This Week Was Absurd | Ep. 079 Lemonade Stand 🍋

17:58Aiden:They've a really limited spread of operations on the continent in general. And the main reasons that they're reciting are there have been like continuous disputes with drivers around fares in the country because of rising fuel costs. Drivers basically saying they aren't getting paid enough and also disputes around discounts or fare programs that Uber has run in the country before. And I saw this story and then I imagine this clip was circulating around the same time for the same reason, which is a clip of Trevor Noah, a South African comedian that is explaining the story of how Uber drivers in Nigeria took advantage of Uber's strategy of how they approach like new countries.

18:47Aiden:Right. So you guys are pretty familiar with the general idea of like Uber launches somewhere. The fares are really cheap. Yeah. And, uh, they give the majority of the fare to the drivers because they need to encourage people to start driving for the platform and they need to encourage people to start using it. And that was like the golden age of Uber for, for everybody. Right. It, from the user perspective, it was fucking amazing. Yeah. But eventually because the company has to start making money, they kind of rug pull the, I don't even know if you could call it a rug bull. Cause it's like a slow bleed over time is they start taking more and more of the thing.

19:24Yeah. People feel like it's worse. Yeah.

19:25Aiden:And it gets worse for both the drivers and the users. And this experience is pretty universal. I would say I've, this is my new, like go to conversation topic with Uber drivers right now is just asking them like how it's changed over time if they've worked for Uber for a long time. And in Nigeria, Trevor Noah is explaining that when Uber had initially announced that they were launching in the country, one of the programs to get drivers to sign up for the app was if you drove people back and forth to the airport, you could get a special bonus on your fare. And this was a benefit to encourage drivers to get on the platform.

20:07Aiden:So what a bunch of Nigerian drivers started doing at the time was they would take two phones with two Uber accounts, go to the airport, call for a ride with their own phone because the fares were low, confirm the ride, drive away from the airport, get the rebate, and repeat that and live off the rebates. Wow. That's peace. And I don't know if this was happening in Uganda, but there's this general idea that over time Uber had dealt with like so many issues with like drivers basically taking advantage or combating them or that they have given up on service in Nigeria altogether. And I think the idea of drivers like just taking two phones and driving themselves around all day is like really funny.

21:01I remember someone doing this in the early days of, what's the Uber Eats competitive? DoorDash and Uber Eats. Yeah. And there was restaurants because they wanted to get restaurants to sign up. So they would give them these incredible, you could upcharge or whatever and they would give you all the cut. Yeah. And so I remember one guy had his own pizza place and he sold like 5 ,000 pizzas to himself.

21:26And he had to take a photo for it or whatever. It was just empty boxes, but he stacked them up and took a photo and then got, and it's just like these weird little niches in the investor cash burn. Exploit the system. At least be forced to eat the pizzas.

21:38Aiden:He has to eat it on camera while the CEO watches. It's like, I feel like it's those like random, like in the older days of the internet when there was like less ID security around things, maybe you could sign up for a platform and get like a$5 bonus in your account or something like that. And then you made a bunch of accounts with like proton mails. Oh yeah, yeah. Yeah, yeah, yeah. Yeah. It's fun. I, I, uh, do you guys, this kind of reminds me of when, uh, you remember movie pass? Yeah. How they would, movie passes. That's the goat. That's the gold standard of like, we're just going to burn money on things.

22:13Yeah. But I don't know if you guys knew what took them down was mission impossible. Three was such a popular movie that everyone went to see it and use movie pass. And they literally could not afford to buy the tickets at a loss anymore. And that's what killed the company. Like they were kind of keeping it going, but Tom Cruise's movie had such a big opening the business only worked if movies were kind of bad people were kind of bad it's so funny they couldn't see too many movies it's kind of a glorious couple years i'm thinking about all

22:39Aiden:my smash gg co-workers that had movie pass living in san francisco and it was like uber was still cheap movie pass existed yeah all these like vc funded startup ideas that just had no long-term legs at least to like actually become profitable but you existed in this like glory time of them being cheap and accessible.

23:01Atrioc:You can do a one-month boot camp and get$100 ,000 at those companies. I know people who did that.

23:07Aiden:Literally. I know people. Dude, and as far as I understand, they're not great engineers. Yeah. Like, they're, like, fine. Yeah, the millennial VC subsidy from, like, 2012 to 2016. That was a really glorious... Anyway, okay. Uber shuts off service in these couple places, but I want to know about all these videos in Austin right now because I've been seeing like way, way more videos of cyber cabs flying around Austin, Texas and presumably other places. Back to Texas.

23:38Atrioc:Nope, just Texas. Okay. Cyber cab from Tesla has launched. We've talked a bunch about robo taxis and our first episode. There's a very first second. No, second. I think second. Oh yeah. And I think we can now officially say I won the debate. Cyber cab is here. Here is a video plucked off of YouTube. There are a number of these videos of people taking cyber cabs. So these have launched. And what this is, is different from the traditional Tesla that you go buy as a consumer, which now has that sort of like self-driving feature. This is a car custom made to not have a steering wheel. There is no driver.

24:11Atrioc:There are two seats at the moment. And then you kind of sit there in front of this little like TV, iPad type thing. And it has launched. It's out. And so this happened last, oh God, the other videos of, there's a lot of funny memes about this. But yes, last week on September 3rd, this launch, it is limited in Austin, Texas. As far as I can tell, it's maybe like hard to get or only influencers. The information in typical Tesla fashion is hard to get and understand. But Perry, if you can pull up my thing, my favorite sort of recap of the weekend and how it went overall is from this website, Basenor.

24:49Atrioc:This is from Basenor. And the headline recapping the weekend was Cyber Cab completes launch weekend with no fatalities. let's go oh we freaking did it um one thing i thought was particularly crazy here uh and this is within i'm not really sure who the publication is but they talk about how with the cyber cab there is no ability for a remote driver to like take control of it so oh wow unlike the other ones this is built up so this is the first one that's out there it's like whatever happens happens you can't come take this over yeah so um it seems like it's going fine of the couple videos I saw people, you know, like it's mostly very pro Tesla influencers basically is who's using this stuff.

25:30Aiden:Yeah. Cause they had an event recently, right? Where they invited Tesla specific influencers to be a part of the showcase or something. I mean,

25:38Atrioc:it's kind of how they launched their robo taxis. So the first stage of this, which we talked about was they had cars that were driving around Austin, but with a safety driver. And now this is their, like, this is a model that is fully meant for robo taxis. Um, but it's kind of, they're pushing it farther, it seems like, than other cars where, like Waymo, you can still remote control one of these things.

25:55Aiden:Is there any explanation for the lack of that control? Because, you know, ideally the product works fine without it. I think the idea in my mind of, oh, this security measure for a Waymo exists is good.

26:09Atrioc:Yeah, because there's still a lot of problems with these. These cars are not perfect yet. I mean, they're getting better, but they're not, like, ready to go, most people would argue. Yeah. So, I mean, I don't I don't know how they argued this, but I will say is it ties to the broader story here. And this is from TechCrunch, which is that they are now immediately Tesla being probed by the National Highway Traffic Safety Administration for not following the specific safety requirements that you have to have in a car at a federal level. So at the Texas level, the Texas state level is like kind of loose on regulation.

26:43Atrioc:But at the federal level, there is an organization, the NHTSA, that basically says, hey, to be a motor vehicle in America, you have to have these certain things like certain brake systems or steering systems or crash protocol, you know, ideas, steps, all these different things. And the weird thing is that companies to say, yeah, our car is valid to be on the road, they self-certify. So they just report to the NHTSA, yeah, we followed everything. So Tesla did that. They're like, yep, we check out. We're following all the rules. Okay. But how could you possibly follow the rules about steering systems when there isn't a steering system?

27:20Atrioc:Obviously. It's the airport rule.

27:24Aiden:What do you mean by that? You don't have to follow the steering system rules if you don't have a steering system. That's actually what is happening.

27:31Atrioc:Yes. That is actually the argument and what a lot of these autonomous vehicle makers have been doing, which is saying, well, that thing doesn't apply to us because we don't even have a human driver. It's an aid. it's just an A. Yeah, so immediately they opened a probe. You can tell that this organization wants to be very pro, like, robo-taxis. Their statements are all about that. Like, we fully support the safe development and deployment of automated vehicles, but as the federal regulator, we need to ensure that our laws are followed. So they've kind of said, like, hey, you're clearly not following stuff.

28:04Atrioc:We need to do an investigation and see what's actually going on. And this seems like a pattern where Elon's companies kind of just charge forward and then they deal with the regulation impact yeah that's always been his mo afterwards yeah there's some of them success and of detriment yeah so zooks is another company you might have heard of which is a smaller they're mostly in las vegas right now and they're also a vehicle that is on public roads that has no driver and no steering wheel so that's the other one that is like notable but they had the same problem in 2022 they also were sort of investigated by the nhtsa they had to slow down their development a whole bunch of zooks is sort of behind they're owned by amazon they're like amazon's player you quite possibly have not heard of them yet but it's interesting right now because like all these companies are yeah here's the zoops they're trying or are launching cars with no steering systems and to be honest in la it looks fucking cool to like sit in a car where there's no steering wheel there's more space and all that stuff but obviously you have to like make sure shit is safe um so that's where it's at right now cyber cab is actually out and i will and i will end this by giving a doug take which we all value deeply Don't take.

29:09Atrioc:Don't take. Which is, I've said this before. I think it is a bummer. I think the real value of autonomous vehicles is going to be on the consumer side. The average person driving a car, having some kind of safety system and automated driving, because the average person are the idiots who get into car accidents and kill people and do all this horrific damage. The average Uber driver or taxi driver is incentivized to be very safe. So on the safety side, the real value is consumer vehicles, not replacing Ubers. and so I think it's a bit of a bummer that like this is the big push from Tesla rather than saying hey let's get the Tesla vehicle ready because that's the one that would like make the biggest impact if your argument is this is going to make humanity safer yeah I mean I guess that's the

29:52Aiden:the angle is the the monetary incentive right like this is just the path forward to like monetize this project quicker yeah you and get more reps and yeah yeah plus I mean you know you know how like young people nowadays are getting their driver's license later and later. It's pretty common.

30:09Atrioc:Yeah.

30:13Like if this technology continues to grow at scale. Yeah. Oh, people don't have consumer vehicles. That's like a real, that's like a possible future. To me, to me,

30:22Aiden:like the, the idealistic version, like the, the end point that somewhere in the future, it's like you live in some sort of city, you have some sort of like robust, like Metro and public transportation system for all the areas and things within the city, you have this network of vehicles that are automated or can communicate with each other that lower the rates of accidents or the fault of drivers. You can tell he's moving to Sweden. You're able to rent. You're able to easily access or rent some sort of larger one if you need to move things from a store or something like that.

30:55Atrioc:The weather is cold and depressing. And it's cold and depressing.

30:58Aiden:And the sun has gone down at 2pm. And we all say, hey door, when we say goodbye to each other. Yeah.

31:04Atrioc:we all want that's your dream future paradise i i agree that's that's gonna be awesome in many ways i think the bummer is that if you imagine a let's say 20-year timeline from where we are now to getting to the point that all vehicles are automated on the road and we've mostly gone away with the enormous amount of death and destruction that happens from human beings driving cars at each other that's the steps to get there it would be cooler if we started by eliminating the average consumer accident rather than the first step being eliminate all the jobs of people who do this work and aren't really causing the accidents anyways.

31:37Aiden:I guess it's really hard to incentivize a bunch of people that already have cars to spend a bunch of money on this new vehicle. It's extraordinarily

31:44Atrioc:hard. It makes logical sense that this is where they're going, right? It's just a bummer.

31:49Aiden:It's funny to think about what the core of that message is in a way like you can package it differently, but it's like, hey, you're a shitty driver and that's why you need our car.

32:01Aiden:that's why you need to give me 30 to 60 thousand dollars plus a recurring monthly fee probably and there's a subscription speaking of the millennial subsidy it kind of applies here because i saw that the austin cyber cab prices are extraordinarily low well below even waymo who's probably gonna have to drop their prices in response yeah and so we're looking to her a few years here probably of you can you can go to the airport back and forth or whatever and you're self-driving car because it seems like there's a big race uh in in this and llms and all this that they're just they're subsidizing it for you it seems like it's all happening pretty quick to be honest at least maybe it's tbd right because it feels like the regulatory part has always been the slowest thing and that doesn't i don't see it going that maybe it's like a thing

32:48Atrioc:where the dam breaks you know somebody gets it dude nobody died we're gonna go maybe i wasn't that we know of there's a feature in the car where it then hides the body

32:58Aiden:scrapes it something so the other part of what i've been talking to uber drivers about lately is this and how they feel about waymos and automated vehicles come in it's interesting there has been a theme so far across every person i've asked from their perspective they're like i don't think the cars are good enough i'm not really worried about not being able to do this anytime soon, which is interesting to me because I do think they're clearly getting very good. Like, especially in LA, you have examples flying around everywhere already. And I'm not, uh, so instead of, I expected people to be more like worried or maybe even angry that this is happening and potentially threatening their work.

33:49But they were all, every single person I talked to was,

33:54Aiden:with the air of this isn't even going to be a big deal for a while. I'm not even stressed about it, which, which surprised me. And this is, you know, this is only a sample. This is a sample size. It's like five people in the last few weeks that I've talked to. Right. But the fact that all five of them had a similar error to that. Is this in LA? Yeah. LA is the craziest place to do it. Cause we see Waymos all the time. Yeah, I know. They're like, they tailgate a little close. one guy's insane. He was just so insistent. He was just like, I'll always be a better driver than that thing. And I was like, yeah, that could be true.

34:31Aiden:Maybe he's the goat. I don't know. Even if you're the goat driver, it's not like when I'm drunk at night going up in the bar, I'm like, let's rank these on who could do the fastest lap or whatever. I just, I don't know.

34:42Atrioc:Genuinely, my criteria is don't kill me, get me home. Yeah, don't kill me, get me home.

34:46Aiden:The driver's name, Max Verstappen. Times are tough, huh? Max is doing a little between race weekends. He was at the airport going back.

34:59Aiden:Support for Lemonade Stand comes from Anthropic, the team behind Claude. You guys have been using Claude for language learning lately. You're not really hanging out with me anymore. You're talking to your Swedish Claude, you're talking to your Japanese Claude, and none of you guys talk to me. And I could teach you things about language. I can't think of one thing you could teach me about.

35:19Atrioc:just outside of language even really unless you could have a basic conversation with me about whether you like sushi or not in japanese you've been quizzing on whether it likes watermelon or

35:28Aiden:something this is real i like i just went on a trip with a bunch of swedish friends it was like me and 15 swedish people and i've been learning swedish with the help of claude for a long time and it was like my first trip with them where i could like have a conversation with it was it was so awesome.

35:43Atrioc:Yeah. I found that for language learners, being able to ask a lot of follow-up questions, like I still have, for example, a tutor. I use other resources, but being able to at any point ask about, hey, what's actually going on with this sentence structure? Help me generate examples. Help me go back and forth. And there's a voice mode on the Claude app that you can use and just have a conversation in that language as well, including saying things like, can you talk a little more slowly? It's really a fascinatingly helpful tool, I think. That's cool. If you have problems worth solving. Get started with Claude at Claude.ai slash lemonade.

36:13That's Claude.ai slash lemonade and check out Claude Pro, which includes access to all the features mentioned in today's episode.

36:18Atrioc:That's Claude.ai slash lemonade. And now Aiden will say goodbye in Swedish.

36:25Aiden:Hey, Dua. Support for this show comes from Gusto. All right. Cool, Aiden. Gusto, online payroll benefits software. Super good. Super helpful. I've used it as an employee and an employer for years, including someone's employer. Someone has to look at you with this hat and then say, you signed my paycheck. Do you know how many employees report to me collectively? It's more than 20. Isn't that insane? Isn't that insane? Far too many for this hat. And Gusto was really great for handling all the paperwork related to their employment, getting them paid every two weeks. But that stops now. I'm done paying them.

37:03Aiden:I'm done paying them altogether. together. If I were paying them and keeping them employed, I would use Gusto because it's a great piece of software that works really well. But that's front hat Aiden. And I'm getting rid of all of them. I'm doing it all on my own. Doing it all by myself. And all their paychecks. And then for the last part of that episode of the ad read, let's bring back front hat Aiden. Oh my God. Oh my God. Oh, wow. You're probably interested in trying Gusto today. Sorry, I don't know where that came from. That's lemonade. You can just You can just get there for three months for free.

37:35Aiden:When you run your first payroll, that's three months for free payroll at gusto.com slash lemonade, gusto.com slash lemonade. You're all still, I'm sorry. I didn't mean that. I don't know.

37:48Aiden:This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus. All right.

38:14Atrioc:I have been just overwhelmed by all this stuff I hear about AI. Could somebody here explain it to me? No. This has to be collaborative here. Let me know what you've heard because I'm teeing up this story because I wanted to bring it up. And it ties in what we just said. jensen wong my old boss and the ceo of open ai two people greg brockman two people who have no incentive to lie have both said something to the effect of agi is here jensen wong he literally said agi has arrived yeah it's actually funny because greg brockman sort of was like trying to give himself a little bit of wiggle room he's like uh this model may not exist so the context is that open AI just released their latest model Astra it's a leap in performance and uh he said maybe it's not this exact model but we're so close that the era of AGI is here and then Jensen Wong goes no we're we got it we got it bro it's here lock it in it's been achieved so if he hasn't know AGI artificial general intelligence is the idea of basically a machine that is that is better than humans at all tasks is that the idea or is it like human level performance on any intellectual task.

39:28Aiden:I'm not, uh, I mean, that's the criticism of it is there's no solid definition of that term. People do not disagree. People do not agree about what it actually means. So whether or not you've arrived at it is contentious to begin with. And then of course you have the financial relationship between both of these parties, which makes them incredibly incentivized to compliment the other in regards to this being achieved. Especially as OpenAI prepares for its massive IPO. Anthropic, same thing. Both have them coming up. They're a very big deal. There's a lot of financial things here. But I do want to say, as someone who's not an expert, the demos and tests and things that have been coming out from Astra, I don't know about AGI, it doesn't seem like AGI to me, but are spookily impressive.

40:16And as someone in the Melee community, I don't know if you saw, they finally, after a years-long project, decompiled the full Melee code.

40:24Aiden:Yeah, they were at a roadblock for a really long time with it. And Astra is what broke the roadblock. And I saw an example that really stuck to me is, so Grand Theft Auto Vice City is a game I liked growing up. And it has horrible mobile, it has no mobile port, it has a horrible PC port. And they just, I guess, fed this game in and it made a mobile port and the mobile port ran way higher FPS. and it's like things where i don't know if it's not like if it's not novel breaking new ground i don't know how good it is at that but on things where it's like this is a pain in the ass and would take a lot of time and maybe the code base is all understood it's like doing things that are genuinely i would be incredibly impressed with a human team taking the time to do that so it's like it is valuable in that is a valuable thing like that is rockstar took it down instantly because it's like showing them up but like that i saw it play and i was like that is a smooth mobile port of GTA 4.

41:17That is interesting.

41:19Aiden:If I was a dismissive, cynical, lemonade stand commenter who has no friends, I might be typing... I'm not even saying that. Hold on, hold on. I might be typing right now. Oh my God. He says it's so important, AGI, but then he gives two examples that are just fucking video games. I can already see that comment, by the way. I know who you are. I know where you live. You're connecting two dots. I haven't seen anything that makes you go, holy fuck, I'm talking to the fucking robot from Deus Ex Machina. I don't think that, but I am starting to see examples of like, damn, that's a project that I know would take people a lot of time and effort and it is done quickly.

41:55And that is like, I don't know. These examples are like, just replied video games.

42:00Aiden:Kill yourself. He just replied. Video games are an area where I have some like context. So I can like, no, this would take a while. I have, I've, I've downloaded mods. I've worked with my, I know you've decompiled things. I haven't decompiled things, but I've worked with a game developer. Okay. and I just it is interesting and I think Rucker Bragman we talked about him before a guy who is extremely in the left wing space but the one area he diverges on is like hey I think AI is pretty important here it's worth discussing and he's been going crazy about that he's talking about it all the time so I just think I don't think AGI is here it seems like a bit of a marketing hype but I sometimes think people go oh marketing hype well let's dismiss it out of hand and there's nothing to even look at here and when I look at what's happening with Astra It's like, damn, I'm seeing performance leaps again.

42:47This is better at things than it was before. And so especially, especially, and this is something I do know about because I've seen the process. Even when I made the game, I fucking funded the game but worked on it. He made me design a level in Blender and make a model. Like I had to go through the process. We made videos about that. And so I've seen how fucking painful that process is. And there is some insane examples of someone feeding an image into it and it generates a full Blender model in 3D that can be used. That is a time saver at the very least. I have to call these out when I see them because I still think there is a theory amongst people that this is crypto where it's just fucking useless years on.

43:31This is useful for all people. This is going to do something.

43:37Aiden:I actually have a great story about the practical application of AI in somebody's work that I'm saving for the Patreon that a viewer shared with me. We had a call this week. It's amazing. We'll tease. Sure. Well, I'll give you a practical application right now. My wife designs cosplay props professionally and people commission her to create cosplay props. And she created a light-up sword. She has no coding experience, really. And she was able to get it with a Raspberry Pi to set up the light show thing for the sword. And she programmed it through Claude and it just did the work for her. that I'm just seeing these real world examples of like shit getting done.

44:13And it makes me think I have to update my priors here and constantly, uh, mentioned it to me. Why? I, I think it's being ignorant not to, there's something happening. So I still doesn't change much on my thoughts on, um, the financial reality of these, uh, IPOs. I can talk about the anthropic one, which is coming up 2 trillion. There's a lot I want to say about it. I don't know if we want to go into it, but whatever. I give thoughts.

44:34Aiden:2 trillion. Yeah. I, could you give some thoughts about that? The one thought I want to give is they are being real. Everybody is incentivized, like in these quotes, to talk up the amount of revenue that they're creating so they can justify the valuation. And Anthropic is doing something really sneaky with their revenue, which is that they are, it's like if you're Best Buy and I am a video game manufacturer, okay, and I sell you a copy of my game, give me a game, Mario. Final Fantasy. Final Fantasy, okay? And it retails for$60. and I sell it to you for 30 or 40 and then you sell it for 60 and collect the upside.

45:14They are recording, this is what like Anthropic does through model providers like Microsoft or whatever, they have these middlemen. They are taking the final listing price the middleman sells it for, recording that as their revenue and then recording the cut that they get as an outside expense that doesn't get recorded in EBITDA right here. So it makes it seem way fucking bigger. It's like the end result, if you go down to the fine print, is correct. But the way they're recording it is not the normal accounting practice. So it makes them seem like their revenue is much, much bigger and growing much, much faster than it probably is.

45:51And they are a fast-growing company. Again, it's tough because there's shades of truth, but everybody is incentivized to be a little fucky with it. And additionally, so you guys watch Big Short together. There's a big scene where the woman with the blind glasses on is talking about, which is the ratings agency. There is a massive push right now from Anthropic, OpenAI, and honestly, NVIDIA, even though they're fine, to once these companies IPO and they're listed, to be listed as investment grade, which is above BBB, which means pensions and life insurance funds and safe things can buy them. Now, normally, this process takes a lot longer, but SpaceX was able to get through really quickly with this, and they're trying to do it for these guys.

46:35a company like meta or google took years after being listed to be on these lists because it is just you're not investment grade if you have like it the one below it is called speculative grade or junk but the idea is like you're still not making money yet there's still a risk to to loaning you money which is basically what buying their bonds is and uh there's a lot of pressure on this because if it goes through they're they're these guys borrow money all the time they're borrowing money like crazy. If they start borrowing money, not just from VCs, but from life insurance funds, then it publicizes their problem.

47:10You know what I'm saying? It puts it on the public. It puts it on the general public, things that are likely to get bailed out. So that is, those are my financial worries around all this, whether that technology, I think is like, I honestly see things that impress me. Maybe I'm being fooled by marketing, but I continually see things that impress me. Maybe not for society's all good, but they're like, they're doing things that were hard. So I don't know. I don't have any thought. I'm talking for a lot. I want to, yeah.

47:31Aiden:Can you remind me, because wasn't there, there was a big pushback on XAI's or SpaceX's IPO. Yes, that was their inclusion in like retirement funds, like the S &P 500, like track. They didn't get included in that. But this is like when SpaceX goes to borrow money, the rating agencies will give their bonds a grade and much like mortgage bonds, mortgage-backed securities. and if you get above triple b it is like the unlock it's the holy grail unlock where you can get access to a lot of things that are that are legally not allowed to buy you under that and so there's a big push like they're they're they're putting a ton of pressure on rating agencies they're hiring the best lobbyists they're hiring lawyers they're trying to crack that thing and it just from the general public perspective you're like you don't want to see any of that you don't want that to happen you want it to be an honest ratings assessment of like how risky is loaning these guys a ton of money.

48:24Aiden:Sorry, this is for their issuance of stock or the bonds they've been issuing? This is the bonds that OpenAI and Anthropic and the other companies are issuing. Okay. And they're issuing a lot of them. It's like they're issuing so many bonds, which is them asking to borrow money, IOUs, that it's crowding out government debt. That's the idea. Government debt is being crowded out, which is like there's never been something at scale borrowing this much money. They probably transition. That's an insane transition. That's perfect. I hope I land this. Well, on that

48:57Atrioc:note, that was awesome. The Holy I segment, I said Final Fantasy and nothing else. You were looking at me with like soulful eyes. I felt I was just lost. I was lost. I don't know if you have any thoughts. I want you to speak. I would honestly like to hear your thoughts, even if it's like just unstructured because I it's a genuinely interesting thing to me. And I'm OK, I'll I'll pose one interesting thing and then we can move over to Bonzo Aiden said. Primogen, who we've had on the show and is a lovely tech YouTuber who has much more deep experience with programming than I do, released a video, what, two days ago now?

49:33Atrioc:And said this. This is basically his feelings on these new models being released that are increasingly competent.

49:41Aiden:But at the same time, I'm still going to have the real problem I have, which is how do you make someone's life better with the code? Which is really, how do I make it better with the project? And so it really doesn't absolve me of the hardest part of programming, which is making something awesome. And so when I see all these slop games that you see, like, there's a reason why I feel upset. And it's because the actual hard part about making a game isn't putting together a demo. It's making something that's repeatable and fun. And when I look at that, I go, okay, yeah, that took you some money, and then waiting for a prompt to finish.

50:14Aiden:But the actual fun part, it's not there. There's nothing fun about what you built. And really, that's a reflection of me, which is that given infinite resources, can I build something fun?

50:26Atrioc:Can I? I thought that it was pretty interesting. He I've really, I mean, so I've been able to chat with him a whole bunch over the years. So his perspective has been evolving quite a bit as well. And he's sort of in the middle camp as I would say I am. I'm obviously a hundred percent AI is good, but other than that, I, other than that, I'm very much in prime's camp of like, this shit is getting really, really powerful and good. And, you know, he has shown or talked about many examples where he's seeing this stuff. Every software engineer I talk to now, I ask like, are you using AI? Most, but importantly, not all have said like, it's just too good to not use now.

51:01Atrioc:At the same time, it's really interesting to where to see it get to a point. And I've certainly experienced this as well, where it kind of, you now have to just actually have a good idea. You have to actually create value. And we're seeing so much slop on the internet where somebody goes, look, I made Tetris in one shot. I made GTA five in one shot. And none of these games are fucking good. Nobody's made one of these that is actually compelling or interesting. And there's something sort of like raw and very human about the idea of so many people who clearly thought for a long time, if I had all the money in time, I could make such a sick game.

51:35Atrioc:And now those same people can, this technology can make it in 30 minutes with$20 in tokens. and then it turns out hey your idea isn't very fucking good actually and it's this really strange thing of like for the first time you know we are opening up access to for many people to be able to create whatever they thought and it turns out hey actually ideas are really fucking cheap and easy to come by and it's going to take real deep design and creative skill to make something that anybody cares about i think it's like a fascinating dynamic that's happening okay i

52:08Aiden:I actually have, before we get to the bond sell-off, I actually have a pushback that I want to run by you guys. And it's this conversation I had recently with a friend who he has worked. He worked in recruiting for a long time, but more recently he's been talking to a friend to help him build his like YouTube and media business basically. And that friend works in and around like Roblox a lot. And because of this, he's been trying to get to know and understand Roblox, like what makes for a popular game. How do people build these things? What's the scale of the dev team? How do people monetize this stuff?

52:52Aiden:And he was giving me these notes on how what trends on Roblox and the way thumbnails work and the way that like games will pick up really hard for short periods of time and then fade away. and how there'll be a ton. You know how on YouTube, like if a trend hits, it's like a bunch of people making a similar type of video all at the same time, then it fades out. He's saying Roblox is really like that, but with video games. It's like these little miniature games that aren't really games in the traditional way that we would look at them as like millennials or even like Gen Z might. They are like these little interactive experiences that are more about like the thumbnail than the actual gameplay itself.

53:36Aiden:And a lot of the games aren't like fun or fulfilling experiences in the way that people our age would look at video games. And with that in mind, as someone who doesn't play Roblox, it's like, I think my fear with a lot of this stuff and when people levy this argument against like art, how art is more about like what you make and like the merit of it and the human experience behind it and how AI doesn't replace that part. My fear is a lot of people don't care. A lot of people do play the slop. The slop is getting copy pasted under Roblox and tens of thousands of people who just like to eat, kids who just like to eat candy and don't really care if the game is like fun in this like holistic sense that we like to parade or I think Prime is kind of like alluding to there.

54:29Aiden:It's like the game sucks and 10 ,000 people are playing it right now on Roblox and the person who made it and like pumped it out is actually making a lot of money making that

54:39Atrioc:yeah i totally but that doesn't show the thousand other people who also made slop and it didn't pick up sure you're right like if you shoot enough slop into the slop can at a bunch of children they're going to play some of them right yeah but 999 out of those people are going to go like yeah i have this really sick idea for a roblox game and vibe code it and it's going to suck shit because they don't actually have any deep design skills they haven't built up any real true development ability.

55:05Aiden:That's what he said his view of the landscape is like as he's interviewed developers and he's like tried out games and he's tried to develop stuff himself. He's like a lot of this is like developers who just pumping out stuff with AI, literally hoping something hits for like a couple weeks so they can make their bag for like the year and then repeating that process, pumping out the slop until they hope they get another like hit again, which is crazy to me. I had the exact same feel. You talked about Chinese micro dramas recently on this show. Yeah. My team and I did a deeper dive on this, and I watched some.

55:42I watched a bunch of Real Shorts, which is the big Western Chinese company that is making them here in L.A., and they have an astronomical number of views, and they are truly, truly slop. Like on the most fundamental level, I'm not being an art critic here. it's like my werewolf alpha billionaire boyfriend impregnated me nine times is the title really what's the url wait there's like 50 different ones called like the billionaires like there's one where it's like i married a homeless ceo billionaire that's one and that's like and these are like in the top 20 do you know and they have 500 million views that's a great title and i watch

56:23Atrioc:That's not slop. And a good chunk of them now are made with pure AI. And it is slop. It is slop on a fundamental level, and people love it. And so there's like, on some level, it is the sad reality of it is that people like it. If it was like being forced on people, they would be like, we have to fight against this fucking tyranny. But it's brave new world, bro. It's people that fucking enjoy it. They prefer it. And, you know, I don't know if you mentioned this.

56:51Aiden:It's like people who want to eat. It's like people, people want to eat Sour Patch Kids, bro. They want to eat them. And I guess I do. And you could, and I, and people want to eat. Some people will eat a lot of them. Yeah. But I, you know what it feels like is like we have these fundamental weaknesses in our brain and we, the technology is getting so much better at pressing that fucking button. And that, that other stuff is getting crowded out. And yeah, I had a, like a really kind of like, I don't know I felt like dizzy I was watching these and there's just so many of them they're doing so well and uh and what's interesting is like even in the micro drama space which I think you mentioned which was normally shot with human actors crazy schedules very slop I watched a human I can't watch a human one the script is terrible they're barely reading it's all one take you can just tell what they've been replaced largely with AI they just they make AI ones and they interviewed we got interviews with people that work on it and they said yeah we thought there might be some pushback but the consumer doesn't seem to care the consumer just keeps scarfing down the slop and so i don't know i i do i do wonder what percentage of people really

58:01Atrioc:are watching this stuff because we've said this a number time and i don't know what i do know is that we have been talking for two weeks now about how the you views on youtube just got ridiculously inflated yeah because they started changing how the the views are actually counted presumably these real shorts are doing the exact same thing yeah and then even while we hear these stories of like oh this ai song or whatever just topped spotify correct me if i'm wrong you guys have heard otherwise the vast majority of music that people are listening to is still human made it is still human made youtube videos it's still human made video games and while yes it's growing and there's this increased audience that seems to be down to just like ingest slop all day long i'm probably being naive here i would like to believe that that caps out at like 20 of humanity and the rest of us are like, hey, I actually don't want that.

58:48Atrioc:Yeah, I'll hope for you too. Is there an industry where it's actually taken over rather than carved out a niche? Maybe Roblox is an example. Well, I would say if you look at where we're at in our media consumption environment and where China is at, which is ahead of us on this, whether the numbers are inflated, revenue is massive. And the number of people are mad and people that talk to me, one of our researchers is Chinese and her mom watches these all the time. And so it's like, it's a real thing. If you look at five years ago, it's zero, and now it's a lot. The trend line scares me whether or not it's a hit majority status.

59:23I'm hopeful, too, that it hits a thing and caps out, or even like smoking. Look at the smoking graph in America. It goes big, and then it's like maybe it's a thing where we get antibodies to it. People realize this fucking sucks. Things like soda has had people realize it's kind of bad for you. You hear about Gen Z doing more run clubs or getting outside and touching grass more. like maybe it's a thing where humans we always get one shot by something new and then we figure

59:45Atrioc:it out i'm hopeful i think it's possible i might have copium but i i think look before all this ai stuff jimmy fallon was popular okay and if you were to imagine like slop people have always people always like slop and there's always going to be a percentage of people like slop and now there's a new version of slop that they can get in this very intense endless format and i most people don't watch Jimmy Fallon, right? Most people don't, I guess it's, I was about to say, don't play Roblox, and that's not true. They have 5 billion users. It's a lot. I don't know. Maybe it's Copium. I would like to believe that the majority of people don't want to watch this stuff, because yeah, these numbers are huge, and you're right, and the numbers for people who watch human content on Netflix is way, way, way, way bigger.

1:00:27Atrioc:Sure. And so maybe we hold the line. You know? Come on. It could happen. Hey, I'm with you. I don't want to give up, bro. I want to hold the fucking line. I'm down. I just want to like not bury my head. I don't want to be like the guy like, I don't know, pretending there's nothing happening. This is like, this is fine. Yeah. No, no, we're on the same page. I just, I, I want to believe that there's a cap on how many people are willing to do this stuff that, for example, that you and you and me and every person that I know in my life is not going to suddenly go, you know what? I do like this now.

1:00:57Atrioc:Like none of the people in my life would at any point be like, you know what? I'm going to watch Chinese micro drama slop. Like they're not going to do that. And so I want to believe that the majority of humans, even if it's just 51 % over 49, like that's enough. I think we can hold the bulwark. Yeah. You know what? And with the important caveat that all AI is good. And that's the lemonade stand stamp of approval on slop.

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1:02:22Atrioc:Avatar Fire and Ash is now streaming on Disney+. It's the film critics are calling the best Avatar yet. Go, go, go, go! A true epic and completely jaw-dropping. This is the only purest thing in this world. Return to Pandora on Disney+. It will be an adventure for the whole family. And watch the Oscar-winning phenomenon at home. This is sick! avatar fire and ash now streaming on disney plus rated pg-13 well why don't we we mosey on over to

1:02:53Aiden:this global bond sell-off that has been going on and you said two trillion dollars the expected market cap of anthropics ipo yeah i thought that was an interesting number because two trillion is the amount that countries are expected to spend on debt servicing this year. As in paying interest on government debt across all nations. And the story here is bonds across pretty much every OECD country right now, the bond yields on that are climbing right now. So like U.S., like 10-year, 30-year bonds, French bonds, German bonds, it's all increasing at the moment. The yield for U.S. treasury bonds specifically is climbing well, I think, quite a bit above 5%.

1:03:48Aiden:And I was going over this, and I was trying to dig into my mind. And I was like, you know, I went to school for this. I learned about this stuff. I learned all the terms.

1:04:01Atrioc:Yeah, you have no excuse.

1:04:02Aiden:I'm going to do it. I'm going to do a little refresher. And I wanted to just walk it back and kind of explain to people how these things work. So you might be familiar with treasury bills. These are like the shorter term bonds that have been issued. Those are like a year or less. Dude, you've got to turn off notifications on Discord, man.

1:04:23Atrioc:What if somebody sends my address to you right now? What if I send my address to you? Oh, who would do that on a podcast? Who would share someone's address?

1:04:30Aiden:I mean, it's...

1:04:35Aiden:who would do that so i i feel like a lot of people are familiar with treasury bills which are uh have a year or less of a term the way these work is uh say i buy a five percent treasury treasury bill for a thousand dollars and then i get my thousand dollars back with a five percent return on it and a lot of people were doing that a couple years ago because the the time the interest rates on like six month bills were at historic highs. So even like normal people were just putting their small amount of savings into treasury bills because it was like, oh, this is a free 5 % over six months. But for treasury bonds that are longer term, like say a 10 year or a 30 year bond, the way they work is you don't like, you're not buying the bond and then just getting that interest back at the end, you're getting coupon payments.

1:05:22Aiden:And with US bonds, you get semi-annual coupon payments. So say you buy that thousand, uh, thousand dollar bond for 30 years. What you get is twice a year. You'd get a$25 payment. If that bond was at 5%. And you could use this coupon like at Walmart. And you could, it's$25 in Walmart credit. That's actually how the U S ones work. It's all in Walmart credit. Walmart and Raytheon. Walmart and Raytheon store credit. You would pick the option when you buy the bond goes to two great American companies. and uh if anthropic gets their way with regulators there'll be a third anthropic bond hell yeah that's the news that'll be the big three uh but uh so the you get that over the entire lifetime of the bond if you own it right you get 25 percent or sorry 25 every six months for the full period of the bond but if you own that bond you can also sell it uh and there is another value that's not the interest that gets talked about all the time which is the yield or the yield to maturity, which is a calculation of the coupon payments, the face value of the bond and how much more time it has left until it matures.

1:06:30Aiden:So right now, because a bunch of people are selling bonds all at the same time, what does that mean? It means the face value of what that bond is gonna sell for is being driven down. So say I gave that example of the thousand dollar bond I bought earlier. Maybe now because a bunch of people are trying to sell at the same time, I'm actually gonna sell mine for like$900. or$800. And as a result, whoever is buying that bond has a perceived higher yield than just that 5%, right? Because they're getting at the end term of the bond, they still get$1 ,000 paid back to them because it's a$1 ,000 bond.

1:07:09Aiden:That's what it was initially bought for. So, so many people are doing this all at once right now that it's pushing yields higher and higher. And also in order to compete with the amount of people that are putting or selling these bonds in the market, governments, in order to continue selling bonds or service, sorry, selling bonds of their own, have to raise interest rates on existing new bonds that are being put out in order to remain competitive with these higher yields. And this is pushing yields in the broader bond market higher and higher and higher. And one of the main reasons this is happening right now is not only are governments like competing for this, like governments are usually the largest issuers of bonds, but large AI companies for the first time in kind of history from my understanding, are issuing huge amounts of competitive bonds of their own.

1:08:05Aiden:And part of that is because a lot of these AI companies are hitting a wall where they can no longer, like companies like Google are, you know, they're having a time period where they're facing a negative cash flow on a quarter for the first time, first time in history, right? Or a negative posting a net loss for a quarter for the first time in history. So as the expectations of AI get higher and higher, and these companies are on under more and more financial pressure, they're issuing these bonds in order to get more cash to continue pushing this AI race forward. And it's having this insane effect on the larger bond market where all of these things are going up at the same time.

1:08:45Aiden:And the consequences for governments are at a time when the global debt is at like 300 trillion or something. And the debt servicing costs of the debt now is at this like$2 trillion high. All of these governments are issuing bonds at the highest percent of interest that they've ever, that they have had to list at in a while and they will have to continue to pay on that interest way down the line. So debt servicing costs, uh, as a part of their budget become a higher and higher portion of their budget, putting like more strain on them financially. And it's weird to see this like massive financial effect, like be fueled by the issuance of like private bonds.

1:09:32Aiden:Like things are so rarely issued at this scale that it could have this effect on the global bond market. yeah only i would say is i don't know i think that's that's uh it's part of it i mean there's a couple other things too like i uh real quick you help me

1:09:49Atrioc:understand so presumably the reason the bond prices are being pushed down yeah many people like you said are selling yeah what is the incentive to sell right now for 800 or 900 if you know you can just wait it out and get that back is it just you need a bunch of short-term cash

1:10:02Aiden:yeah i i don't think i don't think i really know the answer to that to be honest maybe like why why people want i i know there's a general sentiment that like the uh because of like the iran war and like economic instability or inflation people want access to cash or don't perceive u.s treasury bonds as safe as they used to so they want to move their money to other things but i feel like there's a larger story that I don't understand. I think that's the main reason. It's like this, this gigantic spike in yields is partially because they have to compete with this massive issuance by AI companies, but partially it's like everyone waking up and it kind of started when Scott Besson stepped in and tried to buy some bonds ourself with printed money and like people started looking at it and they're looking at it all over and they're just realizing that almost every one of these major developed economies has no real plan to ever, not just like balance the budget to ever do it.

1:11:04They're, they have no real way to pay back what they borrowed and their plans for the future are all to like borrow even more, like borrow even accelerate. And so if you're loaning a human being money and they, you notice that they are, they show up with a new Ferrari and then a new Bugatti. And then they're like, it's, it's just obviously like, Oh, you are never going to pay me back. Or like, if you're going to pay me back, it's going to be not in the way that I intended. And so the risk is higher. Um, are they,

1:11:28Atrioc:are the bonds like not working or something? Presumably you're still going to be paid back. Or are you saying that people are now worried that these governments are going to default and not pay them? Yes.

1:11:39Aiden:So it's accounting for the risk of default. It's the same reason why like Ukrainian war bonds have like such a high percentage of interest, right? They need to accommodate for the risk of that not being paid at some point in the future or the coupon payments failing. And there's just broad decreased trust

1:11:55Atrioc:across all governments now, basically. But a company, we've done this in the show a couple times, a country like the US or Japan or the UK or the Eurozone, really, they can't actually default because they can always print new money. So the real risk is that I am going to get that$1 ,000 back, but you're going to print so much money. It won't be worth anything. Okay. So I want to get my money now. I got my$100 in real money now and I buy something with it that's valuable. Yeah. Like Bugatti. Yeah.

1:12:20Aiden:So maybe you understand this part a little better than I do. Warsh, Kevin Warsh is, I think I brought this up a while ago, is like there, he has this outlook of not guiding the markets, so to speak. So the previous Fed chair, like Powell and the previous Fed chairs for like quite a while since the 2008 crisis had this general idea of let's hint at what we're about to do in order to give the market like a sense of security so that they have, feel more confident of like where to put their money. but Warsh doesn't really want to do that. Yeah, I guess I would say Warsh is interesting. He has talked a big game.

1:12:59He has seemed tough. And yes, he did get rid of forward guidance. So they no longer like, I think that might've been a good idea because Powell was like basically telling everybody what he was going to do well before the meeting. And then the meeting would just be an exercise. And if they did anything off script, the markets would fucking panic. And I think it's better to be, but he's just talking a lot. And so far he hasn't done anything. And Trump does not want him to raise rates. That was what he needed to do to like kind of fight this problem. And he says, I could do it. I could fight it. I could raise it, but he hasn't done it yet.

1:13:27So it's kind of a TBD till the next meeting and see what happens, which is coming up into this month. I will say that there's one country that kind of shows that this is not all inevitable. This is not like the fucking Ray Dalio cycle we all have to fucking go through. And it's Switzerland. Switzerland in Europe has had a, doesn't have a gold standard or anything, just has a debt break. They don't spend more than they, or like more than a few percent more than they make in taxes. And if you look at, I wish I had a graph, because maybe you can find it. Every fucking country in Europe, America, Japan, the yields are rising, the borrowing costs going up, Switzerland, flat and low.

1:14:02They can borrow as much as they want. Everyone trusts them. They are a reliable partner. And their society, broadly, is doing pretty well. They have high education. They have healthcare. Like it's not, thank God they exist, because it's an example to show that it's not impossible. I mean, it's Switzerland obviously easier, smaller fucking everything, whatever. But like, this is not inevitability. This is like politicians spending like fucking crazy because they know they'll be out of power by the time the bill comes due. And you need to make a rule that limits that. It doesn't have to be a gold standard.

1:14:32You need to have something. You need to have something that stops this from happening. Otherwise, everyone will obviously ice cream for everybody while I'm here and then kick the can. Kick the can. I mean, that's what the debt ceiling is in theory, right? In theory, but we've never not extended it. and yeah, you need to make it a harder rule. The other one is China, which you mentioned. I think China's a little bit of a...

1:14:51Aiden:I mean, there's an asterisk on it, right? There's an asterisk on it. Because they kind of hide how their debt works. Yeah, China's bond yields, nobody buys it. Like China, when they borrow money, they borrow it from their own citizens and banks. Like nobody goes and buys Chinese bonds, so their yield is very low. Wait, Kate, you can't buy, you can buy Chinese bonds as a foreigner, right? You can buy them, but people don't do them. Okay. and so if it wasn't actually on the free market like to the globe and it wasn't being dragged down by them buying them themselves i think it would be a higher yield i don't know what it would be it would probably be lower than america because they they're more reliable on paying that i'm sure but anyway uh yeah the the i don't know if you showed the graph but highest since 1996 in japan highest since 2008 in the uk borrowing costs are a big problem and it's going to crowd out government budgets until people figure out how to either take the pain or kick the can again.

1:15:42That's the option. That's what people are dealing with. Could Biden do some sort of loan forgiveness plan? I really hope that Joe Biden would step up and do that. Yeah. And I think it's a, I want to blame him for all of this.

1:15:58Atrioc:And we do. That's the lemonade stand. Isn't that crazy? Switzerland, like completely out of step with everyone else. their currency is doing really well too yeah it's almost doing too well no labels on oh never mind Switzerland okay sorry I needed my glasses

1:16:13Aiden:China bond market China bond yields super low

1:16:16Atrioc:I was going to do a different story but let's swap over to a real quick

1:16:19Aiden:China what if we hop on over to China look like China alright from China

1:16:22Atrioc:two weeks ago I think talked about the amazing new development in melanoma the RNA vaccine that Moderna came out with which is genuinely very very exciting and cool. Okay. CAR T cell therapy is a different type of thing, but it's also a very expensive, personalized type of medicine without getting too much into the details. You are extracting a person's immune system cells. You are re-engineering them to go for a certain type of cancer marker. You put them back in the human body and then they go and attack the cancer. And this works for specific types of cancers, blood cancers. This is very expensive.

1:16:56Atrioc:It is like a personalized type hypotherapy. And it costs, let's say,$600 ,000 to$800 ,000 in most Western economies. So this Wall Street Journal article talked about how a 25-year-old man in New Zealand was diagnosed with lymphoma, one of these cancers. Chemo and radiation did not work. He learned about this CAR T cell therapy, and he was given the advice to go do it in China instead, because they will do it for only $300 ,000, about half of the price or less in many cases. And he went to Shanghai, and he did this treatment this extremely advanced personalized medical treatment where you're there for a while and this august last month his cancer is now in complete remission syrah ahmed from the anderson cancer center said china has basically done to car car t cell therapy the same thing that it's done to other industries which is they've industrialized it she she is was in texas like a doctor who works with people in texas for this says she now tells her patients to seek treatment in China because it could be$200 ,000 compared to$700 ,000 in the United States.

1:18:00Atrioc:And so I want to ask one more time. Can China let us have one fucking thing? Can we charge somebody$800 ,000 to fix their cancer? Come on. They're going to take everything. They're taking games. They took short form slop from us. Now they're taking medicine.

1:18:16Aiden:This is unbelievable. I can't believe they make electric cars cheaper. They make the cancer treatments cheaper. I don't I'm starting to not like them.

1:18:26Atrioc:i'm sorry this is honestly that's it there's other people look obviously this is incredible that china is doing this this is it's going to save lives and it offers competitive pressure this is so expensive and hard to do this particular hospital in shanghai has done like 35 international patients but the fact that people around the world are recommending go to china to do this extremely this isn't like i don't know the hair replacement you did like this is a high tech thing i think it did a bad job i did in america then that's true you paid a lot of money for yours wasn't even good services yeah i mean so it's interesting in a number of factors number one is just china's fucking caught up and they're like ahead of us it's not just that they're doing it cheaper it's not like it's like by the skinnier pants one quote from this guy in new zealand who had really looked into car t-cell therapy was after talking with the doctors in China who we talked to after the American Australian and Indian doctor said, I felt like I had done more research and knew more about it than the doctors I was talking to.

1:19:26Atrioc:But when I talked to the Chinese doctors, she had so much experience. It was nice to talk to someone who knew exactly what she was doing. They are straight up better than us and are half the price. And they are now advancing in CAR T cell therapy. This is a sort of specialized type of treatment. That's pretty hard to work on other cancers. This has been around for like a decade, but the fact that China is like this much farther and this much cheaper and now offering it as a service is crazy so it's cool stuff but wow just another industry that they are doing successfully and taking it yeah i mean

1:19:57Aiden:it's like the the continuous dismantling of this like old view of well china does the manufacturing or china does the thing in the lower quality way but they get it done and they they get it done cheaply, but it's winning on both ends all the time now. I feel like that is what you see outside of manufacturing. This is not manufacturing, right? This is something else entirely. Yeah, I think ever since breakneck we talked about it, but it's just the idea. If you outsource the cheap stuff, that's practice. That's how you get good at things. That's how you innovate. You know what I'm saying? The idea that you can just only keep the very top-end, high-margin stuff, and then you lose how to make the battery and the wires and the fucking cancer treatments and the that's that that comes from the bazillion reps that comes if they start making our roblox games i will cry well that's our job i'm sure they i mean they might it's actually

1:20:51Atrioc:mostly international developers is my understanding i mean it's all over but i i'm sure there's chinese you know what this reminds me of when we went to shanghai and we talked to that not professor but you know a person who works in the administrative side of education in shanghai and he talked to us about how for what decade or two China realized that you can get kind of highly rated if you just have a lot of scientific journal articles posted and so they just they kind of just blasted all these articles out sort of as slop and were copying other people and just got themselves up onto the board because it's like well China's doing a lot of science research they're posting a lot of articles they're doing all this different things but he was like the quality was not good Chinese scientists were largely just sort of copying things and then they hit the ceiling of what that gets you.

1:21:39Atrioc:And so the last decade they've been like, well, I guess we just have to get really good at science and start actually making breakthroughs and doing original research. And now they are, and they are tied with the best scientists around the world. So it's interesting seeing this, where this is another example of just like, yeah, for a while there's been this perception of they're just kind of copying and doing it cheaply, but at some point they're just actually going to level up and now beat the rest of us. Okay. Well, that segues pretty well, but in a sad way to this headline, if you bring it up.

1:22:07Okay. So there is a every four year major study called the Program for International Student Assessment, PISA. It is by far the most comprehensive. It has like 800 ,000 students across many countries. It is the most comprehensive rating of students' academic achievement in reading, science, and math. Those are the three. and we've talked about this before. I think in an early episode about how the scores were kind of trending down in 22 or whatever, but this is the latest up. It's the 26 version. It's bad. It is bad. On a grand zoomed out scale, maybe you can find the chart. We are looking at dips in especially reading, but also science and math that have not been seen, that just haven't been seen.

1:22:50Like mostly it's been trended up or flat for the longest time. And now we are seeing a true regression in these scores across the globe. I mean, across everyone, but especially we're seeing it here in America and a lot of these Western countries with rising bond yields. I don't know if we're going to hold the bulwark. So that's, that is why I was thinking about this when you were talking and I'm just like, I'm worried about this next year. And I know you guys discussed this on the yard.

1:23:13Aiden:Weirdly talked about, not the specific of the scores, but we weirdly talked about this on the yard. And you mentioned, and we were just talking before the show, you talked about how there's these four different stances. Your crew on the yard kind of covered the four responses that I see, which is kind of funny. you said that slime said it's kind of how things have always been. People are not any dumber, right? Is that what you said? Basically. Yeah. You can break it down. Yeah. I would say slime was at the camp of like, I don't think things are like that different now than any other time in the sense that people fall into like general pockets of like success and non success.

1:23:47Aiden:Like people will be all right. Nick and Ludwig were on the same page in that, even though people are failing at these traditional metrics that we're laying out for them, kids are undoubtedly spending their time and getting good at other things that we don't perceive as valuable or as measurable. They are, you know, because they still exist and they still are interested in things. And then I was making the argument that I do think there is like a cognitive decline that is happening right now. And people, and at a base level, not just at a test score level, like we are like a younger generation that is cognitively less capable than they used to be.

1:24:32So I, I think the data would agree with you. And that's why I want to put, I want to tell you this, I want to open this by saying, I'm fully aware that you can go back to literally ancient scrolls times and find people saying how kids these days, the scrolls make them too stupid. It is a human condition forever of them saying this new thing is making young people stupid. But this score drop is so dramatic. And we're looking at reading down 28 points across all OECD countries since 2015. That is, when you measure that out, that's like a year and a half of lost learning. So that's just gone based on the same age.

1:25:08They're a year and a half behind where they were before. Math down 22, that's a year of lost learning. One in five 15-year-olds would now be considered on the old segale a low performer. These are numbers that are much worse. And what's interesting about the United States, our scores, we actually moved up in the rankings while moving down in the numbers because other countries dropped faster. That's a dub, that's a dub. Let's take it around us. So we moved up in the rankings, even though our scores are down. But the United States had the largest gap between the top 10 % performers and the bottom temperature for us of any country recorded.

1:25:47So it clearly is different educational outcomes. They're showing that wealthier kids or people in better areas of the country are reading more, cognitively able to answer these questions better, and people that aren't are getting destroyed. They're literally getting wiped out in their ability to read. And so to make it seem like this is business as usual, people have always been, some people are dumb, but it does not seem to track with what we're seeing. This is anomalous. and the people that are looking at this are broadly pointing at a couple of things. No one can pinpoint the exact reason. Part of it could be COVID, which is where that begins to really trend down.

1:26:22COVID was bad for learning across the globe, but most people expected this would bounce back by about 2025. We're in 26. Not only is it not bouncing back, it is accelerating to the downside. So it is a crisis, like it's a big deal. Kids are spending 6.5 hours a day on average across all of these kids on their phones, on screens, on screens. half of all students now use AI chatbots for schoolwork. That's who admits it. Half of all students use AI chatbots for schoolwork. And the ones that use it to write essays, they score a full year behind their peers. So we've talked about AI's possible potential as a learning tool.

1:26:56Currently, when people use it, provably they get dumber on the score. It takes away any of the cognitive friction that requires you to learn something and they fall well behind. And that is happening most effectively in reading, but it's also hitting other things. So, and there's also a global teacher. There's a lot of things. Like there's a lot of people, people things point to, but those are the things people are saying are cross nation that are causing almost everyone to decline. Now there's a few outliers and I think it's worth talking about. Number one, Singapore, by far the best performing country in this thing consistently.

1:27:28And it stuck to it with this year. They dominated across all three subjects, significantly above every other country in reading and science. They have a system that incentivizes intense teacher training, heavy emphasis on problem solving, and less memorization. They also banned phones, which is a big part of it. So it's worth noting that it stands out. China also had an incredible score, worth talking with the China, I mean, crushing episode. But as with all things China, there's a little bit of a twist, which is that they only submit the test scores from their four wealthiest districts, which is, I'm sorry, four wealthiest

1:28:07Aiden:areas, which is Beijing, Shanghai, Jiangsu, and Zhajiang. I don't know I said last one, but that's like, if we only use Massachusetts, California, New Hampshire, like whatever, it's like our top 10%, actually America's does score in line with the strongest East Asian countries like Singapore and Japan and Korea and China. So our best people are as smart as their dumbest. No, no, no. Our best people are, well, I guess in line with the average of our tied with their average. Yeah. Singapore's average, I guess. Yeah. I mean, it's very high scores. I wouldn't say in a bad way. I would say like our best schools are doing well, but they are so rare comparatively in the grand scheme of the country that our national average is, is, is brought down.

1:28:52Uh, Japan was top 10 across all three subjects. They did very well. South Korea, Taiwan. I mean, all these East Asian countries are doing quite well. Estonia, big Estonia guy here, uh, was the European champion, best performing European education. Uh, they only have 1.3 million people, so it's a little bit easier.

1:29:07Aiden:How many kids took the test? Like five? I don't know how many kids they even have. Yeah, you're right. It's 8 ,000 globally.

1:29:13Atrioc:So they send their like three crack Estonian students.

1:29:16Aiden:Yeah. Actually, yeah. Wait, it was more than 8 ,000. It was 800 ,000, right? 800 ,000. Oh, sorry. Sorry. I misheard. Okay. It's probably still like three Estonian. It's like six now. This is a massive tag. This is truly one of the biggest and well-structured analysis you can get on educational performance. Estonia, best performing in Europe and best performing worldwide in equity. meaning the difference between the richest, best performing students and the worst performing students was closest. So they had like an overall high performance. They're not as high as Singapore or whatever, but pretty good on that.

1:29:50One thing that's unique about their school is they do have some tech use in it, but it is, call it structured. I guess the idea is that you don't get unstructured access to AI chatbots and whatever. It's like there's a few things they planned around. And then the only one that I think is worth like highlighting as a standout, again they didn't actually go up but they stayed the same since like five ten years ago the uk and the uk which was considered kind of a low ranking one has not lost anything in like the post-covid they've maintained and so they've actually moved up the ranking quite a bit they're top 10 which is like pretty well and they're the ones most similar to all these other countries that are failing so uk is like the outlier i don't have a deep dive as to why but i would say They did educational reforms for 2015, including a focus on traditional phonics-based reading, which people have abandoned in some countries, which is too much detriment.

1:30:44And again, phone bans, phone bans and phone limitations. So these are not unsolvable problems. And that's why I don't like the idea of like, hey, people have always been a little stupid or some people are whatever. I think these are like choices we've made to give access to things that are hurting education, which is like phones and AI chatbots. And countries have solved them, have made progress. And if we do it right, we'll have a more literate society, which I think is better in a democracy. I think as people become angrier and dumber, we see the result. It's problematic. So I think this pizza score is like a big blinking warning light that that shit is not on the correct direction on this.

1:31:27Atrioc:Well, I guess I can give a quick counter. Sure. So, or not counter, but we are seeing momentum. And we've talked about on the show, a bunch of people starting to ban social media for kids under the age of 18 and varying capacities in various parts of the world. Over in New York, this is from the AP this past year, Mom Donnie is cracking down on children to access to AI in schools. So New York City public schools are banning kids from using AI tools for one year. this is up to the eighth grade so mom donnie just did this announcement where like you are not going to be able to use chatbots at all in school if you're under uh if you're eighth grade or less it's a little bit confusing i spent a bunch of time trying to um understand it and they even the united federation of teachers said quote this leaves many questions unanswered the general vibe seems to be already phones have been banned actually for a year or two now in new york city so no cell phones at all but then on top of that they're now saying you can't use you know ai chat bots or AI generation tools of any kind in the school system.

1:32:31Atrioc:The teachers can use it to prep, but they cannot use AI learning platforms or programs inside of the actual classroom because this is often talked about with AI of like, oh, it's going to be this amazing learning tool. And I think the idea here is like, we don't really know how to use this stuff and what's going to be good or bad yet. And so this is a full on like Memorial memorandum for the next one year. and by the way there's other examples uh los angeles is doing the same thing but in different capacity they're temporarily blocking ai access to all grades i think this is good but what you're seeing from the singapore example is that it if you don't change the way that we structure our curriculum which rewards performance on homework and tests through things like people will still cheat like telling them you can't do it yeah it's not enough like you have to make a problem solving based curriculum where it's not really about what the chat like it has to be things that you are coming to solution yourself it's about creating mental friction if you don't create mental friction people become smooth wally people like it's the only way and so i do think this is progress and i think banning phones is huge but uh i just i just want to like push back on the ignoring it.

1:33:47I think this is real. I think in 2026, these stats are real. This is really happening. It's a problem. And it's fixable if we treat it as a real crisis.

1:33:56Atrioc:Mom Donnie said, quote, I want to kill the children. Yes. And then? Use the ability to read. And we applaud him for it. And we applaud him for it. Yeah.

1:34:10Aiden:I mean, I think that's our episode for this week. this one kind of flew by. We have like a ton more stuff. Seven more stories. We have so much more on the sheet that we were going to come up with. One of them says in all caps, they're putting weapons on cockroaches. That's from Brandon. Oh, put that on the Patreon. If you guys want to hear these seven more stories and anything else, you can join us for an extra bonus hour of content on the Lemonade Stand Patreon every week.

1:34:35Atrioc:Patreon.com slash Lemonade Stand. I will end it with just a little bit of optimism here, which is that looking at those results of the pizza test. Yeah, Sweden beats us in mathematics, but America wins in science and reading. That's right. Let's go, baby. Can't wait for Aiden to become a... Can't be right. Where's Italy on the pizza test? Gonna go over there and start denying science.

1:34:54Aiden:I'm gonna go home and tell my girlfriend we're moving to Singapore instead, actually. It's gonna pivot the whole plane. It's never too late, by the way. You can go to a Singapore elementary school

1:35:01Atrioc:and finally learn to read. Dude, we should just ship. Dude, what the fuck? Estonia is way up on this list. I don't know what I just said. We're going to Singapore.

1:35:11Aiden:we're going to Singapore at the end of this year in December so maybe we're going to feel for we're going to steal what they're doing why this is

1:35:18Atrioc:you know things are so good there Lemonade Stand's going to sneak into an elementary school in Singapore yeah if you're an American who can't read join us on this trip we're going to get you educated in Singapore

1:35:28Aiden:we're going to get on the battle bus we're going to head over there we're going to play free Roblox games we're going to doom scroll Chinese AI slop and then we're going to go to the CS Major final actually you know what Instead of like trying to learn from them, why don't we bring them down to our level? Let's bring Slop. Let's bring Roblox games to Singapore. A little espionage. Strategically deploy American culture into their education system. Try and bring them down. Me at a Singaporean elementary school? Passing out vapes. This is B-NOS.

1:36:05Aiden:All right, we'll see you guys next week. Still waiting in line? Again? Again? you'll never get back. Save time and money with Stamps.com. Over 4 million businesses have skipped the line with Stamps.com. Join them to save up to 90 % off carrier rates from your computer or phone right now. Print postage for certified mail, registered mail, and packages in seconds. Then schedule a pickup right from your home or office. For a limited time, go to Stamps.com and use code PODCAST for a free welcome gift. Taxes and fees apply. I see you.

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