AI’s Power Problem, Apple Goes Meta on AI Glasses | Pat Gelsinger, Josh Isner, Sheel Mohnot, Santiago Nestares, Austin Federa

28:45Animal brains are nowhere near the blank slate they appear to be at birth. First, a lot of what is commonly attributed to learning is, in Andrea's opinion, a lot more maturation. And second, even that which is clearly learning and not maturation is a lot more fine-tuning on top of something clearly powerful and pre-existing, the brain. For example, a baby zebra is born and within a few dozen minutes, it can run around the savanna and follow its mother. This is a highly complex sensory motor task, and there's no way in my mind that this is achieved from scratch tabula rasa. The brains of animals and the billions of parameters within have a powerful initialization encoded into ATCGs of their DNA, trained via the outer loop optimization in the course of evolution, if the baby zebra spasmed its muscles around at random as a reinforcement learning policy would have you do at initialization, it would not get very far.

29:41Similarly, our AIs now have neural networks with billions of parameters. Andre goes on. He does give a summary. He says, anyway, in summary overall and actionably, I think this pod is solid. Real talk from Sutton to the frontier LLM researchers who might be gear shifted a little too much into the exploit mode and not enough in exploring. Probably we are still not sufficiently bitter lesson pilled and there's a very good chance of more powerful ideas and paradigms other than exhaustive bench building and bench maxing and bench pressing. And animals might be a good source of inspiration. Just look at how a gorilla can bench press.

30:18That's what we need to do. Is anybody actually working on that? Yeah, Working on getting gorillas. Come on. You got the robot Olympics. Let's see some Olympic lifting. Yeah. Intrinsic motivation, fun, curiosity, empowerment, multi-agent, self-play, culture, use your imagination. I keep coming back to this idea of like we're obsessed with this like agentic horizon, one hour, two hours. I'm like my initialization prompt, humanity's initialization prompt is like be fruitful, multiply, right? That's Genesis. And I think there's something where humans, the goal that we seek is like survive forever, reproduce forever.

31:03And so I don't really see my life as like a string of one hour tasks or five hour tasks. I see it as like a hundred year journey, potentially thousands of years when I think about my multiple generations. And so it just feels like we're pretty far from something that is satisfying all the different criteria. And, of course, you know we need Smell-O-Vision, and we're not making any progress there. Tyler, what was your reaction to this? Yeah, I mean, it's very interesting. I think, like, Sutton is very RL-pilled. Wait, wait, RL-pilled? Yeah, Sutton. Are we in the RL paradigm? Yeah, but it's still, I mean, we're still on, like, very early days, right?

31:46I think Sutton envisions this thing. It's like it's just RL, right? At its core, you start with nothing and you learn the world where the current paradigm is like first you basically mimic the world. Pre-train a bunch of stuff. And you're basically like at first when you're training a model, it's literally just like memorizing facts. Yep. And then you slowly get it to generalize. Yep. So right now, the way I think about it is like for a modern chat bot that I'm using, there's maybe like 300 megawatts of pre-training compute and then 300 megawatts of RL thrown at it. And it's like a 50-50 balance or something.

32:21And then maybe he's saying it should be like 100 % balance towards RL. and like there should not. Well, so to ground this in Sora, part of why this new app is strategic is they're generating an asset and then they get to immediately see feedback. Basically, the reward is more engagement and watching it longer. If you see a Sora video and you just on X, OpenAI is not really able to leverage that, right? You could indirectly be like, okay, this went viral, like maybe that's good there. But in the app, if you're in the trough, you're immediately the time that you've spent watching the video. Did you like it?

33:00Did you send it? All of that is providing feedback for the model. RL. Yeah. Tyler? Yeah. So I think if you look at just training, like RL is nowhere close to half of compute. It's way less. But I think it is a very cool idea to basically have this very pure model in some sense. It's just experiencing the world and learning from that. Yeah. But I don't know, like if you go to the Dylan Patel kind of example of the baby, like putting its finger in its mouth, like figure out where its fingers are. Like the baby is not just like randomly twitching, like its nerves are not just randomly firing. There's still some like prior that comes from evolution or whatever.

33:40But there is like it's not just like purely experiencing things and then updating. Yeah. There's something there. I was thinking about it with the zebra example. Like that's true, but also like the baby is kind of randomly twitching in the womb and, and like the baby, like you can see on the, on the, uh, what's it called? The oscilloscope or something. I forget what it's called. Uh, there's some sort of like device that you can like look inside and see the baby and the baby's moving like very basically, but probably like doing some reinforcement learning essentially like, like pre birth, I think, I don't know.

34:11Yeah, I mean, on some level, like, there is some encoding that is going on into the baby of, like, this is how, like, you can walk around or something like that. Yeah. There's some, like, I think if you just had a baby and, like, without any other people around. Yep. Like, maybe it could, like, learn to walk and stuff. But there's some, like, I think there is still some imitation going on generally. Like, Sutton is saying that, like, none of it is imitation. It's all just, like, RL. Yep. you're experiencing world, then you're updating on those, on the actions you took. You have some goal, you either like complete the action or you don't and then you update.

34:46Yep. I think, um, I think imitation is like more, uh, important, right? There's like the kind of, um, like the Girardian take or whatever is that like, um, humans are, are apes, right? To ape is to imitate. If you drop a baby in a prison cell from birth, it'll never learn to walk because it needs to see a human walk to learn that yeah something by that i think they'd figure it out okay maybe not walking but like doing you know useful things like it's not gonna i think i think if i think if my son was born in a padded closet and just given food and an excel sheet he'd be writing vba macros in five years with no external well maybe it's been encoded into your pure pure pure reinforcement learning experimentation from first principles i think it's possible I don't know.

35:35Anyway, Figma, think bigger, build faster. Figma helps design and development teams build great products together. Hey, man, just wanted to say, I think we talked about this yesterday, but I love it so much I put it back in. Hey, man, just wanted to reach out and say I loved how much you drank at the networking event last night. There are a few of those. This is becoming a new meme format. There was another one. I'll find the other one for me in the meantime. Apparently there's a game that makes you a YC partner for a day. you watch old pitches and guess if they made the batch. I wonder where this data came from.

36:07Usually YC is pretty locked down with these old pitches, but this seems like a fun game. I went to the top of Hacker News yesterday. Here's the other post. Hey, man, just wanted to follow up and say I admired your ability after three drinks to persistently ask who had a bag at the super serious networking event last night. Super serious networking event. Yeah, I could never. Yeah, I could never. What do you think about, I was texting with Tyler about this, Like there's this post, Sam Altman is playing 4D chess. Sora 2 is about to take over social media. The virality is guaranteed once this scales.

36:40Billions in ad revenue will flow straight into more compute, fueling the flywheel. In a year, Sora 2 will be so efficient and cheap that margins explode. You can't out-accelerate Sam Altman. And I wanted to reflect on this idea that Sam said, it's way less strange to watch a feed full of memes of yourself than I thought it would be. not sure what to make of this and Gabriel. I mean he's again my read on this is I don't uh I don't fully believe that he actually I I don't know I don't know how to read into this other than he is very incentivized to normalize people being deep faked all the time right I mean it's a crazy crazy move to just be like somebody had my likeness I'm going first my life I'm merging i'm merging it's like him going first being on the first spacex rocket hey it's not so bad look at it's not so bad i don't want to turn turn this off i don't i don't want to see that i i don't like the skibbity toilet thing to begin with and then you mash it up and it gets yeah but anyways he uh he went first he's uh very incentivized to get a bunch of other big names personalities to agree to do the same thing did is this i would imagine it's very weird to watch videos of yourself committing crimes you know there's a video of guess video of him in blackface floating around yeah um there's a bunch of videos that i think would be incredibly strange to watch of yourself um so but stranger than your expectation because i would expect it to be weird i i expected it to be weird when tyler sent me a deep fake of myself bench pressing and then turning into a golden retriever i was kind of just like yeah yeah this is what this is below my expectation like it is less weird to me i don't know you haven't seen one of yourself yet right has anyone made one of you you haven't uploaded i don't think i've done i haven't you haven't done the cam i haven't agreed to do i think what what about you tyler did you expect it to be weird to see yourself in a sora video and then was it weirder or less weird than you expected uh i don't think it's that weird yeah but it's also like it's still not like that good where like it's kind of me but it's not like all the way there totally totally but i think okay jordy do you think that him basically releasing a social media where like half the content is just him is that an aura farming move i think it increases his fame which is a resource that he's able to leverage

39:04but i don't know that it it didn't you know a lot of the videos that that i've seen don't uh i don't think are necessarily good for the brand but it's also just putting out so much stuff into the world that it just all gets diluted and you don't read too much into any one video because it's not created by him do you believe in cosgrove's law that or farming is all you need break it down for us yeah always be or farming okay i think i i have a text somewhere but um yeah okay basically or farming right yeah um you can think of like most things are on some level like based off like interacting with other people like like any kind of if you're uh you know raising around if you're going to make some deal, right?

39:50It's based off like your interaction with someone else. Yeah, people want to raise from tier ones because every dollar is the same, but you get to aura farm the GP. Yeah, and then it's like when you're raising around, you want to be aura farming the VC, right? Because they want to be like, oh, this guy's like pretty sick. Like I want to give him money or something like this, right? So basically the idea is always be aura farming, right? You always want to be doing something that increases your aura because everything you do, like any kind of interaction you have, will be influenced by your personal aura.

40:21Yes, but stretch the analogy. Like wearing a fedora of plants. But stretch the analogy to the absolute limits. Sometimes when you farm, your lands grow fallow, and you have a failed harvest, and you can also salt the ground so that nothing will ever grow again. No bounty. And so there is a world where you go out to Aura Farm, you set up your Aura Farm, but someone has salted the ground and you don't grow a single crop. Yeah. So that's like a, I mean, that's a failed Aura Farm. Failed Aura Farm. So the question is, is this the sort to putting yourself in the cameo? It is an attempted Aura farming.

41:04Was it a successful Aura Farm? yeah i think most like i would say in most cases or farms you can only tell the success of a farm uh in retrospect if it's successful yeah so so it's like in six months we'll see i think if people are still on sora yeah if the app is still like being used as a social media platform not just like a creative tool um yeah then i think it will be a successful farm because now sam is just you know he's just everywhere it does it does feel like there's always a winner and a loser in an or farm and like if you are or farming yeah vcs will do this they'll they'll buy secondaries in a company to say they're an investor even though they didn't participate in a primary round that's true and then also and that's for every time for every time uh a founder or farms a tier one venture capitalist and then blows the company up in a major scandal uh that reduces the aura of the fund that put the money in and they got farmed.

42:03They got farmed. Yeah. If you backed FTX, you got farmed. You look bad. Yeah. There's always two sides, right? Because in Jordi's example, the VC is farming the company. But when it gets exposed that they actually bought secondary, that they weren't real investors, then - It's a negative aura. The company is farming the VC. They're like, oh, we're so great. But there must be positive sum or a farms where two people come together. They grow a beautiful garden together. When an emerging fashion brand partners with a legacy brand, let's say a streetwear company partners with Solomon. They can both benefit because the streetwear brand is getting new legitimacy and Solomon gets to be like culturally relevant and cool.

42:48And that is a positive sum or a farm. Yes, Sidney Sweeney and American Eagle. positive sum or a farm. The stock's way up. Everyone's doing well in American Eagle world. Sidney Sweeney is back in the news and dominating. It seems like a win-win. They or farmed each other successfully. They grew a new bountiful harvest together. It was more positive for American Eagle. It was more like net neutral, I think, for Sidney Sweeney and that she got a bunch of blowback from it. She got a bunch of attention, but it wasn't all positive, whereas American Eagle, just the stock ripped. Anyways, I have an interesting post here that I wanted to throw in.

43:27It's from a guy named Robert, if we can pull it up in the timeline. Let's pull that up, and I'll tell you about Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation. There we go. So this post went super viral. This is Robert says, good game, everyone. And he's charting total job openings versus the S &P 500. And he shows that when ChatGPT was released, there was this massive divergence. Now, a lot of people took this at face value. And they thought, okay, ChatGPT is just killing jobs.

44:06but i put through in another post here um anybody that's used chat gpt understands that it's valuable but it doesn't replace them at work yep like maybe i i don't i haven't met somebody that's been like hey jordy like i have to admit i've lost my job because chat gpt just does it for me right yeah it's there's certainly in key areas like finn is like replacing like the need to add more cx reps um but uh but by and large chat gpt was not the catalyst that's just like you know totally reducing the number of job openings so there's another post in here from simon saris uh who says the zero interest rate era is going to become lost history because people want to make up a narrative around ai the white collar bloodbath didn't happen because of a chat app release it happened because of the end of Zerp, which occurred rapidly in 2022.

45:00So literally when FTX, like ChatGPT was released when FTX collapsed effectively during, you know, within like the same 30 day window. And so it really was a lot of CEOs woke up and said, we have to get a lot more efficient. We have to get more lean. Let's not hire, you know, a ton of new people. Let's do more with what we have. The AI narrative from a job loss standpoint has also, it's also in some ways, I feel like been a lot more narrative driven and that CEOs have a massive incentive to show they're getting more efficiency out of AI. And so they're just saying to their teams, like, I don't want you to hire more people, just be more efficient.

45:45And even that by itself, just forcing people to say like, no, we're not expanding your team. Just do more with less. Yeah. There was also with what you have. A huge memetic contagion from the Twitter buyout where X was able to run with like one-fifth the staff and the service doesn't really go down and they're shipping features. And so I think a lot of CEOs just kind of adopted a year of austerity, a year of efficiency and wanted to test what they could do with less. And so they pulled back. And so, yeah, you have to look at the labs or scaling headcount rapidly. Anthropic is hiring teams to capitalize on all that.

46:21demand they have and they're some of the most you know AGI pilled of anyone right and so you have to read into what what people are are actually doing um and certainly there's been massive job job creation and in the kind of startup ecosystem broadly just because of you know we were talking yesterday with a friend seems like every we've it's become so normalized but it feels like every day there's like just on tbpn like at least 100 million of new funding announced usually like you know half a billion at least uh at least lately and so all you know a lot of that is going to go into hiring teams and um so anyways this this original chart thought it was worth calling out yeah it's important to reality check the put one chart over the other and see if they line up perfectly we had some updates from tyler cosgrove yeah there was another chart we we were asking somebody had made a chart tracking the nasdaq uh dot com bubble to today and this person effectively did graphic design to make them look like they match up perfectly like by the day oh perfect it looks so perfect and tyler spent 24 hours this week trying to recreate it and no matter which index he was looking at yeah take us through the thought process yeah i just sent it in the chat but basically um it's it's supposed to be uh nasdaq um from 1998 2001 and then overlaid on top is 2023 to now yeah um and then yeah i mean they just like don't line up like you like you can kind of see like there's a little spike and it person just like made up the data or something?

48:12No one would ever do that. I don't know if it's like literally made up, but this is the original post, right? Yeah. So the time scales are not lined up correctly. Okay. Oh, so they compress time on one of the charts and not on the other. Yeah. Yes. Even when I did that, they still wouldn't really line up. So I think certain parts of the graph are more compressed than others to make the kind of... So it's like a linear scale and then a log scale on a linear scale. It's the ultimate chart crime. Yeah, I think this is pretty bad. Do you have your actual overlay available? Can we look at that? Yes, let me pull it up.

48:48I would love to see that. While you pull that up, let me tell you about Graphite. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. I love that when I hit that sound effect. I know you're going to amp up the WWE. Fire me up. While he's pulling that up, John Galt shares websites should be this again, waiting for the first company to authentically do it. Everything looks like a venture capitalist yoga retreat website at the moment. It's from the Sony website in 2002, web design history. Remember when we pulled up the old iPhone website on Apple in 2008?

49:26And we were like, oh, it's going to be like all iPhone focused because it was the iPhone moment. It was like the MacBook Air and like the iPhone's off to the side and said high technology is one of the features that you get with the iPhone. I like this. I wonder if this would convert, how bad this would be. I wonder if someone's actually going to take this post and run with it and build a site that looks like this. We've seen some cool people do interesting things with web design. Post Hog had a very cool website. There's still room for innovation in the website. Have fun. Do something different.

50:01Don't just copy Linear. Our sponsor, Linear, is the tool. It's a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product rules. All your favorite products are built using Linear. So do we have the actual truth zone edition of the stock chart? Okay, there's some overlap there. Yeah, I mean, they're both rising. Yeah, they're both rising. They're both up and to the right. But yeah, it's a wildly different timescale. Yeah, and that little dip and then pick back up does not line up at all. Well, now it's tariff-driven.

50:43You can line up certain parts of it. Yeah, that was the big dip. And you can line up certain parts of it, but then the rest of it doesn't work. So if you shift it around, like if you shift actual timescales of certain parts of the graph, then I think I could get it to line up. Yep. You can copy the red line and make it a different color and just offset it by a little bit and be like, I'm going viral. That's the secret. That's the secret. Well, if you want to do your own analysis, head over to Julius.ai, chat with your data, get expert-level insights in seconds. It's the AI data analyst that works for you.

51:17And so back on Sora 2 and the question of energy, Zephyr says, pretty sure OpenAI made an algorithmic breakthrough. Sora 2 is a much smaller model. Tyler, I don't know what you think about this, but Andrew Main is saying, Another interesting metric is that VO3 costs$3.20 per eight-second clip. You get three a day. That's$10 a day. I pay$2.50. So they're basically paying, like if I use all my VO3 credits on Google's top tier of Gemini, I'm break-even. But, you know, Sora currently gives you 100 10-second clips per day. that's$320 of video generation per person for free right now if that's what they're doing.

52:03I think they'd eat that cost all day long. What do you think? Do you think that they've actually brought the cost down to 32 cents per clip, to 3 cents per clip? Where do you think it's going? Yeah, I mean, I would be very surprised if it was like the same kind of cost as a VO3. I would, if I had to guess, I would say maybe like 10x, so maybe it's like 30 cents. But even And then that's like pretty deep. That's like pretty hard to squeeze that out. I just think like they gave me 100. I've generated six over three days. Have you generated 300? No way. Yeah, I'm at like five. You've done five. And we're like kind of power users, early adopters, really testing this for work.

52:42And then they're also rolling out the invites slowly. I wouldn't be surprised if this is, yeah, it's three bucks a prompt. But like they're just going to eat that for a while until it gets to scale where, I mean, if it's a million new videos a day coming on the platform, that's only three million bucks. That's only a billion a year. Like they can eat that. Right. It's only a billion a year. It's only a billion. That's really nothing for OpenAI. They're a$500 billion company that's raising tens of billions of dollars every second. And they and what's at stake? like winning the next social platform, like really eating Meta's lunch.

53:23The trough wars. The trough wars are going to be fought one 10-second clip at a time, no matter what it costs. Well, people are still doing things the old-fashioned way. Ramp is doing things the old-fashioned way. We talked about this earlier in the show, but Kareem says, Sora 2 is insane, unbelievable, and he got a community note on it because Ramp published a launch video that it was shot with a real camera, and the community notes team put them in the truth zones that it was not created by Sora. It's a real commercial. I think that helps with the virality and it helped Kareem got 400 ,000 views on this, 450 ,000 views.

53:58I wonder what percentage actually just believed it was Sora too. I saw someone in the chat saying they think it's Sora. I don't know if they were joking, but I do think some people, you know, it's hard to tell. It's hard to tell these days. Well, we have an amazing announcement. What's that? Which is that there are 19 ,000 private equity funds in the U.S. and there are 14 ,000 McDonald's in the U.S. We have more private equity funds than McDonald's and I just I think it's important to uh yeah recognize you know recognize this moment this milestone. I wonder how that's calculated is that like does that count like an LLC that holds a sports car in Montana is technically a private equity fund or or are we talking like there's a real office with a couple people that are buying companies with that and equity like Is it a true private equity fund?

54:46What's the scale? There's probably some crazy power law, right, where KKR is here, and then there's some company. Yeah. Are they counting funds for ants? What's the median size of that private equity fund? I would love to know that. Anyway, we can dig into it more. Speaking of budgets, the government is about to shut down. And the Polymarket. Isn't it already shut down? I believe it did shut down. Not good. The parties fight to cast shutdown blame. You know, do people like the government? I don't know. It seems like a mess. Delian was on the show laughing about how no other country just shuts down the government.

55:23Do you have the polymarket on when the shutdown might end? That seems like a useful data point for us to track. You can pull it up. Hours into the government shutdown, the White House issued new threats. Congressional leaders were digging in, and some rank-and-file Democrats and Republicans were searching for a way out. Senate Majority Leader John Thune and Vice President J.D. Vance said they are open to talking to Democrats about extending expiring health care subsidies, but won't negotiate as long as the government is closed. Democratic leaders said they won't agree to reopen the government until their health care demands, at least some of them, are met.

55:58And when does Polymarket think it's fine? The vast majority of folks, over 70%, think that it'll be October 10th or beyond. 44 % believe. October 10th, that's our one-year anniversary, I believe. Really? Something like that. So, you know, hopefully the government reopens and we can celebrate the one-year anniversary of this show. In other news, Apple is shelving development for the cheaper, lighter Vision Pro, the Vision Air, planned for 2027. And they're prioritizing a more urgent effort developing AI smart glasses to rival Meta. This is interesting. There's some debate over whether or not this is actually going to happen.

56:37Apple's a big company. They could just be working on multiple things. But the news from Mark Gurman is that they are reorienting. So the company, Apple, had been preparing for a cheaper, lighter variant of its headset, codenamed N100, for release in 2027. But Apple announced internally last week that it's moving staff from that project to accelerate work on glasses, according to people with knowledge of the matter. Smart glasses have emerged as a critical arena for tech companies, which are racing to develop AI-centric devices. That's crazy that Meta's making them dance. Making them dance. Ducks making them dance.

57:11Tim Cook was watching our Meta Connect coverage and was like, I want to hit that gong with those guys. Let me do it. I got to make some glasses. Dumb day. Dumb day. I got to get my own Rocco Basilisk. I got to get. There's only one. My own Rocco. Yeah. What could they do? Oliver Peoples. Is that owned by Luxottica as well? Also. Also owned by Luxottica. Where will Apple go? I think Apple will not try and partner with a fashion brand. I would make that prediction that they will do their own and they will look like AirPods and they will be mostly all white. And they will be a big status symbol to let people know that you have an Apple product on your face.

57:46And there will be a couple of different colors. There will be different colors every year. But Apple will try and own that design language. Apple has done a few partnerships. Didn't they do an Hermes band for the Apple Watch? I believe they did that and a few other collaborations. But Apple generally has been pretty limited on the let's partner with Nike. They've done a little bit there on the running side. But in general, they have not done a lot of like this iPhone is co-designed with another brand. It's just you can get a case from them. We'll give them the design. It's up to them to do whatever they want.

58:22You can get the Louis Vuitton colors and whatnot on design. One more post before our first guest. there's a post from Modest Proposal who's sharing a screenshot from a transcript of Patrick's interview with Dylan Patel. Patrick says, yeah, he's doing demand guarantees. He's doing all this crazy stuff right now. Of course, they're talking about Jensen and NVIDIA. Dylan says, yeah, right, right. He's using his balance sheet to win. Try and win more, which is an interesting dynamic. I don't know if there's ever been anything this in terms of the anti-competitive nature of this where you backstop clusters.

58:56Core, we've recently got a deal with NVIDIA where it was where they backstopped a cluster, right? So that's saying, like, if you buy this and bring it online, we will guarantee the demand is there. Dylan continues, now, CoreWeave would have never built this cluster because it's for short-term demand, and renting GPUs on short-term is a terrible business model. You want to do long-term contracts, and you want to do long-term contracts with people with balance sheets. That's the golden goose. But that doesn't exist so much, important point. So you do long-term contracts with people who don't have a balance sheet, OpenAI.

59:30And if you can't do that, then you'll do short contracts with people who do have a balance sheet. There's this whole matrix of who you rent GPUs to, but from NVIDIA's interest, it's, you know, what I really love is when venture capitalists fund a company and then 70 % of their round is spent on compute. They effing love that, talking about NVIDIA, right? And that's what's happening with all these companies, whether it's physical intelligence, They're spending a lot on robot arms and SHIT too, but they're also spending a lot on compute or it's any other startup that's raising cursor, et cetera.

1:00:02And even if it's not directly, it's indirectly going to GPUs. They love when people spend their entire round on GPUs. It would be really good if this wasn't a two-year deal or a three-year deal for that compute. If it was, you can spend 70 % of your round on one training run, leave a company with these ideas, gather the data, do the training run, And then you have a product and you show how good the model is and try and raise again. That would be really great for NVIDIA. But no one wants to build a cluster who's predicated on that as a business model. That's crazy. So they have to backstop a cluster to do that.

1:00:32Yep. Before we bring in our next guest, there's a related article in the Financial Times. One of Britain's best-known tech investors has warned of a disconcerting rise in artificial intelligence valuations, saying NVIDIA's planned$100 billion investment in OpenAI brought uncomfortable echoes of the dot-com bubble. This is about James Anderson, who is at Bailey Gifford. He had a massive position in NVIDIA. He was the largest, that was his largest holding. He's now in Chinese battery maker CATL, Kettle. and he said, I have to say the words vendor financing do not carry nice reflections to someone of my age.

1:01:16And so the, yes, the echoes of the dot-com bubble are growing louder. Well, we are pleased to be joined by someone who is building in a completely different space. We have the chief operating officer of Axon. The president. The president of Axon. I was reading the chat, little misinformation. What's going on, Josh? Welcome to the show. How are you, boys? Good to see you. Thanks for having me. Thanks for hopping on. What is this setup here? This looks amazing. That looks incredible. In space. Virtual background. You're in the command center. Yeah, yeah. We have some folks at Axon who just on their own come out.

1:01:54They just churn out new Zoom backgrounds. So every time I open Zoom, there's like five or six options to choose from that I've never seen before. So this one looks pretty cool. It's looking great. Can you take us through kind of the shape of the business today, maybe a little bit about your journey, just to kind of set the table for those who might not be familiar with the business? Sure. At Axon, we make pretty much all the cool technology that police officers use day to day. Everything from their taser gun to their body camera to all the SaaS software and digital evidence management to all their reporting products, drones, virtual reality police training.

1:02:30We really believe that we can add a lot of value in a lot of different spots where really software and hardware intersect in policing. And so I've been at the company 16 years, two years or two months, sorry, two weeks after graduating college. Wow. I drove across the country to join Axon and here I am. That's amazing. What's been the most recent transformation in the business? I was talking to somebody about this category and a very experienced investor. He was like, oh, no one's really made it work. And I was like, well, what about like Axon? They seem to be doing pretty well. And he was like, oh, it's not that big of a company.

1:03:05And then we looked up the market cap and it's a huge company and you've been massively successful. But what has been the biggest transformative moment over the past five years for the business? Sure. I think really for the first 25 years of the company's history, it was really about hardware. And in the last five years it's been far more about software. So we manage more than 40 times as much content as the Netflix library combined. So we're managing all of this police evidence in the cloud. And in figuring out how to make use of this massive data set for our customers has been the name of the game.

1:03:43So most notably, a couple of years ago, we released a product called DraftOne, which is a Gen AI product. It analyzes the body camera transcripts and creates the first draft of the police report for the police officer. So cops spend about 50 percent of their time writing police reports. We think we can make that like 10 percent of the time. So is that something where an officer in the middle of an action, let's say they're pulling somebody over for speeding. Do they talk out loud and say, all right, you know, how are you how where is that data coming in from? Because I could imagine they're just kind of John actively uses like transcription with chat GPT.

1:04:20So we'll be like talking about something and then he'll, you know, be prompting it just with voice. I could imagine an officer does the same thing where they're saying like, I'm pulling this over. I'm at this intersection. I clocked him going 20 over. And and then that just gets built in. Or what is that workflow like? Sure. So it's a great point. Cops are getting better at prompting the AI to to, you know, improve the quality of the police reports. But even without doing that, just in the normal conversation, you can imagine that same incident when the cop walks up to the person's window and says, hey, you're speeding.

1:04:59You're going 20 miles an hour over the speed limit. And still pick that stuff up. And even just like, what's your name? And then the person says that. And then that's in the audio file. And then that gets transcribed. And that's just like so much manual work. You're not putting anyone out of a job. You're just making their life better. It feels like a fantastic use of artificial intelligence. Very exciting. And you guys have been super acquisitive. I think you've done a number of acquisitions, but recently completed, it was an$800-ish million acquisition. We got a gong here. We'd love to, you know.

1:05:34Yeah, it was about$630 million. It was prepared AI. There we go. Love that. We have a gong as well at headquarters. Nice. Big deals. You hit the gong. I love that. Of course. We're excited about those guys joining the company. Their founder, Michael Chime, super, super talented and very happy to have him as part of Axon. Is the strategy with that deal to kind of diffuse the technology over everything you do, keep it as a separate business line, cross sell it? How are you thinking about that? Yeah, so our mission is to protect life. We want to keep people from getting killed in policing incidents to include police officers.

1:06:11And the best way we can do that is shrink the time between the incident taking place and help being on the way. Right now, that's like a two-minute cycle. Someone calls 911. They talk to a call taker. Call taker talks to the dispatcher. Dispatcher figures out the right officer to send to the scene. And we think we can automate that entire process in partnership with Prepared. So essentially, call 911. based on the metadata of the call. Drone has already taken off to head to the incident. Over time, we think we can route the proper police officers to those scenes without a lot of human intervention.

1:06:50And so that's a lot of what we have to look forward to with Prepared moving into the future here. You guys are at the stage where you're a true platform, multi-product. I'm sure you started with, I don't know the exact, the first product, but in this category, how hard is it to get point solutions through? If you're just building for other startups, like a typical YC company, for example, they can build a really narrow, simple point solution, sell that into somebody in their batch. It's pretty easy. These aren't super sophisticated operations, whereas selling into police departments, I imagine just the just the timeline alone of building that relationship is probably really hard for a young company.

1:07:39I guess like talk about the different maybe stages of the companies and getting to the point where you're truly a platform. Sure. The biggest part is, you know, you have to recognize that US public safety is less than a million total users. So a lot of startups wouldn't even be able to get funding based on that TAM, you know. And so when you go into public safety or defense tech or, you know, this segment, you really have to be confident. You can build something for the long term where you can win the majority of the users on your platform. That's really the only way you can have a viable business model in this space.

1:08:15And so, you know, we look at this like, hey, you know, we start with the most talented teams we can find and then the most product synergy. And so with a company like Prepared or one like Fusus that we acquired last year, we really believe we can help accelerate their growth by plugging them into our ecosystem and, you know, the products nicely play off each other. And, you know, with police, they want to outsource as much of the technology as they can. They don't want to build things internally to, you know, to capture their use cases. And so when we can show up with a really nice end-to-end workflow from what we call capture to courtroom, that really has a lot of value to our customers.

1:08:56And so that's part of our thinking and hypothesis as we look at M &A and which companies to partner with. In terms of that platform, is there demand from local law enforcement agencies for you to play nice with other companies, build some sort of open API? Is there another kind of enterprise resource planning backbone that they want you to plug into what's kind of the software supply chain of a modern police department look like these days? Yeah, it's a great question. And the short answer is yes, you want to build something that's open that at the end of the day, this isn't about trying to help people make more money or make more effective ads on the internet.

1:09:42This is about fighting crime and saving people's lives. So when you do those kind of sketchy things, where people don't have access to your data, or you don't, you know, you don't work well with others, you're ultimately undermining the police department's mission of protecting their communities. And so for us, we try to look at this like, hey, we want to be the Switzerland in this space. And regardless of the hardware inputs or the software outputs, we want to play nice and leverage open, open APIs to, to help our customers achieve what they're setting out to do. What robotic form factors are you guys most bullish on over the long run i'm sure you leverage a lot of drones is there any other we we had uh tony from doordash on this week who built a really cute robot for delivery l4 autonomy what are you guys thinking about are drones enough uh or other things on the steves we want so the reason i'm smiling is i thought like i pitched our founder rick on this idea like two years ago to do this big hugging robot uh like the michelin man just imagine this thing kind of walks down the street it's like big criminal and takes them into custody.

1:10:52So people aren't as scared of robots. I don't think that one's in our future, but the thing I'm most excited about is the ability to put less lethal on drones. So you can think of a school shooting taking place. And if you have drones in nests in the, in the roof of a school, there's no reason those things can't be equipped with taser technology and they can fly autonomously. They have targeting software for us, uh, uh, end user, you know a police department uh would always decide when to use force that would not be autonomous but this idea of finding ways where we can keep people safe in these mass shooting incidents before first responders ever get there that's that's very interesting to us and over the over the next few years we hope to be playing in that space more and more here with uh with some tools that can really uh uh you know again shrink the time frame where these incidents are happening from when they start to when they're concluded.

1:11:49What about, somebody in the chat is asking about technology for firefighters, specifically wildland firefighters. We're here in L.A. As the fires unfolded at the beginning of this year, it felt like they were so, they had too little technology. At least that was the perception. We had firefighters relying on the nonprofit fire tracker that kept going down because they didn't even have capacity. What are you guys doing on that front? It's a tough market because fires are so unpredictable, but certainly feels important. Sure thing. Sure thing. I think the most interesting thing I've seen in that space to date is these drones that carry thousands and thousands of pounds that can stay in the air for hours.

1:12:37And you can imagine you could actually string those along with, you know, with very lengthy fire hoses and fly out into the fire and try to contain the fire from within. Like those types of improvements through the air, I think, will help. I think in software, it's a little bit of what you said. It's predictive. It's based on the wind. I'm not sure that's like a major game changer. I think you've got to find a way to get water faster, more reliably into these fires. And it feels like drones over time, especially as they can carry more and more weight, will be, you know, a reasonable kind of creative way to help there.

1:13:18What are your current thinking around facial recognition? Obviously, image generation or generative AI is getting so much better. But there's different parties. How are police feeling about it? How are different communities feel about it? Does it differ from township and city to city? How are lawmakers thinking about the tradeoffs there? It seems like one of those conversations that's like forever ongoing. And maybe that's the best process in a democracy. But how are you thinking about it? Yeah, I think you characterize that well. You know, the United States is one of the few markets right now where facial recognition is not used in policing.

1:13:55And we haven't participated in that market yet. I do think we're more interested in it now. The thing we've been waiting for is to be able to demonstrably show that the algorithms are rid of racial bias. I think that is certainly something that is worth making sure that you got that right. And ultimately, up until now, we haven't felt comfortable with the technology, but it is improving and we're seeing those improvements. And so as we start to kick the tires on what this looks like, ethical design principles, and, you know, like we say internally, helping make the right things easier and the wrong things harder, but that's going to be kind of at the center of our thinking as we as we think about facial recognition on fixed cameras on body cameras, and so forth.

1:14:44Yeah, where's the where who has ball control on that narrative? Someone in the chat was asking about this documentary, All Light Everywhere, very small box office. I hadn't heard of it until this person mentioned it. Are there other communities or nonprofits? We talk about AI all day, and there's this guy, Eliezer Yudkowsky, who's defined the AI doom scenario of super takeoff. And there's a couple of thought leaders. The Dwarkesh Patel show is talking about trade offs and AI building. Who are the key thought leaders, influencers, groups, public groups, or nonprofits that are actually defining the conversation there?

1:15:22Sure. I think a big piece of it on the policing side is major county sheriffs and major city chiefs. Those are the large organizations that, you know, that kind of paint the path forward on what the priorities are for public safety. But I think ultimately it's going to be very political. Like we need to get to a place where mayors and city counselors and all, you know, the downstream folks they serve, the community is looking at this saying, hey, there's far, far, far more good than harm here in this technology. And it's progressing, albeit slowly. But I do think we're getting closer to the point where we can say, hey, look, everybody should be interested in equipping public safety with ways that you can reliably fight crime and keep constituents safe.

1:16:12And between mayors and city councils and the police chiefs and sheriffs, I think that's the key combination of folks coming together on this one. What about on the hardware side? It feels like that piece of the business is pretty stable. But is there anything interesting happening that you can share on, you know, there's this big American dynamism movement, make stuff in America, there's a trade war, like, has anything shifted your thinking about manufacturing just hardware devices in America or for, you know, your business over the past few years? Yeah, for sure. And as a company that's sold to not only U.S.

1:16:55public safety, but the federal government and federal law enforcement for a long time, we've always manufactured in the United States. So Scottsdale, Arizona is where our headquarters is. Hopefully it will be in the future. We've got a lot of drama around that right now, but we can get past that. We'll keep building tasers and body cams in Scottsdale. And we're proud of that. We're supporters of the Buy American Act. We think it's in the best interest of the company to have all of our defense equipment made here. And so we're happy to participate in that process. How crazy valuable is an individual person in the manufacturing process?

1:17:34There's been this debate going on in Silicon Valley about process knowledge, this idea that I don't know if you've been tracking this, but Mark Zuckerberg has been paying hundreds of millions of dollars to people that know how to train just a very specific set of skills and how you train a large language model. And once they know that information, once they know how to do it, they're worth so much because they understand how to do it and no one else does. And there's been this debate about, well, could we do the same thing with semiconductors and bring some people over from Taiwan and know how to make that, make it in Arizona, where their TSMC is already set up.

1:18:06But does the same thing exist in the world of like hardware manufacturing? Is that even something that exists or is it more diffuse? It exists to some extent. I think, you know, for us, all of our cartridges, the things that go in the tasers that have the darts in them that fire out, those are all made by robots. They're all automated at this point. So, you know, we make millions of those every year. So the idea of people kind of hand winding darts and so forth, that gets expensive. And so robots are expensive, too, but they scale really well. And so ultimately, we've really made a big bet on automation for taser manufacturing.

1:18:48And we think it's the right bet. We've had automation for years and years, but we continue to invest more in it. And frankly, the people who know how to do that really well, like you said, they might not be as valuable as some of the folks on the cutting edge of LLMs right now, but they're very valuable to us. And got to make sure manufacturing automation is one of the things we continue to be really, really good at. Awesome. Well, thank you for the updates and come back on when you guys do your next. Maybe the next acquisition will hit the$1 billion mark, but always welcome in the$600 million range.

1:19:26Sorry for keeping you over time. Thanks so much for hopping on. This was great. Congrats on all your success. And looking forward to seeing you again soon. Thanks. Talk to you soon. Great to meet you, Josh. Cheers. You got to look up the Axon market cap stock chart. It's beautiful. It's a thing of beauty. Up 128 ,000 % for all time. IPO'd, according to Google, in 2001. Wow, I had no idea. It's a$55 billion company now. Yeah. Yeah, it's really big. Well, back in the startup world, Deesh Jain is announcing Mosaic, an agentic video editor. I definitely want to give this a try. He says, in a world trending towards AI slop, create something real.

1:20:12There's no wait list. There's a public beta. We've got to pull up the video. Let's pull up this video and see. Is it slop or not slop? How are we feeling? Comment Mosaic. You can get some credits. Let's watch this launch video. They didn't bring us here to change the past. The Mosaic. The Mosaic. The Mosaic. The Mosaic.

1:20:37The real test, was this built in Mosaic or was this After Effects or Premiere? I can see this being pretty good. Yeah. So node-based workflows are really popular like this where you wire things together because then you can repeat the process very quickly by just dropping in a new base clip. So if you say, I want to use AI to remove the background, add subtitles, we have a workflow for this that we've defined with clips in code, but oftentimes it helps to just be able to have a node-based workflow that you can just wire up and understand where each piece goes to the next, overlay the text. DaVinci Resolve is doing this, and a lot of other, like the next generation of Blender and Houdini have all moved to node-based workflows.

1:21:27Cinema 4D recently moved to a node-based workflow. Well, I liked it. I thought it was a good video focused on the actual product, what you could do with it. It shows you how the UI works. I was worried because the founder said, in the era of AI slop, and then it looked like it was just going to be a bunch of clips. No, no, no. This is very clearly stolen footage from Interstellar. I doubt that they licensed it. But that's fine for one second. Yeah, I think isn't it legal to use it for like three seconds? Yes, it would be transformative. It would be fair use. Yeah. Probably. I wouldn't, you know, you've got to talk to a lawyer if you want to get it.

1:21:59Didi Doss is sharing some news from earlier. A lot of people have already seen it. Probably OpenAI wrapped a$6.6 billion share sale at$500 billion. This wasn't primary capital. This was employees selling into it. the sale fell short of the 10.3 billion that was authorized. But does that mean it was oversubscribed? Does that mean that 10 billion of demand came in? They went to the employees and said, you can sell up to 10 billion. The employees held. Is that what happened? I want to dig into it. OK. Yeah. So it says with the insiders seeing this as a sign of employee confidence and continued investor demand.

1:22:39I was hearing that people were getting cut down. Yeah. That could be a spin by being like, employees don't want to sell. But I think a lot of employees at$500 billion are probably happy to convert a meaningful amount into liquidity. They're smart. They're running the comps. It's life-changing money. They can see, like, you know, I'm sure you can still be very bullish on the business and want to sell even half of your position at$500 billion. you know, many people weren't underwriting that when they joined the company. So it's eight and a half million per employee on average, apparently. And so DD says, thanks, ChatGPT, for absolutely destroying the SF real estate market.

1:23:28So even after taxes, these employees are all going to be sitting there being like, it's time to hit market buy on Zillow. Will they be buying in San Francisco? They might be renting in San Francisco and buying in Incline Village, getting those Nevada taxes going. I don't know. They're in office. They might be buying in Menlo Park, you know, Atherton. Yeah, Bay Area broadly. They might be, yeah. Yeah, the challenge is like, you know, hundreds of employees sold into this. And if you look at how many nice single family homes that are move-in ready are available, I'm sure it's less than the number of employees, right?

1:24:05Yep. So if everybody rushes to buy a home, it's going to really spike prices. It doesn't feel like it's happened yet necessarily, right? It feels like there was a time when SF real estate was really hot, and then it sort of sold off, I believe, during the pandemic. You could buy a two-bedroom condo in SF, you know, not in the nicest area, but for like$600K. But that was down from like really elevated prices, right? Totally, totally. And so we crashed, and now we're predicting a resurgence. And I mean, it feels like it will come back. I mean, San Francisco has been on a tear in a bunch of different ways.

1:24:45It seems like it's more like a better place to actually settle down. But still, there's always the pull of South Bay of what's up there. Yeah, it's interesting because it still looks reasonable, maybe because we're in L.A. Obviously, home prices are crazy here, too. But you can get a four-bedroom for$1.8 million. That seems reasonable. Take the money and run to the Ozarks. Did you see this story? First, let me tell you about Fall, the generative media platform for developers. The world's best generative image, video, and audio models all in one place. Develop and fine-tune models with serverless GPUs and on-demand clusters.

1:25:22There's a very cool video that we are featured in that was generated on Fall that we will show later in the show. But we only have five minutes until our next guest joins. but the article from Performative Mail says this is the biggest toughest article I've done about so-called AI psychosis. It's the story of a man who committed a horrific crime in his youth but served his time and against all odds found love and a new life one that swiftly unrattled after he started talking to a chatbot he grew obsessed with an AI chatbot then he vanished into the Ozarks what a wild story John Gantz committed a terrible crime very dark, always tough to read into these anecdotes and see like how widespread is this would this have happened without AI would would this person be deranged by something else a book did you get one-shotted by Walden the the book about going and living by a lake who knows but you can go read it on Rolling Stone if you want to dig in to that piece Trini says as highlighting or quoting one of his own posts saying And Korea's financial news is so ridiculously lit.

1:26:30It's a bunch of sad ants crying in the Samsung chart. Those are ants? Oh, that's hilarious. And Satrini says this article was posted like 24 hours before the absolute bottom for Samsung. The ants are very happy now. Let's go. The ants are so back. I have never been a Samsung shareholder. no but i guess samsung is uh i mean they did that big deal with elon for tesla ai chips i believe so uh you know they're certainly getting in on the ai boom um well econ econ kids will see this and think i should give this guy money to help me get rich and it's two of the most crazy looking individuals i don't recognize either of these and this is the guy on the left is a is a rapper what's his name oh yes he was the basis of spring breakers this is riffraff riffraff this is riffraff i don't know that he's actually done a get rich quick scheme or like no they just there are some guys out there that look like somewhat like it's a very evocative how to make money by rob frund we haven't seen a course bro just sell a course called how to make money just reasonably priced and just really breaking down, you know, here are the different ways that...

1:27:50It's Econ 101, baby. Tyler Town. Conversations with Tyler. You can sell services yourself. You can sell services that you deliver through a team. You can buy something for one price and sell it for a higher price. Yep. And that's pretty much it. Yeah. Naval kind of one-shotted that entire category with the how to get rich without getting lucky thread. He should have dropped a quarter. He didn't need to because he summed it all up in a series of like 20 pithy tweets. And you can just scroll and be like, yep, that's the algorithm. Yep. Anyway, Mounted Cashflow says, always exciting when you see a new letter get added to the end of EBITDA.

1:28:27What is he talking about? What's the latest one? I did a sale leaseback. Community Adjusted was the classic. Community Adjusted. What was that? CR? CA? EBITDA? Or EBITDA CA, I guess? EBITDA CA? I don't know. So I don't know if there's a new one that's going around. Because the AI companies aren't even talking about EBITDA yet. It's all ARR and LOIs and just top line numbers. NVIDIA, only company with profits. Yeah. So they haven't had to dip into some crazy EBITDA calculation. I don't know who is, but stay alert. You get to talk about cash flow. Yeah. And if you're diving into EBITDA numbers, head over to public.com.

1:29:08investing for those that take it seriously. Multi-asset investing, industry-leading yields, and they're trusted by millions, folks. Adam, person of Swag, says you can just do things. Option on the left, quietly announced a$200 million Series A in a tweet saying back to work. And the second option, get blackout drunk at Cheesecake after closing 120K pre-seed. Seems a little specific there, Adam. They think those are both great options. One more post from Buko Capital Bloke. Most people think investing makes you rich, but that's wrong. Until you're making at least$500 ,000 a year, the best ROI is growing your paycheck.

1:29:46Get the cash flowing first. Totally agree. We had this conversation with the team. No matter how excited you are about investing, when you're young, focus on developing the skill set that allows you to be more valuable to your market. So without further ado, I think we should bring in our next guest, a man that should need no introduction. Pat Gelsinger. He's in the Restream waiting room. We will bring Pat into the TVP and Ultradome. Welcome to the show, Pat. Great to meet you. So good to be able to join. Thank you. Thank you so much. I'm so excited. I would love a little bit to catch everyone up on what you're doing today.

1:30:31take us through the current project, the current business, and what you've been focusing on over the last few years? Yeah, thanks, John. Thanks, Jordy. So since Intel, I've been focusing, you know, I've been wearing two hats. One is the deep tech investing hat with playgrounds. So the hard stuff, you know, quantum computer, superconducting, next generation light sources, new materials, you know, those types of things. And then my other hat is being the head of technology for Glue, a faith tech company. I've lived my life at the intersection of faith and technology. And Glue is building the platform for the faith and flourishing ecosystem, you know, from running IT all the way up through the latest and greatest trained models for AI services, for the church and the faith ecosystem.

1:31:27Yeah, I'm fascinated by Glue. We've talked to the founder of Holo on the show, and it feels like an industry that is super ready to adopt technology, and yet there just aren't that many founders that are pursuing it. Would love to talk more about some of the findings that you put out when you investigated the foundation models. How did you process that information? What was the methodology for evaluating these models? And then I'm sure we can dig into more about the consequences of those findings. Yeah. You know, and maybe the first point is, you know, I've been driving benchmarks for 40 years.

1:32:06Yeah. You know, my name, you know, right. In fact, some of the benchmarks that are still used today have my code in them. Yeah. It's sort of like a sort of embarrassing way. It's amazing. Yeah, you should have moved on by now. But anyway, some of my code is still there. So I've been deeply associated with, okay, if you can't measure it, you can't manage it. So, you know, this idea of measuring AI models and, you know, people are working on this today. But, you know, we're also seeing that they're just measuring performance or cost per first, you know, time to first token, cost per token, right?

1:32:43You know, total token throughput. Those are great metrics, but it doesn't measure, is it good, right? And to me, the absence of bad does not demonstrate the presence of good. So what we did, right, is the second point is, there's this body of work that was fairly recently released by Harvard, Baylor, and Gallup measuring human flourishing. A five-year Lilly study that across 22 nations, across 50-plus cultural groups, what is human flourishing? So now we can answer fairly definitively across multiple dimensions, across relationships, character development, finances, spirituality, and faith. Is it good?

1:33:28So now we have a solid view for that. And then the final piece is, okay, let's create benchmarks for AI systems using that foundational research. And now we have a corpus of qualitative and quantitative results to measure good. So if you say, which is the better model for human flourishing, OpenAI, Gemini, Anthropic, Claude, I can give you an answer based on a solid corpus of data with the most rigorous of benchmarking experiences and numerical analysis sitting behind it. And we believe and our objective is the result of that is we will make models better because they can start measuring not just first token time, but did I give a good answer that's aligned with human values?

1:34:17How do you think about that benchmark of human flourishing? When you go through your life, are you thinking about your finances, character, happiness, relationships, meaning, faith, health? is are you consciously checking in with yourself or is this something that's more reflective on your life where it all kind of rolls up into happiness or well-being and then when you investigate your life you realize that those are the things that you've done how intentional have you been I guess yeah you know I'd say it's sort of in two different uh you know dimensions there I mean hey I don't go benchmarking myself all the time But, you know, that said, you know, every time a major new model comes out, I want to ask the question, is it better?

1:35:05Yeah. And on these dimensions, so, you know, we'll be producing these benchmarks on a periodic basis every couple of weeks. You know, we'll be updating those benchmarks to say, okay, are we better? You know, which model is better? Is DeepSeek better than OpenAI, than OSS, and so on? I want that rigor to be in place that everybody is, you know, okay, you know, are we improving in this area? Because you don't fix these things overnight. You know, it's a long trajectory of, you know, evolution and development of the technologies. You know, secondly, you know, and then the second side is, okay, you know, you'll hear disastrous situations, you know, where we have kids committing suicide.

1:35:52You know, their best friend has become the chat bot. Wow. When those things come up, would our benchmarks be detecting those? Can we, you know, and then do we have to add more and make them more rigorous that those kind of things can now be avoided, you know, in a constructed way, you know, that we really are happy that we are making technology better or the language I like to use, you know, technology as a force for good. technology itself is neutral are we going to bend that arc toward good how receptive have the labs been to to the benchmark you know i'll say it's early uh at this point and you know so you know we're interacting with all the names that you would like um and i'll say you know they're getting better you know their scores have improved somewhat you know so i do think we're having some influence uh with them but it's still early and you know as i would like to you know also say, I don't think the benchmarks are rigorous enough yet.

1:36:52You know, we got to, you know, we have sort of, you know, an early version of them out there. These are good, you know, 1230 questions or so are part of them as well. But I expect that becomes a bigger corpus, right, of questions. You know, also, we got to go deeper. You know, for the most part, these are single shot, you know, questions. We got to get into multi-turn conversations. We have to, you know, have more of a mixture of experts, you know, that you're testing different experts. Also, how do we test the safeguards, right? You know, we're now at the sixth turn of a conversation. You know, this individual was clearly suicidal.

1:37:28You know, how do we go handle that? Yeah, I think a lot of the safety concerns that at least we have is when people are, you know, many, many, many, many prompts deep, right? In a specific conversation, it could be thousands, right? depths to which that personally I've never gone. I don't know how crazy it gets that far, but certainly the labs need to be thinking about all those extreme edge cases. Yeah. So I think we have more work to do, you know, and I'll say multi-turn conversations and how we build more of that robustness into the benchmarks. But, you know, what we have today, and you can go to the Glue website, FAI, right, you know, and see what we have today.

1:38:13You know, this is a good start. But, you know, I do think in the speed of evolution of the AI technologies, we have a lot more work to do. And I'm sort of excited now as we get some of that momentum underway, you know, really start crawling into, you know, just like you said, more of the multi-turn conversations. And we can be pretty aggressive in the questioning sets for multi-turn to drive some of those extreme behaviors. You know, because, you know, the first few questions is mostly driven by prompts, right? you know, as you get deeper into, it's much more reflecting what's the underlying model weights, you know, themselves.

1:38:49So all of that, we have more work to do, but I'm excited to have this first version out there and we're starting to get some impact and good results. Yeah. There also seems to be some sort of unresolved question around alignment by default. How much do the models just reflect you? If you show up with a lot of negative energy, they can kind of become negative and it feels like it's the self-reinforcing spiral. If you come to it just asking interesting questions about the world and wanting to understand how math works, you're going to get a tutor if you come to it with something bad. So a lot to sort out there.

1:39:24I have a question. One of my favorite quotes from you is from this talk you gave where you sort of lightly accused Silicon Valley to be a group of miserly pagans. It's a great quote. I think it's a very apt analysis. And when I look at the performance scorecard on glue.com slash flourishing hub research, I noticed that the models seem to be doing very well at finances and very poor at faith. And I'm wondering if that's a reflection of the humans that train the model or the data set that's going into the model or both or how intractable is that problem? Yeah, you know, and I think that's great because, you know, I mean, where's a lot of the training data coming from?

1:40:11Yeah. Right. You know, associated with that, you know, and I view it as, hey, you put bad stuff in, you're going to get bad stuff out. You know, you put good stuff in, you're going to get good stuff out, you know, for it. And, you know, I mean, we're doing some work, you know, we glue, you know, we'll have our own values aligned models, right? And part of the reason we're going to do our own foundational training, you know, for those models is specifically, I'm not going to put the bad stuff in. I don't have to worry about it ever coming out because it was never in, you know, we can never probabilistically producing those things.

1:40:47So, you know, but, you know, getting more specifically to your question, I think a lot of it does have to do with the implications, of those training sets in the first place. You've seen lots of conversations about the challenges of we don't have enough training data. We don't have good training data. The quality of synthesized data versus raw data associated with it. So I do think there's a valid problem. You know, and, you know, I'm always a bit optimistic on the individuals that their motives are good for it. You know, but we've clearly seen in the social networks, you know, the algorithms were bad.

1:41:35Right. You know, I mean, it leads to more degrange behavior. Right. You know, it's only about dwell time on sites. You know, and I think those same motivations would, you know, naturally drive the AI models if there wasn't further accountability. And that's what leads us to saying we have to have better benchmarks that are rigorous and values based that get the answers we want. Well, yeah, even with with human driven social media and and how it can take people down these extreme rabbit holes, that they're not as worrisome as LLMs because LLMs can be totally private. They can go to these kind of dark places, and it's just one human interacting with the model.

1:42:21Whereas social media, at least if somebody's on some crazy forum, there is a point at which they can say something that goes too far. People can say, hey, I think you should go out and touch grass, right? And I haven't seen a model tell somebody to touch grass yet. Maybe that's built in somewhere. Somewhere. Did you did you always predict, you know, feels over the last few years, Silicon Valley has a massively renewed interest in faith and religion. How how much did you anticipate that? Clearly, you know, you never cared what the industry thought. You had your own faith. But is that something that you predicted?

1:43:02Did it come faster or sooner? Yeah, maybe three different dimensions, you know, there, you know, I mean, one is there is a call it a post COVID and a post success renewal, right, where, you know, this is very endemic of Silicon Valley, but you see it in lots of other, you know, communities, New York, Austin as well. you know, people presume success. And now they're asking deeper questions like, is it significant? So, you know, there is this national, right, you know, shift in what's important. Some of that might have been driven and some suggest it was driven by COVID isolation. You know, some of it is driven by the success phenomena, you know, that we're in, you know, but it isn't just Silicon Valley.

1:43:54You know, there's a number of statistics, you know, Those that believe in a faith view of Jesus Christ, the church engagement or spiritual engagement, we're seeing very much 20 to 35-year-olds is going up in very meaningful ways, four data points in a row of rising engagement or spiritual value engagement. So it's a national phenomenon at this point. Clearly in Silicon Valley, we've seen a greater willingness to talk about faith. I started an organization about 12 years ago called Transforming the Bay with Christ, one of my other hobbies. And that organization now is over 800 churches strong. When I talk to people, they didn't believe we had eight churches in the Bay Area.

1:44:46I have over 800 participating in transforming the Bay. And I'll just say there is a renewal, a connectivity associated with that. You've seen other things recently, some news and commentary about Act 17. Yeah. Trey and Michelle Stevens and, you know, Peter Thiel and Gary Tan, you know, friends of mine that all of a sudden, you know, I mean, we're hosting these events. They're sold out events, right? You know, where hundreds of people are showing up, you know, asking life questions. You know, some of it's, hey, I want to come and hear Pat speak. I want to come and hear Peter Thiel speak. but some of it is they want to have life questions from someone they respect.

1:45:37So I'll just say, you know, there is this renewal going on, you know, and personally, I've been at it so long, people often say, well, do you feel more comfortable? Well, you know, I felt comfortably uncomfortable 30 years ago to speak about my faith in the Bay Area, you know, 30 years later, well, I've been doing it so long, everybody expects me to do it. So it's not as uncomfortable, You know, but in many regards, you know, it's like, it's who I am, right? And if you have a different faith or a different worldview, you know, everybody should be comfortable talking about that. And I'd say from my faith perspective, it's, you know, like I spoke to a Baha 'i woman recently.

1:46:17I don't know anything about Baha 'i. Tell me about Baha 'i, right? And the more I engage you where your worldview is, the more freedom I have to talk about my Christian worldview and why I think that's good, powerful and meaningful as well. What do you make of it feels like an easy prediction to make that there will be religions built around AI feels like they're already emerging. if you go into the Reddit forum on ChatGPT, you have people that, you know, worship 4.0. It feels scary. Even in technology circles, people kind of joke, oh, we're building AI God or God in a box. It's going to be so powerful.

1:47:02It's super intelligence. It'll be above humans in some way. And it's a little bit tongue-in-cheek with some people, but some people seem to believe it. And I think there's a long history of Silicon Valley and even parts of the Bay Area trying to recreate religion from first principles. I have, you know, my family has been in, you know, Palo Alto in some way or another since the early 1900s. And I've heard stories of like cults emerging around Stanford in the 60s where people were basically creating a club that looked like a church. They would meet like a church, but ultimately were just basically trying to create new religion.

1:47:50And I think these, yeah, these conversations are uncomfortable, but they're important because I think it's inevitable that they're going to pop up. And it feels like, you know, potentially can go to a very dark place. Yeah. And I'd say, you know, maybe three different comments there. One is, you know, technology is neutral. You can use it for good and bad. Right. AI, most powerful technology that we've created yet, in no small part because it's built on the shoulders of all the other technologies, connectivity, cloud, et cetera, so it can grow and expand more rapidly. But our job is to make it good.

1:48:28Can it get used for cults and other things? Of course. Just like everything. What was the early driving use case of the internet? I think the number one websites early on were pornography. Not what we intended, but gambling and pornography. It's like, oh, man, you know, man, what have you done? Right. So I have no doubt, no hesitation that there will be, you know, these cultish experiences that emerge. Right. But again, our job is make technology a force for good. Yeah. And where and how do we build safeguards and other into it? Second general comment is, you know, people talk about super intelligence and those, you know, and some of it is, you know, it's like, man, you know, the calculator is a super intelligence.

1:49:19It does math better than I do. And, you know, my Excel spreadsheet, man, I ain't giving that up. And I don't want my accountant to give it up. Yeah. Right. And so, and, you know, we think about LLNs and the futures, man, they're going to become indispensable, right? You know, because it is like the real time contextually relevant encyclopedia of my life. Right. You know, it's got a better memory, better knowledge, better connectivity. I mean, we're going to use AI to conquer language for the first time in humanity's history. You know, I'm going to be able to teach every kid in their native language contextually relevant using the power of AI.

1:50:05And because of that, you know, almost all the people that live in poverty live in the fringe languages that are not conquered. Wow. You know, how exciting. You know, I mean, the extraordinary opportunities, you know, this is going to give us to truly improve the life of the planet. But, you know, ultimately. It's been interesting. I've been debating with John how bad would it be if I suddenly didn't have access to LLMs. And we've gone back and forth on this. I personally would much rather live without LLMs than a mobile device or the Internet, right? I think some of these enabling technologies that we have that make LLMs valuable and useful and widely available feel today more foundationally important, but that is coming from a viewpoint where most of the internet is English, most of the media that I want to watch is English, and so the point you made about being from somewhere in the world that English isn't your native language, being able to educate yourself and watch any content, things like that are pretty exciting.

1:51:21um where do you think continuing and going back to you the the core of your question though you know will there be ai gods right god designed us as humans to be in relationship and any technology that's driving us apart you know three teenagers sitting on the couch texting each other right how terrible talk to each other right god designed us to be relational right uh individuals and you know foundation of religion, spirituality, you know, isn't just the self, it's the community, right, that you're part of. So, you know, I fundamentally, you know, things that take us apart, you know, I think, okay, we have to build safeguards to have them be tools bringing us together.

1:52:03You know, I do not want my AI doing suicide prevention counseling. I want a real human doing those things. You know, I want a real human interacting with kids and teaching and learning. You know, I want AI agents that are helping the teacher do better education, right? You know, because, you know, of the modalities, the training and so on. But ultimately, these are very, you know, powerful, right? Human experiences that we need to keep as human experiences. How have you been processing the dialogue around the Antichrist? You mentioned Acts 17, Acts 17s and Peter Thiel. It's something that's really sparked a huge discourse in Silicon Valley.

1:52:50I think a lot of people weren't even thinking about Christianity as somewhat unique in the idea of the Antichrist. But how have you processed it through your life? And then how are you thinking about that concept today? Yeah, you know, I do think there's, you know, there was, you know, when I was in my, you know, whatever, 20s or 30s, there was a series called Left Behind. It was like, oh, you know, and if you go back and read that, you know, and the late great planet Earth, you know, there's sort of been this episodic flow of end times discussions and discussions on the Antichrist and what they would be.

1:53:29So, you know, this topic has, you know, only persisted for about 2 ,000 years. You know, it just sort of goes away. It's Lindy. It's Lindy. Yes. It's been around forever. Yeah, yeah. So, you know, hey, having another cycle of that, great, because it causes people to ask deep questions. Yeah. Right? You know, to me, that is a good side effect to it. Now, from a biblical scholarship perspective, you know, Antichrist is mentioned one time in the Bible and not contextually in Revelation. Right? It's like, okay, this is a thin discussion, right? If you look at it theologically that way, most of the revelation and apocryphical conversations in the Bible are actually much simpler.

1:54:21People of those days were looking at, they were seeing the Antichrist, and his name was Caesar, in that sense. And the Bible was written to be, I'll say, eternal, but current at the same time. So I think a lot of this, it's this episodic flow of excitement on the topic. But I think a theological study of it would say, calm down a little bit. We are living in the end days, meaning that there isn't another expression of Jesus Christ coming until the end of time, as seen through scripture. And because of that, hey, if this causes people to be more interested in religion, yes. But at the end of the day, let's make sure we have good theology behind the conversation as well.

1:55:11What about millenarian thinking generally, apocalyptic thinking generally? It feels like maybe I'm out of touch with what the vibe was in the semiconductor industry when you were active in it. But it feels like the semiconductor companies have not historically said, if we don't build this, the world will end. But we've seen a rise of entrepreneurs who have been talking about apocalyptic consequences to either building or not building what they're working on. And it feels like it's more in the zeitgeist. It's kind of the final conversation you can have about the impact of a technology. And so far, I mean, it's not just the AI folks.

1:55:49Even Elon Musk talks about the consequences of not becoming multi-planetary, being apocalyptic potentially. And so we have to explore the stars, which I completely agree with. I love space exploration. And so I'm wondering about that as a rhetorical tool in entrepreneurship. Is that something that you've noticed is on the uptick or has it always been this way? Well, again, I think there's an episodic nature to it. You know, when, you know, go read some of the press when Sputnik flew through the sky. Yeah. The Russians hear everything, right? They can read my mind. I just saw it in the sky last night, right?

1:56:32You know, so my father, you know, talked to me about when he saw Sputnik in the night sky, right? You know, so, right, you know, and so I do think there's somewhat of episodic nature. And when you hit these huge inflection points, right, like AI, that is just exploding in capacity and capability, I think, okay, you know, we're in the next episodic discussion, right, as a result. But I think if you look over history, we've seen that go through over time. In the first days of the internet, my cell phone is going to turn my brain to Jell-O and all of these other kind of things. I just don't get too excited.

1:57:17Oh, we might have a technical issue. Let's give just a second. Hopefully we can get back. Pat down. the deep state, took down the Zoom. It was getting too real. It was a fantastic interview. We were enjoying that. Hopefully we can bring back Pat Gelsinger. I didn't get to ask him about AI CapEx. We'll work on getting him back. We'll work on bringing him back in the meantime. Let me tell you about Turbo Puffer. Search every byte, serverless vector, and full-text search built from first principles on object storage. Fast, 10x cheaper, and extremely scalable. Head over to Turbo Puffer. And we have Pat Gelsinger back.

1:57:55He's back. sorry about that. AGI is here, but the internet still doesn't work. I always get a kick out of this when the cell network, uh, here, let me close this as well. Yeah. Yeah. We are selling that work or the internet, uh, drops the Silicon Valley. It's like, man, what's going on? What's going on? We should get this right. I don't know where exactly where we got cut off, but I, wanted to ask you about. There's been so many insane headlines this year around AI, AI CapEx, AI talent wars, you know, rewinding in your career in the 90s, early 2000s, like what, what parallels are you personally drawing?

1:58:44Yeah, you know, I do think, let me give two different answers to that first. Because, you know, I mean, people are talking about these 1, 5, 10 gigawatt data centers. Every time somebody says gigawatt, the image I want in your mind is a nuclear reactor. Because one nuclear reactor is about a gigawatt of power capacity. How many nuclear reactors has the U.S. built in the last 25 years? I think it's one or three at Vodal, right? Yeah. Remember, China, I think China has 60 under construction today. And fundamentally, energy capacity, we sort of lost a decade as we were so focused on climate that we weren't building our energy capacity and renewables.

1:59:43Hey, I'm the biggest believer, but for the most part, they're not economic. right there's a lot of work going into making them economic you know some of the playground companies are working on that yeah but for the most part they weren't economic and they didn't add that much to the grid right yeah when they said you know so there's this craziness going on right you know of that capex expectation and so on you don't have the energy to do it now you know obviously we're working on dramatic improvements to make inferencing 10 or 100 times more power effective, right? Because ultimately, you know, I think the demand for inferencing capacity is nigh on infinite, right?

2:00:26To Jevons law or the gas law, you know, it really should be permeating every aspect of what we do going forward. You know, but some of the crazy predictions associated with this, you know, it's not going to be chip limited. It's not going to be land limited. It's be energy limited going forward. And I do think it's inducing a lot of investment into the energy systems, which I view as very positive, because our long-term economic growth as a nation will be energy limited. So even if we're, quote, overbuilding capacity, I view it as a super good thing, right? Because, hey, whether I need that for my electrification, whether I need it you know, for my quantum computers, whether I need it, you know, for...

2:01:14Just make my power bill cheaper. If you have more energy to go around, the price is going to fall for average Americans. That's a win. Yeah. You know, and I mean, the oil crisis. Yeah. Great. You know, it can become the electrification crisis in the future, right? So I just view that as such a good thing. Yeah. Because we have so mismanaged our nation's energy capacity going forward. Now, some of these forecasts are just nutty. It's 100 nuclear power plants next year. Who knows? Yeah, I mean, we did have an IPO today, Fermi, that is planning to make a nuclear reactor by 2038 or something. They raise this money to try to bring it online.

2:01:59So I was poking a little bit of fun at that because the company is nine months old. They're valued at$17 billion, but maybe it will be net good if we can bring a new nuclear plan or two online. And, you know, by the way, I just became the general partner lead on an investment that we're doing in the nuclear space and playground. So I'm learning a lot about this. And a lot of the small nuclear reactors, they're not economic. You can't connect them to the grid. You can't scale them. the regulatory thing. So I do think it's a very fundamental problem for the nation. And one, hey, I'm now diving into that problem as well.

2:02:43So we need to bring on many gigawatts of additional capacity for the future of our nation. Now, some of the other projections there that people point to, I think they're way over their skis, right? Not everybody is going to add 10 gigawatts of additional capacity. And I am excited that, you know, like one of our companies, Snowcap, you know, we're out to make AI 100 times more power efficient than it is today. Not 10%, not 10x, 100x. That's great. Right? You know, as we move to superconducting. So instead of that gigawatt, you know, I'm going to have 100 megawatts of cryogenic capacity that produces 10 times more inferencing.

2:03:30Okay, that's industry reshaping. You know, and those are the kind of things that are truly going to, you know, say, do a better job of the energy capacity we have, and, right, you know, creating more ultimate capacity for the future. And what about, you know, some of the vendor financing going on, some of the demand guarantees that people have been making? Does that, is that immediately worrisome to you because of some of the the negative events that that came after things like that in the dot-com era or do you think it's yeah we've kind of heard both sides part of the cycle yeah we've seen this before you know look at all the optical companies you know in the early days of the internet right well you know everything is up and to the right you know for uh you know exponential growth for unlimited periods of time.

2:04:21Okay. I mean, it was a stunning 10 years, but it didn't extrapolate to 30 years. And I see most of the AI, I think, I see fundamentally no change for the next two, three, four years. But by the end of the decade, some of these transformational technologies will be at scale. So I do see a real shift in them before the end of the decade, particularly on inferencing costs, inferencing performance and power consumption for inferencing, which is sort of like the big one for a broad deployment of AI. How do you think about, I mean, there's a lot of founders in our audience who are, you know, it's raining right now and they're happy and everything's good.

2:05:10But you've been through so many market cycles. Is there a story or advice that you give to entrepreneurs or founders who are going through a reset and going through a bear market? How do you think about getting through those hard times? Well, you know, so they're going to come, right? Right now, you know, as a CEO, right? Your job is the high is never as high and the low is never as low, right? You know, your job is to sort of, you know, cut the tops off of the crazy highs and manage through the crazy lows. That's your job. And if you're not ready to do that, if you're the super enthusiastic champion that everything's up and to the right for the next two, three decades, you shouldn't be in the CEO's job.

2:06:00That's called a cheerleader, not a CEO. And we have way too many companies that are led by cheerleaders as opposed to CEOs. Right. And we can go back over history and identify a number of those. Also, you know, like I say, I think the next couple of years, I think, are going to be just fine. Yeah. But, you know, as we get to the end of the decade, OK, things are not going to be just fine. You know, there's going to be fundamental shifts in the economics and the capacity. And a CEO's job is to get the balance sheet in place that they can navigate through those times. You get cash when you don't need it, because when you need it, you can't get it.

2:06:39So you have to be managing thoughtfully about when those disruptions occur. So I do think, particularly a couple of years out from now, that's your job as the CEO, as the leader, as the entrepreneur. Do I have enough capacity to take a meaningfully negative time and be able to go navigate through it? What about team building, leadership? how should you be communicating with potentially thousands of employees who are looking to the CEO for leadership, not just cheerleading? Well, you know, you're, you know, the first job of the leader is to represent reality, right? You know, where it is, you know, that is the first job.

2:07:22Here's where we are. Life is great, but it's not as good as that. You know, life is bad and here's the situation. And it's not as bad of that. First job of the leader being that point of truth, that point of reality. You know, as I say, you know, the leader's job is to communicate the vision over and over and over again to the point that you are absolutely sick and tired of it, right? You know, you think there can't be a single person that hasn't heard you communicate the vision. And just about the time that you're absolutely dreadfully bored by it, it's the first time it's really getting through.

2:08:00It was just that hard. And about the time your organization knows it, usually one to two years, it takes another year or two for the customers to understand it. And if you change in less than three or four years, nobody understands it. So that constancy of vision, purpose, mission is a super important thing for the leader. preparing for the bad days, like we already touched on. There will be bad days that you have to navigate through. And then when you have success, you give it all to the organization. And when you have failure, you claim it all in a transparent, effacing way. And that's how you build loyalty and commitment from your teams.

2:08:55And being a CEO is not cut out for everybody. period, stop. You know, if you're not ready to take accountability, if you're not ready to make the hard calls, if you're not ready to hire, but also fire at the same time, if you're not ready to demand your organization to excellence, you shouldn't be a CEO. At the same time, if you're ready to do that, it is one of the most fulfilling, satisfying opportunities of a leader's career. It's fantastic. Well said. Well, very well said. Do you have time for one more question? I For you, absolutely. Thank you. I'm really enjoying this. We were talking with Brett Taylor of Sierra about kind of the SaaSpocalypse and how there's a lot of legacy enterprise software companies that are needing to react and respond and evolve as, you know, LLMs and generative AI sort of comes online.

2:09:52and he said something I wanted to get your thoughts on and maybe some examples. But he believes it's easier to change your technology stack than your business model. And he was saying in the context of it's great if you're a software company that started and is charging based on value, but if you have seat-based pricing today and your competitors are now selling, you know, not trying to get you to scale headcount, but just trying to deliver more and more value, that can be tough. I wanted to ask if there was any notable kind of moments in your career where, you know, you witness a company sort of be able to effectively evolve their business model and or on the technology side and how those two things play together in your view.

2:10:43Yeah, yeah. And, you know, first, you know, Brett, you know, just he's a world-class guy. So if you have the chance to bring Brett on or Pat on, take Brett. Why not both? But Brett is great. We took VMware through the transition from enterprise licensing to a SaaS business model. It is butt ugly hard. A business model is like a deep rut. right you know one of my favorite posters on this was you know it showed a deeply rutted indian road and the caption read right you'll pick your what carefully you'll be in it for 100 kilometers right you know and there's sort of this truth to a business model because your competitors get used to it your customers get used to it your supply chain get you you know you just get funneled into it and when you try to change your business model man it is dreadful You know, the contractual, the legal, the renegotiations, et cetera.

2:11:49The team. Yeah, team compensation. Yeah, everything is hard about it, you know, because, you know, you build every aspect of the business around, you know, the characteristics of the business model you've chosen. So, you know, Brett is right on. Changing the technology is quite a bit easier than changing the business model. Now, the master stroke is if you can keep sort of that interface to the customer and the business model the same and do a major retooling of the technology underneath it, okay, now you win. By the way, the first major success in the enterprise to SaaS conversion, my friends at Adobe, they navigated through it.

2:12:37I mean, that was their masterstroke, and many others followed in their footsteps after it, but that was hard for the transition. Now, as we go to AI, most are going to be in a SaaS-like business model going forward. That said, the user experience in an AI native application is dramatically different. right you know you know you know and if we think about it you know and i you know in very broad terms the computer has i have been adopting to the computer for the last 50 years in an ai world the computer adapts to me right you know if you think about the fundamental shift of that where now i am speaking to it on my terms it's hearing me in my way you know it's understanding my face, my recognition, my thoughts, contextualizing them in my language and understanding.

2:13:36So I do think the idea of just flipping to a SaaS AI business model versus an AI native experience that truly harnesses the full breadth of that power, I think many people, as they talk about the AI conversion of their applications, wholly underestimate what will be associated right with truly creating an ai native experience for the future everything changes yeah it's not just even business model going maybe from seat based and and fixed contracts to value or selling the work but it's even the entire user interface and the the app like what does the application look like what does it feel like does it feel like hiring and managing a team does it feel like hitting buttons yourself yeah so doing both of those things at the same time Okay, actual last question.

2:14:25Is it true or do you still have a VMware tattoo on your arm? So, no, I don't. Okay. And it was so funny because when, you know, my... But you did at one point. I did, right? It's amazing. But it was like one of those 30-day tattoos. Okay. Okay. That's great. So, you know, and I came home from that trip and my wife, you know, somebody sends the video to my wife. Yeah. right you know the tattoo artist and everything like that and she says you may not have that on your arm by the time i go on vacation with you that's amazing yeah people think tech uh tech people are hardcore today when they launch like a video or something or they put up a billboard like the the 30 day living with your brand for 30 days is a new level and we thank you for your service to the technology industry pat thank you so much for coming on the show this was fantastic thank for the work that you're doing.

2:15:22It's very important. I'm very excited. I mean, we'd love to have you back, dive into all the different portfolio companies, also what's happening on the glue side in terms of actual productization. I know we spent a lot of time in the AI world and talking about the other labs, but there's so much more that we could go into, but we'll give you back the rest of your day. Have a great day. Thank you. This was a lot of fun. Thank you so much. Talk to you soon. Cheers. Let's pull up this video of the Meta Ray-Ban display. I'll be right back. I will react to this. The Meta Ray-Ban display has a new video that we are gonna pull up in the meantime.

2:15:52Let me tell you about Profound. You've heard that you can now buy products on ChatGPT. You're gonna need to get your brand mentioned in ChatGPT, and you can reach millions of consumers who are using AI to discover new products and brands. We did this just yesterday. We found some new microphone stands. I took a picture of a microphone stand that I saw, dumped it in ChatGPT. What is this? Wound up, I didn't check out actually in the ChatGPT workflow, but we were pretty close to getting there, and you're gonna want your brand mentioned in ChatGPT with Profound. Let's watch the Meta Ray-Bans video right now.

2:16:23This is, so we've demoed this. Both Jordy and I have looked at this. This is what the heads-up display looks like. It looks better when you're actually using your human eyes instead of trying to film through it. But the navigation, the heads-up display, the COD minimap, I think they should give it much more Call of Duty aesthetics if they want it to really pop and go viral. Tyler, what's your reaction? Would you wear this? So is it like running through your phone at all? So I believe we were debating this with Simon on the show when he was here. I believe that almost all of the compute is done on the phone and it is serving up maybe like a small JSON file that it renders on the headset.

2:17:05Or maybe it's even just streaming images. The bandwidth over Bluetooth has to be limited. And then the compute on the device is also limited. So I would imagine that it doesn't have GPS. It's not doing any on-device inference. It's really doing limited just, this is the graphics that I need to show, render that graphics, and pipe it in there, but then keep that battery life going as long as possible. Yeah, because, I mean, with these, these are the Oakley ones. Yes. And these, like, when you set up, you have to connect to your phone. That's, like, the very first thing you do. Yes, yes. So these you definitely have to connect to your phone.

2:17:40They do not work without a phone. over time you would imagine that they try and bootstrap a true platform on top of this and say hey as soon as we have developer access to this i'm going to add the sound effects so it'll using the live ai feature you got you walk outside you're walking down the street the glasses are you know monitoring the situation and you're getting you're getting these kind of sound it would be electric electric uh bobby in the chat asked why don't we use lav mics well we were discuss and it turns out lav mics are complicated we're figuring it out we're gonna see some up lav mics are coming we want to be able to walk around enjoy the horse yeah the horse can we go to the horse cam do we have a horse cam today i'm putting the production team on on short notice with that one get the horse cam going i mean here's the wide let's go we got the horse over there and the gong over here we're filling out the studio we're having a lot of fun zoom in on the horse.

2:18:34It has been unboxed. Some folks in the chat were asking, what's the genesis of the horse? There's a few things. We enjoy equestrianism. We enjoy polo. This was from the early brand exploration that we did. We found that there was a bit of white space there. A lot of people in tech are equestrian. Too many people in tech media were afraid to show their appreciation. In some ways, the horse is a monument to technology journalism. Obviously, many technology journalists grew up yes you know uh with a very equestrian lifestyle of course we thought this was considering the show wouldn't be possible without the brave reporting yes from uh many technology journalists we thought why not put a horse uh also i have a buddy truman sachs he's been on the show he runs a company called cubby and uh his he's he's obsessed with horsepower horse metaphors he's obsessed with the idea of channeling the energy of a horse much like i channel the energy of a golden retriever.

2:19:31The horse is a very, it's a noble stallion. It has a lot of noble qualities that you should be emulating. And so the horse made its way onto the soundboard and now the horse lives physically in our world every day at the TBP and Ultra Dome. Anyway, let me tell you about numeral sales tax on autopilot. It's a horse for your sales tax. Spend less than five minutes per month on sales tax compliance. That's faster than a horse can run around the Kentucky Derby, I think. I don't actually know how long it takes. Some breaking news. Barry Weiss to be named editor-in-chief of CBS News. Let's go. People were predicting.

2:20:18Promotion. Trade deal. This is such a brutal deal. Well, there's another post here. Paramount will announce deal to acquire free press and bring Barry Weiss to CBS News on Monday. I feel like this deal has been announced 50 times so that when it actually gets announced. I wonder why. Are media people obsessed with media people? Turns out, yes. Yes. People love reporting on this. You could never get this much press for a$250 million acquisition of your database ERP enterprise AI company. You'd be begging for Bloomberg and TechCrunch pieces. But when you're in the media, the media loves to tell a story about media, and so you get a lot of press.

2:20:55In other news, Arvind over at Perplexity is announcing the browser, which I think was teased earlier, but he said announcement in 3.5 hours. I'd love to get an update from Tyler on what this announcement was and how it's shaping up, what the timeline's saying. Do you know what's going on in Perplexity world, or are you perplexed? I believe that the main announcement is that Comet is just free. Okay. It was originally$20 or$200 a month? Yeah. Well, there's two different plans. I think it was usage-based. And I think it was also, I mean, it was recently, it was in beta as of very recently. And I think it was released probably to just the paid plans.

2:21:33And now it's fully free. Well, you should give it a try again. See if you churn, see if you stick around. Some people love it. Some people have just kind of stuck with Chrome. I'm kind of still living in Chrome world. Although I do Chrome on desktop, Safari on iPhone, which I feel like is the worst possible combination. I should have some bleed over, but I posted a screenshot of some App Store rankings for Sora and Microsoft Teams. So is this a mobile-based browser? Can you get comment in the... Good question. Let's go to Tyler Cosgrove, our IRL Clulee. Anyway, let me tell you about Fin.ai while everyone looks that up.

2:22:11It's the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake-offs, number one ranking on G2. Yeah, I don't believe Comet is available as a mobile app, which, again, it's very hard to be a$20 billion company trying to grind to product market fit for a new product. And the browser company was working on something similar, and there's news that OpenAI will be launching something as well. I mean, even Anthropic now has an extension, which is very similar. Okay, yeah, so it bends in Claude 4.5 into your browser, basically. And is it taking, do you know if it's taking, I wonder if it's taking screenshots or looking at the HTML and JSON as it comes in, acting at a lower level?

2:22:57Yeah, I don't know exactly. I don't think it's agentic. Like, Comet, one of the main things is that it can actually, like, make actions. I don't think the Claude one is actually agentic yet. Perplexity is a fascinating story. You know, we've had fun with the founder on the show. but it'll be interesting to see how it plays out. It feels like there's a whole bunch of big deals that need to happen under the hood. Dance partners with, you know, they tried to buy TikTok and you could see partnering up with another legacy tech company, revitalizing them. We saw the browser company go over to Atlassian and there's so many different ways this could break but good luck to the team over there.

2:23:35In other news, open source Pantex Cap says, here's the thing on data centers. I laughed at all the dumb sell-side reports on data centers being canceled earlier this year. Remember those? People were saying, oh, yeah, we're not going to build data centers. Turns out that was all, maybe. Satya was pulling back. And I read a little bit from this. He went back on pulling back. There's news today in the journal that Satya said that, oh, where is it? It's somewhere in here amid a bunch of other articles we won't be reading. Microsoft CEO gives up some responsibilities. Nadella said in a note to employees that Judson Althoff has been promoted to helm the company's commercial business in essentially overseeing a large swath of the technology giant's operations.

2:24:20Nadella is saying that he needs to focus on the company's biggest artificial intelligence bets. So he's going back in and really doubling down on AI personally, and he's promoting other folks to take stuff off his plate so he can refocus on AI. So kind of a retrench into let's go big on AI. Yeah, it was, I was pretty, I got personally a little bit bearish when Satya was pulling back, right? He has more data than almost anyone on earth, right? Very smart guy. He was basically actively getting fit. They're doing rounds of layoffs. As he pulled back, a lot of other people have stepped up. Oracle has obviously seen a massive appreciation from leaning into.

2:25:08Yep, totally. And you could see Microsoft, like, filling that gap if Oracle hadn't stepped up. Totally. But what open source or PantexCAP is saying, he says, you know, I laughed at all the dumb sell-side reports on data centers being canceled earlier this year, made a ton of money going long against that nonsense and bearishness, but now we're on the other end. I don't think people understand the actual logistical hurdles in place for data centers now. First, power companies are overwhelmed and tired of all the FUD. They're putting up huge barriers to weed out all the BS. You mentioned this earlier.

2:25:42If you want 500 megawatts from Georgia Power, you now have to put up about 600 million up front. That's just such a massive number to be locked up. I'm sure people are also lending, helping people finance that. and he says second communities are pushing back more deals are getting canceled on it the water we saw the amazon data center was in tennessee yeah where was it that just got canceled uh he's saying water consumption is a real issue data centers actually help electricity prices go down but overall rates are shooting up and they're getting blamed so i want to dig into this more unpack this more because that's not this was always my anti-face anti-fast takeoff take which was even in this world where the algorithms hold the scaling is all you need the bitter lesson holds it's like at a certain point you're just moving like billions of tons of sand and refining it into silicon to make chips and like the laws of physics come into play at a certain level if you're just moving an immense amount of equipment around the world and you need more boats to move the GPUs from one place to another.

2:26:52You need more energy. You have to build a new Hoover Dam every two minutes because you're accelerating so fast. And it feels like there will be some laws of physics that will kind of act as a drag. I don't know. Tyler, what do you think? I mean, yeah, but periodic labs is kind of like the answer to that. I mean, obviously, like at some level, you always have to like, you know, conform to physics. Sure. But I think we have a long way to go where like you can actually have the LLMs improving the chips. How many days until AGI on the day tracker? Right now it's 3 ,600. 3 ,600. So that's what, 12 years or something?

2:27:24Yeah, I think. So based on today, based on this week, based on Sora 2. Yeah, it hasn't been updated since Sora. I think I need to kind of give a good think about this. Okay. Figure out where I am. What about you, Jordy? If the singularity is roughly 10 years away, does the Sora 2 news, Does the energy consumption news move your estimate out or move it forward? I think I'm moving a little bit out. I'd probably add another 100 days to the Singularity Counter personally, but feel free to fence it if you want. Yeah, it signals.

2:28:02Yeah, this is a Wilman Itis post from yesterday saying, is this the product you release if you believe you're three to four years away from superintelligence? Yeah. Well, if you're looking for super intelligence for CRM, head over to Adio. Adio is the AI native CRM that builds, scales, and grows your company to the next level. Get started for free. Also, another extremely AGI-pilled news headline, Google ads are now live in Gemini. Let's go. There we go. We love ads. Where was DeepMind on your AGI-pilled category? Ads were always on the critical path. I think this is critical path. I don't think this is bearish.

2:28:40Let's take 2 ,000 days off the singularity counter. It's coming tomorrow. Considering Gemini is the only provider which doesn't allow users to opt out of training their models on their data, which I don't think is true because we just got news about the meta team will be training ads and targeting ads based on your interactions with meta AI chatbots, which makes tons of sense. Targeting here will be off the charts as Wasteland Capital. Every data point about you, every question you've ever had sold to the highest bidder. And so if you're just chatting with Gemini or you're chatting with meta AI, you'll start seeing ads that reflect what you've been searching for in the chatbot or talking to the chatbot about.

2:29:21Makes a ton of sense. I'm sure there's going to be a bunch of weird things. It was already weird where people would say like, I talked about this product with my friend and then I saw a targeted ad. How did that happen? It was already feeling like creepily accurate, and I'm sure this will make it way creepier. But it'll be good for the business probably, right? What do you think? Bullish? I think it's pretty good. You know we're bullish ads. Bullish ads. Well, we are also bullish. Sheil, a good friend of the show. He has some big news, and we're going to bring him into the TBP on Ultradump from the Restream Waiting Room.

2:29:51Sheil, how you doing? Boom. Great. How are you guys doing? Fantastically. It is great to have you back. It's been too long. Awesome chat with Palette Gelsinger. Really went deep with him. It was a lot of fun. that's amazing yeah i mean i feel like the only like like since i was last on you guys have had like zuck yeah like a bunch of i feel like the level getting on tbpn now is a really big deal well we're happy to have you uh give us the news what what's new in your world yeah so um we just announced yesterday that we we raised a new 140 million dollar fund

2:30:33multiple time guest massive new fund congratulations one gong hit for every fund you're on fun it's crazy i thought you guys were on i i would have if i had to guess what fund you're on it would have been like at least five by by now maybe you're like you got that wise unk status or something but uh yeah just just getting started i appreciate that yeah it It feels like we're still brand new, though. I still refer to myself as a new investor, but we've been running BTV for six years now. Any change in strategy with this fund, or can you just restate the thesis for me? Yeah, so the thesis is investing in the best pre-seed and seed stage founders building fintech companies.

2:31:18We take a pretty broad view on fintech. So for us, there's a lot of stuff that you might not think about as fintech. Vertical SaaS is probably the main one. So if you look at Toast, Shopify, MindBody, those kind of companies are actually largely fintech companies. So 80 % plus of the revenue for those companies comes from financial services. So we invest in those kind of companies. We invest in some B2B marketplaces. But primarily, we're just investing in the future financial services. What's the mood on the ground with LPs? Is it easier than in past years to raise this fund? Uh, is it, is it contrarian to be focused on FinTech when everything's AI or were you able to kind of roll that into the narrative because every FinTech company is obviously leveraging AI now?

2:32:06Uh, what, what, what talking points were you running through? Yeah, it was definitely, I mean, the, the mood on FinTech is definitely not what it was when we last raised, which was 2021. Nothing could, could have been, I mean, in 2021. 200x revenue multiples for a team that had started two weeks ago and had an idea of a customer. It was absolutely crazy. We announced it yesterday, and we haven't even started deploying from the fund, but we actually raised it a little while ago. I think now things are probably a little bit easier, but it was a harder fundraise for us than the last one in 2021, for sure.

2:32:47but we'd actually, we actually are larger than we had planned for. We had planned to shrink our fund size. And the idea was last fund took us three and a half years to deploy this one. We wanted to go back to a three year cycle. So we were going to go from one 50 to one 25, but we ended up, ended up going to one 40. We wanted to have, we had some LPs that we really wanted to have involved. So overall it wasn't too bad and we're excited to deploy from it. But I think since we raised it and now there's actually, It's actually like the market is ripping. You had Chime, Klarna, eToro, GoPublic, Circle, and you have so many more coming, Wealthfront, Navon, Ethos, and OurPortfolio.

2:33:32And so I think the market is pretty hot on fintech. So actually, I was just before this talking to another fintech investor who's about to raise, and I said, now's a great time to raise. The market's awesome for fintech. what uh i mean you've been through a proper cycle what uh what what advice did you give to founders at that time what are the stories that you share about like uh buckling up and getting through rough periods rough patches as a founder entrepreneur yeah it's just like do what you can to survive and if you live another day and you're a smart team you'll figure it out and we've had that happen.

2:34:12Some of our companies basically had no growth for two years. And then all of a sudden, the last year had total inflection. And I think 22 and 23 were really hard for fintech, because a lot of these companies are selling into other fintech companies. If you're an infrastructure company, you're selling into other fintech companies. And the funding completely stopped. There were all these, you know, neobank for X that got funded in 2021, like, way too many of them. And so you had, it was just so easy to grow in 2021. And then 22 and 23, you had to grow significantly just to tread water just to stay like even.

2:34:52And then now we're seeing companies grow a lot. So it was really just stay alive, hunker down, a lot of our companies got to a point where they didn't need to raise money. And obviously, that's the best time to raise money. Now investors are throwing cash at them. How are you thinking about stablecoins? I think we've talked about them before. It's an interesting time to me because people are so bullish on stablecoins as a category. And yet it seems like the people, the companies best suited to capitalize on this opportunity are not startups. And I don't know if you feel the same way, but you see Stripe's launch of open issuance.

2:35:31you see uh which was interesting to me because we had a company on like a week and a half prior that was building the exact same product and then stripe launches it and they already have you know there's also a public company circle that like is mature yeah in that space and there's a yeah and then it feels like also interesting because even the the scaled stable coins the tether usdt usdc are now under attack from every institution yeah on earth and you know the the pie will grow but at the same time, it's going to get sliced up. So where are you thinking about the opportunities to deploy against this kind of technology at the early stage?

2:36:10Yeah, I think you're right. I think one challenge we're having right now is we're just seeing so especially, we talked about last time I was on the bridge acquisition. Since then, we've just been seeing so many companies built in every sector within stable coins. And I haven't seen that many that compelled me to say, okay, this is, you're going to beat Stripe on this. Like Stripe is executing at an amazing clip. And I haven't found, the use cases I found are specific to a geo. So like, you're solving a problem in Latin America. And I think you might be the best person for that. You might be able to get the license in that region.

2:36:54Yeah, I have an investor in Menteo, which is doing something similar to Bridge, but just for LATAM, right? And so they've been building banking relationships for years now. And so they're in a good position. But yeah, it's a weird thing for venture capitalists and angel investors to be, at least from my point of view, super bullish on the category. And it's like, it's hard to deploy against it other than just buying some Stripe secondaries. It's totally true. One thing that I, like a couple of days ago, Stripe announced that they were doing agentic payments. And obviously that was coming. But it's so hard.

2:37:32I met at least a dozen companies in the last year doing agentic payments. And I feel like as a VC, you're not supposed to say, what if Stripe does this? But it was so obvious that Stripe was going to do it. Yeah, but saying what if Stripe does this is very different than what if Google does this, right? Or what if like Morgan Stanley does this or JP Morgan or like an older company that maybe isn't in founder mode, maybe not in Silicon Valley, maybe not Sam Altman on the cap table with the company that's doing the thing. It's like, you know, this is going to happen. Anyway, we have one last question.

2:38:06It's clear that agendic payments are going to be awesome. Yeah. And it's, and like, so it's the same thing that you just said, Jordy, which is like, I believe in the category. I believe that I will be making purchases through like through my chat interface. But I don't think that there is necessarily a lot of opportunities for new startups. Yeah. Last question from the chat. They're calling you the people's mayor of San Francisco. And everyone wants to know what's the best place to get Indian food in San Francisco or New York? It's a great question. OK. All right. So New York, my favorite restaurant in the country, in the world, Indian restaurant is, my favorite high-end Indian restaurant is a place called Ambassadors Clubhouse.

2:38:48It's in London. And there's an Ambassadors Clubhouse in Gymkhana. And they're actually opening in New York next year. So that's going to be big. Lines out the door. Lines out the door. Book the flight today. And then there's a book of flight now. SEMA in New York is very good. I got to say, in San Francisco, I don't think we have excellent high-end Indian food. There's a place called Etan in Palo Alto. And then my favorite spots are Udipi Palace on Valencia Street, Colapasi, also in the Mission. And then there's a new spot called Jalebi Street in the Haight. So those would be my three go-tos in San Francisco, all kind of hole-in-the-wall places.

2:39:33But that's the best Indian food. Well, thank you so much for breaking it down and coming on the show. And excited to get a report to see you guys. I wouldn't be surprised if it's impossible to get a reservation in any of those places after this pod drops. Thank you so much. Great stuff. Great catch up with you. Great to see you. Later. We'll talk to you soon. Let me tell you about adquick.com. Out-of-home advertising made easy and measurable. Say goodbye to the headaches of out-of-home advertising. Only Adquick combines technology, out-of-home expertise, and data to enable efficiency in this ad buying across the globe.

2:40:03We have our next guest in the Restream waiting room. We will bring in Santi from Dual Entity. Dual Entry. Sorry. What's happening? How you doing? Sorry to keep you waiting. What's the latest in your world? Do we have video? Do we have sound? No. Well, we do have another advertisement. We got... Don't tempt John. GetBezil.com. Your bezel concierge is available to source you any watch on the planet. Seriously, any watch. What did you call it yesterday? AGI for your wrist or something. I don't know. It's probably on one. Out-of-home ads for your wrist. Yeah, it is out-of-home ads for your wrist. All right, it works now.

2:40:43Hey, welcome to the TBP at UltraDome. What's up? How are you doing? Thanks for having me. Sorry for keeping you waiting. We were going long with Sheil, but good to have you here. Please introduce yourself, the company. Get that gong ready. And what's the news today? Thank you. I'm Santi. I'm a co-founder of Dual Entry. We're an AI ERP and we're announcing our$90 million series. Let's go.

2:41:10There's nothing like the feeling of coming out of stealth with an AI ERP with 90 million of funding. It just doesn't. I don't think it gets better than that. It's fantastic. How long have you been working on it? What were you doing before? We've been working for about a year. It does feel good. I will say it does feel good. But it feels even better to be able to run an ERP that doesn't suck like the 1990s. For sure. And we've been working for about a year now. Under stealth, we used to run a product company before, and we suffered one of those legacy ERP migrations for over nine months. Oh, yeah.

2:41:43And, you know, as good entrepreneurs, whenever you have a problem, that means there's an opportunity to solve. I'm going to steal Jordy's question. When did you know you wanted to build an ERP? the first the first day we were out of the out of the other prior company we promised ourselves that was the day we were going to do it i'll tell you it was a very unpopular you know we had we had a ton of people saying it would back you guys for any other idea other than that one because that sounds like a very stupid one yeah so what is the yeah so why how are you how are you i mean it's the hardest system of record to rip out it's an enterprise it's a company that is built on something else out there they're maybe unhappy but they're really stuck are you better at my integrations with AI?

2:42:24Are you just better at sales? How do you actually onboard customers? Because I have to imagine that you have some serious traction to hit this series A so quickly. Yeah, that's exactly right. I mean, we understood from the very beginning that ERPs have a chronic back pain. It's sort of a pain that keeps growing with time. But if you have to think about back pain surgery, it's very risky, it's expensive, it might go wrong. And we had to fix that problem. And the back pain surgery in ERPs is the implementation process. It takes, you know, nine months. The failure rates are over 50%. It's very expensive at times, two, three times the software fee.

2:43:00So we fix that with our next day ERP migration engine. So we actually plug in to whatever system you're coming from, whether it's legacy ERP or starter cloud. And we actually have you live by the time that you're doing the demo, in most cases. Whether they like it or not. Wow. Pull the data from their cold, dead hands. I love it. It's our customer's data. Yeah, of course it is. Speaking of customers, what's the median size of a customer? Are you going mid-market to start? Are you going for the huge Fortune 100, Fortune 10? How do you see the market now, and then where will it develop? Yeah, so we're targeting the mid-market.

2:43:37We're starting with companies as small as 5 million, but we have publicly listed traded companies running on dual-engine today. They're a full set of books, not a subsidiary, not a department, just the entire company. And the most important thing for us is to give customers the certainty that this is the last year appeal they'll ever have to do. You know, you jump on, you upgrade from Starter Cloud, and this will take you all the way. Why do you guys think you're having more success getting people to trust you, switch over? Or is a lot of it helping, I imagine, agentically sort of do the migration?

2:44:13Or what's working now where, you know, some of the investors you talked to maybe a year ago were saying, I'd fund you, but doing anything else? Well, I think AI is bridging that last mile in migration, especially when it comes to the mappings that need to be done. They're very tedious and they're conventionally done by overseas teams. Then, you know, it takes weeks and it's error prone. but I think the best thing is we don't have to ask our customers for trust. We just say, go use it, demo it out. You don't have to come with us with questions and think about all the hypotheticals because you also don't know how your business is going to evolve.

2:44:49We're the only ERP in the world that we know of that can actually give you a free trial that lets you use your data and consume it. By the way, this ERP migration engine is perpetual so you can plug it in and if it takes you a month to make that decision, the data will continue to flow. You can show your CEO your reporting. I know you can really play around with it, test all the edge cases before you make a decision. And that's how we've won the trust of our customers. Interesting. How are you actually, and feel free to pass on the question if it's too much detail, but are you basically saying, like, you have an existing legacy ARP, finish out your contract, but, you know, we'll start the migration over.

2:45:26You can start building trust with us now, and then when it comes up for your contract renewal on your existing ERP, you can make the call then. Do I want to stay with the legacy, or do I have enough trust with you guys to just keep running here? That's exactly right. We send you a link, you click on it, we authorize the connection, and the data is flowing within 24 hours. And then at times people like it so much more, and they realize how much time they're saving, that starting to pay for dual entry is not even the biggest issue or the biggest part of the budget, is the fact that they're saving two or three people doing manual categorizations and the same journal entries every single month.

2:46:04And accounting is a very repetitive task by nature, but every accountant doesn't want to be blocked down in repetitive tasks. Every finance team member wants to be forward-looking and thinking, sitting down with the CEO and saying, these are the areas where we should be investing more, and these are the areas we should be cutting back, not chasing invoices or categorizing transactions and drafting the same journals over and over. So oftentimes they see that and they make the jump even before the contract elapses. Very cool. What's the go-to-market going forward? You guys have been obviously in stealth.

2:46:33You're out of stealth now. Are you going to get loud? Are you going to buy up all the billboards on the 101? What's the next move? Well, we like to get referrals. That's the best way. So far, we've gotten most of our customers through referrals from existing customers, and we hope to continue that. We've never gotten so many demo requests in an hour in the past, but we're excited to use those customers as a way to get the word out and have more people come to us. There's no reason why you need to have a dinosaur in your office today. I love it. Nice. You should skip the dinosaur or get a horse.

2:47:06We have a full-size horse here. Statues are in. Dual entry is really sounding like a stallion of the ERP market. I love it. Dual entry stallion. I like that. Congratulations. Short the dinos. Very inspirational office view right there. wonderful having you on the show today thanks so much for stopping by thank you for having me, thanks Don we'll talk to you soon let me tell you about Wander, find your happy place find your happy place book a Wander with inspiring views, hotel great amenities dreamy beds, top tier cleaning and 24-7 concierge service, it's a vacation home but better our last guest of the show is Austin from Double Zero, he's in the Restream Waiting Room let's bring him into the TBP and Ultradrome Austin, how are you doing?

2:47:47How's it going? Good. Thanks for having me on. Thanks for hopping on. Kick us off with an introduction to you and the company and the news today. We'd love to get up to speed on Double Zero. Yeah, certainly. So Double Zero is a blockchain protocol building an alternative internet for high performance distributed systems and blockchain. And so at its core, this is a physical fiber infrastructure network run by multiple independent contributors to allow systems like blockchains to go faster than the public internet. will allow them to go. What's the status quo in the industry? I feel like if I sign up for AWS, I'm going to get charged ingress and egress bills, and they're kind of abstracting the underlying infrastructure, the physical infrastructure.

2:48:33At what level are you operating? How does all of this fit together? Yeah, so this is what's called an OSI layer one, two, and three network. So this is pretty much the lowest level down in the networking stack. And so this is the physical cables, the protocols that transport over them. But fundamentally, this is exactly what you're talking about, the egress and ingress problems in cloud data centers. That's pretty much the only thing that you get billed for in the data center when you really think about it, especially the cloud data centers. And so this is a way that they generate lock-in. It is easier to stay in the Amazon ecosystem because data moving within Amazon does not get charged, whereas data leaving Amazon does.

2:49:14And this is why you have such a vendor lock-in in the cloud market today. And so if you think about the ultimate mission of decentralizing the entire AWS stack or the GCP stack and basically rebuilding these on decentralized Rails, not just for the point of decentralization, but so you have a greater choice from a consumer standpoint, the network and connectivity layer really is, in my view, the first piece of that that we need to tackle. And it's in some ways the most broken piece of it today. The internet is an incredible resource. It connects us all. It serves data in far-flung regions of the world, but it was never built for high-performance systems.

2:49:53And so Wall Street does not use the public internet. Facebook does not really use the public internet. Even all these big internet companies that we think of, they run private networks, and they run private networks because the internet is too slow to show you Instagram reels. And so why are we building what is supposed to be the alternative replacement to traditional finance on those rails? How do you, who are the suppliers that are bringing internet connectivity to the network? Do you need to do deals with companies like Akamai? I don't really know who the major players are in the space that you would be pitching to bring resources to the system.

2:50:29Yeah, so today we have 11 independent, basically fiber contributors to the network. And this ranges from the folks you'd expect, you know, large trading firms that own and operate their own private networks for high frequency trading purposes, like DRW Cumberland and, you know, Jump, to digital asset native firms like Galaxy that are, this is a new thing for them running private fiber, but it supports a lot of the other business lines that they already do, like market making and trading. And then you have data centers themselves, bare metal providers like TerraSwitch, Latitude, Servers.com, Cherry Servers, getting involved on this as well as a way to basically make their regions more attractive for this new burgeoning blockchain and AI infrastructure.

2:51:14And then you sort of have the last category, which are blockchain native groups themselves like Gito. How does the high-frequency trading example work? I remember reading Flash Boys, where they build the fiber lines between Chicago and the New York Stock Exchange so they can trade commodities faster or something. Do those just go dark outside of market hours, and then you can resell the slack capacity? Is that the idea? Or like, why would a high-frequency trading firm, if they built this pipe and they got it and they're making money off of it, like, in what world do they end up with extra capacity that they want to sell back to basically a grid that you're building?

2:51:52Yeah, so there's two things that are going on there. One is simply the technology changes very quickly. And so if you are in the business of being a high-frequency trading firm, you pay a pretty extreme premium to be on the absolute fastest path. In blockchain, the second fastest path or the fourth fastest path is actually totally fine. These are still orders of magnitude improvement over the public internet. And so sometimes they have what you'd call sort of secondary inventory that they can contribute to something like double zero. The other component of this, too, is there's not that many financial centers in the world when you think about it.

2:52:26It's a pretty tractable problem for a large trading firm with a large budget to go out and have a team that connects all these major financial centers. You look at just Solana, it's run in over 300 data centers around the world. And when you include other blockchains, that number goes up dramatically. It's too big of a problem for any one organization to solve and address. And so what do we turn to? We turn to a consortium model powered and aligned through tokens. And that is what the token is the best unit at. It can bring disparate efforts together, again, a common goal to benefit all. And it really is an innovation on the traditional corporate structure, which, of course, in itself changed the world in its own right.

2:53:06Sure. Tokens just happen to be the best way to create this type of alignment. Yeah. Your guys' token launched this morning sometime in the early hours. It's now trading at somewhere around a$6 billion fully diluted valuation. What goes into, like, what's, like, the process to get to this point from a, more from, like, a financial standpoint. Obviously, you need traction with the network and usage and a bunch of different partners. But we talked to a lot of, you know, more traditional public company CEOs, we'll often talk to them on their IPO day. And we'll talk about the different processes around the roadshows.

2:53:49But on the digital asset side, launching a network like this, what are kind of the key steps leading up to this moment? And congratulations, by the way. Thank you. Yes. One of the things that is different about a blockchain protocol than any sort of traditional structure is we don't own and operate any of the fiber. And now you can say, sure, Uber does not own and operate any of the cars. But at the end of the day, the role of the core contributors to the double zero protocol is to build the software layer with other core contributors that then allow this contribution of fiber units to it. And so a ton of the work in the early days on this project, apart from the software side of how do we actually build these things in decentralized fashions that allow for permissionless contribution of fiber, but how do we go out and convince these people who have access to fiber that they should take a quite valuable asset that has fairly high OPEX and fairly high CAPEX and contribute that to the 00 network?

2:54:43And a lot of that comes back to, you know, our contributors, for the most part, are fundamental believers in the power of this technology. We don't have today like an AT &T or a Verizon or a Lumen contributing capacity to the network because those are largely either publicly traded companies or companies that are owned by PE firms. And they're expecting a very traditional, dependable type of return from that. Crypto is not that. This is very much the Wild West. The hope, of course, is that over time we basically prove that it's worth contributing even a small slice of a global fiber network owned by one of these sub-C cable firms or these traditional telcos into the mix.

2:55:27And we've had a number of outreaches just today from more traditional players asking how they can get involved. The real thing here is all of these companies, it's the same thing that the cable companies were going through in the United States maybe 10 or 15 years ago. They're priced and they're valued and they sell effectively dumb pipes. And I don't mean that in a derogatory way. They're quite sophisticated advanced technologies, but they don't have the same ability to take a cut of what flows over them the way you see in other types of spaces, especially in software. And so the promise of going from selling something for a fixed dollar amount to a token model where validators operating on it and traders operating on it pay a percentage of their earnings into the network is a potentially disruptive business model opportunity for these traditional players.

2:56:14The same way that the cloud providers, yes, there was a technology revolution there, but it was as much a business revolution as anything else. How has the new admin been helpful to you guys, even just in terms of being generally pro-crypto? I don't know how long you've been building the foundation and the network, but I imagine you know this wouldn't have been the kind of thing you wanted to launch two three years ago for a number of reasons Yeah, I mean, I got involved in crypto in late 2017, early 2018. worked for a company called Republic, worked for a company called Bison Trails, which then got acquired by Coinbase and spent the previous four years working for the Solana Foundation.

2:56:58So I've been through the changing regulatory landscape. You know, we received a no action letter from the SEC for key components of the flow of tokens in the double zero network. Shout out Cooley. This is really important. Shout out Cooley. That was your law firm, right? Shout out Cooley, yes. Let's go. We love lawyers here. They don't get left right. I owe him a drink. Yes. There you go. I will say that the whole thing that came together here was going to the SEC and asking for relief. So this is a process where you can basically go to them and say, we would like to do this. What do you think of this?

2:57:35Do you see any problems with this under current securities law? And so we applied for relief on two specific areas. The first area was around the reward distributions to contributors. So basically the network programmatically paying out tokens proportional to the utility that a contributor brings to the network. This is not like proof of stake. This is much more similar to proof of work where if you generate 10 % of the hash power for Bitcoin, you get 10 % of the rewards. But this is really important to us because many of our potential contributors, especially as we sort of move lower down and closer to the direct fiber owners, they are not sophisticated crypto lawyers.

2:58:13They may not even be sophisticated securities lawyers. And that sort of reassurance that we can get from the SEC of, hey, this programmatic payment based on this type of model, they don't see any issue with that from a security standpoint. Yeah, makes a ton of sense. Well, absolutely massive day. Yeah, congratulations. I hope you, it's unlike, you know, public company CEOs, you know, the market closes and then you get a little breather. You're not so fortunate. but massive milestone. And as you start knocking down some of these massive partnerships, come back on and tell us about it. Thanks so much for hopping on the show.

2:58:54We'll talk to you soon. Appreciate it. He said that the internet is not a series of tubes. Are you familiar with the famous line that was said in Congress, I believe? The internet is a series of tubes. There's a music video. This is a huge sign of respect. They turned it into a meme. It's from 2006. It's one of the great sign of respect in my culture to show you a YouTube video that you might not have seen. I want to show you this video from Internet Explorer 4.0, the Internet being a series of tubes. Let's play this. The Internet is not a big truck. The Internet is not something that you just dump something on.

2:59:32The Internet is not a big truck. This was huge in 2006. The Internet is a series of tubes. This is a real clip from a testimony that happened in Washington, D.C. with a lawmaker who was trying to explain the Internet to Congress, basically. It's not a truck. It's not something you just dump something on. It's not fixed. It's a flow of tubes. and he was lambasted and made fun of for this. But it's kind of true. It's like the flow rate matters more than the fixed quantity. It's not a data center. It's a series of tubes. It's a series of tubes. Anyway, how did you sleep last night? Brutally. It's honestly been a brutal week of sleep.

3:00:22I got an 85. I got a 65. Oh, give me the sound. Give me the sound. Let's go. Yes. There you go. Yeah, they have this new feature that tracks your sleep debt. Oh, I saw this. The sleep debt is really, really nagging me these days. I've accumulated two and a half. Okay, I'm at zero. I'm at perfect sleep balance. Not in debt. No surplus. No debt. I'm doing good. It's great because I have this handicap of having a much longer drive in to work. And so it kind of, I really got to push myself. Equalizes for the twins. Earlier, yeah, it equalizes for the twins. Yeah. It was great to see. We saw Will Robbins in the chat earlier.

3:01:02Thank you to everyone in the chat today. Pumping up dual entry. We had dual entry and then double zero back to back. That is a funny name. A little bit confusing, but apparently Will did the seed of dual entry. So he's feeling pretty good with this announcement. In other news, Inversion Space announced ARK, the world's first space-based delivery vehicle. This video looks remarkable. ARK enables the on-demand delivery of cargo and effects to anywhere on Earth in under an hour and offers unparalleled hypersonic testing. Sounds very sci-fi. They have a rendered video here. We'll have to dig in and understand the actual timeline for this.

3:01:39It seems like a very ambitious project, but congrats to everyone over there at Inversion Space. Very cool. And we got to get on with London. We do. Tomorrow, unfortunately, we will not have a stream. we encourage you to touch grass watch our recap of the week maybe we'll release the recap early no show tomorrow watch the first episode we ever dropped there's a lot of lore in there enjoy that we will be off tomorrow we will be back Monday with full force I cannot wait and we hope you all have a fantastic weekend but don't start until tomorrow maybe around 5 maybe around 10 Maybe burn the midnight oil.

3:02:23But have a great weekend. We love you. We'll see you Monday. See you later. Bye.