Dr. Alex Karp LIVE from AIPCon | Alex Karp, Dan Ives, Eric Brock, Casey Lane, Ted Mabrey

12:13Eric Brock:Right? And we're making it useful with customers. So we're on an adoption curve. So, you know, the history of the company is we've been developing technology for a number of years. That's the core. Yeah, what was the first product?

12:25Casey Lane:Was it actually like you build a product, you sell it to the government? Was that what that was?

12:29Eric Brock:Yeah, essentially. So we've got our first product was a drone in a box. So this is a drone infrastructure. It lives in a docking station. And then it takes off. Yeah, it's got a robotic arm because it's got batteries and payloads. Sure. And that's used for, say, drones first responder. The Dubai police are deploying this. Yeah, we see that a lot. Drones everywhere. They fly. So very useful. But what's particularly important about that, and it was really helpful for us to start to break out, is it works. These technologies, it works. But as we've evolved, in terms of history, I'll fast forward.

13:03Eric Brock:Once we were able to sort of demonstrate that we can take these to the end zone and start to build markets and build customers, we really began to become aware of the bigger opportunity. There's many, many players, I say drones, but it's on the ground, they're in the air, they're in the water. And all the critical components around these systems, we built a lot of companies and they're maturing. However, we built technology platforms. Now we have to build businesses. And that's what Onus is about. So we've begun to consolidate and bring these capabilities into a portfolio. But it's not just separate.

13:33Eric Brock:We're going to integrate them. You get scale going to market. You get supply chain scale. And that's the whole thesis around our financial model.

13:39Casey Lane:So there's part of it that's more private equity roll-up. There's also an investing arm. You take minority stakes as well. When you make an investment, are you always looking to build a position over time to where you could own the full company? or are you also looking at those venture capital bets where they will just perform financially?

13:57Eric Brock:Yeah, so the answer is yes. Okay. So it's all of that. And really what we believe is that there's a couple things. So most of our capital is deployed in control investments because we want to get that leverage. We want to focus on mature technologies. At the same time, the ecosystem is really important. And I think particularly when we're coming into the public markets because we're transitioning from venture-funded companies to now they're maturing. We need growth capital. It's a different business model. It's a different cost of capital. And that's where it's deploying. So one of the things we've been trying to do is the public markets are not as familiar with a lot of these technologies and systems as compared to the private markets.

14:32Eric Brock:That's where they were born. So as a leader, and the leader we want to be, we think the market needs, is we're trying to shine lights and support some of the ecosystem players. Because we need the ecosystem to grow up around us to get scale. So even places where you might say, hey, they're competing. is that not really, leaders have to come together because the supply chain needs us. We can't be a cottage industry of hundreds of drone players. The leaders have to come. And if I can help identify that for the public markets, that's important and we get value from it. And of course we can make money.

15:02Casey Lane:Yeah, so tell me more about the disconnect between the business and the market. I'm interested to know, there's a lot of investors out there that they don't even need to know the product, use the product, but they know if it's SaaS, It's going to recur. It's going to be revenue. There's going to be some high gross margins, some costs, low capex, et cetera. How is your business and the business lines that you have, how are they different from other companies that are in the market? Is it you're doing deals with the government, so you're working on programs record, the money comes later, but the contract values get deployed earlier?

15:37Casey Lane:How financially is it different?

15:38Eric Brock:There's a lot of that, but maybe I'll start at the most simple level, which is where you started, which is the drone. The drone in and of itself, by and large, is a commodity. It's not hard to build a quadcopter, even a fixed-wing drone. What is hard is to make them autonomous. It's another layer of development and sophistication. So that's one. And then the second layer here is bringing the systems together, right? Air and ground, putting the command and control around it. And, of course, that's where Palantir is really going to help us at massive scale. But that's where you start to differentiate, and that's where you can capture margin.

16:13Eric Brock:That's where you can capture recurring program business. And the thing about the markets are a lot of what we're doing is infrastructure. So think about counter drone. There's a massive number of locations across the world that need to be protected. And this is not going to be just, hey, this year we're going to protect from drone threats. It's 10 years to build this cycle. They're just too big. So it's recurring that way.

16:35Ted Mabrey:The last two weeks have taught us anything is that it's any targets on the table, commercial or military. Particularly, yeah.

16:43Eric Brock:I mean, you know, they attack the economy, right? And I think this is a threat that we're seeing today. The public safety, the homeless security officials, the Department of War, they've been preparing for this for a long, long time, but it's hard. So you're seeing a lot of technology, including ours, that we're under a faster pace of maturation. But we're here. It's going to happen, but it's going to take some time, and it is urgent. And so then the other question I get a lot is, okay, what happens if peace breaks out? Well, I don't know that anyone's expecting that soon, but eventually we hope that that does happen.

17:14Eric Brock:We still have to have this protection because you can't be vulnerable. The lower skies, as they say, technology has now made them, it's a different threat than we've ever had, particularly U.S. soil. So, again, you asked about the business model. You can think about this as an infrastructure built for a decade or longer. And then, of course, when you're installing infrastructure, you have to service it, you have to upgrade it. So there's a lot of recurring elements here in our financial model.

17:39Casey Lane:That makes a ton of sense. Well, thank you so much for taking the time. Hopefully we'll see you in the studio much warmer next time. All right, I love it. Let's pop off those headphones, and we will bring over our next guest. Thank you so much for hopping on. And we will continue our coverage today. What's going on? Good to meet you. How are you doing, man? How are you doing? Good to see you. Let's throw this headphone set on. Can you do it over the hat? Can you do it over the hat? I don't know what we'll do. You can put the hat over the – oh, there you go. That works. See if I can throw it back on.

18:11Casey Lane:That works great, actually. There we go. Can you hear me okay? I can. Perfect. Perfect. Can you hear me okay? We can hear you just fine. First time on the show, please introduce yourself and the company.

18:21Ted Mabrey:My name's Casey Lane, and I work for a Western sports entertainment and media company called Teton Ridge. We do a number of things across sports media and entertainment, all focused around Western lifestyle and Western sports.

18:35Casey Lane:That's great. What are the most popular sports that you're covering?

18:38Ted Mabrey:So we have a television network and a subscription-based streaming company called Cowboy Channel and Cowboy Plus. So we have a linear channel, and then we have a subscription app that covers all of professional rodeo on the PRCA, which is the primary sanctioning body of professional rodeo. And then we also have a bull riding team in the TKO PBR-owned PBR Teams League. So those are the two biggest, two of the biggest. We also produce a massive rodeo Memorial Day weekend at Globe Life Field in Arlington and do a variety of other things in Western sports. We have a Hollywood division that produces scripted, unscripted movies, all kinds of stuff around Western sports and Western lifestyle.

19:24Casey Lane:A few years ago, I followed J.B. Monty a little bit. Who are the big stars these days?

19:29Ted Mabrey:So the big stars of bull riding right now, you know, they vary from sort of team to team, space to space. On our team, we have a couple of guys that are like, you know, chiseled old veterans, a couple of Brazilian guys. And then we have a sort of middle-aged bull rider, I would call him. He'd love to hear me call him that. Keyshawn Whitehorse. Okay. That's a good name for a bull rider. Yeah, he's great. That's a good name for a bull rider. He's awesome. Yeah. But then, like, there's some emerging talent. There's a kid out of North Carolina named Clay Guyton. There's a kid that's on Florida's team but grew up in Texas named John Krimber.

20:04Ted Mabrey:So always new talent coming in. Colby, who's my head coach, just spent four days in Brazil at a combine that PBR puts on down in Brazil to try to find new and emerging talent down there as well.

20:16Casey Lane:Very cool. How's the business growing overall? There's a lot of turmoil in media, a lot of consolidation. But I imagine with the Internet, there's more people just becoming aware of bull riding, of Western lifestyle sports broadly. But what's it been like the last couple of years?

20:31Ted Mabrey:Yeah, I mean, it's no secret in the market that Western has, you know, had a renaissance, right? A combination of COVID and the Taylor Sheridan Yellowstone effect. I was about to say, there's so many different funnels into this world. And I look at, like, I will give Taylor all the credit in the world, but also I look at it as, like, you know, that's a little bit of the canary in the coal mine. Okay. I think, you know, people, particularly in the U.S., have grown up farther and farther away from farming and ranching.

21:00Casey Lane:Yeah, people are moving to the cities.

21:01Ted Mabrey:But it's always part of our ethos, right, as Americans. This thing right here is the most iconic American symbol that there is. It really is. You know what John wears on the weekends. I'll say that. I do. See you in the weekdays. And so that sort of cultural phenomenon of what sort of Yellowstone brought and what COVID brought, getting people back outdoors. They couldn't go on vacation. So, you know, I'm going to buy an RV and a side-by-side and go see the West. all those types of things are you guys are you guys trying to manufacture some type of drive to survive moment because i think what that obviously drive to survive introduced the sport more broadly to americans but it also drilled down into the individual talent which that's something that taylor sheridan like the taylor sheridan industrial content complex is not

21:55Ted Mabrey:yeah i think um it's definitely on the roadmap of projects that we're looking at We've done some stuff. PBR has done some stuff. There was a show on Amazon a couple years ago around the first year of the Teams League that we participate in. But, you know, what we are really, you know, my belief is that we have this, we have the attention of the country. And to some extent, the world, right, that's looking at Western. The place where people attach passion is sports. So how do we take that interest in Western and drive it towards sport? Because that's a place where we're heavily invested, right?

22:34Ted Mabrey:Like I said, we have a whole television network and streaming app in Cowboy Plus that is dedicated to the business of rodeo and rodeo media. So it's definitely something. And we sort of have extensions, too. Like our big rodeo that I talked about that we produce in Arlington, the American, is actually on Fox. it's not even on our own platform because we're trying to widen the aperture a little bit and get more people into the top of the funnel to drive them into that sort of fandom what's the next country outside of Brazil that's a pipeline for talent bull riding in particular is very popular in Canada Australia, Brazil US obviously, Mexico Argentina is sort of a new frontier A lot of it has to do with the level of bull talent that those countries have access to.

23:27Ted Mabrey:There's two layers, basically. Yeah, because if a guy is really good in Argentina right now, he probably needs to go to Brazil and get on a little bit better bull and then come here to get on the highest caliber of bull, right? If you took a kid straight from Argentina and put him on our bulls, it would be like going from the pony rides to riding thoroughbreds. You know what I mean? Just because they don't have that level, not that the talent's not as good, they just don't have access to the kind of bull power that we do here.

23:59Casey Lane:Are there any science or technology stories that the industry is grappling with? I'm thinking about cloning prize bulls or genetic engineering or performance enhancing drugs. Are there any areas where the community has sort of grappled with and found a happy medium on these new tech?

24:19Ted Mabrey:um well there's a there's a lot of there's a lot of those scenarios over the years that that have been relevant genetics is a huge part of the buck and bull and bucking animal business um you know it's like it's like anything else you know racehorses run fast exactly yeah labradors chase tennis balls and buck and bulls buck you bring bulls that buck to daughters of other bulls that buck and you get more bulls that buck there you go um but there's a ton to the genetics and There has been some cloning projects and things like that. Okay. You know, really the revolution, the next revolution, I think, in technology and Western sports is what we're doing right now with TWG and Palantir.

25:00Ted Mabrey:And we're bringing, we're building a video analytics platform that basically tracks the animal, the rider to provide data. It's Moneyball. It's Moneyball. Yeah. And we pair that with the actual data from, you know, scoring and timing. Yeah. And we're building to the best of our ability to predict, you know, predicted outcome models of this type of bull with this particular rider. This, you know, these sort of different scenarios. We're using it on the broadcast side to really dive deeper for the fan base into, you know, why is this, why was that ride scored that way? Well, we can go back to this analytics platform and show you with graphics and with the data why this bull bucked harder than that bull, essentially.

25:55Ted Mabrey:So those are the kinds of things that we're working on right now to do two things. One, on the bull riding team side to make us better and give us a competitive advantage and then sell the pieces and parts of it maybe to some of our competitors as an analytics platform. And then on the viewership side, it really is about informing the fans. I mean, look, you watch an NFL game now. You know when a guy does a punt return, oh, wow, that guy ran 23 miles an hour or whatever the number is. We don't have that stuff in rodeo yet, but we're building that right now.

26:28Casey Lane:Yeah. How do you think about these must-see events, creating the Super Bowl moment, amplifying all the energy in the entire broader industry into one singular day, minute, hour? What is the strategy there currently? Where do you want to see it going?

26:44Ted Mabrey:So that manifests itself in each of the different sports verticals differently. Like in professional bull riding, that moment is the team championships in November at T-Mobile Arena in Vegas. In traditional rodeo, in the PRCA, that's 10 days in Las Vegas in December during the NFR. But just like you say, sports are about moments in time. Our rodeo that we do, the American, is like the U.S. Open. It's the top five in each discipline against a group of five per discipline from every other part of the world that have competed on a track through a series of qualifiers and regionals to get the chance to compete against the best in the world.

27:35Ted Mabrey:And if they beat the best in the world, they win a million bucks. Actually, this year they win two million bucks. Two million, okay. Because last year, nobody won it, and it rolled over. Oh, nice.

27:42Casey Lane:There you go.

27:43Ted Mabrey:So that's kind of, you know, those are sort of like the big moments in time right now in Western sports.

27:49Casey Lane:Yeah. How do you think about the creator economy broadly, the personal Instagrams? I was following, like, saw someone who does F1 Racer, and he's on Twitch in the simulator. And you just have this ability to go to the actual event, but then also open up your phone and continue that experience. How important is the continuation of the experience across the internet these days?

28:15Ted Mabrey:It's hugely important. And we've done a number of events. We've got a guy in our company who runs our fantasy gaming business, who's a former contestant, who's a really energetic sort of personality. and he has done several hosted events where we take the live rodeo feed from our cowboy plus product and push it through you know alternate platforms like twitch and bring in people yeah to host on their own channels that have never watched it before and interact with him asking questions like what's you know what what the hell are these guys doing what's going on there you know so um that's a space we're just sort of trying to figure out i think right now yeah but But in terms of like, you know, the influencer community, you know, our athletes have found sort of their own voice there.

29:09Ted Mabrey:Right. Because in rodeo, you know, until these until teams came along in bull riding rodeo, everybody's like an independent contractor. Right. So my ability as a contestant to monetize my very short career is, you know, can I put a logo on my shirt that's going to get caught on TV? Well, now, with the emergence of social media, those guys have their own voice, their own place, their own incentive to get more followers so they can go to these bigger brands and say, Hey, Ariat, you've got to pay me X because I've got this many followers and I'm talking about your brand every week and that kind of stuff.

29:41Ted Mabrey:What's your most memorable bull ride for yourself? So I was never a bull rider. But you have to have taken one out at some point. Never. Really? Too dangerous? So dangerous. It's one of those, look, so I did the timed events in traditional rodeo growing up. My dad was a bull rider, and I think as much my dad, but more so my mom, having been married to a bull rider, made sure that I never even looked in that direction. But I'm pretty convinced I don't have the thing. The thing. There's a thing there. The thing is the ability to suspend fear. Yeah. It really is. And every active bull rider will tell you that they're not scared.

30:24Ted Mabrey:And every retired bull rider, five years later, when he looks back on it, says, no, it's not about not being scared. It's about being able to convince yourself that you're not scared. There you go. For that moment that – because when you – you know, I'd love for you guys to come to an event, right, get behind the chutes. When the whole thing is – when the whole, you know, 25 ,000 pounds of steel around you is shaking because a bull is moving and he's 1 ,800 pounds and a 140-pound guy is about to climb over the chute and get on him, I just don't have it. It just doesn't exist in my brain, the ability to just shut that switch off and say, I don't blame you.

31:01Ted Mabrey:I think you have it.

31:02Casey Lane:I would love to see it. I have full faith. You do it. You're good. I'll be watching. I'll be rooting for you.

31:08Ted Mabrey:And look, I compare it. There's a lot of comparables. You think about IndyCar drivers that are going 240 miles an hour down the back stretch at Indianapolis. Or you think about motorcycle racers or UFC guys. UFC guys compare a lot to that, I think. But to a person, when you bring those guys to a PBR event and they watch it live, they're like, I can't believe that this is a thing. We were just in Pittsburgh a couple weeks ago, and we had Ben Roethlisberger with us on the back of the shoots, and he was just going crazy because he's not been up that close and personal with us.

31:53Casey Lane:Well, thank you so much for taking the time. Thank you, guys. I appreciate you. I appreciate you on the show.

31:56Ted Mabrey:I look forward to coming to an event at some point.

31:58Casey Lane:I'm going to grab those headphones from you and have a great rest of your day. We'll do. Thank you, guys. We'll talk to you soon. Welcome back to the show. It's been a little over a year, right? Did we talk to you last year? Good to see you, Ted. Good to see you, Ted. for those who aren't familiar please introduce yourself how long have you been working at Palantir I've been here 16 years 16 years there we go there we go this is the coldest AIP

32:21Alex Karp:yeah you're freezing I got married down the street and an outdoor wedding with no contingency plan

32:29Casey Lane:wow and what I was like the weather was great oh weather was great you picked the venue this year You got good luck. This is the bad luck. You can only roll the dice so many times. Talk about your role. Talk about how it's changing. I'm very interested to know how the role of the forward deployed engineer is changing this month because of AI agents. But take me through a little bit of the history and how you think it progresses from here.

32:53Alex Karp:Yeah. So my role primarily for 16 years, what I've been doing is going on site, deploying our software over and over and over again. and I think the this year question is really prescient because having done it for 16 years, I'm pretty good at it. I kind of know how to do it and as I go and see what our teams are doing, it looks like a complete alien.

33:13Casey Lane:I don't recognize it at all. Does that speak of timing or actual roles or what people are doing?

33:20Alex Karp:I think there are two things that are actively changed and then two implications of it. The two things have actually changed is the timing, the pace is rapidly accelerating to zero. You can start, and within a day, you can have an application that actually matters to a business. And what's driving that?

33:40Ted Mabrey:Is that your guys' internal process, or is it the technology getting better? I think it's three things.

33:47Alex Karp:One is, and maybe most important, is the market is now demanding much more from software than it's ever demanded before. And so that cultural expectation is a huge part of it, of like, this has to matter. This has to be in the fight. But this has to be really relevant.

34:01Casey Lane:Everyone's used ChatGPC. They know what it's capable of, and then they show up to work, and they're like, why am I still filling out the same form 10 times? They're like, hey, this thing's magical. Work sucks. Yeah, work sucks.

34:11Alex Karp:And it shouldn't. And that demand is huge. And it is a huge accelerant for us. Then the second is, have you been building the infrastructure that presume the models are going to get better? And if you're ahead of the infrastructure and you're presuming, like, hey, what's going to have to be where these things are actually load-bearing in very highly consequential? regulated decisions that's made a thousand times, which integrate different decision-making processes across people, across systems. You're going to need infrastructure that's able to do it. That infrastructure has matured a lot over time.

34:39Alex Karp:And then the models themselves are getting better. And so that means that you can now have software go from legacy, rigid, defined by its limitations to immediate, adaptive, and it can be embodied, maybe not like literally embodied, but embodied in the way that you want it to be, such that it works. Which is the second thing that I think is just dramatically changing about the process, which is it never made sense for your best people to engage with what the technology is that runs your business. What does that mean? When you think about like every organization has this at the edge and they have it in the C, in the C suite.

35:11Casey Lane:Okay.

35:12Alex Karp:They have the thing at the edge, which is like the guy who runs the plant. Yep. And the guy who runs the plant knows why it works. Sure. He knows why it breaks. Sure. Every time something needs to be fixed, like, you know, John, right? Like John makes, makes, makes the plant work. Yeah. And in some ways, John was like the least levered person by technology because everything you'd buy with enterprise technology would be to standardize, to enable management. And that person worked around the system. They had their access databases, their own Excel macros. They had their own way of operating. Now the technology can be John's Iron Man suit.

35:39Alex Karp:And so that means that it now makes sense for John to spend all their time. And you have to earn this, is what the forward deploy engineer do, is earn the time of the best people so that they can dictate what the system is that actually runs so that their company can be more differentiated over time. Got it, okay. And then at the top, you can do this with the CEO. and a lot of my conversations is, this is what the company that's going to dominate my industry is going to look like in 2030. And then our FDE's job is to say, okay, let's get an MVP of that done by Easter.

36:04Casey Lane:Do companies, I mean, in this world where companies are demanding more from software, do they understand what Palantir does? Do they understand the value prop more now? Is it easier to explain to them? Or is it getting more complicated because the tools are more complicated and the capabilities are more complicated?

36:19Alex Karp:It's easier to explain because we spend no time explaining it and all you do is show it. And so it's like the tortured explanation, I kind of think, which is a derivative of I need to understand everything because this decision that I'm going to make, I'm going to be stuck with forever. I'm going to be locked into this system. I'm going to have to use it. This is like made sense for how people procure enterprise technology. It's an analytical process, these things. And now it's like, show me that it works and show me that it works. And so I want to spend virtually no time explaining why it works and just showing you how it works.

36:49Alex Karp:And then let's talk about how to make it work 10 times better for you.

36:52Casey Lane:So put aside like Palantir's hiring plans and just talk to me about the American economy. Do we need more forward deployed engineers as like a society for where we're going?

37:04Alex Karp:I think the thing that the forward deployed engineers embodies for us and why I always get a little bit stuck, you know, talk to a lot of companies that are like, hey, we're thinking about the FTE model. Does it make sense? Are we going to do it? And the place where I always get stuck is, well, if you're not building our company, I'm not sure you should do forward deployed engineers. I don't think it's intrinsically good or it's intrinsically bad. The reason we do forward deployed engineers is our core philosophy, the core business strategy is that we're going to build the technology so our customers win.

37:32Alex Karp:And if that's your core thesis, then of course you need forward deployed engineers. Because if you want to win, you have to be able to deliver and you have to be able to do it. And then you also need to figure out for our customers and we also have to win. We have to scale our capabilities. We have to be able to invest in R &D. So we have to be able to figure out how to synthesize those things back into scalable technologies that allow us to deliver for our customers more and more over time. That is a highly tasteful exercise of what gets synthesized, what gets productized. Frankly, I think if you didn't have Shom, it would be impossible.

37:59Alex Karp:I wouldn't do it that way. But the thing that I think forward deployment engineering does embody, which I would argue we need more of in society, is it's sort of the rejection of the financialization and managerialism that defines what you think a business can look like with software versus saying the point of software is to enable creation, is to enable the end customer at work. And by the way, we've proven that you can do that and build a really scalable, profitable business at the same time.

38:23Ted Mabrey:Where do FDEs fit into the customer lifecycle? Is it kind of a reoccurring engagement? I'm thinking about the last two weeks. We have so many different supply chain disruptions, a lot of companies that are leveraging Palantir to run their operations. are they, I imagine the systems are built to be able to withstand chaos. That's kind of the point. But at the same time, do you ever redeploy forward deployed engineers during moments like this?

38:55Alex Karp:Yeah, I would think of it in two ways. One is for us, the forward deployed engineer is a CapEx investment, right? You're installing the factory, you're building the initial ontology, you're training the existing customer to be able to wield the technology in the way that they want it to. and forward deployed engineering done well is kind of a capex investment. And then the place where it's not is and where you do have re-engagement is our goal is to continue to push the bounds of the ambition of like, what do you want to do? Not can I deliver the same thing more efficiently to the next customer?

39:21Alex Karp:But given what you've done today, have you thought about doing this? And have you thought about doing that and pushing the boundaries of the creativity and then having the connectivity back with our core platform seems to say, we're going to completely throw away our entire roadmap and focus this around this one singular customer because if we can do this, they can win. And by the way, we're going to build the primitives that allow us to build things that our other customers went with.

39:40Casey Lane:How much of the discussion between FDEs and Palantir folks and corporations is around just explaining the capabilities of modern AI models versus previously, like, what a software system could look like? How is that changing? because it feels like we're in this crazy capability overhang where like the models move so fast, the technology is getting so much better that you can take two weeks off and come back. And that thing that you were smashing your head against the wall on has just been one shot by the latest model. Yeah. I, I don't know in my world where we live,

40:23Alex Karp:that isn't true. Like we've seen very little, what I would call like cannibalization of the existing thing, but we have seen the, I get to re-decomp this problem. I can reorganize around what these things are. And so a lot of it is, are you building an engine that presumes change in the underlying technology? Or are you preserving what most enterprise IT systems, people, organizations are, which are, I need to presume stability and manage risk, costs, and effects. You do need to now build a system that presumes rapid rate of change.

40:52Casey Lane:Yeah. So where are you seeing more value in using generative AI models to build deterministic software faster versus actually deploying a stochastic model, a non-deterministic model, into an enterprise workflow. Because I imagine that a lot of your systems, a lot of your customers are saying, look, I don't care that the latest model is 99.99%. I would rather have a system that's 100 % verifiable because at least I know that if I've defined it in a particular way with business logic, I get the same output no matter what.

41:23Alex Karp:Yeah, I can tell you the ANSI pattern and the pattern that's working. So the ANSI patterns are called like the pejoratively, the private equity mindset of how to deploy this software, which is you have now three types of, call it cognition computation. You have traditional computing, you have human thought, and then you have generative AI. The private equity model is saying I'm going to take this new form of cognition and try and replace old forms of cognition and do the exact same thing I'm doing before with slightly fewer heads. So then you have the anxiety around job loss. You have the, hey, I'm going to increase margins, but so what?

41:58Alex Karp:And I think that is a dramatic underuse of the technology. One, it's a lot harder than it looks to do that, to turn something that's non-deterministic into something that is deterministic. But more importantly, it's why would you do that? It's so powerful if you put it into white space, like let it run like a thoroughbred by decomping problems into where it's actually useful versus trying to replace something in the old kind of slurotic enterprise technology estate. Yeah.

42:22Ted Mabrey:How have you processed? There's a bunch of AI roll ups, holding companies, people, you know, venture people that are trying to maybe take something out of the P.E. playbook, but build some type of advantage by applying AI better. Like, what do you think their prospects are? One of those things that sounds sounds really straightforward, but easier said than done.

42:45Alex Karp:Yeah, I don't know any specifics, so it's hard for me to opine what they're doing. But the first question that I would ask is to understand what the culture of those companies are and why I think like private equity is just culturally not built to do technology. To do this technology right, you have to presume that you're wrong at the outset, not presume that you're right. That's very hard from my experience with working with folks in private equity. And so if you can build a culture that presumes that you need to create, iterate, and discover what the thing ought to be versus do the deductive kind of management consultant playbook of, you know, I've talked to all of these firms.

43:19Alex Karp:And, like, the weird thing is everybody ends up with the exact same target that they're going to go to because they have the exact same deductive framework of, like, this is what it looks like. They process a lot of papers. It's like, okay, and then somehow everyone's doing accounting roll-up. So then where's the alpha? The investment thesis is done. And then I think the execution is going to be a lot harder than they think it is.

43:35Casey Lane:Yeah. Well, Ted Mayberry, thanks so much for taking the time. Great to have you. Thanks a lot. We will grab those headphones and talk to you soon. Jordy, would you rather have$10 million or access to ChatGPT in 2012?

43:51Ted Mabrey:This is such a funny question because it reminds me of the, like, you know,$10 million or dinner with Jay-Z.

43:58Casey Lane:Dinner with Drake or something, or Jay-Z.

44:00Ted Mabrey:But in this case, we were talking about this off-air. And if you had ChatGPT 10 years ago, you could make hundreds of millions of dollars in so many silly ways. I'd be like, same-day essays for college students. You need an essay? You got something to do? Great, we got one. If you were the only person with the technology? Same-day speech writing. And Ben was saying, even on the ImageGen video side, it's like, I'll generate any asset that you want.

44:30Casey Lane:Yeah, commercials. commercials that I mean, that would be crazy. People would be like, how did you do this in a day? Even, even just like, even if you don't have codex, but you just have Chachapiti, you can probably, uh, you can probably piece together so much software that then you could go sell as an actual company. There's a million different ways.

44:48Ted Mabrey:Yeah, really, really funny because it sounds, it sounds like such a silly question, but then when you actually think about the capability,

44:53Casey Lane:it's, it's, it's remarkable.

44:54Ted Mabrey:I would build a very, very thin wrapper. I mean, that's one.

44:59Casey Lane:If you just actually go and sell this futuristic technology, everyone will assume you're a time traveler. We're doing pretty well. We're doing pretty well.

45:09Ted Mabrey:The snow is hitting my feet.

45:13Casey Lane:The computers are working. The stream is up. This is a miracle. It is so cold that the computers weren't charging at one point. But I've heard, you know, if you're in the desert, you need fans for your computer to keep it cool. We probably need to get some of those. But I never thought we'd have to get heat pads. Oh, they have. The team, the production team has heat pads on the computer. And we should be joined by Alex Karp in just a few minutes. So thank you for tuning in. Thank you to our sponsors for making this possible.

45:43Ted Mabrey:More news. Trump administration set to suspend the Jones Act to team oil prices.

45:49Casey Lane:Was this what Alex Epstein was talking about?

45:52Ted Mabrey:Yeah, I mean, a lot of people have wanted this forever because the Jones Act obviously has had some unnecessary or unintentional consequences. Yeah, it sounds really good on paper, but it's difficult in certain situations. So yeah, we're getting it in not the way that people would have expected. Yeah. Gwart says, why don't they just tokenize the oil in the Middle East and transport it across permissionless financial rails, thereby avoiding the Strait of Hormuz altogether?

46:20Casey Lane:other here's your oil nft here's your here's your gasoline here's something we need to figure out

46:26Ted Mabrey:uh helium uh helium exposure catar's shutdown of liquefied natural gas production has shaken about a third of global helium taken about a third of global helium production offline affecting chip makers who rely on helium for semiconductor manufacturing helium has no viable substitute in the chip process and no other source can immediately replace catar's supply with helium containers already filled before the war remaining stranded. If the disruption persists, helium shortages could force chip makers to deprioritize lower margin product lines, reinforcing the existing allocation towards AI memory and deepening an already severe memory shortage.

47:07Casey Lane:Find me the Alex I've seen of helium today. Find me the Scott Nolan of helium. There's got to be someone out there who's been building a startup around helium. I actually did talk to someone. I don't know that I should share all the details, but they were looking at a startup that was going to buy a pretty significant helium mine or something like that. And they had a whole business plan for it. And I think this was years and years ago. But it was a fascinating industry. I dug into it for about an hour with this friend of the show. So lots to learn more about rare elements and minerals and all the different impacts that the recent news cycle has on all aspects of the economy.

47:55Casey Lane:Hopefully an Odd Lots episode on helium soon. That would certainly be welcome.

48:00Ted Mabrey:In Philly, 600 tubs of French dip mysteriously showed up at several restaurants. Is this real? And Brooks says, yeah, it's in the Philly Enquirer. Brooke says it's starting It's starting

48:13Casey Lane:Who knows, it's very ominous What dip, French dip? Is that like sour cream No, with the sandwiches, right? French dip Oh, well French dip is a sandwich, but is it also a topping? I know, but it's a soup It's a soup

48:28Ted Mabrey:You dip the sandwich in it, the au jus

48:31Casey Lane:Okay, okay, I'm getting it

48:33Ted Mabrey:Sue Hale says the run on inference capacity is coming You have been warned

48:38Casey Lane:Inference capacity I mean, we've seen that with Claude going down. The GPUs are on fire over at OpenAI with the Codex team. Tebow resetting limits. Someone made a button, a website that's just, have the Codex limits been reset? And you can just go to this website. It's one of these one-off vibe-coded pages. And if Tebow resets them, you can go and check your Codex.

49:01Ted Mabrey:Sam Hogan says, real GPU shortage has never been tried.

49:05Casey Lane:Yeah, we could be getting close. There's a lot of demand. especially if Nvidia is starting to keep the chips. This is huge news for Tyler. He's been pitching Jensen on keeping the chips for himself and building an AI model or an open source model, and that was the big news. What was the total headline figure? Something like$26 billion over five years investing in open source LLM development, something like that. It was a big number. 26, big number. It was a big number, not the biggest number we've ever heard. Another big number.

49:34Ted Mabrey:Netflix is paying$600 million for Ben Affleck's company. This was reported earlier in the week that they were acquiring it, but there was no number. 600 is a lot bigger than what I imagined. I was looking at it as like, you know, hey, this would be a nice soft landing for this film company, but pretty significant outcome.

49:56Casey Lane:Yes, 600 is a big number. It'll be very interesting to see what Netflix does with that. We tracked a little bit of the, there's a new Cal Street market up on which Hollywood studio, which traditional Hollywood studio, big Hollywood studio will release a fully AI generated film or scripted series by 2027. And I think Netflix was in the lead, but just barely. It's so early. So we'll see where all of that goes.

50:23Ted Mabrey:Redbird is the big backer of Interpositive.

50:27Casey Lane:Oh, interesting.

50:29Ted Mabrey:Redbird is also. Redbird Capital? Yeah, big backer. of the Warner Brothers deal.

50:33Casey Lane:Are they an investment bank or an investment firm as well? They do both. They take positions and advisory, right?

50:40Ted Mabrey:Yes.

50:40Casey Lane:Yeah. Exciting. Well, we should be joined by Alex Karp in just a minute. Anything else in the timeline worth reviewing? I thought this was interesting.

50:49Ted Mabrey:One of, at least Anthropik's only marketing growth person did an interview. And extremely impressive what he was able to handle on his own, obviously using the tools to their fullest extent. But a lot of people thought it was funny because it's like, hey, you're probably growing that fast.

51:10Casey Lane:You could probably add more people. Well, good growth people are hard to find. They are. Yeah, it is difficult. But yeah, it would be interesting.

51:21Ted Mabrey:Got to talk about Cursor.

51:22Casey Lane:What's going on with Cursor?

51:23Ted Mabrey:Cursor is having what sound like early talks to raise more money at somewhere around$50 billion. I saw one post that was maybe$60.

51:34Casey Lane:I mean, it's just a massive uparound. What was the last round,$18 or$20? $30, okay. So, nice little step up. A lot of doom and gloom on the timeline around Curse. We were debating this yesterday. Fascinating just how big the market is, where adoption sits.

51:50Ted Mabrey:But the reporting says they're growing at 25 % month over month. Incredible.

51:54Casey Lane:And at that scale, 2 billion ARR, something like that. Yeah, and I just think we keep getting these data points that show that the world is much bigger than whatever people are saying on X on any given day.

52:07Ted Mabrey:Yep, yep, yep, yep.

52:10Casey Lane:It's easy to read into Kyle Russell's post about his team, which is truly the cutting edge most online group of folks shifting over and shifting away from cursor. but there are still probably applications where it makes a ton of sense and a bunch of companies that are happy with the product and continuing to pay, continuing to grow. And then there's also that interesting thesis about maybe there's a world where they act as a model router in some ways and are piping different services in. Who knows what the margins look like in the limit, but certainly could continue to grow. So what else is in the timeline while we wait for Alex Karp to join TBPN Live?

52:56Ted Mabrey:I mean, the big news is Taco Bell is adding a skincare item to its menu. Mountain Dew Baja Blast under eye patches are going to be infused with caffeine and citrus.

53:06Casey Lane:That's essential if you're in a Code Red. If you're in a Code Red, get the Baja Blast under eye shadow. I don't even know what that is. But you can get it at Taco Bell on the menu at any Taco Bell. Is this like some limited drop? Is this some viral stunt? Is this real? I don't know. Check it out.

53:26Ted Mabrey:Dean Ball is going back and forth with Emil Michael.

53:30Casey Lane:That's right. They're trading blows about what does it mean to have a constitution? Who should write that? Who should give the models their personality? And I mean, we'll talk more about this tomorrow, but Dwarkech Patel has a great post summarizing a lot of his thoughts, working through all the different philosophies of when the government should be in charge, when different public companies should be in charge. Dean Ball's main point is that maybe Constitution wasn't the right term, or maybe it's a charged term or a loaded term that people read into, but Dean Ball's point is that there is no way to train an LLM that doesn't have a personality.

54:10Casey Lane:Even if it's the most robotic personality, that's still a personality. Well, we are joined by Alex Karp. Welcome to the show. Thank you so much. Great to see you. We're taking the time.

54:18Alex Karp:You guys want with or without hat?

54:20Casey Lane:Whatever is comfortable for you, you can do. It's cold out here. Keep your hat on. I feel like this is an average day for you. You're always out skiing. You're cold. We should have done that.

54:28Ted Mabrey:Yeah, we're close to getting skis. Look.

54:31Alex Karp:Well, you know, we were supposed to do something physical. It's starting to stick. It's starting to stick. It's starting to stick. Oh, I like this. Now I feel like a newscaster. I feel important. This is good. You're like eight feet tall. People don't realize that. He's not standing up because he's like counter-acculous. for all of us. It's like eight foot.

54:50Casey Lane:Last time we talked to you, I think you were doing four minutes on the dead hang. What's it up to now? 505. 505. What about in the cold, though? That's going to affect it, right? No, no. Sorry, we need to have

54:59Alex Karp:a special minute for that. 505. For those of you who haven't done a dead hang, first of all, go do it. Why is it important? Well, there are very few things that are proxy indicators that are accurate for health. Yeah. It's like dead hang, farmer's walk, body weight, and VO2 are the three ones that count. Okay.

55:15Casey Lane:I don't think anyone really I'm not one rep match bench press. That's all I focus on.

55:19Alex Karp:Okay, well, you know, it's like... I feel like as long as I have a really impressive bench press, I'll live a short but glorious life. Yeah, I don't know. Didn't they say something about that?

55:28Casey Lane:Who wants to live a long, glorious life when you can live a glorious, short life?

55:33Alex Karp:Yeah, I think that's what they tell you before they give you a bad salary. I think it's back in the house. I think it's like, yeah, it's like, yeah, my social life is so great I only have a bot, but I enjoy it. Yes, yes. That kind of logic.

55:45Casey Lane:No, but no, it's... Dead hang is important.

55:48Alex Karp:Dead hang is crucial. Okay. And you really need to go work on it, especially anyone watching your podcast is likely to outperform.

55:56Casey Lane:Yeah.

55:57Alex Karp:You want to have some, you know, you want to be able to do something with that outperformance. Yeah, like dead hang. Like, yeah, well, the dead hang may be a proxy indicator for other things you could do with your outperformance. Yes, yes, yes. You know, not everyone is, yeah, not everyone is like six foot nine.

56:11Casey Lane:You may not need a dead hang, but the rest of us. Well, I can cheat because most of the pull-up bars, I just stand on the floor. Yeah, that's right. And I can hold forever. Forever. As long as I can stand.

56:21Alex Karp:That's right.

56:22Casey Lane:But when you're not dead hanging, what should people be doing with the new coding agents? How important is it to learn to code? How important is it to?

56:30Alex Karp:Look, there are two. Everybody's worried about their future, but there are basically two ways to know you have a future. One, you have some vocational training. Okay. So it's like, or two, you're neurodivergent. And when I say neurodivergent, I mean broadly defined. Like, your guys are sitting here. You could have had a corporate tool job. You could have been like, I don't want to pick on Goldman, but like just say, you know, like a job. I applied there. They turned me down. I did work at St. Louis for a little bit. You could have had a job where you're like a cop. He tried and failed. No, actually, maybe they didn't know the right way to test.

57:04Alex Karp:Yeah. Like, it's like, yeah, they were like, you know, whatever. I'm not picking on one or the other. I'm just saying, you know, like, you are probably here. You think you're here because of it. But it's actually you probably wouldn't be able to do that shit because there's like it's the same thing as sit down in class and learn some bullshit. Like and you just regurgitate it. Like that's not a valuable thing. If you are actually have insights into anything and you have real technical expertise. Yeah. Like, you know, you can look at a company, but you actually can look at it because you know something about how these things work or something about clients work.

57:38Alex Karp:But then all the other stuff that used to be precious, like being able to do low-end coding, being able to do low-end lowering, being able to do low-end reading and writing. I feel like Odin came down and was like, I'm going to make the world just right for a dyslexic. Odin has come down from it, or Lockheed has come down and said, you know what, Karp, you suffered so much as a kid. I'm just going to make the whole world so everyone else can suffer. I don't want that. It's like now, but it's really an inversion. Like everybody with like the normal shape skills are dyslexics. Because like, meaning the thing they can do that used to be valuable is not so valuable.

58:17Alex Karp:The thing that they need to learn to do is like be more of an artist, look at things from a different direction, be able to build something unique. And you see this on the battlefield. Like one of the most underappreciated things about fighting a war, which is the, I mean, there are basic core things civilizations do. like build technology for work, is every society fights differently. Every component of the society fights differently. And when, like, American as allies, we do not even approach these problems in the same way. What makes America lethal, more so than any currently country, is like a combination of obviously the technology, which we're super interested in and believe are paying a huge part in.

58:56Alex Karp:But it's like 20 years of, like, operators figuring out what worked, what not what worked in a manual like what worked in reality also even selection if you look at the selection of people like you meet like tier one operators they don't look anything like what people would think it's not like the movies they're like these like these like this big and like you know it's like because we have vining yeah we have we have we have specialized ways of doing that all that is crazy valuable as a proxy indicator people who are getting their news from you are just likely to massively outperform. People are getting their news from something that's a regurgitation of you've got to vote for one party or the other.

59:38Alex Karp:And then the real problem we have in society is not your listeners or Palantir's customers or our partners is like, well, what happens to everyone else? Are they going to lynch us? Because like, that's the real problem. Like these products, like what we're building, like our or agents mean that like the most, I mean, the most powerful people in the Democratic Party are highly educated female voters. And these technologies, like they love, I mean, like, yeah, I actually get along with all these people in private and there's a public dispute, but like largely I've talked to Daria over and over again.

1:00:10Alex Karp:It's like, yeah, you love one company because they're not pro-Trump. That company's taking your job. How are you going to feel about that company when you find that you have no job? What do you think the Republican Party is going to do to products that do not support our military? What do you think the Democratic Party is going to do to products, even if you're voting for them, that are taking away the jobs of every one of your constituents and saying, oh, people are going to love you so much and you're going to be poor. By the way, we love you so much, we're going to give you a little handout once a month.

1:00:38Casey Lane:Yeah. So apply that to the SaaSpocalypse narrative, the enterprise SaaS. There's an idea that the first jobs that will be taken might be the enterprise software products that exist, haven't really innovated, have lock in, and they're going to be replatformed.

1:00:54Alex Karp:If you, the thing that these technologies do is they also make it harder to lie about, this is part of the political problem. If something's not creating value or something's not working or there's corruption, you can't lie about it. And nobody believes that all software companies actually create value. I mean, the famous thing that we all learned was that we rejected, that you were learned and people taught you is like, your software company is supposed to give the client the feeling they're getting laid while they're getting fucked. Now, if that's how your products actually are, now it's you who are going to get fucked.

1:01:32Alex Karp:And this is going to happen so quickly. And the simple test for people who are looking at this is, does this product, or in our case, we were never pure software. We're actually like a hybrid of like humans, FDEs, augmented humans, so AI, FDEs. and then orchestration and then essentially what we would call primitives, like taking the tribal knowledge of institution, coding it into logic, and then using that to be extended in LMS. But we don't have to explain that to our clients.

1:02:02Casey Lane:So there was always this, oh, is Palantir a consulting firm? Is it all just people? Is there any real software? I feel like that narrative went away. Oh, no, no.

1:02:11Alex Karp:They couldn't invest in us because we were a services company. Exactly. And now it's like...

1:02:16Casey Lane:But is actually having that service ability better in the future?

1:02:21Alex Karp:No, no, it's not better. It's crucial. Underrated. It's crucial. It's crucial. Like all these places that made fun of us, they're running around and trying to get FTEs. Of course, getting an FTE is like, yeah, it's not as easy as it sounds because you have to know how to manage it, where to put the person, how to extract value. And then you need all these products that augment the FTE. What are those products? Ontology. Foundry. FTE. AI things that we've built.

1:02:48Casey Lane:So the value of the business is not a monolithic code base that never changes. It is the people. It is the deployment. It is the relationships. Is that how you're thinking about the business these days?

1:02:57Alex Karp:Well, actually, the way I'm telling you, like when you walk around here, they don't care about any of that. What they care about is you transform my business in three months. It would have taken three years and IE would never have happened. That's what they care about. Now, then there's a question of how do you do that? and that is the concatenation. It's artistry. It's like select client. Select where you would start. Select ways in which, and innovate in ways they would not accept. Innovate in places they do not understand you should innovate. Learn to manage these very complex, by the way, it's not just culturally complex, it's tribal knowledge, and much of that tribal knowledge is in rules that they have to apply because there are all sorts of rules about manufacturing, hospitals, rules that are applied that they're not saying they apply, laws, like all sorts of regulatory things on top of all that.

1:03:50Alex Karp:All that has to happen very rapidly. So you would need, and like without going into details, like I'm in the middle of like every single one of these discussions in almost every breakdown. It's like people do not understand how institutions work. They don't understand how the software would work. They don't have the LLM would work.

1:04:09Alex Karp:They they still, at the end of the day, are not saying, we're going to charge them a value. Okay.

1:04:13Casey Lane:How do institutions work? Why is it that we get these genius models that are 160 IQ, they can solve incredible math, and they're not just like everywhere all the time? What is slowing down adoption?

1:04:25Alex Karp:The simple version is they're 160 against a test, but the test isn't, it's a concatenation. The simple math would be it's 160 on one test, but you've got to pass differentiated tests over a long period of time. So it's a thousand tests. So de facto by the 50th step, it's zero IQ. But then there's also, there's also, yeah, I mean, it's like, it's, it's, it's insane. Like no, I love when I hear about all this is going to replace. And then I go to our clients and they're like, could we have more? We don't even have the capacity. Like it's like, it's a surreal thing. Like, would you guys like to be FDs?

1:04:58Alex Karp:Cause we need some help. If you're in the audience completely seriously and you're aligned, broadly speaking with America is a great country. You don't have to agree about anything else. And you're out there and you're technical or just smart. Apply. We need you. Okay.

1:05:13Casey Lane:America is a great country. Put aside Democrat, put aside Republican. Is democracy the correct formulation to decide the future of AI? Should the American people be voting to decide or should that be handled by private companies?

1:05:29Alex Karp:No, America. Well, it depends. Yeah, great. So in the war fighting context, The Department of War has to be the arbiter of what gets deployed. But as a citizen, I vote for the Department of War, correct? Exactly, yeah. Okay, but I'm just saying, so I want to split domestic and foreign, because we in this country have God-given rights, literally given to us by a higher being. There's a right of free expression, which we're exercising all the time, and it's very important to us. There's a Second Amendment, which I exercise. I shoot very well. I would encourage you guys and other people listening to avail yourself of the Second Amendment.

1:06:08Alex Karp:Yes. It was not—it is there to protect ourselves in case the First Amendment fails. That's the reason it's there. There's a Fourth Amendment, which is essentially we have a right to privacy. Okay. We have those rights. Adversaries trying to kill us in Iran do not have those rights. Sure. And I don't believe—I've never believed in extending our rights to foreign countries that are adversarial to us. I don't even really believe. I don't like, you know, in Germany, where I lived half my life, they don't have a First Amendment. They don't believe it. And by the way, they've never believed in a First Amendment.

1:06:42Alex Karp:They have other rights. That's great. I'm not going to dispute that, but I want our rights here. In this country, if you're going to tell the American people you're building what is clearly a dangerous technology, it's dangerous because it will likely take your job, especially if you're white-collar. So if you're voting, you know, you're highly educated.

1:07:03Ted Mabrey:Have you flipped on that in the last like six months or so? Because I think I think the last time we talked, your general mindset was like high agency, highly productive people will be able to continue to leverage the tools to deliver value.

1:07:20Alex Karp:Yeah, I think if you're neurodivergent and high agency and you're highly educated, that's great. But if you're not neurodivergent and you're like lawyer 14506, that's a problem. Okay, but let me get to this. And they're linked, but it's okay. On domestic stuff, we have rights that are not subject to majority rule. The majority can vote against us having Fourth Amendment rights. I want that litigated at the Supreme Court. because our Constitution is not about majority. It's actually about the rights of the minority, and it's our right. I bet you the three of us have opinions that are very much in the minority that we want to be able to say, at least in the privacy of our own home.

1:08:06Alex Karp:So those are real issues. I'm super sympathetic with restrictions around the use of these products in a domestic context, even though it's funny. People out there, every conspiracy theorist thinks, it's insane, I'm the only one. conspiracy theorists, you may hate this, but there's one person protecting your right to be a conspiracy theorist that actually has a seat at the table, and that person is me. You may not want to hear that truth, but it is fucking true, and maybe do a little more reading before you pontificate on your absurd and obviously ill-formed and many times stupid opinions. Okay, so, because like, you're attacking the person who's protecting you, idiot.

1:08:45Alex Karp:It's like fucking so stupid. Use one of the bots to correct your opinion. It's like, I'm being attacked online now. It's like, Dr. Karp is anti-progressive, because of my whole life. I'm just telling you the truth. These things are going to take your job. Okay, so then, but in the warfighting context, and it's the primary justification for these products has to be, there are two relevant powers now, us and China. This is a have-have-not world. It's going to be either us or them basically deciding the world order. because like these other countries and maybe India will get involved, maybe the Arab, non-Arab Middle East.

1:09:23Alex Karp:But currently on the trajectory we're on now, there are two places where these things are being developed and deployed. It's us or them. And I'm not particularly, you know, I'm not out to hurt China. I'm just out to, I think we should win. I'm not trying to hurt them. And in that context, you can't say we're not going to do X, Y, and Z. I mean, I give you examples, but like there are data sets that are publicly available in the U.S. market. that I don't think should be used against you and me in a law enforcement context with the help of, say, AI agents and ontology. But if you don't use it on the battlefield, obviously Iran's going to use them.

1:10:01Alex Karp:You don't think they can go online and buy those products? And by the way, without going into somewhat classified data, those things are in combination with other things lethal. Like a lot of people who want to hurt America on the battlefield end up dead because of our ability to aggregate and then figure out what's going on in the battlefield before they can figure out what we're doing. And so I'm very much in favor of it for moral reasons, but I'm also in favor of it. I don't know how else you explain this to the American people. We're going to take your job. We're going to take away, you're going to eviscerate your ability to have money and power, but that we're not going to defend you on the battlefield just seems like, yeah, well, you know what's actually going to happen?

1:10:38Alex Karp:That nobody believes me in tech, but there's going to be a movement in this country that gets very strong very quickly to nationalize these things. First, it's going to be take away all our money. Billionaires are evil. You may not have heard that. Super evil. And if you take away their money, it'll help poor people. That's really important to understand. Making rich people miserable is the only way to help poor people. That's obviously true. Once you've learned that, the next thing you're going to learn is we have to nationalize it.

1:11:03Ted Mabrey:They're going to quote you on that. Well, it's like... They've quoted you on...

1:11:08Casey Lane:So, I mean, it sounds like you're closer to Dario on, you know, potentially 50 % of early stage white collar job loss. Like, you're aware that there's a risk, at least some probability. Everyone's aware of it. You're aware of it. What do you see as the solution?

1:11:23Alex Karp:Well, first, we just have to, I mean, the obvious thing is, okay, we can't have any migration here. Like, how are we going to create more jobs? Like, it's like you have to, the problem in fairness, not that people want to be in the business of being fair to policy leaders, but we are dealing with technologies that will determine the policy decisions. So you can't just pretend they're not happening. Like, step one is like, we, it's going to be hard but possible to make this society work, given that transforming it requires these technologies. Like, I really like the people here. They're not here because they like me.

1:12:00Alex Karp:Like maybe they're here for my jokes. High quality in some cases. But it's like a long trip and we're here and I'm the only one who likes this weather. It's great weather. I brought it for you. But they're here because they've seen their business being transformed. And this is happening in America more than it. So we have to win those battles. But the costs are going to be very high. And so you have to work back from, okay, the costs are going to be very high. We can't put oil on the fire. it's like you know it's like well getting jobs for all americans is going to be hard and people maybe who become americans but it's like you have to have different policies around migration you have to different policies around how we train people like currently if you're a young kid in high school and you're neurodivergent they're literally track chaining into your chair and feeding you medication so you can have skills that are not valuable yeah like it's so it's like and then we'll probably over time have to have like a discussion of like yeah if you go into this career, you're not going to have a job.

1:12:59Alex Karp:Like a really honest discussion about that. These are the places where you will likely have a job. And yeah. Help me.

1:13:06Ted Mabrey:You know, it seems like we as a country will probably head down a more European path where it is becomes very, very difficult or near impossible to let people go. Do you think that's correct? In Germany, it's much harder to lay someone off. And that does impact the growth of companies. But I think many Germans would argue that's probably...

1:13:35Alex Karp:Yeah. You know, Germany's... I mean, I'll answer your question. Germany's an interesting place. I did this thing in German where I basically told the truth, which you're not allowed to do in Germany. It's like, you know, it's kind of a really bad situation and the economy sucks, The migration thing is a complete disaster. And the energy situation compounds everything. I got thousands of people literally saying, thank God someone told the truth. And there are a lot of people like you guys, young people building things that feel hampered and are correct to feel hampered. I think the American version, if we're not careful, is not going to be the German version.

1:14:13Alex Karp:I think it's going to be hang the rich. I think it's going to be not protect everybody else. are going to be like, oh, look, this is too dangerous, and we're going to hang the rich but not really help the poor. In fairness to the German version, German health insurance, insurance, all that stuff, it works. I was poor in Germany for a decade, and I had the best life on the planet. Being poor in Germany is like being better than being rich here on some days. So basically policies that lift the floor, re-education, training, lift the bottom. So if you want to do what we could do here, the things we could adopt from Germany are, Germany has three high schools.

1:14:52Alex Karp:Yeah. Two are vocational. Sure. One is academic.

1:14:55Casey Lane:Better education.

1:14:56Alex Karp:Better programmatic, vocational. Vocational, it also has a bad, like a weird vibe here. Like vocational training in Germany is very technical. Like the people building the cars at BMW or even in the French version, Airbus, like very complicated jobs. They didn't go to college. Sure. They went to a very, very high-end high school. Yeah. And they come out without any debt. And that stuff is really valuable. So if you want to, you have to completely transform our educational system and go very young into like training people to do things. You also need to change our testing system. Like different forms of intelligence.

1:15:30Alex Karp:All of our tests are built around things that were valuable in the industrial revolution. It's like you want to pull out all the dyslexics, all the neurodivergence. Everybody who can't sit or needs to build or wants to build have to go into a separate slot of like, yeah, we should have gotten you before you got turned down at Coleman. And like I said, this is like, that's a waste of your time. You could be building something important.

1:15:50Ted Mabrey:And what else goes, would be a part of the good outcome?

1:15:54Alex Karp:Well, the most important part of the good outcome is we show our adversaries. You can't fuck with us. And we're the best. We're the best military in the world. I believe we're doing that right now. on the good outcome side, we go around. And then on the commercial side, we go to all these high infrastructure, hospitals, manufacturing, all these things, complicated infrastructure, and we AI enhanced all of them. So the products are legitimately the best in the world. And we rebuild manufacturing in this country. A big problem for us, including on the battlefield, is our manufacturing just is not up to where we have to be.

1:16:28Alex Karp:And that, by the way, requires rescaling, scaling humans. And we're doing this all over the place. I mean, the guy writing a lot of the scripts for the target, these people, they're like high school, college grads, the people building batteries and all these things using our products. These are high school, college guys. There's a lot of opportunity there. But, you know, one of the things I told the Germans and I would say to us is we, I was like, you know, Germany, you have to call it a crisis. We do need like, this is a crisis moment. America isn't tomorrow is not going to look like it looked at all, or we're going to have radicalism on right or left.

1:17:01Alex Karp:The problem, the danger is if we don't do these reforms, you are going to get the pitchforks because then the only solution people are going to have is, well, you know, let's go after the unlikable rich people in tech, especially AI tech. And then, but then what can work is, yeah, close the borders, keep them closed, start doing huge vocational efforts, change how we test aptitude. Like, so we have an accurate diagnostic of where you could be slotted. Be ruthless. Find out new ways to test and do ruthless testing and slotting. And then also go around to universities. You know how when you want to smoke a cigarette, it's like this cigarette may be harmful to you.

1:17:40Alex Karp:Maybe we should be putting that in universities. This university is harmful for your investor. I'm libertarian. You want to go to university?

1:17:49Ted Mabrey:This student debt may be harmful to your future financial health.

1:17:52Alex Karp:And your personal life. Explain to someone you've got a million dollars in debt. A million dollars in debt. I mean, maybe if you're 6 '9", you can get away with that.

1:18:02Casey Lane:But the rest of us have to provide. That's funny. Help me square this idea. You were talking earlier today about people misunderstanding your business.

1:18:12Ted Mabrey:Yeah, what's it like to read about your business?

1:18:15Alex Karp:Oh, I mean, first of all, I hate it. But then the part I love is, and it's like your value is pretty directly convergent with people's inability to understand what you're doing. So it's like all these technologies are essentially commodifying everything. Yeah. Okay, so if you are a business that is, you know, not services, not product, but both, but also works on tribal knowledge, on data, and every single business you make is individual. And so, yeah, that's a crazy valuable business.

1:18:52Casey Lane:That's true in a lot of industries where if the broader business community doesn't understand your business, you might have a short report, but you'll have way less competition because people aren't copying you. Well, it's impossible to copy certain.

1:19:04Alex Karp:Totally. And we neglect this. It's like, you know, almost like you even see it culturally, like luxury products dominated by the French, watches dominated by the Swiss, currently certain kinds of warfighting dominated by America. And it's like it's very hard for people to eviscerate these cultural advantages. And our products augment that, which makes it, you know, augments the differentiated specific over the generalizable. And that's where literally all the value is going to go. And it's going to be like a waterfall. And that's the problem with a lot of software companies. It's like product A, B, C, T.

1:19:38But then when you read it, it's like one of the more depressing things that you guys probably confront,

1:19:45Alex Karp:but it's like a huge market opportunity for you. It's like, where are the experts? It's like, you hope and pray. I'll tell you the funniest thing about my life now and people internally know. Almost every day I'm like, wait a minute. I'm the adult in the room here? it's like everywhere I go it's like it's like wait a minute I like I and it's like there it's like and and it's big so it's it's surreal when you read about these things but and it's it used to really frustrate me but now I kind of just think well like I can't believe we're still viewed as crazy it's like everything we're doing is the only thing that's where I mean like I don't want to like spend a lot of time on our baller essential essentially baller numbers from last year but it's like you know clearly our shit works clearly nothing is working at that level and you would think they would take like i don't know 10 minutes to think okay well the thing i believed and i thought would work didn't work at all this thing i thought was insane is as like a rule of 127 when like no one like 40 is considered like and like but they don't and and and then and i yeah but it's sometimes frustrating honestly and the hard part actually is i kind of view it as a feature.

1:21:00Alex Karp:Internally, we get these bright-eyed kids. It's so funny. I mean, we get the best people in the world. But, you know, just like I was probably at 21, they're very romantic. It's like, but why does the adult not understand this? It's like, but the adult expert tells me. It's like, I don't know when you guys had to drop the shoe moment and you realized that the adults are on crack or something.

1:21:25Casey Lane:Okay. Last question. Would you rather have$10 million Or access to ChatGPT In 2012 It's a viral question that's going viral right now

1:21:38Alex Karp:I have to choose one or the other I mean okay I don't think it's hard to answer I don't think it needs 10 million Can I have my social life in grad school? There we go

1:21:49Casey Lane:How about a new pick?

1:21:51Alex Karp:We just have to ask you this question You know it's like great

1:21:53Casey Lane:I'm going to take something I valued oh okay yeah the most valuable thing social life and grad school well thank you so much for taking the time to come chat with us it's fantastic we'll talk to you soon and that's our show today folks thank you so much for tuning in to TBPN today we will be back in the TBPN Ultra Dome tomorrow at 11am Pacific you want to sign off with us? point at the camera goodbye

1:22:15Ted Mabrey:have a good one cheers