This Week in Startups - Did OpenAI Steal the Navier-Stokes Solution? | E2335

Episode Date: September 9, 2026

This Week In Startups is made possible by: Northwest Registered Agent - https://www.northwestregisteredagent.com/twistdomain NetSuite - https://www.netsuite.ai/twist Vanta - http://www.vanta.com/twist Check out a full transcript and summary of today's show, created by Plaud: https://web.plaud.ai/s/pub_c2b45bfe-abad-43ce-b7ef-41118f55f738::Vo2MH6PuXBzTCaxKRDjHH0zu8FbzgDpQL5OnfBfMzLP22CQRxciqE74Mq4YDD-LwYXGZCazgIeglPuwC Today's show: An Anthropic researcher quit this week, saying both leading labs are gambling with everyone's lives. His coworker chimed in and predicts there is a greater than 10% chance that AI will end humanity IN THE NEXT 10 YEARS. Jason and Lon take it to Yohei Nakajima of Untapped Capital, Ben Lerer of Lerer Hippeau, and Rebecca Lynn of Canvas Prime, who cannot decide whether it is the greatest PR strategy in history or some kind of mass psychosis. Learn why Jason says founders should never hand a frontier lab their proprietary data, whether or not they're offered free credits. PLUS, who really solved Navier-Stokes, and what does the OpenAI–Buckmaster fight mean for anyone doing real work inside ChatGPT or Claude? Guests: Yohei Nakajima on X: https://x.com/yoheinakajima Untapped Capital: https://untapped.vc/ Ben Lerer on X: https://x.com/BenjLerer Lerer Hippeau: https://www.lererhippeau.com/ Rebecca Lynn on X: https://x.com/VCRebecca Canvas Prime: https://www.canvas.vc/ Relevant Links: Jacob Coxon quits Anthropic - "gambling with our lives" https://techcrunch.com/2026/09/09/gambling-with-our-lives-anthropic-researcher-quits-warns-against-self-improving-ai/ Evan Hubinger, Anthropic's Alignment Science lead, on X: >10% odds within a decade — https://x.com/EvanHub/status/2097497037956891126 Future of Life Institute — the 2015 Puerto Rico AI safety conference Jason asks Lon to pull up → https://futureoflife.org/ Meta debuts Muse (Axios) —https://www.axios.com/2026/09/08/meta-debuts-muse-personal-ai-agent Harmonic — https://harmonic.ai/ China blocks Meta's Manus acquisition (CNBC) —https://www.cnbc.com/2026/04/27/meta-manus-china-blocks-acquisition-ai-startup.html OpenAI fought dirty— https://techcrunch.com/2026/09/08/openai-fought-dirty-on-career-making-math-problem-says-nyu-mathematician/ Savvy Wealth — https://www.wealthmanagement.com/ria-news/savvy-wealth-raises-100m-valuation-hits-600m Augmodo — https://www.augmodo.com/ E2B — https://e2b.dev/ Daptic — https://www.daptic.com/ Timestamps: 0:00 Jacob Coxon quits Anthropic: "crunch time" and "endgame" 4:53 Evan Hubinger: >10% odds AI kills all humans in a decade 11:22 Northwest Registered Agent - Got a new business idea? Northwest Registered Agent helps you bring it to life. Get a free domain, email, phone number, and more - with no purchase required! Learn more at https://www.northwestregisteredagent.com/twistdomain 12:23 "You have succeeded in scaring the bejesus out of Americans" 14:59 Jobs, the wealth divide, and which industries get wiped out first 20:07 NetSuite - For the first time ever, you can try NetSuite Next for free. If your revenues are at least in the seven figures, go to https://NetSuite.ai/TWIST 21:09 Savvy Wealth's $100M round 26:52 The Kalanick story and why Jason built a syndicate backstop 29:04 Vanta - Get $1000 off your SOC 2 at https://www.vanta.com/twist 32:05 Meta ships Muse 32:56 Can Meta be trusted 35:29 Threads Metrics 49:27 Robinhood's free-share referral 51:16 NYU's Tristan Buckmaster accuses OpenAI of fighting dirty on Navier-Stokes 57:43 Jason: "It's a trap" 59:03 Harvey goes open-weight, Go.AI on-prem, Covenant Labs 1:12:22 High performing portfolio companies Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Follow Lon: X: https://x.com/lons Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis   Check out all our partner offers: https://partners.launch.co/   Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland   Check out Jason's suite of newsletters: https://substack.com/@calacanis   Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com

NYU mathematician Tristan Buckmaster put out a statement saying, Open AI only started prompting its model on this problem after word of his own work reached the company. Not surprised at all. You look at the YouTube's and the drop boxes and the like, right? I mean, it's a common trend. Trust these companies with your data at your own peril to some degree. In the scientific community, right, people are very conscious about what they share with who because they want to control who builds on top of their work.

And if you start doing that work in chatchiped Claude, there is a possibility, that it makes the next researcher find that direction faster. Agents are scraping the entire web looking for partial solutions and can build on it. So the importance of locking in your research becomes increasingly stronger. I would not trust them with anything that's important or proprietary. This idea that you're going to give instinct or Zuckerberg, your Gmail, then your notion, then your docs, then your databases, means they're going to steal your IP, train it, and then give it to your completely.

patators. This week in startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast. Get $1,000 off for a limited time at www.w.vanta.com slash twist and Netsuite. For the first time ever, you can try NetSuite next for free. If your revenues are at least in the seven figures, go to netsuite.aI slash twist. Built for every industry, ready for every boardroom. NetSuite.A.I. slash twist. Northwest Registered Agent. Got a new business idea. Northwest Registered Agent helps you bring it to life. Get a free domain, email, phone number, and more with no purchase required. Learn more at www. www. Northwest Registeredagent.com slash twist domain. All right, everybody, welcome back. This week in

startups we do are this week in VC roundtable every Wednesday. What do we do on this roundtable? Well, Juan reads the news. I do a bit of moderation there, and we have three great guests who are active investors in startup companies. And we've got quite a lineup today. Lon introduce our guests, please. Yeah, well, first up, we've got Yohe Nakajima. He is the general partner at Untapped Capital, and he also runs Agent Fund,

a 2025 Angelist Rolling Fund for Autonomous Agent Startups, plus Ben Lear. He's the co-founder of Lear. That's a major firm. What a guess. C-Firm, he started in 2021. Finally, we've got Rebecca Lynn. She's the co-founder of Canvas Prime and a five-times Ford Midas-less entrance.

There you go. There you go. Welcome everybody. Jason had no idea that I was on. He's just like, oh, my God. Like, did she hear you? I was hamming it up a bit. I mean, come on, man.

Then showed up. Amazing. I mean, you know, whatever. Listen, we have got a crazy docket. And, Lon, I guess we have to talk about the end of the world. And how we're all going to manage that because, you know, typically our funds last 10 to 15 years, but right now I'm trying to figure out how to get DPI if, in fact, the world is ending in 10 years or 2030, according to Anthropics. So let's discuss this

for the 50th time this year. Anthropic people quitting, and Open AI folks have done it as well. But let's discuss people quitting because they saw into the black AI box and decided it's the end of days and we're all going to die. But he's just going to start a hedge fund or a venture fund, right, Jason? I mean, isn't that what's coming next? I expect that to be the next announcement. That would be. Lod, tee it up for us.

Who is this lunatic? And then his co-worker, lunatic who decided he would retweet it. So this is Jacob Coxon. He's a 27-year-old pre-training researchers. Spent three years at Open AI, credited as a core contributor to

GPT-40, before moving over to Anthropic in July. He joined Anthropics specifically because of its safety reputation. And about two months later, he quit the company and the industry entirely in a seven-post threat on X that already has tens of millions of views. He told the Wall Street Journal that researchers inside these labs have started using words like crunch time and end game. And by the end of next year, some of the most aggressive scenarios could already be out

of control. Then it got stranger because two current anthropic researchers publicly agreed with. with him, including alignment, alignment scientist lead Evan Huberinger, who said that he personally puts the odds of AI killing all humans in the next decade, around 10%, give or take, 10% chance we all die. And all this is landing while Anthropic, of course, reportedly heading toward an IPO at something like a $2 trillion valuation with its safety first reputation as a central part of the pitch to investors.

Yohe, what are you making of this latest instance of doomerism? I mean, it's going to continue, right? We're going to continue to see incidents like the hugging face. There are going to be things where we see a hint of AI doing something bad and we're going to see what if this happens at an exponential scale. The conversation is not going to end, but the conversation is important. The conversation itself is going to hopefully prevent any likelihood of that happening because we're going to put things in place.

So I would think that part of the reason that you see this really public side is Anthropic talking about this a lot and researchers talking about this with the whole. that this triggers conversations that changes that make sure that people are building in a safe way. I think I think some of the dumer people might actually be speaking more doomish on purpose just to get people to push in that safety direction more than if they had honestly said their practical like oh you know it's going to be a you know a hundred years or something. But if you say 10 years people are going to lock down on safety more. So that's my kind of take on it. I'm going to go last because I have spoken on this so many times. Ben,

what does this mean for our portfolios? If you believe this stuff is so powerful that it's going to kill us all? I actually think it's pretty funny that there's 92 million views on this. Clearly, Elon is like pinning this to the top of X for all users in all countries. I mean, it's like, look, I think that every month I become more astounded by the speed that these models get better and what you can do with them in ways that I'm. excited by as an investor, but like if we keep ending up with these app lives getting tighter and tighter, you know, it's like, it is creepy to think about how powerful they're becoming, and it's obvious that we do not have, you know, sort of a government that knows how to deal with any of this

stuff. You know, I think it's, it's, on the one hand, I think it's hysterical. On the other hand, I do worry about, you know, it making its way into national security and just like the state of the world a little bit. It freaks me out, to be honest. This one doesn't mean anything, although I do think you've had a lot of people complaining about Open AI and leaving. I think there's been fewer people who have sort of raised the red flag on Anthropic and they've done a great job with the messaging around that and, you know, Dario got very out in front of it very early. But like we're dealing with some pretty unbelievable. technology that's moving much faster than, I think, like, the average person should be comfortable with. I personally look at this, and it's, you know, to me, it's a lot of, it's clickbait. I mean, this stuff is, um, AI is incredible, like what it can do when we first saw, you know, GPT4, I saw it in August of 22, right? It was incredible and just what it can do now, you know, versus then. And I think there's just a natural tendency in society to be afraid. And what we should be, I think, is more excited. And, yes, having this conversation.

But, you know, I did nuclear engineering in my old life. And, you know, if you recall when we were growing up, and Ben, I'll put you in the wee bucket, right? And Jason, you know, the Russians were going to end the world. And we were all going to have, you know, how it was nuclear was like the fear. And then if you read back and we were going to talk about AV, autonomous vehicles later, but it's really, I always love to read historical fiction and like look back at what people were thinking, you know, at different points in time. And when, you know, cars first came out, much less, you know, ones that drive themselves, people. people really thought they were going to kill everyone. And so I think this, I mean, super pragmatic, but I think it's a natural reaction to change

that we have. And what we should be doing is having the positive conversation about, you know, how it can help us live longer and lead happier lives. And I think AI can do exactly that. And so for me, it should be incredibly exciting. Yeah, this is like, it's super interesting to be here now because in 2012, 13, and 14, I had two neighbors who I was independently friends with, and we would go have dinner in Brentwood.

One was a philosopher, neuroscientist, named Sam Harris, who hadn't started his blog yet, but asked me, like, how do I start a blog? And I was like, well, you get a microphone in a guest. He said, what else? I said, and that's basically it. And then Elon Musk, who lived in Bel Air, I lived in Brentwood, and we'd go to Poponais, this great Italian restaurant.

We'd sit there and I'd watch these two geniuses talk, and I'd ask some questions about it. And the one thing we talked about over and over and over again was AI. And this was, like I said, 22, 23, 2014. And what was the book that came out right along the time that got everybody super hand-wringing about the superintelligence maybe? Nicholas, whatever. The Bostrom. Yeah, Nick Bostrom's book had kind of been making things.

And then there was this crazy conference. Puerto Rico by the Future of Life Institute conference. You can pull up the picture of everybody at this conference. But this is where it all coalesced just for a brief history lesson here. And there's like a really famous photo of everybody there. Somebody needs to go back here and just draw the lines on it, because this was the famous conference where Elon, and I have a point here, Elon, you know, after conversations with Sam Harris decided he would put like 10 million towards this, funded OpenAI. credit to the folks at this event, they saw that there was some downside here. And they started mobilizing.

And they did exactly what the industry needed. Hey, is there a nonprofit who could work on this and maybe keep an eye out for it? That nonprofit that was supposed to keep an eye on this issue was Open AI. Obviously, famously, they went to become a for-profit company. And we know how that story went. But these folks are now the worst possible spokespeople. for AI. 80% of Americans hate this.

And if this keeps up, and I don't even think you can reverse it now, I don't think there's a way to reverse the negative sentiment in America. They're going to block every AI data center. They're going to burn every Waymo in the streets, and they're going to ban AI in schools. Like, you know, New York is,

I wouldn't exactly call it a ban, but they're, you know, kind of banning it or limiting it. And I have some, I think there's some positive aspects to limiting it to make sure it's being used properly, not to cheat or whatever. Regular listeners already know that if you've got a great idea for a new business, our friends at Northwest Registered Agent want to help you bring it to life. They're going to be the most amazing partner you've ever had.

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Learn more at Northwest Registeredagent.com slash twist domain. Congratulations. to the team at Anthropic and Open AI, you have succeeded in scaring the bejesus out of Americans. They're going to burn Waymo's in the street. They're going to burn data centers, and there's no way to stop it. Now, congratulations. You're going to have a huge IPO

because who in their right mind would not buy the company that's, you know, got a 90% chance of being the last company in the world. You've kind of obligated to buy it if there's a chance that's the truth. And a 10% chance of the world exploding. well, then money has no purpose. So congratulations on a PR strategy that is either brilliant or insane,

and you're all suffering from psychosis. I literally cannot figure these people out. Well, this is an interesting one because is it a conspiracy theory? Because this guy says he's quitting. So he wouldn't be doing this to boost anthropic stock unless there's some kind of deal they worked out with him. So is that where we're going with this? Like, are we actually going through the looking glass?

There's the most liquid stock in the world, Anthropic, right now. Like, it's more liquid than, like, buying Microsoft or Amazon on Robin Hood. You can find it literally in the 100 milliseconds it takes to trade a stock on Robin Hood. I think in 10 milliseconds you can find a buyer for Anthropic. I'm being facetious, but Ben's shaking his head in agreement. It's, like, super liquid. This person probably cleared their position ahead of the chaos. Jason, I think you made a good point bringing up the $2.

Or not. Or, yeah, I mean, it doesn't. Or he left the double. Like maybe it's going to triple. It has no effect on like it's a it's a runaway train. It's it's unstoppable. I mean, it really is. I think you're right also that negative sentiment is is unstoppable.

But that's there's like a bunch of different downsides here. You know, when I talk about ruining the world, it's like are we going to give, you know, our defense systems over to AI? That's where like you actually have like real fear for the end of the world. My hope is that that is not. You understand that Trump has like a little red button that he can just push, right? I think there's some people around him who made a special pat that like, no, they literally, in the first administration. In the first administration, yes.

Yeah, they made like a spot. The adults in the room like disconnect his button. They were like literally. Yeah, they literally pulled the red wire off the button and they're like, yeah, let them click it three times and tell him it's got a 60 second delay. But it's definitely going to fire off the things. It turned on the guerrilla channel on TV. The reason that people, I mean, I think like, you know, the masses don't like AI is because realistically it is going to take a lot of their jobs.

And we don't have, you know, by the way, I believe it's going to create tons of new jobs also. Like, you know, we invest in AI all day long. I'm not like a dumer here. But I, like, it's going to get worse before it gets better. There's going to be a ton of industries that get wiped out. You see this right now with kids graduating from college. There are no jobs. There's very few entry levels.

jobs. Like, you know, the wealth divide is going to grow. If you were like in the right companies and you have access to the private markets, then like you're going to create some kind of wealth. And if not, like, you're going to have, you're going to be on the wrong side of that divide. Like we're, and, you know, we don't have particularly stable leadership worldwide for a bunch of reasons. And like, it's a, it's a tough backdrop. And, you know, I don't think AI is going to destroy the world, but it's going to make a lot of people's lives much harder before, like, we get the full benefit of, like, you know, the largest that we're all promised. Yes, the abundance is not here yet.

Yohe, what do you think here? You and you have been raced in with their opinions. No, no, I was just going to say, like, you brought up the 2015 Dumer thing. I was just going to say, like, it's important to understand the context that this Dumer thing thing is not new, right? They've been around forever. They're just getting attention finally because AI is getting attention. And negativity just gets more attention, right?

I was actually talking about AI with a whole bunch of people, and I asked a whole bunch of people with social media net positive or net negative. And overwhelmingly, people immediately jump to the negative. People aren't connecting with each other. But then as soon as you start bringing up some of the positives, like this show runs on social media, there's been people who didn't have a voice, and then once you start talking about those people,

are like, oh yeah, there's been positive as well. And I think to some extent the same thing's happening in AI, where we are talking about people not having jobs and whatnot, but at the same time, I've also been, I've also talked to a lot of people who I would think wouldn't hate eye that love grokbot. They just can't stop talking about super rock. And there is AI impacting people in positive ways today as well. I can't agree more.

I mean, AI is helping people grow their businesses, right? In incredible ways, even like the offline businesses. And so, yes, there'll be change, right? But I think people fundamentally, like this doomsday headline is what sells. It's what gets clicks, right? It's what gets everyone engaged. But when you look at even the advances. in healthcare that people are experiencing, even on the micro level of being able to go and

research your own conditions and really untangle what might be going on, you know, AI is not taking away the need for doctors. If anything, it's pushing more people in because they want to go and discuss these things with their doctors, for example, right? I see it as the net negative, and yes, some jobs are going to go away. But I think a lot of people are reporting, you know, busier than ever largely due to how people are the consumer is leveraging AI. That's certainly been my discovery. I was very concerned about office workers. And in my organization, I scared the bejesus everybody. I just said, if you don't use AI as your first attempt to solve problems and when you have a question, if you don't ask two or

three different AIs how to solve that problem, if you're not doing that, you can't work at the company. And I saw like us go from 20% of people logging into Claude to like 50%, then 60%, then 70%, and then 70%, and then we have like a monthly bonus system inside of our venture firm. And the same people kept winning each month. Like in fact, they won 10 out of 12 and 11 out of 12 months, the top two people. They were all using AI. And their impact became three, five, 10 times that of the people not using AI.

And I think what's started to happen here is people, if your organization can show people, my lord, your coworkers are now 10 times more effective than you are, then that should be the kick in the ass that people need to embrace these tools. The famous quote, you're not going to be replaced by AI. You're going to be replaced by somebody using AI is exactly correct. Jensen nailed it. Because a customer support person, literally a person who just picks up the phone and does. customer support can use these tools to build a system to make themselves 10x. And they don't need any computer training. They just need to know how to talk to Grock, bot, Claude, co-work, pick your poison.

You can just tell it, how do I get 10 times better at my job? And then here's my job. Here's my email box. Here's my Slack. It will do it. It will literally make you a plan. And I think that's what happened in corporate America. And when that happens, what I'm seeing is more operational.

If everybody's 10 times more effective, okay, what else can we do? Can we start another podcast? Can we, you know, run another incubator session? Can we find better companies? Can we help our companies find, you know, downstream funding and introduce them to VCs faster? Can we sort through applications for funding faster? Like, all of those things are occurring. So I, I, I, the only area I'm actually really concerned about in the short to midterm is drivers, door dashers. Like, I think those people are going to be the first wave where we see millions of people lose their job. If you're a founder who's not using AI to make yourself more efficient and productive, trust me, you've been left behind, but fear not. There is NetSuite next. You already know

NetSuite. They're bringing together your financials, your inventory, HR, CRM, and every other system of record that you need. They're already trusted by 44,000 companies. Now they have NetSuite Next. And that offers the same amazing platform, but with AI running alongside everything, your guide on the side. Just ask your question, in plain English, obviously, into Ask Oracle. And you'll get a real answer. Pulled from your company's live data. Plus, they've got an interactive canvas for automating your workflows,

monitoring your real-time data, and managing your AI agents. Now, for the first time ever, you can try NetSuite next for free. If your revenues are at least in the seven figures, go to netsuite. Dot AI slash Twist. It's built for every industry, ready for every boardroom. NetSuite.AI slash twist. Well, I think drivers like truck drivers, I think are the first ones, actually. But to your point about making people more efficient, I mean, this is exactly our thesis

and to plug a company, sorry Jason, but savvy wealth announced. Okay, good. Savvy wealth announced, you know, their $100 million around today. And what they're doing for advisors is exactly that. People thought, well, wealth managers are going to go away. I've never believed that. I think people crave that personal one-on-one attention. but these wealth managers are made, you know, 10 times better.

And the numbers they're giving us that we have, you know, to have checked is they're getting 19 hours of time back in their week, every week, to do what they want to do most, which is, you know, serve clients. And so by doing that, they're actually increasing their AUM three times faster, the assets under management that they have because they're able to take those 19 hours that they're getting back by using AI in a really smart way and put. it back into their relationships, actually, with their clients. So that's exactly the thesis.

I think that, like you said, Jason, makes people 10 times better. And that means they can charge, they could take their one and a half that they're charging and bring it down to one or 50 bibs. If they have three times as many customers, then they can compete in the marketplace and say, well, I have three times as much assets under management. I don't need to take 1.5 of your 4.5 returns. I'll make it 1%, which is what well-fronted. They use technology to undercut the advice.

and bring it down, and they had great success with that. So that ultimately benefits the consumer and those financial advisors. They both do their job better. Yes. And they have more time back. The same thing with lawyers. We did case tax, right? Same thing with lawyers.

Everyone's worried lawyers are going to go away. But lawyers actually spend so much time on these mundane tasks when they really want to spend time with a client with strategy, very different, very different job for them. The makeup of jobs that people do have changed significantly over the years, right? If you look at today versus 10 or 20 years ago. And I think it's obvious that it's going to change over the next 10 or 20 years. The question is how? And I don't have an answer.

I'm just throwing things. Well, drivers, I think, are one, right? You know, Jason, I did Luminar years ago and it's since been public and all that. But I thought when I did Luminar, my son who turned 16 this year wouldn't be driving. And so it's actually been slower than what I thought it would be in terms of the uptake of autonomous driving. And I really truly told my son when I made that investment that he'd never have to get a driver's license. And he has a driver's license, but also likes Waymo. But it's taken a bit longer, actually, than I thought it would take.

Yeah, I mean, 10 years longer than I think everybody anticipated. People thought we would be there 10 years ago, Elon, Waymo, etc. Yeah. Well, you know, there's – I think the reason for that is the expectation been like – people's expectation is if you're going to have self-driving cars, you take out the steering wheel, nobody can die. That is the public's. It has to be nobody goes to the hospital, no broken bones, no deaths. That's a crazy benchmark for a couple of thousand pound vehicle going 65 miles an hour now that they're on the highways. That's the reason this is a slow rollout. They can only be perfect.

By the other way, we're early in Zipline. And I'm sure you saw last week, national news that an Amazon drone dropped a package in a swimming pool. And it's like, you know, there are tens of thousands of deliveries happening every day now and one package is dropped in a pool. And it's like, oh my God, Drone. The end of the world. Silly joke. And it's like, you know, we're focused on on the wrong things.

Oh, yeah, but that's amazing. So then I have to ask you because I wanted to do the series, it was either A or B in Zipline. But did you invest when it was a toy company? We invested in the pre-seed when it was a toy company. It was, we invested in Keller as like person building robotics and his first, the first product was a toy. That's so cool.

Yeah, it was like a little robot or whatever. It wasn't even a drone. That's what I had seen it. The first product was called remotive. Yeah, I'd seen it when they were doing the drops over for medical and things like that and love the technology of not having to land. And so I'll tell us it's a funny story. So I was an investor who shall not be named.

I was actually talking with the zipline crew about potentially letting them fly the drone on my ranch because they needed like a big area of flight to fly. And I knew a very early, early investor. And so I was having breakfast with this not to be named investor and said, hey, I love this company. Zipline. It was in his portfolio. And he's like, oh, you know, we invested in something totally different. It was a toy company. We'd never do the deal today.

and it was fairly negative on it, and I walked away just deflated, right, because I really loved the deal. Said investor then led the round that was announced two weeks later, entirely, right? So I learned a very hard lesson early in my venture career from that experience, but really love, you know, Zipline

and all the innovation they have managed to do there. I, too, missed it. I met Keller when he was delivering blood on fixed wings, and I said, you know, hardware is really hard. I had them on this very podcast. I said I would love to donate to this, but I don't think I can put my LPs money in it.

Then like last year, he's like, you know, you missed the investment. I was like, yeah, I know, I feel like an idiot. I didn't know you were going to deliver brito. I was just like, no, neither did I. That was not. They were like, they had like a UN contract or something to deliver like medical aid in Africa, right? Which is literally in my notes. I was like slow sales cycle.

Like the UN is not the best company. It's okay. I sat with Kalanek for three hours one day as he was discussing taking over the CEO spotted Uber. And I was like, and I didn't do that either. So that's a funny story. When he told me somebody else was going to be CEO, I said, if you do that, I'm going to not invest.

You have to be the CEO. And he was like, do you think? And I had this like really long conversation with him. And to this day, Ryan, who was going to be the CEO, is like, you dissed me so hard. And I was like, I didn't. You're Ross. He's Steve Jobs. Like, we're talking about Steve Jobs here, like Elon Musk or Bill Gates. That was in all of our best interests. I shouldn't be on the management team. I shouldn't be the CEO. I would be amazing. So anyway, long story short, I have now a backstop. If I miss an investment, like Zipline, I have the syndicate.com. I've got 80 family offices in our tight little circle. And I say, hey, I found this incredible company, Zipline. I missed the investment, and I would love to have you join me in putting in, five, ten, $20 million.

And I have a personal in with the CEO. We're friends. And he's been on the pot. And my CFO knows their CFO. And we boom, just, yeah, this is when I had him. I literally talked to him at this launch festival about making up for my missed investment. But anyway, we don't have to play this. By the way, guys, if you didn't know, here's Steve Jobs.

if he worked at Anthropic and launched the iPhone as an anthropic employee. As you can see here. The iPhone increases anxiety, disrupts your sleep, kills democracy, creates misinformation, eating disorders for our children. It wasn't the iPhone. It was actually just social media that did all of those things. Yes. Anyway. Fair enough.

Access information. The App Store did it. Yeah, I should make it the launch of the App Store. We're now going to partner with people who are going to destroy our lives. I mean, it's crazy. But he had to do it before someone else did, Jason. If we would imagine if somebody else had the iPhone had fallen into their hands. Yes, it is.

That's the argument for the nuclear bomb, isn't it? Here's a lesson for all my founders out there. Trust closes deals. You can have an amazing, beautiful product. It solves every problem your customers have. But if those same customers who love your product don't believe it's totally secure, they're out. And that's why you need a partner like, Vanta. They're the number one security and trust platform in the world, and that's going to get

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Learn more at vanta.com slash twist and get $1,000 off. We literally had this discussion the other day. You know, there was an internal debate of if they should have done a demonstration, a public demonstration to the people of Japan. you know, like drop a bomb, you know, I don't know, 10 miles offshore or, hey, clear out this city. 20, 30, whatever it is, clear out this island atoll, you know, and we're going to drop a bomb and you're going to have to really rethink your, you know, commitment to this World War II kind of thing. And they got over, they got vetoed because they felt it wouldn't work. And I think that's like maybe a major error in the history of computing.

the history of technology, like in technologists here. But anyway, let's keep going. Glad Jobs did it first for the iPhone. Yes, thank goodness he got there first. Before we go on, Jason, we should mention I'm wearing my Plaud pin right here. You can see it on my jacket. We do pause for the cause. We do applaud, plod our friends over there.

If your work depends on conversations or interviews or meetings or calls, we're recording this show right now, by the way, on Plot. We will upload the Plaud transcript. in summary afterwards in the description, so you can read it yourself. A great way to keep up with everything that you're doing, everything that you're listening to, all your conversations. Just get yourself a Pplod PIN.

This is the Pplod Note S. I have it, too, and here's the thing. It has a little red light. So if you're going to use it, you don't have to worry about privacy, whatever. You just ask people, hey, can I record this meeting and I'll send you the notes?

It does great notes. I take it when I go on hikes. All right, let's keep going. So check out Plaud at plod.a.ai. twist, use the code twist for 10% off. All right, there we go. Move on with the show. Okay.

What's up next? Yesterday, met a shift, an agent called Muse that they've been testing for teeing up since Zuckerberg's infamous 6,000 word manifesto last month. Muse is an AI agent tailored toward the everyday person. You message it, just like you'd message another person in its own app or in WhatsApp, and it goes and does work for you, booking travel, filling out forums, turning a recipe into a grocery list. You get it, the usual stuff. Stripe has partnered up with Meda to develop the payment feature for the Muse agent,

and it's free up to 100 million tokens a week with $20 and $100 tiers above that. No advertising in Muse at all so far. The whole thing rests on trust. This is, of course, the company that just agreed to an $18 billion settlement over social media harms less than two weeks ago. They're now asking people to hand an agent, their inbox, their calendar, their credit card. So we'll go to you, Ben. Is Meta going to be the company that finally gets everyday consumers to trust an AI agent with every aspect of their lives?

It's a funny question. On the one hand, meta already has all of my data. Like, it couldn't have more. And so I guess what's the harm of throwing it another thing? Yeah, like I gave up years ago. I think that meta's got a big trust problem with, I'm actually not sure how deep the trust problem goes society-wide. I know within sort of like tech circles, there's like lots of snickering about like, you know,

meta being very behind in a hundred ways. But obviously there's two billion plus people using their products every day. Distribution is, that's a huge distribution advantage. I'm sure they're going to get a lot of people. I mean, by the way, you know how many people are using threads? Like it's meta. close to the amount of X, I think, right? I mean, like, Medi can take anything and jam and jam it down the throat of like hundreds

of millions of people. I haven't used Muse yet. And obviously, there's instinct in town and a lot of companies like playing around this space right now and that are, you know, there's going to be a lot of capital thrown at it. But, you know, it's hard to, on the one hand, it's sort of hard to get bet against meta getting something real going. On the other hand, traditionally they've had to buy all their big six. successes. And so, you know, it's, it's sort of hard for me to imagine them, like, winning this

with a homegrown product because they haven't done that since, like, the blue app. Yeah. They're good at stealing. I'll go with Ben on this. They're very good at stealing people's innovations, like features and putting them into their core product set. But Instagram, WhatsApp, were purchases, obviously. Facebook was the original thought. This is, feels like they're just ripping off OpenClaw, Hermes, and most of all, Grock Bot, in making the most simple, easiest way for you to communicate with an agent, and then giving it to our cousins, our moms, our uncles, who maybe aren't super tech savvy. And in that regard, I think it's going to do very well if it's integrated into Instagram,

and they give prompts. So the reason threads, in terms of the ram and jam down your throat concept, Even if four out of five products don't work, if they ram threads into the main feed over and over and over again, which is what they do. And then when you're on Instagram, the total amount of time I spend on threads is when I'm on Instagram and I type a snarky, funny comment on somebody's Instagram post, there's a share on threads, which is like completely stupid. But I do it just where there's something on my threads, I guess. Were those thread stats that you just put up? Yeah, this is thanks to our pals at Harmonic.A.I. We just looked this up.

Oh, $11 billion of revenue this year in threads. Wow. These are your threads. That's 500 million monthly active users in threads. Like, I don't know a single person who since the week that Threads launched has mentioned threads. I've no, no one. No. In our circle, though, and they're doing like the same revenue as all.

Threads is doing more revenue than the entire consumer AI category. with the exception of open AI. I will tell you sometime on Instagram, they'll show you like some of your friends who are active on threads. And I do, there are a few people. I think it's a lot of people who are still active on Facebook.

They get sucked in a lot to threads through some sort of integration. But Zuckerberg admitted, you know, when he announced Muse, he was on somebody's podcast. And they were confronting him about, like, oh, you're active on X. And he's like, all the AI people are on X.

So I have to meet them where they are if I'm going to talk about AI stuff. So I post my AI stuff to X as well as to threads. So he kind of made that admission. But the funny thing is it doesn't really matter because all that revenue is coming from targeted, targeted advertising, right? And the AI people are not the ones buying all that shit. It's like, you know, 50-year-old housewives in the Midwest, right? And so I think the joke's kind of on Grock in a way because it's like,

he's like, yeah, I should I go talk AI there, but I'm going to sell all my shit over on threads, right? The higher your IQ and the revenue. Yeah, the higher your IQ and your income, the less likely you are to click on ads. That's the great conundrum for X. You have high IQ people who are like, that's an ad. I'm being manipulated, scroll, or I'm going to pay for the premium version so I don't see ads. It's always been their challenge since Evan launched the company. Yoie, what are your thoughts here on?

Well, I think Meta did try to buy their end. way into this, right? That was probably what Manus was supposed to be until that no, I forgot about that. And then I think I heard a rumor that they tried to make an offer on instinct. I have no idea. I just read it this morning. So I think the meta was trying to buy their way into it, but, you know, none of those fell in. And then there was enough open source stuff out there that they could replicate it. I didn't tell you. Explain what happened with Manus, Yohei, because I haven't been keeping up on that, but that was the benchmark backed frontier lab based in China that tried to move to Singapore. Yeah, it started in China. They had moved

it already to Singapore, then grew, then Facebook tried to buy it. But because it was technically started in China, China was able to effectively, quote unquote, block it. But by that time, the transaction has gone through. So then they had to like try to buy, find buyers for Meta's share somewhere else. And I think that's where I kind of lost the thread. I don't know if anybody Yeah, China forced Meta to unwind the deal. Yeah. So they had to go look for someone else to buy that equity that Meta had bought. And and there, there were already like they'd already started integrating the team. So mad as people were already working at meta and they had to like, sorry, you have to leave now and go back to your old job. Give us the badge back. I'm going to need that

laptop. Yeah, really. It's like, that's very dramatic to lose your job that way. This is why, you know, I was talking to somebody who is in that region. And they were like, if you're a founder in China, you have to move your family immediately to Singapore, like before you get traction because they will just, you know, sanction you and you'll wind up in a re-education program like Alibaba's CEO, Jack Ma. Who's now painting. Muse is good, though. I tried it. I feel like, you know, every generation of these agents that comes out takes all the, like all the learnings from the last generation and just embeds it. So, I mean, even just playing around with it, like simple stuff, like connecting to Gmail.

On bot on Grochbot and Muse, you can just click a link and it just opens up in off into it. The chat to be in Cloud, you still have to, like, connect your MCD, your HIPCA connector. The chat doesn't just give you a link to click an OAuth into.

So there's small things like that that just get like... And speaking of Gmail, like, where the hell is Google in this whole thing, right? That's the question. That's the question. Like, aren't they just going to come in

and just take the table at the end of the day, right? And just kind of watch all these things happen. I mean, talk about a company that's shitty at building product and having to buy every product they've ever launched, except for maybe the very,

very first one. But that's what they do. And so all these startups are popping up. They're proving the use case, right, that consumers want these things. Aren't they just going to come take it at the end of the day? No, I mean, I think they're going to buy it. Well, they'll buy it. They'll buy something.

Now we'll buy one thing, right? I don't, I mean, given the market caps of the MAG 7 and that LenaCon is now working in New York to destroy my hometown, like I think we're now in a position where like, well, no, she can apply her incredible lack of experience in economics outside of like whatever Ivy League school she went to. But she turned off M&A for four years. Yeah. Biden hired her turn off M&A for four years. Now Trump's then. You can think what you want about Trump. He's all about our biggest companies, our national champions, getting bigger.

And that is extraordinary. Cursor got sold for $60 billion. Andrew Wang's company, the one. scale AI got bought for $10, $11 billion. If this... 15, 15, 14, 15, whatever. 14, 15. I mean, these are extraordinary. And if this company, what is it called?

Instinct is the new... Instinct in town. Instincter town. Yeah. I mean, you know, it's like instinct's raising a two and a half right now, $2.5 billion. And it's still like invite only free monetization. And...

It's so like, that's just a crazy... That's just like a crazy acquisition strategy. Like, must get, must get invited. And then, oh, you're all. I mean, it's just such a crazy acquies. It's just a consumer like mind flog essentially. But here's the thing. If you think about it from first principles, these companies are worth $2 trillion,

$3 trillion, $4 trillion. Okay. So 1% of, let's just pick them a $3 trillion company, one percent is $30 billion, correct? Yeah. So 1% is $30 billion. If you make 10 of these acquisitions and you spend $300 billion on, on those 10 acquisitions.

Or let's say you do 30 for 10 billion each. If one works out, it's going to be worth more than $300 billion, which is exactly the math that Sergey and Larry did when they bought YouTube and Android and when Zuck bought Instagram WhatsApp. It's just an, it doesn't make sense to the business community, maybe watching it or to people who watch CNBC or, you know, normies. Like a normie can't understand this. but I think we all can.

It's like it's kind of worth it. If only one in 10 or one in 20 work out, like here we are. Go ahead, let me get Yogi in here. I was asking myself, has there been, I was considered this a consumer-ish category startup that was King made successfully,

as in like a lot of money helped a consumer-facing startup really grow. I feel like King means. Oh, okay, that's that. Yeah, Uber, but no, but the reason I know it so well is I was an investor in it, which I guess you guys didn't know, But, um, wait, hang on. Yeah, it's breaking new story.

It leaked. I had no idea. It leaked. It leaked. No idea, Jason. Somebody just, I think, uh, Wall Street Journal just did an expose. I was the third or fourth. Um, they were the first to use capital as a weapon, but nobody else has really done it.

Yeah. Maybe open AI and anthropic are doing it now by buying 90% of compute. So we might have three examples that off the top of my head where they're using capital as a weapon. They tried to do it with. We work. That didn't work. There's lots of examples of king making capital. So capital basically flexing that everybody else should stay out of our way. And we are the, you know, we're the champion of the category.

Examples. I mean, what comes to my own? But we're asking if it works. Harvey today is using capital. You know, Harvey is still, I think the jury is still out on Harvey. By the way, I was in Times Square today. I drove through Times Square and the side of a building, 40 stories tall, was a Harvey. And the ad said, Harvey, $15.5 billion valuation and then listed Sequoia, blank, blank, and listed 20 VCs.

And that was the ad. Do you remember, but doesn't that remind you the dot-com? What's going on here? No, isn't that reminiscent of like living an SF and the dot-com? I mean, same type of thing. like money doesn't mean that you've like won. It'll be interesting to see, I think, at the end of the day, where it goes, right? B2B makes sense to me.

Because if you have money, then I can trust the company with more money because they have more backstop. Consumers, I don't think, care. You have the key, was a Kibi or KUIBI, there's Clubhouse. Quibby. Remember a name back in the day that was, quote, Kingmade Social Network, right? Way long ago. Here's the thing.

If the product category, if you look at all three of those, Clubhouse was a Bad product category. Ning, bad product category, like groups. Who cares? Like, it's small. And clubhouse small groups. It's also kind of bad. If you look at Quibi, there's actually the right idea.

Maybe at the wrong time. These shorts in China, and there's a name for it, Lon, you would know. What's the name of these dramatic shorts as a category in Hollywood? Micro dramas, thank you. Micro dramas are actually printing my name. So I would say Jeff Katzenberg got it right, but was three years too early. you have to look at each of these on a case-by-case basis because if you king make a category and that category sucks or you're too early what does it matter yeah you you actually nailed

it on that when snapchat was like having its big moment hollywood got obsessed with this microdrama id and a lot of companies spun up trying to do like oh we're going to do like soap operas but it'll play on snapchat and it was just too early but now that's the time for for it so it also the cost to produce. I mean, the difference with Quibi was Hollywood talent, Hollywood quality, $100,000 for a three-minute video, and these microdramas are made for, you know, a thousand bucks for an hour or whatever it is. I mean, it's a totally different math equation. That is very true. All right, let's keep up. Yo-hee, did you have something you want to add there? I saw you know. No, no, no, no, I just think it's a fascinating, I'm fascinated to see how these, how these consumer ones do.

In terms of venture capital, this is- We should think about more of these, these, these, being made consumer companies. Because, I mean, it's happening all day long in B2B, but it is interesting. Oh, here's magic. Magic leap is another one. Magic leap is another one. Consumer is a hard. Jobbone.

I just remember being so jealous of my friends who got friends and family in Webvan. Cosmo and Urban Fetch in New York were the big ones. Ciro, come on. Like, DeCereo, that was, that would blew my mind. I mean, I think there's like spectacular failures. But there are like Webvan, Cosmo and Urban Fetreux. were examples of pouring too much capital onto management teams, and they just spent it too fast.

If those three companies, and Urban Fetch and Cosmo, you probably remember, Ben, because we live through it, I think. They were selling everything at half price in New York to get market share. And so people in my, and they had no minimums. No, we didn't order a single stick of gum, like one stick of gum at Cosmo. And you didn't have any. You didn't have any delivery fees. So they would spend $10 delivering you a pint of ice cream for $2.50 instead of $5.

So they would lose $12.50. Then when they went out of business, people were like, and then right as Cosmo was going out of business, I remember talking to the investors because I tried to buy the asset from JP Morgan who owned it and restarted. And they became profitable in the top three cities because they added a $10 delivery fee and they stopped discounting. So they literally had figured out DoorDash. but they ran

and when the dot-com bust happened they ran at capital I wonder if you're looking at something like Harvey today spending on the side of a building if they have the right business the right team but maybe they blow through the capital

and they're like wow we spent $10 million on advertising that we could have just put into the product and sales team this was case text I mean case text was launched in 20 launched you know with OpenAI

and it is powering co-counsel now for Thompson Reuters right And case tax was sitting at like 30, 35 million of ARR and hitting profitability, you know, three years ago and not having to spend all that money getting clients. Like their CAQ was very low. And so your point, Jason, you think is just like managing your acquisition cost. And are you really, you know, kingmaking or not? And I'd argue you're not if you don't control your own destiny to some extent. And if you're just like torching.

Managing large amounts of capital, Yohei is something young people are not. good at inexperienced people. I watched this in New York when I was doing Silicon Aller reporter, my second magazine. And Double-Click, Kevin Ryan and Kevin O'Connor raised a second, secondary. Like, after they went public, they cashed up for like $2 billion. Market crashed, but they were deploying it very slowly. And then I watched other folks who had raised an equally large amount of money, and they were just plowing through it. And I saw this with Robin Hood and Uber up close. Robin Hood was giving away a free stock. if you sign up your friend.

You got a free stock, they got a free stock. Here's what they knew. Because I remember asking Vlad about this. And this is like months before pre-launch. He had told me they were going to do a gift to get like Uber and Dropbox said. I said, explain it to me. He goes, well, we're going to give a free share, whatever. I was like, because it's $300 to $500 to $500 for E-Trade to get a new customer buying ads on CNBC, right?

It's like, yeah, how did you know that? And I was like, oh, I worked at AOL. We were, I had sold a company to AOL and we watched that. And we watched that happen up close and personal when they were spending $100, $200, $300 to get somebody to put an AOL CD in their computer. And they just decided they would spend $15 on either side. So they're spending $30. So they're spending 10%, but they figured out a device that was just super appealing to consumers.

If you told the consumers they got $25 each at $50, they wouldn't have done it. But if you told them you get a free share of a company or a fraction of a company, they'll do it for $5 to $10 in the free share. It was crazy. It's really smart hack. I've heard Harvey's on the order of $400,000 acquisition cost for every new account, right? And that's a law firm with an annual spend of what, I guess? But giving away a free year.

And it depends. Like the law firms vary wildly in terms of profitability. Wait, just as it on the Robin Hood, that's also genius because of the retention thing, too, right? Because if you get $25, you have no reason to come back to the app. But if you get a stock, you're going to come back and check it. You're going to come back and check it. It's pretty smart. Oh, yeah.

I didn't consider that. You're right. It actually is a re-engagement. Your attention is going to be way higher for somebody who has one sur. But Yoshi's your point. You have to actually probably set up the account and give them all your information to actually get that one piece of stock, right? So that's gold. We've got to talk about this.

NYU mathematician. He's accusing Open AI of fighting dirty on the Navier Stokes solution. Yesterday we covered Open AI on this weekend AI. We covered Open AI claiming its internal model had cracked Navier Stokes, one of the seven Millennium Prize. problems. Today, though, we're getting a different side of the story. NYU mathematician Tristan Buckmaster put out a statement saying OpenAI only started prompting its model on this problem after word of his own work reached the company and that a whole team and an insane amount of compute went into it. Buckmaster had spent most of the year on this with Levant Alpoge, a mathematician

who works at Anthropic and he ran the report to drafts through OpenAI's Codex the whole time. So when they asked whether the model had been trained on their sessions, they never got a clear answer from Open A.I. Buckmaster also argues that Open A.I. twice pushed him to drop Alpoche from the paper because he works for their competitor. He then threatened to go public and was asked, why would you ruin your career? Open A.I. Sebastian Boubec calls all of this false and inflammatory. And it since apologized for that line and said he retracted it on the call, though Open AIs write-up does confirm its effort only began on September. September 1st after they heard the rumor this is being worked on. So, Rebecca, we'll go to you.

Does a story like this change what you're willing to put into a frontier model? Are you surprised Open AI may have stolen or borrowed some of these ideas from a researcher? Not surprised at all. Not surprised at all. But impressed with what, you know, the models are able to come up with here and how they're pushing, going far beyond, you know, reading your email and summarizing it to actually solving these mathematical equations. but not at all surprised. I mean, and if you look back, I mean, if you look back at like very large companies and, you know,

in terms of, you know, stealing data to get started, right, or to build, you know, you're look at the YouTube's and the Dropboxes and the like, right? I mean, it's a common trend, I would say. So, no, not at all surprised. Ben, do you think, I mean, if you were an academic or a researcher, are you going to keep using Codex for this? Or are you going to be like, well, I don't want them to do. swoop in at the zero hour and publish right at the same time as me and take credit for my work.

Well, we're actually in a stealth company that would solve this problem, potentially. So maybe I'll come back on at some point and we can discuss this. Yeah, there you go. But look, we use, we're a clawed shop here. We have a bunch of information living in Claude, you know, hopefully in secure ways. I'd like to think that what they claim about the data privacy and what they're training on and all that is true. We're also in a world where these companies are so big and so powerful.

I don't even know how they get police. I mean, like, Facebook pays $18 billion. It's like, okay, as we just talked about, Jason, just like, Facebook can go. It's a feeding ticket. Facebook can go buy 10 companies for $30 billion apiece as a way to take an attempt to see if they can get one out of ten right and win a category. You know, these companies are at this point, like, in some ways too big to police.

And so, no, the reality is I think you, like, you know, trust these companies with your data at your own peril to some degree. And, you know, there's some kind of work where, like, you'd prefer your data not to go out. And there's others where your entire life work is, like, working on a math problem that if somebody else solves it before you, you're, like, out of luck. probably shouldn't, you know, that's not the kind of work. Ben, I'm dying to hear about yourself company. Yeah.

Ping me later. It's a good one. Next time. Oh, save a slice for J-Cal. Yo-hee, what do you think? I got you. I got you guys. It's a complicated issue.

What do you think of the sniping? I went deep on this. It's a complicated issue. The stuff that we deal with, that's private information, right? And making sure private information doesn't get out. That's very different from the discovery piece, like he said, finding a new solution, discovering a new drug. And for those, even if you strip out the PII out of it

and you turn that into synthetic data, that makes sense that that might still be enough hint for the model to help discover what they were trying to discover. And so there's this issue of like in the scientific community, right, or people are very conscious about what they share with who because they want to control who builds on top of their work. And if you start doing that work in chat chip between Claude, there is a possibility that it makes the next researcher find that direction

faster. And I do think that is something that's going to be brought up a lot more in academia, especially as these things happen. There was actually another paper recently where a professor unknowingly had had a preprint available online. And somebody else's AI found the preprint and then built on that research. And then the student proposed like a full solution to something the professor was working on. And he had never meant to share that six pages. But now agents are scraping the entire web looking for partial solutions and can build on it. So the importance of locking in your research becomes increasingly stronger. I think this opening, I think is really nuanced.

There's a lot more, you know, I think it's pretty complicated. I think no one's trying to hurt anybody, but it's just kind of felt through in a bad way. Well, I actually helped you solve the problem, right? Yeah, yeah. Yeah, I'm going to take the other side here. I've been saying for a long time that I don't trust the frontier model companies not to look at the results, not to look at the prompts. They have plenty of ways to get around this.

the terms of service. And I would not trust them with anything that's important or proprietary. And this idea that you're going to give instinct or, you know, Zuckerberg, your Gmail, then your Notion, then your docs, then your databases means they're going to steal your IP, train it, and then give it to your competitors. Now, if it's for your, like, ordering your groceries, who cares? It's probably for the benefit of everybody. But if you're trying to solve one of seven remaining mathematical problems in the world,

I have to say, like, why on earth, if you look at the history of these companies, would you trust them? And I always, you try to explain this to founders. There's no free in the world. No free beer, no free pizza. There is no free vacation. You still have to sit through that seminar, webinar, webinar for your timeshare and get the high pressure sale for three hours. There's nothing free in the world. So when they offer you free credits for your startup, Open AI offered like millions of dollars

in free credits, Anthropic is giving people discounts, whatever. And then what does Anthropic do to Figma? They launch design, Claude Design. What do they do to Cursor? They launch Cod Code. They lied from what I'm told and what's been discussed publicly about their intent with the Cursor competitor. Cursor was their biggest customer.

And so lovable. 11 labs. Harvey. None of these companies should trust the frontier models. And it's nothing personal. It's that they're under so much pressure with $100 billion, $250 billion, $1 trillion build-out of data centers to make maximum money. And I don't think they can make max money from tokens. I think they have to win the application layer.

So they're lying. And they're going to go after the application level layer. And when they do, your startup and everything you've built will be sucked into their new product, period, full stop. It's a trap. It's a trap. Put in the It's a trap, Admiral AdBuck here from Star Wars.

Were you guys running everything on open source models? That's what Harvey said they're doing now. Harvey released, I think, just two or three weeks ago, that they had gone open source. There it is. It's a trap. They had released. They were now doing open source for their model.

Then they were doing contained models for their customers. So, Ben, if you were concerned about like your Sherman Sterling, which I think is still the largest law firm in, Wilson, Sincini, Oric, you know, Latham, if you think you have some proprietary data and you don't want them to go from one law firm to the other because you use Harvey, Harvey's now addressed that. And they're saying you can have your own verticalized harness, small language model, whatever it is. They're going to fork open source. Is it on-prem? I mean, like... It should be. And I have one of the big successes in...

This will probably wind up being the biggest success we've ever had out of our accelerator. We've had a billion-dollar company before Grin and multiple $300,500 million-dollar companies. This one, go.a.I, formerly known as Abacus, they do on-prem. And they basically make this go one in a box and you order this for your company. And now you're going. And they build assistance for you, a studio. And you're now compliant if you're healthcare, finance, any of the regulated industries that can't put their data into these services. Now you're boom.

You're on-prem with a server. So you don't have to wait to build a data center. you could just pop this into like some IT person's office and just start, you know, experimenting. And so everybody check out goadda. AI. I have a plug here that's really relevant. Plugs are, just to be clear, VC saying what they invested in is not a plug. Okay. It is a description of conviction.

It is a description of conviction. We love that here. I have a company called Covenant Labs that's figured out how to encrypt open source LLM. So if you wanted to put it on a cloud, you can just take an open source model, they'll encrypt it, give you a secret key. You encrypt your input. You get jumbled output back. You just decrypt it.

So the GPU provider inference, so it never sees unscramble data. Okay, let me repeat that back to you. I think I understand it. I want to send a job to a cluster, but I don't want it intercepted because I'm renting the cluster. So I can send a job up encrypted.

It gets processed. If I was building a frontier model or a vertical model, sends me my data back, sends me my model back, whatever it happens to be. And the service provider, if it was Crusoe Cloud, if it was AWS, never even knows what was processed. Yes.

The input is jumbled. The output is jumbled. You encrypt it with your secret keys beforehand. You decrypt output with your secret keys. Love it. But it operates. The model works exactly the same way as if you've never, as it was a encrypted. I mean, only the paranoid survive, right, Rebecca?

Yeah, yeah. Survive. And we have a scale or we have a skyflip. And it's the data sort of, it's the data security layer for AI. And they have signed some massive deals lately where they're, they're basically sort of, I don't know, the containerizing is not the right word, but protecting the data, they're going to the AI model. So these big enterprises like Walmart is, is a big customer of theirs, can control and

knows where their customer data is going into the model and when it's coming out. And so Skyflow has created, they were. they were in existence prior to, you know, all of the huge step forward in AI and they just were right place, right time to sort of answer this question about protecting, protecting really sensitive data and allowing companies to use AI in that way. So super interesting company. Yeah, love it. Yeah, really. I mean, incredible founding team and the teams. That's the one thing that I think has changed, you know, we're talking about this being analogous to the dot-com bubble recently.

And I think if you look at this, the real difference is these are real company spending large amounts of money and getting very early wins from their spend. Is anybody here believe that the AI spend is not resulting in massively positive results for corporations and individuals? I think if anything, these AI tools are underpriced and the spend is underpriced. They're running the math on the acquisition costs and the upsell. and all of that, and it's working, right? Well, I do think there's cases where you have people, you know, everything is so new. And I know of examples where there's major law firms that are, you know,

let's go back to the Harvey example, using Ligora and Harvey trying both, figuring out what they want to be their sort of system of record and they're going to pick one and drop one. Orr, or building their own. Orick built their own, right? Orick rolled their own. So, yeah. I just think you're going to see, like, I don't think that all the revenue is going to be

sticky, but I do think that the budgets are going to be only continuing to grow. Yes. The budgets are going to continue to grow. I mean, the fact that somebody would buy two, by the top product and the second product, shows that they're willing to be inefficient and not do it sequentially, right? Because you can say like, okay, let's try Lotus 1, 2, 3 for six months, then we'll try, you know, itself for six months, and then we'll have a bake-off. It's like, no, this is so powerful. Half a of you get Excel, half of you get Lotus 1, 2, 3, the top 10% have both. It doesn't matter if we double spent.

In our company, we have Claude running full steam ahead, we have GROC running full steam ahead, perplexity, and we have local models running on Mac Studios. Like, we're doing it all and then just spreading it out across everything. And now I

think I have to resubscribe to chat GPT, which we kicked out early on because I was like, I don't know if I trust these guys totally with our data, et cetera. But now with their new model, I'm like, can we afford not to have access to this? But I'd be a little cautious. I mean, what we're seeing is that a lot of these enterprise companies that are doing this, I mean, they have massive R&D budgets that we've talked about, right?

And they're seeing the spend as a paid pilot, essentially. And so they will make a choice. It's not going to continue for forever. But they're seen as it's a paid pilot. And, you know, a lot of these, I talked to a medical practice the other day. day who was using a company. There's a lot of these right now that go out and do prior offs and all this kind of back office work and inpatient enrollment. And they'd signed up a pretty major institution. And I called the institution and was like, hey, excited to hear what you're,

what you like about this company. And the answer was, you know what? It was, it was free. They just let us sign up for a year. So we didn't really do any work on it. And I'm afraid that's a lot of what we're seeing in some of these kind of quote, fast growing, you know, B2B company or B2C companies is, you know, B2B, sorry, companies is that, you know, they're kind of trying everything. And I think, and I think it will shake out. I think they will, they will pick a horse. And so I don't know that their R&D budget will necessarily shrink or their spend will

shrink on AI, but I think they'll pick a horse. I think I'm spending like 5K a month in our firm across 20 people. Yeah. And I was totally reasonable. And I'm like, that's real. 60K. I'm like, and they're like, can we spend $400 on this a month? that I'm like, I think you could double the spend

and we're going to get the value from it. Like an extra 60, 70K a year. Okay, that's like one, you know, entry level person. I think entry level person makes 60, 70, 80K. So do they beat the incremental, does that spend beat the incremental entry level employee? And in the answer in every case, Yogi is?

We're never going to have an analyst. Like, at this point. By the way, coming back to the first point of the day, There's a reason that a bunch of people are pretty sick out of that AI. You know, it's hiring an analyst again. But, yeah, that is interesting you guys are seeing it that way. I'm hiring five researchers at a time, hoping one becomes an associate. We have an associate training program.

But now when we hire them, we came up with a trick. We give them a project to do on their own. We paid them $500 to build something with AI, like a dashboard, an agent to solve a problem, like write a deal memo, research companies, whatever it is. And they can't use something as amazing as Harmonic, right? Long, because that's paid, Harmonic AI, which is a partner for our program here. They have to use, like, whatever they have access to. So if they want to spend $20 on lovable, you know, while they do this project,

and we had 15 people who were like good candidates, half of them wouldn't do the project. I'm like, but we're paying you $500 for 10 hours to do this project. And I realized, oh, those half are not capable of using AI. They're intimidated for it. So the five we wind up hiring them, none of them were intimidated by AI. And that's the key. Like this stuff, people are explicitly, there's a group of people, it's probably 50%

who are explicitly not using the tool. And that's like a major red flag. If you just are too scared to use it, like you just don't exist in the world anymore. They'd be like not using the internet or not using Microsoft office or whatever's Google Suite. I started doing intro to AI sessions, not for portfolio companies, but telling my CEOs they can invite all their employees to just demystify where to get started. The idea that like if I can level up all the employees across all my portfolios, even a little bit, just making them more comfortable, I think that has a good impact. Yeah. It's trying to doing that.

It's been pretty cool. I get a lot of good feedback on it. Employees who are hesitant to use AI, felt much more comfortable starting to play with it. Well, and then what's brilliant about what you're doing is if you were, If you used AI in January, March, or June, and you have impressions of it, your impressions are completely wrong. Because so much changes every three months that, like, you would have missed, like, four or five new product features from Grockbot to, you know, the new open AI model,

the 6X models, Claude Fable. You would have missed all those. Claude Tag. You just wouldn't understand the state of the art. So people think, I tried, you know what, I tried AI. It didn't work. And I'm like, okay, when did you try it? They're like, I think it was like May or June.

And you're like, doesn't. What? That's like 1990. You used the internet in 1990 and it didn't work for you. Okay, it's changed a bit. So it makes it so hard to invest, right, Jason? Because it's, you know, people start developing these applications and you look at it. And you're like, well, in six months are the models just going to be?

Or it makes it easier because the only thing you're investing in it, And year zero and year one is the team. The team, the team and the team. Who are these two or three co-founders? And can they deal with this pace? Will they pivot their way to success? By the way of success. I mean, like cursor, pure pivot.

Yes. Like, I mean, you know, like you're looking at like the big exits of today. Most of them started my under, I'm actually not sure. I was told that instinct is a pivot as well. I don't know if that's true. That is the classic case for outlier success. Even SpaceX, they have a launch business. They add cursor.

Okay, they've got a, you know, $3 billion in whatever cursor's revenue is or maybe it's $4 billion now. And then they're like, we have extra compute. Now we have Elon Web Services inside of it and it's $30 billion or something insane. It's like dwarfing the other categories. So so much opportunity space, it just requires a team that is just absolutely relentless. And we had a company, micro one. They had, they were $12 million company.

We invested $500K. We did a little syndicate. We just fell in love with the founder, Ali, and it turns out like he made this incredible, he's a data lab now, hundreds of millions in revenue, $4 billion valuation. Again, we invested in one of those $12 million, so this will be a fund returner like times five to ten if, you know, things keep going the way it goes. He started with just trying to figure out, he made an AI test to figure out who were the best developers.

So he built an AI tool just to figure out who's the 1% of AI developers. Then he saw Scale AI and all these other labs, and it was like, wait a second, I could just find the top 1% of legal accountants, whatever. You know, we need training data for. Okay, let's just be a training data company. They just see it. So I always tell founders, like peripheral vision, super important. Like, you will see something in your peripheral vision that is bigger than what your target was. And then you just turn and you change the target.

You just move the crosshair. It's not that big of a deal. But you have momentum, you have momentum and you can't start from zero. Like, Lyft was that. Lyft was Zimride, right? And they thought what Aberg was doing and they just turned a little bit, right? Yeah. I mean, they just, but they were up against a generational CEO.

Yes. Goes back to my core premise, like, just bet the jockey, man. It's just, it's the jockey. Always the jockey. Always the jockey. All right. Listen, great episode, everybody. We could be here for another hour so much to talk about.

But let's end with, hey, what's your? what's the fund returner or the most fun investment? You can pick whatever you like in, you know, this year, last year, whatever it is. Just a company you want to give a shout out to that's doing exceptionally well in your portfolio. High performers. Let's make that the category. Yogi, you got a high performer you want to share with us? Yeah. I mean, we've all talked about sandboxes, but E2B was one of, we did one of the earliest rounds of E2B. That was right after Baby AGI.GI. and I remember Baby AGI being in E2B's deck, so it's been really cool to see them just,

the whole category just blow up and them staying at the lead on it. Oh, so these are the machines that things like Muse and cursor pop up and run virtually. Exactly. So perplexity, I think. Manas, Jen Spark, those guys were. So when they write code and run it,

they want to run it in a safe sandboxed computer so it doesn't touch anything outside of it. So that's what these guys are. We talked about savvy and Skyflow, but one of my most recent deals, I absolutely love this team. When you talk about founders, it's a team of three like MIT Eng. And they're doing, it's called Daptic. And they're doing compliance monitoring, which sounds super boring, but it's so cool at Google. Data Centers just signed on.

Honda's a huge customer, Kamatsu, all these really, you know, sort of old line industry players. and what they help companies do is ensure they are regulatory compliant around the world. And what I loved about this company is when I called some of their customers, they talked about the ROI behind the contract they just signed. And one company in particular said, we just signed four times more pieces of equipment in this country than we would have signed without DAPTC because DAPDIC could show our customer that we were in, we checked every regulatory box they have.

And what they're doing, yeah, super cool. What they're doing now is they're going upstream in a new product development. And so if you want to design a drone, for example, and know that you can fly that drone in every geography out there that you want to be in, it'll tell you exactly. That'll save a lot of time. Yeah, amazing. Sounds incredibly boring and like a money printing machine.

Exactly. That's what I love. Incredibly boring and money printing machines, yes. Ben, tell us about Ogmodo, Ben. Yeah. Well, you know what I like about this company? But the reason I wanted to highlight it is it's in a space that is sort of just a graveyard. Like going and selling into big retailers and supermarkets is, you know, one of the, it's like an absolute no-no for venture.

It's like we've tried this 50 times. Like we understand it's a trillion dollar category, but like sales cycles are too long. Like, no thanks. Margins are too thin. There's like a thousand reasons that you're basically told absolutely under no circumstances should you engage in. in such things. And guys have just sort of like really bucked that trend and gotten like unbelievable uptake with retailers who, you know, shouldn't have trusted a company of this size in

early days. And, you know, what they what they figured out is how to, you know, essentially solve the what's on the shelf inventory pricing problem in real time without the human labor going and doing checks and going in, you know, like the armies of people that are running around, you know, counting inventory on shelves and passively solving that with a piece of hardware that store workers are using as their sort of name tag. And over time, it'll become like the physical hub for how they use AI in their day job, but that also passively monitors everything happening in the store and ties back into the inventory system.

And it's just like, this is a really, yeah. I actually looked at this early and passed, unfortunately, and because I had seen all the robots and things like that and prior things. But, I mean, this solves so many more kind of problems that retail stores are having, including the shrinkage issues and things like that that they see in their stores. And then, Jason, this comes back to your idea about, like, founder. Ross had sold his last company to Niantic and was really like a, you know, like very, very, very, you know, top 0.01% AR thinker and applied, applied sort of like that giant weird brain to this category. And by the way, had no background selling into these kind of retailers,

but just was a very special person. And, you know, we're getting rewarded for trusting our instinct. on the person when we were really like, like all, every smart person in the world would say, just like, don't touch the category. And I like when we're right, when, like, we're being brave, not just when we're right when we do the obvious thing in pay for it. It's the non-consensus bet. And this is so of the moment because AI, spatial computing, and you look at the badge, right, there's this whole movement to like Amazon tracks, employees.

We have companies that do this for fast. food workers with the standard cameras out of there, just to make sure, you know, things are operating optimally. And, you know, you run the risk of it being creepy. Here, what I like is it's not a creepy thing. It's just the person's walking through the store. And if it's got incorrect pricing, low stock, it just figures that out from the badge. And then you've now turned the average retail employee at a supermarket or wherever else they

could put this into like a superhuman robot, right? Like, they couldn't possibly process this much data. So the store is going to be more efficient. And this goes back to, like, what I was saying earlier, you're not going to be replaced by AI. You're going to be replaced by somebody using AI. This is the perfect example of it. Like, this person is 10 times more valuable now,

which means they can have a higher salary, which means the store could be more profitable or more sustainable, or they can pass on savings. So this is, like, the promise of AI here. It's going to make the store more profitable, which means just working raise wages, have less turnover. It's just absolutely awesome.

And yeah, to your point about being a VC, like the startup graveyard, I feel like is the perfect place to look for new versions of old ideas. There was an Uber and a Lyft. Yeah, yeah, totally. It was called Go Taxi or Taxi Magic that was on Palm Pilots and by text.

So there's a company called Taxi Magic. You could call, but it was pre-GPS, pre- iPhone. They were like, taxi magic was like, yeah, there it is. This is 2000.

Cosmo and Cosmo and DoorDash, right? Cosmo and Urban Fetch. The two led to DoorDash. Yeah. And so look in the start of graveyard folks. Like, we get pitched all the time on like a travel plan.

Particularly now. Because of AI now. Yes. Like the whole idea of like a travel planner was like group travel planner. Well, people go on a group trip like five times in their life. It's not like a common thing. But we had an AI travel planner.

It was doing so good for us. It was called Rome, I think. And then the founders, and they were like during the chat chepti 2.5 when it was only an API era. And they were like, yeah, chat chvety, three point out. You can just do this directly with chat chpT. And I was like, no, no, no, you have a half million dollars in the bank. Keep iterating. Chat chitpD is never going to build an interface.

They're never going to have a logo. They're never going to have a concierge. They'll never have a $500 a month product. Like, it'll do 80% of what you're going to do it. And I was like, please do it. I was like, please don't quit. This is a different one. Oh, wow.

This is Rome around, but we had one called Rome. Unless that, yeah, no, I don't think that was it. But it's an obvious idea of like travel planning. And now I've got a bot named specifically for Tokyo and specifically for the Middle East, where I take, this is my new workflow. I just take a screenshot of whatever's interesting that I see. And then I send it to the Grockbot. and I say put this, and when I send you a screenshot,

add it intelligently to my database itinerary for my next trip. So I sent it like the world's 50 best restaurants. I said, tell me which of the restaurants on the top 50 list are from Japan. In a city that I'm going to. Yeah, I mean. In Tokyo.

And it was like, pink. And it made the list. And then I'm like, okay, now go make me a Google map. And it's like, sure, I can do that. I can make a Google map for you. I'm like, okay, that's just, why do I even need a travel planner? like incredible.

All right, everybody. Another amazing episode of this week in venture capital. Thanks, Ben, Rebecca. Yohe. Great to see everybody. Excellent job. Thanks to our amazing newsreader. Newsreader.

Lon Harris. Well done, sir. Well done. We'll see you all next time. Bye. Bye.