Everything's Computer

0:28Hi, I'm Eric Newcomer. Unlike traditional business banking solutions, Brex has no minimums and no transaction fees, and you can get 20x the standard FDIC protection. Even better, you can earn industry-leading yield from your first dollar, while still being able to access your funds anytime. Get the business account trusted by one in three U.S. startups at brex.com forward slash banking dash solutions. That's brex.com forward slash banking dash solutions. Welcome back, Eric. How is Las Vegas? Sunny Las Vegas. I am staring out right now looking at this fear, which have you seen it? I've never seen it in person.

1:12No, I have not. It's pretty amazing, actually. I mean, I haven't been inside it, but as an object, it's fascinating to look at. I'm here for Human X. You're at South by and then what? YC Demo is going on today right now as well. It's just conference week over here in startup land. You end up making a statement wherever you go. Like, I think Katie Roof of Bloomberg tweeted, like, you're either at HumanX or you're at South by. Maybe it was James Cham at Bloomberg Beta. I think it was like, you know, we're here in San Francisco, you know, sort of like. We're here building. Yeah. Good for you. Have fun.

1:48I saw another tweet that said that South by was the BTC conference and HumanX was the B2B conference. Maybe that has some more truth to it, honestly, because this has been my tour through brand activations and like bigger tech firms rather than the classic startup ecosystem, scrappy teams, hearing talks from IBM. And well, now you're contradicting yourself. I like the B2B versus B2C, but you're saying South by is B2C, right? Well, I'd say the bulk of who's attending and the founders that are around are very media heavy. And it's, you know, people related to the film and music industry as a whole and creator economy.

2:25There's a lot of that here. Maybe I'll put it this way. South by is people selling to consumers and people who are old and haven't caught up with where the times are and are still at South by. What's been your takeaway from Human X so far? How's it been? Yeah, the energy is good. You know, they're pros. Obviously, we host our own AI conference. So there's always a little jealousy, but I'm pretty supportive. I mean, they're going for something much bigger. They've got a whole convention center. We have our nice little intimate founder and investor gathering. Coding looms large. I think that's key.

3:01I mean, we're all watching the cursor codium sniping, which I guess we can touch on. Coding doesn't just come up as like, oh, what's a cool use case? I think the AI founders are the most true believers in, no, these coding tools are going to make it. So we really have to build our company fast. You hear from founders. I think I was talking to Abnormal Security. And they're just like, oh, yeah, what if it turns out our product pipeline needs to be much more aggressive now because we can build much more. I was talking to a founder just, I don't know, an hour ago, who definitely thinks it's all a bubble, you know, she's in AI world.

3:39And it's like, you know, they're all selling to each other, right? They buy, they buy from each other and sell to each other. I think the information just had a story today about how Corey has NVIDIA as a customer and a major supplier. You know, it's just sort of like, oh, there's a lot of like, money flowing back and forth here. I think the buzzword of the event, vibe coding. Anyway, enough HumanX. How's South by Southwest? How's Austin? Your hometown happens to want to go to South by now. Yeah, my hometown. Well, it's kind of the best thing ever where if I want to pitch a work trip to South by Southwest as part of a routine family visit, it's incredibly easy to do.

4:17So that's awesome. It's been great. The energy has been lively. Well, it's maybe to your point, it's like it is the B2C conference. I've seen a lot more, you know, influencers and startups and technology companies that are more media adjacent. So things closer to the other kind of banner, pillars of South by music, film, that sort of thing. There's been, you know, people here with tools for monetizing sports athletes and creators that I've met at a couple dinners, which are really interesting. So it's more in media world, but there's still some energy. I just think it's been interesting because, you know, this was the place for like Twitter launch, you know, back in 2007.

4:52And, you know, Foursquare had its big debut here in 2009, Meerkat 2015. it was kind of this launching pad for a lot of really big startups in the app wave. Now I'm getting to be an old timer. I guess I've been covering tech like 12-ish years. And so I was there the Meerkat year. So what did you say that was? 2015? 2015. Yeah. I'd say I was in the period of like, can South by recreate the glory? It's like you had these viral moments and everybody still sort of believed that a consumer app could launch. I never really saw the success, you know, Meerkat. But I saw the I forget his name, Ben. You know, the Meerkat CEO is like the minor celebrity at the party.

5:35And you're like, where is he for an app that, you know, people care about for six months? All the reporters went. We wrote our trend pieces about what was happening. But I think the hope for the viral South by consumer app was already fading by then. Definitely. I will say, though, there's been an interesting showing, at least just maybe it's my source network, but a couple companies have had some mixers. And that's really where you get to meet founders that are building interesting things at this during this week. And I attended a mixer hosted by a base power company, which is Zach Dell, Michael Dell's son and his co-founder, who's an ex-Anderol guy who worked really closely under Matt Grimm.

6:13And they're building hard tech power storage batteries that connect to your house. So if the Texas power grid fails, they can have your energy saved. And they're really looking to target deregulated energy markets, which there are... Texas is the biggest, which is why they started here, but there's more everywhere. And it was lively and like Old South By and people were mingling in the backyard. And everyone was dressed in their t-shirts and jeans, classic Austin festival. And the energy was really there. And right after that, I hopped over to like a defense tech happy hour, which had a really good showing.

6:45So there's some pockets of hard tech and some founders still mixing. Have you got any political vibes? I don't know. I think it's a fair statement to say no business leader has said to me, ooh, these tariffs are great. Or like, you know, there's some range of very negative to like, I'm not focused on it, I think, in long time horizon. Vinod Khosla on stage, you know, so I interviewed him. He was less negative about the Trump administration than I expected. He certainly wasn't defending tariffs, but he was just sort of like, I think in a long time horizon, Vinod was clearly like, oh, yeah, I have the ear of Dr.

7:22Oz. So they're listening to me. So I'm not I'm not so mad at them right now. But but I'd say generally like the backroom sort of mood is like, why are they like sabotaging the economy for for no reason? Have you picked up political vibes or are the Republicans Silicon Valley people? relenting. You saw Balaji sort of tweeted something that's like a corrective to the right wing. Yeah, I know. I think there's, I would say, cracks, if not just outright frustration being voiced now about the tariffs. OK, this is going to be the economic prosperity, American dynamism, innovation, economy, administration.

7:59And to then have policies that are directly pushing back against that has ruffled a lot of feathers. And I would say even just in talking to people more kind of in the hard tech defense world people are very bullish on american dynamism but very not here for the tariffs so i think they're kind of all still hoping that they're gonna not really do it honestly delian's brother tweeted something like all right i'll put the pronouns back in my profile i think like retweeting like the stock market going down which is sort of like okay like we we did all this for what i've been so many like i'm sorry i talked bad against woke i reclaim woke please come back woke memes with just like every stock read yeah one somber political comment and then we'll go back to our a observations this green card holder getting arrested for leading palestinian protests is terrible and they're like getting disappeared yeah i i mean i i continue to think the biggest issue with trump is law and order and like how can anybody in the tech world who is shouting about free speech, it's not like I'm some pro Palestinian, you know, I'm pretty supportive of Israel, but like disappearing people is just like terrible.

9:17And so I find that deeply troubling. I mean, same here as you know, a Barnard Columbia double alum. Oh, yeah, exactly. It's very, it's been hitting very close to home just within a lot of my networks. And there's been reporting out as of today that students who are at the journalism school now are being directed by the administration to not talk as much for their last two months of coverage on anything that could be, you know, negative around this case because they're afraid of being targeted. It's like actually silencing journalism students at the journalism school currently, which I mean, I honestly, I don't have the answers.

9:53I would frankly, I would love to read something more and get some clarification on how much Columbia is involved in this because, or if this just happened, you know, not on their watch, which is very possible. Right. We don't know how much Columbia facilitated the actual apprehension or not. Or at least allowing ICE on campus. Yes. Because we know he was living in campus housing, but we don't know how much that was, you know, facilitated with or coordinated with. And that is not out yet. I will not speculate on that, but I just, as an alum, I really would like some answers about protection around speech going forward, especially on campus.

10:26I felt like I had to bring this up only just because I feel like I was talking about the Trump thing as a farce. And obviously, I don't know, we're all losing our money. There's a certain nihilism. If you're comfortable enough to lose it, that you're like, it's terrible. But like, what are you going to do? But obviously, there are lots of pieces of the Trump agenda that are beyond farcical. And yeah, this that being one of them. Anyway, redirecting back to the AI industry. Any other observations from South by? I have a couple more thoughts, I think, on Human X. People were very excited about quantum computing here, actually.

11:00Team Quantum had a really big showing. That's coming up. Yeah. Yeah. And just the ability for chips and compute development in tandem with AI to really unlock a lot of quantum ability. People were more bullish on that than I've heard in years. So fascinating. How are the rest of your panels? I know you mentioned you talked to Vinod. What other conversations were you having on stage, Eric? I talked to Jason Warner and Erica Brescia. Jason X, Redpoint, now CEO of Poolside, one of the foundation model companies focused on coding. And then Erica is an investor in Poolside at Redpoint. Jason is committed to AGI is going to be big.

11:39Being one of the few, a select less than 20 companies in the world that really get sort of foundation model level intelligence is going to be valuable. I mean, I think they have going for them, their ability to strike enterprise deals and sort of the GitHub lineage and sense like we can work with real companies. I mean, they're very guarded about the actual capability of their foundation models. They haven't released a consumer version, so you can't really try it. Hard to believe they're ahead of people given that they haven't sort of bragged about it. So I think there we're going to need to see more proof points.

12:16But overall, I think they're very representative again of this sort of big progress in the coding world being the vanguard of AI applications. So that was one. Then I did a Q &A, which is, I don't know, it's like Eric's thoughts on the world. I mean, it ended up being mostly about media, honestly. I did a panel with three people in sort of communications and marketing and venture world and sort of I was the independent media voice. I feel like I'm always gay. I like the meta story of how tech is covered. I mean, going back to the dead cat version of this podcast. So always game to talk process.

12:53My main point on that panel, I'd be interested in your take. I was sort of saying that I think that one thing that will happen because of AI is that we'll have a platform where we're really strong, like hopefully the newsletter and the podcast, but not TikTok experts or not wanting to spend time on Blue Sky. And there will be much more of a AI, like take this product that we have thoughtfully built for one platform and build it for another. We're already hiring a team to use AI tools to make videos faster. But I think over time, there'll be more and more of this sense that if you're a creator, it's like, okay, this is my platform.

13:32And then the marketing platforms, I'm going to sort of automate. I don't know. I'm curious what you think about that. I think that's spot on. But more just to further that point, I was having conversations with, you know, media people at South by this week about how the bulk of what's going to happen, especially with like creator influence reporting is the ability to find original information. And like the journalist toolkit is going to be like what really sets you apart. And like all the marketing stuff is going to get very automated. And like the the video creation part of it, that's not shaping a narrative is going to be a lot tougher, too.

14:06And I agree with that. And I I was hitting that point as well, just that tech people can overestimate how much the challenge of getting information is organization rather than the fact that there is still a lot of information that is not posted online. And so if AI is really good at organization or creating a lot of blather that's hard to differentiate, I mean, I think having novel information remains something that is hard for the computers to replace us on. And so if you can get real information from real people, that's valuable. So some media, some AI. Last couple minor themes I thought were interesting.

14:45I mean, I think there's creation of real world AI information. You know, it's like whether it's like if you think about self-driving cars, obviously, and Tesla taking things in or Fei Fei Li's company. I just think this sort of efforts to capture information about the real world to train models is an exciting area. Oh, well, that's been actually a bigger theme at South by that I've found really promising, too. There was a really good robotics panel. The head of robotics over at Amazon talked a lot about it was the classic, you know, humanoid versus non-humanoid pitch of like what's better. And of course, everyone's, you know, in the warehousing world where robots are really in effect.

15:23We're saying like, you don't need humanoid robots like the money is going to be made with robots that aren't human shaped because then they can do things that humans can't do. Physical AI and like the embodiment of AI and algorithms to do hard tech and hard things. things and that kind of learning and information capture is one that people are very excited about. A fun one, you know, I studied philosophy in college. It was precision neuroscience, which is trying to a sort of Neuralink competitor, different philosophy that they're trying to put on the brain, I think instead of in the brain, a very sort of medical focused team that's, I think they've implanted in like 30 people.

15:58The questions that raises about like, if we, Like, you know, could we communicate in a different way? Like the founder that I was talking to is making the point that, you know, what if you turns out you could read like emotions directly from a person, right? And if you think language is directly, you know, shapes how we think about thought, right? That those interplay and that you can't really think of one without the other. Like, what if the brain has a new way to sort of externalize things besides like movement and language? You know, I don't know. it's just crazy that in 20 years, we got different ways of directly exporting information from the brain.

16:36So, you know, it's going to take a while, you know, and I think they're very focused on, you know, people are paralyzed and medical use cases where you could also imagine this period where like, someone who's paralyzed gets to leapfrog potentially, you know, it's like, oh, they have a reason to get this device. And you could imagine like the devices have less latency, right? Like one of the advantages like typing there, you know, there's a delay, even talking, there's a delay. Yeah, that's a fascinating space. So a lot of exciting companies remain really optimistic, honestly, about what Silicon Valley is working on at the moment.

17:10On the side of coding applications being a big use case, it seems to be working out very well for Anthropic beyond just coding. But generally, there's some new reporting came out this week that their annualized revenue has grown to$1.4 billion as of the beginning of this year. And they're generating$115 million monthly. A big hit product for them has been computer use. And their Claude AI assistant is very good at coding. So that's been something that developers have been really excited about, specifically with Anthropic. And they're making money. Mike Krieger, the chief product officer at Anthropic, was at the event I sat down with them.

17:49Yeah, I mean, I think, you know, Anthropic is clearly doing really well on coding. I do think there's going to be this question, you know, they help power cursor and then they are creating a product that could be perceived as competitive. I think, you know, people are really excited about what Anthropik is released, but are still trying to get their heads around it. I think Anthropik's point of view is that whatever they build will help companies built on top of it. And so we'll flow to companies like cursor to me, like the best case scenario for a lot of these foundation model companies is that they all sort of find their lane.

18:25You know, it's like, it's like Peter Thiel's thing. You sort of want to be a monopoly. It's like, if they're all just like directly competitive with each other, that could be a problem. Whereas if it's like Anthropic is good at coding, OpenAI is good at sort of the general sort of text box. You know, there's just more of a path. XAI is good at people who hate Democrats, but you know, All these companies also feel compelled to gobble the world given their valuations. So I don't know if they're going to stay out of each other's lanes at all. Moving on down to our deal of the week. AnySphere, which is the maker of the powerful coding assistant cursor, is in talks to close another round of funding.

19:07It's coding assistants all the way down. Oh, my gosh. Bullish on coding assistants. This is what? 10 billion? What are we at now? Round has not closed yet, but they're in talks to be close to a 10 billion valuation, according to Bloomberg reporting. AnySphere, of course, has raised a ton of money already. They've raised already around 175 million. They're backed by, you know, Andreessen and Thrive. And Thrive is expected to lead this new round, as per the reporting, too. They're crushing it. They're growing super fast. Classic lean team AI tool with big use case coming up. Yeah, I can't mock Thrive anymore for its high price deals.

19:45I don't know. They've been doing well. I don't know. It does feel windsurf is a little the buzzier one at the moment. It feels a little bit. And, you know, I don't want to get too much into petty Twitter drama, but, you know, your fierce rivals, Codium and Cursor, just like trading barbs on Twitter now. But it's a hot space. So it's they're both doing well. And congrats to Cursor when they close this big$10 billion round. That's a super high valuation for a lean team. But, you know, in the AI era, if you build something that people want, you got it. You got the funding. I guess we'll both be back in New York next week.

20:22The Newcomer Roadshow will be returning to New York City. Yeah, exactly. Where everybody thinks, everybody thinks I live in San Francisco, which I take as a compliment, you know, that it's like, oh, the newsletter is a very of the Silicon Valley. People think of Silicon Valley in San Francisco. I'm like, Silicon Valley is on the internet. My Twitter bio says I'm in New York. I am saying on this podcast, I'm in New York. I could not be more transparent that I live in New York, though I remain extremely bullish about San Francisco and we host many of our events there. Breaking the Bank, May 20th.

20:55Have we talked about it on the podcast? Yeah, we've got a fintech coming up. Excited about that in San Francisco. So apply if you haven't. And we should talk about it more on the podcast. We do expect you to subscribe to the newsletter. The business, you can support us by becoming a paid subscriber to Newcomer. If you're a mooch just listening to the podcast, time to subscribe and find out how Lightspeed's returns are and General Catalysts get informed about what's happening in venture capital. That's our show. We'll be back in New York next week.