TBPN - The Experts Weigh in on Intel, Big Family: The Ultimate Status Symbol | Wade Foster, Dan Wang, Nicolas Sharp, Shan Aggarwal, Vikas Enti, Bryan Pellegrino, Logan Kilpatrick, Rylan Hamilton

Starting point is 00:00:00 You're watching TVPN! Today's Tuesday, August 26, 2025. We are live from the TBPN Ultradome. The Temple of Technology, the Fortress of Finance, the Capital of Capital. Thank you to the team at X. Thank you, Elon Musk. Thank you, Nikita Beer. Because in the latest app store graphics package for the X app, that's the Everything app on iOS,

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Starting point is 00:03:24 I don't know anything about anything else. I promise you, there should just be like, here's a fucking podcast. pile of money and next time you have come with idea do it almost everything that i don't like is un-american we get into producing ballets a model that we basically use AI to basically use AI to make AI we are going to win the temple of technology the fortress of finance the capital of capital you're watching tv what a great edit thank you uh jace fantastic edit that's really funny fantastic edits. Thank you. Thank you for making that. That's amazing. They beat us to it. We were working on something like this, but you guys did it for us. So thank you. Thank you for being a part of this.

Starting point is 00:04:09 Thank you to Ramp for making all this possible. They took a shot on us very early. So you should take a shot on them. Ramp.com. Time is money saved both. Easy use corporate cards, bill payments, accounting, and a whole lot more all in one place. They did. I think we had something like a thousand followers when Ramp committed to working with us for the year. Yeah. And we are forever grateful. Yeah. They made it possible. Yeah, it's been a fun run.

Starting point is 00:04:34 Anyway, the real top story is, of course, Intel, the experts have weighed in. We have some amazing breakdowns from John at Asianometry, Ben Thompson at Stratheckery,

Starting point is 00:04:50 and Doug O'Loughlin at Fabricated Knowledge, Semianalysis. The true experts have weighed in. We've obviously been following the story on this show, but these folks really know the details and we're able to put together a bunch of great analyses mapping out what might happen next. There's a really good video from John at Asianometry that we should play to hear a little bit of what happens next. The quick recap,

Starting point is 00:05:21 as I understand it, is Intel was dominant right up until mobile. Not only did they manufacture are the best chips, but they also had an incredible brand from their Intel Inside campaign. These stickers were all over every PC, Intel Inside. It was on every PC that every kid wanted. And I can still hear the Intel sound in my head. If you, dun, dun, dun, you know that sound? No. Wow. Extremely offline. Before my time. Tyler, do you know the Intel inside sound? That sounds like the Xbox sound. No, no, no. Pull up the Intel inside sound. We need this on the, on the, on the sound board. This is the only sound we need.

Starting point is 00:06:02 I'll just play it here. I think you can play it. You've never heard this before? Let me play this. Oh, come on. I do know that sound. You know that sound. That's iconic sound. I take it all back. Everyone knows that sound. So, incredible brand, right up until 2007, the iPhone drops and... Did they used to get, they used to play that sound when you would be booting up a Mac? I think that was a different sound. But it was just all over two. TV. So you couldn't turn on the TV. They were just wall to wall. And it was interesting because you wouldn't go and buy an intel. Like medium for a hundred percent. They have not been taken advantage of fully in the internet era. I mean, what did I say about the Super Bowl ad that Ramp ran?

Starting point is 00:06:45 I was like, that song at the end is iconic and like this one. I was like, there's something here that you could double down on. Switch your business to Ramp.com. Switch your business to Ramp.com. Thank you for sake of one, Barclay. So it was a fascinating time because Intel was making the chips but also designing the chips and then also marketing the chips and people would buy the computer because of the chip not just because of the brand and that just doesn't happen anymore really. And so in 2007 the iPhone launch and it did not include an Intel chip and this was a bombshell. Instead Apple selected a Samsung manufactured system on a chip based on ARM, which is a design firm that designs the, chips and has an architecture that is incompatible with x86 which is intel's architecture so the reason was chips from arm were far more energy efficient than intel's x86 processors at the time and the

Starting point is 00:07:40 iPhone needed to optimize for long battery life there's a debate over whether or not apple ever had a chance to go with intel but it it almost doesn't matter because they went with samsung and then eventually they did apple silicon and they stayed on arm and they went for a more efficient chip more less power, less power hungry. And so Intel was just too power hungry. And Intel as a company underestimated how important the mobile market would be to remaining dominant in semiconductors over the long term. Ben Thompson identified.

Starting point is 00:08:12 Missed AI. Yes, but they didn't miss cloud. And that's where it gets interesting. So 2007, they start missing mobile because of the iPhone. But the iPhone was small, and it was a small portion. It was unclear how much computing was going to be done on mobile. A lot of people weren't taking it seriously. A lot of people weren't taking it seriously. Ben Thompson comes up with...

Starting point is 00:08:29 And there was real reason for that. If you were just comping it to the PC market and saw Apple's market share within PCs was a tiny fraction of the overall market. And then also just the idea of like, what, am I going to do my work on a tiny phone? Like that's such a stretch. Even if, yeah, okay, I can text a little bit better, but I'm not going to be doing a lot of work on here. And now it's like the device of CEOs. like don't even open computers anymore. So Ben Thompson came up with this thesis in 2010 that Intel

Starting point is 00:09:04 needed to pivot and really double down on going into foundry mode, not founder mode, but foundry mode. They needed to get other customers to design chips that were specific for what those customers needed and then Intel would make the chips and act as a foundry. He launches the blog Stretoree in 2013. It's one of his first posts. Intel needs to build a foundry. Legend call. Now, interestingly, he, by his own account, says that wasn't a good trade recommendation because for the next eight years, Intel ripped because of cloud computing. Because as mobile was growing, cloud was also growing, because what does your phone need to talk to? It needs to talk to a server in the cloud. So the cloud was growing. AWS is growing. GCP, Azure is growing. And so

Starting point is 00:09:46 Intel's selling a lot of CPUs into EC2 instances on Amazon, AWS. And Intel's business is doing fine until AI comes around and they miss that as well. And now they miss mobile and AI and they're just falling, falling behind. And then now the cloud is starting to look at, hey, well, actually the power tradeoffs of Arm now are actually pretty good. And so maybe we should do, you know, different chips in the data center. So they are facing pressure in a lot of different ways. Now, that type of pivot would have been really antithetical to Intel's culture.

Starting point is 00:10:20 They would have had to build a customer service organization. and Intel was so dominant. It was like this center of excellence. It had the best people. And so they weren't used to saying, oh, yeah, like, let's do what the customer says. It's like, no, we know what's best. We make the best thing.

Starting point is 00:10:37 And you decide. When you're on a roll, that works really well. Exactly, exactly. And so who knows if they could have done it? They actually did, as we talked about yesterday, they did try and spin up a little bit of a foundry for these FPGA startups, but it was always a small piece of the business.

Starting point is 00:10:53 Basically, like, if you need a very specific chip to do, like, networking or encryption in a data center, it's like a special chip, they would do that, but with a small startup, and they never really pushed into it. They never went for, like, the big wins, like Apple. And so because of the cloud boom, Intel performed quite well throughout the 2010s, but the AI boom is a different story.

Starting point is 00:11:16 Intel's far behind now in Camps simply cannot afford to build their new cutting-edge manufacturing. without external customers and no one wants to work with Intel right now. But big companies do want to stay in the good graces of the US government. And that's the bull case for Intel here. If big tech companies get art of the dealed into putting large enough orders into Intel to underwrite the completion of their new 14A boundaries, that's the big Ohio plant that is estimated to cost something like $40 billion in orders

Starting point is 00:11:43 to kind of make it math out. They don't need to go head to head with Nvidia. Nvidia. They don't need to win the GPU market necessarily, and we'll get to this with the video. John and Asianometry argues that Nvidia should buy CPUs from Intel. So, Nvidia sells a CPU called Grace that they pair with Hopper, which is Grace Hopper, which is the namesake of the system. And that's not an X86 chip. But there's no reason why Nvidia couldn't license Kuda and the design to Intel and say, hey, Intel, you're going to be our manufacturer for that, because Intel's not a manufacturer. So realistically, Intel should be able to say, hey, yeah,

Starting point is 00:12:26 we'll go to Intel, we'll go to TSC, whatever gives us leverage. That the government and Trump have a stake in Intel, you can imagine Trump really leaning on Jensen to make something like this happen. And Trump also has some leverage over Nvidia because he's taking this 15% kind of questionable export tax. And so you can say, hey, Jensen, like, how about I make that go away and you give Intel a little bit, a bit of business. Or, oh, like, I'm going to threaten a really crazy tariff and I'll pull it back if you work with Intel. And so that's kind of the bulk case here that people are kind of coalescing around the experts who I trust on this issue. And so if Trump was able to strong arm Invita with a somewhat legally dubious 15% export tax, getting Jensen and Liputon in the same room,

Starting point is 00:13:16 today to hammer out a deal. Doesn't seem like the craziest idea. And there are other tech companies that might play ball too. This is an expensive gambit. Ben Thompson estimates Intel needs 40 billion in demand to make the foundry play pencil out. But big tech companies are spending almost 10 times that collectively, and they all still take the president's phone calls. So let's play the Asianometry video right here. Perfect. He's going to be in California, by the way, or Arizona. So what seems most likely about to happen is that the United States government and a few aligned investors first take a stake in Intel. The government puts up money to finish the fab in Ohio, then raises tariffs to a high number with some carveouts to satisfy the crowd.

Starting point is 00:13:56 That's the $20 billion. And then they will apply pressure to the tech giants to get them to throw some orders at Intel Foundry. There's a comment on the Wall Street Betts thread on the story that succinctly lays down the sentiment. Dude is 100% going to nudge, quote, unquote, Apple and NVIDIA to use their 14A foundries. This is going to skyrocket by EOY 2026 in the hundreds. Doug O'Loughlin of Fabricated Knowledge agrees and adds that pressure might also be applied onto the semiconductor equipment companies too. Additionally, forcing semiconductor companies like KLA, applied materials and lamb research to invest and give resources in exchange for approved licenses is another example of a carrot and a stick.

Starting point is 00:14:42 A few companies have already started to turn on this perceived trajectory. For instance, just as I write this, Intel has announced that softened. We need a stick-in-a-carry in the studio, for sure. Considering how Masa invests, I'm not surprised he's first through the gate. There's news that he was in talks to buy Intel's fabs. Maybe that will happen by the time you see this. As I said before, this seems to be what the plan is. Coalition of the Unwelling.

Starting point is 00:15:08 Okay, we can stop it. It's a great video. You should go subscribe to Asian Almas. on YouTube and get a I think it's part of the Stratory bundle if you go for the bundle you get access to John at Asianometry's blog posts as well which are fantastic and I've been going deeper into the Asianometry YouTube and there's so many good Intel videos and the guy really understands the history apparently this isn't the first time that the US government has tried to reshore manufacturing of particular technology he highlights the DRAMs, like this memory gambit that happened in the 80s,

Starting point is 00:15:47 and it didn't really work out, and you kind of draw some analogies there. Anyway, John, next time you shouldn't just upload that YouTube video. You should stream it on Restream, one live stream, 30-plus destinations, multi-stream and reach your audience, wherever they are. Go to Restream. Anywhere.

Starting point is 00:16:04 So Saga and Jetty is quoting Ben Thompson on the Intel 10% stake. Quote, the single most important reason for the U.S. to own part of Intel, however is the implicit promise that Intel Foundry is not going anywhere. There simply is an credible way to make that promise without having skin in the game. So it's not just a lender of last resort. It's actually just a commitment that there will always be some level of U.S. manufacturing on the leading edge, which is what Intel's trying to do here with this Foundry and what they have been so far unsuccessful at drumming up customers for. So yeah, uh, he, uh, Sager shares, some screenshots from the Stratory article.

Starting point is 00:16:44 Given all of this, acquiring 10% of Intel terrible, though it may be for all the reason Linsacom articulates, and I haven't even touched on the legality of this move, is, I think, the least bad option. In fact, you can even make the case that a lot of what Linsacom views as a problem has silver linings. Intel deciding to stay in manufacturing is arguably making a political decision, not a commercial one. However, it is important for the U.S. that Intel stays in manufacturing.

Starting point is 00:17:10 It is a political issue. Intel prioritizing government interests, which are inherently focused on national security and the long-term viability of U.S. semiconductor manufacturing over their fiduciary duties could just as easily be framed as valuing the long term over the short term. Had Intel done just that over the last two decades, they wouldn't be in this position. So America is setting Intel up to be able to make that multi-decade decision. It's going to be a lot of pain, but then eventually, hopefully they'll be back on the leading edge. Yeah, I remember it felt like two or three weeks ago, Lipputon was just focused. You could imagine the morale at Intel just being absolutely abysmal because it was just cut after cut after cut versus any type of obvious long-term strategy of getting back on the leading

Starting point is 00:17:54 edge. Other companies being pressured to purchase Intel products is exactly what Intel needs to not just be viable in manufacturing, but also to actually get better. If TSM and Samsung are disadvantaged by not making chips in the U.S., that's a good thing from a U.S. perspective. Both companies are investing here. the U.S. wants more. Private capital prioritizing U.S. manufacturing is a good thing. I remember when the chipsack was first breaking. Ben Thompson was advocating for something that

Starting point is 00:18:19 looked a little bit more like Operation Warp Speed, where basically the government, instead of, and this is what they do in China too, where instead of saying like, okay, we're just going to give $20 billion to Intel because like we pick them and they're good, it's more like, hey, the U.S. is going to be a buyer at this price. So if you make it in America, we'll buy it. And this is what's happening with MP materials right now. The DOD invested, I think, 500 million, but then also said, hey, we will buy all the magnets at this price. If you can go sell them at a higher price to somebody else, do that,

Starting point is 00:18:49 but you got us and we'll just build a stockpile. And so you can imagine the U.S. being like, yeah, we'll build our own data center and we'll try and lease it out. And maybe we take a loss if there's like an overbill or something. But it could very well pencil out. And if demand for these chips is actually higher, then you'll just sell them to someone else. We won't even need to buy them.

Starting point is 00:19:07 So just acting as like that stop gap actually makes more sense, maybe, but so many of these decisions were already made that this is probably in this moment in time what made the most sense. And then private capital prioritizing U.S. manufacturing is a good thing. Ben Thompson closes this little quote out by saying, the single most important reason for the U.S. to own part of Intel, however, is the implicit promise that Intel Foundry is not going anywhere. There simply isn't a credible way to make that promise without having skin to the game. and that's now the case. So, of course, go subscribe to Sturtecary. Go subscribe to Fabricated Knowledge. Doug O'Loughlin is saying,

Starting point is 00:19:44 not going to lie, a lot of people who are mad at Trump for everything. Can't see the genius of the Intel investment. I mess with it massively. I love the way he posts there. It's great. Doug messes with it, everyone. Yeah, I'm messing with it. But I'm mostly deferring to the experts on this one.

Starting point is 00:20:02 Trust the experts. Anyway, if you are designed, designing not a chip, but something else. Get on Figma. Think bigger, build faster. Figma helps design and development teams build great products together and get started for free. Figma.com. David Senra, you saw him in the Vibreel.

Starting point is 00:20:19 He just dropped a fantastic episode called How Elon Works. It was a very interesting process. He outlined it for us on the show. Basically, the latest book on Elon is more of like news. I think it's Walter Isaacsons. and it's more of like news articles minute by minute. And so it's a play by play. It's a play by play.

Starting point is 00:20:41 Less of a playbook. Yes. And so Senra wanted to transform it into a playbook. And he did that by, I think he read the book like seven times or something insane. But he like turned it. He took notes on it and then read it seven times. And then, you know, he does his process. He did real actual deep research.

Starting point is 00:20:59 Not just a problem. Seriously. Seriously. But I really enjoyed it. And I think you'll enjoy it. so you should go listen. But the interesting thing that I liked about it was that it helped me, it helped me understand a little bit what's going on with Starship

Starting point is 00:21:14 because we've seen so many setbacks with that program. And when you actually listen to how, like the risks that Elon takes, it is crazy. So first one is that he is not interested in achieving any sort of short-term goal. He only wants to develop a system that can do something a million times. And so that says that has a much higher bar than building like one exquisite rocket that gets there and has like, okay, yes, we spent, we spent five years and we made sure that every screw was in the exact same place and the perfect place and everything was designed flawlessly so that we could get up there. And then the next time we want to do it, it's going to take another five years and another $10 billion. He's like, no.

Starting point is 00:22:01 the thing that we're going to design needs to be able to go every single day. So it needs to be cheap and fast and and we need to copy and paste it. And so I think the manifestation of that is that you're going to have a lot of failures early on. But then once it gets polished up enough,

Starting point is 00:22:21 it's going to start churning and you're set up for much more scalability. The other example he gave was like Elon would go around the manufacturing line and just be like, why are you using four screws there? Do you think you could use two? Like, save a little weight. Like, do something.

Starting point is 00:22:36 And the person would be like, well, like two screws, like the thing might fall apart. And he's like, we'll try it. Like, just try it. And we'll see how it goes. And if you imagine that manifesting in the Starship program, it's like, how many of those experiments are there? It's like, yeah, that one,

Starting point is 00:22:49 you actually need three screws at least. You definitely can't do it with two screws. And so I imagine that there's tons and tons of those little decisions that like once you get, like, instead of, instead of starting with like the exquisite system and then tearing stuff down with this, it definitely seems like he's starting with like the bare minimum and then just like adding things back to like keep it stable so that it actually will work.

Starting point is 00:23:11 But when it works, it should be very, very cheap, very reliable and actually solve an economic equation. This Starship launch, the timing with everything that's been going on in XAI world recently. This launch feels more important than the last few in the sense that, Elon and the SpaceX team don't want to give the haters material. Totally, totally. So this current launch has been delayed a couple times. It's currently slated to, they're going to attempt it as of now in five hours later today. So hoping this one gets off the launch pad and does well, right?

Starting point is 00:23:51 Because if we get another one of those, you know, fireworks shows, I think that Elon is going to want to log off X for a little bit. Yeah, people are going to be talking trash, talking trash. Or at least pause the ony posting for at least 24 hours. Yeah, well, if you're building and business that's going to space, you've got to stay compliant. You've got to get on vanta.com, automate compliance, manage risk, prove trust continuously.

Starting point is 00:24:19 Vantas trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. In other news, Taylor Swift is getting married. The private jet enthusiast. Well, I feel like most of our audience would know her for her Wall Street Journal op-ed in 2014, where she said for Taylor Swift, the future of music is a love story. Where will the music industry be in 20, 30, 50 years before I tell you my thoughts on the matter?

Starting point is 00:24:51 You should know that you're reading the opinion of an enthusiastic optimist. One of the few living souls. Yeah, one of the few living souls. in the music industry who still believes that the music industry is not dying, it's just coming alive. There are many, many people who predict the downfall of music sales and the irrelevancy of the album as an economic entity. I am not one of them. In my opinion, the value of an album is and will continue to be based on the amount of heart

Starting point is 00:25:16 and soul an artist has bled into a body of work and the financial values and the financial value that artists and their labels place on their music when it goes into the marketplace. piracy, file sharing, and streaming have shrunk the numbers of paid album sales drastically, and every artist has handled this blow differently. In recent years, you've probably heard the articles about major recording artists who have decided to practically give their music away for this promotion or that exclusive deal. My hope for the future, not just in the music industry, but in every young girl I meet, is that they all realize they're worth and ask for it. Music is art, and art is important and rare. Important, rare things are valuable. Valuable things

Starting point is 00:25:56 should be paid for. It's my opinion that music should not be free. And my prediction is that individual artists and their labels will someday decide what an album's price point is. I hope they don't underestimate themselves or underestimate or undervalue their art. So did she get this right to date? Not really. I think she got the thing that she got right is that what an album is can be extremely monetized if you continue to think about what... Like the album is scarcity. Like, you either have it or you don't,

Starting point is 00:26:34 and the internet kind of reduce that scarcity to zero because you could stream it, you could pirate it, but there is still scarcity to be created if you are an artist, if you are a musical artist. And so the way she does that now is when she releases an album, she goes on a tour that becomes so big that again there is scarcity because there are only so many tickets at Sofai Stadium and you have to be there.

Starting point is 00:26:59 Because it's a moment. One of the best monetized recording artists of all time. Yes, yes. And so she gets the long tail eventually. And eventually her music is essentially free and played in grocery. So I'm going to read you something from their Instagram caption announcing the engagement. Yes. It's not just a marriage dash, M-Dash.

Starting point is 00:27:22 It's the perfect love story. No way. No way. It's back on X is calling this out, saying, claiming that Taylor and Travis or one shot it. No way. What did you got, Tyler? What's that?

Starting point is 00:27:34 No. I was going to say something about her like monetization. Like, Kyle Sagan has this good post. She said, Taylor Swift's engagement is actually very relevant to monetary policy because she is the most powerful stimulus tool we have. Oh, really? How so? Well, I mean, her tours are like massive.

Starting point is 00:27:50 Like you can see the rise in consumer spending. Yeah. Ooh, interesting. Especially like smaller countries, it's like very noticeable. Yes, yes. But how does her being married, like, she could just go on tour and be single, right? Is she going to sell more tickets because she's married now? Does it allow her to tour more?

Starting point is 00:28:07 You could also see it in a lot of people are talking about birth rates, right? So maybe a new boom, baby boom. Catherine Boyle just posted a picture and just said, with the captioned, their pictures, pictures just said American Dynamism. I do think this will be good for the birth rate. It's also going to be some, for anybody that's in a longer-term relationship in their late 20s, early 30s, pressure is now on. These photos are going to be getting sent around. They're setting a new bar, right?

Starting point is 00:28:37 Quite the floral display by Travis. Got to give them props there. How many kids do you think she'll wind up having? She's 35. She's 35. She's got to get good. going. Oh yeah, 1980. And hopefully a ton, right? I mean, I think we'd like to see... It is the last luxury status symbol, apparently. I'd like to see at least 10.

Starting point is 00:28:59 Yeah. It'd be great. Well, if she wants to manage her family's plans, she should get on linear as a purpose-built tool for planning and building products. It's a family planning tool. You could make it work for it. For modern software development. Streamline issues. She used projects and product roadmaps, start building. I don't know. She could probably use linear. She's probably developing software and websites and stuff.

Starting point is 00:29:28 Anyway, what we should talk about is this post from Robert Sterling, the only form of wealth that's ever mattered, screenshoting the Financial Times, the ultimate status symbol, a big family. So the Financial Times writes, a flex of Uber wealth in 2025 is multiple children, all the while preserving pre-parenthood lifestyle interests and physique. What is the ultimate luxury status symbol, Jordie Hayes? Once upon a time, it may have been flaunting a rare handbag, sports car, or flashy watch. But with the soaring costs of living and shrinking household sizes and depreciation of tycons, sports cars are now...

Starting point is 00:30:07 They're given tycons away. They're given tycons away. The only thing that you need that you can flex your wealth with is having kids, specifically lots and lots of them, says the financial times. For most working parents, quote, And particularly those living in cities, even to have one child comfortably is a major economic calculation that requires considerable financial stability, says Eliza Filby, author of Inheritocracy. It's time to talk about the bank of mum and dad. Well, that was also true historically when having an enormous brood was bolstered by a need for labor, religious imperatives, and preserving family legacies in the face of high infant mortality. children today aren't a source of positive household cash flow.

Starting point is 00:30:52 They are a drain on it. But I think we've got to put these kids to work. We've got to put them in the mines in the Minecraft or get them on if you if you got once your kid hits three you should set them up with a WAP account. I was about to say, pay for college. Yes. Do it. Don't don't make mistakes.

Starting point is 00:31:12 Actually make some mistakes, but figure it out. Hey, I mean, uh, in the Stevens household, you have to pay the bills, uh, making, making tech deck. Start making courses for other three-year-olds. How to be a three-year-old. Yeah, don't expect the official course. The andrel chairs to pay for your college, buddy. There's only so many of those to get around.

Starting point is 00:31:31 We're not selling. You're still long. You've got to pay for those with skateboards. The reality is that middle-class parents do not support kids to 18. Philby says that for families who can afford to, it's often closer to 30. with costly child care, a lack of family support systems, and a global trend of women. Parents hiring child care for their 25-year-olds?

Starting point is 00:31:54 I guess, yeah. In some cases. Conceiving children later, there is a feeling that one child is increasingly the norm for dual-income households, Philby says. Two is a bit of a push, and three or more is not just an anomaly. You need to be super rich. Officially, official birth rate figures in many countries have hit all-time lows. In the UK, the Office for National Statistics, says that the fertility rate is 1.44 children per woman.

Starting point is 00:32:20 While in the United States, that figure is 1.6, in some Asian nations such as Japan and South Korea, the rates are 1.2 and 0.75 respectively. I was talking to somebody who is very bullish on South Korean tech because of AI and a lot of the companies that they sell. S.K. Heine. Yeah, and there's a whole ton. I think they have their own, like, S&P 500

Starting point is 00:32:45 of like really, really great. They have their own TPPN. They do. They do. But I had no idea that the birth rate was so low. That's crazy. 0.75 is really, really low. So they've got to turn that around.

Starting point is 00:32:56 But while one and done may be booming as a cornerstone of modern middle class parenting culture, so too has a fetishization of the opposite end of the spectrum. In other words, ogling extremely wealthy figures in the public eye whose picture perfect families never seem to stop growing. Behold the fixation of frazzled millennial working women. and others with the Tradwife movement, a social media phenomenon that glorifies homesteading, milkmaids,

Starting point is 00:33:21 and taking care of your husband and offspring. Its brightest star, Hannah Nealman, Nealiman, I don't know, a ballerina farm, has attracted a 10 million strong following on Instagram, thanks in no small part to her eight immaculately disheveled blonde children with her husband, Daniel Neelman,

Starting point is 00:33:39 the son of JetBlue founder and airline mogul David Neal. Hopefully they sold before JetBlue became a... Pennystock. Oh, my God. Yeah, get out. Get out. Get out.

Starting point is 00:33:51 In the celebrity orbit and beyond the trials and tribulations of the ever-expanding Kardashian clan, Alec and Hilaria Baldwin sent the internet into meltdown earlier this year with a TLC reality television series called The Baldwin's. I had no idea. This is a thing. Which documents life between their Manhattan apartment. Try to pull up this picture. East Hampton Mansion with their seven children and eight pets.

Starting point is 00:34:14 I had no idea. Alec Baldwin had seven children, eight pets. I wonder what pets he has. Huge families. You know that Haley Bieber is Alec Baldwin's daughter? No. Is that right? Am I right on this, guys?

Starting point is 00:34:28 Wait, what? That's true? No way. Okay. Learn something new every day. Pretty sure that's true. Yeah. Might need the truth on it.

Starting point is 00:34:36 No, no, no. Uncle and niece. Uncle and niece. Okay, so they are. Okay, okay, okay. Yeah. Got it. Interesting.

Starting point is 00:34:43 But here's the picture of a picture of Alec Baldwin and his family still just pumping him out. Looks great. Looks great. Take those kids to a wander. Find your happy place. Book of Wander with inspiring views. Hotel great a menus, dreamy beds, top tier cleaning, and 24-7 concierge services.

Starting point is 00:34:59 It's a vacation home, but better folks. Anyway, huge families are increasingly visible among the 1%, especially in some of the world's wealthiest and most competitive enclave, such as New York City, in her widely red, if controversial book, Primates of Park Avenue. Wednesday, Martin memorably observes that massive families they were everywhere on the Upper East Side, a neighborhood with some of the most expensive real estate, schools, nannies, and hobbies in America. Jordy, what were you about to say? I was about to dive into that. Four is the new three. Previously conversation stopping, but now nothing unusual, she writes. Five is no longer crazy or religious. It just means you are rich, and six is

Starting point is 00:35:36 apparently the new townhouse or Gulf Stream. According to a study by Forbes of more than 700 American billionaires. At least 22 have seven or more children, often from multiple marriages and adoption, including perhaps most famously Elon Musk, regularly named the world's richest man. Musk has become a poster boy for billionaire procreation in a vocal proponent of pro-natalism, which he sees as vital to humanity's survival and declining birth rates. Fascination with the Uber elite with how they live their lives and run their households is not new. A raft of high-end fashion and consumer lifestyle brands have turned to notions of parenting, with almost unlimited resources and incorporated them into their product offerings and marketing efforts.

Starting point is 00:36:17 Artipop offers $800 velvet and cashmere baby carriers that have been heralded as the burkin of mom gear. Heralded. Heralded. Heraldo. Ravrevera. Heraldo. Rebranding, wearing a baby as an ultimate accessory. I mean.

Starting point is 00:36:35 It is the ultimate luxury accessory. Much like having graphite in your software development team. 100%. It's kind of the burkin. It's the burkin of code review. Graphite.dev. Code review from age of AI. Graphite helps teams on GitHub ship higher quality software faster.

Starting point is 00:36:51 You can get started for free. If they don't mention Pavel Derov in here, I'm going to stop reading. Anyway. When I'm walking around with my one-year-old and my three-year-old, people often assume that I'm the uncle. And are surprised. Because you're young? Yeah. Oh.

Starting point is 00:37:08 Just it's still. Sure. seems wild, even though if you go anywhere slightly off the coast, it starts to become commonplace. Yeah, super normal. Yeah, it is interesting that if you actually look at birth rate trends by income bracket, for a long time, the higher, the lower income cohorts would have more kids. And so technically, I think from an economics perspective, having children was an inferior good. It was something you did more. It was like

Starting point is 00:37:43 the equivalent of Costco. It's like the opposite of what they're saying here. But really what we're identifying is like there's a barbell effect where at the high end you get a lot more kids and at the low end you get a lot of kids. But in the middle there aren't that many kids. And this is, oh, I'm going to make a movie reference that you haven't seen so I won't even try. Hit me, hit me. There's a 1% chance. Idiocracy. Nope. we should pull up the intro to idiocacy because it is hilarious

Starting point is 00:38:14 john ross in chat says nick cannon has 12 kids that is crazy that is a big number wow very good i think i mean it's it's it's also i'm guessing that's across a number of different uh relationships it is it is yeah yeah nick cannon um okay so mini me designer collections and six hundred dollar high tops allow an army of children to dress like their parents as well as one another. And white labels such as Patek Philippe and Dolce and Gabana have long placed glamorized visions of family at the heart of their advertising campaigns.

Starting point is 00:38:47 Of course, you never own a Patec. You merely hold on to it for the next generation. Or Patec, as they say. Newer efforts from Patega Veneta and Berbering. Evolution. Oh, yes. You want to play this? I think this is the intro to idiocracy.

Starting point is 00:39:03 Let's play this. It was at a turning point. Natural civilization. the process by which the strongest, the smartest, the fastest, reproduced in greater numbers than the rest, a process which had once favored the noblest traits of man, now began to favor different traits. Most science fiction of the day predicted a future

Starting point is 00:39:24 that was more civilized and more intelligent. But as time went on, things seemed to be heading in the opposite direction, a dumbing down. How did this happen? Evolution does not necessarily reward intelligence, with no natural predators to thin the herd. It began to simply reward those who reproduce the most and left the intelligent to become an endangered species.

Starting point is 00:39:50 Having kids is such an important decision. We're just waiting for the right time. It's not something you want to rush into, obviously. No way. Oh shit, I'm pregnant again! What's it? I got too many damn kids! kids thought you was on the peel of some shit hell no

Starting point is 00:40:09 must have been thinking of brittany no there's no way we could have a child now not with the market the way it is no that just wouldn't make any sense come on out of here bishops you yeah well there must be something he likes over here oh shit it wasn't me it wasn't me and I'm not pointing fingers, but it's not going well. And this is helping. I'm just saying that before I have in vitro, maybe you should be willing to...

Starting point is 00:40:45 That's always me, right? Well, it's not my sperm count. Okay, okay, we've got to cut this off. You get the idea. I got the idea. Decision fatigue from the 138 IQ. Simply too smart to have kids. Too smart to have kids.

Starting point is 00:41:08 Anyway, let's continue. Yeah, this is an interesting line. So there's been, you know, other brands, Pataga Veneta has had a campaign with ASAP Rocky, which has been cool. I thought this campaign was brilliant. There's a line here. Healy thinks these campaigns come at a time when the luxury industry is struggling to maintain its cultural relevance reflected in a cooling appetite for products

Starting point is 00:41:33 as social signifiers and a fall in global sales. Focusing on family reflects an attempt. to move into the realm of behaviors and values and away from physical things, you can't dupe having a family, Healy says. You can get a dupe of a burkin or something like that. Oh, that's what dupe is referencing. Yeah, or something from the row or whatever. Every luxury brand gets knocked off immediately.

Starting point is 00:41:58 Healy says it's a very long-term commitment, not to mention one of the most significant and transformational that you can make in your life. But it's not just having kids that is venerated by brands and vaunted. As a status symbol, it's about how you are having kids and to what extent you can maintain your pre-parenthood lifestyle. For many celebrities, this means an army of child care support. Kim Kardashian is said to have 10 nannies on a 24-7 rotation for four children, while the Baldwin family have two on staff. That feels low for how many kids I saw in that picture, to be honest.

Starting point is 00:42:30 Child care positions in the U.S. of this nature can easily command annual salaries of more than $200,000, though more standard wage would be closer to $85,000. paid support of any kind remains an unobtainable luxury for the majority of families. Yeah, for me, I noticed this, I noticed the jump in, you know, how I was living at 25 pre-kids, realizing as soon as you add kids, everything that you do, whether it's where you live and how you travel becomes, travel instantly becomes, you know, if you were staying at nice hotels and now you're traveling and you've got to get a hotel for your nanny, you've got to get a hotel for your kid,

Starting point is 00:43:10 then a hotel room for your kid, then you add a second kid, and so now you need, in some cases, you need three extra room, one for the nanny, one for each kid, one for the couple. And so the actual cost of something as simple as a weekend trip can four racks pretty quickly. And it certainly inspires you to grind harder in my experience.

Starting point is 00:43:34 100%. This version of parenthood doesn't mirror the experience of most people. Healy says there's a version where you're still constantly meeting friends, returning to your pre-baby body, showing up the club or late-night event, and not being tired all the time, moving out to the suburbs or wearing clothes with milk splattered over them. Fashion has always traded on allowing us to project something a little bit better than we are, but having a large family also sends a signal of confidence in the future. We're also the generation that grew up with suburbs being bad and something to avoid.

Starting point is 00:44:05 Yeah. And as an adult with kids, I realize the suburbs are incredibly underrated. Yeah. He heard it from Dr. Drew yesterday. He lives next to a golf course. It's amazing. A demographic that may feel more secure than most, those with more money. Musk paints his pro-natalist vision in stark terms and has some highly unorthodox personal

Starting point is 00:44:27 family values. But among the traditional conservative right, whose social media sway is growing and who champion Americans having a large household. The question of who should be having more babies is an uncomfortable one. A sizable portion of the extremely wealthy pronatalists say they want us to use breeding to fashion a better human race, Philby says. But the current fetishization of being a mother of multiple children can reduce women to a kind of birthing machine, fulfilling her social societal duty and demonize women working incredibly hard and contributing economically toward society who are having fewer or no children, whether by choice or necessity. I think not

Starting point is 00:45:03 Nadia Asperuhov had a good rebuttal to that, which is that tech can certainly embrace and kind of invalidate this false dichotomy by creating a more welcoming ecosystem and not like noveling when a woman shows up. Yeah, I mean, it's interesting to note that a lot of the technology that we take for granted today makes parenting like a little bit easier but not dramatically easier, right? the sort of, I think people, people tend to judge, you know, the family out to dinner with the kid on the iPad. Yeah. And if you haven't had kids, you don't realize that many kids would not be able to. Just strap the VR headset right on. Yeah. You have to deal with them at all.

Starting point is 00:45:45 And just bolt them down to the kid seat. Yeah. And then just fully locked in. No, when I go out to the. The high chair. Yeah. Yeah, when I go out to the restaurant, I bring the full racing rig. with the wheel, the steering wheel, and the pedals and the VR headset.

Starting point is 00:46:02 And I'm just like, lock in, brother. Lock in here. You've got to beat this time on the NERB ring. Otherwise, we're not going to. And I don't want to hear a peep out of you. No, I'm not wasting time with an iPad kid. No, but I mean, we, you know, we've tried the iPad here and there. We don't, we don't do it anymore.

Starting point is 00:46:24 But the kid is just, the kid is just, you know, my three-year-old will just run laps around the restaurant for like two hours straight. And it's cool because he likes to socialize a walk up to other tables and like try to grab a French fry or something. Oh, yeah. That's a little bit. Yeah, no, I love it. I love with a runner around the restaurant just being crazy.

Starting point is 00:46:43 It's so funny. Nothing brings me more joy. Yeah. Because I'm like, that's what I want to do. Yeah. I want to stretch my legs right now. I don't want to be sitting here. My little guy was stood up.

Starting point is 00:46:55 We were at a little beach house in Malibu. and he's just stood up. Last time we were there was a Sunday, there was a DJ playing, he just put his chair up next to the DJ stand and just stood on it. Yeah, the iPad thing is like an endless source of trolling for me.

Starting point is 00:47:13 So the four-year-old's like, oh, for my next birthday, like I think I want like a tablet. I'm like, oh, like what? Like you want it like, because, you know, some kid told them like that they're the most incredible thing in the world, of course. And I'm like, yeah, like let's make one. Like out of cardboard.

Starting point is 00:47:27 Yeah. I'll buy you a C. six hours into a crafting project where you're like, what do you want on the screen? Let's draw it on with crayons. We're just six hours into this thing. Oh, you want to have a, he was like, I want one for my birthday. I was like, oh, so you want the, you want the theme to be like tablet-based technology. Like, we'll bake you a cake that's the shape of an iPad.

Starting point is 00:47:48 And he's like, no, I want the actual thing. Like iPad cake coming your way, buddy. Don't worry about it. Don't worry, I got you. Paper, machet, iPad, pinata that you. will smash and get candy out of that we will make by hand. But I think you'll have to wait. You'll have to assemble one on your own with a box of scraps in a cave.

Starting point is 00:48:09 That said, following trad wives or billionaire spouses with lots of children on social media isn't necessarily a retreat into the home and history. As with many objects of aspirational focus, sometimes these trends are rooted in a type of parasycial cosplay, exploring styles of life and livelihood that are far removed from or will never be our own, nor do we really want them to be. Much of the internet is consumed as if it's a type of speculative fantasy fiction, Healy says. The ballerina farm family, for example, represents a vision of economic security.

Starting point is 00:48:42 It's just so much diet code. Clearly defined gender roles in a certain degree of purpose. People might engage with it as a type of entertainment or escape, but many will also look at it and think in the real world in 2025. In no way do I actually want that. Why not? I want, I want, I want, I don't know. The more the merrier.

Starting point is 00:49:04 More the merrier. Within reason. Within reason. No, I do think, I think that anecdotally from what I've seen in my social circle outside of work, I do think that kids are 100% a status symbol. I also think it's incredibly unfortunate that it's gotten to that point. Yeah. I wish there was a polymarket on the birth rate.

Starting point is 00:49:27 I don't know if there is. We are, of course, sponsored by Polymarket, and you can see the Polymarket's on the ticker. We will need to spin up something. I want to see if Southwood... I mean, there's a polymarket on the Swifts. Oh, really? I guess it would be Taylor Kelsey.

Starting point is 00:49:45 Okay. And who is she marrying? Travis Kelsey. What does he do? He is, I think, from what I can remember, he's involved in like the pharmaceutical industry. Okay. As a spokesperson?

Starting point is 00:50:02 I can't quite remember, but I think he also played some sport. Okay. We'll have to look into it. Well, I'm sure he'll be more popular now that he's marrying Taylor Swift.

Starting point is 00:50:14 People probably dig into his backstory and like learn. Yeah, figure it out. And stuff. For sure. It'll be interesting. We'll be following it. For sure.

Starting point is 00:50:21 Anyway, let's go to this post by Young Macro, one of my new favorite posters. He's been on an absolute tear. He has been on a tear. And he highlights the dynamic that he's experiencing right now. He says the hyper-reality version of the bedridden industrial magnet envying the dashing young socialite archetype is that basically every one of your billionaire idols, Elon, Teal, P. Marka, Sama, etc. feels intense jealousy every time they witness an Anon-Zumer surf the cutting edge of the algo purely organically.

Starting point is 00:50:51 Oh, Donald Boat. Shout out of Donald Boat. I bet you every other day they see a random Zit that makes them ache to have once experienced being the guy to have posted it. Enjoy every second of it, Anon. You're the nubile maiden bathing at the village creek as the laboring brutes admire from behind the bush. This is actually sort of tied to what we were just talking about. This is great.

Starting point is 00:51:16 So if you're Anon Zumer out there surfing the cutting edge of the Algo, just know that you can parlay that into a $50 million series A if you do it right. Yeah, that's great. Well, we should move on to this story in the Wall Street Journal, a billionaire, a psychic, and a bad investment, the friendship breakup from hell. Of course, you want to stay away from these bad investments. You want to get on public.com investing for those that take it seriously. Do not take it casually. Take it seriously. They got multi-ass investing. I think we're allowed to do that as advice. It's not financial advice. It's not financial advice. We just say take it seriously.

Starting point is 00:51:53 And don't be a casual. Anyway, a woman convinced her best friend, an heiast to the Thompson Reuters Empire. We've, of course, had the CTO of Thompson Reuters on the show. Didn't get to talk to him about this. I need to have him back. I'm back on. To invest tens of millions of dollars into a crypto meme coin created by a psychic. It went to zero, of course.

Starting point is 00:52:13 And this is in the Wall Street Journal magazine. So over a decade, Taylor Thompson and Ashley Richardson were inseparable. A fight over money destroyed at all. oh my god said taylor thompson clapping her eyes on ashley richardson for the first time you have those fabulous heroin chic arms in 2009 both women were lounging in the backyard of a malibu home of bow st clair a film producer and mutual friend richardson wearing a muscle tea over her bikini over her bikini uh bashed in the sun muscle tea like uh like a like a like a stringer you know okay kind of like that gold gym enthusiast I literally don't know the name for the non-bodybuilding version, but it's like a tank top, a tank top.

Starting point is 00:52:56 A tank. A tank. Yeah, tank top. Richardson wearing a mussel see over a bikini bass in the Seymal Thompson sat carefully covered in a flowy outfit and hat. Her then 10-year-old daughter clutched a hot pink mini Burkin. Richardson, a lanky six-foot-tall blonde was a free spirit who went on to build a career designing social media campaigns for companies like Ford Motors and McDonald's. Thompson was an heiress to Canada's wealthiest family, an eccentric with a self-deprecating sense of humor. she went to dinners and party with parties with wild hair and drapey distress clothes by California designer Rick Owens. Give it up for Rick.

Starting point is 00:53:28 She was a subversive secret billionaire, says one mutual friend. But a few crucial commonalities, assured silliness, the love for animals, and a deep spirituality drew them together. Thompson liked that Richardson had spent five years in India working with a spiritual leader named Amma, the so-called Hugging Saint. Richardson bonded with Thompson's daughter, whom she recalls as precocious and a quirky, little being. Taylor is holly go lightly adventurous bohemian spirits, says Richardson. She has this big, beautiful heart when she lets her guard down. Both women have ADHD, she adds. Because of that, I think we got each other. Richardson soon became part of a small Los Angeles friend group that Thompson called her in her sanctum. Whenever Thompson would land in L.A., says Richardson, her phone would

Starting point is 00:54:12 blow up. The women, often with Richardson's girlfriend, would order no-bu takeout and pair it with tequila at Thompson's beach house. Richardson made Sunday dinners and frittatas at the Arras's Ballard Mansion. When Thompson had staffed there, her assistance chopped onions. When she didn't, Thompson was the first to do the dishes, and Richardson taught Thompson's eager than teenage where... Daughter, how to roast potatoes for New Year's Eve. They planned a menu that included chocolates and truffles, also an onion to chop for caviar, reminded Thompson in a text message at the time. I can see the problem here already. They were not doing enough data analysis on Julius. Julius could have changed everything in this equation. Totally. What analysis do you want

Starting point is 00:54:57 to run? Chat with your data, get expert level insights in seconds. The story would have ended here if they were running. Yeah. If they were running their life. Yeah. If they just become data analysts powered by Julius. But instead, we're forced to continue here. Over the next decade, the friends traveled to Italy and London, bought the same via life, vegan, feda, and stocked up on right-age. hand cream. This is very random. Richardson remembers the insanely unhinged article.

Starting point is 00:55:25 Remembers the duo peeing in the bushes at a Rolling Stones concert. It was Thompson's first ever. What is this writing? I can't even read this out loud. We got to get to the part where they start slang and checks. Okay.

Starting point is 00:55:38 Let's scroll down. Richardson had grown up in an affluent part of Monterey County, California, where she attended Elite Prep School and was skiing by age two. There we go. It's crazy. Wilson's wealth was a different ballpark.

Starting point is 00:55:49 We would go somewhere for a few days and she'd be buying houses like other people buy mugs. Though there was a lot of it, money didn't interfere with their relationship. The reason we'd be friends because there was no financial connection. Richardson could be defensive about the way people used Thompson at the freeze art fair in London. Richardson recalls attendees descending on the heiress. People know who she is and that she will drop millions, says Richardson. It was nauseating. There was one time, there were then there were one-time friends who Thompson later assumed were reusing her for her

Starting point is 00:56:17 money, she had a nickname for them, taker. Don't be a taker. Now, the relationship between Thompson 66 and Richardson 47 has exploded into an epic battle that landed the pair in court, but this time the billionaire is accusing her one-time best friend of doing the taking. The story is based on interviews, blah, blah, blah, blah, what went so wrong. Okay, by the time Thompson met Richardson, the heiress had spent decades trying to prove herself to her family for the Thompson's control of the empire passed down the male line, according to people familiar with the family. Taylor, The middle child and only girl felt less favored than her two brothers and her efforts to forge her own path led to occasional periods of estrangement. But much of the tension with her brothers revolved around money, Thompson family in 2024 was the world's 10th richest.

Starting point is 00:57:02 Wow. Give it up for the Tomp. Let's hit the gong for the Thompson family. There we go. 10th Riches family, according to Bloomberg and Taylor wanted equal access. The family holding company Woodbridge owns a majority stake in media and technology company Thompson Roy. Her older brother David is the chair of both companies. Thompson pursued a career in acting,

Starting point is 00:57:21 training at the American Repertory Theater in Cambridge. She performed with Shakespearean theater companies in Massachusetts in Los Angeles and had roles in the TV show Matrix, a Canadian drama for ever night about a vampire working as a detective. That's very cool. Big into TV, maybe you should go. No, no, I'm not big into TV. I'm a cinephile.

Starting point is 00:57:43 Thompson often suspected people were trying to use her for her money, according to people that know her. She insisted that those around her signed non-disclosure agreements from assistance to an ex-boyfriend of her then 20-year-old daughter, and she could get aggressive if she thought those terms were breached. Thompson even hired an infamous Hollywood private investigator, Anthony Pelicano, to spy on her former nanny who she's suspected of sharing personal information

Starting point is 00:58:06 with her daughter's father during a custody battle. I want you to do whatever you can to get information on Pamela, said Thompson to Pelicano on a recorded call played during Pelicanos 2008 wiretapping trial after which he was convicted. Just get it. I'm not going to ask questions. Crazy. By the fall of 2015, Thompson and Richardson's friend, St. Clair,

Starting point is 00:58:26 were losing their battle with ovarian cancer. Her closest friend surrounded her in her final months. Richardson and her partner at the time had weekend slumber parties at St. Clair's ranch home, St. Clair's producing partner, Pierce Brosnan, then came by. Wow. Thompson decorated for Christmas with Dr. Sue's original green sketches from her personal collection. Okay, we've got to get to the crypto stuff.

Starting point is 00:58:45 There's some crazy stuff in here. Let's just keep scrolling. Keep scrolling. Keep scrolling. Thompson's poxed that this is all false, blah, blah, blah. Then the pandemic. Richardson's work was drying up in a fit of anxiety. She Googled a burning question.

Starting point is 00:59:01 Had anyone predicted any of this? She stumbled upon Michelle White Dove, a celebrity psychic. She dropped $25 a month for White Dove's newsletter, then largely ignored it until the spring of 2021, when she noticed the psychic had recommended a new crypto token. Persistence, White Dev wrote. This is another dark horse that's going to come up on everybody and be a big dog. Get it and sit on it, which is what I would tell myself.

Starting point is 00:59:27 The value of persistence's token called XPRT quadrupled from less than $3 in April to as high as $13 by the next month. That summer, Richardson brought up White Dev's predictions to her friend. What is the link to that website of the channeler Thompson Textage? she followed up with Robert Sabella, an astrologer and intuitive, she regularly consulted. Combining astrology and crypto is so good. It's a magic in heaven. Absolutely. More do you need? An intuitive, she regularly consulted for advice, both personal and financial. Once, when Thompson tried a Xanax after a panic attack, she asked Sabella for his thought. He replied, I'm getting that Xanax is not good for you right now. Stop taking it and find another, I mean, fair advice. Fair advice. He also. wait in on her investment. No glazing there. Those answers, I promised you.

Starting point is 01:00:18 He said, but other coins show promise. Ada has a very high reading on it, attend. Persistence does as well, even higher. Oh, no. And so they're using the astrology readings for as financial advice. So with Richardson's help, Thompson invested more than $40 million in messages after the initial purchase. Richardson cheered persistence's early success, but at times she pushed back at Thompson's requests, including when she suggested buying 60 million of the token. Are you sure you want 60?

Starting point is 01:00:50 I will try. Still think you should diversify. Richardson wrote her. That same day, Thompson and told Richardson that she would seek access to what she viewed as her share of the family money. I'm going to write to my brothers directly. David and Peter Thompson wrote, as you know, as I know you both are more than aware, our family branch, Thompson and her daughter. Thompson and her has been completely locked out of any voice of control of stewarding our future financial wealth. She acknowledged having always been one for riskier investments than the rest of the family, but said she had been exposed to valuable opportunities like crypto. She accused her brothers of discrimination, the 2020 infrastructure around my family branch,

Starting point is 01:01:39 and the inherent restrictive compliance, which was put into place, completely removed any opportunity of me stewarding meaningful investments. To be blunt, it is no longer acceptable. For the next several months, Richardson spent as many 20 hours as many as 20 hours a day hunched over her laptop research and cryptocurrencies and executing trades for Thompson. Richardson says Thompson provided instructions over daily hours long phone calls and messages. They just become a hedge fund. They're just day trading. This is crazy. Richardson, they get into physical custody. Look, Richardson stored physical wallets like USB-like devices holding millions in crypto around her home, including at one point in her then

Starting point is 01:02:19 partner's underwear drawer. Richardson, whom Thompson didn't pay and who has no financial background, says that moving that money was exhilarating and stressful and then debilitatingly scary. So at this point, they're managing $140 million in crypto based off of astrology. I looked up the chart for XPRT, the one they tried to put $40 or $60 million into. at the time that they were investing in it was about I guess $3. Okay. Now it's sitting at less than $0.3.

Starting point is 01:02:52 Less than $0.3. Wow, that is like a complete and total loss. Like, wow, they had $140 million. They probably walked away with like $140,000. That's really bad. Today, Richardson is driving an Uber up and down California Central Coast, a job she took to make ends meet.

Starting point is 01:03:10 I had this charm, magnificent life. She sounds ejected and wistful. Her life wasn't charmed because of Thompson, she now says, but in spite of her, she had a lively community of friends in Los Angeles, a partner she loved in a thriving career. There were dinners and parties, she says, a chosen family that included Thompson and her daughter. I don't look at them and say bad people. I look at them and say, this is the catastrophe of having money. Now she lives in her childhood home in Monterey County. A private investigator's unannounced visits to the home of her mother and stepsister this August has led her to worry for her family.

Starting point is 01:03:42 Said, I was hired by Taylor Thompson, says Richard's mother of the woman, a former FBI agent who now works for the consulting group Guidepost Solutions. Richardson has applied for food stamps. She can't afford paid medication for her dog Jasper. She is buried in legal work. Wow. This story has been a disaster. She lost more than $80 million in crypto associated with Richardson's involvement.

Starting point is 01:04:05 Thompson did. Asked about the private investigator, a Thompson spokesman said. guidepost with making continued efforts to recoup the tens of millions of dollars from of mrs thompson's monday under miss richardson's control because of course um uh any one of those thumb drives could still have like a bunch of bitcoin on it that you like forgot to sell or trade into something else and so uh whenever a crypto deal happens there's always a lot of like exhaust nonsense nonsense going on uh persistence apparently rewarded richardson by giving her a secret kickback of seven $183,702 worth of XPRT, the lawsuit alleged.

Starting point is 01:04:44 So they were like, you're bringing us a whale, will kick you back something, which is not good. And you need to disclose that, obviously, if you're getting commissions or something like that. You're not acting as a fiduciary. You're also not licensed or trained or, you know, have any reason to be doing this. But what a mess.

Starting point is 01:05:02 Yeah. The lesson is clear. Would have hoped there was a white pill in here, but I think it's just total disaster. Total disaster. Should have gone long tea bells instead. Wow. Friend of the show just texted me something very funny about the story that I cannot read off without completely doxing someone.

Starting point is 01:05:24 Doxing him. But this goes deeper than we thought. Okay. But anyways, let's move on to the next story. This was a total black pill. But anyways, if the, I guess, moral of the story, don't day trade crypto, don't day trade your friends crypto based on your astrological readings. Yes.

Starting point is 01:05:49 And yeah, just stick to betting on horses. Trust the experts, really. Go down to the track. I mean, it seems like stick to real estate. Like, you know, if she was known for just like buying houses on a whim, and that seems like kind of ridiculous and silly. You can overpay for something, but hard to. I bet almost all of those have been, yeah, very, have done very well even since the real estate market's been booming.

Starting point is 01:06:12 Anyway, Pavel Asperuhov, a friend of the show, says Travis, Travis Kalanix, corporate catering services is insanely good. This is a brilliant, by the way. Faux Chipotle is better than Chipotle. Delivery is the exact same time every day without fail. Cheaper than competition. TK is a beast, man. I mean, we got to get on this. This would change. This would fix us. This would fix us.

Starting point is 01:06:34 This could be the thing that gets us from 100K to a million. Devastating for many technology brothers out there that used to be able to rely on Yes. On a whole life quality meal. Yes. And it has just gone down the train. You know, the problem is with Cloud Kitchens, not very good name recognition very much under the radar. They need to get, Travis needs to get.

Starting point is 01:07:02 Travis needs to get on profound. He needs to get his brand mentioned in Chachapit. He could reach millions of customers who are now using AI to discover new products and brands. We've got to try this out. There's another post from Polymarket in here. Breaking Bitcoin is now predicted to crash

Starting point is 01:07:18 below $100,000 this year, 67% chance before 2026. Currently, I mean, Bitcoin's 110. I remember this viral video of like, Bitcoin's goes up and then it crashes down to $100 and then it crashes down to $1,000 and it crashes down to $10,000. And then it crashes down to $100,000.

Starting point is 01:07:42 It's like we're kind of using like silly terms for like what is like a pretty remarkable rise over a very long time. Yeah. Anyway, I'll leave it to my straw or juror to decide whether or not it should buy or sell Bitcoin. Just kidding. Not today. Nick here has an exas a very funny post.

Starting point is 01:08:01 there was a new Google image generation product released today. It's very cheap. It's very good. And Nick is always taking advantage of the moment to post a funny picture of Sam. He loves it. But this is a good meme for that. Where did he get this? From Sun Valley or something?

Starting point is 01:08:21 Yeah. He went deep in the... In the archives. Yeah. Some paparazzi uploads a bunch of photos, and Nick finds the most ridiculous one. But it is interesting to see the cost of these different models. You know, if you're doing high volume image generation,

Starting point is 01:08:38 probably makes sense to check out Google's offering. And we will have Logan joining two today. Talk about the release, state-of-the-art image generation editing, incredible character, consistency, lightning fast. Very fun. Available in AI Studio and the Gemini API today. Fantastic. In other news, Alex Wang has unblocked Yaxine.

Starting point is 01:08:59 this is shaking up the timeline. Maybe we need a trading card unblocked. Unblocked. It is huge news in the tech world. So, there's big things you're going to come from that. Can someone tell Alex Wang to unblock me? The reason I was being annoying was because of the whole

Starting point is 01:09:17 M-E-I thing, because the whole M-E-I thing was sensitive to me. But now that Zuckerberg crowned him the king of AI, I actually think it's really bad for my career that he doesn't like me. And so, and so. We got to get a yesine up. We've got to get it back on the show. Yeah. So Bone GBT messages Alex Wang and says,

Starting point is 01:09:36 please unblock Yaxine. He's very sorry. Thank you for your attention to this matter. And Alex Wang says, unblocked. L.O.O.O. I love it. And Bone says, you must send a raven to ruin for me. What I mean that means.

Starting point is 01:09:51 Good post here from High Yield, Harry. Do we have the video? We have to pull up the video. In the meantime, let me tell you about numeral. sales tax on autopilot, spend less than five minutes per month on sales tax compliance. Go to numeralhq.com. And I got the video here. It is in the timeline team.

Starting point is 01:10:10 This is, of course, Mike O'Hern, the famed bodybuilder and known for memes and video reactions around the internet. And here he is. We need the audio too. Are you following generally accepted accounting principles? Giga Chad. I'm just smiling. I just look good. What are you asking me?

Starting point is 01:10:40 I don't care. Just look at the chart. Yeah. Just look. It's fine. It's all good. Stop asking me questions. Yeah, this guy is just born for the internet.

Starting point is 01:10:51 Absolutely fantastic. Anyway, in other news, Mark Zuckerberg gifted noise canceling headphones to his Palo Alto neighbors because of the non-stop construction around his 11 homes. So thoughtful. This is awesome. Chris Bakke says this is a very. funny. I'm deeply sorry I've been jackhammering the concrete of my old wave pool to build a new

Starting point is 01:11:08 wave pool for the last few years at my 120 million home, which is next to your $18 million home, $18 million home in order to remedy the situation I've gifted you these $199 headphones. Who knows? I think it's a thoughtful gift. I think, yeah, it's the least you can do. It's a thought that counts. He's like, it is the thought that counts. Eventually the jackhammering will end. Hey, I mean, are you, is it time to build or not? Yeah. Throw it on the gauntlet. Yeah. Just say, I mean, if you're angry, about this. Just say it's not time to build. Yeah. Just say you're anti-reindustrialization.

Starting point is 01:11:38 You're anti-growth. Yeah, you're de-grother. You're de-grother. If you're not into growth. Anyway, in other news. This has been, this is the Cadillac is coming to F-1. This is the most important story of the day. This is huge. This is huge.

Starting point is 01:11:52 Sergio Perez is returning to F-1 to drive for the Cadillac team joining the grid in 2026 along with Valtre Botas. This is particularly important. for John, who daily is a Cadillac. I do. Blackwing, much like Zuckerberg. Been waiting.

Starting point is 01:12:09 Does. Yes. Yes. If you want an American-made, if you just have a few, like, you know, requirements in your daily, you want it to be American-made, you want them to have an F-1 team,

Starting point is 01:12:20 you want to have a supercharged V8. Like, there's really only a few cars that fit that. It's not that many. Those basic criteria. You don't have a lot of options. And so it eliminates a lot of other options. Pretty much everything. Yeah.

Starting point is 01:12:31 So you kind of force, forced my hand on that one. Totally. Totally. And the different, uh, Sergio Perez had like this very like serious announcement. And, and Botas just, just posted him in a tuxedo with an American flag. The tuxedo with the American flag is absolutely ripping. Yeah. Looking very sharp. He has a water bottle or something. But it's like, it's a green can of beer or something, but it's like, it's unbranded. It's fascinating. Very interesting stance on the, on the, on the, I have to admit, the first time I saw this picture of Sergio Perez. I thought it was the guy from

Starting point is 01:13:02 Fire Festival. No, I thought it was Billy McFarland. Why did you think that? Billy McFarland looks kind of like that. Don't you think? Interesting. I don't know. Maybe I'm crazy.

Starting point is 01:13:13 Anyway, fin.a.I, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bakeoffs, number one ranking on G2. All eyes on 2026. Their driver lineup is locked in. I can't wait to see an American team. And they're going to be working with Tommy Hilfiger. Oh, really?

Starting point is 01:13:31 And so this team is going to be very. very, very American. Ooh, very fun. Yeah. This is a good opportunity for, you know, Trey was taking shots at Pallenteer, his former employer, because Pallentier sponsors an F1 team. Anderl sponsors a NASCAR event.

Starting point is 01:13:48 This is the chance. If you're a reindustrialized company, if you're an American dynamism company, getting your logo on the Cadillac F1 car feels extremely high ROI. Yeah. It's probably not going to price like Red Bull, like Ferrari, but it will certainly get a lot of attention, especially online. And then you'll fill up the top of the leads bucket.

Starting point is 01:14:11 You'll be able to put everyone's information in Adio. It's customer relationship magic. That's right. Adio is the AI Native Sierra Am that builds scales and grows your company from next level. And Nick, the founder of Adio will be joining to talk about their new round later today. I'm excited for that. What else? And we have a post here from Mike Anutia.

Starting point is 01:14:29 he is highlighting an article from Bloomberg, data centers to propel infra securitizations past 110 billion by 2026. We had been joking about data centers crashing the global economy. Was it last week or the week before? Hopefully it doesn't happen, but the tech lash... Someone was saying that Mark Zuckerberg has the ability to crash the economy with how much he's spending on CAPEX.

Starting point is 01:14:58 but I don't know. Yeah, I think that's a Derek Thompson take that the economy is data centers and dialysis. It's kind of an interesting take, but the, I don't know, the data center build out, like, the KAPX numbers are growing, but they're not

Starting point is 01:15:14 10xing yet. I mean, even the most AGI-pilled folks are like, the training runs will increase by three-axis size per year. Like, that's a ton, but we're still early. And, like, all the KAPX numbers are growing, but the cloud bills are growing as well.

Starting point is 01:15:30 Like there are some crazy deals out there, but it's certainly not the size of the mortgage market. Yeah, and the big question is how quickly will these assets depreciate? There's some conservative estimates. There's some very extremely bearish estimates. Bloomberg is reporting the market for securities backed by various digital infrastructure, including data centers could grow by 46% by the end of next year to roughly $115 billion. Data centers account for 61% of the current $79 billion market.

Starting point is 01:15:58 for digital infrastructure securitizations, according to Business Bank of America. Fiber infrastructure makes up another 20% while cell towers are at 18%. The estimate's taken to account both asset-backed securities and commercial mortgage-backed securities. Companies have been developing large data centers to help support demand for AI, and banks as well as private lenders have been competing to underwrite such deals. Meta platforms picked Pacific Investment Management and Blue Al Capital to lead a $29 billion deal for its data center expansion in rural Louisiana. J.P. Morgan Chase and Mitsubishi Financial Group,

Starting point is 01:16:33 meanwhile, are leading a loan of more than $22 billion to support Vantage data centers plan to build a massive data center campus. Investors' concerns about the development of data centers, cloud adoption, and the path of investment in AI have been, sorry, cut off. The four big data center developers in particular,

Starting point is 01:16:58 Microsoft, Alphabet, Amazon, and meta platforms discussed higher cloud business revenues and reiterated plans for capital spending increases. Risk premiums on all three types of digital infrastructure. ABS, data center, fiber, and cell towers have tightened significantly over the past two years. While B of A strategists expect limited spread tightening going forward, they see such securitizations as offering attractive relative value compared to other types of ABS. So. Okay. So there's a post that I found through a Martin Screlli quote tweet. Congratulations again to Martin.

Starting point is 01:17:33 I'm becoming a father. But it starts with this Cuppies Corner Post. Global Crossing is reborn. And it's a picture of Mark Zucker. I got a fever and the only prescription is more data center build out. Microcap, David, says, this is insane. I had no idea. It's this bad.

Starting point is 01:17:49 Shares this post, which leads you to the first shocking revelation, the AI data centers to be built. built in 2025 will suffer 40 billion of annual depreciation while generating somewhere between 15 and 20 billion of revenue. The depreciation is literally twice what the revenue is. Global Crossing was started in 1997, and it's like it's the textbook example of like the dark fiber overbuild. So the main business was a global fiber optic network.

Starting point is 01:18:16 They wanted to sell wholesale bandwidth to telecom companies in the 90s. it completely moaned. The market cap was over $47 billion, around 2000, didn't really have that much profit, but it was like key infrastructure for the new economy. The bubble burst, and they had already spent a lot of money to lay cable, but the demand for bandwidth is far lower than expected.

Starting point is 01:18:39 The company filed for bankruptcy in 2002, and so a lot of people lost a lot of money, and that's what people are, that's what people are meming around. Martin Screlli has a take here. He says, so this assumes $400 billion spent on AI data centers. So much of this math is wrong.

Starting point is 01:18:56 A100s have depreciated 50% after five years, not 10% after three to five. A B200, which will depreciate over eight to 10 years, costs roughly $62,000, 500K for eight. You can produce some amount of human-like intelligence with this machine. Would you pay for around the clock always improving human-level intelligence for 8,000 a year,

Starting point is 01:19:22 $8,000 a year. Chips are a much bigger percent of the cost than implied here. So this breakdown says like it's a third depreciation, a third energy, a third GPUs or something like that, which I think is not quite right. So Screlli's putting it in the truth zone. But obviously it is worthwhile to like reality check the overbuild. You don't want to get over your skis too much. But at the same time, bubbles are important. Bubbles are important. We get a lot of a lot of capacity to build the next thing. Joe Wisenthall hit the timeline at 3 a.m. this morning. Let's hear no.

Starting point is 01:19:59 He wasn't sleeping on 8Sleep, but you can be. Go to 8Sleep.com, get a pod 5 with a five-year warranty, 30-minute risk-free trial, free returns, free shipping. Back in the game. Yeah, what were you doing, Joe? I have to assume 630 East. Okay, he's up early, Brian. So he's just up early, post. And he said, rather than take equity positions, and he's talking about the Intel deal,

Starting point is 01:20:18 Rather than take equity positions in private companies, perhaps the government could confiscate 20% of pre-tax earnings. And then when it comes to control, Congress could pass laws governing corporate behavior. There could be something here. Gregory replied, that is just the beginning. Your scheme could be expanded to confiscate a quarter of any increase in the value of those companies when people sell their share. Oh, okay. Interesting. Another potential play here. Yeah, this is interesting. I think we're getting somewhere.

Starting point is 01:20:54 There was an interesting post here earlier. Dan Premack highlighted that Trump's Pentagon is thinking about taking equity stakes in defense contractors, according to Lutnik. They're going all over. They're fiending. They're in deals mode. Meals mode. Lutnik was on a squat box with Sorkin earlier and what?

Starting point is 01:21:25 Someone, apparently the team put up breaking news of TBPN and Taylor Swift engaged. And somebody quote tweeted Kana, co-wit, never in my life did I think I would find out about Taylor Swift getting engaged via TVPN notification. I mean, she's a bean air and she's a private jet enthusiast, right? What else do you? Why would we not be highlighting that? This is fantastic. She's an incredible entrepreneur, an artist. This is great.

Starting point is 01:21:54 Anyway, should we do this five-span stake in the New York Times, this activist investor? This is kind of interesting. Bloomberg has a story. So the financiers that led a high-profile activist campaign at the New York Times three years ago have now taken a stake in the iconic newspaper via the new investment firm, Five-SPAN partners. New York Times, Mike Isaac.

Starting point is 01:22:16 your favorite activist is back. They missed you guys. Yep. So the activist investment firm started last year by Dylan Haggert and Sarah Coyne has built the position in the Times and is pushing it to use artificial intelligence to expand its subscription base according to a letter. The pair left value. They're just like every VC. Write a check. Hey, you guys should be using AI. I've heard a lot about it. I think there could be something here. AI is a clear tailwind for the New York Times. Our work shows it can more than double the company's long-term revenue and profit potential enhancing growth by reaching broader audiences, converting more readers into paying subscribers and unlocking new lucrative profit pools.

Starting point is 01:22:55 What's the steel man for this? I think that if the New York Times goes AI slot mode, it's very bad. It's a very short-term win. So they're saying we're talking about using it to more, I guess, more efficiently convert non-paying. They're saying. The Times could use AI to broaden its international reach, low-cost text and audio translations. That makes sense.

Starting point is 01:23:20 Develop more dynamic paywalls and optimized pricing. Low-cost video offerings could also boost revenue per user, according to the 5 fan. Yeah, and so AI doesn't necessarily mean LLM's generating text of articles, but translation, nailed, audio, nailed, and already, I don't know why you're laughing. Well, I just, I think it's, I think it's pretty funny to just, we should do this bit with, with, with TB, T.B Nation, where we collectively take a stake in something like a Google and tell them that AI, we think AI is very important. We think it could be good for your business. We'd like you to take this seriously. Yes, yes, yes. Hey, Satya, we're going to take a position, we've taken a position in Microsoft, our whole team. And we want you to take this seriously. The ask, if we're being activist investors in Microsoft, I know the ask. Bring back Clippy. Bring back Clippy.

Starting point is 01:24:18 Clippy. Is Clippy still around? Can you find him anywhere? I think there's some merch out there, but Clippy is not productized. Clippy needs to be. That is a billion dollar IP. It's locked in. Imagine a billboard campaign on adquick.com centering Clippy as the new spokesman for Microsoft.

Starting point is 01:24:37 Out of home advertising made easy and measurable. Say it about the headaches of out of home advertising. Only ad quick combines technology out of home expertise and data to enable efficient seamless ad buying across the book. Clippy should become CEO for a day as like a little stunt. Oh, I like that. Give Sotty the day off. Like Clippy run the show for a day, just one day.

Starting point is 01:24:52 We gotta bring back Clippy. It's so good. It's such good lore. And it's so fun. It's like inoffensive. It's the perfect mascot. Clippy's not really canceled. So we've been joking around about five spans ass, but I think it is, I'm happy to see

Starting point is 01:25:08 that they're not saying, you know, lay off, you know, to... AI will definitely not be able to do the fact-finding that the New York Times does. Like, journalists are particularly good at that. And it requires, like, building a relationship over time, getting someone to share a piece of information that you can then verify. That's really intractable for AI. Yeah. And then even the instantiation, you know, TIL has that line about, like,

Starting point is 01:25:33 like, AI will hurt math people more than right. writers, which is kind of counterintuitive because you'd think that, well, AI is really good at writing. But AI is not actually that great at writing, and you can still clock it when there's the M-Dash. And we saw this. It's not this, that's that. Travis Kelsey Taylor-Swift announcement. Go into Chat-G-G-T-T-T-H. Not just a marriage.

Starting point is 01:25:56 It's a love story. It's a love story. That is full-z-old. What's probably, the problem is, like, people do write like that every once a while. But now you just can't, you can't use those. It's not this than that. They hit Chap. You think so?

Starting point is 01:26:07 You're convinced. But on the tinfoil hat, George, if you're going to make that strong. We've got to keep it closer. We do. We need the hat rack over there. A representative from San Francisco-based five span declined to comment. That's the most boring line I could possibly read this article. Today, we believe AI represents transformation opportunity.

Starting point is 01:26:23 There is something interesting here about instantiating low-cost video. So the New York Times will occasionally take a story if it's really big and turn it into a video, like a video essay. And they could probably do that for more content where they take the video. or they take the facts that have been found by human and the writing that's been found by human and then use an AI voice and then use AI to select different stock imagery or generate images. So five Spanish and they could slop it up. Yeah, they would be slopping it up, but it would probably be like value additive to just like get the stuff.

Starting point is 01:26:56 You know what they should do? They should do the Clively strategy. You should take a position in the New York Times and be like, you need 500,000 clippers. You need to just be clipping everything. You just need to clip it all over. This is the thing. Maybe that's the strategy for Clippy. Clippy will clip your content.

Starting point is 01:27:13 Clippers. So you do a campaign for Clippy and then you have Wop, clip it all over TikTok, and then you buy TikTok. Anyway, we went through the family stuff. Let's go to this gentleman over at Waymo, Ethan. I love the Waymo team posting. Everyone in Google feels like they're getting more comfortable on the timeline right now. I don't know if they're just emboldened, but they were cooking now they're posting.

Starting point is 01:27:41 Exactly. They've been sort of building in silence, but now they're getting out there. So there's a video of Waymo on the 101, driving from San Francisco to San Mateo, rider only, doesn't touch the steering wheel. Very impressive. Congratulations to the team. And Ethan at Waymo says, multiple sensors together is a fool's errand. What do you do when the sensors disagree? Surely no one has solved that. Anyway, here's one of our freeway, that don't count in our one million plus fully autonomous paid rides per month because freeways are for employees only for now. Interesting that they're not doing freeways because the risk

Starting point is 01:28:19 of serious injury is much higher on a freeway because you're going much faster. So Mercedes has done the same thing with their level three autonomous system that only works in like stop and go traffic I think or like under 40 miles an hour because with the modern seatbelts and airbags like it's really, really hard to get into a serious, serious, like, injury accident if you're just going 35 miles an hour. So the Waymos can kind of drive around. It's much lower stakes. But they're testing it, and they're going to be bringing them onto the three ways. Yeah, that's a cool video. So congrats to everyone over there. On the COGS debate, Tane shared a chart of marginal differences, AI startup's recent gross margins. This is where high yield Harry pulled that video of

Starting point is 01:28:59 Michael. Mike O'Hern, for sure. So Anthropics at 60%, perplexities at 60%, open AIs at 50% gross margins, stackblicks at 40, lovable at 35, and replet at 23. And there's an important note here. Perplexity, replet, lovable, and stackblits do not incorporate the cost of running AI models for non-paying users and calculations while Open AI does. Anthropics, oh, anthropics accounting couldn't be learned. Interesting, so that's what I mean. Which I think is fair.

Starting point is 01:29:32 They don't need to, I mean, it's not Anthropics. job to tell journalists what their approach to accounting. Well, you know what? We have the perfect guest to talk about building a business without burning a ton of cash because we have Wade Foster from Zapier, Zapier, here in studio. You know, you were in my YC batch in 2012 and I called it, what did I call it? I called it Zapier like a rapier for a long time. And then, and then people, were telling me that's wrong. And so I started calling Zapier and then I learned that was wrong. But it's zapier like snappier, right? Yeah, Zapier. It's funny. Snapier was actually what we called it first. Oh, no way. Yeah, we had to switch to Zapier because there was, you know, copyright issues.

Starting point is 01:30:21 Oh, of course, of course. And of course it was one snapier with one P. And so we just doubled down on the mistake. Okay. It went Zapier with one P as well too. Well, it certainly hasn't heard the business. You've been on an absolute tear. We've enjoyed talking to your co-founder a ton about RKGI and that stuff, but we'd love to get just into the rest of your world and what's going on with the business. And do you have any advice for current generation startups who are maybe playing it a little bit fast and loose with the accounting? Did you ever have gross margin problems?

Starting point is 01:30:51 Was there ever a moment where you were like, okay, like we have customers that are actually making so many calls to our APIs that we're losing money on them? Or was that just never an issue? We became profitable in 2014. So basically two years in and when we raised the yeah when we raised our seed round at a YC Yeah. We said hey, we want this to be the last money we ever get. And so I like looked at every expense on our P&L and approved everything and was just like vigilant about not spending money if we didn't have to.

Starting point is 01:31:28 And yeah, I think in 2010. Like that decade, we were looked like as crazy. Totally. And now it's very trendy. Like, in fact, I heard this term popularized out, like six months ago, seed strapping. Seed strapping. Or it's like, yeah, one round and then, you know, don't raise more. Okay.

Starting point is 01:31:45 So did you believe it? No, that's what we did. Yeah. Did you believe it at the time? Were there specific entrepreneurs that you were looking to as like mentors? Like, where did that idea even come from? Because the meme in Silicon Valley at the time was much more on the, on the Reed Hoffman, Blitz scaling, raise a ton of money.

Starting point is 01:32:02 And every venture capitalist would echo that because they want to put dollars to work. And so there was definitely like a mood in Silicon Valley of like, hey, it's more than okay to raise an A, B, C, D, burn, burn, burn, win, win, win. Like, did you believe that when you said it or did it come from somewhere? Like, talk to me about the thinking at the time. We had two examples. So we founded the company in central Missouri. All three of us worked at Veterans United. This is a company owned by two brothers, 50-50.

Starting point is 01:32:31 They never raised a dime. I was employee 500, and when I left 10 months later, there was 1,000 employees there. So this company scaling like crazy with mortgages during the financial crisis. Wow. And so we see that and are like, well, clearly you can build a successful company this way. Then one of our favorite products, MailChimp, they were one of like our earliest partners that was most successful, entirely bootstrapped. And then coming from the Midwest, we're just we just don't know anything about like, this Silicon Valley world for how to build companies. Yeah. Yeah. And so it kind of makes us skeptical

Starting point is 01:33:07 of any time, you know, venture capitalist is, yeah, I remember one said, no important company has ever been built this way. And, you know, when you make grandiose statements like that, and you have counterfactuals, you're just like, well, what other advice are they saying that might just be wrong? Yeah. And it doesn't mean that all the advice is wrong, but I think we just ran it through a thicker filter than most people who are like, well, I guess we're going to raise an A and a B and a C. But I think it's important. It doesn't, my read and I guess what I've heard over the years is it's not like you said, we will never raise another dollar. It was more so we we hope to just make a great business and not be forced to. And I think the issue when I hear people talking about seed strapping,

Starting point is 01:33:53 it's like seed strapping, I don't know if it's like the right goal. It can be something that you hope to be able to achieve. But if you're raising a $5 million round and you're telling everybody, oh, yeah, we don't want to raise more money, it's just like not the right, oftentimes not the right thing to be fixated on. It's like, be fixated on like, we want to use this money to find a really sound business model that will allow us to scale efficiently and we will tap capital markets as needed is like a better goal than, oh, we just don't want to raise more money. And because I usually feel like that comes from founders that are like, you may as well just say, I don't want to dilute myself anymore. And that's not necessarily the right thing. Because ultimately,

Starting point is 01:34:33 if you want to create value, you should just make the share price go up. And like, there's some companies that need to dilute a lot in order to create more value. I think the exercise to go through is to look at your growth and really understand where is there a bottleneck in your business. What is the long pole in the tent that is holding you back from achieving your goal? And every time we did that exercise, we came back with an answer that wasn't more money. It was management horsepower or, you know, we need this particular feature to go launch, which we can go build. Like there was just other things that were the thing to go address to help us grow faster. And the place where I see folks making mistakes is they get caught up in the noise.

Starting point is 01:35:22 and the logic will be like, well, so-and-so raised a lot of money, or what if something, what if this happens, or what if that happens, which are not actually grounded in factual truths of reality. What you do know is this is where my company is. This is what it'll take to get there. And if my bottleneck is money, great, go get money. But if the model neck is something else, you as the CEO, like, it's incumbent upon you to spend time on the most important thing instead of go chase another thing that actually is not the most important thing. And so that's kind of how we always thought about it.

Starting point is 01:35:54 And, you know, I think it raising more money never was the most important thing. And so we spent our time differently. Was there ever a moment where you blinked like, you know, halfway in or a few years past being profitable where you were like, oh, like this idea, maybe it's worth, you know, dipping in, raising some money getting back on the train? Or was it just like, okay, now we've been going for a few years. We're good. Well, once you get it going, it actually gets harder to want to raise more money because you start to look at your growth rate and going, you know what? Like, why would I raise at this valuation when I can just wait six months?

Starting point is 01:36:31 Yeah. And, And, you know, my revenue will be up by 50% or 100%. Like the valuation just never makes much sense. Now, obviously, and this is, I think, why you see a lot of like really runaway valuations right now because the founder kind of just looks at the math and says, well, there's no, there's no sense. And so a venture capital has to come in and be like, well, I'll give you a 40x or 80x or 100x to get them to go, well, okay, maybe for that I would do it.

Starting point is 01:37:01 Yeah. Yeah, it's very funny that we're seeing in the market right now, like tough margin stuff, crazy burns, crazy valuations. And then simultaneously, we have another company in the AI space mid-jurney, David Holes that hasn't raised any outside capital and is just growing, growing, growing. And so it's not like it's something unique to the, to the fundamental structure of AI. Like, there is, there's clearly a way to do it without raising an incredible amount of money and yet not, everyone's on that path. Everyone seems to be on the path of like burn, burn, burn, I don't know. Yeah, well,

Starting point is 01:37:35 and I think it depends. You know, like some of the foundation models obviously have huge CAPEX and expenditures. And so that's a different beast. You know, whereas if you're at the application layer, your cost structure obviously looks a lot different.

Starting point is 01:37:47 So, you know, this, this advice, this way of building obviously has to be filtered to your, your context. Yeah. It doesn't make sense for all companies.

Starting point is 01:37:56 Yeah. Was there something about your particular business or where you fit into the, the landscape where you, it wasn't, it wasn't positioned as a product where on, on day, you know, 200, AWS is like, we're competing seriously. Or you had like a million competitors immediately. Like, was it less competitive because of the position in the market and kind of like how you, how you shape the product? I, like, the product felt like, I don't know, somewhere in between.

Starting point is 01:38:31 like a developer tool. It was almost like a new market that felt less competitive, but I don't know what your experience was. It definitely was an odd product. Like we had folks like comment to us like, how exactly did you come up with this idea? And I think partly what made it so defensible

Starting point is 01:38:47 was integrations, middleware is just inherently sloggy. Like there's not a lot of secret hacks to do that. You know, now with AI it's getting easier. But it's still not easy. You still just have to like, you know, just kind of chunk away at this stuff. Like I would put us, plaid, others kind of in this category where it's not actually easy for a big company to just decide, oh, we are going to go compete in this. And most of them just don't have the fortitude to kind of keep chipping away at a bunch of like really boring engineering work. Like they are hiring all these engineers that want to work on more sexy things.

Starting point is 01:39:26 Yeah. Versus chip away at integration code all day, every day. Yeah, now you kind of have like such a platform that you're in, I feel like you're just like a natural beneficiary of the AI wave because you're already plugged into so many customers, so many integration, so many data sources. There's already so many primitives that AI can take advantage of. There's two areas that stand out to me as potentially valuable. I'd love to know which one's more valuable to you. And then if there's a third that I'm not thinking of, let me know. First is just having AI co-pilots help write new integrations, help accelerate your software development,

Starting point is 01:40:05 just do more with the team. I doubt you've done like massive AI layoffs or anything like that, but you're probably being more productive. That's maybe one area that is interesting. And then the other is just AI as a product that can be drawn on in the midst of moving data around. So if I have one connection over here on Zapier, and then I want to have an LLM transform that data and then send it to another integration. That feels like a really, like really amazing use

Starting point is 01:40:30 case. Have those both been equally beneficial? Has one stood out to you as, uh, as particularly greater? Is there something else that I'm nothing you? They're, they're both really valuable for different reasons. Yeah. So the first, this idea of like a co-pilot or text to workflow is really valuable for helping people build new types of workflows. Sure. Inherently, like, these no code workflow editors have a fair amount of configuration involved with them you we always invested a lot in design and making that experience good yep but it's still a lot to configure and copilot just gets closer to how humans think about this stuff most humans are not great systems thinkers they don't break the task down bit by bit by bit and so as a result

Starting point is 01:41:18 a co-pilot can be a really good way to attract folks into the market that may be struggled in the past, but it doesn't fundamentally change the use cases that folks can do, which is where the second one gets really interesting. And I think the this is where we've had some really interesting learnings because we have launched Zapier agents, which is a purely agentic experience, and we have our classic workflow editor where you can now inject AI steps. Yep. Now both have been successful, but the latter has been far more successful. And I think it's because when you look at the And the latter, sorry, to clarify the ladder is, in this case, is workflows with AI steps. Yes, exactly.

Starting point is 01:42:00 And I think the reason why is because agents inherently just don't quite have the reliability yet to get you to solve like sophisticated use cases. Yep. You know, you think about it where it's like, well, if you're asking it to do anything complex, call it like 10 tasks in a row, 20 tasks in a row. But the error rate is 10% every time. well, by the time it, you know, rips through 10 or 20 tasks, like it's messed up on a handful of these things and it's way off and left field. Whereas within a workflow, you can put it in a harness and say, hey, mostly I want this thing to be deterministic throughout all these parts of the steps. But right here, I need to summarize something or I need to analyze the sentiment of this or I need it to

Starting point is 01:42:42 generate an email. And you can put the agent part, the AI part, in the spot where it does. the thing best. And then you wrap it back in, fold it back into a deterministic workflow. And that has opened up a huge amount of uses. We have like a quarter billion, more than a quarter billion tasks that have run through Zapier with AI like that alone. And I think that's the, honestly, I think it's kind of a sleepy category. Yeah, when did, when did you guys realize what a good position you were in here? Because you basically spent before agentic workflows were like a term that people were throwing around every single day. You guys spent a decade basically building out all the really,

Starting point is 01:43:25 really hardcore integrations with hundreds or thousands of different services and getting just simple workflows dialed so that you can just slot in, you know, reasoning or slot in LLMs at different steps. But have you been surprised at how many people are coming in to kind of like compete in this space? because it feels like I've just seen a lot of pitches over the last 12 months that are, I just look at it and be like, okay, this is like, this is Zapier, but just like, you know, pretending that Zapier doesn't exist. But AI first, right? Yeah, yeah, yeah, AI first. And it's like, well, it's Zapier, but you can buy the stock in the private markets.

Starting point is 01:44:08 It's, yeah, it's Zapier, but we're doing a series B. There you go. Zapier, we sell software. We're Zapier, but we sell stock. Yes, exactly. There you go. Yeah, you know, I do think it kind of surprised us that we were as well positioned as we were. You know, we had started to dabble with generative AI a few months before Chat Chapti had come out.

Starting point is 01:44:34 And I had started to see some customers building workflows on our private developer platforms. We have a developer platform where folks can build their own stuff. And so we'd started to see some of that happen. And as the models advanced, in particular when GPT4 came out, we were like very unsure if workflow was durable. Like we started to think like actually this like pure agentic experience is probably going to be the future. Now, I still actually believe that it will be the future. I just don't think it's going to get there as fast as we think it will. Yeah.

Starting point is 01:45:14 And, you know, over the course of the next year, we just kept seeing agent, like, AI use cases on the traditional workflow builder grow and grow and grow and grow. And then we started to realize, huh, like maybe what we need to do with our product roadmap is actually help people surf the wave. Like, help them go from just old school, classic deterministic workflows and move steadily into purely agentic ones and allow them to kind of mix and match these experiences along the way. Talk to, take it back to gross margins for me. How important is offering the full suite of Pareto Frontier models within those deterministic steps? And is there a world where you want to offer even smaller and more focused and cheaper models? We talked to one company that's training transformer-based models, but just for sentiment analysis, just for, for censoring bad words, just for JSON to CSV or something.

Starting point is 01:46:18 Like, stuff that could almost be done deterministically in many cases, but just like you need a little bit of AI there, and they train them on GPUs or on like gaming graphics cards, and they run like super, super cheap. And I'm wondering, like, if you're in a high, if you built out Zappier workflows that are high volume, the cost per inference feels relatively, there and it feels important and I feel like you would have a good insight into like

Starting point is 01:46:45 how some of these like bigger models can kind of blow up on you if you're not careful. Yeah. Well, this is also where it's nice if you can encode your workflow into something that's deterministic. Sure. You get reliability. You get cost advantages. You get speed. You get a lot of things that are really, really nice.

Starting point is 01:47:02 And then, you know, insert AI only where you need it. Now, the way we've thought about this is we really want to abstract as much of this away from the customer as possible. You know, we sell predominantly to folks in GTM orgs and GNA orgs and folks that are not paying attention to the subtle differences between, you know, which model is best for coding, which model is best for writing,

Starting point is 01:47:26 which model is best for this, that, or the other. So we're trying to abstract away a lot of those choices. And that extends into how we price for this stuff as well too. So we wanna make it a little bit more like, you just buy it, we charge you for tasks, doesn't matter if it's an AI task or another task, will just sort of, the math will kind of all work out for you in the end. But I imagine if you were selling for, do you guys have a lot of,

Starting point is 01:47:49 do you guys have a lot of learnings from like pricing on, on pricing based on outcomes versus traditional SaaS? Because that's, again, so many of the ideas that VCs have gotten excited about with agenetic workflows and just agents broadly. I feel like our ideas that you guys have explored. You've basically always been consumption based, correct? We've always been consumption-based. consumption base.

Starting point is 01:48:12 Yeah. And I think the challenge that we have seen. And the other, and sorry to interrupt, but the other way to look at that is like, uh, uh, you've been pricing based on work done. Yeah. Is,

Starting point is 01:48:23 is like the, the sexier way to describe that at least. It is. It is. Uh, we do a task. Like you pay for tasks. Yeah.

Starting point is 01:48:30 And I think the challenge that exists for horizontal products is the way in which folks use the software. They, they get variable. value from it. And high usage doesn't necessarily correlate with high value and low usage doesn't necessarily correlate with low value. And so that's where, you know, if you're building horizontal usage-based software, you run into a trap where you're like, hmm, how, like, where along this spectrum are we going

Starting point is 01:49:04 to price? Are we going to pick one credit system where everything is going to cost one? and we're trying to figure out, well, is it a premium thing or is it a more commoditized thing? Or do we risk making our pricing more complex and start to say, we're going to have a credit system that's tied to different value? But now your customer is having to a bunch of different calculations in their head figuring this out. This is where I think vertical agents have an advantage right now, where they can say, hey, we are hyper-fixated on one use case. And as a result, we can maximize the value that we are going to sell for. We're going to say, hey, if you're in customer support, we're going to charge you if we close the ticket.

Starting point is 01:49:45 And you can do very direct math to say, well, today I have a support rep that I got to pay this much money every single year to answer this many tickets. If I can turn that into an agent, they can answer those questions just as well, then I'm willing to pay. This is sort of like the maximum I'm willing to pay for this. So that's where these vertical software do have like pricing advantage. as if you're charging horizontal, you have a much trickier challenge because you have so many variable use cases at the end of the day. Yeah. Are there new, uh, new markets that you're noticing open up that are uniquely available to

Starting point is 01:50:20 you because of AI? I think the thing that has surprised me is the certain like more traditional or like industries, have been fairly quick to jump on this. And I think my hypothesis is partially that their use cases are well suited for this. So if you have, if you're working a lot with like PDFs and like paper documentation, the SaaS stack was like kind of tough for you because it had to be structured. And there wasn't tooling that could turn all this like unstructured data into structure data for you. However, LLMs are uniquely.

Starting point is 01:51:06 good at that. And so as a result, these companies have seen seemingly jumped on this stuff pretty quick. The second thing that's been interesting is we've watched particularly media companies be relatively fast at this, which also surprised me. In some ways, I felt like they were faster at it than certain tech companies we've spent time with this. And I have to wonder, like, how much of this is because they saw so much disruption in their business model during the internet craze. that they were like, we are not going to let that happen to us again, whereas technology companies have kind of had it pretty cushy. And so like, yeah, we're doing the AI thing.

Starting point is 01:51:46 It's fun when you're doing the disrupting, but getting disrupted. Yeah, and not so exciting. And so they're like, act two, we're going to be on it this time around. Where do you stand on estimating the impacts of AI on the job market? Because I feel like a decade ago around the time, when you were getting Zapier off the ground, Zapier, sorry, we said it both ways. I'm sure people are saying, like, automating business processes will lead to, with software, will lead to job loss.

Starting point is 01:52:21 Did people say that, I guess, yeah. I mean, people said that with the internet. They said, you're not going to need sales reps anymore. Everybody's just going to be able to go and, you know, you're just going to be able to go to website. And I just, yeah, I'm curious, like. Well, there's two data points that we've been pointing out. One is the Wall Street Journal had an article today saying that new grad unemployment is

Starting point is 01:52:43 not tracking as well as it should, and there might be a real effect of AI driving companies to hire less new grads. But then on the flip side, there was this report that came out that said that, you know, 95% of AI tests at Fortune 500 companies did not make it past the test phase. And so AI as an installation into these large companies is not going as well. So there's kind of evidence on both sides, but I'd love to know what you think. Yeah. You know, when I think about this, my take is that capitalism is largely undefeated. And it's easy for us to spot the disruption.

Starting point is 01:53:29 We can see the jobs that are disappearing easier than it is for us to see the new, opportunities that are being created. Sure. But history will tell us that there is always new jobs created. And this is what we see play out in our customer base. I talked to small businesses over and over where they're like, I, I never could have hired somebody to do this work. And now because I'm doing it with automation, I'm actually getting more done.

Starting point is 01:53:58 I'm generating more revenues. And now I'm reinvesting that. And when they go to reinvest that, yeah, some of it's being invested in AI and more automation, but some of it's being invested in people. So that's kind of where I think this plays out. And the second thing I think will happen is there's this meme that goes around where it's like, well, all these software companies are just going to have crazy high margins now. Like we just don't need that many people. But again, capitalism is undefeated. If someone looks out and sees like, wow, you're generating so much value,

Starting point is 01:54:31 how about I just come in, I'm willing to tolerate. Or if everybody, everybody has high margins and they're like, we should just spend three times as much on user acquisition and just get more scale. Exactly. Exactly. And well, how are you going to get user acquisition? Well, some of that's going to be invested in advertising. Some of that's going to be invested in people. And like, I think at the end of the day, it nets out where, hey, we're all, we're all going to still have jobs. But what jobs we do have, that's where it's going to shift. And I think those reports are kind of telling that story. where new grads, the requirements are shifting. What's needed inside the workforce is changing. And so there's kind of a shift going on there. And that's always what's really challenging in these moments is time, is the skill sets required to be successful.

Starting point is 01:55:16 They're not static. Yeah, what about job creation around the implementation? Like, I'm sure there's been a cottage industry around Zapier for a long time now, people that just help integrate Zapier and companies. And we were talking probably, at the beginning of this year, thinking that what, what an, you know, in the same way, there used to be a big opportunity to just help companies run Google ads or help companies run Facebook ads. And there's still opportunities there, but it feels like right now taking Zapier into a company and just saying, like, I'm going to save you guys, you know, $250,000 a year if you pay me $20,000 to, like, set this up properly. It just feels like that is extremely repeatable, and there's so many businesses that,

Starting point is 01:56:02 as for as many that are coming on and using Zapier or other platforms, there's probably a multiple of those that just aren't even fully aware that these tools exist yet or how to implement them. So 100%. We're seeing the rise of the AI automation engineer. We have some of these internally where for our enterprise customers, if you want us to do it for you, we will come do that for you. And to your point, we're seeing this cottage industry starting to blossom.

Starting point is 01:56:27 And it's particularly effective when you can combine that skill set with domain expertise. So if you have somebody in HR who has this capability, they're able to work magic on this. Same thing in legal, finance, marketing, sales. If they have the systems thinking, this ability to break down tasks to use the tools, they're often able to work wonders inside the stack. And it's been pretty exciting because we've, this person has kind of existed for all of all this is who we've served for all of our 15 years. But in the last couple of years, they're starting to get more, um,

Starting point is 01:57:05 credit inside these organizations. They often were like the underappreciated person who just kept all the plumbing working. Um, but now like they're like, yeah, automation engineer. Like I'm making magic happen. Um, can you give me your take on MCP and how it just explain it and how it fits in and is it a tailwind or a headwind and alternative? something that you're just benefiting from immediately.

Starting point is 01:57:30 How does it all fit into your landscape? Yeah. So MCP model context protocol. It's a protocol much like HTTP or rest or something like this that allows, it focuses on agent to agent communication, letting agents talk to each other. I think right now, there's obviously a lot of hype around it, whether it's a tailwind or a headwind or both. You know, we're still figuring it out.

Starting point is 01:57:56 Like I think there's a lot that has to be. to be figured out with the use cases and whatnot. I think the most important thing is to actually get the use cases really dialed in. And the place where we're seeing it be most effective is in like Claude. We're seeing a lot of folks that set up Claude projects. They give it access to various tools. And then they go deploy that tool like an internal tool for their organization. So, for example, if you wanted to create like a sales briefing tool for your sales reps, you might say, hey, I'm going to set up a project.

Starting point is 01:58:35 I'm going to give it a list of a template for how I want the brief to be created. And I'm going to give it access to HubSpot. I'm going to give it access to access to, like, deep research through chatypt or perplexity or something like that. And now my sales reps can just come in and say, hey, I'm talking to, you know, Sam Altman tomorrow. like what do we know about our deal with open AI? And it goes and does deep research. It affects everything you have from your internal CRM. And it generates a brief for you.

Starting point is 01:59:05 So you come in way more prepared. So those types of like internal tools in the past, those are like kind of hard to build. And MCP is like making it really easy for folks to build those kind of like chat style internal tools really effectively. That's the use case that we're seeing pop up most frequently. But I have to imagine that as time goes, on, we're going to see a lot more.

Starting point is 01:59:28 Like, it very much feels like we're in the very early innings. And we haven't, you know, seen these like new user experience paradigms like launched yet or popularized yet. Yeah. Yeah. It always just felt like to me with just the, just on a, on the basis of inference cost, if you're hitting an MCP server a million times, you would rather just have your agent like write an API integration and just go direct to the database for most of those

Starting point is 01:59:54 things, but there's probably specific use cases where it makes sense, especially if you're like dancing around a lot of different points. I think that's, I think you're correct there. Like at the end of the day, there's going to be some use cases where you want, you know, an API call and deterministic code because it's faster, cheaper, more reliable. And then there's other use cases. Yeah, we saw this with chatypte pretty early. It was like, yeah, it's pretty good at math.

Starting point is 02:00:14 It can memorize a lot of math. But like, why not just give it Python? And then it can get the math 100% right. I don't care. I just want the right answer. You don't need to like stunt on me by memorizing. every number of pie. You can just go look that up on Google if you want. Anyway, Jordan... It's fine. That worked out pretty good in the past. Yeah, exactly. Let's stand on the

Starting point is 02:00:34 shoulders of giants as much as possible. Anyway, this was fantastic. Thank you so much for hopping on. We will talk to you soon. Great to chat. Thanks guys. Have a good rest of your day. Cheers, Ray. In the meantime, let me tell you about Bezell. Your Bezell concieres is available now to source you any watch on the planet. Seriously, any watch. You can go to getbezzle.com. And we have Dan Wang in the Restream waiting room coming in to the TVPN Ultradome. is releasing a new book today, I believe. It's already being reviewed. Got to ask him how many pages it has.

Starting point is 02:01:01 Is that the question you want to ask? And hit the gong. Okay, yes, yes, yes. Definitely. What everybody's been waiting to hear, how many pages has your new book? Yes, yes, yes. He's a research fellow at the Hoover Institute. The book is Breakneck China's quest to engineer the future.

Starting point is 02:01:19 I saw a video of him going viral talking about the difference between China's government officials and America's government officials talking about how they have an engineering society. We have a lawyer society who's fascinating. Can't wait to talk to him. So we will bring him in from the rooster room, waiting room. Dan, how are you doing? Welcome to the show. Welcome to the show. Really well, guys. Thanks so much. Big day for you. Huge day. Well, huge day. I get to be on TBPN. This is a nice day indeed. Welcome. Welcome. We've been waiting for this moment. How many pages are in the book? Less than 300. Wow. Less than 300. I think this should be Quick read. Quick read. Quick read. Talk about the background. Was that intentional, by the way?

Starting point is 02:02:02 Were you going for something? Like, could you have written, you know, 700 pages and you want to condense it down? To condense it down? Yeah, I think it's much better to write a book that is that people feel was too short and could have been a lot longer than it is to write a book that everybody feels should have been 100 pages shorter. So that you want to err on that side. Yeah. Yeah. Give me some background on the path to writing the book, the type of research you were doing, what inspired it, and a little bit on your background. I was in China from 2017 to 23, working as a technology analyst, mostly for hedge funds, thinking about semiconductors, clean tech, China and science, trying to figure out what's going on. So I was living in China at the start of the first Trump administration.

Starting point is 02:02:47 I was in Hong Kong, then Beijing, then Shanghai, trying to figure out what China's going to do on Huawei. how it's going to respond on the trade war. And so I ended up living through the first trade war, the trade war that morphed into a tech war that really hurt Huawei. I lived through the entirety of zero COVID, and I was just trying to make sense of all of this experience. I was thinking that, you know, you use these words like socialist, capitalist, neoliberal, democratic, whatever that means to describe the U.S. and China now. These are all words from like the 18th century or something. And let's just come up with a new framework. And that's why I came up with, the engineering state and the lawyerly society.

Starting point is 02:03:26 The lawyerly society. It's a great framework. It really stuck out with me. Remind me where your family comes from within China. It's somewhat far away from Beijing. Is that correct? Yeah. It's in the southwestern periphery named Yunnan.

Starting point is 02:03:41 So it's really far away from Shanghai and Beijing. That's right. And you said that the distance from the government was relevant to the political culture there. and I was wondering if there was a similar dynamic that you saw in the United States. Like, is being in California or Silicon Valley, is there a distance from Washington, D.C. or Mar-Lago or Trump Tower in New York that is at all relevant? Or do you think that that distance from the center of government power unique to the geography of China that your family grew up in? I think I'm an outsider both the U.S. and China.

Starting point is 02:04:23 Well, I'm Canadian, so I'm not exactly American. Sure. Now I'm in Silicon Valley, but I've never quite felt like this is exactly where I'm from. This is exactly where I need to be. And also in China, I didn't grow up in these hyper-competitive Chinese cities like Shanghai or Beijing, where everybody owns a bunch of property. You liquidate one of these properties, and you can send her a kid to UCLA and give her a Mercedes as well. And so I feel like my strength, looking at both countries, as an outsider, not really, you know, buying into everything that D.C. or Silicon Valley thinks about itself.

Starting point is 02:04:58 Yeah. How, how, when you, when you, when you try and define, like, the, the structure of China's government or the United States government, you've obviously coined these terms, the, the engineering and lawyer leases. society. I was looking at data to try and quantify the difference between the Chinese economy and the U.S. economy. And the U.S. has, I think, higher taxes and potentially a higher share of the population working for the government. And I'm wondering if there's this world where you can look at the United States as a socialist country that's trying to be capitalist and China as vice versa. And I wonder if you could like toy with that at all where the U.S. is actually, you know,

Starting point is 02:05:54 like the government is huge. And yet it is the country of like, oh, yes, the government is not involved at all. And in fact, it is extremely involved. Yeah. Well, I think the best line I've heard on this is that the Department of Defense is America's answer to central planning

Starting point is 02:06:08 and the Communist Party is just so big. My view of China is that it is 19, 1950s, Eisenhower, America. Giant manufacturing sector. They're building highways absolutely everywhere. Very little immigration, very traditional gender roles, pretty low taxes, very minimal transfer payments. Eisenhower had more transfer payments because he embraced the New Deal.

Starting point is 02:06:33 But there is a sense in which I think China's the most right-wing country in the world for all of the reasons that I've just outlined. And the U.S. is kind of a capitalist country that's a little bit embarrassed about it. and trying to get to a bit more socialism. Yeah, I heard you mention that, like, imperialism was somehow, like, the final form of capitalism or something like that. Can you explain what you meant by imperialism's relationship to capitalism?

Starting point is 02:06:59 Well, that wasn't me. That was a much balder thinker about Vladimir Lenin. Oh, yeah. You were quoting it, yeah, that's right. I was quoting Lenin. Yeah, that's right. So imperialism, the final stage of capitalism, which is one of his big pamphlets.

Starting point is 02:07:12 I recommend it. Okay. But unpack the thesis there, because I don't immediately understand intuitively the relationship between imperialism and capitalism. Like, what was his argument? And then what's your take on his argument? Yeah. Well, I think maybe we don't need to get too deeply into Marxist thought here. But they have something about class struggle and how the proletariat really needs to rise up because the people at the top have all the resources.

Starting point is 02:07:39 And the capitalists, in order to maintain their capitalist expansion, just have to go overseas and conquer Africa and Asia and Latin America in order to maintain their expansion. That's the idea. Yeah. And then like the white pill of like America avoiding that, like what was the, what was the bull case for American capitalism not devolving into imperialism? Well, imperialism, I think, was a thing of the past when, you know, you really needed a lot of rubber in order to power your cars. And we know, we know. need this natural rubber anymore. You know, we can synthesize it through petroleum. And so I think the U.S. doesn't need to be imperialist. That doesn't mean that it doesn't have any other sorts of

Starting point is 02:08:22 problems, but it hasn't needed to conquer a lot of territory in part because it's built this wonderful structure of alliances that you don't really need to conquer them because the elites kind of do what you already want to do. And I wonder if the Trump administration is still going to value all of that. Yeah. How much do you think Trump is actually inspired by the Chinese approach? Well, every time he talks about his buddy Xi, he compliments Xi for his great head of hair. And this is like something that they talk about pretty often. I've always felt that Trump never said a bad word about his buddy Xi Jinping up until COVID. Trump always kind of hated the Japanese and the Germans more, which were the enemies of the 1980s.

Starting point is 02:09:07 I think there is an aspect in which the U.S. is becoming like China. The U.S. is nationalizing Intel. Intel is now going to be a stay-down enterprise with American characteristics. There's a lot less data probity, I think, with the statistics not being perhaps quite right. There's a lot of interference inside the economic agencies. I think there is more construction, but there is more construction around gilded ballrooms and detention centers. And I just want Trump to take a leave from China and build a lot more mass transit, I'll build a lot more subways in New York where I'm chatting with you from. Build a lot more housing for people.

Starting point is 02:09:46 Let's make Silicon Valley a much more livable mass transit friendly place. Is there any hope for the federal government building anything? Really, I feel like all of that is the domain of the state and local governments. When I think of the roads and the bridges and the high speed rail in California, like that's not a federal project. Should it be? The interstate highway system is a federal project. And that was something really built by Eisenhower.

Starting point is 02:10:12 Sure. Manhattan was a federal project. Apollo was a federal project. There is a lot of local building, that's for sure. A lot of maintenance. A lot of highways need to be built locally. But I think there's no reason for the federal government not to be much more muscular and take over California high-speed rail.

Starting point is 02:10:30 Rather than nationalize intel, let's nationalize California high-speed rail. We'll do a much better job at it. This feels like something that Trump could get on board with, like for sure. You would love to. pop over to Newsom's backyard. He loves building stuff. He's a builder. He's a real estate guy.

Starting point is 02:10:44 What about on the energy side? What do you think America can learn from China's approach to increasing energy production? Well, Trump has this policy of all of the above. And I think China is actually the one that is much more all of the above because they're building most of the world's coal plants still today. They're building all of the wind. They're building all of the solar. So they don't have that much natural gas, but they're building much of everything else, including all the nuclear. So the Trump administration is doing more nuclear now, but they're getting rid of wind projects that are almost completed.

Starting point is 02:11:17 They're not really building much more transmission. I guess they're favoring coal as well. But China is doing all of the clean technology, all of the new stuff, as well as some of the old stuff too. One question I haven't like press freedom in China is just why isn't China? Does the repression of the press in China? reflect a lack of confidence in how good things are over there? Because you'd think if you're, if you're confident about what you're doing, if you're happy, if you're successful, you'd be like there are no skeletons in the closet. Let the press run free. They will by default report positive

Starting point is 02:11:57 things. I think that is a sign of lack of confidence. A communist party is super thin-skinned about any sort of criticism. But I think the other aspect of that is that there are a bunch of engineers. and you've spoken to engineers. They're not really good at talking. They don't even want to talk to any of us, right? So they like to just sit, you know, sit with their projects and design a new bridge or something. Whatever they don't understand, they tend to censor.

Starting point is 02:12:23 And they're also really prickly skinned about any sort of criticism that they have. And so I think that it is a manifestation sometimes of lack of confidence in China system. They're really nervous that any criticism will somehow topple the Communist Party. And then whatever sort of jokes or any sort of humor they don't understand, they simply censor it. And so I think the engineering state is also kind of an explanation for why China has been relatively weak at producing soft power.

Starting point is 02:12:50 It's not like the Koreans. We're all listening to K-pop. We're all watching Squid Game. The Japanese with Nintendo and the Game Boys and Mario Kart. They've been amazing. Chinese have not produced quite that much. What about the Labubo? Labu is the first attempt, I suppose.

Starting point is 02:13:06 I think this is kind of a new thing. But China's been getting richer for nearly five decades now. And this kind of a weird doll is, is that the best they can do? I don't know. Well, TikTok. TikTok would be the other. TikTok feels like it. But even TikTok is, it's not its own cultural power.

Starting point is 02:13:22 It's not its own brand. It's like a bucket that people put different brands into. It's like the hoverboard, the anonymous hoverboard that came. That product was developed in Shenzhen. And it never had a brand around it. It was just five different. front brands on top of a technology that was engineered. I don't know. It was an interesting phenomenon. Yeah, I mean, mostly on TikTok, all I'm watching are short clips of TBPN, not the

Starting point is 02:13:48 Chinese propaganda, right? I'm only watching American propaganda from me. I mean, that is really proof that they're not putting their thumb on the scale. If we have any traction over there. If we have any traction. Have you been surprised to see Elon engaging in lawfare with the apples of the world, the open AIs, feels like, you know, if anybody represented the engineering state in America was Elon, you know, creating these mega projects, massively impactful companies. Even more broadly, just like, it feels like the lawyerly society kind of had organ rejection from having an engineer in the room. That was like, I don't know, if I'm trying to apply your frame of thinking to the Elon Trump, like, there were other people that were successful in

Starting point is 02:14:33 Washington, David Sacks has a law degree, Peter Thiel has a law degree, Keith Rubei has a law degree, Elyle, Jayd. Vance. Elon goes in. He's in the same crew. He's in the PayPal Mafia, and yet he is, you know, ejected pretty quickly. Yeah, I mean, I think this is one of the tragedies of Doge. I feel like we could have had engineers building a really big mega project inside government, as we used to do. We had Robert Moses built a lot of projects in New York, sometimes not very well. We had Hyman Rickover, father of the nuclear Navy, build this giant Navy project powered by nuclear reactors with some ships as well. What did Elon do? Well, he wasn't really trying to build anything inside government who was kind of destructive to a lot of aspects of

Starting point is 02:15:18 government. And I really wish he applied his talents more to like build 30 big nuclear reactors for for the U.S. instead. And that's not what happened. Would those need to be net new projects? Is that a more fertile ground for government projects, as opposed to say, take over Intel, take over the high-speed rail initiative, like take over something? Because it just feels like there's a lot of stuff that's not working, both in the private sector and the public sector. And that seems to be where we focus as a society in America. There's so much that's going wrong.

Starting point is 02:15:50 The government is kind of the lender of last resort that can step in. When I agree with you, I think I like the idea of another Apollo project, another Manhattan project, another project that's like completely new. and no one would underwrite it in the private sector to begin with. Yeah, let's have both. Let's have a functional high-speed rail project out of California. Let's have many more nuclear reactors because I think we had only one new nuclear reactor in something like the last 40 years.

Starting point is 02:16:16 And that's kind of pathetic. I'm talking to you now from New York. New York is trying to fix up Port Authority bus terminal. It's going to take something like five years and $6 billion to make a new bus station. Every mile of subway that New York builds, cost something like $2 billion per mile. This is just the highest costs in the world. And we can't even build something as simple as a public toilet in San Francisco.

Starting point is 02:16:38 And so, you know, we need to get better at every sort of thing. You know, we need to do the public toilets. We need to build the bus stops. We need to build the nuclear reactors. Let's go to the Mars. Yeah, yeah. Is the, is one possible path here, the wolf and sheep's clothing, the engineer with a law degree that they acquired online or something?

Starting point is 02:16:57 They passed the bar in their free time. Can the lawyerly society be hacked in the way that an engineer, my social engineer, a job application or reverse engineer and API and hack a website? Yeah, I want Peter Thiel to hack all of that and be the lawyer that is actually the real engineer. I think that would be great if something like that could happen. But I also feel like the U.S. used to be an engineering state. You know, it built a lot of, in the 19th century, built canal systems, built the train systems. It built a lot of skyscrapers in Manhattan and Chicago. And then in the mid-20th century, we built the highways, we got Apollo, we got Manhattan, we built the Hoover Dam.

Starting point is 02:17:46 You know, the heritage is out there. But right now it feels like we're walking amidst the ruins of a fading industrial civilization. And we need to at least renew this and hopefully build more. Yeah. Trump yesterday said we're going to get along good with China. I hear so many stories about how we're not going to allow their students. We're going to allow, it's very important, 600,000 students. It's very important. Where do you think that's coming from feels like a little bit of a pivot? And do you think there's that much demand on the student side for opportunities at U.S. universities? Yeah, Trump is now the most pro-China member of the White House. And as I said, I think I've always, every time I saw Trump and I was living in Beijing in 2017, 2018, when he was visiting China, he visited the Forbidden Palace once. He's always said nice things about China up until COVID. His real enemies are like the Germans and the Japanese.

Starting point is 02:18:46 That's been long the case. And that's not always going to be true. But a couple of months ago when a journalist asked him, does the U.S. US want so many Chinese students. Trump said, it's our honor to have them. You know, it's our honor to have them. And I think that's a really ringing endorsement of Chinese students. They think there's still a lot of Chinese who are really keen to move to the U.S. They're attracted by some aspect of working without censorship if they're in the arts, if they're working in journalism. They're attracted by some aspect of pluralism. New York is a great place. San Francisco is a great place. They want to come. And I think more American students should also go to China. Take a look at what? what Shanghai is like, take a look at what Shenzhen is like. You know, let's just have more exchange and let's have more mutual curiosity too. I studied abroad in Shanghai in 2016. What do you think?

Starting point is 02:19:39 Within a week of arriving, I decided to stop studying Mandarin, and I was excited to go home. I think that's part of partly because I was born and raised in California and I like clean air and healthy food and things like that, which are not in large supply over there. But I was still shocked. It was overall a cool experience. It was interesting because I was working at an interning for a company that was at a Chinese startup accelerator. And I got to experience how hostile the sort of local market was to external kind of startup players in the ecosystem. You also got paid to be in a promotional film about teaching English, which you weren't doing, right? Yeah, yeah. There's a little like local government fraud. Yeah, yeah, yeah. Can we pull up that clip? Let's, yeah, yeah, yeah, yeah, I think it'll be tough to find.

Starting point is 02:20:35 I still don't, I still don't have it. Yeah, one day Jordan gets paid to go out to some, like, yeah, there was, the official was clearly cooking the books on, like, how much English was being taught. Yeah, there was, there was a, there was a local, some, some state government had, like, really bad test scores, and they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, Which anybody any student in China can become like an English teacher or whatever But anyways, it was a very weird very weird experience it was this was also during the during the election cycle which was just absolutely wild But I'm not surprised now that I think there's like only 800-ish American students currently studying in China Which is just such a wild wildly inverted from from how many Chinese students that we have here

Starting point is 02:21:21 Switching gears, what do you think of, I like the take about like the quantitative nature of Chinese policies, zero COVID, the one child policy. It's very quantitative. My kind of take on the Chinese birth rate decline was that if you can effectively put a gun in someone's face and tell them they can only have one child, you can put a gun in someone's face and tell them that they have to have three children. And so is there actually cause for like nervousness or fear around true population decline? If you are and if you do have the authoritarian playbook in your back pocket and you can just upregulate fertility essentially? I doubt it. I think it is you can stop a lot of births by putting a gun to people's heads. It's much hard. It is really difficult to, you know, coerce some measure. of copulation. How are you going to get to people in bed to put a gun to their head? I think

Starting point is 02:22:27 that's not the best conditions. It's not the best conditions. It's much harder. Is population decline, like overrated, underrated? Is it a serious threat to China in the long term from an economic perspective or population perspective? Yeah, Peter. Overrated in the short. Yeah, Peter Zihon loves to go on and say how cooked. Yeah, yeah, he's been saying that for a long time. But yeah, what were you saying? Overrated in the short term, correctly rated in the long term. I mean, the curve is not that steep right now. The population is really gently declining.

Starting point is 02:23:00 Sure. You don't need a giant population in order to have a semiconductor industry, right? The global population of semiconductors is not that large. And so this is really going to bite something like 20 years from now. But that's still 20 years when, you know, 20 years is a plenty long time. 20 years ago, you know, we were dealing with some sort of a housing bubble and the U.S. bumbling around in Iraq and Afghanistan. 20 years could be a long time, and it could be that China fully deindustrializes

Starting point is 02:23:27 Germany and Japan and maybe even the U.S. over the next 20 years, and that sounds pretty bad. Yeah. What is your frame of thinking around the Chinese semiconductor industry? It feels like they've been investing consistently for decades, never really hit the leading edge, but they've always been there in the conversation. They've never stopped investing. But how do you think about China's place in the competition against TSM, ASML, the rest of the Western semiconductor supply chain? They've never caught up, but they're closer and closer.

Starting point is 02:24:06 And as they get closer and closer, the profits among the leaders are going to shrink because they're going to be outcomputed by China. You've already seen this happen in memory chips, which is simpler. But Micron has been kind of struggling for quite a while. while. Intel struggles have almost everything to do with itself and nothing to do with China, but it could also be that once China gets much better at Foundry, then a lot of orders will shift to SMIC, which might be able to offer a lot of cheaper alternatives. So I don't think that China will catch up to TSM in the next, let's say, 10 years. It might never catch up. China also might never catch up to ASML. But if it is just consistently following behind and it's good enough, you know,

Starting point is 02:24:46 maybe that extra quality level is not worth triple the prices. And that's always been China's success, right? They make 80% as good at half the price, and that's good enough for most people. And once that shifts, then a lot of the leaders stop having profits, too. Are there any moves by the United States in the competition for semiconductors with China

Starting point is 02:25:09 that you would like to see America avoid or you'd like to see America particularly go down on a particular path in terms of the semiconductor competition? I think that America should import a lot more Taiwanese engineers, send them to Arizona, send them to California, wherever it is, and then just bring all of their process knowledge and to manufacture in the US instead. The US hasn't done a great job supporting Micron,

Starting point is 02:25:37 hasn't done a great job supporting Intel. I'm skeptical that nationalizing these companies is really going to be a good solution. But the US has everything it needs to succeed chips. Intel hasn't been good, but Nvidia and Apple could shift a lot more of their orders to, let's say, a better Intel or a better TSM, import a lot of ASML equipment, and then just become a lot better at that. It has a lot more resources and much more capabilities than China does now. Yeah, the yields in Arizona seem particularly good. I'm not sure where I heard it, but someone

Starting point is 02:26:10 was saying that there was the potential of TSM spinning out the Arizona. assets, which I think might be quickly made a meme stock, but certainly would be an exciting development. How do you expect the trade war to resolve between the U.S. and China, just given Trump's more up-to-date messaging around signaling that, you know, we're actually, we actually might be friends after all. Every time it gets close, there's always the chance that it falls apart. And I've seen that the trade deals fell apart several times when I was living through the first trade war in Beijing. And so I want to be optimistic that these two countries come to some sort of agreement so that, you know, we don't have the world's two biggest countries at each other's

Starting point is 02:26:56 throats, two biggest economies at each other's throats. But I'm not really optimistic. Trump is erratic and sometimes he wants to make a deal and sometimes he doesn't. And even if Trump and Xi come to some sort of agreement, I'm not sure if that's really good for the world. What if Trump decides that he's simply going to gift Taiwan to Beijing? I don't think that would be good for the world. And I think there's a lot of European countries and other Asian countries who are really nervous that they do come to some sort of accord. So I don't have a good sense of what is the right move here.

Starting point is 02:27:31 How do you think China is thinking about Taiwan? There's a, I think America comes to the Taiwan conflict. with a very Cold War mindset, a very kinetic warfare mindset, where I've heard more interesting theories around sort of like slowly shifting the population with propaganda and political influence and just creating a more pro-China, Taiwan over time, being very patient might be something that's like more in the direct playbook of China. What's your current thinking on how China would like Taiwan to play out if everything went according to plan over the next decade or so?

Starting point is 02:28:17 China has had this patient strategy for a really long time. And then it's tried to shift the population with propaganda. It was on course to work until they blew it up themselves by being really mean towards Hong Kong. So China promised Hong Kong that it's going to have essentially 50 years of freedom. And it did have about 20 years of freedom. and then he went back on basically Deng Xiaoping's word and they crushed it. And so after that, you saw that the Taiwanese population don't have faith that China would actually respect any of their own wishes.

Starting point is 02:28:50 And so I think what we're thinking about now is I don't think that a kinetic action, a big conflagration in the Pacific is the most likely. I think the most likely path is just some sort of status quo, which to, you know, U.S., Taiwan, China don't really try to do anything big. And if anything, more likely than a kinetic action would be some sort of a blockade to surround Taiwan. And then the U.S. would be in this kind of a tough position to have to be the initiator to break the blockade rather than being the defender of Taiwan. And so I think that is kind of the challenging, politically challenging thing that Beijing would like to put the American position in. Yeah.

Starting point is 02:29:29 Well, hopefully it's resolved peacefully. We'll continue monitoring the situation. Thank you so much for joining the show. Yeah, congrats on the lunch. Congratulations on the launch. Thank you very much. I get our copy. This is fun.

Starting point is 02:29:40 Yeah, we'll talk soon. Have a great day. We'll talk to you. See, again. Bye. The book is Breakneck. You can go and check it out. Dan Way.

Starting point is 02:29:47 Send it right up the charts. Yeah, send it up to the top of the charts. Our next guest is in the re-stream waiting room. We have Nick from Adio. Coming into the studio. Gilles Sharp. What do we got? Fantastic name.

Starting point is 02:30:01 The news. Give us the news. happening. Welcome to the show. Hey guys, how you doing? Great. Uh, late for you, right? Yes, it is. Especially when you are, you've got two toddlers asleep in the house. This is well past bedtime. Yeah, yeah. Well, I know how that goes. And I'm, yeah, I'm glad you were able to always good to get them. It's good to have like a meeting set for, you know, somewhere around bedtime. It's like extra incentives to have bedtime. Yeah. And also dodge the duties of putting them to bed.

Starting point is 02:30:34 So, so good. Thank you. Good, good. Well, big day. Big day. Congrats on the raise. I have the gong mallet here ready. If you can give us the details.

Starting point is 02:30:47 Okay, absolutely. So we are very, very excited to announce our $52 million series B, led by Google Ventures with... Sorry to interrupt. Fantastic. Great down. Give us, I mean, first time on the show, give us kind of the full,

Starting point is 02:31:07 kind of abbreviated, but full history of the company and how you guys got to this point because it hasn't. There's a big milestone, but certainly been at it for a little while now. Yeah, absolutely. No, big, long journey. So, you know, fundamentally what we do

Starting point is 02:31:25 is we build an AI native CRM. And what that means is a very, very flexible data model, allows businesses to mold out here to go to market motion, rather than having to do it the other way around, which has been the way software has worked for a while. And then a massive amount of data ingestion, which gives us all of the context to automate action, essentially. CRM is a big product to build, a very big product to build, and there's not really an MVP of a CRM. It's a big ask for a customer to adopt it. And we've got about five

Starting point is 02:32:01 thousand companies that have now adopted at you but to get there is a lot of engineering and uh so we did three years of of engineering in a you know in the sort of startup desert pre launch um pre launch uh and yeah so we did three years pre launch of just hard engineering grind and uh launched that two years ago incredible um what uh yeah i guess like maybe talk about kind of the influx at what stages kind of where LLM started to really unlock value for customers and where kind of where you had those initial sparks. Because I think like when people, for better or worse, every CRM provider now says that they're AI native. So I also want to understand like what does that actually, what does that actually mean in practice and what kind of advantages do you have as a new player

Starting point is 02:32:56 that hasn't, you know, been in the industry for a couple decades at this point? Yeah, I think fundamentally we have two really big advantages. So one is the quantity and resolution of the data that we ingest and building a data model that can do that. So LLMs work great when they have lots of context, and you need to feed them that context. And so one of the things that, you know, we worked, one of the first things we worked on was this data model and being able to instantly ingest the companies, you know, emails, calendar, product data, et cetera, et cetera. And so that was the bit that really took, you know,

Starting point is 02:33:37 took a long time to build, especially when you need to do it at the scale, you have to do it at for CRM. The other thing that is, is, you know, a big difference between Artio and sort of legacy products is that we think that, well, we have a thesis that code is becoming the new no code. So the idea of no code and these kind of very complex UI

Starting point is 02:34:04 that you have to learn and very steep lining cars, you're not learning how to code, but you're learning something pretty complicated. And especially when you start to hit up against edge cases, et cetera, then the UI has become extremely complicated. And so one of the things that we've engineered into Atio from the offset was the ability to execute code inside of your CRM.

Starting point is 02:34:25 And you think, if you think about, what has made Salesforce successful is this infinite flexibility through very, very complex engineering processes with Apex and a language not many people know and huge amounts of difficulty. But what we do with that here is build in this native code execution very early, and LLMs are brilliant at generating code, especially in these kind of safe, somewhat constrained environments. And so that's another thing that we think is going to, especially you know, as this plays out, it's going to be a really, really big deal.

Starting point is 02:34:59 The idea that software becomes so much more malleable because code is so much easier to generate. How do you think about the right, like where is your focus on the customer side? Again, CRM has so many different applications within different companies. And it's, in the long run, you can serve everyone. But what's the focus been to date in the kind of 5,000 you mentioned? Yeah, so the focus really is, is on what we would consider builders. So people who like to get stuck in to building things,

Starting point is 02:35:33 the rise of the GTM, the go-to-market builder is pretty apparent now. And so about 50% of our customers are tech companies. And even the 50% that aren't tend to be people who really want to get stuck into building something. But as you said, CRM has a huge range. of users and we think deeply about the kind of you know the consumer of the CRM that's the AE the SDR etc all the way through to someone in Rev Ops or you know building out really complex go-to-market motions and so we have to serve all of those customers and you know we focus a lot on making the consumption of the CRM super seamless as well and obviously AI has been

Starting point is 02:36:23 incredible for that, you know, massive reduction in data entry and stuff like that. Talk to us about gross margins. They're in the news with a lot of companies, sort of like just reselling inference. Obviously, your business is very different than that. It doesn't feel like I'm just paying you for tokens or just output. But are there any examples of like customers where you've looked at their usage and you've been like, wow, this person somehow triggered like a million, a million different calls and ran up a big bill. And are there, Are there any lessons that you've learned from just like building an AI product that is on the back of inference and does have real costs that are somewhat variable? Yeah, yeah, absolutely.

Starting point is 02:37:06 And, you know, like all good startups, the sort of approach we took to this initially was, it's not our focus right now. In the last sort of six months, 12 to six months, we've actually made incredible, incredible gains there, and we're in a very, very good place now. And that has been a combination of, I mean, that's a combination of models getting more cost effective and us learning to use them better. But one of the things that we can do, for example, is we can decide at runtime which model is best suited for a task. So I think this is now becoming a relatively mainstream strategy. But if we're digesting an entire cool transcript, we don't need to use the best reasoning model. We can do sort of compaction first on a faster, cheaper model, and then put less tokens into a better reasoning model. And so it's a big engineering effort, but with a combination of all of these techniques,

Starting point is 02:38:09 you know, we have very, very good margins now. The other thing is a lot of the value that the LLM provides is very apparent to the end user. So it's worked done. And that's changing the way that we think about pricing as well. And so, you know, CRM has historically been just a seat-based product, but I think increasingly we'll see that that will change. And, you know, we now have a hybrid pricing model, which is there is a seat-based aspect, and we give sort of very generous automation, automation and sort of AI credits to those seats. But if you want to go really wild and you want to replace a lot of work, then you can buy credit to do that. Yep, that makes sense. Well, congratulations

Starting point is 02:38:54 on the round. Thanks so much for hopping on the show. We will talk to you soon. Have a great rest you now. I'm back on anytime. Yeah. Absolutely. Thank you guys. Yeah, nice to see you. See. Up next, we have Sean from Coinbase joining. I want to get his reaction to this front page news about stable coins. Wall Street calls for stable coin rethink is friction with crypto industry builds. There's a loophole on industry yields apparently. We're going to dig into it. He's in the Restream waiting room and now he's in the TDPN Ultrodome. Welcome to show. How are you doing? Good to see you. Hey guys. I'm doing great. Good to be here with you. The chief business officer. It's a great title. That's the coolest title. That's the best.

Starting point is 02:39:34 Anyway, give us a little of your background and what you're working on. What's the most interesting thing in your world these days? Yeah, first off, congrats on 100K, pump for you guys in under a year. That's huge. You know, we're just trying to keep up with the crypto charts here. Yeah, my background. So like you guys mentioned, I'm chief business officer at Coinbase. I oversee the broader company's strategy, partnerships, MNA investments, and a handful of other things. I actually started out my career wanting to be a brain surgeon. So I studied neuroscience at UCLA, realized late in college that I had a big enlightening moment, which was that I fainted when I first saw that much blood up close.

Starting point is 02:40:19 And I realized like, hey, this isn't going to be the thing for me. I ended up working in strategy consulting. I know you guys have been talking a lot about Intel and semiconductors today. Those were like some of my early clients there. We're doing a lot of due diligence for private equity firms and the like. Were you pounding the table saying go Pure Play Foundry in 2013? You're like, Ben Thompson just wrote about it. We got to implement this.

Starting point is 02:40:43 Yeah, exactly. I don't know if you had the same clout back then. Well, fortunately, you know. Yeah, after the consulting thing, you know, I wanted to get more on the right side of the table in terms of allocating capital. So I worked in venture at a fund called Greycroft. We're actually based down in the arts district, John, down the street. Oh, yeah, I've been to the office. Yeah.

Starting point is 02:41:02 So, yeah, we were early movers there to the east side of L.A. But, yeah, and then I jumped on Coinbase in 2018. Yeah, so take me through the recent history of your work at Coinbase, what you're focused on, what is moving the needle for Coinbase in kind of this next phase. It's obviously a very scaled company. But it's one of the, it has to be one of the largest founder mode financial institutions. now and I'm starting to stop thinking, I'm thinking about it less as like, yeah, it's the place where you buy Bitcoin and more just like it is a financial institution that does a lot of things and potentially we'll do kind of everything in the financial world over the next decade.

Starting point is 02:41:42 And that's been extremely acquisitive. Yes. So yeah, yeah, give us a whirlwind tour. Yeah, totally. I think two primary dimensions. So historically like you mentioned, I think Coinbase has primarily been known as this place where we make it really easy and secure for people to buy and sell crypto assets, right? And people know us for the first party applications, the Coinbase Blue App, which has been great. But we're broadening that out now to support

Starting point is 02:42:08 a wide range of different assets. I think fundamentally it's driven by, we think that all assets are going to get tokenized and be on-chain in some capacity. It just provides better infrastructure for financial transactions. And so we announced pretty recently that, for the first time, Coinbase is gonna be building

Starting point is 02:42:25 what we call the Everything Exchange and supporting things like equities, prediction markets. We opened up through the Coinbase app now that you can trade assets directly on Dexes. So in general, what we see is basically the blurring of these lines between what was off chain and on chain. And we want to make a very simple and seamless user experience for people to access all of these assets that are going to be on chain. So that's, yeah, go ahead. Yeah, yeah. I mean, in general, super on board. I feel like liquidity just lowers cost of capital allows businesses to do more impressive things.

Starting point is 02:43:05 It's good. Obviously, there are areas where I'm particularly thinking of like stocks on chain. There's situations where like I don't know that I'd want someone to be trading shares in my company all the time. So how are you thinking about that market evolving? Obviously, there's a huge benefit to getting access to capital without some of the over, like the the cumbersome nature of the reporting constraints of going public and all the all the different issues with floats and IPOs but how are you thinking about the the path to bringing more assets on chain what's the most logical and then what's further out on like the long long time horizon yeah I think

Starting point is 02:43:50 it starts at the regulatory front and that's where we see like the biggest uphill battle so you know right now it's sort of like in vogue to talk about tokenized stop. And this theme of tokenization, tokenization isn't really anything new. You know, when we co-founded USC in 2018, that was, it's a tokenized dollar, right? Like it is a dollar on a blockchain. And at that time, people were sort of like, what is this thing good for? Yep. But now they realize like, hey, you have all these benefits that are just come with the asset when it's on chain.

Starting point is 02:44:21 So you get programmability, interoperability, global access, all those types of things. So public stocks, this is like the new thing that people are really excited about. And we're really excited about it too. Actually, in 2021, I was helping take the company public through our direct listing. And we actually explored issuing a tokenized version of Coinbase simultaneous with the exchange listed version of coin. And that was always the dream where you could basically have a user that holds the asset on chain.

Starting point is 02:44:53 And if they wanted, they could redeem and hold the asset on NASDAQ or, go vice versa, depending on their preference. And we just ran into a number of different regulatory blockers in 2021, where we realized that wasn't possible. And so I think the regime change in 2025 makes it much more collaborative. There's a very healthy bidirectional conversation that's ongoing around, you know,

Starting point is 02:45:17 what are the rules and requirements for an asset that's traded on chain? Do you need to be, does it need to live in the environment of a broker dealer and a national securities exchange? or does it not. So we're really excited about the regulatory environment progressing with the benefits of the technology. Is there a great argument right now that you've heard for how, like your average American benefits from stable coins? Because I've literally paid people internationally in stable coins. It is amazing. And if they don't have access to dollars otherwise,

Starting point is 02:45:50 like in a high inflation country, I totally get that. But is there a way to contest? intellectualize it for somebody who isn't doing any international business and is an American? Like what are the benefits besides like you know programmability abstractly? Yeah, I would say right now most of the benefits are really cross-border transaction oriented. But like, you know, the one that I think will resonate with a lot of people who are Americans even is, you know, if you're hiring freelancers or contractors around the world, like how do you get them money? Yeah. These are people that you might need for like a one-time job or for like just a few weeks.

Starting point is 02:46:26 It's a lot easier to do that. And we have a partnership with Stripe where Stripe is enabling stable coin payments through USDC on base. And one of Stripes keep customers is Remote.com. And they start to see that this is just a naturally native better way for small startups and founders in the US to pay freelancers regardless of where they are in the world. Do you think that with like the freelancer, are they more just excited about getting dollars? or do they actually care a lot about like the yield that comes from treasuries and all of that?

Starting point is 02:47:00 Because it feels like they're both important, but I have trouble waiting them. Like, what do people care for? One obvious benefit is just getting the money immediately versus having to wait days, potentially 10 days, just get your money, even after the client has hit pay. Yeah. Yeah, I think the thing that has become clear is there is just insatiable demand for U.S. dollars around the world. Like everybody wants US dollars, but it's really difficult to access US dollars. So, John, I think to your first question, the pain point is really, I want dollars or a safe, stable currency.

Starting point is 02:47:38 And then Jordy Deer point, it's like, I want it as quickly as possible in a form factor that I know and I trust. And, you know, we started to see this kind of organically a couple of years ago where a lot of people in Argentina and a lot of other countries were just like natively. finding their way into dollars, stablecoins. And in those countries, you know, we spoke with a lot of customers. And it's normal, right? Like you look for different stores of value, whether that's, you know, buying real estate in the U.S. or gold or Bitcoin. And stable coins are just a natural and more relatable form of store of value for a lot of these people. Yeah. Can you talk about the significance of the Deribit acquisition that you guys just completed? Yeah, we're really excited about it. We just closed it for context.

Starting point is 02:48:24 Deribit is the world's largest crypto options exchange, specifically. They've had about 80% market share in crypto options for the last eight-ish years or so. So kind of like up and down through the various crypto cycles. And in the crypto markets, derivatives are orders of magnitude larger than spot markets. Coinbase kind of grew up and got its foundation its roots in helping people seamlessly go from fiat currency, primarily U.S. dollars and euro and

Starting point is 02:48:57 GDP into crypto. And the derivatives markets have just sort of like ballooned in size. So over the past year, so we've made a big push into the derivatives markets. We have exchanges in the U.S. and internationally that support a handful of products. But Deribate really, for us, brings us market leadership in this options category that we think is going to grow tremendously. It's also a differentiated capability that will basically pull together spot options and futures as different trading products together into one exchange platform. And what that does for users is really two things. One is it creates new trading opportunities. A lot of people will buy spot and short features.

Starting point is 02:49:44 And you can do that now across more instruments just on one place. And then the second thing is it unlocks more cash. capital efficiency. And this is really a key one is whenever you put on... Let's give it up for unlocking capital efficiency. Love to see it. It doesn't get better than that. Yeah. Whenever, as you guys know, it's like, how do I get the most bang for my buck, quite literally, right? So if you can trade across all those different assets, you hold $1 or one crypto asset with Coinbase,

Starting point is 02:50:14 then you basically can get margin and cross margin across all these different products with that $1. So it's just a better trading experience. overall for people who move in size. Very cool. Let's hear for people that move in size. Play the eagle sound. There we go. I love it.

Starting point is 02:50:34 Thank you for coming on. You're always welcome. Yeah, anytime. We'll talk to you soon. And congrats on the new title. Well deserved. Thank you. Well deserved.

Starting point is 02:50:42 Up next. We need to make somebody the chief business officer here. Yeah, it's up for grabs. It's simply too good. Tyler, you're going to take it? You're going to take it? I'll take it. Chief intern officer, the CIO.

Starting point is 02:50:54 CIO, but, you know, any day now, you can get promoted. Anyway, in the Restream waiting room, we have Brian Pellegrino from layer zero. Oh, sorry. No, we have. Okay, sorry, we have a switch. We are. Rylund from Bikas from Reframe, right? There we go.

Starting point is 02:51:13 Sorry. We have the technical difficulties over here. Welcome to the show. Good to meet you. Good to be here. I'm glad you guys have Ryland on, too. We did. old colleague mine.

Starting point is 02:51:22 Oh, no way. That's amazing. From what era? We were both that Kiva and Amazon robotics maybe 10 years ago. That's very cool. Awesome. I had a friend who just got a tour of an Amazon facility. They said like on site, just on this one facility, they had like 10,000 robots or something. And they built the whole facility like six months ago.

Starting point is 02:51:43 They said they're already two versions out of date from like what the next stage of Amazon's build out is. It was like the most impressive tours every time. Anyway, we're not here to talk about Amazon. We're here to talk about you. Take us off with an introduction on yourself of what you do. Wonderful. Well, it's great to be here. I'm Avicasse NT, CEO and co-founder for Reframe Systems. We're on a mission to build climate resilient homes for everyone.

Starting point is 02:52:04 And we're doing this by applying some cutting edge robotics and algorithms with micro factories that we can deploy within a hundred days to build pretty impressive, good-looking homes in neighborhoods all around the country. It's incredible. And the news today? Give it to us. we've raised a $20 million series A super pumped Not as pumped as us

Starting point is 02:52:26 Congratulations Incredible When did you start the company And I guess what was the initial catalyst Yeah We started about three years ago With the pitch deck And the catalyst was as simple as me becoming a dad

Starting point is 02:52:44 My twin daughters are four years old now Oh, you're twins. Yeah, so they were, yeah, the catalyst to kind of take a step back and think about what else I should be doing in my time besides getting boxes to people's doors faster. And I decided I'll get bigger boxes to people's doors that boxes people can live in right now. You're committed to making boxes go faster, basically. That's my superpower. What kind of, what kind of, yeah, I mean, obviously, Reframe is trying to provide a solution for one of the biggest problems

Starting point is 02:53:17 I think, facing our country. How have you thought about kind of narrowing it and focusing, go to market, what markets are important and what does success look like in the early days? Maybe we can go to talk from what the big picture is for us. We want to build a million homes by 2045. That's twice as fast as how long it took DR. Horton, the largest home builder in the U.S. to build a million homes. But the places we're going to be building homes will look vastly different. If you think about where homes are getting built today, they're out and farmlands that have been converted.

Starting point is 02:53:50 They're far away from existing communities. That's the only place you have land available for large-scale optimized builders. We believe that by applying software and robotics, we actually change that equation. We can actually be just as efficient as them, but in infill neighborhoods. How do we actually build 100 units, not in a single lot, but on a bunch of scattered sites in a neighborhood in Palo Alto or a neighborhood out in Somerville or Cambridge, Massachusetts? And we believe that by leveraging software, we actually get to a wall that we defined as mass customization. How do you convert existing building designs to have it be compliant with any site?

Starting point is 02:54:24 But make the marginal cost of this change go down to zero because software is in the loop, robotics is in the loop. And whoever can achieve that end state can get the same efficiencies of a production builder on scadred sites. And we believe that's our path for actually getting and creating the type of housing that people actually want to live in, in neighborhoods people want to live in. ideally at price points that are also significantly better than what's out there today. So we're currently focused in markets that are building homes are over $400 a square foot. So there are markets on the coast, so New England, so we're currently based in Massachusetts.

Starting point is 02:54:56 As part of the series, there will also be launching capacity out in Southern California to help with the LA Wildfire Rebuild. So LA is also a target market. And then we have markets out, so Salt Lake City, Utah and then Denver adjacent, and then Seattle and Washington, D.C. adjacent. would be other markets in the future. How does, is, what is the process to start working with somebody that ultimately wants to buy a home? Are you working with developers that are developing entire neighborhoods or can somebody just go to your website and say, I want one house, please?

Starting point is 02:55:30 Yes, so today we're very focused on working with developers. So it's still a B2B sales motion for us. We believe that the best customer is a repeat customer. And this is that we're trying to build a pretty long-term multi-air pipeline. We have sold to individual customers, but the experience for them doesn't resemble that of a custom home builder. Like, you're still building off of our product portfolio. We will customize our product to meet the site. We're not going to design a ground-up custom building.

Starting point is 02:55:56 And if customers are fine with that. And that's the experiment we're testing out with L.A. Because now we're working with homeowners who've had their previous homes burned down and we're trying to help them rebuild. And we're able to make good progress with customers who realize they're going to get a better product significantly faster working with but they'll have to make some trade-offs on what the product is and what their expectations are. And that's been an education process. And we've actually been surprised that people actually just want limited set of choices. If you can give them choices on things like cabinet colors, a few different arrangements of windows, etc.

Starting point is 02:56:28 They're actually pretty happy with the process versus saying, right, you can only get one color as long as, or any color as long as it's black. I think that doesn't work out here. Doesn't fly in a house. and the whole aspect of mass production doesn't work for construction either, which is why we've had to embrace customization. Yeah, that makes sense. What, do any of these stick out as factors for your business? Self-driving cars, potentially making it easier to people live in farther away suburbs

Starting point is 02:56:58 or just the adoption of technology in cities, you can live in a smaller house because you can put on a VR headset and you don't need a home theater anymore, Or you can go to a local gym instead of needing a home gym or a library because you don't need a home library. Or even like the ADU thing in California, the idea of building more smaller houses on existing plots of land. Or any of those factors that you think about? Yeah, so the ADU factor has been great. I think it's actually spurring a whole bunch of upzoning.

Starting point is 02:57:29 You can actually add more units into existing properties. It changes the calculus even for developers trying to develop new properties. They get to add additional density. And we're also seeing this trend where people are actually OK living in smaller spaces, which also results in us being able to build homes that are more space efficient. But the place that we're also keying off of in, right, I think that from the practical standpoint of self-driving cars, solving the logistics challenge, well, that is true. We're also noticing a generational shift taking place.

Starting point is 02:57:56 If you actually look at buyer sentiment for, right, zoomers are coming into the market, eventually what we expect gen alpha adults in vision, there is a loneliness pandemic. They're looking to build more connection and community. And I think their desires are actually vastly different than what was true for the boomers all the way through the millennials and gen buyers. So I actually think we'll see a migration of people coming back into cities or pockets of communities. There are more denser and more connected than what they were for how development took place for the last 20 or 30 years. And the only way to be successful in that space is how do you actually embrace scattered side development and infill development? Sure.

Starting point is 02:58:30 And not build the 300 unit apartment building. people only live there because it's the only choice. People don't live there because they want to live with 300 other people who are complete strangers. So this is a place where we get to refactor what housing of the future looks like. It's not just the form, but just the connection of how it's connected to neighborhoods.

Starting point is 02:58:48 But the only would unlock that is, again, round up new technology. You said a million homes by 2045. When do you want the first home to be built? Well, we've already built our first home. It's occupied today. So we built our first home. 18. Thank you. Fantastic. I need to get one of those buttons here.

Starting point is 02:59:08 Yeah, for you. We'll license you the TVPN air horn. Every time you guys have completed new home. But congratulations on the progress. It's tremendous. We'll talk to you soon. Have a good day. Cheers. Take care. And our next guest is in the Restream waiting room. We will bring them in to the studio. I believe we have Brian from Layer Zero. Welcome to the stream. Play that soundboard. There we go. Look at this background. There we go.

Starting point is 02:59:38 How you doing? How are you guys doing? I'm good. You got some news for us? What's you got? Yeah, got lots of news. What do we want to go through? Kick us off.

Starting point is 02:59:49 What's the biggest news in your world? Biggest news in our world is we just wrapped up the largest Dow acquisition in history. About $120 million. Yeah. Congratulations. Okay. break that down for the audit

Starting point is 03:00:05 what does that actually mean in practice and and kind of why did it make sense for layer zero and yeah basically to combine these two businesses yeah so I mean there's a little bit of context here that's originally we built layer zero

Starting point is 03:00:21 we actually built Stargate as well and spun it out and sort of was running as this independent entity and we now have like refolded it back in with this acquisition right so so it's coming back home, there's been kind of me, the bridge is coming home finally. So for us, layer zero already today, you know, 86% of all dollars that move across chains happens through layer zero.

Starting point is 03:00:44 Largest stable coin in the world is built on us. Largest wrapped Bitcoin asset, largest synthetic yield-bearing asset, like first state issued a dollar with Wyoming. All of this is already there. So we're doing that set of things. You have on the background of Larry Fink saying, listen, every stock, every bond, every asset is going to be tokenized. So, like, we're already sitting there.

Starting point is 03:01:05 Stargate is the consumer touchpoint, right? Stargate is where the end user facilitates, where we've sat in the background. And so for us, this was just purely a verticalization of the entire stack. It's roll up the whole thing, have a single touchpoint, single offering to both developers, merchants, and end consumer,

Starting point is 03:01:21 and have it in one single place. That's awesome. So breakdown, like, what did the, what did the entity that was Stargate prior to, to this acquisition actually. This was a Dow. Dow was thrown around, I think our audience, some people in our audience are more crypto native,

Starting point is 03:01:40 but many others aren't. And so they may have heard about Dow's back in 2021, 2022, but are less familiar. Yep, that was sort of fascinating idiosyncrasy within crypto itself, right? So Dow is decentralized autonomous organization. We built this protocol, we launched it, and we basically said,

Starting point is 03:02:01 hey, governance is going to be left up to all the people who hold the token, right? So there's a bunch of people who hold the token. They have the ability to stake and actively vote on all kinds of things, how things get priced, how the dollars that the protocol owned, to the protocol had accrued about $95 million worth of their assets itself internally, like all kinds of things within it. And it was just running. And naturally, as you can imagine, something that gets run by, you know, 50,000 people as opposed to a small group of very agile, fast-moving entrepreneurs,

Starting point is 03:02:33 runs very differently, right? And so what's meant is a lot of things are slower than you would like them to. Innovation is sort of like slow in that side. So, I mean, it was very dominant from a bridge perspective. That's what Stargate does. Just move assets around. It's done about $80 billion of assets transferred,

Starting point is 03:02:48 so by the largest bridge in the space. But purely on the innovation side and to keep moving forward, much slower than kind of you would hope. And so the offer from the layers of our side was listen. We're going to basically buy out these SDG, this governance tokens, STG. We're going to pay a premium on top of what exists. So we're going to pay an offer above kind of what's there.

Starting point is 03:03:10 And the Dow gets to vote on whether or not to basically accept this or not. And so we paid again close to about $120 million at current market price. And so what happens is they get rid of their old token. They swap it for this new one. They now have this $120 million. So they're made a hole. They're invested in the future direction of the new thing. And now universally that stack those assets, everything drives in a single direction.

Starting point is 03:03:34 So what was Stargate, what it was accruing value internally, revenue streams internally, now all drive directly to layer zero. How does it on-chain acquisition happen? Is that the largest, like, take private in crypto history? Yeah, largest, largest Dow acquisition ever in history. Really, like, really not, definitely not comment. might become more common, but definitely very unique. Yeah, yeah.

Starting point is 03:03:58 Are there like lawyers in the room? Is this all executed on chain? Is this something? Everything on chain through the Dow. So it's not like, you know, we don't have an agreement that we can sign with the Dow. It really was an offer. So an acquisition is sort of how the industry is internalizing it because I'd like to make sense.

Starting point is 03:04:15 What it really is is, hey, the Dow is going to vote to sunset their own token. Take this other asset in place of that and basically migrate the whole system over. and they're getting a premium for doing that. So it looks more like a GitHub PR than a traditional, like, filing from a legal. Has to be one of the most efficient acquisitions from the sell side, from a cost and legal standpoint. Check in on the bank. What should we be looking out for in the back half of this year, I mean, four months, I guess, at this point. But in terms of assets coming on check.

Starting point is 03:04:54 and tokenization broadly. Yep. Yeah, I mean, like right now, what we've become most well known for and where we sit is stable coins. Almost every, you know, the large majority of stable coins are built on top of those.

Starting point is 03:05:07 PayPal, USDT, all of this stuff built, moves through layers of error, right? So stable coins have been in broader, butter. That has been the focus of really what we're trying to do is the cleanest and most efficient money technology ever, right? That's really our pitch internally is the way that value moves.

Starting point is 03:05:24 And what you're going to see in the coming months, and then accelerating very quickly from there, is, you know, hundreds of tokenized equities, stocks moving on chain, all of this, again, moving out of these same rails. So, like, the layer zero, what makes it so special and what has, you know, we're talking hundreds of billions of dollars of assets moved is you can move today, you know, $5 million, $50 million for, for, you know, cents or low dollars, right? like incredibly efficient to move extremely large amounts of capital around all of these ecosystems. So when you talk Stripe and Coinbase and Robin Hood and Circle, all are launching their own networks, right? And all of these platforms are racing for tokenization, for issuing equities on chain. Again, all of, you know, this entire sort of Larry Fink 2025 mandate of like this is the way that the world is moving. None of those have the ability to talk to each other, right? None of them, there is no way right now that you're going to settle between Coinbase and Robin Hood or that you're going to be able to move these assets to anywhere.

Starting point is 03:06:25 So that is where we sit. All of this flow that again has been historical stable coin flows, these hundreds of billions of dollars of stable coin flows. Now you're talking every asset that exists. And so very, we're very directionally focused on that. Fantastic. See what you're set up for success. Yeah. Come back on again soon.

Starting point is 03:06:44 There's going to be a lot more here and we should have a longer conversation. and congratulations on the take private, the acquisition, whatever we want to call it. Very cool. Very cool. We'll talk to you off soon. Have a good day. We'd love to.

Starting point is 03:06:56 Thank you guys so much. Thanks for coming on. Our next guest is in the Restream waiting room. Let's bring them into the studio. I think we've got to get the gong ready again. Ryland, what's happening? Great to see you. Hey, guys.

Starting point is 03:07:10 Good to see you guys. Sorry to keep you waiting. Give us the news. Welcome back to the show. Thank you. It doesn't seem that long ago that was on the show, but we raised our series A to a led by Google Ventures and Davey McKello. $50 million.

Starting point is 03:07:24 $50. GV's been busy today. Busy day. They're not taking, they're not taking August off. Yeah, that's true. Incredible. Yeah, give us the update since the last time you're on. It must have been probably two, two, three months.

Starting point is 03:07:42 I'm also interested. I think I'm an investor in this round, right? you are yeah yeah i didn't know you guys have been moving you guys have been moving very quickly you know you never um but uh but yeah what's the update um so we announced our sort of seed round came out of stealth in the spring uh that round was just to get the company going get the team together and start developing some of the key tech for what we're building and we're building and designing autonomous ships for the navy and now with the series a we're actually able as one of our investors said we've left the reservation we actually build a full prototype ship

Starting point is 03:08:15 which will launch next year for the Navy. So when I say full prototype ship, talking about half a football field and length. So where there's a lot of unmanned service vessel that the Navy is working with today. Some are smaller inform factor, little temporal. They're great for choke points.

Starting point is 03:08:29 But we're building ships that are meant for like the open ocean that can operate all the way across the Pacific. And they can fit like basically a full shipping container on board, if not multiple. And then so you could put. So in this case you're saying half a football field, that is what the ultimate. size will be, but you can't be starting.

Starting point is 03:08:47 It's the Goldilocks. So we want to carry payloads that matter for the Navy. And so if you think about the payloads that today's guided missiles destroyers carry, you can actually disaggregate them and take one or two of those payloads, whether the radars or the equipment look to hunt for submarines or even missile launchers and put them on these smaller-sized ships. So they're big enough that you can operate across the ocean. You can carry the payloads that matter.

Starting point is 03:09:10 We have the range and endurance for the Pacific, but we're not so big that we call it. cost an arm and a leg. And so we're making ships that are tritable. They're reusable. So you can send them out and they come back. But if you lose them, it's okay. And it's relatively inexpensive compared to like a $2 billion destroyer. Yeah, we talked to Dan Driscoll about the Army modernization project. What's going on with the Navy? What does it look like to sell into the Navy now as opposed to maybe five, ten years ago? I would even talk about a year ago. So a year ago when we started this company, we had a thesis around building this sort of Goldil-like type ship, sort of a medium, the Navy would call it the medium unmanned surface vessel. But it wasn't

Starting point is 03:09:52 on the shipbuilding plan. There wasn't a ton of money around it. But we thought there was a need. And so we started the company with just a small check to start the company. But what's happened is there's actually $2 billion now for this program. And so there's a ton of investment. there's a ton of activity and a ton of attention around the space. And so right now it's us and a couple other companies that are with our own dollars building what we think the Navy needs. And there's just an AOI that went out. We submitted for it.

Starting point is 03:10:22 So we're super excited to see all the progress in the space. How does the Jones Act fit into your business model? Does it affect you? I've heard of talk to some folks who've said that it's making it difficult for them to source certain pieces if they're building in Europe or something. obviously Europe has a long lineage of shipbuilding, but how does the Jones Act fit into your strategy or benefit you or is it red tape? That's a good question.

Starting point is 03:10:48 I don't know who gave that one to you, but that's a little bit spicy. So in a good way, because of the Jones Act, we have mid-tier shipyards either on the West Coast, the East Coast or the Gulf Coast that actually can build our ship. So we don't need to start from scratch. We don't need to go find 100 acres of Greenfield and try to go build a shipyard, which to take years ago launch. We'll announce later this year a partnership with the shipyard so we can actually build and launch our ship next year.

Starting point is 03:11:14 And if it weren't for the Jones Act, I'm not sure if that industrial base would be around today. But I think in some ways, we're not as competitive as other countries in shipbuilding. And so because of that, we've had to go source some of our long-lead items from other countries that have a sort of deeper base around sort of shipbuilding. But we think we can bring shipbuilding back to the U.S. And I think it's not by necessarily trying to compete directly with countries like China or Japan or South Korea, but it's about out innovating them and sort of taking a lead on the tech side.

Starting point is 03:11:47 And so we believe in maritime autonomy not only for the Navy, but also for the commercial sector. And we think there are a ton of different use cases that are out there. We're already getting comfortable. And you've seen in L.A., like hopping in a Waymo, has zero drivers in the front and just taking that. And sometimes it's a preferred kind of method versus having sort of a manned vehicle that's out there. we can apply that same technology for the maritime industry, and we're super excited to do that. That's very exciting. Incredible. Very exciting.

Starting point is 03:12:13 Thanks so much for taking the time to hop on. Congrats to the whole team on the Mousdown. And yeah, we'll have to at some point. I assume we'll do a podcast at sea on one of your ships. The next time I'm on, I don't want to be a funding announcement. I want to do an interview from like a shipyard and show you all the cool stuff we're doing. That's what people want to see it. phone it's a zoom link so we can anywhere exactly if you want to see welding and steel and all that

Starting point is 03:12:40 yeah i want to see sparks flying that'd be great great to see we'll talk to soon sparks congrats have a good day cheers up next we have Logan kilpatrick from google coming in i think i have it right this time we got a little mixed up my calendar we're caught up to speed Logan great to see you congratulations give us the news what's the launch is there a number we can associate this so we can ring the gong for looking for any reason to hit the gong number of parameters number of cost per token Your cost per image or something. 0.39, 0.039 cents per image. There we go.

Starting point is 03:13:15 There we go. Step back. It contextualizes it for us. Give us the actual news, the actual update. Yeah. Super exciting day. So we launched, I think folks have probably seen online this whole nanobanana thread. We should have gotten y'all in banana suits or something for this.

Starting point is 03:13:33 Yeah. we launched this new model state-of-the-art image generation editing model i think what people are losing their losing their mind over is it's just this character consistency of like how well you can do all of these like prompt-based edits and like transform whatever people have i've seen all these great examples online already of what people are doing um so it's also to see and it's a model that's available for free for everyone to go and play with and try gemini app ai studio um you can vibe code some cool stuff with that i was working on a tbppn announcement card generator earlier.

Starting point is 03:14:06 Oh, that's amazing. We need that. I'm like, I'm putting your media team out of work. No, no, no. No, I mean, the biggest thing there is speed. I mean, it's just about the ideas matter. That's amazing. Yeah, yeah, yeah.

Starting point is 03:14:19 I love that. What's the story on the research side that unlocked this? Is this new algorithm? Is it just more scale, bigger data center, bigger training run? Is it some sort of unique advantage to Google on the data decide, like what went into achieving this? Because I think people are tracking this stuff very closely these days. Yeah, yeah, that's a great question. I think there's three things quickly that I'll

Starting point is 03:14:44 mention. I think one of them is there is this interplay between image understanding capabilities and image generation capabilities. And it's actually, I was just talking to the VO team two weeks ago as well. And it's a similar story on video as well, which is like if you have stayed at the yard video understanding, it tends to be that that actually really helps you when you want to generate really great videos. And there's a bunch of dimensions of why that's the case. But so I think that's part of it, which is from the ground up, Gemini was built to be multimodal.

Starting point is 03:15:11 So it's been like the core focus from a, from a modeling perspective for a long time. So I think we've see that now in the generation capabilities. I think another one is like this, this iteration flywheel that we had. So we initially launched, this was actually before OpenAI launched the GBT image model. We shipped the first native LLM image generation model

Starting point is 03:15:36 and got a ton of feedback of things that didn't work and people were wanted it to be better along a bunch of dimensions. So this launch was a culmination of looking at it and spending a ton of time with folks in the ecosystem who've been giving us all the feedback of like, what would they actually want this model to do in order to build a bunch of real production use cases and use it to support whatever their work is.

Starting point is 03:15:59 So I think that's another angle of this. I think the last one is just this continued model train that we have, which is like the, there's all of this infrastructure that's being built in order to make it so that Google can ship models and bring them to the world and have them scale up on day one like we are right now and all this other stuff. So I think the new capabilities of image generation,

Starting point is 03:16:24 I think benefits from like this huge amount of momentum and inertia that's happening inside of Google to get this stuff out the door. So I think it helps. And we see this on like every other model benefits by like how much momentum there is on the core model progress standpoint. I have two follow-up questions. One is, are you thinking about some sort of Pareto frontier? Do we need a benchmark for image generation that then we can comp to put on a beautiful X and Y axis so we can go viral here with cost to quality tradeoffs?

Starting point is 03:16:59 because I haven't really seen that pop up. We're still in the age of just like, there's like the state of the art's great and then everything else I wouldn't want to use. And so people aren't really making those tradeoffs, but you can imagine that as people start to implement this into business processes, if I'm just like, oh yeah,

Starting point is 03:17:17 I'm just generating like an icon and like a previous generation model can basically one shot it because I'm not trying to do anything crazy. I want to be very cost conscious versus this super frontier. I'm going to be using this as, you know, a poster and VFX and a Hollywood movie, it's got to be the best.

Starting point is 03:17:34 And whatever the cost is, let's do that. Are you starting to think about a paradeo frontier kind of emerging in image generation? Yeah, I mean, we should collaborate on this because I feel like y'all will do a great job on it. So that's maybe an action item. But I think one of the cool takeaways for me on this launch is actually the like cost per image didn't change between 2.0 and 2.5. So if you see, I think we released a graph of like the level of progress from 2.0 to 2.5, it was literally like almost like doubled in quality across certain dimensions.

Starting point is 03:18:06 The same zero point. It's like the pricing is annoying. It's like four cents. Well, we're going to switch to like cost per million images at some point because just like cost per million tokens. Like if we tried to say cost per token, we'd be in like 0.000,000,000. $0.4 cents per image or $40 for 1,000 for a thousand images. it that makes it easy to do now and then now we're talking you know 40 bucks for to do yeah yeah

Starting point is 03:18:30 i think it's just crazy though there's there's so much that you could build that like you wouldn't have thought about building before at that price point like 40 dollars is like not for a thousand images customized for whatever you want it's like actually not that crazy totally yeah how what was the reaction been from some of your guys as partners on the on the API side in terms of this i'm assuming they got early access and exposure to it because i see a lot of them are already rolling it out to millions of users. Yeah, I think a great example of this and something that I'm super happy about is OpenRouter, which I'm sure you all have covered some of the stuff.

Starting point is 03:19:03 They have a bunch of like actually cool leaderboards that show like their leaderboards are all usage based. So it's like Alex on the show, the CEO. Alex is awesome. He's, he's an incredible founder and entrepreneur. He joined the day that he raised like a hundred million dollars and didn't mention it at all. He says super low key dude, too. It's crazy.

Starting point is 03:19:23 Yeah, he's awesome. Awesome. So we are the first image model that OpenRouter has actually ever released. And I think there's like a bunch of philosophical reasons why from a platform perspective. But I also think it speaks to like the level of quality and the progress that's been made on these models that OpenRotter wanted to like actually take the first step in and have like a model that they felt is like conversational enough for their customers to just like embedded into a bunch of their existing workflows. So I think the reception has been super positive. and we need to get like a live type coding segment and show some of the cool stuff that you all can do. There's literally so much. It's incredible to see what people are building already.

Starting point is 03:20:01 I want to talk about naming version numbers and all of this. It's good for releases. It's good for showing that there's some sort of binary change that you should pay attention to and actually see the jumping capabilities at the same time. Eventually, this stuff just diffuses into everyday workflow. and Google has a bunch of products that don't really have version numbers. Big query just gets better. Google Sheets, I mean, there might be some version numbers under the hood that I'm not aware of, but like for most people, they just open it up and, oh, there's a new feature

Starting point is 03:20:33 today, or maybe there's release notes. Are we close to entering that era? Are you going to miss the era of constant name changes? Banana emojis hitting the timeline. There are benefits and there are costs. Like, there are high expectations when there's a new big number. But it all also draws a lot of attention. It's a reason to talk because something happened as opposed to just, you know, BigQuery is growing and it's better and it's good and it just keeps getting better. It's less exciting. So how are you thinking about that in terms of like messaging all of Google's products here? Yeah, I think this is a super fine line to walk. I hear like I talk to lots of customers who have this feedback, which is like it's there, there's so much exhaustion with the pace of releases and

Starting point is 03:21:15 they're keeping up with, you know, something point one version update. And it's just like all this stuff to keep in your head. You're just like, please stop making technological progress. Like, we've had enough, please. That's not what people, this is the challenges. I don't think that's actually what people want. They just don't want to have to like stay on top of it. So I do think there's a point at which like this stops being the thing that everyone is

Starting point is 03:21:39 talking about. And there is this like, what's the like, there's a bunch of good sayings that I'm sure you both know better than me, which is around like the arc of technology and how it like transitions from actually being technology to just being like something that is a part of a product. Like a car we don't look at as this like science thing anymore. It's just this like object that we use to get around. I think AI will sort of eventually go on that arc where it's just like diffused into everything that we're doing and we don't think about it. And it's, it's part of every product experience. And therefore you don't look into like all the nuance

Starting point is 03:22:10 details of the small version number. But I do love the, my takeaway is you need a good mascot. I love the nanobanana thing really took off. And I think if it wasn't something that was like easy to attach to that had an emoji, that like all this other, like there's all this like subtle weird marketing lessons that you, I feel like I relearn every time something like this happens. That's great. Talk about jailbreaking bug bounties. Is there some benefit to the flywheel of people trying to jailbreak stuff?

Starting point is 03:22:41 It actually helps improve the models. There's some, there's some post out there. figured out some jailbreak the chat wants to know. But I've always thought that the nature of social media kind of encourages, like if you can get the models to do something weird or funky or rude, then it goes viral very naturally. And of course there's like the negative like, oh, this is bad. But it's actually pretty helpful. But how are you thinking about that side of the world of getting these models out to the world? Yeah. One of the things that we're always trying to like, again, walk the fine line of is all the like safety parameters. So I think I, I,

Starting point is 03:23:16 I already saw a bunch of folks making comments around like, what are we over blocking on? What are we under blocking on? There's the global legislation on a bunch of the stuff is extremely complicated. I have a bunch of empathy for the teams that have to like think about this more deeply than I do. But like it is, it's actually not easy. There's a lot of open questions. It's not easy to deploy. It's super hard.

Starting point is 03:23:37 Especially on I was thinking about like the trademark infringement side because I was like, well, well, I want to be able to use my own trademarks. I want to be able to go and generate my own, my own. deep fakes of myself, but I don't necessarily want everyone else to be able to do that necessarily without something. So like, it's such complicated. We've run into that trying to generate images of ourselves. Yeah. And it's a, oh, no, you can't do this. And it's like, you've kind of arrived, but now you've got to prove to the model, no, I'm John Coogan. Yeah. I am. I really am. This is a very, I think this is like a non-trivial problem that like will end up getting

Starting point is 03:24:10 needed to be solved. So I don't like, I don't think there's any good experiences to solve this right now. But you know to the extreme of this is like the future of you you orb scan your iris to like i view to the model that like you're really john and then that's how this sort of you unlock this capability that's the extreme version but yeah yeah i mean yeah there's a bunch of ways to to to make sure that the stuff works but i mean also just like like i feel like uh google's been particularly good with releasing like the thinking behind the decision making in both like a blog post and a technical paper like Jeff Dewey covered Jeff Dean talking about the amount of energy and water used by various queries. That was crazy.

Starting point is 03:24:52 And I just, I love that because it was, it was written in a way that was accessible to the person that just wanted to see a viral post on X, the Everything app, which is kind of like, you know, it's a, it's a mud fight on there every day. And then, and then you also, the blog post, which was like, you know, a press person could show up there. there was also the technical paper. So if you're scientists, you could go in there. And it wasn't phrased as like, you.

Starting point is 03:25:16 this counterweight to like all the pieces that have come out saying it's really bad. It was just like, here are the facts in three different tiers of complexity so you can kind of get the answers at whatever level you want. And I thought that was well handled. Anyway, Jordy, anything else? Absolutely. Now, congratulations on the lunch. Always great to see you and have fun out there on the timeline.

Starting point is 03:25:35 Have fun out there. Let's go vibe code some stuff. I can't believe you think the timeline is a mud fight. I'm like, people in your replies must be horrible. I feel like everyone's very kind in my version of facts. but you're always just one, one quote tweet away from getting... From war. From war.

Starting point is 03:25:49 The timeline's in turmoil a lot. We monitor the situation every day, and we see the timeline in turmoil nonstop. Someone puts out a bad take. There's going to be a pile on. There always, always. But it's a good content. It's good for business. It's good for business.

Starting point is 03:26:02 Sure is. Great to see you, Logan. Thank you, we'll talk to you soon. And on that note, you got to hop on. We've got to get on with London. With Pyong Man. One sec before. Oh, we have one more thing from producer.

Starting point is 03:26:13 We have a special guest. We have a special guest. Who is this? Okay, let's bring them in. Moments away, let's bring them in. Okay, who is this? Who's this? This is a surprise. What's this? What's this for you?

Starting point is 03:26:26 This is a joke or something? This is a prank. Are you pranking us? I'm genuinely not prepared for whatever's going to happen. Who's this? Oh, wow. Oh, wow. No way.

Starting point is 03:26:40 What is this? Happy 100K here. Wow. Oh, thank you. Oh, we have a cake in the studio. Come here. No way. That's so cute.

Starting point is 03:26:51 A model of Dom. Wow, it's amazing. Thank you. Thank you. Welcome to the show. Amazing. Look at this. Can you say into the microphone, you're watching TBPN?

Starting point is 03:27:05 You're watching TV. Yeah. Amazing. Well, thank you, folks. Fun show today. Can you say, see you tomorrow, Technology Brothers? Say, see you, see you tomorrow, technology, brothers. See you tomorrow, technology brothers.

Starting point is 03:27:30 There we go. Yay. Awesome, folks. We will see you tomorrow. We will see you tomorrow. Thanks for tuning in. Thanks for tuning in. Thanks for tuning in. Goodbye.

TBPN - The Experts Weigh in on Intel, Big Family: The Ultimate Status Symbol | Wade Foster, Dan Wang, Nicolas Sharp, Shan Aggarwal, Vikas Enti, Bryan Pellegrino, Logan Kilpatrick, Rylan Hamilton

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