Amazon Bets $10B on OpenAI, Ford’s Reality Check, Paramount Deal Unravels | Diet TBPN

0:01SpaceX is potentially going out, going to hoover up 30 billion of capital. They're going. They're going out at$1.5 trillion. They're talking to bankers now. They're going to hoover up all the capital. They're hoovering. The public market's going to be tapped out, right? Well, Sam Allman would like a word with Andy Jassy, and he says, I need$10 billion. And Andy says, sure, as long as you buy a bunch of tranium chips. That's basically the story. Closing out the story with the Ford F-150. Of course, this broke earlier this week. CEO Ford did a round of press interviews talking about the news, which is that Ford the historic automaker is killing the F-150 Lightning, their electric truck.

0:42Sales fell 72 % year over year. That is a 72 % decrease specifically in last month, which is post EV tax credit going away. I mean, the first question that I was sort of toying with that we've been debating is, did truck buyers ever really want to go electric? Was that ever a good idea because it always seemed like who's the last person that's gonna buy an electric car? The truck buyer, right? So one thing that I was thinking about is I feel like the cyber truck probably got truck buyers to like traditional truck buyers to go electric, but it wasn't because it was electric. It was because it looked electric.

1:23Yeah, it looks crazy. It looked wild. I completely agree with this. Yeah, there's this weird thing where like the F-150 silhouette is iconic but you sort of forgot i had yeah he has forgot i had my elf ears on ballpark how many how many ads how many billions of dollars have been spent on ads that associate trucks with like being a being a cool dude guy dude guys being dude driving through the mud and a big part of that is the engine note and a big part of that is the actual exhaust coming out of the back like roll All that advertising worked on me. I grew up in a Toyota family. We only had Toyotas growing up.

2:00We at one point had two Priuses, right? Yeah. But as soon as I was an adult and I could afford it, I bought a Ford Raptor. It was black on black on black on black. It was lifted. I just wanted the truck that was advertised to me as a kid. Yeah. Right? Yeah, yeah. There's an interesting data that Ford was sharing that they were framing as positive when the F-150 Lightning launched. But I think in retrospect might have actually been sort of a canary in the coal mine. So the first stat was that of the people that reserved the F-150 Lightning, 50 % had never owned a truck before. And then 75 % of the reservation holders had never owned a Ford before.

2:46And so Ford was celebrating this. It's like, we did it. We did it. expanding. New hero product. New hero product. It's going to bring new people into the Ford ecosystem. It's going to bring new people into the truck ecosystem. We are expanding the market. And in hindsight, what it feels like is the truck buyers didn't want it. The board buyers didn't want it. And they're the two biggest markets. And so, yes, there were a class of people that were like, oh, I would always, I've always, an electric truck, that sounds really interesting. I love the idea of a 220 volt. I'm a unique purchaser. And they're like, this is a niche product.

3:16And they They go hard for the niche product. They show up immediately, and they'll do it no matter what. And you wrote in the newsletter the first electric truck was the Rivian. Yeah. And that had only launched a few months prior. Six months earlier. Yeah. So the Rivian came out in September of 2021. That's the R1T. Ford shipped in April of 2022. That's actually very impressive to me. I was very impressed with how fast Ford was able to respond to the idea of electric trucks happening. This feels like they were like, no, we're moving in the first wave. They did successfully. A lot of that's because they built off of the F-150 platform.

3:51They were able to reuse a lot of equipment there in the supply chain. But ultimately, they didn't ship a product that delivered at the level of the R1T. I was thinking the Rivian name. Do you like the Rivian name? I think it's fine. It sticks out to me. It was also weird when I first heard it. I'm neutral on it. It was weird when it first stuck out. It sounded like something that came from like a like a brainstorming session at a pharmaceutical company You know because it's like this weird like what does the name actually mean? I guess it means river and Indian kind of portmanteau But it's really grown up as a blend of syllables from the river symbolizing adventure and connection to nature sure I always looked at a Rivian is as something like the the whole foods of cars, right?

4:35Like the the REI of cars, right? It's like people go to REI. Sure. Like the average person going into REI is not necessarily like buying gear for the most rugged adventure. Yep. Like they might be buying gear for their backyard or like going on a hike that weekend. And again, like I feel like the Rivian cars, again, I mean, we had the CEO on, but like have that range where it's like it really is just like a good daily. Yeah. But they've built it. It's super powerful. It's very capable. Ford's plan is to pivot. So they're going to be pivoting to hybrid, hybrid trucks and hybrid designs. But what's interesting is that it's one of those, it's this extra long range hybrid where you have an electric powertrain that is charged by a gas motor.

5:22And so you can get like 700 miles of range. Here's a question. Here's something that people don't like about Rivians. They don't have car play. Is that a deal breaker for you? I think it's solid. The thing that I find annoying is the fact that the cars that I've owned are all defaulting back to the actual operating system. Oh, really? Wait, what do you mean they're defaulting? So I have two Mercedes. They have like the regular Mercedes operating system. Yeah, of course. And then CarPlay is layered on top. Yeah. But I still find myself like turning on the car sometimes and it's the stock system.

5:58So I just wish there was a single operating system. So Apple's trying to do this because I've noticed this in my car. But the manufacturers are like, well, we sell the Android, and we don't want you to control us forever. Amazon is in talks to invest over$10 billion in OpenAI. Yeah, the valuation would be higher than$500 billion. The Amazon investment would help OpenAI afford some of the commitments it has made, some, to rent servers from cloud providers, including from AWS. Yeah, this is like there's some circularity, but it's not entirely. Not fully beating the circular allegations on this one.

6:33OpenAI last month announced it would spend$38 billion renting servers from AWS over the next seven years, making AWS one of at least five cloud providers OpenAI uses to develop AI. The deal also could help Amazon find a new customer for its Terrainium AI chips, which compete with the NVIDIA chips. This is kind of like a rebate. You know, it's like they said, hey, we're going to buy 40. And they said, here, take 10 back. And we'll take a piece. Honestly, the more notable news here is that Amazon and OpenAI have discussed commerce partnership opportunities. That's very interesting. OpenAI wants to turn ChatGPT into a shopping hub and has discussed earning fees for referring customers to retailers.

7:11It isn't clear whether Amazon OpenAI deal would involve any arrangement related to such features in ChatGPT or AI-powered shopping features that Amazon is developing. So I just look at this in the same way as like the Disney deal, which is like, hey, we're going to invest, but we're going to give you access to this thing. And I would expect that, I mean, you can imagine OpenAI has been working on getting referrals from basically getting a revenue stream from referring products out to Amazon for a really long time, right? They've done the Etsy deal. They're doing deals with Shopify. They have not done eBay notably, and they have not done Amazon notably.

7:45And I think there's just been some general hesitance to, again, let the fox into the henhouse, right? Because you can think about it, like the Google search experience is like, or sorry, searching for products on Amazon is extremely profitable for Amazon, right? If consumers start just going to ChatGPT to find products on Amazon, that like Amazon needs to be really careful around that because yes, they can get a referral fee or they're getting a customer, but then they Amazon or sorry, opening eye wants them to pay them for that customer. and that's a customer that didn't just go look at a bunch of ads, right?

8:24And I do not like searching for products on Amazon because the experience is I'm just trying to find, I always use the example, like paper towels, right? And it's like, it's so frustrating to search on there because I just want to buy, like, I'll spend$20 to$30 on this thing. And then it's like three pages of like$6 versions of the product that I know are going to be terrible and a bunch of ads for those things, right? And so being able to go into ChatGPT and just say like, hey, I want to buy this item from a manufacturer or a brand that has been in business for more than 30 years, like pre-e-commerce.

9:04I want a brand that has just been making this thing well for a really long time. And so I would be defaulting to the LLM and skipping Amazon entirely. Yeah, you want to fight to be the aggregator. I guarantee that although Amazon shows up on Google search results, they want people to open the app and search in the app and be the main starting point for their entire commerce journey. We've seen this with Shopify as well. Shopify, obviously, would love for the commerce journey to not start on Facebook or meta properties. Instead, start in the shop app. They're working towards that. The same thing is true of Amazon.

9:41And every aggregator is acutely aware of aggregation theory and acutely aware that they should not let someone aggregate on top of that. So Amazon is apparently projecting$60 billion of advertising revenue, which is growing way faster than the core retail business. The core retail business is probably growing at the rate of overall e-commerce penetration, whereas this is just like extremely high margin, fast growing, and they want to protect that. And probably bigger than what they could make off of a referral fee on top deeper in the stack, if they're deeper down. Well, the other side of the Amazon OpenAI deal is that the deal could also help Amazon find a new customer for its Tranium AI server chips, which compete with NVIDIA AI chips that OpenAI primarily uses today.

10:28as part of the deal being discussed, OpenAI plans to use Tranium chips, two of the people said, the cloud deal Amazon announced with OpenAI last month, only made mention of service powered by Nvidia. So the interesting thing here is, what will they be doing with those Tranium chips? Will they have a specific model that runs on Tranium? Will they set up some sort of abstraction layer that they can run any of their models on any hardware or any ASIC, basically? Like, will you see, or will it be like, okay, we still have GPT 4.0 workloads. Let's recompile 4.0 for Tranium and let it just chill there.

11:10And Tranium is our pool for 4.0. Or you know what? Tranium is going to be our workhorse for ImageGen or VideoGen. And let's do our ImageGen optimized for that particular stack. The Wall Street Journal highlighted real-time video as an interesting place where Tranium could potentially outperform. They weren't making the case, at least to the Journal, that Tranium is what you want if you're gonna do the biggest and most massive training run. That was sort of the narrative that the TPU was pitching with the latest Anthropic runs. But they did highlight you know real-time video generation. And so what I'm interested in is that is, does Tranium get abstracted to a point where it's sort of like model agnostic or is OpenAI like the the ChatGPT, the app, has a whole host of models because these models are now mixtures of models and there's model routers and there's different products, video, audio, image, you know deep research is one of those going to be on Tranium or will Tranium be a like a liquid pool of compute that cuts across the entire stack do you have any you know instinct on this or yeah I mean I think the abstraction thing is pretty hard right because you always hear about TPUs and how the TPU team and like the Gemini team are so closely integrated right like every all the model architecture is like interlinked with the with the GPU architecture yeah tpu yeah so i think it's hard to actually abstract all the way up but it's interesting i mean anthropic has been like multi-platform platform for a while now so i'm curious how they think about this stuff something that's interesting if i search on gemini for a product on amazon find me the best blank on amazon it takes me it says top recommendations on amazon and then i click the link and it takes me to a google search for that product that is a sponsored result on Amazon.

13:16So who's paying who? So Amazon is paying Google to appear in search results. AdWords. Okay. And AdWords. Yeah. And then Gemini is routing basically to AdWords to get the click through there. Yes. So there's no direct integration at all. Google has so many odd advantages. It's crazy. Like the fact that the Google bot just sees so much more of the internet feels extremely important. And yet, I just don't know if it will be enough to win in consumer in some meaningful way. Does it mean 50 % of the value of consumer? Does it mean that they can win, come from behind, defeat OpenAI, ChatGPT? It feels so important, and yet it also feels extremely hard to actually pass that message through.

14:02The Amazon investment would help OpenAI afford commitments, including from AWS. That's very funny. Liquidity is showing the gang standing around. All right, Jeff, you're up next to invest in OpenAI. LMFAO. Amazon,$10 billion investment in OpenAI in the form of AWS credits. You got Satya Nadella pointing. I couldn't find where. 2 % for Amazon, maybe less if it's at above a$500 billion valuation. So Andy Jassy's getting 1.5 % of OpenAI. Satya's sitting there with over 20. He's pretty happy. Pretty happy looking at the screen. Jared Kushner is pulling out of the Paramount bid hours after his father-in-law took aim at the Ellison Klan, apparently.

14:51The latest news in the Paramount bid for Warner Brothers, the story that just keeps on giving, is in back-to-back salvos Tuesday, the president and his family distanced themselves from Paramount's hostile bid for Warner Brothers discovery. I think we know what's going on there. It's about foghorn leghorn. It's about Tweety Bird. It's a rebuke to owner David Ellison's attempt to leverage relationships with the White House to close the$108 billion takeover effort. President Trump Tuesday afternoon said he had been treated far worse by the Ellison-owned CBS since the family closed a deal for CBS parent Paramount.

15:35Which is so interesting because I've seen a bunch of people have been riled up about Barry Weiss running CBS. The reason that you maybe would say that she's doing an effective job as a manager of that asset is because people are talking about CBS content in a way that I have not seen ever. Do you ever remember, like maybe a couple times here you'd see something and she's clipping CBS content. It's like she's doing stories that... It feels like it's working. No shade to the people that were writing CBS before, but what content was on that network? Yeah, we just don't know what they were doing before.

16:13It's like it didn't exist. And now it exists. And you can like it or you hate it, depending on your political persuasion, but you can't deny it exists now. And I always looked at this as like— It's a thing. The Ellisons were like, hey, we can get a truth engine. Yeah, I mean, there's definitely like the brand is still great. Like CBS feels like a solid news source. So I agree with that. But the distribution was so far behind that people weren't talking about what was going on there. And I would say the reason, one way to think about the value of CBS is what would it cost and how long would it take to recreate a brand like CBS?

16:49Probably cost, it would take you decades. I don't think you can buy it. Like I actually don't think, I think you could be Sam Altman and Marshall a$50 billion fundraiser round. Yeah, you can't just snap your fingers and get a TVS. And it would still take 50 years to get there. If you get$50 billion, what do you have to do? You have to go buy the legacy IP because there's only, you can't just, you can't snap your fingers and create a brand overnight. Like it just takes time. So Warner Brothers sent a letter to shareholders this morning basically saying that they're riding, they want to, the board of directors still wants to go with Netflix.

17:26They believe it's superior in a number of different ways. One thing that stood out to me is that Paramount has consistently, they said Paramount has consistently led WBD shareholders that its proposed transaction has a full backstop from the Ellison family. It does not and never has. Paramount's most recent proposal includes a$40 billion equity commitment for which there is no Ellison family commitment of any kind. Instead, they propose that you rely on an unknown and opaque revocable trust for the certainty of the crucial deal funding, despite having been told repeatedly by WBD how important a full and unconditional financing commitment from the Ellison family was.

18:04And despite their own ample resources, as well as multiple assurances from Paramount Skydance during our strategic review process that such a commitment was forthcoming, the Ellison family has chosen not to backstop the Paramount Skydance offer. and a revocable trust is no replacement for a secured commitment by a controlling stockholder. The assets and liabilities of the trust are not publicly disclosed and are subject to change. So they basically have this entity being like, yeah, we're guaranteeing it, but it's not actually them saying they could move assets out of that trust. Yeah, yeah. Got it.

18:39So strength of the offer not as strong potentially as Netflix. You know Netflix is good for it. It's a huge company. They've already signed a deal with a massive termination clause. I believe they've raised debt for this. They're ready to rock. Bird in the hand is worth not too in the bush. Yeah, the other thing is Paramount has not offered to reimburse the breakup, the termination fee. It's a$2.8 billion fee. There's also financing costs that Warner Brothers would have to take on if they don't complete the debt exchange. So, yeah, at the end of the day, what do the Ellisons do at this point? They've been doing deals, right?

19:19They've got CBS now. They've got the UFC. They're trying to build this streaming platform. Again, going back to some of the conversations that we've had, the entire strategy to date has been predicated on getting this Warner Brothers asset. Yeah, yeah. And it seems like it might not happen. But the game's not over. Announce the$1 trillion backlog. I can't believe you. Every out-of-home agent I've ever talked to has offered 50 % reductions in price when doing a large-scale campaign. Most of the inventory is actually pretty cheap if you don't focus on the most premium assets. Where haven't you seen a friend.com billboard?

20:01The 101. You haven't seen it in the iconic places. He hasn't done the Times Square buyout. He's in the subway, right? When we saw him, you always make fun of this one. There's one that's up against the wall. I saw one just on a random bus in my hometown. It's like, there's just random places, but there's so many of them. Some of the alpha and out of home in LA, is there's so much traffic that you're kind of moving slowly by some areas. And you'll just see random stuff. And so, yeah, I was kind of fighting you on this. Like, was this truly one of the greatest campaigns of the year? And hearing his extra context, it's incredible.

20:38He might have unlocked some entirely new strategy of just like the go big massive billboard campaign I wouldn't be surprised if next year is the year of the copy paste the strategy for You know a company that has a million dollars to spend on a big campaign. Let's do an interesting billboard campaign Maybe they have a million dollars in revenue, too Ideally, yes ideally ideally. Yes, I mean he clearly like it was you know, he's he's like risk on exploring testing new things, like learning. But just the core arb of a big billboard campaign paying off, I think you got to credit him. You got to check in with Avi Schiffman.

21:18Did you see his other post? He said, SF is over. Still a beautiful place to live. Hype around LLMs has subsided. It's not an interesting place to be anymore. Why go to a hackathon? It's not like GPT-4 just came out. There's nothing too interesting to discuss at a party anymore. All the big companies are too mature now. Most of what is new is just YC slop startups. If you're still in pre-seed exploring stage, it's mostly too late. The directions have been positioned in. It's just a performative scene left. There are always a cycle to these things, and this is fine. I have enjoyed 2022 to 2025. I hereby declare New York the new bastion of what matters in the near future.

21:56Could not disagree more with pretty much every single word in here. I think Avi has shown brilliance in some ways, even though many don't. But I put this up as one of the worst takes of the year. It's literally like saying in the early days of the internet or in the early days of the iPhone, like, hey, yeah, it's over. Just don't build anything. Also, you should get in. If you're bored with the hackathon, you're bored with the YC Demo Day, get into shark diving, go dive in the bay, put on the 7mm wetsuit, swim out to Alcatraz, take on a shark head to head and emerge victorious. I think that will really give you the sort of the glory.

22:42You'll be excited again. You will have survived a shark attack. That will energize you in a way that GPT 5.2 might not be energizing you. Totally. Fighting head on with a great white shark in the San Francisco Bay. That's something you can only do in the Bay Area. Or who's making friend.com for sharks, right? Like a wearable pendant that a shark could use to better navigate. Maybe they're lonely out in the high seas, right? It's cold. It's dark. Maybe, you know, in between hunts, right? They're just kind of hanging out, right? Yeah, just having a digital companion. Why reserve digital companions for just for humans, right?

23:21Like all life, all life matter. Think bigger. The other thing I was thinking, why has no one made like a telemedicine for anabolic steroids for your pets? Somebody has, right? Isn't that a real thing? I want to see a golden retriever as a mass monster. I think that's just a Rottweiler. I mean, you can make your cattle really jacked, right? That's like what SARMs are. So you could just, couldn't you just give it to your dogs? You know way too much about performance enhancing drugs. Anyway. Yeah, just saying the word SARMs is like, just say that you've been deep in bodybuilding forums, Tyler. Okay, okay.

24:00We got a Christmas present from friend of the show, Sahil Bloom. Let's open it up. It's on WCW. Also, I got a belt on today. I'm looking much more Santa. Belt it up. Okay, so this is from Sahil Bloom himself. Look at this. Look at this. New brand alert. I love this. So he said, I got sick of putting things on my skin that I'd never put on my body. So I spent 18 months creating the perfect solution. The perfect solution, Wild Roman. I can smell it. Everyone says the TBP and Hulk drum smells bad now. Smells great. This actually smells fantastic. So Wild Roman is 100 % natural skincare for men made with grass-fed tallow, cold-pressed oils, and wild battalionicles.

24:44You can order today at wildroman.com. I just want to give him a shout out. And then we were going to... So this is good stuff. You've been using this? I've been using this for about like two weeks. Wow. And I think it's working so far. Two weeks on Wild Roman and you look like that. Yeah. Wow. I mean, I think it's been, you know, it's helped with like beard growth and just skin clarity. You look fantastic. Yeah, you're glowing. You're really glowing. Truly never stop using this product. Yeah. Because I do not want you to go back. Never churn. I don't want you to go back. Never churn. I think you're a customer for life.

25:14What do you think it takes to win in this category? Sahil's obviously an influencer, an author. He has a massive newsletter. He has 1.1 million followers on X and has an audience. But something we keep coming back to is like an audience might not be enough to truly win in a category. I think he's got to go hard on Target. This feels like a good brand to introduce like Tallo to the Target audience. right this feels uh again like going going for the set a bunch of products out the gates this this screams end cap to me uh i i was talking to a friend and they have a brand that uh does over a hundred million a year only in target yeah they don't sell anywhere else yeah um and so it's just such a such a massive channel and so i think sahil can probably leverage his brand to just go really hardened to target early, but I'm sure he can at least get some initial traction DTC.

26:19The main thing that people miss with personality-led influencer brands like this is that no matter how big your audience is, you can be Kim Kardashian, and in order to build a truly big business, you get this initial boost from your audience, but the nature of any audience is that the longer that you just advertise against it, you can saturate it. It just becomes its own. Kim K can post like five times in the first week, but then eventually you have to go find new net new people that aren't necessarily getting exposure. Dave Portnoy, the founder of Barstool, says, Breaking, I am proud to announce in our continuing 20 plus year evolution, we are now partnering with Netflix for exclusive video podcasts.

27:08and the way he frames this in the video is remarkable. So let's play it. Emergency press conference time. If you haven't heard the news, I'm proud to announce that Barstool is partnered with Netflix for three of our top podcasts. That's one Netflix. Exclusive video only on Netflix starting next year. I'm talking you want to watch a video, part of my take, Netflix. Three. You want to watch a video of spit and chicklets, Netflix. I actually spit there. That's just my brain. You want to watch a video of Ryan Rosillo's show, Netflix. Netflix, Netflix, Netflix. Six, seven. News of video, audio, stay the same.

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