This Week in Startups - Amazon’s “Age of Efficiency,” LLM distribution, AI wearable worries, and more with Elad Gil | E2197

Episode Date: October 22, 2025

Today’s show:*Amazon’s dropping a LOT of employees for AI and robots… are Jason’s darkest predictions coming true?Legendary investor Elad Gil joins Jason and Alex for the full show today! Together, they’re digging into the Amazon news, looking back at Jason’s predictions from just last month, and theorizing about just how many people will lose their jobs to computers, and what we’re going to do about it. (Is it possible the US hasn’t been massively hit by job displacement so far because those gigs already moved overseas?)PLUS… Anthropic’s Dario Amodei responds to criticisms from JCal’s bestie David Sacks, Sesame emerges from stealth to work on AI wearables, and where will people in the future interact with their favorite apps? A headset? Phones? Somewhere else? The great debate continues.Timestamps:(00:04:04) Our guest is iconic angel investor Elad Gil! What’s he working on…(00:04:54) Alexandria AI translates public domain books into all commonly spoken languages… Do people actually prefer AI translations?(00:09:16) Why compute tends to centralize over time… (It’s because of economies of scale!)(00:09:29) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://www.Squarespace.com/TWIST(00:12:49) So are we building TOO MANY datacenters? Will AI apps eventually run on your phone anyway?(00:16:39) Jason says “The Age of Efficiency is upon us.”(00:19:24) When companies trade inference for market share(00:19:27) Sentry - New users get 3 months free of the Business plan (covers 150k errors). Go to http://sentry.io/twist and use code TWIST(00:21:57) Why one of the main challenges of adopting AI is buy-in and convincing teams to use it.(00:25:47) Elad’s robotics questions: (1) What % of winners will be incumbents?(00:27:50) Jason called the Amazon news last month and we have the receipts!(00:29:36) Pilot - Visit https://www.pilot.com/twist and get $1,200 off your first yea(00:45:33) Jason says Adobe and Figma should abandon the UK entirely.(00:45:55) Time for a Polymarket: The sharps say 80% chance Tesla beats their quarterly earnings(00:51:02) What is Sesame? They just emerged from stealth, they raised $250M, and they’re working on AI wearables.(00:53:21) Jason has concerns about AI wearables that are always recording… Does Elad share these concerns?(01:03:17) The crypto industry is now one of the largest purchasers of US government debt… what does that mean? Who owns who?(01:08:53) Anthropic responded to JCal’s Bestie David Sacks… Is Dario Amodei a doomer? Fearmongering?(01:19:12) Why Jason thinks AI companies need to self-regulateSubscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.comCheck out the TWIST500: https://www.twist500.comSubscribe to This Week in Startups on Apple: https://rb.gy/v19fcpFollow Lon:X: https://x.com/lonsFollow Alex:X: https://x.com/alexLinkedIn: ⁠https://www.linkedin.com/in/alexwilhelmFollow Jason:X: https://twitter.com/JasonLinkedIn: https://www.linkedin.com/in/jasoncalacanisThank you to our partners:Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://www.Squarespace.com/TWISTSentry - New users get 3 months free of the Business plan (covers 150k errors). Go to http://sentry.io/twist and use code TWISTPilot - Visit https://www.pilot.com/twist and get $1,200 off your first yeaGreat TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarlandCheck out Jason’s suite of newsletters: https://substack.com/@calacanisFollow TWiST:Twitter: https://twitter.com/TWiStartupsYouTube: https://www.youtube.com/thisweekinInstagram: https://www.instagram.com/thisweekinstartupsTikTok: https://www.tiktok.com/@thisweekinstartupsSubstack: https://twistartups.substack.comSubscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

I think in general, my sense is that overall companies that have been considering going public are now sort of opted to do that sort of route. Okay. I was asking because there's a great note in their S1, Jason, you'll love this. They were talking about how they're using their AI-powered virtual agent chat bot, and they say that our ability to control customer support costs over time, even as volume has gone up, has contributed to an increase in gross margin from 60% to fiscal 24 to 68 and fiscal 25 and even more. So essentially, they're automating things, Jason, static team size, cost savings. it's helping the company look more profitable. So kind of an AI story and a fintech story a lot. The age of efficiency is upon us. Every unit in every company, particularly in startups, who are all these resource-contrained, they are the ones to first use these tools because

their resource-contraint. They can save a, they can turn a nickel into a dollar. Start-ups are going to do it. Now, big company is like, well, we're spending $3 to get a dollar in value and we can afford to do it because we're sitting on a bunch of cash. There's no, you know, imperative. There's no existential dread about money at Apple when you're sitting on hundreds of billions of dollars in cash. So, yeah, we'll get to it when we get to it. But at a startup, it's quite the opposite. You're seeing that as well, I assume that is startups doing really fascinating stuff with this technology already. Yeah, it's super exciting. And the ramp on revenue for some of these companies is out of this world, right? I mean, between going from zero to a few hundred million

in revenue in two, three years is something that I haven't seen in a very long time. And there's multiple companies doing that. So I think this is the big C change. And you see it in enterprise adoption. You see it in all sorts of things. The company that I started with Jared and Eric Wu and others that we mentioned earlier is basically working on this for big enterprise. How can you help big enterprises really make that adoption of AI and what applications

should you provide for them to be able to really thrive in this post AI world? So I think there's an enormous amount of stuff to be done there. Yeah. And it's going to be really interesting. The cynical take on this is a lot of people sampling AI solutions and trialing them and there'll be big, big churn issues and, of course, competition issues. And I guess the optimist view of it, which I'm primarily in that camp, is these things are providing massive value at very low price.

Therefore, why wouldn't you try it? It's like, you know, come get three hamburgers that are grass fed beef for 20 bucks. Like, how is that possible? Okay, I don't need to know. I'm just going to order the burgers. Like, if you want to charge me 20 bucks for something that saves me $2,000 a month, okay. And it's just wild to see how mispriced some of these products are for the value they're creating. This weekend startups is brought to you by Squarespace.

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Pilot provides the most reliable accounting, CFO, and tax services for startups and small businesses. Head to pilot.com slash twist and get $1,200 off your first year. All right, everybody. Welcome back to this week in startups. I'm your host, Jason Calacanus, with me and my co-host Alex Wilhelm and a special guest today. Entruce our guest, Alex. Our special guest today is the former founder of Mixer Labs and Color Health. He helped incubate Brain and Co. But you probably know Alad Gill as an investor, Paxalance. He has back many, many, well-known names in the technology world, and Jason, I believe, commands the largest single AUM of any solo GP in the world. Alad, we're happy to have you.

Thanks for having me on board. Yeah. What are you working on these days before we get into all this crazy news? What's in your fancy? What are you excited? Yeah, it's kind of a mix of stuff. Yeah, it's a nice stuff. You know, I guess three things. One is recently launched a company with Jared Kushner, Eric Wu, and a few other folks to bring AI to the world's biggest enterprises. So we're really excited about that. Second area, just investing. So, you know, a lot of the companies I got involved with early, perplexity, Harvey, Decagon, a bridge, et cetera,

on the AI side are obviously all seeing, you know, real growth, acceleration, et cetera. And then third, there's kind of some side projects I've been working on around building large-scale monuments, translating books using AI, a variety of different things. And so there's also more of the societal and philanthropic stuff that I think has been really fun. Amazing.

Kind of those three areas, yeah. Well, tell me about this translating books with AI. Yeah, we're calling it Alexandria. The basic idea is that if you look at every society, we've benefited since the days of Alexandria, the Egyptian Library, from large-scale access to human knowledge and books. And so we're taking 1,000 of the most important books that are off of copyright, and we're translating them working in concert with Open AI and Anthropic and 11 labs and a few other folks on creating a version of the book in every language,

audio books in every language, so anybody in the world can stream it, they can download it, they can interact with it. We've actually built a book reader. And so we'll be doing a launch for that in the next few months, but that's been incredibly rewarding. And we've actually done machine versus human e-val, where people check, do they like more what we've done with translation or what human translators have done?

And people prefer the machine translated works by far. And so that's been a really interesting and unexpected outcome of this. What are you attributed to? I think it is often more modern language, although you can obviously tune that based on your prompts. And then I think often it's more concise and often it's more consistent. You have better QA, especially if you're thinking about a long work or corpus. You can enforce certain things that a human translator may or may not be able to do. Fascinating.

I want to know how long until you add a zero to that and then another zero. When is it 10,000? When is it 100? And what's stopping you from going to like a million? There's a lot of books out of copyright a lot. Yeah, I think we decided to start with the things that we thought were books that often should exist in other languages that just have never been translated because if you look at it, there's maybe two dozen languages that cover 80% of humanity. And, you know, for even some of the greatest works ever produced, or at least the consensus from academics as these are the greatest books ever produced, there just aren't copies in all sorts of languages. You know, 20, 30, 40% of humanity can't access them.

So we just thought, let's start with this stuff that's kind of obvious. I think to your point, you could do, we have the infrastructure belt now, so you could run an arbitrary book through. And if you really want it to, you could turn this into a service where anybody should be able to upload any book and then basically have this output in terms of every language, every audiobook. We've also been looking at building AI guides to the book so you can start interacting with it, asking questions, etc. So I think it's almost like this modern library of Alexandria. We want to bring humanity's knowledge to the world in an accessible way. So it's been fun. So have you also gone down like the BitTensor and distributed computing as related to AI and LLM's rabbit hole?

Yeah, I've looked at it a bit. Yeah, what's your conclusion on it? I don't have one, but I made a small investment in a, like a hedge fund that's looking at all the nodes of BitTensor every day, trying to figure out the different projects, buying you know, the tokens, et cetera. And it feels to me like now that we're in the sort of SACs era of crypto regulation, I feel more comfortable spending a little time there. And I've always felt like distributed computing and would be a viable co-existor to cloud computing for certain jobs.

And we'll move from that SETI at home kind of, you know, I don't want to say silliness, but hobbyist, you know, toy to something more meaningful. And perhaps at some point even if we're building out too much infrastructure, it could be like Bitcoin and that people will start putting up infrastructure and know they'll make a high return on it. And you could get some, you know, I don't know, scale that was not previously considered realistic in the same way Bitcoin and the number of, you know, people, participating in the number of nodes would be hard to comprehend 10 or 15 years ago, right?

Yeah, that's an interesting question because I think in the case of anything that has strong economic viability, compute tends to collapse into centralization. And so, for example, to your point on bitcoining, I think it's like the six or seven largest mining pool are over 50% of Bitcoin volume. Yeah. And so that's centralization in terms of buying of hardware, in terms of energy, in negotiation for that. And so anytime you have something with a huge economic output, it seems to almost always centralize

because of those economies of scale. And then to your point, there's all sorts of circumstances where you have more distribution, either because it's people who are just, you know, generating an extra Bitcoin every once in a while because they have some idle capacity,

but on a volume basis, that's pretty low. If you want your business to succeed online, it has to stand out, and that's why you need a beautiful, world-class website. The good news is you don't have to hire an expensive designer anymore, nor do you need a bunch of developers.

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So check out Squarespace.com slash twist for a free trial and when you're ready to launch. go to Squarespace.com slash Twist to get 10% off your first website or domain purchase. That's Squarespace.com slash twist. Or it could be things like SETI at Home, which is more philanthropic or very early Bitcoin mining or crypto mining where, you know, there isn't that same liquidity in terms of mining of the token. So it's a really interesting question of when do you transition from decentralized to centralized and the characteristics of that. And it's an open consolidation that occurs because it's not like you have to add. a gatekeeper, it's not like you have to go to, you know, somebody and say, I would like to participate in this. Can we cut a deal? You're not like negotiating with Oracle or Microsoft. It's like you can just

participate. And if you have innovations that you can bring to bear, you come up with your own chipsets, you come up with your own power strategies, you have a cousin who works at a nuclear facility in China. And they happen to give you a little space for your, for your nodes. All of a sudden, you're up to the races. So I'm super bullish on it. Also, like, if you just think about all the inference that's occurring, it's going to be unlimited demand for this stuff, I think. I don't know that the demand curve ever, yeah, I don't know if it's going to abate anytime soon. What's your take on it? Like the overbuild versus, you know, the dark fiber analogy. Do you have a position on it or does all this stuff, Jevinsdown looks a way to a conclusion?

Yeah, I don't have a strong point of view on it. I do think there's some really interesting shifts that are happening. So to your point on the inference side, eventually more and more inference will happen on a device. And so to some extent, the distributed compute notion may just be everybody's iPhone in some sense, in terms of at least the inference side. In terms of training, the thing I've been looking at most is the degree to which energy costs will impact where training centers are actually going to get built.

And one thing that I think is really under discussed is the fact that given how poorly Europe has governed itself relative to energy, shutting down nuclear power plants in Germany and being dependent on Russian oil, etc., it basically means that training data centers are unlikely to go there because it's going to be too expensive to run them just because of energy, ignoring regulation and ignoring everything else, which means that basically all the training centers should end up in the Gulf and in the U.S. And the golf in part because under the Trump AI plan, basically there's some extension of some rights relative to being able to run training in UAE and a few other places.

And those are going to be places with low energy costs. So I think there'll be parts of the U.S., parts of the Gulf where all the training is going to run. Inference is probably more globally distributed in part because of GDPR. So Europe will force it from a regulatory perspective. But they're going to lose out on tons of GDP spend and cap-back spend. because people just won't build training centers there. So I think that's a little bit under-discust right now. It's quite a paradox because also in the Middle East,

they're adopting solar and batteries at an extraordinary pace. These are people who, it seems to me, the people who understand energy are not being particularly precious about where the energy comes from. In Texas, we have the largest installed pace of solar. And I can tell you, living in Texas, they're not super precious about, you know, where the energy comes from. Is it the cheapest way to do it?

Great. We can make a business out of that. We got a grid. Let's compete. And that's what they're doing in the Middle East where there's a lot of sun. There's a lot of sun and there's a lot of capital to buy those solar panels. And you're right. Their energy costs are going to be so de minimis.

And they also have a populace in that region that has been educated in the West over the last 30 or 40 years, very quietly at the top institutions who have now boomeranged back to Qatar to UAE. to Saudi, you know, and then of course, of Israel, which is, you know, just a juggernaut per capita in terms of startups. So it's, I'm spending more time in the region. I probably spend two weeks, three weeks a year there, looking at startups and working with different investors. Are you spending time in the region? A little bit. Yeah, I'm an investor in a few companies, some of whom have been bridged across Israel traditionally, so that'd be things like trip actions, not called Navon, et cetera, but then also more recently a company called. called the Eon, which is doing data infra, one called Kela on the defense side, etc. So I have a

handful of investments in Israel. And then obviously there's just really fascinating things happening across the entire region. Yeah. It's going to be really interesting when you can fly direct from, you know, Tel Aviv to Riyadh to Doa to, you know, this is kind of mind-blowing in our lifetime that this is happening. So Alad, you mentioned Yvonne, which is going public right now. It's currently in a little bit of limbo with the government because the government shut down and such. But what can you tell us about the company's road to IPO? Yeah, I can't really say anything. I mean, you know, usually IPs have quiet periods.

I think in general. I was hoping they didn't apply when the government was shut down, but apparently not. In general, my understanding of what's happening at a meta situation is just because of the government shut down, the SEC for a short period was not reviewing or fully reviewing S-1s. And then they actually issued a rule that would allow companies to still go public if they did certain filings and certain disclosures and then within a certain time period they could go out. And so I think in general, my sense is that overall companies that have been considering going public are now sort of opted to do that sort of route. Okay. I was asking because there's a great note in their S1.

Jason, you'll love this. They were talking about how they're using their AI powered virtual agent chat bot. And they say that our ability to control customer support costs over time, even as volume has gone up, has contributed to an increase in gross. margin from 60% in fiscal 24 to 68 and fiscal 25 and even more. So essentially, they're automating things, Jason, static team size, cost savings, and it's helping the company look more profitable. So kind of an AI story and a fintech story a lot. The age of efficiency is upon us.

Every unit in every company, particularly in startups who are all these resource-contrained, they are the ones to first use these tools because their resource-contraint, they can save a they can turn a nickel into a dollar. Startup's going to do it. Now, big company is like, well, we're spending $3 to get a dollar in value and we can afford to do it because we're sitting on a bunch of cash. There's no, you know, imperative. There's no existential dread about money at Apple when you're sitting on hundreds of billions of dollars in cash. So yeah, we'll get to it when we get to it. But at a startup, it's quite the opposite. You're seeing that as well, I assume that is startups doing really fascinating stuff with this technology already. Yeah, it's super exciting.

the ramp on revenue for some of these companies is out of this world, right? I mean, going from zero to a few hundred million dollars in revenue in two, three years is something that I haven't seen in a very long time. And there's multiple companies doing that. So I think this is the big C change and you see it in enterprise adoption. You see it in all sorts of things. The company that I started with Jared and Eric Wu and others that we mentioned earlier is basically working on this for big enterprise. How can you help big enterprises really make that adoption of AI and what applications should you provide for them to be able to really thrive in this post-AI world.

So I think there's an enormous amount of stuff to be done there. Yeah, and it's going to be really interesting. The cynical take on this is a lot of people sampling AI solutions and trialing them and there'll be big, big churn issues and, of course, competition issues. And I guess the optimist view of it, which I'm primarily in that camp, is these things are providing massive value at very low price. therefore, why wouldn't you try it? It's like, you know, come get three hamburgers that are grass-fed beef for 20 bucks. It's like, how is that possible? Okay, I don't need to know. I'm just

going to order the burgers. Like, if you want to charge me 20 bucks for something that saves me $2,000 a month, okay. And it's just wild to see how mispriced some of these products are for the value they're creating. Yeah, 100%. And some of them are burning a lot of money along the way to get there. as to your point, the pricing versus the value differential. In one or two well-known cases are also just leading to odd economics. But I think most of them are very solid in terms of what they're providing the potential cashposts with the business, etc. So a lot on that point, we're not seeing a lot of gross margin negative businesses then,

because I've heard bits and pieces about people saying that some companies are so underpriced that they're actually gross margin negative, which is so uneconomic as to make me worry, but it sounds like that's not the case too often. No, I think there's one or two very hyper-popversions. of that and one could argue in those cases they're basically trading in France for market share and so you could do it as a marketing funnel. I've been working with and investing in founders for so long I've got supernatural startup powers. For example, I know your team is spending too much time on debugging. Your engineers are chasing down bugs at 1 a.m., 8 a.m. and every time in between

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That's right, F-R-E-E, just for being a loyal twist listener. That covers 150,000 errors. Just go to Century.I-O and use the code twist. That's S-E-N-T-R-Y. And make sure you use that code twist so they know we sent you. But I think in most cases, most of the companies I know are running at, you know, quite healthy margins. And in some cases, software plus, one thing I've been investing behind over the last two years kind of quietly is these AI-driven roll-ups. So can you fund the purchase of services, businesses,

roll them up, and then increase margin dramatically using AI because effectively you're making the people on those teams dramatically more productive. And that's been a thesis that's really been proving itself out quite strongly. There's two companies I'm involved with in particular where we're seeing very strong lift and very strong execution relative to these really big opportunities. Can you say the names of them or are they stealthy? I can mention one of them.

The other one is quite stealthy. The one that is non-stelthy is called Long Lake. and or Long Lake Management, so LLN. And basically, clever. Yeah, very good. One of the founders, Alex, is an exceptional PE person. Zach Frankel, who's more technical, helped get it up and running,

and they basically have a really great team of both engineers, but also private equity and operations people. And if you think about it, the key for any sort of AI-driven transformation is, is you need, if you're doing a roll-up, you need a PE person. If you're not, you just need the sort of edict to do it. Then you need somebody to operationally implement it. A lot of the issues with adopting AI is not the AI. A lot of it's actually pretty easy to build given that APIs that we have from Open

AI and Anthropic and others for Google. It's usually the change management. It's convincing the team to adopt it. It's aligning incentives. It's saying, hey, we understand you really like this tool, but we're switching. You know, it's all that kind of stuff. Yeah, the resistance is real, right? The resistance is real.

Very real. Yeah. In some cases, maybe it's going to threaten that person's job or perceptually do so. So often when you're doing roll-ups for AI, you need the PE person to be able to do good purchases. You need the ops person to really help revamp the org, and then you need the engineers to implement the AI and the workflow. And so very few of the roll-up companies that I've seen have this magical convergence with those three skill sets into one team. Yeah. Athena isn't a roll-up, but they're, you know, people think of them as, and I'm the first investor in that company, as well as was the first investor. and Thumbtack, Jonathan's other company. People think of it as like assistance, right? Virtual assistants in a different time zone at a different price,

but it's really an AI company because every time they can automate a task across 10,000 assistants, if they can help one assistant schedule 5% faster, right down the line. If they can help them book hotels faster, right down the line, etc. And we have an investment in a company called Howie that Austin Peter Smith is doing, that it's just doing one thing, scheduling better than anybody. So there's a lot of people taking swings at this. I guess the company this week of note, the main character energy goes to Amazon. Alex, maybe you could tee up the breaking news from the last 48 hours about Amazon and jobs and

employment. Yeah, so the New York Times, yeah, New York Times got its hands on some internal documents from Amazon, the cloud and e-commerce giant. These are from the 2024 time frame, so they're a little bit dated. Essentially, the company's investments in automation at the warehouse level in particular are going to help it hire 160,000 fewer people through 2027. And the Times Rights of that could save them up to about 30 cents per package that they pick and then deliver. 30 cents is not that much, but if you multiply at times billions of packages, it adds up quite

quickly. And all the work they've done over the last 10 to 15 years to build out robots and increase automation in their warehouses, we'll save them about 600,000 hires through 23. And the ultimate goal is to get to about three quarters automation, about 75%. One of the major stories we talked about through the COVID era was how many people Amazon hired to build out its warehouses as e-commerce took off during that period of economic disruption. Now we're seeing the other side of that. And a lot of long-term bets by the company come good.

Great news for Amazon shareholders. All of us here who have 401Ks. Pretty tough, I think Jason looking ahead for the people who currently feed their families on $19 an hour Amazon warehouse jobs. What did you take, lad? Seems conservative to me, but what are your thoughts on automation, robotics? Yeah, purpose-built, humanoid. Yeah, it's interesting.

It feels like for a long time, robotics is one of those areas that was always going to happen and didn't quite, right? If you looked at the installed base of robots, it was in the hundreds of thousands of new robots per year, largely for automotive and very specific industrial applications. And it seems like now we're going through a C-change. And I think, you know, it's kind of funny. Actually, if you ask what's a robot, your dishwasher to some extent is a robot, right? Like a lot of things that we kind of take for granted now are robots.

In the modern era, the things that are really emerging now are obviously some of the things that were just mentioned relative to Amazon, but also even self-driving cars and Waymo and Tesla and what's happening there, those are robots, right? Those are cars that drive themselves. There's a lot of startups right now, Pi and the bot company and a few others who are all building next-gen's sort of foundation models for robots. And so it seems like within the next couple of years, we'll see a lot of these things substantiate.

And there's sort of two questions that come to mind for me. One is what proportion of the winners will be incumbents versus startups? So for example, if you look at self-driving, there was two dozen self-driving companies, but the winners arguably are Waymo from Google and then Tesla, right? Two incumbents actually effectively have so far at least one self-driving. There's cool companies like applied in tuition and others who are providing pieces of this, but you know, CarOS and other things.

But I think that's sort of clear winners at least so far, those two. And robots, it seems like Tesla, will be won through their optimist work. And then the question is, who else? Is it a startup? Is it another incumbent? Is it an incumbent who buy the startup? Is it at home robots, which a lot of people are working on?

Which I view would be kind of awkward. There's like a robot in your living room and you walk in. And it's like mopping or something. I'm joking about that. Or is it an industrial application or B2B, which is for the Tesla Optimus sort of view. And so I think there was this big question of who wins and why, And then what are the first application areas on top of that?

Yeah, it was pretty obvious to me. I saw Andy Jassy speak at a private event, I don't know, a couple of months ago. And it was pretty bullish on AI. And then a day later, he did this public missive where he wrote, hey, AI is going to transform everything. And we could see different team sizes. That was like a, to me, when a CEO that's sophisticated, doesn't write that memo without a reason he was telegraphing internally externally with partners hey you know this is going to result in less jobs and um i was on the bulwark podcast a political podcast and i said you know um i don't see a

world in you know the next 10 years where a human being touches a package at an amazon factory or to your doorstep here's the quick clip jason do you want to just run the clip yeah it's a little self-indulgent but sure. Let's, this is literally your podcast. You're allowed to be self-indulgent. I don't want to be too self-indulgent here. Quoting myself.

We'll stop you. Anyways, here's Jason quoting himself. This is where things could get really nutty. And we're already starting, and that's where like the dooms day scenarios, Terminator ones kind of come out of that group. So what happens if,

you know, all drivers go away? Well, every self-driving car is for full-time jobs. And every, a humanoid robot in a factory is five jobs, maybe six, because those jobs, you can work for maybe seven hours as a just physical limitation. As humans were driving, you can work in 12-hour ship. And those are, those are going to be here, folks. Before our 2030, you're going to see

Amazon, which has massively invested in this, replace all factory workers and all drivers. The idea that when you order something from Amazon, a human would touch it at any point in that supply chain is insane. It will be 100 percent. you know, a robotic, which means all of those workers are going away. Every Amazon worker, all those jobs, UPS, gone, FedEx, gone. All of those are going to be gone, and those companies will be more profitable. And when you order something, it's going to come faster and cheaper and better. And your Uber will be half as much.

But somebody needs to retrain these people. And that's actually a very valid. What do you think about job displacement, Alad? Obviously, I have strong feelings that this displacement is coming. I don't know if anybody disagrees with that. I guess we're all just going to debate timelines, three years, five years, seven years, ten years. Do you think we're going to have societal issues

with job displacement? We're already seeing computer science graduates having a hard time recently getting jobs. And I think most people are attributing it to AI, making the senior people more productive. So what's your take on job displacement? I'm curious. Probably the best part of being a founder is

watching a project that started as just an idea blossom into a full-fledged startup. The worst part? It's bookkeeping. It's boring. It's detail-oriented. And it takes time away from building your product and, hey, growing your team. It's time for you to let Pilot take care of all this bookkeeping so you can get back to running your company. Pilots is the largest accounting farm, and it was built just for startups. They understand the technology industry and the landscape. They know the stakes. And they're already trusted by amazing companies we love, like Open AI, scale, air table, and beyond. And you know what?

Pilot is about so much more than just getting your taxes done on time. Pilot has a smart dashboard that puts all the essential metrics your startup is tracking at your fingertip. And they have helpful advisors who can walk you through crucial financial decisions you're going to need to make in the coming years. Plus, when it's time to raise your next round, Pilot's COO and CFO services are there to help. So it's time to focus on your company and let Pilot handle the book. books and Twist listeners get $1,200 off their first year. Just go to pilot.com slash twist to get started. Yeah, I mean, I think any technology wave definitely has a job dispacing that comes with it. And so then the question is, what do you do from a retraining perspective? How do you think about

social safety nets? And then also, how well you governed? If the, you know, if we were governed remarkably well, I'd say, well, we'll figure it out. If we're governed really badly, then it's probably a different story in terms of the degree to which you end up with, you know, different forms of unrest or outcomes, depending on how much jobs are in place at what speed and then how much of a safety net or retraining or other things you provide. So I think it's a pretty complex thing. But I do think that it's pretty clear in certain areas that you're starting to see

shifts in terms of labor, particularly around, you know, customer support, maybe. be one of that earliest places that I think ends up getting impacted to some of the points made earlier. Yeah. I think your point. Oh, just Salesforce said they're saving $100 million a year now on automated customer support a lot. Just to back up your point. It's a place where people are finding enormous cost savings already, which of course impacts jobs. Yeah.

And if you have like a time for outsource labor team or you've partnered with somebody about it as a company, you're more likely to be willing to cut that back than if it was your own employees, right? And so often when you have these outsourced or delegated systems, you're more will, willing to shut them off. And so that could be some of the savings without actually changing official employee headcount. But it changes the virtual set of people that you've hired. And I think that's why we're not seeing it in some cases as much, right? It's kind of hidden because of the way that works. That's such a good point. Yeah, you're outsourced it already. So you're just ending a contract. You're not doing a plan shutdown. So in the United States, you have that. It's not visible.

Warren notice. The Warren notice. The Warren notice. You don't have to warn anybody. It's like, yeah, I just got rid of a vendor. And I wonder if that has a pass-through where you still have to do a warn notice, putting it aside, I will say, just have this realization as you're talking about, I now, as a default,

do not go to, you know, the manufacturer's website to get an answer. I go to an LLM. Why? The LLM has indexed all the Reddit threads, Quora threads, Twitter threads, you know, message boards of people, solving the problem on their own

before the company even knows there's an issue. And you, so I think most organizations probably don't even know what their true customer support request for. Yeah, yeah. And there's companies like Decagon, obviously, helping with that. And then I think there's two other implications of that or implications of all this.

One is there are certain countries that should be impacted sooner rather than later from an employment perspective that we're not actually thinking about, right? Because there's certain types of jobs outsourced to specific regional hubs. India, Philippines, etc. Sure. And then I think the second thing,

and this is the point that Nikesha Aurora, the C&Polalta Networks has brought up with me in the past, which I thought was a really good insight. He said this quite publicly that they're using AI tools and foundation models and everything else to iterate on product because customer support in some cases not all. It just means your product isn't working good enough or the UI is hidden or something else is going on.

And so to some extent by iterating on product, faster, you're going to cascade into support as well from that perspective, right? Essentially, if you have bots fixing every problem for you automatically, your support loads you go down. Right. And so there's all these really interesting sort of second or third order things that, you know, are really interesting to speculate on in terms of the future world. It's really interesting to see the number of people employed at these companies stay the same

as their earnings go up. Exactly. And this is why. I've never seen that in our lifetime. And this is, if you were going to think about where to park money in the world, I was hearing somebody who's like super liberal podcaster who hates America and Trump derangement syndrome, the whole thing. And he's like, I'm taking all of my money out of the United States.

Not you, Alex. I was going to say, dude, I'm sitting right here. As well, you just got doxed. Yeah, exactly. You don't have TDS. You just have a love of democracy. It's slightly different. And they're a capitalist.

Yeah. And he said, I'm just putting it. I think the United States is on the decline. I've got to put my money in Europe and every other thing. And it's like, mm, a narco capitalism would argue the opposite. If in fact, people are going to deploy this technology aggressively in the most vibrant capital market on the planet,

the United States, we could see Amazon, to my point earlier, like, what does Amazon look like with no delivery drivers? What does it look like without, with, you know, delivery times cut in half and running 24 hours a day? What does that even look like? Yeah, eventually it says Jeff Beezzo, sent a bunch of bots. I mean, back to the one-person billion-dollar startup, like maybe it's a, you know,

10-person trillion-dollar startup at some point if it's, if it's that efficient. here in Texas, they're delivering stuff from Amazon warehouses so fast that I'm like, I don't need it that fast. They literally like, would you like this from 4 a.m. to 8 a.m. or 8 a.m. to, you know, 10 a.m. And I'm like, it's 10 p.m. sir. I'm ordering a cable. It's 10 p.m.

It's going to go tomorrow. That's okay. Don't ring the door. Yeah. And like, literally the drones are coming. Like if you live on a ranch or something like that, I mean, the drones are going to be the ultimate. How crazy is it in a lot that Larry and Sergey bought every robotics company for five years, what, 10, 15 years ago? And then they sold them all because they couldn't figure out an application for it.

I mean, yeah, there was so far ahead on so many things. And so I think a lot of creditors do in terms of being really advanced on the curve. And, you know, there's the old saying that, I mean, there's, there's, there's, two different things I think that apply here, but one of them is just that, you know, A, the features here is just not goodly distributed than B, you know, often it's less a matter of who, but when. And this is a good example of a when, right? They were just too early. And I think they've been remarkably early on all sorts of things. They experimented with delivery. They experimented with internet using weather balloons. They experimented with satellites. You know,

because eventually, I think they sold their satellite companies. to Planet Labs or somebody, right? But they had satellites. They had everything. They were just too early on so much. So, goodos to them, you know, for trying. And, you know, it's like a venture portfolio. You only have to hit on one, and it looks like Waymo will be that one of the other bets.

The Loom Project was too close to Earth. Turns out low Earth orbit better. You look at Google Glass. That might actually be landing soon in the form of these raybans that, you know, everybody can't shut up about for meta. So they could have kept going with that. I also think their Chrome books and the Chrome operating system is eventually where AI lands. Like if you think about what will be the starting point for every AI journey, where do you think that will occur?

You think it's voice and wearables, phones, dumb terminals. But what do you, a new operating system, where do you think the end game is for mass consumption, mass interaction of AI? Yeah, I think it depends on how good the companies are who are currently providing all our hardware because the default status they should win. Now, the question is, are they going to win, which I think is a separate question. And one could argue that there's been very little on-device innovation in AI. And then the question is, is that because they're waiting to see what works? Is it because they're investing and it takes time to build client applications? Is it a lack of imagination?

And so I think there's this broader question of why has social? little AI been built into these devices so far. And in some cases, you look at something like Siri, it was never the best voice-based system, et cetera. And so there's a broader question of, why is that? And in some cases, it's to protect users. So for example, Apple has a very strong data privacy policy, which means that they don't have a lot of data

that they normally would have for training that Google has. And so it's been purposeful. But now in the AI era, should that still apply or not? Or how should you think about it as a company? I think those are very interesting, probably ongoing questions in terms of where does that AI future come from. The default should be the devices you use today or the devices that should be the launching point for AI, whether that actually happens, I don't know. I mean, what do you think? Yeah, I've been thinking about Apple a lot.

They are very good at making hardware. One of the greatest things they ever did was get off of other people's chipsets and just make their own, right? That's been kind of the revolution, and they can make devices that are higher margin, more powerful, leapfrog everybody low battery consumption stuff has so many problems for them these laptops they build are unnecessarily powerful and unnecessarily long battery lives because they've just optimized so well so they actually have an advantage in that and then there will be a time when people have their lLMs um come up in um you know lawsuits and discovery and sam m won't be more than happy to turn them over he said Like, don't put your stuff in here, folks.

Like, we will, you know, have to hand them over. You know, I think that's good that he was honest about that. So, encrypted on your device with an Apple phone, Apple Mini, Apple, you know, M17, whatever they get to, you could actually run the LLM locally. All the, you know, context window could be run locally on all your items. And it could be running in the background, indexing your photos without ever putting them in cloud like Google and having your photos, you know, train Google's LLM, which I don't think you really want to do.

And Zuckerberg will do that in a heartbeat, obviously. So I think I have a potential there. Yeah. Yeah, it's a really interesting question because if you look at search of an analog, and I don't think it's the correct analog, right? But if you look at it as an analog, basically Google ended up paying Apple tens of billions of of dollars a year to use its search instead of developing its own. And it was all margin, right?

You'd have to hire old engineers. you didn't have to implement all the stuff. You literally got paid money to just distribute somebody else's search. Effectively, it seems like that's the path that's been taken so far on LLMs around foundation models. And then the question is, is that the right approach or wrong approach in this era because you're not just searching for things. It's not just a way to interface with the web. It's the way to interface with everything. You're shifting the set, the framework.

But from a deal perspective, that deal worked so well that I wonder if that's part of the framework that they're thinking it. So I have no insight knowledge of them just saying, if I would if I, if I, had gone through that historical arc, maybe that's how I'd be thinking about things. And it may or may not apply to this different world of like AI doing sort of all these various tasks for you and agents suddenly spawning up, like in the agentic world, that's a very bad strategy potentially. I'm so, I'm so bullish on Apple making a big AI purchase. I just think they should just take out whatever LLM doesn't break, you know, stay in the top three. They should just take out perplexity is a great user interface. They really know how to build slick interfaces,

the comment browser. And my lord, just since the antitrust case, think about how much traffic they could spill over to duck, duck, go, brave, or perplexity or anybody in that kind of zone of excellence. It would be extraordinary for those companies. Yeah. Yeah, I led perplexity's first round. Wow. And Arvind is one of the most, impressive founders I've worked with in a really long time. Like just a complete, he's incredible at hiring, incredible at execution, highly strategic, morphed into a very commercial person. I mean, when I met him, he was at Open AI as a researcher, right?

And I actually met him because I think he reached out to me on LinkedIn and said, hey, I was, you know, I'm working at this lab at Berkeley and I joined OpenEI like eight months ago. And this is when nobody was doing generative AI stuff, right? I think I funded him in just 22 sometime. And so we started meeting up weekly and was brainstorming. And he obviously came up with perplexity and that's what he wanted to do and what he wanted to pursue and all this stuff. But I've just been impressed by how he's really just ramped so quickly on so many areas.

So it's been a very impressive journey to watch. Are companies sniffing around perplexity trying to snap it up a lot? I don't know. I'm not on the board there or anything. So, okay. Look at Alex trying to get this breaking news. I like it, Alex. Well, no, I'm just, I mean, Jason's been talking about some of your darkest secrets.

What is the difference? The difference is the worst thing that happened in your childhood. Let's talk, you know, like, no one cares about my secrets. That's, that's the difference. My secrets are newsworthy. No, but I'm more just asking the general point, like, how much interest is there from the incumbent technology companies towards AI startups because we've seen some acquisitions. Yeah.

But Jason keeps seeing these interesting possible combinations. and I don't see as many of those in the market as we would expect. So I'm just kind of curious about the temperature or the appetite for that kind of deal-making. Big AML. Yeah, I think it's because, you know, the FTC has continued to be reasonably anti-large tech acquisitions. And that was started into the Biden administration with Lina Khan and others. And I think that has just been continued into this administration. So I think it has as much to do with kind of a purview of how the government may intervene.

And that's not just the U.S. government. It's also the EU. It's the U.K., right? The Figma deal was scuppered by the U.K. It wasn't the U.S. that did it. And it almost feels like there's this regulator Ron Robin where these different groups are taking turns in terms of who's going to scupper which thing.

So it isn't the same party every time. They must be on a group chat. They're like, we're busy with stopping the totally inconsequential Figma Adobe deal. Why don't you guys find an inconsequential robotics purchased by Amazon for a $2 billion company to block? And it's like, how does the UK have that much power, though, Jason? Like, the UK is this little bankrupt block off the coast of Europe, which is an actual economic block.

I said this probably many times. They should just ban you from using Adobe and Figma products in the UK for ever and just punish them. If for blocking it, they should just say like, okay, if you're going to block it, we're not going to sell to your citizens. They can go use some open source project. Hey, speaking of interfaces, we have this sesame round, which I'd like to go to. but before we do, I think it would be good to look at a polymarket. Will Tesla beat their quarterly earnings? So I chose this, Jason, just to let everyone know,

because we're getting into earnings season, and I'm a big dweeb to the public markets. And I thought it's interesting that as we see sports betting and prediction markets come together, it's important to keep in mind that also people use these for what we used to use the stock market for, which was a surprise to me, because why would you bother to use a different vehicle for that?

But people seem really into it. Yeah, 80% chance they're going to beat their quarterly earnings. I think you could really do well on these prediction markets by looking at the historical data. Almost every company tries to sandbag these earnings, right? They're always trying to underestimate them so they can beat them. So beat is almost always the default case. But this is an interesting. If you were a large shareholder, I guess that you could use these prediction markets in some way to head.

edge, you know, just like sometimes people collar stocks or something like that or getting a little extra juice. How do you think about putting aside just this one specific one, which you're welcome to comment on, what do you think about these prediction markets becoming just so quickly integrated into our lives? I was using one to gamble on the Emmys and made a little bit of money watching the Emmys. And then I did, I was watching a boxing match. I won again. So obviously these things are amazing since I've won two times in a row. If I lose, then I have a different opinion. But for now, my confirmation bias is these things are awesome.

They're fantastic, yeah. Yeah, you know, it's interesting because this is one of those concepts that's existed for years, and there was crypto projects to do another. And finally, it's working between Polymarketing and Kalshi. And really, if I look at it, it feels like there's two or three big use cases, right? There's basically sports and sports betting. And they took what was a really complicated interface. They did three things, right?

One is suddenly it's available in every state when it wasn't. before because sports betting was regulated on a state-per-state basis. They simplified the Y dramatically, right? It used to be what's the spread and the point thing and the this and all those complex stuff versus who wins? Yes, no. So they simplified the Yides, like swiping left, right? And then there's kind of like, you know, that global liquidity pool where you're suddenly

reaching a much larger mass of people. And so you have way more crowd wisdom. And that sports is a huge area. Politics, when there's the political season, is obviously a big area. And then one could argue the stock market is this a prediction market, right? It's the same thing. And so I always wonder where does this go? Can you start buying stocks or shares that are basically collateralized via crypto?

You know, because there's also basically tokenized shares through these markets at some point, like do these things converge? Are they completely separate? In which case, a lot of the financial speculation will continue to be the actual markets. and this becomes more sports and politics. So I've been kind of wondering, like, where does this whole world go? And what sort of financial instruments emerge either on top of this, or does it go the other way, right? The New York Stock Exchange announced that it was investing through ICE.

I think it was $2 billion in polymarket. Do eventually the stock markets effectively become these prediction markets? Because they are in some sense already. Yeah, I think if you want to own the underlying asset, you buy the stock. and if you want to speculate and get extra juice on more acute, specific, time-based moments. Options. That's option-treating. It's like option-trading.

But you're doing it in a simple way. Yeah, it simplifies options way down, yeah. And that, I think, is the real innovation here, is you've collapsed these really complex, speculative things, sports betting, options, et cetera. And you've turned them into a yes, no. Yeah, this is. when you're in the professional gambling circles, and you are like the bottom rung of it as I am,

and I watch people try to do side bets, what they call string bets. They make them very complicated, which for the people who are the sharps, who are constructing these between the poker sessions where they drop them out, it's like those option traders, you know,

they're coming up with some really interesting, synthetic thing they want to do, like Michael Burry and the big short or whatever. And then there's somebody on a goalman, trying to make it more complex to try to get an edge. And they're all just trying to get some little edge on it. And you're right, the simplification of it. Yeah.

You know, will Open AI raise money at a billion dollar valuation in the next two years. Well, I can't own Open AI shares. It's too complicated. Or people want 10% Vig on it. You know, I'll just bet on that. Yeah. The same, you know, it's like, okay, it's a 60% chance. Great.

I can make, you know, whatever percent more on my money, I'll take it. Yeah, it's a transition from blogs to tweets, but from a financial speculation perspective. Perfect analogy. Perfect analogy. Shorter form, fewer calories. You do more of them. More people do it. Easier to participate.

Everybody can do it, et cetera. Yeah. Okay. Let's talk about the Sesame raising $250 million because I don't know what Sesame is. Yes. I thought you might not. So this is a company that came out of stealth back in February. It's done a couple of things.

One, it's built voice first AI and its first two models that have put out earlier this year, Jason, were popular enough that they racked of five million minutes. But what's interesting about this company and why I wanted to bring it up on the show today is they're also working on hardware. They're building glasses for you. And I have an image here from their, oh, let's call it their lab or their office. It doesn't really show us much. But the idea here is, back to the point about Google Glass being early, is that Sesame

wants to give you some hardware that lets you chat with your personal AI agent or assistant or friend or whatever you want to call it, on the go. And they're taking the hardware approach to it. And I think that explains the amount of capital here. Just as background, how did they manage that? Well, they're founded by Brendan Eribe, a co-founder of Oculus, and also the former CTO of Ubiquity 6, which was an AR startup. So they have a lot of that AR DNA in their veins.

Interesting. So they worked at Ubikwity. So they understand AR, $250 million. And exactly how is, the device going to work? Is there a demo of this device out? Have they made a video of it? Very, very little. The Verge got to try it and talked about it a little bit, and that's where that image came and I do have another one from the same post, but it's pretty, pretty nascent. In fact, this company is only putting out the beta of their iOS app now. They're actually

taking applications for the beta of their iOS app. So it's very much under wraps, if you will. But the idea is, and Sequoia wrote about this in a piece explaining their investment, Jason, is that it's not just another AI voice chat, like your chat GPT instance, for example. It's supposed to be more of like a collaborator with you and with a focus on how it handles speech to make it seem natural between you and maybe your AI. One thing I'm sure you've noticed is that if you chat with GPT5

and you make any sound, well, it's talking, it just stops to give you space, which makes it almost impossible to converse. So I'm hoping that what they're doing here is making more natural communication with AI, more personalized AI and then making it functional on the go without having to opt in to the Zuckerberg, I would say, you know, spyware empire. What are your thoughts on wearables, Aladdin?

This idea of like it's persistently monitoring what you're doing in the world and what could only be described as the most creepiest Truman show concept ever, but the benefit. Seriously, I'd like it. I love the Truman show in a dystopian. way like that's called yeah i think um have you guys ever read this book called accelerando i have not it's like a book it's like a it's it's a it's a it's a book with wonderful concepts i think the book itself is a little bit roughly written but the basic idea is it's the um you know for it's it's like the decades leading up into the singularity where you have this

technology discontinuation and you know eventually at the point where every 10 years you accomplish more than all of human progress and then eventually every year you accomplish more than everything ever before that, et cetera, and things keep accelerating. And in it, they have this notion of glasses, which are effectively a form of external memory. They're an agent. They're an agent. They act on your behalf. This book was written maybe 20, 25 years ago.

Yeah, 2000. Very sort of word-looking, yeah. And one of the really cool questions that it raises is so much of your memory and all these agents and all these things you do is actually loaded in your device and you lose your device and somebody else puts it on how much of your personality or how much of your personality or how much of your memories or how much of your abilities is it absorbing as you sort of augment as a human and you externalize stuff. And so I thought that was a really interesting, almost like conceptual book. Like, again, there's lots of really interesting ideas in that book. And this

was one of them and is one of the earliest versions of, you know, glasses and human augmentation and all that kind of stuff. So is this interesting old concept that seems to, again, people are iterating it against. William Gibson had a similar concept with, in his, um, virtual light, Uduro, the bridge series of like San Francisco dystopian future. And he had this thing called God's little machine or something. It was like a little Zeppelin that flew above you in like a three-quarter shot, like the Sims, recorded your entire life, indexed it.

And you could pull it up and say, oh, when did he let and I first meet? Or what was it like when I, you know, the first date I went on with my wife? And you could just kind of replay everything. And then you have, of course, strange days, the Catherine Bigelow film where you can put on a neural headset and record your experience, then somebody else could put it on and live stream your experience and or relive it. So these ideas are there, and it really goes to show how much of our consciousness and processing in the world is done visually.

And that whole system could be the unlock for intelligence and consciousness in some way, is what some of the, you know, biology, yeah, I'm sorry, Strange Days. And it was called The Squid, Superconducting Quantum Interface Device. Thank you, producer Claude, for coming to the rescue here. I do have some concerns about these things or being always on and recording everybody all the time. I don't know if I'm going to win that battle, though. You have concerns about this? No.

You know, I'm in general, a very paranoid person, so I always have concerns. But I think that it just comes back to utility, right? I think one thing that's been proven to us is people fluctuated between willing to sacrifice privacy in order to get access to more stuff. That was Google Gmail, right? There was all these concerns around Google reading your email, reading it, not really, but a machine reading it to generate ads. And that was an issue, but then, you know, hundreds of millions of people adopted Gmail. And then Facebook, similarly, people had concerns about their own personal data and privacy. And I think for a while Facebook actually was doing fine on it.

And probably what happened is, because I sold my first company to Twitter, and that was around 2009. And so this was right as Facebook started paying attention to Twitter. And I always wonder if there's some alternate timeline or history or something else. Instead of trying to go after Twitter and media and public content, Facebook leaned into its strengths. Because with the time, it was a very trusted privacy brand, right? It was your identity and it was your friends and your friend group. And it was viewed very differently. And what if they'd gone into banking and payments?

What if they'd gone into healthcare? What if they'd gone into all the things that were privacy-native, almost what Apple ended up doing? That's a very interesting alternative timeline for Facebook. And maybe they would be the trusted identity. Yeah, no, but it's an interesting concept, right? Of like they decided to go after Twitter, what if they decided to go after banking at that moment in time

when they were very trusted as like a, you know, they had all your stuff, but that was fine, right? Because it was just your friends seeing it. It was your social graph. It was closed. They weren't trying to serve your ads in Zuckerberg. in fact, hated advertising. It was like he thought it was terrible.

He didn't want to have ads on the service until at some point somebody told him, you can make it free and get billions of people to use it. And he was like, okay, fine. And then Charles Sandberg comes and the rest is. And this could have been an alternate timeline. Maybe you would monetize your payments. And this has happened a few times, right? I've talked to some of the people who worked on the early browsers.

And it was the same thing. They're like, is it going to be micropayments or ads? And they ended up going down the ads route, but there was an alternative universe where it was like micropanement. that's right. And you just pay out. Maybe not. I know. I mean, the technology wasn't there. As the founder of a short-lived micropayment startup back in 2000 and whatever, you know, I mean, credit crisis weren't, weren't there. I think the idea was good, but I think we needed essentially. You had one? You had a micro payments startup? Oh, you did not. You did a startup?

Yeah. It's called contentioner. We founded it. TechCrunch wrote about it. We launched, got customers, and then we failed, and I had to go back to college. Oh, okay. Wow. You You were just too early. I kind of feel like, yeah, they were doing the brave attention token for a while. That didn't take off. That was right. Yeah. BAT.

There's been a couple of shots at this. And, you know, one of the things I've learned is when we just talked about it with, you know, Sergey being so ahead of the curve that he was too ahead of the curve. And then probably some accounting wonks were like, we're seven years into this, Sergey. Like, let's pull the plug. And he was probably like, all, fine. when if he had just stayed till year 11, it would have been like, oh, okay, now we own low Earth orbit satellites. We had Starlink.

Which was Waymo, right? Yeah, which was WIMO. But yeah, they could have had a couple others. So, again, very forward-thinking company. I think they don't get enough credit for that. I think this is where, like, Sergey and Larry just need to say, we will be willing to lose money on projects for 20 years, not just seven. And we don't care what you think. Remember, they were doing Google Fiber?

And I think that one got deprecated as well. well that would have been fascinating if they kept going along and pulled that string because then you'd have fiber plus uh satellites you'd have fiber we'd have flying cars basically everything would be done well and be out of business you can't invest anymore well exactly be like google's world but also that was like larry had to go off balance sheet and use his personal balance sheet to do he did three of them i think kitty hawk right kitty hawk was he also in archer i think he might have also invested in Hard sure. He was in at least two of them.

Just fascinating how close being too early is, but I'm always encouraging founders to look in that startup graveyard. I think actually, micro payments, as silly as it sounds, built into a social network, a browser for content, you know, this might be like substack or, you know, a YouTube competitor might be able to do very well with this where you could set your, what if you could set your browser to just say, if I watch more than. then one minute of a YouTube video, send the person one penny. And if I watch, you know, a penny for every second I watch of anything.

And if I, you know, if I stay on a new, a document and I scroll down to the end, yeah, give them a penny. There's a lot of people who might buy into that if there was some reward for it. I don't know what that reward is. Well, I mean, that was kind of what we were trying to build, Jason. So it was back then, you couldn't do one penny. you would put in $5 to your contentioner account. And then as you went around the internet, we would hand out the money to people that you visited

that had our integration. And people kind of liked it, but it was hard to get any sort of momentum for that. Think about stable coins. Like, I wonder if stable coins are the unlock here. What do you think about stable coins? Yeah. Yeah, I've been long interested in them.

I mean, it's interesting to see some of these second order effects of those now, right, in terms of the biggest holders of treasuries in some cases. Yeah. Amongst the biggest holders are stable coin companies. Yeah. So it's been fascinating to see both their growth. I remember when Tether came out initially,

everybody thought it was super sketchy or very uncertain in terms of the assets are actually holding against the money. And now obviously it seems like they're really collateralized between a mix of like gold, Bitcoin, and treasuries. They've done a great job cleaning it up. Yeah. Yeah. So it seems like it's going to be a really central thing in general.

And I think one of the things that people have underappreciated about crypto, particularly people in the US, is the degree to which globally, for example, people don't have access to dollars. Because you're not allowed to buy your government. And this is a way to buy dollars. And this is a way to do simple transactions. Like all the stuff that we take for granted here.

But it also shows the path forward with tokenizing shares and tokenizing, you know, things we've been talking about for years. It feels like are finally going to happen. So it's a very exciting era, I feel. Here we go. Tether is according to producer Claude. Tether, 127 billion in treasuries. as of Q2 2025.

Number 18 global ranking head of South Korea and circle, $18 billion is in the top 30. Yeah. Yeah, it's very under-discust how many treasuries are actually held by crypto companies now.

And so one of the biggest buyers of the U.S. government debt is the crypto industry. Think about that. What are the implications of that in the long run? If crypto gets 10 times bigger and that $120 billion goes to $1.2 trillion, what does that mean

in terms of the U.S. government's relationship to crypto? How should we think about that? Yeah. Super interesting. Who's your daddy? It's kind of like the China relationship. It's tether. It's tether.

It's tether. Tether's your daddy. Pallor is your daddy, I guess, in that case. Well, and the interesting thing about tether is, yeah, they did have that really spicy. I'll use the word spicy. I don't want to get sued here, but they were banned in a lot of regions, a lot of regional action taken against them, a lot of questions about those reserves. and they have gone like on a five-year process of cleaning all that up.

And there's like, I think they have according to the bill, the stable coin bill that Sachs was involved in or talked about on the pod a bunch of times. I think they have a three-year window to clean everything up in order to participate in the United States. So circles got the clear lane along with, I guess, their partnership with Coinbase, but they have to, Tether is going to clean up. And the guy, Paulo is his name. Pello, yes. Who was like living in some non, you know, the speculation was like none of the executives

were available and they were living in jurisdictions where you couldn't be deported or picked up by a red notice. I don't know how much is that true. There were a lot of tethered truthers out there, you know, speculating. But them figuring out how to go legit if these stories of illegitimacy were in any way true is like a story for the ages. That's going to be the next storking movie, I think. Yeah, that's pretty good.

But I think one of the most under-hyped players in crypto right now, perhaps, is Stripe, who I think I've been doing amazing things in terms of stable coins and bridges and all the rest of it. And I first invested in Stripe in 2010, I think. So it's been kind of a long road. But what an amazing next to act. I mean, obviously, the payment stuff is going to keep going and the SaaS stuff will keep going out. But I think what they're doing in crypto is super interesting right now. They're never going to go public.

bridge and anything else. No, they're never going to go public. This is my new prediction. Private and forever. Polymarket. I just think that they... Yeah, perpetual, perpetual options. Put on hyperliquid.

Well, here's the thing. If you have that fluid of a market, if you're an expert in transactions and commerce, what's to say they couldn't build and, you know, the infrastructure to let people who are qualified purchasers trade in and out of their private company and that slowly buy back all their shares based on massive profitability and then have a black box company that nobody understands what's going on there. It's a tremendous advantage. And the Carlson brothers are unique in their perspective of the world. I don't think they're particularly driven by some outrageous, you know, personal net worth on a public market and the tradition.

accruciamante of being an entrepreneur. They seem very mission-driven and have very specific principled things they want to work on, like their think tanks, their science think tank, etc. So that could be amazing. I mean, I'm trying to think of the equivalent

of what's the largest private entity. Yeah, there's a couple of them. There's like Coke industries, there's Cargall, there's a bunch of these, yeah. It's kind of interesting at Bloomberg, right? Yes, famously. And it's private. So I think people under appreciate, you know, Europe, like a lot of the market cap is actually these

middle-stadt private companies in Germany, for example. Mm-hmm. These family businesses. Vitol, Swiss-based Dutch multinational energy and commodity trading company. Yeah. Revenue, $400 billion in 2020. Yeah. Isn't Coke like a hundred billion?

Coke is number five, $125 billion. Cargill should be on there. There's a bunch of these. Cargill number 4, 160. I'm trying to find a tech one. Huawei, number 10. I didn't know that they were probably. Yeah, I mean, I guess Bytance is a private asset.

Byt and 14. That company. Yeah. Yeah. Hey, a lot on the on the Stripe stable coin points, I agree very much that they're leading. They bought, was it Bridge for $1.1 billion? And they just announced tempo, their own kind of blockchain or L1 for Staplecoin

payments. I'm not asking for internal information here, but like, what do you think they're trying to do with that? Is that just to make a better foundation, better rails for Stables to fit into the kind of existing e-commerce world? Or are they trying to solve a more, I don't know, fundamental issue with Stable Quays today that is not well served by existing L1s and L2s? Yeah, you know, I think it's best to just look at what the company says about all this stuff. Because I don't want to overinterpret or misinterpret what they're trying to do. I think fundamentally, if I look at what they've been building as a company over the years, it's really this focus on providing a piece of global infrastructure.

Like Patrick used to talk about it almost like container ships and that enabled global commerce for the world. And so I think they're very mission driven around, you know, this interconnected web of commerce is not good for the world and how do we help make it really easy for people and in particular developers to build things against that. So absolutely extraordinary. What else do we have on the docket here?

We got maybe one more story. left in us. What do we got left? Well, because we have a lot here, why don't we talk a little bit about the the, the frocus Jason with Anthropic and your bud David Sykes? Oh, that's spicy. Yeah. I don't want to have the open AI browser less spicy. Let's go for the spice. Okay. Let me just pull that up real quick. I got a fine. I have some thoughts on it. I'm shocked. I'm shocked that you do. You're not believe this, but I have opinions. For better or worse. It's good. It's good. All right. So, Anthropics, Dario Amadeh wrote a public post this week, responding to his critics, but to understand what's going on. We have to go back in time a little bit to the one big, beautiful bill. Jason, we discussed here on the show that there was a provision that eventually didn't make it in, but that would have banned states from having state-level AI regulations for a period of 10 years, ended up getting voted down 99 to 1 in the Senate. Fast forward to recently, Jack Clark, another co-founder of Anthropic, wrote a, a post, a summary of a talk that he gave in which he said that he thinks other stakeholders

in the world should have a bit of a say in how we build AI as we build it. He's not a dumer. He's definitely an optimist, but he thinks that we should listen to other people. And then your friend David Sachs comes in and he says that, quote, Anthropic is running a sophisticated regulatory capture strategy based on fear mongering. It is principally responsible for the state regulatory frenzy that is damaging startups. Fast forward through some back and forth and other people weighing in. And we got Dario's open letter. essentially saying, hey, what the hell is wrong with you guys? We love startups. We work with them. We're in favor of a federal standard.

And this has become such a big deal, such a back and forth that CNBC is covering it. And so, Jason, I'm incredibly curious why we have left the era of founder-friendliness. And we're now seeing venture capitalists attack some of the most successful companies in the history of startups. You know, this industry left its boutique phase when Facebook hit scale. Facebook just had far, far too much impact on society, elections, our children, Instagram. I think that was the end of the innocence. Just if I were to pick, you know, a demarcation point of when we became so big that we couldn't be looked at as the weirdos in California building cool stuff. And then it became, oh, how are these things damaging society?

we should be questioning everything about AI. We just did today talking about Amazon and job displacement. We should be thinking about kids using these products. We should be thinking about people getting one-shotted and getting, you know, and we should be thinking about the truth and the search for truth. I think all these things are valid discussions. I think what's at stake here is there is covert, I don't know, lobbyists and covert political actions to try to regulate things.

And though that does make me nervous, I just want to see all the evidence of it, if that's actually happening or not. And I told Sachs this, he wasn't too pleased with me, Elad. But if this is the most important technology of our lifetime, why wouldn't states have a right in the format of the United States of America to, you know, chime in on it? you know, if they, kids access to it or how it's used in healthcare, how it's used in terms of job displacement. What's your take on all this? Yeah, I think at this point in time, and I think industries evolve over time, and the nature of how you regulate those industries should evolve with it.

But early on in industries, it's a bit of a disaster to let each incremental state chime in on how to regulate it because fundamentally there's a handful of states that effectively by Fiat govern what the rest of the country does. whether the rest of the country adopts things or not. And so it's almost the flip. Why should California be able to govern AI for everyone in the U.S., which effectively almost happened through the scout-kina bill? So I actually viewed on the other side of this one where I think the states should not intervene for now.

It should be federally mandated. There are both national security reasons to do that. There are national competitive dynamics to drive that. So, you know, my view would be, and this literally almost happened, right? California was going to try and regulate how the rest of the country deals with AI, which is a really bad idea. And it was based on the number, the amount of compute you have as if that is some sort of... Well, the question is, why should California regulate it for at all, A and then B for everyone else? Which is the fact that, I mean, it would have been national, which means it would have been global.

So should California have the right to set national or global AI policy effectively? Yeah, and the car example is a good one. And so that's one where I happen to be in. favor of it. So when you look at these, it's always... It may have been the right thing to do. The question is, should California have been able to do it? In other words, it's a broader question. I was in favor of it. Yeah. Yeah. Yeah, it's like, let's separate the, do we agree with the thing? Yes. From how should that thing get done, right? I think those are two separate things. Yeah, and that's what I've been trying to parse in my head because I, you know, yeah, we should have higher gas standards and who cares if cars cost a little more.

having smog over cities and people losing, you know, months to years off their life and, you know, asthma and all this kind of stuff. Yeah, it's obviously a tragedy of the Commons. It's a good thing that California did that in my mind, but should Texas be forced to not buy the trucks they want that have the hauling power and the price performance ratio that they want? I picked Texas as a place to live because I like less regulation. And so it really does come down to the operating system of America where the states are supposed to have some sovereignty, but they have to super oppose it against, well, if we are in a fact in a global race with China, can we afford to slow ourselves down? And that's like a very interesting. This is probably, there's a global race with China.

And then there's the, there's the political side. There's the military side of that. There's the economic side of that. There's the political and cultural side of that. And so I disagree as well with, hey, we should have every country on the planet we end on how AI models should get built in the US. I think each country should have its own sovereignty our model. And there's lots of ways to accomplish that, right? Like if I was running a country, I'd be very interested in that. I want my cultural values represented in local models and things like that. So I agree with that.

But the flip side of it is, if anything, perhaps the last few decades have shown us that perhaps we don't need to solicit everybody's opinion on everything, both in the context of a company and the context of a country and the kind of, you know. And so this is almost a throwback to things that haven't really been working, it feels. Yeah. If you were to put this against high-speed trains, Alex, like, there's a reason why we don't have them in America because everybody gets to chime in on the high-speed train. And then the high-speed train, you know, is like, you know, in other countries, they're like, high-speed train, zhou.

Has to be a straight line. Yeah. Or else it can't go fast. And, you know, it's. But in China, there's been a lot of studies discussing how. Now, both province and central planning has led to a dramatic overbuild of economically inefficient high-speed rail. And so we can all give a thumbs up to the Shanghai Beijing line.

Why not? But when you see the, what is it, eight pillars and eight crossbeams, there's some model that I'm translating poorly here for how to build high-speed rail in China. And it's led to a lot of misplaced spend. And so I agree that we should have. But the drivers of that spend, you know, like that's often also corruption. That's a bunch of stuff. It's not just.

But if you want centralized. power a lot if you don't want people to have saying, you're going to end up with a central power. Well, really what the question is, is one of the things that should be regulated by what level of government. And that's, that is something that has been established and adjudicated in the U.S. for centuries now, right? And this falls into line of those things, which is how much should states be able to govern on their own overall technology progress for the U.S. and for the globe? And that's effectively what this issue really is, right? Interstate commerce.

Not just interstate commerce. It's effective de facto regulation of the entire country. Right. No, I'm saying that because it's that, it should fall prey to that and therefore it could be limited in that way. Exactly. Exactly. But what's interesting, though, is we're talking almost about the wrong foe here.

Because I think this is why Anthropic is, you know, being dragged into a bit of the mud here. But the provision to block state-level AI regs was voted down nearly unanimous. in the Senate and partially because Republicans from the South wanted to protect local industries. So how do we get Congress to listen to this perspective and do something intelligent and pass something that will preclude or maybe just do better than state level regulations? Because Dario said in his letter that they disagreed with the idea because a blocked action without offering a federal alternative. So how do we get to one?

How do we fix Congress? I mean, there is a question for you. There is this, I'd say three things on it. One is I tend to stay away from politics. I'm the least cogent person to ask about how to fix Congress or how to change, you know, like that's not the world that I tend to spend time in. You know, I do think there's a number of different approaches that we've taken in the past or historically to federally mandate things.

And one route is executive orders where they can be applied. The other route has been acts of Congress. There's three or four routes that are just standard. And the question is what best applies here? And then I think it's back. There's also the meta issue of where do states cross the boundaries in terms of the areas that probably shouldn't apply to them? And is that a legal framework?

Is that something else that already exists? And how do we interpret the existing legal structures of the country relative to some of these topics? I think that's the granular piece that you're talking about a lot. I think is the key piece of this. which downside, what concern do we have over AI that is not addressed by an existing law? If you were to go in an AI and you ask it right now, how do I build a chemical weapon? How do I build a biological weapon? It says, hey, I'm not going to do that.

It's already been solved by the teams. They've self-regulated. So, okay, what's the next piece? Oh, how do we deal with, you know, I don't know, the terminator series? I remember the bio-weapon stuff. The bio-weapon stuff is so overstated. And I feel like that's the way that some of these companies have been trying to cause distress and fear and regulators and others. Because the reality is all the protocols for building a virus you can release, etc. are on the web.

I mean, I worked as a biologist for almost a decade, right? And all these web protocols are out there. The real issue is buying the equipment, using it, actually doing things in an intelligent manner, ordering all the old logos you'd need, et cetera. You know, so the extra information content, in my opinion, isn't high. And the hard part is the physical world stuff. And so whenever people raise that as an example, I view it as kind of a red herring where it's purposefully raised in attempt to cause fear in people so that they'll react

and regulate something. So I do think those are bad examples that people tend to use. In general, and it's purposeful, I think. I agree. And I always ask people, tell me the next one. Tell me the next one. Let's just get granular here for a minute. I have one like IP protection.

I think that that should be done. That should be self-regulated by the industry, which they're starting to do. They're starting to say, hey, even if you don't agree with how Sam's doing it at Open AI, he's saying with SORA, hey, if you're like, you know, the estate of Elvis or Martin Luther King will be gracious and turn off the ability to make Martin Luther King saying inappropriate things. and they did. They didn't have to go the legal route. Sam said, we're good people, we're going to be aggressive in letting people do things, but we're also going to be reasonable in turning them off. I disagree with the approach. I think they should always get permission, but okay, fine. He took a different route. He'll get the legal exposure. But, yeah, this is a situation when we have to get into each one. And I was just thinking when you

were talking about, you know, bombs. And I was like, remember fertilizer bombs? Everybody was like, oh, my God. You know, the Internet's causing this. The tour network, you know, dark lab, everybody knows. And it's like, you still got to get the fertilizer. Every piece of, every bag of fertilizer has IDs in it, like in the chips from what I understand. There's like some secret way that they watermark every bag of fertilizer. So if you blow something up and then if you buy them, you need to register and they've got some, you know, I mean, who knows how the government is implementing this after the 9-11 because the first, before 9-11, they tried to blow up the World Trade Center with the fertilizer bomb.

They succeeded in blowing up Oklahoma City, two different groups of terrorists, domestic and international. They solved this problem. I bet you they have like ways of tracking fertilizer where like the second the person leaves the fertilizer store. There's like a camera on their license plate. They're being tracked by a drone. Like the government took this seriously. There's so many like simple solutions to this. Yeah, that's why I stopped fertilizing my garden.

And I was worried that I get tracked down. Yeah, exactly. So you laugh, but the only time I've actually gotten pulled out at the airport and put it into a small room was after going home to Oregon to my parents' house. And I was walking around the backyard a lot. And I popped some sort of test at TSA for a possible fertilizer. I had that happened too. And they like, I've never been treated as a criminal quite like that.

They're like, is there anything in here that's explosive? I'm like, I don't know, fucking weed, but please don't find that. And it was so, oh, sorry, we're live. Edit that out, I guess. But it was just, it was so surreal, but it can catch you. And they literally asked me, like, have you been doing gardening? I was like, no, how's that relevant? I didn't know what they were talking about.

You're like, I've been helping startups grow. I don't get it. By spreading manure. Yeah, exactly. All right, listen, this has been another amazing episode of this week in Startup Salon. Thank you for joining us today. What a great guest. where can people find you?

I mean, you've got a Twitter account. You're pretty active, yeah? Yeah, Twitter. They can find me at a lot, Gail. And I'll plug here to be on. Thanks for including me. All right. And we'll see you all next time on this week at startups.

Bye-bye.