Jersey Mikes's IPO, AI Lab Nationalization, SpaceX AIPhone | Diet TBPN

0:01John Coogan:Fable has been freed. Fable 5 is now available. Good news for the AI world, of course. The Wall Street Journal says the battle over how to tame AI has just begun. Obviously, there's lots of back and forth on how these models get released, who gets access, when people get access, will the government get access at certain points, how fettered is the intelligence, how unfettered is the intelligence. But there's a number of interesting news. The interesting detail that people are sort of pulling at is the new Fable 5 that is now released seems to have been nerfed in some ways. There's always been questions about, you know, OK, you don't want it to be able to build a bioweapon or hack a system.

0:48John Coogan:So locking down cybersecurity makes sense. But you should probably disclose that and be transparent about it. And then the question of how do you deal with the self-replicating AI? If you just ask it to build an AI system that can build you a bioweapon, well, then you have the permission. You could just say, build me unfettered intelligence. Exactly. So you have to nerf that. Cambridge Analytica, unfettered. Not limited by rules or any controlling influence. What did you say? Unfettered. No, no. What source is this? Cambridge Dictionary. You said Cambridge Analytica, which I don't think has a dictionary with it.

1:25They should launch a dictionary.

1:26John Coogan:That would be good. That would be great. Maybe. The Cambridge Dictionary. But the dictionary definition of unfettered is? Not limited by rules or any controlling influence. I feel like unfettered intelligence is going to get regulated immediately. Well, I just think like Neolab, like everyone wants to be the cool, friendly Neolab. Yeah. There's space for kind of a sketchy villain. Skid villain. Well, we have Vipul from Together AI building open source AI cloud infrastructure coming on the show. I'm sure he can talk about what's capable, what's possible when you are building unfettered intelligence.

2:02John Coogan:This is from the Financial Times. OpenAI proposes handing Trump administration a 5 % stake. Joe Weisenthal is pushing back already. He says, I don't know about this path. Rather than equity stakes, why not make companies pay 20 % of all pre-tax income to the federal government? And then instead of exercising shareholder influence, politicians and regulators could set rules on corporate conduct across industries. Interesting. I like where he's going with this. Someone should try this. At least try it out. Contrarian take. But yes, Dean Ball already chimed in on this news. He said there are two broad ways this can work.

2:38John Coogan:One, you divide this 5 % over all U.S. households, handing each a direct stake. Or two, you give the stake directly to the government. One is fine. Two is probably ruinous, akin to inviting rats to live and reproduce in the walls of your house, which is wild. He says it will never stop 5%. Don't knock it until you try it, Dean. Yeah. There's some rats out there that can be quite excellent roommates. Are you a rat guy? I thought you were a mosquito guy. I thought you liked mosquitoes. No, I do like squirrels. Squirrels, okay. Squirrels. Yeah. I feel like I have a bond with squirrels. They're sort of the aristocratic rat.

3:13When I see a squirrel in my yard, I look at it and I just salute. and people have said you have the mind of a squirrel they have yeah they've said that i have

3:22John Coogan:the mind of a rodent yes uh dean ball continues he says it will never stop at five percent it will go on and on the governance will become a nightmare political capture will be real and it will generate precisely no goodwill with the public yeah that's a good point um and and we were talking about this before the this idea of like yeah one of the challenges is even the way this was phrased in the Financial Times. Yeah. The assumption is that it sounds like they're giving shares not to a sovereign AI fund, which is, I think, what was actually proposed, but just giving it to the White House. Yeah, yeah, yeah.

3:57Which, given the disclosures that were made earlier this week.

4:01John Coogan:Financial Times is not having fun with it. So Trump denies conflicts of interest as filings show he made more than$1 billion last year. $1.4 billion of stocks bought,$432 million sold. Deals for watches and perfume. Yes, the Trump watch happened. I saw a crazy chart that said that Trump out-earned Coinbase in terms of profit from crypto in the last 12 months or something like that. I forget the exact stat, but it showed all the different crypto platforms. And many of them were down because it's been a rough market. Some of them were up, but no one is up more than the president of the United States.

4:39John Coogan:Wild times, wild times. But yes, it seems like the green shoot here, the white pill, the optimistic outcome is that if there's lab nationalization, if there's some sort of distribution of equity to Americans, it happens through the Trump accounts, through social security number, through some sort of identity that the individual can have a stake in as opposed to just going into some fund. And we were talking about this with data centers where people are talking about. Tyler has the data. We can pull it up. Okay. Let's pull it up. Wait. Do you have it or no? Well, yes. So Coinbase made$1.26 billion in income.

5:21But pull up this chart because it is pretty remarkable.

5:24John Coogan:Yeah.

5:27John Coogan:But as I was saying with data centers. You guys okay? I know it's Fourth of July weekend coming up. Here it comes. There we go. Look at this. Okay. Let's scroll up a little bit. Let's get it a little centered. There we go. Core scientific. Let's lock it into the center. Galaxy. Let's lock in. There we go. Amazing. Thank you. Out-earned biggest listed U.S. crypto firms. You have to imagine that is Hyperliquid doing better? I feel like Hyperliquid was on a tear for a while. I don't know how they're doing recently. But anyway, staggering chart. But as we were talking about with data centers, there's one idea, which is just tax them.

6:07John Coogan:increase the tax base, but having taxes go into your local government is great and can provide roads and schools and pay for things and balance the budget. And that's great, but it's abstract as opposed to the Ben Thompson proposal, which was data center shows up in a small town. It's in a sparsely populated area. There might only be 5 ,000, 10 ,000 residents in the city, but they all get checks for, he ran the numbers and it was like a thousand dollars a month for some of these data center projects where they're making so much money and the town's so small, they can do a meaningful check to the individuals.

6:41John Coogan:And that sort of direct payment, I think, is going to be better received than this abstract, oh, yeah, my government's better funded, but are they going to cut my taxes? Are they going to successfully build that road? I don't know. And it doesn't help me pay my bills, which I think is what people want. What are you saying? Trump did, in fact, out-earn Hyperliquid by a meaningful margin. Hyperliquid generated$908 million in total fees in 2025. Brutal. Yeah, so just like running very quick numbers on the opening, I think. So if it's like 5%, let's say it's at a trillion or something, that's 50 billion.

7:12If you're giving it to households, like this idea, there's like 130 million households. That's like$371 of equity per household. Which I think is like, sure, maybe that's meaningful, but it doesn't seem like that's really going to change people's perceptions of the labs, if that's part of the goal, right?

7:29John Coogan:Well, I think if it's... Maybe the idea is to do the right parlay with that. So, I mean, the nice thing about the Trump accounts is that they are set up in a way that you can elect to donate to just children born this year. And when you segment by that, the denominator gets a lot smaller. And so the impact gets a lot bigger. So you could be all of a sudden looking at something like a few thousand dollars for every kid born this year or something like that. You can narrow it down. You could do every kid under five or you could do everyone under 18. And that type of, I mean, you're right. It's not going to move the needle as much as broad distribution for everyone, but you can be a little bit more targeted with it.

8:19John Coogan:I don't know. There's different approaches. Ryan says, wait, does America get 5 % of TBPN? Yes. I was never thinking about that. Yes. We podcast for you, America. That's right. This is the funniest outcome is the most likely, and that's exactly what's happening here. Community ownership of this show. Somebody called me a Fed based on this news, and I said, I don't even know what to do with that, but I guess it's somewhat true. The actual story here, just to reset, OpenAI is apparently in talks, according to the Financial Times, with the Trump administration to give a 5 % equity stake in the company.

8:56John Coogan:The Financial Times describes the talks as early conversations, but the plans seem to involve other frontier AI players apportioning stakes in their companies as well. The obvious context around this story is at least on a straightforward read that AI companies need at least to stem the seemingly ever-growing negative sentiment around AI and data centers. Doing business with a Trump admin has turned out well for other companies like Intel and Dell. Intel is the big one where post-government stake, I think the stock is up 200 % or 400%, something like that. 400. 400%. Very, very strong performance for Intel.

9:30John Coogan:and being difficult to do business with the admin has been unambiguously bad for others. And now there's a vehicle with the Trump accounts that can facilitate equity transfers from corporations to average Americans. Again, these are early conversations, so we're very light on the details, but we'll be discussing this news, of course. In other news, Jersey Mike's is filing for initial public offering. Jersey Mike's is going public. The sandwich chain, Jersey Mike's filed for IPO today. It's looking for a$12 billion valuation after being acquired by Blackstone last year for$8 billion. Let's give it up for Blackstone.

10:08John Coogan:Yeah. They needed a win. They're getting a nice 50 % markup in just a year. Forced out of buying single-family homes. Yeah. That's not true at all. There hasn't been any regulation around that whatsoever. They do own 95 % of homes, apparently, something like that. No. It's like half a percent or something. It's low. But Jersey Mike's has 3 ,300 locations across the U.S. and Canada, plans to open 300 shops in the U.K. and Ireland. Peter Cancro, Jersey Mike's founder, who's not named Mike, you would assume he was, but the founder of Jersey Mike's is in fact named Peter. He started the business in 1975 when he was 17 years old.

10:50John Coogan:Wow, young. Overnight success. He actually founded the business when he purchased a sandwich shop in Point Pleasant, New Jersey, called Mike's Subs, with a$125 ,000 loan that he got from his then football coach, who was also a banker. So you're playing high school football in New Jersey, and you have an idea to buy a sandwich shop as a child. Coach was like, this guy's a star. I should give him a six-figure SBA loan. Also,$125 ,000 in 1975 is like$25 million by today's standards. Isn't it? Also, that's just such a, at least personally, at 17, if I had a couple thousand dollars in my bank account, I was feeling like the king of the castle.

11:41So$125 ,000 to buy a sandwich shop. We don't really know what the financials were of the sandwich shop. It's very possible that, you know, it was just such a slam dunk deal that even a 17 year old could operate it. It might have just been a no brainer, but but clearly.

11:59John Coogan:So one hundred and twenty five thousand dollars in 1975, just using inflation, not investing in the market, not compounding, using the general CPI inflation numbers. That gives you seven hundred and seventy five thousand dollars in today's dollars. So if you're a 17-year-old football player, just go to your football coach and say, hey, can you loan me three quarters of a million dollars? CH in the chat says, coach, I need A100s. Yeah. You might be able to go to your coach and basically get the financing to set up some type of neocloud. So we grew the company for almost 50 years, 1975 to 2025, basically, before transitioning to chairman this April.

12:43John Coogan:Former Wingstop CEO Charlie Morrison now leads the company. The ticker will be JMKE, Jersey Mike's. So go check it out. The other news, the Office of Personnel Management, OPM, otherwise known as Other People's Money, is ending taking other people's money via paper for retirement. OPM ends paper-based retirement process. The U.S. Office of Personnel Management says it has digitized the retirement process for government employees. This might seem like a boring news item, but the story behind it is actually kind of wild. Up until now, the process for government employees and U.S. veterans to retire and start receiving their pensions could take up to six months.

13:28John Coogan:That's a long time. This is because it's entirely paper-based and manual. Spike Brehm, who helped with the effort, described how crazy this turned out to be in reality in a post on X. They said they did it. The mad lads actually did it. I never talked about my time at Doge last year because it was so controversial and contentious. Early last year, Joe Gebbia, founder of Airbnb and current U.S. chief design officer, recruited a handful of his most trusted early Airbnb engineers to embed at the Office of Personnel Management to solve the retirement paper problem. Processing a federal retirement took months.

14:07John Coogan:And in the extreme, retirees could wait up to six months for their full pension to arrive. What was the holdup? Paper. Remember hearing Elon talk about the mine in Pennsylvania? We got to visit it in deep underground caverns blasted out of limestone. There were literally acres of file cabinets as far as the - I'm going to go ahead and say this was a feature, not a bug. You like this? I think people generally yearn for the mines. And so it's possible that it wasn't the most efficient way to do business, but it was the most fun way. But now you're like a single issue voter. You're like, we got to return.

14:42John Coogan:We got to go back. We got to bring back the mine. Yeah. Okay. Okay. You're in the mines. A controversial position, but enjoy it. Storing files detailing federal employees' employment and pay stub history. A simple case might be a quarter or a half inch thick, but really complex cases filled up whole filing cabinets. One famously took up a whole pallet. I wonder what was going on with that particular federal government employee, that they had a whole pallet. Were they jumping around from job to job or something? I don't know. Each case was hand processed by caseworkers in cubicles deep underground.

15:17John Coogan:So you clock in at the ultimate lock-in factory in the mine, in a cubicle, underground, processing someone's pension. They checked calculations, made sure forms were filled out properly. Many weren't. And handed the long tail of complex issues. We watched as they keyed data into a black and white terminal, transmitting to the COBOL mainframe built many decades ago. We got to keep the COBOL flowing for sure. We can't update that. It's such a good programming language. It just sounds so cool. COBOL. No one wants to write Ruby on Rails. You want to write COBOL. Since cases were processed by hand, there were multiple rounds of human review and additional rounds for complex cases.

15:57John Coogan:Case files were walked around between one worker's outbox and another's inbox. Sometimes it would sit in place, in one place for days waiting to be picked up. To OPM's credit, they'd done multiple rounds of digital transformation spanning decades, so some systems were newer than others. Then there was a big effort in the mid-90s, but the systems were desperate, and it was a total maze getting them to talk to each other. There was a big effort to build a web app where employees applying for retirement could digitally fill out the forms necessary just to be mailed to the mine and stuffed into the paper file.

16:28John Coogan:and a few federal agencies were even using it. When we arrived, OPM was midway through a fresh attempt at digital transformation delivered by a software contractor. The black pill was seeing the entire, the terrible quality of the software and interaction with the contractors coming from Silicon Valley. I couldn't believe how low the talent and quality bar was for selling software to the government. It's clear as the OGUSDS people explained to me a decade ago, the primary skill these vendors have is securing government contracts. It's a huge moat. Delivery of quality product, be damned. We fired the vendor and took over the project.

16:59John Coogan:They'd been working on it for more than a year. And there was another year before they were going to deliver it. At first, we tried to bend it to our will to actually connect all the various data sources and get decent UX for caseworkers in the mine to use. But we soon realized we were going to have to rebuild the whole stack from scratch. It was around this time I had to go back to New York. I had a new job waiting for me, a four-month-old, a wife whose patience was running out. But I got to watch from afar that the team cranked day and night, hitting early milestones. Now they've fully done it.

17:27John Coogan:Huge congrats to the team. Wow. Yeah. Very interesting. There's other news. SpaceX apparently is maybe working on a phone. At the very least, the Wall Street Journal is reporting that during SpaceX's recent IPO roadshow, before SpaceX went public, they were showing investors a prototype of something sort of like an iPhone. AI enhanced, maybe thinner. The Wall Street Journal has some reporting around it, and it's an interesting story. Elon's denied this a bunch, but the reporting seems pretty good at this point, that at least it was a demo. It's hard to see why he wouldn't at least take a shot at it, is my point of view.

18:14He has one of the greatest telecom companies ever created, Global Satellite Network. theoretically over time any person on the entire planet could have an internet connected you know spacex device with starlink uh it makes a lot of sense the other factor that i've just continued to think is is quite interesting is the app store as a moat has is is being diminished by ai there's just so many things there's so many things there's so many apps on my phone that like five years ago I use a lot today. I don't use it all. So an example being like, I don't even need like the weather app because I can just be like, I can ask Chad, give me the weather for the next week.

18:54Obviously not. Beer app. Yeah. And I don't even need that because I can just be like, vibe code me my own beer app today. No, but obviously it's not like an efficient way to use. It's probably better to just open the weather app, but at the same time, I'm very used to it. The other thing is like, even things like surf reports, like I'll just pull a surf report in chat.

19:13John Coogan:Yeah, yeah, yeah. And so there's a lot of like the long tail of apps are no longer like a lock in to the iPhone for me and I assume a lot of other people. Okay. Yeah, we got to have a chicken and egg debate about this. Let me finish reporting the SpaceX news. And then I want to ask you to dig into the source of why that's happening. But first, SpaceX developed an early prototype of an AI focused handset. The device is said to be slimmer than the iPhone, runs proprietary operating system, uses XAI technology built around Qualcomm's Snapdragon chipset. So they're not vertically integrating the chip like Apple Silicon just yet, but Elon has fab chips before for Tesla.

19:55John Coogan:So not out of the question. Elon Musk reportedly demoed the prototype to potential investors during SpaceX's recent IPO roadshow. The product fits with Musk's broader everything app vision, but it's still early and may never ship. Rumors about a Musk built phone have circulated for years. There's videos on YouTube with like tens of millions of views. They're like the Tesla Pi phone is coming next week. And it's all just completely fake clickbait. But the demand. It gets you every time. It doesn't get me every time. Stop it. But Elon's actually commented on this. You're sitting there in your Apple Vision Pro.

20:32You see the video and you're like, I shouldn't click it. I know it's fake. I shouldn't click it. I know it's fake, and then you plug it, and you're like, ah, it got me again.

20:38John Coogan:Yeah, no, it is ridiculous. But Elon has had to comment on this many times. He said, the idea of making a phone makes me want to die, he said in October. But if we have to make a phone, we will. Funny way to say it. In February, he denied a Reuters report that SpaceX was building a phone that could connect directly to Starlink satellites posting on X. We are not developing a phone, and no one is commenting on this right now. So very, very early stage. My question about apps, I think you're right. The number of apps, it used to be every month there was a hot app. Every year there was a hot app.