TBPN - Weekly Recap: Tesla's Crazy Plan, USA vs. Google, Palantir CEO on Conspiracy Theories

Episode Date: September 6, 2025

(00:00) - Intro (00:05) - Cracks Emerge in Meta's Scale AI Bet (14:19) - Alex Karp (Palantir CEO) (36:57) - USA vs. Google (01:04:37) - Big Numbers: $610M for Browser Company, $1B in ARR at Ramp, $600B in Meta CAPEX, $1T for Tesla's Pay Package TBPN.com is made possible by: Ramp - https://ramp.comFigma - https://figma.comVanta - https://vanta.comLinear - https://linear.appEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.com Numeral - https://www.numeralhq.comPolymarket - https://polymarket.comAttio - https://attio.com/tbpnFin - https://fin.ai/tbpnGraphite - https://graphite.devRestream - https://restream.ioProfound - https://tryprofound.comJulius AI - https://julius.aiTurbopuffer - https://turbopuffer.comFollow TBPN: https://TBPN.comhttps://x.com/tbpnhttps://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235https://www.youtube.com/@TBPNLive

Watch it. Cracks are forming in META's partnership with Scale AI says TechCrunch. It's only been since June that META invested $14.3 billion in the data labeling vendor soft. Invested. Yeah, invested. So it's not an acquisition. It's not an acquit hire. It's a trade deal.

It's basically a trade deal. That's how I think about it. 14.3 billion for less than half the business equity, a big dividend. 49%. They just wanted some of the scale people went over. They thought 49% was a nice, nice, nice. Yeah, they just pull it out of a hat. Random. It's just random. And so several of the top executives left scale to go run meta superintelligence labs. That's MSL. But says TechCrunch,

the relationship between the two companies is already showing signs of fraying. At least one of the executives wanting brought over to help run MSL. Scale AI's former senior vice president of Gen AI product and operations, Ruben Mayer, has departed meta after just two months with the company, two people familiar with the matter told TechCrunch. Mayor spent roughly five years with scale AI across two stints in his short time at meta, according to these sources. Mayor oversaw AI data operations teams, but wasn't part of the company's TBD Labs, the core unit in meta tasked with building AI superintelligence,

where top AI was... You think they made MSL and TBD and like the... Just to confuse TechRunch reporters. Just to confuse... Yes, yes. The journals. Yeah, yeah. It's entirely the 40 chess that's going on.

And so after this article was published, Mayor reached out to TechCrunch and was like, hey, you got the story wrong. My job was to set up the lab with whatever was needed rather than data. And I was part of TBD Labs from day one rather than being excluded from the core AI unit. Mayor also clarified that he did not report directly to Wang and was very happy with his meta experience and was leaving for a personal matter. So again, it's hard to read too much into this article. But the bigger question is like, like TechCrunch has their angle. And then the timeline was kind of in turmoil. I feel like the timeline's always been rooting against Alex Wang.

And there's a few reasons. So I wanted to go through like the bear case for just the question of like, was meta buying scale AI the right move? Like did they overpay? Will we look back on this as a great deal? Because when we look back on Instagram, we're like, that's one of the greatest acquisitions of all time. What's up? Also great acquisition. Very expensive at the time.

both very expensive at the time. Even Oculus. I was thinking about it and I was like, Oculus VR, super expensive, multi-billion dollar deal. And the level of headset adoption, I mean, they didn't even have like a consumer product at that time.

It was like dev kit still. And obviously retention was super low. People would churn off of them. And they still do, even what, a decade later. Like, but you... But it was very important to Zach.

Yes. And VR is a tech wave that's going to, that's going to happen. at some point. Like, we know that the technology is going to get there where it's not going to miss the next platform. He has his surfboard. And when that wave come, he's ready to surf.

Did you get any surfing in this weekend? I did. I did. I did. Describe your surfing experience. Can you do like 360s off the back and stuff? Can you do a backflip? Can you go backflips?

But I went surfing with a TBPN, a technology brother, Steve, founder of Clock Tower, Capitol. and he saw me do a couple airs. You could do you do airs. I didn't land either of them, but... You were telling Speeder, like, he has to get barreled. Did you get barreled? It wasn't barreling this weekend. It wasn't barreling this weekend.

But it was, it was fun. There was definitely swell. I got quite sunburned a couple days in a row. It's fantastic. We should one day stream your surfing endeavors, and we should do it on re-stream. One live stream, 30 plus destinations, multi-streamed, your audience,

wherever they are. People have been asking, will TDPN expand to other mediums? Will you do other things? And it's like, yes, surfing live streams. That's what next. And you, if you're surfing and you want to live stream, head over to re-stream. There's a bunch of questions in the chat we should get to at some point, but let's keep

talking about this Scalia-Ey stuff. So, Zuck has a surfboard with Oculus VR. The question is, what's going on with Scali-I? Because it's not necessarily an obvious compounder where like with Instagram and WhatsApp, it's like you have this network effect. It's just going to keep growing, keep growing, keep growing. You can grow the user base.

The user base never goes down. The business never gets smaller. You just run more and more ads and it just prints, prints, prints, right? Buying a growing social network that has strong product market fit, easy, easy to justify at any price, basically. Well, Elon wanted to get out at one point. Yeah. For the most part. But if you can buy it and then lever it up and then merge it with a foundation model lab.

Yes. So scale AI does not have that obvious like winner take all network effect. That very real competition. Extremely real. Surge, which is, which was the bootstraps scale AI that was printing money, Mercor, which was emerging. Isn't there another one, Garrett at handshake? Handshake, label box. There's a ton of these companies.

There's a bunch of players. And so the reason is because it is not a monopolistic. market by default. You might be able to make it one, but it's, it's tough to justify. It's tough to think that, oh, yeah, it'll just continue to compound. And then also, if you're AGI pilled, you don't believe that basic date, the labeling tasks are going to be done by humans in the future. Like, if you have a bunch of tasks that are like, oh, yeah, like just, you know, what do you go to scale AI for? Oh, RLHF this? Tell me if this is a good answer. Like, if you're a GI pill, do you think that the next version will be able to do that level of task, like perfectly.

Yeah, and the expectation if Scale had stayed fully independent would be that they would keep having to like bet the company on these new sort of like eras. And that's and that's sort of the story. I mean, Scale started as a data labeling company for self-driving cars. And then eventually that kind of hit takeoff where there was not that much more business for scale to do, I believe, because Waymo had gotten all of the data and Cruz has gotten the data and Tesla had gotten, like the base level data. And then the RLHF boom and the LLM boom happened. And scale was able to move over to that. And then all of a sudden they were having their best years ever. And so the business was kind of like up and down very much like, oh, they have a second act.

Do they have a third act? Chunky, yeah. Very high volatility. And so as the market shifts and more and more expert, like as it shifts to more of these expert data collection processes, like what, we see from Merckor, scale potentially becomes less and less relevant. It's not like an obvious just beneficiary of every next wave. You have to keep kind of reinventing the company. And so there's... And they were at some point they stopped working with Open AI. Correct? Yes. Yeah. Yeah, they stopped working with Open AI and then and then post-meta-deal. It's part of what's creating

the opportunity for Merckor-Mercore. It seemed like Microsoft and Google both pulled back from working with scale. And so like the core scale business doesn't seem like it's just like endlessly compounding. So you really can't underwrite this like 14.3 billion dollar investment purely on the basis of scales business. They're not trying to make money on the investment. Yeah, maybe. Yeah, it seems like they need a mad scientist for their lab. And every other AI lab is a mad scientist. Yeah, or deals guy, exactly. So, uh, open AI has Mark Chen, SSI has Ilya, DIME has Demis, Anthropic has Dario. Each leader has a different shape and style, but they're all capable of rallying top AI researchers and building teams of missionaries, Alex Wang is

unproven here. So if you believe that the best talent magnet wins, it seems like a bad deal. And that's kind of the bare case. Now, the bull case is that, yes, meta-buying scale AI is a bit pricey, but ultimately it was a good decision for the company. Here's why. Let's review the landscape of big tech's AI efforts. Google has deep mind firmly on the frontier.

Microsoft has GPT-5, also frontier. Amazon's a bit behind, but the core business doesn't seem very threatened by LLMs. Nvidia benefits from basically every outcome right now. Apple acts as a window into AI, probably not too threatened. Meta feels like it could benefit hugely from getting to the frontier, but it doesn't have an obvious dance partner. So what do you try and do? You go down the list and you try and buy every company or hire every researcher you can,

hence the rumors that Zuck tried to buy SSI, tried to hire Mark Chen, etc., etc., right? Because it's super high. I mean, we saw that image of like some Wall Street investment beggars like did like a kind of some of the parts valuation of Google and just deep mind was worth like $150 billion. Right. And so if you're thinking like, okay, if I have my lab and it's adding all this value all over the place, like is that worth $200 billion to my market cap? Like absolutely, right? And so you try and do that. So at the top of the list, you have something like, you know, assemble a dream team.

Get Ilya, Mark Chen, Demas, get everyone. Just put the OG OpenAI team and the deep mind team together at meta and like you win, right? But that's obviously not on the table. There's a bunch of reasons why you can't make that happen. There's economic reasons. There's interpersonal reasons. There's some ideological reasons. But Alex Wang isn't that far down list.

And so, yes, he hasn't led a real AI lab that's trained a popular big foundation model. But if you look at his trajectory, all of a sudden it becomes a lot. I can be a lot more optimistic about it. So he's 28 years old. He's a fantastic communicator. You've seen him on every podcast, and he clearly communicates very well about... He's been on Theo Vaughn.

One of the few AI heavy hitters that's been on Theo Vaughn. You know, you joke, but he was on Theo Vaughn really early, and he tells a very convincing story, and he's actually able to communicate to both insiders and outsiders, I think. And he's genuinely been at the center of the AI boom for his entire career, but he wants to go bigger. He's built a great company that easily could have cash flowed hundreds of millions of dollars over time and continued to serve the training data market,

but getting further into the action that's happening at the big labs was probably not in the cards if he stayed at scale. And so teaming up and people would push back on that and say that scale was losing real market share to surge and other players who had a reputation for having higher quality data. Losing market share, but still. like so many big contracts that if they just went like like to like weaker and weaker clients and just like held on and just had high margins like I built to die basically like I I do think like the run out the clock value on that company is definitely like hundreds of millions of dollars every

year it's just such a big market but that's clearly not what what Alex wants to do he's 28 he wants to go bigger he loves being at the center of AI and wants to work on interesting huge problems Now he has will have does or will have more compute than pretty much. Pretty much everyone. Like the latest cluster that Zoc is trying to build is supposed to be just a couple percent over the next biggest cluster. So he will have the biggest. And so I think that when you look at Alex Wang, you see someone who's been through like the Gartner hype cycle of training data. It's like, wow, we are teaching cars to drive.

This is incredible. Then, oh, wait, like, they actually don't need that much more data. And then, like, oh, wait, like, LLMs need incredible amounts of RLHF data. And then, like, oh, wait. So he's been on the up and down. He's, so there's a bunch of different takes here, but let me continue. So there's also the rumor that scale AI isn't fully delivering all the data that MSL needs to train their next model. But the reporting here is a bit questionable.

I don't think that the scale acquisition was ever fully underwritten against the value of the training data business, as we've discussed. And the AI race is so aggressive that every company is grabbing every possible resource. Not only is meta using other data providers, they also just signed a $10 billion cloud deal with Google. Yeah. So this idea of like, oh, demand is outstripping supply pretty much different. Oh, they did one deal with scale. That means that they shouldn't do a deal with Mercor or they shouldn't do a deal with surge. Like, no, they're going to do deals with everyone.

I think all, yeah, all it says is that it was primarily an aqua hire. Yeah, an aqua hire of the team and a bunch of the people. And mostly, it's a bet on Alex Wang. And so I think that the fud over the departures is overstated right now. It doesn't seem like it's an exodus. They hired a ton of people. There's been rumors that, like, one person was thinking about leaving, but then wound up staying. And then one person left, but they said they were,

like never really planning to stay and then another person left, but clearly to start a company. So it doesn't seem like there's some sort of massive exodus. And basically it just comes down to the value of developing an in-house AI team that's like DeepMind. That team, if it works and if they build it out, the value of that team is immense, probably in the hundreds of billions of dollars. And so there's inevitably going to be bumps in the road. But at the end of the day, Zuck is just betting on the most successful entrepreneur that Gen Z has produced thus far. And it seems still reasonable that even if he's not entirely a researcher, he's deals guy, you have him and then you have Nat Friedman who's worked with Ilya and you have the pieces of the team to put together

the right amount of researchers and engineers to actually go and build out a frontier capability or near frontier. It's an all-star team. It's close to an all-star team. It's not. It's not the all-star team. Like the all-star team is Ilya and Demis and Mark Chen, but like that's not happening. It's just never going to happen. What is the big announcement from today is, are you are you trying to tell more of a story around enterprise with this? You know, we're kind of not. I think we're just, it's more like we're crushing it. Yeah. Everyone tells us to be, super modest about 93% growth in the U.S. and 94 rule of 40. They may be redefining the rule to like make sure the other people don't like have to live in shame. I keep seeing these articles like

in the Wall Street Journal. It's like rule 40 isn't real. It isn't really. Yeah, just real because we're like crushing everyone. You were forced to be humble for a really long time. I was forced. Well, people were showering me with humble nuggets all day. It didn't really exactly work. But you know, I do you think you have to judge humility by the delta between performance and ego. And I would say somewhat ill modestly, I'm the most humble I've ever been. And, uh, and, uh, and, and now, and I just, I think it's like, so what we try to accomplish with, uh, the, we've been doing these kind of conference forever. Basically, because everything we've done at Palantir is like completely, uh, it, it's

antithetical or at least orthogonal to how you would build a business. You guys look at a lot of businesses. You would never build a software downstream from value creation. It's all basically how do I make the client feel like they're getting laid when they're getting fucked. That's the whole way you build a software business. In our business, we began in the beginning. I used to tell people, you know, this is a, we're a mutually servicing business. Both sides should like be happy. And the way we built the business was it basically underlying metric. I always thought was, you know, the logic of software should be, we charge you something downstream of value creation.

That sum is a percentage of the value we create. It's better for both sides because it's significantly less than the value create. It's good for us because there's a multiple in the value. The flaw in the logic was always that FDE model would basically mean that you'd get a one multiple. So we were structurally misaligned with everyone in finance, everyone not at the founder's fund, but basically everybody else because of that. Now, what we've proven with Entology,

FDE structures where FDE are actually technical and internal orchestration, which is largely artistic, basically was, now we got very lucky because without large language models, this would not be hypercharged. So it still didn't exactly make sense, but lo and behold, we have large language models. It hypercharges everything.

So downstream value creation is an enormous amount of money. And because of our unit economics now, which some people believe are the best in the world, we actually get fairly valued and what are we doing actually downstairs is we're saying America's central advantage is the plasticity of how we approach the pragmatism right so businesses have to move from businesses where it made sense to have parasitic software products that are like basically helping you say it's like one of these things it's like you believe you're learning to sell they're selling you on something that is you can't get rid of you then run to wall street and say

our clients all we have 50,000 clients that all hate us They're like, great, that's a software business, because the hating means they can't rid of it. But a platform business means that you're creating more value than you capture. Well, the way we do, the way we sell is like, and this is why it's just all, it's like, all these things are hugely contrary. Our revenues going up, our sales orders are going down. The number of people we plan to have in the future is less than now. We are very focused on, you know, everybody's like high volume. The volume makes up for, you know, the fact that revenue decreases per client.

We're not focused on that at all. We believe we're going to make more from people in the future than in the past. sizeably more because it's like why should we not capture a part of the value that we help create actually it doesn't have to be the majority in fact it's usually the minority of the value to create we also believe that if from more kind of like kind of architectural implementation technical perspective the value is in high fidelity data captured in in an ontology with FDEs and where there's an enhancing factor with LMs and that that's going to be very very hard to replicate

right. But again, all of this is kind of very non-traditional. And so what we're really doing in these conferences is saying the same thing we say on the outside. Don't believe anything we're saying. Talk to other people have done it. We're not, we don't chaperoon the people here. So you can talk about things you like, things you don't like. People are on stage. But learn how to build the business of the future. What does the business of the future look like? Actually, the interesting thing is workers become more valuable, like actually trained workers become more valuable. This is exactly the opposite of what people are saying, but it's true. The person at the top is actually crazy valuable. People with technical expertise are crazy valuable. And everything

else is going to be done in foundry, ontology, and something like an FDA. So like the orchestration of the business is completely different. Where are Fortune 500 companies getting screwed by these AI pilots? We saw the stat like 95% of AI trials in the enterprise aren't converting. Like, what's going on there? What does it look like when somebody sells someone? Well, I mean that there's a technical reason. These are LMs are probabilistic.

They're not precise. The value of L of them is when it's essentially in an ontology wrapper. Because to actually create value, you have to be able to take the output, serialize it, and de-serialize it in the context of the business. So the logic, actions, and security of the business. its tribal knowledge and what it's trying to accomplish. LLMs are vertically crucial, but the error bound is very, very, very narrow. And the way you actually do LMs in the real world, not in theory, not as like, is that

you essentially put them in a concatenated chain where each single thing has to be done as a street unit because otherwise the underlying math is 95 times 100 separate change. It's like totally unreliable. And if you do it any other way, you're getting a steak dinner. and that steak dinner is super tasty. It's not going to work. And even worse than the steak dinner, honestly, is that you're being taught how to do something incorrectly.

It's like, okay, I'm going to learn how to learn from a wokster. Yeah. Great, great. The damage that wokester is doing, mostly on the left but occasionally on the right, the real damage they're doing is they're teaching you how not to learn. Like, and if you just pick your favorite person right, left, center, who's just selling complete garbage. it's all conspiracy, the whole thing.

Yeah, it's like, it's like, there's no such thing as building. There's no such thing as agency. You can get away with EpiS. Well, if you want to, like, Palantir is lifted. One of the things I'm proudest about in the world is we've lifted people from their mom's garage to their own house. Millions of people. You want to stay in that garage. You listen to those people.

And it's the same thing happens in Enterprise. They're selling you something where you think you're getting late and you're getting fucked. And once you're fucked like that, it's very hard to undo it. And like, yeah, you know, the crazy thing about my life is I'm like this wacky dyslexic. It's actually much harder to be dyslexic, but it's also much harder to get fucked. Because you don't believe, you don't believe in any of this BS. It's like. So speaking of sales, there was the CEO, founder's CEO of a CRM company that was making some comments yesterday.

Did you catch? Look, Pallantier, we structurally mind our own business. And I love that everyone minds our business. But I would say that what I, we constantly have people on TV. It always sounds like, you know, the guy in high school who's like, but I'm so nice, why don't I get laid? It's like, it's literally like, it's the same thing. I'm so nice. I'm so nice.

I create all the value and I'm so nice. I'm begging to get laid and no one. It's like, I have such a big this. I have such a big that. And we're like, yeah, we're not trying, dude. We're here. You know, and yeah. I don't think about you at all.

Well, it's like we are very focused on value creation. And we asked to be modestly compensated by that value. And, you know, if you disagree, you're like, you don't like us as a client, or you love us as a client, but you think it's like, great, we're doing our thing. You know, in Palantir right now in the U.S. is the market account that counts. We don't have the people. We don't have the time. We orchestrating completely perfectly at Palantir, which, of course, we don't do.

Because we're like an artist colony, right? We don't have a time to, like, actually focus on, like, what we need to, like, extending certain components of ontology we have to do. extending Maven for the sake of the West, building things in classified environments, extending things with high value. It's like, yeah, we're focused on that, and we don't have the time.

Like, when you're growing 93% off of a very serious base with a de facto de minimis, yeah. It's the 93, and that's not even our best number. It's 94% rule of 40. It's like, and then people are like, Oh, yeah, yeah, well, but we have all the skills. We have all the motion. But somehow our ocean isn't working.

It's so big, but it's like, yeah, great. You have problems to, you have time to focus on us. We got things to focus on here that are crucial. You guys are, it feels like you're reacting to the changing world and actual, like, customer needs, whereas other players are reacting. Let me give you a more kind of slightly philosophical, economic thing. What the large language model does, models do. in combination with ontology and FTEs and knowing what you're doing,

is it creates a period of optimality over time. We're not there exactly. But every single tech company in the world is going to be paid based on value creation. Maybe that's not completely true today. It will be true tomorrow. So when any company is saying something, you really have to ask, given that the aspiration of LLMs are transparency and competence. Broadly defined, actually the big cultural shift,

on enterprises, people running enterprises believe that this thing should work. I should know the cost of the components in my business to the second. I should know how to rebuild things if there's a macroeconomic strategy. I should be able to put the bomb on your head and not on his head. Okay, so that basically means every conversation in the future is going to be, you create X value, I'm going to pay you Y. And the central problem, a lot of the larger kind of less agile, scurotic companies have is it's like they can't you it's very hard to move from i get paid because you can't get rid of me to i get paid because you could get rid of me but you don't want to because you're creating so much value but that's where the future is going and like people talk about like you know how

are we going to you know get do 10x and revenue blah blah blah with the same or less people it's like yes but the whole market's going to have to move to value creation and we're in the business of that and try to do it you know it's not yeah do you think long term that the gross margins of software companies will change materially because of like LLM inference costs, like token factory costs, that type of thing. Well, you mean like enterprise software companies? If I look at like the Fortune 500 right now, there's like a set number of gross margin that's out there, should we expect like gross margin compression based on AI bills basically?

Well, first of all, I think, let me just give you the trends. I think first of all, skilled workers are going to become more valuable. Sure. You're going to be paying them more. they're going to be happier. It's exact, downstream politically, it's very hard to argue for anything but high in immigration. So, like, why do you need more people?

Like, we got to make the people we have here work. So, like, politically, it's like, you know, I'm an unhappy Democrat, but running around saying, oh, crime isn't an issue when everyone knows crime is an issue. It's like suicidal BS and no one believes it. And now that wokeism is luckily, mostly, at least in that way, you know, not as punishing, we can all just admit the obvious. So, like, transparency is going to be like, so the people are like workers are going to become more expensive. The overhead's going to become less.

Truly, basically, artist-shaped people are going to be incredibly valuable and they're going to demand to be very highly paid. So, but the aggregate cost structure will come down. But more importantly, the products you build are going to be much closer to what the market wants in real time. And then, again, just an obvious thing. This is happening. Like, we have 10x growth in America compared to Europe. Same people, same product, same everything. So it's like and then I the other thing I the point that's a little less obvious that I think people ignore is time is

Time is not time we always assume a minute of time is a minute of time it's not like it's like from the time you want to do something to the time it happens If that's 10% of the time you've just grad you just got a 10x so it's like you know it's like Poundeer's not these kind of Atrophied companies they really take every it takes them three years five years to get a year it takes us a week to get a year So it's like you know it's like that that's actually what what explains them numbers in a weird way is yes, but what if five years represents 40 years? What if I'm saying in the next five years? It's not. We're actually, it's like the whole problem with the DCF model, actually, that experts love is A, they don't understand product. So then B, they kind of extend the DCF if they like you. So it's like, oh, I like the person. The DCF is super long. Yeah, it's like,

give them an extra decade. It's like, give them an extra decade. But the real problem that they somehow don't understand in the DCF amount is a year is not a year for pound here. Like a year is like, we don't do holidays. I'm working all the time. I'm working. Honestly, I'm working. Honestly, I sometimes hate the enemies of Parenthere, but God, do they get me to go back to orchestration? Because I'm like, I'm going to fuck these people. And like, you know, and the basic way I'm going to do it is, you know, going back to like dyslexic, you know, like organization, orchestration of we're going to have the best products, the best people.

I'm going to recruit those people. I'm going to make sure they're the most valuable. And I'm going to put them in enterprises that value us. And if you don't value us, go go work the people that hate us. Try them out. Yeah. Do you have advice for young people? I mean, you said like artists like.

people not literally artists necessarily said the company is like an artist colony yeah they just become an artist yeah well people underestimate like their artistry because like from a young age you get huge benefits for conforming and you can say why don't I mean the central advantage of being dyslexic we can't conform yeah so that was that ends up being a huge because you just can't so you're gonna have to so your basic thing you've to emerge do not conform and by the way the people who are telling you simplistic bullshit that means you know like meritocracy isn't going to matter, you're not going to judge, all these conspiracies. It's so you can't do

wealth accumulation if you're in this country. Like in America, I think actually a lot of these things are true in other countries. But in this country, they're teaching you how not to learn how to be complacent, how to give up your agency, how to fail, and how to blame it on anyone else. And if you're, so you have to say it's like all that to that. Yeah, reject that, that's kind of and then you have to really, really look at people and judge them by their fruits. The best way to learn is to look at somebody and say, okay, well, you know, it's like, you know, you work with somebody like the co-founding team at Palantir. So you have Peter, Joe, Stefan, Nathan, Nathan. Like, part of what made us so good is it's like, okay, you can measure yourself. It's like,

you know, when I started at Palantir, I actually just, because I just wanted to be left alone. I was like, yeah, I'm going to make some money. I'm going to move to Berlin. I'm going to live a debauchous life. That was my goal. Like, I'm moving to Berlin. I thought I needed 250K. I was like, at 250K is a minimum, a million dollars in maximum. I'm a million dollars in maximum. I'm moving to Berlin and it's like, Tabatri forever. Bergheim. Yeah, well, I had to like, yeah. So it's a, and then-

Remote Office there. But like you then measure yourself and it's like, okay, well, I'm highly differentiated on measure, on managing complicated people who have to believe their opinion is their opinion, but still have to build a product that actually delivers value. That's my differentiation.

And so like, you surround yourself. And then remember, you have to remember, the persuasion, being persuasive and being right are not correlated. So you have to really look at people who are historically right, rebuttably give them the rebuttable presumption that they are right and work back to discover if they're right or wrong. Not just, and like all these things, and like, for example, on the Pallenture thing, is a great lesson.

Go listen to our critics. Whatever critic you love, we're a conspiracy theory. So like you can take the left wing version, which is like, Pallentier is stripping you of your civil. the British, with some people on the right belief. Pallantir is a Jewish conspiracy run by a mutt. Somehow, whatever. You know, it's like, okay, well, go.

Actually, how does the product work? Does the product protect data? How does it protect it? Is it better than any other company in the world of doing this? How do you build a company? Do you think it's just like an allocation based on a conspiracy? Why did we work? Yeah, just pick your conspiracy and that's the strategy.

And then, but then unpack it and learn for yourself. Like, did this work? How did this work? How did they do it? Assume that at every single decision, if it was a decision anyone else would have made, you would not have worked because that's a commodity. Commodities aren't valuable. And then apply that to your life. What part of this do you understand? Like, you know, what part do you not understand? What part do you understand better than them? What part could you do better than them? And the weird thing about LLM ontology foundry is this actually will work for anyone watching this podcast. Yeah.

If you're watching this podcast and you enjoy this, you've already passed a test. I don't care whether you're a welder, a plumber, a carpenter, an astrophysicist, or somebody who'd like to build a business or just want to get rich or you want to get enough money and move somewhere and do what I want to. It's not the right place anymore. But any case, but you've already passed that test. Now go out and pass the test for life. Yeah. You said Germany's not the right place anymore.

Like, what is your current mental model for the state of the world order? Like is is is is American decline? Do we need to bring things back? Like who are the power players? America is power payer number one right now and like all this media BS. It's like you know you got to compare America to any you can't compare America to some thing you're pretending in your head could be America. Compare it to Europe. Yeah. Compare I don't know. Were you going to compare it to China like you want to have no rights? You know I mean again I'm actually not anti-Chinese culture but CCP. You know it's like a compare it to Europe. Like no. tech industry. Everyone rich was born rich basically or with almost no exceptions. The most important Germanic company, I hope someone from Germany is listening to this. Compt Alse Palo Alto is Peter Thiel and Dij. It's like the only German company since SAP that's real. Like they won't listen to us. Like just think about that. You have Peter Thiel like the most

important venture person maybe that's ever lived. Co-founder of Pallenture and you have me. It was like some way know, basically, partially dramatic, did my PhD in German, and you have no tech industry. Wouldn't you have us on fucking speed dial? Yeah. Yeah. I mean like on speed dial. Like you don't have to listen to what we're saying. You don't have to agree with what we're saying.

Who are you talking to? Who are you talking to? You're talking to your like, I don't know, expert that came here and studied us. Trust the experts. Trust the experts. So it's like, yeah, it's like energy. Like we're like. Do you think that there's, there's optimism around the idea?

You'd still pick up the phone call, right? Oh, no, no, I pick up, it's crazy who calls me. It's like, it's honestly, like, I can't talk out of school calls me. You'd be surprised in a number of people come. And I begin every call with, don't listen to me. Very few people have. I'm going to give you the freak show answer. You probably want to ignore it.

This is what I think. And they're like, huh, okay, yeah, huh, yeah, okay. Some call back, some don't. But, yeah, of course, I mean, I have a lot of, I mean, like, honestly, we have a huge retail. A crazy thing about Germany is a huge retail investor base. Sure, sure. They don't admit it in public, but in private, they're like, Keep going.

Keep going. But yeah, no, I'm just saying the point I'm saying is, you know, it's like, oh, so then it's like energy, technical talent, understanding how to manage the technical talent. That's an art. Like we have the right venture people, the right entrepreneurs, the right spirit. We have generations of people who are entrepreneurial here. It's like kind of. Like, no tall poppy syndrome. Yeah.

Well, it's funny. You mentioned that. That's like, yeah, like, we're very, well, this is a thing. we have to fight for this. Yeah. Because that no tall pop, what that basically means, and people may not realize this,

but in every other culture I know of, and I lived broad into Germany, Europe, incredible cultures. But if your head sticks above the line, it gets cut off. There's one culture where that doesn't happen here. The only thing is we have to fight for that because the thing that unifies the woke left

and the woke right is they don't like the consequences of meritocracy. They want to work back to the inputs. So that just will screw society. Like you've got to be able to allow people to succeed wherever they go. Now, I was kind of still progressive, you know what believes it. I super would like the inputs to be fair. But the outputs, those are the outputs.

The results of freedom. Okay. Last question. We've got to get you out of here. I walked by your office. There were some kettlebells. What are the kettlebells for? Oh, okay.

Well, this is slightly long. I'll give you a short version. So to be a cross-country skier, you've got to train year-round. So you need substantial V-O-2 max and actually, you need to be strong per unit of weight. So as an example, I do three days a week of kind of above and below lactate threshold running, but mostly pretty far, and then once a week kind of at. And then I do two days of strength, one day of like endurance strength.

And currently, the thing I'm actually really proud of is I just started doing hang from a bar as a dead hang like four months ago. And I hit four minutes and 36. Four minutes and 36 seconds. What's the goal for the end of the year? What do we do? Well, actually, my goal for the, yeah, you got to hit the soundboard. This isn't just money.

No, I mean, my goal for the year was for actually the next 12 months was four minutes. Okay. But then there's the number two. We got to get those numbers out. Well, no, but the number two, the second best mountain climber in Norway. I don't know if we know his name. but he, I have a picture, he did four minutes and 22 seconds. Oh, there you go.

What can I do? Did it part time. Thank you for having us. I appreciate your work. We'll talk to you soon. Have a great rest of your day. Congrats. My question is we're going to go through the timeline.

Tyler Cosgrove has written out the full United States versus Google case timeline. We're going to dig through. We're also going to go through Ben Thompson's. But my question that I want to answer is, is what do these pay for default deals look like going forward? Specifically, in artificial intelligence, there is going to be a particularly odd dynamic around how LLM queries route on the iPhone by default.

Like the last possible moment to start taking AI seriously and build like a serious AI foundation model lab, the last moment that you could credibly do that, I feel like was earlier this year. Like that was when the, the last train left the station. And who was driving that train? Mark Zuckerberg.

And what did he do? He went and tried to buy everything that was viable and hire everyone who was hireable. That weren't viable. Yeah, for sure. And what he wound up with was not exactly a dream team. He didn't get Ilya. He didn't get Dario. He didn't get Demis.

But he got a really solid crew, right? And some great business guys. Some great business guys. Some great researchers. He also just filled out the researcher. He's got a ton of researchers. So I feel like he wasn't worried about salary caps. No, no, not at all.

And so we were debating yesterday whether Alex Wang was a good pickup for meta. And my conclusion is like he is the best possible option and I think it'll pencil out. I think it'll be a good deal. It is a big acquisition and it'll be interesting to see how we look on that in a decade. But I think the opportunity is so big it makes sense. At the same time, like what would Apple even do if they wanted to compete in AI? Like, everyone is taken off.

All the pieces are off the board at this point. They don't have the DNA for mega acquisitions, so they're not going to go and try and buy Anthropic. Like, that's just not how they work. They don't like writing $100 million checks for talent. Tim Cook only makes $74.6 million a year. They're not going to pay some AI researcher $100 million. It's just not going to happen.

And so everyone else sort of has a dance partner at this point. Apple wouldn't just be like trying to turn the cruise ship that is Apple. they're building an entirely new cruise ship. It's just not going to happen. So I don't think Apple is going to try and build a serious frontier lab. I think they're going to partner on this. And the question is, where does it leave them? They have something incredibly valuable. Do you know how many active iPhone users there are worldwide right now? One and a half billion? 1.4 billion. Isn't that a ton? That just, I feel like I was, if I had to just guess, I'd be like,

job's not finished. Truly. Truly. But so, like, that is incredibly valuable because it's not just, it's not just over a billion users. It's over a billion users that have money. They can charge $9.99 a month forever, randomly. Yeah, yeah. So many different monetization.

But it's also, it's like, it's the top $1 billion, really, usually, like, basically of, like, earners, because it's the most expensive phone, usually. And so, and they also have that button on the side that right now activates something that should feel like AI, but is very clearly far from the frontier. And so the logical outcome feels like a partnership here, but what will the scale and structure of that partnership be? If OpenAI really nails Agenda Commerce, as semi-analysis suggests, it wouldn't be crazy for Open AI to pay Apple billions of dollars to be the default. And so right now we're thinking about if you push the Siri button, you trigger an LLM inference query that's very expensive.

Every time I hit chat GPT, it's a couple cents. If I do some crazy reasoning things, some deep research report, might be a dollar. I don't even know. It's expensive, right? If I'm sending off some agent to go and research every single different type of tennis. You drained an aquifer somewhere. Yeah, that's what it feels like, right? It feels like every time you hit a query, it's expensive.

But that's going to flip. And I think each query is actually going to be monetizable, and they're all going to be, they're basically all going to be profitable like Google searches. And so if they are profitable, if every time someone hits an LLM, it's not a cost center, but it's actually a profit center, well, then Open AI can pay to get more search volume, some more query volume. And so that means that maybe Open AI will wind up paying Apple billions of dollars to be the default. And of course, they're going to try and build their own device, and there's a lot of other dynamics. But would they go with Gemini? because they're already on Google for the search default,

but would they go, would they do that? Or is that to, is that never, are they never going to be able to compete there because Gemini is so deeply integrated with Android and the Android phones are over here, kind of doing their own thing? So, you can imagine. And over this year, there's been rumors bubbling up

of Apple in conversations with Anthropic, with ChatGPT, with Gemini, right? And a lot of these companies have been throwing around. some very big numbers with Tim and the Apple team. And I think they had, at least back then, they seemed to have some stickers. So right now, it feels like the foundation labs

are going to Apple and saying, every time we run a query, it costs us one cent, 10 cents, a dollar, whatever. You got to pay us to use our amazing intelligence. Yeah, to bring value to your users. But I think it might flip. And I think that each query

might actually be profitable just at the query level because there's going to be commerce that's triggered from those. So in the future, you'll pick up your phone, you'll press the button on the side, and you can instantly fire off a best in class Open AI agent to do your bidding. So you'll say, order me some creatine, and it'll just go do it. And that will be valuable, and that will actually drive, that will be a profitable query. And so Open AI could potentially be paying Apple for the right to do that. So right now, Open AI and Apple do have a partnership in place, but the reporting suggests that no money is directly changing hands, but I don't necessarily expect it to stay that

way. So I don't know. What's your take? How do you, do you think that this is reasonable that Open AI could be paying Apple billions of dollars within the next, I don't know, five years? Or do you think it flips the other way? And Apple is the one shelling out billions of dollars for access. to frontier AI models from maybe Anthropic, maybe open AI, maybe someone else.

Yeah, it's interesting. I mean, the people that are paying for chat GPT today probably have a pretty insane overlap with iPhone customers. Like it probably looks something like this. I think that Sam recognizes, I mean, every consumer tech entrepreneur has like realized how important. it is to integrate at the hardware level, right? This is why Zuck is hell-bent on winning in VR, right? He's been sick of like being at the app layer. And I know that Sam does not want to be in that same, you know, why would he pay billions for Johnny Ive and that team? Like he understands the importance of the hardware layer and certainly will recognize the leverage that Apple is going to have over the entire ecosystem. I think the question is a lot of this just comes

down to, in my view, are consumers going to be paying for AI in the long run? I haven't been totally convinced that everyday American is going to be spending. Certainly not $200 a month. I don't even know about $20 a month, right? It's going to ultimately flip. And so I can see there being a period where Open AI is willing to pay to be like the default intelligence product within the Apple ecosystem.

but again, it is just going to be a really, it'll be an interesting dynamic in partnership, right? Because it's going to, it's so, there's so much tension there because Apple is going to want to, Apple is already selling intelligence as a reason to upgrade the iPhone, right? And they've gotten lawsuits over this because they sold Apple intelligence and then people are like, this isn't very smart at all. What did I just buy, right? And so are they going to be incentivized to say, even 70 IQ is a form of intelligence? It's just a low level of intelligence.

They didn't say Apple high IQ intelligence. They didn't say Apple super intelligence. They just said Apple intelligence. It has some level of intelligence. Apple, room temp. Room temp. Room temp. Hi, Apple.

What do you think, Tyler? Do you think that Open AI will be paying Apple? Or do you think Apple will be paying other foundation labs? Or where will the flow of money go in the next few years? Yeah, I don't really see it flipping very soon to where. where like prompts or tokens are like actually super profitable. Because you need like both massive, you need like way better capabilities

and it needs to be way more efficient. Because like if you just have more capabilities, still like right now most people are not paying for chat chabit, they're just using the free plan. Sure, play the free tier. Which is like if you compare, I mean, if you compare 4-0, like look at like five months ago, if you compare 4-0 to like 03,

it was like massive, you know, difference. and people still weren't paying. In cost or in... In capabilities. Yeah. Yeah. And people still weren't paying. So you need it to be like way better for people to actually start paying or you need

to be way cheaper. Yeah. I don't know if I agree with that. I feel like 4-0 was definitely good enough. People were obsessed with it. People were like falling in love with it, right? Even Meek Mill. Like I understand as a power user like didn't get that much out of it.

Yeah, but I think you like if you ask normal people what they think of like AI, they're like, oh yeah, this is not going to take my job at all. Yeah. When reality, if you used like 03 and they, if they used O3 every day, if they were a power user, they would be, I think they'd be way more bullish on AI generally. Yeah. So I think that might be evidence that people like, I don't know, are not. I think, I mean, one crazy dynamic is Apple says, I mean, if they were to do a deal with

Open AI, they could just say, like, great, like, we're going to sign up every, like, how many paying subs do you have? Great. We're going to start heavily. if Apple just starts heavily pushing chat GPT, they will by default get their 30% from the app store, right? But they could work out. So like this could end up being like,

even if Open AI is not directly paying Apple for it, it could end up generating. I don't think it's enough. You don't think it's enough? I don't think it's enough money for the value that it'll bring on. If it was actually integrated into like the Siri button at the low level, I can just press a button. button and say, order me creatine. Order me creatine and it knows my address because it knows my home

address from my contact in the, in there, it has my payment information saved. It does all of that. Like, I don't know if taking 30% of my chat GPT subscription if I subscribe and if I subscribed on mobile, but really most people are going to subscribe on desktop and opening eyes is going to be constantly being like, hey, go over here and like use a web view to like subscribe this way and stuff. I don't know. It'll be interesting to see how it pencils out. I feel like there's going to be some new deal that that's going to happen. Someone's going to, someone's going to pay. Someone's going to bid. Someone's going to pay out. Yeah, the Google team says, hey, we're already paying 20, 20 billion. Why don't we double it to be Gemini be the default? Can you imagine? I mean, if Gemini was the

default on iPhone, that would be bizarre. But I mean, it does kind of like, it does kind of match with the with the search deal, right? Anyway, let's read through Ben Thompson. Maybe we maybe go through the history first to get us up to speed, Tyler. Do you mind taking us to do? Take us through it. So this is the United States versus Google. Yeah.

Which started in 2020? 2020. It starts in October 2020. So that's under Trump. Okay. So yeah, I think let's just go over like kind of the central claim of the actual case first. So it's basically that Google is violating the antitrust act of 1890. It's wild to think of.

about and you know before Donald Trump was a technology founder yeah with true social there was a time where he was beefing with big tech yeah that's crazy so long ago instead of just competing thanks for getting us up on VHS we needed this fantastic only possible on Restream one live stream 30 plus destinations multi-stream your VHS tapes and reach your audience wherever they are head over to it truly is technology is incredible yes also Yeah, continue. OK.

So Sherman Antitrust Act of 1890. I also put some of the victims, previous victims of this act. So we see standard oil. Standard oil. American Tobacco Company US Steel, AT&T. This is what broke up Bell Labs. Probably set us back a couple decades. Do you know who founded Bell Labs?

Who founded Bell Labs? Is it like, I don't know. Is it Claude Shannon? No. No. Who founded Bell Labs? Oh, Bell. Alexander Graham Bell.

Oh, Alexander Graham Bell. Yeah, that's correct. Yeah. Alexander Graham Bell started Bell Labs. Let's go. We don't know how to name. We don't know how to name companies. I know.

I was looking at the names. Standard oil. American tobacco. U.S. steel. What is the A and AT&T stand for? Is that America? American technology and transfer. Okay.

What does AT&T? Okay. Anyway, continue. Okay. Microsoft, of course, it was a headache for Bill Gates for his entire career until he retired. Yeah. Oh, that's so good. American telephone and telegraph. Oh, that's so good. When you pick a name like that and you actually, you understand the job and you're just like, yeah, standard oil. I'm going to standardize oil. I need a name for my telephone and telegraph company. What about American telephone and telegraph company?

Founder. Okay. Okay, anyway. So basically the claim is that they're legally monopolizing the source engine and the advertising market. like in search. Yep. So they're locking up distribution. They're self-reinforcing barriers to entry. And they're like... And the evidence is that they paid billions to Apple and other vendors. Exactly.

Probably hundreds of billions at this point, because it's been like 10 billion for decades, right? Yeah, yeah. So that is... They filed the case, DOJ, in 2020. Should we start with the history of Google Search and Safari? Sure. Yeah, yeah. That might be better.

Okay, so Google Search and Safari. So 2002. 2002. This is pre-Iphone. Yeah, this is pre-Iphone. This is just on Safari on the, I guess, the Mac or whatever it was. So Google is the default there. It's just like.

They just, Apple just picked that because it's the best one. It's just the best thing. They just put it in. Yeah, there's no like deal or anything. So Google has been the default search engine on Apple devices since 2002. Yep. And we don't know specifics. Most recently it's $20 billion annually, but it's been over two.

20-year partnership. I mean, that's a crazy, it's crazy to go. I mean, Google's founded late September, 1998. And then by 2002, you're the default on Apple, like, the previous era, biggest computing company. I mean, I guess Apple wasn't like what it is today back in 2002, kind of pre-Iphone. It was certainly not, like, the biggest company in the world. But still, like, pre-tyler, too. It's all pre, I mean, three years, 2005.

2005. Wow. Hey, if you want to feel old, born in 2005. Okay, so anyway, Sergey Brand, what does he do? So 2005, Sergey Brin suggests some kind of revenue share. They always call it a revenue share. Just out of the goodness of his heart? What is he thinking?

That's crazy. I have to assume there's like there's some competition he's seeing it on the horizon. Okay, okay, yeah. But yeah, I like that they always call it a revenue share. They don't, they're not paying. Sure, sure, sure, sure. They're just helping a brother out, you know? And then, 2016.

Yeah, 2007, 2009, these are like the real negotiations. They're like, it's like, Sergey Brin says like, oh, yeah, we need a revenue share. But then when it comes down to it, he's like, well, you know, let's slow down. Let's push the brakes a little bit. The numbers are getting a little high. And then basically, the actual like numbers are not public. They really only show up as a result of this case, like them being. Oh, after the fact.

So we learned this through the case. We didn't know for years. Yeah. So it's not really till 2021. So there was like a full decade where people were like, yeah, like Google's probably paying Apple something, but it could be like hiding

a $30 million. $20 billion line item and you're you can do it if I believe the disclosure rules in SEC filings are something like if it's a if it's a division of the company that reports the CEO, then you have to break out the financials. This is like YouTube.

This is the story of like AWS when we first got the AWS financials. So if it's just something like like you know is some deal and it's just one deal like it's not it's not even a it's not even like a whole division of the company a deal I did with Steve yeah it's just like just like other other income or something like I don't know yeah so yeah so 2021 it's kind of revealed or estimated at least that payments are around 20 billion a year and then 2023 this is also a result of the case sure Apple is like confirmed to be taking

36% of the the revenue from Safari that Google makes okay no so it's similar their app store revenue a little bit higher 36%. And that's probably how they got to the number. That's pretty crazy that Google's making $60 billion off of. I never knew they got where they were getting 36% for the big man. For the big man. That's crazy. Yeah, and then 2025.

We know you paid to be here, but I'm going to need a cut too. Yeah. Wow. Yeah. Okay. So let's go through the full case, the case. Yeah, so September 2023, this is really the first like, actual trial. It's the bench trial. I don't really know what that is, but August

2024 is the actual like initial judgment. So this is Google is in fact violating antitrust. Yes. Something needs to be done. We don't know what is to be done. But we're going to do, but then we will eventually decide what the punishment is. Yeah. But they are guilty. They are guilty. They were found guilty. There's no, you know, results like what are they going to do. Yes. Yeah, they're guilty. And then it's not until, April of 2025, so this is five years after the, you know, it was actually filed. There's the remedies trial. I think that's what it's... Sure. Yeah, figuring out the remedies.

So this is like what is actually to be done. Now, like we know that they're a monopoly. What do we do about it? And then it wasn't until, I guess, yesterday that we found out what the verdict was. Yeah, I got it. So I think we already went through some of the verdict. Yep. But it's that the judge denied the DOJ's request for forced to vestiture. of Chrome and Android.

They ordered Google to end exclusive distribution agreements. So that's like, I think we talked about this too with Apple. You can't like just, it can't be exclusive to Apple the like payments or whatever. Yeah, what does that mean in practice? It can't be exclusive

so they have to pay like Xiaomi or something. Are we talking about other phone manufacturers? Are we talking about other search engines? Like I know that it like, it's not like if I go into my Safari settings, I can't pick bang. I can still pick other things. It's just the default that they're paying for. Yeah. I have to dig into that. Jordi, do you want to look that up?

I'm asking Gemini. Okay, cool. Yeah, it's kind of like legalese. And then there's mandating Google to share search index and user, basically sharing data with competitors. I don't understand the exclusive. So Google pays Mozilla. Yeah. They, Mozilla basically wouldn't survive. without Google, apparently. It's like a very significant amount of their revenue, which is funny because Google obviously competes with... On Chrome. With Chrome.

And then they do this with device manufacturers like Samsung that just continue to make Chrome and Google Search pre-installed. Sure, sure. Okay, and then what's the last one? Search Index, sharing of the search index and user interaction data with rivals. So was that bang?

I guess. Yeah, so I guess this means, these are all basically direct quotes from the actual, like, file. But I assume it means that they have to just share some of the actual like, actual like, index data from like whatever page rank is. They have to like put it out publicly. So we got to hammer the chief product officer of Microsoft today about Bing and what this means.

Because, yeah, I mean, there's got to be a way to make money off this if you're Microsoft. This is the way to do it. Okay. Anything else from the history? Okay, so just to be clear, they prevent exclusive contracts. So Google is barred from entering or maintaining exclusive contracts that give it search engine, Chrome, Google Assistant or Gemini app a monopoly position on a device. Basically they can't go to a smartphone manufacturer and say you just can't host any other.

Sure, sure. In the chat, Paracletes says Google's only going to share their search data with like other top three companies. It's still remaining a monopoly. interesting and people enjoy the VHS. So thank you for for tuning in. Also, so these rules also apply to like Gen A.I stuff. All this also applies to like Gemini if they want to do the same, you know, if they want to lease it to Apple or whatever, all the same rules apply about. If you've been enjoying the whiteboard segments, we are thinking about getting a smart whiteboard

where we can put up a fig jam from Figma, of course, sponsored by Figma. Think bigger, build faster, Figma Health Design Development Teams, build great products together. You can get started for free. Figman.com. Let's run through Ben Thompson's take. So he kicks it off with Google's remedy decision, Alphabet Inc. will be required to share online search data with rivals while avoiding harsher penalties, including the forced sale. We know this.

Google's statement was short and sweet. Earlier today, U.S. court overseeing the DOJ's lawsuit over how we distribute search, issued a decision on next steps. Google closes, says, as always, we're continuing to focus on what matters, building innovative products that people choose to love, choose and love. That's a statement of a company that lost some battles but won the war, in my estimation, says Ben Thompson in Stratory. She should go subscribe to.

There are some cursory objections to Judge Mata's decision, but by and large, that statement exudes relief and rightfully so. The company that is truly breathing, the company is truly breathing easier today, however, is Apple. Apple's actually breathing easier because they're getting that. Sweet, sweet. Sweet, sweet. So, sweet, 236% off the top.

99% margin, 20 billion a year. The first set of remedies were the ones that Google proposed and has already implemented, namely, ending the exclusive agreements that were the foundation of Judge Meta's original finding of liability. So let's see. I want to know what these actual remedies are. Here we go. Again, this is literally illegal behavior. What?

we should just highlight again. So Google will be barred from entering or maintaining any exclusive contract relating to the distribution of search, Chrome, Assistant, and Gemini. Google shall not enter or maintain any agreement that conditions the licensing of the Play Store or any other Google application on the distribution preloading or placement of Google search Chrome. This is the bundling thing. So a lot of the antitrust cases hinge on bundling.

You say, oh, you can't have the Play Store on your Android. phone unless you're defaulting to search or you you have to have Chrome pre-installed if you want access to search like all of that stuff is is seen as anti-connected. And so Ben says again this is literally a legal behavior so ending it was the bare minimum. Anti-trust precedent however dictates that judge meta go further again from the opinion. This is from meta. Yeah. Oh this is good too. So they cannot enter or maintain an agreement that prohibits any partner. either Apple or Samsung from simultaneously distributing any other search engine, browser, or Gen AI product.

So Google can't go to someone and say, hey, you, in order to have search as your default or Google search or whatever deal we're doing or whatever we're paying you, you can't have Anthropic pre-installed or you can't have Mozilla pre-installed. Like you can't be in the contract. Yeah, can't be in the contract. And that was, and that is illegal behavior. And so ending it is the bare minimum, says Ben Thompson. Antitrust precedent, however, dictates that Judge Mehta go further.

Again, from the opinion, the question now is what to do about Google's violations precedent requires fashioning antitrust remedies that effectively pry open to competition, a market that has been closed by a monopolist's illegal restraints. Denying the fruits of the violation is a valid objective. and so, too, is ensuring that anti-competitive behavior will not recur in the same or related ways. The court has broad discretion to impose remedies to accomplish those aims. Judge Meta laid out four fruits of the violation. The court found that the agreements had four main anti-competitive effects. They won. Foreclosed a substantial portion of the relevant markets, thus impairing rivals' opportunities to compete.

Two, denied rivals access to user queries or scale. needed to effectively compete. Three, reduce the incentive to invest or innovate in search. And four, enabled Google to increase text ad prices without any meaningful competitive restraint, thereby allowing Google to earn monopoly profits to secure the next iteration of exclusive deals through higher revenue share payments. These effects did not persist independently together. They enabled Google to widen the moats and pull up draw bridges to ward off competition. Great analogy. Judge Meta attempts to address number two necessary scale by forcing Google, to share various types of data including Google's search index but not the actual data from the

web pages and the index or the output of google's page rank algorithm competitors which explicitly include gen a i providers will get a one-time snapshot not an ongoing one and only need to pay google's marginal cost for providing the information user click and query data showing what results users clicked on competitors will get this data at least twice but the final number will be determined by the technical committee, the court will set up and oversee. Do you fully understand, like, yeah, that's a very, very odd, like, change and, and, remedy. Like, I, I guess it, like, lets people catch up to where things are.

It feels like the remedy is, like, like, there has been this unfair advantage for Google for years. We're letting everyone catch up, and then we're creating, like, a fair race, but we're restarting the race, and then everyone can go out and do whatever they want. Current thing is big numbers. $200 million for the free press, Barry Weiss's media company to CBS. People did not like the quiet in the chat.

They said, scream. $610 million for the browser company. We talked about that a little bit yesterday. Ramp hit $1 billion in ARR. Great hit, great hit. 600 billion in meta-capex. And one trillion, potentially, on the... table for Elon Musk at Tesla. So we're going to go through this. So the free press is one of the

most impressive media companies built in the last decades has Austin Reef from Morning Brew, correct? Yes. Huge congrats to Barry Weiss, Nellie Snoosy Weiss. This is a funny name. For building something truly different. This is, I think, still rumored. I don't think it's fully confirmed at this point, but it's all but. Yeah, it was hard to tell which side was leaking the news. Yeah, there's this dynamic where media likes to talk about media, and I feel that 100%. It's super interesting to hear about, like, the business of Joe Rogan or the business of Huberman or any of the experts. But so obviously also, you know, you're surrounded by journalists, literally, if you run a media company. So they all talk.

Journalistic force head of gone to you. I heard that one before. But you're surrounded by journalists. And so obviously everyone talks and the media leaks out and the news leaks out. and the news leaks out. And it could be interesting ways for either side to put pressure on getting finish line and getting what they want out of the deal.

Yeah, yeah. And so there's a series of takes I was talking to a buddy who works in media who was coming at me with like, it's a crazy number. And so that's kind of level one. Level one of the take is like on a price per subscriber basis.

Seems high. I think they have about a million free subscribers, $200 per free subscriber. Feels like a lot, I guess. Kind of hard to tell if you think about long-term value for CBS. But then others are complaining about the political implications of the deal. Is this something that's like a give to Trump to help get the demurger or the spin-out

approved, something like that? Yeah, and I mean, this is an $8 billion deal, this merger. And media companies are now entirely, like, media companies at their best are personality led. Yep. And paying $200 million to bring on. a face for CBS, one of the most important properties makes sense. Yeah, that's my, that's my level three, like, final take, which is that you sort of have

to put aside the price per subscriber, you know, take, and you have to put aside the political implications of the take. I just think about it from, it's a big company, $8 billion, you said, something around there, does bringing a younger, more entrepreneurial talent into. the organization move the market cap by 1% or 2% over the next few years. Like it seems like the same math that we're doing for buying a very expensive AI researcher. You're paying a lot of money in terms of like what like a salary would count. But you just can't get that level of talent on any sort of normal.

The overall property. Exactly. Exactly. And so I was, the person I was talking to who was like, this is a ridiculous price. I was like, yeah, but dude, like if you were at the. CNN, you could probably add $200 million of value to that organization pretty quickly. And so it's just a matter of time until like the market and the board of directors and the shareholders kind of wake up to that dynamic of how power loss certain people are and actually

go and figure out how to get the deals done. And David Ellison is doing deals, right? He just did the UFC deal. 100%. 100%. So there's a lot of big numbers flying around. And there's an interesting dang damn. And the premium, right? We saw this yesterday with the browser.

Oh, yes, yes. You do get a big, fantastic outcome for having the the beginning of the name. Maybe we should just be the business production network. Drop the technology. Technology's over. The hype cycles peaked.

We're just the business production. We're in the trough. We have some fun stuff coming in terms of the hype cycle soon. But it's interesting because many companies just cannot justify putting someone on staff or our $100 million W-2.

We've seen this as Apple with Tim Cook. You know, the CEO pay. Once you get into the, the, these eight, nine figures, it just gets hard. Thank you for bringing that up. No, thank you for, no, seriously, thank you for bringing that up. Oh, yes, is. Thank you. Apparently, Tim Cook, we'll try to pull up this video in a bit.

Apparently, he said thank you 12 times in two minutes when talking with President Trump last night at the dinner. Yeah. So, he's very grateful. So the, so, yeah. Meta's like the first company to really like break this trend of just like, yeah, we're willing to pay $100 million in salary. We will do the crazy acquisitions and the aquilers to get really talented people in the org. But I don't think other companies are in that world where they could go out and hire somebody like a Barry Wise just for $100 million.

It's got to be done through an acquisition. That's what gets board approval. That's what gets shareholder approval. And so you're kind of wrapping an individual, an influencer, someone who's incredibly talented. an entrepreneurial around an organization just to actually get the cash flow to flow through. It's making me think about CBS News for the first time in decades. Yep. Yep. Yep. Yeah. Yeah. It's true. And even if the, even if like the subscriber numbers are like a little low, I mean, honestly, a million is a ton. It's great job. But even if they are

a little low, it's like, well, what are they compounding at? What will the free press be able to be at in a decade with the support of CBS and the and the backing, financial backing of CBS and Barry Weiss's execution strategy, like could be 100 million. I don't know. Could be really, really big. But you don't have to raise money for it. You can just focus on growth. Anyway, similar story at the browser company, $610 million from Atlassian.

Very interesting deal. The timeline was not a fan of it. They came from the land down under with a brink's truck. Yes. And so a lot of people are asking, is this summit run around by the Australian government to try and influence the browsing habits of Brooklyn hipster? I don't think there's much of that. Try to control the narrative.

Exactly. So as a way to say, you know, what if we could get all of the data from Brooklyn hipsters, all their browsing information, their communication? Yeah, they're known for drinking PBR. But what if every time they went to PBR on the ARC browser, the DIA browser, it just automatically rerouted them to Foster's. Yeah. Or the AI assistant on the side pop.

Oh, oh, you're in DIA. You might like foster. You're asking, oh, what should I do this weekend? and just auto populates, oh, yeah, we're using AI. Why don't you throw another shrimp on the Barbie? Yeah, and if you search, is it true that kangaroos are extremely violent, it'll start spinning it and saying, well, actually, you know, they're only violent when promote.

Provoked, yeah, they're actually quite peaceful. Yeah, your dog actually tried to barked at the kangaroo, and then the kangaroo went after it. Exactly, exactly. I think this is really smart from Australian, from from from from people pulling the strings in you know in Australia yeah yeah to get a little bit more influence over the Brooklyn hipster yeah and the Ark and Dia user yeah Zab did not like the acquisitions pull this up me uninstalling arc is a certified atlasian hater there is a wild

gap between the vibes and so some people had this take that like uh it was an it was a vibe acquisition they acquired good better vibes with the next generation of founders I think this is funny, but I think that from what we've seen, DIA, they're going to continue to operate independently. I bet they're going to build some beautiful enterprise browsing experiences like they always have. Yeah. And they should build in re-stream. One live stream, 30 plus destinations, multi-stream and reach your audience wherever they are. So you should be able to stream from your DIA browser, from your ARC browser.

So my take on this was there's, so basically right now the team, is saying, we're going to stay independent. We're going to go. But my question is, are they going to stay? Are they going to stick with that narrative of, like, stay independent? And this is very rare for pre-product market fit acquisitions. I haven't seen a ton of examples of that where a company was acquired that wasn't, like, clearly on a, you know, just dominant path.

Instagram was bought for a billion dollars. Yes. And almost everyone involved at the time thought that it was crazy. They did. Yeah. That is true. And it was like a key threat to Mehta's business, right? Like the user growth was insane.

I mean, I would love to look at the retention metrics for DIA versus Instagram. Because it's totally possible. I don't know. Do you know how many DAUs or total downloads Instagram had at the time of acquisition? I know it was small. But was it sub a million? I feel like it might have been a little bit bigger. Can someone look that up?

But basically. Look that up, Tyler. I'm also curious about YouTube. as well. YouTube was bought for... Yeah, how many people were using YouTube? Three times.

Yeah. And again, the dollar isn't what it used to be. Yep. Yes. So when Instagram was acquired, estimated around 860,000, so less than a million.

DAUs. Okay. Okay. So... DAUs, though. Yeah, yeah. But still, I mean, we're in the same ballpark here.

Very interesting. Instagram. People that have... Yeah, yeah, yeah. If DAUs is wildly different than total downloads. Okay. Okay.

Yeah. But still, I mean, we're in the rough ballpark where you could, where, at the very least, we have to take what Atlassian is saying and what the browser company is saying at face value. They are saying, we're going to continue building this browser. We're in it to win the AI browser. We're going broad. We're going consumer. This is not, we're acquiring this browser.

We're going to bake it into Trello and we're going to bake it into Jira. No. I actually disagree with you here. They don't, they're, all the messaging was that. they're not going to be focused on consumer. Like from Atlassian CEO was that we're going to build great enterprise browsing experience. Oh, okay, okay. So there's nothing, there's nothing in there that I saw from the Atlassian side that said,

we want to win in the consumer. Oh, really? Really? Okay. Interesting. Yeah. They are, they know their business, right? Okay.

Yeah. So it's very interesting. I can't imagine having like a work browser, but maybe that makes sense. I mean, people have worked laptops. But I feel like the trend has been you have, you have like one phone that you do work and life on and then you have separate apps and maybe you have, you know, an enterprise software product installed on your phone. But really like there's, the trend seems to be more people using like Gmail and Google email at work. And it seems like there's less and less like, oh yeah, like I have a separate work computer with a separate operator system. Chrome is very set up. Chrome is already very set up to have like profiles. like personal profiles and work. Yeah, I have, I have, too. I have a personal one and I'm a VPN one.

So I don't know. Yeah, we'll have to see. I mean, the founder is saying like we're going to keep working on DIA, but maybe that means in the enterprise context. Anyway, we'll have to keep an eye on like where they wind up going. So Mike said, again, I said this yesterday, with DIA browser, we're going to collectively redesign the browser to help knowledge workers kick butt.

in the AI era. And so that to me kind of reads a little prosumer, right? I don't think they're, but it feels like, you know, very much oriented towards people that are working in the browser. Oh, yeah. OTP says, get Sager on here to give pushback on TFP. Bye, he's going postal about it. I should text him and see if he wants to hop on.

We will, yeah, we'll definitely get him on when, when he's ready to, to, you know, go live and, And have some takes. I also invited Barry Weiss. I'd love to hear her side of what's going on and what her plan is. It's a fascinating story. Of course, these are still, like, leaks. So most people don't want to talk until there's, like, finalized information.

Anyway, if you're trying to design a browser, you've got to do it in Figma. Think bigger, build faster. Figma helps design and development teams build great products together. Get started for free. And the third big number of the day, ramp has crossed one billion in revenue. Sheesh. says Tyler Hodge. A key question is whether it's gross revenue.

It's now revenue. I think it's gross revenue or he goes back and forth on this. But anyway, they've been on a tear. As David Senra likes to say, it's a great example of taking a simple idea and doing it deadly seriously. Taking a simple idea deadly seriously. I think David was quoting someone, but I attribute everyone's quotes to David. To David's now.

We should pull up these videos from the dinner at the White House last night. I only have one question for Eric, which is, is the job finished? So we will figure that out today. Are you going to call him? I'm, he's busy. I'm going to play this video. Oh, yeah. Please.

You've done an incredible job with Apple, a little company called Apple. Thank you, Mr. President. Very, very few people have been able to do what you've done. Congratulations. Thank you, sir. That means a lot to me. I want to thank you for including me this evening. It's incredible to be on my.

everyone here particularly you and the First Lady I've always enjoyed having dinner and interacting I want to thank you for setting the tone such that we could make a major investment in the United States and have some key manufacturing advanced manufacturing here I think that says a lot about your focus and your leadership and your focus on innovation I also want to thank you for helping American companies around the world. This is a very key thing, and I really enjoy working with your administration

on those topics as well because I think they're so important to the country. I want to thank the First Lady for focusing on education. There's nothing more important than education. It is the great equalizer. Triple glist. And always will be. And so thank you so much for including me.

We are all different in some ways, but we all believe in the power of technology to improve people's lives. And that is the thing that binds us all together. And Tim, how much money will Apple be investing in the United States? Because I know it's a very lot, and you know, you were elsewhere, and now you're really coming home in a big way.

How much money would you be investing? $600 billion. 600 million. We're very proud to do it. That's great. Thank you very much. Thank you. Appreciate it.

Thank you, sir. We did that 10? Thank you. I think it was 12. Somebody else had counted it as 12. I was around 10. Yeah. Crazy.

We should. Why wasn't Christina from Vanta there? I feel like that's key to the U.S. Tech strategy. I agree. Automate compliance, manage, risk, proof, trust. Continuously.

Vantta's trust, management platform takes the manual work out of your security and compliance process. All right. We got to pull up this video. With continuous automation of Zuckerberg. This was our fourth big number of the day.

Zuckerberg says he will invest around $600 billion by 2028. Zuckerberg says META will invest $600 billion in AI infrastructure by 2008. Meta's already guided CAPEX of $70 billion in 2025 and $100 billion in 2026. So that's a big ramp to go from $70 to $100. And then they still got $430 billion to do in 27 and 28 to actually. to actually reach 600 billion. Spending would need to jump to 200 billion in 2027 and 300 billion in 2028. That's a lot of dollars.

Video in the timeline. Let's play it. This is quite a group to get together. And I think all of the companies here are building, just making huge investments in the country in order to build out data centers and infrastructure to power the next wave of innovation. So we don't often get. get together as the CEOs of the different companies, but it's good to see if all.

How much are you spending, would you say, over the next few years? Oh, gosh. I mean, I think it's probably going to be something like, $600 billion dollars in the U.S. That's amazing. No, it's significant. That's a lot. Thank you, Mark.

It's great to have you. Well, thanks for hosting us. hosting us and this is quite a group jane. So does anybody in the chat know if which, which of them went first? Yeah. Because that number, that number does not align with, that number does not align with, with Mattas stated. Yes.

Yeah, it doesn't appear in the SEC filings yet, but it is like very forward looking. No, it was 2028. 2028, which is something that they might not actually put out or might not be demanded by the, by Wall Street, but that is hilarious. Anyway, whatever they do, they're going to have to do it on graphite. Graphite. Graphite Dot dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster, get started for free. Yeah, so meta-guided, uh, CAPX of 70 billion in 2025 and 100 billion in 2026. So to get to 600 billion spending would need to jump to 200 billion in 2027 and 300

billion in 2028. Yeah. What's interesting is that, uh, so these numbers are like insanely big. And obviously it looks like a big acceleration relative to past KAPX numbers. But I'm so inured to big numbers now because of the fast takeoff crowd that was like, oh yeah, like trillion dollar buildout data center like next year for sure. Like AI 2027, like it's going to be 10 trillion. It's going to be $500 billion. And so like when I hear $600 billion, I'm like, yeah, yeah, that sounds like totally reasonable. Like I think they'll definitely hit that.

And I don't know, but they probably will. It doesn't seem like there's many barriers in the way. Like it's just continue to grow the core business, run more ads, dump the profits into CapEx, build some more data centers. Semi-analysis, Doug O'Loughlin over it, Fabricated Knowledge has a good deep dive today on the glut of lagging edge chips that I think we might have a chance to get to in a little bit. But it was a fun dinner. Are there any other videos that we should play from the White House dinner?

I like the idea of, this is like, this is kind of a new podcast format. Just have a dinner with everyone, have some cameras there. And just yap. Just yap. Yeah, that's good. What's up, Tyler? I don't have another video, but there is a photo that came out. I'll send it to the chat.

But it was like the full dinner. And right at the very edge, I'm pretty sure it's Dylan Field. It is. Yeah, yeah, yeah. So someone had the full breakdown here. It's in the deck. It's much deeper. Let me pull it up.

Where is it? The full list of, people who attended the dinner is, wow, there's a lot of stuff. Okay, so Ed Ludlow has it. The full list of attendees at President Trump's dinner with tech leaders. The president, the first lady, Susie Wiles, Sergey Brin, Jerilyn Gilbert Soto, Sam Altman, Greg Brockman, Anna Brockman, Safrakeh, Galtarach, Justin, Jason Chang, Meredith O'Rourke, Natalie D'Ompé, Tony Fabrizio, Dylan Field,

John Herring, Jared Isaacman. Jared Isaacman, oh, I guess he was... You're missing one. Yeah, Elon didn't go, but isn't... Oh, Chimoth is in here. So, Sunny Madra, Satchanadella, Chimoth, Palli Hopatia, Sender Pachai, Mark Pankis, Vivek Ranevi, who owns the Golden State Warriors.

And I believe Vivek Ranadevei is the, like, the guy who worked with Chimoth on the first Spaks. And Vivek, Ranadivay kind of like pioneered that format almost. Did you say Lisa Sue from AMD? Lisa Sue made it. David Sacks, Shams Sankar from Palantir. We missed him yesterday.

He was at this dinner in D.C. Jamie Siminoff, Alex Wang, Sanjay Marota, Tim Cook, David Limp, Mark Zuckerberg, and Bill Gates.

What a crew. Jensen didn't make it. So the fact that Jensen and Elon are not there, I feel like you shouldn't read too much into it. It's kind of just like Trump catching up with a bunch of people, but I don't know. There's also like this, yeah, I don't know.

They have it like falling out, but it seems like they've kind of patched it up. I don't know. Always hard to read too much into this stuff. But speaking of Elon Musk, he didn't need to be at the White House because he's setting up a $1 trillion pay package. $975 billion. Oh, it's not a trillion. Just a little bit shy. Okay.

So the update is Tesla's board has greenlit a fresh pay package for CEO. Elon Musk. If he hits 400 billion in adjusted EBITDA he deploys 1 million robo taxis for commercial use, ships out 1 million energy storage units, produces and delivers 20 million vehicles, secures

1 million of ongoing FSD subscriptions, aim for a 8.5 trillion dollar market cap. The gold retrievers are barking. 7 and a half to 10 years in the CEO role. The starting share prices, 334 and 9 cents. The package

includes 12% of company stock divided into 12 segments. And so, um, Signal says this is a master class in how to design incentives. This deeply ties Elon's upside on the world radically improving. If he actually hits those milestones, the value unleashed for society dwarfs his payout. Most CEO comp is rent seeking. This is moonshot seeking. I completely agree. Every pay package for executives should be this absurd on both sides for the company and the individual. And this was exactly my take. It's like bet on yourself. He's done this. He's done this before. And Dan Primack, when the pay package, the most recent pay package came into, under like legal scrutiny, Dan Primack was like, I like this when it was announced. And I thought it was crazy. And I,

and everyone thought it was impossible that he would pull it off. And he did. So he deserves it. And so it was this crazy legal battle, but it was actually aligned with exactly what a CEO should be doing, creating shareholder value. This should be a model for CEO comp going forward in my opinion. There's another side of this, which is increasing a founder-CEO stake by doing aggressive stock buybacks, but this is a way cooler because it incentivizes bold investments and huge cap-backs on factories, moonshot technology gambles, and generally thinking in decades. So I'm super stoked about it. I think it's good. I hope it holds. It's a good way to signal. I mean, they're very much signaling to the base.

We're going. Tesla Army. That there's a lot of potential upside. Totally. Chris Camillo said earlier, been tracking XAI, accelerating cash burn, flattening user growth, monetization, and fundraising struggles since the beginning of this year. And I don't see how they last another 12 months without a Tesla or Elon bailout. I mean, saying I don't see how they last another 12 months without the founder bailing them out. It's like, that's kind of the founder's job.

I just continuously bail out the company. But I thought this was relevant because I do think that, part of this, part of setting up this pay package could set up a scenario where XAI gets just merged into Tesla and it becomes a standalone. It just all gets rolled in. Yeah. Yeah. I mean, Tesla has, I mean, Carpathie work there. Like, it's, it's a fantastic AI organization. And it makes sense that there would be a lot of overlap in, in what they do. I guess there's probably, and I mean, if X, the Everything app was part of a public company again, how is that knock? How does that get valued at less than $8.5 trillion, right?

That's a good point. And so with Elon having that ace up his sleeve, the fact that we're all addicted to this app. Yeah. I mean, I guess it's good that there's other milestones in there that you can't just like merge everything together. Because if you merge it in SpaceX and XAI. It's like shipping out one million energy storage units

feels like wildly like this even need to be included if you're going to deploy one million robotaxies for commercial use. Yeah. That one seems a little bit, I don't know, easy sandbag. Who knows?

Yeah.