Anthropic Drama, Meta Now Tokenminning, Fox's $22B Roku Deal | Diet TBPN

0:00John Coogan:Obviously, Mistral is in the news. Incredibly bullish for Mistral. Obviously, very unfortunate drama happening in the anthropic world. We'll go through all of that. But if the sovereign AI thesis could not get any stronger right now, this weekend really showed a lot of countries, hey, maybe we do want a national champion. Hey, maybe we do want someone that will provide us models forever. or SpaceX IPO. We have Gavin Baker joining in 30 minutes. And we're recapping UFC Freedom 250. It happened at the White House last night. Jordy, take us through your reactions. Introduce our first guest of the show.

0:39Okay, quick intro on the event overall. I am a UFC fan.

0:45John Coogan:Yes. It's one of the few sports, maybe the only sport, where I actually know the names of the people that are competing. Our guest in just a few minutes is one of those people. Are you more of a fan of the UFC or more of a fan of the government? Because a lot of people were watching just because they're fans of the government. And they said, oh, I will watch anything. I watch C-SPAN all day long. I watch anything that happens if it involves the government. This was an interesting crossover. No, more seriously, as a UFC fan and as an American, I'm excited for the UFC to do well. I'm excited for the fighters to have a platform.

1:22I was a little bit wary of this event overall. just because the aesthetics of putting on this crazy party in this moment when there is a ton to blackpill about. Interest rates, wars, all this other stuff going on. Yeah, so war raging, gas prices are high, house prices are high, rates are going up. A lot of people in America are not having a good time, and it really felt like a bread and circuses moment. Sure. But the bread and circuses, John, it worked on me. Top notch. It worked on me. Some of the best ever. It was – Why was it so good compared to a normal UFC event? Well, you didn't watch, so I guess it's hard.

2:06Was it the aesthetics or the actual card? Well, so one, the production value – one, the card was absolutely stacked. It was eight fights, no filler, wall-to-wall, really, really – fights that had a lot of – they carried a lot of weight, right? So like the main title fight, Gaethje versus Ilya Tapuria, that changed both fighters' careers. Like full stop, right? And even with Bo Nickel joining in just a few minutes, you know, Bo, that was the biggest possible stage that any athlete could be on. And especially in the UFC, at least here in America. So anyways, going into it, I thought the aesthetics were bad.

2:47I was excited to watch the fights. It turned out it was just really cool. And sure, there's still going to be people that are upset that the president and the admin is like platforming something like this. Turned out to be really fun. It was a cool night. And I think America kind of needed it.

3:06John Coogan:Yeah. A lot of people are saying that it's not unprecedented because Teddy Roosevelt held a boxing match in the White House almost 100 years ago around that time. And apparently he fought in the boxing match, which is crazy. Yeah, he was a big boxer. He was a big boxer. And so this is like a light craziness. Anyway. But anyways, yeah, the event was incredible. And I came away thinking that big parties and sporting events are potentially the most underutilized political strategy. I would actually expect the admin's overall popularity approval rating to go up based just on this event. Because there were so many iconic images.

3:52Funny enough, the most iconic image is of a Brazilian named Diego Lopez, which we had up on the screen there. Standing up on that. But anyways, really, really wild.

4:02John Coogan:So the other big topic over the UFC was the fact that Dario Amadei was not in attendance. He wasn't front row. Mark Zuckerberg was. And it sort of underscores this odd situation that Anthropic's in where, like, they just got dealt this weird hand where, like, they're doing so well. And the admin could not be more misaligned aesthetically with Anthropic. Their whole brand. Yeah, but the whole brand. They're very, very different. And I was, you know, I read the article yesterday that Anthropic staff were going to Washington, D.C. And it was funny. Some people were like, oh, this is bad. Like, if they could solve the issue easily, they could do it over the phone.

4:46Not how this works. You always go. Serious issue. Everybody gets it. Show, you know, yeah, you would obviously go. But flying to Washington, D.C. to try to solve an issue on a Sunday, there was not a worse.

4:57John Coogan:Oh, they'll be here. No, no, I know. But you can imagine you land there. You're like, okay, where is everyone? Let's meet is a big issue. Let's meet and figure this out. This is important. National security is on the line. Let's figure this out. I'm busy. And they're like, where is everyone? And if you take safety seriously, cybersecurity seriously, biosecurity seriously, export control seriously, UFC could not be less aligned with the stakes there. And so there is this big gap between the administration and Anthropoc. And I think that everyone should, like every American should care about bridging this gap.

5:34John Coogan:Like private enterprises should be able to flourish in the United States. Everyone agrees with that. And the government should be able to enact reasonable regulations to protect America's interests. And both of those need to find a way to play together. But there is just a really, really broad gap between these two organizations. And so everyone's hoping that things resolve quickly. And it seems like the right, you know, wheels are in motion. The flights have been booked or already taken, and things are moving along. But just to recap on the play-by-play, March 4th, Anthropic received a Department of War supply chain risk letter.

6:06John Coogan:That, of course, got rolled back eventually. April 7th was the Mythos preview announcement alongside Project Glasswing. June 9th was the Fable 5 launch last Monday. Mythos with guardrails around cyber, bio, and AI research. And on June 12th, just five days after the end of the week, Fable 5 gets suspended after the Commerce Department issues an export control directive. So Anthropic explained in a blog post that the U.S. government is restricting both Fable 5 and Mythos 5 from being used by any foreign national, whether inside or outside the U.S., including foreign national Anthropic employees.

6:43John Coogan:And so that's a huge compliance burden, very sudden. And that led Anthropic to completely suspend the use of those models for all users, not just foreign national employees, because they need to, at least if they want to comply with this, do all the KYC, understand how different organizations are using the model, who at those organizations has access. If something's being vended through an API and it's showing up in another product, does that product do all of the proper authorizations? And so it's a big wrench in the gears of the rollout of this model. Then the information reported that Andy Jassy at Amazon had raised concerns with the senior administration officials about jailbreaking, the risk of jailbreaking fable, and getting access to all of Anthropic.

7:31John Coogan:Anthropic countered in their blog post saying, quote, We reviewed a demonstration of this specific technique being used to identify a small number of previously known minor vulnerabilities. These vulnerabilities all appear relatively simple. And we have found that other publicly available models are able to discover them as well without requiring a bypass. So they're saying this isn't that big of a jailbreak. This isn't that big of a deal. We can move forward safely. We've taken safety seriously. But that is the debate that's going on between the admin and anthropic. So as everyone knows, the rollout of Fable 5 has been a bit rocky.

8:06John Coogan:Incredible demos, incredible benchmarks, but offset by the odd decision to silently degrade the quality of answers related to frontier AI development. Instead of just refusing the request, like cyber and bioprompts, which that was the main thing that everyone was really confused about. The actual rationale behind AI development refusal is pretty sound. Like people are upset about that if they're working on machine learning systems, recommender systems, anything that requires, you know, like instantiating an AI product, let alone if you're just, hey, I'm just doing open source AI research and I'd love to use the latest and greatest models to help me.

8:43John Coogan:Now it's not an option. But at the same time, just think about the logic. If a model doesn't let you hack a system, just have the model build you an unrestricted model that does let you hack that system. And so clearly in that scenario, it makes sense to restrict. If you want to restrict hacking or bio, you also have to restrict the tool that makes the tool that hacks the system or develops the bio weapon in theory. And so but the choice to silently degrade responses was not well received. These are important issues. And there's another timeline where AI leaders are cut from the same cloth as America's elected officials.

9:16John Coogan:but we're in a world where Anthropic has to make their case for safety in an age of RSI during a UFC fight on the White House lawn. It's a very bizarre timeline, but here we are. Most of the big tech CEOs, they have figured out how to work with the administration effectively, showing up to large dinners, photo ops, the occasional movie screening to make their case about hot topics. Many of these CEOs also have business relations with Anthropic, either on the customer side or on the investor side, and that's what's really complicated about the Amazon relationship. obviously Amazon uses uh anthropic models also is an investor in anthropic also provides compute to anthropic and so they have a very hairy complex circular relationship and so uh that clouds the discussion over whether or not is anthropic going to try and help anthropic get through this are they doing everything above board at the same time you know people were sort of putting out that like oh did did Amazon like spike the ball on this and uh at the same time if the government comes to you and asks like, hey, you're a big tech company.

10:15John Coogan:You've been using this model a lot. You're a close partner to a topic. Were you able to jailbreak it at all? And your security team just issued a report like, yeah, we actually were able to just jailbreak it a little bit. Like, you're not going to withhold that from the government. You're going to turn that over. That's different than calling and saying, hey, I really think it's dangerous. You got to put pressure on them. So there's this wide range of levels of interaction that can go both ways. You can be a lab partnered with a big tech company. That big tech company can have a really established government relations group that is actually helping you get through to the admin.

10:49John Coogan:On the flip side, you could have a big tech company that is competing with you or frustrated by your business and is actively trying to put their thumb on the scale the other way. So I'm sure we'll learn more in the future. Many of these CEOs have business relationships with Anthropics, so we'll see how all of this develops. And they're always renegotiating these contracts too, which makes things more complex. And they're competing across multiple markets. So expect the 4D chess to be on full display all summer long in Washington. Anyway, what else is going on? Meta is doing a 180, according to Amir over at The Information, trying to be the vanguard of token minimizing.

11:32John Coogan:I think the token maxing, token minimizing thing is so silly. because do you know where maxing comes from really like it comes from gamer lingo usually and adopted by looks maxing community i don't know if looks maxing community was the first one they certainly made it really they popularized like i feel like through yeah effectively through clavs clipping yeah it's that language the idea of like doing anything like oh i'm i'm computer maxing today yeah isn't it from like min maxing min maxing and that's what i'm getting at like you shouldn't be token maxing or token minning, you should be token min maxing.

12:10John Coogan:And the idea of min maxing is when you're in a video game, you want to get the most resources for the lowest cost. So if you're playing League of Legends, you're going to put just the right amount of gold into this particular item or this particular stat point in an RPG, and you're going to try and find the optimal build based on your resources. You have confined resources. And somehow it feels like Like tech and all these companies went through some sort of hallucinatory period where they lost sight of that they should always have been min-maxing because that is the goal of business at all times in all things.

12:46John Coogan:You would never say like, oh yeah, we're ad-maxing this quarter. We're going to buy as many ads as possible. Oh no, it didn't work. We spent way too much on ads. They were not effective. We need to admin, spend as little as possible on marketing. It's like, no, you always want to be spending, you always want to be getting the most return on ad spend, the highest leverage output. Yeah, there was, and again, unsubstantiated post. Yes. But somebody was saying they talked to somebody of Meta, and there was one engineer that spent$90 ,000 in one day and was quickly terminated. Oh, really? Terminated within three days.

13:20So again, could just be entirely fake news,

13:23John Coogan:but it seems somewhat informed. The crazy thing is that the lesson from that will be... This guy's like, I'm not getting fired. I'm going to use AI more than anyone else in the whole company. I'm riding loops. $90 ,000 bill. I mean, so the lesson that will be learned from that is don't spend$90 ,000 a day. But the Super Bowl is, for a marketer, the Super Bowl is spend$5 million in one day. And it works sometimes. And sometimes Super Bowl ads deliver$20 million a day. Yeah, but what do teams do when they run Super Bowl ads, right? We ran our Super Bowl ad. Yeah. We trained our own model in order to...

13:57Yeah, yeah. I'm kidding. No, but teams are going to run a Super Bowl. positive.

14:01John Coogan:And we only bought the ad in a small market. And we did it before the game. Where our audience was. And so for a very low cost, we were able to get a very high value. So I believe we got a very high return on investment. We mid-maxed the Super Bowl. Now, there were some companies that sort of just Super Bowl maxed, and they just spent a ton of money. And when you looked at the data on how they were received by audiences, it seemed like, oh, they definitely didn't get$5 million in brand value back. In fact, maybe that ad was poorly received. Some of the AI-generated ads. I got to give it up to the UFC for the level of advertising during the event yesterday.

14:39They're running full ads in the middle? No. So one, the interesting thing, with the new Paramount deal, there's a lot of ads. But one, Dana White was in a lot of the ads that were running. So Dodge was doing a TRX ad. It was Dana White driving. That's cool. There was another ad. I forget the brand. I guess it was a bad ad. But Dana White, they faked a podcast set where it was with an insurance company. And Dana was having a conversation about business insurance with the CEO of the company. Interesting. So it looks like a podcast. So I thought it was interesting they were casting Dana in all of them.

15:16Then second, the level of advertising just in the octagon was out of this world. There was so many different ways to gamble. UFC cannot do a gambling exclusivity deal with anyone, right? Because it's crypto.com. It's Polymarket. It's Bet365. Any possible way that you could want to gamble.

15:39John Coogan:Bet365. So the only day you're taking off is Leap Day. Every four years, you take one day off of gambling. That's the mission. That's kind of like the ETH. One day off every four years. And then Calci's running ads during the event. Oh, so Calci and Polymarket are duking them out? So Polymarket is in the octagon. Okay. But Calci's running a bunch of ads. Against it? Against it. And they're buying directly through Paramount? Because you streamed it on Paramount, is that correct? Yeah, I don't know. Did you have to pay for it in addition to? No, no, no. Okay, so you pay for Paramount on a monthly basis, and then you get UFC for free.

16:11John Coogan:Got it. Gambling is just min-maxing done poorly. That's true. So the news around Meta is Meta is doing a 180, trying to be the vanguard of token minimizing. Two months ago, Meta epitomized token maxing on track to spend billions a year on Claude, etc. We've seen an exponential increase in AI usage, and we are tracking to spend billions on internal use alone in 2026. The memo said at the same time, individuals and teams have limited visibility into and control over how they use AI. In 2027, we expect Meta will move towards managing AI tokens in a more structured way with bullet budgets. allocation decisions and supporting tools.

16:48John Coogan:That makes sense. You have a marketing budget. You should also have a token budget. I also saw something they have like MetaCode, which is their internal. Yeah, that makes sense. I mean, they're like, you know, catching up to the frontier with. Yeah, I mean, I can talk about this. There's a bunch of like these leaked calls where Suck is like, you know, you should imagine that MetaEmployees are going to be better than like the average open source contributor. So it's like the basically quality of coding data within Meta. It should be super good. You can train some model on that. It's the same pitch as take a frontier model, bring them in through some sort of consulting partner.

17:21John Coogan:They fine tune on your business workflow. They automate your business process. But your business process in this case, if you're meta, is generating code that makes your social networks better. Yeah, especially good because like in meta, all of the like, you know, internal business, like whatever data, it's already in like code format. You don't have to like scan in a bunch of papers. Yeah. And to, you know, like digital. I still don't know what Meta is actually building. And I think there comes a time soon that they should probably communicate that to the market. Personal super intelligence, baby.

17:56John Coogan:What's there not to understand? No, it's just, okay, what is that? What does that mean? 75 % as valuable as SpaceX, buddy. Come on. It's crazy. SpaceX, well. SpaceX is 2.3. Well, if things keep going the way they're going, we'll see even more of a divergence. No, but I think it's so unclear. You should be able to put a lot of the SpaceX bull case on Meta, right? It's like, sure, maybe Colossus was built a little bit faster, but Meta's pretty fast. I think they're wildly. I think they couldn't be more different with Meta right now. The bull case is it's potentially the greatest business in history that is not threatened by AI.

18:35Totally, totally. That actually is accelerated by AI.

18:38John Coogan:Yeah. And I don't think. Anyways. But I do think I would expect some communication from Meta around what their real strategy is over the next month or so. Because it's killing them that they just keep saying, oh, we're personal super intelligence. But wait, they're building a coding harness and they're working on coding. Are they going to sell that externally or is it going to be internal? Coding? Are they going to try to... Coding seems like it makes sense. Are they going to try to sell their model on an API and get into enterprise? The big question is, like, do they take the leap? They kind of did that with Manus.

19:16John Coogan:Yeah. But that's getting unwound. Fox is buying Roku, the streaming service, for$25 billion. It's in the Wall Street Journal. $25 or$22? $25 billion in the Wall Street Journal here. Let me refresh the page, see if they updated it. It still says$25. Weird. I'll read through it. Aarons is reporting$22 billion. Okay. But who knows? Somewhere in the north of a billion, sub$100 billion. Let's be very conservative with our estimates. Yeah, CNBC, also$22 billion. Weird that the journal is... The journal, I mean, I have inside information, given that it's a News Corp property related there, right? Anyway, let's read through the journal piece.

19:57John Coogan:Let me just give you some facts, and then you can sort of give me some takes and contextualize it with more information. So Fox Corp said it's acquiring Roku in a deal valued around$25 billion. And so the Wall Street Journal is saying around. Is 22 around? Maybe. Making a major bet on the future of ad-supported streaming. Ad-supported streaming. Obviously, Netflix pivoted to ads after saying we're not going to do ads. Turned out to be a great business. Ads are undefeated. Consumers are down with ads. They're just down with ads, especially if they're good ads. Anyway, the Fox. The deal. The deal is Fox's largest to date.

20:33John Coogan:It brings together a media company known for its live news and sports programming with the biggest provider of streaming platforms for connected TVs. It will add scale to Fox's streaming business, currently home to free ad-supporting streaming service Tubi, which the company bought for$400 million in 2020 and subscription-based Fox One and Fox Nation. And Tubi, from my understanding, has been a home run. Yes. Like, I don't remember exactly what their revenue is, but they bought it for$400. It's in the billions now. And all the metrics about actual audience size are huge. and getting to tens of millions of dollars in revenue, hundreds of millions of dollars in ad sales against a big audience like the Tubi viewership when you have the Fox machinery behind it, makes a ton of sense.

21:17John Coogan:In addition to distributing other streaming services through connected TVs and devices, Roku has its own ad-supported Roku channel. The combined company will better compete with the likes of Amazon.com and Netflix for ad dollars. Quote, bringing these two companies together will really help define the future of television in the United States and in many other markets around the world, Fox chief executive Lachlan Murdoch told investors on a call Monday, Fox will pay around$160 per share, 96 in cash, and 0.9693 Fox Class A shares. The deal is valued at around$22 billion on an enterprise basis. Fox expects to fund the cash portion of the transaction with$12 billion in new debt, as well as cash on hand.