Kim K's New Energy Drink, Citrini Discourse Rages On, the $100B Meta-AMD Deal | Diet TBPN

0:01John Coogan:We're running down a dream today. We are surviving the Citrine apocalypse. Live to fight another day. A lot of chaos in the markets. A lot of reflection about the story behind the story. What happened? We had a lot of fun debating the Citrine report. A lot of good stuff in there. Some other kind of crazy stuff that sort of got everyone twisted in a knot. It did become the current thing and I think a lot of people were talking about it. I mean today is a new day and there's a ton of new tech news. The story behind the Cetrini story, I had some takeaways. My big update mentally was just that we are the sell side research now.

0:38John Coogan:Basically like new firms, not us, but X and Substack. Like independent researchers and analysts are really moving the markets. Ben Thompson has been a source of alpha for the market for a long time. He's been a source of investment theses, but he doesn't put a buy or sell rating on things. And oftentimes - It's much more long-term. Long-term, exactly.

1:02Jordi Hays:Like here's how strategies are converging. Exactly. Here's how the market is evolving. Exactly. Make your own decisions.

1:08John Coogan:Yes, yes. And then I see like semi-analysis is thinking more in like a couple years out and it's still like, they get held accountable for, oh, you said Microsoft was going to do this and they did that, blah, blah, blah. And they have a different model that they actually sell to hedge funds. And so they're very much in the research business, But what's interesting about semi-analysis and a lot of these other independent analysis firms is that they're not sitting inside banks Like we are very much used to sell-side research being done by Morgan Stanley Bank of America Goldman Sachs You get these equity research reports that your friends send you the PDFs for because you can't afford them No, seriously if you're working in the industry Get the sell-side research report on your industry as fast as possible.

1:50John Coogan:It's very very informative There's always good data in there. My big update was like, wow, okay, this is like a viral post that completely broke containment. There's people making TikToks about it now. And also it's on the cover of the Wall Street Journal. Fear sells. Yeah. Doom sells. Doom sells, yeah. It's over sells. Yeah, that's one of the narratives. And then there was this funny thing about like, oh, well, it's just one scenario. It's just one scenario. It's low probability. Yeah, it's just one scenario, but you only gave us one scenario and you spent a hundred hours on that scenario. And so like, what do you expect people to take away from it?

2:25John Coogan:Except like, this is the one scenario that you think is most worth considering. But of course, it is possible that software is cooked, everything's cooked. And if there's a 5 % chance that everything's cooked, yeah, the market should probably sell off by a couple of percent. And the market didn't even really sell off a couple of percent. Like a couple of names went down a few percent. Some of them already popped back up. Markets, I think doing pretty well today. Yeah, green on the Dow, green on the NASDAQ. and a lot of green on that ticker down there. Derek Thompson.

2:53Jordi Hays:The Thompsonator. He said, the Thompsonator. He says, I really want people to see the story above the story here, which is that whether you're reading Satrini or listening to Jamie Dimon at a cocktail party, the conversation about AI is a marketplace of competing science fiction narratives. That's not to say I think the technology is a parlor trick, but rather that the level of uncertainty is so high and the quality and supply of real world, real time information about AI's macro economic effects so paltry that very serious conversations about AI are often more literary than genuinely analytical.

3:23Jordi Hays:And I think that observation sets up another important point. I feel lucky to be able to have conversations about the frontier of AI with executives and builders at Frontier Labs, economists, investors, and other AI folks at off-the-record dinners where important truths can theoretically be shared without risk. I can't emphasize enough that nobody knows anything is about as close to the reality here as three words are going to get you. Nobody knows what's going to happen this year, next year, or the year after that. There is no secret cigar-filled room of people. Except for us. Except the back room.

3:52Jordi Hays:I think we do actually have some cigars back there. You have unique access to some authentic postcard from the future. When you drill down underneath the bluster, the boosterism, the fear, the anxiety, what's there at the bottom is genuine uncertainty, a vacuum into which storytelling is flooding. The frontier labs don't really know what they're building exactly. But we do. And economists don't really know how to model the thing they claim they're building. But we do. Whatever you think of AI today, be prepared to change your mind soon. Yeah, this was something with All Up yesterday. When I asked him, why do you think that so many of the internet predictions were deeply wrong?

4:29Jordi Hays:His answer was, it's just a continuum. AI is just a continuum. And so like, give it more time, basically.

4:37John Coogan:Yeah. The rebuttal that I heard from him when you said that, he was like, well, no, like look at all those predictions did come true and it was like yeah but over 20 years which is like wildly different than two years because the the fear is your article is called the 2028 exactly

4:54Jordi Hays:exactly and so also so if you tell me also so many institutions just adapted yeah like if you go to

5:00John Coogan:somebody and you say hey in in 20 years your job is going to be radically different they're like i hope so like i'm going to be super bored doing the same thing for the next 20 years don't worry I'll be on to the next thing. In two years, there's gonna be no industry that you're currently in. Everyone's gonna be like, oh, okay, like that's crazy. It's wildly different to be like, you have 20 years to adjust what you do. If you're in Hollywood and you're like, okay, I gotta learn digital filmmaking. I gotta learn how to integrate CGI. I gotta learn AI as a tool. That's way different than just like next year, we will be one-shotting Hollywood films and you will have no employment prospects whatsoever, not even as a prompter, because the labs will be prompting them themselves for AI videos.

5:41John Coogan:And maybe that's possible, but I have a feeling that it's just like, it's not a year away. It's not two years away. It's a little bit farther, still on the 10-year camp, still on the Kurzweil timelines. I'm impatient about it. Like I want it to go faster. I want the acceleration. I want the progress. I think the progress is good. So I'm not like a doomer pessimist. It has felt like something happens and I'm like, oh, wow. Okay. AI can generate images, but it's sort of sloppy. And then I wait like four years and it's like, okay, it's like a lot less sloppy, but it's like still not like dialed. Like it went from 90 % to 99%.

6:18John Coogan:And I'm waiting for it to get to 99.9999999999999%. That's where I want it to go. Anyway, is DoorDash cooked? Let's go over to Ben Thompson on Stratechery. He said, okay, fine. While I'm here, the DoorDash example is just unbearably dumb. He is a believer in the power of DoorDash to weather the AI storm. Set aside for now the question of agents and aggregation, that's a post that is definitely in my mental queue. What is notable about the assertion is the total denial of any positive reason for DoorDash to exist and to be so successful. There's no awareness that DoorDash provided a massive consumer benefit, restaurant food at home, from scratch.

7:01John Coogan:I like Keith Rebois' take that DoorDash is the I'm hungry button on your phone. And then there's a whole bunch of crazy things that you have to do to make that happen, make that button work. I ordered DoorDash last night. I felt like I did it in protest of the doom. I was like, I'm still supporting. I'm riding with DoorDash. There's no awareness that DoorDash provided a massive consumer benefit from scratch, that DoorDash massively increased the addressable market for restaurants, or that DoorDash provided brand new jobs for millions of drivers. Instead, the article just sort of takes it as a given that DoorDash exists and that it is a rent extractor preying on weak-willed humans and their habits.

7:33John Coogan:All large successful tech companies exist not because they created a market with virtuous cycles, solving all kinds of thorny problems along the way, but rather because the government didn't regulate hard enough. I was thinking about in antitrust regulation, you know how they'll stop two firms from joining because that will create a monopoly, but they don't really have a tool in the tool chest for stopping a company from just shutting down and stopping competing. Like if Xbox goes away, as people are predicting, doom around Xbox. PlayStation gets a lot more powerful, obviously. It's like the only game on the block.

8:06John Coogan:And so should the FTC have a hammer to be like, no, you got to lock in, Asha. You got to make more Xbox games. You got to compete harder. We want you to get GTA 6 out exclusively on Xbox faster to put the screws to Sony. You don't have time to spend three months gaming. No, no, no. Lock in. Give us a new Halo. Give us a new Modern Warfare. Give us a new Fable. I don't know, what were the other great Xbox games throughout the years? I was never that big of an Xbox gamer.

8:34Jordi Hays:Never owned an Xbox.

8:35John Coogan:Never owned an Xbox. Wow. Oh, I'm a gamer. No, you never say that.

8:40Jordi Hays:I didn't have the, what was an Xbox back then?

8:43John Coogan:It was like 300, 400 bucks. It's expensive.

8:46Jordi Hays:The disconnect in the SaaSpocalypse is that AI native SaaS is getting funded at an insane rate. Yes. While you have these massive sell-offs in the public market. Yeah, there is a little bit of disconnect. There's private companies that are getting lots and lots and lots of funding that if they were public, would have traded down 20 % over the last week or so.

9:08John Coogan:There's this whole idea that you'll be able to build your own CRM or your own ERP and Vibecode it. And open source CRMs exist. There's one called SweetCRM, there's Odo, there's ERP Next. There are open source alternatives to almost every piece of software. There's an open source Photoshop that people use on Linux, and they've never really gotten adoption. I used an open source forum software for a while, and very quickly I called the person that was maintaining it and was like, I'll pay a thousand bucks to just do this for me.

9:41Jordi Hays:There's an open source Capybara simulator.

9:43John Coogan:Is that open source? No. But it's interesting because open source has always been this pressure on SaaS, and it's always withstood that. and like yeah maybe like if you can just prompt it and it feels like emailing your your sas provider to reconfigure things like that is a real pressure but i think it's underrated that open source crms have existed for decades and never really taken off because there's something else that's valuable there but tyler has a real yeah because he thinks everything's gonna get slopped i think that's like

10:17Jordi Hays:mostly cope okay that's fine the comp to open source stuff why it's just annoying to maintain So no one ever does it? And you're kind of just paying whoever to maintain it, right?

10:25John Coogan:No, no, no. In open source, like, you don't need to pay someone to maintain it. You can just use the open source.

10:30Jordi Hays:The closed source version of the open source thing is, like, you're basically paying someone to maintain it. Yeah, yeah.

10:34John Coogan:Host it, manage it, make sure uptimes.

10:36Jordi Hays:But, like, models keep getting better, and they'll just, like, do all that for you.

10:39John Coogan:They'll do all that for you.

10:40Jordi Hays:Yeah, I think that's, like, very obvious. There's two narratives, right? There's the, okay, everyone will just vibe code everything. In any department, you can just have an employee just make the software, tell the agent not to make mistakes, or tell the agent, hey, fix this thing. So that's one thing. And I feel like that is maybe a part of the sell-off. But the bigger reason for the sell-off is maybe what Derek Thompson is talking about, which is that the world is getting weirder. A lot of people are feeling the acceleration. And if you just don't know what the world looks like or what work looks like, you want to take some risk off.

11:16Jordi Hays:You're not willing to pay the same revenue multiple that you were three years ago.

11:21John Coogan:Yeah. I do want to dig into that point that you mentioned earlier a little bit more, which is like the Tyler philosophy of like you could vibe code everything and the agents will be able to go around and maintain. And everyone will have personalized software, individuals where the value accrues to the person using the software, but then also the lab providing the software, the inference. And then there's like the private markets boom right now in AI enabled software where companies are saying, well, we were able to pull our roadmap way forward. We got to an MVP in a weekend and we're able to ship features way faster.

11:52John Coogan:So when we onboard new clients and they ask for something, it's like, boom, and we get it done in a few days as opposed to a few weeks of engineering sprint. We're moving faster and we're creating like AI enabled products that couldn't exist otherwise. And it feels like both of those can't be true.

12:07Jordi Hays:Ben Thompson called out the real estate example. He took a segment out. This is from Citrine. Even places we thought insulated by the value of human relationships proved fragile. Real estate, where buyers had tolerated, I'm saying this in an extra dramatic voice. Love it. Where buyers had tolerated 5 % to 6 % commissions for decades because of information asymmetry between agent and consumer. Crumbled once AI agents equipped with MLS access in decades of transaction data. could replicate the knowledge base instantly. And then Ben Thompson says, the real estate example makes the exact opposite point the author thinks it does.

12:45Jordi Hays:The truth is that the internet already obsoleted real estate agents in terms of information flow. You can go online right now and get a listing of every house for sale with pictures, its full history, et cetera. There is no information asymmetry, but rather information abundance. The fact that real estate agents still exist despite that shift is actually one of the more compelling arguments that humans will be remarkably resourceful in terms of giving themselves jobs to do, even in areas where they ought to be pointless. I'm in process. I'm currently in escrow on a property. And the guy representing me is going to make a lot of money, but he's extremely helpful.

13:18Jordi Hays:And he does a lot of real estate transactions. I don't do any. Yeah, technically, entrepreneurs could negotiate their own legal docs with Claude. But that being said, you're paying for effectively therapy throughout the deal and like general guidance.

13:34John Coogan:Kim Kardashian, she has a product called Drink Update. And here is the photo shoot from none other than Dayjob.