The Stablecoin Future, Milei's Memecoin, DOGE for the DoD, Grok 3, Why Stripe Stays Private

25:06It's to help the organization succeed. And so I think I have heard from people individually. I've seen this tenor shift underway right now. And I think that Jamie Diamond is another kind of exemplar of this that seems to have some resonance. All right, Shamaff. I want you to respond specifically to this next clip. Let's play the second clip about organizational bloat. Every area should be looking to be 10 % more efficient. If I was wearing a department of 100 people, I guarantee you if I wanted to, I could run it with 90 and be more efficient. I guarantee you, I could do it in my sleep. And the notion these bureaucracies, I need more people, I can't get it done.

25:43Now because you're filling out requests that don't need to be done, your people are going to meet you, they don't need to go to. Someone told me to prove some of his wealth management that they had to go to 14 committees. I am dying to get the name of the 14 committees and I feel like firing 14 chairman of committees. I can't stand it anymore. All right, Shemoth, the bloated bureaucracy at big companies, your thoughts. Well, you know, there's that adage that says something akin to 50 % of advertising is useless. We just don't know which 50%. Yeah. I think it's probably true from most corporate structures in general, which is that a lot of the organizational bloat has evolved because of the way that people have responded to how you use technology.

26:29So meaning, if you went, look back 50 years ago, if you look at that famous picture of the Microsoft early team. They didn't rely on software necessarily. There wasn't Salesforce, there wasn't Workday, there wasn't all of this infrastructure. And so instead they probably organized by what they were good at and they just tried to do things efficiently. And I suspect that many companies in the absence of technology found a way to just be very efficient. That started to change when you have these rigid demarcations of where one job ended and another job started. And part of why that happened is because you had all this software that went in and convinced people.

27:06This will create efficiency, but in return, the chief marketing officer's job is X, Y, and Z. This is how the roles are defined. This is how people do it. And so I think that the reason why things have become so bureaucratic and bloated is that there is just this propensity to run towards software because you think it's a solution. At best, it's a symptomatic aid. It doesn't address the root cause. And and in fact it promotes bureaucracy and it promotes the bloat that Jamie's talking about. And if you look at Jamie's PNL, he spends $16 billion a year on IT. And I suspect that if you streamline that, you'd actually have half as many people because they'd be doing the job in a wholly different way.

27:50And by the way, the counterfactual to it is if you look at companies like Facebook or Google or Tesla or SpaceX who designs, and I'm sure Stripe is the same, who designs a lot of stuff internally, that's custom built for their org. I think the way that you see this in the revenue per employee and a bunch of these other metrics in terms of the efficiency of those companies. So I think what he is talking about is that he is a victim of this push to productivity because he would look like a luttite if he didn't to drop technology. But by adopting the off -the -shelf stuff, he introduces organizational bloat because these things are demarcated very, very rigidly.

28:27Yeah. You got the marketing team as you mentioned using HubSpot and then you got like the sales team using on our own sales floor or organizational bloke. The other thing I just want to say on the first topic is I've mentioned this before. Other than engineers who are naive but can be extremely productive from day one, there are very few other job types where naivety is an asset. Most people early in their career are in a j -curve where they are negatively contributing And the whole whole glowing everybody down. Yeah. And the whole goal is that you invest in these people so that they come out of the jaker.

29:03There are probably other jobs that are like engineering, but many, many are not. And so I think it's important to get the kind of mentoring you get by being in an office. And in the absence of that, I think these young people, like Jamie said, are totally lost. That's on them. But then for the company, they're completely unproductive and useless, which is on us. Hey, John. Toby, I don't know if you know Toby from shop, But he did this like zero based budgeting kind of concept for meetings. He just perched all meetings at the beginning of the year He just like deleted everybody's meetings from the top down.

29:36I'm curious how you think about below And just all of these meetings and committees. Do you worry about that? It's right? We know to be very well and I don't know I always Feel like yeah, we should I'm tempted to take some of the ideas like we haven't done the meeting deletion one And you just say, oh, the meetings get recreated, but they measured us and they didn't. It sounds like, and I do always enjoy Toby's perspective, which I think that many organizational problems are in fact software problems. And you just need to write a script literally. I think he wrote the script to the meetings from the group counter instance, but there's this purity that you're over intellectualizing your problems.

30:17And I do agree with Jimathan, the remote thing, where it's very dangerous. One thing that can be dangerous with as CEOs think about this stuff is I think there's these unfair, anecdotes that feel unfair that get people really riled up. The quiet critter is the anti -work subreddit. You know, all these talk of people working two jobs and that generates a lot of energy with corporate leaders. But you don't want to design your policies around like the bottom five percent of the company. That would be a horrible mistake. Yeah, you want to design your policies against a top We have some outrageously productive remote people and they're off.

30:50And again, the cabin, I know somewhere just coding up the storm. The thing that we have seen and interestingly, we measured this before COVID, because we were doing a lot of remote hiring and we wanted to see how much we should lean into it, is that it is not good for early career people. We could actually measure it in our productivity data before the whole discussion about remote work happened during COVID. And it's bad from a work point of view. It's also just bad from a personal point of view where they go mad, because they're 23 years old. And they're not. And they're in solitary confinement.

31:20Exactly. I mean, it's the initially solitary confinement. It's ridiculous. And by the way, breaking news here, Jamie Diamond now knows which 2000, or I'm sorry, 1 ,739 employees to lay off first, there is a coworker dot org petition to get Jamie to retract his statement. So they opt in has been created. If I know Jamie, I know he'll be retracting that statement right away. Absolutely. He will bend to the pressure of those 1700 mids. Patrick, how do you deal with mids at Stripe? How do you deal with the mids? The people, I'm not saying you have any, but maybe you've run into, because you have over 10 ,000 employees.

31:57When somebody's average, that must make you crazy. How do you deal with it? No, the median employee at Stripe is awesome. The median employee at Stripe is not the median person in the population at large, although I think the median And first in the countries we, you know, we have a lot of work. It's also quite good to see. Well, no, we're just into terms. Mids are people who are just average people, not the above average striped people who opt into that. But how do you deal with low performance is kind of what I'm getting. Well, look, you need to have an aggressive performance management culture and to stay on top of that.

32:27And look, it's not, it's not good for anyone to keep those people around because nobody likes feeling that they aren't succeeding. And so if those people are, you know, their careers aren't advancing, they're not getting, you know, positive feedback from their manager, from their peers, they aren't shipping things like whatever. This is just like not a good equilibrium for anyone. So we really try to, you know, stand up at that. We track it closely. The thing just on this discussion broadly to say is, I think people very readily fall into a kind of normative, moralizing perspective on this stuff of people should be in the office.

32:56They shouldn't be in the office, but like there's a lot of should here. I think it's helpful to just one kind of a John reference with, you know, some of the analysis just, you know, be quite empirical and objective and just like look at what the data says. And then second, to recognize, there's a lot of heterogeneity. As in people have different preferences, people have different abilities to work effectively when they're by themselves and some don't. Organizations are doing different kinds of work. Nvidia, last I checked, is doing pretty damn well. And Jensen is on the record saying he doesn't give a shit about where you work.

33:27Coinbase, Shopify, they're all these remote first companies. And then as recently chatted the folks at Jane's Street and they really believe that being co -locations and be able to share ideas and the trading floor and so forth is really important. But I don't think these pictures or these worldviews are necessarily contradictory. They buy a higher different kinds of people, they're in different kinds of businesses and so on. And so I guess I'm just skeptical of flat sheds in this space. And many paths to have. Yeah. Many paths to have. All right. So let's move on to our next story. Let's just keep in mind.

34:00And labor productivity in the US is up like 20 % in the last 10 years. and so just like, again, you just look at the data, just the median person, the economy, or the average person is producing 20 % on an inflation adjusted basis more than they were 10 years ago. Yeah, I'm not gonna keep ramping up with AI and all these amazing tools that are coming out. We'll leave that on the side for now, because that would be an hour long rabbit hole. We could jump down, but we gotta get back into Doge. The number, well, I've heard a couple of criticisms of Doge. One of them is it's one side we're only hearing about, you know, people on the left doing griffs and USAID.

34:31The other one is, hey, you're pointing out little tiny things like USAID when are you going to get to defense spending and social security? Well, here we are Washington Post is reporting that in between doing sets of 47 push -ups defense secretary Pete Higgs said, ask senior leadership at the Pentagon to develop a plan to cut 8 % from the defense budget Each of the next five years. That's compounding 8 % here's a chart. We're talking about close to 300 billion in savings over five years if they hit, which isn't a crazy target eight percent a year. It's just crazy in our country where we haven't even been able to have our defense department pass a basic audit if you've seen those type of reports.

35:17Let's pause there and just talk about military spending. I think that military spending needs to sit downstream from technology because if it doesn't, you're sort of misappropriating the money. And what I mean is that we're inventing incredible capabilities in AI and autonomy. I think that you need to take those things first and figure out how to projectize them because I think that builds the kind of modern war machine we need. And otherwise what happens, I tweeted about this, Nick, maybe you can find it, but like the CBO read flagged a project where the Navy was about to appropriate $1 .2 trillion to build frigates.

36:01Now there's a body, I think, of military planning that says this is a projection of power and so you need to spend this kind of money because people want to see the big boats and the big iron in the water. Okay, and maybe there's something about that. But the reality is you can't be spending three or four billion dollars a boat and taking eight, nine, ten years to build these things. So this is not sustainable. And part of why they do that is it's not coupled to what's actually happening with respect to innovation, where there are core pockets of companies. Seronic just announced a $600 million raise today.

36:37a sale drone announced hundreds of millions of dollars of contracts with the Navy. Androle is doing that with the Army. So I think that military spending needs to happen downstream from what's actually happening in technology broadly speaking. We don't have that. What you have instead are system integrators with extremely deep connectivity that are able to contract well and not necessarily to invent well. Freebergherner, that's there on cutting defense spending. Obviously we have to Tramot's point. Amazing founders like my guy, Palmer Lucky, cutting the cost of very important, he's on remand. He hates it.

37:17That's my guy. He hates SD. Oh no, it's all a joke everybody. Calm down. You just have a little bit of a break. He hates you Jason. No, listen, I know all the board members, I got a personal relationship with them, but he's gonna send it. He comes to your ranch. He loves Jake. He loves it. Everybody needs a foil. That's all for the problems for the rest of us. You go out and talk to people for no reason. What did you talk about? I never talked shit about Stripe. Guys, we don't have any beef with Jake. You call your employees mids for no reason. For no reason, you just like, oh, what about your mids?

37:47That was a hypothetical. Okay, I did say that you guys pocketed 500 large. Look, we can come to the summers and, you know, Palmer style just like. Yeah, oh my god, yeah. long list of things I've said about you. Absolutely. Shout out to my guy, Palmer Lockheed. What do you think, Freeberg? For sure. Let's get back on track here. Okay. So here's what I think if you take defense down to first principles, there was an excellent tweet that we were all texting about yesterday. It may be observation that prompts negotiations with Russia and China, where there's all of this Heming and Haing about those negotiations being complying with the wants and needs of dictators may actually be a shift in strategy on the global relationship the United States has with other global powers.

38:37In particular, a shift from the objective being about US primacy and the US being kind of the sole great power on earth to recognizing that that's no longer the case and that in a multipolar world, we no longer need to invest in wars need to invest in conflicts, need to invest in defense with supposed allies to try and build up our strength across the globe. And I'm not saying that this is necessarily the right strategy, but it was an observation that maybe the strategic imperative is now to have kind of a multi -puller stance in the world rather than a stance of primacy. And in that framing, you then ask the question, okay, make that the case.

39:16Now, if we do agree that we are all going to settle into a new world, where China, Russia, the United States are not necessarily equal powers, but shared powers across the globe. In that context, do we need to have as much of an investment in global defense? Do we need to continue to pour dollars into building up arsenals and military bases and troops and stations and positions all around the world? Perhaps not. Perhaps the world gets divided peacefully. And we open up global trade relationships and everyone benefits economically from the advances in technology and improvements in productivity and the world order is peaceful, but multipolar.

39:53Maybe that's the new era that we're entering. And in that context, you don't need as much of a defense. And separately, to Chimaz point, there's different technology that's now in play. We've seen it in the Ukraine -Russia context that a $10 ,000 drone can destroy a $10 million piece of equipment. And China now has drone factories that can output millions of drones each month. So if China develops this new type of arsenal with millions of autonomous flying systems that can go and attack troops and attack expensive pieces of equipment, do we really need aircraft carriers? Do we really need tanks?

40:24And I think that's the whole Hegseth led Trump led conversation that's underway in defense right now. Number one, multipolar. Number two, therefore we don't need as much defense spending. Number three, maybe the defense spending that we do do should account for the new technology in play in the battlefield, and that really changed as the character of how the defense department is structured and how funding is structured. So that's really, I think, the way to look at it versus, hey, let's just cut defense spending for cutting sake. And that might be what's going on right now. A holistic view of it.

40:54Patrick, any thoughts on we're seeing in defense tech and saving money through Doge? Well, obviously what Andrew and others are doing is pretty amazing. But we're obviously not defense experts, but just bring the credit card merchant perspective to bear here. We naturally just go and look at the time series and the data around us. I'm struck by, again, some of the details wrong here. This is outside of our zone. As far as I can tell, the cuts proposed over the next couple of years for the defense department are of approximately the same magnitude as the reduction in the defense budget that occurred between 2010 and today.

41:38And so it's not like this is some unprecedented transformation in DOD budget. We've done this. And then secondly, you know, as far as I can tell, one of the most ecumenical, uniformly shared bipartisan issues in Washington is the inefficiency and the proskecy of defense procurement. Jim's FALLOW is writing a book about this in the late 80s. You had Augustine's laws and at their whole book about this, just everyone seems to fervently believe that defense procurement is monstrously inefficient. Now, it's possible to make budgetary changes without fixing that, but obviously the prospect of meaningful improvement there seems like it would be really beneficial.

42:24And if I can just give a quick book recommendation. Here's this book, Boyd by Robert Corham, about John Boyd, the Air Force Colonel, who was part of the reformist movement. I feel like everyone in Silicon Valley has that book on their shelf and no one's actually read it. But it is a... Exactly. It is called Reference, sprinkling some udaloups into your remarks, all these things. Exactly. Yeah, yeah, yeah. Sounds smart. But that is a great book and it's a book about Air Force procurement, essentially, where he had his, you know, basically historians that the Air Force generals of the time wanted planes that were bad and he had a theory about better fighter jets and he had his fingerprints all over the F -16 and the A -10 and the F -15 and various aircraft and it was a real battle to get the Air Force to produce better aircraft and they really, you know the generals really wanted these bad aircraft that they had planned and so that's a fun read at this moment in time when it feels like we have this similar transition from man to the book.

43:20Tell us the name of the book. I know there's many books about it. It's called Boyed by Robert Korum. It's a really engaging read. It's also just very well written. It's this kind of narrative nonfiction style. Yeah. There it is. Okay, everybody. Another book selection from the All -In Book Club brought to you by Stripe. I use the code All -In to get a year free of everything. You have to go into the Stripe Press books. Absolutely. Oh, you do actually have a series of cool books. Yeah. We'll plug those towards the end. And all right, Tremoff, you added a crypto update. Crypto corner is back. We had an exciting week of innovation in the crypto space last week, Argentine president Malay, who is a hero to a lot of people in on the right or for government efficiency, promoted a meme coin.

44:08It was called Libra, Dullesign Libra. And he originally tweeted, this private project will be dedicated to encouraging the growth of the Argentine economy with a link to Libra for his citizens to go buy it and buy it they did. But he deleted that tweet when this whole thing came apart and said I was not aware of the details of the project and after having become aware of it, I decided to not continue spreading it. The market cap ripped 4 billion. It crashed 95 % as these meme coins always do. 74 ,000 traders lost almost 300 million. 24 wallets had losses over a million, and Malay has been sued 100 plus times already.

44:55And this just happened last week. He's being investigated by his own government now. And there is an impeachment attempt underway by the opposition. Malay's team told CNN that his endorsement of the coin was a mistake. Really? Oh, wow. Going on a limb there. According to insiders, Millay never actually owned any Libra and was not associated with the coin. I think family members maybe put them up to it. The details of why he brought it remain a little bit unclear. There's a lot of speculation. Jamat, your thoughts. It's kind of crazy. I mean, he was on such a positive upswing of momentum. It doesn't make much sense why he got embroiled in all of this.

45:34the problem with this, though, is I think that the cover -up is always worse than the crime itself. So the first message was very Clinton -esque, like I did not have sexual relations with that woman. He was like, I did not endorse it. I just shared it. It was his justification for how he could rationalize what he did. The kid that's behind this thing, Hayden Davis, I think, is his name? He was on coffeezilla. Was it incredible one hour? Did you see that? The coffeezilla. Well, I saw some of the clips on X and it was pretty brazen because he essentially said that he had Javier Malay in his pocket.

46:16And then there were text messages that used some pretty colorful language to basically say the same thing. Then on top of that, there were some text messages that seemed to implicate Malay's sister as having got some of the money from all of this. I don't know, the whole thing just makes absolutely no sense. He was doing so much good, and now he's going to go through this whole cycle of trying to wash his hands of this whole thing. It's a complete waste of time and effort. I don't know why he did this. And there was another interesting little tidbit, Friedberg, a friend of the pod, David Portnoy, supposedly he's been getting in on this, and he's a gambler, and he loves gambling, and he looks at his gambling, obviously.

46:55He had put reportedly millions of dollars into this, and this guy, we're talking about gave him his money back. The sky also has something like a hundred million dollar sitting in a bank account anywhere. What's your take on all these meme coins, Reaper? I don't like them. I don't think that they're like good. I don't think they're productive. I think that a bunch of people are going to put money in and lose money and a few people are going to make a lot of money. And you know, but at the end of the day, it's no different than the people that sell trading cards or the people that create and sell collectibles and get paid for them.

47:29And this is just effectively a digital collectibles business. Unfortunately, I think it's like amplified by like a thousand X because collectibles businesses have friction and they're manual and you got to ship them. And this creates a bit more of a digital frenzy where you see the social feedback loop happen really quickly in real time. And that drives these things to a high value, which means people have the ability to lose a lot more than the otherwise would. But look, I mean, these are not helping the financial system get rebuilt as we talked about earlier. They're not creating productive value.

47:58They're entertainment mechanisms, it's just like any other kind of gambling system might be. And you know, people can choose to do that if they want, but personally, I'm not into it. I just think it's stupid, but whatever. Patrick, you stood there on. Yeah. Do you think these are like collectibles or do you think they are perceived by the people buying them more like securities in more like Bitcoin. They do to steal them on the other side of the argument. They do trade with a ticker symbol. They are traded on major platforms like Coinbase and Robinhood. And people share charts about them. So where do you stand on it?

48:36You're in the finance business. Memescoins good. Memescoins bad. I'm basically with Dave. I mean, they seem to me to be maybe analogous to gambling. But I don't know that we want to ban gambling. If you're able to do it responsibly, you understand what you're getting into and so forth. I guess that's fine. But as you say, judging by the tweets that I see, there are a lot of ticker symbols and charts and prognostications about future price trajectories and so forth that lead me to think that people are placing somewhat more weight on the assets and security value of these as compared to the, I don't know, some new menace intrinsic aesthetic value.

49:29So, yeah, it's in the sky. John, maybe two things could be true here. People are gambling and they are being presented as financial instruments and they're trying to trick the suckers at the table. The suckers, in this case, being the people who voted for Malay to Tramock's point, this is the unbelievable cell phone of the decade. Yeah, look, I don't like meme coins. I think they're bad. And I think they're part of, like Patrick said, a broader sway of things that we need to figure out, society, where the legalization of sports betting and combined with highly targeted advertising. I don't know if you guys have seen the stats on, you know, whales in sports betting, losing very large amounts of money.

50:10And it's just these heartbreaking tales. And there's a very large number of them, of people kind of losing much more than they expected. And I don't know, we have to reckon with these societal questions that are, I think, the super easy answers. They come along from time to time. I only learned recently that state lawteries are relatively recent phenomenon. Like, I think it was one state started doing it in the 1970s and then a bunch of the other states followed suit. But it's kind of odd when you step back that like I've passed a billboard on 101 for power, you know, the state of California trying to get me to buy a lot of negative EV bet.

50:46Yeah, it's just like, but that's become very normalized. And so I think it's a bucket of hard questions here around, you know, beamcoins, sports gambling, whatever, I don't know what you do. But there's a lot of, the mean coins are not the only place you find these very hard breaking stories. This is the, this is the first time where they've actually talked about, or at least where I saw the details of how this stuff happens because he laid it out. And there's these people called snipers that go and like pump up the bids right as soon as the coin gets launched and then they're able to feed. So there's like this entire mechanism.

51:20It's also shady. I was going to say some there where I feel like the specific thing within meme coins that's probably most pernicious is like the rugged dynamic. And if you could have meme coins. The hunt to a girl. But without the pump and rug, if it was just some mimetic tracker of some sentiment or something, maybe that'd be okay. But the particular way in which they seem to be employed is some sort of discontinuous run -up and then the rug. What do you think, Jake? I agree with you, Chema. Malay had the greatest PR run of all time, I think. And he became an inspiration to all of us here in America who were concerned about the deficit and out of control spending and ridiculous departments.

52:07We heard Jamie Dheim in talking about ridiculous committees and all this nonsense. I don't know if you guys remember, but remember he was like minister of culture, Afwara and minister of gender, Afwara. This was the precursor to, of course, Doge, where now we're like USA, deleted,

52:25Department defense department minus a percent. And what I really find terrible about this is that what it means for leadership, what Malay did was he rug -pulled the people who put him in office. The people who voted for Malay are the ones who got hurt here. And when you think about leadership at its core, it really is about putting the needs of your constituents ahead of your own interest. The needs of your investors in the case of, if you were running Stripe, right? you got to think about all these shareholders. Leadership at its core is, I think, setting the example, right? You set the standard.

53:03The moral, the ethical, the vibes, the culture. You set that standard. He had set such a great standard that we all loved. And the appearance of impropriety is impropriety in my mind. That's the leadership standard that should be here. So even being near this, your sister launching it, your brother launching, whatever it is, he then went on to taunt. This is where I've really, you know, like people make mistakes, but, and this is a stupid one to make. But the taunting of his own followers, you know, I'm out on Malay right now. This is what he said. The reality is if you go to the casino and lose money, I mean, what is the claim if you knew that it had these characteristics?

53:41This is another failure of leadership. Leaders own their mistakes. They don't attack the victims. You take ownership of it. And the way you should judge people, I think, is what they do when they're given a lot of power, And what they do in the make mistakes, Millay is a failure on all of those fronts. It's absolutely apporn. That's it. Thanks for coming to my TED Talk. No, I'm just, I'm on fire about it. I just think it's really terrible. Do you need help getting off your moral grandstand now? I do. I do. Actually, yes. Yeah, I'm over here. I'm sorry. I actually care about morals, ethics, and leadership.

54:16I think that there's a standard set by these people. That's what I think about when I think about you. Yeah, of course. Thank you. All right with friends like these Carlson brothers. Can you imagine? Imagine please say there okay. I'm so I know like can you please say the call us in yes and I So now it's the god damn I call this and I'm pronouncing the Irish okay, we speed things up a little bit We couldn't together It's a little bit different. You wouldn't know this from being from Sri Lanka a great country No white anyone watches the show would you? I don't know. Just something to jump into this right now.

54:48Everybody says you have no content for this. It's funny. It's funny every show, a train wreck, and we have to get it out of the... The banter is why people come. People listen. So many TV shows are about, it's nice to have friends. I mean, you look at friends or how much your mother, my wife and I are rewatching the Westring right now. And it's basically a show about, you know, yeah. But it's just like, the same old buddies and loyal to each other and everything. And I think the underlying idea behind lots of TV shows is it's nice to have friends. and I think that's the success the all in process.

55:16Less wing by the way, is an incredible, which season are you on? It's an incredible show. We're up to season four now. God, I gotta get in on that. Five or seven, five or never. I haven't got in on the way. I'm gonna put a croissant left after season four. And so many people say, what kind of thing. The whole thing about the great debate that America needs to have, I think it's still like the missing aspect of modern politics is every thing gets. Well, the great debate is like, let's talk about the topic that's at hand and talk about it on the merits of what's right for the country, as opposed to everything being about attacking because the other side brought the idea forward.

55:50And now we have to attack the other side and frame the idea as being beneficial to them and hurtful to us. Nothing actually gets resolved because we don't end up having objectivity around these conversations around some of the major issues that the country faces, many of which, by the way, both sides have valid points of view. And if we can kind of have the great debate, if we can have these conversations like Doge, right? like abortion, like, you know, the rights of states, like spending. Like, there are all these things that we should be talking about rather than use that moment as a way to attack the other side politically so I can make sure I've got points and kudos leading into the next election cycle.

56:25It's just awful. Anyway, I'm going to start about the West Wing. It feels like a purist, like, just a beautiful way of thinking about how this could work. I wonder what it would be like to watch the West Wing and then House of Cards back to back. That's something I should know. It's like really a juxtaposition, those two different checks. But isn't the Westwing kind of the opposite of what you just said you want the all -interrepresent because I see I see the Westwing as being sort of fully immersed in and representing you know one sort of particular worldview There was you know There was in some sense we look back on the 90s at the Clinton years or something as you know This period of great harmony in the country and you know that harmony might have engraved in the economy was doing well And you know all the things and but it wasn't exactly a period of I mean whatever I wasn't here in the 90s but from afar, it did not feel to me when I was eight or whatever, as a period of tremendous ideological debate and fervor and schisms and all the rest.

57:18During the 90s, during the Clinton area, you're saying. Yeah. Yeah. And I think, I mean, I'm wrong, but I think of the West Wing as, you know, a kind of recapitulation of the 20 years. Maybe they were, I mean, maybe they were the compromising party because, I mean, tell me another modern Democrat president that's had any point of view who unbalancing the budget and creating a surplus, which he was essentially was aligned with the Reagan point of view at the time. And he kind of, you know, again, as Jay, Jake, I'll say it was a centrist and he brought the party he's closer together rather than farther apart with how they operate.

57:48I agree with Patrick. I see the thing that makes the West Wing a great show is that it's about the insider nature of the White House and the West Wing. And where you see these characters like Toby, who would never be a star in any other show under any other circumstance, on any network ever. And instead, he's one of these central quasi -good, quasi -naferious bully kind of, you know, he was like the precursor to the Rama manual archetype in the Obama White House, I think. I also found it funny where, you know, the way Dominic Cummings has talked about just his experience of life in government was that it's so distracting trying to get anything done because, you know, you have some plan, you get up in the morning and you're going to go do something that matters for the country.

58:33And then you're just instantly by 8 a .m. side -swifed by some kind of silly controversy of the day. That's basically many of the episodes of the Westring where they like have some actual important thing that they want to get done. And then they just get way laid by a silly controversy. Yeah. It seems to me like you're also the product of the technological innovation that occurred during your presidency and during your term. And if you think about Clinton, he got to ride the internet and this massive economic boom. And you look at Reagan, the PC boom, I mean, sometimes the timing really matters, I think.

59:09So do I think? Yeah, and again, I'm not any grand experts on the Clinton years, but I think it is interesting where one of the first acts of the Clinton presidency was the Deficitist Reduction Act, Dave Deere Point, once the last time that a Democratic president really cared about the Deficitist, and I think federal spending fell by five points of GDP over the course of the Clinton presidency, which is really not a small amount, you know. So obviously there were some kind of structural tailwinds from technology and the internet and all that. Yeah, a bunch of that was defense, but like none the less.

59:43So he did it. And the last two administrations, and you look at California, there were massive windows of surplus, and there were massive windows of a surging stock market over the last eight years and we plundered and we wasted them by adding 16 trillion to the debt during a good time. Like what's going to happen during a bad time? Just absolutely brutal. Let's move on. Where do we want to go here? We got Grock 3. We got the China private sector. We got a victory lap for freeberg. You guys questions about our institute and the EVO model. We should do that. Let's do the arc institute. Freeberg, why don't you ask the question?

1:00:22Patrick runs the or a institute, right? Okay, yes. And we're the co -founders. And then there are two scientists. You're one of those scientists. And you guys are a funders of it? Or maybe you guys give us the answer to our question. You put a lot of money into this, yeah. Yeah, so the art institute is a non -profesh. It has basic biology research. It's in Palo Alto, Nexus Stanford. It's about 230 people today. And yeah, John and I are among the funders of us. But there's much of other very generous donors. Can you explain how you say how you have this? Curiosity -driven research that's on the website.

1:00:49Yeah, there's got two things behind us. So the first is the vast majority of biology scientists today receive NIH grants of doing basic research and the NIH grants are one just hard to get and annoying to get you know scientists spend 40 % of the time working on grant overhead and so forth but worse like even more perniciously the grants are very restrictive in terms of the kind of science they can do and so we ran a survey of scientists back a couple of years ago of top scientists and four out of five, like 79 % of them told us that if they could just spend money however they wanted, if they weren't kind of limited by what they're prescribed by these NIH grants, four out of five tools, they would change the research agenda a lot.

1:01:28And so I think the analogy here is imagine if there was only one VC firm and it was run by the government. How would that change? And that VC firm had strong opinions on what kind of companies people should built. Exactly. You know, literally the grant panels at the NIH are, and they're consensus based, like explicitly. They've kind of, consensus based scoring mechanisms, and they, you know, penalize you if you're doing work outside of your field and so forth. So we kind of, we go to all this work to train these amazing scientists, and then we sort of don't let them pursue their best ideas. That's kind of problem one.

1:01:59And the ARC, the ARC investigators, you know, they're fun to do whatever they want, curiosity of different research. And then the second thing behind ARC is this idea that you can kind of divide diseases into three categories, you know, the infectious diseases. And we, you know, broadly speaking, know how to, you know, generate cures for treatments for infectious diseases. We've monogenic diseases like one mutation or something. And we don't know how to cure those in most cases, but we can, we can be screened for them and so on. And then we have, you know, what the biologist call complex diseases with some kind of gene environment and direction.

1:02:30That's most cancers, most autoimmune diseases, most neurodegenerative diseases, and so forth. Alzheimer's, things like that. Exactly. And we've never cured a complex disease. And many of these diseases are very tragic, precisely because not only we're not cured, but we don't even have treatments as John says in the case of Alzheimer's, for example. And so the question is, can we do something about this? And watch what a research agenda and program that can help shine some light on these complex like diseases looked like. And our hypothesis, we'll see how much it's born out of our hypothesis is that we've gotten a couple of new technologies over the last couple of years, single cell sequencing.

1:03:10We can sequence the DNA or the RNA just like in one cell. We've fancied you functional genomics and CRISPR technologies. So you can make these fine edits and perturbations again, even just in a single cell. And then obviously you've transformers in AI, and ML, and all this stuff. And this is kind of a new read thing, write, loop in biology that just didn't exist a decade ago. And again, the question is, is this powerful enough now to solve some of these previously intractable diseases? And so yesterday, ARC released this new foundation model for biology. It's the largest biology NL model ever.

1:03:47It's actually, I think the largest open source AI model ever. This is EVO 2, you're talking about EVO. The number 2. And so it's not just open weights like the deep seek model or Lama or something. It's actually open source, and the training code is public. And you can people can read the blog posts or the paper or whatever. The thing I find amazing at EVO and that just really surprised me is, so it's trained on 9 trillion base pair gene tokens. So, you know, ChetchyBT, LLM, it's normally trained on human language. This is a language model, but it's trained on DNA, the language of life. And there's only one human genome in the training session.

1:04:31It's mostly other species. And even though it's only seen one human genome, it's state of the art at predicting the pathogenicity of human genome mutations. And so, you know, a famous mutation is the BRCA mutation for breast cancer. Like, it's state of the art at predicting the pathogenicity, the harmfulness of BRCA mutations. Again, it only saw one human... This might never have been seen one in humans. It's only seen one human genome and that human, you know, did not have these pathogenic mutations. And so it's kind of learning something deep across the tree of life. And I find that pretty cool.

1:05:06And sorry, is there phenotypic data set that's used in training? So I think, like, you know, when you're typically... Right. And so when you're building models in typical like genotype by phenotype models, you're trying to look at the phenotype, the physical characteristics of the organism, what can it do, what does it look like, what are the features, and then you look at the genome. And so that tells you, hey, these are the specific genes or alterations or mutations that drove this particular phenotype is kind of what the model tries to learn over time with the objective being, hey, can I ask it to define a genotype or a genome based on a phenotype, based on a physical, set of characteristics I'm looking for, vice versa.

1:05:46Maybe you can just help us understand what is it trained on and how did that kind of prediction in Braka, how is that possible? Great question. So it's totally unsupervised that is to say, you're just showing us lots of genomes and any kind of latent structure that it learns is just based on trying to figure out how to kind of organize that knowledge, but we're not showing us any labeled data or phenotypic kind of outcome data, or what have you. And so then you're able to, you can give it a genetic sequence and ask relative to its understanding of the genetic universe how lightly is this particular sequence.

1:06:22And so then you can do things like, you know, predict anomalousness or pathogenicity or whatever. Right. You can also then kind of using the embeddings of the upper layers. No, we don't need to get too technical here. But like you can train another model on top of the model and and even if you showed maybe only a couple of examples It learns very quickly. Okay, kind of here's you know here's how the weights of Evo to correspond to this particular task and those Those sort of models trained on top Turn out to be you know really accurate you guys open source the base model or you open source the fine -tuned or both We open source the base model, but there's no kind of proprietary reason that we didn't open source the fine teens Like it's really easy to produce them and yeah, if anyone wanted one of them we'd happily share it Where does it stand in the spectrum of?

1:07:13Different tools that folks would would use to solve these life sciences problems There's cell models that are being developed by some then there's these protein models Where does this fit this kind of landscape of? of foundation models and biology. It's obviously very new, so it's a bit of an open question sort of how exactly people are gonna find ways to use it and applications for us. Part of what I think is cool is that proteins and RNA and phenotypic expression and everything, all these things sit on top of the DNA, like in some sense, the DNA encodes everything because the whole organism comes from the DNA.

1:07:51And so I guess the question would be, And we don't really know yet, is DNA all you need? And with EVO1, we saw some encouraging suggestions that for example, you can build really good protein structure, prediction models out of a DNA foundation model, even if you don't train on a lot of protein structure data. So, but I'd say it's a really exciting time and it's kind of an open question. And I don't know if you analogize EVO2 to, I don't know whether it's GP2 or 3 or something, but I think we're going to see a similar Cambrian explosion of applications over a couple of years. The thing we're really excited about at ARC is training sales state models and trying to better understand what causes them to change states.

1:08:39And so we're thinking a lot about that, but the way it's around hugging face and hopefully we'll be surprised in my completely different way. And Patrick, do you just expect that over time as Stripe continues to grow, you can just take some of your own excess capital and other people will do the same and keep funding arc. And then if there's something that arc creates or innovates on, if it can generate some amount of money, it would just kind of flow back. Is it meant to be self -sustaining or is it always just going to be via patronage from successful folks that just want to keep it going? John and I are, you know, we are ourselves very committed to us and we're kind of underwriting us in that regard.

1:09:17But one, we're just lucky, where there's a growing donor pool of other people supporting us. I think it's just better for an institution if it's not kind of beholden to the whims of one donor, one group of donors or something. So I think that's just a much healthier structure for us. I think there's also a larger group of people for just becoming interested in science and realizing, Jason was on his moral pulpit. But my puppet is that all is not well in basic research in the US today. And again, the way to see this, it's just talk to the scientists themselves and they tell you how inhibited they are and the problems caused by the structures and structures around them.

1:09:59And we don't see arc as the answer. Hopefully it can be one point in the space. But then there's other people doing cool stuff. if Ryan Armstrong started a company in the longevity space and Yuri Miller and others started Altaus and the Chan Zuckerberg Institute. People are trying different things. But no, our arc is where we're going to be disappointed. It's possible that arc over the long term becomes self -sustaining. That's... That was my next question. It takes a while to get things into the tenet, so we're not holding out for that tomorrow. Well, you know, when they have this technology transfer department at every major university where when scientists get grants and they work on some innovation, it gets monetized.

1:10:43And so what happens here? Who owns the innovations? How do you license them? Because it would be amazing if it just wasn't based on, I believe you guys have put over a billion dollars into this. That was my understanding. Is that true? You guys are over a billion dollars into this effort? Not quite. The numbers are public. So, ARK spends around 100 million a year. Oh, okay. And it starts at about three years ago. Okay. So, hundreds of millions of dollars, this is a really significant thing. Yeah, and I mean, I want to emphasize, there are other donors. Yes. It's not just us. But, I mean, it's a non -profesh.

1:11:21There have been spin -outs and there will continue to be. And so, if one of those, you know, really, if one of those becomes Moderna or, you know, with the next, it was then pick or something, then that could be really good for arc. And arc might have an endowment and be able to kind of self -sustained and so forth. We're, there's no prospect for us to make money on it in the sense that, you know, it's not a problem. Well, I think John, you know, just one thing there, I was talking to a friend of mine. You could, if this thing actually hits, you could flip this nonprofit. Oh stop, stop, stop, stop.

1:11:50I got a guy you could talk to. Anyway, John, go ahead. Oh, straight. On the whole like modeling world, We talk a lot about the idea that you can kind of use a computer, state the phenotype or the physical characteristics you want in a biological organism, and have the software resolve the whole genome, all the DNA needed to make that physical organism real. and it can do it from its prediction ability on what genes, what combinations, but we're a couple orders away from that, right? I mean, I think like ultimately we always talk about, hey, we want to be able to define or have the software define the plant that can grow on the surface of Mars.

1:12:30It knows the soil type of Mars, it knows the air, it knows that it's carbon dioxide based, it's 10 % of the Earth's atmosphere. This is what the daylight structure looks like it needs to be wind tolerant. And then the software predicts an organism that might be able to do that. And obviously there's a lot of this predictive work going on in proteins. Then the higher order is cells, so single cell organisms, microbial organisms, and then ultimately multicellular organisms of plants. And then finally animals where you could basically create organisms from scratch using software because we have all the other tools to biologically put these pieces together today.

1:13:05But this is a great kind of, I view it as a pyramid. There's a ton of phenotypic data that still needs to be fed and ultimately to kind of have us all understand protein models and a lot more to it But it's a great I think that I think that's right like you can there's a certain amount you can write derived sort of You know from first principles just by looking at genomes, but I think the really powerful models are gonna need to do exactly What you say and to feed in a lot of ancillary phenotypic and just kind of other data how they fare in different environments And the sequencing data got ahead of the phenotyping data because there's so much sequencing data that's coming.

1:13:38So you can do a beautiful job predicting like correctness in a genome. But and this and this sequencing data is really nicely digital. Whereas, you know, the phenotypic stuff. It's like, well, it's the data. Dave, sorry, I've, while we're in the science corner, I have a question for you, Dave, which are strawberries you might know the answer to this. A bunch of tree species around the world are under attack. So in Ireland, we have this problem of the ash dieback. Ash is kind of Ireland's national tree. They use it to make hurlies, which is for the national sport. And since mid 2010s, especially as the live plant trade has ramped up, we need to have a hurl for Jason obviously.

1:14:15So what do you try here on the shelf? Hello, Tony. Did the American chestnut here? Yeah, exactly. I was going to reference the American chestnut as well in the US. But it feels like we have this real problem. And it's so sad where so many beautiful trees are under attack. the bark the bark beetle in in California and you know the the various conifer is the releasing so we got a So the black pod does eat the black pod fungus and cacao and coffees being destroyed TR4 is destroying banana right now Don't let's do them. Let's go No, I can't say real like it is a real issue. This is a real issue Yeah, what are we doing to the science corner here?

1:14:46So this is yeah, I mean, this is exactly what we aim to address at O 'Holo So in some cases You can actually silence a gene that's a suppressor of immune function of the organism which can actually improve disease resistant. But how do you do delivery of that? Do you like this airborne sprays? Or how do you treat the tree? Yep, so ultimately if you're gonna use a genomic method, you would transform the genome. So you would edit the genome and you would regenerate a plant or regenerate a tree and then propagate that tree. Okay, but then like we have to replant all the trees. We have to replant the trees.

1:15:19We have to replant the trees. And ultimately, I think that's - Do you custom projects, can we do a little thing on ash in Ireland. Absolutely. That is some of the work we do. So we announced the three weeks ago a partnership with the University of Florida to use our methods to basically introduce disease resistance for major fungal pathogen. That's destroying the Florida strawberry crop. And so that's what we call a trade program at a hollow where we can identify a specific genomic trait that we can go and introduce into that plant. But then you're right, you do have to grow all the plants back and then put them back in the ground.

1:15:49That's the second best to pure extinction but I have been in Ireland, I ended up owning this kind of country house and virgin woodlands, where woodlands that Ireland used to be fully forested and then was denuded with the arrival of agriculture. And there's some ancient woodlands on this that are from the original where Ireland was fully covered in trees. And I find the die off of species very sad. And so we've got to get... Yeah, but no, it's not like I'm very optimistic. like we know how to address these solutions. We know how to regenerate the trees. We can do this quickly. We can resolve these problems.

1:16:27But you are right. I think you should be selling a skew to the people in Tahoe. Like, you know, the Tahoe base has been so worse than decimation. It hasn't decimation is only one in 10, which is like half the trees in Tahoe have been hit by a bark beetle. So those are very interesting ones because in insects, you can actually build very specific defense mechanisms against insects. But we generally have to improve genetic diversity and in doing so, you know, there's a natural resistance because the evolutionary, like the reason we have a TR4 problem in banana, all the world's banana that we grow commercially comes from one original banana clone called Dorf Cavendish.

1:17:06And they took that one plant, they cut clippings of it, put it in the ground, put another plant, cut clippings of that, and they kept multiplying it. So all the bananas we, and all the bananas that are planted across 10 to millions of acres worldwide come from one original clone. And because of that, this fungus has been exceptionally capable of evolving itself to better eat that banana plant. And so 60 cents of every dollar we spend on bananas today goes towards fungicide. We're spraying these bananas trees once or multiple times a week to kill this fungus. We're consuming that. It's super expensive.

1:17:36And if we had genetic diversity, if we had better genetics in the banana programs around the world, we'd be able to radically improve. The majority of the administration says you think we need more diversity. are you in favor of DEI? Freiburg, they cornered you. Freiburg, I got you got to make one promise to me. You're not going to start working on Raptors. I don't want to see any of these Raptors running around San Francisco, okay? Chamothi, your thoughts here on the science corner here? It's been a really enthralling one. The Raptors are coming for you. I find it incredibly inspiring, but there's just so much movement in these foundational models.

1:18:13It's incredible. Every day just seems like there's something new. The biggest problem that I think that the commercial community is going to deal with is how to actually take advantage of it because you're kind of headspins because you don't exactly know where to start. The biological models are different in that. I think it's a much smaller population of people that will use it. I think they do have to figure out how to take these models and complement the existing pipeline they have. The pipeline they have right now, I think, is pretty brittle. I think we all know that in life sciences. My wife struggles with this a lot is how to complement a very traditional pipeline with this kind of stuff.

1:18:51So I see it firsthand in how she tries to allocate capital towards these problems. On the other side, I just think these foundational models are really incredible. And I think that I was completely wrong on a couple of my earlier thoughts. One of the thought that I had for a long time was it just seemed like all these base models were asymptoting. And so I was not convinced where all this CAPEX would go in a productive way. Like why are you buying all these Nvidia GPUs? And then I think if you looked at Colossus, the Elon's Colossus X AI built the largest data center over 100 ,000 GPUs going to 200 ,000 in 120 days.

1:19:36But basically what he proved was that there are still valuable gains in pre -training. And so the larger the cluster, the more value that there is. Now he also benefits, I guess, from the X feed. But that was really interesting. So now I'm like, a little bullish on Nvidia. I'm like, oh my god, if this is true, then all this CapEx may be justified. you could be buying a lot of stuff. Then, look, I actually also just to maybe riff on this GROC -3 thing for one second. I had three takeaways. My first takeaway was I was sneakily surprised on the pre -training upside on having a larger cluster. So I think that that's very pro and video actually.

1:20:21And it's actually also just really good in general for foundational model makers. So I think like that's like a really positive thing. And the second thing is, I don't know if you watched the livestream, but did you guys hear some of the stuff that these guys had to pull to pull this thing off? One of the most incredible, so the way that Elon narrated it was, we first had a physical problem, so we just had to search all around the country for one single location where we could actually put 100 ,000 GPUs and they found it, which was an old electoral lux factory in Memphis. Okay. That's kind of interesting.

1:20:57The power. He only had like 15 megawatts and he had to get a quarter gigawatt. And so he had to basically buy every useful generator that was available. But then they had to liquid cool it. And so they bought one third of all the portable liquid cooling capacity in America and located it on prem. But then they figured out that there was a power problem. So then they took all these Tesla power packs and then had to do power smoothing which had them had to rewrite all of the power pack firmware. where in all of this, you know how we talked about deep seek being this moment where we had lost sight in America of capital being the source of innovation, he proves actually a more generalized rule that I took away from this, which is you always have to have a constraint.

1:21:42So meaning let's say there's like infinite capital in his case and infinite talent because he can basically recruit anybody he wants. What did he do instead? He created this artificial constraint of time. And so he was just able to say, you're going to get this done in a moment. And Nick, I saw the third graph that the guys at artificial analysis sent to me. I just want to put it up here because it shows you guys the quality of GROC three relative to the amount of time that they've spent on this problem is to me what's staggering. So if you just sort of project the rate of change of this and this is without judging open AI or anthropic or anything else, those guys have been doing it for years.

1:22:24These guys have been doing it for a year. And they did all of this Magyver engineering and were able to pull this off. So that's my second takeaway is that innovation needs a constraint. Sometimes it's capital, sometimes it's talent, and sometimes it's time. And so if you can basically be just completely rigid on one of those dimensions, you can get a great team to create something. So that was an interesting takeaway. And then the third is, I think what this also speaks to is the notion of like a Kuretsu, right, which is like the Japanese word for like companies that work together while still remaining independent.

1:23:06And the Almorets, you know, it's more like your linked confidence. It's interlinked. Japanese have curetsos, but this is the manifestation of an American curetsu, which is Elon is able to get engineers from Tesla. He's not just buying the powerpacks. He had them reengineer the actual firmware in real time on site. And so there's this positive ability to just like organize effort and human capital. Like look, could we all stand up a data center and go and buy 500 million dollars of powerpacks from Panasonic? Absolutely. It would take a few months. 18. And then when it looked like we need to rewrite the firmware, we're taking another 18 months to your point, Jason.

1:23:49So it's really incredible what these guys are able to do together. Those are why it was really, really inspiring. Chimath, a book I think you might find really fun is it's called Henry Kaiser, Builder in the American West. But Kaiser's kind of underappreciated these days. He was the Elon of his time. He started as a road builder of all things. He won the contract to build the Hoover Dam. He built the Hoover Dam. He started a shipyard during World War II. Yeah, exactly this car's he decided to make cars he decided to make air planes stations TV the famous for days Liberty ship remember the propaganda win during World War II of you know They were able to lay down a bit that was at the Kaiser shipyards Kaiser permanent a spun out of them as part of their I was literally as Martha saying that pulling up my notes from the book and And just a complete phenom and he just kept finding new industries.

1:24:40It's like, oh, building cars. How hard can it be? Oh building airplanes. How hard can it be? Yeah. I mean, that is the nature of entrepreneurship is doing something delusional and then just letting you know most entrepreneurs just do one delusional thing once and stayed in that state. Like again, Elon and Henry Kaiser back in the day. It's in the world of atoms. It seems very hard things, short timelines. And San Francisco now, kind of at least in the physical domain, stands for a kind of stasis. It takes you 10 years to build anything. But when he had the ship. Don't be a twilight. The ship building yards here.

1:25:16He went from zero to 100 ,000 people in Richmond in Wundhier. He basically built the city of Richmond, California. How do you, how do you, what guy's okay? Let's just double. How do you think these guys pull this shit off? I don't think these are such a two -dimensional sacrifice. Massive personal sacrifice. I understand that, Jason, but I'm talking about, like, tactically pull this off where you have to be on -site at some point, organizing this team, directing this team, being able to help isolate these problems, fix them. It just seems impossible to do it once, let alone six days. I don't understand how they can do it.

1:25:51I actually have some insight into this just from knowing you on. A lot of these things compound a lot of what he learned in material science, doing SpaceX, And about making the engines and then working with metal, you see in his production at Tesla and specifically in the Cybertruck. He has learned so much about factories. I don't think there's a person on the planet who knows more about factories now, having built a battery factory, a space factory, an engine factory and a car factory, and now building optimists on top of that. So these things compound and then a lot of the engineers will float between the companies.

1:26:29So there are folks who have worked at SpaceX who then go do a tour over at Tesla, etc. And a number of those wound up coming into. I'm going to read you a few quotes in this book and just going to see if they remind you of of anyone. Kiser's manager is challenged convention from the start as builders. They were experts at coordinating workers and materials, Kaiser was almost contemptuous of traditional methods. His partners had long since despaired of getting him to follow customary procedures. In preparing his bids for each new job, Kaiser would try to conceive every possible technique that might justify making a bid low enough to win the job.

1:27:10Once the construction was underway, he was forever trying to come up with ideas that would expedite the work. Perhaps more than any other builder, he believed that the faster a job gets done, the lower the costs can be. That's incredible. Incredible. Well, and what happened with Clauseis is they had told Elon that when he wanted to use other network operation centers to host Clauseis, you know, and he looked, they were not available, and when he did find quotes from them, they told him 18 to 24 months. He just determined, hey, if this, there's no reason to even do this. If I can't get this done in a, you know, 100 days or something, why even join the race, I'm going to be so far behind.

1:27:52And if you look just to wrap this segment up and get onto our final two segments, if you look at these two charts about rock, it's now, and you know, listen, these benchmarks and these arenas and testing, there's a lot of controversy around them and people keep leapfrogging each other. But they do give us, I think, our best shot at looking at progress. This is the benchmark here for rock on a bunch of different tests, math, science, and coding. And as you can see, GROC3 has now Eclipse Gemini, which is Google's LLM and DeepSeek from China, Quad and Chat GPT40. And so to your point, it's pretty impressive.

1:28:36Yeah, I'm not impressive. It's top of the LNCS leaderboard. The thing here, I think, Freiburg, I'd like to get your comment on is if hardware is the constraint, does that mean that the person who understands hardware and build out, as Chimoff was pointing to, does that mean that they buy default win? No, Jason, well, this is what's counter -intuitive. It wasn't clear because no, it was not. Yes. I would guess that the last couple of iterations, it seemed like OpenAI has moved to what comes after the base model, meaning in the allocation of resources in terms of what they were creating. And so this is what's so counterintuitive.

1:29:18He was like, no. And so I don't understand what he knew that everybody else didn't know. But the size of that cluster made no sense. And it could only be a result like this where he basically proved that there was still value and pre -training where his size actually led to better outcomes. That's not, I think that was counterint. It's super consequential. I mean, complete agreement with the Chimath and just freeberg to wrap the segment up and put a bow on it. And we see these LLMs, they're made incredible progress as we just heard from EV2 or EVO2. I'm sorry, a GROC and we're making these giant gains in space, you know, in work.

1:29:55And it's specifically in space, Dave, do you think this will get us any closer to your anus? So sad. So sad. Didn't you plan? Don't even acknowledge it. Don't even acknowledge it. Don't even acknowledge it because we'll just do more of it. I tried to get you mom to do one. He wouldn't do it. Okay. Last two segments, we're going to talk about staying private longer and when you guys are going to go public and then there's an asteroid coming. What do we want to do first, boys? You want to talk about this asteroid coming? Dave, is it the end of the world? If it hits us, what's going on? NASA dropped the probability of it hitting Earth to one and a half percent.

1:30:31So every day when the sky gets dark, they can do a better job seeing this asteroid that everyone's freaking out about. So we finally got a good night sky two nights ago. The telescopes were able to get a better trajectory reading on it and that allows the models to make estimates on the probability of this asteroid hitting Earth in 2032 when it's projected to cross our orbit. And so right now the probability is estimated at 1 .5 % that it will hit the earth. And based on the size of this asteroid, there's this range. It goes up to 320 feet in diameter as small as 80 feet in diameter, which actually can have a pretty big effect on how big of an energy release there would be if it actually, you know, hit the earth.

1:31:17So even on the high end, if it was called 300 feet, it would be the equivalent of call it a 20 megaton bomb, which is not insignificant. If it were that big, it would hit the earth. If it was smaller than that, it would probably just detonate me air and create a massive shockwave and firestorm. But the region that it would decimate would be limited to probably a couple dozen miles, up to a thousand miles of effect. And if you look at the total surface area of the earth, we're talking about 10 to 15 % of the earth having people that to have to take enough people to have a tape. Probably going to land.

1:31:49No, shouldn't. Right. Yeah. So it's 1 .5 % chance of hitting the earth and then call it a 15 % chance of it hits the earth that's causing lots of life. So 10 basis points, it hits the city. Yeah. And then it's a function of how big it is. If it's actually as small as 80 feet, then it's not going to be that significant, even if it does get close to the habitat area. So yeah, I'm not losing sleep over. Over there. Do you come across in your research? I feel like this is a real boys are monitoring the situation in that moment. Do you come across the Tunguska event? Yeah, I'm sure it's incredible.

1:32:19So that one is incredible. Yeah, so you want to talk about it? Go ahead. Yeah. Just, no one knows this. In 1908, an asteroid hit the Earth. It hit relatively uninhabited part of Russia. It was a first off. The asteroid did not hit the Earth because it got so hot on reentry that was an air burst. And it was a thousand Hiroshima's in size. The explosion, yeah, they have here, they have a 60 meter asteroid. and they have the megatonnage somewhere. Wow. It's the largest impact event in recorded history. Obviously, there was stuff before recorded history. It's flattened 80 million trees. Weirdly, basically, no one was killed because it was so uninhabited.

1:32:59But this is quite comparable to the one that NASA is talking about. That's right, it's about the same size. Exactly. And I think you can take a little bit of reassurance maybe that we have had a similar size asteroids hit before. And there is some existence proof that despite the giant explosion, it doesn't show up in the climactic. Yeah, the Tunguska asteroid was at like 160, 200 feet. So if this asteroid is in that range and it hits the Earth, you have this kind of explosion in the air. If it gets above, I think, 250 roughly is where they think that it doesn't burn up fully in the air, and it actually will strike the Earth.

1:33:34But yeah, that's... This is roughly what we saw happen, what we think decides will be if it hits. Is there a counter measure? I don't mean to get all sci -fi here. Great question. Yeah. No. Is there a counter measure possible? And like, if this thing was coming, let's say in five years, and it's twice the earth, yeah. But relative to the earth, this is like tens of thousands of kilometers a hour, right? It's a very fast moving object. Yes. It's pretty small, right? 160 feet. So you've now got to figure out the exact trajectory, get it perfectly right, get a launch off of the earth, and intercept this thing at the exact moment that you need to push it off course or detonate something nearby it to redirect it.

1:34:18So technically very complicated, very hard to pull off. But this is exactly why we have this planetary defense of funding at NASA, which is to track these objects. And this is another example, by the way, where I would say AI can play an important role. And I'd love Patrick and John to a point on this. But I have a thesis that like AI, more than anything unlocks deeply complicated projects for humans that would otherwise be kind of infeasible in the pre -AI era. I think in the post -AI era we're going to be like, oh, here's all these projects that we do that are like, oh, you know, we, we on a daily basis, we mind to the center of the earth and we get cool like rare earth minerals from like 500 miles down and we go to space and colonize the moon and all these crazy things because AI unlocks these large scale projects that would require millions of people to do things in a coordinated way.

1:35:03And AI can be very smart in this way, but I think AI could play a role also in in these planetary defense initiatives, concepts, Jake, how in the future, where you can actually build a complete project model in software on how you would actually address this problem, and then go execute it with automation. But yeah, there's a planetary defense function at NASA. They track these objects, and they're funded to do it. So we hope that NASA continues to get funding to do this work, very important. And guys, it just came through that NASA just dropped the probability of an impact event to about 1 third of 1%.

1:35:34So it's gotten even smaller, which is we can all go to sleep comfortably tonight. All right. All right. Now, good morning, everybody's been waiting for Patrick John. You founded the company in 2010. It's 15 years later. The entire LP industrial complex and venture capital is everywhere. I'm sure some employees are wondering when will stripe go public and under what circumstances and what's the hold up here? Why aren't you public already? Yeah, look, I think people sometimes hold us out to be a dogmatic or something on this topic, whereas we feel like so many other people out there in the world are dogmatic.

1:36:17We just tried to be pragmatic on us. Keith was on the show and he was saying, he believes companies should go public as quickly as possible. I don't know, maybe that's the right thing for some companies, but in at least Stripes case, that hasn't been the case. I also think the environment has changed quite a bit, where it used to be the case to do any return of capital to shareholders, or if you needed any kind of large sums of money, you needed the public markets. That's obviously not true today, where the stable private markets exist. We looked and we say, is Stripe better off at the moment as a private or a public company, and up to this point we have determined private that could change at some point.

1:36:56But it's kind of no dogma from our point. The last thing I'll just say is, I think Keith made the argument, people generally make the argument that it is critical for discipline to be public and public companies run in a more disciplined fashion. And I think that's hudwash. Like if you need a 25 year old Fidelzee analyst asking you to double click on your cat -back splababla -blah to run the company with discipline, something is horribly wrong with the company and you need new management. And so that argument has never really resonated with me. Basically, what you guys are saying is, for your intellectual perspective, you get a lot more return on the time you spend talking with the private investors you have, and your team, and then customers.

1:37:41And customers. And customers, and it would just be deludive, and you would have sh** year out, comes quite honestly. If you had to talk to these other folks who are talking to you and 50 other companies don't really know much of anything, maybe very surface level, and then may actually distract you and force you to make decisions you don't want to make. We're not even that negative. We're not even that negative. I was about to say, but it's, there's no spiritual status associated with being public. Like, why be public? It is a cheaper source of deeper and more liquid capital. And so if you want cheaper and more liquid capital, then by all means go with it, but you know, it's not more moral.

1:38:17And I think, you know, again, it's just helped sort of get away from that kind of framing. I also think it's noteworthy. If you look at financial services in particular and we're kind of a company at the intersection of financial services and technology Being private for a long time is is the norm. So you know bloomberg is private company Fidelity's private company vanguard the private company Jane streets private company Goldman Sachres Yeah, Goldman waited 130 years to go public JPMorgan was it 70 years go public visa was it fees visa weighted 50 years to go public and You know Again, those are all different times in history, so I'm not saying you can draw like individuals for them.

1:38:53But I think it's a thing of financial services, where there's always a tendency uniquely here to be kind of prosickical, and I think you need to be particularly careful as a public financial services company to avoid some of those temptations and some of those tendencies. And so I think that's a unique dynamic that applies in our space and then financial services. And if you look at companies like SpaceX, they're able to provide this yearly liquidity, which actually is probably better, because it smooths out a lot of the ball, and then people can get back to work and just kind of. Are you guys profitable?

1:39:26I think there is, by the way. We are profitable, yeah. And profit will be like a fully loaded gap net income basis, not like a community adjusted even a stuff. Plus, you should have, Adam Newman come on the prod anytime. You gotta wear shoes. I do think we think, as it pertains to people joining the business and being compensators, you know, everyone loves the idea of an IPO pop. But if you look at a bunch of the other FinTech companies, you know, Square, really great companies, 70 % off its 2021 peak PayPal 80 % off their 2021 peak, if you're an employee and you join those companies in 2021, it's not a great feeling.

1:40:08And so again, I think the lack of wallet, you know, the good and the bad is you are not priced every single day by the market, but it's not only a bad thing. All right, the framework, you know, if I'm trying to predict our actions, like the framework we use is kind of two things. One, I think, you know, what matters is the last kind of the returns in a given year and more duration. And so the question is, you know, what enables the best compounding on sort of a 10 -year time horizon and what's best for shareholders as you really take kind of the longer term perspective and then just what best for customers and you know, what helps you build of the best products in Chimati, you kind of said it, where, you know, at least at this juncture with the business growing at this rate, we want to spend the marginal hour with some comfortable.

1:40:46And I think you guys have gotten this sense, like this is our life's work. You know, we're not going anywhere. We'll be very happily running Stripe in 10 years time and 20 years time. And there's so much going on in the space where we spent a bunch of time talking about stablecoins, talking about AI, everything like that. And it's hard enough to stay ahead in the world of business, you know, without all these distractions, like you said. And so it's just a question of how do you set yourself up to win and do right by anyone in a Thoroughest pretty competitive. I think if you had to steal man the Bill Gurley point of view There are very few founders that are probably as steely eyed as you guys And so what I think a lot of board members in most other situations that are not straight deal with is What is a good forcing function to keep these folks on track and focused and thinking in a multi -decade kind of way.

1:41:37And they found that the public markets, I think, do that more than anything else. That's probably the most compelling for the folks that would otherwise maybe get distracted. But then for guys like you, that can frankly just do it. It's great. It's impressive. It's really impressive. Congratulations. Well, appreciate you guys coming on the program. Come back anytime you were awesome today. And listen, let's recap what have we learned? People got to put some paths on and get back to work. Can Strait Makes For Great Art? Strait's Going Public in 2050. Chimath lost $5 billion, not investing. The Cullsons read a lot of books.

1:42:11But I'm still kicking. Live and kicking, bro. He's still in the arena? Got a lot of chips still to fire. So I'm gonna say what else is. So I'm gonna fire fire fire. South American President shouldn't have their own meme coins. And life finds a way. We are, and you pronounce a call, this son, obviously. I said, go listen, because you know, We're down the road and carry and we go and get some eggs and baking sometimes. Okay. Coming to South by Southwest brought to you by the call call us and brothers in stripe. A all in is headed to the South by Southwest. They're not sponsoring it. I'm joking. All in is headed to South by Southwest on March 13th.

1:42:48Me and Freeberg are going to sit down and do our interviews to best these on the future of media media and building businesses in this new media ecosystem. We're going to have a casual party food drinks. the whole thing, event is going to be pretty intimate, a couple hundred seats. When are you guys in this? March 13th. You opted out. You and Freiburg want to do it. Thursday. Don't can't do. Yes. And it's by application only with a small $30 registration fee of which Stripe will take $19. Go to all -in .com slash events to apply. I'm not bitter about it. And fro, gramming note, the besties are on a tear.

1:43:27You are on Megan Kelly last week and next week our bestie Friedberg is representing us on Celebrity jeopardy. We can't say what happened. Oh get the clips ready get the clips ready We are going to do a recap of every single question when do you when do you when is it air on Monday next week? I think I don't know Wednesday at 9 p .m Wednesday at 9 p .m. Oh perfect before the taping yum yum Perfect perfect there he is between Anna Navarro. She's from the view, right? You know what? I've seen clips of her. I should have gotten some counsel ahead of signing up for celebrity jeopardy on the lack of upside in doing this.

1:44:10And you will see why we'll talk next time. Oh, no. You lost that good. You lost it. You lost it. You didn't lose it. I'm like, did you? Look, guys, I'm just telling you guys got 160 IQ. the view puts together doesn't have 160 IQ. Let me just tell you what we'll talk about it afterward. I just love this. Don't tell me they got pop culture. You're pretty good on pop culture. Oh no. Okay, love you guys. I gotta go. Love you. Bye bye. See you next time. Bye boys. We'll let your winners ride. Brain man David Sack. I'm going on. And it said we open source it to the fans and they've just got crazy with it.

1:44:54I'm going to the toilet! I'm going to the toilet! What? What?

1:45:02Besties are gone! That's my dog taking a wish to drive away. Sit down! Oh man, I'm a disaster when we get to the toilet. We should all just get a room and just have one big hug or two because they're all just like this sexual tension that we just need to release some of them. What you're the beef? What you're the beef? Beef? What? We need to get merchies aren't there. I'm doing all this!

1:45:34I'm doing all this!