This Week in Startups - Amazon's RTO Impact, Lina Khan’s 60 Minutes, and Microsoft's Big Nuclear Deals | E2013

Starting point is 00:00:00 The key here is for us not to have foreign dependency and to win AI and win super intelligence. You cannot win super intelligence without a ton of power and a lot of chips. This is going to be awesome for America independence and reaching super intelligence. And the super intelligence is going to train us how to make better decisions about technology to get more efficiency and energy. This could spiral in a really good way. The first thing is super intelligence is going to. say, it's going to print out. Lena Kahn was right.

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Starting point is 00:01:46 companies. He's been studying the technology industry as a journalist and writer for two decades. So welcome back. We're in a second decade, I should say, yeah. I don't want to make you seem too old, but in your second decade. Today, our housekeeper, I was going in to shave my head in anticipation of our recording today. And she said, you're going to shave your hair? What hair?

Starting point is 00:02:06 And I was like, oh, getting burned on all sides. Wow. Keep getting roasted. Yeah, in my own. In your own home. I love it. Fantastic. So, yeah, I'm old, is what I'm saying.

Starting point is 00:02:15 Anyways, before we get into the rundown, Jason, I wanted to bring up this, this viral tweet from Harry Stebbins. Shout out Harry Stebbins, shout out Harry Stebbins. Yeah, 20VC. I've met him. It seems nice. This blew my mind.

Starting point is 00:02:29 So Harry says the biggest problem in venture capital right now is that we've made entrepreneurship to safe a career path. Starting a company should be for the crazy, for the obsessed. Instead, today it's for the rational. Leave a top tier VC, aka Stanford, raise VC, own your time, work on something cool, pay yourself well. We need to go back to the ones you only do this because they cannot bear to not see their creation in the world. Okay. I have thoughts about this, but let's start with you. First impressions of that tweet.

Starting point is 00:02:56 easy to say as a venture capitalist with very large salaries, huge compensation if things do work out and very low risk because you're in a mutual fund of startup company. So whenever you're a venture capitalist, you do have to be careful to understand that your job is incredibly low risk and diversified, whereas founder's jobs are incredibly concentrated. and if it does go back to what he describes where you, you know, make a pittance of a salary and it's incredibly hard, then you will leave out people who might pursue the path who have, I don't know, a baby, a mortgage, you know, a payment for college. So there are a very small number of people who can do what he describes, which is live off of ramen and suffer, etc. is. So I don't

Starting point is 00:03:50 disagree that in the old days, it was harder and it drew more grit. But the truth is, it might have been actually too hard back then and a little bit too unreasonable. And listen, I am a eat rocks, chew glass, spitblood, entrepreneurial guy. I had to do what he's describing there. If you were a founder, it was because you were a misfit

Starting point is 00:04:15 who couldn't work at a big company, and you had to suffer, you know, and essentially live like a monk and put every penny you had into it, and it created a certain pain and suffering. Much of that pain and suffering is unnecessary and a distraction and probably doesn't actually accrete to a better product or service. In other words, like, if you have a studio apartment or a one bedroom or a two-bedroom, it probably doesn't make a difference. the ultimate success of your startup. That being said,

Starting point is 00:04:50 we did create the luxury version of entrepreneurship, which is I could take down a 250K salary, and my salary should be similar to the salaries of, let's say, you know, the equivalent of me working as a vice president at Verizon AOL, you know, Cisco, Uber, you know, or Apple. And so between the two is kind of the truth. You don't want people to suffer so much that they don't become entrepreneurs and they have no choice but to take that Amazon job.

Starting point is 00:05:23 We'll talk about that in a minute. And you don't want them to be so, I don't know, coddled that it's like, you know, the Google Pooley sendup where you're just picking between which cut of steak you want before you get your massage and play volleyball and do a meditation mindfulness session like you see in a TikTok video in the day. of a life of a Googler, which, by the way, I think pissed off a lot of people from Google, like those millennials doing those specific, you know, soy, macha honey, manuka honey latte. You know, it's like, in my day, we had bad coffee and we drank it. And you put a little cheap and easy to make, and you can make it in big vats. Yeah, I mean, you want your macha latte with manuka honey and your tweak that they have soy instead of whatever nut milk you like.

Starting point is 00:06:16 That's, I think, what he's reacting to. But, you know, having been there when it was pure suffering, it was probably a little too much suffering. Yeah, no, actually, I think that's very reasonable. I mean, my first job at a startup, I was sleeping on a couch, and my desk was a series of cardboard boxes in front of me where I put a laptop. And that was fine because I was 20, you know? Like, I mean, I could literally sleep on my, also my office chair because it was the same

Starting point is 00:06:41 couch. That's fine, but not for everybody. The thing that I think that it's not brought up enough is secondaries became so common in the larger rounds in the 2021 era. Peakserb. Yeah, Peakserb. But I think a lot of founders got accustomed to the idea that they should be able to start a company, raise money, and then also be a part-time VC on the side and make lots of money and be da-da-da-da-da. And so I think like the founder, the universe got much larger and that takes money. And I think that's changed things. But the nice thing is, a little austerity solves successes. And I feel like now things are getting a bit back to that middle ground you detailed,

Starting point is 00:07:18 which is why this Harry tweet's interesting to me. I'm curious if this is not like a 18 months late tweet. I have a feeling, you know, when you see a VC tweet like this, and Harry's a nice guy, you know, I think it's probably just some frustration with an acute situation that happened that week to a VC. We're all human. and, you know, there probably was some founder who was like, yeah, I know the company's dying. I know we got product market fit problems.

Starting point is 00:07:47 And when I get back for my silent retreat and I spend, you know, this money I spent in secondary at Pexerb that I sold on my, you know, new, you know, beach house. I'll try to solve that problem. It's probably something like that. He probably got tweaked in. We're all human. It happens on both sides of the equation. People get frustrated with their VCs. they get frustrated with their founder,

Starting point is 00:08:10 they get frustrated with their CTO, they get frustrated with the VP of sales. But the truth is, you know, as the market gets hot, exactly as you outline, you can let people who just don't have the metal, the proper, you know, grit to be founders,

Starting point is 00:08:27 will get anointed as founders. And I'll be totally honest, people who do not have the stomach to be venture capitalist, have become venture capitalists. So this is overall, in our industry, it got too easy. Now you get an inside look at my life as a venture capitalist.

Starting point is 00:08:45 When the market comes down, there's no DPI. Lina Khan's reign of terror on the industry continues unabated for another six months. You know, we have to figure out, hey, how do we sell a $50 million company without the 10 buyers who would love to buy it being too scared to buy, you know, a little acquisition that might make your venture capital. It might be the difference between a seed fund, existing next year or not existing might be that little $50 million acquisition because they own 20% of the company and they would have got $10 million to distribute to their LPs and their

Starting point is 00:09:19 $20 million fund and it gets them to break even, right? So we are in a very difficult time for the industry. A lot of like things have been a lot of the excess. We've got to clean up after like a bender. You know, you have a bender and like the house gets trashed and then everybody leaves and And everybody who was at the bender who broke the windows and the railings broken on the staircase and the mirrors cracked in the bathroom. Like, those are, the people who broke it aren't the people who clean it up. No, no. Because the people got to live in the house who cleaned it up. The person who's puked in the sink is never there with a plunger the next day fixing that.

Starting point is 00:09:52 Nope. No. Definitely not. Thank you for that graphic reminder of college days. Of college days. All right, founders, are you tired of doing all your own software development? Do you need help, but you can't afford all this time it takes? to find great talent? Are you dreading the endless interviews and email chains just to find somebody

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Starting point is 00:11:32 We're going to talk about that and what it means for stealth layoffs and startups. Then we do have some notes from Lena Conch who's on 60 minutes. We have clips to bring you all the latest there. Jason, you brought up Apple Intelligence, aka AI on Apple devices. We have Microsoft and some big nuclear deals, a couple of new twist 500 companies. And a little bit more on Open AI to wrap things up. So let's start with Amazon. Jason, the big story here is that Amazon's going back to the office of five days a week.

Starting point is 00:11:58 They are tooled around with coming back three days and now they're going to five. Just to break this down for everybody. CEO of Amazon, Jassy asked two questions. One, do we have the right org structure to drive the level of ownership and speed we desire? And two, is the company set up in the way that it's going to be the most effective? And in both cases, he said no. So two things are going to happen. One, they're going to try to reduce the ratio of ICs or individual contributors to managers

Starting point is 00:12:24 by at least 15% by the end of the first quarter of next year. And then also, like I said, returning to office five days a week. In order, Jason, first of all, a mandate to reduce the number of managers compared to ICs. Genius, top down, I can't decide. Yeah. So, you know, Andy Jassy is not a founder, but he's going in founder mode. The stock has been up and down. They obviously got a huge COVID bump.

Starting point is 00:12:53 But if you, and dependent on when you look at the stock versus the SMP and contemporaries, what you'll find is, you know, you take out that huge spike they had in COVID. Stock hasn't kept up with the performance of contemporaries. And if you are a hired gun CEO, you know, Bezos left in 21, I believe, 20, 21. You have to perform. And your performance is exhibited through the stock price. And Amazon has an incredible business. It's growing.

Starting point is 00:13:26 But I don't think the stock has done particularly well. And I don't think the work-from-home experiment is working at Amazon. Now, if it's not working and you feel people are not as committed and you know you have to reduce workforce, what's a good strategy? You want to test everybody. And so I'll just, this isn't necessarily an endorsement from me. This isn't necessarily the strategy I would pursue. but reading the tea leaves here. Stock price, not great.

Starting point is 00:14:02 Business, growing, but maybe you see more innovation and people are talking about Microsoft AI's effort, Apple Intelligence, Zuck releasing his own LLM, Tesla being on the verge of releasing their, you know, robo taxis and FSD coming out quite nicely, Waymo doing quite nicely at Google, Google,

Starting point is 00:14:23 it's got Sergei back in the, the office and they're making progress and then you go to Amazon and you're like, what have they done? Put more ads in our search results. Okay, precisely. Also, they put ads in my prime videos, jerks. I mean, it's like, okay, Lord of the Rings series that nobody's talking about for a billion dollars. It does not feel qualitatively or in the stock price like Amazon's a lead. If you're not a leader, you're falling behind and everybody else is thriving in AI, you got to shake things up. So, how do you rattle everybody's cage?

Starting point is 00:14:58 You want to scare the entire team and make them feel unsafe. Now, I know this is sounding triggering, so I'll put yet another disclaimer, Alex. I'm not saying that this is what I would do. I'm not endorsing this saying it's right. I'm just telling you reality. You want to scare the shit out of every employee there

Starting point is 00:15:16 that their jobs aren't safe unless performance changes. That's what's happening right now. And if you don't get your ass into a seat by January, your resignation is. accepted and then whoever's left is going to get compensated, they're going to get your RSUs and we're going to get this company back on track. Full stop. That's what he's trying to do. Will it work? Let's talk about it. Yeah. So I want to go back and just clarify that when you say you

Starting point is 00:15:41 want people to feel unsafe. We're not trying to say like unsafe in your person, just unsafe in your current existing employment deal with Amazon. So a very narrow. Not that you're going to be beat up. He's not going to come with a bat and do an Al Capone situation from the untouchables. I know with the round table, right? Yes, exactly. Baseball is a team sport, but when you're at bad,

Starting point is 00:16:02 it's for an individual. Oh, boy, that's a memory I haven't come back up within a while. No, but I agree with you. I went and read a bunch of forums about this. I read the AWS,

Starting point is 00:16:15 Reddit, and read a bunch of other different areas, just trying to find any developer on one of those groups that thought this was a good idea and would lead to retention of the best talent. I couldn't find a single example of that.

Starting point is 00:16:28 In fact, everyone was saying things like, oh, well, I just took a job at Amazon because it was three days a week in the office and my commutes long. And now what am I going to do? And a lot of people expressing annoyance that this was being put into effect the way it was. Some even saying that the new RTO policy

Starting point is 00:16:45 is actually going to be more strict than Amazon was pre-COVID. So this is a tightening down. my concern is that from a C-suite perspective, this looks great because you want some people to quit anyways. Amazon's been doing small layoffs throughout the year. Why not do this? We'll get better return in our office space. We've already bought or released. Cool, cool, cool, cool, cool, when?

Starting point is 00:17:09 I just think you lose a lot of the best people who know stuff. And I don't know how to put that in EPS terms, you know, but it is going to be institutional knowledge walking out the door. And if I was the CEO of a company as complex as Amazon, that would give me pause. You know, I don't mean to throw my hat in here. I just, it makes me worry about who they're going to lose. That would be a calculus that they discussed internally. For sure, you're highlighting something that they had a discussion about before they did this.

Starting point is 00:17:38 They said, you know, there's this team over here at Twitch. There's another team over here. They've been, like Twitch, I think has been remote since before they were bought. So Twitch got a carve out. So there'll be a little carve-outs that occur to address what you're saying. They just won't talk about those publicly. They'll do them very quietly. You know, and that has always been the case.

Starting point is 00:18:01 There could be some incredibly high performer in sales or development. And you just, they've got a different set of rules. And everybody goes, why does that guy or that guy, I'll get a different set of rules? And it's like, here's her sales and here's your sales. And then everybody, you know, STF use. like there's nothing really to discuss. This person's the high performer. They want to work from Japan for six weeks.

Starting point is 00:18:20 They're working from Japan for six weeks. The end, we're done. Every corporate policy is a thing the corporation wants. It's not something that they're going to hold themselves to. It's designed to limit your behavior, not theirs. Just keep that in mind, everybody. Unless you're in charge, then it is your policy. So if you wanted to get rid of 20% of people,

Starting point is 00:18:36 not pay six months or a year of severance, not have to deal with, you know, all the legal filings that go through plant shutdown rules. These are antiquated rules that existed. So like a factory couldn't just leave a town and the whole town collapses. They got to give some warning, right? Those warning acts exist.

Starting point is 00:18:58 So there's a lot of moving parts there. And I think they looked at all options. Getting people to come into a three days a week wasn't working. People wouldn't do it. They would do coffee badging. They would, you know, basically ignore it. And, you know, in the details here,

Starting point is 00:19:14 devil's in the details. One of the details I saw that people were particularly tweaked with was assigned seating. So you have to say there's a, well, why is that so controversial? Why would they include you will be in your seat, not a seat? So what they're saying is when they say that, and again, you just got to like kind of read into, you're just imagine you're in that management meeting and they say, how do we get people to take this seriously? We say, yeah, they have a desk. What they're saying is, you have a desk, 15% of people are going. And if you're not in that desk,

Starting point is 00:19:49 we assume you're one of the 15%, you're one of six or seven people that will no longer be working here. Worst case scenario, they lose some institutional knowledge. They'll survive. It's not going to affect my buying stuff on Amazon. I will probably not notice

Starting point is 00:20:03 the loss of that institutional knowledge. That burden will be carried by the employees who remain who have to clean up that mess. Sorry, it sucks, but so be it. And worst case, their earnings go up. And the stock recovers.

Starting point is 00:20:21 Best case, maybe the company becomes more competitive and actually releases some products or services that are disruptive in the way that Amazon Web Services were. So he's trying to, and he's trying to keep his job, and he's trying to do a 15% riff, and he's trying to make the stock go up.

Starting point is 00:20:40 There's your explanation, folks. Well, if you were curious about if Amazon is now and it's Balmer era, I think the answer is, yeah. Actually, the best comment I read online was, isn't this some day two? We can bleep that out, but I was kind of laughing about that. Listen, are you spending too much time as a founder all tabbing between your team chat, maybe a document editor, spreadsheets, database as well? It's time for you to consolidate all of that knowledge into one platform and that one platform that I use every single, day is Coda. If you don't know Coda, it's like a new category of software, best described as

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Starting point is 00:22:00 plan and track all of your goals effectively. Take advantage of this limited time offer just for startups, coda.io slash twist today to get six months free of their team plan. You're going to save at least a couple hours a week per team member and you're going to feel like you're in control that's coda.io slash twist to get started for free and get six free months of the team plan. Coda.coma.io slash twist. This fits neatly into something that we've been talking about on the show, which is static team size. Amazon actually a couple weeks or months ago dropped this big note about how they saved all this time and money using what's it called Amazon Q? I think. Yeah, Amazon Q, their Gen AI software assistant. You save them like, you know, hundreds and thousands of hours and

Starting point is 00:22:44 hundreds of millions of dollars. And so I think Amazon's also looking at this stuff they're building internally and going, we're going to limit our need for developers. So if we lose some in this process and get what we want out of it, maybe that's fine. So I wonder if RTO is actually somehow being made more possible by advances in Gen. AI and therefore if developers aren't taking away some of their own perks by building better AI tech. Thousand percent. Static team size,

Starting point is 00:23:14 AI arriving, you know, AI job loss, and then offshoring are all part of what's going on here. You will see some of these jobs go to India or, you know, Ukraine, South America, where they don't,

Starting point is 00:23:30 acquire RSUs and their cost is 50% or 30% on the dollar. Not even counting RSUs. People in those jurisdictions are not expecting to get big, huge stock grants. It doesn't exist culturally as a concept that you would take the risk of working out a startup and get some big payday. They haven't seen it. Therefore, they don't expect it. They don't demand it.

Starting point is 00:23:54 So you get all of this massive air cover. And, you know, a lot of times management is. are made based on never waste a crisis. COVID was a crisis, was not wasted on executives at companies who decided working from home is dope. Now we've got a reason to. Let's hold on to it. Coming back to office, the stock's in crisis or the stock's not as robust as it could be in comparison to competitors and other competitors are doing things that are making Amazon look like a laggard. It's a bad look to be a laggard if you're part of the, you know, you want to look like a leader.

Starting point is 00:24:32 So this, I think dovetails nicely into what's happening with MNA, which has been a part of Amazon's and Facebook's growth. And then also, you know, looking at Apple intelligence as a consumer company. We're going to get into the M&A thing in just a second, but I want to grab one more chart. This is the number of job postings on Indeed that are for software development gigs in the U.S. And I think we actually may have had this on the show before, but I pulled it back up for today thinking about this Amazon thing.

Starting point is 00:24:59 What blows my mind is we're essentially back down to the lowest point of COVID. Like that early three or four months of COVID, everyone thought the economy was going to be dead forever. That's how low today job listings are for software development gigs in the U.S., which is kind of shocking to me. It's worse than I thought it was going to be based on what I just saw. The finite resource in our industry was developer talent. It is no longer the finite resource. And so that shows you exactly what happens during, you know, this kind of, you know, economic and boom-bust cycle we've seen combined with the efficiency of AI. This is a multi-factor experience from here.

Starting point is 00:25:45 People are people overhired, therefore they've reduced. AI makes it so you don't need to hire as many people because people are getting 30 or 40% more effective a year, so you don't have to hire people. That's two really considerable factors there. It's almost like you built too many apartments, and then we came up with this new technology that made construction workers 30% more efficient at a year, every year. Imagine if that happened in housing. We'd be like, whoa, housing prices are going to plum and there's going to be construction people everywhere, and we're not going to need as many.

Starting point is 00:26:16 And we don't have that because there's regulatory capture and there's, you know, nimbism and all kinds of other stuff that are factors there that distort that market. but you don't have that distortion here and then add to it globalization. Multiple factors working in conjunction to reduce the need for developers in the United States. I agree with all of that, but there's a tension that I can't quite unspool for myself, which is how does a company that wants to go RTO to get back in the office, the most IRL they could possibly get, five days a week, hanging out, bump and shoulders, and then also do offshoreing.

Starting point is 00:26:49 So are we going to see like companies that pursue RTO be the outliers when it comes to hiring people in Ukraine, Latin America, and so forth, or can companies kind of like walk and talk to the same time, I suppose? Those employees are in offices in India. Oh, I see. The Bangalore office is in office, and there's some manager there. And, you know, it's always been my belief that the top 20% of performers overperform at home by removing their commute, increasing their happiness.

Starting point is 00:27:18 Then I think there's another swap, probably equal size, who do, you know, just as good, plus or minus. couple of percentage points. And then I think it's the bottom half, which when you have an at-scale company becomes the real challenge. There's no mentorship. There's no discipline. They don't have self-discipline. They don't have the ability to learn on their own. They need resources. They might need people next to them to motivate them. You know, when you're in part of a sales culture, as an example, or you're part of a running club as an example, if the people who are around you, when you run, as a young runner coming into the world, if you run with people who run an eight or nine minute mile,

Starting point is 00:27:57 you're going to trend towards that. If you run with people who run a 12, 13 minute mile, you're going to jog and you're going to jog instead of run and everything in between. And so that is human nature. And I think when you look at finance companies, they were the first to say, you know, get back in the office.

Starting point is 00:28:12 We need that dogged competition, that energy. We want people to be part of this culture. Now, in information work, writers, designers, sales people, maybe in startup land, we are slow to get back. But I think for that bottom half of people, that vibrant competition and learning and collisions equal some culture that does increase performance. I know if you put these companies side by side, an in-person culture would beat a remote culture with the same people. I mean, I'm sorry to people who that hurts their feelings or it's a bummer. Me. You know what?

Starting point is 00:28:55 If you weren't you, I wouldn't give you the gig because you're an extremely talented person. There's only, I would say, maybe 30 of us, 40 of us who in tech can draw an audience and have a good conversation on a pocket. You're one of 30. You're not one of 30,000. You know, and so that's, if you want to work from home, be one of 30,000, not one of 30,000.

Starting point is 00:29:16 and the people who were being forced to come back to offer it are mids. Yeah. Yeah. The thing I'll- They're not elites. We got to move on to Lena Con, but I'll just say this. Spoken like a true extrovert. Said with nothing but hearts.

Starting point is 00:29:31 I just want to be like, I'm like, oh, yeah, I can see that from you. But also I'm like, I also want to hide in the corner a little bit. And yeah. All right, everybody, you know, being at a startup is a team sport. You're not going to get there alone, man. You got your founders. you got the early team members, of course, investors, most importantly, that first couple of customers, right?

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Starting point is 00:30:58 Pause the podcast because these are big numbers, folks. They really want to support you. I don't know how long they're going to do this for. So startups.com.com slash twist. All right, let's get back to this amazing program. Halloween is coming up, ladies and gentlemen, which means that everyone's dressing up as things that scared them most, which is why I'm very glad to report that Jason is going to go as Lena Con for Halloween this year. Nothing makes him more. It's funny to talk to you. I talked to you a lot.

Starting point is 00:31:25 And you're actually pleasant to nice. And then Lena Con goes up and you're like, she is destroying the industry. Terrible. She's Godzilla kicking over my tower. Yes. But she was also recently on 60 minutes. And we have a couple of clips.

Starting point is 00:31:39 We're going to play them for everybody here. And then we're going to talk about what she says and what we've learned. So decades of. of M&A and what happened with that? Cort, hit it. In the technology markets, we went through a couple of decades where we saw over 800 acquisitions by the five big players, not a single one of which was blocked. And some of those we realized ended up leading to significant harm.

Starting point is 00:32:03 Just to give you a concrete example, there were companies that were offering Americans greater privacy. And they were promising that we're not going to use your data. We're not going to sell it. We're not going to spy on you everywhere. the time. After some of those firms were bought up by one of the big guys, all of those data privacy policies changed overnight. And so Americans lost those privacy protections. You're talking about Facebook and WhatsApp. Yes, that's one example of that. So Jason, first of all, thoughts about

Starting point is 00:32:33 that about that argument that a agglomeration of technology companies has led to a deterioration of consumer privacy? Uh, hogwash. I mean, we take 800 acquisitions. she mentioned 800 acquisitions. Can you name the three or four that were the most harmful? And they came up with one. And I would say the harm of Facebook tracking WhatsApp users is all within the law. If it falls outside of the law, they get very significant penalties. And in fact, Facebook had the largest judgment against any American company in history for privacy violations.

Starting point is 00:33:13 And they are audited because of that. if you remember that case. This was over 10 years ago. Very recently, there was the Attorney General Knaxton, Texas case that cost meta, I think it was $1.4 billion. So this is still happening. So there are laws around privacy. So she's taking a fear tactic.

Starting point is 00:33:35 And she is very smart and very evil in my mind. I think she's sinister. I think she is political. I think she is a political tool to be anti-capitalist. and to be, and you can see in that weak argument exactly how blatantly political what she's doing is. They don't like Facebook. They want to go after Facebook.

Starting point is 00:33:59 They're going and taking an acquisition. That was not fought at the time of a messenger app, which is a commodity that anybody can build. It's not like it's some incredibly proprietary technologies, technology that exist inside of now. Twitter has encrypted messaging, signal, telegram. I mean, there are more messaging apps

Starting point is 00:34:23 than you could ever use available to you, and they're all free. So the concept of consumer harm here that they're going to is privacy. Consumers don't have to use those apps. They can easily use one of the alternatives if they really care about privacy and they don't like the feature set

Starting point is 00:34:38 or the deal presented by WhatsApp, which is a free product. That is a free product, People can use globally communicate for free and run it for their businesses and get massive value out of. And so I think they're in that quote, you can see how insincere this effort is. Now, because it's scary to consumers, oh, they're collecting our data. You opted into that. You don't need to opt into it.

Starting point is 00:35:03 You could use another service if you really care it. Consumers do not care about getting targeted ads. If we've learned anything, consumers do not care about that type of privacy. they might care about having their phones hacked. They do not care about getting targeted ads. It's a total red herring. You and I do, though. I mean, we rerun ad block and all sorts of stuff.

Starting point is 00:35:24 And I suppose the, I guess to me the argument that unsophisticated people are unsophisticated and therefore they shouldn't have protections is, eh, I know what you're getting at. The thing that I'll say, though, is, and I just say this as an enormous. Please take the counter argument. I mean, this is my worldview. I mean, I would love to hear the counter if you have it. Which is that I don't think she's being insincerative. at all. I think she really cares about this.

Starting point is 00:35:45 I think that you disagree with her entirely. I just don't think that she's as malicious as you make it out to be. I think you guys just have a very deep-seated policy disagreement and she's been, I would say, effective at changing the conversation from where she sits inside the government. And I'll

Starting point is 00:36:01 also throw in that I don't think that many people think that Lena Khan, no matter who wins the upcoming election, is going to have her gig next year. So to me this is definitely not. Kind of like, it's almost like a, not a victory laugh, but like a farewell tour. Thank you, Jason.

Starting point is 00:36:18 It's kind of a farewell tour. I was surprised that she was on 60 minutes. I'm like, oh, evil. Why would you do this now? It's almost like she's probably been told that someone else is going to get the job if Kamala wins. And of course, if Trump wins, she's out of your job either way. I just don't think she's evil.

Starting point is 00:36:32 I think she's just applying the best take that she can of the regulations that are in the same way that I don't think Gary Gensler is the evil mastermind that everyone wants to make about to be in their crypto. world. Do people have legitimate policy beef with them? Hell, yes. So, yeah, my counter to that is, I think Gary Anser is a square, a nerd who just wants to apply the law, and he doesn't want to deal with the chaos of adding new technology because it's a lot more work and it's a lot more headache, and it's all downside for him. And so that is a fundamental architecture of that organization, an enforcement organization. They're rewarded for stopping crime.

Starting point is 00:37:13 They're not rewarded for allowing innovation. So, you know, just the nature of a, it's not like a police officer, you know, or a police precinct gets like bonus points if everybody in the community is happy and they're thriving and they go to, you know, great colleges and their scores go up. They only get graded on if there's less crime. Did less people get murdered? Did less stores get robbed? You did your job. And that's the SEC, right? There's no upside.

Starting point is 00:37:40 There's no reward for them allowing new types of financial. services. So that's like a very unique situation. And with her watchdog organization, I think she was selected because she had extremist views and there was an anti-technology bent to the current administration, which wanted to stop what they perceived was the power of the social network specifically and information because it felt like, hey, man, maybe this is competing with politicians and their abilities. So I mean, I'm starting to sound a little conspiracy there here, but they picked a 32-year-old with very radical ideas to run this. Her ideas are, you know, break up big tech and to stop future harm through competition. What we've learned

Starting point is 00:38:24 is there's a very simple way to deal with monopolies. It's to allow technologists to start companies and compete. Now, it might take 20 years to displace somebody. It might take 30 years, but we're seeing it right now between Chat, GBT and Google. We saw it between AOL and Google. We saw it between AOL and Google and Facebook and Twitter. It's just always some renewal that occurs, Android, iOS versus, you know, displacing Microsoft in mobile. Like everybody thought Microsoft would win mobile, right? They won desktop. So how do they not win mobile?

Starting point is 00:38:54 And they play no role in it. So, you know, I'm just, I'm glad she's going. I think what we're seeing here is, you know, what she did was just basically freeze the market for a couple of years. Hopefully we allow the small. acquisitions to occur and we actually look at the behavior of the companies and address the behavior, not a theoretical future competition, because I would rather not have government officials determining through a crystal ball what's going to happen with future competition. I'd rather leave it to the market, if I'm being honest. I'm not saying the market's perfect. You can get monopolistic behaviors,

Starting point is 00:39:33 but I want to see them give speeding tickets, you know, and revoke licenses, you know, in the this metaphor of unsafe driving for people who actually break the rules. I don't think, I don't think Facebook broke the rules by buying Instagram and WhatsApp. Well, I, I think if, well, Facebook was a smaller company at the time. And that's, that's the thing that we should bring into this conversation. I am slightly more skeptical of how to knock off certain incumbents because there doesn't be quite a lot of inertia in the market.

Starting point is 00:40:05 But it just feels like sometimes. people point to Lena Con's regime and rain as more impactful than it is because I can't recall that many examples of deals that are these tuck-in acquisitions that are so important to early-stage funds, seed funds more earlier, getting blocked. To me, it's the major deal. They're just not happening. It's the chilling effect. So you're correct. You're not seeing to get blocked because people don't even try. That's how bad it is. Would they get blocked? I guess is my is my question. Probably would get, probably would get a legal letter, saying, you know, and you probably would get vetted.

Starting point is 00:40:42 And so they've just given up on it. And the paradox of it is, then they just build their own. So instead of buying things, they say, you know what? We'll just build. And so if you actually wanted to make Apple and Facebook and Microsoft less powerful, having them buy the companies and having those companies be valuable and being able to raise more money would be a better way to do it than having those companies fail and just have Facebook incorporate the idea.

Starting point is 00:41:09 enter their next version of their product. So the argument there is if we allow big tech companies to go into the pool of startups that are competing with them in some ways and pull out a couple of the names, it enriches the pool so much that the overall package of startups become stronger. I'm very sympathetic to that. I mean, I am a guy who, I mean, I've been interested in startups since I was going to the public library in my hometown because I think they're cool. I think it's cool to go up against the big players.

Starting point is 00:41:34 Like that has been the key thing that's going to be interested in this sector for so long. And that's why I've always thought that some antitrust work has to be pro-startup because if we do have some limits on companies that are monopoly trending, let's say, avoiding some arguments, then it creates more room for startups to be able to compete and then take them on. So I can see this from both sides. I will say that I thought this interview was interesting and it's framing. So, Cort, why don't we play one more clip from this from Lena Con to get more of a taste of what they put out? Of all the thousands of deals that are proposed every year, the FTC and DOJ collectively investigate maybe two or three percent.

Starting point is 00:42:14 That might not sound like a lot, but startup founders complain that she's spooking investors so much. She's actually stifling innovation. Others fear that her chasing the tech giants will cause a domino effect. Earlier this month, after it was reported that her counterparted, part at the Justice Department subpoenaed the chipmaker invidia. Invidia share is getting slammed in the regular session. The stock market plunged. Do you ever worry?

Starting point is 00:42:45 Okay, court, let's pause it there. So, did you see what just said? So back to your point about weak examples. I think that is the definition of a weak example. They just said that when someone who is not Lena Con, and that's an investigation of a different company, their share price quote plunged, played a clip from CNBC when the show price was off, 2%.

Starting point is 00:43:03 Yeah. after going up by like 8,000% in the last, like, back. I mean, this shows you, like, even 60 minutes is, you know, as a journalistic enterprise, very lauded, does incredible work at times. You know, they also, at times, they also are an entertainment program that's, you know, fighting for audience, and they can make things a lot more dramatic than they actually are. The DOJ investigating, like, you know, some activity at Nvidia doesn't necessarily have to do with her. that is just an example of the government investigating companies,

Starting point is 00:43:37 and then sometimes that affects the stock price in a minor way, or a major way, but in this case, a minor way. So it's not exactly evidence. The statement before that, which is that startup founders are feeling the chilling effect, is the actual story. And I think what she's on right now is an apology farewell job interview. I'm going to restate that it's just a farewell tour,

Starting point is 00:44:00 because she's 30-something years old. I think she is doing these tours because she's going to be doing one of two careers after that, one of three careers. She's either going to be working for a very large tech company on the other side of the table, a venture capital firm on the other side of the table,

Starting point is 00:44:20 and advising them on how to get deals through, et cetera, work for one of the giant law firms. I'm not sure if she's an attorney or not. I assume she is. Somebody should look that up. But if she is an attorney, maybe she goes and works for one of those firms

Starting point is 00:44:32 to help deals get through. So when Figma's getting bought by Adobe, maybe Adobe hires her. And I think the other possibility is to run for political office. She's well spoken. She's highly intelligent and she's anti-corporate, which plays, you know, in a lot of America. So she would be a great senator,

Starting point is 00:44:52 congresswoman, you know, who knows what position she would go for next. But, you know, this is a great resume builder that you try to fight against the evil of Amazon, etc. I love the consumer harm framework. And I like the idea of looking at specific anti-competitive behaviors. I do believe Apple, giving all of their search results to Google in a multi-year,

Starting point is 00:45:19 tens of billions of dollars a deal. I do believe that feels anti-competitive. I do believe not allowing app stores on the iPhone or Android, or I guess Android allows it now. but iOS previously, or iOS taking a 30% tax, not letting people click to pay directly and have a direct relationship

Starting point is 00:45:38 with their newspaper or their, you know, app of choice. I believe that's anti-competitive. And that's where you could really make really good progress. You know, if I want to use Apple News or I'm Apple's, you know,

Starting point is 00:45:55 I'm the Wall Street Journal app, why am I giving money to Apple to go through the app store? I mean, if it felt like the 3% you pay to Stripe slash Visa, that's one thing. But 30% is 10 times that number. And so I think, you know, forcing them to allow other app stores on iOS, which I think the EU is doing now, they're going to force them to do that,

Starting point is 00:46:23 and allowing them have links on the web page to say go direct. there's a podcasting 2.0 standard that Adam Curry is working on that has two buttons that Apple and Spotify don't put into their apps to the best of my knowledge. One of them is the donate button. One of them is this podcast is going live.

Starting point is 00:46:44 That is like now standard in the HTML code, like the RSS code, the standard for podcasts. So when we go live, we have to tell you like log into YouTube, subscribe, etc. But it should be in any podcast player

Starting point is 00:46:57 If you have notifications on Spotify or Apple, you get that alert. But they don't follow the standard. And there should be a button that says donate that goes to our Stripe page and that you donate or whatever we choose to use, Patreon and Stripe. And we program that.

Starting point is 00:47:11 We don't have to go through Apple's subscriptions through Spotify subscriptions, through YouTube subscriptions, and let them take 20, 30% absurd. So I think that would be a better use of whoever comes in next, a better path. And then we've talked about it here before.

Starting point is 00:47:27 Let's let the small companies go crazy so that we have more big companies. Instead of a Mac 7, we've got a Mag 17 or a Mag 170. And that would happen if you allowed Uber and DoorDash to merge or Waymo to spin out and merge with Uber, you know, or Tesla to buy Uber or DoorDash. You know, that's where you start getting really interesting ways of competing against big tech. Thank you for coming to me, Ted Talk. No, no, I'm here for it.

Starting point is 00:47:57 just going back. She has a lot of degree from Yale, unsurprising given that she runs a department. And she is 35. So it turns out, according to my research, I just did, Lena Con and I are one month apart in age, and we are four months older than Taylor Swift. So there you go.

Starting point is 00:48:15 I mean, three of the most important people in my life. Yes, also a nightmare blunt rotation. I think that would be the worst way to hang out. Okay, let's move on. Swift does is just bogies that duby every time. I'm like Swift, T Swift, pass it. Puff, puff, pass. And she's like, absolutely not.

Starting point is 00:48:33 I have to date a football player. All right. Jason, so today, before this show, you were all hot and bothered about Apple Intelligence because you have the new version of iOS. My iPhone is too old. Sorry, I'll lie new one. Tell me what's up. So it's just

Starting point is 00:48:49 interesting to see a lot of the features that were in products like Superhuman, Gmail, grammarly, notion around writing, all of a sudden appear on the operating system level of your phone. So the first thing I'll show here today is the writing tools. I sent a couple screenshots. I'm sure we could find other screenshots online.

Starting point is 00:49:15 But in the new iOS, and anybody can join the beta, by the way. If you go to your software section, you can join the beta. there's Sonoma and then there's another one right now. I can't remember the two names of the betas. And they have different things in each one. And some of them we need Apple, Silicon, and higher levels.

Starting point is 00:49:31 But the writing assistant tool, very good. And so here I was, I think, in our docket. We write a nice little docket here. And when I say we, I mean Alex. And so I could highlight the section here, and writing tools comes up as one of your choices. So I highlighted the section we did on Amazon's Rift that you wrote. and then it can proofread it, rewrite it,

Starting point is 00:49:52 make it friendly, make it professional. In other words, like, you know, maybe 20% of what Grammally already does, right? Here's another one. This is a very simple feature that you can use with chat, GPT4, or Claude, all of them. But it's built into Safari. So when you're in Safari, you'll see,

Starting point is 00:50:10 on the top left, you have that reader view. Now it pops up a menu, and you can enable highlights. Highlights, so you have writing tools, and now you have highlights. highlights Safari intelligently displays, summaries, previews, and suggestions from the web,

Starting point is 00:50:24 nearby locations, and more, you turn it on, and then when you're reading, let me show you that, and this is just another feature I found, which is to hide sections, if you click that hide sections, and I don't know if this is part

Starting point is 00:50:37 of Rappo Intelligence, or they had this previously, you could do something like here, I opened up the New York Times top story about RFK having a really spicy relationship with a journalist, you could click on something like the carousel and say, hide this.

Starting point is 00:50:51 And then it no longer shows you that when you go to the New York Post. So you can actually like, Yeah, it's kind of cute, right? And so it's not an ad blocker. It just empowers the user to remove clutter. Now, of course, you can click it. Again, another screenshot of send is when you click on that, you can get the reader review. So everybody knows reader review.

Starting point is 00:51:10 If you don't know reader review, it takes everything out and it just gives you text. I love read review. Now, when you do reader review in Safari, you have Summarize. You click summarize and you'll get essentially a three-sentence summary of the story here. Robert Kennedy is considering suing Olivia Newsie. Her name is Newsy and she's in the news. I think it's Nuzzi. Okay, Nuzzi for allegedly sending him spicy images and videos after tricking him into unblocking her number.

Starting point is 00:51:41 Okay, there you go. Like this is a summer here. Sorry that I picked those salacious story was the top story. No, I just, I find it really funny that everyone's like, on this, we find RFK Jr. Entirely believable. I mean, it's kind of hilarious. Like, this guy's like 70 years old and he's a Kennedy and like these are the stories. I mean, this guy has got some, I mean, I don't know what it is.

Starting point is 00:52:04 Is it the Kennedy last name? Is it the delivery? What is it that sends people into a tizzy? I don't know, but people still have Kennedy, rose-tinted glasses in a way that, you know, we given my age and being born. in Oregon never reached me. I missed the mythos of this, but it's like I missed all of Princess Guy

Starting point is 00:52:22 being a big global phenomenon. So those are just a couple of the ones that are interesting. Another kind of interesting aspect of this is when you talk to Siri, it puts a glowing bar around your whole iPhone, which makes it feel alive. You know, it's almost like a little bit of a synthesizer

Starting point is 00:52:42 where it kind of glows as you talk. And then knowing that you don't always want to talk to it, there's a spot on the bottom of your keyboard. If you double click it, it will pull up your keyboard glowing with Siri and you can have a text exchange with Siri. Essentially, it turns itself into chat GPT. So it's going to, and it's also kind of got a very different, it has a very efficient way of listening to you. So if you said to it, hey, blank, I'm not going to say because I don't want to turn everybody's on

Starting point is 00:53:19 if you have a similar voice to mine. You know, I want to set a timer for six minutes. No, make it four. Actually, make it three and a half. It would actually follow that thread and very quickly respond. If you ask it, how do I set up a calendar item on my phone? It would do it very quickly.

Starting point is 00:53:36 So it's got that snappiness that it needs to actually be utilized and they're doing what Apple always does. take the simplest, simplest features of AI and make them work for everybody, you know, including laggards, including the Vanguard and, you know, the massive middle of technology adoption. I'm giving them like an absolute A plus, not for what's been delivered, but for the approach. I can see this approach is going to work. I think Siri that sucked for a decade is going to become essential in the next decade.

Starting point is 00:54:17 I think they're going to nail it, is what I'm saying. I'm a buyer of Apple stock. I'm not selling any shares. I'm very optimistic to hear all that because my iPhone 11 has finally, I think, reached the end of its life. So I'm about to go get an Apple Intelligence Ready iPhone very, very soon. Are you a Pro Max guy or just a pro? I'm a Macs.

Starting point is 00:54:37 I like the large screen size. You know, I'm older. I wear glasses. So, you know, when I have this giant one, it's got better battery life. and I can read it a little bit easier. I put my anchor battery pack on it with my little stand. I got my kickstand here. And I put it on the side.

Starting point is 00:54:52 When we're talking, I can leave it open during a show, et cetera. When I'm on an airplane, I can put the kickstand on and I'm in great shape. Yeah. Okay.

Starting point is 00:55:00 This is going to be pretty big. They've also got recording of phone calls they're adding and transcribing them. In other words, what's already in Zoom. So that'll be huge. I don't know if it alerts the person. I haven't tried it yet.

Starting point is 00:55:12 I'll try it and let you know. know on a future episode, but I think you can call somebody, click the record button. I hope it tells them your recording or ask them for permission. You know, Zoom, I think tells people the calls being recorded, right? Like, that's a standard procedure. And then obviously, there's different states that have different rules around recording or two-party consent of recording. So, you know, it wouldn't be so difficult for it to know what geo you're in and say, hey, you're in California. You need consent. hey, you're in New York, you don't need consent. Would you like to request consent?

Starting point is 00:55:47 Yes or no? As opposed to just telling people like, Jason's recording you. Like, whoa. Would you like to ask Alex if you could record this call and make a transcript and send it to both of you?

Starting point is 00:55:57 So there's going to be a new... We're going to have some new... What's the word that I talked about? Manners. Norms. Manners. I have a character, Miss Manners, that I call on the phone for my daughters.

Starting point is 00:56:11 I don't know if... if you know about Mismanors, but... I don't, but I'm going to need to know. Well, I'll give you her phone number. Her phone number's very easy for you to remember. So when my daughters were young, they said, listen, that's it. I'm calling Mismanors. No, no, no, no, call Mismanors.

Starting point is 00:56:26 I pick up my phone and I go, beep, beep, boop. That's Mismatters phone numbers. Did you get it? It's beep, beep, boob. I got it. No, no, I'll never forget that. That's written in my head now. And then it goes, burr, and then I do my MISDAFIR.

Starting point is 00:56:40 Oh, hello, it's Ms. Manners. What's going? God, it's good to hear from you, Jason. I say, oh, you know, my daughters, they're misbehaving. Somebody just said this pasta is gross. Oh, we don't use the word gross. We say, I don't care

Starting point is 00:56:54 for it. I'm wondering if there's another option, if it's not too much trouble for dinner. And so I taught my daughters to stop saying yuck or gross because at another person's house for a restaurant, that's on truth. Sure. And now they say,

Starting point is 00:57:10 when asked if something is not to their liking, we'll say, I don't care for it. Thank you very much. How did you manage to hire the late queen to hide on your phone to scold your children? And what did that cost?

Starting point is 00:57:26 No, no, it's a new startup I'm incubating. It's called the mismanors. It's an AI that teaches manners. It follows you all around. The startup point is what I wanted to get to because you said at the start of this rent that, you know, some stuff from superhuman

Starting point is 00:57:39 is making it play in, some stuff from grammarly is making its way in. And to me, there's a thing called getting Sherlock in which Apple takes a product that was built by the community, brings it into its OS, and politely kills off another company.

Starting point is 00:57:54 So I'm curious, do you see Apple intelligence coming to all of our phones very soon hurting a class of startups out there? No, because I think there'll always be a place for luxury power user software. If you can,

Starting point is 00:58:11 can't, the pace at which Apple likes to release stuff is when it is bulletproof for 99.99% of, you know, people, you know, the picture of your friend who literally doesn't know how to turn on the flashlight or, you know, doesn't know where the Bluetooth

Starting point is 00:58:27 settings on their phone is. Like, that person, they wanted to work for that person if they stumble upon the feature. So you're, there's, they're never going to be part of the Vanguard, the avant guard, you know, and it would mean you are a very lazy developer making a really terrible product. with an untalented team

Starting point is 00:58:44 if you can beat Apple's product velocity. So I don't worry about that too much. What I do think it's going to do is educate a large number of people to trust AI in certain circumstances. And I think the person

Starting point is 00:58:59 who loses the most here is open AI. I think that Apple does not need open AI to do any of this. They could use Lama, they could use any of the hugging face models. none of this is dependent on chat ch pt and i think what will happen is chat ch pt is massively that i'm seeing and by massive i mean six to twelve months some people might argue it's 18 months i don't think

Starting point is 00:59:24 anybody in our industry is arguing that chat chippy is like 24 months five years yeah nobody would say that yeah i don't know if you would um i doubt it um yeah it's like it feels like a six So this 01 preview is so good. I was talking to people in the industry the last couple days about it. And everybody admits, oh one is wild in what it does in terms of thinking.

Starting point is 00:59:48 You and I talked about it, I believe last week. Yep. The distance between Apple having that grok inside of Twitter slash X, clawed, it being in every Facebook, I think it's all commoditized.

Starting point is 01:00:03 I don't think OpenAI will be able to charge 20, or $50 for this to that class of consumers. I don't think that class of consumers is going to need another app. I think a lot of that, I think a lot of the base functionality,

Starting point is 01:00:19 like rewrite this or proof it for me is going to be enough for a large group of people. So it doesn't mean chat chip, he doesn't have a great business, but if you were to ask me who loses most, I think they lose

Starting point is 01:00:31 because Apple is intent on making this a system level feature. It's not an app. It's in the OS. It is the interface. And when I saw what they're doing with Apple intelligence and I used it

Starting point is 01:00:46 and you have to use it in order to understand. It's like a key premise I have as a technologist and an investor in technology companies and a commentator is use it. So I made everybody in our organization tried as hard as I can.

Starting point is 01:00:59 When you open up a new tab, have chat GPT4 or Claude open up in that new window. And when you start doing that or you install the beta of this Apple Intelligent what you realize is it's going to be the new interface. You're not going to scroll and click apps.

Starting point is 01:01:15 You're going to talk to Siri. And Siri is studying your behavior in apps. There is a bunch of stuff in the terms of service. You and I talked about it offline, where they're asking you to watch yourself in an app. The reason they're doing that is they want Siri commands to go two clicks into each app. An example of that would be when you ask Siri,

Starting point is 01:01:37 to play a specific artist in Spotify, it works. So you want to play music, you want to play the genre of music, and you want to do it in this app. So three things. Music, genre app. Now it's going to be like, I'm looking for a sushi restaurant

Starting point is 01:01:54 within this many miles, and I want it to be open tonight, and I want it to be good for groups, and they have to take Apple Pay, right? Can't be cash only. So now you got like five, you know, variables. Oh, and please, I need them to have Peking Duck. So I want to go to a Chinese place with Peking Duck that takes Apple Pay and is good for groups. Now it gives you the three

Starting point is 01:02:15 dim sum restaurants. And it's like that one's not open on Monday nights and it's a Monday night. So here are the two. Those queries will be done through Siri, not by opening up Yelp and clicking a bunch of buttons, if that makes sense. No, it absolutely does. But I mean, it does limit the number of companies that have that have that opportunity in front of them, because it comes down to Microsoft, Windows, Google, Android, Apple, iOS, which are three of the Mag 7. It disappoints me a little bit

Starting point is 01:02:46 that we're kind of trending towards, a future, by the way, that I agree we're going towards. I'm completely on board with where you see this going. It just makes me worry a little bit. Sure. It's a lot of power. It's a lot of power.

Starting point is 01:02:57 It's a lot of power. He who owns the interface, like, really can exert a lot. Now, once you're inside of that app, It's now up to Yelp to earn their keep and have a discussion with Yelp's data set be more robust than what Apple can simply look in Apple Local or Apple Maps and give you. And so it just means you have to be that much better, you know? Or, or it means that Yelp at all simply become data providers for AI models, essentially, and they become less and less a consumer-facing entity. and instead they're mediated through

Starting point is 01:03:37 the Jason Cali-Kanis Siri instance that you have across your iOS devices. I wonder if a lot of companies just won't have a GUI in the end and they'll just be essentially API data streams that are fed into either real-time answers or model creation and training. I mean, there are probably many companies already

Starting point is 01:03:59 that exist that would fit that model. You know, there are databases of airline flights and hotels and you know, Kayak queries them to give their results and then gives them a, they pay a license for data. So it is possible, Yelp's future is not in having a front end

Starting point is 01:04:17 interface for the majority of users, but allowing chat GPT, Gemini from Google and Apple's new, whatever, to pay them per query. And maybe it's a better business model for them.

Starting point is 01:04:32 Maybe they just perfect the data set and it's a better business model and it's better for consumers to have that interface. Right now, they're already being mitigated through a desktop or an app that has to go through the store.

Starting point is 01:04:45 So it is troubling in some ways and it is an opportunity in other ways. And again, as a technologist, you must look at the trajectory of what they're doing. They want to control the conversation. You're going to have to have a better tool, a better mousetrap that provides more value

Starting point is 01:05:03 than they can. Yeah, absolutely. And I bet the argument you made earlier about Apple's App Store being a bit too controlling of other companies trying to reach consumers. We're going to have a complete reprise of that with Siri and other similar services at the OS level, I think, with other people wanting in. Looking forward to that when it happens. Now, Jason, give me a direction here. We can talk about Microsoft and the Renaissance and Nuclear Power, or we can tie this right into OpenAI. What do you want to do? Well, I think the more important story is obviously, yeah, the most important story is obviously what's going on with nuclear power and Microsoft in Three Mile Island.

Starting point is 01:05:42 So why don't we just do a quick hit on that and take one question from our LinkedIn Twitter X audience? Awesome. So this is one of the cool stories that it has hit the world of technology in a long time. everyone knows Three Mile Island here in the U.S. the site of the worst nuclear accident in our history. It was a partial meltdown.

Starting point is 01:06:03 That was back in the 70s. Things have changed. And now Microsoft is working with Constellation to turn back on one of the producing units at Three Mile Island so that they can essentially buy all the power

Starting point is 01:06:15 for its data centers. Low carbon, Jason. We love to see a clean energy source. But, you know, Microsoft is now essentially in the leasing its own power plant, business because of the demands that it has for power and so forth. And this strikes me as an absolute story of the times.

Starting point is 01:06:34 I mean, we were sitting here a couple of years ago, and if you brought up nuclear power, people would reference Fukushima, and they were scared to death, and don't put it in my backyard. And then, you know, now we have AI demanding more power. We have utilities and many people in the country putting generators on their homes because they keep losing power. So, and then, you know, we have global warming, which some people don't believe in, but statistically is clearly happening.

Starting point is 01:07:03 And we have energy prices out of control. So I have found this very strange phenomenon where what people tell you they care about is very specifically impacted on what they have to pay for that product or services or its availability. So when electricity is not available and it's really expensive, people are like, can I get another solution? And nuclear is obviously the cleanest along with solar. And so solar takes a while to deploy some of these nuclear power plants. Apparently, I didn't know this, but most nuclear power plants have multiple reactors.

Starting point is 01:07:41 Okay, I didn't know that. Fukushima had a couple, three mile on a couple. But Three Mile Island was still operating in 2019, and they shut it down for financial reasons. We need to restart nuclear here in the United States. We need to have the will to put up these new Gen 3, Gen 4s, and turn on the old ones. If you look at what happened with Germany, not to make this a political show, but Germany, Germany turning off all of their nuclear power because you've got some green group of individuals who are obviously misguided and don't understand that they're now burning coal and oil instead of having nuclear. like we really need to educate people. And Three Mile Island,

Starting point is 01:08:23 Fukushima and Chernobyl really warped people's minds into how dangerous this technology is. It is the safest technologies ever. We have more people dying from coal, from breathing it in and getting lung cancer. And we were talking about tens of millions of people

Starting point is 01:08:40 or millions of years of lifespan. I would say probably billions of years of lifespan have been shortened by coal. But we remember, three dozen people who died acutely in fires at nuclear power plants. Like, come on. Let's try to have some thoughtfulness about this. And if AI is the reason that will have the willpower to do it,

Starting point is 01:09:01 this is a huge win for society. Yeah, absolutely. Also, keep in mind that Three Mile Ireland was back in 1979. That's before Metallica had released their first album. That's how long ago that was. I mean, it's back in the day. Technology has improved. and what had to happen for there to be a crisis at Fukushima?

Starting point is 01:09:20 Well, there was massive earthquake and tsunami. So, you know, we are never going to have zero risk energy, but nuclear is so safe that I would live on top of a nuclear reactor today, let alone nearby to it. Bring it on is, I think, a great way to phrase it down. It generates very little waste. You can just throw into a hole in the ground. Huzzah. It's fantastic. So Microsoft, 100 points for this.

Starting point is 01:09:44 I absolutely love it. We also found some stuff. bouncing around the internet, including that Amazon is hiring a principal nuclear engineer, data engineering, power generation solutions. So we are moving towards a world in which data centers not only are getting larger or more power intensive, but the power that goes into them will also be owned and operated by the company that runs the data center. So that means that Microsoft is going to be eventually a nuclear power operator, a data center

Starting point is 01:10:09 provider, a laptop maker, a failed phone company. And it's like, these tech companies are getting kind of weird. Business productivity, yeah. I mean, fantastic. You know, sometimes, you know, some need will drive changing people's opinions on these items. And here we are. We don't get our power situation straightened down in this country. You know, there's other countries that maybe you have top down control and they can just ordain a company or force through

Starting point is 01:10:45 eminent domain that, you know, one of these nuclear reactors gets thrown up every X number of miles. And then they never have to drill for oil again or be dependent on another country. So the key here is for us not to have foreign dependency and to win AI and win superintelligence. You cannot win super intelligence without a ton of power and a lot of chips. Interestingly, most nuclear power plants in the United States are on the east coast. And you might ask yourself, why is that? And And it's pretty simple. That's where industry formed in our country. A lot of it was on the East Coast.

Starting point is 01:11:21 That's where water is and that's where population density was. And the people in industry who needed power were all in the East Coast, not the West Coast. You know, so we do have a lot of people who moved west since the 50s, 60s and 70s. I think 60s and 70s, early 70s is when this ended. So during that time period, they all cluster on the East Coast. we need to actually bring to the West Coast as well. And, you know, more power is a good thing for our country, which is now a net exporter of fossil fuels.

Starting point is 01:11:56 So we're going to be, this is going to be awesome for America independence and reaching super intelligence. And the super intelligence is going to train us how to make better decisions about technology to get more efficiency and energy. So we've got this like, This could spiral in a really good way. The first thing the super intelligence is going to say, it's going to print out,

Starting point is 01:12:22 Lena Kahn was right, and you're going to go, no, why have we made this? She's totally right about the speeding ticket she's given. I give her a lot of credit for, you know, investigating people for app stores.

Starting point is 01:12:34 It's just the M&A piece that it really gets under my skin. And I cannot wait for her to join Andreessen Horowitz. That's where I thought, you would use that VC firm. I'm like, it's going to be Andreessen Horowitz. I mean,

Starting point is 01:12:44 sure why not? Yeah, yeah, yeah. Okay, I know we got to go, but before we leave a couple of notes about companies that are building next gen nuclear reactors. Actually, a few are public, which blew my mind. So new scale power, nano nuclear and Oclo are all public. And they have a combined market cap of $4.2 billion. So not the biggest companies. We're making J-trade. Well, I'm not going to tell you which one's my favorite because I don't know yet. But I will add that there's two startups that I'm going to put onto the Twist 500, last energy and X energy. Last energy, last raised a $40 million series B and X Energy's last round was a $235 million series C. But these are companies that are working on more modular, easy to install nuclear power that you can place where you need it. And I think that's freaking great. So we need it everywhere because data centers aren't always located near power generation.

Starting point is 01:13:34 So I'm stoked at the money flowing into this, the need for it, how it's going to change our society. I love nuclear power. And now we get to watch Chernobyl again because that's a great. any series. You know, I didn't get to it. I wanted to watch it with the why if people seem to be over the moon of it, I will just say, if you haven't tuned it into industry, it's the HBO show about young people doing trading in London. It is awesome. Oh, really? Okay. It's kind of like secession or sopranos, but taking place at like a Goldman Sachs trading firm with a bunch of young people doing crazy things that young. finance people do. But, you know, like a lot of HBO shows, they kind of innovate in storytelling.

Starting point is 01:14:21 And the innovation here is you don't know any of the actors, but they're all really good. And it moves fast. It's kind of like that movie that Adam Sadler was in Uncut Gems. If you remember, did you see Uncut Gems by chance? I did not see Uncut Gems. I know it's Adam Sandler's latest masterpiece. It's incredible. I mean, it's basically about a degenerate gambler doing degenerate gambler stuff.

Starting point is 01:14:44 But this has that vibe of like, these people are taking risk. It moves too fast. The screen moves quickly. They're talking fast. They're doing crazy things. And it's got like a pace to it that's so frenetic that each episode is like a starter's pistol goes off. And it's a sprint. Oh, I love that.

Starting point is 01:15:05 And then it's really compelling in, I haven't seen this in storytelling, except in like very manic portions of movies like. in Goodfellas when they do that scene where like the helicopter's flying and it's like an intense 10 minutes of like. Oh man. That's yeah. It's kind of like that for the entire series. It never lets up. It's just chaos and the lack of sleep and stimulants and coffee and trades and anger and double crossing. Highly recommend the TV show industry. It's on its third season. It's gotten better every single season. All right.

Starting point is 01:15:43 Well, Jason, I'm going to watch that this weekend with the spouse once I get all the children into bed. But a couple of comments and questions from our dear friends who are with us live. And so from Andrew Storm, why is it with the obsession in technology to return to office? I think he's asking kind of as compared to other industries. I think competition is driving it. And that's the big. and end of it. I think there's some obscure situations where people feel like they want to do a riff.

Starting point is 01:16:20 So it's the gentleman's riff. We've talked about that before. But I think the obsession is really, can you compete against an in-person team? And do they have a distinct advantage? If everybody was working from home and you didn't have competition, I think people would be like, okay, yeah. But people believe that in startups there's more intensity, creativity, when everybody's in an office. As but one example, I heard three people first, three team members for our company in Austin will be in office in October, and I'm going back to the office. So of our team, we'll have four of 21 or 22, will be in office. But I'll grandfather everybody who's not in office if they are ultra high performers. So you have to be a U-H-P to be remote in my mind. Does it mean like tomorrow everybody's got

Starting point is 01:17:13 I'm not taking this like in, you know, hardcore. Everybody comes back to office on this date. It's be an ultra-high performer who I don't have to manage. Or if you choose to be creative and come to an office and that's fine. I think there's room for both. And that's my personal philosophy. But when you were in a large organization, it's just easier to tell everybody get their s's back and see it. So it's a little bit of lazy management. There's a little bit of control and there's a lot of competition worries. Yeah. No, I think there's no good way to build an incredibly large company. I don't think any corporation has managed to build an internal structure at like a hundred thousand person scale that that works. I think they're always trying to

Starting point is 01:17:52 make it kind of fit. And so I think Amazon got so much bigger during the pandemic and now they're trying to make that work. Okay, let's just do one more. Giacomo, Bali says, why is it not okay to make rules for your own proprietary hardware anymore, essentially argument against your app store comment? So, you know, when you have a large percentage of market share and you try to extract more value than you're giving, I think that's when people get a little bit tweaked. If you are giving a tip to a creator, you know, let's imagine. and you were walking by somebody in the street, they play a song, they took a request,

Starting point is 01:18:38 and you wanted to give them $10. It was very special for you. If somebody dipped in there and took $3 and walked away, you'd be like, but I gave them $10. Now, if you did it with Venmo and you gave the $10 and they got $9.25 or $9.50, you'd be like, okay, fine, I got to use Venma. So it just doesn't feel fair.

Starting point is 01:18:57 It's the percentage. If the app stores were 5 to 10%, I don't perceive anybody would bring this up. It's because they're over 20%. Even if it was 15% I don't think people would bring it up. But 20, 30% is a big ring. It's a big rank. There's not a lot of poker chips left

Starting point is 01:19:15 if the dealer is taking 30% of all the chips every hour, every transaction. It's just too much. That would kill the poker game. In fact, that might be a good way to think about this. If your cut is so high that if it was a rake, it would kill a poker game, you're taking too much.

Starting point is 01:19:32 You're taking too much. The thing that I would just throw in there is that you know right now, I don't think Apple's breaking the law, but we have regulations to shape the market because not everything fits exactly in an act of promise. But anyways, everyone who's live, you're the best. Otherwise, we'll see you all on the podcast things. And we are back on Wednesday with more live news. We'll see you then.

This Week in Startups - Amazon's RTO Impact, Lina Khan’s 60 Minutes, and Microsoft's Big Nuclear Deals | E2013

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