Stripe’s $7.5 Billion AI Bet: Why It Just Bought OpenRouter

0:01This 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+. Hello and welcome back to the Market Maker podcast and on this week's episode we are talking all things Stripe and their 7.5 billion dollar acquisition of Open Router or Open Router.

0:37What are you going to go for in this episode? I think I'm going to switch it up. I've been looking at our analytics and it's about 50 % from the UK, 50 % from the US. So I'm going to split it But Ruta, Rauta, doesn't really matter. Okay. Well, in this episode, then, we're going to dive into the deal, trying to understand how a company that only raised seed capital a couple of years ago can now be worth over$7 billion. We'll dive into OpenRuta and its business model, why Stripe is acquiring the fledgling company. And then we'll look at Stripe. What is it? Why does it matter? And why they announced that we have indeed reached singularity.

1:16of which quick shout out for the older listeners i just said to you steven offline when i read that in your notes i thought my mind immediately went to the movie the event horizon with sam o 'neill so shout out to sam yeah i've never watched event horizon but it's wonderful to to look at it look to look it up on on google and to see that it's imdb rating is 6.6 rotten tomatoes 36 percent i I assume you're bumping that number a little bit up. And crikey. Yeah. No, that's not good, is it? Shows my movie selection. But just before we begin, I've just literally come back from Morgan Stanley, just delivering a program to 17-year-olds, actually, pre-university.

1:59And two of them came out to me and said, and so thank you so much. The podcast, I've just got it accepted onto the Goldman's FIC and Equities apprenticeship program. and the podcast was one of the key components of getting through the application process. And then two, another young lady said she's studying nothing to do with finance and this podcast was her first interest to get the ball rolling and now she's at Morgan Stanley. So there you go. I'm going to do my own shout out as well. I spend the weekend with my sister-in-law who doesn't doesn't do anything to do with finance, but she listens every single week.

2:39So shout out to Hannah. Cool. Well, look, let's get straight in then. So Stripe acquires Open Router for$7.5 billion US dollars. So what's the headlines here to take away? Yeah, so this is the acquisition by Stripe, which as of earlier this year is valued at$160 billion. Not bad. But also it's a company that processes, and this is a mind-blowing statistic, Stripe processes about 1.6 % of the world's GDP. That is why this is an important episode to run. It's acquiring a three-year-old startup, OpenRouter at somewhere around$7 to$7.5 billion. You don't know precisely what the terms of the deal are.

3:33Stripe are not always that forthcoming with regards to the specifics of these deals, but Stripe's a private company, so it doesn't necessarily have to be. So OpenRouter, there was a thought that this company was going to be worth upwards of$10 billion. This was discussed earlier on this year as recently as july but still a 7.5 billion dollar price tag nets the three co-founders alex atala chris clark and louis uh vichy 1.5 billion dollars not bad for three years of work well you know it's good at the guys over at cursor though are they do you reckon they're thinking about that do you reckon they're thinking wow we've just pocketed 500 million dollars but that's how these guys roll no you know that's that's why they're successful people do you think the uh the houses the homes of the cursor founders are kind of commensurately bigger on a square foot basis than the houses of the open router team well let's look it's one of those things there's probably someone who listens who knows someone who knows alex attila so he can let us know.

4:45Yeah, absolutely. Let's hope they go and do good things with their money, like buy massive super yachts and maybe even a sports franchise. Give something back. So of this then, this, like you just said, not a very old company. So talk me through how they went through their inception and i'm assuming seed to venture capitalist money to then put the turbo boosters behind the growth of this company so what did that look like and who was involved who are some of the vc names that people should be aware of yeah this is a this is another this is another example a little bit like as we discussed with cursor and other companies on this podcast.

5:34This is another example of things just speeding up. The world seems to be speeding up. The speed at which companies get to$100 million of run rate revenue seems to be getting shorter and shorter. The speed by which you go from being a local domestic company to an international global company seems to be going from years to months to weeks and is quite remarkable. how you can go from being nothing seed stage in between December 24 and June 2025, they raised a couple of rounds. So that was what a year and a bit ago at a$60 million valuation led by A16Z and Sequoia, not bad. Then in June 2025, so stepping out of the seed phase, June 2025, they raised a series A at a$500 million valuation-ish, led by Menlo Ventures of the Menlo Park in Silicon Valley.

6:39And then series B, note this date, series B, May 2026, amount raised$113 million. Post-money valuation, 1.3 billion. So led by capital G, which is the Alphabet Google VC arm, N Ventures, NVIDIA, Databricks Ventures, the venture studio from Databricks, Snowflake Ventures, MongoDB Ventures, and then ACX16C and Menlo Ventures. So this is just a massive pile in from a load of the AI leaders and infrastructure providers into this company, OpenRouter. Fast forward from May 2026, which seems like yesterday, to August 2026, they're now being sold for upwards of$7 billion to Stripe. Absolutely crazy. That is crazy.

7:35That's phenomenal. What's the thought path of the founders then? Why not wait why don't wait literally another two weeks and then get another billion on top and get another couple of tens of million in my pocket so how does that work oh it's a really interesting one there's so much of a art to when you sell your company and you want to be selling your company with enough history of breakout hypersonic growth, but with enough expectation and hype that that growth is just going to get bigger and bigger and more hypersonic and more crazy, right? So you've got to prove the concept, but you've also got to showcase that this is going to be much, much, much, much, much bigger.

8:27So yes, they could have waited a few more weeks, but$7 billion has kind of priced in the fact that they are growing. They're doubling their token consumption every 11 weeks or token throughput every 11 weeks. That's already been priced into the deal. So if in a few weeks time, things start to slow down, even just a fraction, you'll probably get a significant haircut to the$7 billion as opposed to a premium. So timing in these venture capital hyper growth companies, timing is everything. And I'm assuming that there's probably less risk associated with doing this pre rather than post-anthropic listing.

9:11Yeah, absolutely. I think Open Router has been on the Stripe cards or kind of in the crosshairs of Stripe for, I was going to say quite a long time, but nothing is quite a long time in this world. So it might well have happened pre-Anthropic, post-Anthropic, because this is a private company acquiring another private company, there's a little bit less sensitivity in terms of valuation. But you're right. If Anthropic had gone out there and absolutely bombed, the good vibes might have gone away. But we'll talk about Strike in a few minutes. And they are all in mega balls about the quadrillion dollar economy.

9:50And as you mentioned, the singularity as well. It's a final question before we move on. Sequoia Capital. So they were in on the seed series A. Just talk to me a little bit. What does a team look like at Sequoia? and what sort of relationships are they fostering? What are their interactions with this young talent emerging out of these centers of Silicon Valley? Yeah, I mean, the world of venture capital is so remarkably driven by network and therefore the Rainmakers, i.e. the partners, the Sequoia partners, of which there's only a few and they're based around the world, but predominantly in Silicon Valley, they will be the ones that hold all of the longstanding relationships and they will be getting the deal flow probably before anyone else.

10:44But your job as an analyst or associate working underneath that partner, working for a particular fund, one of Sequoia's large venture capital funds, your job is going to be, all right, you need to be on campus. You need to be at every function. You need to be at every event. You need to be speaking to the next big thing and you need to be getting out there right so much of vc and it's whether this is a good thing or a bad thing i'm not sure so much so much of it is about who you know and if you've got a brand name like sequoia you're gonna get access to the very very best deal flow so you can't just sit around and just hope that the pitch decks come in but the pit the best pitch decks will go past your desk in some way shape or form right they'll make it to you because you are sequoia yeah well it makes a lot of sense so let let's maybe go back a step and just understand a little bit about the company that stripe is purchasing here so open router what exactly do they do you've talked about it in quite quite bold terms in terms of the way it's been pitched but what do they actually do?

11:55Yeah, Open Router, it's an interesting one. And again, it's a company that could only have been founded in the last couple of years since the proliferation of large language models. The premise behind Open Router is that large language models of which there are over 400, or actually now over 500, that can be accessed through OpenRouter, the premise is that large language models will and are already becoming largely commoditized and they are good and cheap and cost-effective for certain different tasks. So OpenRouter, almost as the name suggests, basically routes companies that go through OpenRouter to the appropriate model for their particular use case.

12:46So 500 models from 80 plus providers, the likes of OpenAI and Anthropic, but also importantly, DeepSeq and Alibaba. And actually, if you see the league tables on OpenRouter, you see that the likes of DeepSeq are at the top because they're the cheapest. So purpose of OpenRouter, giving a single API to developers within companies to tap into all of these models without having to integrate each one separately into the workflow, into the payments processing, remember those two words, of that particular user. And it is scaled extremely quickly to over 10 million global users utilizing using 300 trillion monthly tokens on their platform.

13:43So again, as basically a broker or an intermediary, they've gone from nothing to trillions, hundreds of trillions of tokens monthly. is there any way you could put into context for me what 300 trillion in tokens is is there a way to sort of like contextualize that for most people that figure sounds ridiculous but what would be a good comparable to understand that figure just the size of it okay so to put it into a little bit of context. 300 trillion a month sounds like a lot and it is a lot and it's used a lot of what companies use Osborne Router for is coding software and more kind of agentic type work.

14:32So it's quite kind of token intensive. Relative to, I mean, it's really hard to find good sources for how many tokens are utilized or used every single day or every single week. But Epoch AI estimates that there are 432 trillion tokens per day across all providers worldwide, which 300 trillion a month is a lot, but that puts it into a little bit of context. And just for the layperson out there like me, a short chat message. So what is the capital of France, roughly 20 to 30 tokens used, right? A typical back and forth of a few interactions, 200 to 500 tokens, and you go from there. So you see, by the way, a short interaction like that is not really the use case of AI in this enterprise level context.

15:27It is the more computationally heavy or token heavy pieces of work that these developers are asking the llms through open router to complete so a lot of the young people i talk to are very savvy now about you know the idea of the types of roles they might want to work in types of companies many of them i mean are very interested in stories like what you've described in terms of the speed and creation of what's happened with this company what what was the initial idea then these founders had what were they trying to achieve and what is their background because i know a lot there's going to be at least one young person listening going yeah i want to do this i want to imitate this so what's the model to imitate yeah i think it's a really hard thing to try to imitate a hyper speed hypersonic model that is happening at the moment.

16:28If you try jumping on a bandwagon and it's too late, you will fall off. And there are just precious moments in time where the eye of capital strikes upon a particular technology and everything goes crazy, whether it's climate technology, whether it was the internet 2.0, whether it was non-fungible tokens, which we'll talk about in a second and crypto and things like that. You just need to be in the next big thing in order to be on this travelator, this escalator that is going to get you to that remarkable two or three-year story. But as we've said many a times before, for every one open router, there are dozens of companies that just don't make it.

17:17Dozens of people that are thinking, founders that are wanting to be part of the success story that inevitably are not going to try quite make product market fit and are not going to reach what the venture world calls escape velocity, where people like me and you talk about a company on a podcast for 40 minutes. But I did mention NFTs, non-fungible tokens, which I think we probably spoke about on the podcast about three years ago. They seemed to be a thing, didn't they? And Alex Atala, who is one of the founders of OpenRouter, previously worked at Apple and Palantir before creating OpenSea, which you might have heard of or might remember, the NFT marketplace, which was valued at$13.3 billion during the height of the crypto boom.

18:08Do we ever speak about OpenSea anymore? No. And Darius, our researcher, put a nice visual of the Bored Ape Yacht Club NFTs, if you remember those things. And lots of listeners that are new to the world of finance or kind of the obscure world of finance would have never heard of this. But this was a thing, if you remember. Oh, my brother was all over that. He was seeing from the rafters because he was in the NFTs. He was proper full. Him and Mark Zuckerberg were holding hands, like skipping down the street at the time. And it was all looking very rosy for a fairly long period of time until it wasn't.

18:54Yeah. And if you got out the right time, well done to you. It's a great representative, a great case study in just because something is scarce doesn't mean it's valuable. That's very, very important rule. Rule number one of economics. I was just actually having a quick look about Alex Attila because I was like, well, what actually is his story because one of the things i was thinking was that hang about he's perfectly positioned timing for open sea co-founded it caught the entirety of the wave come out of that now he's caught this ai adoption on an enterprise scale like this guy is serial like winner from these patterns in terms of like you said technological timing of the eye of the capital sort of deployment storm so i just had a quick look how old is he he's 34 35 he is born in colorado to a colombian immigrant father and american mother trying to look for others early flair for data tech uh disguised a bit of a whiz kid actually graduated so it's not like some of those stories you know like the zuckerbergs of the past where it's like they just leave university straight away.

20:04He did graduate from Stanford in a bachelor of science, computer science. You mentioned, I think, earlier, Palantir Technologies started his software career in natural language search, ontology management, and cybersecurity products. So, but yeah, this guy's already CTO in 2014. Yeah. And again, going back to the Sequoia, what are they looking for? They will be wanting to fund whatever comes out of Alex Attala's brain next, right? 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.

20:49Gemini 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+. If you've had one strike, you're doing pretty well. If you've had two strikes, I'm listening to you. Get behind or get around this guy. I don't know if he's a nice guy or not, but he's done. He's certainly catching the right waves. I think there was a quote, right? He said, Alex specifically, he described the firm, I guess, in talking about his own company as the stripe for AI. What do you think about that? Yeah, I mean, that's really interesting.

21:31thing it's great when you already you already bookmark or you already road sign your potential acquirer by saying we are the x for y and by the way x if you want to require us at some point we're open to talk what are we going to be as market maker the podcast and we are the who are we going to get sold to i don't know professor g's media company can buy us oh no we can do better than that so one of the things then is that what we're seeing even within the the business that we run at amplify me is you know we build simulations but i think the friction or the moat to building simulations is probably decreasing because of people can use ai to speed what was before our developers building this stuff the output for us our moat is our data and the breadth of we have lots of hundreds of companies and tens of thousands of students so the data is so rich rather than used by one person.

22:29So with this, what's stopping someone else coming along and just creating a competing platform that essentially does the same thing? Yeah, it's a very, very good question. So their moat, Open Router's moat, is not a tech moat. They haven't created something that is extremely complex. It's not really a complex business whatsoever, quite frankly, and no one pretends to admit that it is. What OpenRouter does have is the first mover advantage and the associated economies of scale by being the go-to interface or intermediary or router of choice for large corporate clients. So what can that give OpenRouter beyond brand recognition and things like that is you can have network effects on routing intelligence.

23:27So it has a thing called AutoRouter and it ranks candidate models by aggregate community spend on a trailing seven day window. So the more people that use OpenRouter, the better AutoRouter gets. That is a classic network effect. The more telephones, the more useful the telephone network is, the original network effect. And that's something that might provide the moat for OpenRouter. But let's just think about this for a second. And I'm going to talk very quickly about how the company makes money and introduce a question mark here. So OpenRouter makes money in two main ways. Firstly, they have a 5 % credit top-up fee when customers buy credits to spend on tokens from any one of these 500 plus models.

24:175%, right? And then secondly, this concept that I am relatively new to, bring your own key. So basically, when companies have their own API with, say, Anthropic, they can give the details to OpenRouter, which passes through the billing. So they don't have the 5 % credit top-up fee, but they have 5 % fee on usages above$20 ,000 or$25 ,000 a month for the large enterprise clients. So, and by the way, this has resulted in revenue finishing at about$19 million in 2025, annual revenue. And it looks like it's going to be up at around$160 million in 2026, so almost 10x. This is my question mark. 5%. So any company that doesn't have a massive tech moat that is sticky, but not overly sticky, that is trying to charge, you know, multiples more than Stripe, who charge on average 0.36 % for their payments processing, but even multiples more of the likes of Visa and MasterCard, you're thinking to yourself, that is That is lunch for another company to go and take, right?

25:34That 5%. And it's only when, you know, Visa or MasterCard of two enduring, almost incomprehensible business models for people to study at business school, you know, they have managed to create global integrated ubiquity, the likes of which are so, so difficult to get out of so that they can command a reasonably high transaction fee, right? And obviously, lots of challenges have come and gone, but these two companies keep going. Open Router with a 5%, I don't know. Isn't that just fine, though, in terms of the survival of the fittest and then the evolution of it? What I mean by that is that Open Router knows this, they grow as fast as they can, and they sell to a big fish, and the big fish can't live without having this as an option within its broader offering.

26:28so isn't it just this is natural progression you're absolutely right and to your point on earlier on which is you know why didn't they just wait a few more weeks well in a few more weeks there might be an upstart you know there are already a lot of competitors this is not the only router or the only intermediary out there and in a few weeks there could be another hot company that's growing even faster that's taking the lunch of open router so yes this is the natural course of things unless you are one of those generational companies like a facebook that manages to break out of that cycle of hype then get acquired you know okay i just need to look up what's this alex's uh x handle i need to find out what the next thing is and just pile all in here what's his what's his postal address you know you're gonna write him some fan mail no i mean I just want to know what comes next after this.

27:26He's going to parachute out with another half a bill in his pocket. I mean, his ideas are just going to get bigger and better, bigger and badder, I think. So here then, we often talk about the AI kind of ecosystem. And there's lots of talk ongoing always about vulnerabilities that that might have. It's quite a circularity of investment, all these sorts of things. And then that in context of the macroeconomic climate that we're in. So is there any other signals or things in that context on the macro side that we'd need to be cognizant of with this deal? Yeah, it's definitely worth listeners, if they're interested in this world, re-listening to our episode on the business model of AI that we put out a few weeks ago, trying to pull apart where the economic value will reside once the dust settles from this Cambrian explosion of companies and intelligence and amazing new products and innovations and things like that.

28:35So ultimately, Stripe acquired OpenRouter because they believe in AI models being commoditized And therefore, owning the platform might be more profitable than owning a model. So there's plenty of examples of platforms being more valuable than the data or the product that lies behind it. Thinking Amazon as a prime example. so if you think that llms are going to compete each other to death and there are just going to be ubiquitous models from different countries doing different things at different capabilities then my gosh stripe and we'll talk about stripe in a minute fantastically well managed extremely successful company that basically does the gdp of the internet right that's how that's that's what it wants to manage, it's just saying, look, there are two things that matter in this world.

29:36And there are two things that tend to have transaction costs and friction, capital and intelligence. We're dealing with capital through payments processing. We're dealing with intelligence through the acquisition of the likes of OpenRouter and a couple of their other acquisitions. So this is the way that Stripe and their co-founders see the world. So talking of that deal rationale then, so from what we've discussed so far, am I right then that the simple way of looking at this is OpenRouter benefits from staff, resources, someone like Stripe who's just bigger, more established, a wider platform to operate from.

30:20they get to improve their own offering themselves stripe gets the leading platform in managing this ai spend they can almost probably there's probably some premium in bumping up the ai plugin to their own perception of the value of their brand as much as the mechanical side of it um and then there's tokens and and routing selecting these best models and so forth is there anything else though what's the other side of this am i missing something No, I think you're spot on. This is a pretty logical acquisition. And we'll talk about Stripe's wider ambitions in a little bit. But obviously, as I've mentioned before, Stripe aims to grow the GDP of the internet.

31:03And they are so bullish on this explosion in creativity, a new business formation that is coming out of the AI revolution. And they want to capture the transaction value of all of this new industrial or AI revolution. And from a Deer Rationale perspective, as I've mentioned before, there was a letter that was released in August the 19th, a couple of weeks ago, talking about the Deer Rationale for Open Router. and in this Patrick Ollison says zooming out we see capital and intelligence becoming the two digital flows undergirding every business and we basically want a piece of that right and if you think about it at the moment 1.9 trillion dollars are being driven through Stripe at the moment hundreds of millions of customers hundreds of billions of transactions and they are earning 36 basis points or 0.36 % on every dollar that goes through.

32:16Now, OpenRouter owns 5 % on every dollar that is processed through its platform. So what Stripe could easily do is go, all right, we're going to lower that 5 % down to 1%. That sounds bad in theory, but we're going to push OpenRouter across hundreds of millions of businesses that are already running through Stripe. So you lower the cost, you massively increase the market size, and you end up tripling, quadrupling, massively increasing the revenue from that product. So the deal rationale is pretty logical. I was just looking at as well within your notes, I saw the words, the rise of agentic commerce.

32:59so I guess for again thinking about this in its most simplest terms agentic commerce buying and selling where autonomous AI agents do everything for you so in my head I don't know why if I imagine myself I'm in the kitchen doing a bit of cooking slicing a few tomatoes and I'm speaking to my device and my device then is researching negotiating comparing and completing the purchase. So I might say, for example, I don't know, I'm going on holiday and I am tomorrow. I go to France and after this record breaking heat wave, it's going to rain every day. So which is a true story. So find me a waterproof hiking boot size nine, around a hundred euros.

33:44It could arrive by X date, for example. Now I'm assuming depending on what it is that I'm saying I want it to do. If I said, can you create me a platform that could do xyz and i want to do this more complex tasks would this be a use case where a the technology and human behavior shifts towards more agentic commerce and then b that's where the model fits in where you're going to look to optimize on costs in regards to the model that you're using to facilitate these workflows yeah it's this concept of agentic commerce and it is definitely one that Stripe talks about quite a lot. And I would massively recommend anyone that's interested in the space reading or listening to the Stripe annual letter.

34:35It comes out every year. Last one was a few months ago. And Patrick Collison, one of the brothers, the founders, talks there about the five stages of agentic commerce. And I'm not going to get every single one of them because I can't remember them. But it starts with, all right, filling out forms is really, really annoying on the internet, right? So if I could just say, here's the URL, put it into an LLM, it fills it out and it pays, that's agentic commerce number one. And he goes through this example, I think of buying clothes and preparing a young child for school. The next stage is, hey, I've got a kid who's five years old, please recommend, as you rightly said, please recommend some shoes and recommend a backpack.

35:21Still pretty basic into an LLM. Stage three is the, actually this might even be stage four or five. So go back and read the letter. But eventually it gets to the stage that the AI knows that it is coming up to the new school year, knows that little Johnny has gone from being a six-year-old to a seven-year-old knows that your preferences are A, B, C, D, and E. And all you have to do is say, here's the budget and everything arrives, right? That is agentic commerce stage four or five. We're not really even at stage one, we're kind of at stage one or two. So yes, OpenRouter will be a fantastic plugin to the token spend related to agentic commerce.

36:11but I tend to think that those two words, agentic commerce, are still a little bit hyped and still quite a long way away. Come on, let's juice this. Let's get the hockey stick out. It's agentic. You just need to put that word in wherever the statement is being published. But let's talk about the other person in this transaction and that is Stripe. I think people sort of take for granted Stripe. It seems to be a part of everyone's daily life given the wide global application of it. But can you explain to me, what's the story of Stripe? You mentioned the Collison brothers. I didn't even know it was brothers.

36:51So what's the backstory of the company? Yeah. So the success of Stripe is largely attributed to the genius of their founders. So these are Irish brothers, Patrick and John Collison. And if you know, if you've read enough financial newspapers over the last 10 or 15 years, the profiles that they get have gone from excited to enraptured to almost adoring comments. These two grew up in a small village in Ireland with no internet access. So this is not like Bill Gates lobbying for his private school to get the first computer so that they could start coding. They learned coding through textbooks at their local library, which is absolutely brilliant.

37:40So at 16, Patrick was the recipient of the 41st Young Scientist of the Year award due to his work on the LISP programming language, which is basically AI before it was AI. And then John, not to be outdone, he achieved one of the highest Irish leaving certificate grades in the country in 2009, whilst also taking up flying as a hobby and building this company, Orktomatic, which is an absolutely terrible name. One of the worst names out there. So he built this company. This was during Patrick's first semester at MIT, when John was still at college, still at high school. They founded this company, Orktomatic, which was a tool for eBay sellers to manage their inventory and track best-selling items and underperformers.

38:33It sold for$5 million, making John a millionaire before he even finished his A-levels. So these guys are absolute geniuses from a small town, small village in Ireland, And they birthed Stripe and have scaled it to a company worth$160 billion. And it is just the darling of Silicon Valley and the darling of these great success stories. And obviously a very, very important company to do. Yeah, I love that. And shout out to County Tipperary. I'm sure we've got some listeners there. Oh, I hope we do. so talk to me about the so before we go into some other of the mechanics there's the way of the business of stripe so what does stripe actually do i think people just think quite vanilla when they think stripe of just payments but is there more to it than that yeah absolutely the way that i like to think about stripe is how do you and i interact with stripe on a day-to-day basis because it is one of those infrastructure, the plumbing of payments, and you don't necessarily see it, but you definitely, definitely use it.

39:46So this invisible infrastructure rears its head predominantly in things like online checkout. So any online shop or subscription service or app that uses a checkout page might have the powered by Stripe thing in small print at the bottom. It might have, again, here in the UK, faster online checkout via Link, which is the company's saved card wallet. So you might see a pay with Link as an option. And it also processes a lot of the Apple Pay and the Google Pay payments options. So I use Apple Pay all the time. A lot of that is getting routed or wired through Stripe. And then increasingly, it is the infrastructure for subscription and recurring billing.

40:36And this is where Stripe has really, really exploded. This is the exponential growth of the company. What Stripe does so well is it basically says, we want to win you as a startup, as you're very exciting, you're an e-commerce startup, or you're a platform of some description, or increasingly you're an AI startup and you've got subscription revenue coming in. And then we want to win you again as a large business. So it almost sees it as two sales processes. We get the companies when they're small, and then we get them when they've got bigger because we are big enough to deal with the large companies.

41:16So again, as a infrastructure of the payments of the online payments ecosystem, them. Stripe basically does everything and it's definitely worth taking a look at their website and just looking at their product suite to A, get totally overwhelmed because they do a lot of different things, but B, to realize that their goal is to capture every single part of this entire ecosystem, which involves the friction of capital online and the friction now of intelligence on there. So I'm assuming then what you've described is their moat. Their moat is that they are master of the universe, so to speak. And as a dovetail of owning the volume, you own the data that's produced from that.

42:08Interestingly, when I was with these MS students earlier today, I managed to talk about Argus. You'll be proud. So we were talking about Argus and I was kind of cycling them through the different departments within the bank. and we got to technology and we were talking quants and stuff and we started talking about big data and I was trying to get them to think about well what are all the other big data thinking quite creatively that we could look at of where in a location you could do to try and anticipate the performance of sales at Argus. So is it the similar sort of thing here if you think with Stripe and they've just got millions of payments happening every single second of minute of the day there must be such rich information i can imagine hedge funds must pay these guys a lot of money yeah that's a very very interesting point yeah they definitely have an edge they have a lead with regards to data analytics and they can probably wrap that up and do what they want with it from a monetization perspective i think probably their stickiness the kind of product moat, their product's really good.

43:14It's more expensive than comparables, but it's better. And users, companies, enterprise users love it. And once you've integrated Stripe into your ecosystem, into the nuts and bolts of your business, and you realize that Stripe works really well, then you are going to stick with it. And as I said, you win them as a startup. up. And by the way, if you've ever used Stripe, if anyone's ever used Stripe, it is dead simple to get started with Stripe if you want to launch an e-commerce company or whatever it might be. And then, well, as you get bigger, they can help you. So it's just that stickiness.

43:51People that join with Stripe don't leave it. And that's the main moat. Is there any comparables then from Stripe's M &A strategy that would be akin to like a Facebook in a sense of it's the number one dominant player in its field and then it keeps very high like track of the emerging technologies and talent coming up and then just gobbles them up and then bolts them in yes i think that's probably fair so stripe's done 19 acquisitions over the last few years only a few of which have been priced or been valued or been disclosed uh the biggest one before the open router acquisition was the$1.1 billion acquisition of Metronome in December 2025.

44:39And actually they released this letter to their shareholders discussing the logic of their last three acquisitions. And it says something like this, read the acquisitions as one stack and the logic stops being mysterious. Metronome counts the consumption. Open Router decides where the consumption goes and at what price. Privy holds the wallet and then bridge and tempo settle. ACP handles the checkout when the agent is the buyer. They are vertically integrated, right? So maybe instead of it being a Facebook example, certainly with a WhatsApp and an Instagram and a Facebook, maybe think of it as a vertically integrated technology company, more akin to maybe an Amazon that owns the cloud, that owns the software layer, that owns the analytics layer, etc.

45:32So these guys are vertically integrated to an extent horizontally dominant as well. And again, if what they are saying turns out to be true about the future of the economy and the future of the world, then they're going to be well positioned to take advantage of it. Just as you were explaining that, I was just thinking in my mind's eye there'd be so many good infographics to explain what you just said then you've got the vertical integrated company and i had my mind like the you know the bps the shells what you might have you and then you've got the ai side and then you've got this payment side such a great way of of thinking about it coming soon to a uh to a ant chung linkedin post near you we'll see we'll see how many tokens it will take me to uh create all right well the the the final bits here were you said the word singularity and that set off probably my mind in the wrong direction so where should my mind have gone yeah so so collison i believe john said that we had reached singularity and they put the singularity at january the 1st 2026.

46:47When people think of singularity, they tend to think about autonomous robots taking over with intelligence that is better than any humans across any number of different areas. And those agents are, or those autonomous agents, are self-improving, right? Basically, the machines have taken over. this is a little bit of a different definition of singularity and even in the letter they say it's a fuzzy and perhaps already overworked term but we decided that on january the first that marked the beginning of the singularity and we have since been operating on that basis and what they kind of mean to the singularity is effectively there's no ceiling to the global economy they are evidencing the singularity through a sharp rise in new firm creation and basically the fact that they're doing really, really well, it seems to me.

47:45And Gizmodo pointed out that, well, basically questioned, quite rightly, why a payments middleman gets to unilaterally declare that AI has surpassed human intelligence, noting that the evidence was just elevated business formation stats, which I kind of agree. Basically, things are really going very well in their business and AI is helping a lot of new businesses get created which is benefiting them. That doesn't mean that we have hit some kind of nebulously defined singularity. So I think they're maybe in over their skis. And by the way, if you're interested in these guys in the Collison Brothers and in Stripe, they do the very well-listened to Cheeky Pint podcast.

48:32where they talk a lot about, I mean, they're very intelligent, well, very intelligent people. So there's a lot of very intelligent stuff that goes on in that podcast. But yeah, singularity, I'm not so sure. Well, there you go. This podcast show is in collaboration with the Cheeky Pint. So there we go. I just had a look. Patrick Collison is 37 years old and John Collison is 36 years old. I don't know about you, but as we do more and more of these episodes, I guess this podcast is now into its fourth year. The older I get, oh, is it the younger these people are getting in terms of creating these phenomenal companies.

49:13So the two we've talked about so far, the Open Router and these two brothers, they're literally in their mid-30s. Just quite incredible. I like to think the only way that I sleep well at night is believing that these all of these people are deeply deeply unhappy for some reason with no evidence to prove it they go god damn it the cursor guy outbid me on my Malibu beach house how dare he correct correct okay well look if you enjoyed that please do let us know drop us a comment I think you can hype the show on YouTube these days. So give that a go. Let's see if we can push it out to as many people as possible.

49:53And I do know a large portion of you aren't subscribers. So your first time listen, if you have made it to the end, make sure you do subscribe because we're going to have fresh episodes as always coming twice a week, top and tail, start and end with a more M &A focus or business case study focus, and then one reviewing the global market conditions of that week. All right, Stephen, thank you as always. Shaq here. What's it like to buy a car from Carvana 100 % online and get it delivered to your door? Let me tell you. Your car is here, Mr. Shaq. Thank you, Mr. Carvana guy. Can't wait to take it for a spin.

50:29Only the best for you, Mr. Shaq. Hey, have you always been so big, tall, and handsome? Not always. I was 6 '10 once. Seven days to love it or return it, Mr. Shaq. Not that I would. You never do. No, I never do. So buy your car today on Carvana. Delivery fees may apply. See our seven-day return policy at caravana.com. Thank you, Ant.