This Week in Startups - Stripe’s Crypto Wallet, M&A Momentum, and Robots Replacing Soul-Crushing Jobs | E2138

Episode Date: June 13, 2025

Today’s show:In this episode of This Week in Startups, @Jason and @Alex break down Stripe’s big bet on crypto wallets with its latest acquisition of Privy, the return of major M&A activity from Meta, DoorDash, and Stripe, and the rapid rise of robotics replacing soul-crushing warehouse jobs. They dive into why today’s toy-like robot arms will become tomorrow’s billion-dollar tools, how stablecoins are quietly transforming fintech, and why Disney is going to war with AI platforms over IP theft. A must-watch if you’re building, investing, or just trying to understand where tech is headed next.Timestamps:(1:48) Startup Tip: "Find a service you hate and make it better"(9:23) Why Stripe wants crypto wallet company Privy(10:09) Lemon.io - Get 15% off your first 4 weeks of developer time at https://Lemon.io/twist(15:46) Klarna: The New Rent-a-Center?(20:00) Superpower - Visit superpower.com/twist to get $50 off your membership. This offer is only for the first 100 twist listeners who sign up.(26:28) Why M&A is good and Lena Khan was wrong(30:00) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit northwestregisteredagent.com/twist today!(33:20) Robots are going to make your life better(42:11) When toys become tools(46:25) Tesla's on-the-road FSD tests... do they need safety drivers?(54:13) Jason has the answer for all these AI copyright suitsSubscribe 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:(10:09) Lemon.io - Get 15% off your first 4 weeks of developer time at https://Lemon.io/twist(20:00) Superpower - Visit superpower.com/twist to get $50 off your membership. This offer is only for the first 100 twist listeners who sign up.(30:00) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit northwestregisteredagent.com/twist 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

The opportunity to create a Jedi image with you as a customer is Disney's and Disney's alone. And the fact that you can make a Jedi version of somebody on one of these services is because they ingested Disney's IP. Yes. Here's an example of that. They didn't train it, by the way. They stole it. They stole it. They took it without permission.

Yep. That's stealing. You can't steal people's. IP. So if somebody wants to create Shrek, Minions, Spider-Man, Darth Vader, it should say we don't have the rights to those characters. You can make a green org. You could make a samurai with a laser sword, but you can't make these other ones.

Go to Disney. This weekend startups is brought to you by lemon.io. Hire pre-vetted remote developers and get 15% off your first four weeks of developer time at lemon.io slash twist. Superpower. The best founders know better health equals better business. Visit superpower.com slash twist to get $50 off your membership. This offer is only for the first 100 twist listeners who sign up. And Northwest Registered Agent, starting your business should be simple. With Northwest Registered Agent, you can form your entire business identity in just 10 clicks and 10

minutes. From LLCs to trademarks, domains to custom websites they've got you covered. More privacy, see more options and more done, visit northwest registered agent.com slash twist today. All right, everybody, welcome back to this week and start with us. I'm your host Jason Callagannis. With me again, Alex Wilhelm, Alex, what do we got in the docket today? Give me the top three stories and then we'll get into it. What do you need the top three stories are, Cheney? Top three stories, I'm going to have to say Chimes IPO and the results from it. That to me is just such a milestone event for the technology scene. I'm going to say the combination of Stripe, Shopify Amazon and Walmart advancing their stable coin initiatives.

And on the startup front, Jason, I went through the YC batch. And I pulled out some themes and some notes for us, just in case we want to do a little bit of a dive into the upcoming new generation. Okay. YC class number 723. My God, been around forever. Congratulations to the team at YC. They do a great job.

Okay. So hit us up. What's the first story? All right. So we're talking about Chime's IPO. Now, everyone I'm sure knows, but I'll remind you, Chime is an American neobank that means it's a software company or a software layer on top of traditional banking services, popular amongst consumers, mobile first, youth friendly, popular around

the world. Chime, Jason, went up to a $26 billion valuation during the ZERP era, the kind of 20,021 era moment and time, and went public at about $11.7 billion. It priced at $27 a share above its range, positive, and then had an absolutely great first day. ended up closing at 3711 per share, up 37%. Not a crazy pop, nothing that's going to get Bill Gurley too mad, but a very solid first day result for you get another 2025 Deccorin IPO. All right. So Chime is a NeoBank. A Neobank provides services like checking, banking,

but it does it in a modern fashion so that it's easy to set up an account, easy to get into your checking. It's easy to move money around, move money around. And they tend to have a much better deal on fees. The playbook for startups is, what services do you hate? Who's got the worst customer service? And if you think, who's got the worst customer service? A bang? Mm-hmm. Anything that's monopolistic, like if you only have cable in your neighborhood before Starlink existed or 5G, you know, you can order 5G for your house, I think now in some markets.

So whenever you have one person who's got a monopoly, they tend to let their customer support go down. They take their customers for granted. That's what happens. in socialism and communism, you have like one bread, take it or leave it. And if you don't like the bread, you don't really get to write a Yelp review. So you don't have to fight. You don't have competition like in capitalism. So one of the great playbooks in a capitalistic society is try to find something people hate and try to make something better. People hated New York City cabs. They had a long list of reasons of why a New York City cab sucked. They typically were

dirty. They didn't smell good. Drivers drove like lunatics because they were trying to make a ton of money. And they were under the gun because they have to pay $125 at the beginning of the shift to rent the car. So they're basically for the first eight hours negative. They literally are losing

money for eight hours. Then we have the next stage of this, which is you couldn't get one. And they weren't predictable. So what you would do is you look for one of these, and I think New Bank, Chime, and all these great companies looked and found

these. And so congratulations to them. And there's crypto exchanges who did this, but crypto was a new space. Robin Hood did this to trading on E-Trade or Ameritrade or some of those old clunky services that were expensive and slow. Expensive, slow, bad customer support equals new opportunity available. Absolutely. Sometimes though, it's hard to go after these spaces. It's not easy to get into the banking world, Jay Smith regulation and, you know, incumbents. And I would presume just institutional dislike of change. But that's also where sometimes you can make the most money. I mean, Uber had to take on governments, local governments, state governments,

entrenched interests, taxi drivers. Like they had a myriad number of people who wanted them to fail. But the prize was big enough to keep going after it. And in the case of Chime, a lot of folks made a lot of money. People that owned more than 5% of Chime at its IPO, DST Global, Crosslink, General Atlantic, Menlo Adventures, Cathay Innovation. A lot of people are eating off this deal.

So I'm going to ask you the same question I do every time. How much will this liquidity help the drought that you and I have been talking about for what feels like 10 years now? Yeah, I mean, it's obviously super helpful when, you know, DST, which is Yuri Milner's firm, I believe. And that's his money, I think, primarily. I don't think he's got other LPs now. But for the other folks who were in,

this, they might have been sitting on Chime. I'm not sure when Chime was founded, but this is a 10-plus year old company, I believe. You can check that. And, you know, this is a long wait. They might have had opportunities to sell in secondary, as we talked about during our venture roundtable on Wednesday, which went really well. People seem to like that. You know, this is great for the industry. And looking back, we had a Circle IPO that went 4x. We had a core weave IPO that went 3x. and now we have Chimes, IPO. And what was the pop? 50%, 60%.

It closed up 37%. It opened up 59, just under 60, but closed the day up 37. But still, a very strong result. Those are three in five weeks. We should, every time we, I wanted to have like an IPO tracker here. So at the end of the notes, let's always have the last, you know, a running total. We can copy and paste it in the docket. For those of you want to follow the docket and really get smart and really understand the industry well,

go to this week in startups.com slash docket. Alex says a great job. So in the IPO tracker here, when was CoreWeave? What date? And then the one before that, one after that was... CoreWeave was March 28, 2025. And then we had E. Toro, which was May 14th. And then we had Circle, which was June 5th.

And now here on June 13th. So about a three-month run for a number of successful, mostly FinTech IPOs. Got it. So this is why we make a list. Alex is because we have so much trends. So stablecoin, stock trading app, new bank,

and then an AI hosting company core weed. It stands out a little bit of the last one. Well, I mean, it is, AI is going to be the next wave. I predict we're going to see a series of AI IPOs in the next year. Maybe GROC,

maybe Open AI, if they can clean up their issues. I think you could see a whole flurry of IPOs. Just to be clear, though, you mean GROQ, GROQ, not GROC the AI chatbot that we use over on X. Correct. Grock, the inference chip backed

by Chimov, my friend, Sandeep Moddra, friend of the pod, he's working on there, his company was required by them. I could see them going public. I don't have any inside information, but, you know, if you get towards a half a billion dollars in revenue, a billion dollars in revenue, and we're seeing this, so once again, it's not a political podcast, obviously. But when you're trying to assess what's happening, it's very easy to get emotional and talk about, you know,

oh, this person's, you know, out of it and Biden's, you know, weekend at Bernie's or Trump is anti-Big Tech. Put aside all the noise you hear on MSNBC and Fox. Irrelevant. Look at the data on the field. That's what I like to do. The data speaks. Got four IPOs in four months that are significant.

We also have, I think we're up to about 10 M&A transactions, and we'll go through those again, but we can even do them off the top of our head because we cover this so deeply. Two for DoorDash, two for Open AI. I think there's maybe three for Uber this year, you know, really tiny tuckins. And then one for Salesforce. That was, yeah, that was the moon company. But actually, this is a great segue, Jason, because we've been tracking stable coins quite a lot. And we just found out this week that Stripe is buying a company called Privy, which comes after its purchase of Bridge.

Bridge was their stable coin investment. And Privy is a crypto wallet startup last value at $230 million. Now we don't know how much they paid for it, probably less than that, if I'm being honest. But yet another deal that is a token acquisition. Now this is in the fintech space, but I think it just goes to show that the momentum in MNA that we're seeing is persisting. And across a pretty good cohort of companies. Founders, let's be real. Finding the right developers is time consuming. It's arduous. It's painful. You hear the tone of my voice. And you're trying to scale your startup. Well, my friends at lemon.com can save you time. They're going to save you money. And they're going to get rid of the headache that you have right now, which is finding great developers. They've done all the legwork and they have pre-vetted developers. And they're ready to help you ship product. Their experience, their results-oriented, lemon.io isn't just finding you great developers, but they're helping integrate them.

into your team. They're skimming the cream. They're only offering handpicked developers with at least three years of experience. This is the 1% of the 1%. This is the creme de la creme. And if something goes wrong, Lemon.I.O will find you a replacement developer ASAP. That's the time frame I like. Twist listeners get 15% off their first four weeks. I think that's a month. 15% off the first month. Pretty good deal. Totally unnecessary. You guys have great prices anyway. But hey, we appreciate it. So stop burning money. Hire developer smarter, visit lemon.io slash twist. I do want to point out there that it does feel like Stripe and Databricks and some other these like quasi public private companies. You know, the private companies that tell us their

numbers and they basically act like public companies, they're getting pretty inquisitive. And I think that's really healthy for the technology scene. But it probably does complicate liquidity a bit because if you invest in a company and, you know, Stripe buys it, I guess you might get cash for, but if you get Striped stock, you might still be kind of locked up. So I'm not sure if all these acquisitions are as liquidity inducing as, you know, Google buying you or whatever, but still super positive to see that amount of, you know, shares trading hands. Okay, great. What else is in the news? All right. So sticking to the Stablecoin theme, a couple of things, we just talked about how Stripe is buying Privy. Other news items from the world of Stables this week include

that Shopify is now going to support merchant transactions using the USDC stable coin from Circle, on the base blockchain, which is Coinbase. So we're seeing those companies work together to increase the availability and usability of stable coins. And then news today is that Walmart and Amazon, and then quoting the journal here, and other multinational giants have recently explored whether to issue their own stable coins in the U.S. So we could see a dramatic expansion in the number of staple coins in the market.

And it seems in response to that, Jason, Visa, MasterCard both lost about four or five percent because they might be essentially circumvented in some cases. Now, both Walmart and Amazon have more than $150 billion in quarterly revenue. So we're talking about, in theory, a lot of money movement that could be swapped over to stablecoins. And that, I think, really opens up a lot of opportunities for startups because there's probably a lot of tooling to be built in around the stable coin space. And I don't think that a couple of stablecoin startups we have in the twist 500, one money and stably are all the companies that are going to do well here. But I think our thesis about stable coins is really coming good. All right. So, Stripe bought Bridge. We remember that stable coin. We don't have the date here in the notes, but I think that was in February and March. Let's always have the dates here so we can really understand the industry tightly. Yesterday, Stripe made a second purchase, which was a wallet company named Privy. And so these two, I guess the thesis is are some way related and that Stripe is going to give their partners, maybe even customers. I don't know.

Are they going to go to the customer level and let people have wallets and then let people buy stuff with stable coins? Or are they going to be the provider of stable coins to their top merchants so they can make their own? This is a theory I've been thinking about. Maybe everybody who does over a billion dollars in transactions could have their own stable coin. And if I send you a million dollars in Amazon as a supplier and you give me a million dollars in Shopify, it's all the same thing. Who cares? They're all backed by US treasuries. Am I correct? Are you going to need some, yeah, you are.

And I will point out that Privy is less of a consumer wallet service, Jason, and more of like wallet infrastructure, sorry for the buzzwords, but provides a technology that underpins crypto wallets. So I wouldn't say consumer facing. I mean, Stripe isn't, right? That's not, that's not their main thing. They're not trying to be a company my mom knows, but they want to be a company that everyone who sells my mom uses.

On the, everyone with a billion dollars more revenue. Well, I would pause on that for a second. I wonder if, you know, Stripe at some. point we'll make a play for the consumer wallet. And if they're buying something that enables crypto wallets, why wouldn't Shripe have its own, you know, PayPal type product? I've always wondered, like, that would be quite accretive. And the reason I think that is because they said Shopify would never have like a portal and they have shop, and I have the shop app and I have shop.com. And I find myself looking at the, you know, just on this like three or four times since I got a little

more frisky and buying direct from different bespoke brands. And so I was just buying stuff on Amazon, which I was finding like the quality was going down. And I was looking for the slightly higher quality product. So these glasses that I wear my readers are from Cadis, C-A-D-D-I-S. Okay. And, you know, Katus, I think, is a Shopify store. So when my delivery comes, they put all my Shopify deliveries in one location, the shopper. So now I have that app.

I wonder if Stripe will make a play eventually for consumer wallets. someone. It could be. And by the way, just everyone knows, the shop app is actually very highly ranked. It's currently number 21 on the US free iOS rankings. So I mean, top 50 is a big deal. Top 25 is a hit. I'll add to your point though, Clarna has an app that lets you, I think, search around and buy things because they want to drive more GMV. So why not help with that? So I guess the question is what-Larnia now pay later app is saying if you, here are the merchants who support buy-now pay later. So if you are, buying things and installments start here. It's almost like those stores. What were those stores

called layaway stores that existed in the 80s or 90s? You could go to a store that you could rent to buy. Remember those stores? Rent to buy stores. Rent a center. Correct. So maybe that's kind of like rent a center for them. Interesting. So that seems to be an interesting theme. If you own the merchants, you own the businesses, at some point do you subtly make a play for consumers? And the Shopify, the reason, do you have shops app on your phone? I do not have it on my phone. So if you, the reason to get it is,

if you buy something, they kind of push you towards it to get your updates on shipping. And so for shipping updates, it's like reminding you, but when you go in and look at your shipping, like, oh, your Tadus glasses are coming.

It's like, and by the way, by the way, your glasses are coming. And if your glasses are coming, here are some other things that are related to glasses. I thought so.

I thought, that might be the corollary there. The only thing that I'll say, just thinking about this out loud with you, is I think it's really cool to see Stripe expanding its product remit, but I just don't want to see it trying to eat space in the market that other companies kind of fill because I think that would be, I don't know, we don't need any more incredibly broad incumbents that want to do everything. I kind of like the Stripe does like five things really, really well.

I wonder if they would be good at consumer, but at the same time, I guess all companies need to keep growing. So we'll see if that happens. one more data point here, Jason, is that when I was going through the Y accommodator batch of companies, not a single stable coin entry in that list for this last cycle. That really surprised me. I thought there would be three. Just because... What's your analysis of that? As a classically trained journalist, and then I'll give you the insiders. We'll see if we're insane. Okay, why, okay, let me just one clarifying question. Why are founders making less stable coin companies,

or did why did YC admit no stable coin focus founders? Probably both of those things are true. But generally speaking, the accelerators don't define what the companies are. They accept the best teams and what they're working on. So I think you could leave the YC part out. YC is going to pick the best founders and the founders are going to pick what they work on. So if you come with that premise, then it means less founders are doing stable coin company. Why would less founders engage in the stable coin company?

building stable coin companies, I think it's because that opportunity to build them was five to ten years ago. Whenever the stable coin bridge, whenever bridge was started, that was probably the ideal time and the exit was a billion dollars. Whenever Tether started, that was over 10 years ago. And USDC was probably six or seven years ago. So I think they probably think this is an established technology and there's no opportunity here, not dissimilar to hard drive. You know, like, why aren't their hard drive startups? You know, it's like, are you kidding? Like that technology they've run. every ounce of it. They get 5% better a year. It's a mass quantity, low margin business. So that's what happens with tech. Opportunity goes away. I can imagine a couple of things here because go back to your

point about the $1 billion revenue making your own stable coin. If you're going to eventually want to be able to trade stripe bucks for Amazon bucks, you're going to need a centralized place that can do the swapping with regulatory approval and said. That's a cool idea. I still need more. I mean, or maybe you just, maybe the market is so robust. You just have a wallet and the CF at Amazon has a wallet, the CFO at, you know, wherever has a wallet and their bank, Wells Fargo supports it or they don't and they just send direct. And like the money is in a wallet. I mean, I know that sounds crazy, but I think that's where this is headed. Oh, well, okay. Well, maybe there's less room than I thought, but I will say we do have two of them, a stable coin

focused on the Twist 500. So I'm hoping that those two companies. What are those two do? And that's actually a really good thing to look at because then we could play the game. Yeah. by them? Or is their opportunity still valid? It's a very interesting thread we're pulling here. Founders are all about performance. That's how we do it. That's why founders are optimizing every part of their startup, whether it's your CRM, your cap table, your hiring process. But when's the last time you optimized yourself, your health, your mental well-being? Well, now there's a way for you to monitor all this and manage it better. It's called superpower. I am obsessed with this company. I've gifted it to like five of my family members and team members already. It's the ultimate founder

health membership and it keeps high performers at their peak. You do full body testing across 100 plus biomarkers. You can do it today. Just visit superpower.com slash twist and get $50 off your membership. This is only for the first 100 twist listeners. Go get your superpower membership today. You're going to love this product, gorgeous interface, gorgeous workflow. Because better help equals a better founder, which means a better business, better outcomes, you're going to be happier in life. I wish I had this 20 years ago, but I'm going to use it for the next 20, 30, 40, 50 years. Whatever I get on this planet, I'm going to be a subscriber to superpower.com slash twist. Okay. So this is what happens when a market becomes robust. All the players are looking and saying,

okay, we're leaving the midgame in chess. You know, you have like the opening. Opening happened five years ago. We're in the midgame right now. And then we're about to enter the end game. The pieces are consolidating, right? In the end game, you have less pieces, and the pieces are more developed. The pieces here are bridge getting bought and privy getting bought by Stripe. USDC going public. The what was the act called?

The Genius Act. Genius Act, right? I got that right. The Genius Act, maybe even tether getting more legitimized and moving to audits. All of that is end game behavior. So, okay, I think we're in the beginning of the end game. This is the beginning of the end game. Let's go off those two companies and let's see what they do.

Yeah. I'll add an audible here. Then we'll try to guess the outcome and then we'll look a year from now. We'll put a reminder in Notion to remind us in six months to check every six months if we got this right. And your notion is such a great piece of software. I'm filibuster while X does this. But Notion is such a great piece of software, notion.com slash twist, I think is our code, that you can literally put reminders to remind you in a document.

How cool is that? Like, the document or database will remind you to check. Okay. I think we used to call that no code, sorry, low code, but now it's just a standard feature. All right. So to answer your question, this is the first one we added to the Twist 500.

It's called Stably. And the reason why I picked it initially was it offered what it calls stable coin as a service. And you and I share a thesis in which we think people are going to make a lot of stables. Why reinvent the wheel? Why not go to the company that's good at it? They have expanded Jason in doing some other stuff, including some kind of on off ramps.

for stable coins. Now, I think this number, this 0.5% Vig's going to go down to there's more competition, but they have expanded. Who buys it? Who buys it? I mean,

you can make an argument that Circle buys it. Sure. Take it off the market. I mean, you would be a buyer build. And if they have, this would get bought

for one of two reasons. The technology is so advanced that you want to save a year building it, if it's, you know, year build. Yeah. So somebody like,

you know, some companies like Apple or Elon a Tesla, they're build folks. They have like an incredible dexterity in building stuff. They don't buy. Other folks like Zuckerberg, they're good at building, but they're not innovative, obviously. So they like to buy. And then Google kind of sits in between.

Google will make a Gmail, they'll make their own Chrome browser, but they're also frisky and we'll buy a YouTube, you know, now and again. So I think this gets bought for that reason. So you want to save a year by, by one of those companies, or it gets bought by a legacy player who doesn't have the ability

to ever get this done, or if they did have a number of key customers and your Shripe and you want to enable a bunch of this or your Bank of America and you decide this is critical for you, you're kind of buying the customer base. So just something to think about as a company,

okay, the end game's happening, what happens to your company? A legacy player will overpay. Visa, they'll overpay. banks, why will they overpay? Because they want to get those leaders into the company to jumpstart the company. Yes.

Somebody who has dexterity might buy you to save time and to get your customer. So you can work on those three things. Every customer you get, it makes it easier for an acquirer to justify the acquisition because they don't have to close that customer and you might be, you know, in the skunk works and hard to rip out. That's a really good sort of thing. And what's the second one? or any questions on that analysis?

No, I don't disagree with it. I'm just trying to figure out what it's worth because I think that if you're selling to Visa MasterCard, you're selling potential team and technology over revenue, you know, how fast do your customers buying more

and so forth? You're buying more potential. So let's just say that it was valued at, I don't know, let's say 100 last time. You could probably get Visa to pay you four or five for it. I can see that.

A hundred. Yeah, it was valued at $100 million. The way people will make these acquisitions is, a legacy company will, with a lot of cash, they'll just make a very, some people might say not logical bet, they'll overpay in other words, because they could see this as a threat to the mothership. So if they have a hundred billion dollar business and they spend, you know, a billion dollars on this, that one percent of their market cap to buy this, if they felt that this was going to be a headwind against them and they could lose 10 percent of their market share,

but if they spend 1%, maybe they only lose 5% market share. So that would be like the defensive justification. The M&A team might come in to the person at American Express Visa, Bank of America, Wells Fargo, and give that justification. Hey, we got to defend the cast. The other one would be the opportunistic one. Hey, we have 10,000 customers who all would want to participate in stable homes in some way. If we convert 1% of them a year, that's 100 new customers. Each new customer is worth a million dollars a year, lifetime value of $10 million.

dollars. Therefore, you know, every 100 of them we get is a billion dollars in revenue and lifetime value. We can easily afford to pay for this if we just execute on a 1% thing. That would be the opportunistic way to look at the acquisition. So it's defensive and then growth opportunistic. I'm doing a little bit of math right here, and I'll explain why in a second. Here we go. I can do division without touch typing. Okay. So one thing you're talking about a little bit, Jason, is how much of our company's worth do they spend on an acquisition? And this is a really great rule of thumb that everyone should use when they look at a deal. Because often you'll see a large dollar amount and think, oh, this is an enormous transaction for the buyer. When in reality, it's not.

So we're going to talk a little bit later on about meta, essentially purchasing scale. And they put in $11, 12 billion. Oh, my gosh, $11, $12 billion. Well, that works out to 0.6% of their market cap today, more or less. So that's a rough calculation. Don't quote me on that. But I mean, it's not much of the company's total worth. This is the way to assess them is to look at the percentage of your market cap and then say, number one, what does this give us an additional market cap? Or number two, how does this protect the kingdom? When Amazon bought Whole Foods for 12, 14 million, it was something in that range.

And it was a long time ago. So they bought it for almost 14 billion. The stock went up 30, 40 billion the next day, which is another way of seeing. saying they got it for free. Yes. They got paid to acquire it. There you go. In a certain way.

You know, you want to look at the revenue quality because you could have the market cap go down. You could lose a billion dollars a year running whole foods, etc. So you do have to integrate well. And for every three you buy, every three whole foods you buy, two of them go to zero. So that's another rule of them. So it better, you know, grow. But this is why.

the wrath of Lena Con was so damaging to our industry is people stopped taking big swings and thinking big. We want companies thinking big. We want them thinking, hey, if we put these two things together, we can compete with a bigger player. Hey, if we buy this, we can add a new service and give it for free to customers or at a discount. All of this is accretive to lower prices for consumers. We had this discussion. I think when you first started here as co-host of like, give me an example of an acquisition that resulted in higher costs or lower choice customer. And it's like, you get just many places you can post images other than Instagram. You can use many different messaging apps than WhatsApp.

There's a zillion other ones of each of those. And those are still free. Well, I mean, I guess because I was looking at this earlier on today, DoorDash bought Walt. Uber Eats bought Instacart. No, Instagram. Postmates. Postmates. those made. So we have seen some contraction occasionally, but those have remained robust competitive

markets, which I think is, I think it's okay to say that a deal might be constrictive of competition, but because there's so many players still left, it's sufficiently competitive to not warrant risk. And I think that's where Alina Khan went to a little bit wrong, because I think she's thought that any reduction in competition was net bad without thinking about the broader market itself, if that can be a little bit broad. I think it's a pretty good way to phrase it. I think she thought anything that could potentially harm future competition should not be done. Well, you know, according to who, whose judgment? Lena Kahn's who's never run a business before, who's never started a company,

who's never been in venture capital, has zero skin in the game, some elitist Ivy League theorist writing papers, no offense. I said, I like offensive things, but no offense. But an elitist. This person sucks, but I love you. No, but I mean, an elitist, you know, idologue with no skin in the game. and no experience in the trenches, you know, in the arena is like, I think I can predict what's going to happen in the future. Investors like me are not going to invest in your business

unless you're structured properly. So founders, if you're serious about raising money, you need to set up your business the right way. And that starts with a registered agent. Before a venture capitals can wire you a single dollar, they're going to check if your company is incorporated and it's in good standing and it's completely. That's where Northwest Registered Agent comes in for just $39 plus state fees. They're going to handle your paperwork, keep you compliant, and make sure investors see you as a serious business concern that's worth putting money into. In just 10 clicks and 10 minutes, your business is officially investor ready. Thousands of founders trust Northwest, so don't let paperwork cost you your next funding round.

Go to Northwest Registeredagent.com slash twist and get your business investor ready today. For just $39 plus state fees, you can set up your company the right way, fast, private, and compliant. Go to northwest registeredagent.com slash twist today. Here's what 99 out of 100 of these things proved. Things get cheaper for customers. Customers' lives get better. Like, I'm trying to think of an example of any acquisition where things got worse. Even the one you're talking about, you know, where there was consolidation and food delivery.

and there has been some. Yeah, yeah. What was bought were tended to be the unprofitable, you know, dying companies or sideways companies

that everybody saw the writing on the wall. Like, Lyft's not going to make it out. Postmates wasn't going to make it out. You know, whatever, grub, this or whatever. Like, they were just things that were,

yeah, exactly. They were kind of things that just weren't as good as the ones that consumers selected. So in that case, consumers picked DoorDash

because DoorDash Listen, I'm team Uber, you know that. But I think DoorDash had a better interface and had better restaurants on it. They were about 20% better on a product basis. That's why they were leading. Uber has since caught up. Uber has added some other things, but I would still give a 5% edge, maybe a 10% edge to DoorDish's UX. I think they've just polished it a little bit better and I think they had some exclusives.

And that's called competition. And their fees are still going down. The fees are going down. The membership programs are going up. The robots are all over L.A. There are Cocoa robots everywhere on Melrose Place. I'm staying in the, like, Melrose, you know, place, you know, kind of area of L.A. this week. And I have seen, I don't know if it's the same five, but I have seen no less than 50 deliveries going on.

And these things are zipping around. It might be the same five. And they're on the same five blocks. but these cocos are everywhere on Melrose Place. And just to add to this, everybody, Coco recently raised $80 million, according to my dear friend Rebecca Scrutek over at Tech Run. I actually didn't have this little bit of data, Jason, in the docket. I cut it to focus on some other rounds, but because you brought it up, I wanted to

throw it out there. Can we spend the other... I think we should add them to the robotics section of Pist 500, or at least consider them, and we should check that we have those other robotic companies in it. those robotic companies, people are not taking, people are not taking into account exactly how impactful robots are going to be. I have just two examples. Okay.

Those robots. And then if you can pull up figure tweeted, and it's number one on their, this is the number one story, I think on their X-Feed, for the figure robotics. Remember figure, the company figure, they make a humanoid robot. They were raising at an extraordinary valuation. I think it was close to $40 billion. People were complaining the back channel inside the industry was it was a bunch of

SPV, special purpose vehicles with what venture capitalists consider Gen Pop, rich dentists, putting in money on a free revenue company that didn't even have a product in market. That was the claim. That was the back channel. That's what the hand ringing was about. You might have even seen Rulov say, we're back into this market. where SPVs are being done by people with no skin in the game.

In other words, the people who are running these SPVs aren't putting their money in. They're just getting the value of it. And so they don't care what the valuation is because they didn't pay for it. You put all that together. And then there was this famous BMW story where the BMW, their lighthouse customer, the customer that was supposed to convince you to pay $40 billion, said something like, yeah, we're not using that in production. and then like two days later was like,

well, we are in production. So obviously this got to the founder, I think, this is my time store psychologist, I think this got to the founder of figure who probably was like, yeah, you know, they're accusing me of securities fraud here. It's a pretty serious shit.

I'm going to prove that our product kicks butt. So they've released not a six-minute video, a 60-minute video of a figure robot, and I'm going to talk over it here, Alex. There's a figure robot. It's on a tether, I believe. I think it's hanging from a tether because these things don't stand very well. Um, so they're not like the Boston Dynamics one. But this is sorting packages, putting the barcode down and then moving it. And so, pretty slick. So yes, in your tech, you've been covering technology for two decades. So you

understand that if it can do this today, next week it will be going 15% faster. And then every six weeks, it will be going twice as fast until physics. like the physics of, you know, moving objects in the world. But this will become lightning fast. And if the error rate here, I don't know if it was an error rate stated, but it was given the general, it was given a very general, kind of like a chat GPT prompt. Hey, just put the, um, just put the, um, barcode face down, right? And Jason, just to be clear, this is not CGI.

This is not, this is an actual figure robot doing this. That's my understanding. Okay. So, so two things stand out about this. One, the dexterity of the robots, tremendous. Just backing up your point that things are moving very quickly. But also this, I think, detail is precisely and exactly why I'm pretty excited about having more robots in the market and why I'm very bullish on humanoid robots in particular.

This job sucks. Right. Like, who wants to, I don't want to stand there and do, what is this, a package a second all day long? Just, it looks like it's doing one, two, well we've stopped at a weird time here four, five. It did two and five seconds. It looks like six seconds. We're one every three seconds right now. So 20 a minute. Yeah. Yeah. So you're correct. Now, how many people work in Amazon factories doing something like this? We'll assume this gets

10% better every month, every seven months is twice as good. So this will be doing odd size packages, larger packages, dealing with arrows. It'll be doing a lot of other, like slightly more complicated, but you're right. People are getting paid $15 to $20 an hour to do backbreaking, monotonous labor like this, which is kind of akin to being in a torture chamber. Let's call it what it is. To spend eight hours doing that is it's work. Listen, no judgments. You got to pay for your kids, food, got to pay for shelter. I'm not making any judgments on people. I've been there. Literally, I've been there in life when, you know, I was working week to week to have food on my table and watch my parents do it. So no judgment on the people.

But as a human, as you're pointing out, to do this kind of labor is soul crushing. You can do it in a fun way. You can make the best of it. But it's soul crushing for $15 an hour, $10 an hour. These will cost $1 an hour. And they will work $23.9 hours a day. Yeah, just got to plug them in and squirts some WD 40 on them and off they go. You're done.

You're done. So the job destruction, the job destruction, the job retirement that we're going to see. I'm writing a blog post on this. I'm going to release this weekend. It's going to be greater than anybody anticipates. And in our industry, we don't want to talk about it anymore. My thesis is five years ago, we would talk about it, Alex. You know why?

Because it was hypothetical. It's no longer hypothetical. Waymo was hypothetical. Nobody was riding in them. Nobody was getting Coco or that other company delivering their burritos. Serve robotics. Serve robotics, delivering their burritos. Nobody had seen these robots doing things.

and CafeX, you know, I would get on the margins, people saying like, oh, is this going to get rid of every barista job? And I was like, it's going to get rid of a lot. It's going to get rid of the people who are not doing it for artistic, artisanal purposes. Yeah. Because you want your coffee perfect. You go to CafeX. It doesn't make a mistake.

If there's a mistake, it's like, you know, Edge Kid. Whereas 30, 40, 50 percent of drinks at Dunkin' Donuts and Starbucks have a mistake. Literally, like one in three or four. Yeah. So, anyway, my thesis is, job destruction in the hundreds of millions. I'm going to put it at four or five hundred million according to my early estimates. I think globally, four or five hundred million jobs, three million, two to three million jobs retired a year. I'll say one to three jobs. I have

to really refine this, but I think one to three million jobs in the United States are going to be retired per year. So the 60 million people, 62 percent of people participating in labor, 150 million people working jobs. I could see 1.5 to 3 million of those jobs going away per year. And what jobs replace them? And it will be jobs to replace them. How quickly? Because there could be a period of time in which we delete some jobs but haven't made

the new jobs yet. I'm a very long-term believer that we're going to stay at full human employment for forever. But I'm not convinced that it won't be a period in between the two. And that's when I'm concerned about for folks who currently make $15 an hour doing this for Amazon into warehouse. But I have driven night shift berry harvesters for a farm for 12-hour shifts for $8 an hour. And let me tell you, worst job of my life. Like just sounds pretty rough. Dude, you drive a one mile an hour in a straight line and you just want to die.

So, yeah, I'm totally in favor of this. Here's my question. How did we get from stable coins to hear? So we were talking, I have no idea. The audience will tell us. We were talking about, oh, yeah, acquisitions of the companies, LenaCon, competition, and then robots. Okay, I'm going to take us back to the beginning and just answer the other half of your question.

The other company that we have in the Twist 500, and I've lost the time now, is one money, and they're building their own network blockchain strictly for stable coins. So the idea there, and this is kind of a binary bet, it's either a billion dollars or it's zero, is that existing blockchains are a bit slow. And so if you want to have something that can handle the kind of like transactions per second that a Visa or MasterCard handles, you're going to want something more purpose built

just for that. The anti-argument here is that base, the L2 that Coinbase runs is very good. So we'll see who ends up being right. But that's the latest on stable coins. Amazing. And competition. Yeah.

And robotics. Pretty amazing how quickly, and you know, there's another founder lesson here that I think everybody should just internalize. because it's important. Sometimes it takes the third swing at the bat, or it's swing at the bat for these things to become reality.

We saw e-cash before the crypto movement. Then we saw crypto. Then we saw ICOs. We saw all kinds of permutations over 20 years around digital currency, even PayPal, right? And over that 30-year journey, it ended with the optimal product is a stable one. that's what consumers want. They don't want to worry about their money is going to disappear.

They want to know it's back. They want it to be lightning fast. So we came to a very basic conclusion that people knew in the PayPal days. The PayPal Mafia knew it had to be safe and it had to be fast. So you had to trust it and it had to be fast. And it just turned out the manifestation of that was a stable coin. Robotics. We knew it had to be intelligent.

We knew it had to be predictable and we knew it had to be cheap. those Boston Dynamics ones were absurdly expensive. You know, those are half million million dollar units. They didn't have LLMs. They didn't have, you know, an ability to say, what's on the table in front of me? Yeah. Put the barcode face down. And it's like, I know what a barcode is.

And I know what face down is because I'm a language model. That's pretty basic shit. So the manifestation of that was a large language model in commodity hardware that was driven to that point by, the smartphone and the EV revolution, which made small batteries and incredible sensors and incredible processors and video games from Nvidia. So the ultimate manifestation can be predicted if you just assume all the technological barriers become cheap. And then it's just a matter of when it arrives. This is getting so cheap that I couldn't find it in my notes. I'm not going to spend five minutes looking for it. But there's a company in their latest YC batch that made a $200

dollar robotic arm that you can prompt using natural language and it can play chess for you. Robotic arms used to be industrial only that it cost you a billion dollars and needed to set up for one single use on a assembly line for cars. And they would do one weld 20 billion times. Now they're just desktop toys you can program with English. I mean, that just makes me so excited. Jason, the future is going to be freaking awesome. And I'm excited about it.

So, yeah, these two or three joint gantry robots, I think they're called. is, you know, there's, there's different types of these, but I think that's a jantry. Cartesian jantry robots, three linear axes providing straightline movement are well suited for pick and place tasks and assembly. And those have been around for a long time. They are wildly expensive and they're mounted. And you mount them and you pay, I think they, you know, they got down in the, the ones in the Cafe X machines. You know, it's pretty public knowledge. You can look at them. I think when they started, those were $30,000, $40,000. and now they're $10,000. If you want to have an industrial one that you can run for 10 years and not worry about.

Now, if you want one for home use and you're just going around, yeah, I could see conceivably making a $500 one. So here is the latest entry. This is Vassar Robotics. I did find it. And here is the demo I was watching earlier today when I was going through the latest cohort from YC.

It's doing like a language model commentary on its moves. But it's just, It's a toy. It's janky, but here's the thing. $200 and it's sold out. Yeah, it's a toy. Yeah.

But toys become tools. That is another pattern in Silicon Valley where things that feel like toys quickly become, you know, tools. And that toy, like Canva was a toy for a lot of people, like Microsoft Paint was kind of a toy. Canva was kind of a toy. Then they become essential. And that will start and look, that looks like something like for educational use to have. fun like Legos. That's a kind of modern day Lego and smart of them to, you know, make them, as Paul Graham always says, you know, founder of YC, do things that don't scale. It looks like a 3D

printed, you know, janky, easy to criticize, you know, weird looking product. They sold out. How many did they do 100? You'd come up with a million ways to diss it, just like people did with the roadster. Oh, he's making 100 roadsters for 150K. It's a Lotus Elise. It doesn't have power steering. It's loud. It has no suspension. When you hit a pothole, you feel like your fillings are going come out of your teeth. This was the criticism of that car. And now you have model wise self-driving around Austin, you know. I've seen the videos. I've seen clips of people. Hopefully they're safe. You know, I kind of feel like there should be a safety driver in them for the first year, you know, putting aside Tesla or any company. Yeah, yeah, yeah. You know, just to go off on another

diversion here. I think like having driven FSD since inception and, you know, I just got the latest juniper. It's unbelievable. But I think it's probably an intervention every hour for me on the hardware four, two interventions an hour on hardware three. And there's a website. It's really cool. There's a website tracking disengagements, what they call critical disengagement,

and there's an amazing group on Reddit. If you want to really get into FSD and where it's at today, the FSD group and then this other group of like Tesla super fans, they're recording through the computer and, uploading all of the data and telom... Telemetry? What is that word? Telemetry. Telemetry, thank you.

And they're publishing it. So if you find this FSD tracker, I think it's called FSD tracker, Tesla. Yeah, FSDC community tracker, Tesla, FSD tracker.com. There's a bunch of software. One of them is called Matterkey. And this is like super interesting. and it shows the number of drives with one or no disengagement, city distance to critical disengagement in kilometers and miles.

And so you can see over time what this different software is. And right now it's saying every 200 miles there's a critical disengagement. Well, 200 miles is incredible achievement. It's going straight up. So this is, you know, I've been down the FSD rabbit hole and FSD is. extraordinary. You know, my gut tells me just to appease regulators and avoid, you know, what happened to Cruz and Uber and Waymo in the early days, which at Zooks just happened, you know, these little fender benders, or God forbid, a human getting hit, that's going to

happen in all self-driving cars. Tesla's, Waymos, it's just a matter of time, like random stuff happens. So we should be judging these based on how much safer they are, as you've pointed out, than human drivers, but that's not how they'll be judged by regulators or the public or the press, or just society writ large. The majority of people are looking for these, I've come to the conclusion to be superhuman, not human. Superhuman means, I think, perhaps LiDR to see through fog and see through rain, which obviously Tesla's taken a different approach, although they're testing mules I saw on this FSD forum on Reddit. But here's the data. Number of drives with no critical disengagement, 98% of drives. So, you know, basically it means, like, you could do 98 drives out of 100

and not have a disengagement, but that also means one in 50 people who take, imagine if one in 50 people taking away Mo got a critical disengagement, that would be often. That means if you used it, you know, daily, or if you used it, you know, when you go out to dinner twice a week, for a week, 200 a year, you would experience one a quarter, one critical disengagement quarter. That's too much for a human's brain to process. They will videotape it. It will become a social media thing. Yes.

Just like it did for Waymo when that Waymo went around in a circle. So I think they should, I think the states should have the right to make their decisions. I don't think this should be a federal mandate because I believe in state's rights. Number two,

I think that they should have safety drivers be the standard for all autonomous driving for the first year or X number of miles. thousand million miles, whatever it is. Because the safety driver costs nothing. And they have the safe, they have,

my understanding is they said there's two or three safety drivers per car for Tesla during the test and that there's one or 1.5 for Waymo, you know, these backup drivers who are monitoring everything. So if that's the case, like, there's no shame in the safety driver game. Put one in there for the first year and just have them sit there and talk

to the customers and put their hands down and say, here, watch you go. I'm here in case there's a critical disengagement. A kitten runs across there because we want to be better than humans. And here you see, city distance to critical disengagement. And this is only for people who have 2,000 miles reported, this yellow chart here. And as you can see, you know, back when it was 10 and 11 and 12, you know, people were going. Version number.

Version number of the software, thank you. You know, people were going 61 miles, then 146 miles back down to 110. Then all of a sudden, in 12 and 3, 148 and 237. So that's really, that slope is very notable. It's getting better and better and better. It will be getting probably exponentially better. But still, every 200 miles, if the average ride is five, that means every 40, which was the math we just did.

Every 40 rides, you get a disengagement. That's a little too much for consumers. Now, of those, some number will be picked up by the remote drivers who are connecting to the car over LTE. Who knows? Maybe he'll put a satellite dish in those. I was about to say, who owns a satellite internet company? I mean, you put Starlink in there, it would be even, I don't know if the latency would be lower than 5G actually.

Oh, good point. The top line bandwidth would be higher, but maybe more consistent, or maybe you just have both and you just send the information on both. And if one, you know, you have some sort of redundancy. Actually, that's probably what they would do. That's what I would do. So, because the cost is so de minimis. So here you go. Keep an eye on that. And then the FSD group in Reddit, you can see all the nuances. For example, they figured out, It's amazing what this crowdsourcing can do. There's a thing where if there's tire tracks on the road, you know, somebody peeled out or slammed on the brakes and they left tire tracks, confuses the hell out of cameras. It thinks there's something on the road, which makes total sense.

You think about a camera. All of a sudden, there's a black streak, and it's a random black streak. It's not a predictable black street. The car could have slammed on the brakes for one second, for five seconds. It could have spun out and made a circle. It's just like some random blackness. And I think that's where LIDAR wouldn't get confused. And so I have a feeling

Tesla's going to have a very successful launch, but I think it should be very slow and steady with safety drivers. That's my best advice is safety drivers for the first six months or a year, let them talk to people. I don't know what you think about the sort of deployment of this technology, but Waymo took five years with safety drivers, right? Something like that? Yeah, they took forever.

My question is, would you have this done on a per market basis or a per fleet basis? For example, Waymo is going to go to D.C. next year. would you say that Waymo needs to have safety drivers for the DC market itself or because they've already done this in other cities they don't need it anymore? Waymo does safety drivers every time they go to New City because each city is unique. That's what I was shooting for here. So essentially I think that you're 100,000 or million mile mark, I would do on a per market basis for all these companies?

100%. Per city, per geo. And I used Waymo two or three times while I was here. The wait times are terrible. The cost is more expensive than Uber. but it's kind of rock solid in the area of L.A. that it's in. It's on surface streets. I thought it was actually too aggressive. There were a couple of moves that Waymo did that I was like, that's a little too aggressive. Like it cut somebody off. And so I was looking at it and I was like, I'm kind of shocked

that a Waymo hasn't gotten into a serious accident in Los Angeles because people in L.A. are frisky with the way they drive. And I can't believe, you know, I think it's just amazing. They haven't gotten into a serious action yet or that that data is not out there. And the only caveat I'll give you to that data I was just sharing at TeslaFSD tracker.com is there's been a lot of back and forth of if you should trust that data because I've heard both arguments. These people are out to get Tesla, they're shorts, and these people are super fans. They're along the stock. So when you add a stock and a bet like Polymarket, shout out to our friends at Polymarket.

I don't know if they have a Robotaxy bet, but we should pull it up if they do. That would be pretty cool. When there's a public market stock at stake here, you could have people place a bet for a million dollars and then fake a crash in a Tesla. And there was a very controversial Tesla crash where the person claims FSD drove them off the road.

And it was actually, there was data that the person, jogged the steering wheel before it went off the road and disengaged the FSD. Oh. That's not so good. But the person driving claims

they were still in FSD, but the data shows they moved the wheel. So this is kind of like shows one of those gray areas between the two. Mm-hmm. Oh, here we go. Will Tesla launch a driverless

Robotaxy service before July? This was the most pertinent polymarket I could find. 28% chance. But let's look at how they settle the bet. When you're doing a polymarket, you want to know how this is reconciled. So the rules. This market will resolve to yes, if Tesla publicly launches a fully driverless taxi service

by June 30th, 1159 p.m. Eastern Time. Otherwise, it will resolve to know any service that allows a member of the general public to summon and ride in a Tesla vehicle operating without any human, on board or remote. Oh, okay. Actively controlling the vehicle will count. A human may be present in the vehicle or monitor remotely for emergency. the intervention, but they must not be physically positioned to take control. For example, no safety driver in the driver's seat and must not actively steer, brake, accelerate,

or otherwise drive the car under normal operation. That seems fair when they fully explain. I mean, I think that's a good way to resolve it. And I think that's probably, this is why the devil's in the details. Yes. There, it's all likelihood that this will be still be in private beta. And you would need to be accepted to the program. So a public member couldn't just download an app and do it. Like, you can just download Waymo now in Los Angeles. You don't need permission. So, all right, great show. Anything else we need to get to in terms of housekeeping here?

I was on the housekeeping side of things. No, I have a really great Reddit rapid response for Monday for us to get through. Oh, you want to do it today? Let's do it. Yeah. I love a rapid response. A Reddit rapid response. Here we go.

All right. So I was over on our dear sister forum. Oh, by the way, Reddit is suing somebody? We didn't touch on that. Did you see that? is suing somebody for ingesting their forums. And then there was last week, we missed it, the anthropic. So they're suing Anthropic.

And then Disney is suing another company. So all this is- Mid-Journey. And Meta is suing the nudify people who did that AI app. So quite a lot of, okay, let me break it down for everybody. Yeah. Reddit, the online social forum is suing Anthropic, the foundation AI model company.

best known for us clawed family, if you will. The problem is Reddit's kept telling them, please stop scraping us and Anthropics been scraping them. Now, I'm sure both sides are the allegations, but there's now a lawsuit. The second thing Jason's talking about is Disney, the famous consumer media brand suing Mid Journey, which makes generative AI models that make videos and images. Not a huge shock to see that. And then what's going on with Meta and Nudify, they're suing the parent company of that

service to stop advertising on their platform because they've kept doing that, the meta said no, because they didn't want to be associated with taking money from apps that will make, Jason, help me out here. What's the term for when you make a synthetic nude of somebody? No, it's not revenge porn. Yeah, it's not a real. Non-consensual, artificial imagery. Yeah, nudes, I guess. It's disgusting. Yeah. So, um, the first two are the really important ones on an industry. The, the third one's obvious. You shouldn't do this stuff. It's illegal. And they're going to pass laws for it. The first two are really worth meditating on. I've been saying, for a year, you should not be able to take Disney's characters and make Jedi's. That's their opportunity

in the market. You can be certain Disney is evaluating what consumers will pay to make, you know, our, you know, birthday card with me as a Jedi. If you, if Disney offered me to make Jedi nights, I was just at Disneyland, I did, Rise of the Republic, Rise of the Rebellion, it's incredible ride. Disneyland's an incredible experience. My, my daughters want to go to Star Wars section. immediately. And they sell the ability for you to buy a lightsaber and construct it. They sell Jedi robes. They sell pictures of you on the rides. It's like the whole, it's their IP that they spent billions of dollars on. Tens of billions have been invested in it. They bought it for billions of dollars. The opportunity to create a Jedi image with you as a customer is Disney's and

Disney's alone. And the fact that you can make a Jedi version of somebody on one of these services is because they ingested Disney's IP. Yes. Here's an example of that. They didn't train it, by the way. They stole it. They stole it. They took it without permission.

Yep. That's stealing. You can't steal people's IP. So if somebody wants to create Shrek, Minions, Spider-Man, Darth Vader, it should say, we don't have the rights to those characters. You can make a green org.

you could make a samurai with a laser sword, but you can't make these other ones, go to Disney, which has that opportunity. And by the way, Claude or Grod or Chachibati, what an amazing opportunity. Give Disney a billion-dollar deal for a hundred million a year to be the official partner to make these things

and let them promote it for you and share revenue. And now you've figured out way for the writers and for the artist to get paid. And the companies that own their art, get paid even more. To underscore Jason's point here, we're not going to get to it. We don't have time, but Tollbit, a Twos 500 company that does kind of the marketplace between IP and AI companies, Jason, also created by humans. And there's another one on the list as well that's escaping me. Now, they dropped a report all about essentially AI scraping and how prevalent it is and how much

is happening. The latest change here is that now most AI scrapes are not coming from model training but from RAG, essentially when you do a search and it goes out to find information for you. Those are now the majority case. And the amount of traffic that is sent back remains effectively de minimis. So I think you're describing one facet of a larger problem, but we have not figured out how to repay IP holders for AI. Make the decision. If you're willing to pay $6 billion to Johnny Ive for his company, you should be willing to pay a billion dollars. for Disney for 10 years. Like, literally you could buy all the rights to the Disney characters for a billion dollars,

I'm sure they would go for that. But you're giving Johnny I've six. So it just shows how, you know, I think people haven't thought this through. Licensed Reddit, like Google did, for $50 million, $100 million a year. It's not a lot of money compared to the value you're getting. Yes. And then Reddit should be looking at their top contributors and saying, we've created a contributor fund.

people who have accounts over five years old and that have done over a thousand posts are now going to get a 20% rev share in the licensing data we have and then just start shipping them red and gold and they can donate it to charity or they can sign up

in 1099 when they hit $1,000 or $500 and take that money out. There could be a beautiful system here that shows the world how to do it correctly. It's not too difficult. What I just described could be built in under 30 days

by the entire industry. You're choosing not to do this. They're choosing not to do it. Well, because right now it's free if they win these lawsuits. They're not going to win. They're going to lose. They're going to lose and they're going to lose hard. Like, when I say lose, they're going to get injunctions against them.

So what they should be doing, Sam Wotman's a great dealmaker. It's like his best skill. Google's got a lot of history with doing deals. Go to folks and say, hey, what would be reasonable for the next five years? Let's come up with the system for five years. If people want the output of your characters, they want to put in prompts around your IP, we can alert you when that is. You tell us your keywords.

And then when the output happens, we can say officially licensed by. Just like if you want to use Getty images as your big, bold images on your blog, that's not fair use. Now, if you want to crop, you know, 5% of a low-res or a third of a low-res, getty image, and you're making commentary on it, yeah, you could do fair use. But if you're doing that every day all the time, you're probably going to need to get permission. So there is like a balance here. And just be thoughtful about it.

This is my message to the industry is like, be fair. Put the fair and fair use. It's very simple, folks. Well, I couldn't say that better myself. All right, Jason, do you want to do the red wrap response? We're safe for her Monday. I, you know what? I've got a call with a founder right now.

So I'm going to demure. We'll do it on Monday. All right. It's a good one. This week in startups. com slash docket. And we have a tick talk account that I want everybody to go find and an Instagram account, go find those,

follow those and just say hi to us over there. We're trying to build up those channels, and we'll see you all next time on this week and startups. Have a great weekend. Bye, everybody.