GPT-5.6 Sol Reactions, Coatue Bets Big on Blue Origin, Cheaper Vision Pro Delayed | Vincent Weisser, Ben Thompson, Rodrigo Liang, Alana Palmedo, Byron Boots, Will Mayer, Tucker Brown

28:17Okay. Maybe it's a little bit higher tech, but it's IBM, 80s. An estimate, I think, is reasonable is around 20 megawatts. 20 megawatts. Yeah. So you're looking at a small data center. Is there any natural gas in the ground? Can we frack? Can we put solar panels on the roof? Can we build a nuclear reactor there? What are our options if we want to get this thing churning out tokens? We want to turn it into a token machine. Interesting. We should go check it out. Anyway, let's move on to the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Just do it.

28:53And Jordy. Car and Driver says 2026 Lucid Gravity available with no interest due to no interest. What? Several months after launching the 2027 Gravity, Lucid still has plenty of 2026 models. So it's offering customers an interest-free loan incentive. Okay. I wonder how long there's no interest on the loan. That seems like a good deal. The Lucid is a very well-reviewed car, very luxurious interior, very polished product. For some of the higher, more performance-oriented trims, incredible 0 to 60 times, incredible range. I think Larry David has one. they're well-reviewed cars but it's an electric vehicle which has high depreciation and then you're signing up to work with a company that a lot of people think might not be around forever so what does the maintenance and repair and flow of products and new parts look like in a decade and so that is a risk factor for a lot of people but the Lucid Air Gravity I think it looks sort of cool.

30:03It's sort of like a, it's a little bit like it wants to be a minivan. It's trying to do the job of a minivan, but they didn't just lean into the sliding doors. At least the Model X realized that what makes the minivan great is the accessibility of the doors. And they made them cool doors by making them gull wing or butterfly doors. Yeah, the problem here is that when I looked up Lucid Gravity for sale, I'm seeing a 2026 with just 3 ,000 miles that's selling for$125 ,000. That's a lot of money. That's a lot of dollars. And even if you're paying no interest, it's probably losing, you know, it's depreciating thousands of dollars a quarter.

30:45And so it's still going to be a rough ownership experience. Yeah, yeah. It will be interesting to see where they end up. I know they already have some big investors and potentially some corporate partners. It could eventually be rolled into another organization as sort of the EV strategy of a larger automotive group. Who knows? Did you want to look at end of stay? Did you see this? We got to pull up this video because we were talking about exactly this. The 964 Cabriolet Junior is a Porsche 964 that has been shrunk, actually shrunk exactly what you said. Look at this video. This is what you asked for.

31:34Fully customizable. And look at this. It looks normal size, but wait until this guy gets in it. This is amazing. So it is a go-kart that has the body work of a Porsche. And so you can get one of these. They go like 60 miles an hour or something like that. Like they're pretty fast. Yes. So I think if you put a governor on this vehicle, you'd have what you want, which is the vehicle for the kid that is fun, engaging, and highly stylized and made with precision. The group behind this is called End of Stay. S-T-A-Y has periods after it. So I imagine it's some sort of acronym. But what a while. They did it.

32:20Yes. They did it. They did it. I'm interested. You can see the YouTube video here, the preview of the 964 Turbo Junior high performance version. It's an absolutely crazy, crazy video that I got organically served to me. And I was like, this is what we've been looking for, for sure. This is exactly what we were talking about. I need one. I think you do. I need one. Anyway, GPT Live, a new generation of voice models for natural human-AI interaction, launched today from OpenAI, rolling out to ChatGPT starting today, taking shots at that guy on Instagram who's unsatisfied with legacy voice models.

33:04It's a lot smarter. I have a feeling he's going to find a way to keep using the old models. Oh, maybe. Or he'll just become, who's the Pliny the Liberator? He's sort of the Pliny the Liberator of voice models in that I know he's taking shots and he's like very unhappy with the quality of the voice models. But at the same time, he does a great job of actually exposing and finding limitations, Not necessarily jailbreaks, but by watching those videos, you can very clearly understand, okay, I understand what's going on here. It doesn't have tool use, so it can't count. It can't set a timer. It doesn't have a long-running context window that can stay with you for a long time, so it gets lost.

33:44They can't talk to each other. There's a whole bunch of different ways. And once you have all of those documented by just a—he's basically like a white-hat hacker. He's exposed— He found a bunch of benchmarks. Oh, wait, what? He found a bunch of good benchmarks. Yeah, yeah, yeah. Basically, benchmarks. Like, if you can satisfy his videos and run those experiments again in a satisfying way, you probably have a better product at the end of the day. So, I don't know. I think it's cool. I'm excited. Very, yeah, super excited for this one. I wonder if the, yeah, the real-time nature unlocks, like, under, unlocks, like, almost like a new kind of, like, pod, like, real-time, like, podcast format where you can just actually have a conversation about a topic.

34:26Yeah. Right? Yeah, we should have it sitting right here. It has a full duplex architecture, which means that it can listen and speak at the same time, so it can jump in appropriately. And it can also route certain questions to smarter models to run in the background. You can still have a conversation. Yes. Which is very cool. Which is great, because my default flow, like if I'm driving, which I don't think I should be doing, But I will tap the record button, not the voice mode. And I will dictate a really long prompt. And then I will click send. And then I will wait for it to cook. And then I will have it read that back to me.

35:05And that's all just like a couple extra clicks, a couple extra steps to get what I really want, which is a conversation. I was interested about the idea of where this goes. is like, is there a world where you are talking to a model and you can have sort of multiple threads of conversations going within one conversation? So you can say, hey, I need you to go and do a deep research report on IBM Watson. And it goes and cooks on that. And then while it's doing that, you're still talking to it and you're still having a conversation. But then you also might say, well, catch me up on the latest news.

35:43And it has that at the fingertips. so it can talk to you about the latest news, and then you can go, and it can say, hey, by the way, I'm done with the report, or I'm done with the code that I wrote, but you're talking to me about other problems in your organization, other decisions, other research projects that you have, and it's all done in one continuous conversation, like, you know, me interacting with you. Like, you know, you might delegate something and then continue the conversation and then move on. Oh, I've got to text this person. Okay, I'll text them. They'll do that. They'll come back to me in 20 minutes with a revision to the thing that we're working on.

36:18But in the meantime, let's talk about whatever else we got going on today. So interesting to see where this goes. In other open AI news, GPT 5.6 Sol, along with Terra and Luna, will launch publicly this Thursday. Preview access is expanding globally. Lots of people are having fun with this. Some people got early access. Other people were joking about clearly not getting early access but wanting early access. But a lot of people are having fun. What did John Palmer say? What did he say? He's in here? No, he had a... He has one. He says, it seems I'm allowed to talk about 5.6 now. I wasn't one of the testers, but I heard it's really good.

36:58Again, I haven't used it yet, but this will probably be my default model from here on when I get access. It's a good one. People are having a lot of fun. Kit Langton says, I can finally talk about GPT 5.6. I've been using it for many months. if not decades. And what is glaringly obvious to me now as I look back on my life is that you did not have access to it. It's very fun. People are very happy with it. Interesting, there's a little bit of a fork around how the vibe around 5.6 is different than Fable 5, how interactive it is versus, somebody said Fable is like light speed across the galaxy and Sol is like a Porsche on the Nürburgring, more engaging.

37:44I don't know. It seems like we're entering some fragmentation and like the right tool for the job. Yeah, Ethan says, my big takeaway is that both Sol and Ethan had access. So he says, both Sol and Fable represent jumps over previous models and have opened a large gap with the next best AIs. People will have preferences for one or the other. But if you're doing any work where better intelligence matter, uh these two those two models are your only choices dean says i think for me the main takeaway with soul and fable is that i can't remember a time when the leading models were a so decidedly ahead of everything else and be so distinct from one another so yeah um so yeah a lot of people are talking about how they're using the models together it's probably a function of uh just tighter tighter distillation protocols like there's less pollution like also like not everyone's training on the exact same data anymore because uh it used to just be everyone just trains on the entire web corpus and now uh each company has different data sets different data brokers different usage patterns that they can train on and then different sort of research tastes so go give it a try i forgot to mention this gbc 5.6 souls world leading in computer use it made me use it 100x more when we lost access to 5.6 i quickly started to go insane without it so yeah people in the early access program obviously lost access for a couple weeks sure uh due to the dc action yeah um but yeah i saw some people saying like what are some good uses for computer use and it's like anything on your computer what do you use your computer for they're not all going to be great uses but yeah i'm curious i still think it's worth it's worth it's always worth popularizing those genuinely useful patterns.

39:34Deep research was that in many ways. It gave you a 20-page PDF report on the topic that you were asking for, and it did a lot of the work for you. I still think the come up with a good prompt idea, find the right reason to use AI is a problem for a ton of people. There are plenty of people that adopt the latest AI tools, immediately find what the model's good at, how to use it, how to use it profitably, effectively, not waste tokens, not waste their time. But other people need ideas. They need to know that there's a new capability. You see this with the chat app. You see this with the voice mode where people are like, judging a model based on hallucinations that disappeared a year ago or judging a model based on some, oh, it has a cutoff window and that hasn't been a thing for a year but it still burned its way into the memes of the online culture and thus people need to be updated on that.

40:39I'm in favor of coming up with good computer use demos. The real one is just, can it play Counter-Strike effectively? That's the real computer use test. Can it rank me up to global elite? Can it downrank me so I can smurf a little bit? This is the future. This is what I want. Anyway, let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web app servers, databases, and more, while Railway automatically takes care of scaling, monitoring, and security. I'm extremely excited to welcome our next guest to the show. We have Vincent Weiser.

41:16from Prime Intellect. He's the co-founder and CEO, and he has some amazing news for us. Tell us what happened, then we'll dig into the news, the market, the story, the company. But first, give us the news because Jordy's already warming up over here. Amazing. Yeah, so we've announced that we've raised$130 million at a billion with Prime Intellect to build the open superintelligence stack. That's fantastic. Congratulations. What we were talking about before the show is the ratio between dollars raised to run rate. Yeah. Absolutely incredible. Yeah. How much have you raised before this round? Just$20 million in total.

42:04So I think we've actually got to this run rate on less than$20 million in spend. That's crazy. Which is north of$100 million. Yes. That's amazing. Yeah, we doubled it, I think, since we actually closed the fundraise to 100. So basically, yeah, I'm on track to grow much more from here on. Okay. So reset me on the latest and greatest in the actual product offering. What customers are coming to you? Is it I have used a frontier model to figure out that AI can, in fact, do some agentic workload within my organization? I want to cut cost, and you're going to RL an open source model for me? fine tune it and then am i paying you for tokens am i are you getting me gpus what is the full suite of products that you offer customers these days yes so basically it is kind of like the full stack to do training deployment and continue improvement of models i think customers basically come to us for anything ranging from compute to inference to the full rl and post training stack to train models.

43:14And I would say it's like with customers coming from different buckets and categories, a lot of them are like the AI natives who are basically starting out and oftentimes also like being multi-model, right? Like they use like the frontier models, they use open models for different use cases. Like good examples like RAM, for example, as one customer more in this like AI native bucket and a lot of the big AI native startups. But then we've also increasingly been able which attract a lot of the new AI labs, like a lot of the Neo labs. So a lot of those are using our full stack from like large scale clusters to our pre-training and post-training and RL stack.

43:52But then also increasingly like traditional enterprises and even sovereigns coming to us who want to have their own end-to-end stack that they can run like on-prem. So how I see this is to some extent, it's like there's just increasingly, I think like a demand for having your own like sovereign AI stack, right? It's like your own open end-to-end stack. But I think this is almost like complementing in many cases, like the other like frontier like models and stacks. And you're using sovereign in not just the geopolitical sense, but also if you're a fortune 500 company, you want to own your stack from start to finish potentially.

44:29Exactly. Yeah. I think like there was a lot of recent talk about this, obviously like folks like Satya and Alex Karp, we're also making those points and arguments over the last few weeks. And I think it's increasingly something I think where a lot of enterprises want to basically build this compounding data mode and flywheel where ultimately I think the future that we're starting to see is a lot of these companies want to build basically self-improving agents. And the way to do this, I think, is generally you have an RL environment for you, you scale on it, and then you ultimately deploy that into production and then continues to improve with the user interacting with that agent.

45:07It's almost like the Tesla autonomy levels, but for knowledge worker agents. So I think the Ramp example was one that people really resonated with for basically them being able to, within a week and less than 50K of training spent, outcompete a frontier model at automating spreadsheets and finance at a fraction of the cost of running the cheapest models. So basically they were able to outperform Opus at a fraction of the cost of Haiku and like 30 % faster, like much more tailored to the use case. So I think in many ways, like these like specialized agentic use cases are a big unlock. And I think in many ways, you still need the God-like big mega model to do the orchestration or planning.

45:55But then I think oftentimes execution, I think can now happen with these specialized sub-agents. So I think those have been extremely, I think, like fruitful and useful for a lot of companies adopting and training their own agents. Then I think the other big trend is just like an explosion in new entrants that are like taking model training seriously. Obviously, hundreds of Neo Labs really got stood up in the last 12 to 24 months. So we started powering a lot of those like with our full stack, including with also large compute clusters. So NVIDIA also joined us as part of the round. And we've since day one basically operated large clusters.

46:35And this is in large part why we need so much money, right? It's like to basically be standing up more and more GPUs. Like right now we run like 15 ,000 GPUs and scaling to like over 30 ,000. And so this is like a lot of the capital needs even. And walk me through when you're pressing the huge cluster button. Is that because there's broad demand for specific models that you need to inference at scale? And so there's just a lot of inference demand. Or is it that for the level of training that you're doing, you need to be cluster scale to even kick off the training run? Yeah, so basically it's like for all the needs, like from training to inference, you need obviously compute.

47:19And in a lot of ways, like our customers are doing a lot of these large scale training runs with us. like leveraging our post stack including our compute right so it's like pre-training for a billion parameter models like for what we did with rc um like q4 last year um or a really large also post training runs and rl runs right so it's like increasingly basically we abstract all that info away so basically people can just like hit a button and to do a post training run without having to like lock into the gpu cluster and managing um the bare metal gpus so we basically abstract a lot of this GPU complexity away.

47:54But for that, we're basically also ramping up our own clusters to basically just serve hundreds and thousands of customers in parallel on those. Yeah. So what you're saying is there might be a situation where I have a 50K budget, like you gave with the ramp example. I have a 50K budget to do some post-training, and I need to deploy that 50K into thousands of GPUs, but only for a short amount of time. And so the budget's actually going to be relatively small, even though if I were to buy all of that, it would be way more than 50K, millions, millions of dollars. So you sort of absorb some of that cost, orchestrate it, abstract it away, and then you can deliver for the customers.

48:36Just a slice. So basically, I think this is also a big unlock, also on the inference side, where customers don't need to front load hundreds of millions and CapEx expense for large data center commitments. so we basically also increasingly serve a lot of inference so it really is the full stack and I think a lot of the compute we have quite a clear visibility into the demand just because people come with us with large requests or large contracts to basically do larger training runs and deployments so we basically just need to secure the compute to be able to fulfill all of those and I think right now we would probably be at many orders for Bank 2 more compute, like compute, but also revenue, if compute wouldn't be as constrained as it is right now.

49:25So it's like right now, I think like in the current environment, it's like basically GPUs are pretty sold out for the next few months and for almost like the rest of the year, especially if you want to like stand up data centers in the US. So I think this is actually like the main bottleneck to scale right now for anyone in AI. And this is, I think, what we've been able to really scale through extremely well because we've basically partnered with almost every data center out there since like over two years. So basically able to send up like data centers and different geographies and orchestrate them globally.

49:59Yeah. Any predictions, forecasts for American open source over the next six months? Yes. No, really great question. We joined also like NVIDIA to help them train NemoTron. So they're doing the NemoTron Alliance and coalition and so we were one of like I think 10 or so partners so it's like so like I can't speak about like all the things there but I think like in general both on that front and other things we won't tell anyone anything just between us so basically I think like like in some ways like the leading American efforts actually are NemoTron and actually like RSI with the Trinity models.

50:44Both of those we're very deeply involved in and so I think those will continue to lead with American open source. We have some of our own models cooking and then we help a ton of customers over there. So I think there will actually be a huge resurgence of frontier open models coming out of the US. Also let players like NVIDIA itself and a lot of our customers and partners. So yeah, I think in general, I think the interesting geopolitical question is actually what happens with Chinese open models, right? It's like obviously we've seen news that China might consider export restricting them and there might be policy interventions on both the Chinese and the US side, right?

51:27So it's like I think this is I think actually in some ways like the motivation to build a stack and to also push American open source forward is to have like less reliance on models that might get banned any day, be it all more close, right? It's like, I think this is something increasingly, like a lot of enterprises are starting to realize that like there's actually huge dependence, right? In a sense on, like mainly from the policy side. So this is something I think where we want to just like enable everyone to have like their own end-to-end front-to-open stack to be able to create their own models.

52:01And ultimately I think like there will be like, there's obviously a lot of like now, also Neolabs and a lot of them are actually thinking about things in a quite open way. I think we'll be surprised that this may be one of the hot takes is to see more Neolabs release open models. A good example that we also partnered with recently was a pool site, for example. People were expecting them to be closed, but they actually opened up their models. So I think there will be more of those, especially given there are hundreds of well-funded Neolabs now. I think there will be huge resurgence, just like of like the age of research in terms of like these, these new labs, like pursuing truly normal directions, right.

52:40It's like going where like the big labs almost can't go necessarily taking big, like bold bets that also might not pay off all of them. But like if you have a hundred shots on goal, like some of them will probably pay off and result in interesting outcomes. So I think this is like really also, I think what we are empowering, right. It's kind of like helping these new nail labs and, and big AI natives and enterprises to move much faster and not have to basically all build the same stack each by themselves in-house. Because almost a lot of them are like tiny teams of like tens of people instead of like thousands.

53:15So we're able to like help them move much faster basically. But I'm adopting our stack. When you hear of a, you know, major American tech company, let's say someone in the mag seven that has extra capacity, do you reach out to them? Do you ping them? Are you at the scale yet that a deal would be interesting to them? Or are they really searching for these$10 billion plus opportunities? For sure. We already are sourcing pretty large clusters. Sometimes up to 5 ,000 to 10 ,000 GPUs. We're basically looking at every source and pocket of supply that we can find. We've literally turned every stone to find the last GPU available on Earth.

54:07And we've been quite good at that. In some ways, I think we're like, that has been one of the core tenets almost since the beginning, is that we really wanted to orchestrate the global compute supply efficiently. So we did a lot of optimization for tolerance and distributed training, even in the early days, to train across distributed compute. So it's definitely, I think to this question, I think it's something that we're definitely considering. If there's anyone with some spare JBS, you can always get that back in. That's great. Back on China, do you agree with my perception that if there is some sort of lockdown on Chinese open source export controls, that would not affect?

54:55Yeah. Are they mad that American companies are distilling on or post-training their open source models? My design, I thought it was a goal of the project. But what I'm interested about is, would they try and claw back access to Kimi or GLM, any of those models that are already been deployed? Because there's an element of like once the weights have been downloaded, it's sort of just out there. Of course, you could go and try and like sue every company, but that's very hard if you're in an American jurisdiction and you're a Chinese company. But how would you see that playing out? Would it just be going forward, no more open source, and that's the CCP telling Chinese companies, or some other shape of, like, restriction?

55:43Yeah, I think it's really hard to know. I think, like, a good example was, like, even, to some extent, like, the most popular Chinese models already has been closed for a number, which is Quine, right? Like, in some ways, like, they've actually, like, changed their licensing, stopped open sourcing. So I think there will be both companies changing their policies, but then also I think probably state intervention in different shapes or forms. So I think basically one can't rely on the steady stream of frontier open releases out of China in many ways from different perspectives. And I think similarly, a lot of other sovereigns, obviously including the US, also doesn't want to build on necessarily Chinese open world.

56:22So it's like, I think a lot of American enterprises, obviously also like sovereign use cases, like need American open mouth. But I think similar for other continents, right? It's like, I think there's been a lot of work, obviously. And we're like collaborating with people also across Europe, across India, across other geos. So it's like, I think we'll see a much more like multipolar, I think, open ecosystem of like open-fronted models. So I think that's a healthy balancing away from just relying on Chinese open models, even though they've obviously been a great accelerant of open source progress.

56:58I think it's also unhealthy to rely just on that ecosystem. And yeah, I think there will be, I think, a bunch of quite unpredictable changes similar to all. The last few months have been quite unpredictable, I think, to everyone involved. So I think this will continue to be the case in the sense that it will be like quite a dicey policy, like AI policy landscape for the next few years. Last question. Data centers are data center construction, new data center construction, deeply unpopular in America domestically. Simultaneously, the workloads that are being done in AI data centers are basically latency is basically irrelevant.

57:39For training, certainly. For most inference tasks, if you're waiting a couple minutes for a result, an extra 500 milliseconds to get across the world isn't going to matter. This feels like a recipe for global competition, for aggressive data center expansion in a country that does see it favorably, that does see an economic boom from it, or does have a lot of energy. What is the state of the non-domestic, non-U.S. data center build-out? Yes, so we're certainly building a lot of data centers and partnering with a lot of them outside of the US as well. But I think there's still a lot of demand for data centers in the US.

58:18I think even from a data perspective, there's a lot of now the financial industries and highly regulated industries also adopting obviously more and more agents and compute. I do think inference still matters, like, speed, in a sense, like, maybe not for, like, long-running agents, but, like, for a lot of use cases, people, I think, still really care about, like, having extremely snappy, like, responses. But I think, like, there's definitely, I think, like, a general boom in data center build-outs outside of the US as well. I think there's just like a limited set of countries who are like strong, like allies with like ample amounts of like geopolitical stability, but then also like energy and green fields and enough space.

59:01Yeah, the U.S. has unique access to natural gas, which is if you're trying to bring energy online super quickly, it's hard to beat. Yes. And I think we're seeing this across Europe, even where there's specific regions that are much more active in data center buildouts than others. And those are generally the ones that have their own money to invest in them and cheap energy and a lot of also local support for it. So I think in general, from what we're seeing, I think there is new entrance almost to the data center buildouts. even places like Australia and New Zealand and much smaller places like Armenia, Kazakhstan and others who have a huge amount of energy and making huge bets also on data centers while also being allies of the US.

59:47So I think those are the countries I think generally which will see the biggest boom in data centers. I think at the same time, I think we'll also continue to see a boom in US data centers. But yeah, it's definitely harder to get data centers in the US than outside of the US. So it's something we'll see both continuously expand. And I think there might also be, obviously, to your point, a policy updating with upcoming elections and mid-term things. I think there's almost populism in the US around data centers and a lot of the public sentiment as potentially also sovereign influences and other things from other nation states who are trying to harm almost the US data center build out.

1:00:33So I think there's a lot of things at stake for the US to not pull back on their data center build out. But I think there will also be specific states who are leaning in much more heavily than others. I think this is already what we're seeing. Exactly. So it's like there's specific states in the US that are just much more well suited to really ramp up data centers from here. And I think we'll see them ramp up globally and hopefully also outside of, like, beyond Earth. And I think this is the only way to really probably scale. I love it. Well, thank you so much for coming on the show. Incredible progress.

1:01:12Incredible progress. We love seeing you and the team win. Yeah, it's fantastic. Have a great rest of your day. Say hello to Will for us, and we'll talk to you later. Cheers. Goodbye. Let me tell you about Cisco. Critical infrastructure for the AI era. Unlocks seamless, real-time experiences, and new value with Cisco. Our next guest is Ben Thompson, the founder of Stratechery. He's been on an absolute tear during a slow news cycle. Does it feel like a slow news cycle to you?

1:01:41Ben Thompson:I don't know. The summer is always slow. I take a couple days. I slow down a little bit myself. I feel like you've done a good job of providing really insightful and interesting pieces during a slow time where I didn't know that I wanted to hear you. I'm doing you a favor. Yeah, you are. Is that what I'm hearing? I didn't know I wanted you to adopt the voice of Mark Zuckerberg for 20 minutes and go on a tour. But it's not like that was driven by like a specific, OK, there's a Wall Street Journal article where like Bloomberg has a scoop and like we need to know this. It's more just like resetting on the meta narrative.

1:02:16I want to talk about the meta narrative, but can we start with Xbox? Sure. I want to know. First, let's go back in time a little bit. And I want you to reality check me on the story I tell myself about how Microsoft wound up in the situation it wound up in with Xbox. And I think it stems with DirectX. It's the graphics layer that allowed games to be run on multiple graphics cards. So that was a Microsoft licensed piece of property. So this is why we don't have the Chrome box.

1:02:51Ben Thompson:You ought to go really far back. Because we didn't get an Amazon gaming console. We didn't get a Google gaming console, right? Right. Like, why X-Box? DirectX is interesting. So you go back way back. I mean, we can go really far back here. I mean, back in the day, the main technology for doing 3D and was coming along was OpenGL. And OpenGL had various pluses and minuses. It was, you know, we're way back in history. but this is the origin of the NVIDIA story, making cards to do 3D graphics. You had the Riva, the 128, then you had the TNT, then you had the GeForce, and we're talking back in the 90s when I was your guys' age or whatever it was in college.

1:03:38Ben Thompson:And making the first, Quake comes out, like the real first 3D game. There was actually a really interesting Twitter back and forth with the old id people talking about Quake and how basically they obliterated the company by burning everyone out by launching it. But super fun back and forth. But Microsoft comes out with Direct3D as an alternative to OpenGL. That was, I think, and this is a little out of my area of expertise, but I think it was a little easier to use, had more niceties, was more tied into the platform. But this is all sort of PC gaming. The Xbox, the way I think about it, and a lot of gamers kind of get annoyed about the gaming stuff because I don't really care about the game part of it.

1:04:20Ben Thompson:I'm more interested in the strategy and how that fits in the overall company. Yeah, but what is your review? Yeah, can we get a GTA VI review? No. Well, I feel compelled. Number one, Rockstar, I think, is charging way too little for this game. They're charging, what,$80? Yes. You're going to get canceled for this. This is a nuclear take. No, they should be charging like$200. I know. GTA VI is like the last great game. Yeah. Like you think about everything. It was mostly all made pre-AI. Like it is the pinnacle of this AAA craftsmanship, years and years and years of blood and sweat and tears to the extent where you have like the Twitter analysts like counting cigarette butts outside of the offices to see like how much crunch are they in right now?

1:05:10Ben Thompson:I don't even think he's trading the stock. I don't even think he's trading the stock. I think he just wants to know what GTA is saying. The love of the game. Literally the game. the gamers are insane so i always tread in this water like very very carefully but uh no so i feel compelled to buy gta 6 just in honor of it existing i like that even if i don't know if i'm ever gonna play it so i'm definitely gonna do that and i'd be happy to pay yes i have two hundred dollars like eighty dollars is ridiculous they should charge more anyhow um yeah we had one of the youngest person on our team was commenting on people online complaining about the price and said something like, you didn't have, you had 10 years, you couldn't save up 80 bucks?

1:05:49Ben Thompson:I know, seriously. It's like, you can do anything. Whoever you are, like, I know kids that do lemonade stands and they clear like 100 bucks, you know? Oh, absolutely. I want, you know, the old$20, I'll keep the change. Nothing will make a kid's day better than that. Although, unfortunately, with inflation, I think now it's sort of like expected. It's unbelievable how expensive things are these days. It's bad. So, anyhow, I got to GTA 6. But we're back. Oh, so the console era. So the way I think about Xbox is you go back to Microsoft and Microsoft had this whole thing. This is pre-iPhone. This is idea of their corporate strategy was three screens in the cloud.

1:06:28Ben Thompson:And the idea that we're going to, we already own the desk via the PC. We're going to own the pocket via the phone. and people always used to say Microsoft missed mobile. Microsoft did not miss mobile. They came out with a Windows CE in like 1999. Like they were in mobile. They just had the totally wrong conceptual model because they were basing it around, you know, as an extension of the PC. But then the third screen was the living room. How do we get in the living room? Well, people have consoles plugged in their TVs. If we can get in and own the console, we can own sort of the gateway to the living room and we need to earn permission to be in the living room.

1:07:06Ben Thompson:we will do that by creating the Xbox, the game console. And what's interesting about this is this is a strategy that totally failed. And it failed for kind of an obvious reason in retrospect, which is first and foremost, people buy consoles to play games, not to have a portal to the Internet in their living room. And so you're selling a multi-hundred-dollar sort of console to people who want to play games, but people who don't want to play games aren't going to randomly start buying consoles. What actually ended up taking that over was things like the Fire Stick, or Apple TV made a play of this.

1:07:44Ben Thompson:I still think it's probably the best solution, but it's way too expensive. Now, the Apple TV's poor price got jacked to the moon with this recent memory increase. But the Fire Stick is probably a big one. You had the Chromecast, you had Roku TV, you had these, which ended up being, it's not that it's a classic Microsoft thing they were actually right there was this new front page to online services to be built they just took totally the wrong approach with Xbox and what's funny is that this approach actually became this uberos of self-mutilation because the Xbox didn't succeed in achieving this because the games console is way too expensive to achieve this But then also they killed the Xbox where Xbox 360 was pretty competitive.

1:08:30Ben Thompson:And that generation is actually the most interesting console generation. I'm happy to expound on that if you want to. But they come out after that with the Xbox One, I think, which was super expensive because it had the Kinect built in, that sort of like wave your hands around sort of thing. And it had much more like restrictive DRM things. It was going to be more digital. It was basically that console was designed around we're going to realize our vision and own the living room. And gamers hated it. So they rejected it. So their vision, which they didn't achieve, also killed their console. And so I wrote over a decade ago.

1:09:11Ben Thompson:And the whole Xbox saga is filled with regrets, I think, first and foremost for Microsoft, but also for me. Because I, from the beginning, is like, they need to kill this program. Or they need to spin it out or get rid of it. the stated goals which made sense from a corporate perspective were not achieved and it is continuing to exist because it exists yeah and i was actually sympathetic to that i worked at microsoft from from 2011 2013 when microsoft was in the dumps and you know they were still had a great business but their stock had been like 40 for like a decade and uh and the one thing the employees has like well at least we have xbox all the cool kids over there like it was such a important thing to corporate culture to have xbox even though this was a totally failed division in terms of achieving corporate goals and also was sort of self-immolating because it was trying to achieve corporate goals that it was not going to achieve yeah what do you think the naming scheme says about that project i always found it very odd that they went from xbox to xbox 360 that sounds like the third it's actually the second then xbox one is the third but it's one and then now they're on series x which feels like the 10th but it's the fourth and then they have a bunch of subnames it feels like they just didn't they never leaned into just like xbox two xbox three xbox yeah um well you're asked i mean maybe it shows i worked at microsoft you're asking the wrong guy about naming things i think um but uh yeah total mess they called it the 360 because it was coming out the same generation as the playstation 3 and they wanted to so they wanted to well they wanted to be on the same level like we both have sort of a three in our name yeah so what's interesting about the playstation 3 is the playstation 3 was sony's big misstep in terms of the whole playstation era what they had this crazy processor called the cell processor that had all these capabilities and they had uh up to that point consoles were differentiated by hardware and so sony famously helped one of the reasons they beat nintendo was they had discs so they could have much larger media and things along those lines, whereas Nintendo was sticking with cartridges.

1:11:24Ben Thompson:And they were much more favorable to third-party developers. Just in general, they had sort of taken over in PlayStation 1 and 2. PlayStation 3 comes along, they produced this, oh, they wanted to get Blu-ray off the ground. That's another example of consoles getting screwed up by trying to attempt to other corporate priorities. It worked. Yeah, it worked. Didn't they win? And didn't Xbox go with HD DVD and they lost? They did, but at the end of the day, what happened was the PlayStation 3 was way too expensive. I think it ran super hot, if I remember. And all these extra capabilities were not used.

1:12:00Ben Thompson:And the reason they weren't used is that was the first HD generation. And you had this shift to 3D games and high-definition graphics. And what happened was it used to be games differentiated themselves by how well they wrote the game. Like, how did it perform on your Super Nintendo, on your Nintendo? Now we move to a world of actually all the actual game was offloaded to engines, game engines. Like, you know, it had one. Obviously, these were epic, got super big with the Unreal Engine. And so you no longer did that. What a game company did was actually design the game and then asset creation.

1:12:33Ben Thompson:And asset creation at HD was way more difficult, way more expensive than it was for standard-deficient TVs. And so the economic imperative for developers came, we can't just be on PlayStation. We need to be on everything. And so that was the ultimate generation in almost every game was made to run everywhere. Run on PS3, run on Xbox 360, and run on the PC. And that was also the Xbox 360's best generation. That was the one they were most competitive on because they had all the games, because all developers were making them sort of run everywhere. They had a very simple to develop for architecture.

1:13:11Ben Thompson:The 360 was very PC-like, even more so than the one sort of previously. And that was their best generation. And then they come back the next generation shoving Kinect down people's throats. We're going to own the TV. And meanwhile, Sony learned their lesson. They're like, okay, we can't differentiate on hardware. We need to create sort of generic hardware that is easy to develop for. And the way we will differentiate is through exclusives. They bought a bunch of small studios, in contrast to buying Activision, which we can get to in a little bit. They bought a bunch of small studios and pushed all those studios to developing killer games for the upcoming PS4.

1:13:48Ben Thompson:And so you got things like the Spider-Man, that was a huge game. Naughty Dog, Last of Us, that type of stuff. Exactly. And so the PS4 was an unbelievable generation. And a lot of the reason it was unbelievable was because it had these exclusive games, and they just crushed Microsoft. Because for all the cross-platform games, the Call of Duties, the Maddens, things like that, those always ran everywhere. And so what you do is you limit the economic potential of your studios because you're only building for your platform. And you make it back by all the licensing fees you get off the EAs of the world and the Activisions of the world.

1:14:26Ben Thompson:because 80 % of gamers are on your console, not on the other guy's console. And so they just wiped out Microsoft in that generation. And that really just continued to the PS5. And this is where we sort of get to the Game Pass disaster. Okay, yes. So yeah, let's just jump forward to that. How is it a disaster? I didn't want to ramble too long. That's going to give you a chance to jump in. No, we love it. I have a bunch of other questions not related to gaming, but I love this history. Oh, I think the console history is fascinating. It's really interesting how it sort of, because it tracks technological change to such a large extent, and it totally shifted sort of strategies.

1:15:07And I think you can draw a lot of real parallels, even just model releases over the last couple of years, how certain decisions around one model sets you back a certain number. They're iterating a lot faster, but I'm seeing parallels.

1:15:22Ben Thompson:Yeah, the sort of development of, yeah, it's interesting. You can always just sort of draw lessons. So you get to Microsoft at this point. Again, I think I wrote at the time. Okay, time to give up. I wrote multiple times through the years they should give up on Xbox. And at this point, Microsoft stops doing much better. Was there ever an option after they bought Activision just to make Call of Duty a console exclusive? Or would that have been an FTC problem? Well, we'll get to that because that's part of the story here. So Microsoft decides, OK, what we we're going to actually try a new business model.

1:15:57Ben Thompson:It's true. Xbox sort of selling a console, selling, you know, licensing it. We kind of do that, but we're actually moving to being a services company. The stock's doing much better now. You know, like we have Azure, all the all these things. What we need to do and the way we compete with Sony is we need to have the exact opposite of the Sony strategy. and we need to lean into services, lean into subscriptions. We're going to do Xbox Game Pass. And the idea of Xbox Game Pass is instead of buying every individual game for$60,$70,$80, gaming pricing, by the way, really has stayed suppressed probably far longer than it should have been, particularly for the AAA games, but we already got to that with Rockstar.

1:16:39Ben Thompson:So they're like, you pay one price per month and you get access to all the games and Game Pass. Well, of course, no publisher wants to partake in this because they make all their money up front by selling games to their biggest fans. It's kind of like the movie model. You make a bunch of money up front. And yeah, in the long run. Were they looking at what happened to the music industry as an example of saying like, yeah, it's cool to make your product more accessible. You get more listeners by bundling and streaming. That was the bet. You had to make it up in volume, right? And so this is why the Series S came about.

1:17:15Ben Thompson:There's the Series X and the Series S. The Series S was a more underpowered but much cheaper model. I think it launched at$300 versus the X was, I think,$600 or maybe$500. And that was also a problem because you're kind of neutering the X because developers build to the lowest common denominator. That's sort of the highest one. So that was one problem. But the idea was we're going to expand the market. And they have these package deals where you get an S and you get Game Pass for a year, and it's this sort of thing. And we will make it up. And the problem is no independent developer is going to go for that.

1:17:50Ben Thompson:So they had some of their own games, but they went out and started buying a bunch of developers. So they bought Bethesda, which included, I think, it at that point, and ZeniMax. Yeah, Elder Scrolls. They have a bunch of great IP libraries. That's what they did, the Activision deal. But those developers just aren't releasing incredible titles annually, except for Activision, which does have an annual release date. Exactly. And so the issue with buying these companies is what you're paying for is you're paying for their existing business plus the premium. And their existing business was selling single copies of games to all platforms.

1:18:32Ben Thompson:And what they were saying is we're going to basically force all these studios to take a bath, to lose a ton of money by putting all their games on Game Pass. We'll still sell on PlayStation because we have to because that's a lot of money. It would be massively economically destructive not to. But what we think is going to happen is gamers are going to realize I could be paying$70 a pop on PlayStation. or I could go to Xbox and I could pay$20 a month and I can get all these games and that's it. What a better deal. And by the way, we'll get new gamers. People are going to come in and realize, wow, I can get all these games for$20 a month.

1:19:10Ben Thompson:None of that happened. All they did was cannibalize their existing business. They didn't expand the market for console gamers. All they did was have gamers who would have paid way more to play these games pay way less to pay these games. and Microsoft ate it. And I think the recent reporting was they expected to have 75 million Game Pass subscribers by this year. They have like 30 million, and that number is actually decreasing. It's not going up. And so it's just been – and so that's sort of the context of what's happened here. Phil Spencer got retired, which if you retire at that level of a company, you're probably canned.

1:19:51Ben Thompson:Probably too late. the whole strategy of disaster. They brought in new leadership. And now there's sort of like a reset going on. They're laying off a few thousand people. They say all games production are going to continue. But there's a real sort of critical decision here. What do we do? Because we ended up getting stuck in the middle. And we're just, this doesn't work. what uh what did you read into their approach of laying off 1600 people now and keeping a 1600 person riff i mean it's a terrible idea like everyone there for the rest of the year like every vc would tell you to like just cut hard cut deep and then move forward with the team if you're on the ship we're going to valhalla together i think i i do have some sympathy because the reality is I appreciated the note because they are in big trouble.

1:20:52Ben Thompson:And there's an aspect of just stating it clearly. We're not sugarcoating it. And if they laid out how much trouble they were in and then only cut 1 ,600 people, then everyone kind of knows they're going to be cutting more people, right? So I think they're just in a bad spot. So of course it's not great. It's going to destroy morale. It's going to destroy everything for the next year because everyone's waiting to get fired. But there's a bit of they did, I think, tear the bandaid off to the extent they could. And now there's just a now they can be very overt. They can go through and actually talk to employees about what are you working on?

1:21:27Ben Thompson:Why should you still be here? And it's a reflection of the employment climate. Like people in general are more they're just not going to bail. Microsoft, you know, they're going to want to keep their job. and so they can probably hopefully fingers crossed do better cuts by virtue of doing them in the open um but i don't know i mean i don't envy i don't envy xbox's leadership at all it's going to be a very tough thing but i i i can totally understand how they are where they are probability of a spin out i mean i think it i think it needs to happen like i i but you know this is again the regret is this was my take for years and years and years like okay fine xbox game pass that kind of seems kind of interesting let's go for it it should have stuck to my guns they're like no stop this is going to be a disaster um i think yeah i don't i i don't get it um i just don't i didn't see it before the thing that got me to say okay let's give it a chance didn't work i don't see it now i mean i think it does give me pause they hired matthew ball who i've had on strategy multiple times uh as their chief strategy officer i have a lot of respect for you know his takes so i'm curious what he's thinking about this gets to the question before is there a bit where they just write off these acquisitions and say actually all this stuff's going to be exclusive now we're like call of duty buy an xbox uh like basically giving into the ftc's worst fears which uh but they those fears didn't make sense at the time in the context uh because it's by What's funny is that we lost billions and billions of dollars.

1:23:06Yeah, and it would be a good pricing test for the power of a AAA game to say, okay, you can only get Call of Duty on Xbox now, and you would see how many incremental Xbox sales do you get. Because that means the real value of the game is actually in the hundreds of dollars if people have a PlayStation, and then they'll try something new. Switching gears a little bit, we keep having this experience where there's a company, an AI company, let's say an application layer company that is, or lab, that is hot, but then you don't hear very much for a few months and you write them off and then they come out and they've added hundreds of millions of dollars in revenue and are doing a crazy up round.

1:23:50And it's this weird thing where even historically, there's power laws everywhere, but I feel like in this moment, we're seeing more and more examples where like the 10th best company in the category is still having the financial performance that a company that would have been the leading company in their category five years ago what do

1:24:11Ben Thompson:you make it what do you make of that this is just a thing in tech in general that that is always sort of stuck out at me i mean i i think i hasn't been though but like like crm for example like if If you go back to 2015, was the 10th best CRM company actually printed? No, no. The example I always go back to is I think it was 2014 or so when Apple bought Beats. And they bought Beats for$3 billion. And the tech press is going crazy. Everyone's writing thought pieces about it. And I'm like, of course, writing about it. I'm like,$3 billion. Apple is a$500 billion company. What does$3 billion matter?

1:24:51Ben Thompson:And what's funny about that take is, number one, it was right. Who cares about$3 billion? That's in our couch cushions. People were spun up about something. It didn't really matter. Number two, Apple is only a$500 billion company. The astronomical increase in valuation and numbers around this is absolutely crazy. So to your point, yeah, a 2019 CRM company, number one, there probably wasn't a number 10 even then. But yeah, the numbers are not even remotely tied to like any. I just sort of let them go and be like, I write down the numbers and they don't really mean anything to me. But it's very hard to keep track of like the inflation in tech numbers specifically.

1:25:27Ben Thompson:You know, you think that what was I complaining about pricing before? Oh, yeah. Lemonade stands are bad. Silicon Valley lemonade stand inflation is absolutely the worst in the world. Um, on mergers and acquisitions, uh, there's this news today about Getty Images calling off Shutterstock deal after UK regulators said that they would have to sell the editorial business for the merger to be approved. And it seemed very odd to me that a merger would be blocked by a regulator when that industry that is consolidating and is maybe becoming more monopolistic is under such insane attack from generative AI.

1:26:08I can't imagine a better defensive move than putting Getty Images and Shutterstock together.

1:26:14Ben Thompson:This happens every single time. The natural response to your overall category being threatened by an external force is consolidation. It's the only way to defend yourself to sort of, you know, you get synergies. All these companies are pretty established, so it's actually fairly easy to price. You know exactly what things are. If you have growing companies, you want to merge them or acquire them. It's really unclear because how do you sort of price out the future? These companies are declining. So it's very easy. You could do a discounted cash flow and understand exactly how much they're worth.

1:26:48Ben Thompson:It's a very straightforward negotiation. It makes total sense for them to consolidate. But precisely because they're knowable and understandable, it's very easy for regulators to block them. And you see this happen again and again. You see pushback on – you saw this with TV and different networks getting together and the various pushbacks that happen to that or in telecoms. Like this happens – this is a natural pattern. The moment that a company, an industry wants to consolidate, needs to consolidate is the moment regulators are most likely to stop them consolidating. And whereas the actual time when action would matter, like when it's growing and a company is making the right acquisitions to take over an industry, regulators don't do anything and also rightly don't do anything because you're dealing with the future and it's unknown.

1:27:39Ben Thompson:You don't want to screw it up. It raises the question of what do regulators sort of do anyway in broad strokes? I used to be, I think that they probably do more harm than good as far as a lot of these sort of blocking mergers and things go. But I don't know. I'm the one that just said maybe Microsoft should take Call of Duty exclusives. So who knows? Maybe I'll have something in the face. We had a funny moment because we were looking. It's a$3.7 billion deal. But I'm like, how is this a$3.7 billion deal? These are two$300 million-ish market cap companies. and it was because the deal was priced back in January of 2025.

1:28:19And so both companies had declined so much over the last 18 months. So maybe they shouldn't do the deal anyway. I don't know.

1:28:27Ben Thompson:I mean, it could be worse. You could be Netflix and have the stock market sort of like make a bid for Warner Brothers that the stock market hates, abandon the deal. But they already decided you did the deal because you're desperate. You're screwed anyway. So yeah, you don't even get what you bid for. So maybe that's what happened here. I don't know. Oh, well. Well, thank you so much for taking the time to come chat with us. Have a great summer. Enjoy the break, and we'll see you soon. Yeah, good luck with the lemonade stands. Yes. Try to make it through summer. Don't go into debt. You're going to run up on a kid that has Klarna.

1:29:01Ben Thompson:You're going to raise some money. Yeah, I know. Exactly. Yeah, Klarna and a lemonade stand. Klarna and a lemonade stand. Five easy payments. It probably happens in Silicon Valley. Interest-free. Interest-free, it might. Well, thank you so much, and have a great rest of your week. Great to see you. We'll talk to you soon, Ben. Yeah, talk to you later. Have a good one. Let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds, online, in-store, on mobile, on social, on marketplaces, and now with AI agents. And our next guest is Rodrigo Leong from Samba Nova.

1:29:28The co-founder and CEO is here with us in the TV event. Rodrigo, how are you doing? I'm doing good. How are you guys? We're doing fantastically, but it sounds like you're doing better. Give us the news. What happened? You know, we're super excited. We did a big funding announcement today with a billion-dollar round that we did a first close on at an$11 billion valuation. So super excited about announcing that. Incredible. There we go.

1:29:57Ben Thompson:There we go. This is reminding me. Somebody posted a couple weeks ago something to the effect of every day there's a new billion-dollar deal in chips from some company you've never heard of. and I guess the trend continues. Yeah, talk about it. Yeah. Is this an overnight success? When did you start the company? How long has this been overdue? It's an overnight nine-year success. I've been building chips for 30 years, high-performance processor, and we started this company in 2017. So, no, but it's been a great journey. Again, it's so noisy. There are so many companies out there doing all sorts of awesome things, But look, then you have inference.

1:30:43Inference is now right in front of us. It's kind of broken everything open. It's what we do. And it's been what we've done for a long time. And so it's the new training run. And so people that have kind of been thinking about building just for training, well, now it's the time for inference. And this is where we shine. And we shine, you know, and investors are putting all their money behind that. And so we're excited about that. How, walk me through the phases of, I mean, you have some of the biggest companies in the world you're working with. JP Morgan Chase selected you for secure on-prem AI inference.

1:31:17And I'm interested in the thought process that large Fortune 500 companies, Fortune 100 companies are going through right now. I imagine that there's a lot of explore with frontier models. Very expensive. They're token maxing. Then they shift to, okay, this agentic workflow is working. Let's use an open source model for it that is, you know, either the open source frontier is caught up and can do this particular task. Maybe there's a fine tune or some RL on some private data that makes the system perform better. When is the conversation shifting to actually optimizing the inference stack, the hardware?

1:32:00what's the conversation like there what are the savings that people are focused on well I think what people are starting to realize after they started using ChatGPT and the Frontier models is there's a bunch of things I can do there and it's great, we'll use it and it's going to be part of their business for a long, long time and Hyperscales are offering all sorts of different services with different TPUs and GPUs and training chips, they're offering different things there again on the cloud But what's happening now is this next phase of production is people starting to realize, okay, what happens to the stuff that I'm not comfortable releasing to these models?

1:32:35Like my private data, my superior data, the stuff that I want your models to learn and then somehow become part of the global knowledge, right? And so what happens with that, right? And so I don't know if I have my clients' banking information, if I have some very regulated information. What do I do with that, right? And so people are starting to realize, okay, there is a whole other class of workloads, a whole other class of applications that you've got to go and do private. And so with someone like JP Morgan, which is fantastic, I mean, we are the top of the top when it comes to enterprise and IT, right?

1:33:08And so in technology, fantastic partners. So they selected us as the ones that can come in and go into an environment like JP Morgan, do full on-prem, secure, private. They can bring their open source models. They can fine tune into it. then can deploy that privately, securely, and control the models and control it forever. And so I think we're starting to see the landscape starting to steady. There's some things you use the entropics for. There's some things that you're going to use the hyperscale clouds for. And there's some things you're going to say, hey, let me run on-prem and let me control the outcome.

1:33:40And especially since I don't know how the regulatory environment is going to settle, let me just be secure for that. Let me just be safe and just run those things on my own models in my own environment with my own security around it and then be done. Yeah, you can think, you know, pharma company being like, I would love for all the other large pharma companies to share their data with a frontier lab. Totally. But I'll pass. What does partnership with you look like for a large organization? if I have a large IT footprint already, I probably have data centers, but they might be more CPU-based workloads.

1:34:21Maybe I have some GPUs, but I'm not doing frontier inference. I'm not fully scaled up, but I have some... Are you consulting with them at the level of where they should be buying land for their next data center, how they set up a powered shell, who they should partner with? Like how deep in the stack will you go with a company that you're working with? Well, look, you know, I mean, if you look at the AI ecosystem up to date, you know, we've been really focused on hyperscale clouds. You know, the neoclouds, the frontier models, we're really focused on building those out. You know, gigawatts here, megawatts there.

1:34:58I mean, just, you know, just this large scale deployment. And then what you're still thinking about is, well, how do I get as many tokens out per megawatt, per kilowatt, megawatt, and gigawatt that I have, right? And so that's kind of – we're very focused on that. Some of the work we play into that are really, really efficient models. We run the big models really fast. That's really what we're known for. Huge models, right? The battleground for power and data center and all that is about huge models. It's not about the little models. It's about the trillion, multi-trillion per number of models.

1:35:26That's what we focus on, and we run that faster than anybody else in the world. But then you flip it over to the enterprise, and for them, it's not as much about how many thousands of racks can fit into an environment. It's about data privacy. It's about security. It's about having the capacity when I want it. It's about low latency. It's about these things that, again, you go back to traditional computing. It's what they've always wanted. They always wanted low latency, high performance, all security and privacy. They always wanted that. And so what we can do is that because our rack, our rack is a 10-kilowatt air-cooled rack compared to what traditional GPs are, 140 kilowatts per rack.

1:36:02We're a 10-kilowatt air-cooled rack producing state-of-the-art AI. Now you can go into your existing data centers. You don't need to go buy new data centers. You already have data centers. Roll out the old gear, bring in the new gear, off we go. And you're running the latest and greatest models at a great performance. So that's kind of what's exciting about it. And, you know, they're first and foremost, our customer, you know, they're buying the racks and deploying them. But then broadly, they're really also a co-developer, you know, when it comes to enterprise and you secure AI for enterprise, right?

1:36:32Because they are the most knowledgeable when it comes to deploying these types of applications. And they're just so smart about this stuff. And so we can partner with them and figure out how to bring the enterprise on board, which, again, you know, if we all think about it, there's three classes of AI clients. You've got the model makers, you've got the clouds, and people forget enterprises just waking up. And historically, there have been a massive amount of spend. They're just waking up. And you see Jake Morgan and some of the banks and some of the other retailers, some to come on board. And I think that's going to be a part of the ecosystem.

1:37:07I think it's going to be something that's going to be around. Last question from me. Jordy, you can take whatever you're after. But walk me through the pre-Chat GPT era for your company. I imagine that since 2022, 2023, it's been on fire and demand has been through the roof. But how did the company survive from 2017 to 2022? What were you doing? Who were the customers? Did you have revenue? Like, what was it all R &D and venture funding? Like, what was the early history of the company? Because that feels like a very potentially rough period. But how did you get through that time? Well, look, I mean, I've been in chip design for a long time.

1:37:46Well, I always know that it's a long-term investment. And so, I mean, back in 2017, we're still trying to recognize cats and dogs on the web, right? It's just a cat or a dog. That's what we're doing, right? We're trying to figure out, you know, what do we do with this thing, right? And so, and we're building recommended models. We're also some different things for people. But the reality is what OpenAI did, it just flushed out all of that noise pre-OpenAI and focused all the value around, let's start here. It doesn't mean that images aren't important. It doesn't mean all these other things are important.

1:38:20But what it did is focused us as a global market to say, let's start here. Let's just start with language. And it's a very good place to start. And it allowed us to actually, all of us, come together and say, hardware, software, models. Everybody started focusing in on language as the use case. And now you've got so much production traction. And now you can focus on other things. Like we're doing great in voice. We're doing great in video. And these are things that are also coming. But the ability to sequence these things in production so that you can actually see value has been incredibly important.

1:38:51Love it. On that note, going forward, how are you thinking about reacting to customer needs? It's like this partnership with JPM and some of your other new customers feels like reacting to this real-time need of like, okay, we understand the potential. We're willing to invest a lot here, but we have certain kind of criteria around how we want to roll these products out versus skating to where the puck is going and trying to make predictions around R &D that you do today that will pay dividends three, four, five years out. Yeah, well, when your chip design, as you guys know, right, it takes you two years to design and you've got to go through TSMC, you've got to build these wafers and you've got to build the systems.

1:39:29I mean, there's a three or four year cycle, right? And so there are always, it's a blend between engineering and fortune telling, right? And so you're kind of mixing those. But the reality is you're always doing that. But here's the difference when it comes to enterprise. And not only do we have JP Morgan, but last month we announced a huge partnership with Vista Equity, which has 90 people for the companies. building all these applications. So what is the biggest thing that we run out with AI is we don't have off-takes. We don't have off-takes. And so now what you're seeing is the JP Morgans of the world, the Empires of the world, the Vistas of the world, all these applications, all turning SaaS companies into AI-first companies, and you're seeing the demand pull through.

1:40:09And so what we're excited about this is not only do we have the chips, and you've got to connect it with the data center that's there, but the next thing is connected with the end user, the end-off taker that applies AI into something that's useful to new businesses. And so we're super excited about the JP Morgan, the Vista, all of these applications. That's our mentality is what are people using it for? Solve that problem. Everything underneath follows. Thank you so much for coming on the show. Congratulations on the massive round. Nine-year overnight success. Can't wait to talk to you again soon.

1:40:42Have a great rest of your week. Cheers. Talk to you soon. Goodbye. Let me tell you about public.com. Investing for those that take it seriously. They got stocks, options, bonds, crypto, treasuries, and more with great customer service. Our next guest is Alana Palmito from Paradigm. Hey, guys. What's up? What's going on? Welcome to the show. Our last guest raised$1 billion. You had to one-up them. You had to two-up them with$1.2 billion. Tell us about the new fund. Oh, man. Thanks for having me, guys. Really great to be here. we're super excited about it we raised 1.2 billion to go after the new opportunity set Frontier thanks for warming that up for me it sounds nice and warm fantastic alright continue 1.2 billion for investment alright guys we're going big we're going after all Frontier tech we're really excited about it obviously you guys know we got our our start in crypto back in 2018.

1:41:46This is our fourth fund. Yeah. Pretty, pretty excited about it. But I feel like, I don't know, this is being somewhat positioned as like an expansion of the vision or the thesis, but I feel like paradigm has been investing in broader frontier themes for years now. Like, can you talk about some of the, the history of expanding beyond crypto and, and the key moments in the funds history that sort of woke you up to, of broadening the thesis. Yeah. Well, I think in 2018, crypto was the most interesting frontier to be investing into. And like that really was the heart of how we started building the firm.

1:42:26And it was the it was the thesis behind being the sort of researchers, builders first. How do you get really close to the tech to be able to understand and underwrite these things from first principles? And then I think over time, it's it's become pretty obvious that it's not the only frontier and really hard to ignore what's happening in AI. But actually, like, I would say it's more than that. It's like the world itself has started to blend together. And drawing these concrete lines is like no longer applicable. I think that like even something that called itself a crypto project years ago today, like things that are right on the periphery, tech is just all touching each other.

1:43:03And when you think about trying to separate it, it just doesn't work that way. How are you thinking about the early stage? There's been some chatter on the timeline about, oh, like every VC just wants to pile more money into the biggest private companies, the trillion dollar private companies. Why would I waste money or time talking to an early stage founder? How are you thinking about opportunities at early stage, mid stage, late stage? What even is mid stage now? Is that a mere$50 billion company early stage at this point? Who knows? Yeah, I think, well, I think stages is a hard thing to define because Like, what are we really talking about?

1:43:38Are we talking about the stage of the company, the valuation? Like, I think it's it's impossible to to not be backing some of the earliest founders and folks who are coming out with new great ideas. And so for us, it's like talent led, I would say, like you find great people. Oftentimes they're in their early 20s. So I don't think you can ignore the early stage, but you also can't ignore the dynamic that you're describing, which is like the power law of what's happening with these larger later stage companies and how much they're able to capture and the compound rate of growth. So I think it's like you have to do both.

1:44:15From an actual product standpoint, are you breaking out the fund? Is there some amount segmented for the early stage, some for growth, some for incubation? How should founders be thinking about the new vehicle? It'll be truly stage agnostic. So we're going to invest in everything from super early seed stage, even pre-seed in some cases, all the way into growth markets. We also, you know, we have a core flagship fund, which is an open-ended vehicle. And so we invest into public markets too. Oh, interesting. Very cool. What is the effect of this year's IPOs? What have been the internal learnings from the height of the opening of the IPO window?

1:44:58It feels like it's sort of open, but maybe not fully wide open. We've got a lot of exciting IPOs that have done well. But how is that affecting the fund and your feeling around the market right now? That's a good question. I think it's a hard thing to answer. One of the interesting dynamics happening in IPOs is like hyperliquid and some of the trading activity we've seen in advance of the IPOs. It's been pretty fun to see the 24-7, 365 markets really come alive, which has been a long term thesis that the crypto markets have had. And I think Jeff Lowe at Hyperliquid has just done an incredible job pulling it off.

1:45:36And Jeff Lowe at Trade.xyz and Jeff Yon at Hyperliquid. And so like the Cerebrus IPO, SpaceX IPO, like all of these now, like we had all of this trading activity going into those. And so there was a lot more transparency on pricing in advance of the IPO event itself. um yeah how how accurate was the like on-chain pricing relative to what these ipos actually opened at and do you feel like surprisingly accurate yeah surprisingly like quite accurate actually interesting have you heard of any institutions like starting to you know bigger like firms on wall street that you think will if they're planning to invest in the ipo or or trade it after it opens actually start their activity on chain?

1:46:26Is that something that you see happening in the future as we get sort of more evidence that on chain trading tracks, you know, real life after these IPOs actually happen? Yeah, it's a good question. I mean, if I were them, I would be doing that. I don't know what the rules are and what the playbook is for them today and like what the liquidity and depth of those books looks like. But I mean, I think that's the thesis for what 24-7, 365 markets look like in the future, is you're going to have a lot more institutional activity. Certainly, we're seeing that in perps as a derivative product themselves.

1:47:01I think they're just a much more efficient pure play product for big hedge funds to come in. And I would even say the same thing can be true in prediction markets. What we're seeing is some people are relating to prediction markets as an institutional product for getting exposure to things and bets that they want to place that is much more precise than we've had in the future, or excuse me, in the past. And so the future, I think, holds like still a lot of white space in terms of how these markets are going to evolve, but we continue to be really excited about it. What do your internal meetings look like?

1:47:33Do you have like, you know, a meeting once a month where you guys pitch new frontiers that you're kind of kicking around? Like, at what, like, what is, what is forming a thesis look like? Is it, is it all partner driven or is it a more collective? You guys have kind of a general idea of a category that you're excited about and then you work together. Well, I'd say top down, like thematically we're investing into areas where, that are structurally long AGI first and foremost. Um, so what are the things that are going to have a natural tailwind to come out of that? We don't run like necessarily a top down process though, down to an investment and say, like, let's go do a deep dive or a particular theme.

1:48:16I think that oftentimes you try to gain conviction and do sprints on individual areas in the market that were maybe like there's a particular founder that we are excited about. But the process, yeah, I would say it's more organic. Like each individual partner may have a different thing that they're excited about and digging in on. I do think like, you know, fundamental to our thesis is like we have to be close to the tech. And so we ourselves have to be able to go really deep and like understand these things down to, you know, lines of code. And a lot of folks on the team are computer scientists or physics.

1:48:59What about down to the metal? Down to the metal, yes. You guys have a little data center in the office? No data center in the office. Yeah, I mean, like orbital data centers, I'm in the future. I don't know. What do you guys think? I don't know. I think you guys should get on the next SpaceX rocket and run a little experiment. I think it's all just, yeah, I'm on the Elon timelines, which is take whatever he says and multiply it by three. And that's probably true, which is still going to happen, but just not next year. yeah i think i think elon will will things into existence yes with enough time you will get there yeah almost always absolutely uh but it takes time uh anyway thank you for taking the time to come chat with us and congratulations on the new fund yeah and excited to meet all the new founders yeah joining the portfolio portfolio yeah yeah super pumped about it we got some great folks i love zipline yeah evan rogers teller is amazing at zipline yeah yeah fantastic well have a great rest of your day and we'll talk to you soon.

1:50:01Great to have you on, Lana. Cheers. Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows. Codex helps you move projects forward from start to finish. Our next guest. Next up is Byron Boots. We got Boots on the ground. Boots on the ground. Let's bring in Byron Boots from Overland AI. Welcome to the show. How are you doing? Oh, great. Thanks for having me on, guys. It's really exciting to be here. Yes. Great to have you. We're very excited. Can you reintroduce the product and then take us through the latest news and the contract that you just signed?

1:50:38Ben Thompson:Yeah, sure. So good news is I'm working here out of our factory in Seattle. So you can actually see the product that we have. Right. So we're building autonomous ground vehicles for defense. Basically, you think about that as like robots for the battlefield. Yeah. So do you guys want to see it? Absolutely. Absolutely. Let me walk through it a little. Give us a tour. So here's one of them. This is our Ultra product. You can kind of see the top part of it. It's a large off-road ground vehicle. You've got sensors in the front, so there's stereo cameras and LiDAR. You've got these big wheels here and long-travel suspension.

1:51:15Ben Thompson:Down here is a payload deck, so you can think about putting big payloads on the vehicle. Right in here, there's onboard power. There's compute down below the deck, comms in the back. So that gives you just a brief overview of one of the things that we're building. And then, you know, you asked about the contract and we're super excited. So we're the first ground autonomy provider to get a production contract with the U.S. military. $20 million contract with the U.S. Marine Corps.

1:51:48It's fantastic. You're thinking what I'm thinking, that truck needs a gun. What does the payload look like on there? It seems very modular. It seems like you can put a lot of different equipment on that. Is that something that's delegated to the Marine Corps? They decide they partner with other primes, or do you have other relationships where you can bring the configuration to them?

1:52:10Ben Thompson:So we've put 30 payloads, 30 different payloads on these vehicles. It's designed to be modular. You can see that there's L-Track down here that makes it really easy to attach things. Sure. So this is everything from kinetic payloads, like remote weapon stations, drones, EW. So it depends on what the customer wants. We can help them integrate anything onto this vehicle. Dogs as a form factor. There's been a bunch of sort of creepy robot dogs. Or actual dogs. Well, we should get into real dogs. But there's been a bunch of videos circulating recently. Recently, there was one maybe a week ago of a robotic dog, and it seemed like they had solved some of the recoil challenges.

1:52:55Do you think that's a, like, how are you thinking about that form factor? Obviously, you guys are focused on something else, but I'm sure you understand the tradeoffs of both. I can imagine, like, your product is much better for high range, you know, situations where you need a lot of range. But how do you think about it?

1:53:14Ben Thompson:Yeah, so one of the reasons why we love this form factor is that it's, first of all, large enough to put a serious payload on it. It can handle 1 ,000 to 2 ,000 pounds, depending on what the configuration is. It's got wheels, so it has really good use of energy. You can drive it 100 miles. So robot dogs are really cool, too. So before I started Overland AI as a professor running a lab where we worked on machine learning and robotics, and we had a bunch of robotic dogs in the lab, and they're fun to work on. But I think wheeled vehicles are really the place where we can get the most... You're saying the wheel is underrated and it doesn't need to be reinvented.

1:53:55That's what I'm hearing. Well, it was just crazy.

1:53:57Ben Thompson:Yeah, I mean, so not only do you not need to reinvent the wheel, I mean, if you have squishy tires, you can do things like drive up and down stairs and do all sorts of stuff. I never thought about how simple that is. You can just drive up the stairs if your tires are big enough. How big are the tires on that? truck? I think these are like 38 inch. So it's a pretty big 38. That's fantastic. I love it. What does the actual manufacturing process look like? Obviously you're very well funded company, a hundred million dollar round recently. At the same time, there's probably a lot of experimentation, a lot of putting different parts of the supply chain together, a lot of modularity.

1:54:32So how hand built are these? What does the automation story over the future look like?

1:54:37Ben Thompson:So the ultra vehicle like this one is actually based on a Polaris Razor chassis and drivetrain. So we get that from Polaris and then we upgrade the suspension. You can actually see a great view of that here. We pull out the seats. We just add this flat payload deck. And, you know, we do all the work to add the compute and the sensors and wiring power, all of that kind of stuff. So we pull all that together in our factory here. We're also very field forward. So we test these out in the fields all the time. You know, we're in the field every single day working on the, you know, the software, the autonomy.

1:55:15Ben Thompson:And I think one thing which is really, really important about these systems is that this is a completely autonomous robotic system, right? Like it has sensors that allow it to perceive the environment, plan through the environment, control it so that a user can just tell it where it wants it to go, what payload to execute. It's not you know, it doesn't have to be tele operated You know a single user can control multiple vehicles. It's one of the things which is really cool about this tech I imagine there's like very high demand for both tele-op and full autonomous mode though, right? People want to be able to port in for a particular mission and then also be able to just try and draw waypoints on a map So so one of the things that I think we see is when people first start to use a vehicle like this They're like, oh, I want to teleop it and be able to precisely control where it goes.

1:56:05Ben Thompson:But they quickly realized that you can actually just tell it where to go on the map, tell it what orientation you want it to be in, and it will just go there and do it. And so it's actually safer, more efficient, and allows you to get much more force multiplication if the operator just relies on the autonomy to get it there. And so what we've seen is warfighters really embracing that and starting to experiment much more with that. So we think autonomy really is the future. Any plans to make a dual-use version for Malibu? If you've got a bunch of surfboards, you want to get them down to the beach, you load them up and say, hey, I'll meet you there in five minutes.

1:56:42Some natural light. Some natural light. I mean, it sounds awesome.

1:56:46Ben Thompson:We are actually dual-use. We are using this for things like wildland firefighting and other things. So who knows? I mean, maybe pretty soon we'll be able to get you guys one. The day party market. The Eman. taking you around the hotel property. Well, thank you so much for coming on the show. Fantastic news. Congratulations. And we'll talk to you soon. We appreciate it. Thank you so much. Really appreciate it. Have a great week. We'll talk to you soon. Goodbye. Let me tell you about console. Console builds AI agents that automate 70 % of IT, HR, and finance support, giving employees instant resolution for access requests and password resets.

1:57:26There's a scoop. There's a scoop on the timeline. Perplexity is quietly building an AI coding tool that takes on clog code and cursor and codex, potentially. It's meant to build software end-to-end. The tool is being internally used for now under the code name Teammate. Perplexity has been sort of bouncing around from different. So Steve Hu here says, what happened to the Bloomberg terminal killer? They were working on that for a while. Then they launched Bloomberg Computer, which was sort of a computer use agent and saw incredible growth. Like you saw the ARR numbers went way up. It feels like one of those examples of a company that people were sort of skeptical about.

1:58:07And then all of a sudden there's some new good news. Perplexity has a ton of revenue. They're taking a ton of shots on gold. Just like every other company, to be clear. but I think the difference is that perplexity doesn't have a product that's being used heavily by tech insiders and so people just see them as like running around with like uh they it feels like they don't have something like that's a hit in enterprise that they can fall back on while they keep taking shots at some of these more sure enterprising products yeah and so uh yeah it's interesting i i it feels like it's fun prints remember they they fired up the perplexity investment fund investing in other startups i don't know what they invested in i don't know what they invested in but but he has he has good access it's possible everything in that fund is just on fire because the market is doing so well so many companies are getting marked up that could be a pretty interesting portfolio to deal into at some point i think that this is more this teammate makes me think that it's maybe something else but i could see them seeing lovable's growth and having a lot of overlap and audiences and replet and saying like hey we want to make you know we yeah we want to make a more consumer leaning product i i think it'll be hard to really get a foothold they are more adjacent than you think you go to perplexity to look up some information you get uh nice you know uh ui design on the responses they have the joe rogan partnership which seems like it's crushing and they and joe can be like hey jamie build me a build me a new crm during the show i don't think jay rogan has any interest in a crm i don't think he's in the market i think he does everything over text message and you have to be invited so i mean you know if you're gonna be on the show before we have our next guest grok four five that's right is out is out uh some reviews looking good on the benchmark goes uh i wonder how does michael true I'll have a SpaceX AI badge yet.

2:00:09Is the Cursor team involved in this heavily? Because I know they were doing some consulting work while the deal closed. Of course, the deal was announced, but they still have to go through post-merger integration. I wonder how deep that team was integrated, but excited to check it out. I think they're still going to be running under the Cursor umbrella for a long time. I think it's much easier to sell Cursor through the enterprise than GROC. And they have Composer, a separate model, but GROC is still. Yeah, Cursor did say that we've partnered with SpaceX AI to trained Grok 4.5. So I think that there was a lot of class.

2:00:38I really wonder if there'll be any gap in capabilities in the spiky intelligence sense of Grok will be good at a particular thing, writing or something that's a little bit more X native, Twitter native, news, social media, like that's been the advantage there potentially. And then cursor will be more data code driven, and there'll actually be sort of a bifurcation in the models. Or will we just see a consolidation where both models wind up offering basically the same spiky frontiers every other model. Anyway, excited to dig into that. Always love a new model launch. But we have our next guest in the waiting room.

2:01:14We have Will Mayer from Colt Holdings. Welcome to the show. How are you doing, Will? I'm doing well. How are you guys? Thank you so much for taking the time. Great to have you on the show. Great to have you on the show. What do we got in the background here? Is that real? That is real, yeah. That's like various artifacts from the past. So yeah, very cool. Webby awards. I think the spring, isn't that a Webby award? That is a, that is Webby award. Congratulations. Give us a little background. Give us a little bit of the journey. Introduce yourself for those who are watching who might not be familiar with your work.

2:01:46Yeah, of course. I am Will Mayer. I'm the co-founder and high priest at Cold Holdings. Background came from making skateboard films at a young age when I was like 14 for companies like Vans. Became deeply obsessed with brands and what they represented. moved from there into advertising, working with brands like Nike and Netflix, and then started working more and more with startups, incubating companies, and fell in love with cults and religions and believe that many of the best brands are some form of a religion. I remember early in Silicon Valley, I was working on a company, and people were saying, oh, you don't want your product to have a cult-like following.

2:02:26and I was looking at Cult of Mac, like the website that tracks Mac, they refer to it as a cult. It's a great way to think about things, obviously. What was the case against not wanting a cult? Oh, just that like, you know, cults are bad. They often lead to like terrible outcomes in the literal sense. And also you probably don't want like psychos following you. You want just like normal customers in reality. And that's what Apple wound up getting. They got a huge amount of just normal consumers, but they do have a cult-like fan base. Yeah, they needed the cult to get them through to the truly hit consumer product.

2:03:02Yeah. I mean, before the 1970s, the word cult was actually neutral. It just meant a new fringe group. There was a period in the 1670s, people referred to it as the Fourth Great Awakening. It's like a huge boom in spirituality. Things like Amish and Marikyo, Children of God, but also brands like Blue Ribbon Sports, which became Nike or Apple from Jobs. jobs. In that period, the word cult went from being a neutral word to a negative, and conservatives started to use it to demarcate and delegitimize new movements. So today, sociologists mostly refer to cults as NRMs or new religious movements. Okay.

2:03:35Got it. Interesting. But you're reclaiming it. You're taking it back. Talk to us about, I mean, you have a couple different things going on in your world, but I'm interested particularly in advertising video production. What does it look like to work with you? How long are you on a particular project. The Polymarket ad went very viral. And I'm wondering, like, what does that process look like from start to finish? It really depends on the type of folks we work with. With Polymarket, we've been working with them since January in a bunch of different capacities. The team and I have been working on strategy, a bunch of the brand work and out-of-home stuff.

2:04:10That campaign came together in an insane timeline and was driven a lot in partnership with their internal team. I got a call three weeks before the World Cup. If you guys know, people now are working on Super Bowl ads. It's a six-month process. Normally, that whole thing from concept to production to post to being online and routed for TV was like three three and a half weeks wow so it was insane yeah uh what how did you process all the different reactions i i think i saw the ruben ad like while watching ufc i watched it too and i was like whoa rick rubin yeah prediction market ad yeah uh the ad was obviously very cool a lot of people were surprised by that i brought up to you you were like rick rubin came out of the rap game Why is it surprising that he would do like a prediction market on UFC?

2:04:59So, yeah, I feel like it was very, very mixed reactions to it. You know, not not on the creative. I think that was universally like creative was awesome. But how did you process people's reaction to it? I mean, I feel like a lot of the best campaigns are pretty controversial. I mean, in our time with Equinox, we like banned membership sales on January 1st. And that became like the most heated moment that business has ever had, but also the most successful campaign in history for them. So I think with someone like Rick, what was great is there's nobody that represents questions better than him for those who feel like they're the creative actor or anything else.

2:05:30So he felt like a great fit. Yeah. I've been feeling over, you know, we're sort of at like peak marketing content. And yet, like, it feels like advertising has never been in a worse place. I don't know if you feel the same way. The campaign with Polymarket is like, it is a campaign. It feels like the craft of advertising. And that's why I think it broke through as much as, again, the actual creative was good. Do you feel the same way? Do you have launch video fatigue? It used to be like maybe a company would come out with a video, but they were really just hoping for a TechCrunch article. Now it's like, well, we're definitely doing a video, and it'll look exactly the same as every other video.

2:06:15And then, yeah, maybe we get a TechCrunch article, but it feels like people are trying to create their own artifacts. I mean, dude, I don't want to point it back at you, but you guys created the OG launch video, I feel like, for TV. I remember that was my first experience at TVPN was like, you guys on a helicopter or something. Yeah, yeah, yeah. So I'd say if you like even that. No, and you'll appreciate, we had 20 other videos planned, and then it just started this sort of snowball where everyone was launching videos, and we were like, this is no longer a good way to actually break through and get attention.

2:06:49So we just switched. We literally had the whole production team here geared up for weekly video shoots with ideas and different songs that we were going to play on, and then it just got so tired. And we're like, okay, let's not do that anymore. Yeah, we should have made 10. We should have made them all. And then launched them one day at a time or something like that. But I don't know. What do you think about the oversaturation of things, like how fast the internet moves, when you want to jump on something, when you want to bring back something from the archive that hasn't been touched in years?

2:07:17It's tricky, man. I mean, again, not to throw it back to the 70s again, but the average American, I think, then saw 500 as a day, and now it's more than 5 ,000. And who knows what it'll be in a few years from now. Wow. We get hit up every day for countless launch videos. Sure. I'm not sure how long the trend's going to last. I think just it's cliche to say, but taste and a contrarian point of view will cut through. The approach I would give to people to try is I think the polymarket work resonated because we took somebody who would, the whole team, from creatives internally there to the photographer to the talent, normally wouldn't be a part of a prediction market campaign.

2:07:56When you think of Equinox, every photographer we ever hired for Equinox had never shot fitness before. They only shot fashion. All of our design team came from museums that we would poach. So I think like hiring people out of category, you have enough subject matter experts in the business. So bring in people who don't know the category and can bring new things to it. Yeah. When you have a campaign that hits, where do you, do you think the value is primarily coming from a great idea or the execution? I think a lot, it's hard to say. The Equinox, the great idea is like, let's make it impossible to sign up for a membership on January 1st, right?

2:08:35that's the idea and that's what sticks with people. I don't even remember a lot of the visuals, but to me that's what made it a great campaign. Yeah, I think that we spent less than 1 % of what we would normally spend on a January campaign that year for what we launched, which was We Don't Speak January. It was just black and white text, which is why you don't remember it. But brand actions, I think, cut through more than anything now, especially with, I feel like AI is going to democratize creativity and skill to so many people. That there'll be such an abundance of beautiful visuals over the next few years that like the concept and what the company actually does will probably be the most important thing.

2:09:09Yeah. What action are you willing to take? Yeah. Yeah. Yeah. Actions speak louder than words and maybe slop as well. Uh, how, how do you, how is working with Brian Johnson different? Because it feels like, uh, Polymarket, it's sort of like a standard playbook. You have a celebrity, you have a video, it's going in the world cup. It's like, it's like standard inventory, obviously executed very well. But, uh, with Brian Johnson, it's like this massive owned media influencer driven individual. He's huge on Twitter. It just feels like a different company. How did you approach that? What'd you wind up working with him on?

2:09:43It's massive. Him and Kate hit us up like probably late 2024, early 25 because they heard we were focused on like building religions and the brief was basically like build a religion for don't die. So we spent a lot of last year, we had to like basically collaborate with them on what the doctrine of don't die became a lot of the rituals around it. There's like a, I don't know, like five core tenants of like how to build a cult brand. And I think Brian's like done all of those completely naturally, authentically on his own. Do you know, were you, were you responsible for getting them on a cigarette box?

2:10:14You know about this? I was not responsible for that. In, in France, they have pictures of, uh, I think cancer patients on the, on the boxes of cigarettes. And one of them looks exactly like Brian Johnson. Hold this up. It's very funny. Yeah. We can share it with you and you can see, um, I, I'm interested to know the, the, the five key, uh, tenants of building a cult brand, but first we'll show you the image of the Brian Johnson on the cigarette box. Can we zoom in there? It looks just like him to me. This one, this would have been good guerrilla marketing. Yeah. You should have claimed credit.

2:10:49Yeah. I'm honestly surprised it's not, but yeah, respect. But well, yeah. Walk us through the five tenants, how did they apply to blueprint and beyond? Yeah, I think it comes down to like five core things. The first being doctrine. So having like identity before features, which is like, what is the sacred text that everybody abides by? Most brands have a tagline, but what can actually be like truly enforced and felt by the community. Brian's done this incredibly well. Think of things like most religions have commandments or tenants. Brands have like think different or just do it. You have longer forms of doctrine, like the technological Republic by Alex Karp or like zero to one.

2:11:26Brian used to write under the moniker zero all the time. So he's been primed for that. The second is ritual, which like again, Brian through the dinner series for don't die dinners did such a beautiful job at. You guys have a ritual here every day, five days a week. But like, what are the initiations into your brand or into your community? And it's basically forming like a ritual that becomes a habit that becomes identity over time. So you buy a pair of shoes, you join a run club, you are a runner. The third one is symbols and language. So how can you take elements to create in groups versus out groups?

2:12:02What are the key features that signal people who are insiders versus outsiders to your brand? CrossFit has like, it's not a workout, it's the WOD. With Equinox, we never said gyms, we would say clubs. So elements like that are super important. The Catholic church used stained glass windows to educate an overwhelmingly illiterate population in the 12th century to indoctrinate them into the church. That's another form of symbols for that. The fourth is a charismatic leader, which again, you have in Brian, you have in folks like Palmer Lucky, where you almost icon yourself. Palmer, goatee, Hawaiian shirts, flip-flops, things like that are so incredibly important.

2:12:39Then the fifth one is an enemy. I think every brand needs a nemesis. A lot of people use competitors. Apple started as IBM with the 1984 campaign, but over time it evolved to the concept of conformity because when you get bigger than your competition that enemy loses power but if it's like an overwhelming thought that can never truly be defeated the enemy always keeps power if you were doing a brand for the dog breed golden retrievers and you needed to figure out an enemy for the golden retriever what what would let's let's workshop the tennis ball no it's not the tennis ball because that's your friend that's thing that you want to that's the thing that you want to that you're desperately trying to find and get it's hunger i don't know what do you think it could be hunger for for my australian shepherd it's like every single loud car so i would say like the opposite of peace and in defining your enemy you define yourself yeah so like i'd be interested who's your enemy who's like the nemesis of tbpn right now uh we we've actually yeah we mapped this all out we actually did this experience and i mean it was uh geopolitical near peer rivals who you can guess uh and then we had a bunch of like more uh satirical ones like uh like our ally people who block data centers like we love data centers that whole thing i mean yeah that was that was early on we would do things more like who were who are our allies like if someone would mention private equity we would just like you know yeah that was like no one ever is like standing yeah short sellers we hate short sellers that type of thing you know of course yeah the yeah we have a sheet the terms and memes how do you think about scaling what you're doing in a craft business?

2:14:20It's been done. Scale's been done in the creative field with agencies, but oftentimes it's at odds with great work. But how do you think about it? I think the point of view, the way we work is different than most I'd say agencies, I have no desire to scale the agency much larger than it is today. The way in which we work was you can either grow an agency really large, try to sell for a pretty multiple down the road, or what we started doing five years ago was incubating startups. So only a third of our clients pay us in cash. The other two thirds pay us in some form of equity. We helped create a credit card company that is called Built Rewards, which you might have heard of.

2:15:00This guy, Uncle Jane. And I've done a bunch of stuff like that. So we're working on a ton of those with firms like index and other venture firms i found our actual yeah actual list of enemies did you hvac repairman i don't know why they're on there dji drones tiktok season ping under monetized podcasts podcasts that don't have enough advertising which we solved uh leaf blowers yeah fantasy football why did we put that on there what's wrong with fantasy football this is from the original printout of yeah the tpn so we we when we were doing the show early on we would have these bits. And if we had a good bit, we would write it down and we would have this sheet that we would update and I would just keep it here.

2:15:40And it would just remind me of like the kind of the core tenants as we were establishing. In allies, we had job creators and bubbles. Very good. Very good. Yeah, it was a lot of fun. Yeah. Good exercise for any brand. But of course, everyone should call you first because clearly much better than most people. But fantastic progress. Thank you so much for coming on the show, breaking it down for us. Jordy, anything else? Yeah. Next time one of your founders is coming on, flag it to us. Yeah, be great. Excited to meet them. Yeah. We'll talk to you soon. Awesome. Sounds good. Have a good one, guys.

2:16:14Have a good one. We'll talk to you soon. Goodbye. The old term sheet, the size gong timeline, some personnel news. We haven't done one of those in a while. We don't really do the trade deals. The trading cards really took the place of the trade deals. But speaking of advertising, I want to watch this SK Hynix advertisement that Tyler dug up. Let's play this because I want your reaction, Jordy. This is an ad for SK Hynix? Okay. Don't wait for me. So we're also being extorted by others. And time went by.

2:16:58He's dressed up as the chip as the HBM. He's dressed up as the memory. Can't you just be cool? How have you been doing? Why is he frozen?

2:17:25some prop comedy i like it wow i have no idea what that means but i love sk heineck yeah we don't know how to i think that ad has like 80 million views Wow. For good reason. It's a good ad. Makes me want HBM. Well, our next guest is live in the TVP on Ultronome with us. We have Tucker Brown from Compound Creative Holdings. He's the managing partner, friend of Paki McCormick. And we're very excited to have him here on the show. We're back. We're back. This is quite a set. Yes, welcome. How was the rest of your trip to France? France was hot. Okay. It was productive, though. I think you guys probably saw the energy that there was.

2:18:10Were you doing deals? I was trying to do deals. When you do the deal, are you a back-of-the-envelope guy or a napkin math guy? Which one are you pulling out? You've got to kind of combine, I guess, both. Ooh, both. Is that just because you're doing a DCF and it gets so big, you might have spread comps on different tabs? Yes, I'm sure you understand the category that we're in. you got to be creative with the deals so anyway what was your first can? what was my first can? when did you go for the first time? this year you waited until it was actually going to be productive for you yeah exactly make it worth the money you got to spend to get there but yeah take us back early in your career how did you get here?

2:18:53so I've been at CAA for 15 years the talent agency that represents biggest entertainers in the world athletes and all that It was at Evolution, which is our investment bank, working on large-scale M &A, capital-raising transactions across different categories. It's been that for a long time. I'd like the applause on that. For capital-raising? Yes. Worked with pro sports teams, worked with entertainment companies, TV studios, production companies. When does Evolution get tapped in for a transaction? Yeah. I can imagine if a sports team is going to transact or an emerging league or an athlete has a business that they want to sell, am I in the right area?

2:19:42Yeah, it depends. We don't work on tiny deals. We like to focus on larger scale transactions. So in sports, it's probably going to be something 50 million plus. So if you're putting a check into a team and you got some money to spend and want to buy a piece of a sports team, we'll facilitate that transaction. We'll work on team sales, too, so entire teams that trade. One of the earliest deals that we did was the sale of the Sacramento Kings of a big runaway in 2011. Backward teams traded, by the way, for$500 million. How much does that organization look like a standard investment bank? A lot. I mean, that's the service that we provide.

2:20:19I think the difference is we sit within CAA. So we have the strategic connectivity, the knowledge that might be a little different than other investment banks have. And probably less public markets coverage, no IPO stuff. Yeah, no, we don't have capital markets. Okay, yeah. We don't do public markets. But focused on M &A. Yeah, generally. Got it. So probably a little bit smaller. Our team is only about 20 people. So kind of 50 to 500 million is our sweet spot. Sports is going to be a lot larger than that. But I'd say for other deals, it's really in that kind of range. Okay. So I was there for a long time, and it came to how I've gotten to Compound and what we just launched.

2:20:55I started working around creator deals a couple of years ago. Kind of just by chance, you stumble across deals and companies that are interesting, that make sense. You want to lean in and figure something out. And that was the case with Dude Perfect, a creator business that had been scaling really nicely for a long time. But we're not successful. Probably 20 years in the making or something. Yeah, 16 years at the time. 16 years at the time. Yes. Wow. So they were ancient in YouTube land. But consistent in their performance the whole time. I think they were growing at a 50 % CAGR for that entire time.

2:21:28And no matter when you, a lot of people dip in and out of Dude Perfect content, of course, you go through some binge watching. You watch a bunch of the archive. Then you come back years later and you see that, okay, everything's evolved and all the great pieces are still the same, but they've added on a bunch more capability. Yeah. And their audience, I mean, they sort of 8 to 16-year-old boys, I'd say, is the core of their audience. But they also grew up with them. So these guys are, they're 38 now. They have a big audience. Oh, wow. People in their 30s. that you're watching the content. So I didn't know much about it other than what I'd seen on YouTube.

2:21:59They built a big live entertainment business. They go on tour. They sell at NBA-sized arenas. So what's unique about that deal? Because they have multiple revenue streams at this point. They're doing advertisements, partnerships. They only have a partnership with Nerf and a bunch of other deals in the works, tours. And then they were also talking about building a Disneyland, basically. Do Perfect World, yes. Do Perfect World, incredible. There was a big mock-up of that when I first went to visit their office in Texas. Yeah, insane. A giant amusement park. To make a pilgrimage. Yeah, listen, they wanted to build, and we've heard this a lot from creators, but kind of a next-generation Disney-type business for a specific audience around sports, kids, comedy, family.

2:22:40Very family-friendly business. And yeah, so I sort of got to know the guys, saw their business, diversified across a bunch of different categories. It wasn't just a YouTube business. It was a real media company. so we took that to market and executed a pretty large-scale private equity transaction it wasn't easy um i was naive in the sense that i thought it would be because the financial profile was so attractive why was it not legible to it just it's a new category i think generally for transacting it's the opportunity that i see at this point in time you don't have decades of like case studies in harvard business there are no comp there isn't a single comp or press and i looked at media company comps for it, I guess.

2:23:23And you're dealing with talent, you're dealing with key man risk in a way that's sort of unnerving to some private equity investors. Platform risk. Platform risk. I mean, with them, it was a little bit less contingent on the platform itself, which was an advantage. Their YouTube revenue was a small percentage of the overall business at that point in time. But sure, investors get spooked by algorithms, what can happen if it goes up or down or changes and how that impacts the business. So it took And by the way, you have to find the right partner, too. And for talent and for their business, they built it over 16 years.

2:23:55They owned it outright. They cared about what the future looked like with their partners. So finding the right, not just the right deal, but the right people behind the deal to transact with, I'd say in this category, in the creator world, is more important than in others. And so you came out of that feeling like you had a greater sort of understanding of these businesses as well as like an appreciation for their potential and their quirks. And so you decided to become the buyer. Is that the right way to think? There were many times during that process, and there were a couple of others I did after, where I was, yeah, I just wish I was the buyer in that situation.

2:24:32I feel like I was doing the work to structure the deals that made sense. I understood the talent behind the deals in a way that maybe other buyers couldn't. And I came from the world of the agency at CAA where we had a whole suite of services and things we could provide for these creators in a way that a typical buyer wouldn't be able to do. So we pretty quickly started to think about what we could put together to basically be that unique buyer that we didn't see in the marketplace. Or we didn't see many of, didn't see really at scale, didn't see sophistication from, and started to iterate what that would look like and how it would come together.

2:25:06And do we do it through the agency proper? Do we set up something independently? Which is what we did, because I think it's important to be independent. in the way that it's structured and raised, you know, a good amount of money and, you know, looking to do, you know, a lot of deals in the category and really become the first of its kind, you know, kind of becoming a buyer in this category. So, yeah, excited. For creators or media businesses that wind up with the Disney style business, the flywheel of multiple properties, multiple revenue streams. Do you find that those businesses are sort of organically grown by garden, like a garden or built brick by brick?

2:25:49Like how often do creators have the idea of where they want to go and they execute one step at a time? Because I always think of that Disney flywheel and it's a beautiful napkin sketch and it's so cool and you understand how the business works. But when he drew that, it was like two years before he died. Like it was very much a reflection on a life's work. Yeah. Listen, the best creators really are creative geniuses, but there's not always cohesion with how they think about the future and what they're doing. So oftentimes I'm going to see the whiteboard over there in the studio. You walk into their offices the same way, you know, I walked into Duke Perfect's office in Texas and you see a whiteboard scattered with ideas and it's all brilliant.

2:26:32It's not necessarily put together and structured in a way that provides, again, a lot of cohesion, but there's a lot of opportunity that they see. And I think first and foremost what they've all done successfully is they focus on building a pretty rabid audience and building engagement with that audience. And then once you have that and you have that captive audience, it really expands and opens up the world of opportunity beyond whatever that core product or offering might be. So for them it was trick shots on YouTube, and then you build an audience there, kids, family, comedy, And you can extend that into live events, into products, into things they probably, you know, certainly in 2009 when they started, didn't think they'd have a line of products in Walmart necessarily.

2:27:13Right. But then you start to dream bigger once you realize that what you're doing is actually working and resonating with the audience. Yeah. So the fund that you've built, how permanent is the capital? Are you thinking about a certain fund lifecycle? cycle, is there a world where maybe not today, but in 10 years, we are talking about capital markets, public markets, creators going public. There's been rumors about Mr. Beast and I can see that happening, but that might be like a exception that proves the rule. But is there a world where in a decade we're looking at like, yeah, like the top 20 YouTubers and podcasts are public?

2:27:46Yeah, certainly possible. I mean, it's the, you know, it's the fastest growing segment of entertainment. People want exposure to that. It's going to start with private capital. I think we'll probably move into the public markets. So, yeah, I think we're moving in that direction. For us, I think permanent capital is an important part of our strategy. We don't want to be forced into an unnatural life cycle where we're forced to sell quickly. Creators don't. Yeah, they're like, hey, you're doing your life's work, but also we're going to try to just change up who you're partnered with in a decade.

2:28:17Whereas, like, a CPG business or a software company, like the management team might be fully turned over over the fund life cycle. So we tried to, again, in structuring this, we tried to solve for what we heard was important to creators in the transactions I've been around. And some permanence of the partnership or permanent capital is part of it. You know, letting creativity sit and remain with the creators even in a control transaction. So there's no interference in the creativity of what they built. That's really important even if you're selling equity control. Yeah, to me, I look at it and I can see over time this just being a more and more and more important part of CAA's strategy because the challenge right now is you have creators.

2:28:59Historically, there was maybe – I don't – you'll know much more about the history, but my feeling is that historically there was like maybe 500 stars that matter. And then now in media, there's like 50 ,000 stars that matter across every single vertical. It was maybe easier to run a business when you had – you could just focus on like a smaller number of like really, really big stars who were running their own – basically they had their own individual businesses. But when you have 50 ,000 creators and all these sub-niches, you can't – like it seems like there's probably a limit. Like you can't scale the CAA team 10, 20X and expect to be running the same kind of business.

2:29:43You need too many agents to cover it all. And so as a sort of new strategy saying like, hey, we're going to try to service as much of that market as we can, but we're also going to try to find the best talent and businesses across all these different categories and then be a long-term partner to those and actually participate in their overall business. Yeah, you go deep with the ones you believe matter most and are positioned to scale the most. right so we're not you know trying to transact with hundreds or thousands of creators it really is to pick the businesses we believe in and categories that we think are exciting and scalable um and go deep with them across the board on the capital side of things then you know yeah how do you think about stages in a creator's life cycle there's people that are going to be incredibly talented from a just pure talent standpoint right there's people out there that are like not even good at making videos, but have incredibly engaging content because they're so good.

2:30:45And then usually they graduate into having, you know, better and better teams. And eventually maybe they get into products, but like, how do you look at the different stages? What's, what's too early? When are you seeing a, an individual who's like showing all the potential, but it's too early for maybe a transaction? Yeah. We don't like to be hyper prescriptive with, with how we look at it. I mean, there's certain things we do look for to assess whether it's the right stage for us to get involved. If it's an individual without a business, it's tough for us. There's a lot of work to do probably to pull it together and make it transactable.

2:31:19So we look for it to be an actual business that's been built and scaled to some capacity. Is that like multiple revenue lines, not dependent entirely on platform revenue? Maybe an operator. Diversified to some extent. Maybe an operator. Not essential. I mean, there was no operator do perfect when we did that deal. Wait, they do everything themselves? I mean, there was, I think 20 employees. The oldest outside of them was 24. Yeah. But they didn't have like a business guy who would do like the ad deals. No, not a single business guy. That's great. I love that. That's awesome. Yeah. It's a different business.

2:31:50Yeah. It's 80 employees now. Yeah. Of course. So you look for some sense of a business, achieve diversification in some, it doesn't need to be massive, but yeah, small platform monetization is, you know, it was attractive. And then, yeah, scale of revenue, profitability. We really only like businesses that are profitable. And that's not, I don't want to say it's not hard to do, but in this category it is. You're used to seeing margins that are not common in traditional media. 50 % plus margins for a creator business is actually relatively standard. So yeah, look for profitability, growth, and again, categories that we think are positioned to scale and where we can be valuable and add additional value.

2:32:32So, you know, bring services. When you're underwriting a deal, how do you think about a business where you know there's a ceiling? And I imagine there's certain situations where you're totally – there's certain creators. I would say that we've always said that if you asked us to make content for 100 million people, we just wouldn't enjoy doing it because we'd be covering topics that are not interesting, right, to us at least. And there's, I think, a lot of creator businesses where there's sort of like some TAM from an audience standpoint in the category. You don't think we can get 100 million views on an SK Hynix advertisement reaction video, Jordy?

2:33:17Have some faith. We'll see how that does. We're talking about South Korean memory company advertising. Come on. But I can imagine you're talking with a creator and saying like, hey, I think that you're a$5 million business today, I think that you can get to 40 and, uh, and that's going to be enough for it to be a home run for you and us. Like, is that a conversation that you have? Or is it always like, I need to see the path to superstardom and, you know, nine figures of revenue. I think, listen, there's a difference between how we might underwrite the deal and think about where there's a ceiling and then how you communicate that to a creator.

2:33:53Um, if you're trying to justify, value. Maybe that's part of the conversation, but really the best creators won't really cap their potential. So even if it's a$10 million business today, they probably think this is a billion-dollar business if we do it right, if we serve the audience in the way that we can. And so honestly, any of the businesses we look to transact with now, probably we ourselves believe could be billion-dollar-plus businesses. And if we don't believe that, we're probably not betting in the right categories with the right creators. It's early to maybe make that kind of call in this space, but to the earlier comment about public markets, you know, potential, I think we'll see many of these businesses scale to that billion plus dollar mark, potentially go public.

2:34:40And yeah, it's just, there's a lot, I think, that's left to. Would it end up, is a more likely, or one of the more likely paths where you end up with effectively an index of a bunch of top creators? because to me, like a creator business is like, I don't know that many creators, even like look at the most sophisticated operations, like a Mr. Beast, right? You have these like nine figure Amazon deals. You have these consumer packaged goods businesses. You have, you know, royalty streams effectively, but him running his business being like, I got to make sure that next quarter is good. Otherwise we're going to nuke.

2:35:16Like that feels challenging. Whereas if you took a basket of, you know, 200 top creators that were trading, you could see that being stable and growing. You're looking for sort of like a Manosphere ETF for you. So you can have exposure to Rogan. Lovicular and routine in one ticker. Listen, that's partially what we're trying to do, right? I saw the difficulty from institutional capital partners to transact with single creator businesses, single assets. they're all eager to get into the category. They want to put money to work. They talk about it all the time. You bring them a deal that's attractive, and they're like, ah, we can't do this.

2:35:57There's too much risk. If you bring a basket, though, right, I think it's a lot more attractive. And in some ways, Dude Perfect is a little bit of a basket. There's a number of on-camera talent. It's not single person, single name, and same thing with Midas Touch. They have a number of products in their portfolio and number of hosts and whatnot. The more layers to diversification you can achieve. more attractive. It's probably going to be easier. So the business itself, the talent maybe that's involved, and for us, the portfolio that we build. How are you building out your pipeline of opportunities?

2:36:32Are you going, you're in Cannes, you're meeting a bunch of creators, but I imagine you're like, probably the beauty of creator businesses is they're out in the open. Like an invisible creator business is not one. Yeah, yeah. Whereas some of the best deals in traditional private equity are like, you would have to live in the town and know that this certain business was printing. Yeah, they're out in the open. But some of the flashiest ones don't always have the numbers you might expect that they would. Some that you don't think about as much, a little quieter, building actually really significant businesses in a different way.

2:37:08So you don't always know everything, even if it is quite visible. You know, I've had the benefit of living in the category for a little while. So I've seen a lot and have a good sense of what, you know, the immediate attracted targets might be. You know, we, again, have the relationship with the agency at CA. We've got, I think, 308 creator clients. Not all of those would make sense for us, but a lot of them are growing and are looking to potentially think about capital partners. So there's a built-in pipeline there. And, you know, we're open for business. I've gotten a lot of great inbound opportunities that have come our way since we announced.

2:37:41That's great. And so, yeah, there's a lot of activity and a lot, I think, for us to do. How much time are you going to be spending in New York versus L.A.? L.A., yeah. I've been back and forth over the last decade plus quite a bit. I spend the winter out here usually. Smart to do. February in New York is not always the most fun. So I'm usually here about twice a month. We'll have a headquarters probably in both locations. And then creators are kind of everywhere too. So New York and L.A. have been the hubs of entertainment, London a bit internationally. But we see that much more dispersed with creators that are all over the place.

2:38:20How has the influencer creator industry evolved in China? Is it similar? How is it similar versus how does it differ from the U.S.? Yeah. Because they were big and early in live shopping, for example. Yeah. Yeah, I mean, you have a sort of massive, you know, massive population. All the numbers you see with businesses over there are pretty crazy from an audience perspective. It's, listen, transacting with China. Yeah, I can't imagine you could do deals there. But I'm saying, like, when you look at that market, is there anything that you see that allows you to feel like you're seeing into the future?

2:39:03it's tricky right because if you do take that as a learning and you try to apply it to a different territory it probably won't necessarily translate in the same way um yeah like live shopping is taken off in the u.s but it's a lot of like a functionally gambling not like buying oranges yeah oh like a lot of these like live shopping platforms are like people live breaking open packs of cards yeah unboxings and stuff like they're like shopping for apparel in the same way that in China, like a lot of these live shopping platforms, they would start with, like, you could literally go and buy Kiwis and you can just see the Kiwis and then you're just hitting.

2:39:39Apparently China doesn't have a Joe Rogan. Like, they don't have a really dominant just public commentator who just gives his random opinions about everything. Well, I think somebody like Joe Rogan that's commenting on that many things. It's a little risky politically, essentially. I don't know how that would apply. Yeah. What about Hollywood? What's been your update on the creator economy's interaction with Hollywood post the trifecta of creator-led movies? So Obsession, Backrooms, Iron Lung. Three born on YouTube crossed over. This was predicted like a decade ago. It's finally here. It feels like very high status, but maybe not actually moving the needle for some businesses.

2:40:20Not something reliable like something low status like ads and merch, which might actually drive a business forward. Yeah, again, tough to rely on that and bet on that as a business model in and of itself. I think it's a component that's pretty interesting. For creator businesses, I mean, it was a big kind of narrative early on in podcasting, using podcasts as a cheap sort of IP development mechanism for long-form content. You know, same thing with YouTube, right? A cheaper way to test and see if you've got an audience and then use that to sort of monetize in long-form. So it's a great trend. I think that we're seeing more and more of that will continue.

2:40:57We were talking to Alex Ramosi about this yesterday, and it was interesting thinking about like he was saying that he just doesn't reach the same audience as a Dave Ramsey who just has syndication on so many radio shows. And if he were able to crack into that, it's not that that deal would make him that much money. It's that it would expose his overall portfolio, his overall business to a new tranche of clients and potential customers, but also audience members. And so there's an interesting world where you could underwrite the high risk. Maybe this person does the next obsession. or you could say this person's on a track where they are going to crack distribution on radio or TV at some point, and they're going to be on that channel and that's going to be a halo for the overall business, but obviously hard to predict.

2:41:48Yeah. And so that's why it's hard to underwrite against that. Right. I mean, it's a, that moonshot outcome could drive upside, but probably not going to be a base case underwriting situation. That makes sense. What about sub stack and potential new platforms? platforms as substack you know you've seen some really nice businesses built and monetized on that platform um so in the same way that youtube can be a core that you build off of another area is you can take youtube building a substack the same thing i think we're seeing migration from substack into video and other you know other platforms so um it's one of the the kind of top platforms that we're actually looking at to evaluate if there are things for us to to invest in there and again migrate that audience into other mediums um so yeah there's a lot you know to do in that category yeah i was thinking like why is there no sub stack for video you know like like a platform that was less algorithmic and of course the sub stack for video will almost certainly be sub stack yeah yeah probably you just got to get the right people on there something it's hard because like as soon as you make a video you're like well this wants to be replicated everywhere on the internet so let me throw it up on every channel timeline to first deal announcement any predictions you're gonna hold me to it i don't it's always hard are we gonna i mean but but but we know we we have you know friends with funds that have a unique strategy and sometimes they don't do a deal for 18 months after closing a fund so like i think we benefit from a bit of a running start because we've been in conversation with creators we've had this you in the works for a little while.

2:43:23We have relationships that are warm. So we're looking to move fast, but also want to be thoughtful. We know those first couple of deals are going to be really important for setting us up for longer term success. Love to think we get something done by the end of this calendar year. These deals, at least the ones I've been around historically, they do take time. There's a relationship element to it that involves a real-time commitment. You want to make sure it's, again, obviously structured the right way. So we're ready to go. Just want to be thoughtful about making sure that we're picking the right partners and setting up the right deal for ourselves.

2:43:57Amazing. Let's hit the gong for the fund itself. No, I want Tucker to hit it. Look at this guy. He's a giga champ. You can have at it as hard as you want. It's warmed up. It's warmed up. Break it. Break it. There we go. Well, thank you for coming on the show. Thanks for coming on down. We can wrap the show there. I'm ready to do this with your first deal. Yeah. We're excited for that. Leave us five stars on Apple podcasts and Spotify sign for a newsletter tbpn.com and we'll see you Tomorrow. Goodbye. Cheers. Love you