Big Tech turns to mining, Thinking Machines loses top executives, NYC Sauna Wars heat up | Diet TBPN

0:02Tesla is sharing that they made a ton of progress on their lithium refinery and then simultaneously, AWS did a deal with Rio Tinto to buy a bunch of copper, not that much copper, we'll get into how much, but they're sort of underwriting a new chemical process for refining copper. And it's all just sort of interesting that, you know, Marc Andreessen published the Software is Eating the World story back in 2011. And I think even the folks in tech who took that seriously were saying, oh, yeah, of course, well, that just means that - I didn't take it seriously, I took it literally. You took it literally, yeah.

0:37But the people that took it seriously were thinking, okay, well, you're going past just the first wave of the internet, the newspapers on websites, that type of stuff. And yes, we're gonna get the Ubers, we're gonna get more and more tech companies that are consumer facing or business facing. And you might see some transformation in legal services, financial services, logistics, airlines will be using apps to let you book. But we're now in the era where the tech companies are starting to vertically integrate so deep that they own the mines and they own the refineries. And it's not just that they're actually building software for the mining - it's technology eating the world.

1:20Yeah, yeah. And it's a new layer of a vertical integration that sort of just crept up on me because it wasn't an issue until the AI boom really necessitated massive, massive industrial scale build outs, new industrial policy, which admittedly can't turn on a dime. But we're now two, three years into the chat GPT boom, into the AI boom. The data center build outs are getting bigger. We're seeing bottlenecks all over the place, whether it's chip shortages or energy shortages. And so, you know, the companies like Tesla, AWS, a lot of other folks are really looking deep into the supply chain all the way into the ground, into literally eating the world.

2:01Because I see mining as sort of terraforming. I see it in some ways as literally eating the world, like you said. Amazon's buying the first new copper produced in America in over a decade. It's a very exciting project. And Tesla now has a Texas facility that can convert raw ore directly into battery-grade lithium hydroxide. It's a more efficient process. We can get into that. Tesla originally broke ground on this lithium refinery operation in May of 2023. It feels like they were sort of quiet about it, but now they're getting a lot louder. Obviously, the narrative around China controlling 90 % of rare earth extraction and rare earth elements has been in the news, and this is sort of their response.

2:44Refinery is the first spodumene to lithium hydroxide refinery in North America. We're deploying a new technology platform that is inherently much more environmentally friendly and cleaner. It's a simpler process. It's not that big of a facility. And this should be able to create enough lithium for 500 ,000 vehicles a year, EVs a year, maybe a million a year, I've heard. Now Tesla's shipping 1.65 million, so this won't be 100%, but you copy paste this two, three times and you got enough coverage for all for the entire Tesla fleet. Take it through a kiln and cooler. From there, we take it through an alkaline leach and additional purification steps.

3:26Take it into crystallization and produce battery grade lithium hydroxide. Our process is more sustainable than traditional methods and eliminates hazardous byproducts and instead produces a co-product named Analsyme used in concrete mixes. From breaking ground in 2023 to running rot through the kiln in 2024 to start a full integrated plant startup. The guy looks so tired. He's just like, yeah, it's been great working for Elon. Hi. I love it. Yeah, it's been relatively relaxed here. Yeah. at the site. You know, we sleep in the factory. In this case, it's just dirt, but sleeping in the dirt, surprisingly comfortable.

4:06This refinery really enables us to have access to the critical minerals for energy storage, for battery manufacturing, and ultimately for EV growth. And it enables us to accelerate Tesla's mission by regionalizing supply chains for battery minerals and materials, by providing jobs, by cutting emissions from the transportation network that's required for those supply chains. It really allows us to usher in energy independence for North America. Who would have thought that Texas would be the home of EV domination? I know. Narrative violation. California really dropped the ball. Tesla shipping 1.65 million.

4:40That was a little lower than the previous year. I think they were up at 1.7 million. But you get a couple of those facilities and it should be enough to cover everything that they need. There's been a whole bunch of news around rare earth minerals generally. Last year, a company called Iconic or Ionic Mineral Technologies made a large discovery of 16 different types of minerals in Utah late last year. This was in December. As we do. Yeah, yeah, yeah. It has been funny. There have been rumors about this, but they found a huge deposit of all these different minerals. Amazon's partnership with Rio Tinto is a little bit different.

5:15They're not fully vertically integrated like Tesla is, but they are partnering with Rio Tinto. Rio Tinto had been working on a new method of refinery low-grade copper deposits so basically like there's a fair amount of copper in the ground but there's a lot of dirt a lot of other stuff that you have to process out that can be very expensive but because of the data center expansion exploding the price of copper has I think nearly doubled in the past two years copper is not the main ingredient to an AI data center a token factory but it is important because the biggest data centers use tens of thousands of metric tons of copper to move electricity around so you need wires there's copper and circuit boards there's wire in the there's copper in the transformers that move electricity around and there's tons of miscellaneous electrical components all over a data center that need copper so this particular AWS Rio Tinto deal is only 1 ,400 metric tons over four years I don't even think that's enough for a single AWS data center, but it's allowing Rio Tinto to underwrite this sort of risky new process methodology that if it works and they get the price down on this new process, then they can apply that to tons more copper reserves that's locked up in messy ore that otherwise would be uneconomical to refine.

6:3870 % of the global supply of copper is currently locked away in ore that's not economical to refine into actual copper right now. So if this new process technology works, you effectively triple the amount of copper, you triple the supply, and so price should fall. It's doubled. You triple the supply, maybe price comes down. Good news for anyone who's in the copper market. Rio Tinto, some quick backstories. One of the world's largest and oldest mining corporations with a history that spans over 150 years. Name is inspired by the Rio Tinto in southwestern Spain. But the founding, again, goes back to the mid-19th century.

7:20Spanish government was facing financial crisis, and they started selling off their older minds. And so, crazy story of just like a very old company, you know, continuing to be a key player in an entirely new tech trend. Yeah. Also for lithium ion, they do some stuff there. They had one investment that I think they wrote down, then they spun another one up. They've been back and forth. X-Freeze broke the Texas lithium ion, lithium refinery down a little bit more. It's the first in North America to convert the raw ore into battery grade lithium hydroxide, skipping intermediate steps in the long term, probably more economical.

7:56It went from groundbreaking to first production in just 19 months, an unheard of timeline at this scale. The process is cleaner, no hazardous waste, a useful byproduct that can be turned into concrete. The single refinery can supply lithium for over 500 ,000 EVs per year and directly challenges China's 60 % grip on global lithium refining. Elon chimed in and said it sounded like I saw another number that was maybe closer to a million, but either way, you do two or three of these and you're good. As we predicted in our annual predictions episode at the start of the year, unless someone shows up with super conductivity or carbon nanotubes.

8:31Copper is the only game in town and AI is a huge demand driver for a very under-resourced material. So he's taken a victory lap with his thesis on copper. And speaking of AI, there is turmoil in the trade wars, in the talent wars. Breaking Thinking Machines has terminated its CTO, Barat Zoff, due to unethical conduct. According to two sources familiar with the matter, CEO Mira Moradi announced the news that an all hands with employees today, Sumit Chintala will be taking over as CEO. And Mira posted as well, confirming the news, she said, we have parted ways with Barrett. Sumit will be taking the new CTO of Thinking Machines role.

9:14He is a brilliant and seasoned leader who has made important contributions to the AI field for over a decade, and he has been a major contributor to our team. We could not be more excited to have him take on this new responsibility. and uh alex heath actually has some new news yeah 30 minutes ago he says more thinking machine employees are in the process of joining open ai after three of the startup's co-founders rejoined yesterday yeah of course the thinking machine co-founders had previously been at open ai uh not great i think uh potentially more controversial news was that thinking machines has branded squat racks at the office.

9:54Yes. Ryan Peterson posted a photo. Ryan posted this. A lot of people took this as somewhat of a red flag, right? People say, you know, the sort of common guidance is don't make merch until you're generating some real revenue, right? And so if you take that further, it's like maybe you shouldn't have branded squat racks. What was Ryan doing to get this photo? It seems like he's going journalist mode here. Do you see this? He's like, he's not in. If you zoom in, you can see these things look fantastic. Well, Ryan, you're outside. You're outside the Thinking Machines branded gym. Yeah, I'm somewhat envious.

10:30These things look fantastic. I'm kind of mad that we didn't get the branded plates. But this coming out while losing half of your family. It has to be weird. I mean, how much did they raise? It was$2 billion at$12 billion, something like that. It's got to be so weird to start a company and on day one have enough money for a custom gym. That's just like unheard of. Like normally you start your company in the garage and maybe there's a weight in the corner you can lift or kettlebell. One dumbbell. Not even two. One kettlebell or something. But to just come in and say, yes, we're taking class A office on day one, hiring a massive team, bringing on six or seven co-founders.

11:15Atlas was saying like the other red flag is where are the 45? I think I'm going to assume they're just not in sight. You know, like you can't see them, right? They would be mounted lower, right, on the rack. In case you forgot, Andrew Tulloch left Thinking Machines in Q4 of last year. Zuck had been trying to poach him and offered increasing amounts of money. The sense is that Andrew was like, you know, I can't be bought. But he needed the money. he needed he needed he had a shopping cart filled with chrome hearts supreme and he was like wow like my next outfit's gonna run me 500 mil i gotta get a new job i can't afford it i can't afford my lifestyle maybe it was a case of lifestyle inflation they talk about that tyler do you remember the final amount that meta paid it was like uh because because i i always appreciate a lot of rumors it was in the billions like my in my head it was like andrew was like yeah like i I'm really honored that you would make such a big offer, Zuck, a billion dollars.

12:17But unfortunately, I'm mission driven. There's really no price that I would take to leave the company that I started. And Zuck's like, two billion. He's like, yeah, what happened? I think all the rumors were actually from the summer when there was all of the talent wars going on. So first, I think it was just one billion. And then there were rumors of three and a half. And that being turned down. But then later in the year, then he eventually went. Okay, so people kind of assume that the rumor is true because he eventually made the move. Yeah, but I mean, it's not necessarily higher than three and a half, right?

12:51Because now we're seeing more people leave. Like, why are they leaving? Yeah, yeah, yeah. You know? Yeah, yeah. So at one point, one of my buddies who works at a big lab, he was saying, at that time, Thing Machines has, like, the best team. Yeah. Like, any of the big labs. There was already immense amount of pressure and, like, really, really, really high expectations on Thinking Machines around what they put out first. I don't think these people leaving, maybe it makes it harder to deliver, right, on those expectations, but the expectations are still sky high. I did feel like kind of rough messaging, very, very rough messaging, right?

13:26You know, pushing this like unethical conduct angle. People at OpenAI have obviously their bias, but they've denied it. Some quick thoughts on Barrett Zoff and Mets and Schoenholz. Going back to OpenAI, Barrett was the vice president post-training at OpenAI before he left for Thinking Machines. He left OpenAI in September of 2024. Barrett would have probably initially had options for about 10 to 30 % of Thinking Machines. That's insane, they had six co-founders. How could that beat so high? Post training was one of the more valuable skills at launch, I suppose, okay. The seed round was two billion at 12 billion.

14:01So this would mean that he would have options now for around eight to 25 % of the current company. This seems all hypothetical here. There were rumors back in November that Thinking Machines was in talks to raise at 50 to 60 billion, so this puts his equity at 4 billion to 15 billion valuation. Thinking Machines could probably exit somewhere at between 30 and 60 today. Who has that money? I don't know. Maybe NVIDIA buys them or something. At least at some point over the next two years. I think the most likely acquirers would probably be Microsoft, Apple, Meta, Amazon, and NVIDIA. Okay, large cap company that wants to build a frontier model.

14:38Barrett would have been just over his one-year cliff. So assuming he was not fired for cause or thinking he doesn't want to litigate, he still has about one to three and a half million. How does that math work? I don't know. It's called thinking machine now because there's only one left. No, there are three left, so it's still plural. Reading into this, I mean, there's gotta be some real excitement on OpenAI has just been outflows, outflows, outflows. Getting some of these superstars back on board has gotta be good for Murr. So is this with the elves and Valinor? Do we know what Rune was posting about?

15:12Because we learned that Rune posts the elves have left for Valinor every two years, apparently. OK, well, he posted it once before in 2024, in January 22nd. So now he posted this on the 12th, so three days ago. I think most people have now taken it to be about this, right? People leaving, I think machines going back to open AI. But I think there's a couple ways you can look at it, right? So if you look at it in the context of the last time he said this, it was the exact same quote that Elves had left for Valinor. Like, okay, what is Valinor in Lord of the Rings, right? Valinor is where elves go, so they don't like diminish, or like they don't like kind of fade away.

15:54So it's okay, what does that mean? Like maybe it's, you're just basically securing like massive wealth, right? Or the other way to read that is like you go to like one of these newer labs and you could be a superstar, but your abilities could fade away with time, right? Because you just don't have the scale or the resources. Yes. So I think in the 2024 context, Valinor actually was the Neo Labs, right? Because you can basically go start a company, be the co-founder. You guys raise at$12 billion. You're just like, let's go. Like, yeah, they just secured insane amount, like massive bag. Yeah. But then now...

16:30Now OpenAI is Valinor. In our context, OpenAI is now Valinor, right? Got it. They're setting aside 50 billion just for pay packages. Sure, sure, sure. If you go back, I mean, you're doing pretty well. It's another bag. It's pretty safe, right? You don't have this startup. You're not sure if it's going to work or not. Everyone's focused on the AI wars, not enough attention going to the sauna wars. The real heated rivalry is at the bathhouse. Yes. From bathhouse to other ship to altar, a wave of bathhouses in New York City are popping up just blocks apart, igniting a war of zen. This is especially relevant to the TBPN team because we've been in somewhat of a sauna war ourself, which we'll get into at some point in the story.

17:11The Flatiron District in Manhattan has been a center of nouveau wellness for around 15 years with its many boutique fitness classes, gyms, acupuncturists, and stretching and recovery centers now wave of bathhouses that offer dry heat and cold plunges face off in a few blocks. There is bathhouse on West 22nd with other ship two blocks away and altar set to open this winter. You could walk between all three in mere minutes. Williamsburg has its own cluster, right? Parallels. It's like a super cluster. Welcome to the sauna wars where dedicated bathhouses compete with members clubs like West Village's Continuum, which costs$40 ,000 per year, that has a bathhouse set up in the financial district co-working space, WSA's wet lounge as well.

17:54co-working space with a wet lounge not something not something you hear about every day the fitness chain tmpl has a whole subway ad campaign entirely around their bathhouse facilities featuring women in swimsuits reclining in a suggestive way that one doesn't really find in saunas in real life and of course the russian and turkish baths in the east village which is the sort of place newcomers are brought to see a slice of the real new york city it's usually teeming with people some getting whacked by bushels of oak leaves in a treatment called Platza and has two owners who rotate weeks of ownership.

18:30That's interesting. It's no frills and even a little gritty for those who are used to conveniences such as booking ahead. There's none of that to be found. They do have a nod to modernity with an active TikTok account featuring guest endorsements recently highlighting Uma Thurman wrapped in a pashmina and calling it one of the greatest best New York institutions. The first time I went to 10th Street Baths was in 2007. I love the authenticity and how it made me feel. I would find my way back there when I felt depleted, underslept, whatever it might be. I would come out feeling great, says James O 'Reilly, who is one of the founders of the co-working space Neuhaus.

19:04His latest project is the new Lore Bathing Club. This is where you go if you want to cultivate lore in your life, I guess. Founded alongside restaurateur Adam Elzer, Lohr takes some inspiration from the Russian and Turkish baths, as well as the communal sweat traditions of Europe and Asia, and drops it into a 6 ,200-square-foot space finished in travertine and white oak in Noho. The bath world is quite a scene, one where skincare brands such as Pharrell Williams' Human Race send out a press release to announce they're temporarily supplying Lohr locker rooms with their signature 7D gel sets. What is a 7D gel set?

19:43Tyler. other chip is hosting comedy nights alter will be selling bathing suits that are custom made in brazil and has hired a lighting designer who has worked with billy eilish it is a sauna boom reminiscent of the glut of boutique fitness studios have flooded the market in the wake of the success of soul cycle it used to be that you would go to a gym and it was outrageous to go to an expensive group class as jafari but now there are 99 boutique fitness concepts in a four mile radius. Still, there are not as many as the peak days pre-pandemic. Not every boutique fitness studio survived, let alone thrive like SolidCore and Tracy Anderson.

20:18Competition is always something we are aware of, says Emily Bent, other ship's co-founder and director of marketing. The saturation in North America for bathhouses is not even close to what it is in Europe. We're starting an industry and rising tides and all that. While the message from founders blissed out on 180 degree heat is one of bringing together community and good vibes. The reality can be cutthroat. Consider the case of Bathhouse, probably the most well-known of the businesses in the second wave of New York City sauna culture. Co-founders opened their first location in Williamsburg in 2019 and a second in Flatiron in 2024, both featuring sauna steam rooms, warm pools, and cold plunges.

20:56Goodman, the founder, saw the company's more-is-more approach through the model of working on large event production. You think like an experienced designer, so going to Bathhouse is not a monolithic experience but more of a choose your own adventure. When it first opened, Bathhouse was jokingly called the Bitcoin Bathhouse as they used the heat generated from mining to warm the tubs. We got to talk about Meta because they just laid off 1 ,500 people in their metaverse division. Obviously, 1 ,500 people is a ton. That's a lot of people. But they still have 14 ,000 people working on Reality Labs.

21:32So there's a question about, like, what exactly will they be doing? How much does this represent a shift? The Reality Labs team work on a bunch of different stuff, and it started as sort of, you know, the Oculus acquisition of VR headset that all of a sudden it was Meta Ray-Bans, which is, you know, mostly just a camera, certainly not a VR headset, but has it feels like it's sold many more units. I actually don't know the precise numbers. I'm super curious how many of those 1 ,500 people will end up working in VR as in their next somewhere else yeah it's just like can that can the industry really absorb that or that many people a year after the name change and pivot the journal reported that the company's flagship metaverse product called horizon worlds was failing to catch on with users it had less than 200 ,000 monthly active users and most so-called worlds were never visited by anyone at all I still believe meta is a fantastic name yeah Yeah.

22:29Do you think Salesforce should rename? I wanted to ask Benny off that yesterday. If he's ever just going to go Force. Metal Force. Just Force. Metal Force would be a good name. Meta's been ramping up spending on AI, pushing its capital expenditure to$72 billion last year with plans to accelerate that spending this year. It's also doled out offers worth tens and hundreds of millions of dollars to AI researchers and engineers and recently acquired a Singapore-based AI startup called Manus for more than$2 billion. Companies Ray-Ban smart glasses equipped with AI have also started to take off. The company sold more than 2 million pairs and has delayed the rollout of its newest glasses in Europe as it struggled to keep up with demand in the US.

23:08The sort of Ben Thompson takeaway from this was that even though Mark Zuckerberg has effectively complete control over Meta and can rename the company and move very aggressively and acquire big companies, at the end of the day he does respond to shareholders and the shareholders have been watching the Reality Labs losses pile up billions every year. And at some point, if you have a new sort of big money pit initiative that's AI, and you're going to spend tens of billions there, you have to sort of make a sacrifice or at least show the shareholders that you're refocusing on the new thing. I want to go back briefly to the sauna thing.

23:49I didn't get a chance to give a take. I am extremely bullish on Americans starting to sweat more because the evidence is like so clear that if you use this on every day, you will probably extend your health span, lifespan. It's heavily, heavily studied because of how popular it's been in the Nordics for like decades and decades. So very bullish on sweating. one of the things that's interesting though is that New York is is like the center of consumption right people have tiny apartments so they're just constantly consuming right food you know exercise shopping etc but I don't think it's representative of the way that the Americans will like sweat broadly because you can get a sauna for like a couple grand and so all these bath houses are like a few hundred dollars and so I think for some people they want the social experience whereas for me, I don't like the, I'm not really like that into the.

24:47You don't like talking in the sauna? I do like talking in the sauna. We've obviously had our sauna wars. Our sauna wars are, I guess we were talking too loudly in the sauna the other day because this guy just absolutely, absolutely snapped. I was, he was a bit of an angry elf, but, but, but anyways, like the most, most consumers are going to be looking like, I can go and buy a sauna for$2 ,000. And I have space for it because I have a two-car garage and a backyard and maybe a pool. And like for the average American, it has a little bit. Last time I lived in an apartment, this was like six or so years ago.

25:25Sure. I had a whole cold plunge that I snuck into my apartment. No way. And a sauna. I had a two-bedroom loft. You had a sauna too? No, no. I had two. So I had a two-bedroom. I had a two-bedroom loft. And one of them I just put a... It was just like a cold plunge on a wooden floor. That's insane. And I had a sauna. Okay. Of course, I don't think you're allowed to bring like a mini swimming pool. No way. If it leaks, you're going to destroy the whole building. I actually, I did. They did eventually tell me I had to get rid of it because there was a leak in the building. Yeah. And they went in to look.

25:54You have to understand, you know, for other shipping these companies, like you have to go, I think, into dense areas where people don't have a lot of space and have saunas because a lot of people are going to look and say, I either have one in my gym or I can, you know, people can go and just, even if they don't have the two grand, you can use a firm and like you're effectively paying a couple hundred bucks a month for like a private experience. In other news, Beijing has told Chinese firms to stop using CrowdStrike. If you didn't have a reason to start using CrowdStrike, this is a pretty good one.

26:27Is this the TVP effect? They saw us run a couple ads over in Beijing and they were like, yeah, they're too powerful. They're too powerful. You have homegrown car. Apparently this is already very tiny business for CrowdStrike, so not super impactful. But in other news, OpenAI's number one hater in the entire world, Nick. Is back on the timeline. He was the OpenAI hater of the year last year. Yeah. He's probably, he's really gunning for it again this year. His camera roll is all just pictures of Sam Altman. Trying to go for a double-clack. His camera roll is just all Sam Altman photos for sure. OpenAI and Sam Altman backing a new bold take on fusing humans and machines.