Anthropic S1: Their biggest customers spend 0.1% of revenue on AI | The Pirate Street Journal

0:00Everyone thinks Anthropix is losing money fast, but here are the 3 things the S1 actually shows. Google's fifth-year business, they did$439.5 million. Anthropic, in its fifth year, did$4.59 billion. That's not what makes it the most legendary business of all. It is the capital efficiency of it. Musk is sitting there going, great, go ahead. Ban data centers. I'm going to be the only guy with data centers. And you can't stop me. Good luck finding power. Anthropic specifically, maybe OpenAI as well, think they're creating life. And anybody with a God complex is terrifying. This is going to be the worst of the worst roller coasters.

0:40Last year, Anthropics market share was approximately 40%. Guess what it is this year?

0:55Hey, Pirates, welcome to today's episode of the Pirate Street Journal. This is episode 27, and we went a little off road today. If you've listened to the other 26 episodes, you know we normally do three topics at 10 minutes each. But the Anthropic S1 was just too big of a headline, so we spent the whole 30 minutes on it. We'll talk about how fast Anthropic is really growing and how that stacks up against Google and NVIDIA. Spoiler alert, it's not even close. We'll get into the line nobody thought they'd ever see in an IPO filing, and we'll dig into why this is a knife's edge business and what that could mean for anyone buying the stock in year one.

1:31Stick around for the end where we explain why this category isn't really AI at all and why demand for it might be infinite. If you've ever felt like an invisible expert, the smartest person in the room nobody listens to, you might be category blind. Pirate Street Journal is how you avoid irrelevance and start seeing the world through the category lens. Listen for 30 minutes today to be the smartest person in the meeting tomorrow.

2:00The Good. Everyone thinks Anthropic is losing money fast, but here are the three things the S1 actually shows. One, it's growing like crazy. Anthropic made about$23 billion in the first nine months of this year. At the same time last year, about$2.5 billion. Two, it has a giant pile of cash. Investors have put in about$140 billion and about$132 billion is still in the bank. And number three, the scary loss is mostly on paper. The filing shows a loss of about$104 billion. About$94 billion of that is a non-cash charge on convertible notes that rose in value as the company did. So Eddie, 10 minutes, is this the best business ever built?

2:44certainly looks that way it's hard to know with just the s1 and we'll see what happens with it but the numbers are just striking and i think brie you nailed it of this is a we knew the revenue is growing fast and the amended s1 just showed q3 and revenue continues to climb there right so i think they're still at that 65 67 billion dollar arr and as you mentioned if you kind of strip out the economy you know mumbo jumbo with it it is a cash flow positive business which is kind of like nine months of operating cash flow is plus$6.6 billion. And I think a lot of people were shocked with how much cash they had on.

3:19It looks like they spent net cash,$9,$10 billion to stand up a $65 billion business that is cash flow positive already. Like, that's amazing. The number that is stuck in my head of the numbers, here's the weird data, is that they listed enterprise customers and prosumers, which nod to super consumers, which was great. But the enterprise customers apparently, you know, these are all people, they've segmented them, spending$100 million or more, this and that. But best as we can tell, the number that stood out to me was 0.1%, which is to say their biggest customers are spending 0.1 % of revenue, I believe, on tokens.

4:00And Christopher will know this number better than I am, but IT budgets, I think, tend to be four or 5 % of revenue, give or take. So if you run the simple math that way, people are like, what's the size of prize with it? And, you know, we've written about lots of mini books on the size of prize and how to calculate that and all the category science around it. But here's a simple rule of thumb. If their ARR right now is at 65 billion, if they went to 10X revenue of$650 billion of revenue, that would take their token costs for customers from 0.1 % to 1 % out of a 4 to 5 % of total revenue for IT.

4:38So it's still a fraction of IT. And guess what? What does AI help out with? It's your technology spend. It should get more efficient. You should be spending less on headcount. You should be spending less on potentially software and the like there. Let's say it 25x so that you got to, Anthropic was getting about 50 % share of wallet of all technology spend within these large enterprise customers, about 2.5 % of revenue, right? This is not an insane amount of money. The AIR goes to$1.6 trillion of revenue. Now, that is a number that is remarkable because at$65 billion, if you can be cash flow positive, imagine what the operating leverage you'll have at that point.

5:17And so obviously they have a lot of money to spend, and this is a lot of back of the aisle of what if math. But the sheer fact of the other bit of stuff that I was trying to figure out was their compute commitments for next year, not that much money. It's, I think,$60,$70 billion. They already have that. So even if they pulled the plug on the IPO, they would have enough money on their books to cover their CapEx needs for next year and maybe part of 2028. So do they need the IPO? Yes, not for the cash as much as I thought they would. So that's kind of the good news is that the revenue had room, the size of private looks ginormous.

5:53You don't need to do a whole lot of fancy math to figure out how much. And secondly, the cash flow dynamics suggest that they are a wildly capital efficient business. And so will they raise money? Yes. Will they need to go back to the secondary markets to raise more debt markets? I don't know. I mean, they might do it just to shore up their balance sheet. But here's the important part. They don't need to. That's the shocking part of this, that even though they're buying compute on the spot market, they can actually get by. Which makes us, the revenue number is amazing. That's not what makes it the most legendary business of all time.

6:23It is the capital efficiency of it. That's the part that is super impressive to me. And the reality is, if I understand the S1 correctly, and correct me if I'm wrong here, Eddie, past their initial funding raise, I don't think they needed to raise any money. No, no. And I just want to get to the revenue ramp rate because I think it's very important for people to understand. So if I go back to Bree's question, is this the greatest startup ever? It is. And here's the proof on the revenue side. So let's look at the first five years of revenue for NVIDIA. NVIDIA was founded in 93, and in their fifth year of business, they did$29.1 million in their fifth year, NVIDIA.

7:07Google was founded in 98, and in Google's fifth year of business, they did$439.5 million. Anthropic, in its fifth year, did$4.59 billion. so we are we're seeing a run rate here that we've never seen before it's not comparable to anything and that by definition has to make it the greatest startup now there's another thing that that came out recently that got largely unnoticed between the s1 and politics and all this stuff going on and so you say who's going to be the category king because that's what we really all want to understand, right? So if you understand the basics of how tech category king economics work, we can walk through how you get there.

7:56But the net of it is based on our primary research, we know that the category king earns 76 % of the total value in the category as measured by adding up the market caps and valuations of all the companies in the category and figuring out what percent goes to the category queen, the leader. Okay. With that said, we know that from a market cap perspective, that's what happens. I don't have the number in front of me right now, Bree, maybe you can look it up. But a disproportionate, I think more than 50 % of venture capital investments in the United States went to Anthropic and OpenAI in the last 12 months.

8:33If that's not right, it's a very high percentage. Okay. Now, get this. What's their market share? Right? Because the two indicators of are you the category king is, do you have the number one market cap, that is to say value, and what's your market share? And the two things are often very correlated. So the folks at Menlo Ventures, I don't know if you guys, did you guys see their report that came out on November 3rd of this year, 2026? They did a market share report on AI. And here's what Menlo Ventures says. Last year, Anthropics market share was approximately 40 % guess what it is this year?

9:2355%. Amazing. So it's one thing to look at the company growth, but when you apply the category lens, what you want to look at is not just the revenue growth or market cap growth. You want to look at market share growth against competitors, of course, but against the entire category as well. Okay. So you have a situation here where a company grew its market share from 40 to 55 percent in one year. And that's at a time where everybody said the open source models are going to crush open AI. And I think they are legitimately afraid of those open source models. And they're having to bring their pricing down because of some pricing pressure as a result.

10:05However, all that said, from 40 percent to 55 percent is a hell of a number. You raise such an important part. Just a quick note for people. Look at the HBR article I wrote on don't measure share of market. That's the old way of doing it. Measure share of growth. That tells you where the crystal ball is going. And that's exactly what Christopher was saying. So keep going. And so I think those things are extraordinary. Now, on the flip side, I think they're a terrifying company. I wish, I want to love them. I wish I could love them. But I think they're a terrifying company. And for a point of reference, and maybe we can put this in the show notes as well, Preet.

10:43The folks at the Free Press did a fascinating article. I think the headline was something like the dangerous ideology driving anthropic and open AI called effective altruism. We don't have to get into all of it, but for the most part, it seems like to me, these people have invented their own religion. They think they're smarter than all of us. And most importantly, the most terrifying part to me is the people at anthropic specifically, maybe open AI as well, think they're creating life. And anybody with a God complex is terrifying. So that's on the negative side. The other thing is, I believe this is the first time in history, check me on this, Bree, that a company put out an S1 describing their entire business and adding in the risk factors, oh, and by the way, our technology could kill humanity.

11:34I don't think that's ever happened in the history of IPOs. And then the one other critical thing I think that's important to put on the table, Elon recently tweeted that there's no more power and that the issue is power. So we're bringing all these new chips online, but there's not enough power to power the chips. And so as we've talked about the game board before, Anthropic, if you go through their S1, What you realize in the S1 is their biggest fear is access to data centers, access to compute, access to power. And they don't have control over that part of the stack. They are a customer of other people's technology in that regard.

12:17And so it's going to be fascinating to see if Musk is right and the barrier to growth is becoming electricity, it'll be fascinating to see what Anthropic and all of the others do to generate their own power. Microsoft, this is not widely reported, did a, I believe it's a 20-year deal. It's a very long deal with Constellation Research to refine Three Mile Island, the nuclear power plant. Google has invested massively in nuclear power. And so it's going to be fascinating to see how they all solve the compute capacity problem going forward. And especially now with the midterms, it's likely that data centers are going to be through all the backs.

13:05I saw Dan Ives, he started his own new company. He was at WebBush before, but I think he is taking down his number of data centers estimates down 10 % as a result of the moratoriums and this and that and whatever else it is and stuff. And so, you know, it'll be interesting to see what actually transpires. Now, to Christopher, your point about the good and the bad, the bad part that we've transitioned to. My first read of the S1 was that it was well written. And then my second read of it with the amended one, I'm like, they could have done it better with simplicity as velocity and languaging being really important.

13:40Is that when you read the opening letter, right, and you're exactly right about the risk that they highlight, right? So here's, here are the benefits that they said. AI can accelerate biology medicine. Okay, grow the economy, diffuse these benefits to the rest of the world, and then raise the government quality. And of all those four, I'm like, eh, grow the economy. Maybe I don't understand what the other ones are. Like, do I really want the DMV to be better? Sure. But I don't know why I care, right? had they said AI will cure disease and save lives, number one. Number two, AI is a software printer.

14:18It will save you time. And AI can be your three, your personal CFO and save you money, as we've been writing about in our DDRs. I think it's like done in the story. I like this. The other thing I would add to that, and I think this is a big whiff, software and IT technology in general is deflationary over time, right? So if you agree that affordability is the number one issue in the country, or certainly one of the number one issues in the country, it's clear that AI should drive some deflation, right? Because creating things of value, which is what the economy is based on, is getting cheaper.

15:01If you look at our little company, we're a three-person company that executes like we're, I don't know, you tell me, Bree, a 20-person company, a 15-person company, right? And you hear people saying what used to take, you know, six years of research is now taking hours. These are things we're hearing from scientists. So I think it's deflationary from a cost perspective, and it's also, I don't know if this is a word, but I'll use it, excelatory on innovation. But at two point, if you just, if Anthropic just said, here's what you get with AI, and Bria, you would, you would coin this phrase, a 24 seven doctor or nurse.

15:38Perfect. A personal CFO, save you money, cut your costs, cut your stupid up. Great. And then you said your personal software coder, software engineer, CTO, whatever else it is, where you can, they will help you pick the right software where software didn't exist or create it. It's like, oh, these are all good things. And so if they just kind of simplify down the languaging, then they will make more progress if they actually, and again, I think they are better than some out there. But if you just get the talking points down to we're going to cure cancer, we're going to give you free software, and we're going to save you money, people will get on board with the AI category writ large.

16:19And now, to your point about the risk, here's what they wrote, right? Is here's what could happen. AI can accelerate bioweapons and cyber attacks. Kind of scary. AI might go rogue, also kind of scary. AI may steal your privacy, very, very scary, and AI will have economic disruption. So it's the - And by the way, here's the bullshit about that. Everything you just said that they said is full of shit, and I'll tell you why. That's true for every new category of technology of consequence over time. Yeah. Well, and here's the thing, is to your point about it's always been true, and sadly for them, their risks are easy to understand than the benefits.

17:01That's why people are scared. Well, they've marketed as such because they want the regulatory capture. The market, the doomerism from the day they were born. It's the weirdest company in history. Imagine the three of us starting Category Pirates and saying, okay, our number one mission is to freak people out that if they buy Category Pirates, bad things could happen to them, their community, the country, and the world. Now, subscribe to CategoryPirates at CategoryPirates.com. That's what they've done. Well, and so I would encourage them to just work on their languaging. Their P &L looks fantastic.

17:35Their balance sheet looks fantastic, right? Here's the crazy thing. The IPO is important for reasons for M &A purposes so they can build out the rest of the six-layer cake. And I'm a little bit surprised that they haven't done any deals. Like Elon, when SpaceX went, they bought Cursor before, right? And guess what? With the AI trade kind of under some uncertainty, now would be a good time to buy some of these other categories and the layers out there to get some cost certainty. That's what they're going to do. And an interesting point about that. So they are at a strategic disadvantage because they don't have their own infrastructure, right?

18:11That is their big disadvantage, starting with power, chips, all the way up. Here's the other interesting thing to think about. So when you first hear about Musk wants to put data centers in space, my reaction is, what? That seems really expensive, really hard. And why the fuck do we need data centers in space? Well, the reality is you need data centers in space if you're going to do serious space exploration, right? So that actually becomes pretty clear pretty fast. But now we're in a situation where if you take the blue wave and you say some percentage of Democrats are anti data center, which boggles the mind because it's the only thing driving the American economy and we have to win and all that.

18:57But anyway, that aside, Musk is sitting there going, great, go ahead, ban data centers. I'm going to be the only guy with data centers and you can't stop me. And so the reality is, if America takes an ever-increasing hostile position on data centers, what's going to happen is the wealthiest, most powerful man in the world will get wealthier and more powerful because he's the only one that's going to be able to deliver the compute. Well, and I think to your point about all of that, right, it's the risks are well understood. And you can see the backlash from the general public that way. And I thought they actually did a good job.

19:38we talked about in the last one with Jensen about customer testimonials, you know, in technology, beyond technology. Here's what I think they should do is, again, three benefits, 24-7 doctor and nurse, you know, personal CFO to save you money, personal software engineer to, you know, make software easier for your life and make your life faster and cheaper is I would like to see more testimonials like Bree, right? Personal stories. I don't know, Bree, you want to talk about what AI has done for you and your health and stuff like. There is no doubt that even before we discover our cancer or the cure for cancer that using AI to make really big strides in your personal health would make a massive difference.

20:16I mean, you tell me, Osprey, about that. It's incredible. About a year ago, now if you're watching the video, my face is incredibly clear. If you're not on video— You look like a different person. Your color, the shape of your face is different. I've struggled with acne my whole life. my family struggles with acne. So at this point, a year and a half ago, last June, my acne started reappearing as I was getting off of a prescription drug that my dermatologist previously prescribed me. I uploaded photos of my face to ChachiBT at the time, and I said, how do I solve this? What's going on? And it said, well, have you ever heard of the supplement DIM?

20:58I hadn't. Had never heard of it before. And what it is, is it essentially gives you the nutrients that you get when you have broccoli. And at the time I was understanding like, oh, this is why I crave broccoli all the time. Really weird craving. I need more of this supplement in my body. So I start taking it, face clears up. But as time passed, as that prescription drug wore off and all of that stuff, my acne reflared. So what did I do? I went back to AI and I said, what's the situation? Well, it turns out there's multiple kinds of acne. I never knew that. My dermatologist had never told me that.

21:29Several dermatologists that I've seen. Are you saying there are multiple categories of acne? Aha, I am. Now, if there's a dermatologist. See, once you have the category lens, you see categories everywhere. Everywhere. Now, if a dermatologist is listening, this is a vastly oversimplification. They'd probably chop my head off, but that's besides the point. There are definitely three types of acne, hormonal, bacterial, and fungi. Turns out my acne is bacterial. AI helped me figure this out. I went to the internet. I heard other people's testimonials, use cases, et cetera. That opened up a whole other rabbit hole for me.

22:04Turns out what you need to do if you have any health issues is go take a comprehensive blood test. I had been to doctors, OBGYNs, dermatologists in the past, and I said, hey, I'd like a blood test. And they said, what do you want to test? And I said, all of it. What do you mean? What do I want to test? You tell me. You're the doctor. And that was a pre-AI era, but AI helped me find function health, which is you go pay$300 if you're unfamiliar with it. It's by Dr. Mark Hyman, which is a wonderful creator capitalist, one of my favorite to follow. And he launched Function Health. You go get every single thing tested you possibly could.

22:38So I did that. Got my results back, uploaded it into their AI, uploaded it into my AI. Turns out I have thyroid problems. Started treating it. And I am a different person than I am or was at the beginning of the year. Incredible. Absolutely life-changing. And we can literally see improved color in your face. Like you're it's a visible health difference. And the story doesn't stop there because I started. There's more. There's more doesn't stop there. I started getting these weird bumps this year. And so I uploaded it into AI started. I ended up getting some cysts, all of that stuff. AI, AI, AI.

23:18And it was like, hey, have you ever considered you might have HS, which is an acronym for a really fancy two words, sounds like a Harry Potter spell. I won't even try to pronounce it. And so I go to my dermatologist for these cysts, and I was like, I think this is actually a part of a larger problem. And I brought up HS, and he was like, baby, remove the cyst. Life goes on. Seven days later, before the stitches even can come out, the cyst comes back. So I go back to the dermatologist. I saw a different one. And she goes, you know, I think you have HS. And I said, I know. AI figured that out for me two months ago.

23:55But thank you for the confirmation. Confirmation is great. Always go still see your medical doctors. So now look, what do I have? Gentlemen, if you're not on video, you will not see it, but it is an aura ring on my finger. Opened the app. Their usage of AI, incredible. That's now going into my AIs in order to keep monitoring these things. Life-changing. It's an amazing outcome. And you know what? Your story is going to help other people who, you know, I mean, the acne category is the weird data for, you know, the leading indicator for others, more systemic health issues. And that's the, you know what you just, your story is, goes back to our content pyramid, right?

24:35Because we, we talked about the difference between most writers and legendary authors and writers is you got consumption, then you got curation, you got obvious connection. That's what the first dermatologist missed was like, well, okay, you know, patient with AI, whatever. Like the second dermatologist got to non-obvious connection, which is the hardest part for most people to get to. I mean, what do you always say, Christopher? To be a thought leader, you need leading thoughts. The simplest way to have leading thoughts are the non-obvious connections, right? And so when you get to that, then you get to all, you know, that That was the unlock that got you to where you are now.

25:14Your skin looks better. Your color looks better. But I'm going to, I think you tell us, Bri, I'm guessing just you probably sleep better. You probably move better. Your flying is probably easier and better. Like the unintended consequences of this or what? Like your lifestyle has just dramatically changed, I would think. Oh, yes. The umbrella word is I just feel lighter. I can move through the mountains when I'm hiking and moving through all of that. I feel different. And the other cascading effect that we haven't touched on yet, we touched on it in the background, but this has affected my family too because I've gone back to my younger nephew and been like, hey, if your acne might be bacterial based too, I think gluten is driving mine every time I have gluten, my face flares.

25:57And then I did that to my dad who also struggled with acne and he was like, oh my gosh, when I stopped eating bread, things cleared up for me. So there's a cascading effect for families as a whole that we're missing in this conversation so far. But this is the part that I hope that if I think about the good, the bad, and the ugly, in the ugly part, Anthropic, I do not envy the CFO. This is a knife-sedge business, right? If they throttle back on the spending, revenue slows down, and the revenue slows down, the valuation goes down. If they want to put pedal to the metal on the valuation, they got to grow revenue, which means they got to accelerate spending.

26:37And to Christopher's point, good luck finding power. Like, I don't know where you're going to solve. Like, some of these things are just the reality of where things are. Space-based data centers, I don't know, it's a year or two years out from where it needs to be. and so the difference in the p &l is really the spot market versus long-term contracts and you you get this wrong you can get upside down in your p &l right away so like there's the volatility and the risk factors which we wrote about in the spacex ddr was like hey ipos scary business not for us but in year one easy chance you lose your money here do we think anthropic is a legendary business yes will it have a legendary outcome more than likely is the volatility, just like the ARR and the spending, going to be like anything we've never seen before?

27:27Absolutely. This is going to be the worst of the worst roller coasters. So if you have an iron stomach, then be prepared. I do think stories like Breeze could actually smooth the ride over, but the volatility and the risk is going to be often, that's probably going to be the ugliest part of this whole thing. Now, there's an important context for this. So when you listen to Bree's story, if you have the category lens, you see it differently. Most people hear that story and go, wow, that's great. I'm glad for her. I'm glad for her family. Isn't AI cool? Maybe I should ask AI about some of my health stuff or my family's.

28:08That's all. Let's call that obvious. Here's the less obvious from what Bree just said. So what's the category ultimately? So it's been called artificial intelligence. Now some are trying to call it super intelligence. Here's what the category is. Intelligence. That's what it is. And Bree's story tells us two things about the category potential of intelligence, particularly when you tie it back to, Eddie, your insight about the minuscule market penetration of anthropic. which is stunning in the context of the growth that we talked about. Okay, so here's the aha. A, the category demand for intelligence might be infinity.

28:58And the reason for that is B, what the intelligence category really is, or intelligence technology really is telling us, is the intelligence of all of us beats the intelligence of some of us every single time. So what do I mean by that? Was Bree seeing dumb doctors? No. Was Bree seeing doctors who didn't give a shit about her? Probably not. They probably cared about you and they probably wanted to help you solve your problems, right? Was she seeing uneducated doctors? No. I bet the doctors that you went to went to good school. They're good doctors. They're certified in the United States of America, which makes them some of the best doctors in the world.

29:39And maybe they aren't the greatest dermatologists in America, but they were good doctors. Yes. OK, so you have educated, good people, certified, worked years to acquire that existing knowledge and then get paid to apply their interpretation of the existing knowledge that they got trained in. one person acquiring knowledge and applying knowledge in an effort or I should say intelligence, excuse me, acquiring intelligence, applying intelligence in an effort to affect an outcome for Brie. And they got to an outcome that wasn't optimal. It actually wasn't working. You were on all these meds, your health wasn't right, et cetera, et cetera.

30:24So what happens? Brie goes to the AI and now she takes the intelligence of a few doctors that she's been told. She dumps into her AIs, and what happens? She's now accessing the intelligence that is known around the universe for that topic. And so the intelligence of all of us beats the intelligence of some of us. That's what AI is. And so what we're learning, and Bree's story is a great example, is that the demand, the category potential, the demand for access to broad intelligence as opposed to narrow intelligence from one person versus broad intelligence from the best thinking, the best research, the best data, ideally of humanity, is infinitely more valuable, and therefore it has the potential to have infinite demand.

31:25And that actually is what I thought was the most interesting thing in the S1, because as soon as you leave the United States, you go anywhere else. Google, still penetrating into certain places. SEO, still a topic of conversation. The ability for it to expand like it's a small percentage of people utilizing it in the United States, but globally, I found that to be the most interesting thing in the S1. Two things came back from our research team while we were talking. Christopher, you had asked about venture capital funding throughout this year. OpenAI and Anthropic have taken 43 % of venture funding this year.

32:03AI as a whole has taken 82.7%. Second thing on languaging, you, Christopher, had asked about how the IPO states that what we build could essentially endanger humanity. The closest thing that we have found in another IPO is SpaceX's from the spring, where they said life on one planet, quote unquote, carries existential risk. However, they then reframed it to Eddie's point about languaging, that they save humanity with their technology, even though there does pose as existential risk. Whereas Anthropic changed the narrative and said we could what we might build might endanger humanity. So, to me, there's going to be unimaginable volatility.

32:48So again, trust the data on year one IPOs only for the most speculative of speculative stuff. So just don't be so smart, you're stupid. But number two is that a little bit of language and goes a long, long way. You know, 24-7 doctor and nurse paired with brief story, personal CFO. We wrote about how AI saves, you know, I'm continuing to cut costs, by the way. I got rid of a duplicate. I had two DocuSign accounts. Who knew? One was on some enterprise level that I didn't need. And so I'm continuing to save. I think I'm up to like$6 ,000 of savings now. And three, of it being your personal software engineer, like we are early in the midst, but thanks to Pirate Bree, we're in the midst of Vibe coding our way out of some software subscriptions that maybe we don't need anymore.

33:32And so I think the more we, if they get the languaging right, the tide will turn with public sentiment. And if the tide turns with public sentiment, then the whole category gets de-risked because we can build, we can get power, we can kind of get ahead of all the stuff that we need to do. But until we get that right, it's going to be tricky because to your point, Christopher, they can't help themselves. But the doomerism is all about how do you benefit the outcomes and the risks? Because that's the whole thing that we're talking about is like every technology, every breakthrough in science has had the Oppenheimer effect, right?

34:06It is amazing and it is scary. This is not anything new. We just have to remind ourselves to talk about them with equal weight and bias and say what needs to be true for us to emphasize the benefits while preventing the negatives. And guess what? The answer to the risks of AI going rogue or bioweapons or privacy hacking in the cyber surveillance state, it's more AI, right? The only way to solve that is with more of technology. And so I do hope that we kind of get to a point where we have responsible stewards at the helm talking about the benefits, talking about the transformational benefits to individuals, to the economy, to society writ large.

34:46But pirates, buckle up. It's going to be a wild ride. So I was doing some checking as we were talking. And if these numbers are right, so according to ChatGPT, 76 % of humanity has access to the Internet. That's a giant number. Further, there's a report that came out in June of 26 from Microsoft that says 18.8 % of people on the planet ages 15 to 64 use Gen.AI. So we have 6.3 billion people on the Internet who have access to free AI today, right? And only 18, almost 19 % using it on a regular basis. So that just shows you how much more room there is to grow. And obviously, the uses of AI have changed dramatically.

35:42We've gone from prompting to aid to building individual agents to building multiple agents and managing those multiple agents to having agents that build agents and manage other agents. Right. And we've seen now just recently Muse and GrokBot leading the way the the the let's just call it the beginning of the tipping point of the personal A.I. category. So personal AI as a category really is in its brand new kind of infancy. And so the point being, you take Bree's story, you take that data, if it's right, we take everything we know about how categories grow, and you say, you know what? The intelligence category will undoubtedly be, and I could be wrong, but I don't think so, the largest, most profitable, and most important category for the foreseeable future.

36:42Yes, and intelligence is neither, it's amoral. It can be used for good things, it can be used for terrible things. I actually had once a pastor friend of mine say, he was a professor at a seminary, and he goes, you know, the good and the bad of being at a seminary is you see all the people who come through and a lot of people who want to be pastors are broken people that want they're trying to solve their own brokenness that way so what is it every psychiatrist a mental patient yeah yeah so you have a lot of that and then what he was telling me i don't think i appreciate it at the time he goes he goes i know you and kristin i know your marriage you should have as many children as you possibly can i'm like what like it's a bit of a societal translation we We need more good people making good people.

37:27We need a lot less dumb, bad people making dumb, bad people. The only way to solve any of this stuff is that for people who have a healthy structure to have more people in there to do more good things and whatever else. But, you know, this is all up for grabs. This is not a lack of agency problem. If we are scared of AI, then you should be using intelligence to do great things, do positive things for people. And we will get the future we make. We'll see you next week, Pirates. Thanks for pressing play, Pirate. You just spent 30 minutes becoming the smartest person in the room. Want it to stay that way?

38:03Subscribe or follow wherever you're watching or listening. It's free and you'll never miss an episode. And if this one gave you a case of thinker's high, give it a like or a five-star rating. It helps other Pirates find us and we'd greatly appreciate it. And if you want to go deeper and build your own category, the founding membership is for you. The link is in the show notes. See you next week, Pirates.

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