even if people are just so, like underwriting the 500, the 500 billion is like pretty, pretty simple. Because you can just say, okay, if it just keeps growing. Yeah, and I think if you're an investor in any of the companies that Sam has announced these spend, these like press releases with, it's totally fair to say, I'm not bearish on you, Sam. I'm bullish on Open A.I.

This is the interesting hypothesis. I'm bullish on Open A.I. But I have capital deployed in all the companies that you've committed spend to. Sure, sure. Yeah, Brad's a big Nvidia holder too, right? I'm sure he's invested in all these companies. He's probably invested across. So it's a fair question to say, what's the, like there were so many other ways to answer. Oh, that is interesting. Yeah.

Yeah. Yeah. Yeah. It could be like, it could be like, are you going to nuke my portfolio? And I'm going to be fine on your deal. But the rest of my portfolio is getting cooked. That's kind of a funny outcome. Yeah.

That's, that is the, that's the risk. That's one risk. That's why. That's why people want to know about it. Sure, sure, sure. It's, it's what, how real is the. backlog, right? Sure, sure. Like, is this Oracle 300 billion commitment? How much actually comes through? I mean, no one knows. It's predicting the future. I know, but usually,

usually when companies would come together and announce a deal like this, there is, is a lot more, like, you could have done a few of these press releases, and there wouldn't have been as many questions. Like there's a lot of big numbers that you could throw out. Sure. Before people are like would say like opening eyes revenue ramp is insane. They have the biggest consumer product created in the last 10 years. Yeah. Everyone, people love this product, right? It is, it is entirely mainstream. It is magical. It's the first real thing that can compete with search. And I just think that it's still

like when you announce a $100 billion deal, a $200 billion deal, another $100 billion, a $50 billion deal, and then less than 72 hours after this interview releases, there's another $38 billion deal announced. Sure. And now is

an appropriate time I think for people to just press them harder on this because the joke of like Open AI is holding up the stock market is incredibly real right now. I mean, I don't know what more people want, though. Like, it is, it is, like, like, the logic is there.

Which is just like, we've been growing three, three acts every year. We project that we're going to continue to grow three acts. The quadrillion number is a joke, but clearly they back at the envelope to being a hyperscaler. So say that. Don't say we're automating science. sell your shares? Like, you didn't have to answer, like, I think that the fact of the matter is Elon, Elon does very similar things, right?

Yeah, totally. We're going to go Mars and we're going to have a flying car. And we're going to do trucking, data center space. The thing, the difference is that Elon is Elon is probably 10 to 50 times more likable than Sam. Mm-hmm. And I'm just saying that based on the timeline. like, it is Elon's app, but yeah. I think in general, people like, you know.

Yeah, yeah, I mean, it's hard to tell. Like, you could go in the comments of the Rogan episodes because they both done Rogan. I mean, Rogan clearly likes Elon more than Sam. Like, if you listen to the Rogan interview with Elon, Elon's been on a bunch and he's like, he's echoing that sentiment. There are certainly people that like Sam more than Elon, but. Sure, sure, sure, sure.

I'm just saying like, in general, Elon is more likable. And so people give him the benefit of the doubt. He also has a longer, like longer track record of delivering on, you know, there's the, there's a thing of like Elon, you know, gets the timing wrong, but he delivers. Yeah, yeah, yeah, yeah. And so. I don't know. I don't know. It's weird because, like, I do feel like there's a benefit to, uh, not going,

like, private equity guy mode on this answer. and actually doing the Elon mode and saying like curing cancer and new hardware device and we have these really grand ambitions. There is a different flip on this, which is just like, yes, like revenue's been growing. We expect that it'll compound it, you know, 50% and then 40%, then 30%. And so we projected out our revenues and we projected our cogs. And it looks like in five years, our revenues will be 500 billion and our cogs will be 300 billion. And so where are we going to get the cogs from? We're going to get the cost of goods sold from Amazon and Oracle and ABS and Azure. And so we went and did deals to supply, you know, our infrastructure for those. Like, like, that's a totally reasonable, like,

spreadsheet answer. But, like, it's just going to be more. Yeah, I just think, I just think that we're, we're going to cure cancer answer. We're automating science answer. Yeah. Isn't good enough anymore at this scale. When there's this many trillions of dollars on the line. I mean, yeah, it does, it does feel like a pivot away from just like, hey, we're just going to make a ton of money off of chat chbtee. Because like I feel like there's a world where it's like, hey, yeah, actually, like chat chbtee is going to make the same amount of money as Google search. It's going to be at that tier, at that in that league. And that justifies the investments. Google spent a ton of money on CapEx. I mean, Google spending, all the hyperscalers are spending 60, 70, 80 billion a year. So he could have just, like there is a world where he just says, hey, look, the reason you're seeing all these numbers is because we're building a hyperscaler.

And our products are going to make the same amount of money and get the same amount of attention, have the same amount of users as Facebook and family of apps and Google and all the different Microsoft products. And so we need servers to serve those up. And so we went around and got all of those. And you know how all of those other hyperscalers spend, you know, 50, 60, 70, 80 billion a year? Yeah, we're going to do that too. And so you add that all up and you get to $1.4 trillion over the next decade. And that's the plan. But he's projecting more spend than that.

1.4 over the next five years, something like that? We don't even know. So he's growing faster, much lower revenue base. Also, I mean, it's like how much are they on the hook for some of these? Like, I was looking at the, uh, it was looking at one of the breakdowns. Included in the 1.4 trillion is Stargate, which is like straight up not on opening eyes balance sheet. Yeah. It's like just a new, it's an entirely new company, new thing, new project.

Like, Open AI has some, some loose structure to it. Counting, counting, yeah. But basically, we are at a, like, I agree with you on the assessment of the timeline. But we are definitely in a moment where every single time one of these deals gets announced, they just, everyone mentally just takes the headline number and puts it as liability on opening ice balance sheet. Yeah. And that's just like not the way these things. things are structured. Because they can be like they can have get out of jail free clauses.

I think it's I think so so here's one thing is certainly going private equity guy answer and just laying out all the numbers. Yeah. Then there's the kind of more product oriented answer, not the hand wavy like we're automating science and we're going to have a hit consumer product. But there's like, hey like a gentic commerce we think is going to be is a multi trillion dollar opportunity. and we're not monetizing there yet, but we will be soon. That kind of asked the follow-up question of like, okay, well, like, what if it doesn't pan out? And I'm not betting against Agenda Commerce.

Like I think that people are going to buy a lot of products through chat GPT. But it opens up a follow-up question of like, okay, well, what if that doesn't happen? Are you on the hook for all this, all the spend? And then Sam can say, like, if he answered honestly, he'd have to say, say, well, I imagine it would be some of the effect of like, we have certain minimums that we have to hit,

but we're not on the hook for, you know, the full deal sizes. That's what people want. Nukes. I'm just saying, like, every hyper-scaler involved, every company. Yeah, because you don't get credit for fake PR, for fake press releases, right? Well, yeah, so the Amazon deal, Amazon announced a deal that's $38 billion over seven years. Yeah. Stock went up $150 billion.

What? So that's the press release. Yeah. Wow. Okay. So, I don't know. It's, yeah, it's odd because it's like, these games are clearly working in the public markets.

Like, there are investors. Like, the marginal investor on Wall Street apparently thinks the value of $1 of OpenAI revenue is $10 or something like that. What was the ratio you said? It went up $130 or something for $40? So they're applying like a three or four times multiple on a dollar of open eye revenue, which again is only 30% margin. It's only 30% margin.

Like it's not 99% margin. I think it's like 30, maybe 40. So it is very weird to apply. Pull up this post from Grant Hawkins. How can a company with 13 billion in revenues make 1.4 trillion of spend commitments? Brad, if you want to sell your shares, I'll find you a buyer. Low Tam banger, 13 likes. I'm going to throw a like on that.

Good stuff, Grant. 12. We're liking it while we're... Hey man, how are you going to pay for the $1.4 trillion of spend, you promise, proceeds to crash out? I mean, the timeline, the memes are fantastic. They're impeccable today. You know what else is impeccable?

Vanta automate compliance, manage risk and accelerate trust with AI. Vanta helps you get compliant fast, and we don't stop there. Our AI and automation power everything from evidence collection to continue compound compound two four eight was just going off oh yeah how can we afford it who knows but what i do know is you can sell your share it's so ridiculous what a bizarre what a bizarre club yeah uh i don't know i'm sorry brad but if see you of one of my holdings spoke to me like that i wouldn't be a quote buyer i would be a seller of all my shares that's a weird like vibes based analysis yeah i don't i don't like that one i i've invested in a lot of companies yep

post investment, I have realized that some of the CEOs, I don't like. Sure. But that doesn't mean I'm actually bearish on the company. True. Sometimes it's just like kind of a personal judgment. And I think it's okay to be invested in a company with a management team. You're not necessarily a fan of. But I don't think, I don't think Brad was offended by how Sam answered the question.

Not at all. Like I think they were kind of, I don't know, they're trying to have a public. a conversation about the relationship of a CEO with an investor. It's almost like they're like there's some realness there but then there's also some like we're trying to show

what our what our perception of each other is. It's a very complicated dynamic. It's very, it's ultra neo-media. It's neo-media. It's neo-corporate media. I don't know. There's something weird. It's a very, it's unprecedented. It's a very interesting,

interesting piece of content. Do you want to read any of Brad's breakdown? It's pretty interesting. He says, people are reading too much into Sam being feisty. Yeah, who would spend 30 minutes on a show talking about this? It's like not that big of a deal. I love that about him and in our founders. We laughed about it afterwards.

If you listen to his words, here's what he said, a lot more than 13 billion revs in 2025, which is insane, considering they were doing less than four last year. They're going to quadruple revenue, quintuple. revenue half of a $4 billion base. Like that is crazy. But so are the spend commitments. $100 billion, 100 billion revs sooner than people expect. So they got to get there pretty quick because once they get to $100 billion, that's still, they have to do 14 years at $100 billion to pay for $1.4 trillion, if that's what they were actually on the hook for. Spending commitments aligned with revenue expectations, risk of too little compute far greater than risk of too much.

at that growth rate, could be 200 billion revs in 2030. Match that against 200 billion of CAPEX and you have an absolute juggernaut. Agree. If revenues come in slower. Okay, Tyler, we need to map these against our different projection, our different timelines. So we need the Brad Gersner tab of the spreadsheet next to Leopold-Ochon-Brenner's projections, next to what we've heard from OpenAI in the past. You know what I'm talking about?

Yeah, yeah. EGI 2027 has that too. Yeah, I think we also need a quick exchange rate between dollars of CAPEX to gigawatts to flops and be able to exchange rate between all of them to really understand in apples to apples. Like, is this more bullish than what we were hearing before? because I feel like the general vibe is a de-leveraging of the bullishness in the AI economy. Every time I hear a new number, it's always like pushed out a year and like a little bit less than the previous projection.

And so we're getting, and we saw this first with like the, we could reach superintelligence in a few thousand days, soft singularity, right? Like that felt like a stepping back in the aggression, right? And so I feel like there's a lot of these things. where the actual read on this could be, oh, yeah, like, they're going to hit, they're going to hit 200 billion revs in 2030. Like, that could be way off of the previous projections based on, like, exponential fast takeoff, right?

What do you think? So, AJG in 2020, 27 has $100 billion revenue by June of 2027. Sake. Let's make it happen. It's got to happen. Wait, 100 billion across all the labs. No, that's just like, well, so. In that story, that's like the big, it's like open brain or whatever.

A hundred billion, wait, 100 billion rev 2027? Yeah. That actually seems pretty doable. It's totally reasonable. Yeah, I know. You're bullish. Yeah. Because, wait, if they're tripling, if they're tripling this and they're going to close 25 at 20 and then they're going to close, they're going to close 20, 26 at 60.

They're going to be at 180. Yeah. Extremely bullish. Yeah. I mean, it's pretty simple. Dude, take 500 days off the singularity clock. The singularity is only 2,000 days away now. Yeah, I mean, what it comes down to is that whether or not, like, whether or not Brad, like, Brad obviously is, is.

Yeah. Like, from what I know about Brad, he's not, he's not, he's, I can't, it would, it would be in such a dark place if Brad was trying to offload open AI shares. pre-IPO, like things would be so bad, right? Yeah, yeah. But it has nothing to do with, but the question is not, again, the question is for people that are not invested in Open AI, but invested in all the companies that they're partnered with. Sure. Yeah, yeah, yeah. So, sell your shares is just not a good.

Game of musical chairs. Yeah, that would have been an interesting way to flip it around. It would be like, hey, Sam, I'm still bullish at 500 on Open AI. I'm still a buyer, but. Should I be bullish on Broadcom or Oracle? Yeah. This just goes back to my overbuilt thesis of like who's a beneficiary of the overbuilt. Yes, the Jordy Hayes Overbilt thesis, trademarked right now when it happens.

We're glut-maxing. We're taking a bit of your lap. We're also going to tell you about graphite.dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. Not going to lie. If a CEO's response to, hey, how are you going to pay for all this stuff? you don't have cash for is you're welcome to sell your shares you should probably take them up on that offer lots of the the timeline is just going crazy got to give it to all men very forward thinker itching to go

public for the sole purpose of crushing the hypothetical short sellers that don't exist yet can't wait for the ass one i love that uh i mean i it's a i i thought the short seller thing was was was fine it was good good point um people this whoa jack this is so crazy who is this kind of dread so you're doing 11 billion or 13 billion in revenue, but making 1.4 trillion dollars in spending commitments. How does that work? First of all, we're making 13.1 billion revenue. And second of all, short seller. That's hilarious. Yeah, there was not, there was not, no one came to Sam's defense. Yeah. Okay, okay. So from a media perspective, I am interested in this because, uh, uh, uh, do I have this right that, that Altimeter is a hedge fund? They are,

And they're not like long only buy back the founder, like never sell your shares, hold forever. Like, like, it is a different type of fund. And so there is, like, if you do a podcast with a portfolio company and you're a series, and you're a series A founder and you walk into a podcast that's run by a venture capital firm, like, there's no scenario where they like walk out of that podcast and they're like, we got to sell this. I mean, maybe a little bit, but like not, there isn't that. There isn't that tension.

Like, in general, the critique of fund media is that they're long only. And so they'll never, they're only, they'll never give you an accurate view into the company. Exactly. Because they're just always, they're always, they're turboboles or turbo longs or whatever the word, permables. They're permables. But altimeter's not, right? And so you could wind up in a situation. Yeah, if you're a podcast.

And you actually walk out of that meeting and you're like, oh, wow. He's sold after that. Like, you figure that out. So Altimeter and many other funds. There's going to, yeah. So I love Brad. Yeah. I love Altimiter.

I, and there is a class of funds right now that, like, there are going to be plenty of funds that don't make it through the AI CapEx trade. Like we're in the midst of the AI CapEx trade. Okay. If you get this wrong and you get this wrong enough, you just won't, you'll, you'll, there will be funds that shut down over being, being long into, into a correction.

And so I view this, this question in my view is, is for, more so for the hedge fund community to try to get a sense of like, okay, what, what actually happened, you know, and obviously they have other sources besides listening to a, to a podcast. Yeah. But what happens in a scenario where open AI can't, can't meet the, meet the kind of soft commitments it's made to all these partners? Like if OpenAI growth, like... So, so I believe that if Open AI came out and said, hey, guys, actually everything, all of our

special bets, we're not going to do the hardware device. We don't like that. SOR is not really working. We're taking it out of the app store. We're doing the $200 a month plan, the $20 a month plan. We're basically guidance for next year. We're going to do $15 billion. And then maybe next year we'll do $16 and then $17.

And it's going to be like an $20 billion run rate business. And so we're canceling all the spend commitments. I believe that the market would just retrade right back to where it was. And I believe that Amazon, if they got $130 billion of credit, they just lose that. And we just see exactly what happened at Liberation Day. Yeah, so Oracle traded up 30%. Yep. And I think it trades down 30%.

I don't think it trades down 60%. But now they have a 5x the debt. They don't have 5x the debt. That's just not true. They didn't actually go issue that. Maybe it's not 5x, but they have significantly more. No,

no, no. No, it's not even significantly more yet. Like, it will be like a drip of debt like every quarter more and more and more. It's not just going to pop up all of a sudden. Like it's not just, if you go and you have 300 billion and subspect payments,

you're not just getting it like overnight. Like, I mean, there's this news about meta. Like, meta is also doing this. And they, and, and, like, so they, meta increased, uh, spending on Capax, 71 billion up from 69 billion previously. And their guidance is that they will be notably larger in 26 than 20, than 25.

And so like, yes, that's like a couple more billion. That's significant, but it's a big company. And so they're doing this bond deal. It's 30 billion. that sounds huge. I mean, it's a $2 trillion company. It's like 10 AI researchers. Exactly.

It's like nothing. It really is like not that big. Bank of America tallies 75 billion of AI related public debt offerings in the past two months. So in the past two months, 75 billion of AI, AI related debt offerings. Total. Like it's a lot, but it's not like destroy the global economy yet. It's just not there. AI, Morgan Stanley had an AI, AI, AI, CAPX-Rex-related.

to debt is already between like one and five trillion. So there's over a trillion dollars of debt already tied to... I think people are reclassified. It's like when people change their dot com to dot AI and they're like, okay, I want... I'm an AI company. It's like, actually, this is an AI loan. This is an AI debt instrument.

This is an AI debt instrument. Okay, I have a few more things. One, I got some bad news from Folly Market. There's a 36% chance of a U.S. recession by the end of 2026. So we could be looking, basically 36% chance that it's 1999 right now, which I don't like. What's the definition of recession? Yeah, what's their definition? It's seasonally adjusted. So you have two consecutive quarters of negative economic growth. So less than 0.0 GDP growth. So GDP goes negative.

in real GDP terms, so not inflation adjusted. So inflation adjusted, basically. So you're taking economic growth for two consecutive quarters in real terms, not in nominal terms. It needs to be negative for two quarters, and it also is seasonally adjusted. So you don't get like a little Christmas bump. And this data will come from the National Bureau of Economic Research,

and they will publicly, announced that a recession has occurred in the United States at any point during 2025 or 2026 with the announcement made. So the NBER, they just, they call it when they call it, but it's based on economic contraction, basically. And you can't contract for just one quarter. You get one free one before you get called a recession. So you can have a little blip in your economy for one quarter. As long as you make it back the next quarter, you double down, you parlay, you do something crazy to get out of the hole, then you're good. But if you go down two quarters in a row, you got a gambling addiction and you're putting the recession hole. You've got to

get back in. Anyway, I wanted to share that. Then I wanted to talk about Bucco Capital Blokes assessment of this. Sam breaks people's brains just like Elon. There's a bin line. A.B in the chat says, don't believe the recession hype until the price of a Nautilus drops the sub 100K. I think that is That's a great analysis, AB. Welcome to the stream. New name, but fits right in here, honestly. Thank you for chiming in. Also, if you're looking for a Nautilus for under 100K, you've got to go over to getbezzled.com. Your Bezellon is available now. Source you and you're watching the planet. Seriously, any watch. Might be able to get a boys-sized Nautilus for under 100K, but. Yeah, ladies' nautilus. That could go. Yeah.

So Sam breaks people's brains, just like Elon. There's a thin line between grifter and vision. visionary and creating true believers to harvest their capital requires rhetoric that makes non-believers recoil. Sam hates, Elon hates Sam, not just because he stole his company, but he stole his whole playbook. And so I always like this idea of, is Elon Barnumann Bailey the circusman, or is he Thomas Edison or Nikola Tesla? Well, he's both. And why he has such a power loss, such an incredible impact on the economy, is that not

only is he the inventor and not only can he lead engineers to invent the thing and build the thing, but then he can also promote it and he can promote it really, really well. And so he's both the grifter and the visionary. He's both the real deal and the fake guru. And when you put those together, it's really, really powerful. Sam seems to be doing something similar. The question is, in the Tesla and in the, this is my question for you, maybe it is different. I know, I know that your position is that it is different. But in the buildout of Tesla, in the build out of SpaceX, there was never a moment where it was like if Elon goes bust, everything is dead. Right? It was never like if Tesla doesn't hit earnings or continue to grow, like Ford and all these different

supply chain companies will be out. The global economy will collapse. Yeah, exactly. Elon has never really held up the global economy. between the two is like one going back to the likeability thing like you know not not saying this from from like speaking generally timeline assessment Elon is more likable than Sam he has also made tens of thousands of retail investors so much money for believing in him right that's true and so not only is he just generally people listen to him and they like here they like listening to Elon talk more but so many people believed in the Elon crazy vision and a lot of it has come true, some of it hasn't, but at least tens of thousands, maybe 100,000 of people

have made money because of Elon's vision and believing in him. And so Sam doesn't have the benefit of having, like, there's no retail army defending Sam. Even the thing that was notable is Altymeter. Brad is a one-man retail army. He's the only retail army. And so there was not a single other VC that I saw that stood up and said, no, actually, they're good for their $1.4 trillion.

Here's how they're going to hit it. Yes. Like nobody put their... So Sam actually did say that one of the reasons why he maybe wants to go public is to actually have a retail army to basically... Is that what you were going to say? Yeah, yeah. Yeah, yeah, bring it down.

Yeah, I mean, basically, they were talking about IPOs and then... Because there was that thing, I think, from Roiders about how they were maybe planning on IPOing mid-20207 or late 2027. And then Sam was like, oh, that's just like maybe in the future. But one of the reasons we said, I don't know why people write those pieces. And it's like, dude, everyone knows whether they write them. It's amazing. It's so entertaining. Yeah, but basically, he says like one of the reasons he would want to IPO is so that he could basically bring, you know, not just venture capitalists, but the entire economy with him, you know. Yes, yes. Yes. So he wants the retail army. Yeah. I mean, it is UBI. Everyone should get one share.

of open AI. If the IPO gets priced too high, he'll get a... Yeah, everyone just needs to be riding with him. Anyway, let me tell you about Julius, the AI data analyst. Connect your data, ask questions in plain English, and get insights in seconds. No coding required. The undefeated king of the application layer, Rahul from Julius, go use it. They have a Slack agent so you can ask your data questions in Slack.

Highly recommend, Julius. Elon and Sam, we're also beefing on the timeline. This is interesting. So Elon says, you stole a nonprofit. Sam Altman says, I helped turn the thing you left for dead into what should be the largest nonprofit ever. You know as well as anyone, a structure like what OpenAI has now is required to make that happen.

You also wanted Tesla to take over OpenAI, no nonprofit at all. And you said we had a zero percent chance of success. now you have a great AI company and so do we. Can't we all just move on? Somebody was pushing back a little bit of the can't we all just move on because Sam like a day earlier was saying a tail in the next post.

Vitorio posted 911. I'd like to report a murder and it's Sam basically giving shit to Tesla and not being able to do a refund. And so the follow-up to you stole a non-prone, and you forgot to mention Act 4 where this issue is fixed and you received a refund within 24 hours, but that is in your nature. So again, Elon refunded him. Refund confirmed.

Yeah, so Sam obviously keeps poking here. The Dark Souls overlay refund granted of Elon paying Sam. No, why this was interesting to me was that the nonprofit, I was told that, that OpenAI was going to convert from a nonprofit to a for-profit. And I feel lied to because what we actually got was the nonprofit is still in existence, and there's now a new for-profit, and they're actually separate. I wanted the nonprofit to fully convert, and now you have this nonprofit that's sitting there with $136 billion of Open AI shares.

I want to finish the job. Let's go back to the nonprofit. Let's convert it to a for-profit. Let's take that public as an OpenAI Holdco. So you have $136 billion in the Treasury. Let's get that rip in the public markets while we wait for the real open-AI IPO. What do you think?

Two IPOs. You can have two companies. And then they could merge and they could demurge. It is interesting. Two is a bigger number than one. So there's this funny thing that like, Sam keeps saying, like, oh, the nonprofit is like going to be so well. funded, like, it's the, you know, it's the largest nonprofit ever. But he hasn't really unpacked,

like, will it be a, what kind of nonprofit? Will it be? Will it be a good nonprofit or bad nonprofit? Is there some bad nonprofits out there? I don't, I really think that people are skeptical of nonprofits now. Like, people do not just assume, oh, it's nonprofit. Everything's going to go perfectly, for sure. 100%. Oh, good. It's a nonprofit. Nothing bad can happen. It's ridiculous. I think the best case for the nonprofit is they kind of create some sort of like research arm. and then they start making products and then, you know, maybe it'll become like a consumer product. Yes. Yes.

Just a nonprofit. I love it. I love it. And then they can turn into a for-profit. Yes. The nonprofit is basically just spinning out endless for-profit companies. This is... That could be the greatest nonprofit of all time.

That would be the greatest nonprofit of all time. Yeah, a lot of, I mean, there's so many. But they really should wind it down. Like, I was promised a for-profit conversion. I feel lied to. Anyway. get over to fall, the generative media platform for developers, the world's best generative image, video, and audio models all in one place,

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I have pretty good car control. I can generally get together on a racetrack. Yeah, it's crazy. Uh, but Dave, the tell, the senior driver for the television, uh, show, Motor Week and and pro-level road racer is fearless, death-difying even. I might have preferred not to test the TurboS's biggest ever carbon-serammer brakes while pointed over a cliff at 100 miles per hour. Dave reasons, when else would they matter?

To the untrained eye, the TurboS might look just like another 9-11, one of dozens of variants with inscrutable nomenclature, GT2, Carrera 4S, Cabriolet. But this, dear friends, is the big one. The quickest, most powerful, most versatile, most luxurious car in the 9-11 lineup. The legend, the proverbial gorilla in a tuxedo. Did you ever refer to your car as a gorilla in a tuxedo? Maybe you would have to... It was black.

It was black on black on black. We never introduced it as the gorilla in the tuxedo, and that's why you were like, I got to get out of this thing. Now it's a hybrid, notwithstanding the 200 mile an hour top speed, the goal... I'm actually about to crash out. You are. Okay, break it down. Because I was not aware until... we were reading this, that they were making the turbo S a hybrid.

Okay. And why are you crashing out? Why don't you like that? I thought they were going to have it. I mean, uh, no Porsche owner is sitting there being like, I want them to make the cars heavier. And I want them to depreciate. They've been, they, they, they hold their values so well. I want them, I want them to depreciate. I want you to make it give, make it a hybrid. Okay. Um, the, uh, anyways, continue. And then, and then I can give you some more details on the actual impact of this move. So it still has a twin turbo charge 3.6 liter flat 6 and it has a brand new engine. It has fuel injectors all the way up. With no belt-driven accessories, the unit is a few inches more compact. The turbos themselves are also smaller. These adjustments make just enough room on top of the engine for the pulse inverter and the DC DC converter.

I don't know whether. I don't know enough about engines to understand what's going on there. But I will tell you that Porsche invented an entirely new flat six, different board diameters and everything, just to clear 11 centimeters under the engine cover. But it's not like the engineers had a choice. Nobody was going to tinker with the turbo S's silhouette, were they? Likewise, the eight-speed PDK transmission is totally changed. Wrapped inside the transmission housing is an electric motor.

80 horsepower, 139 pound feet of torque, connected to the crank shaft via a dual mass flywheel. There's some more information here. These can add up to, there's also electrically powered turbochargers. These add 38 horsepower of electric boost on their own, as well as recovery energy from engine braking. The car's 590 pound feet of electrified torque is sustained from 2,300 RPM to 6,000 RPM. The acceleration is terrifying. can get up to 701 horsepower shaking its fist at the sky. The e-turbo's. So this is this is the point that I want you to react to. Purists that sounds like you, Jordy. Are you a purist? Purists may sniff

that the hybrid turbo S weighs 187 pounds more. Fair point. But what is also staggering, it's 14 seconds faster around the Nureberg ring. And they say, hell, the audio system probably weighs more than 187 pounds. So what do you think? You get 14 seconds faster around the track, but you get 187 pounds heavier. Why is this so upsetting to you? I think you just feel the weight as a driver.

Sure. It doesn't matter if it's like slightly faster in a straight line or improved in a number of different ways. Like driving a super heavy car fast is just, I don't know, it's less, enjoyable. It's hard because this is the most dentist-coded car I've ever seen in my life, a white turbo S. Pulling the top down while you're driving, though, that's pretty sick. So, I mean, I really dislike the, I really dislike cabriolets in general. If this is the car that getting a dentist

gets you, I think, no, no shade to dentist, but this is a great car. If you're, if you're buying a sports car to drive to work at your dentist's office, this is a great option. But in general, it would have been cool to see them test something more traditional. But no, it's just my issue here, I'm like, this is going to be a good teeth clean. So yeah, I guess true. But no, my issue here is that this is not what customers want. Well, we'll see how it sells. We'll see the depreciation. I don't, I think I disagree with you in that like the depreciation shouldn't be nearly as extreme as it with like the fully electric cars. Like,

yeah, but, but we've already seen that hybrids depreciate horribly compared to SF90. SF 90. True. Yeah,

good point. Yeah. I mean, yeah, it does feel like it's, uh, is, is the,

is the rationale here some sort of, uh, blended, uh, emission standard? I've heard, I've heard that's a big thing in, in Europe where you need to have a variety of cars.

Do you see that? Like, So it's like 10% of your cars that are on sale need to be electric. Or 30% need to have better than 20 miles per gallon, something like that. So like, no, they are certainly getting, regulators have a gun to their head. Yeah. And they're saying ruin, take away everything. So you realize that this is just an option.

Like the 9-11 is not a hybrid now. The 9-11 has a hybrid option. The turbo-s, you can just get it. I'm pretty sure you can just get a normal turbo. The refreshed 992.2. It introduces a hybrid power train. So you cannot get it without one? Is hybrid.

The new turbo S is hybrid only. Oh, that's not going to be. So this is not an option. You're forced into doing this. And so I'm sure it's still going to be amazing driving experience. Yeah. Like it's probably the greatest car in history. That's rough.

All around. But it's not what customers want. and it's unfortunate that, you know what customers do want? They really want Turbo Puffer. They want a search every bite. They want serverless Vector and full-text search, built from first principles and object storage. They want it fast.

They want it 10x cheaper. And they want it extremely scalable. That's why they go to Turbo Puffer. Yeah, we will see on this run. We were at the track yesterday. Yes. And seeing there was an interesting group that was also at the track. taking a different approach to their track day, they would go out.

It seemed like they were, I mean, they were having fun. But watching that TurboS go around the track, it made me never want to buy a TurboS again. Interesting. It just didn't look cool. It was somebody had a red TurboS that they were tracking, and it just was the most. I mean, it was one of the craziest, like, okay, I've put, I've put a decent amount of value on, like, sports cars and just, like, having a fun car to drive. daily or on the weekends.

And seeing a track car truly was like there is no value in sports cars at all, actually. Track cars are the only thing that matters. They are 100% the only thing that you should ever get if you want a fast car or have a fast car experience. Yeah, just comparing there was a, there was also GT4 RS that was going around at some of the same times as the TurboS. And it looked and sounded remarkably better. Such a half measure.

Even the, I was talking to our new friend about the Formula Mazda series where Mazda makes the engines. And he was saying, you can get one of these race cars for, I think it was like 20K. And the entire season is like 10K to run or something like that. And it, and like just the speed, the actual handling, like the track times are just way better than any street car. Yeah. It's just night and day. So, yeah. But speaking of cars that might be able to do well on the track, I want your review.

WMWLM says play a clip of a GT3RS for the Jintani exhaust. I would love to. I think it might blow out everyone's ears. We'll save that for later. Anyway, speaking of cars, Elon Musk teased on the Joe Rogan experience that the Tesla Roadster will be a flying car. He danced around it. He didn't say that exactly. But he did say, my friend Peter Thiel says we should have flying cars and I think we should give him one,

which is about his clear and indication. Let's play the clip. We've got to get better about playing the clips before we just run into it. But let's play the clip from the beginning, full audio. Are you still doing the Roadster? Let's go. Yes. Let's do it. Eventually? Eventually. We're getting close to demonstrating the prototype.

It's been seven years. Look at that. One thing I can guarantee is that this product demo will be unforgettable. I love it. Unforgetable. How so?

Whether it's good or bad. Whether it's good or bad. It will be unforgettable. The stakes for bad or it could be really bad. Well, you know, if I can crash. you know, once reflected that

the future was supposed to have flying cars, but we don't have flying cars. That's amazing. So you're going to be able to fly? Well, I mean, Joe's face. I think if Peter wants a flying car, we should be able to buy one. Okay, pause it right there.

It's like the, the PR team, I don't even know if there is a PR team, but like, whoever's Andy L. in orbit is like, please don't leak the full roadmap right now. What if it just actually is a flying car? It could be. It could be. Totally.

Okay. I want to keep talking about... Get your brand mentioned in chat GPT. There you go. Reach millions of consumers who are using AI discovering new products and brands. What do you want to talk about, Jordi? We got to talk with Dan, CEO of Iron.

Coming in right now. Massive deal. Dan, how you doing? What's happening to the show? Hi, guys. Good to see you. Thanks for having us on. Great to see you.

Short comments. Massive. massive day today. We saw you announced a pretty big deal. And so we said, what better day to have you on the show? Yeah. Yeah, it was a big weekend. So a lot of sleep deprived iron bodies around, but it's super exciting. What, give us the headline number. We like to ring the gong around here when there's a big deal that gets inked. All right. Iron and Microsoft 200 megawatts, 9.7 billion dollars in revenue. to be in randomized. Absolutely massive.

Absolutely massive. Breakdown the year for us. We've covered Irons rise a little bit. We kind of figured you had some type of deal like this in the works, but what catches up to speed on the last sort of six months? Yeah, look, it's been super busy. So AI popped up really in force probably last April, and since then we've been building out our GPU cloud business, which basically involves us buying the GPUs and providing

access to those via cloud rather than an alternate model, which is co-location where you build the infrastructure and you allow one of these tech giants to lease it back. So we believe in owning the computers and providing that to the end customers. It's been a journey talking to a number of the large global technology companies, but really happy to consummate it with Microsoft. Yeah, I remember it was earlier this year, Satya had a line that's something to the effect of, I'm happy to be a leaser. And so I'm sure you guys picked up on that. Can you give us the...

Sorry. So, yeah, one thing that Satya's, I guess, been saying over the last couple years is, maybe not a couple years, but over the last years, he feels like he's more energy constrained than he is GPU constrained. what kind of advantages has iron had on the power side that made a deal like this possible? Yeah, that's absolutely right. And I think it's almost a little bit more nuanced than just power constrained. I think it's actually data center constrained as well. But let me come back to that.

I think when my brother and I set up this business seven years ago, our underlying thesis was that the real world can't keep pace with the digital world. So the digital world is driving all these exponential demand curves. You know, adoption goes from zero to one overnight, whether it's Bitcoin nothing 15 years ago to $15 trillion today, whether it was AI, not really spoken about two years ago to the latest humanity defining technology. And at the center of that is these exponential growth and demand, but the ability to service that is constrained and limited by the real world.

So when we started this business seven years ago, we explained to people, it sounds simple, You can't plug a computer into a high-voltage transmission line. It takes years and years of permits, approvals, dealing with risk-adverse utilities, giving you access to that network. So, yes, having access to power and having put in the groundwork very early is now paying dividends, but it's actually going a step further than that

where you might have access to power, but do you have the framework to go and build the data center? Do you have the governance regime and the flexibility, of a corporate to give you that decision to go and build and start building the head of the curve. Do you have the internal know-how on how to build these new generation data centers? Because fundamentally, they're a different asset class. These are not metropolitan data centers providing corporate shared drives, doing cat videos. They're fundamentally different.

How do you think about the predictability about the shape of compute workloads, going forward. How important is it for you to project those out? I'd love some history of like, what was the first compute workload that you were doing? Because I imagine it wasn't LLM inference. There was probably crypto mining in the business. There's all these different workloads that were super valuable at certain times, then changed. Now we're in the reasoning era. We might be in a completely different paradigm. How much do you want to bake onto A6? How much do you want to, you know, use Nvidia GPUs, more generalized chips versus flexibility? like how do you think about projecting out the future?

So I would just bring it back to a really big picture and say, as society, do we believe that we're becoming more digitized? Do we believe that we're going more online? And that's going to grow. And again, during our seed investment round, we quoted movies like The Matrix,

like Ready Player 1, wreck at Ralph. And directly, I think humanity is heading that way, which is going to drive this appetite for high performance compute. none of us have a crystal ball. We don't know what's going to be next. We had AI in our seed deck. We also had a whole heap of other stuff that hasn't eventuated. But what it means for us from a business perspective is a number of small scaled bets along the way, creating optionality. To go and pay an option fee on 500 hectares of land in West Texas is a really, really small exposure. To go and pay $10, $20 million to get the grid connection is now a relatively small exposure for our business. So it's right size in your bet.

to a point where you get to sign a Microsoft deal underwriting $9.7 billion of revenue. You go, okay, that justifies more CAPEX. Yep, that makes a lot of sense. What other, are you looking at other opportunities and sites in other areas, or is Texas the focus going forward? Look, Texas was the focus early on because we did the lap of the world, worked out the best place to get power. Low-cost, excess renewables, lots of land,

cheap power, ease of grid connections, lots of fiber backbones, and now the world's there. We do have additional sites. We've publicly announced three gigawatts, but we don't talk about development sites that aren't 100% secured by virtue of a connection agreement. So there is a multi-gigawap pipeline behind that outside Texas and globally. Yeah. How do you think about the like the current playbook for companies that are doing? partnerships with hyperscalers or open AI? Like, what are the do's and don'ts of announcing a big partnership? Because we're hearing so many of them. And I think a lot of people are having

trouble. We're in somewhat of a press release economy right now. Yeah, people are having trouble handicapping them. Like, you can just throw out a big number. You could date it 100 years in the future and get really crazy numbers. Like, what does the market actually want to get out of a press feels significant in some ways because Satya has been so much more conservative than other, let's say, like an Oracle. Totally, totally, totally. Yeah, I think it's good to be skeptical, right? The world works in memes and headlines and public markets.

I come from a private market background, infrastructure funds management, and going into the public markets, there is a lot of narrative, there is a lot of hype. We've tried to keep it very limited to binding contractual deal announcements. So this is binding. This is real revenue. Sure. Let's give it up for real. That's amazing.

I honestly think that needs to be clarified, but thank you. That is very, very helpful. Yeah. We're in a, there's so much incentive for two parties to announce the biggest possible number without any real underlying commitments. And so, yeah,

I was excited to see you guys get this done and announce it with such a great counter party. Yep. Well, we'll let you go. We know you have a busy day. but thank you so much for stopping by the show. Yeah, congrats to the whole team. Massive, massive milestone. We'll talk to soon.

Thanks, God. Good time. Elon Musk says a large solar-powered AI satellite constellation would be able to prevent him, would be able to prevent global warming by making tiny adjustments in how much solar energy reach the Earth. That would be, I wonder how much, how much CAPEX does that cost? it's interesting that Elon, I don't know, there's just like, when he says something like that, it hits just as like sci-fi techno-optimism and it doesn't, it doesn't hit as like, I mean, people still trade the stock off of this, like news. People will look at this and be like, oh, well, like,

you know, like maybe Tesla will get a piece of that, right? And it becomes a little bit of a narrative, but people don't, people don't dig in that far. one thing one thing that was super notable to me or standout kind of section of the uh Elon was on all in Friday and he was talking about the the shareholder vote around his compensation but also the the voting power that'll have and one of the things that he said was I don't want to create a robot army if I don't have if I can be like fired by I assess or any of these voting groups uh and I thought that was I mean, it's just like the most Elon way to, to, uh, who should control the robot army?

It's a good question. He's like, yeah, he basically was saying, I don't want to be fired for political reasons. Typically, typically armies are controlled by democratically elected leaders. Like, we have a system for electing who is the commander of chief of the army. Very interesting question. If you actually wind up with a company that has control over a robot army, that's a, That's an interesting philosophical question. Also, you know, you're going to need to manage that army.

You've got to get on linear. Linearer's a purpose-built tool for planning and building products. Need the system for modern software development, streamline issues, projects, and product roadmaps. So we have Mark German coming on in just a few minutes, but we had a question message to us. I thought it'd be good to get into, kind of break it down. So here is the question.

advice for my friend's company. He has around 400 million DAU, but he's been diluted by 90% since the IPO. He still has full control of the company, but he can't sell because of antitrust. Should he bail? I think no. I think stick it out. I don't know. There's nothing about that that's identifiable. I think that you stick with it. I think it's got to be fun to run such a big company with that many DAU. even if you've been diluted, you know, you're probably rich. You've sold a lot along the way. You're post-economic, but it's better to be post-economic and have control over an interesting organization

than post-economic and just kind of retired. That's my take. My mind's just racing on what company could this possibly be. And it feels like at 400 million DAUs, it's got to be snap. Maybe. Could be something else, though. We should look into it and see what the dilution has been like over there. I think Snap is a company

that I think if you read the numbers, it's like every 10 years they just give away the entire company to the team. It was a billion in stock-based comp last year, something like that. And it's a what is it? It's a $10 million company, so giving away 10%.

Absolutely Crazy. Well, we have Mark German. The legend, the germanator in the waiting room. Welcome to the show. Welcome to the show. Mark German.

German, how are you doing? Thanks for having me. Thank you so much for joining. You know, you know, this has been, you're kind of like our, like, this is the guest we've been waiting for since the very beginning. The backbone. You were, we were like, we've been waiting for this moment for so long. So we're super excited to have you on. Here I am.

Thank you so much. Maybe since this is the first time we've actually met, I'd love to go a little bit back in time just to set the table. Like, how did you land on Apple? how did you become so focused on Apple? Was this like a gradual thing? I mean, I know you from your reporting. It's been fantastic for as long as I can remember, but I imagine that there was a time when you had to make a decision.

Well, I was an Apple fanboy back in the day. I remember when I was very young, I wanted an MP3 player for the holidays that year. And I was lucky enough that, you know, my parents were able to get me one. And the local mall, there was a mall in L.A. called the Westside Pavilion. It's actually closed now. And Google, I think, actually bought the mall to turn into headquarters in L.A. And that whole place fell apart. The whole deal fell apart. But here and over there.

Outside of, I think, Bloomingdale's or Macy's or whatnot, they had a cart, a Dell cart, believe it or not. And they were touting at the time what they called the Dell DJ. And that was the MP3 place. of note at that time. And so I wanted a Dell DJ for Hanukkah that year. And so I was going to get a Dell DJ. And so my dad, you know, went to Best Buy whatnot. He's like, I forget the Del DJ. He got me a blue iPod mini instead.

Okay. And I got that iPod mini. It was my first Apple product and I fell in love with it. So over time, became an Apple family, got an iBook. Then, you know, it became an iMac and MacBook air and whatnot. And so I just fell in love with Apple. I was a huge Apple fanboy, always glued to the forums and the rumor mill and whatnot. I was a commentator and sort of fell in love with it and started wanting to do my own reporting on it.

And I joined a website back in the day called 9 to 5 Mac. It still exists. I left that when I graduated from Michigan in 2016 and joined Bloomberg and I guess the rest is history. That's amazing. How do you think you're perceived by the folks at Apple? because in one way like you know you're promoting apple you're real fanboy but at the same time it feels like every time you get a scoop i'm like oh they must not be happy yeah it's a hard company to be a critic of even even a critic that wants the best for the company yeah because i feel like they i just

have this sense that that they're like they kind of want you to ride with them no matter what but i think they love me personally i mean they should love me I mean, I'm here talking about their products all the time. I think I usually have a pretty good attitude about it. I think I'm balanced and realistic. And, you know, I try not to go down the angle of, you know, the sky's on fire. Everything is burning. Tim Cook should be out of there as, you know, some other news outlets like to do,

whether it's fair or not. Talking about their products, keeping people interested in their products. And, you know, clearly some people are like me because, you know, this information just doesn't come off treatment. right. So definitely I think it's nuanced. Do you think Tim Cook's underpaid? Do I think Tim Cook is underpaid?

So he barely makes about the same amount as this baseball player that plays for the Dodgers annually. Well, maybe the question is, are athletes overpaid? Right? I mean, LeBron is getting like $55 million a year on his contract and then you think about

how much money do they bring in from ticket sales because of him. They're probably making I don't know two or $300 million a year because of him. So, you know, what's the margin? What should a margin be? Right? And you have Tim Cook, he's, what is he making? 70 million a year? He was making $100 million a year a few years ago. Then everyone flipped out and he had no choice but to cut his pay because they were kind of sick and tired of the backlash, right? So he was making $100 million. I mean, what is the value that he brings to the company? I mean, obviously it's multiples of billions. I completely agree. We were very,

close to taking a break from the show and going and just doing a hunger strike outside in Cooper Tino to raise his pay up because we're on your side. We think he's clearly created. Just the trade war. Like just the fact that he's been so masterful in not becoming a target or staying out of politics. Like that level of state-craft is remarkable. You could make, in my view, is the way he waived the F-1 flag. Like it just wasn't, it was somewhat lackluster. I saw that. It was just a rough way.

You know, he was. Maybe he's off there thinking about supply chain, you know. Maybe he's focused on work. His mind's at work. He's not focusing on. He's thinking about, he's thinking about how was that flag produced? Yes. Could have I gotten better pricing on it.

Exactly. Exactly. Okay. What a killer. What's your updated take on the new suite of iPhones? John and I, I had a very funny experience because I ordered my phone. I tried to just order a phone online, walk into the store, be able to pick it up immediately, wasn't able to.

I paid and they said they were going to ship it to me. John, like a week later, just walked in the store and bought one here in L.A. I was like, what is going on? And we've both been, we're not really case guys, and we've both just been amazed at how they could release a phone that just gets damaged. so intensely, so quickly. Wait, wait. So you have a case.

What case is that? It's the Apple Clear case. I rotate between the case and not using case. So here's what happened. So last year they effed around and found out launched this terrible AI service, Apple Intelligence, that didn't really work well. And what they found out is that it didn't resonate with customers as much as prior iPhones. This year, they did not F around. and find out. They did exactly what customers want. Market research data, man on the street

conversations tell you what customers want. They don't want their phone to overheat. They want the camera to be incredible. They want the processing speed to be fantastic. They want battery life to be better. And so what Apple did for the phone this year is they focused on the core competencies. battery life is through the roof the phone doesn't require you to use an oven mitt to hold it for extended periods of time the camera is amazing

I think they hit them hit right on target with the colors I think the new design is terrific they did everything the consumers wanted they did everything customers want in a phone upgrade it came at the right time which is five years after

the COVID influx you know I get a new phone every year you guys might get a new phone every year. Your viewers may get a new phone every year or two. But vast majority of people are not getting new phones every four or five years. And so they set themselves up for a pretty nice upgrade cycle.

And you're going to see that with their first $140 billion quarter when they report at the end of January, early February. So I think all things considered, it's terrific. What about the iPhone? It's still at the center. Yeah, what about the iPhone air?

Did you expect it to sell better than it has? you always kind of bearish? I've been extremely bearish on the iPhone Air. I don't think that there's a significant market for it. See, Apple, because of their large numbers, have reinvented what a significant market is. For Apple, the iPhone Air is not a significant market. If that was a Google phone, I mean, Google would be doing a lot to sell pixels in the numbers

that the iPhone Air is selling. Samsung would be happy if their iPhone Edge sold in the quantities the iPhone Air is selling. It's a beautiful piece of technology, but that's what it is. It's a technology exercise to really set the stage for an eventual foldable iPhone. They have to create thinner form factors, thinner batteries, more advanced materials like titanium for the casing, in order to create something like the foldable phone to compete where Google has been for three years, where Samsung has been for seven years. And so the iPhone Air gets you on that trajectory.

But in terms of overall sales, they didn't even really mention the iPhone Air as a key driver. And nor is it mentioned in their 10K. That makes sense. I guess the follow-up question would be how important do you think the foldable market is? I think it's TBD. I think they don't know yet. I think Apple is in a position right now where they basically have to pull every lever possible to keep people in the ecosystem.

If you somehow have a market of, I don't know, 10, 20 million people who demand foldable phones and they're willing to leave Apple to Google or Samsung because they want a foldable phone, that is a bad thing for Apple, not because you're losing those 20 million customers on that one device, but because Google has an excellent ecosystem now with all sorts of peripheral products and operating systems. Samsung has the same.

The Chinese players have the same. So if you lose a customer because of one product, you risk losing them across the board. You risk losing them for entertainment services. You risk losing them for your laptop, your tablet, your smartwatch. because everyone has everything now, you kind of need everything. Yeah. How do you think about the change from titanium to its aluminum on the new phones?

Does that fit within the framework of like revealed preferences, man on the street interviews? People say they wanted an iPhone that doesn't scratch, but in practice they'll just put on a case or is there more thought to that? It's okay. So people aren't asking for aluminum, but aluminum is triding true. They've used it on laptops for many years. The benefits of titanium is the durability. If you've seen a bend test of the iPhone error, that thing does not. You can't manipulate that.

I have a story. I have a story you'll appreciate. We were having dinner with a group a couple weeks ago, and one person in the group had an iPhone error and was bragging to the whole room of how strong it was. They were saying this is the most durable iPhone ever made. It's impossible to break. And he's going like this.

He's like, he's showing the group. He's like, I can't even bend it. He's like, I dare anyone in this room to try to break my phone. And this guy raises his hand and takes the phone and puts it down here and just breaks it and breaks it and half. And the guy's just sitting there in disbelief saying like, I'm going to, I'm going to email Tim Cook right now. This is ridiculous. Well, first of all, I love that story. I'm all for stuff like that.

But to your point, you know, aluminum dissipates heat so much better. And it was like a big mistake they moved to titanium with the 15 Pro and 16 Pro lines a couple of years ago. You could do some interesting color treatments on it. They had some cool colors like the natural titanium, the gold titanium, stuff they're not doing with the aluminum foam. I personally, look nice. I like that I could drop it without a case onto cement and it would be barely scratched. It was absolutely incredible. The durability was great.

And that's why I used it for the iPhone area. But if you have to make that trade-off, which clearly there is a trade-off. Titanium more durable. Aluminum, you know, it's not as durable. You drop this thing. You're going to get a big gash in it. The way the color is anodized, it doesn't stick like it does on titanium. But it's not going to overheat.

And as the performance of these things improves, as the chips get better, you need better and better heat dissipation. And so this was a reversal. that they had no choice but to me. We had this framework for Apple's strategy right now, which is do nothing win with regard to the AI race. Because people have said, like, yes, they lost, and you mentioned it with Apple intelligence. And I agree with you.

I've taken that. I've been like, ah, Siri doesn't work as well as I want. It doesn't even have whisper APIs. Like, it can't dictate effectively. The main thing was promising this magical experience and everyone being underwhelmed. The one thing they over-delivered on was humor. They're the first AI company to reliably make people laugh through the summarization of...

Summarsation's very funny. But basically, they didn't get over their skis. They didn't invest a trillion dollars in Capax, and it's a $4 trillion company now. Like, they've done nothing in AI, and they've won, basically. But is that narrative click with you? Is that taking hold in Cupertino? Are they happy with the way it's played out? I think they recognize that it's been a disaster.

I mean, still the biggest thing to me is they were completely caught off guard by ChachyPT, Gemini co-pilot back at the end of 22 into 2023. And a company that does this much research, a company that has supposedly this kind of understanding of where the world of technology is going, to just completely like, it's like they had no idea the internet was coming. It's completely unbelievable to me. It's sacrilegious that a company like Apple could have had that big miss. Apple intelligence, they brought it out, and their marketing scheme is always just like,

we're the best, we're Apple, we're going to do it better, we're correct, everyone else is wrong, and that's sort of the message they put out about AI when they launched Apple Intelligence, but it turns out, no, Apple, you were completely wrong. And I think any observer would have understood that people want chatbots, they like chatbots. It is a winning formula. And to date, they have been completely anti-chatbot, which I think has been a very big mistake. mistake. The integration of chat GPT into Siri is very much subpar. Still, they support all the chatbot apps, but they really need first-party stuff. The big AI thing for Apple is the revamp

Siri coming out in the spring. They're using a Google Gemini model to power it, which I think is going to make it pretty top tier. I mean, Gemini's models are pretty excellent, as we know, for anyone who's used, you know, the Google AI services. But what really you have to understand is that the brand damage that has been done to the Siri name over the last 15 years, there's a big question whether or not it's insurmountable. In my viewpoint, if they've gotten Siri to a point where this thing actually meets the promise of this AI voice assistant, they have to change the name.

On the other hand, Siri, as damage as the brand is, it is still a ubiquitous name. So I'd be curious to see, I don't think they're going to make a name change, but they should. So Gemini powering Siri under the hood. Who pays who in that scenario? Apple is paying Google. Do you think it stays that way forever because Google provided a wonderful search engine in the Safari iOS browser?

And Google paid Apple for the right to do that. Well, it's more of a revenue share for the payments there on the search engine. So this is completely separate. This is like you're developing something for me. You're my supplier. And I am paying you for it. Like I'm paying you for it. Whereas the revenue share because Google is making a ton of money by getting people through the Apple interface.

But won't that be the long-term state of affairs with these models? You don't think so. No, I think what I know is that this isn't under the hood white label. model. They've developed the model here. But if it wasn't for my reporting, no one would probably know that this is a Google model. You can be pretty sure that Apple's not going to advertise this as a Google model. You can also bet at some point they'll probably figure out their own model to replace the Google thing. So I don't think it's a long-term bet. Yeah, how competitive was that process? I remember it was probably your reporting talking about Anthropic was in the running as well.

They wanted probably a bake-off. It was a bake-off. Anthropic wanted a huge number for it. Thropic wanted multiples of billions, I believe starting in a billion in year one and doubling every year thereafter, at least for the next three years. Open AI wanted things like an investment and a stake and all sorts of stuff. And so, you know, they originally were talking to Open AI. Then they were talking to Anthropic and they were talking to Google. They did a bake-off of all three. I think they kicked Open AI out of the running. pretty early on until about two months ago it was going to be anthropic and then once they got into the financial terms it quickly pivoted to to google my belief is that the quality of the google engine and the anthropic engine are pretty much on par so i think what what do you think is the is this in your view a threat to chat chit usage is the chat chitp t Siri integration going to exist after this next

release? Are people going to be using this as a replacement for a web search and a browser? Because even though the chat GPT Siri integration is a little weird, if there are people that love that, then you take that away. They're not taking that away. They're not taking away. So again, it's an underlying

under the hood model to enable the existing Siri functionality and the new Siri functionality. So Apple, let's talk about what is the new Siri. Yeah, so the new series is what I'm getting at, because if I can suddenly use Siri to do deep research and do web searches and stuff like that, that feels pretty significant. Yeah. So what is the new Siri? Well, the new Siri, so far what Apple's announced, is three things.

One is on-screen awareness. So you see something on your screen. You can ask the voice assistant about it. The second thing is personal context. So the ability to ask questions and have it search through your personal data in order to answer those questions, like make an itinerary based on conversations I had with someone who's visiting me in town. And there's a few other bells and whistles related to the new series that Apple has previously announced. What they haven't talked about is AI web search. And so the new series is also going to have a chat GPT perplexity competitor for things like deep research and summarizing search. That is going to be an Apple. built an Apple powered system.

What is that? That's just a little sound effect we use. That feels, that feels significant. When there's something super traumatic. Your significant button. Exactly. You play it again. It's like, we're going to war. We're going to war.

The companies are fighting. Yeah, so this is Apple going after chat GPT perplexity, at least for web search. I think it's going to be pretty useful. It's very necessary. It's one of the main use cases. And you'll see them eventually. embed things similarly into Safari and other parts of the iPhone operating system. So it's going to be a big year for Apple AI. And that's just the beginning with the rolling out in March, April.

Do you think there's any world where Apple wants to monetize commerce off of this assistant? They obviously, because that's, I can see the exact same thing that Chat Chb-T wants to do. As their next chapter. Order me a new pair of shoes. Order me some picketel. Yeah, find me, find me, find me yeah exactly book me a hotel book me a flight series it's just not good enough you're not so it comes down to this will uber postmates uber eats amazon whatever right now you can integrate all of those apps uh it's called an extension into syri in fact this has been a feature for 10 years nobody uses it because it's unbelievably terrible and unreliable you cannot trust your iPhone to call you an uber de a syri like you'd have to be out of your mind to need to call

an Uber in a pinch and use Siri versus using the app. Take me from point A to point B with Uber. Yes. Taking you to Antarctica. You cannot cancel. There's really no way

for Apple and these companies to come to some sort of financial agreement around that. That's why they haven't yet. But when this new Siri starts working, when it has those upgraded technologies that mean that I can call an Uber from my phone and know that it's actually

going to happen, then they'll be able to come to those financial agreements. because people are going to start using it. Right now, there's no point in monetizing $0, but once the real money starts flowing through, in Siri, you're talking about a big business for Apple and AI, and really what the future of apps and services revenue is for the company. Yeah.

I'm pretty bullish on this. Yeah, no, that makes a ton of sense. I guess the question is just like, it feels like Apple, the reason Apple is paying Google is because they don't want a situation where I click the Siri button, and say, hey, order me and order me some paper towels. And then Gemini under the hood says, yeah, we'd love to process that through Google payments and Google shopping and all of our under the hood stack.

And then they start monetizing. Yeah, that's not what's happening. How, it's, it's like, hold on long a second. It's like you guys are really, really good at what you do. So I'm paying you to, uh, to, to, to write my, to create my podcast for me. Sure. But you guys have, nobody knows I paid you to do it. Sure.

And I'm the presenter in every year. Pure, pure white label. Yep. How, what's your, been your read on Apple's kind of M&A strategy? They've bought a number of companies this year. Almost all of them are, I think, to my knowledge, very small companies that are probably talent focused. There had been some rumors that I have to imagine were kind of like leaked by perplexity

that Apple was like taking a look at that. That never felt real to me. When you look at Apple's history and M&A, they'll buy, they bought beats for like one or like two times revenue. Like when they buy a company, the only times that I've seen them buy a company that for a large price was like a relatively like conservative. They don't just take swings at $20 billion companies with like $100 million in ref. It just doesn't happen. With no underlying. Here's what I can tell you.

First, on the perplexity when I was the one who broke that, that was real. that did not come from perplexity. The idea there was Apple was sort of scared out of its mind that it was going to lose this Google search deal. There was a very real possibility the judge was going to tear that thing up, and Apple would be out of billions of dollars. And so buying perplexity,

when it wasn't as big of a price tag as it is today for that company, would have made sense. It could have been a pretty easy plug-in play to replace Google search on the iPhone and have an Apple revenue stream there. That's out of the picture because a perplexity doesn't have... Where would the revenue have come from? Oh, they would just integrate their Apple.

Ads in perplexity. Yeah, ads in perplexity. Yeah, you go to default search on iOS. It hits perplexity. And then there are a whole bunch of advertisers that are buying to be at the top of those results. So similar to the app app store. Yeah.

Yeah. You know, it would have been a pretty, buying perplexity would have been a quick plug-and-play, painless replacement for Google search. But that deal wasn't torn apart, giving Apple more time to build its own in-house AI web search product. In terms of the M&A strategy, so they really,

to your point, have not veered from their strategy. Biggest acquisition to date, even post-inflation, appears to be that $3 billion beats deal back in 2014. I do believe they continue to be on the hunt for smaller AI MNA deals. In addition

to perplexity, they looked at Mistral, which developed their own LLM, and related technology out of Europe. But I don't believe there's anything like. I can't imagine France would be like, yes, by our national AI champion. We love to sign this. Well, stranger things have happened, but given the situation with the EU, I'd be shocked as well. Yeah.

What about what can you say about their reaction to the new meta-ray bands release and VR broadly? Well, the Applevision Pro, have you guys used one? Do you guys have one? I had one for two weeks and then I returned it. But I did find it like it was remarkable in terms of screen fidelity. But content library wasn't there and weight wasn't there. I like that they put the battery in a pack. It was a mixed bag and at five grand it was like, why am I doing this?

So I got the Vision Pro on the day came out back in February of 2024. Yep. A friend of mine for the first time got one. Does that make sense? It's been a year and a half, and finally a friend of mine got one. Totally. And so I had my first Vision Pro to Vision Pro FaceTime experience actually a few nights ago. Oh, wow.

And we tried out this new personas thing. You can literally, like, turn on a movie and sit side by side and see the person sitting next to you watching a movie together. It's freaking unbelievable. That's crazy. Here's the problem. Most people don't want to put a pound and a half helmet on their head. Right? And so Apple is limited by a combination of price, as well as people just not wanting to use that form factor.

I also think they've done a pretty terrible job marketing it because I'm ingrained in this ecosystem more than anyone else I know and probably most people in this world. And despite the fact that I've had a Vision Pro, despite the fact that I'm totally tuned into this, I had no idea what that experience was like that I experienced the other night. And so all that tells me is they've just done a terrible job marketing these features. Obviously, they've done some executive interviews about personas in the last few days or whatnot. People don't really care about that. They care about TV ads and they care about demos and what have you. So they need to up their game. Anyways, long story short, they're full steam ahead on smart glasses.

The first version won't have displays like the older metal ray bands or the base level metal ray bands. Those are coming out in 2027. I think they'll be out early enough. Smart glasses without a display will come out in 2027? Yeah, early. And I think it'll be early enough in 27 where there's a possibility, they haven't decided yet, there's a possibility they'll be able to announce it

before the end of next year. And people will want to buy that because the Apple assistant is so good that it's... Well, I thought you were going to say because of the Apple brand, people are not going to want to buy it because the Apple Assistant, but the Apple Assistant being good unlocks that product. Yeah, totally.

Yeah, because if it's not good, like, I don't need to wear a pair of glasses. But it's a pitch is, you don't need to wear AirPods anymore. It's like a substitute for AirPods potentially. It's like AirPods with souped up battery life. And cameras on there. With cameras. Yeah. You know, they've also been working on AirPods like I'm wearing with cameras in there as well.

And so I think there's actually a bakeoff going on internally too. Yeah, between the two four factors. Well, between the four factors or if you need both, I would bet that. that they'll do both. Weird. And then in 20, yeah, because if you need glasses, like for your vision,

a pair of smart glasses that have a speaker built in, you can do phone calls, you have a camera, and you have prescription lenses, like that, there's over a billion people that need prescription eyewear,

and those people will probably be like, this is amazing. I get to wear, I get to fix my vision, and I get all these added features. I'm already wearing, I'll pay the $2,000 to have another kind of like device on my, on my person. And the bet is that the Apple brand is stronger than the Ray brand, Rayband brand.

And I would guess the Apple brand is stronger. And if you have to choose between Rayband glasses and Apple glasses, especially with the context that Apple has severely limited the ability for the metaglasses to think with your iPhone and the iPhone and the iPhone and the Apple glasses will sync perfectly. I think most people are going to lean in the Apple direction. But meta deserves so much credit for creating a category and making a category so terrific. I have the Rayband displays that Meta gave me to test out. Those are amazing. And they're like two, three years ahead of whatever Apple's got. Yeah, do you do you, well, so I was with a,

with the rayband displays, I could imagine that being having like pretty real product market fit, for people in the world that are dependent on WhatsApp and already need glasses. Like they need to wear glasses for their eyesight. If you have those two things and you can get WhatsApp messages just like popping up, you can do phone calls. Like that feels like pretty compelling. And so I can imagine the kind of person that is,

maybe it's a European executive or some Gen C person in Europe. That's just a WhatsApp power user. but what's your read on it? I know it's not your kind of cover Well, they feel like a prototype No, I cover all hardware too They feel like a prototype

If I'm being honest But like a good prototype I think they're priced Perfectly I think $800 is totally reasonable For what their features are You give it a generation or two They're going to be amazing

The trick for meta is beating Apple by a year on something that's a bit lighter and better displays and what have you. See the current metas, they have one screen in them. The second generation version will have displays in both eyes. Maybe making them a little bit more expensive, but meta's onto something. They have a multi-year head start.

What you're going to see is Google come into this space too. They're going to launch their smart glasses with Samsung in a few months. There are glasses with Warby Parker and a few other glasses of brands in a few months. And there's going to be a lot of competition in this space. I think this is going to be really hot across 26 to 28. We have a question from the chat. Could you get us up to speed on the John Prosser situation? This one I'm not terribly read up on.

Okay. Yeah, we'll need to revisit it at some other point. How about this? Put it this way. I lied. I'm very red up on it. I don't want to get into it. It's not my problem to deal with.

That's totally fine. That makes sense. What did you read into there? Maybe this was your. reporting. This is why we were so excited to have you on the show. It's like it's been so many stories that you've originated. But, uh, uh, Evan Spiegel and Snap, Snap, for saying that they might be spinning out specs, uh, and raising capital for it. I was a bit surprised to see that, given that, um, I haven't seen a pair of specs, you know, out in the wild, like in years.

and if I'm an investor kind of looking at this category and you can get exposure to smart glasses through meta, Google, and Apple, like it's hard, it would be hard to kind of underwrite, but I'm curious if you're more up to speed on what they've been cooking on. I like Evan a lot. I'll just tell you that. And I think that they're trying some pretty cool stuff. And their big differentiator there is what these glasses are going to be used for

in the social integrations. In my mind, they might be just better off sort of lowering their R&D on these things by focusing on their hardware, partnering with a company like Google and putting their own social layer over Android XR. But obviously they have their own SNAPOS. They're trying to get this consumer version of the glasses out on the market next year. They look quite a bit different than what you've seen from meta and Apple and some of the Google prototypes.

So we'll see what happens. It's going to be a multi-horse race here. Is true VR just kind of dying or something? Because you have like camera glasses at Snap. It seems like all the focus is on camera glasses at meta. And then Apple maybe pivoting away from Apple Vision Pro. And then Google's really focused on the Samsung glasses that are again, see-through with a camera on there. Maybe a little overlay, little HUD.

But is there anything exciting going on in just like vanilla VR? I want to watch an IMAX movie on my face. Well, vanilla VR is just incredible. Like there's no better video watching experience than what you get on Apple Vision Pro. I've tried all the VR headsets. I've had all of them. I have all of them.

It's just a remarkable category. But it's only a remarkable category for the people who want it. I mean, there's very few people where VR, I think, works. I'm out and about all day. I have a family. I go to an office too. And when do I have time to put this thing on my head to watch a movie? the answer is almost never

because I have people in my life, I have needs around me, I have things I need to do and it just does not fit into my life. For people who can put on a headset and be secluded from the world for two hours, there's nothing better. Glasses,

you can wear them and use them throughout your day really no matter what you're doing. That's the big difference. So there's nothing wrong with VR. It's just the use cases and the people who could use them is just quite a bit more limited. last question i know we're over time but uh do you think apple thinks about open ai and their hardware

ambitions a lot sam was pressed pretty hard on on his uh spend commitments on friday and one of the justifications that he gave for why like basically like how they were going to be able to spend that kind of dollars was something to the effect of like we have a consumer device coming up and we need a lot of compute for that. I'm kind of botching the exact language that he used, but he was seeming to imply, like, we have a hit consumer device coming and just kind of be, like, I can't say more,

but he certainly is telling the market that they're really cooking, but I wonder what Apple's read on it is. Based on what he's saying, this device has to be so amazing that he's confident that they're really going to need that compute. And to date, we have not seen a single AI device

that has either not been a failure or has needed the kind of compute that these dollar numbers are talking about. That's exactly what I said. That's exactly what I said earlier. I'm like every single crack, like you can have the, every single crack at this so far

has not managed to be remotely as good of an experience as like an iPhone with even a physical headset. Like I use. wired earphones. All right, that's ridiculous. But the meta, the meta glasses are far and away the most successful AI device brought to market in this era over the last two or three years. And in terms of the users, probably is using what, 1% of the amount of compute that Sam Altman is talking about here. So we will see.

In terms of Apple worried, I think Apple looks at this as something where they can be a fast follower. I don't I think there are hardware products that Open AI can bring to market that are innovative before Apple, but I don't think there's a product out there that if Apple wanted to copy that it can't copy. So let's see. It's fascinating. Well, this has been a fantastic conversation. Thank you so much for the time. We would love that show soon.

Anytime. We could have spent another 25 hours talking about this. This is fascinating. I hope you have a great rest of your day. Yeah, really enjoyed it, Mark. And thank you for, thank you for. Thank you for all your hard work. Tireless work.

Yeah. Thank you. Yeah. Do you guys do in person? If you do in person, maybe we can. Are you in L.A.? I'm in L.A. Come by.

Yeah. Let's get, we're in L.A. We're in L.A. We're in Hollywood. Yeah. Oh, great. Okay. Come by.

Next time. Yeah. By next time. We have a seat here. I'll get the center seat. Yeah. Yeah. Can't wait.

All right. Okay. I'll talk to you soon. Mark German. All right. See you guys. Equivalin Yappers. We love it.

Love it. Thank you. Talk to you soon. Let me tell you about numeralh.cue.com. Sales tax and autopilot. Spent less than five minutes per month on sales tax compliance. You can get started for free. Up next, we have Erica from Red Point Ventures. Very excited for this.

Welcome to the show, Erica. How are you doing? Welcome. Hey. Happy Monday. Same to you. I have to tell you, I was watching the show from Friday this morning, and I can't in see your costumes.

Rocking. Like very impressive. Having the hairline back is... What was your read? Did you think that John looked much more like Ilya than I looked like Mark? Because that was our read. I think so. I think so.

But I saw it start to crinkle up over time. And I'm like, it was starting. After three hours, a surprise it wasn't just falling off. It's a very weird thing to be under like 10 layers of just stuff. It's crazy. And just be inside this. Think about wearing makeup every day as a woman. What must that feel like?

No, this is a level. This is a level beyond that. We were in the chair for like three and a half hours where they applied light. It was like they basically had spray paint. They were spraying, doing a layer, doing another layer. Literally spray painting. Anyway, thank you so much for hopping on the show. Could you give us a little bit of a little bit of backstory on how you wound up at Red Point?

And then I have a bunch of particular questions about Red Point and the current markets. I call myself an accidental VC. I do think Venture is the best job in the first job. the world, but I actually had no interest in being a venture capitalist. I met my partner, Satiege Darmaraj, like 17 years ago, he was building this company called Zimbra. I had a startup that was trying to sell, we're trying to close him as a customer. It was like our first year of sales, and he was the only customer we didn't close, which really pissed me off. And we became friends, stayed in touch. Funny enough, like, he introduced me to Satya Nadella,

who I know you had on last week, who was awesome, too. And that like, changed. their trajectory of my company years and years ago. Wow. And then he called me and said, hey, I want you to come to Red Point. And I was like, no,

no, that seems like a terrible idea. And he'd done so much for me. He, like, convinced me to come and hang out with the team. I fell in love. I left GitHub. I was CEO there for a couple years

and never looked back. Incredible. You were CEO at GitHub, like, right around copilot launching, right before you saw glimmers of co-pilot. Oh, yeah, I was there when we launched. Yeah, I, so I came in following the Microsoft acquisition.

I was there, Friedman, was there through launching co-pilot and then Lips specifically to join Red Point. Had a couple companies. You saw what was happening internally and you were like the big tech approach is doomed to fail. I got to go fund startups instead. Is that what happened? It was amazing to be part of co-pilot. Everything here's a zero. I'm going out into the private markets.

startups are so much more fun. So much easier. Notorously easy too. Yeah, I was saying I still, I mean, I still think co-pilot is so, I was saying this on the show, it's, it's underhyped because they're not announcing a fundraising. Funding rounds. Yeah, yeah, you don't realize how big the business is because people have no idea of like, you know, that was, you know, when Carpathie was on Dwar Cash and like saying like this is. isn't the year of agents, like one argument against that point was that you see this explosive growth of products like co-pilot and in many ways agents are working even if it's like primarily

in a coding capacity. Yeah, it probably doesn't get the credit. It really deserves for the reason that you mentioned. But I also think there's just been so much innovation in the ecosystem since then. A lot of changes on the GitHub side too. But it was a pretty remarkable thing to be a part of. And honestly, after we shipped it, I went through like a little bit of a darkness. I have a son who's 12 who's like super into coding. And I'm like, what is my son going to do? Like, what are his jobs going to look like in the future? It's been really transformative.

It was very cool to get to be a part of like the early days. Yeah. We were spending the early part of the show reflecting on Sam Olman and Satcha on Brad Gersner's show. And just this question of the 1.4 trillion. in spending commitments versus $14 billion. And I'm wondering. What did you think of Sam's answer?

Yeah, I mean, that's a great place to start. But I do have more questions about impact for startups. But, yeah, not to, not to, yeah, do you want to, I was looking for just one person besides Brad and the Altimeter team to defend Sam. What are you talking about? John, John defended it. He put the, he put the, he put the helmet. Yeah, I mean.

I have a steel man helmet. I can defend anything. Look, we are going through such an extraordinary period in human. in history. I think with every other shift we've ever seen, we tend to like overestimate how quickly it will change things and then underestimate the long-term impact that it will have on society. I think there's a bunch we don't understand. I'm certainly not betting against Sam right now as being one of the major players in this space. And I guarantee you, there's so much detail in these contracts about like, you know, outs and rolling things back and everything. I've seen what

these things look like. I just thought the question was not, you could ask that question without being bearish on Open AI. And like, I look at that as I, if I'm an investor in any of the company, any of the counterparties to Open AI, I want to know. Like, how are you, how are you going to do it? How are you going to do this? Let me reformulate this. So if, if the, if there is like risk of Open AI not hitting $1.4 trillion, there's tactics that you could do. if you're a hyperscaler who's on the other end, right? Like the outs of the contracts. Maybe you don't build as aggressively if you don't think that the demand's actually

going to materialize, even though you have a contract. There's a bunch of strategies that you could do if you're running those companies. What's less clear to me is what are you talking to folks in your portfolio about? What advice do you have for founders where you say, hey, the future is a little hard to predict how this compute build out. There might be this big glut. You don't want to get caught in front of the steamroller. You want to be drafting and riding the big wave and catching the wave at the right time.

How are you thinking about that with founders in the portfolio? Because we've interviewed some folks that you've backed. Ligora came on. It's incredible. The growth rates are so fast. Yeah. Yeah. Look, I don't believe there's going to be any kind of material glut.

I think there's just too much happening. I mean, look at what the pool sites doing, right? building out their own data center. This was like a plan from the day zero. You know, a lot of people think those guys just like got caught off guard, oh, we need to go build this to get, you know, all over our own destiny.

That's totally not true. Like, they have seen this coming for a long time. I think, you know, if you're at the model layer, the smartest thing to do is to have control over the full stack. And the reason I believe that's to be, that's true is because people, there's going to be so much demand

and it's so hard to get access to not just the chips but the power that you need. I am just not worried that we're going to run into any kind of a glut. At the application layer, what we're telling people generally is like, I know this is such a

cliche. I don't care about margins at all right now. Like I care about winning in the market. Let's give it up for not caring about it. Give it up for growth for burn. Let's give it up for a I know. I never, I never thought I would be that person, but I, I genuinely believe that. I think, like, it's very clear that we're at, like, day zero at figuring out how to wield these super powerful instruments.

The costs of inference are going to come way down. We're getting better at building more efficient models for, like, task-specific models. I think what you need to do is figure out, like, what is the U.X? Like, how are humans going to get work done? What does that look like? How can you build some kind of defensibility into your product? And I think we're seeing a lot of kingmaking happening across the market in different categories where companies are just getting out in front of the market, raising a bunch of money, building their brand, and being seen as the winner, even if the product is really early.

And, you know, I know there's a lot of folks that are talking about the recklessness that's happening across VC. And on the one hand, I get it. But on the other hand, I think in a market shift like this, you've got to play to win. And like, you know, some of these are going to flame out. But if you get one or two that really makes it, all of your crazy wild bets are going to have paid off. Yeah, the CEO of Fireworks AI came on the show last week and said she was worried some people were going to scale into bankruptcy. Scaling into bankruptcy was the quote, which is hilarious. It's probably a skill issue.

Yeah. Yeah, let's keep it focused on the advice for founders. I've been interested in this question of like, in the previous. era of Silicon Valley, like the founders, the founder archetype that you were looking for was somebody who could find a problem, build a solution, learn to code. And it feels like increasingly one of the skills, maybe not the only skill, but one of the skills that we need to add to the portfolio of great founders is deal maker, is deal guy, deal girl, like becoming really good at aligning incentives. We see this with Sam Altman, but we see this up and down the stack.

Are you seeing that in your portfolio in the founders that are seeing breakout success, just the ability for them to walk into a much bigger company or much bigger, you know, financier and Marshall Capital or resources, get people around a table and get everyone to say yes to whatever the plan is? I mean, yes, to some degree. I think it depends on the category. I think go-to-market muscle and just sheer velocity matters a lot. And so from that perspective, the folks that can go out and start closing customers and like the storytelling behind it and the trust building, I think is super important.

For most people above the model layer, like I don't know that like deal making in the, at least in the Altman sense of like, hey, we have to go secure data centers and chips and like control our own supply chain. I think that's less important for most people. But I will tell you, we're more likely to back, like, really young, just insanely, like, high-velocity founders that we think will, like, run through walls to win that just have such dogged determination and are willing to go at it so hard that they might not even have, like, the founder market fit that we used to look for pretty consistently in founders. And we're seeing these crazy, you know, 20-something founders who have never really. had a job before that are building these companies that are scaling like crazy just because they're in at the right time. They can tell the right story and they just, they just ship so fast. Yeah. And it's always, uh, you guys, I've always enjoyed red points reporting on, on SaaS specifically and, and multiples and at times a disconnect between multiples in, in the

public markets versus the private markets. How are you, uh, how are you, uh, how are you, What's your view on that with like how much do you guys read into, you know, traditional SaaS companies in the public markets being, I think it's like the average right now is like a 7X revenue multiple versus private markets. Obviously, if you're an AI native company, you're getting, you know, some, you know, massive multiple on top of that. Does that, does that, is that nerve-wracking? Is that, does that make sense?

But, I mean, I'm on that early. side, and so we're not looking at multiples as much as perhaps the growth folks that are coming in at later rounds. But I think the really key difference here is most of the companies that we're investing in are doing, like, direct labor replacement, right? This is no longer just like SaaS software that's going to make people X times more efficient. It's literally, you know, replacing an entire chunk of your workforce. And I think that those companies are able to grow so much more quickly because of the value that they can capture that like the velocity of the businesses ends up priced into the rounds. And they're just growing to your earlier point so much faster than a traditional SaaS company. I think that's justified.

You know, we try to be like very first principle thinkers and just in terms of like how big can this business get and how quickly do we think it can get there. And, you know, we value companies based on that, not based on what's happening right now in the private markets with, like, legacy SaaS companies. We have to ask. Red Point has been accused of manning the anonymous X account, R for Rock. Is it true? Are you behind, are you personally behind the R for Rock account? Maybe we're all R for Rock. No.

It is not somebody at Red Point. We would not take kindly to that. But yeah, we would not take kindly to that. But yeah, I would appreciate it. I think it's a compliment to be accused of having that much insight into the whole market. It could be a shared account, right? It's like a handful of partners. It's got to be junior folks.

It has to be associates because nobody's senior would be that stupid and reckless. And I will tell you one thing that has shocked me getting into venture. from, you know, the builder side is like, there's almost perfect information spread. Like, everybody knows everything instantaneously. It's absolutely wild. I don't know if we've ever been surprised by something that ended up on Arfer Rock, but we have been quite irritated when things have been leaked when they weren't supposed to be. Yeah.

It does feel like it's a little bit of a hassle if you're a founder and you're planning and planning to do like a specific PR push. But also there's this weird dynamic where it kind of, takes some of the energy or some of the leverage out of the existing scoopers in the tech ecosystem because they're losing scoops

to R for Rock, then they don't have as much cache or power, soft power in the ecosystem. It might inspire some media companies to try to basically plant spies. Maybe.

I can plant a spy at each tier one and then you can just leak every single round. Yes. I don't know. That might be against like Probably extremely illegal.

I think it'd be better off, like, hosting a party and, you know, punch or whatever. Yeah, yeah. Just grab some drinks with some people, get him to open up, and you'll have a scoop in no time. Something else left. Yeah. Well, thank you so much for hopping on the show. Yeah, great to meet you. This is fantastic.

We'd love to talk to you again soon. And, yeah, we'll talk soon. Have a great Monday. Wait, wait, before you leave, before you leave, you haven't hung up yet. What, are you in, like, a tower in a castle? Like, what is? Yeah, what is? Whoa.

This is awesome. What is this? My home office. It is not a turret, though. People think it's a yurt or a turret. It is neither. It's just the corner of a castle. I just live in a castle.

I am a library. I am a venture capitalist. I've done very well. And, you know, I live in a castle. It's somewhat of a dome. So it makes sense to call into the perfect place. We also record the show from a dome, the ultradome. There you go.

I did this in deference to you guys. Yes, yes. That makes perfect sense. moment. Fantastic. Amazing. Well, so great to hang. Everyone in the chat loves the background. Yeah, come back on again soon.

We'll talk to you soon. Have you. You guys. Bye. Let me tell you about fin. com. AI, the number one AI agent for customer service, number one in performance benchmarks,

number one in competitive bakeoffs, number one ranking on G2. Don't get in a bakeoff with Ben. We have Benjamin Whitty from recess, coming in the studio. How are you doing? Good to see you. What's happening?

Welcome to the show. We don't have audio from your side. Let's check in with a production team. Let's check in. Could be our fault. Let's tell you about Adio. Customer Relationship Magic. Adio is the AI Native CRM that builds and grows your company to the next level.

You can get started for free at Adio. Good opportunity to tell Ben about Adio. Yes, we got to tell him. He's got a $30 million series B. He needs a CRM. Let's get him on that. Maybe he needs an 8Sleep 2. I believe Coca Cola, another beverage company uses Adio. Wait, really? That's awesome. Okay.

8Sleep.com. We can hear you know. Yes, we can. How'd you sleep last night? Do you sleep well? I slept well, but I could sleep better with an eighth sleep. That's right. Thank you. There we go.

Great to finally meet. We share the day job guys. Fun fact, this is our second podcast together. Your first time on TVPN, didn't we do a podcast together like 10 years ago? Yes, but I forgot what, but what? It was like Lucy. Like me and David Wintel and hung out with you. We did like five episodes of this thing.

It was a total flop. That's right. I was early to the neo-corporate media strategy. Never stopped podcasting. It didn't work. But yes, we should. Yeah, great, great to hang on the show. Why don't you give a quick intro on kind of yourself and the company, if anybody's been

living under, living under a rock? Yeah. So, you know, I started myself. So I didn't come from the, you know, food or beverage industry. I actually started my career in Silicon Valley. So I was in San Francisco in the early stage tech world from 2010 to 2016. But I kind of knew I wanted to start a company in the consulting. space and so went out of my own and around that time and kind of was led to the origin of recess

and kind of my observation in that 2016 era was, you know, we were entering this new period in history driven by technology and was going to leave us all kind of stressed out and anxious. And so at this thesis that kind of led to recess that, you know, in the future that we were entering, kind of people would be prioritizing their mental wellness and looking for healthier ways to reduce stress and relax. And I kind of saw the, you know, the rise of these new types of functional ingredients such as magnesium, adaptogenic herbs, CBD at the time, even THC, and kind of my conclusion was that they were going to serve as the inputs into this

fundamentally new space of products that would emerge on the other side of kind of caffeinated beverages and alcohol focused on relaxation. And I didn't know. And so the kind of the light bulb moment was like Red Bull for relaxation. But I took a much more expansive view of the space that would emerge in the different kind of subcategories that, you know, I could create a brand that could ultimately kind of extend into. I remember hearing you on a podcast back. It must have been in the kind of 2018 era where you talked about how Red Bull, I believe you talked about how Red Bull, like,

distinctly, they didn't necessarily want to make a drink that just tasted the best, but they wanted it to have like this specific flavor that just was like extremely identifiable. and like made you feel something and how you leveraged that with recess, which I think you did well from the very beginning. But yeah, I feel like, you know, looking back, it's interesting that there were so many,

there were so many brands created during that, that initial boom, whatever, 2016 to 2020, kind of I look as like the heyday when you had, everyone was like reading Lean Lux and 2 p.m. you know and and it was just like this this so much investment in the category and to me uh recess stands out because it's the only the only brand in that era that like was kind of riding the same wave but didn't look like everything else at the time yeah um and yeah just uh obviously um yeah like

even even the fact that like whatever pop up you did in in new york uh during that era like still sticks out in my mind when I can't remember a single, I can't remember any of the other kind of marketing that was happening during that period. Yeah, the Instagram sticks out to me like crazy. I remember the Instagram. Did that ever grow? Like, is that like the corner of the cornerstone of like the community? Is that still a, because I remember like the Instagram just popped up so quickly and grew so fast. Was there, like, did that turn into like a whole flywheel of the business? So the twist in the business was like our first product line included CBD in it. And so we got off to this.

I never thought of the brand as like a CBD brand. I thought. I always thought a brand as like a relaxation brand. And we did a lot of like, I'd say kind of groundbreaking kind of marketing, you know, activities in that first year in 2019, you know, from our content strategy, you know, which we can talk more about the pop up in New York, you know, brand collaborations. But what happened was, you know, I saw the writing on the wall that the regulatory clarity for, you know, CBD was going to take a lot. lot longer than everyone thought. And so I'd never, so I basically accelerated the vision of becoming a brand platform and bet on magnesium as this ingredient that we could use that could deliver the same effect in a fully compliant way, which was this incredible bet. Our recess mood line,

which is what, you know, leverages that ingredient as kind of seeing velocities, you know, on par with poppy. And so that lines, you know, national target, Kroger, et cetera, et cetera. Yeah, you were early, you were, CBD was an interesting category because, you know, because the growth of the category was so insane that even though you guys were early in terms of like a CBD beverage. I'm sure you just like I remember you guys. So noisy. Yeah, it was so noisy. You guys did such a good job marketing that a bunch like something about CBG is fascinating because people just think like you make a drink and sell it and just going to work and you just put it on a shelf and people buy it. And obviously like the actual logistics of scaling a beverage brand are so much harder than that that like so few of the companies ever. ever really, you know, even crack like a couple million of revenue. But, um, but, yeah, the timing on magnesium as well. I thought I was supplementing magnesium like, or in that sort of 2016 beyond era. And then it was only like a few years ago that people started talking and saying, like, hey, did you know that the average, like, you know, 70% of Americans are deficient in

magnesium. And to me, that had been just like, I knew that because of our food system and there's There's way less magnesium content and even vegetables and stuff today than there were, you know, decades ago. But you feels like nice and early to that. And that's an ingredient, like a hero ingredient that was quite a bit more durable, in my opinion, than this like initial CBD boom. And I don't, you know, I could call it a bust maybe because there's, I know a lot of people that have built brands, saw great revenue growth and then didn't figure out a way to kind of like center themselves on a more durable kind of hero ingredient. Yeah, I mean, just to double-click on that a bit, like, I think beyond the market, the smart

marketing that we did in the early days are about to, you know, re-accelerate in a big way. I think I had the right kind of category view of how the space was going to emerge. And, you know, just as simple insight, I'd always say, like, I've never heard anyone call Red Bull, a caffeine company. It was an energy company, just like we weren't a CBD company or not a magnesium company or or not even a mocktail company. I mean, the other amazing bet we made was on the RTD mocktail. opportunity. And so we launched, you know, mocktail line in 2023. Kind of what I saw there was,

you know, when the, when kind of athletic brewing was recatalizing the non-alque beer space, you know, my observation was like beer was flat to declining, right, in alcohol. So it's kind of fighting for share of a shrinking pie. What was growing, it was RTD cocktails and hard seltzer. So my thesis was there was going to be like an RTD mocktail category, you know, on the other side of RTD cocktails, just like, you know, non-alcoholic beer existed on the other side of alcoholic beer. And all of these- Yeah, you want to. on a feeling that humans are going to want for a long period of time versus a single ingredient, right?

Yes. And so one framework I had is stimulation, intoxication, relaxation, that this really represented the emergence of this fundamentally new kind of value proposition, kind of in feeling that people would be seeking. And, you know, when I had the libel moment for, you know, what became recess, you know, Red Bull was started in 1987, right? Like, you know, Red Bull, Monster, Starbucks all rode this kind of secondary. tailwind of kind of consumers seeking stimulation. And again, my thesis was in the future that we were

entering, you know, people would be basically figuring how to relax in the crazy world that we were living in and that, you know, all these trends, whether it's, you know, focus on alcohol moderation, stress relief, enhancing sleep, you know, focus are all kind of connected in a part of consumers prioritizing their overall kind of mental well-being. And that's kind of why the recess platform strategy has been kind of successful. And I think there's a lot more kind of we can do, you know, beyond this in the next phase of the business. What are you, how do you think about marketing and brand building going forward? I don't know if I have this correct, but it feels like over the last few years, the focus has been like distribution, getting the right

assortment of products, like laying the foundation so that you are and have the ability to scale. because one of the challenges is a beverage brand. If you're doing people like to buy beverages in stores, if you're doing like viral internet marketing, that doesn't necessarily translate to the sales growth that you want unless you have the distribution. And, you know, the grocery store closest to my house has like recess, so I'll grab some from there.

But I'm assuming it took a while to get the kind of saturation from a distribution standpoint so that you guys can have the confidence to like do a big, celebrity partnership or do a TV campaign and start doing these things that just are kind of a waste of money unless you have that distribution. That's right. And I think that's one actually the best parts of the recess story. As I've been kind of transitioning the business beyond the original CBD line with the additional mood and mock tales, I've been focused on basically performance marketing to drive the Amazon business. We're still 50% e-com. And then we just get so much organic kind of word

a mouth, you know, basically testimonials. So we probably get, you know, 100 to 150 organic tag post a day across, you know, Instagram and TikTok, primarily women, which is our kind of core kind of consumer spreading, you know, the word on recess. And that is super powerful. And so I look at this round, this next phase is fundamentally about, you know, scaling the team, scaling distribution and, you know, really recatalizing brand marketing. Because, you know, John, what are you as alluding to earlier, you know, the kind of groundbreaking content, the pop-up, stuff like that, I really have turned off. And again, if you compare, you know, what we've, where we are, you know, compared to where poppy, liquid death, brands like that, we've done really no levers on brand

marketing yet. And so you're going to start to see, you know, a lot more of that in this next phase. And, you know, just to talk about Red Bull a little bit, like, I always kind of thought of red Bull is like a media company that monetizes through selling cans. And I do think beverage is this very kind of underappreciated category, you know, especially it has some similarities to even, you know, tech companies. Like when I, you know, when I had the idea for recess, I discovered this amazing fact, which is, you know, Monster Energy was the best performing stock of the past 20 years, right? It was a 70 billion. And Celsius did incredibly well, too. It's happened like four times in beverage and energy specifically, like tons of great outcomes. Yeah. Exactly. And so it does

have this like, you know, if you bet on, especially if you're creating a category or writing like a very large secular tailwind, like as this compounding, you know, effect to it. And, you know, obviously brand marketing plays a critical role in that. And I think there's, you know, a lot of new, opportunities to do stuff in news, in new ways in this era with, you know, the role of, you know, Amazon and digital experiences even. I think there's a lot of cool stuff we can do in the next phase of recess. So I'm excited to, you know, turn that back on. Yeah. Yeah. And you got a, I don't know, I don't know how much you, you still work with day job. But if, if you sat down for an hour brainstorm with Ryan and Spencer. You could probably come up with like at least 100 ideas

that would unlock that next stage of growth. Yeah, they'll be back in the mix for sure. We've got to talk about the fundraise. We got a gong here that we would love to hit on your behalf. How'd the round come together? Who participated? Yeah, so the round was led by Kavu. It's a $30 million series B. Kavu's no one. The first round out. Voice drowned out. by the gong. You said you were getting into Kavu. Yeah, so Kavu was the main investor in Poppy, which they just sold to Pepsi for

about $2 billion earlier this year and kind of where their next beverage bet. It's Rohanosa, right? Yeah, yeah. He's a legend. He was like top guy, vitamin water, sold that to Coke for $4 billion. Like truly the crowning achievement of the CPG

beverage industry at the time and still today, one of the greatest Bev deals ever. And then He's been on Shark Tag. He's just like a legendary consumer package goods investor. Yeah. Quick lightning round of questions. I'm assuming that Kavu is not underwriting this, underwriting the business from with any type of AI lens.

Are you getting any leverage out of AI? I would say like we at this show unfortunately get very little. I would say it helps with some research and we build software internally. that's helpful. But I'm curious if the chat was wondering if it's been help move the needle at all. Not yet, but I'm starting to have conversations with different groups, kind of building kind of AI-driven kind of content production. And I'm very excited to figure out how we can leverage that. I mean, you have to pump out a lot of content, you know, running a beverage business or any consumer brand today. And I think there's an interesting way for us to use it in a kind of a tongue-in-cheek way. I mean, the whole recess story in antidote to modern times is kind of, you know, was in response to the implications that AI

would have, right? And I think so it's to like incorporate it into the content strategy. I feel like you could do something really fun with AI customer service where the AI, like, you need some customers or just people are going to have questions about the product generally. There's going to be a lot of back and forth. But you could probably do some crazy stuff with like fine tuning the LLM, bringing a unique brand voice in and kind of like go. That just feels like recess day. There's also, I can imagine, like, I would imagine a lot of your distributor relationships today are still like somebody has to call somebody on another line and a grocery store

has to call the distributor when they're, you know, and it's still like kind of analog so I can imagine some opportunities there. Another question from the chat, uh, they're asking about the potential, like, are you excited about drone deliveries? I can imagine like beverage is something that people, like, when people want to drink, you've built a big e-com business, but when people want to drink, they don't typically think, let me go on my computer and order a drink. And we saw there was, I don't know if this company is still around, but there was a company that was started in the same era as recess that tried to go really all in on e-com. And I think they partner with Coke at some point,

and I don't know that they're still around. Yeah, no, names escaping. Is it Lemon? Lemon, perfect. No, not Lemon Perfect. One of the perfect was like, dirty lemon, dirty one. Yeah, they had text messaging. They were like insanely good at e-commerce. But yeah, theoretically, if you can just, you know, say like, I want a six-pack of recess mood and hit a button on your phone and a drone just drops it into your backyard. That should increase velocity.

But I'm curious. I mean, I'm a big believer in just on the channel. I mean, Instacart's a huge channel for us. GoPuff, DoorDash increasingly, kind of anywhere where kind of consumer products are sold. you know, we want to be. And so, you know, when that becomes a real, a real channel, I think we'll explore it for sure. But it's not, it's not something I spend a huge amount of time thinking about.

Yeah. Got to stay focused. Awesome. Walmart and Costco next before. Yeah. Yeah. I mean, you get those and it's just like, okay, you've kind of won. And then you'll just be in the place to take advantage of whatever thing comes next.

So, yeah. Yeah. Yeah. Yeah. Thank you so much for stopping by the show. Yeah. Great to touch up. Thank you for coming on.

We'll talk to you soon. Congrats to the team as well. Cheers. Have a great rest of your day. Let me tell you about public.com investing for those that take it seriously, multi-asset investing, industry and yields, trusted by millions. Let's go through the- Speaking of stocks, Palantir, earnings, Palantir, according to C in BC,

Tops Estimates, boosts fourth quarter guidance on AI adoption. They issued a strong guidance, attributing growth to adoption of its AI. Government sales, which have been central, of Palantir's Ascent grew 52% from a year ago. And again, stock is not up a ton after hours. But we can dig into this more probably tomorrow. Did we want to try to do? Yeah, we got to go through a little bit of this.

We got to do a little bit of a... I mean, we're just going to go through sort of like random segments, I guess. but basically a, the, uh, I dressed up as coincidentally, uh,

for Halloween, uh, last Friday. Uh, he's the co-founder of Open AI. He, they have shared new details on the internal conflicts that led Sam,

led to Sam Altman's initial firing, including a memo, uh, alleging that Altman can, exhibited a consistent pattern of lying. There's a, there's a deposition transcript that is going around. that is now public from the Ilya deposition.

Tuchan kind of summarizes here. Ilya plotted for over a year with Mira to remove Sam. Dario wanted Greg Brockman fired and himself in charge of all research. That's Dario Amadeh, I believe, from Anthropic. Mira Muradi told Ilya, Switzkiver, that Sam, Altman pitted her against Daniela, Amade. Ilya wrote a 52-page memo to get Sam fired and a separate doc on Greg. And there are some, there are some clips here that are absolutely crazy. The witness, I believe the witness is Ilya, correct?

Correct. And the witness says, one thing I can say is that the process was rushed. And the attorney says, I was rushed. And I think it was rushed because the board was inexperienced. And the attorney asks, inexperienced in what? And Ilya says, in board matters. let's go through a little table reading here i'm on page 17 of the deposition yep Tyler is going to be playing the attorney agnilucci and i will be attorney molo

and what's the number in the top right uh 168 okay so let's pull this up uh Tyler kick it off you're you're the attorney agnolucci correct okay okay okay and i'm ilia you're ilia I don't even know if you're and you're molo I'm mollo I'm mollo Okay, let's go. But first, let me tell you about iGQ.com, out-of-home advertising, easy and measurable. Say goodbye to the headaches of out-of-home advertising.

Only AdQQQ combines technology out-of-home expertise and data to enable efficiency in this ad-buying across the globe. Okay, Tyler, go. Okay, Jordi, I think you should actually start because it starts a little bit down the page. So start at line five. Okay.

Line five. It certainly does matter how much. Keep going. What do you think the value of your equity at Open AI was at the time Sam Altman was fired? And I have the same objection. And I'm instructing him not to put a number on it. What did you think the value was? You can answer the question that he is saying

is relevant here, which is whether you thought you were going to lose value. It isn't my question. I have the right to ask a question. You can object to the question. My question is, what did you think the value of your equity in Open AI was at the time of Sam Altman's firing? And I'm instructing the witness not to answer as to the money value. Are you going to not answer? I mean, what is this john that's you oh i i'm answering okay so uh so you say are you going are you not are you going to are you going to are you going to are you going to not answer i mean i have to obey my attorney okay so you're not going to answer i'll do what my attorney tells me to okay were you concerned about possibly losing your equity at the time that i withdraw the question

eventually you've gone eventually the board of to resign and restore Sam Altman, didn't it? Yes. When was that? Later in the week. And why did they do that? Tyler? Objective four. There was a question of why the board did it.

Correct. Or is this a question of why I supported this? First, I'm asking you, why did the board decide to resign and reinstate Sam Altman? Right now, my view is that with very few exceptions, most likely a person who, is going to be in charge is going to be very good with the way of power. And it will be a lot like choosing between different politicians. The person in charge of what? AGI. And why do you say that? Objective form. That's how the world seems to work. I think it's very, I think it's not impossible, but I think it's very hard for someone who would be described as a saint to make it.

I think it's worth trying. I just think it's it's like choosing between different politicians who is going to be the head of state. Looking back at the process that that preceded the removal of Sam and Greg from the board, what's your assessment of that process? Objection, big.

Calls for speculation. Okay, that's the end of that scene, I think. End scene. We need, we should have rehearsed this. Okay, let's... This is a table. reading. We're riffing it out. Okay, should we go to 26? Because we already did the board as an experience. Okay, let's go to 26. Where's 26? 26 starts, um, the witness. At least at one point, I express support. After Sam was removed,

do you recall Helen Toner telling employees that allowing the company to be destroyed would be consistent with the mission? I do recall. And what was the context of that comment? The executives. It was a meeting. We need to be Southern. Every law exchange is better when it's in a Southern twang. The executives, it was a meeting with the board members and the executive team. The executives told the board that if Sam does not return, then Open AI will be destroyed. And that's inconsistent with Open AI's mission.

And Helen Toner said something to the effect of that it is consistent, but I think she said it even more directly. than that. More directly than you've related here? Yes. Okay. And what was your reaction to that? I don't remember my reaction at the time. Did you think that would be consistent with the mission?

Objective form. Objectiform. I could imagine hypothetical extreme circumstances. That answer would be yes. But at that point in time, the answer was definitely no. For me, it would not. not be inconsistent with Open AIs mission to destroy the business? Is that what he's saying?

I'm kind of lost on what his actual stance here is. What is he saying? He says, do you think that was, so what was the original criticism? Let's go to 28. Do you know, Tyler? Do you know what he's saying? Is he pro destroying? So the executives, there was a meeting with the board members.

Okay. The executives told the board that if, Sam does not return, then Open AI will be destroyed, and that's inconsistent with Open AI's mission. And Helen Turner said something to the effect of that it is consistent, but I think she said it even more directly than that. Yeah, so it doesn't have anything to do with Ilya's position on whether the company being destroyed is consistent with the mission. And you say here there's reason to believe that Sam was removed from YC in the past for reason similar to the one that you identify

in this document. Who else has summarized this? I'm completely lost on the actual deposition. Let's go back to the timeline. Typed female has a screenshot here. This is some social network type stuff. The movie's going to be incredible. We can go back into reading these

because they're a little bit more digestible. And what was your response to that? I was very unhappy about it. and the question for the law why why why uh because i did not i really did not want open a i to merge with anthropic why not i just didn't want to what that doesn't it's actually not this is creating more questions than answers um gdp calls it the worst coup ever planned for a year without any PR strategy as they say if you go for the king better get his head uh first and foremost skill that any leader needs is to be able to survive. No feel good management book will tell you that.

Ilya is a great scientist and great human being, but not a practical leader. Ilya didn't have the skill to plot and survive and come out on top. Samma is the right leader from Open AI employee perspective. You couldn't go this big without Samma. Or I guess he's typed. It's so bad in so many ways, says Rune. I really hope one day Sam gets the credit he deserves. So they're saying that like, if you can't pull off the coup, you probably can't pull off the act two of the company. And so it's, that's a pretty reasonable, uh, that's a pretty reasonable, uh, stance. Um, what else? We talked about the Amazon deal. We didn't get a chance to talk about wander. Find your happy place. Book of Wander with Inspired Reviews, Hotel Grady

and Nendys, DreamVez, top to your cleaning in 24-7, uh, concierge service. It's a vacation home, but better. I like this post from Buck. We almost kicked off the show with it. It said, open AI. the compute purchase order press release company? I think I think startups should start just announcing their their planned cloud spend. Just you know, startups always need like the more, the more times you can launch the better. Definitely. Definitely. Go through YC, get $100,000 in credits and then project out spend, spend 10,000 of those credits the first month, then spend $20,000 the next month, then spend $40,000 the next month.

you're almost out of credits. You've spent 90,000 of your 100,000 credits, right? But you have exponential growth in your credit spending. You project that out a decade. And then you announce that based on the trend, we will be spending a quadrillion dollars with AWS if the trend continues. And then just show the day, hey, we had 10K one month, 20K the next month, 40K in the third month. Do the math, folks. It's exponential growth. That is a good hack. I have a number. I have a another hack, because Sampar is in the timeline, put the timeline in turmoil over whether he is a $40 million gigacad or a pauper at $17 million. That's the debate, basically, right?

Someone, he has said that he sold the hustle for $40 million. Someone quote tweeted him and said, it was actually only $17 million. And everyone was debating the nature of his acquisition. I thought it would be interesting to dive into some of the claims. I don't really care that much about whether it's 17 or 40. Both are big numbers. Congrats to him. The interesting thing is just the nature of aqua hires, acquisitions,

how these different things can play out and how funky they can get. And, you know, he's in a unique position because he kind of has to talk about his business credentials for his business, right? But the more interesting thing is like, if you're negotiating with it to sell a business, what are all the levers you can pull? Because there's a ton of them. So the headline number, I believe, was... Strangely, like, the hustle acquisition was kind of... It was like two deals rolled into one.

There's, like, the core hustle. I could say seven deals. There's so many deals. Well, yeah, there's the core hustle business. There's the podcast, which was, I can imagine a decent chunk of the revenue. Yep. And there's the talent. Like, the podcast is not really valuable without the talent.

Totally. So there's a talent deal. Yep. And I think he was just adding up, like, adding up a bunch of those numbers. rolling them into one and talking about that headline number. And he broke it all down and explained it. Yeah, there's no real like established way to calculate. Like there's no real norms around how headline numbers and acquisitions are accounted for.

Like if you get acquired for, you know, $100 million, but half of it's on an earn out and you don't hit that earn out, like you probably should go back and say like, hey guys, I know I sold my company for $100 million. but it's actually, it was only 50 million because we didn't hit the air and out. Or vice versa. And what it feels like happened was he sold the company for 17, but grew my first million so much that he kept making a lot of money from it. So the thing that he built wound up generating $3 million. And as talent, he was getting a lot of stock. And the stock way out.

And I think he was counting some of the appreciation of that stock to get to the headline number. And I can, yeah, he has. He created a podcast that is entirely focused on talking about wealth. Exactly. So I think you got maybe a little bit. Yeah, he got a little carried away. The Hampton show. Yeah, you have to, you have to show the number.

It is, I mean, it's like headline grabbing. Like, if you want to go viral, especially on YouTube, saying, like, I sold my company. There's this guy who's like whole shtick is he sold his company for, or he's like a hundred million dollar entrepreneur. Alex Hermosie is like really big into like the, the whole thing. $100 million branding. I think he has like a patent on it or trademark on 100 million. Just because like that's a round number. And so he he will throw out, I have $100 million.

I sold my companies for $100 million collectively. I have a $100 million, this or that. And that really, it really works to get clicks. Like it really works to get attention. If you want to sell your company for $40 million, $17 million, I have a hack for you. So this is what you do. You, oh, Tyler's locked in. He's ready.

This is the number one resume builder. right here. Okay. So. Tyler's not just listening. He's studying. You work maybe at some sort of podcast or something. You get together like $5,000 or something.

Then you lever up to get to like, you need to get to like $400,000, I think. Once you get to like $400,000 in debt, it doesn't really matter. You go and you sell your company. But you don't sell it. If you sell it for USD, the value of your bank. account is only 400,000. And that's not going to be like, oh, turning heads. So what you have to do is you have to sell, you know where I'm going with this? You got to sell your company in a different currency, in a different currency. Maybe like Guyanese dollar. Yes, the Guyanese dollar. So the

Guyanese dollar trades at 210 Guyanese dollars to one U.S. dollar. So if you have 400,000 dollars, US dollars, if you've created $400,000 of assets here, and you can sell that in Guyanese dollars. It's an amazing multiple. So 400 times 210 is, it's $84 million in Guyanese dollars. So $400,000 cash in U.S. dollars is $84 million in Guyanese dollars. And so what you do is you build your business to the point where you can sell it for $400, maybe with a bunch of leverage that'll have to get paid out.

But you sell it, the press release, we sold it for $84 million. And you don't specify. No, but you can put in the fine print at the bottom of the press release. Exactly. Super, super fine print. Guyanese dollars. The transaction occurred using the Guyanese dollar. Guyanese dollar.

This is actually just a hack for everything. If you want to become like a social media. Open AI should start doing this. They should start announcing all their deals in Guyanese. Wait, wait. Maybe they have been this whole time. What is 1.4 times? Maybe that was the answer that Sam needed is he's just, he's, he's pushing up on 300 trillion Guyanese dollars.

Yeah, maybe, maybe he should. Sam, how is a company with only 14 billion in U.S. dollars of revenue going to spend 294 trillion in Guyanese dollars is his liabilities? Raghav says Zimbabwean dollars are the real. unlock. That's how you get in the quadrillions. Yeah. Oh, the other thing you should be like, oh, how am I going to pay for $1.4 trillion? One point four trillion. How am I going to pay for it? Well, guess what? I got $2.9 trillion in revenue coming in right now, buddy. Two point nine trillion. Right now, that's my revenue. Right now, dollars. Why? I need dollars.

But Open AI will cross $3 trillion in dollars. Three trillion revenue dollars. this year for sure. 70 Guanyese. 7 trillion Guyanese dollars. The Guyanese dollars is the greatest. It is such good alpha because you can go do a press release and just take whatever you did, whatever you achieved. Maybe you're making six figures for the first time in your life.

Converted to Guyanese dollars. Now you're making two million a year. You know? Oh, you cashed out. You made a million dollars. How did you make your first million? How do you make your first $210 million? Startups, I'd like to flex how quickly they got to $100 million run rate.

Huge opportunity to get there with the Guyanese. Make it 210 times easier with the Guineas dollar. We should acquire some Guineese dollars and just have a stack here. We should. We should. The exchange rate will work in your favor. In your favor. Anyway, there's a bunch of other posts in the timeline.

We'll have to get to them tomorrow. We're on the road tomorrow, but we're still. still doing a show 11 a.m. Pacific. We'll see you there. I don't think we'll be doing any guess. We'll see. It might be a little bit of a shorter show, but don't worry. A lot of time line. Please leave us a five-star review on Apple Podcast, Spotify. We also have Diet TBPN now, which you can listen to. Diet TBPN is a summary show, 15 to 30 minutes, just the highlights, cut down. If you don't have time for the full show, you can go listen to your workout, your commute. And also follow us on substack, TBPN.com. Drop your e-bptop. Drop your Thanks for tuning in today, folks.

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