This Week in Startups - Communist coffee hits NYC, RIP Hulu, GPT-5 arrives and more | E2161

Episode Date: August 7, 2025

Today’s show:It’s a brand-new PACKED episode of TWiST. Jason and Alex welcome guest Zach Dive of Adam.new, to tell us why he made a deepfake AI ad starring Jason and the All-In besties.PLUS a rundown of the biggest tech and startup news of the day, including Disney’s decision to sunset Hulu, OpenAI’s new open-weight models, the Cloudflare vs. Perplexity feud, Uber’s newly-announced stock buyback, China’s Luckin Coffee coming to Manhattan, and much much more!Timestamps:(0:00) Luckin Coffee hits NYC… along with COMMUNISM?!(09:15) Is China taking on major American brands on PURPOSE?(10:16) Lemon.io - Get 15% off your first 4 weeks of developer time at https://Lemon.io/twist(11:29) Show Continues…(20:17) CLA - Get started with CLA's CPAs, consultants, and wealth advisors now at https://claconnect.com/tech(21:30) Show Continues…(26:02) RIP HULU: Why Disney is sunsetting the iconic app.(28:37) Nostracanis Returns: Jason’s 2017 Disney vs. Netflix predictions came true(30:24) .TECH - Say it without saying it. Head to www.get.tech/twist or your favorite registrar to get a clean, sharp .tech domain today.(31:28) Show Continues…(35:39) Zach Dive of Adam.new joins to tell us about making a viral deepfake ad starring JCal and the Besties(44:10) Zach shares thoughts on AI and copyright, and why it’s a problem for the “big dogs,” not him… yet(48:12) Jason wants to wet his beak… but is there room in the Adam.new seed round?(53:07)OpenAI’s new models are open-WEIGHT; how that’s different from open-source.(58:36) Do Nvidia and Apple devices NEED kill switches and backdoors? Why it’s such a tough question.(01:02:10) GPT-5 arrives TOMORROW?!(01:03:31) Cloudflare vs. Perplexity… let them fight?Subscribe 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:(10:16) Lemon.io - Get 15% off your first 4 weeks of developer time at https://Lemon.io/twist(20:17) CLA - Get started with CLA's CPAs, consultants, and wealth advisors now at https://claconnect.com/tech(30:24) .TECH - Say it without saying it. Head to www.get.tech/twist or your favorite registrar to get a clean, sharp .tech domain today.Great 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

It's been done. So maybe, I mean, listen, I don't, I don't describe any bad intent here, but you thought people wouldn't be confused? I would say the majority were not confused. But hey, you're confused. But you explicitly did it with the tech crunch one to confuse people. So let's call it what it is. You're hacking media to confuse people to get attention, correct? Sure.

This weekend startups is brought to you by lemon.io. Hire pre-vetted remote developers and get 15. percent off your first four weeks of developer time at lemon.io slash twist. CLA, innovation takes balance. Our CPAs, consultants, and wealth advisors can help you get from startup to where you want to end up. Get started now at cLac connect.com slash tech. And dot tech. Say it without saying it.

Head to get. dot tech slash twist or your favorite registrar to get a clean, sharp, dot tech domain today. All right, everybody, welcome to this week and startups. I'm Jason Kalakanis. Back home in Austin, Texas. Had a great dinner last night

with my team, my growing team. I don't know how many people were up to, but, man, launch is growing. With me again today. Alex Wilhelm, you know, from TechCrunch, cautious optimism. Dot News. Is that right?

Nailed it. First try, Jason. I'm so quick. Thank you. Corsh optimism. Dot news. I got to post it up. go ahead and i think you should go to your your daily right now right yeah five days a week not the right

move i need deeper insights from you i'm going to just give i'm going to be your editor in chief i think you should go to two or three days a week let the news build up because the news is a commodity now all the bullet points Alex and i think what people would rather have is your insight, your take. So I'm going to give you permission to run an experiment. It's your choice. Obviously, your business. To try that for August. Alex's analysis. Because when I see you cover the bullet points, I'm finding I know 80% of what you're saying. You're just taking the time to type it. But I don't care about that. I know the headline. Your readers are so in the know that I think you should just do the headline, Alex's analysis. I will, I will play with this and I'll let you know how it goes.

Thank you for the idea. Just an experiment. It's an experiment. Is there a shorter version Alex analysis? I feel like we're almost at something. We've almost got to say it. Alex analysis. Alexis. Two idiots, Lott and I do all day, is brandy games and make memes and do jokes. Trying to come up with tons. All day long, all day long. That's our life, the life we've chosen. All right. And with me, of course, Lon Harris. Hey, everybody. Our editorial director. I am, you know, we had a great meeting last night with our team.

Yeah. One thing I realized is we need to, you know, I have the pilot, co-pilot concept. What do you mean by the pilot co-pilot concept? It was something I learned in management. I used to have very few resources. So I would staff, we used to say man, but I would staff. Now I staff, I don't man. You understand why, Alex.

Yes, because your team is majority women. It's absolutely true. You know, I have three daughters. So I say staff, we staffed. Yeah, no, I'm with you. I appreciate that. I'm teaching people. I'm teaching them.

There was a period in time where at the, we had a woman who would come, an investor who would come to our accelerator. And every time somebody used the wrong gender pronouns or whatever, when she would give them a review of their business, she would start with like a five-minute lecture. you said sales guys I would like you to know that there are women who work and it was just like

it was like clockwork it was just like oh my god these poor founders so I had to like do a thing like when she would come and say I just want you all to know that there are firefighters not firemen they're firefighters

like you gotta understand the non-gender words anyway all right there's a lot in the news I like coffee Got a big coffee story. We got a big coffee story today because I remember a great fraud that had occurred with something called Luckin Coffee. And Alex remembers it as well.

But this incredible baked books, which, you know, baking the books in China's, I don't want to be derogatory here, but it's not uncommon, let's just say that. It wouldn't be like a shocker that somebody had put their thumb on the scale. So they had some sort of accounting scandal. Sure. But the news now is that they're launching in New York. Correct. And that this meme has merged with the socialism meme, which means I'm interested.

Coffee and socialism, let's go. You and every undergraduate poetry student loves coffee and socialism. So, yes, you summarize Luckin. They're a Chinese coffee house chain founded in Beijing in 2017. they have been rapidly expanding over the last few years. Luckin stores in mainland China now outnumber Starbucks, which is an incredible stat to think about. They are opening two locations in Manhattan, Greenwich Village, and Chelsea.

Now, as you mentioned, Luckin was accused of accounting fraud in early 2020. They denied it, but then later after investigations, the company did admit to falsifying around $310 million worth of... Say it again. Say it again, Lennon. Three hundred and ten. How many million? Million, three hundred and ten million dollars worth of twenty-nine coffee.

That is a lot of coffee. How do you even fake that much? You got to fake buying all those beans, brewing all of those cups. I mean, I can tell you a million ways to run a scam like this. It's pretty simple. I mean, you just say, you count the number of cups and then somebody at the manager at the end of the shift who refreshes them just takes 50 cups, puts 50 cups. puts 50 extra sales in the register and you count it up.

Yeah, I guess so the company got hit in China. They wound up going through bankruptcy procedures in 2021. They emerged from bankruptcy. Oh, I didn't know that. Emerge from bankruptcy in early 2022. And that was when they started this new international push. So they've expanded to Singapore and Malaysia already. And now here they are.

They have landed in the US of A. their 2025 Q2 earnings showed 47% year over year growth, 1.72 billion in total revenue and GAAP operating income of 237 million, 26,206 locations around the world. That's a lot. That's a lot of coffee. It's a lot of coffee. Now, this has become quite successful for a number of reasons.

One is price. Yes. They've realized that sugar, milk, ice, and coffee, none of those ingredients in and of themselves are particularly expensive. Yeah. So they have run the price down on these things. They also have another leg up variety of drinks. Like they have a lot.

It's some of the TikToks we saw compared it. It's almost more like a boba shop with their variety of different kinds of drinks than just a coffee house. So a lot of those drinks probably have less expensive ingredients than coffee. in them so you can also cut the price there. Yes. And I just want to add here that there's a difference between the way we think of coffee shops here in the States or probably Europe as well and the way Luckin operates in China.

It's mostly a mobile ordering experience and then you arrive, pick up your drink and leave so you can have higher efficiency stores and therefore Jason lower prices. So it's not a place where you have newspapers laying around Starbucks chairs. It's not a third space. It's not a European experience where you drink out of a ceramic cup. And that's super interesting. When you think about it culturally, in Europe, to ask for a to go cup is like, they're like, why? Just drink your coffee and enjoy the moment.

Relax. Smoke three cigarettes. Enjoy your coffee. Why not? Sure. I just pop it out. Why not popping out? So, race for impact, boys.

No boy. Now it's going to. Now it's a show. For those of you watching it home. Now it's a show. Now it's a show. hour show. So, and then America, we got used to, yeah, like having a third space, place to work.

Yeah, and Starbucks was always very explicit about it's like an Italian coffee shop. The drinks have Italian names. It's that leisurely European vibe. Sit down, grab a comfy chair. And yeah, we've talked about how that is a little bit out of step with the times that we're in when people want to like go into Starbucks, get their drink and go. And now you're in line behind eight kids who want unicorn frappuccine. and now it's your whole afternoon.

So luckin is a different experience. So what's been the reaction to this in my hometown? I wonder. I mean, on one level, they're embracing it. They were doing pop-ups. They got those long lines, just like you always do when you have Instagram-friendly pop-up social media experiences. People don't want to miss out.

What is this new matcha thing people are drinking? But there has also been a little bit of a pushback about the communist China origins. of the company and people are making connections to the candidacy of Zoran Mamdani, the Democratic Socialist candidate who has taken over New York. And where are they expressing these opinions? I'm just going to, I'm wondering, where would a young socialist in New York comment on the communist coffee company?

I mean, it's all happening on TikTok. As we say so often on the show. Who is TikTok? A Chinese company called Bite Dance with connections to. the Chinese conference. And Jeff Yoss. When you're a busy founder, finding a new developer, my God, that can become a full-time job and you've got enough on your plate. I mean, you're running a startup. But lemon.io has done the hard part for you already. They've got a crop of pre-vetted developers that they've ensured are experienced, results-oriented, and prepared

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And we always get the best feedback. So go to lemon.io slash twist and find the perfect developer or even a tech team in less than 48 hours. And Twist listeners get 15% off their first four weeks. Stop burning money. Higher developers smarter. Visit lemon.com. So the CCP, the Chinese communist coffee producers own. The Chinese coffee party.

Yeah. Yes. They own the TikTok. The caffeinated Chinese coffee party. And now they're going to own New York City. They're coming. I mean, they're coming for New York, folks. It's a little bit aggressive.

Do you want to see we've got some of these TikToks? Oh, we do have TikToks. Okay, great. We can look at a few luckin' ticotks. All right. So we have some options here, Lon. We have the official announcement one. We have the local news coverage.

And then we have the woman in the Hammer and Sickle, Jersey. Yeah, I'm going with three. Hammer and Sickle Jersey. Do it. Okay, that's fine. We got options. We got options. Somebody get their daughter.

All right. Here we go. Let's do it, boys. Okay. Here we go. Hey, guys, come with me to get a $2 cup of communist coffee. Yeah. This specific coffee shop.

This is great. Has more locations in China. Sure. Starbucks does. Um, okay, I'm going to come back to make a video there later. But no, this company went through a $300 million accounting scandal, where they faked their profits because capitalism sucks. And then they started paying their workers and putting the money back into the coffee and what actually matters.

And now they're more successful than Starbucks. European family that doesn't know how to walk on the sidewalk. She's so New York. Of course, this location is right by NYU campus. Should have paid your workers. Oh, man. If you're from New York, you know how the birds is Starbucks. So the fact that the first Chinese communist coffee shop is on this strip is crazy.

No, two dollars. Yeah. It's the very first store in the U.S. Oh, they numbered it. I got the iced coconut latte. Ice coconut latte? That sounds good. They also have a pineapple?

Time for a little review. It's so loud in here. She's beautiful and it is full of finance frozen here, but the barista complimented my shirt. So we see each other. Okay. All right. No, we don't know. You missed the bagger.

There's a total bagger in here. Yeah, we got to keep cut. You gotta keep going because this is like amazing. Now is she, is that like a European accent? Chinese companies coming to the US. No, I think she's a New Yorker.

I'm sensing like she's got a little bit. Oh, did you hear that one? Rewind that little bit. This is her best line. This girl's all bad, this young lady. It's all bangers all the time. Wait, I'm sorry, I spoke over again one more time. Let's be the beginning of Chinese company

coming to the U.S. and disrupting the market and being better than American companies, even though it's literally a communist country, they're better at capitalism than you are. Ooh. That's done. That stung. She got me on that one. She's right. Jangita.

This is Jengita on TikTok. Shout out to Djanga. DJ A-N-G-I-T-A. This isn't like any other coffee pool. I think I've had. And this is also just in time for the Duncan boycott because not every company needs to be talking about eugenics and their advertisements. Ooh. Ooh, she's taking out Starbucks, Duncan.

Yeah. Capitalism. You go, girl. You go. Making lots of enemies today. Smooth, okay. Smooth you can. It goes down like super smooth.

Yeah. Socialism usually does go down smoothly at first. Yeah. The other side that you got to worry about. There's a lot to take away from this, I think. I'm sending this to my guy, J.D. Vance. I'm going to send this to J.D. Vance. Because this feels like this is the beginning of a MAGA.

angle that we could go after here, which is that the Chinese companies undercutting American brands. Let's just let this sink in for a second. We're allowing. Go ahead. Oh, I was just going to say fast fashion. We did see this. We saw it with fast fashion. Your American companies got beat by Sheehan and those.

You cut me off at the past. Oh, sorry. Go ahead. No, it's okay. I'm going to give my rant because this is a mini rant. America is so dumb that we're going to allow luckin to come in. Sponsored by the CCCCCC, the Chinese communist caffeine coffee party. Collective party.

Collective comrades. We're so dumb that we've let TikTok come in and take over social media and program our children. Now we're going to allow them to come in and destroy one of our iconic brands by undercutting them. Keep in mind that this, if China really wanted to damage one of the great strengths of America, it's our brands. Why are we allowing them to come in and do this? I know that they're allowing Starbucks, but Starbucks has been struggling and they're going to sell off the business in China. I guess my question. So hold on, let me finish my rant.

Keep your questions, gentlemen. I need to finish my rant here, please. This is the start of a communist tsunami. that's, this is a brilliant technique by the comrades in China. Pick a company, our automotive companies, and then send BYD in with the ships we talked about just on Monday. Send Wachan in, undercut every American brand, get all those jobs onshore to China,

have all that money and all that profits come back to China, which by the way is exactly what we did to them. them. We said, hey, make our iPhones. Designed in Cupertino made in China. The people in China made a buck an hour. They were jumping off the buildings. I had to put safety nets around the Foxcon buildings to keep all the suicides because they were working six days a week, putting in tiny screws and just the most arduous labor you can imagine, or amongst the most arduous labor. And now they know our playbook, which is build a great brand and win the hearts and minds of consumers.

This is something that is being done deliberately, strategically, and thoughtfully, and deftly by the Chinese communist caffeine coffee company party. They're doing this on purpose. They see, okay, Instagram is number one. We bring in TikTok. Tesla is number one. We bring in B-Y-D. Starbucks is number one.

We're going to bring in Lucky. and what's the next thing to full? What's an American iconic brand that they will want to take from us next? Disney Parks? The NFL? The NFL? I mean, seriously.

It's already happening. The number one most profitable animated film box office-wise around the globe of all time came out last year, earlier this year. It's called Nisia 2. It's Chinese. I don't know it. They already are making...

Pull it up on screen. Let me see that. N-E-Z-H-A-2 is how you spell it. They're already making blockbusters that exceed Hollywood films in China. There was also, I think, 2024's top film was called Detective Chinatown, and it was a Chinese movie. And so, yeah, they're already taking us out in the entertainment field. I'm taking action here.

I'm putting a 100% tariff on Luckin coffee. Oh, I want to try it. It sounds good. It's okay. You can try it, but not for $1.99. All right. You're paying $3.99. And that $2 is going to re-education camps here in the United States to re-educate all these communist sympathizers.

Okay. Are we so threatened? My question is, are we so threatened by China because they are our largest rival? Is it because they are communist? Or is it something else? Because I feel like if this was a Brazilian coffee chain, if this was a Thai coffee chain, I don't think anybody would care. Everybody would be like, oh, cool, a Thai coffee chain.

I want to try that. But for some reason, we've elevated China the same way we did, I feel like the USSR and the 70s and 80s. For good reason. I mean, maybe. Maybe. They've got a billion for people. They are extremely ambitious.

They're hardworking. And they are cutthroat. This is a cutthroat rival. But I mean, is that not all true of India? And that if in India open. India opened a coffee place. Tell me the Indian brand that's taking over our social media. Tell me the Indian brand taking over our cars.

Tata's not dumping cars around the world. But if this was an Indian coffee chain, I don't think anybody would be like, oh, there's so many Indian people. They're coming for our coffee. Here's what has to happen. One of the themes we talk about over and over again on this week in startups is making sure you do your chores.

I'm no expert on these things. I have some experience, Stephen Estes from CLA. is an expert. Let's talk about being cash efficient. Tell us about efficiency and what you see in the top tier startups in your practice. We're seeing kind of an interesting trend out there where companies aren't needing to raise quite as much as they had in the past. You really have to be careful as a founder to only take on as much money as you really need. You've got to do the forecast and you've got to do the modeling and you've got to dialed in and get it right. Otherwise, you're going to end up either not raising enough capital to get to where you're going and you're going to have to go get

venture debt or go back, have an extended her to the round, or you're going to give up too much of the company because you just didn't recognize how much money actually needed. Yeah, very important to get this stuff right, folks. And that's really a bummer when startups don't do things in a button up. I always have a great partner, a good partner to have on this adventure. While things change, my friend Stephen over at CLA, visit cLA connect.com slash tech. And don't forget to mention that your boy, Jay, Calcension. That's clyc connect.com slash tech. Start today. What's good for the goose is good for the

gander. I'm putting a $2 tariff on it. And if you want to launch your company here, you have to have a local partner. So you need to give 49% of the company like we do when we're over in China. You got to get four, you have a local partner and some Americans got to wet their beak on this. And we got to have, we got to have somebody from the administration on the board with a golden vote. a golden vote. I'm putting my guy, Howard Lutnik, on the board of Luckin Coffee, USA. We're taking 49%.

It's going in the sovereign wealth fund. What's going on? USA. No, Jason. No, free trade. No, no. All of this is so, oh, God. Okay, so a couple things.

A couple things. The reason why Chinese companies are coming after American brands is that the free market gave room for American entrepreneurs is to build iconic global brands. Now, in the case of BYAD, we are seeing the impacts of basically an industrial policy, the national level in China, subsidies, and so forth. So that, I think, is a market distortive area. In the realm of coffee, while we joke about the Chinese communist caffeine collective,

whatever, it's not actually part of the government system. So in my view, by telling American consumers you can't have lower-priced coffee because Starbucks can't compete with this company, we're just reducing consumer welfare, and by approaching them and demanding golden shares, Jason, all we're doing is aping the CCP. So when you and I see that young lady wearing her, I presume, tongue and cheek, hammer and sickle jersey, I didn't think your response to that was going to be excellent. Let's put that stamp on the U.S. by forcing the same practices here.

We're supposed to be better. Okay. I'm looking for reciprocity here. You are correct about free markets. You're also making up a very good point. B.D is subsidized, which is called price. dumping in America. Agreed.

So we say no buono to price dumping. What is a $1.99 cup of coffee for a ginormous thing? It's price dumping. I believe Luckin Coffee is engaged in price dumping.

I'm bringing back Lena Con on special assignment. I call on Lena Khan to run a new division which will stop communism and socialism spreading into our country. Lina Khan, you are now part of the 47th administration.

I'm calling my connects. You guys know I'm very connected. I'm calling my guy Lutnik, calling J.D. Vance. And I am going to bring this to the top of the agenda. No price dumping. You need a local partner. We get our bets. We wet our beaks if you want our market.

No, in all seriousness, I do think it's like the price dumping is the issue. I don't mind the competition. But I do wonder if they get to bring their brands here, How's, there's a Disneyland in, is it in Hong Kong? Shanghai, I believe. It's in Shanghai. Yeah.

I want to know if we could ask producer Claude. It was incredible, by the way. And I have my common browser set up to use producer Claude. Oh, nice. You can set your default. Look at this. I can try out Opus 4.1 now. It's for complex challenges.

Don't get ahead of the docket line. That's coming up later. Oh, okay. A little dramatic foreshadowing. Yeah, let's ask it this question. What do you want to ask? Let's do it. Well, no, what I really would like to know from producer Claude is...

He's listening. What's the deal? What's the deal with Disney Shanghai? What is the deal? Who are these people? Who are these people getting 49% of Disney Shanghai? I want to know who owns the 49% of Disney Shanghai. Is it Xi Jinping personally?

Who owns it? Because we have to have a partner there. Bobby Eiger and Donnie and Eisner. They had to cut a deal. The Shanghai Shendi Group, a Chinese state-owned enterprise, owns 57% of the Shanghai Disney Resort. What? The Walt Disney Company owns 43%. All right.

That's it. I want, I'm upping my 49%. We need 58%. If you take 47% of Disney, I want at least 62% of luck. Case closed, I have given my verdict. Yeah, thank you to producer Claude. So did you see how speedy Opus 4 was with that answer? I mean, if we put Oliver on, now it would have been seven minutes instead of it was seven seconds.

No, he's a human. He's great, but he's a human. Give me number two. You have a number two culture story here. I do. I do. It's a big, it's a big, it's a historical milestone. We've all seen this coming, but it's nonetheless an end of an era.

Now that Disney owns Hulu outright, they purchased all the remaining shares that Comcaste still held. They are going to sunset. Hulu as a standalone app and platform and integrate it entirely within Disney Plus. By 2026, everybody will have a unified Disney Plus. Now, you'll still be able to, if you want to just subscribe to Hulu content, you'll be able to do that. You can access just your Hulu or just your Disney Plus, but it will all be under the Disney Plus umbrella.

Bob Eiger told investors he thinks this is going to be not only a better, clean or less confusing user experience, but he thinks it's going to cut down on churn. Fewer people are going to unsubscribe because they'll already have Disney Plus and Hulu ready to go. And because these two, they already have the same ad team. So this is going to unify a lot and allow them to bundle and do a lot more with ads now that it's just one platform and they don't have to worry about supporting Hulu and Disney Plus.

In addition, this is also an interesting footnote. They're going to sunset the star brand internationally when Disney first entered the Indian market, it bought Star India, which was the big native Indian streaming platform. And so in India, all this time, it's been Disney Plus Star. That's going away. Star is also going to just become Hulu in terms of brand. Fantastic. This is a great thing.

We predicted it. And what this will do is if we could get producer Claude on this. I'm curious where Disney Plus and Hulu are in their subscriber bases and where Netflix is. you know, in relation to this. Because consolidating these two, I don't know the overlap and subs, but this has got to be pushing, I would think, Disney over 200 million.

Well, we'll find out in a second, yeah. Yeah. And where is Netflix at, Alex, in terms of their subscriber base? And what was the first year Netflix offered the streaming service? Because what we have, anybody who's got it. Netflix is just over 300 million global subscribers.

I'm going to look up when they introduced streaming. It was like, oh, January 16th, 2007 was when they first started. Okay, so they're at 18 years. Disney Plus was five years ago, I believe, when they did that introductory $6. I think it was more like six years, 2019, before it was pre-pand-down. Now, I made a prediction on CNBC, and I'd like producer clot to find it. I made two really spicy predictions when I was doing my CNBC rounds. One was they got to get rid of Tim Cook because Apple cannot come out with innovative products under Tim Cook.

I want to get that call. I'm going to talk about that on Friday. And maybe a little mini victory for me. It's done great in getting an extra $3 out of every iPhone, every iteration. But I think I predicted that there's a possibility within the first 10 years that Disney would eclipse Netflix. and that it would certainly be Netflix, then Disney, then whoever else. So core Disney plus subscribers are at about $128 million. As of the end of last year, the last time we got an accurate Hulu count,

they had an additional $52 million. So put them both together here, close to $180 million, well behind of Netflix's $301.6 million as of August 2025. Also owned, and big news out of ESPN today, that they sold 10% of ESPN to NFL. To NFL. ASPN Plus has 24.1 million subscribers. That sounds about right.

So now we're at 200 million plus. Yeah. In six years, Disney has achieved 66% of Netflix's 20... Oh, I got it. Almost 20-year-run. In 2017, when Disney first announced plans to launch a streaming service, Calicanus told CNBC, quote,

it will be very easy for them to get tens of millions of people to subscribe, and he said Disney is the one company that could compete with Netflix and streaming content from Amazon Prime. He predicted the top streaming platforms will be Disney, Netflix, and Amazon. We all understand the importance of a crisp, memorable, easy-to-spell domain name. One of those names you can say over the phone and people know how to type it in without asking you the spelling. But let's get real. The good ones are either taken or there's some poacher who's holding it and waiting for some huge payday and they don't reply to you, even if you want to pay for a premium domain. You don't want to use up all your runway on a domain name.

That's just the truth for a startup. You want to put that valuable cash back into your startup's operations. So you should consider this, a dot tech domain. You can get a clean, crisp, super memorable name for your website and company and signal out loud to your customers and investors. We're a tech company that's instant branding for you. That's why over 500,000 founders have collectively raised over $5 billion in investment, building their companies on dot tech.

So skip the hassle, head to www. Dot get. Dot Tech slash twist. Or go to your favorite registrar and grab your dot tech domain today. That's what Claude gave me. 2017, when Disney announced, when Disney announced, that was when they first announced Disney Plus, it didn't even launch for two more years. So I need a victory last.

I need a victory lap. I'm going to go back on CNBC to take this lap. But this is big news. And I also said, I think, on that, that Disney Plus was missing the hugest opportunities ever, which is to make Disney Plus the singular place for all Disney services. The fact that they have not listened, I need somebody to get me a Bob Eiger interview. And if I ever had another job, it would be a studio head. I would love to run Disney. I'm putting my name in the ring. If this happens, I'm folding up shop, you're all coming with me to be on my Disney CEO jaunt. So I would like the Disney. I'm throwing, put me in the, as I said, put me in the, put me in the game, coach. Yeah. I would love to be, a little internal reference for the Twitter. I would love to be CEO of

Disney. Heck yeah. Oh, here's what I do. Okay. Day one, Disney merch is a tab in the app. When you're watching a show, when you get to the end of the show, it shows you all the Disney merch and says, since you just finish Lilo and Stitch or, you know, since you just finish watching whatever, TV show, here's the Fargo merchandise page. And since you completed season one, you get 20% off. If you complete season two, you'll get 30% off. And if you complete the whole series, you're going to get a free t-shirt, or whatever it is. I don't know. Something. Then for Disney Parks, Disney Parks, if you subscribe to Disney Plus, you get first shot at the premier dates at Disney Parks, the holidays.

The holidays are for Disney Plus subscribers. You can't walk up and buy a ticket for those days. You must have a Disney Plus subscription. And we give first shot at those to the top. the top longest tenure Disney Plus subscribers. So if you have a Disney Plus account for five years, you get to buy tickets first on the holidays, then second. So you get a pre-sale, a pre-sale at the beginning of the year,

and we collect the money ahead of time. It seems it's almost like Amazon Prime, but it's like Disney Prime. You're joining their like heavy users. Correct, correct. The Disney Adults list, yeah. Correct. And everything is in, so there's a Disney World app, right?

Yeah, oh, yeah. kicking this. You have to have the Disney app now. If you go to a Disney park, it's all through the app. You basically don't have a choice. You have to download it. And we're starting a Disney Miles program and a gamification. Well, they have cruise ships too.

Yes. So as you go and do these different things, your Disney Plus account and your karma in the Disney Plus account grows and your badges grow. So when children go to Disney Plus, you put your kids names in. They get to have credit for which rides. they want on. They have the percentage complete they are for California adventure, percentage complete for Disney World, percentage complete for Disney Shanghai, et cetera. As you move it up, you learn more and more. Here we go. All right. Thank you. Let's drop off our friend, producer,

I'm sorry, editorial director, Lon, thank you for coming on. And that was a, that was a brutal call I made back in the day, Alex, when I said Tim Cook should, because, you know, the stock went on a rip. My point was, the stock can go on a rip because he's a bean counter. And sure, it's going to be a good bet on the stock, but it's not going to be a good long-term bet technologically if the person running the show is a bean counter. And sure enough, here we are. And Apple cannot build a car. They cannot build a VR-A-R headset. And they cannot build a goddamn AI assistant. So, like, every major New category since I make these comments, which I'll talk about Friday, seems to have been a whiff. Okay.

Should we go to our gas? I'm going to actually want to wrap up here. Definestration. Russian accident. Now, earlier this week, Jason, you saw a video of what appeared to be yourself doing the All-In podcast, talking about a company. And you had this amazing moment when you said, did we talk about this show? Is that actually something that happened? So, Zach, we'll talk to you just a second.

But Jason, do you want to show, do you want to show the original book? I think we should just show like the first up until my part of this and then we can pause it. But this was so crazy because people were like, oh, what episode was that? And I was like, I don't know. I think, did I say that? Because I do seem to remember people doing, you know, sending AI jobs to Manila, wherever. And they were actually using, pretending it was AI and they were brute forcing it with humans. So I was like, I did.

Did we talk about this or not? So, play the clip. Here's the clip. We have a confession to make. Brilliant. Y'all, we got a situation. Sources are calling the biggest tech scandal since Soham Perak, a YC startup called Adam,

that creates 3D models from prompts for game developers, has been exposed for allegedly using a human employee named Adam instead of artificial intelligence to manually edit those models. Wait, so game developers thought they were using cutting edge AI, but it was just some dude pulling all-nighters. It's sleeping. Bro, if that's true, it goes on from there. Basically, these guys hacked the system, and people thought that this was real.

And so I'm like, wait a second. And I start asking, like, did we, do I know that? Because there was another company. Ask Pruders Klau, what was the other company that was doing this exact thing? Builder AI. It was builder AI. Okay. So this is, as far as I thought maybe we were talking about builder AI, but then I see this

Adam, so I see this young gentleman, Zach, dive. Zach, welcome to the program. Thank you, thank you. And so take us behind your idea here. Take us behind the idea here, because this is sinister and brilliant and all those great things. Go. How'd you come up with this idea? We actually did a first for April Falls, where we made an April Fool's prank,

where we put up like a fake TechCrunch article and said that, like, the AI behind, Adam was actually a guy called Adam. And it went fairly viral on X. In fact, we even had some foreign investors call us and, like, freak out, but I was like, it's fine. And then, yeah, then we decide to do it again. And with the new AI video, as you can tell, it's getting pretty close to real. But, yeah.

Okay. Which tool did you use to make these fake AIs? I mean, right now you can use a mixed tool, so you can use, like, you can use 11 labs, clone someone's voice, you can use lipstick models, and then VO. We actually use the company, shout it to them, YZULads, who are really good at doing the AHAVT. Okay, and you're a YC founder. Yes, winter 25. Congratulations.

Not easy to get into the program, and YC does look for pirates. They look for punk rock people who will break the rules. I've been there. This is a minor infraction. I was an investor in Uber, Robert and countless other companies. that bent rules, you know, and we're even more punk rock than you, Zach. But I saw this and I was like, hey, Zach, what's the story here? So I DM with them, like, hey, listen, people are confused.

And you can't do this kind of stuff to the point at which you're confusing people. Now, I've had people do, there was a all-in AI that a kid named Edward did from a company called Podcast AI that I wound up investing in. And he did this digital all-in one, but it was so bad back then. and we all knew it was fake. The problem with yours, Zach, is you did it too good. The tools are too good. People were actually confused. So I said, Zach, you can't do this.

You can't take me out of this. I will say most people would think probably a joke that a guy called Adam is doing. Probably. Yes, except it's been done. So maybe, I mean, listen, I don't, I don't describe any bad intent here, but you thought people wouldn't be confused? I would say the majority were not confused. But hey, you're confused, a few people confused.

But you explicitly did it with the tech crunch one to confuse people. So let's call it what it is. You're hacking media to confuse people to get attention, correct? Sure. Sure. Okay. So I told Zach, I was like, Zach, you can't do this kind of stuff. Take me out of it because I don't want to be a spoil sport here.

But this is causing confusing. And also, I do endorsements. I have an endorsement with Athena. So, like, if you can use me as an endorser, that messes up my business. So I got to nip this in the bud because literally in the last, this year, I've had no less than 10 startups

use me in their ads, including my friend David Freeberg's team cut me talking about SuperGut and then put me in a paid ad campaign. You didn't put any money behind this, did you, Isaac? You didn't do a paid ad campaign, did you? Be honest, I know if you did. We didn't do a paid ad campaign.

The ad was free. even making you a Muppet was free. Exactly. So then Zach's like, okay, fine. And I was like, and please take me out of the previous one. So I was like a little hardcore with Zach. But Zach was a gentleman. He knew he was in the wrong, I think.

And he fixed it. But then he decided he would dunk on me, well played. Here you go. Let's play the next one. I have cut, my dear friends, to the place where Jason arrives in his new get-up. I think this is a really good fashion for you, Jason. I like it. I like it. Has been exposed for allegedly using a human employee named Adam instead of artificial intelligence to literally edit those models.

Wait, so game developers thought they were using cutting edge AI, but it was just some dude pulling all-nighters. Even better. So the Muppet thing's been done a bunch, but yeah, so that was your way of like giving me a little counterpunch, Zach? You wanted to be a little spicy with J-Cal? Yeah, yeah, I mean, it got me on the podcast. So what's the status of the company? I mean, explain. So well done. media. I give you credit for that. But in all sincerity, please don't use me in ads. And there's a bigger issue. Now there's crypto ads. I don't know if you've seen this, Zach. Have you ever seen me or Sachs or Elon or Chamoth doing crypto ads on like YouTube and TikTok on live streams? No, no, I haven't. The only thing I will make you into Jason is a 3D model. That's the only thing.

I mean, okay. I mean, there's some amount of fair use. Just there's a thing called right to publicity. I sent you this link because I also, there was a teaching moment because I was like, hey, Zach, if this is going to become like a regular thing, just know right to publicity is even if you parody a person, you still need to get permission and can't confuse you get up with all kinds of disclaimers. That's why when there was like a group of advertising, I don't know if you remember this, Alex, on radio where they would use celebrities' voices and they would use like Arnold's voice or whoever, some iconic voice. And they'd be like, celebrity impersonator, not the actual Arnold Schwarzenegger. Oh, yeah, yeah, yeah, yeah. And they would be like, I love to eat the superhuman bars.

They're incredible. So I just was like, Zach, just known. You can't, like, do this as like a, you know, 100% of the time thing. You know, one time's okay. But tell me about the business and what you guys are doing. Since you got yourself here, you can create a little bit of a ruckus. And now everybody's donkey. Oh, Jake L has no sense of humor.

Okay, fine. I have a sense of humor. I mean, it's punk rock. But just don't do it as a programmatic thing. Which one did you think when it was funnier, the first or the second video? Well, obviously, the second is better. But these deep fake crypto ones are the ones that I'm really concerned about. I had somebody tell me in my DMs that they had bought $10,000 worth of like

j-coin or something in a crypto scam and they wanted their money back. And then they sent me pictures of the DM. So somebody created fake ads using AI. Then they DM from fake accounts on like Instagram. These Instagram accounts, I'm not aware of because they download my whole Instagram account. They create a copy and they block me. And they block you. So you don't know that they're doing this stuff. So there is like, just so you know, Zach, why their sensitivity here is like, I don't want my, you know, people who listen to the show and the listeners to get scanned. And this is like part of that whole genre of using AI to do this. So there's like a real thing here. It's not like I'm just singling you out. But tell us about the company.

Yeah. So we're Adam. We're an AI powered catator and 3D modeling tool. So basically, like, the model of the company is that you can just speak anything into existence, right? So I could say, make a snap fit enclosure for a Raspberry Pi and it'll generate the CAD model with a subset of parameters. Or I can even say like make a figurine of Jason holding a cup of CCP coffee. I could 3D print that and put it on my desk and show it off. Yes, make me into your comrade. Jason, can I show you what it looks like when you use it? We have a demo for you.

Oh, great. Awesome, man. Go run a demo for Zach. Let's get them some customers. Who's it for, Zach? Who's this for? Is it people making video games? Is it for people who are like traditional CAD people or you're trying to do what Canva did?

and make CAD something that everybody can do and kind of induce an audience to exist. Yeah, I think where AI is right now, we're bringing the floor down. So what we're allowing people to do is people who really want a 3D model who don't necessarily have the modeling skills, a bit like Canva,

is they can just go in, describe exactly what they want, and then, you know, 3D printed or put into their video games. And then we also have professionals, so we have some AA game studios, using it to sort of make assets for their games. Oh, they are making assets. Yeah, I did hear that,

A lot of folks are now making assets in real time using AI too. Is that part of the vision where you could actually have the tool built into the back end and world create and like insert things in real time? Yeah, exactly. Use your feedback. I think the big thing, I mean, a lot of the asset generators out there, you just like put an image in or put a prompt in and you can't edit it. Ours is the only tool that is like chatyp tea, right? You can keep conversing with it, right? So I could have you holding the CCP coffee and then we could, you know, have the same thing.

and having you, you know, having a communist flag as well, so we can keep editing it. Where are you guys based? We're in SF in the marina. Well, congratulations. You raise money? We were able to raise money on this idea? Where are you at? Who's the lead investor here?

Yeah, yeah. So we, I mean, we're lucky enough that we had, you know, we had a launch during YC that was pretty much one of the most viral YC launches of all time. So we raised like a very healthy seed around. We'll probably announce it in a few weeks or so. Oh, great. Awesome. And then, yeah, so we basically, during YC, we made the very first, like, sort of web-based

textic calendar. So some people call it like Vesel V0 for CAD. Even Guillermo called it C-Z. Then we built this 3D acid-generator tool in the last, like, two, three months, best asset generator tool in the market. And now we're going full-fledged on sort of AI CAD research. But Alice can show you a little bit. Here's an example adjacent that I made.

So my prompt was a model of an elf wearing a Lorna Shore T-shirt. and I picked that because heavy metal bands have very, very complicated logos, ready to jump out of the tree. And here it is. One shot of this thing. Isn't that crazy cool? I would actually play a game with this guy in it. I think it's fantastic.

Awesome. Hey, since we have you on, Zach, how do you, we're talking about IP. How do you think about IP in these kind of tools has been a big issue with output, right? Obviously, training data is one thing, but output, like if you ask it to make a Jedi or a Disney character, will it do that, or do you have to, like, start thinking about those kind of issues now? Yeah, I mean, you know, I feel like that's a problem for the big dogs out there. If anything, like, you know, initially we were content moderating it, but we found that users wanted to generate different IP, and I guess, like, since the models are slightly

different and adjusted, we kind of allow you to generate any single character you can think of. So your favorite movie character, you can generate a figurine, print it, or, like, put it in your game, so, so, yeah. Awesome. All right. So in the tradition, in your interpretation of IP, no problem using other people's IP for the output.

Not yet. All right. So there's a lot of lessons here for you about IP usage. I would not let people output other IP things. We can make a video game with you in a Jason. Wouldn't that be sick? What's that? We can make a video game where you're like walking around and stuff.

We could have you. That would be sick. Yeah, we could have you like slashed down the CCP coffee. I love it. I love it. So is there any room in the seed round now? I feel like I need to get my beak wet here. What's going on with the seed round?

What's going on? Is there room for J-Cal in the C-Rown? We could let J-Cal in if we get expressive publicity rights. We can deep fake you whenever we want. I can make giant 3D-printed models of you. I'll put it on top of the power of my notes. All right. Well, send the 50 Bips as an advisor agreement over, and we'll get that sign straight away,

and then let me know about the term sheet. Maybe we'll pop in a quick hundy, and we'll be along for the ride. But I wish you great success with it, and yeah, it was great to meet you and have a little back and forth with you. All in good fun, folks. All in good fun.

All in good fun. All right. Peace. Check us out at Adam.com. Oh, yeah. Adam. N-E-W. Dot new. Adam.

And if you want to generate Jason in 3D and post it on Twitter, you can do it. Subdomain? N-E-W? N-E-W, yeah. It's like bolt. Holy cow.

That's a neat domain. I like that. Yeah. Zach continued success and great to get to know you and I will see you on X, sir. All right, well done. I think it'd be fun to just cut this off before it becomes like a palmer lucky situation.

His enemies accumulate. And this kid, Zach, is just, I know a punk rock founder. Like, I kind of, this is my speciality is finding the punk rock founders because I was kind of one of those back in the day. Because the second, I was like, hey, you know, maybe you can't do this kind of thing. He's like, oh, yeah, let me escalate this because I can get more views. And I'm like, yep, that's what I would have done when I was your age. That's exactly what I would have done as a 25 or 30-year founder. You told me to stop.

I do it twice. You told me to stop again. I do it four times. You tell me a third time, then I'm probably going to tone it down slightly. But in all seriousness, this will become an issue over time. I don't recommend doing this as, for people listening,

don't ever take a known person's talking about your product and put it in an ad. Because this recently happened, actually. I think it was Huberman. Look up as producer Claude about Andrew Huberman doing a lawsuit based on people. I think it was Tim Ferriss, Andrew Huberman, and Peter Attia. And one of those three or multiple of them had to write a bunch of cease and desist letters. And I think it was Huberman because people were taking Huberman who might talk about a compound on like Joe Rogan. And, you know, he might talk about, I don't know, like vitamin D.

or something. And then they cut him talking about vitamin D and then put their supplement ad on it. But this was like not just, you know, a startup, you know, and their seed round doing it on Twitter precociously. This was programmatically. They were buying millions of dollars of ads and using his likeness in it. And they, and then somebody did it to Joe Rogan as well. Now, if you do it to those two people, they're in the business of their image. Like I think, uh, you know, you would have Joe Rogan reading ads for these people. So now you're circumventing his ability to run his business. And that's when you lose in court for a big dollar number. And you would have to go back and pay for that violation in a major way. Now in this one, you could argue a little bit of parity,

no harm, no found, there was no damages. But with Huberman's case, Andrew Huberman's case against a nutraceuticals company or something, he can actually claim significant damages because he has advertisers as well. So we're here from May of 2024, Jason, is an Andrew Huberman post from Facebook in which he says, unfortunately, many ads are currently running on social media. They use my face or a drawing of it to sell it. He sent cease and desist letters. And then he lists here are actual sponsors down below.

So yes, this was Huberman. You were dead on. Yeah. And I don't know if it actually went to a lawsuit or not. But this is going to become, you know, young people have a different view. And technologists have always had a different view of IP copyright and kind of fair. of this stuff. And so in one instance where somebody did this programmatically and paid for it, they were like,

we're just fans. And I was like, that's fine, but you understand this is our business. And then, unbeknownst to me, they went and bought some ads on the Sweden startups. I was like, wait a second. Is this the same company that was stealing? They're like, yeah, they felt bad about they bought these ads. Now, this was a company doing tens of millions in revenue. So I was like, okay, that's a nice gesture, sure.

I didn't ask them to do it. But I did think, gosh, I always think when a founder is doing something. then close to the line, I should just give them a little bit of like, hey, be careful, which is actually what I did in the Parma Lucky situation. I was like, you know, don't buy covert trolling ads because it could blow up in your face. Anyway, I may have said it in a spicy way, so I'm sorry if I said it too spicy, which I probably did. I was a little spicier back in the day.

But they've got more news in the docket. Let's get to the docket. Is there anything more news for us? Because there's a lot of major news today. I saw that, I think the biggest one is opening. I dropped two open source models. Wait, I thought they were out of the open source business. Pause, not open source, open weights.

Open weights, not open source. Okay, that's totally different. But still much more open and as... So you can't see the source code, but you can change the weight. So maybe you could explain to the audience what's going on here. Yeah, okay. So I knew this question was coming. So I spent a lot of time trying to figure out how to best respond to what the hell is an open weight.

Yeah, sure. First thing at the top level, you can down. download these models and you can run them locally. You don't have to interact with them via an API or an inference provider. You can run them on your computer at home. Or if you have a serious GPU from Nvidia, you can run the larger model there. Open weights is not the code. So you cannot download the code and actually extract the individual lines.

But what you can think of is that weights are a bit like memory or the knowledge of the app once it was trained. And because they're open, you can see what Open AI did. This is dramatically more transparent than the most recent generations of Open AI models and it is, I think, driving some change. So for example, XAI Jason, in the wake of this announced, Elon said this, I think it was today, that they're going to open source, maybe open weight, GROC 2, after having open source GROC 1 back in the day. So a good move by open AI, you love to call them closed AI.

Here they're making a good step in that direction, but it's not open source. And so people are mixing those two a little bit. And I think it's important to make the distinction. Okay. So in a way, when you train these things. you might wait certain information over others, I think is another way to say it. And so, you know, like maybe this is not correct. I would like to have somebody really figure out how to explain this.

We understand that there's parameters and all this stuff. But how do you weight different things as being truer or more important, I guess, is how you could think about this. So if you were going to do something specifically with this model and make a cursor AI competitor, you would maybe tweak the weights. Maybe you think, oh, the stuff we scraped off stack overflow is more important. Or this GitHub stuff is more important or this GitHub ranking makes this thing more important and slide the weights around. It's always been known that Microsoft owned the source code and the weights in the Open AI relationship where they bought like half

the company or whatever it is. So this feels really interesting to me because you can also run it on your local computer. And we knew this was coming. and what this means is, when you start thinking about IP or privacy, this is going to have a big impact on it. If you're doing something like, I don't know, I'm taking, you know, pictures of my grandparents or whatever, and I'm making them into videos like people are doing. Sure. Do I want to upload those photos to open AI and give them those? And then the next person who makes pictures of a grandpa, it's my grandpa.

You know, you get the idea. Yeah. And then on a privacy basis, if you were doing deep analysis of your documents, do you really want that in the cloud with somebody else? And then somebody else, you happen to index, I don't know, salaries, bonuses, legal documents. You know, this stuff can get pretty gnarly. And then it's training their model. You will have a large language model in the operating system on your phone, on your computer. This is where Apple, which has been just totally. totally disgracziad when it comes to LLMs, could actually maybe come from behind. If they were to take one of these open models or work on one and then incorporated into their operating systems of which they have billions of users, oh, Lordy, that would sync with,

and I predict they'll do this, I predict Apple will use one of these models encrypted on your devices, so you never have, to use a cloud-based service and be subpoenaed for what you do. And when you choose to subpoena Apple, because there was a terrorist attack at, was it San Bernardino and they wouldn't unlock the iPhones?

It was San Bernardino, I believe, right? And they were like, oh, there was a terrorist attack. Love to help you, CIA, FBI, everybody, but we don't have access to it. That's a bold thing to do as Apple, right? like terrorism, you know, explicit images of miners. Like there's a small cohort of things that any reasonable person would say turn it over. But Apple has taken the stance, quite bravely, I will say, of saying we don't have access to that.

And then giving you that information of the terrorists would compromise billions of people on our platform. Therefore, we're going to make this higher level decision that ankeling, slowing down, the next terrorist attack and finding out where the terror cell is is more important to Apple. It's more, it's, it's a, it's a, that they're willing to pay the price of another terrorist attack occurring from a sleeper cell, then compromising billions of people's, um, privacy by having a back door. That's a hard, hard, hard, hard decision to make. This just came up. This just came up, Nvidia, uh, put out a, hard, hard, hard decision to make it. Yeah, this just came up, invidia, uh, put out a,

a blog post yesterday or today, Jason, I forget exactly which. And they said there are no kill switches and no backdoors in Invidia hardware. Invidia is currently trying to get back into selling its H20 chips in China, working with the Trump administration on getting permission to do that. And I think China is a little bit worried that what they're going to get is backdoor chips, just like, you know, the U.S. would worry about a Chinese company sending compromised chips to the U.S. And so they're making a pretty clear stand about that. And then also we've seen the U.K. work recently to try to get companies, again,

to break encryption and provide back doors. And Nvidia said in its post, don't forget the, was it the clipper chip that had the compromised back door that led to all the security flaws? And so in the case of Apple, I feel like what they're doing is they're just saying encryption is or is not,

and there's no middle ground to offer up to law enforcement. I'm sure that if Apple could find a way to have encryption be compromised in a way that was safe, which I know sounds oxymoronic, they'd go for it. But I just think they're being technologically honest. So that's my take. Of course we care about children.

Of course we care about stopping terrorism. But, I mean, either we haven't cared about everybody's privacy. A right to privacy is the term I just use. That's for public figures, having the right to publicity, actually, is what it's called. But a right to privacy is even more core than, you know, what celebrities have to deal with. And, oh, I was correct. I see here, producer Claude lets us know that Tim Ferriss successfully got an injunction. Very good.

Tim Ferriss, in a company he owns, Cresa Performance obtained a default judgment against defendants, alleged to have improperly used his name and likened us in connection with a fraudulent scheme. According to the case, Alliance Publishing and Peggin Twitty perpetuated a fraudulently get-rich scheme in which they published a flyer asking targets to mail $97 and $100 to a dealer and whatever, blah, blah, blah, blah. So anyway. People are scammers. I mean, scammers are out there. It's like, that's part of becoming a known entity in the world is that people will try to leverage

your followers into some dark place. Okay. On the open AI point, though, just a couple more small things. I want to make sure we share with founders because I think this matters for what they're building. So there's two models from Open AI you can play with. There's the 220 billion parameter model and then a 20 billion parameter model. One's more tuned for data centers. One's more tune for home use.

There are lots of fun. The metrics seem to be by benchmarks pretty good. I've heard some people say there's a lot of hallucinations, but it's certainly, I think, having more open models in the market is good. And Jason, on the show, we've talked about how when we think about open source AI, it's really a Chinese product now, as American companies mostly go closed source. So here is a rejoinder from the West, if you will. Yeah. I think that's very important. And then there's two other, there's a couple more things about AI models.

And I'm going to just run through these. But I think for all the founders out there who are building and are curious about what they can build with, here's the latest. So the other thing is Deep Mind, which is part of Google, released a thing called Genie 3, which is a world model that has much better context maintenance. So essentially, if you're playing inside this world model, Jason, and you turn around, it doesn't forget what you've seen, which means that it's now much more useful, much more high fidelity. It's just great. I'm not going to go through a demo today, but Genie 3, if you want to take a look at that. Anthropic dropped a very incremental improvement to Claude 4 called Cloud 4.1. again, the benchmarks say it's better, but it's going to be more matter of taste.

So I'll be curious to see what people think about that in the coming days. Then the big news is that tomorrow, Open AI is going to release GPT5. Oh. Well, this is the big one. Wow, that's the shebang. Maybe we should do a live release of that. That's incredible. What do people expect in the chat GPT5?

I heard a rumor, no hallucinations, more reasoning. What is the expectation here? Have they tipped their cards and said, here's what's happening? And when was the, when was chat GPT4 launched? I wonder how many months between those. Producer Claude, can we get the gap from GPT3 to GPT4 and then GPT4 to tomorrow, please? So we can compare those.

That'd be lovely. The most important reporting that I saw to answer your question, though, Reuters spoke to several people who have had access to GPT5, didn't share their name because they're under NDA. But they specifically said, it's better at coding, it's better at Reutting. it's better at reasoning. But critically, of course, it's going to be better. The question is how much, right?

Sure. They said it's not going to be as big of a jump as we saw from GPT3 to GPT4 from four to five. So they're downplaying. That's interesting trying to manage expectations. So GPT4 came out in March of 2023. GPT3 came out in June of 2020. So that was just under three years. This is just over three years, just over two years.

So actually, it's a little bit faster from four to five than three to four. Huh. Who would have thought? Interesting. There's been a big kerfuffle between Cloudflare and comment. And you emailed the found, you emailed the press department there. And I CCed the founder. And we got kind of the backstory here on the perplexity versus Cloudflare. I don't know if it's on the docket. Did I not add Arvind to that email? I did. You probably didn't, but I did because I was like, Arvin should know about this. I meant to. My bad on that one. Okay. So anyways, no

apologizing on Twist. The backstory here is, mm-hmm, mm-hmm. Getting there, getting there. A while ago, maybe a month, Clonflare announced paper crawl. This was a big deal. We talked about it on the show. The idea was if an AI model going out of the internet to collect information on behalf of a user query wanted to come to Jason callakhanis.tumbler.gif, you could say,

no, you have to pay us a cent or whatever to come, take our information and bring it back to your user. I think we said this was pretty reasonable. and an interesting experiment in economics for the internet. Time passes. Paper crawl has been in close beta now. They're working in publishers. We'll see what it looks like when it comes out.

They have not responded to my notes asking how that's going, but we'll see. So, Perplexity, sorry, Cloudflare comes out this week with a post, essentially accusing perplexity of very bad behavior online. They said that, look, you know, we set up a test website that had, you know, a big stop sign for AI, and then we use Perplexity's models to take a look at this, and we found the information, and accused them essentially of being bad online citizens. And perplexity fired back with, you guys don't know how technology works,

which was an interesting moment because here we have two very different perspectives that don't seem to be talking in the same language, Jason. So maybe you can explain what you mean by they're acting in good faith because I think that's an interesting, important point here. Okay. So you never let a good argument get in a way of reality because both companies now are being talked about.

which I think is part of the point. Yes. You can send a crawler out. There's many third-party services that you can fire up as a developer to go crawl websites. It will fire up a web browser, a virtual machine,

and it looks like a user agent, right? So it looks like a human being is browsing, say, something that doesn't let you scrape it, like Reddit or Quora. Like you ever go to Quora and you try to click on an answer and it gives you like maybe the first 500 words

that says, hey, you got to log in to see this. I hate that. Well, but it's the purpose. example of somebody trying to protect their IP from these crawlers. Absolutely. So what Cloudflare is basically saying is, perplexity is trying to circumvent that. And I can tell you, all the LLMs have tried to circumvent this.

But now we're starting to get to the point where lawsuits are flying and something's at stake. And that's why these language models now need to behave because Disney, New York Times, are suing. And we've got actual court cases. So people are being more thoughtful about this. It's amazing what Cloudflare is doing by saying, hey, if you want to crawl our websites, that's okay. Here's the rules. Here's where you send the money.

And if Cloudflare, what does Cloudflare take? 10%. I don't know what their Vig is. I would really love to know that. I don't think they've released that. But if it's more than 10%, we're going to take them out back and whack them with sticks. I think 10% feels like a reasonable Vig.

I would pay them that. I don't think 30% would be. But 10% seems reasonable for them to manage the buy and sell side. And, you know, 10% plus. your stripe fee, so they get a full 10%. I think that would be reasonable, actually, maybe. You're literally describing the substack model, and I think that's fine.

Yeah, it's like enough for them to maintain the service and pay for their team, and it's not predatory in any way. It's kind of genius, I have to say, it's a really unique way to do it. It empowers the content creators, and it gives a programmatic way for LLMs to ask for permission. Now, in comes the rub.

We've been talking about the browser's role in this. You could, and we talked today about OpenAI having a language model you can run locally. You're allowed to do whatever you want on your desktop with other people's IP. So if you paid for, well, let me should pay for it. So if you bought my book and you decided to take screenshots and you decided to run analysis on it and you bookmarked it, more power to you. As an individual, you paid for it, you can remix it.

Just like you take the physical book, you could cut it up, put it on your wall, make a copy of it for a backup, but as long as you don't distribute it, right? So if you want a photocopy in my book, so you have a backup, and you have it in one house and the other in case the house burns down, God forbid. I mean, it's nonsensical because you could get the bound book for the same price as a photocopy. You get the point.

Browsers are not detectable. These third parties are, and I think what's happening is there might be some confusion that comet users using the browser are doing queries. So when I showed, hey, I'm doing a United Airlines, you know, task and it goes and it fires off on my local desktop, the browser, to go do things. What I suspect is happening here is when I just told you I had Slack summarize the channel

using the comic browser powered by Claude, how does Slack look at that? It looks at it as my user agent. It looks at it as my desktop. It doesn't look at it as a back end scraper. Now, if you took that content and you trained your LLM on it, you would be using me as a proxy to backdoor into stealing content. Yeah, okay. So let's use the core example. Cora says, hey, you can't use this in your language model. But you and I go on there and we say, oh, give us all the questions about Cormats and

we start reading them. We say, oh, get us the best answers on these Corvettes and teach us about the whole corpus of Corvette history or whatever. And we build this whole document and deep research on it. And we've queried, you know, over a number of days, a thousand pages of Corvette information and history and lore, that Cora owns. Cora owns that. Even though the users made it,

they made it with the understanding it goes into the Cora corpus. And Cora said, you can't have this. Well, what if that then fed the perplexity language model? Well, the founder of Poplexy said they're not doing that. So whatever you're doing is not happening.

So there might just be like they're talking through each other, perhaps some misunderstanding of the user agents, but this is where the details matter. Details really matter. And that's what I show like this week in startups is about. we get into the very nuanced, granular details of these kerfuffles.

And this Donnybrook is valid. It's an important one. It's very important. And I think the way, where I come down on this, putting aside the technical differences of whether or not Cloudflare, quote, misunderstood 20 to 25 million user agent requests that are not scrappers, according to perplexity's blog post. How many? 25 million? Yeah, 20 to 25 million user agent requests are not.

scrapers. Anyways, that's from the long perplexity post about this. We will sort this out. But what I'm worried about is this. The idea that if I go to, let's say, Chad GBTBT, and ask it a question, and it pings 47 websites, collects the information and brings it back to me and gives me a summarized paragraph. And then opening eyes says, well, we're not doing that.

Alex says, not really. There's a automation and scale differential here. And I tried to talk about this for something that I wrote. And I was trying to think of the analogy as food. So, Jason, if you come over to my house, you can eat anything you want. Open the pantry, the refrigerator, the freezers, steal it from the kids. I don't care. There's lots of food.

Come over, eat. But if you sent a robotic courier to my house to collect food for other people, the centralized application. It's the scale of what you're doing it. It matters. And the automation, because it's not one-to-one. And so I'm concerned that people are saying, as long as a user request it in some tenuous capacity, anything downstream from there counts as

Alex requested or Jason wants it. And therefore, it's okay. Yeah, and the other thing is these websites will also block you if you do unnatural behaviors. So people for all time have been creating local index like Google does. And so they'll just have their browser open 100 LinkedIn pages and start scraping. And there's infinite number of tools online you can get to do a user agent. in your browser to spam people with in-mails. And you're paying for in-mails.

There's a throttle on. You can only send so many, but there were tools in the early days to just automatically like posts on Twitter, automatically retweet stuff, and create all this garbage on the internet. And so it's up to the website owner as well that if somebody does more than 100 clicks in an hour,

to pause them and say, hey, we noticed you did 100 page loads in an hour, hour, a normal human being can't really do that. So what's going on here and pause your account or freeze your account? And sophisticated people like, say, Crunchbase or the Wall Street Journal or the New York Times, anybody who's got a subscription product or Quora, Stack Overflow, they build these things in to know a user or what appears to be a user is doing something with malfeasance. This is incredibly niche, but an important topic. Okay. This has been another amazing episode of this week in startups, my amazing co-host Alex, Lon, X.com

slash Alex, X.com slash Jason, X.com slash lawn, X.com slash TWI. Startups, we'll see you all on Friday. Bye-bye. Bye-bye.