TBPN Live - Sam Vs. Elon Continues, Turning Soldiers Into Superheroes, Boomless Cruise, Market Map Drama

Episode Date: February 11, 2025

TBPN.com is made possible by:Ramp - https://ramp.comEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.comFollow TBPN: https://TBPN.comhttps://x.com/tbpnhttps://podcasts.apple.com/us/podcast/technology-brothers/id1772360235https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV(02:18) - Sam Vs. Elon Continues (20:00) - Palmer's Making Superheroes (42:00) - Quiet Booms! (45:45) - a16z's Market Map (58:29) - Alien ETF (01:05:54) - GPU Whisperer (01:12:33) - WSJ Breakdown (01:27:37) - Hims Superbowl Ad (01:46:10) - The Timeline

Welcome to Technology Brothers, the number one live show in tech. We are live from the temple of technology, the fortress of finance. That's right, the capital of capital. It is Tuesday. What day is it? It's February 11th, three days from Valentine's Day. So get ready for that. This show starts now. We have a fantastic show for you we're going through open ai's uh crazy uh fight with elon andrew launched vr headset they're working on the new ivas system with the military uh boom supersonic they don't have a boom anymore they're going boomless we'll break it down a16z launched a new market map we're going through an alien technology etf you're going to be able to bet on technology in the public markets.

We're breaking down the GPU Whisperer, a good buddy of mine who helps build out GPU clusters. We're going through a defense tech op ed, pouring some cold water on all the defense tech hot companies right now in the Wall Street Journal. And we're breaking down the HIMSS Super Bowl ad. And then, of course, we have a fantastic timeline looking through a bunch of posts on X4U. Jordy, how is your day? How have you been? What's new with you?

Four espressos so far. About to crack a Red Bull, firing on all cylinders. Let's go. I got to hang out with Patrick O'Shahaughnessy this morning which was fun um and uh yeah just get got me really fired up on uh content i love making it i love listening to it and i'm very excited about what colossus has coming up i got some big stuff in the works but um yeah a lot of a lot of news to cover this uh the timeline the timeline has been consistently in turmoil and it's a blessing for uh episode 50 jordy can you believe it's episode 50 episode 50 baby ah can you i i can't honestly genuinely can't wait for episode

5 000 that's really the one that's the one takes most podcasters a year we've been doing it a couple months we caught up we caught up we caught up i love it bad day to be a weekly podcast it's very weak it's right in the name anyway let's move on to yeah let's move on to the open ai news we got a clip from sam altman he is in france uh at an AI summit. JD Vance is there. Emmanuel Macron is there. Lots of heavy hitters, lots of size lords. But of course, they asked Sam about the craziness from yesterday. Elon submitted a bid to buy the OpenAI nonprofit for something like $97.1 billion or $97.4 billion. Obviously, that complicates the for-profit spin-out and conversion process that's obviously kind of unprecedented at this scale. And so let's go to Sam. Let's hear what he had to say in France about this offer.

OpenAI is not for sale. The OpenAI mission is not for sale. Elon tries all sorts of things for a long time. This is the late, you know, this week's episode. You take it seriously at all? What do you think he's trying to drive out with this? I think he's probably just trying to slow us down. He obviously is a competitor. It's, you know, he's working hard and he's raised a lot of money for XAI and they're trying to compete with us from a technological perspective, from getting the product into the market. And I wish he would just compete by building a better product, but I think there's been a lot of tactics, many, many lawsuits, all sorts of other crazy stuff, now this. And we'll try to just put our head down and keep working. Do you think Musk's approach then is from

a position of insecurity about XAI? Probably his whole life is from a position of insecurity, I feel for the guy. You feel for him? I do, actually. I don't think he's like a happy person. I do feel for him. Okay. Do you worry that he has this proximity to the president

and he can influence the decision-making of the U.S. presidency and policies around this agenda on AI? Not particularly. Maybe I should, but not particularly. I mean, I try to just wake up and think about how we're going to make our technology better.

What do you think jordy narrator he wasn't just thinking about how to make the technology better like uh you know the elon like here's the whole situation elon feels that sam has played extremely dirty you know doing the whole uh I'm just doing this uh because I love it bit you know Senate you know testifying in front of the Senate to then converting into a for-profit uh Elon is frustrated because he was very early to this trend now he's like playing catch-up with XAI both of them in their own ways have been playing dirty, right? Elon's choosing to do that through lawfare. And it's in, you know, it's in many ways, like exactly what Elon should be doing, right? He feels like he was, feels like he was slighted, feels like he deserves some aspect of, you know, some position in the company.

And then simultaneously, Sam is doing exactly what he should be doing, which is fighting the lawsuits, trying to keep the team focused on the mission and the product and winning. Um, and when I look at every founding journey is like a rollercoaster ride. Anybody that's built the company will tell you it's like a rollercoaster ride. One day you're like super stoked the next day you're, you know, questioning, like, is this going to work? And if will tell you it's like a roller coaster ride. One day you're like super stoked. The next day you're, you know, questioning like, is this going to work? And if you think about Sam's like last two weeks, it's like, okay, deep seek launches. And like, so that's like a low moment. And then they launched like deep research and then, you know, he's getting, and then

it's like a Superbowl ad and then like a new lot, like new lawsuit, new offer to buy the company. So it's like it's it's, you know, the waveso of a much much much much you know a company that that is like a tiny tiny tiny tiny fraction of the size um i feel for sam in terms of like the roller coaster that he's going through and how difficult the job is where you know i just posted about this five minutes ago sam is actively competing with four of his former co-founders in OpenAI that have all raised more than, you know, that have all raised billions of dollars. So not only is he fighting like the world's richest man, he's like in lawsuits, he's getting attacked by DeepSeek, he's fighting for, you know, three other of his former partners. And so the pressure, it can't be overstated how much

pressure he's under. And so I think that he, I read this as like good talking points. He's nailing it. You know, it's a good response, but you can tell it's wearing on him, like getting to the point where he's saying, I wish that they would just focus on the product or the technology. So it's clearly wearing on him. And, and I don't know, there's not many people on earth that would be able to deal with this much pressure for this long while being this much in the spotlight while trying to you know innovate in a very meaningful way while trying to stay ahead of all these other labs while trying to stay ahead of china um while facing you know i didn't even bring up like meta and facebook and llama right like that's been a whole other aspect. And so, you know, Sam made a choice to play the biggest game in the most competitive space. And

now he's dealing with the repercussions on that, but there's not a CEO on the planet that's under more pressure than Sam Altman. Yeah. And it certainly does. It pales in comparison to like Steve Jobs was not under the same level of pressure when he was launching the iPhone. Even Zuck. I mean, they were making movies about him as a kid, basically. Yeah. Basically hit piece movies about everything he did. It was rough. He did not have the world's richest man going after him at that time. And in in fact he was partnering with microsoft and bill gates and it was somewhat of a friendly relationship it wasn't that much of like google wants to kill you yeah google launched uh google circles or whatever that was uh i can't

remember the name but it was like kind of a shot across the bow it was nowhere near as serious as what's going on right now um yeah and so what's interesting is that Sam actually has to kind of restate the fact that, hey, the nonprofit is still going to exist. People don't even understand what's going on there. It's not that the nonprofit is converting. It's that almost like you're running a nonprofit, you discover some gold in those hills that you happen to own, or you invent something brilliant, and then you're spinning it out as a company. You're effectively selling that asset off the

balance sheet of the nonprofit. And it's very confusing because the nonprofit does want to continue going on. And it's not really a full conversion. There's actually two organizations that are going to split out. But it's all been so complicated from day one that it's been just, there's been so many vectors to attack it. And it's not just Elon, Zuck has also put pressure on them in California for trying to do this. And what's interesting is that I think about the dawn of open AI, like what the initial pitch was and what the initial strategy was. And it's very clear to me that no one actually predicted scaling laws would be as capital intensive as they wound up being. The thought was, let's get the smartest people in the world, the smartest computer scientists, Greg Brockman. He was the CTO of Stripe. He's already really,

really rich, probably a billionaire. He's going to work for a nonprofit for whatever, healthcare. It doesn't matter. And a lot of people are going to say, hey, yeah, I could make 2 million a year at Google doing ads, but this nonprofit is still going to pay for my health insurance, pay for my kids. It's going to be a fine life. And I get to work on the most important problem in human history. If it was just a human capital problem of just let's design the perfect algorithm for AI, game over. You don't need the capital. It works as a nonprofit. The original strategy works, but then they run into the scaling law. And all of a sudden, it's very funny to me. It feels like the machine God of AGI is like, okay, humanity, if you want to summon me fully,

you have to be all in on capitalism. None of this nonprofit, this nonprofit stuff does not work. You have to be a highly tuned capital formation machine in order to make this happen because I demand GPUs. I demand sacrifice of GPUs to the Shoggoth. And so it's very interesting how it's played out. But what else have you taken away? And then maybe let's move into some posts and some reactions to this. Yeah, it's an interesting scenario to think about. Would OpenAI be the company it is today if it didn't have this massive group of founders that now is its biggest detractor, right? The fact that you have Mira going and raising billions for a company to directly compete with the original company. You have Ilya doing the same thing, right? You have John going to Anthropic, helping them out,

now going and joining Mira, right? So in many ways, it's like the company probably wouldn't exist in its current form if it didn't have like all these brilliant minds working on it. But it also set it up because of how, you know, brilliant and independently gifted all those, you know, founders were. It also caused all of them to basically think, I can do this better myself, right? Yeah. And I'm going to do this better myself and I can attract the capital. And, you know, if, who knows, right?

And they're all sort of drafting off of Open AI in terms of like the billions of dollars that were spent on, you know, research internally and the learnings from that. And just like genuinely, you watch the probably read the Ashley Vance book or documentary, because it's going to be it's going to be absolutely wild. For sure. Let's move on to some posts. Kevin Kwok says Elon's open AI bid, of course, is to move FMV fair market value for nonprofit conversion. Interestingly, this has been gray area in tech startups because technically anyone can screw up a company's 409A slash option pool planning by sending unsolicited term sheet, which is very interesting. I didn't know that you could actually do this.

Hasn't been a major issue because it would be a very aggressive move and burn bridges. Plus, mostly companies are fuzzier on all this stuff with IRS than they should be. But this has been a known attack area for a while. Kevin follows up and says, I really do want to spend one day. I really want to one day spend a weekend talking with both OpenAI and Elon's legal slash tax people.

Not about this thing, just in general, they have such amazing structures. They have navigated. Sigh. And I love that he's just like, I want to nerd out with these folks because they've done such crazy stuff and it really is crazy i know multiple uh people that got early access to open ai in their first for-profit like fundraising and they just passed even though it's like how could you pass on that team like the initial team was like greg brockman sam altman like it's just the most insane founding team and it's like they're gonna make money like you shouldn't it's all green flags and then you just see the biggest red flag ever which is like

you're not getting stock you're getting units and and of course like yeah it seems like it's gonna work out and and it could but it's obviously yeah and it fight yeah I mean there are so many reasons that you could have written a memo and said, I love the team and the opportunity, but it's not the right fit for our firm. On his note about, you know, term sheets, potentially screwing up foreign A&As and option pools, every startup founder eventually goes to a position where they're expecting a term sheet. And then they're trying to process a bunch of like, you know, employee onboarding type stuff to make sure that it hits before getting that term sheet. And I've been in positions before

where I've told the investor, wait until end of day Monday to send this because like, I need to get a few things in order to make sure that my, you know, people that are about to join the team are getting refresher grants are going to get them at the, at the, you know, previous valuation effectively. And so SMB attorney says what Elon Musk just did in his 97 billion bid for OpenAI is genius. The previous go private price was 40 billion. He's playing chess. Here's why. Delaware courts apply something called the Revlon rule to M&A bidding situations. When a board decides to sell a company, their legal fiduciary duty shifts to getting the highest price for shareholders. But OpenAI isn't a normal company. It started as a nonprofit, then created a for-profit arm, OpenAI LP, to raise investment. That structure creates a legal gray area. Musk's bid isn't about just

buying OpenAI. It's about forcing a decision. If OpenAI's board even considers transitioning fully into a for-profit company, Musk's bid puts them in a position where they might have to apply Revlon rules, maximizing value just like any other corporate sale. It's a strategic move that could expose whether OpenAI is still mission-driven or if it's just another big tech company playing Wall Street rules. And that's the real play. Musk is challenging OpenAI's leadership on both legal and ethical level, testing whether their decisions align with their original vision

or the financial incentives of investors like Microsoft. Sam Altman and OpenAI's board rejected Musk's offer outright, but that response raises more questions than it answers. You see, they probably have a duty to create a special committee, consider all offers and entertain an auction. If OpenAI isn't a company that can be bought,

why do they take billions in investment? If they are a company that can be bought, why turn down 97 billion? Either way, Musk has put them in a position where they have to justify their existence, not just to him, but to the Delaware Chancery Court. It all comes back to Delaware, maybe. It's crazy because Delaware, I mean,

Elon has had his issues with Delaware, but the Delaware courts have proven to be unpredictable, right? Everybody would have said, like, there's no way that they're going to entertain this ridiculous lawsuit from a shareholder that has like seven shares that clearly is just basically working on behalf of lawyers that are going to make hundreds of millions if this decision goes. And just with that, you know, some people were predicting, we covered this last week, that the decision to end Elon's pay package could literally cost Delaware billions of dollars in lost tax revenue as companies say, hey, you know what,

I'm going to go to Nevada, I'm going to go to Texas. So I feel like Delaware is unpredictable right now. We've seen their judges make sort of more political decisions, but this is such an unprecedented situation. So much gray area, so many conflicts. I don't know that there's great precedent in Delaware for nonprofit to for-profit conversions that have already raised tens of billions of dollars. Like it's just, nobody really knows. And I think, um, yeah, we, we covered, we were able to live react to this on the show yesterday. It was very obvious that he was throwing like this a hundred billion dollar wrench or a hundred billion dollar grenade into the, into the for-profit conversion. And it's great to see a SMB attorney kind of breaking down like,

Hey, what's actually going on behind the scenes here. And it really comes down to like And it's great to see SMB attorney kind of breaking down like, hey, what's actually going on behind the scenes here? And it really comes down to like, it's an ethics thing. There's a legal question. You know, it seems like if OpenAI's board just immediately rejected it, then to me, like, at least the board is kind of aligned on the deal that they want to do. But then again, if you if you get the courts involved you know maybe maybe like they they start poking holes in that decision yeah well hopefully there leads to some legal precedent that allows more non-profits to convert to for-profits we've been advocating for the red cross and peta to go for-profit and we'd love to see uh more non-profits

uh move over to the venture capital world or maybe do private yeah i want to see i want to see pita transition to a private military contractor and actually put it on the line and defend the animals you know exactly commando style you know and if if you could yeah basically black water for poaching black water for pets yeah yeah black water for poaching oh you think you're taking down an elephant well there's a apache helicopter coming through yeah paid for by peter reapers yeah yeah reaper drone gonna be circling every hippo in the savannah uh anyway let's close with uh some uh, as always, from Ben Thompson over at Stratechery, an absolute doge. He says, the OpenAI nonprofit is controlled by its board, which does not have a fiduciary duty to maximize OpenAI's value.

Again, because it's a nonprofit, that means it can't say no. At the same time, the structure that lets OpenAI's board say no is exactly what Altman is trying to get rid of in favor of a for-profit structure that will unlock new investment. the primary motivation and the primary outcome is very likely to be to make to be to make an already complicated and pricey transaction even more so so i think we'll close there we'll see where it goes maybe there's more wrinkles in this story i'm sure there'll be more drama uh the boys are fighting it feels like that scene in the matrix when uh neo and morpheus are fighting and all the crew neo and morpheus are fighting and all the crew, Neo and Morpheus are fighting and they got to go in and watch because it's a, it's a knockout drag out fight. Two of the greatest, uh, tech entrepreneurs in, in, in the modern era, uh, warring. And, uh, we'll be

here reporting on it folks. So stay tuned. Uh, let's move on to some on to some other fantastic news. Palmer Luckey announced on X this morning that Anderle is taking over IVAS and we don't have time for business as usual. Whatever you are imagining, however crazy you imagine I am, multiply it by 10 and then do it again. I am back and I am only getting started. And so for those who don't know, Anduril is taking over the U.S. Army's integrated visual augmentation system, the IVAS program. That's an augmented reality headset for the modern warfighter. And it's pending the Department of Defense's approval. We are now fully responsible for production, hardware, software, and integrating Lattice to greatly expand warfighter capabilities. This is incredible news. And Palmer posted a whole

blog breaking it down. Let's read through it now. As of today, Andoril Industries is taking the reins of the largest project of its kind in history, the United States Army's Integrated Visual Augmentation System program. For me, this announcement is deeply personal. Since my pre-Oculus days as a teenager who had the opportunity to do a tiny bit of work on the Army's Brave Mind project, I've believed there would be a headset on every soldier long before there is a headset on every civilian because you can kind of mandate it and it can be designed exactly for what the warfighter needs as a very specialized use case um given that america loses more troops in training than combat the squad immersive virtual trainer side of ivas alone

has the potential to save more lives than practically anything else we can imagine building tactical heads-up displays that turn warfighters into technomancers and pair us with weaponized robotics were one of the products in the original Andoril pitch deck for a reason. The past eight years we have spent building lattice have put Andoril in a position to make this type of thing actually useful in the way military strategists and technologists have long dreamed of ever since Robert Heinlein's 1959 novel Starship Troopers. Fantastic book. Great movie too. Not just day and night and thermal and ultraviolet, but peering into an idealized interactive real-time composite of the past, present, and future that will quickly surpass traditional senses like vision and touch. Put another way, Superman doesn't use menus. He

just sees and does. I love it. If Andoril had been more than a dozen people when Ivas was first getting spun up all those years ago, at least the tragic heap guys didn't win. Our country really dodged a bullet there. I do believe our crazy pitch would have won this from the start. As things stand, though, there is no time like the present. The IVAS program, one of the most important programs to the army, represents just the beginnings of a new path in human augmentation, one that will allow America's warfighters to surpass the limitations of human form and cognition, seamlessly teaming enhanced humans with large packs of robotic and biological teammates. I can go on and read more, but Jordy, you got anything for me in the interim? Oh, I mean, it's just crazy because every time Anduril does anything, like, you know, around the world,

multiple teams just cry out in anguish because Anderle just ends up doing the thing that was the only thing in somebody's pitch deck, right? And this was just one of the things in Anderle's pitch deck eight years ago. And they're getting around to these things slowly as they build out this incredible distribution channel and relationship

with with the dod uh so anyways i think uh obviously makes a ton of sense uh it's just wild how andrew all continues to basically own the product areas that were in every sci-fi novel that basically anyone has ever read and they're just getting to these things first and just capturing you know not only contracts but but mindshare and um you know as as always um you know seems to be a huge win for andrel but also you know i'd love to see the the kind of even the language that they're choosing technomancers is some great uh great great choices of uh of, of words. So very cool.

Very cool to see. And this is the kind of thing, you know, like the reality is the average soldier today grew up playing call of duty. And so they like already had this experience as 12 year olds in the Xbox 360 lobby screaming, you know, and so these are all the things that I think our soldiers have, you know, expected and just simply haven't really existed, right? There's been heads up displays and things like that, but nothing that was, you know, truly, truly integrated and something that was on par with even an Oculus-esque experience. So to me, this is like, basically, this is probably a,

this is clearly a product that Palmer and the rest of the team have wanted to build forever. And they're just now getting to the point where they can actually really deliver on these ideas that, that seem like they're out of a sci-fi novel from the nineties, but are, you know, very becoming very real, real. So, yeah. Yeah. Technology has advanced so quickly that, uh, the integration into the military just hasn't happened nearly as fast enough. There's funny pictures of, uh, like drone pilots using literal Xbox 360 controllers because the government doesn't have the resources to build their own. So they just patch that in. And sometimes Google maps is often used to as a targeting system because they just have the most reliable

app for understanding where the roads are and great satellite imagery and so you'll literally drop a pin send it to the guy and be like yeah call in the artillery right here it's crazy yeah do you remember um when that submarine uh the titanic submarine went down and then everybody like this video started going viral they were like oh they were using an xbox controller like can you believe that like of course they went down but it's like no that's literally what our entire military is like running on like basically like xbox controllers also sometimes it's like well yeah actually the xbox controller is like one of the most mass produced products on the planet is probably the most reliable controller than some one off that you build.

Like a lot of times it's like, why deal with that when you can just get something off the shelf that's been manufactured to like complete Six Sigma precision. Anyway, so a couple of years ago I was doing a deep dive on iVAS And I asked Palmer, hey, you're the perfect guy to do this project. Why is it still sitting with Microsoft? And he was kind of cagey, like, oh, maybe we'll do it one day. And now we know it just was in the pipeline, clearly. So I wanted to give the listeners a little bit of background on the Ivas program. It's a really interesting story of how Microsoft won that contract, what was going on in the military at the time. So let's go through

some of it because this idea of like VR, AR for soldiers goes back decades. So in the early 2010s, VR and AR is going to be the next thing. Everyone's calling it. Oculus is blowing up and Microsoft wants to get in the game. They launched the Xbox Connect in 2010, which was an augmented reality system that would track your motion and then put that in the game. And then they launched the first HoloLens in 2016. That never made it to a consumer device, but they did roll it out in some industrial capacities and it was more of like a tech demo. So they, Microsoft ultimately determined that augmented reality was too cumbersome for everyday consumers.

And I used the HoloLens and it was rough. It was heavy. And the field of vision was very narrow. We're still, you know, a full decade before Meta's glasses. And the Meta, the new, I forget what they call it, the Icarus or something.

It has some funny name. But the new Meta glasses, they're not even out yet. And so we're still not there. Even the Apple Vision Pro is still not widely used, high churn. And so Microsoft is just too early. But nevertheless, they decide that they're good at selling to large enterprises, plays to their strengths, and few enterprises are larger than the U.S. military. So they get a $22 billion contract for a project called IVAS. And think about it. I mean, Anduril is raising on $1 billion ACV, $1 billion revenue or something like that. A $22 billion contract goes out to Microsoft for this. Obviously it's over a number of years, but still that's massive. And this is like perfect for Anduril to do. So the initiative aims to equip over a hundred thousand American soldiers with augmented reality headsets based on HoloLens technologies. They're going to mass produce these. This is a lot of tech going out. So IVAS was the latest chapter in the military's long running fascination with augmented reality.

And it starts all the way back in the eighties. So the army had recognized that technology was transforming battlefield intelligence as satellites and drones generated vast amounts of data that traditional communication tools like radio struggle to keep up with. So, you know, you can hear somebody in your, in your headphones over a radio, but it's so much easier if you can just be like, let me actually pull up the map and see what you're talking about. It's really hard to describe, Hey, over that Hill, there's a bad guy. And you're like, which Hill? And you're like the one on your left. And it's like, I can't hear that. Right. Yeah. I think people don't people like it, it truly is going to be so transformative where, you know, I met like oftentimes like a, a corporate office is chaotic, right? It's like,

you don't know where like, you're like, Oh, where's like, uh, where's your coworker? Where's this person? Oh, can you try to get this person over there? Imagine a battlefield where there's hundreds or thousands of vehicles that are all coordinating individuals, different platoons, teams that are working together and the enemy engaging with you. And, you know, it's just like the most chaotic environment that you can possibly imagine. I, my great grandpa fought in World war ii and was like shot down like twice and he's like told me a bunch of stories about how like once you're in there it's just like all out chaos and uh and that you know that that like that largely hasn't changed like teams have

gotten better communications gotten better but it's still chaotic and so the potential for this technology is like it will become like impossible to actually engage in a productive way on a battlefield. If you're not like in this VR experience and having full visibility of the battlefield and where your teammates are and stuff like that. And it really will transform the effectiveness of, uh, the reason this technology is important. And the reason that the military said, we're going to spend 20, $22 billion to try to get this thing is that it's going to, you know, the potential is obviously there. Um, but, but technically it's an extremely difficult challenge. And so the first thing that the army does is they start this prototype project

called the soldier's computer. And, but the results are really underwhelming. The heads up display use the same low resolution, uh,-only screen found in the Nintendo's Virtual Boy, which was a complete consumer flop. I don't know if you remember this thing, but you could play Mario Tennis, and it would have basically just two planes of 3D. And it was really cool. I remember playing with it as a kid

and being like, wow, for two seconds, and then being like, that's miserable. I'll just stick with the Game Boy. But it makes sense so the project was moved to uh the u.s army's natick soldier center in massachusetts the budget increases expectations soar and now there's more money at stake and so in 1992 the soldier's computer entered field testing early impressions were promising uh soldiers praised how thermal imaging extended their sight range

and how the system enabled them to fire around corners while staying in cover. So they'd actually have a camera mounted to the gun and then they could see what the gun saw in their heads up display. So they could put the gun around the corner, shoot and basically stay in cover. It's pretty cool. Um, That's so, so such a funny product that I imagine the soldiers in practice absolutely hated because

it's so like, it's, uh, it's so, so out of a James Bond, like villain movie. Like I have my gun, right? There's also an old Soviet, uh, gun that actually has a curved barrel so you can aim around corners. And it completely destroys the ballistics. Like, it's a disaster. And I think if you put more than, like, a couple hundred rounds through it, it just completely melts down and breaks. Anyway, so there's a ton of drawbacks. The head-mounted display was bulky. Data transfers lagged by up to 75 seconds.

Over a full minute, you're waiting for it to refresh. The system crashes were frequent. A U.S. Army Research Institute report featured blunt soldier feedback. They call it junk. They say it sucks. And they all mention how painful it is to wear. One particularly damning quote encapsulated the frustration. I don't know whoever

put it on the soldier's back in the original configuration and had them walk around with it. It appears to me to be designed in a vacuum as in, well, we need all these things to make the system run, but we don't really consider the reality of a soldier walking on a street, hopping a wall, going through a door, coming out of a hatch. The equipment added 40 pounds to a soldier's pack. By contrast, the Meta Oculus Quest 2 weighs just over a pound. And so clearly the technology has advanced. Everything shrunk down. Even heavy headsets now, you're talking about one pound, two pounds. You throw that on a ballistics helmet, it's not going to be that big of a deal. You throw a couple of pounds of battery packs in the backpack, probably doable at this point.

So, but despite these shortcomings, senior military officials believed in the program. And there's just this, there's this chain of like, Hey, we got to keep going. This is my job. I'm, I've been working on this for a decade now. This is my career. And so in 1996, the DOD rebranded the effort as land warrior, and they approved a billion dollar budget. Remember, they've spent all this money and this has never made it to the field, really. Like this has never been a successful project. And so the DOD appointed a colonel to serve as an intermediary between engineers and soldiers. However, the project faced a fatal flaw.

To leverage cutting edge technology, the military began incorporating consumer hardware into the system's design. This is a smart move, but unfortunately consumer grade equipment wasn't built for the battlefield. And so it's a perfect example of like why you need Palmer in here. Cause he's the, he's the consumer guys built the Oculus he's built, uh, you know, the chromatic, but then he's also built stuff that needs to sit on the battlefield. Like, you know, all of the drones and sensor towers that Anduril has produced. And so the hardware failed in rain, couldn't withstand electromagnetic interference, and the effort to ruggedize it caused costs to skyrocket.

By 1999, spending had increased 50%. A private company burning this much cash with little to show for it would likely face intense investor scrutiny, but too many military leaders had tied their reputations to Land Warrior, making failure unthinkable. And so I can go on here. One of the project's biggest champions was Navy Admiral William Owens, who served as vice chairman to the Joint Chiefs of Staff during the Clinton administration. Owens was a staunch advocate for

what he called network-centric warfare, which is actually a really cool idea. In a rare candidate interview from the mid-90s, he declared, I genuinely believe, and this sounds like it could be said today, I genuinely believe in the next five years, there will be a revolution in the way this nation fights wars. It will come primarily from the smart front end of warfighting, that is, the to use high technology surveillance of a very large battlefield. We have never in the history of warfare seen the battlefield that way. And so Owen's vision aligned with the army's post-Cold War shift towards a smaller, better equipped fighting force. And this was the story of the Gulf War. Iraq had a huge military, but it was really just America had way better technology. And so that war was supposed to go on for a long time. It ended in just a few days. Um,

in, in 2005, 229 infantry soldiers were equipped with the system nearly 20 years after the project had begun soldiers in Iraq, use the gear to digitally Mark safe regrouping points, but enthusiasm remained lukewarm, more refinements were necessary. It's, it's interesting because this type of headset is competing with, with literally a radio that just can call out someone else and be like, Hey, here's the rough coordinates. Let's meet there. And then you're using this clunky headset and it's like not working. And if it's not working perfectly, you're on the battlefield, you're in the most intense situation, your life is at risk, your team's life is at risk, the mission objective is at risk, you're gonna if it's not perfect, you're just going to pick up the radio. And or

call up to, you know, air support and say, Hey, let me you know, can you get a visual on this? What do you see? Cool, you know, and it just quickly becomes something that, so it's crazy to think that however many 20 plus billion dollars after 20 years nets out as a mid product for 229 soldiers. Not the best trade, but again, there's an argument to say like, hey, they were right. They were just basically too early and to me the interesting thing here is like i i would love to the long term i think everybody has a sense that the battlefield long term will be a bunch of autonomous and tele-operated devices right in the same way that the people that fly uavs in the middle in the middle east for the Middle East for the United States, like are sitting in Nevada, right?

Like outside of Las Vegas, like, you know, basically remotely flying these craft. And it does seem that you'll eventually have a range of different types of robots similar to that that will be tele-operated. And so I'd be interested to hear how Palmer and Trey and the rest of the Anduril and Matt and the rest of the Anduril team are thinking about what is, how does this new, um, you know, sort of, uh, augmented reality VR, I don't know, whatever, what, what this headset, how does that fit into the tele-operated future? Is it, you have one guy on the battlefield that can use the headset to basically drop into like some type of drone or, you know, robot that they can then carry out other activities because ultimately at the

end of the day, um, it doesn't, you know, it, it seems like there's, there's an obvious trend of just remove removing human life from the battlefield entirely because the, the actual loaded cost of a human, not to mention the, the, the value that the family and that person's family and that person themselves puts on their own life. But the full cost of a soldier annually is just so every lost life is tragic because we have an individual who's not going to go home to their family, but then there's also the economic burden of every individual soldier is always going to be worth an order, you know, orders of magnitude more than a robot that could just blow up and maybe it's unrecoverable, but it's replaceable, right?

Yeah. Yeah. The 22 billion sounds like so much, but I remember we were talking about the F-35 and I think I mentioned that it cost a trillion dollars and you were like, that's impossible. And someone followed up with me and was like, no, it was a trillion dollar project. Like, like Jordy, it is an unbelievable amount of money. It wasn't over one year. It was over decades, but still the total cost of that project was in the trillions. Um, but in 2010, they actually did de-scope it and move kind of halfway, you know, VR headsets, the future radios, the past under the Obama administration, what? Over, over, over 20, over 20 billion in the hole. And you're like, guys, I think it's time to like, let's de-scope this one. Yeah, no, they literally do. And so, uh, in 2010 land warrior rebrands as

net warrior. This is like the fourth name for this project. And the bulky pack and headgear are replaced by a respect Android phone secured to the soldier's chest. And so they basically flip it down and then they can see maps and all the information. But it doesn't need any of the headset, not heavy on the face. Kind of leaning into like what the technology was good at at the time. And so mobile technology had evolved to fulfill much of William Owen's vision. But the army was determined to extract more from its decades-long investment. In 2019, Microsoft engineers were invited to a military base to learn what soldiers needed from an augmented reality headset.

That weekend birthed the mark of IVAS. Given the years of research behind the project and Microsoft's extensive experience with augmented reality, one might have expected a smooth rollout. Instead, IVAS encountered problems from the outset. Soldiers were blunt in their critiques. You've got to ask yourself the question, in warfare, where does this tech just become too much and not really worth having? It doesn't do any more to help the troops. It may actually hinder them because of the hassle factor. Another soldier warned, my worry is that if we give these to soldiers, they're going to rely on them too much. They need to know how to fight without them. They really do.

Others were frustrated by the logistical burden. Perfect. All I heard was we have like five new pieces of sensitive items we have to worry about. Common sentiment was that the system was unwieldy. It doesn't look promising. I mean, this thing is just way too big. It looks uncomfortable. It's heavy. If you're sprinting, jumping, running, doing infantry stuff, you're going to be sweating. Despite these concerns, Microsoft and the Army remain committed to making IVAS work. The project holds potential to improve soldier situational awareness. Moreover, the US faces pressure to stay ahead of technological advancements from Russia and China, both of which are also pursuing augmented reality programs. The military is determined not to fall behind.

Their current goal is to deploy working HoloLens-based headsets into the field. This was written in 2022. They wanted to deploy it by the end of 2023. It's always just a few years away. Hopefully that changes going forward because Anduril's on the job and they've been able to ship stuff like a tech company, which is great. And so we wish the entire Anduril team massive luck in this endeavor. Go get them. Build some cool stuff. Get it out in the field. Help our soldiers.

And I'm proud to be an american same story let's do it we got a massive new story from blake scholl over at boom supersonic boom supersonic no longer has booms they cracked it today we are introducing boomless cruise supersonic flights up to 50 faster with no audible sonic boom we We quietly, ha ha, demoed this on XB-1's first supersonic flight, three times actually. How does it work? It's actually a well-known physics called the Mach cutoff. When an aircraft breaks the sound barrier at a sufficiently high altitude,

the boom refracts in the atmosphere and curls upward without reaching the ground. It makes a U-turn before anyone can hear it. Mach cutoff physics is a theoretical-turn before anyone can hear it. Mach cutoff physics is a theoretical capability on some military supersonic aircraft. Now XB-1 has proven it with airliner ready technology. Just as a light ray bends as it goes through a glass of water, sound rays bend as they go through media with varying speeds of sound. This means the supersonic booms can make a U-turn in the atmosphere without ever touching the ground boomless cruise requires engines powerful enough to break the sound barrier at an altitude high enough that the boom has enough altitude to u-turn and real-time weather

and powerful algorithms to predict the boom's propagations precisely now i heard an interesting take on this that even though they cracked the science, and I think NASA and some government organizations were working on sonic boom reduction, and the military's had some technology here. Obviously, it's a huge thing to get this into a commercial craft. So congratulations to the boom team. But even though the technology might be here now, the law has not caught up. And I think it is in many places illegal to fly at supersonic speeds, even if you're not producing an audible supersonic boom on the ground, because we have a speed limit, not a sound limit. So obviously, this needs some legal work to get in. And, uh, you know, I hopefully, hopefully this will be a bipartisan issue. Hopefully this will be a thing that everyone supports. Don't give a MKBHD a boom super sonic because he will just be, he will just be ripping around school zones being like, if nobody can me i can't get in trouble but no i think i i do ask myself did they know did they think that they were going to be able

to achieve this when they named the company and they just thought hey this is still if we can pull this off it'll be ironic that the, the supersonic plane company actually doesn't produce the supersonic boom. It's just the boom jet. So I think it works either way, whether or not they were planning on it. But, um, I just, I just, this is such a great story to me. I I'm, you know, it's still unfolding, but to, we've talked about this before, but to go from this like horrible recap down round, everybody kind of rallying to say, hey, this is an important American company. We want to save it. Nobody else is.

We need teams working on this problem to now seeing a very real reality where a decade from now, we could be getting on a boom jet and flying to across the country. And I don't know how long they're actually predicting that it'll take, but a fraction of the time, uh, is just really exciting. So I look forward to doing a live, uh, a live show in the jet traveling at supersonic speeds. It's going to be congratulations to Blake and the boom team. It's incredible how long you've been at this and the results you're finally getting. Patience is a virtue and it paid off here.

So congrats. Yeah. Well, let's move on to our next segment. Andreessen Horowitz has just released a new market map on text to web app. Market map time. Text to web app and website generation market map from Justine Moore at Venture Twins. New A16Z thesis, building websites, apps with AI. There's been explosion of products that help users vibe code a web app from text prompts.

We dove deep on these tools, who's using them, how they work and where they might be headed. Now, this got a little spicy. I quote tweeted this with a video of a Rainbow Six Siege streamer saying, incredible map knowledge, incredible map knowledge, holy map knowledge. Uh, just because I think it's like the funniest video ever. And I've been waiting for a market map to drop, to post this clip. And I think she thought I was talking trash because she replied with a video saying, uh, from girls, I believe saying, um, something to the effect of like, Oh, you're, you're, you're coming after me just for trying, but I'm not. And I'm on record saying that there is massive alpha for the first VC firm to go back to simply talking about doing deals and making money. And so, uh, talking trash. That was, that was a banger. Let's, let's, uh, let's get this over 1k yeah yeah yeah go like this we're we're 40 40 likes away um

and uh and so so i i i am i am fully uh pro market map i love market maps and i think that i understand why she thought i was talking trash because market maps have been derided as a little like if there's a market map you're too. And I think that's true for people that are thinking about what company should I start? Or maybe even what company should I seed invest in? But if I'm a customer, like, I don't know about these products. This is genuinely helpful to me as a customer. Like we need to build websites for our company, for our podcast. I want these. And as a growth stage investor, someone who later stage, even in the public markets, being aware of this stuff, all of the work that went into this market

map is actually valuable. And I think it's a little bit of an odd, it's a little bit of an odd take because everyone's been talking trash about market maps for so long, but I am pro market map. I am pro this, this core venture content that stays away from deranged politics? I love market maps. It's a way for investors to basically open source their deal flow and insights. And I think people joke about it, but it's genuinely interesting to cover. And I actually think we should do more segments on the show where we break down a specific market. Obviously, we're doing that now, courtesy of Justine. It's kind of funny. They left off Webflow on the website generation section, which feels like a big player.

That was one of the first things that stood out to me. Felt like Webflow was very hot only a few years ago. But one thing that's kind of this interesting dynamic. It seems like website generation or website builders like Webflow, you know, Framer, Squarespace, Wix, they seem to be, uh, good businesses overall because people set them up and generally forget about them and they find ways to like stack fees. So it starts at $20 a month. And next thing you know, you're paying $150 for,

you don't even know why. So they seem to be good businesses, but it seems like there's, because they're these sort of single player, one to many products, there's no moat in these businesses at all, right? So they're able to get to meaningful scale, but there's no reason like Framer came out and I was like, okay, this is just a better version of Webflow, right?

It's like the billing is more clear. I like the user interface more. It's less clunky and developers in my network quickly got comfortable with building on Framer when before everybody, it seemed like was building on Webflow. So this is, and so the last thing that, uh, the last thing that these companies that are more of these legacy website generation and hosting companies needed was more competition because they were already facing like tons of competition from each other. And so now you have this new category that really, I think like the generative AI experience applied to websites makes a lot of sense, right? Because if I'm working with a designer, I'm like, Hey, here's two sites I like,

this is my brand, this is what I want it to look like, these are the features. And then basically, it's the same thing as like, I could just type that into a text box, add the add the relevant links, and then hit generate. and that's very similar to me just talking to a designer explaining what i want and then coming back to it and then even when you get a version one of the site you can be like change this change that and again you can just still deliver that via you know the sort of llm chat style interface so i i'm um i i still wonder if it's one of those things like you know you sort of use this for like a quick V1 of a site and then you just still transition to working with a developer. But you can imagine the developers might just end up as these tools get better just using the same tools in the same way that you use Framer Webflow.

Yeah. Yeah. So, I mean, I think text is the universal interface. Even if these website builders make it easy to change the background color, that can often be hidden in some UI six levels deep in menus. And just saying it into an LLM is often more universal and more accessible. So that's obvious. Now, the question of why Webflow was left off, it's possible that they haven't launched a text-to-web product yet. They might just be behind on that. Oh, got it. Got it. I think this market map is specifically for, it is a chat interface or a text interface

that then builds a website or a web app. But there are a lot of cool companies on here. And it's interesting because during the Super Bowl, there was an ad for a website generator and it had Barry Keoghan, somebody, some famous actor was like, I don't remember. That's the thing. It was either Squarespace or Wix, but he's going around this Irish town and he's throwing laptops to let people know that they could design a beautiful website. If you're like the local pub and it was very cute and he's riding this donkey and he's this famous guy. I think he dated Sabrina Carpenter and yeah, it was Squarespace. Okay. It was Squarespace, but it could have been Wix because I don't think of them as like super differentiated products.

And there's a big question about will the legacy generators be able to retool their brand fast enough to let the market know, hey, we have the best text to web development tools. Like we've rolled these out. We're not behind versus a new company that comes in with that as their main, their main like go-to-market hook and their main marketing messages. Hey, it's just text. Uh, that's a big differentiator. And it's always hard for the, for the legacy companies to kind of say, Hey, Hey, we, we also have the AI tools. Don't

worry. Yeah. So, so GoDaddy is a good example of this popular place to buy a domain. They absolutely jam their sort of AI website generation tools in your face. It's actually really annoying to use it as just a pure play domain hosting registrar because they're so oriented around, okay, you've spent $12 on this domain. Now we're going to upsell you on this sort of AI generated website. And so I think that I can easily see some of these registrars just buying these text to website generators if they get if they actually like start to really execute on the product side, because it has been sort of a funny experience where, you know, historically, you register your domain, and then you then go to some other site and you got to connect the two and Squarespace was pretty aggressive. You know, they, they acquired

Google domains, if you remember that, and that transition I think is still happening. And so all these, all these platforms know that the two things should be integrated, but it's a weird challenge too, because you don't know, am I developing that, you know, over time companies tend to want to just fully own their web, you know, experience and front end and they end up hosting on, you know, AWS or sort of other, other platforms outside the registrar. So you're kind of in this weird space of work building for prosumers and SMBs individuals. And then, you know, who knows where it goes from there. Well, let's read through some more of this thread and Justine's analysis. To start, why is there so much buzz? Thousands of users from consumers to experienced developers are

sharing what they've made with these tools. The growth is impressive. Bolt is at 20 million ARR, Lovable is at 10 million in two months of monetization. Now, how do these products work? Most LLMs generate code based on the prompt and then run it through middleware logic for things like tracking files and API calls. The agents then push the code to a browser execution environment that streams the display to the user. But do they really work? Obviously, LLMs hallucinate a lot. There's a lot of risk. Justine says that a16z interviewed dozens of customers and scoured thousands of posts and they created a flow chart so where do you want to start code or text well there's code generation and editing tools versus do you want to make a website or web app if you want to make a web app do you want fine grain control over the design yes if you're a

designer do you need to be able to export the design as code? Then you're going to need UI generation tools with code migration. So all of this depends on the level of sophistication and really what the developer's end goal. Is this just some fun side project that they're trying to build in an hour? Or is this the start of a real business that will eventually have software developers coding with Cursor and then eventually they'll get Devin involved and be pushing things through a traditional github repo or is this just something where i want this website live today and i don't even want to get off my phone so yeah she goes and gives shout outs to a ton of different companies um and that's what's so great about these market maps is that they do a

great job of uh of showing a bunch of different companies and highlighting everyone together. It really brings the particular community together. And so there are a number of segments here, obviously consumers. You think about the long tail of personalized apps that cater to unique interests and needs. There's a guy here who built a bedtime story creator, probably for his son or daughter. There's a second here who built a bedtime story creator, probably for his son or daughter. There's a second user segment, which is developers. People can code, but they use text to web app tools to get a leg up on prototyping and shipping new things. And then the last segment is consultants and agencies. These people aren't typically engineers, but they're hired to make websites

for solopreneurs and SMBs. They previously used tools like Squarespace and Wix, but now they are using these AI tools. There's still alpha and going to your local plumber and offering to build them a website for a thousand dollars and generating it in two, in two seconds with, with one of these apps. There's you've probably got like 10 more years before people fully figure it out yeah it also just really speaks to the the importance of distribution like the instantiation of these ideas is getting easier and easier you're gonna have an idea spin up a website have it live in a day even

if you're non-technical but then yeah where are you gonna share it are you gonna run ads against it is the monetization funnel good or is it just going to live out there maybe you share it with some friends like i'd probably use that bedtime story creator but i'm hearing of it for the first time now um there used to be a web did you ever use stumble upon back in the day do you remember this yeah yeah that was uh yeah yeah uh garrett uh garrett built it uh really really cool tool you would just click it and it would take you to a random website on the internet that was submitted and you would just find crazy websites in the open web, completely not a thing anymore. I actually built a version of StumbleUpon that would scrape my Twitter feed and export all the links there. And then I could stumble upon

the tweets, the links in the tweets of my feed. And I could just look through all those. And it was really fun. It was really cool. Now it's impossible because no one shares links and links don't even work and stuff. So it would just be, it would just be a feed of only fans, spam bots that are saying, please look at the link in my awful, awful, terrible. Um, but yeah, great market map. Thanks for posting it justine and hopefully there's no hard feelings about the the rainbow six meme i thought it was funny anyway let's move on to our next top story we got a way to invest in alien technology i have been saying this for a long time people say oh the aliens are here the aliens are there uh we got

some evidence and And I've always said, look, call me when we're ready to commercialize the technology. It's not moving the market. I don't care. I don't care if there's a massive UFO parked outside in downtown LA. If I can't make money off of it, I'm not paying attention. But fortunately, now you can pay attention to it because Tuttle Capital has filed for an alien tech ETF, the new fund to invest in reverse engineered alien technology based on government disclosures about UFOs. Tuttle Capital has filed to invest in reversed engineered alien technology. This is exactly what I was asking for. This is not financial advice, by the way, but I'm sure this will be available on public.com when it goes live.

With the Tuttle Capital UFO Disclosure AI-powered exchange-traded fund, which is one of eight new products the manager has registered with the SEC. With the ticker UFOD, great ticker, and the actively managed UFO ETF will invest at least 80% of its net assets in a basket of companies that Tuttle Capital believes to have potential exposure to advanced or reverse-engineered alien technology. John, you're missing a big point here, which is that it's AI powered ETF. So not only will it be, you know, an ETF with a basket of assets that may have exposure to reverse engineered or alien technology, it will be managed by AI, which to me is like,

as a guy who loves AI, I mean, you're making the perfect ETF for me here, right? Yeah, yeah. You can't get any better, right? We need to have Jesse Michaels on to discuss this, to get the take. We got to have Paki on. I know Paki's been watching a lot of Jesse. I mean, this probably isn't, the SEC probably wouldn't allow you to advertise securities in this way. But, you know, the obvious play for Tuttle and their UFO D ETF is to just like create the New Jersey drone effect, but all over the country. Put drones everywhere that are doing light shows that say, fly a swarm of drones over a small town that's been untouched by technology.

Make everybody think they're being invaded by aliens and then do a drone light show immediately after it says, buy UFOD today. I don't know if you can do that, but I know that you can advertise ETFs. I see ads for ETFs on Bloomberg and CNBC all the time. It was really popular during the Bitcoin ETF launch. But also you just see iShares, QQQ ETFs, all sorts of tech ETFs that are out there, downside risk mitigated ones, debt ones. People advertise ETFs all the time. So hopefully we'll be able to see some

ETFs. So here's some alpha. So AdQuick can help you execute drone swarm ads, like the light show ads. And so what Tuttle should do the second they launch this, log on to ad quick, get, uh, get ready to, uh, you know, do a drone swarm ad for their ETF over the Manhattan skyline. But the key is make everybody think early on that it's an actual alien invasion. So people pull out their phones because we've talked about how to helm strategy before you want them to think that they're being invaded by aliens and boom, it's an ad for UF to OD buy it on public.com. I love it. That's a great partnership there. So the companies in the ETF to start will include aerospace groups and defense contractors that may have research and development programs rumored to work with classified technology,

potentially leading to groundbreaking advancements. Matthew Tuttle, the chief executive of Tuttle Capital said he has been interested in UFOs for years. While they are by definition an unknown quantity, Tuttle said he believed investing in UFOs and the technology they may use could take off once his product hits the market. I'm a trader. I look at UFOs and I say,

if they're using a power source that is light years beyond anything we have, if our government has this technology and it's released, that will be a game changer. Each ETF will be traded on the CBOE BZX exchange. The forthcoming products do not have set launch dates or listed fees. The ETF will short companies that are threatened or could be made obsolete because of any alien level technology that is discovered. So you got to harden your business to alien technology. Yeah. If you're

out there and you're saying, Hey, Hey, our business is going to be great as long as aliens don't show up. Well, get ready for a short position to get built in your company. Yeah. This is, this is a time every company that's privately held is feeling very grateful because you might be wanting to IPO in a couple of years, but that gives you some time to build up the narrative around that you're using alien technology. I want to see Stripe talking about their alien payment rails that they're using. I want to see Ramp talking about their alien payment rails. I want to see SpaceX. I've said this for a long time about Salesforce. Like if you think about, you know, if you're an alien, if you're an alien species and you're managing essentially a

fleet of sales reps across the entire galaxy, you're going to have some really advanced CRM running that program. And all of a sudden, if one of these, uh, if one of these, uh, alien SDRs, uh, crash lands and we get ahold of this alien CRM, no one's going to be buying Salesforce anymore. And so that's a major risk to that stock. And so, uh, obviously not financial advice, but, uh, I, I I'd watch out if you're, if you're a Salesforce shareholder and, uh the alien etf has taken a short position anything could happen well said well said and so ufd ufod's launch is not a sure thing however according to tuttle without sufficient information sourced from government disclosures on ufos the product might not go to market but he's optimistic that there will be disclosures uh the risky and opaque nature of

alien investment is not lost on Tuttle and his firm. Can't believe that was printed in the Financial Times. Government confirmation or denial of advanced alien tech is uncertain and rumored breakthroughs might never materialize. This entire theme is highly speculative and subject to rumor cycles. The other seven, so they're launching seven others, the agentic ai etf ai and healthcare ai power generation drone industry ai etf quantum computing ai etf ufo technology may be out of reach for the average investor but ai is one known advancement that tuttle believes is reshaping the financial landscape what ai can do is a game changer. And I don't think people have fully wrapped their heads around that said Tuttle, who added that he used AI for

90% of his investment process. And so we'll be following up here. I love Tuttle Capital is just absolutely hurling ETFs at the market. I mean, it is, uh, it is impressive. Uh, he has, you know, more, more ETFs than some people have, uh, positions. So, uh, an absolute dog. So stay tuned for more on UFOD. We'll be covering it here on the show. Uh, let's move on to the GPU whisperer who's making software for data centers. This is Aaron Ginn, the co-founder and CEO of Hydra Host. Wait, I hate to interrupt, but we got a comment from Calder in the chat. He says, SEC securing extraterrestrial currency. He said it was right in front of us this whole time. So yeah, it was programmed. Well said. It's dialed. Great. All

right. Well, let's move on to this article in the information, the GPU Whisperer covering Aaron Ginn. Is going bare metal in data centers the future of cloud computing? If so, it could signal a shift away from big cloud firms toward a new group of AI computing startups. Bare metal isn't a subset of rock music, but an industry term for renting servers to cloud customers on terms that give them access to the hardware, allowing customers to control servers directly and run their own operating software. Customers going this route miss out on some bells and whistles offered by big cloud firms like Amazon Web Services and Microsoft Azure, but they might gain better performance for more demanding and complex tasks like training and running AI workloads.

We certainly saw this with DeepSeek. They were not on AWS. They had none of the niceties of the Azure cloud. They were as bare metal as you get, optimizing small tweaks in memory bandwidth restrictions on their cluster of kind of random hodgepodge NVIDIA nerfed GPUs. Some in the industry, such as Aaron Ginn, CEO of software firm Hydra Host, think this is the future. Ginn is known to some as the GPU whisperer. This is a great moniker.

If you're trying to get through, break through to the media, you've got to have a moniker. We've talked about coinages. There's a lot of alpha and coining coogan's law you know you already know the hayes paradox uh there's quite new coins uh right now there's more crypto coins emerging every day than there are coinages but we're hoping to flip those uh soon but you know the other side of this is monikers you want to be developing monikers all the time, shipping new monikers, testing, you know, testing the market with monikers and, you know, have your friends test them on you. You know, we have been pushing this David center of the godfather of podcasting, you know? Yep. We, we, we, we throw these out all the time. We need to come up with more because they really help tell the story of an individual

and help them break through in the media. And so he has an intricate knowledge of and connections to the firms that design, make, and install data center servers. I won't explain the history of cloud computing, but one thing to remember is that the big cloud firms, AWS, Google Cloud, and Microsoft Azure, were originally designed to allow companies to rent virtual machines for traditional computing workloads like running applications or databases. Many believe the new wave of AI computing startups might be better positioned to provide customers with access to GPUs for AI workloads, which are fundamentally different from hosting a website,

for instance. Ginn is in that camp. The GPU whisperer speaks. He wants to give operators of data centers, firms that typically own and operate facilities, cloud providers, use the ability to rent GPU servers directly to customers. Data center operators have long operated like apartment landlords, allowing companies like AWS to rent space in their data centers.

Ginn thinks the rise of AI computing puts data centers in a position to be a hotel and generate more revenue in their data centers. Ginn thinks the rise of AI computing puts data centers in a position to be a hotel and generate more revenue from their real estate. They can actually do five-day rentals, week-long rentals, long-term rentals, but they have no software to do it. Tooling in the data center space has been highly open to source because the main big money cow was the cloud. You either sold space to the cloud or you tried to get free software to kind of sell to an end customer.

That's where Hydra Host comes in. Hydra sells automation software to data center operators so they can rent out GPUs to businesses or even cloud startups who want to rent out servers themselves. So they're going a layer deeper into the data center stack. We've been talking about data centers for a long time. Obviously a big narrative in the AI race right now. Got anything? I mean, my head immediately goes to why haven't we personally put money into Hydra?

Because it seems like everybody you become friends with 10 years later, their companies go public. So you got to learn from the mistakes of like 2012, John Coogan. And just, just give Aaron a call. Yeah. Let's, let's get them on the show. Big congrats to him. He already manages 15,000 GPUs with its software embedded in 30 data centers across 14 companies. He hopes to manage a million gpus in the next two years and massive breaking news this has not been covered

on tbpn yet therefore it is breaking news uh hydra host last month raised an eight million dollars in a round led by scott mcneely's flume ventures boom gone, baby. Bringing its total amount raised to $22 million. The latest round was a simple agreement for future equity, safe, at a $500 million cap. Let's go. That's the most boomer way to write out. The latest round, like, if you write out that, you clearly don't know.

It's the meme of, this the german yeah yeah glorious bastards right like yeah oh it's simple agreement for future equity what's going on information guys yeah yeah i don't think jessica i don't think jessica oh who read this got you gotta go to yc demo day anisa guard dizzy yeah get your game up yeah uh but congrats to them 500 million dollar cap banger company half unicorn yeah so uh so crusoe cloud uh ceo chase lockmiller who we've covered on the show before uh who and a guy who just left lambda lambda labs they came in as angel investors uh trey stevens from founders Fund previously led Hydra's $8 million seed round, which included Palantir founder, Joe Lonsdale.

So all the boys are in this one. It's a great company. We're excited to highlight it on the show. And congrats to Aaron, the GPU whisperer. Let's leave it at that. Let's leave it at that. And let's stay with Trey Stevens and the defense boys because John Sindriu over at the Wall Street Journal

has got an op-ed pouring some cold water on the defense tech boom. Let's see what he's got to say. He says, tech firms want to upend the Pentagon. The old defense guard has some lessons for them. Upstart defense contractors such as Palantir. Upstart, it's a 20-year-old company. It's worth a quarter trillion. It's a quarter trillion.

It's two decades old. Give them a little credit. It's not 80 years old. They couldn't possibly know what they're doing. You can only know what you're doing if everyone who started the company is dead. I was looking at one of Palmer's rivals, like the General Dynamics founder or something. And there's a picture of him literally on a Civil War era submarine because the guy developed like the first submarine for General Dynamics, which eventually spun out General At atomics which is now going head to head with anderle in the uh in the cca fight and the collaborative combat aircraft and so i

was like trying to benchmark the founders and i traced it back and i was like i was like the founder of the of the company palmer is fighting with or duking it out for this contract died a hundred years before palmer was born something like that. It was like insane. I was like his birthday. He's more than, he's like 150 years older than Palmer. And like, this is the,

this is the difference in culture. Like we're going to see, we're going to put it to the test. Can the young bucks make it happen? Well, let's find out. Yeah. I know.

What you got, Jordan? I have so little trust in mainstream media, especially, especially op-eds which op-eds are just an opportunity to just like basically fud whatever's going on like it seems like every time you hear about an op-ed it's it's uh or pump or pump i mean yeah yeah in the world that was an op-ed by mark andreessen sure teal's got some great banger op-eds out there floating

no but i'm just saying but yes when you hear about an op when you hear about an op-ed from somebody in our world yeah it's usually to predict something about the future yep when you hear about an op-ed uh that's not from our team it's usually to fud something that that our team is doing uh yep yep uh so boys they're coming for our boys and and everybody's everybody's deeply conflicted if you're not deeply conflicted by the age of 30 you're not heavily invested enough exactly yeah uh so everybody's conflicted everybody's pumping their bags yeah this guy writing the op-ed probably has has he's just mad because he's holding Northrop Grumman's Lockheed Martin

general yeah and look at the side with the chart look at his chart pull up the chart yeah uh this is uh this is Northrop Grumman general dynamics and Lockheed Martin uh flat for the last year and Palantir is like mooting up 300 percent uh so a lot of a lot of hot takes flying given given the spiciness in the market uh let's let's read through some of this maybe we got to put in the truth zone we'll decide maybe there's some good points you know maybe john's on to something let's let's give him a shot uh image defense business silicon valley's motto of move fast and break things doesn't always ensure victory there is a divergence across military contractors. The stock of Palantir, which is riding the artificial intelligence boom, is up 34% from

a week ago after the software and data analytics giant reported 75% growth in earnings per share for 2024. At the same time, shares in Lockheed, Northrop, and General Dynamics have fallen over the past six months. What's going on, guys? Put together, their market value is now less than Palantir's. This is in part because Elon Musk's doge has led investors to believe military procurement will be reshaped to cut waste, let in new entrants, and give priority to software, drones, and robotics. Palantir, as well as Musk's SpaceX, OpenAI, and robotics and AI specialist Anduril Industries are cheering for change at the expense of legacy players.

Quote, oh, from the absolute boy, Shyam Sankar, Palantir CTO. He says, we sense a huge amount of fear among the traditional systems integrators and providers here. Some legacy software projects, he added, are sacred cows of the deep state sham not pulling punches i love it let's go wow uh a lightning rod for criticism of the pentagon including musk himself has been using it has been its use of cost plus agreements which reimburse contractors for expenses incurred and add a fee for profit margin on top. Cost plus contracts were infamously used in Lockheed's F-35 Lightning II, not just for developing the fighter, as is almost always the case since R&D is uncertain, but also to buy several initial batches of it. Only later purchase

of the aircraft, which has become the most expensive military program in history, have started placing the burden of cost overruns on the company rather than the public purse. This is why the Air Force is now buying the first limited production units of the B-21 bomber in development with Northrop under fixed price contracts. The U.S. Space Force created by President Trump in 2019 strongly favors them too, as do the Silicon Valley challengers. Indeed, analysts believe that the shift away from cost plus will accelerate under Defense Secretary Pete Hegseth, who has pledged to make procurement nimbler. But the industry has been down this road many times before. In the 50s, officials made heavy use of cost plus contracts to foster innovation. In response to huge expense overruns, Robert

McNamara introduced total package procurement in the 60s, which involved fixed price deals. After many firms bid too aggressively for projects and ended up bankrupt or close to it, Lockheed had to ask Washington for a bailout. The framework was abandoned, yet fixed price contracting regained popularity in the 80s, and the private sector once again burned its fingers. The pendulum has kept swinging back and forth since. So he's saying, hey, you guys have it good right now. Your stock's riding high, but you're doing these fixed price contracts. You get one wrong, you might wind up bankrupt. But we know the people that run these companies and they're really sharp and I don't think they're

going to make mistakes, but we'll see. Yeah, it's interesting because every business runs at risk, right? And it creates a positive, it means that capital generally does not get incinerated to the degree that it does within defense, right? That said, defense has two factors out of many that drive this sort of overspending. One is projects become too important to national security to fail. And so sometimes startups, they have an ambitious product that, you know, project or idea, they try to build it, and they're unsuccessful, and there's no nobody to bail them out, right? The investors say, like, we don't want to put more money into this, like, it just didn't work. So it fails. The issue with technology that relates to national security is if our peer adversaries are developing the same technology and we want to, you know, maintain or exceed their capabilities, we just can't allow

for specific technology to fail. And so there is some situations where things should be like they're too important to fail. That said, the other factor is that you have internal cheerleaders for technology in the DOD or various parts of the military that bet their career on a specific project or technology. And then suddenly they're the ones fixated on that thing working out because they've told everybody in their professional life, like, no, this is important and we need this and we just should keep spending and spending and spending. Um, but what happens is, um, one of, one of the, uh, I'm an advisor. I mentioned this company on the podcast before to a company called, uh, Aon and they're like developing ground-based tactical missile systems. And already

they're producing missile systems that cost 80% less than what the primes are able to make that for right and so it's uh the sort of cost plus model once you have an established program of and and the technology is working and it's deployed it's almost like the cost plus model works for like super high risk r d to incentivize but then at a certain point once it's established you don't want it to be cost plus model works for like super high risk R&D to incentivize. But then at a certain point, once it's established, you don't want it to be cost plus because then the manufacturer says, well, we're just going to run up the price on this so that we can generate more margin for our shareholders. Yep. So I think that the cost plus thing really comes down to the iteration cycle here. And so when you think about all the R&D, even the best startup, the best people,

the best technology, the hottest company, you're not going to be able to build a new aircraft carrier in a year. It's just not going to happen. And so when you look at something like the F-35, it's just a massive project. And although there were major cost overruns, it took way too long. It's something that was going to take decades, no matter who was at the helm, at least a few years. Like it was going to take a while. Whereas when you look at what Apple does, Apple's releasing a new iPhone every single year for better or worse.

If the cost comes down, they can cut their costs that year. People buy new phones. Same thing if the cost goes up, they can raise the price a little bit. And so for these things that are treatable systems, you have more ability to iterate on the price as well because you're not locked into that same contract and you can actually, you don't need to do the cost plus thing as much. Now, this would be very bad if you think about Anduril going bigger and going into the aircraft carrier space or going after the next F-35 project, they really could wind up saying, hey, we're doing a fixed price contract and they could get bitten. But Anduril's only playing,

and I think they will continue to play because of the way warfare is evolving in these attritable systems. And so what's the future of warfare? It's not an even bigger aircraft carrier. It's a drone swarm. How will drones be purchased? 100,000 drones every single year. And there'll be a new drone that comes out every year. You're already seeing this with the ghost platform at Andoril, their helicopter drone. They're on like ghost four or five. I can't even keep track. And when you think about the headset, the IVAS system, Microsoft was going to produce 100,000 of those. Obviously that was not going to be 100 hundred thousand all in one go. It was going to be 10,000 and then 20,000 a quarter. And if Anduril really nails the IVAS program, they're going to be iterating on that. There's going to be new headsets, new features coming

out every single year. We see how fast the technology is advancing in the consumer space. There's no reason why the military would not want to integrate even better screens and better batteries and, you know, better and better CPUs and all this stuff. So it will look a lot more like an Apple product release, which gives them more flexibility to stay on that fixed price contract and not lock in a price that they have to deal with. And they don't have to predict it out 10 years. They're saying, hey, we got a V2 here. This is what it costs us. This is what we think we should sell it for. This is what we can deliver it for. We're working against that. And there's much less capital at risk. So I'm optimistic. Let's close out with the end of this

article a little bit. It says, as much as upfront setting of prices is the standard in the private sector, defense procurement is different. Yes, today's highly consolidated defense industry gives contractors more leverage, but it also exposes a single customer with unrealistic and ever-changing goals. Big generational programs are scarce, and firms must bid aggressively or risk losing a core business segment. This was the case with the B21, the Raider, which has now caused large write-downs for Northrop.

In its fourth quarter earnings report, Lockheed reported a 72% drop in operating profit alongside a $1.7 billion charge on fixed price contracts, mostly related to missiles. In its own quarterly release, Boeing took a $1.7 billion hit related to fixed price contracts on its T-7A jet. And so lots of companies are in trouble for these big, big, massive programs that they take on. I think the new direction is avoid those big projects, both from a financial perspective, but also from a nature of warfare perspective. The future is systems and that results in more flexibility on the financial side as well. Uh, I don't think, I don't think it's, uh, anybody should feel bad for the Boeings and the, and the Raytheons and the Lockheed Martins for taking a big risk for a huge payoff, right? Like

they're, they, they're making a calculated risk in the sense that, Hey, would we risk, you know, uh, $10 billion to make a hundred billion dollars? Yes. Right. You know, that's like a good bet to take. And so when it doesn't work out, they're going to complain and say that, you know, they should have been bailed out or, or, or they should have been, uh, but, but again, there's a difference between the taxpayers and the shareholders.

They're not, there's, there's a Venn diagram, but they're, they're very different groups. And so it's not, it shouldn't always be the responsibility of the, of the taxpayer. If a defense contractor blows way over budget or fails to execute, right? Like there needs to be consequences. Otherwise you get situations like the, the Microsoft program where they get $20 billion to deliver nothing. Right. Yeah. It just doesn't make any sense. Yeah, completely agree. Well, overall, I think this was a pretty good article, uh, raises some interesting questions, uh, closes with a, with a quote from Byron Callen at Cal capital alpha. He says, ultimately, I don't see how the smaller guys are immune to the same problems that have caught the traditional players. Obviously,

I gave a counter argument to that already. None of this denies the market thesis that prime military contractors have gotten complacent and that the likes of Palantir and Anduril can reap large rewards from expanding their defense footholds, especially since their investors are laser focused on growth. In the case of software, which has shorter development cycles and a blurrier line between development and production, the recent pivot towards fixed cost contracts and tapping upstart bidders has a greater chance of being successful. Great strategists, however, must learn from the mistakes of the past. And I think that speaks to, you know, the real risk is one of the new defense companies taking on too large of

a project, basically betting the entire farm on something that might not even be that relevant if a smaller, more treatable system can make it irrelevant to begin with. Yeah. Take the risk, bet the farm. If you have the conviction in, in completely independent of a potential bailout, right. It seems like these contractors were willing to take big risks if they felt like there was a good chance that they would also get a bailout if they weren't successful, but we want them to, uh, you know, be comfortable with taking risks independently because, you know, the reward of, you know, massive future contracts should be the incentive, not there should not be risk free innovation, right, as a privately held company with with shareholders and running as a for profit organization. I agree. Well, let's move on to our next story. The HIMSS Super Bowl ad. There's an article in the Wall Street Journal here. HIMSS Super Bowl ad spotlights weight loss drug copycats as clock ticks on their business. There's a full-blown war over copycat versions of blockbuster obesity drugs, but their days are likely numbered. During Sunday's Super Bowl, Hims and Hers Health,

ticker HIMS, a telehealth provider known for its provocative ads promoting erectile dysfunction and hair loss treatments, aired a commercial portraying America's obesity epidemic as a rigged game where people are denied affordable weight loss medications because of a greedy healthcare system. The ad positioned Hims and Hers, which sells a compounded version of semaglutide, a copy of the active ingredient in Novo Nordisk's Weguvy and Ozempic, as a Robin Hood of healthcare. There are medications that work, but they're priced for profits, not patients,

the narrator says, as Childish Gambino's social justice anthem, This Is America, plays in the background. Hims and Hers offers life-changing weight loss medications. They're affordable, doctor-trusted, and formulated in the United States. Predictably, the ad sparked backlash even before the big game. A pharmaceutical lobbying group called Pharma labeled it misleading, and Senators Dick Durbin and Roger Marshall, a Democrat and a Republican,

sent a letter to the FDA calling it a deceptive advertisement that failed to disclose side effects or safety risks, unlike traditional pharma ads. Spokeswoman for HIMSS said, the ad aims to raise awareness to a critical issue, the obesity public health crisis, by showcasing the impact of obesity and realities of the lack of access to life-saving weight loss treatments. And so, uh, him stock is way up. The company is doing fantastically, uh, but little bit of controversy about the compounding strategy. Uh, what did you see the ad Geordie? What did you think about it? Uh, what do you think about the ad that just the overall strategy of, uh, advertising weight loss drugs at the Super Bowl?

So, one, I think that T.J. Parker had probably one of the better takes here. I don't know if you remember the post. Maybe we could pull it up. He was hypercritical of it. He's the founder of PillPack, sold it to Amazon for a billion dollars, built a health tech company the hard way, being very, very, very diligent about following the rules and working well with the regulators. And that's part of the reason they had such a big outcome and were able to be acquired by a massive player like Amazon. He pushed back and he was basically like, you're completely, uh, disrespecting all, you know, patent law with this. You're selling at the same exact price as the, um, the people that actually own the IP and you're playing in a very aggressive, you know, very aggressively in a gray market

that, um, isn't, you know, you're not even passing on those benefits to consumers. So his main takeaway was, you're selling this for the same cost as the other players, yet you are trying to position them as taking advantage of consumers. And so he felt it was somewhat disingenuous. I mean, this is not the first time that HIMSS has been in hot water. The CEO, Andrew,

and this again, for context, like HIMS and HERS was like one of the big success stories out of the DTC era. There was like very few companies that made it public. At $10 billion, it might be literally the most successful DTC company other than maybe Chewy to come out. But even that's more of an e-commerce platform. Um, but in terms of, yeah, I mean, huge, huge success for everyone involved. And so, yeah, there was a very long period of time where people said this company was like basically a zero and like, shouldn't be public because they were losing a lot of money and they flipped and then they were in a bunch of, they had a bunch of controversy. It must have been back in the middle of 2023. But they the CEO has, you know, family history in Palestine and like came out very aggressively in against, you know, sort of Israel's action there.

And then the stock dropped dramatically. There was a ton of short-selling pressure. So he's no stranger to controversy. And so anyways, I think they're just selling so much GLP-1s right now that the market is like... Basically, what the market is saying to me is, yeah, they're, they're, um, yes, of course they're bending the rules around compounding and like, but they seem to be okay with that risk appetite because they're printing so much cash off of this that they're like, it's one of those situations where they're like, even if we

get, you know, a few hundred million dollar fine down the road, like we'll just pay it and we'll be in a better position with a bigger customer base. And so I just think this is one of those things, HIMS and HERS was like very well positioned to take advantage of this new development of this new drug. And we've talked about, you know, when we talked about, um, Novo Nordisk, Novo Nordisk had very few customers in the U S right. It's very possible that hims and hers is, is like acquiring more customers on a day-to-day basis, uh, even with heavy competition from row and individual doctors and things like that. So, yeah. So I believe Roe is white labeling or reselling and really just a portal to the actual Novo product, which probably means lower margins. Whereas because typically the name brand drug is on patent for a number of years and then it eventually goes generic. But if there is a shortage, the FDA will allow essentially patent infringement from like the patent rules don't apply if there's

a shortage of a drug and the FDA determines that the drug is important. And this kind of makes sense. You know, obviously if there was some sort of like, you know, like, you know, cancer drug that everyone was getting a certain type of cancer and there was some cancer shortage like, you know, like, you know, cancer drug that everyone was getting a certain type of cancer and there was some cancer shortage, we'd be like, let's make as much as possible in every possible lab. And so the fundamental rule makes sense. And so the FDA recently declared the shortage of Eli Lilly's, Manjaro and Zepbound over, but Novo's, Ozempic and Wagyuvi remain on the shortage list. And so this has allowed compounding to continue unabated. And there's been a big discussion over, you know, when will the shortage end?

When will this compounding not be allowed to happen? Is the compounding higher quality, lower quality? There's been a lot of debate there. The company said it's increasing supply and is in talks with regulators as it seeks to get off the shortage list. So Novo does not want to be on the shortage list because it means HIMS can compound. But it's unclear what HIMS strategy will be post-shortage ending. They could wind up acting just as an e-commerce platform to get the real drug, the non-compounded version. There's a lot of different

ways. And I think shareholders might be looking at, hey, they're acquiring all these customers. They'll still stick around and buy, you know, the quote unquote real thing. A lower margin. Yeah. Yeah. The lower margin version. Exactly. Because it is, you know, obviously like the whole dynamic of telemedicine is it is embarrassing to go into your doctor and say, I have a problem with erectile dysfunction or I have a hair loss problem. And so you click a button. It's very sterile. You just go through their web flow.

And then, boom, the medicine shows up at your doorstep. Great consumer user experience, essentially. And it's the same thing for being overweight. You might not want to talk to a doctor about that necessarily. And so a telehealth, telemedicine interaction might actually be higher conversion rate for selling these drugs. And if they can sell more of them through, even if they're at a lower margin, maybe there's a bull case here. I don't know. We'll see. Yeah. TJ, I pulled up TJ's post. He said this was on January 28th. So they released their ad early, clearly trying to front run the other campaigns. TJ didn't hold back. He said, imagine shamelessly stealing IP, compounding their drugs, which results in patient harm time and time again, selling your fraudulent product for roughly the same net price as the original inventor and then painting them as the problem in an effing super bowl commercial um so you know very uh you know that's his point of view didn't mince words um the thing about compounding pharmacies that's

fascinating is you can go and just buy a compounding pharmacy for less than a million dollars and just start making drugs and and so anybody uh uh, uh, there was one in my YC batch. Uh, and I think they didn't even buy one. They just, uh, they just set up and got the licenses. And I think they were doing a retinol retinoid. It's like a acne medication, skincare basically. So, I mean, in general, if you're trying to do something with health or FDA, you can usually go the nutraceutical supplement route, which is basically unregulated. And you can be like alpha giga brain enhancement and you can say all the crazy things you want because you're not really making claims. You're only making like structure and function claims. Then as you move up, you go into compounding and then eventually you go into FDA drug.

Typically, then you're a biotech company. You go through phase one, phase two, phase three trials. You get a patent. You are releasing like a real drug. And that's what Novo and Eli Lilly do. Startups in the Silicon Valley sense have never been able to really crack that. It's been more of like the biotech path. You go public really early.

It's a different path. But now we're in a blurry territory. Yeah. So these weight loss drugs fall into the pet, like broadly into the peptide category. And so people are, uh, for a while it's been this sort of gray market of, you can get peptides and the same, you can get peptides for weight loss purposes, but you can also get them for, you know, that, that stimulate testosterone production because peptides end up being these sort of precursors to hormones in the body. So it can be a precursor to HGH, right. It is one. So, um, there's a, there's a famous peptide called BPC one five seven that is referred to as the Wolverine peptide. And this is, um, uh, this is what Aaron, I think Aaron Rogers was taking where he tore his ACL

and like basically was back on the field in like remarkable time. And so, uh, BPC one five seven allows you to heal from injuries. Like just ridiculously quickly. There's there's, you can look up on forums, people that are like, I broke my leg and I was like fully healed in like six weeks, you know? So it's like really effective, really. Uh, but they're super complicated. You're dealing with complex processes in the body. They haven't been, uh, many of them haven't been studied well enough. So it's very much a wild, wild West.

Um, I do know there's some startups that are looking to take advantage of the sort of gray market right now. And, um, but it's a difficult space to build in because there's so much demand. If you tell people like, I will help you lose weight or be stronger in the gym or recover from injuries, it's going to be a lot of demand for that. But then are you going to be able to build durable IP value without these big pharmaceutical companies coming in and TJ's point around, you know, patient harm related to compounding. It is a good, you know, there's a, you know, the, the, uh, pharma industry gets so much hate from so many different types of people because they

have had numerous incidents where they've done, you know, sort of bad things or released drugs that they knew weren't effective or that had a bunch of harmful side effects. But one thing is, if you're getting a drug that, you know know is effective, you actually really want it to be made in the most professionalized commercial capacity with incredible testing. That's something that the big pharma companies generally are going to do better than. You could be ordering compounded Wagovi, and it's just some dude in a random compounding pharmacy that could just be one room somewhere. It's just a license, right? And he's just making this, putting it in a vial and shipping it off to you. And then you're just injecting this into your body. And so generally, I think we want patients and people that are using these drugs to have access to highly reliable,

you know, intensively tested. Yeah, it's pretty clear that the compounding, like, I don't know, it's not even a loophole, but like the compounding pharmacy regulations were written for, hey, your town might have a local pharmacist and in a shortage, you should be able to walk down to the pharmacy and they should be able to make you, you know, something that they can't otherwise buy. And then this was taken, this law, it's very similar to the de minimis loophole for Timu, where it's like, no one thought that you could put $5 billion of product through one company through the compounding regulations, but the free market will always put it to the test. Yeah. How about, uh, we need a hims and hers for mass monsters. What about like Chad's and Stacy's something like that? No, but I mean, yeah. TRT. I'll tell you,

I'll tell you offline, but our, our friend of the show is making a peptide, uh, sort of like telemedicine type company. He's going to send us some and we're going to inject it. We're going to inject it on the show. I don't know about that. I'll inject it. I'm doing great, Natty. I think I want to maintain my Natty status, but we'll see. Maybe if I get a terrible injury, I'll need to give that one a try. There's an interesting wrinkle in here. Once you have a large customer base, you essentially have a large voter base on your side and they could demand regulatory changes, which explores. And so

while Uber disrupted the taxi industry, HIMS and HERS is up against Eli Lilly, Novo Nordisk, and the entire pharmaceutical and health insurance complex. And the law is pretty clear that when it comes to a shortage is when it when a shortage is deemed over mass compounding can't continue. That's why HIMS and HERS doesn't sell compounded versions of Zep bound. It may take a few more quarters, but Novo Nordisk will eventually produce enough supply to end the shortage of its drug. When that happens, despite their efforts to influence public opinion, compounded versions will likely be severely limited. So fascinating story, very interesting use of a Superbowl ad, uh, drove a lot of contentious debate on the timeline. But probably, probably good for business. I mean, I, I, I knew some people starting, you know, weight loss telemedicine

companies, and, you know, roughly two years ago, and I was kind of short new entrance into telemedicine. But many of them, the demand is so significant and there really is a shortage broadly of these drugs that almost anybody that launched and had any type of quality operating experience, you know, and capabilities like did pretty well. Um, so a number of companies that just rocket and in general, massive rounds in general, hymns can hymns, you know, the narrative for hymns to take the high road is to say, uh, being fat is so unhealthy that we are willing to play in a gray market. If it means helping more people lose weight and they, they, they do have, there is a

narrative to be like, uh, you know, we are, you can hate what we're doing, but, you know, judge us based on our custom, how our like, you know, customers feel after using the product, because the person that takes a hymns and hers, you know, compounded version of one of these products and then loses 50 plus pounds, I guarantee you, they, they have positive feelings towards HIMSS. And so I don't think we'll know the sort of impact or if, if HIMSS was good or bad until we can see like, you know, enough, uh, customer and patient outcome data. Yeah. I mean, just, just thinking about it, like from like a technologist future of the internet thing, like having a doctor that's available on your phone or your laptop over a Zoom call or a text message, that feels like something that will be real. And we've thought very narrowly about

these companies early on as like, this one just does ED, this one just does hair loss, this one, now they're doing two or three. But eventually, I mean, you could see a lot of young people don't have primary care doctors. They could effectively replace that. And then, hey, we need some blood work. Go here, do this. Oh, we need, we actually need you to go in and get a physical. We need to like, you know, scan you or something, go to this location. But for the basics and just the prescriptions, it does seem like the future is some sort of online telemedicine that's not going away. And so, you know, hopefully all the companies that are working on this can get through all the complicated regulations, play by the rules and win on

product. And I saw somebody on X saying that, that HIMSS was a $ one trillion dollar company i've seen that too that's very funny but maybe there's something in there with like all of it's so care in one app or something i don't know yeah i mean i think uh it makes sense you can make an argument that generally the next that the next trillion dollar consumer company will be in healthcare. Yep. Is it going to be, is it going to be him's no idea? There's never been a medical aggregator in that way. There are obviously massive hospital networks, there's massive drug companies, but there's never been anyone that succeeded in really aggregating all the market power where it's like, you know, if you need paper towels, you're going to open up Amazon. And that has not been the case where it's like, if you need a refill on your medication,

there's one place you go. Unclear how much of a winner take all market it is. Obviously, it would have to be extremely monopolistic for there to be a trillion dollar outcome in the space. But, you know, exciting to watch it play out. I'm sure there'll be more drama in the future. We'll have to have TJ on. Maybe we'll have to have Andrew Dudeman, the CEO of HIMSS, hear it from him. We got to have, we got to have PVP debates on the show where we just take opposing views and let them, let them duke it out. You know, I'm ready. I'm ready. Well, speaking of PVP, we got a post about PVP meme coins from Arjun Balaji. He says, meme coins were once fun and pure, but the industrialized trenches

have turned a harmless PVP game into a predatory one, dominated by insider edge. Traditional casino games and meme coins share a core design idea, a high return to player that masks a built-in edge while delivering intermittent variable rewards to players. Traditional casino games like slots and blackjack offer high RTPs, 90 to 99%, meaning you might lose $1 in expectation of $100 of wagers. These games work because they leverage near-miss effects and the gambler's

fallacy, ensuring that the lure of a big win keeps you in the game even as you're bleeding bankroll. As I see it, the main issue with meme coins as gambling game today is that they have moved away from their purest form to a fully industrialized version of the trenches. Initially, they function more like PVP slot machines. Most bets evaporate, but there's a small chance to graduate with a 5 to 25x multiplier or even hit a jackpot level payout of 100 to 1000x when they temporarily become PVE. The thrill is from catching a runner or watching someone hit a massive win. Now only one to one and a half percent of pump fund launches graduate every day. I would guess nearly

all of these are industrialized, operated by sophisticated influencers and insiders who launch them to their audiences with ever-shortening half-lives. The death knell for these games is when RTP drops so low that uninformed players have no chance to profit. Gambler's fallacy in social media can temporarily keep the game alive by spotlighting winners. Over time, if nearly all profits are captured by the house edge, the player pool is liable to dry up and destroys the original harmless PVP thrills that made the memes fun in the first place. What do you think about meme coins, Jordy? So funny, funny anecdote. Jason Calacanis posted today, like, please ban these meme coins uh at sec gov and then uh which is funny because you can't

actually ban meme coins like the the the nature of them being just like code that runs on a blockchain it just kind of means that that no matter what the government says they can make it harder to on-ramp funds but even then then, there's enough actual uses for crypto that it would be hard for the SEC to be like, Coinbase, you can't on-ramp funds anymore. So, cat's out of the bag. It's not going back in. But the funny reaction to that is somebody immediately launched a token called stupid effing meme coins. And then that went to a multi multimillion dollar market cap and like immediately had a bunch of volume. So all it took was one post from Jason and somebody used that as

an opportunity to launch a token. Um, so I told you this, you're, you're going to say, uh, you know, not financial advice, like never buy meme tokens. And someone's going to launch a meme coin called not financial advice or never launch. Like you can't even have fun with it. And that's what I really don't like about it. I follow the, what would your mother say rule? If you can't explain it to your mom and make her proud, you shouldn't be doing it. Uh, this applies to the language that you use, the vitriol that you bring to the timeline, as well as the projects that you launch. Um, a lot of these meme coins are low class and vulgar, and we don't support them here on the show. Yeah, we will never launch a token at Technology Brothers. But going back to the

original piece, I think it makes a lot of sense. The whole, you know, people are doing meme coins for two kind of real reasons. It's like very much an entertainment thing, right? Like gambling is entertainment. There's like this social entertainment, exhilarating element to it of I might win a lot of money. But as, you know, as more and more of these, you know, in the same, you know, basically meme coins incentivize groups of people to coordinate against groups of other people. So's pvp it's can be one-on-one but then it ends up being you know small groups of um there's been a lot of pressure under under a on a group called the the la vape cabal um which is a group uh loosely led by somebody named uh phase banks who was like a famous you know uh, uh, gaming, um, you know, part of the phase clan,

which I think phase clan was like publicly traded or maybe still is. Um, I gotta see if they're still at it. Um, but, um, yeah, let's see there. Oh, the brand still lives on even though the stock's down. Wait, no, they're, they, I think they're at, they're at a $14 million market cap and you can't, they were delisted. It looks like, uh, del're at, they're at a $14 million market cap and you can't, they were delisted. It looks like. Delisted, but they still do sponsorships and there's still different content creators that join their collective essentially. Yeah. So anyways, you solicited a $0 on public. But, but anyways, so, so there's been a lot of pressure on them. They had the Hawk to a girl.

They like went on their podcast and then people were saying that they were sort of doing insider trading against that. So overall, like it feels like they're again, the president launched a meme coin. So and it's just sort of like code that's out there running. It's not going back in the bag, but I don't, um, it, it, what, what Arjun is basically saying is like, unless you let the average player make some money, sometimes like people are going to stop playing the game. Right. So it's possible that, um, it's possible that this thing becomes, it feels more likely that like it needs to find some independent equilibrium versus like the government solution to me but who knows it's a wild wild space um yeah i don't know i mean we

kind of went through this with the nft boom i'm surprised we're going through it again i thought we learned our lessons there but uh people keep going for this stuff. Yeah. It is funny. It is interesting to think, you know, open sea at one point was a 14 or $15 billion company. Like I'm sure if they raise money now, it'd be a tiny fraction of that. Uh, it's very possible. The same thing happens to, to pump fun. And, uh, they end up at a point where, you know, people, you know, people just say eventually get so burned, like people got on NFTs where they're sitting there. They're like, I have a picture in my wallet that I paid $20,000 for, and I don't want to play this game anymore because I'm not having fun. Um, so, uh, we'll, we'll see what happens, but one thing's

for sure. Gambling always finds a way. Uh, so. Well's for sure, gambling always finds a way. Well, you know what else always finds a way? The consultants. Let's go to Rohit Mittal. He says, Accenture had $1.2 billion in new bookings related to generative AI, and it has 69,000 people working in data and AI. Very funny number. 69,000 people who don't know anything about AI are helping the largest US companies with navigating the fast changing AI world.

One of the biggest grifts in the world. I don't know about that. I mean, you can get up to speed on some of this stuff. A lot of it's just like, hey, you're a massive company. Do you have a ChatGPT enterprise subscription yet? Because maybe your people's could benefit from using chat GPT more regularly. Like some of the transformation stuff, so basic and it can drive a lot of, a lot of shareholder value. If you're just improving,

everyone's like just going in and saying like the recommendation from some of these companies might be like, Hey, go install Devin, go get cognition. And like, Hey, go install Devin, go get cognition. And like, Hey, you know,

okay. You just have an extra developer and the ROI on that contract is positive. And they, it's crazy to think, cause you think you would just go on X and figure it out yourself. But if you're a massive company and you need to pay Accenture to tell you this or put it together in a DAC or, or do all the implementation stuff on what's the legal implications,

how does this fit in our organization? So I understand where he's coming from with the grift idea, but not fully convinced actually. What do you think? Yeah, I mean, one, it feels absurd, but this has always been the business of consulting. There's a new technological trend and then they ride that trend in order to drive bookings and new demand for their services. I have talked with people in the past about there's totally a possibility to build the AI Accenture that helps people use AI. So basically agents as consultants that are internal at companies sort of helping employees better leverage AI tools in the business. Because if, for example, you had an employee with basically some screen capture all day long, and it was just analyzing what you're doing all day and saying, almost like clippy style,

like, hey, did you know that you can like, you know, use this automation or things like that. So I don't know, I think companies wouldn't be spending the money if they didn't feel like there was some value. Sometimes the value of consulting services is so executives can just say, hey, we have an AI strategy that we're working on with Accenture and they're experts, right? They're paid to be experts. And the value is not necessarily the actual results they drive in the business. It's value to the management teams to be able to say that they have things under control if they're not. But again, I would look at this as like, you know, if I was like in college right now, I would be learning how to use these new AI

tools and reaching out to legacy companies that maybe aren't in the target market of Accenture because they're smaller, but reaching out to 10 to $50 million a year businesses and saying, I will help you use AI better in this part of your business, or I will help your developers use AI tools to be more efficient, right? So if Accenture is booking, you know, 1.2 billion for their Gen AI work, a college student should be able to print 10, 20K a month just helping other similar businesses better leverage AI. So we've talked about this on the show before. That's the new version of I will help you to use Google AdWords, or I will help you to run meta ads, or I will help you do social media management. That is the opportunity on the ground. And so we had somebody

in the audience ask, um, um, we had somebody in the audience ask, uh, green gorilla says, brothers, what advice do you have for new college grads? What industries companies you see the most upside in joining you were 22 or 23 today, what would you do? And, um, yeah, I mean, one is just like, whatever you're doing, don't wait to join a company to learn how to use these tools. Like just spend 18 hours a day learning how to use these products. Sharing your work on X is a good start. And then go, you know, there's so many companies right now, more so than five years ago, where you can go and have that company go from $5 million of ARR to, you know, 100 in a very short period of time. So, but again, there's

still, there's also opportunities with these legacy businesses to go in and say, I'm going to find somebody with a $50 million annual business and show them how you can replace, you know, a hundred thousand dollars a month of, of payroll by like leveraging AI properly in the organization. So, uh, I mean, that's a great take. Long Lake is doing that with HOAs. There's already companies doing that at larger scales with private equity buyouts. No reason that a young person couldn't start an amazing consulting business today. I love that take. I think that's a very good advice for young people. Let's move on to a post from Impatient Ventures. This is an older post, but I wanted to highlight it just to give the audience a little bit more background on our friends over at Bezel. They raised an $8 million seed round. Of course, we've talked about Bezel before. It's a watch marketplace for buying luxury watches.

We're huge fans of watches here. We're going to be doing a Valentine's Day gift guide. Lots of good stuff on Bezel that you can pick up for the loved one. But the seed round was stacked. They got John Legend, Kevin Hart, Steve Aoki, Michael Ovitz, Michael Rubin. So many good celebrities in there. Tons of great VC firms, Liquidity Capital, Box Group, Shrug, Abstract Ventures, lots of great VCs in there. And just wanted to let the audience know, Bezel is here to stay. They're making money.

They've raised money. It's a solid company and we love what they do and yeah and i'm quickly becoming addicted to the app yeah it's funny that that you uh you pulled this post from impatient too because the gp of impatient uh jack was in the chat uh on the way he was in the chat amazing i don't use social media until now now i'm a brother, uh, sent from the sauna at the standard Miami. So I'd love to see it. Rip a fun, rip a fundraising announcement and then just go hit, go hit the standard. Um, and, uh, yeah, crazy, crazy lineup. They basically got all the most watch obsessed celebrities in the world into a single round. And best part about it, all those celebrities were marking me up. I got in at the prior round. I got around. So thank you for the markup, John legend. Uh, that's brother behavior right there.

So, uh, that's great. Uh, well, here's a very random post, bit of a bucket poll, but I wanted to highlight it in the show. It's from P.F. Young, a content creator on YouTube. He does mostly politics. I find him very entertaining. He has a series of videos describing online politics through the lens of League of Legends. And they're wildly entertaining. Even if you don't know that much about League of Legends, you can watch these and understand how all of the different groups and sub formations of how Jordan Peterson and Candace Owens work together and how Hassan Piker and Bernie Sanders work together. Fascinating content creator.

Love him. And he says, I am assembling a loyal cult following. And it's a screenshot of a comment on his YouTube channel. It says at this point, I only watch because it's kind of fascinating to see how far someone can get as a political commentator who refuses to read the news or learn anything about politics. I love that. Amazing. Life of a political commentator.

That's the life of every, of every content creator. You just go out there and you rip the vibes and some people like it and some people hate it, but we love PF young and we got to have him on the show. If we ever get into politics, he'd be a great guest, but he's a very funny, fun guy. Somebody, somebody posted yesterday, uh, that they posted a meme responding to Luke Metro. And it was, it was the, I saw this, uh, it was a cycle meme. I'm just, uh, I gotta hold it way up there,

but he says, I look for tech podcast. I find an interesting podcast downloads go up with politics. It becomes all political slop. And then I look for tech, tech podcasts again. So I'm going out, uh, to say, uh, to Elias that, uh, who posted this, that we're going to hold the line for you, strictly tech and business forever. It's on record. We never discuss politics. Decades from now, we're still covering tech earnings, baby. We're still going to be covering tech earnings. I genuinely am not qualified to discuss politics and your views are just too extreme to talk about without both of our views far too extreme for yeah it would piss off it would piss off everyone everyone everyone on both sides of the aisle actually we can't share we can't share anything

be too rough so we gotta we gotta stay away from it but yes i mean, that meme is pointing out a real phenomenon, which is that the addressable market, the TAM of tech content just isn't that big. And I mean, even though Acquired has not become a politics show, they have gone out of tech. Originally, they were doing acquisitions in tech. They would tell you like the story of Google maps getting bought or the story of Instagram getting bought. That's why it was called acquired. Then it became the history of Facebook, the history of Google, the history of Microsoft. But then they went over and did LVMH and Porsche and Mercedes and, and all these just amazing firms. And they've, and they've graduated out of that and become a broader show. And now I think of them as just a great business show. They still haven't gone full politics. But at a certain point, you just run out of tech

content. And so you got to add in some other spice. Fortunately, we have discovered a hack, which is instead of talking about politics, we talk about luxury goods. So this might go down and we stop talking about tech and we're just talking about sports cars. What happened in F1? The latest news in horse breeding. But we won't be talking about politics. That's for sure. OK.

We will be derailed. A little alpha for the listeners. So John and I, maybe we mentioned this on the show, we're exploring getting our own racehorse. So I don't think I even told you this yet, John, but tomorrow we have a call set up with a guy who specializes in helping acquire racehorses. So very, you know, this could just become a horse podcast. And in that case, it'd be cool. Cause then we'd have just tech journalists come on the show. Exactly. They could talk about tech and we would just be constantly trying to talk about horses and it'd be this dynamic where they're like, what are you guys? You're the technology brothers, but you only want to talk

about the, the, the, the, you know, prepping for the Derby, you know? Yeah, exactly. And everyone will be like, Oh, I missed when it was a tech show. Now they just talk about horses. Oh no, it's all horse content. There's two horse pill. Like they just want to go back to the old days. The old episodes are so good. Well, that's the way the cookie crumbles, folks. We might get derailed. Who knows? But not today because we're still talking about tech, and we have an update.

Breaking news from Mateo over at 8sleep. He says, sleep fitness is taking over the world, and the 8sleep pod is now available in Mexico. So if you're listening from Mexico, go buy an eight sleep pod by 10 right now. Code TBPN. I think that's our code, but we love eight sleep. I have been crushing it. Got a hundred sleep score. My first two nights ago. Let's see what I did last night. It was a little rough. Oh, 100. Let's go. I got another 100 sunday 100 monday 97 tuesday 100 7 hours and 44 minutes of sleep i'm feeling great that's great here's the issue with the issue is sleep is most people overestimate how much they're actually sleeping yeah you think that you're you think you're

getting you know you're eight hours because you were in bed but it's like oh well maybe you didn't fall asleep for 40 minutes or you woke up at some point in the night. I'm excited. We're going to be announcing some big news on PMF or Die. I'm going to kick off soon, but I got the players set up in the space yesterday, and we're getting pods for them, Uh, so there'll be sleeping, sleeping, like, uh, sleeping like babies, uh, which I'm excited for. Um, and, uh,

what else we got? I mean, let's just jump in. We got a post from Delian. Oh yeah. We got some breaking news from Delian. Delian broke the news on this. Uh, Google maps has updated, uh, that big body of water south of Louisiana. It's now called the Gulf of America. And honestly, I've honestly forgotten what it was called before. I don't remember it as anything but the Gulf of America. I've been calling it Gulf of Texas, I guess,

but now we've expanded it to the Gulf of America. But I'm very happy to see it. It's very cool that Google hopped on the train. They didn't fight it. They said, look, if it's going to be the Gulf of America, if that's what the people want, it's the cool that google hopped on the train they didn't fight it they said look if it's going to be the gulf of america if that's what the people want it's the gulf of america a little bit of a mouthful i don't know how long it'll stick around it's going to be one of those things that goes back and forth we you know democrat wins in 2028 and boom it's back to something else

it's funny because it it seems like a political issue, but we should all be united around it. It's like, hey, this is massive body of water. I didn't know that the U.S. had the authority to write executive orders to get bodies of water renamed. But it's a pretty, you know, one, if Mexico tries to make some international effort to rename it the Gulf of Mexico, uh, I think Trump would basically say like 50% tariffs on all goods coming in from Mexico until you tell you, you know, just accept the Gulf of America G of a, uh, for those of us that, that say it, you know, frequently. Uh, but, uh, I think this is the start of something great. I, I think we got to take this renaming much further uh new england patriots we're dropping the new it's just the

england patriots england you're old england now you're not you're not just england you're old england or we have england now yeah i don't want that i don't want that also greenland iceland it's always been confusing greenland's the icy one. Iceland's the green one. Let's flip those names around. Let's switch it. I want, I want to rename those. Let's go around. We'll just clean up the whole taxonomy. Any, any weird names out there, you're on notice. If your country name doesn't make sense, we're renaming you. If your body of water doesn't make sense, we're going to rename you. It's going to happen. Yeah. We got the keys to the kingdom here. Delian's going to make it happen over at Google.

And the Google Maps, you better take some screenshots now because it's going to look completely different in a couple months. Anyway, let's move on to Kyle over at Wander. We got a post from him. His pin post, a banger from 2019. Just trying to give you some more color on who this guy is, Kyle. He runs Wander, a company we've partnered with. Talked about them on the show before. They have wonderful rental homes, beautiful rental homes. You got to go scroll the feed for Wander and see what's available. It's really amazing. Some of the greatest homes. People are saying it's fantastic homes, folks. They're

saying it's fantastic. And so he says, underappreciated phenomenon, working at a high growth margin focused startup is a real life MBA, where you get paid six figures plus equity to learn how to build a business instead of paying six figures to go into debt and learning how to build a theoretical one. Absolute banger, 5K likes. I can see why he got so much love on this post. And that really just gives you a little insight into how they're building this business. They are high growth, but they're also margin focused. Every dollar matters in this business because when you pay a couple hundred bucks, a couple thousand bucks to rent a wander, they have to pass a lot of that cost on to the person, the renter, right?

They only take a fee. They're a marketplace, remember? And they don't own a lot of their inventory, or I think very much of any of their inventory at this point in the future. It will be a marketplace business. And so, you know, he's obviously learned as they've been assembling the plane as they're flying it. And, you know, gotten the real life MBA and it shows because the business is ripping. Well said, well said, well said. Well, let's move on to some more geopolitics, geography news. We never talk about politics,

but Germany is in shambles again. EU regulators think it's too dangerous to simply break a bottle across the bow of a new ship. Instead, they insist on the use of this contraption. This is why the European Union is failing. This is economist, economy minister Habeck flailing. And we can't show the video. We're still working on it. But the guy is absolutely hammering this with this champagne bottle, I guess uh across the bow of this ship with this very awkward contraption and uh joe lonsdale says sad metaphor for over-regulated europe in 2025 uh 5k banger we love to see it very funny very funny very odd i don't know why they're using

this apologies apologies follow up to from another angle. And he goes, you switch the screen, Ben, so I can't see it. He says, he eventually just does it the old way. And it works a metaphor there. I love it. Yeah. So Germany, we put you on notice weeks ago when we talked about your crumbling economy. We told you, you got to stop reading out all of the documents during a financing close. That's unacceptable. That's un-American. Germany is a very un-American country and you're on notice. So start doing deals, start doing deals the old fashioned way on a napkin. We've been thinking about napkins. Yeah. Huge napkin with an Excel sheet printed on it. That's the way your deal on there. You can map out a full DCF, multiple sheets, but it's got to be done on a napkin and closed over a text message. Let's move on to John Arnold with a fantastic story about Enron, the real Enron, not these Enron imposters who are selling scam cryptocurrency, but the old Enron energy traders from the Texas-based company that went bankrupt in around

the turn of the millennium. He says, I can confirm this story from Bryn Hobart. As head trader for Enron, when it failed, when it filed for bankruptcy, I received many calls from firms that were recruiting. I was busy trying to close out the trading book and wanted to take some time to decide my future. So I didn't take any meetings. But Citadel was by far the most aggressive. Other companies set up few interviews with Enron senior people. Citadel interviewed seemingly everyone in the trading operation, all functions at all levels. Citadel's team called me twice, but I declined to meet. It was apparent to me that their intent was to reverse engineer the business, and I wasn't going to help them.

They knew that people looking for a job, particularly if they didn't have a fiduciary responsibility to a current employer, would be very free with info. Interview everyone, and you get a 360 perspective of the industry, how the business makes money, its competitive edge, who the best employees are, etc. Citadel probably interviewed several hundred Enron employees. In the end, they maybe hired five. Much more importantly, they built the framework for how to enter the energy business, which, as Ken notes, has been an enormous success. I eventually did talk with Citadel. On their third call to me, they asked if I would talk with Ken directly. I was at the airport heading to Aspen for a quick industry event. Legendary.

I didn't know Ken personally, but had great respect for what he built. So I told this rep he could call me when I got back to Houston the following week. She said, great, but called back a few minutes later with a question. If Ken flew to Aspen to meet me in person the next day, would I? Out of respect, I said, of course. The next day, I had a great meeting with him. And later that week, he offered me a job as head gas trader. I wanted to fully run an operation and thought there was more upside if I could have my own fund, so I declined. I ended up building my own firm, starting with traders and hiring deep fundamentals expertise. Citadel started with the research, as is their DNA, and built up a trading

operation around it. Both models worked fabulously well. I came away from the experience with an even deeper respect for both Ken and Citadel and remain friends with him to this day. I started with a niche gas trading, built a niche fund and burnt out after 17 years. Ken started with a niche convert arb and built one of the most successful financial firms ever and has never tired. And an amazing quote image here is, yeah, Jordy, what you got? No, I mean, just amazing, amazing story that, that gives, uh, insight into just how savage a firm like Citadel is. You don't get, you don't get to, to be that impactful and that large by simply being a good investor or being smart or making some great trades.

There's a level of professionalism and just execution in that industry where in venture capital, you can kind of sit on your hands and if you're at a good firm, you'll meet most of the best founders. And if you do one good deal every couple of years, you can make a great career out of that and that's just like not how it works in the hedge fund world you will get absolutely lapped by a firm that uh you know many

of these firms are playing pvp and they will send an army out you know in a situation situation like enron and just use that as an opportunity to launch a new business line and basically just completely mine, um, mine Enron for all of their alpha in the sort of basically the dying days and, and the sort of, um, you know, during the funeral basically. Um, so absolutely, absolutely savage. And I'm glad that story had, you know, a happy ending and that sounds like he, you know, was able to do well, uh, independently and, um, yeah, it's, it's cool to see. Yeah. A couple, a couple of takeaways for me. I mean, first is that like a lot of people know Enron just as a fraud and they think about it like a Theranos fraud where there was never really a product that worked. And that's just not true. Enron had multiple business lines that were doing

phenomenally. Their gas trading business, energy trading, a lot of that was going well. They just cooked the books and had this accounting scandal and were doing this crazy mark to market thing. And there's like all this crazy accounting cycles. We'll have to do a whole deep dive on Enron. But there were some super talented people there that went on to do great things in other financial institutions. And Ken clearly, uh, was able to extract the signal from the noise and understand that certain pieces of the business, you wouldn't want to touch with a 10 foot pole, probably the accounting department, but there were plenty of part pieces of the business that were running finance, like, like super tight ships and creating a ton of financial alpha

and going and getting that alpha. And those secrets was incredibly valuable. A lot of these firms, they trade on some secret strategy, some insight, some flow, nothing illegal, just a different pattern of pricing a commodity or stock. Maybe they have a different strategy. Maybe it's highly quantitative. Maybe it's highly qualitative. Maybe they're doing a ton of research. There's hedge funds that are buying satellite data, for example, to understand, oh, if there's this many cars in the Walmart parking lot, Walmart's going to beat earnings. Everyone has a different strategy. That's an obvious one, but there's a million that are subtle and those are hidden within firms. And if you can get the guy who knows that secret

when his firm's collapsing, you're just going gonna be able to take all that alpha yeah yeah the the the i always love the example of like using satellite data and like developing your own uh data sources to better better price uh bets and and that's the kind of thing you just don't uh vcs never do that like yeah no general uh there would be more stories about them being like, yeah, I went to the competitor, I sat outside the competitor's office, or I paid somebody to sit outside the competitor's office and, and realize that, you know, XYZ company had a very flexible remote policy. And so I decided to go all in on, you know, their competitor who was like in person, you know, maybe they who was like in person, you know,

maybe they're, they're looking at some of that same information, but it's not as much of a, it's more of like a positive sum game and there's more risk, you know, not, not necessarily more risk, but there's more just sort of luck and patience required that, um, there's not maybe the same information arbitrage or it's just not as serious of an industry. Yeah. When I worked at Citadel, I remember this hilarious story where you know, the weather reporter on the local news, they always say, let's go to the Doppler 5000. We got a Doppler radar system. We're going to tell you, oh, there's a cold front coming in here. It's going to rain on Tuesday, that type of stuff. And one of the weather traders who's essentially trying to determine

how much rainfall there's going to be, and that will affect crop yields and then crop prices. So you can trade the commodities based on the weather report is like, yeah, their weather system, their Doppler radar, that's like a Honda Civic. We have a Ferrari here and they could predict the weather much better than local news. And you think about the weather report as like the most authoritative source because it is just a random consumer of weather news. But the hedge funds have it way more dialed, way more dialed. And there's a million little micro areas where they figure out one market edge and then exploit that 1% margin all the way up to the full market size. This is the original story of Ken Griffin.

I mean, he found that convertible debt, there was this massive arbitrage that was available. He completely mined it, but then completely capped out on the size of the market because he basically brought convertible debt. He arbitraged all the value out, so it was correctly priced. He had to scale up into other strategies, and that's where the quant side came from. That's where the global macro side came from. And he eventually built a very insane, huge firm. And then that doesn't even take into account Citadel Securities, which is the market maker and is such a bigger company now. And at one point, he was doing an

investment bank and was thinking about going public. It was a crazy story. But anyway, fascinating story and a good lesson there that even in chaos, go get the good people, because not everyone is a disaster when the ship is sinking. story and a good lesson there that even in chaos, uh, go get the good people because, uh, not everyone is a disaster when the ship is sinking. Yeah. I wonder if anybody did that when, when, when bolt was basically imploding, you know, I'm sure, I'm sure they were getting, um, I think Stripe did actually, yeah. Stripe went and put some people out, but, but not as aggressive as like going and camping out outside, you know, the office basically. Well, it's different because the thing with like, I'm sure Bolt had some great engineers. You put

those people to work on Stripe's core business. They're going to drive some value. It's very different when there's like one key insight at this hedge fund that's delivering, you know, a billion dollars of profit if it's run effectively or a hundred million dollars of profit or something like that. And it really goes to this idea Ben Thompson was writing about in his, I think his Monday piece about how OpenAI's ChatGPT Deep Research is a fantastic product, but it is fundamentally flawed in some ways in that it only has access to the internet. And so if you run a report from deep research on an industry where there are secrets, there are firms that no one knows about, because maybe there's a big player in the industry that barely even has a

website, but they're actually really important. And you know them by reputation if you actually operate in that industry, but there's just nothing about them on online, deep research, just completely miss it. This was an example there around industry secrets. It's not even secrets. It's just like operating know-how when, when the whole creator economy boom was happening in sort of 2020, 2021, I had been working with creators through Branded Native, my first company, and literally paying millions of dollars to creators. And so I would get pitched these ideas and I'm like, yeah, that's a good idea. And it totally makes sense if you've never worked with creators.

And so I didn't end up investing in any of those companies because I just knew fundamentally that they weren't going to, they just weren't going to work. And so you have this, this happens tech, the, the, the good thing about tech and a lot of great companies come out of this is you have people that are talented and smart, but without industry experience will come into a new industry and, you know, basically completely change it, upend it, disrupt it, um, by just having a fresh point of view and, and, and thinking, what if we just like did, you know, did this from first principles or whatever, whatever their approach is. And for as many like success stories as there are, there's a bunch of, you know, low profile failures that

happens when, you know, people that, you know, apply that sort of startup mentality, like, I'm going to come into this industry with no experience and disrupted. And in the situation with Ken, he was like, I'm going to come in and and take over this market or compete in this market. But I'm going to do that by downloading as like hundreds, 1000s, in this case, 1000s of hours of interviews where they're just grilling people on the exactly what they did, how do they win, where, you know, what, what aspects of the business were really making money, who was, who were the top performers and then just drilling them, you know, grilling them even more. So, um, anyways, a lot, a lot of learnings from that.

Yeah. Fantastic story. We'll have to do deep dive on Ken Citadel and Enron and so many more things. So stay tuned. I'm sure there'll be tons more content. Uh, we will probably get some travel tomorrow, some board meetings tomorrow. So we might be on later. We might skip, but, uh, we will see you guys later this week and please leave us a five star review, Apple podcasts, Spotify. Please leave it on both. It really helps the show. And when you do, leave an ad for your company, a company you like, something funny. Just write a bunch of stuff in the comment with your five-star review. We'll read it live on the show. We got one review I'll just read right now. From C5183 on apple podcast he says uh rare combination of funny and educational

tb combines acquired caliber research with a solid amount of humor and self-awareness which you don't get many places it's poised to become red scares for guys who want to show you their deck couldn't have said it better i couldn't have said it that was the exact idea i had yeah uh that that actually yeah you actually nailed it better. That was the exact idea I had. Yeah. Uh, that, that actually, yeah, you actually nailed it. That was, that was, uh, yeah. And I didn't even know what Red Scare was at the time. And you were like, look at it. This is what we're doing. Uh, so format wise, uh, the only, the only critique of, uh, the only critique of, uh, that review is there's no ad in it. So I'm kind of feel a little bit. Much like Red Scare. They don't run ads.

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