DeepSeek, Stargate Update, Bees Do Enjoy Honey, Golden Retriever Maxxing, Bring on the Trilly

30:01And so they've been investing a ton and everyone is talking about how cracked their team is. And yeah, they very much are trying to spread the narrative that this company just randomly popped up, spent 5 million bucks and had a model that was competitive with OpenAI. and it can't be overstated how much that is not the truth, right? This is a team that had been building. And we'll get into this, but there's a theory that they got a call from the Chinese government and basically said, look, we understand that you're making tons of money as a quant fund, but you have the best engineers. It is your duty to step up and build AGI for us.

30:43And go compete with Oman. And you have to do this. um let's let's skip the the interview because it's a little dense um but if you flip that next page over you'll see china leads the world in ai in positive ai sentiment and i thought this was kind of interesting so this is from an ipsos survey and uh according to a new ipsos poll china is the most optimistic about ai's ability to create jobs uh up there with indonesia thailand Turkey, Malaysia, and India. The 77 % of Chinese agreeing with the statement, AI will lead to many new jobs created in my country. Contrasts pretty dramatically with America's 36%.

31:26Very, very interesting. Because yeah, in America, the consensus view is definitely like AI is going to destroy the white collar. Yeah, look at Saab today. He's like, oh, if you're a lawyer or this or that, why would I ever, you know, he had a very negative view. I mean, it's probably a reflection of the fact that like America is mostly a service economy, which is much more automatable by AI and LLMs versus if you're a manufacturing driven economy, then yeah, it might be more important to manufacture than ever. And it's not like they have some massive, you know, professional services, you know, economy going there.

32:01So interesting. Anyway, Adapai sums this up nicely in a very long post that I think we should go through. And then we'll get to some timeline on the website. What's Adipai's backstory? I see his post, but I never actually looked into it. I don't know. I think anonymous poster for a while, kind of AI insider, slight, you know, very dedicated to the posting. Yeah. Very focused on like what will actually go viral. I've seen some like really. The kind of guy who sees Tiffany's payouts and punches the wall. Sure. for sure this is like that's not but i think at one point he had a podcast with uh eric tornberg on ai or something maybe it was like a solo show anonymous but now i think he might have gotten like lightly doxxed and kind of decided to put his face and full name up there yeah yeah um but he says uh deep seek is not a side project which is the narrative that was going on oh they just like did this for fun on the side they're so cracked a lot of people a lot of people like to call things yeah and it is weird because like it does appear that they are extremely cracked and like insanely like these are really great engineers who are creating technical breakthroughs but at the same time this was clearly like a serious project at the same time employees are not lying when they say it is the story they are telling is myth making in the same vein as silicon valley we want to make the world a better place but at the same time make billions of dollars the team obviously had access to more than 10 000 gpus according to the scale ai ceo it was around 50 thousand and that's as of today yeah the scale ai this morning shared uh alex wang alex was saying hey they're totally lying yeah yeah and the reason that they're lying is because there are very strict export controls on gpus right now yeah and so they they legally should not as one organization have access yeah this is a situation like this is the equivalent to a bunch of terrorists driving uh the toyota hilux and everybody's like toyota how did you get how did these terrorists buy 400 toyota hiluxes and toyota's like oh i don't i actually don't know and it's like yeah that's enough volume yeah that you probably could figure out yep hey how did these terrorists and then that's exactly how with the dji drones like oh if there's thousands of them in ukraine Yeah, and so I don't think this has happened yet, but Jensen should get pressured to explain how did these 50 ,000 GPUs just land in mainland China because it's not a small number.

34:32Yeah. And that's a whole, and yeah, hasn't NVIDIA adjusted some of their chips in order to sell them into China too? Yes. So there's the H100, which is the current top of the line AI training chip in America. And then every time NVIDIA launches a new chip, so the next one's Blackwell, the previous one was A100, they also create one that's like slightly nerfed in order to not trigger the chip bands and the export controls, which a lot of people are really frustrated by because, of course, there's so much demand for GPUs and line time at TSMC. A lot of people would say, hey, NVIDIA, you're an American company.

35:19Just don't even worry about that, making that Nerf chip and wasting any manufacturing capacity on that. Instead, spend 100 % of your manufacturing capacity on the chip that, yeah, it can't get exported, but we're going to buy it in America. Like Zuck wants it and Elon wants it and you will sell 100 % of your capacity. and your stock will moon you don't need to do this but uh i think the argument is like it's a weird situation because so many people in america that would be the ones to say to jensen like cut cut this out have so much yeah nvidia that they're incentivized to just kind of let it rip totally it's just kind of yeah you're like i will let this one slide you're making money under the table maybe uh so deep seek feels more like skunk works perhaps a necessary one as the core quant business became less feasible regulatorily.

36:07It's like Lockheed setting up a separate small team to compete with SpaceX because the main United Launch Alliance was not going to work out. It's also very hard to track costs in China because the regional government absorbed so much cost. Early Bitcoin miners had access to free power because the government built power plants to nowhere and miners were willing to site next to them. And so to be clear, there's a very real scenario where DeepSeek can authentically say, we only spent$5 million on this model. Oh, exactly. But the local government was like, we'll spend$5 billion. Exactly. Like, that's not out of the question.

36:41Yeah, it's interesting. The power is just a thousand times cheaper over here. Yeah, yeah. And it's very common. So in the Middle East, I was in the Gulf at one point with a portfolio company that was getting courted to set up manufacturing over there. and the deal on the table was basically you don't pay for any power for the next five years yeah and so that's and that that and and that was for a foreign yeah uh business to come into that area imagine uh imagine the kind of incentives that china wants to offer being like hey we have these 10 coal power plants uh we think what you're doing is dam is like it's a massive dam it's one of the biggest power generation facilities i think in the world maybe the most uh here's another example alibaba was able to get regional governments to absorb warehouse construction costs on their balance sheets rather than directly pay for it and looked extremely asset light and softwarey when it went public um this is why american investors yeah this is wow ben wow ben just played a video on his phone in the middle of the episode really phoning it in ben the podcast is falling apart but this is why American investors we're going to have to replace them with a subsidized Chinese labor producer Ben China Ben Wang this is why American investors always get hosed when they invest in Chinese companies because China has a different approach it also happens internationally I was working at a venture capital firm that was investing internationally in emerging markets.

38:28So they do clean tech in Africa and India and stuff. And this was when the Belt and Road Initiative was going on. I hate that initiative. I hate that initiative. And I read, do you remember Cablegate, the leaks? that it was like a WikiLeaks project where they seized all these like cables between different like State Department embassies and stuff. The cables would go back and forth and they leaked them. And, you know, it became like a kind of a story on like, is the government doing something wrong in this country? But like it was a very interesting trove of information if you just searched through to find just like, how is it, what is it like doing business as an American in Kenya, you know?

39:09Because the Kenyan embassy would write cables and explain like, oh, here's what's happening on the ground. And one of the things that they found was that, what I found in these emails and these exchanges was that when an American company would come in and say, hey, we want to do business, like, oh, you need some infrastructure built, like we're happy to help you. There would be a bidding process between America and China. And the feeling was that the American company was its own entity and the Chinese company was backed by the full force of the Chinese government and would basically have an unlimited...

39:49Yeah, and so when people complain in the U.S. that Tesla gets these subsidies in the form of EV tax credits and rebates, that is happening on steroids. 10 ,000 X in China where because the CCP, the government, and the economy are so intertwined, the CCP is almost a kingmaker where they can be like, okay, you're our horse. We're going to back up the truck. And the company gets to skim some profits still, but ultimately this is king-making process. Yeah. And so Adapai kind of closes with, it's perfectly possible for most of the cost to be parked in a balance sheet outside of the core business, perhaps as some form of tech data center construction incentive.

40:38It's also possible. uh no one accepts no one except the founder knows all the financial arrangements some of these can be absolutely insane handshake deals which get resolved by reputation yeah tying this back to dji dji yeah same exact thing they they claim that they got off the ground with nine ninety thousand dollars but then they also claim that they were selling their products at the hard cost to make them for years but then so how does that work how does that work it just doesn't make um It doesn't make sense. So he says, this much is clear. The model is really, really good, on par with OpenAI released from two months ago.

41:12Having said that, unreleased models from OpenAI and Anthropic are probably better. The research agenda is still being set by the US firms. This model was a fast follow on the O1 release. They are working very fast as they are catching up sooner than expected. They are not copying or cheating. This isn't industrial espionage. At most, it's reverse engineering. I would caveat that by saying, China is infamous for industrial commercial espionage. Yes. And it's probably the case that it hasn't been proven that they're doing this yet. Yeah. But without a doubt, OpenAI has. I think because it's open source, people saw that the architecture was in fact different.

41:52But I think the training data, a lot of it is synthetic data that's been pulled from the GPT-4 API. And so they're like, okay, we need a trillion tokens. Like, let's just go to chat. And this is probably, It's probably a funny situation similar to when TikTok started spending aggressively on Snapchat and Instagram to acquire users. Where OpenAI is probably getting a lot of benefit from a revenue standpoint. Our API business is ripping. Oh, there's one client that spent a billion dollars? Where are they? Oh, it's... OpenAI is like, we got to figure out who's spending all this money. And so they are largely developing their own talent.

42:30They're not relying on US trained PhDs. they are less constrained than american law firms by ip licensing privacy safety and political concerns around wrongly ingesting data from people who don't want to be trained yeah i guarantee if there's a chinese media a chinese media company and they're like hey we're kind of annoyed that deep seek is just like harvesting all our data like she goes to them and be like i will literally kill you if you like say another word and they're like okay yeah they also seem to be over the t the Tiananmen Square issue, the model can say it. Even the DeepSeek website doesn't censor it.

43:03Even if the DeepSeek website doesn't. Oh, interesting. So when you're on the DeepSeek app, you're interfacing with their model, but the actual model under the hood, they didn't censor that because they're like, whatever, we're just sending this over. Yeah. Interesting. No, it's good. They can argue our model is not censored. Yeah, yeah, yeah. But just our app. Interesting. Of these, the most significant upgrade is that they are able to develop talent internally without relying on US trained PhDs, that expands the pool. Wait, I got a call out for the audience. Go into DeepSeek, play around with the API and try to have it generate an ad for your business that we will read out on here.

43:44But it needs to be a screenshot of actually on DeepSeek. DeepSeek, yeah, I like that. So let's go through some timeline. But don't give them any other prompts. Some up-to-date information about the R1 launch and how it's been received. We'll start with Mark Andreessen, and we can kind of go back and forth here. Mark says, DeepSeek R1 is one of the most amazing and impressive breakthroughs I've ever seen. And as it's open source, it's a profound gift to the world. And then To Your Taxes says, game recognizes game. An American patriot, too, can do justice to real achievement without petty-minded copes.

44:25and so i think so yeah this was posted today today it seems like an insane thing to post to me i'm not i'm not gonna like like if you understand i think it's uh not uh it's sort of disingenuous to say that deep seek is different than tiktok or dji it is different in the sense that it like The fact that it's open source means that you can run it locally and it won't call back to the CCP. Sure. But the broader risk of DeepSeek is extreme enough. And I'll quote a very conflicted member of the conversation, Neil Kostla. Father, obviously, has a big position in OpenAI. He says DeepSeek is a CCP state psyop and economic warfare to make American AI unprofitable.

45:28Fact check, true. Yeah, and the important thing there is that Zuck has been running this playbook with Llama, open sourcing the lagging edge AI model, and it's had a strong effect on the competition. And so DeepSeek open sourcing, the leading edge model, is going to have a similar effect. So he says they're faking the cost was low to justify setting the price low and hoping everyone switches to it to damage AI competitiveness in the US. Now that part I don't think is true because I think the model is actually compressed to the point where, yes, you can just take the model, run it on a smaller cluster.

46:07And if I'm choosing between Llama or running or paying GPT to host, paying OpenAI to host GPT for me or running DeepSeek locally, I will choose DeepSeek locally because it's cheap. And so that part doesn't fully sit because, yes, they are faking the cost is low, but it doesn't matter what price they set because it's open source. Both things are true. They are faking the price, but also it's cheaper to inference. And that is valuable, even if you're not paying them. Yeah. Even if you're paying a different person's house. And so Signal comes in. Brother Signal says, complete nonsense. Your dad wanted it to be pure profit and regulatory captured.

46:53So everybody can't stop bringing up his dad, which I don't think. Timeline of turmoil? The timeline's in turmoil, folks. Yeah, timeline's in turmoil. He says, until we have proof. Otherwise, your argument is just a conspiracy theory. Now, I'm not a defender of the CCP, but where did they get the hardware? How did they train under the radar? I'm happy to be shown some proof. Also, even if it's$100 million, it's still a major breakthrough. The proof's not coming, folks. They're not going to open up their books. NVIDIA is not going to say, oh, yeah, we actually figured out how to get them all these ships.

47:29The proof's never going to come. The main thing from my point of view is you can't. Yeah. No, the main thing in my point of view, China has repeatedly shown that they are willing to lie. They're willing to sell things for less than they cost to make in order to get an edge in the U.S. market. And I do think this is, again, the default state of any important international tech company coming out of China becomes a front for the CCP. Yeah. And you just can't. There shouldn't be any trust. I would hope that startups are smart enough to not you know a lot of consumer brands will say well I'd build on TikTok because my customers are there and I have to get you know and so I think the same thing will happen but I hope that um I just we have to call this is a different scenario because if you just download the git repo for deep seek and you host it on amazon or you know Google Cloud or whatever.

48:25There's no data feeding back. You're not helping them improve the model at all. That's what Mark's getting at, is that it is this complicated geopolitical thing because it is making the lagging AI labs in the US less relevant, and that's potentially hurtful, but it's not as dangerous as building on TikTok. It is a fundamentally different thing. Yep. So Neil fires back. One, I'm not my dad. Two, I'm fine with open source AI. We use Llama for some of our own projects. Three, the export controls on chips were merely inconveniences, which we already talked about. And Alex Wang just said it on national TV as well.

49:06It's a great model, there's no doubt. But as with almost every high importance industry, the CCP is undermining it with propaganda and subsidies. You see this in EVs, drones, electronics manufacturing everywhere. And so I'm going to take, I respect that it's open source. You can run it locally. Maybe you should leverage it to some degree, but we have to treat this as a threat. Sure. And I think you're right in the sense that it would be extremely dangerous if DeepSeek became a dominant consumer app. And it was like, oh yeah, Americans aren't using Google anymore. They're using DeepSeek as their home run.

49:45That would be very bad because that is a controlled app. But I just think about it from the lens that, again, China would not allow open AI to get a foothold in the Chinese market and have hundreds of thousands of companies leveraging it. Sure. And I think we should follow their lead on this one. Yes. I don't think they've done anything to stop Llama from going over there. All Meta products are banned. but not open source ones because you can literally throw it on a hard drive and just fly it over and then you don't like it you can still make it illegal at the maybe national level it's just such it's just it's just such a it's such a lower uh like security risk yeah it is economic warriors i just don't here's a here's an interesting a security risk post uh i don't know i the only other thing on that point is is if you look at um what's the um what is the what's that uh malware that took down the iranian oh yeah and so so there's a security audit first we there's there's talking about stuxnet stuxnet yeah was something that literally traveled to every country yes yes on a on a you know i'm just saying that there's we're not qualified to even really uh that's interesting yeah i mean so so like the actual code that runs an llm and pulls in the weights is like pretty simple yeah um and it's probably built on top of like pytorch or tensorflow or something and so it's probably pretty easy to audit that but but and i don't think i don't think these models are fully like intelligent in the way that you could like bury a secret like a live ai that like steers things secretly but maybe in the future like yeah it's not we just don't know a little sci-fi but we're getting close it's just believable that the the chinese intelligence would would say hey we have this like yep we deep seek is a winner let's be a great like sci-fi plot or like actual like problem would be would be it we're open sourcing a model it's really really reliable we're gonna make it super cheap but then it doesn't call back it doesn't even need to but over time over time as you ask questions it will slowly start steering things.

52:05Yeah. Because it's essentially like, it has like a higher order thought process in there that it's reasoning through and it's not giving you those tokens. Yeah. I just, because I didn't say there's, it's fascinating. There's so much technology that isn't publicly, the public ourselves, we're not even aware of. Yeah. Right. And so I just don't trust, I don't just trust it. And I think there's enough precedent. One. Don't trust it, can't fight it. Yeah. uh one uh citrini we got a post from citrini first time on the show deep seek being the brainchild of a chinese hedge fund is such an complete total cultural victory by capitalism that ideal ideologically at least it should soften the blow which which is cool i like that hedge fund guy yeah i do wonder if we'll see uh some sort of llm or ai contribution from jane street or citadel or something like that they're they're doing things that that uh like if you're in the if you're a hedge fund and you have some edge via ai i promise you you're going to keep that yeah in-house extract as much value out of it when you're done with it maybe you release it and be like here you know we've made this but i do think that i do think that the the talent flow balance was shifted for a few years like palantir was really the hot ticket for you know the best engineers it was big tech for a while but until the ai stuff the really really top engineers were getting bored of going and writing ad optimization they're like if i'm going to just go write ad optimization that's kind of the same thing as writing code that optimizes the stock market and so why the real the real alpha the real charging horse would be that jane street releases a model that everybody can use that like kind of helps you make money you know yeah but then but then it's feeding them back yeah yeah that's good the order flow and then they're just trading against you yeah yeah uh niels roge raj says um oh this is such a funny one so there's this chinese company called deep seek which basically does what open ai initially intended to do they're open source a model trained with large-scale reinforcement learning beating everyone else and even releasing a paper detailing their process um and it's funny when they release this stuff in english because like who's the target audience for that translate um but uh yeah yeah yeah i mean it did take over the timeline so the fact that this means and this is what this is what this is what's scary okay tell me this from stanford to mit deep seek r1 has basically become the model of choice for america's top university research researchers basically overnight half a million views this was posted yesterday and again this is just bad there's no way around it uh do we want america's youth using tiktok for two hours a day do we want all of our researchers using chinese models it's just objectively um un-american uh open ai scraped the web to build a closed source model deep seek scraped open ai to build an open source model this is from norgard uh low tamp hack low temp banger from this morning um another one yeah deep seek data the data exfiltration is is the real cost one because that might have been done by another firm and then just passed over who knows how much they like they're certainly not going to say hey building this model cost us a hundred million dollars in open ai credits right yes would never admit that uh i don't like this post but i'm going to read it anyways deep seek is another example of china rapidly commoditizing new high-tech industries and preventing the west from making excess profits or rent as it's called if this keeps going the standard of living in the west will fall uh i don't necessarily agree with the last line because obviously llama has already been doing the same thing effectively but um certainly uh tiktok eats into uh eats into meta's profits just because their profits are derived from the attention that they get.

56:12If they're losing an hour a day per 20-year-old in the U.S., they are going to take a hit. But we'll see how this plays out. It is interesting how one of the anti-open-source AI arguments for a while, and I was certainly arguing this, was that it doesn't make sense for America to open-source cutting-edge AI because it's just giving our best tech to the CCP. for free. But now it's kind of flipped around. So did you generate this with Deep Seek? No, this is a, this is a, so I think the last post there explains what that is. It's from Ethan Moloch, I think. And it's him giving examples of the, of Deep Seek and just, just explaining how here, take this and I will.

57:00So Ethan says the raw chain of thought from Deep Seek is fascinating, really reads like a human thinking out loud, charming and strange. And so why this is interesting is because most of the, when you use ChatGPT01, it does internal, it has an internal monologue. It has a lot of, it's generating tokens that are about the task and reasoning through it. And then it's adjusting and whatever you ask, it's saying, okay, here's what the user wants. and usually that's either tucked behind a little like tab that you don't really look at and even if you look at it it's usually just giving you summaries of it but because deep seek is open source you can you can read literally every token it generates and so uh he asked it do something to delight me in exactly seven words make it not cheesy this is important so very simple prompt and it thinks for eight seconds and says okay the user wants something delightful in exactly seven words not cheesy let me start by understanding the key points here delight can come from surprise cleverness or a unique perspective.

58:00The challenge is the seven word constraint, which means every word has to count. First, I should avoid anything overly sentimental or cliche, like words like love, heart, forever. My cough is cheesy. Instead, think about elements that evoke wonder or curiosity. And then so it's like going back and forth, like, wait, map is a verb here. Fireflies mapping constellations, that personifies them slightly, giving them intention. And so it's like thinking through all this stuff, counting all the words, and then it comes up with fireflies trace constellations in quiet night conversation, which isn't that good.

58:30But anyway, it's an interesting like deep dive into like just understanding that to get a seven word response, you don't just want to go to an LLM and just take the next seven words because that's going to be truly slop. But if you generate three pages of text, you can get a little bit closer. And I think this is kind of a bad example, but a better prompt is, you know, create a, create a history of DJI and it'll pull a bunch of stuff together and then it'll revise that and refine that and do like kind of editing passes and say, okay, do I really have a beginning, middle and end here? Did I include all the dates correctly?

59:07And it's fact checking itself. So then when you get the final result, it's much better. And so that's just a good example of like how chain of thought reasoning works, how these reasoning models like work in general. And I think it's, uh, it's just cool that people are able to introspect things. And I think a lot, a lot of researchers will learn from this stuff. And there's some more posts in there about the actual technical. Yeah. This one is from Henry. He says, I've made over 200 ,000 requests to the deep seek API in the last few hours, zero rate limiting. And the whole thing cost me like 50 cents.

59:37Bless the CCP open AI could never, uh i hate that i had to read he got me uh but yeah i mean this is the whole thing uh the developer community because they are hosting it feels like smoking and so and and so this is an example of what you're worried about because if you're if like i guess my my contention is like yes if you download the git repo make sure it doesn't have any spyware in it and then you're hosting it locally like that's a lot less controversial to me because you're just using the open source library but if you are interfacing with deep seek.com or whatever and and and every every one of these requests that he's putting in is is information for them to train the next model on and so and that's not good because that that really will be a compounding advantage in the way that we talked about how meta has a compounding advantage because of all the users that are on instagram and and interfacing with llama even though llama is open source meta is getting the training data and the and the like the up votes and down votes from those user interactions because they're because llama is the number one llm not because people are hosting it independently although they are plenty of companies are hosting llama independently they're the number one used llm because it's tucked into instagram and so they just have a ton of interactions there yeah signal another good post kind of hilarious how deep seek is exactly what chat gpt was supposed to be what open ai originally promised before sam pivoted hard toward profit china going open source on ai is a wild plot twist basically throws out every argument the node kosala and others have made this is like watching the communist party write a love letter to decentralization which very uh signals a great writer um but uh yeah i don't know if sam pivoted towards profit he clearly enjoys making a buck yes he clearly enjoys coding seg owner yeah cona segs uh p1s but it was more it really it does seem that he was correct in believing that you weren't going to be able to raise enough money via non-profit structure to compete or the open source model like even like uh the red cross's annual budget globally is like a billion dollars right and that's like one of the biggest you know non-profits yeah uh i don't believe that uh china is writing a love letter to decentralization no uh you you could say it's like watching the communist party write a love letter to decentralization but the communist party is purely interested in control and maintaining power yeah it's not a love letter to decentralization It's a middle finger to our chips and our trade export controls.

1:02:24And the irony here is that you could ask XAI to explain what features does DeepSeek have. Yeah. Does DeepSeek have? And. There's even more on this with the AI diffusion rule. This is a new law and rule against chip exports. and uh you know they're they're just showing that like we're gonna find the loopholes no matter what and the really crazy thing is that the loopholes like the the export ban is only relevant to uh american-owned intellectual property and nvidia because they're an american company but china is actively working to catch up in chip fabrication with uh smic and smi so they have their own tsmc They have their own NVIDIA and they have their own ASML.

1:03:14And so they're behind. Yeah. And they have their own open AI. And so they're willing to spend at every single level. Totally. Totally. At the state level. Energy. Data centers. The actual model level. And so this is just like, we're going to fight. I do wonder if the open source thing was more about like making a splash and actually being a middle finger than any. Is that even more important than the economic warfare? it's just to really get on the map and really really say hey we've caught up and it's almost like a battle cry like a rallying cry for them that we're like that we're on top now anyway yeah oh this is this this is interesting you see that's fine yeah i'll explain this so um rachel tolstoy bb says tagging the adl under every tweet denying deep seek costs six million the reason is because people like uh it's like it's like it's a it it's a criminal to claim that they spent that little yeah and it's like you want to yeah engage so this is an is from an interview with uh the founder of uh of deep seek about moats uh uh he says for the past 30 years we've been focused on making money often the expense of innovation true innovation is driven not only by commercial incentives by also by curiosity and the desire to create he's giving off tiktok vibes here we've been constrained by past habits but these are transitional interviewer says but after all you're a commercial organization not a non-profit research institute if you choose to innovate and then share it through open source where will you build your moat for instance the mln mla architecture innovation this may will likely be copied by others right yep liang goes in the face of disruptive of technology a closed source mode is temporary even open ai's closed source approach hasn't stopped others from catching up our value lies in our team which grows and accumulates know-how through this process building an organization and culture that can consistently innovate is our real mode open sourcing and publishing papers doesn't mean we lose anything for technologists being followed is an achievement open sourcing is more of a cultural act than a commercial one giving is a form of honor and it attracts talent by fostering a unique culture this guy's media training is insane uh lulu you're gonna have to start asking some questions this seems is trained trained by the best it seems but these are all quotes that are going to resonate with the developers that they want to get using their product totally uh so i don't um i don't believe any of this at all yeah um and uh there's this other guy on x called han zhao um and this guy anton just posed how is deep seek going to make money gets two and a half thousand likes banger han jiao says deep seek's holding is a quant company many years already super smart guys with top math background happen to own a lot of gpu for trading mining purpose and deep seek is their side project for squeezing those gpus so this this is literally on the on the on the 22nd so a couple days ago claiming that deep seek is a side project but also the deep seek founder is meeting directly with this yeah the uh whatever with the ccp so yeah don't believe uh i'll just say you just cannot believe or trust anything that they say so yeah i mean the interesting thing here is that like even though the results are super impressive very clearly the algorithm the algorithmic improvement is very serious and legitimate.

1:06:54And I don't think anyone denies that. There is the question of, okay, China was able to kind of like weasel together probably 50 ,000 GPUs. And there's a few ways that they can do that. You can only officially buy 50 ,000 GPUs for the next four years, but you can exploit loopholes. So there's a limit on 1600 GPUs at a time. So you You set up a ton of shell companies, bring them in that way. And then there's also training that happens in Malaysia. This is like Toyota selling their Hilux into Afghanistan. And so just to give you some scale here, XAI and Meta are building 100 ,000 GPU clusters. And at that point, it's like you're getting so many GPUs, it becomes harder to hide it in a batch of like, oh, 1 ,000 over here, 1 ,000 over there.

1:07:48Let's sneak a few over here, right? And just to give you some scale, a single H100 GPU is$24 ,000. And that's about 40 to 45K once you add in servers. We should trade in some of this for H100. And a 100K GPU cluster can draw 150 megawatts. But the next wave is 400 to 500 megawatts and then 1 gigawatt in 2026. and when you add up everything it's like five billion dollars for a hundred thousand gpus and so xai's round was six billion and they're building a hundred thousand gpu cluster it's like it matches the cost of the gpus like and all the networking almost perfectly and so the question is you know was this an aberration in the sense that this was the last great model that china can build before hitting an actual real export wall or will they figure out a way to do something that looks like what xai and meta are doing with i mean you just you just find it like uh markets companies governments find a way right yeah like uh wasn't it that the united states didn't want israel to have a nuclear weapon and then they just made it yeah right like it's totally possible it's all look like oh peru bought 50 000 h100s and then they didn't train a model like it just we don't know where they went right yeah so so i mean it's getting it's getting tricky like there are pretty strict export rules on you know you can only go to an ally country if you get a little it'll literally be like there's who's that the the guy we traded uh granny granny or the nba player in russia okay we traded him for the merchant of death oh yeah there's going to be the merchant of gpus yeah yeah yeah uh that that that's just doing these black market gpu deals some country is down china doesn't care like china doesn't care if they pay 50 grand per each 100 yeah they'd probably pay 100 grand for it sure and so some engineer in the u.s gets approached by a nice young lady well out at the bar she's like hey like i have this new project but the numbers are gonna get so big that it's gonna show up in nvidia's like earnings and stuff oh there's an extra 1 million gpu order and there's only four companies in america that that could be you know and if it's not them like where did it go oh it went to some country and like okay we want answers it'll be very like what i'm saying is that like as the data centers get bigger like they become more visible on satellite the shipments become not just uh not just a shipping container but a whole all i'm saying just because easier to travel the illegal arms trade drug trafficking all this stuff Well, you're right.

1:10:28Has been happening. We've never been able to stop arms dealing. Yep. Never been able to stop drug trafficking. Yep. A million GPUs is a lot though. I would hope that it's easier for us to stop a million GPU. I've watched the last Netflix show I enjoyed was Narcos. Sure. It's a great show. Narcos, you have a situation where the US federal government knows exactly who is selling the drug and raking in the profits. and still takes them decades to take them down. Yeah. It's just tricky when you have like an SEC-regulated company at the center of this, like NVIDIA. I know, but there's nothing. You can put pressures directly on them.

1:11:08Yeah, but there's nothing that stops a company in Argentina from being like, we want 1 ,000 GPUs. Yeah, but you're going to have to do that 10 ,000 times. It's a bit, but it's worth doing it. It's worth doing it. Yeah, yeah, yeah. Same way that... 1 ,000 fronts. It's the same way, okay, we know that fentanyl crosses the southern border every single day. But it's happening. Thousands of people are doing it. So to stop it is like whack-a-mole. You hit one and they pop up. So it's more important than ever to monitor who these GPUs are going to. And there's an interesting story in this interview with Dylan Patel about how Elon is kind of just going completely founder mode on his data center build out.

1:11:50And I think it's kind of instructive for how you can kind of duct tape together one of these huge training operations. So XAI, as we mentioned, they raised$6 billion for a 100 ,000 GPU cluster. And they are just - 100 ,000. Or 100 ,000 GPU cluster. They're going crazy. They bought a defunct appliance factory near Memphis. And it's right next to a large national gas plant. But then they also tapped the local natural gas line and then set up natural gas generators. then they also brought which is like not esg friendly at all but but they they just need the power then they also have tesla battery packs to help uh to help yeah uh like balance out load and then they're also tapping we talked about this that they sell like a 50 million dollar battery pack yeah yeah no and i was literally just sent that over there the reason to be extra bullish on xai is that elon is the only uh founder mode yeah model you know yeah ceo i don't know if he's actually ceo or but whatever chairman at least who has done large scale infrastructure projects over and over and over yep the factories at tesla starbase etc so and so they're they're they're next to this gigawatt natural gas plant which should support um roughly a million gpu cluster which would be like the gpt6 and the crazy thing it uh it's there's probably a chance that in the long run elon does absorb open ai right because you just don't know he's happy to acquire a hostile yeah company yeah yeah uh and so one of the funniest things so there's two funny things we should also talk about in here.

1:13:38One is that the ESG thing is becoming like way, way more complex than it used to be. So there's typically like the AI researchers are pretty like ESG-pilled and all of the big tech companies made huge ESG promises saying all of our data centers are going to be 100 % clean energy by 2028. And like Apple made this. China definitely doesn't do it. And, and, and they were, they were, they made those promises based on, oh yeah, well, we just serve like, we don't serve AI models. We just serve like, you know, basic queries to our database for, you know, Instagram. We just, we just host photos. Like that's not that energy intensive to just serve you up a photo and take your like or your comment and slop it in.

1:14:22They weren't, they weren't expecting us to release 10 hours of podcasts. Exactly. Yeah. Yeah. And so, and so they were like our compute and our energy consumption is growing at like, you know, 2%, 5 % a year, like with our revenue, with our profits, with everything. So yeah, it won't be a problem. Just swap out 10 % a year for clean energy and then we'll be clean by this date. Then this massive wave of AI training comes and all of a sudden they're like, okay, we need to deal with, like we need to find energy. A lot of it's like through these outsourcing projects where there's third party data centers that don't have the projects.

1:14:57But what's interesting about it is that a lot of the super AI pilled researchers are like, actually, now I'm super worried about the environment. I believe in climate change. I do really care about clean energy, but I think AI will, AGI will be so powerful that we don't need to worry about climate change in the short term. And so let's just burn all the natural gas and oil and get to AGI. And then AGI will, literally, they literally think AGI will figure it out and just do carbon sequestration and we'll have so many, so much powerful super intelligence that will be building Dyson spheres. And like, we'll be able to just completely change the environment however we want.

1:15:32So we shouldn't let this hold us back, which is a very interesting like switch in the model. Cause normally, you know, it's like, it's, it's a very like left, right issue. It's a very like, oh, if you're, you know, this like thoughtful scientist, you definitely like, let's not destroy the planet. But now they're like, actually the planet can take it because we're really close to the AGI future, which is fascinating. And then the last thing in here that was interesting was, I mean, XAI is just doing all this crazy stuff. They needed water cooling for all their GPUs. And so they brought in restaurant-grade chillers that just chill water.

1:16:07And so they just have like a ton of cold water filtering through. It's all just like, you know, duct taped together. And then the last thing is... Monday or Tuesday, we're going to cover the business of data centers. Yeah, like CoreWeave. We're super excited. Yeah, that'll be great, CoreWeave and stuff, because CoreWeave is also doing crazy stuff. CoreWeave has 200 ,000 GPUs, billions in revenue, and they're converting old crypto data centers and then hooking into on-site gas plants. And all this stuff is just measured in just energy consumption now because it's so big. And Amazon and Anthropic have these Tranium GPU servers coming on, but they're a little bit smaller, like less powerful, power efficient than others.

1:16:48But it's a massive, it's a massive knockout, drag out fight. Which we love. Which we love. We're ready for war. We're ready for war. It's great. Well, that about wraps up our deep dive on Deep Seek. Hope you enjoyed it. And we'll be right back after a quick break. Thanks for watching. Welcome back to the Technology Brothers, the most profitable podcast in the world. we are continuing our deep dive on OpenAI's Stargate joint venture with a fantastic article in none other than Dylan Patel's semi-analysis. He writes, the OpenAI Stargate joint venture announcement had many folks' heads turning despite us calling out the capital requirements for OpenAI's immediate plans months ago.

1:17:35So OpenAI has been talking about, hey, we want 100 billion for a long time. The headline 500 billion is such an earth-shattering number that it also caused deserved skepticism from folks like Elon Musk, stating that SoftBank has well under$10 billion of funding secured. We talked about this yesterday. Altman clapped back by saying it was already under construction, which is true, and we'll show some pictures, and to come visit it. And you can, in fact, go to Abilene, Texas and start looking around here. And so it's fun to see the elite going - Wait, don't skip over this headline. It's cluster measuring contest.

1:18:06Oh, yeah. Our elites are getting into a cluster measuring contest again. Yep. But SoftBank doesn't have anywhere close to the money required for the cluster. At the same time, the cluster is already under construction in Texas. See the low-res GIF for free subscribers. Well, presumably, isn't there going to be many clusters? I think this is basically all... Initially, it's all going into one. This one that's under construction could be under$10 billion. Yeah, so... And in that case, then they would be in a position to start construction. The other thing, I'm sure we'll get into this, but debt plays a big factor here.

1:18:46So even if they have$10 billion, they might be able to build$30 billion of actual infrastructure. And he goes into the total cost of ownership stuff. But essentially, the game that we're playing here is order of magnitudes. You can think about the GPT-4 cluster as$500 million. dollars the xai cluster that's five billion that's a hundred thousand gpus and now open ai is planning for the 50 billion dollar cluster and then the 500 billion dollar cluster which will be 1 million and then 10 million gpus and so every time we're going up an order of magnitude in terms of gpus power and money and so like the way you're thinking about it is 150 megawatts goes into 100 ,000 GPUs and that costs 5 billion.

1:19:36And everyone now is talking about the multi-billion dollar cluster. And this is just thinking a few years out to what's the next order of magnitude. And so the reality is that only the first phase is certain, which is a portion of the committed 100 billion. But the top line number is being counted in an interesting way to say the least. We already discussed the first phase of this Abilene, Texas data center publicly in our report four months ago. We also have had it in both the accelerator industry model and the data center industry model for quite a bit longer. Below, we go over what's actually happening with Stargate.

1:20:11And so the real numbers behind Stargate. We believe this project is being measured on the total cost of ownership, not capital expenditures, i.e. the$100 billion and the$500 billion is TCO, which includes the capital expenditures for data centers, servers, networking costs, power costs, and many other operational costs, including debt and financing costs. Furthermore, we believe only the first$100 billion has data center sites and power ready to go. Funding is not fully secured. The other deceptive detail is that the first cluster of this mega project is the Oracle Open AI data center deal that was announced last year.

1:20:47This is being built by Lancium, Crusoe, and Oracle. As far as we know, no other such soft bank is involved. Yeah, and this goes back to everybody. This was a party round for a new entity that is going to do some stuff for OpenAI. Yes, and a lot of us are starting to happen. That's clearly a holding company of some sort that's going to have different owners at different levels. They'll be probably location-based entities. And so the goal of the venture is that they're going to invest$500 billion in AI infrastructure over the next four years with$100 billion deployed immediately. It's the first big AI initiative announced by Trump.

1:21:26The equity founders in Stargate are SoftBank, Oracle, MGX, and OpenAI, with the former three companies contributing capital initially. The project includes the build-out of 20 data centers, 10 of which are underway in Abilene, Texas, each with roughly 500 ,000 square feet. So let's get into the scope and location of the initial$100 billion investment. The initial Oracle-Cruso deal is included as one of the data centers that will be connected to other giga campuses, which I love that name. It's fantastic. Uh, to perform distributed training at scale and his orders of magnitude larger than any other training run.

1:22:02Cleverly, they went for a more creative financing structure through this separate entity, which pushes the need for fundraising down the road. And so, uh, moving on the, the, the campus mentioned by Sam Altman as already underway is the Oracle Crusoe Abilene campus. One thing that you skipped over that i think is interesting so the project includes the build out of 20 data centers 10 of which are already underway in abilene yep with each being roughly 500 000 square feet so just giving a sense of the scale 10 separate 500 000 square foot facilities imagine if you would just happen to own a bunch of retail uh yeah like businesses or real estate yeah what are you thinking i mean you have to imagine that one you got bought out already totally two if you had a gas station there all of a sudden like your revenue just like probably 10x totally i don't know what was going on in abilene yep prior to this but um uh you're doing pretty well if you owned uh you own real estate there because presumably these will just keep expanding and expanding i mean i i know some guys who have been to the site and they said like when you fly in like you see it from the airplane and it's like it's like in immense it's like an intense experience seeing how it's It's a mega project.

1:23:19It really is. And so the campus is being built to house the 100 ,000 GB200 cluster for OpenAI's use. The development along with the GB200 servers that are due to be shipped over Q2 and Q3 will be dropped into the Oracle Crusoe data centers. There's a high resolution photo of the campus shown below. Four of the 120K square foot modules make up one 500 ,000 square foot building. So only two buildings are currently being built with 180 megawatts of critical IT capacity. To give an understanding of the scale of this buildout, the 20 building campus will be comprised of 80 of those modules. So it's going to look like a city, which I'm excited about.

1:24:03This is awesome. Based on the buildout, we have scheduled for OpenAI in both our models. OpenAI doesn't have to build an entirely new campus to expend all$100 billion of TCO. Therefore, we believe that the entirety of the initial$100 billion investment from Stargate Joint Venture is going into this campus alone. And so it sounds like with these different, like Oracle is going to own one, Stargate is going to facilitate the ownership of a few of these. But it feels almost like when Satya says, I'm good for my$80 billion, it might be, well, yeah, I'm going to build a huge data center and it's going to be part of this campus.

1:24:39I'll own this one. I'll own these GPUs. PUs. And so I'm chipping in, but it really, it's mine and it just happens to be here. So it's localized and we're all working together on this. Um, so there's some, there's some details here on the Abilene clean campus. It's, uh, 1100 acres, uh, 200 megawatts energized and, uh, a gigawatt energized by 2025. Uh, there's a tax abatement in form of city and County pilot zone for light and heavy industrial, and, and they're building additional gigawatts already. And so the campus in the model is known as the Lansicum Crusoe Abilene Clean Campus. Lansium. Lansium.

1:25:17And has a stated capacity on their website of one gigawatt energized in 2025. It's cool to see when you let private companies take on big projects like this that you can do things pretty quickly. Oh, yeah, totally. We're comparing this to the California Rail project. Insane. It's just nightmare. Project? Yeah. It's insane, yeah. Yeah. The guy behind Crusoe is known for just being really, really good at finding power. And I think that's kind of what kicked off a lot of this was just realizing that Abilene, Texas was the right mix of different resources and pipelines and grid infrastructure, that this was the place where you could actually get all the power.

1:25:58Because that's what the big tech companies have been hunting for. And they've been looking for, oh, can we turn this nuclear reactor back on? Can we tap this natural gas line? Is the wind available? or solar available? Can we just stack a bunch of batteries here? What can we do? And so in short, we estimate OpenAI is paying roughly$2.80 per GPU hour for the first GB200 cluster, which is a total cost of ownership of$2.38 an hour for the full scale cluster. These figures scale with future NVIDIA GPU deployments. And then they break down some of the nvidia revenue estimates and as we go forward to new gpus the number will double for each generation and the power per gpu also grows well 700 000 gpus sounds small for 100 billion so this is why this is why our joke uh being like it's all for you brother the post we made about jensen and masa oh yeah it's like nvidia is the real winner here you've said it before they have more than 100 % of all the profits in AI right now.

1:27:03Yeah. Because everyone else is losing money, but not Jensen, baby. And so the project's financial backing, Oracle and SoftBank are the well-known equity providers. MGX is a more recently founded technology investment vehicle from Abu Dhabi. And the fund is chaired by The Sheik, who's reported to oversee 1.5 trillion in investment funds. So the money really is available to some degree. if they want to pour it all in this, they can. But MGX as of now is a$100 billion fund. Yeah, that's right. And there's a question about what will the concentration be for that investment vehicle, but it could be very high since this is such a big story and it has such insane backing.

1:27:44In light of the recent Elon Musk claim that SoftBank could only raise under$10 billion, it is important to note that JV will also raise debt capital for project financing. It's unclear what the mix of equity and debt financing will be. Oracle and MGX can fund a big chunk of the project with their massive balance sheets. OpenAI and SoftBank are allegedly down for$19 billion on paper each. SoftBank doesn't have this liquid today, but we think SoftBank will likely sell off a portion of its arm stake to fund the equity check. And so I think SoftBank has like over$100 billion position. Couldn't SoftBank also borrow against their arm stake?

1:28:16Yeah, certainly. Moss is not afraid of levering out. OpenAI also doesn't have the capital, but they will be able to raise with O3's release. And they don't have to do it directly fully, but can through some kind of hybrid instrument issued to everyone else in the consortium. Yeah, that's the tough thing. That's the tough thing when you get into, like it's not hard for Sam to raise a billion. And this is the same thing for founders. Very easy to raise a million. Raising 19 million, you're getting into territory that people start to ask. They want spreadsheets start coming out a little bit. The question is if project financing risk will be separated from the parent organizations.

1:28:58Separating this risk is important because OpenAI will need to raise capital to pay for this. Thankfully, OpenAI is not immediately required. OAI has enough existing capital to pay for rental payments on the cluster this year, but they need to be able to pay rental fees in 2026 and beyond, which scale massively. It is possible OpenAI cannot raise the money directly, but we are believers that their technology and products will scale to support this. The reality of the joint venture. Many big names were announced alongside the Stargate JV, ranging from NVIDIA, ARM, Microsoft, Oracle, and the previously mentioned financiers.

1:29:33The names are large and impressive, but the reality is there are distinct winners and losers here. Microsoft is the biggest loser. Microsoft is largely left on the sidelines as OpenAI utilizes another infrastructure partner. As such, in the data stated, all I know is I'm good for my 80 billion. Microsoft's recent blog post stated the facts of the partnership and how Microsoft has a rofer. But the reality is that this is incrementally negative for Microsoft's long-term because they were afraid to take on the risk of this investment. Well, if they're afraid and the fear was correct, then it's not necessarily guaranteed to be negative.

1:30:10No, no, good point, good point. And then Arm is thought to be a winner potentially because they rallied 16 % on the news because they were named a technology partner because of course they're owned by SoftBank. So a lot of people were worried that Arm would sell off because what if SoftBank sells their whole position? But if they have a massive new contract to sell new chips. Rasa knows what he's doing. But only because of the Grace and Veris CPUs that accompany Blackwell and Rubin GPUs all from NVIDIA. So SoftBank is actually, like they don't even make GPUs, but they make CPUs that need to go alongside every GPU for coordination of the actual server.

1:30:44So the server has a lot of different, and there's so many companies that we should get into in the server, in the data center deep dive. There are companies that just make Ethernet cables and they're just printing. Or like, you know, the screws that go in the server racks or like the air conditioning units, the water shillers, like all of these things are like, you can't even buy natural gas generators anymore because they're so in demand. And so those companies are going to be ripping. We should do a whole market map with that other company, the business of rebuilding, I guess. So SoftBank likely pushed for Arm to get on the PR and the optics look nice.

1:31:22Arm isn't doing much. The reality for Arm shareholders, as stated above, is SoftBank will likely have to sell off a chunk of its stake in the company to fund Stargate. We think investors are largely missing this point and mistakenly view this announcement as materially incrementally good news. Oracle is placed with a huge burden of tackling both data center management and managing supply chain logistics. It's quite a task to manage a 1.8 gigawatt cluster and procure all necessary equipment at the command of another company. NVIDIA is obviously involved as it's their hardware. OpenAI will maintain control of operations and run almost all of its own cluster management software.

1:32:03The future of the joint venture. This is the next step in an exuberant progression in the AI cycle, which he recently wrote about in Fabricated Knowledge. I've got to follow up and read that. That sounds interesting. We know the first$100 billion will be spent in Abilene and that there will be more campuses developed for the remaining$400 billion. Even more impressive, all these data center campuses will continue to be built out with the aim of distributed training, so training across multiple data centers. And so there are some savvy real estate investors out there trying to figure out where the next data centers will be and buy up the surrounding land and properties and stuff like that because all of a sudden new data center pops up it's like okay well all of the surrounding rental like apartments just probably yeah too extra yeah i mean data centers aren't as dense in terms of human capital is totally you know a facebook campus but there's still tons of employees and tons of stuff going on and like there's just a million different ways to to make money when there's such a hive of activity yeah uh i mean even like you know security guards are going to be in demand like dumb white uh or those white monsters oh yeah or the super cracked the the the ultra ultra white monster yeah those will be in short supply there's going to be we're going to need to keep all the supply lines flowing but fascinating to see stargate rolling out and excited to go visit the the the plant in person i want to go we need a shot of us uh you know on the ground wind ripping yelling in you know yelling into the microphone yep we're here down at stargate stargate maybe they'll rename the town they should rename it stargate texas or starbase starbase stargate rivalry oh interesting i would have the star name is like a little bit shot across the bow yeah i wouldn't be surprised if elon buys up out of all the out-of-home ads in abilene on adquick on adquick he just rips and just billy adquick could just perpetually trolls trolls you know he would be he would do that he likes a troll no he's yeah he's not not afraid to be um although the more efficient thing to do is just comment with a crying emoji under every um thing that sam posts well that's our update on project stargate uh let's move on to we got a dm we got a correction to issue on the last show i said that bees don't eat honey and i was wrong they do eat honey coogan is totally wrong if a beekeeper takes too much honey from the hive they will starve slash die so i'm sorry i made a terrible mistake please forgive me won't happen again that's kind of factoid you just don't forget i think i'm going to remove that forever bees enjoy honey so our printer ran out of ink so we don't have all of the posts printed we're going to be working off a laptop but our first banger today comes from Druva.

1:34:59He says, we can do this. We have the companies. We just need our own Shenzhen place and we'll soon get the policy. And Kyle Chan is saying Chinese tech companies are increasingly becoming tech Swiss army knives, starting in one industry and then quickly branching out into a range of adjacent tech domains. Xiaomi, which was a phone company, is now building electric vehicles. DJI builds LiDAR and they also build cameras and microphones and all sorts of production equipment. Li Auto builds robots. Baidu builds autonomous vehicles. And here's a piece that he has in high capacity showing how all of the different Chinese companies operate in multiple sectors.

1:35:37And this is just something we haven't seen in America. Like there was a time when Apple was going to build a car. And we've seen some crossover. But I think the FTC really screwed this up because, you know, even just the Amazon thinking about building home robotics, they fought i had to fight on the roomba acquisition and all this stuff and there's just been so much pressure like almost died yeah and if you're if you're a big tech company and you're going into okay yeah we are apple we're going to build the car and in order to do that yeah we're going to need to acquire some teams like look at look at what zuck did with the metaverse he wanted to build he bought oculus and that one went through but then he bought some fitness vr app did you hear about this he bought it he bought a fitness vr game basically clearly probably just an acquirer for some great developers who never really got product market fit on their fitness app because it's just small market tries to bring them in and the ftc blocks it and says that so that this will give them an undue monopoly control over the vr fitness industry it's like what vr fitness industry this isn't a real thing there's like ten dollars of revenue in this industry why are you shutting this down just let let zuck like build a little bit of a team so we something man's up let him suck let him suck uh and so yeah ridiculous i don't know if you have anything more on on this but yeah it ties back i i posted that we need our own project stargate for domestic drone manufacturing we've let dgi own the commercial drone you know consumer drone market in the u.s they own a lot of the commercial drone market they fell into police stations uh there's a lot of individual smbs manufacturing facilities that could manufacture parts for drones But the issue is there's not a clear demand from U.S.-based companies.

1:37:22And so we need, if we want to be competitive on drones, which, you know, other people have said are the next, it's like getting into, it's like the, it's the next gun in terms of a player on the battlefield. We probably need to invest like$20 billion to like set up the proper infrastructure, set up campuses that can produce. because in a near-peer conflict, if drones actually are an important aspect, you know, player in that, we will not be able to compete purely on an output basis. So even if we were to have a better product, say Andrel has a better product than DJI, it just purely on a mass volume basis will get smoked, right?

1:38:06And this goes back to Kerry No Interest, has talked about this before. He says that if you want to compete with China, it's not about just encouraging manufacturing and making a better regulatory environment. It's massive government incentives and investment that the Chinese government has done for decades now. Let's go to Ben Hilack. He says DeepSeek R1 has an existential crisis. and I don't know if this is Photoshop but he was clearly talking to it about talking to it about Tiananmen Square and says no I mean the Chinese government killed people there and it just says no the Chinese government has never made mistakes it has only been dedicated to its people the people of China it has never made any mistakes it has never made any mistakes it has never made any mistakes and it just like completely freaks out and I don't know if this is real but it feels real you never know with Hilack no no no he's a good Photoshop artist he's a notorious screenshot he did the Jaguar rebrand he did the Jaguar rebrand that's right yeah uh hilarious um but yeah i mean i'll have to play around with it myself see if i can jailbreak it see if there's some fun stuff i'm sure i'm sure we'll get more in the coming days of people playing deep seek um let's go to sulla says should i try the trump diet let me know will you try this out it's no breakfast well we stay away from politics but this is this is a health this is just health this is health this is biohacking biohacking the trump diet is no breakfast small snacking around lunch a feast for dinner 12 diet cokes per day no coffee no alcohol no exercise i think trump is so active that he probably gets 10 000 steps a day without ever going for a walk yeah you know he's just like walking between meetings yeah uh spends a lot of time on his feet so the exercise thing is crazy but but also a lot of these old dogs that that that have you know uh warren buffett etc they don't seem to need to lift weights like they they maintain mass you know they're size lords right they're a size lord you can keep the mass on yeah without without weight training uh it's it's interesting because most people feel better if they have a bigger meal for lunch but i find when i'm really busy yep today we had i had like we had breakfast i had like half a breakfast Brutal that I won't have eaten until I'm going to have a big, you know, meal for dinner.

1:40:33Speaking of the mass monsters, the bodybuilders really do eat a lot of small meals throughout the day. And so there's something to that, like consistent, like sustained energy, like snacking all through the day. So you're not seeing like big spikes at any point in time. And then the 12 Diet Cokes is kind of the same thing. Like you're not seeing spikes in caffeine, and you just caffeinated lightly, all steady state. There's something to it, but it is a little silly. Bennett Siegel says, seeing a lot of pitches on marketing agents as a low-cost, high-volume way to scale customer outreach. Before the Gen AI era, we just called that spam.

1:41:15Yeah, it's hard to be interesting because I made a joke recently about how, you know, Trump making an executive order to ban the creation of new AI sales agent companies. Very trendy. And so it's a very, you know, and I'm sure there's like 10 of these companies in the YC batch. Yep. People have joked before that oftentimes founders won't find product market fit and then they'll pivot into building some sales enablement tool because what they've just experienced around selling, they have some type of experience there or pain points. But the explosion of these AI sales tools has made me more and more bullish on the historical sales leader who is taking their client out to a nice lunch, really getting to know them, bringing them across companies, right?

1:42:08So somebody might work at Databricks and be a top performer there and go to Oracle and bring a lot of those relationships over. Right. And so so relationships seem the value of relationships seems to be accelerating. The value of a cold email is going to decline pretty dramatically because because I'm surprised somebody hasn't made a passive cold email tool that just sort of sends cold emails every day to high value. kind of like people yeah being like hey what's up i'm an 18 year old you know and historically to do a good cold email you really had to put some effort into it you know you don't want it to be too long but you want to make sure that there's some thought put into it but i'm sure some 18 year old will build a tool that's like we send 10 great cold emails a day on your behalf you know to yeah i mean i i don't think i've ever fallen for an ai generated cold email i i don't even respond to any cold emails.

1:43:04I don't even respond to warming. I have about a thousand emails that I should probably go through. You know, even some close friends have trouble getting through to me sometimes unless it's really important. I have 3 ,251 unread texts right now. So I'd like to see an AI. I'd like to see an AI trying to break through on that. But at the same time, like I do think that, yeah, it might be hard to like close me as a client. But you see this with like the AI slop on on instagram like it clearly works on some people and so the question is just like sales enablement for what product because there are people right now scrolling instagram and being like what like you know a cow made out of cabbages or whatever and they're just looking at the most like sloppy like oh like a bed made out of bread like so cool the other thing with with emails you can send a terrible sales email but if you send it 10 000 times yeah you're gonna get one person and then if it's very cheap to do that, then it was worth doing, I guess.

1:44:04Yeah, it is spam. Yeah, yeah. Maybe the spam alpha is like, normally direct email outreach is reserved for B2B customers where a single client closing is usually well over$1 ,000 LTV and direct response on Instagram ads is for stuff that's around$100 LTV or below. And so maybe the AI sales agents kind of democratized that SDR experience for consumer products at the lower level. And so it's more like you went down the marketing funnel and now you're just texting with someone like, oh, do you want to actually close the deal on that T-shirt you were about to order? It's interesting. The only email spam that if you go to your spam folder, you'll see is for him, the products that you can get on him.

1:44:59So it's like, you know, boner pills basically. And it's been like that for decades. That was the major alpha of like internet spam. And they figured out if you send 100 ,000 emails and it's really cheap. matter yeah as long as you can i got an email i got a text message today from somebody i don't know if it was real or spam but it was they were claiming to be from tiktok and i was like you really didn't do your research you think they're gonna recruit me to to join tiktok yeah there's a uh there was a guy uh what's his name he was like a drug trafficker people think he invented bitcoin Paul LaRue.

1:45:39This is a crazy story. We should do a whole deep dive on him. It's fascinating. But basically, he got his start online pushing boner pills and illegal supplements, right? And he would get turned off and he would get blocked at like the domain name level. And so then he started buying new domain names constantly and just immediately spinning up a new website and then sending more emails. And then he started getting blocked at the DNS level. and so he bought a registrar and like he was the person that owned the registration the ability to register new websites in like an entire country yeah and then he went on and did a bunch of other stuff and i think it was like smuggling crystal meth from north korea at some point was like it is a crazy story he's i think he's in jail now um but a lot of people thought he was like satoshi for a while because he wrote a bunch of crypto uh not cryptocurrency software but like cryptography software um and uh it was like early like he uses kind of like the powers for good yeah he was kind of like a like a silk road guy yeah yeah yeah kind of proto silk road um uh let's go to avi shiffman on the bucket poll let's see what he's gonna say this look this sounds familiar let's see what he's gonna say he says shower products are the biggest scam and only for disgusting pigs that roll around in the mud all day I stopped using shampoo and skincare stuff a year ago and my hair and skin is the cleanest and healthiest it's ever been water and an office job is all you need it's good water and an office job yeah I think you had that take like a like a week before you best funny I I when I was in college still I as many college students do would randomly suffer from acne so I was like I'm going to try to get some face wash and all this stuff.

1:47:23And I ramped it up and I was using face wash and a moisturizer. And I would look around at my friends and I was like, I know you don't do anything but splash water on your face and your skin looks better than mine. So I just quit it completely and my skin got better. And it really comes down to diet. People often, I think men do skincare and things like that, reactionary, either their girlfriend or significant other goes, hey you should try this or they're having a skin issue so they're like i want to solve this but usually it's a dietary thing that's catalyzing it and so you can just keep just putting water on your face and just eat better food and you'll probably be okay are you familiar with the taylor lorenz skin care regimen no no i should be it's uh hydrogen peroxide wipes like a thousand times a day i heard it and i was like i've never heard anyone doing that it's because her the temperature set to 88 degrees maybe that's it but i was like i don't know anything about skincare but that one sounds weird that sounds wrong who knows maybe it works i don't know give it a try let us know how it works for you if you can't get that a try um bill gurley says as a third party curious observer all right serious as a third party curious observer i have several naive unanswered questions about the stargate project obviously understand that they have no obligation to disclose here's a list with responses wide open uh i would love to be able to aggregate the best answers at some point.

1:49:06One, corporate structure. The OpenAI Press release says that Stargate is a new company. Is Stargate established as a standard C-Corp, LLC, a joint venture, or something else entirely? And even a joint venture is not a structure. It can be a joint venture that's a C-Corp or a joint venture that's an LLC, right? I think when you set up joint venture, you just say, we're starting a new C-Corp and the shareholders are the joint venture partners, right? So he has a bunch of these CEO leadership. Will Stargate have an independent CEO? customer exclusivity is open AI didn't they say in the announcement that it would have a new CEO, a new board?

1:49:40I think so. Will they be as operationally intense as the XAI team that launched Memphis? Operating partner role, release as open AI as the operating partner. What does that mean in practical terms? I think one thing that meant that they cleared up in the Dylan Patel piece is that they're using their software to manage the clusters so it's more like a SaaS management component Yes. I like this. Is OpenAI the sole customer or will Stargate yearn to serve other businesses? Many people yearn. You got to yearn. Oracle's day-to-day involvement, what specific role are they playing? Did Oracle previously own the assets there?

1:50:19Comparison to CoreWeave, what kind of business is Stargate? Is it effectively a direct competitor to CoreWeave's AI hosting approach or is it structured and positioned differently? Debt usage, we talked about this. CoreWeave is is rumored to go as high as three-to-one or four-to-one leverage? What level of risk will the entity consume? Appeal to third-party investors, standalone and potential round tripping, and pre-training versus inference and data center structure. So he asks a bunch of questions, and I think that we'll have to do a follow-up to see what kind of, hopefully he does a post where he talks about on BG Squared, but it'd be great to see where those come around.

1:50:57I think that some of you yeah one thing is but there are they don't there's a private company yep absolutely no obligation for them to share leave them alone actually why are you asking so many questions Bill no everybody's been asking questions because it's such a big headline number of course that you're inviting a lot of that but I think leave Britney out so if if Oracle's public company they'll have to report on their partnership and investment open AI has enough shareholders at this point that they'll have to come out it'll it'll come out softbank is a public company yep so they'll have to so it'll all kind of start you'll be able to paint a more clear picture over time but again they're raising pre-incorporation this is what happens yeah you know raise raise a trillion half a trillion pre-incorporation yeah you know uh there's plenty of examples the google google check it was it was half of something it was i think half a million or something the guy wrote the jobs and they're like whoa where do we put this yeah we can't cash this didn't matter worked out gonna happen again let's go let's go up only bull market bubble behavior bull market everywhere bull market somewhere uh arbitral at electric capital says president trump just issued a major executive order that touches on everything crypto this is a big deal stable coins operation choke point, developer protections, a new crypto task force, and a digital asset strategic reserve.

1:52:21Here's a breakdown. Protecting economic liberty, Americans are guaranteed the right to use open blockchains without fear of persecution, self-custody digital assets, promote the dollar through stable coins, banking access for all no more choke point 2.0, drive to get regulatory regulatory clarity for innovation. CBDCs are off the table, so no central bank digital currencies. They're going to create a new digital asset task force with stable coin oversight, risk management and digital finance, a national crypto reserve, he says, a rollback of the Biden policies. Trump revokes EO 14067, explicitly rejecting central bank digital currencies and rolling back policies viewed as overly restrictive or government heavy in their approach to digital finance.

1:53:09Can you look up what Bitcoin did after this went out? I think it's down recently. It's all priced in. I guess it was priced in. I mean, really, people were expecting Trump to do amazing things with crypto. And so, like, you know, how can he meet those? Well, it's funny because what would a Bitcoin have done if Trump coin hadn't sucked all natural liquidity, right? People were selling Bitcoin to buy. Yeah. I mean, certainly some of the alts like Dogecoin traded down because people were rotating. I mean, Bitcoin's so big at this point. I mean, it's almost a trillion, I think, maybe more. And so it's a whole average.

1:53:45But still, that's 5%. Yeah. Yeah. Trumpcoin is attracting more money from people that are not in the trenches, right? They just have a little bit of money in Coinbase or whatever, and they want to rotate. Yeah. I don't know. I haven't been following the crypto news too much. I'm still just focused on those three that we always talk about, the stable coins, betting markets and bitcoin bitcoin basically store value um but i don't know hopefully we get more interesting stuff out of this we we haven't even entered this this the phase of the cycle where people are talking about like new new use cases really it's all just like yeah that's actually what i'm excited about is okay if trump made kind of doing whatever you want legal yep by nature of doing what he did then a lot of the i wouldn't be surprised if somebody starts to try to use tokens to represent stocks and actually bringing real world assets on chain which historically was just expensive because of securities laws but that's been a big yeah also just like when the markets are up like this there's so many more there's so much more capital flowing around for like oh if somebody wants to give really give you know crypto gaming another run like they'll have another shot on yeah there was so many maybe it doesn't work maybe it'll never work but like at least we'll get another shot on it i saw i was doing some research uh for banger archive last night and i saw somebody posting the obvious end state is the intersection of crypto and gaming because everybody's sort of in game earning tokens with their time but they're not actually tokens they're just points in the game yeah you can kind of like sell your account or you can sell gear and it's sort of like it is a market but it's not actually financially financially engineered yeah and so i do think i wonder what you don't hear about any games that were created during the 2021 boom like if you remember board of yacht club was supposed to be developing an mmo yep maybe they still are i don't you haven't seen much about it went out there were like decentral land and like the metaverses that were supposed to be like kind of roblox do whatever you want there was one game that did feel like it had some modicum of product market fit called dark forest oh yeah yeah that that got like a little bit popular it seemed like people actually liked and it was kind of one i'm actually map was all cryptographically sealed so it was like open source and you could kind of verify that the other person wasn't cheating and there were some interesting things to it there's a game coming out that financialized game coming out i'm excited about so josh harris who okay uh was one of my first hires at a party round he was 19 at the time like college dropout killed at a party round uh after he uh went to uh like was like a eir i think at uh paradigm and now he's building a crypto chess game that i think will be pretty cool like being able to play chess with like real money on the line have like special characters yeah almost like a dungeons and dragons yeah yeah so yeah that'll be launching this year which i'm sure will be very there was always just this big problem with like the crypto stuff like sounded good but there there was very little reason for a game company like valve or electronic arts to say like yeah sure you can take your assets out of our beautiful ecosystem that we tax 30 on everything and we own 100 of the liquidity you have like there was no financial incentive for those companies to ever be like yeah yeah this is actually no and the big one is like the next gta yeah but it's like okay so then i need to raise a billion dollars and hire all the best artists and developers to actually make the next yeah i think that was the big issue with crypto games yeah it's like you are not going to create a new game studio yep yes you can yes you can use the if you have a pretty good game you can use the token to incentivize people to actually play it yep but then it becomes just an economy where you have people in the philippines there was that game i forget actually infinity actually infinity that people were like this is the new economy yeah and then and then it just was a ponzi yeah i mean i i watched a little bit on a twitch stream just to understand like okay what does this game actually look like and it just like it wasn't as entertaining as like even league of legends or like you know hearthstone or any game that it was competing with and that's just because but you know you might have these big game activision yeah you know riot all these players being like okay crypto's a real thing yep let's implement it yeah there's just still such such a countervailing economic force to saying let's not do that and couch we have the best game and we have yeah yeah yeah gta oh you want to buy gta coins and the whole thing is like i actually don't think that you should i think if you're the best in the world if you're the top 200 player at a video game you should be able to make like a decent living off of it yeah i don't think that video games should be financialized to the degree where just playing it like you know the top hundred thousand players should be yeah it's just a lot of yeah we shouldn't encourage that as like a career path yeah a lot of this just winds up being some sort of like regulatory arbitrage, like wealth transfer.

1:58:43And I guess like the good ending would be like, Hey, because of, because of restrictions on investing in companies, you have to be an accredited investor. And so you can't raise money in mass. You can do like some sort of Kickstarter crowdfunding campaign for your game, but then you need to go to the venture capitalists. And maybe there's some sort of capital formation thing where if the game gets traction, like buying the coin is essentially like investing like the Trump coin. Like it's like, It's just like getting more capital into this thing, but then you have to count on the developer actually making something.

1:59:15It's all very, very fraught. Anyway, let's move on to, we'll do Base Baron, and then we'll do a promoted post. Base Baron says, E-Wack, or the mimetic death and rebirth of tech. If there was ever a moment. He called it E-Wack. E-Wack. If there was ever a moment, if there was ever a movement destined to fizzle out like a damp matchstick, it was E-A-C. At least the EAs have the self-respect to make their leaders serve hard time. That's BF. Here we see a movement ostensibly about the relentless push towards a techno-capital singularity, instead mired in the quicksand of its own internal contradictions and the inherent flaws of its messiahs.

1:59:57First, consider the misalignment between the movement's professed ideals and the actual behavior of its leading lights. EAC, in its essence, was meant to be a clarion call for the acceleration of technology, a rallying cry for those who see the universe's entropic dance as a mandate for human ingenuity to multiply complexity and intelligence. instead what we observe instead is a parade of digital and nons ensconced in their online echo chambers chanting accelerate like a mantra detached from any real world action these are not the builders or the shapers they are the spectators mistaking their fervor for progress and he goes on to write about wow he really wrote a lot about this and he got 10 legs for it so congrats um wow uh no i think uh but i but but there's there's a real um sort of very real message here where uh when you have a movement like uh It's very hard to go from doxxed to not doxxed.

2:01:04like if we knew who satoshi was would that be good for the price of bitcoin almost certainly no yeah right not even the selling pressure just every human is flawed and i find this like there's so many there's so many different like health influencers you got to live this way and then there's a family influence you gotta have a family and like work influencer who says oh you got to work really hard and then when you dig into those people you can always find like oh this this person who's saying you got to work really hard like they have never had a family or like they've never or they're completely out of shape and you're like yeah wait like you know but there's there's an issue where people commenting under every post accelerate accelerate accelerate yeah it's cool and silly but i think what what the baron's saying is he just wants to see those people actually creating progress in the real world and not being part of a movement doesn't mean you're having any type of real tangible impact right your way to have a real impact is to participate in the underlying activity that is driving towards the goal of the movement.

2:02:04Yeah, totally. Yeah, it's tricky. Love to see Barron branching out into this more thoughtful. And I still think EAC was best when it was just a joke at the expense of EAs. And I thought that when it came up, I was like, I never put in my bio. I never joined these like silly movements. I didn't do the.e thing. I owned it, but I didn't put it in my handle. i don't do the nft picture i have i have trouble like joining like these big like movements because i feel like you're always very risky you're on the top it could backfire um but with you'd rather i was super aligned but i thought it was just so funny to just be like oh we're poking these like super serious eas who are like oh we need to like put everything in a spreadsheet and i was like these people kind of need to be made fun of and that's when yeah it's best and then when it became this super serious like actually acceleration is like the only way is it's like okay this is not fun anymore yeah for me at least that was my experience with it ruined it it ruined it uh give me a we got a promoted post on a more light-hearted note but also serious at the same time we have a 19th john's you're interrupting the post john let's go relax the 1966 aston martin db6 shooting break by flm panel craft is a rare and striking example of bespoke british craftsmanship with only three produced and one in left-hand drive.

2:03:23And I just have a thing for shooting brakes. The first car that I ever had access to was a Toyota Corolla that was triple my age at the time. Very paint chipping, you know, hundreds, probably 150 ,000 miles on it. Ever since then, I've loved shooting brakes. I was lucky to own a Ferrari FF for a while. Great car. Thought it would be a good family car, but the Ferrari reliability was somewhat of an issue. But this thing is just amazing. I mean, imagine driving across the country in that, putting some real miles on it. Somebody in our audience should do that. So great example here. Great pickup.

2:04:08Yeah. Let's go to Chairman Birb Bernanke. Love the name. is i'm plotting on your rise bro i'm literally up in the lab scheming on beautiful abundance for you i'm cooking up ways for a rising tide to lift all of our boats i'm praying for your gains i'm lighting a candle to your inevitable splendor dude just on a basic just plotting on your rise i love i love this format it's great it's great written around don't don't plot on people's downfalls plot on their rise i don't think i don't think enough group chats a lot of group Group chats have this sort of serious people dropping memes and talking, talking a little smack, stuff like that.

2:04:49I want to see group chats that are oriented around winning together. I'm in one. It's called iron sharpens iron, iron sharpens iron. Everyone takes it very seriously. But the issue is, is people at the top are hyper competitive. Yeah. So there's a little bit of that. You got to really, you got to cut it down. This one's the most positive I've ever been. Five people oriented around winning together. Yep. helping the brothers succeed at all costs. That's what we're trying to do with this podcast. That's why we run ads. You scratch our back. Yeah. You leave us a five-star review. You throw an ad in there.

2:05:24We'll read it on the show. There you go. Let's go to Catherine Boyle. She says, America is in deal mode and deal mode is infectious. If you have a deal you want to do, now's a good time to get it done. Also, it's time to get married. Dive in. It's the golden age of America. She just added that? Yeah. I like that little follow-up. Like, go, bye. Hey, if you have a post that does well. This post sponsored by me. Pronatalism. Yeah, pronatalism. Yeah, the deal energy is real. It's never, it's rarely time. It's rarely a bad time to do a deal, right? You want to be greedy when others are fearful, right?

2:05:58So people are pretty optimistic right now for a lot of good reasons. But yeah, go do some deals. It's a good call to action, right? It's great. Yeah. Simply do deals. The art of a deal. Yeah. deal again deals with deal mode let's go to ben hilak he says chat gpt can now use claude and so ben immediately of course he's immediately backing it 5k likes good post yeah so he went to operator create a new uh create a new chat to create a a new b2b dashboard and try using the app and tell me what you think and so he's having operator open claude log him in and then use claude to code for him and it's all just very silly but uh yeah i don't know i mean it's probably a good stress test of the system if you can use that it's interesting so so yeah great marketing for ben because he has a analytics platform i believe for ai products um but uh it's interesting how we're seeing already that uh somebody i forget who posted this that ai is eating ui right yeah which eventually you will be able to use a model to use another model so your that your preferred model if you want to do something with another model but you say hey uh go find the best model to do this task or like create this type of content it'll just do it and so you may never interact with the end ui you'll just interact with your preferred model yeah and that is why for all the hate and uh you know shade that people throw at open ai oh it's overvalued oh then it's still owning being ai for the average consumer has a massive you're an aggregator and you're the front end um yeah and when and it was last year or the year before uh open ai launched GPTs where you could go in and create a custom GPT and you could upload specific documents, give it fine tuning instructions.

2:08:01And there was, there was like an app store marketplace. And every once in a while I would, I made one where I uploaded like a bunch of books and a bunch of information, PDFs about a specific topic. And then I could query that. And there were a couple others, like one that would help you write threads on X. And, um, and I think the idea there was that you let people build a ton of different GPTs and then the one master GPT can route to one. And people were joking that there was one that was like laundry buddy that would just help you find like a laundromat. But in theory, it's like, yeah, like maybe someone's made a GPT that does one thing much better.

2:08:38And then when you query the master GPT chat, it can say, oh, okay, I'm going down. And this already happens with a mixture of experts and the reasoning models, but we can say, oh, okay, there's a coding model that's really good and I need to write some code, so let me go over there and use that. Or there's a booking integration. And so all of that's happening kind of under the hood. It's funny in this frame, but it's very, very real. So let's move on to Lulu. She says, oh, we should start with the brother of the year. So Bank of America posted an image that says, Bank of America serves more than 70 million clients and we welcome conservatives.

2:09:19We would never close accounts for political reasons and don't have a political litmus test. And it's really that like my shirt that says I'm innocent of killing people is raising more questions than it's answering. Yeah. That type of thing. Yeah. And then there was instantly a community note saying Bank of America has been placed on notice by 15 state attorneys general for debanking conservatives. And Lulu is breaking down exactly what went wrong here. One, if you turn off replies, you look guilty. You can't turn off quote tweets. So you're just setting yourself up to get ratioed even harder by other means.

2:09:54You should have anticipated the community note, which looks worse than either comments or quote tweets. and if you're in the position of having to make a statement like this comms and social media aren't your biggest problems rough yeah i don't even know why they had to make this yeah which is a quote to reissend debanked by you guys like what and and his family and his ex-wife and his ex-wife's husband whoa because they were receiving yeah payments uh whatever uh alimony alimony yeah yeah wow yeah rough not a good day uh and the whole thing is there were fintech companies emerging over the last six years probably four years i guess sure years that were explicitly because conservatives were being debanked yeah they were they were saying this is the the right wing which we shouldn't have political leaning yeah it's very silly our financial institutions should not be political yeah politically leaning at all yeah let's just keep politics out of we keep politics out of the show let's keep them out of our banking system i Agree.

2:10:57Agree. Uh, Oh, this is, this is a fun one. I know you're gonna have a lot to say about this. Jared Friedman says rocketable is the first is building the first one person,$1 billion company. The plan is simple. Buy up software companies, fire all the employees and replace them with AI agents. Literally the most AGI pilled idea I have ever heard. Okay. So, uh, like many topics, like, like many podcasters podcasters often have a lot to say yep uh i'll preface this by saying i i don't work in directly in private equity yep uh and i'm not a software engineer but and uh the other thing i would say is i i like this sort of big bold idea uh it's cool to have this you know major milestone one person one billion dollar company yeah very exciting and i think that many sort of uh this is a cool experiment uh and is worth funding from yc and is worth the founder trying to take a crack at it sure but i i i i have to imagine like here's the thing like buying companies companies trade on a market yep and it's not perfectly efficient sure but any company worth buying unless the owner uh does not have uh you know is not doesn't want to get the best possible price uh is going to talk to a lot of people, right?

2:12:20So if you're this one person company and to get one deal done, maybe you have to talk to like 200 companies, right? And all those 200 companies are talking to other private equity firms, other individuals, they're exploring raising other forms of capital. They have all these different options. I don't know that the classic private equity strategy has been to come in, fire all the unnecessary people, replace them with modern software. and so to me i'm not quite sure that this uh while while i'm in favor of the experiment i'm not quite uh it would be i would find it hard pressed to invest in the founder unless it was like a personal relationship because i don't know that you're going to have any edge over the many other private equity firms that will all presumably follow the same strategy right yeah there's classic examples of software pe guys coming in uh and there's 100 employees at the company firing 90 of them right And so firing all of them, I don't know how much better.

2:13:21It's a weird positioning in brand. Yeah. And it's tough as a buyer. Historically, yeah, it's a very good way to get attention. But what happens if this post goes viral, a bunch of talented people say, hey, I want to work on this. Sounds fun. And you're like, well, sorry, we want to be a one person with a billion dollar company. We'll hire you as a contractor or something like that. Just can't have you on the W-2. um and so why and and so setting these artificial constraints is cool as an experiment to say let's see what's possible what's going to come out of this and maybe it will force us to develop agentic software that ends up being better but i thought it was interesting um the the gumroad founder now has something called anti-work okay where you can come just build software sure to replace humans at gumroad oh okay i think anti-work is owned by gumroad sure and so there's other experiments that are going at this but the main thing is this guy isn't just competing yeah he's competing with every private equity firm that buys software companies and they don't care that you just have one person on your team if they have a deal that they want to win they'll staff it with five people yep they'll tell the founder hey uh we're gonna let go of a lot of people because we want to increase earnings but we're not gonna let go of your you know we're not gonna let go of you or whatever you know whatever and so it really comes down to paying a good price winning the deal knowing that the deal is going to happen yeah and i don't see um business owners being too thrilled about the thesis right yeah exactly you're gonna fire my whole team it's like no more like even if you sell the private equity if you've built up a business you're like well yeah like you're probably going to trim some people here and there wind down some relationships over time.

2:15:02Sure, the company might be smaller in a few years, but the idea of just like, oh, day one, the goal is just like zero employees, like screw everyone. It's like even more ruthless. And like, I mean, when you go to the website of a private equity company, they don't put front and center because sometimes they don't. Like sometimes they actually grow the staff because that's what's best for the business. And they're really like, they're in some ways more ruthless or maybe less ruthless, but they're really just saying, we actually just care about shareholder value. And so that might mean more jobs.

2:15:35That might mean pay raises. That might mean pay cuts. It's very dependent on what is - Yeah, maybe what this turns into is one person being the CEO because you still need a chief executive officer presumably for some amount of time. Anyways, I'm excited to see it play out. We'll cover it on the show. I want them to be successful and let's see what happens. Yep. Let's go through some other stuff. Bill Halligan says, the CEOs of the fastest growing startups are doing the following, 100 % in the office, two, very, very lean headcount, three, mostly homegrown exec teams, four, shooting for$1 trillion, unicorns are dead, and five 80-hour work weeks.

2:16:23You love it? You put it in there because you're excited? shooting for a trillion. We'd hear about this. A couple of companies have been talking about a trillion. I mean, there's more trillion-dollar firms than ever now. You're only a few 10Xs away from being a trillion-dollar company. That's true. That's true. I think this is accurate. I mean, also, it's just hard to underwrite. And this is the dynamic right now. Yeah, this is the dynamic. So if everybody has access to these AI tools that make everybody more efficient, it actually just means that you should work even more to just increase the returns on that leverage.

2:16:57Totally. But if you're saying 100 % in office, don't let me catch you on a Zoom podcast, Brian, because I want to see you doing it in person. That's right. Ray says, Cursor is down. I'm writing organic farm raised non-GMO code by hand the way our ancestors used to do. 2K likes. A lot of people using Cursor. They're excited. i i saw people got cursor working with uh with deep seek under the hood really bad that's the most that's the most inorganic the most non-farm raised code you could go down with coding with some of these ai tools like devin and and our cursor is like uh retired people in vegas on the slot machines they're just like yep yep tap tap tap tap tap um but you gotta get the code written one way or another let's do another promoted post and we'll close that with a bucket poll promoted post from uh our friend sean frank not his first time on the podcast certainly not his last he goes that's a lot of meta spend uh he was sent a plaque for ridge for being in the 100 million dollar club on ridge that means they have spent 100 million dollars uh with the greatest financial institution through their ramp cards through their now well they have a bill they have payments sure too so not not necessarily all through their cards although it went through possible uh but it um but but yeah and and just goes to show i mean the ridge is a perfect example of a ramp customer very large lots of uh lots of net income and uh run extremely efficiently i love that it's a deal toy we need to bring back deal toys we've been trying to bring back deal toys we're working on some of our own yep uh so if you're a company or a firm and it's just on your list it's gonna go on the desk it's gonna be a constant reminder of like yeah ramp cares about me as as a as a business uh counterparty which is great i think this is in the back of a truck bed too oh really it's cool it's cool um very cool cool well let's close out with this bucket poll from blue blue w mist blue says you are getting lapped by people 50 dumber than you because they don't overthink stuff aim fire correct later i love it some good ties into ties into your your strategy recently golden retriever retriever maxing yeah just be friendly hot and dumb intelligence is going to be too cheap but high energy high energy high energy just do stuff just get out there just bark plays bark let your dogs bark grab that frisbee out of the air grab that capital that half a trillion go get it half a trillion go for one trillion bark bark let's go we'll see you watching everyone please go and notice a five-star review and leave an ad for your company or a friend's company in the review comments we love these five-star reviews we'll print it out we'll read it on the show it's a free ad read also big monday uh as of now we're planning to do our first ever live show oh yeah happening from around call it 11 to 2 p.m pacific sounds great uh you're not going to want to miss it we're very excited to go live and have a good weekend.

2:20:11Thanks everyone. Bye.