Leopold Sold, Ferrari Undefeated, Martin Shkreli Joins | Guillaume Verdon, Lulu Meservey, Michael Kim, Joon Sung Park, Karan Kunjur, Vlad Tenev

27:13And then, you know, really since then, the 08 insanity. So it's quite a spectacle. And I think, you know, no matter how much people want to learn the lesson of leverage over and over and over again, we all seem to repeat it. And, you know, it is what it is. But I think that the Jane, the Jane Citadel Millennium kind of like entire hedge fund complex sort of becoming this like shadow bank is quite interesting. You know, and that like these guys are are sort of there to normally the banks would sort of take this on the chin. But now that there's other folks who are like, you know, Jane was an LP, for example, and reportedly was not interested in bidding, which is fascinating.

27:55May have taken the Anthropic, however. Really unclear. We're going to learn more, obviously, as some days go on here. But it's an unprecedented time and, you know, really an insane story that may just get more insane as we learn more.

28:09Vlad Tenev:Is there a world where the fund continues? Because I'm just hearing the numbers and it's like, you know, up at$45 billion. The actual money into the fund was maybe$5 billion or something if you sell the positions. There's a world where you wind up with like$10 billion in a bank account and the LPs are like, well, we gave you$5. Keep going. Get back in the game. I hope that's the case for the LPs who are awesome, for the fund manager who obviously got quite a lot of whiplash. But, you know, at the end of the day, you know, there's there's this concept on the street, as you guys know, like once there's blood in the water, like these positions would go to zero.

28:52Like we'll send Micron to five dollars just to liquidate this guy at three. Right. Like, you know, the craziest thing is like that's that's the nature of Wall Street when this happens. And there's a guy that has to sell 100 billion. You'll have a trillion dollars in front of him just like, you know, let's let's see this guy cry uncle. And it's the saddest kind of most Machiavellian thing. But like he had, he sort of had to blow up. You know, there's no other ending, sadly.

29:18Vlad Tenev:Yeah. Because of the leverage level. It's just like one slight, you know, I remember my old, my old boss was a Tiger, Tiger portfolio manager. Reminded me of the 2000 era where there's this very slight change in tone from one optical component supplier. And that's like him and his partner from Soros just decided to go like as short as they could because they knew ultimately these vulnerable hands were sort of sitting there. After the easy part of the bubble was over, you have this like, OK, what's next? Things have to get a lot crazier. You saw Dworkesh's tweet. Things like that would have to sort of happen for there to be enough second derivative for somebody to be surprised.

29:59You know, everyone knows AI is in this boom. Everyone knows chips are in this boom. What could possibly shock you to the upside? Not much. So if you hear any little like, you know, we're not going to spend as much, the whole shit hits the fan and every it's just too heavy. So I actually wonder if we're, you know, if we're not in for a longer, more protracted decline. Things feel great today. You know, we have this huge boom, this relief rally. A lot of the froth is out of the system. But, you know, what next? You know, I don't know that, you know, a patient and calm market is going to emerge because you had the hyperscalers and the big companies.

30:36They FOMO too. They FOMO just as hard as Leopold did. Right. If not harder. So this isn't just him. It's the whole world collectively saying, fuck, I got to I got to go all in and AI. And it's it's and who had the guts, you know, other than one man, Tim Cook, in the back saying, not me. Do nothing.

30:55Vlad Tenev:Yeah. No, really. It is Tim Cook. Yeah. Yeah. The funny thing, you know, we had been joking. We were joking in like Q4 when, you know, prior to like coding agents really starting to rip, you know, open AI revenue growth had like slowed a little bit. And like there was some jitters and a lot of this stuff wasn't public at the time. But you could tell some of the kind of crossover types were like getting a little nervous. Right. They kind of expected. MAU, DAU numbers. Yeah. Yeah. you know yeah and really plateaued and and and then we and then there was a correction like there was like briefly you know for a period it was probably like eight weeks it was like okay like uh and then it started ripping again and we were taking like a sort of a um a bit of a joking like victory lap being like cool like ai corrected you know bubble popped now we're able to build back We're back sustainably.

31:53Vlad Tenev:We're good from here on out. It's smooth sailing. I think the most unexpected thing is it would be if we saw brand new all time highs for the entire thing. I think almost everyone on Wall Street is skeptical this will happen, which means it has a chance. Yeah, bullish. So you're saying there's a chance. I love it. Can you give me a little bit more insider baseball on what it takes to unwind a big position as a shareholder? Because a lot of people who are not inside the hedge fund world are sort of maybe confused around, okay, yeah, you own$50 million of a$1 billion chip stock. Can't you just dump that on retail?

32:39Vlad Tenev:Can't you just like sell markets, sell that on E-Trade or Robinhood? And in fact, it's much more complicated when you're at this level, even though it's public markets. There's not just a big button. Can you walk us through what it actually takes to like sell a big position when you're at that level? Yeah, there's a lot that goes into it, interestingly. So the first is you have this advertisement system. So if you sell into the market, you can try that. And that's called selling into the screens. The screens are the numbers on your screen. Anybody could buy and sell, Robin Hood, whatever. So you don't normally do that if you can help it.

33:18Selling on screens is at least somewhat quiet. You can just sort of trickle out. There's always this conspiracy that as I'm selling on the screens, there's some guy who can see my screen. And he's like, this guy's got a BWAP market order to sell 10 million shares. That's like, you know, I'm going to tell somebody. And that knowledge would be very, very powerful. And there's even some even crazier conspiracies out there that quants can actually use different all kinds of insane ideas around what they can do to sort of sniff out that this is happening. So there's people that are scared of that. Then you can pick up the phone and this is the way you normally do it.

33:51And you call Goldman and you say, listen, I need to sell five, you know, five million shares of Microsoft or something like that. And they say, hmm, you know, should we take it or do we find a guy that wants to take it? and they'll sort of try to decide. Now, Microsoft is easy. If you're trying to sell Share and AI, a neocloud in Australia that nobody wants, that's a tough one. And you own like 10 days of volume. So if you try to hit the screens, you have 10 days of volume. You'd have to be the entire volume for 10 days before you'd be out. You'd probably take the stock down 50 % or more and you don't want to do that.

34:25So you try to do this advertisement process and you basically can post in the stock market that you're a seller of a stock. And you can post that your four-digit, what's called market maker ID. And so Goldman's is GSEO. So GSEO would be a seller of, say, Nebius, which was one of his positions. And so you'd call up, you'd say, okay, Goldman, I'm a client too of Goldman. What do you got on Nebius? And the guy would say, listen, we got a pretty big seller here. And say, how big? Half a million shares? And he's like, a lot bigger. And so you'd say, hmm, OK, because they have to advertise that they're working your order.

35:07So they have to sort of tell people that there's a seller. They kind of are trying to be coy about how big, but they're not going to waste somebody's time either. So the guy who's heard that there's a big seller, well, he might turn around. He's not supposed to do this. He sort of might turn around and say, you know, there's a huge seller of Nebius out there, and I'm just a little baby fish. Maybe I could short 50 ,000 shares and get in front of this guy. If you're an actual interested buyer, you might also still be nervous because you'd say, well, if he's really got a ton of size, I might have to be judicious about how I step in.

35:41And so if you combine that with the sort of like pressure in the market and you add it all up and then usually what you do is you'd have say, oh, I know a guy that works there. And let's see if he's returning calls. And, you know, when you hit up the guy and he's not on Bloomberg, he's hard to reach. it's kind of like, well, it sounds like it could be them selling. So it's not too many people that own that many shares of that security. So you look at the holders list and you're sort of like, who could it be selling 10 million shares? So you call Fidelity and they say, no, we're not selling. You call the next guy.

36:13No, we're not selling. Next guy's an ETF. Next guy's an index fund. You know, it's got to be him, you know. And so if it's them and then you start noticing all their positions are down, it gets really hard. So ultimately, the bank decides because you might say, you know, I don't want to sell. The bank says, I don't care what you want. We're selling regardless. And Goldman Sachs is not in the business of holding AI stocks. You know, we're going to sell at any price we can because our board would rather know for sure that we're down a billion and just take the rip the bandaid off than to wonder if we could lose 50.

36:47And so it's Goldman's position that we're just going to just cut this, cut the arm off right now before it metastasizes. And so they'll do a fire sale. And of course, Goldman's smart. They're going to reach out to a guy like Citadel or somebody else to place it carefully. But selling the whole portfolio in one shot was a very smart move. Now, again, we've heard the discount could have been as big as, you know, 20 to 50 percent, which is, you know, mouthwatering discount to buy, you know, some quality companies at. But to end it and have finality, what was really to answer the question finally, what you really needed to do is the buyer of these stocks has to have the liquidity to hold them for five years and do nothing.

37:26Because the market, guys like me and to a very small extent, and guys too much bigger will sit there and say, I don't think you can hold this. And they'll start shorting it and shorting it and shorting it and trying to make you cry uncle. Kyosha in Japan, one of Leopold's holdings, also one of mine, is trading at three times earnings. You know, they basically force you. You're forcing the guy to really, you know, to sell. And if you're going to hold this stock, you have to make sure that you can hold it until it's two times earnings or one time earnings. And the only player big enough and more powerful enough to sort of hold$100 billion and not blink is somebody like a Citadel.

38:00And even still, some people, there are rumors out there, they're the people who are going to try to crush your Citadel, which I wouldn't advise. You know, but something like that where, you know, maybe they'll now have to suffer the same contagion. So it's a very crazy time in the markets. And I don't think we've seen everything yet because I do think there are some large tech funds that have had the same trade on. I do think liquidation is over, thankfully. But I do think that there are some funds that are about to be found out to be down 30 percent or down 40 percent.

38:30Vlad Tenev:Take me through the mind of Ken Griffin like a couple weeks ago. There's this rumor that he was sort of like pushing or signaling that there might be a rate hike. But what I'm interested in is if you suspect that there's going to be a fire sale on X, Y, and Z companies, is there a world where you build the hedges before you acquire those assets? Or is that too 4D chess? Because if they wind up acquiring these for 50%, 20 % off, but they already have offsets, then they sort of come in market neutral. Is that possible? I don't think so. So I'm familiar with Citadel's performance for this month, which is surprisingly up.

39:13So I think they're probably one of the only hedge funds in the world that's up this month. It's up very small. They were actually hedged is what you're saying. Yes. They have a diverse platform of different businesses, a guy trading weather, a guy trading rates, a guy trading stocks, about 1 ,000 guys trading stocks. And they have a computer fund called Citadel Securities that is a market maker that trades a good chunk of the volume of every instrument in the world. And ultimately, I think that the prime brokers, the Goldman's and Bank of America's, they do so much business with Citadel. And they've done this before where they know who to go to just the same way the U.S.

39:53government went to Warren Buffett when they wanted to shore up Goldman. And they know that the right person to call is Ken. And he is really going out of his way to make himself the guy to call. And I think that is a great brand because you may not need to be that guy more than once every decade. But look, once a decade to make a free$5 billion or$10 billion is a great guy to be. And it's sort of like he becomes a dependable, trusted partner to these banks. And if he wants something from the banks, he's helped them. because without him, they might have had to sell that at a negative number. In fact, some people think, I don't think this is what happened, but some people actually think the equity in Leopold's prime brokerage accounts went negative, which I think is something that, again, the Goldmans and Bank of America try to stop you before you get there.

40:43But they also don't want to sell, like I said, shared AI, which is an illiquid, tough-to-sell security. Sure. You know, they'll sell your micron very fast or you'll sell it out before then. But if you're left holding this bag of like a liquid crap that you'd have 60 days of volume to get out of, it's pretty tough to sit there and tell your prime broker, don't worry. Which is why, again, I think he needed cash. Probably somebody on Monday or Tuesday tapped them on the shoulder and said, your margins looking a little thin. You know, can you can add, you know, a couple billion here or more? And things happen so quickly that there was just no time.

41:17And, yeah, I think Citadel learned about this at the 11th hour, as you're supposed to. The firm didn't leak out that they were hurting. They didn't have, to my knowledge, daily performance. In fact, from what I'm told, situational awareness as a young hedge fund was not so great with communication, not surprising, especially with monthly and quarterly letters. Could have been more timely on some of those. So it's a small group of a couple of guys. So I don't think that this was the same. You rewind, was it only a month ago? 13F was late. 13F was late and everyone was questioning, did he work out some kind of deal to get it confidential?

42:02But it sounded like you just didn't get around to it. They had other priorities maybe. Yeah, I mentioned – Do you think he can rebuild a career as a venture investor? because in venture, you're just like gigalong always. It's like one of the few forms of investing where it's just so hard to get out of position. That's the thing. I mean, why become a hedge fund manager? I have a friend who wants to start a hedge fund. I told him, this is the most painful, horrible business in the world. Why do this? And if you start a newsletter business that makes$100 million a year, even$50 million a year of revenue, you, you've done better than almost every hedge fund on the planet.

42:44Like you do not want to do this job. And the reason, you know, the reason people do it, and I did it too, and I would never do it again is it's the sexiest thing in the world. You think, you know, the glory is incredible. Yeah. You're the master of the universe. And I had friends wanting to quit really high profile jobs to be a hedge fund. I was just like, you're out of your mind. You don't know what this job is. It's waking up at 3 a.m. checking Korean stock prices and, you know, waking up back up at six, wondering what's happening in the world and stuff like this. And there's absolutely no productive thing you're doing.

43:16You're providing capital. But other than that, you're really playing this high-stakes crazy poker game. And it's certainly fun and interesting. But when it's painful and raw, I hope he'll do something. He's a brilliant person, brilliant people like that. I mean, look, Peter Thiel had a hedge fund that didn't quite have this level of liquidation or anything like that, but it had a rough last few years. And, you know, Teal was able to obviously not only continue his venture investing efforts, creating one of the biggest funds of all time, one of the most successful funds of all time, investing personally doing amazing, also getting back into macro trading with Teal Macro, which supposedly has done well.

43:59So I do think there is this like period of a few years that, you know, he can reset and take the learnings, take whatever talent and skill and certainly genius that nobody denies that he's a brilliant guy and rebuild. I don't think it's the end at all. And I hope he's keeping like that even temperament about this because, you know, I think a lot of people respect him quite a lot. No matter how this turned out, you know, he'll be back and successful. But it is a little bit of a humiliation thing that I think most people on Twitter and other places are sort of saying, well, the market tends to humble you.

44:33And this is like an extremely humbling moment from being, you know, just two months separated from the biggest hedge fund on planet Earth and most successful to being forced to sort of liquidate, that is quite a rapid sort of, you know, reversal. Also, just imagining what the fund looks like in two or three years if you just survive, right? I can, you know, he, you know, there was a clip that was circulating yesterday from his, you know, appearance on Dwarf Kesh where he's like, oh, there's obviously like 100x, you know, left before AGI, right? So like he was like up, you know, 20x or whatever thinking like I got so much room to run, but I just couldn't stay in the game.

45:18I got to say – Extrapolating is always a risk. I got to – yeah, I got to say it felt like a huge moment for you and your business just because everyone, the whole finance world was learning about the situation from your posts. I'm sure a lot of people were glued to your terminal. And it felt like a changing of the guard because, again, you were getting pushback. You were getting some pushback. But then two hours later, it was like Financial Times and Bloomberg and Wall Street Journal. They're all kind of clearly they needed a couple hours to like run it down. but you got to it first and yeah, I was quite impressed.

45:59Thank you. Yeah, I mean, I think that we've talked about this in the past. I mean, there is a change of the guard. You guys helped change the guard in your space and I think that the folks at the Journal, the folks at Bloomberg, the folks at these other companies, they're fantastic reporters but they're not active or former players and we will always hear things before them because, especially on the street um because that's just well the crazy the craziest thing is you you actually waited until it was like over effectively to to share right like you had been hearing about this there's a lot that we sit on yeah yeah yeah and we you know we've been in that position like hundreds of times where it's not appropriate to share anything and sometimes you're sitting there being like i'm really surprised that like legacy media hasn't picked up on this story it feels like It's just common knowledge, and there's definitely a time and place to just not say anything and let something work its way through the system.

46:59Yeah. I mean, to give the devil their due, the information is also quite good at this type of thing, and they are particularly good at scoops on OpenAI, which I still haven't unraveled how, but they're obviously very good reporters. but a reporter at a place like that in Trad Media they generally don't care about burning bridges and resources or contacts so they want that news out yesterday. I do care and it also is a conflict of interest because I don't want to hurt somebody that's given me good information and betray their confidence because I have to keep the confidence of these folks if I want to keep talking to them but I also in the case of this situation as the carnage is unfolding balancing the need for everyone to know with the need for protecting friendships and relationships, you have to make that judgment call each time.

47:53And I hope that our customers understand that there will be things that we know before others that we can't disclose because we want to protect folks and protect our friends. Bloomberg, Washington, they'll never do that. They're always going to serve their customer who is the reader. We can't necessarily do that. You probably know things about a litany, like you said, hundreds of times, different fundraisers going on, different things like that. And we have to all keep our lips closed because, you know, that'll be the last time we hear about a fundraise. And I think that this was a situation where it sort of merited discussion.

48:26It was going to happen momentarily anyway. In fact, to your point, the thing that got me to publish was my friend saying, everyone is hearing this now. Once that happened. I said, all right, well, you know, it's time to let, I can let the cat out of the bag. It's going to be let out anyway.

48:42Vlad Tenev:So, yeah. Uh, I have two more quick questions. If you have a minute, one is, uh, uh, just about how leverage works at a hedge fund. I think, uh, you know, again, from the retail perspective, from the much smaller player, you might know that you can go to a, uh, you know, a brokerage and get a little bit of leverage, but what does the process look like as you're scaling into the tens of billions of leverage. At a certain point, you have to go to all of the banks, certain banks, who's actually, like what does that process to get leverage at that scale actually look like? And also let's appreciate for a moment that I feel like just a month ago, the West Coast broadly was taking this insane victory lap being like the West Coast is eaten, like the best and biggest hedge fund is no longer on the East Coast.

49:36Like we just have everything now, finance and technology. And then just deeply humbled within the span of 30 days. And it turns out you guys over there, you know a thing or two. And here we are asking you, so how would one go about getting?

49:58So one of the things that I think is not well understood is the prime broker make a spread on, I think this is somewhat understood, is they make their business to make a spread on financing. So if you go to a prime broker and say, I'm never going to use leverage, never? They say, I'm never going to use leverage and I'm never going to really trade a lot with your firm. They're just going to sit there and say, like, we'll still take the assets because we can rehypothecate them and lend them to the guys that are going to take leverage. But in general, that's not a great customer. So if they're making a 1 % spread, which actually is a relatively huge amount, and you're borrowing Forex, you're actually giving them 400 basis points of free money, which is sort of fantastic.

50:43In fact, their borrowing costs are probably less than so far. So they may be getting as much as 600 or 800 bips of free money on huge amounts of capital. So leverage is the best friend to a prime broker. Now, the risk guy is sitting there saying, well, wait a second, you know, I love lending, but I don't like lending to concentrated portfolios. I don't like lending to short sellers. You know, short sellers can get big, big, big, you know, leaps in their portfolios, like GameStop, for example. So the most that a long can lose is 100 percent. But if a Forex lever, the most long that loses 25 percent.

51:19So, you know, there's sort of this mix of things you have to think about. I think the getting into the privates is usually like, for me, a really bad sign for almost every fund because it's as tantalizing as private companies are. There is a whole group of people on the West Coast who are much better at that than the guys on the East Coast. And of course, there are funds now like Altimeter and Co2 and others that are doing both and doing both. Yeah. And what made that what made it so tempting, obviously, for Leopold, that just how close he is to like he couldn't be closer to Anthropic. And it's a company that over the last six months has had 100x the demand relative to the allocation, right?

51:59So it just felt like, you know, and I don't know, who knows what the structure on those investments look like. But it's like, if you're going to break your rule and do privates, like, then that's the company to do it with. But then you still get into a situation where you're like, wow, I really wish this was more liquid. I can't press the sell button. Give us an update before you leave on Korea broadly, because, you know, a lot of people are commenting on just how similar Leopold's approach is to Korean retail. I don't know how true that is, but I can imagine like it's there's blood in the water over there and the whole country is probably in shambles.

52:43Yeah, I think so. I made a Kelly criterion calculator and like a little portfolio simulator tool that, you know, basically, and Paul Trader Jones said this a while back, and I had a problem with this. Every single trader out there makes one, seems to make the same mistake over and over again, which is their position size is probably 2 to 10x more than it should be. And if you actually, you know, so it sounds nuts, right?

53:08Vlad Tenev:Yeah. But if you actually run the simulator, and ours is Kelly. So Kelly was a guy at Bell Labs. He was a member of the technical staff. He was the original. Oh, gee, MOTS. And so Kelly came up with the proof called famously the Kelly Criterion, which gamblers use. Mostly it was a gambler thing before a finance thing. And it proves the optimal bet size. And the optimal bet size is your edge subtracted by the reciprocal of it. So if you have 55 % edge, your optimal bet size is 10%. That's still quite volatile for folks. And so people do half Kelly or quarter Kelly. Most folks actually don't have an edge when they trade.

53:47But if they did have an edge, they're trading as if they had 4x or 5x Kelly edge, which is interestingly, like you might sound, okay, well, that just sounds swashbuckling and like that takes a lot of risk. No, if you run the simulator, you will go to zero each time. And the simulator is a really cool tool that shows you even with a 60-40 edge on every trade you make, you'll go bust if you overbet. And it's an eye-opener. You might say, who has a 60-40 edge in the stock market? Nobody has a 60-40 edge. But you will absolutely go bust if you don't size correctly. And it's something that I've had to learn very painfully over the years that I'm almost always overbetting.

54:27And I think every fund is sort of the same. And certainly every retailer is the same. And it's just sort of a weird variance math game that very few people actually map out and say, can I simulate portfolio and just to see what is the sort of the right thing to do in most cases. And in fact, I had a after I left the Tiger Cup I worked at, I worked in the briefly in the office of a guy who worked at SAC Capital, now called Point72 for years. And he was one of the best managers. He's a quiet guy nobody's ever heard of, kind of retired. But I got to watch him before I set up my own hedge fund and did the exact opposite, way over metal and everything.

55:03I got to sit with this guy for a few months, and I was astounded. What I found is that he was managing, I don't know,$300 million or$400 million of his own, basically. He almost never used the capital. 80%, 90 % of the capital was just cash, and he would just make these tiny trades. And the guy had almost never had a down, I think his record was he never had a down quarter in 20-something years of trading. And he had like 20%, 30 % returns, which was great. And the guy just kind of did these little nibbles. And he never lost money. And it was an incredible thing. And then, of course, the second I get the chance to get some capital, I'm 8x leverage.

55:43It's just like it's the dumbest thing in the world.

55:46Vlad Tenev:And you live and you learn. Psychology. Psychology. Well, thanks so much for coming on the show and breaking it down. Thank you, guys. This is always a great time. Yeah, looking forward to the rest of your coverage. Yeah, seeing where we go from here. Have a great week. Have a great weekend. We'll talk to you soon. Cheers, Martin. Goodbye. 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. We have a couple guests coming in soon.

56:14Vlad Tenev:But first, I want to talk about Ferrari. I don't know. Do you want to jump straight into a next guest? No, let's talk about it. I don't want to debate this because there is news in Ferrari world that the Ferrari EV, the Luce, designed by Johnny Ive, has already hit the 2026 sales target. The haters are in shambles. Everyone doubted that this would sell. And the Italian carmaker reports strong demand from China for electric model derided for its unconventional design. There's a whole bunch of interesting tidbits in here in the Financial Times article. Ferrari has hit this year's sales target for its first electric vehicle on the back of strong demand from China, despite a polarizing design that drew backlash from investors and enthusiasts.

57:01Vlad Tenev:Remember, even the former CEO, former chief design officer, former executive came out and said, this is not a Ferrari. There was a lot of back and forth in the timeline. I could have designed a better one with Chad GPT. A lot of people threw out different designs. But this one is selling, at least according to the Financial Times. The Italian group has not disclosed its target for the Luce, but two people with knowledge of the matter said it had aimed to sell this year just under 500 units of the EV. Not a lot, but their goal for by 2030 over the next four years is to get to 2 ,500 units. So 500 a year for four or five years.

57:41Vlad Tenev:That's where they want to get here. And they say they're on track. And so this is priced at 550 ,000 euros, 650 ,000 USD, something like that. One of the two people said the target had been reached earlier in July, just two months after its controversial launch, when critics on social media derided its unconventional styling. And there's also an interesting line in here that Ferrari says they gave strict instructions to dealers not to force its traditional petrol-loving collectors to switch to electric cars. said if you want a luche we'll give you a luche but we're not going to make you buy a luche in order to get in line for an sp3 sp4 some special f80 thing that's more limited just if you want it it's here it's a choice and a lot of people made that choice according to these insiders what do you think give me the pushback and then we'll debate it first let me tell you about console while you think about that console is built ai agents that automate 70 of it hr and finance support giving employees instant resolution for access requests I was pausing because I wanted to start with something nice.

58:48Hit me. I think, so the videos that I've seen of it on the road, it does look even more strange than in the images.

58:57Vlad Tenev:Wait, what is this photo? That's not, what is that? The team just accidentally put in some random car. Okay, so the car is strange. I love the interior, but the car overall is strange. It's still unclear to me who it's really for, but they are finding buyers. The idea that buying the Luce, like Ferrari is saying we're not forcing any dealer to push this car or whatever. But the idea that it's not going to have some, whether or not you bought a Luce is going to have some weight on your future allocations to me is just insane. There's just no way that that's true because every single dealer is going to look at their client list.

59:41They're going to look, what cars have they purchased? Like we know, we, we know multiple Ferrari collectors that are buying two. They're two separate cars that they don't even want of the same style in order to gain status within the dealership and show that they're a proper collector and they're properly sort of cherishing the brand. And so I'm not at all surprised that they've sold 500-ish units. That's about as many as I would have expected for 2026. I actually, I guess if you asked me, I maybe would have thought they would have done more. Like to me, this was a car that was so different than the rest of their cars.

1:00:23It serves a wildly different use case. I would have expected their sales targets to be quite a bit higher simply because when it comes to the really special cars, they make about 500 of them. And so I would have expected at least 500 sales guaranteed. And then you would hope there was a bunch of incremental buyers, people that are like, yeah, I actually don't want a Ferrari sports car, but I do want a daily. and why not go for a Ferrari daily, right? So you would have thought that there would have been like 500 for the first year was like my very base case, and I would have expected a bunch more on top of that.

1:00:59So I think they're positioning this as a win. I think people are going to love the car if you ignore the price, but I don't think it's the win that—

1:01:08Vlad Tenev:I love the Pope and the Luchang. It's so good. okay three points in response to yours two uh first point uh the design's absolutely growing on me like watching these videos here it just looks way better than when we first saw the the first pictures and i don't know if it's just distance and i'm becoming more familiarized with it but uh it looks a lot better even the exterior i've always agreed on the interior i think everyone agrees on that but the exterior is looking better to me somehow i don't know if this is just like I'm getting used to it. Two, yes, there are the 4D chess Ferrari collectors who are saying, I know I'm not getting pressured, but I'm buying one anyway because I think it'll help me jump the line.

1:01:51Vlad Tenev:And I'm doing that independently of any pressure that's coming. But there's also just collectors that are like, this is going to be a piece of Ferrari history regardless of if they, what if they never make another EV again? What if the Feluche is canceled next year and Ferrari literally for 30 years never makes an EV. This thing is important historically. It's an interesting thing to have in your collection. And then there's also just people that are like, I'm a true collector. I want every possible Ferrari experience. Give me the SUV because I want to see what that's like. Give me the mid-engine.

1:02:23Vlad Tenev:Give me the front engine. Give me the electric. Give me everything. Give me a vintage. Give me a new one. Give me a road car. Give me a track car. I want a Ferrari F1 car. I want all of the experiences because I just want to experience everything Ferrari because I'm that deep with the brand. And are there 500 of those buyers? Maybe. And then lastly, the question of what was their goal? I don't see this as their Urus. I don't see this as they were trying to make a mass market daily. I think that they were trying to make a very iconic, very iconoclastic, very contrarian car that was bold and weird and different.

1:03:08Vlad Tenev:And it happened to be dailyable. And the fact that it is dailyable is what is weird about it. Like they're not known, the brand is not known for being able to be dailyed. And yet they made one and that makes it weirder. And I don't think that they were going after this is something that will be like a Lamborghini Urus, which they can sell in mass volume and completely change the profile of their sales curve. My view is that they, I think those are all great points. My view is that I don't think they should have done a car like this because I do think it hurts the brand. Unless it was going to drive so many sales that it could make the rest of the cars that they make better.

1:03:50right like what the cayenne did for porsche or what the urus does for lamborghini right this sort of like workhorse product that can fund a lot of the the the other cars that are more halo cars sure and uh and and so yeah i just i don't think it makes sense if they sell 2500 units other than it solves their sort of a mission european like emissions uh standards issue right yeah i do think

1:04:18Vlad Tenev:a lot of people buy a urus because they want a lamborghini but they need a daily and so they go with that because it says a lot it's a very bold choice and i don't think that's the calculus here because you're paying so much more whereas i believe the urus is cheaper than most of the lamborghini sports cars whereas this is substantially more than just going and getting Yeah, and Ferrari has an SUV that is significantly cheaper, and it is much more desirable to the Ferrari clientele because it has a naturally aspirated V12. Yes, but at the same time, the Pro Sangue, the SUV that you're referring to, had a lot of pushback when it came out.

1:04:59Vlad Tenev:So did the SF90, and they all look really great now. And so the anti-Halo car theory also holds. But I think it looks good, and I think it's going to turn heads in a weird, weird way that very few cars, as we are collapsing and we're getting to everything is white, everything is gray, everything is black, everything is the same rounded. Can you tell the difference between a McLaren or a 296 or a Lamborghini? They're all sort of starting to look the same like supercars, and then there's the whole hypercars, the Batista. Yeah, I'll give you this. I think certain specs of the Luce are going to look funky, but they're going to look cool, and they're going to be a joy to drive.

1:05:41Vlad Tenev:I just like that Johnny Ive, in the Financial Times, they sent this photo of him looking over. We've got to pull up the – go to the Financial Times article, scroll down to the picture of former Apple designer Johnny Ive, who designed the Luce. And he's just like – He's like, what did I tell you? You doubted me? You doubted me? You doubted me. You doubted me. We couldn't sell 500 of these. We did. It's a true victory lap photo, and I love it. Yeah, great photo. Anyway. And I can't wait to see one in person. Me too. That's a big moment. Let's not keep. Let me tell you about Figma first, and then we'll bring in our next guest.

1:06:18Vlad Tenev:Agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. And we have Guillaume Verdun from Xtropic. Long overdue, but very excited to have him on the show. Guillaume, how are you doing? Welcome to the show. Doing great, doing great. Long time fan, first time caller. So excited to have you on here. Congratulations. During a massive moment. Massive moment. Thank you. Thank you. Long time coming. Give us the State of the Union on the company and then the news and the deal that's going on, the letter of intent. Yeah, I mean, so, you know, at Xtropic, we've been pioneering this new form of computing from the ground up called thermodynamic computing.

1:06:56Our whole thesis is that right now everyone is focused on scaling things up, buying more GPUs, bigger data centers. We want to scale things down. We think there's going to be a race to densification of intelligence. So we started that about four years ago, which was very early to worry about energy. It sounded crazy to say we're going to run out of energy four years ago, but here we are. And so we've reinvented how to leverage a transistor for the era of generative AI. So generative AI, for those not familiar, is a probabilistic algorithm. You're sampling from these distributions of like, okay, if I type in the word cat, what sort of image do I get out?

1:07:31It's kind of random at the output. And so that is a probabilistic workload. It turns out you could run electronics probabilistically at much lower power, and we pay a huge price to maintain our electronics in a deterministic state. So it doesn't make sense to run probabilistic workloads on deterministic electronics if we're going to pay a huge tax to know the state of our computer at all times. So our insight is if you use very little power, essentially your computer can operate probabilistically and you can train it directly just like a neural network. And you can map your algorithm that is a generative AI algorithm like a diffusion model directly onto the physics of the hardware.

1:08:12And so that's kind of the vision. and it's been a journey. Essentially, a year, year and a half ago, we had our first prototype in silicon. There you go. X0. And this one we taped out with TSMC. We've also now done global foundries and that demonstrated that actually because when you operate electronics probabilistically, you can use far less transistors for these algorithms. You don't actually need the smallest transistors. And right now, the reason people have to go offshore is because the best cutting-edge fabs are all offshore and they have the smallest transistors. And so what we demonstrated is that in principle we can manufacture these chips in the U.S.

1:08:51And that was very interesting to all sorts of folks higher up. And we had some conversations and there's a very strong history of the government supporting the Silicon industry. I mean, Silicon Valley was founded.

1:09:07Vlad Tenev:They created the internet, right? Exactly, right? And now we're trying to go with, or I guess we're going with a modern twist where if the taxpayers are going to support R &D, they might as well get some upside as well and get some equity. And so this is what this announcement is about. It's with the CHIPS R &D office. And we'll get into it. In terms of where you want the first applications to be, it feels like different models are maybe sometimes designed around certain architectures. You see certain, like GPT OSS runs really well on Cerebris. And then you'll have another model that runs on an NBL 72.

1:09:52Vlad Tenev:It's like RackScale. And then there's other models that can sort of run locally or run on a Mac Mini or Apple Silicon. And there's all these different pieces of the puzzle. And increasingly, we're starting to see where voice models might be really good for those to run locally, but some crazy long-running AI agent might be fine to send off the server. Do you have an idea yet of where you think, if things go perfectly, the first application might be? Where's the sweet spot? Yeah, we've been exploring a lot of applications. Obviously, running the model itself, the transformer is a big one. What we found is that, and we have a blog post coming soon, I guess it's a scoop here, but we have a blog post coming on a sparsity scaling law.

1:10:35So if you sparsify your model, because our chips have a sort of sparse structure, so that means sparse is just, you know, print GPUs, they have big matrices, which are these grids. And basically every entry in the grid is busy, right? Like there's something going on. Sparse means there's a lot of zero. There's a lot of stuff not going, that's not activated. So our chips are really good at sparse operations. That's not originally what we're designed for. But if you really want to shove a transformer on our chips, you can do it. And if it's sparse, as long as it has the same number of parameters, you could reach the same sort of performance, which is interesting because for us, the flops are much cheaper per watt.

1:11:14So even though you use more flops, you get more intelligence per watt. So we have something coming out soon on that. I'm teasing it here a little bit. But overall, we're really interested in diffusion models, you know, models for predictive control, for defense, physical intelligence, signal processing, you know, stuff you would use an FPGA for. You want to use one of these chips. So, you know, we have RTX as investors for that reason and similar defense primes. I'm very interested.

1:11:44Vlad Tenev:How are you feeling about the retrospective on effective accelerationism? because it feels like my interpretation is that you were 100 % right at the time. And that class of models didn't really pose any real risk. There was clear need for a build out and diffusion of this technology. But now we're in this like new, the last few months, there's been a new discussion over literally slowing down, literally decelerating. And it's coming from inside the leading labs, not just like doomers who are outside. How have you reflected on what IAC was, its role now, just AI optimism versus pessimism, risk?

1:12:32Vlad Tenev:How are you thinking about all that now? Yeah, I mean, originally I wanted to just bring balance to the force. It was kind of a modern culture in Silicon Valley. It was just the doomer camp. And I was seeing the writing on the wall. If we just had the doomers, then that would eventually affect policy. And to me, it was a very biased view of the world. And so I think we kind of stretched the Overton window. It was okay to say no to doomers and say, that's a ridiculous model of the future, you know, great goof, all that stuff. But now, yeah, we've reached a point where the models are very capable.

1:13:06The EAC view to me is just like viewing the whole world as a complex self-adaptive system. And ever since the dawn of time, it's basically been PVP. Every form of life is becoming more complex and harder to predict. And then its adversary has to step up, get smarter in order to predict it, in order to compete. And if you do that slowly, then basically you can have a whole ecosystem. and everything's good, but if one thing becomes much smarter and much more complex than others, then it can kind of control others, and that's bad. And so I think stopping makes absolutely no sense. Pacing can make sense, but really it has to come with a really strong investment in, for example, cybersecurity and hardening things because you can't pause things forever.

1:13:52Essentially, you just want to be adversarially robust, and I'm all for that, personally.

1:13:57Vlad Tenev:It is very interesting reflecting on the Doom arguments, how they were like to your point about Gregoo and Foom, it was not as precise as cybersecurity risk, which some people were calling out. But the conversation was definitely distracted from the more practical difficulties around slop and overinvesting and bubbles and all these different things that are much more short term that America will need to grapple with to actually deliver a positive outcome here. How are you – is your development process being accelerated by AI? Oh, absolutely. We use all the big model providers in-house and we try them all.

1:14:50We have agents constantly running. For us, we have to speedrun deep learning. It's like you teleport back to 2011 and there's no AlexNet paper and you have to speedrun 10 years, 15 years of deep learning progress as fast as possible. But now it's like New Game Plus in a video game. You have all the power-ups. You have the AI. And so we're speedrunning progress very quickly. And we have online learning agents. We're training our own models as well, or post-training rather, sorry, as the cutting-edge companies do. And so that's very exciting to me that current AI can help bootstrap and kickstart the next paradigm, the next substrate.

1:15:35And going back to your comment about the cycle, My thesis was that GPUs are not the endgame. And so we want to invest in the current cycle, but we should hedge our bets. As we saw today with Leopold, Rip, you've got to hedge your bets. And I think if we're all in on GPUs and we don't invest in the next generation, the next paradigm of computing and have a couple bets there, then when that pops up, you're going to get wiped out. And we don't want that. And so to me, we're starting the next S-curve. We're starting the next cycle. I know people are not over the current cycle, but everything is cyclical.

1:16:10But it's my responsibility to make sure we can have build-outs in the future that are really power-efficient. And it gets you better return on investment on your capital, whether it's on Earth or in space or at the edge. yeah it feels like the one of the you know you've been one of the loudest biggest voices on on x for the entire time that we've been running the show we've you know had a bunch of your posts on the show over the years and it feels like you picked a you picked a product category that just by the nature of it was going to take time to evolve and i think like when i think back it's like the challenge of showing progress.

1:16:54I mean, this moment is massive, right? It's a vote of confidence and it's very exciting, but everything that it took to get here, meanwhile, you're getting like hundreds of millions of views from some of the, yeah, billions of views. And I'm curious, like, yeah, reflecting on the last two years, do you feel like you've found the right balance between like, you want to be getting attention and you want to maintain your voice, but you also want to be moving the business forward. And at any point, X and Teapot specifically, if they feel like those two things are not balanced, they're going to pounce and take shots and all that stuff.

1:17:33And I know you've gone through that, which is why I'm excited for this moment. But yeah, how have you processed it all? Yeah, no, it's been a journey. It's been a lot. Despite allegations, it was never planned to get doxxed. I knew I was going after a very much a deep tech moonshot that was going to take some time to cook. Exponentials are slow at first and then they compound over time. Could I have had a product that would have had a shorter time to market and use the heat to make it grow? Probably. But I was just dedicated to this one mission. I think it's the most important thing I could be working on and I've been all in since the beginning.

1:18:15But yeah, there's certainly a tension like building in deep tech where you're supposed to be in stealth. You have nation states trying to reverse engineer your technology and you're trying to just reveal the minimum because your secrets are your edge. But at the same time, you want to get buy-in. You want to shape people's beliefs like, hey, actually, this technology is here. It's coming. Here's a hint. Here's a prototype. Here's a nature paper. Here's this. Here's that. Here's some signal. we're going to have a lot more coming up next week a big announcement for Z1 and all those products around it including our stack.

1:18:47Vlad Tenev:I love that framing of New Game Plus. It feels like there's so many founders from the previous era who grew big like SaaS companies and are now sort of on New Game Plus moving a lot faster. It's a great formulation, great philosophy and thank you so much for coming on the show and breaking it down. Yeah, congrats on all the partners. We'll talk to you soon. Have a good one. Goodbye. 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.

1:19:19Vlad Tenev:Did you see that California startup Saturus unveiled a two-meter-tall centaur robot designed to enter disaster zones too dangerous for humans? There's no way this is a real picture. Sorry. Go to the website. I mean, Satyress, S-A-T-Y-R-E-S-S.com. So they made the demon robot to go into disaster. Imagine you're in a disaster zone, John, and through the fire and flames, you just see. Just kill me. Yeah, okay. I actually am in Hades. I'm in Hades. If this thing says no job is worth your limbs, that doesn't mean a job isn't worth doing. Do you think this is a prank? Do you think this is a joke? Or do you think this is a real company?

1:20:06I think if it's not a joke, then they got to go back to the design minds and do something else.

1:20:14Vlad Tenev:Human-like torso and arms allow for natural pull-off. On the website, it says this robot is more dangerous than it looks. Like, no, it looks dangerous. It looks very dangerous. I think this was vibe-coded, and I don't think it's a real company. Well, it's burning up the timeline. People are having a lot of fun with it. Anyway, we have Lulu Misservi from Rostra in the waiting room. Let's ask Lulu if she thinks this is a real company. Yeah, and the value of rage bait, the value of, like, fake launches. All right, Lulu, please look at this product, this new robot company, and tell us, give us your read.

1:20:51Is it real? Team, can we pull it up?

1:20:53Vlad Tenev:Show her the centaur robot that is absolutely horrifying. Yeah, I saw a glimpse of it. This is, like, the stuff from Nightmares. Like, imagine that you're a natural disaster and this thing comes to you through, like, the smoke and the flames. I think you would probably die of a heart attack if it could save you. Don't worry, human. I will protect you. Yeah, really fascinating. I think if they change the head, you know, maybe you could get it a little bit better. It looks like the canonical demon head. Like, this looks like the canonical Satan head when he appears in form on Earth. How did this originally hit the timeline?

1:21:33Vlad Tenev:Like, where did this? This just came out as if it's... Well, the whole world gets their news from prediction market social media accounts now, so... I guess. But yeah, it did go out on like a PR newswire. I guess Sotris robots, like, to answer the question... No, I'm curious. I want to have them on now. They say the horns are necessary because they place cameras there so they can see the position of all limbs and tools. It gives a layer of redundancy in case there's issues with encoders and on the actuators. That's what will make people like AI more, actually. It's that the horns don't have enough cameras.

1:22:05But once the horns are for surveillance, then people will come around. I think I saw an open letter about this. Yeah, they gave the demon robot a chainsaw, and they say the horns are completely necessary.

1:22:16Vlad Tenev:Yeah, yeah. Yeah. What do you make of the current startup launch playbook? Because there is a world, like there's all this speculation that Nathan Fielder is working on a new season of the audition with that boy band called Boy Throb. Have you heard this, Jordy? No. Boy Throb? Boy Throb. So it's a real band, boy band, that has been detained. And they've been making news, but people have been suggesting that Nathan Fielder is sort of puppeteering behind the scenes. And I'm wondering how far off we are from a startup just launching something that's intentionally rage bait or viral. And then sort of like pulling off the mask and saying, oh, well, we actually are doing a quadruped.

1:23:06Vlad Tenev:It doesn't look as crazy as this. This was just to draw a bunch of attention. Here's the final design. It feels like that would probably be a rough go because you've sort of violated the trust of the audience on day one. But do you think the right founder could pull it off? I think it's a really bad idea to just optimize for going viral. Okay. Why? Because viral comes and goes. What's that? Yeah. Yeah. Why? Why? It feels like it's such a badge of honor. So viral comes and goes. Like, you're viral for, like, 24 hours, 36 hours, good or bad. You know, I think for Leopold, maybe we could get to that.

1:23:44Like, by next week, people could be saying he's the goat again. People are just very fickle. And everyone is at maximum intensity all the time. 5X. No, I do think people have this idea of, like, if I can just go viral once, then I'll have a big business. And I think back with just building our show. like we had so many we had some big you know moments you know you can think of like the the soham pariks and there were big guests and there were things like that but the amount of times that we needed to go like moderately viral on x to build our audience was like 20 times more than i would have thought yeah that you needed to to build a media business and so yeah just trying to go doing something that will get you viral once and sort of a shortcut kind of like a almost cheating, which rage bait is like, wouldn't call it cheating, but, but it's like, you know, it's kind of, it's, it's kind of close to there.

1:24:41It's just short term and it doesn't actually get you the thing that you want, which is like derp sustained attention. Yeah, I agree with you, but it's also not just about viral versus not viral. It's actually about consistency. So if you are consistent over the course of a year, there'll be times when you go more viral, less viral. There'll be times when there's like some Tuesday afternoon thing that you do that catches the attention of 50 people, but it happens to be that one of the exact right people is among them. You just have to keep doing the same thing kind of forever. It's like getting fit.

1:25:10You don't get fit by eating nothing for two days and then lifting for two days straight. It's like you just have to go to the gym kind of every day for the rest of your life in order to be fit. And the same thing is true of relevance. Consistency in just keep doing it. It's not a one-time thing, but also consistency in like, what are you going viral for? It's like Ilya said, what are we scaling? What are you going viral for? Because if it's not going viral for the thing that you actually consider your true identity to be, now you've actually just gone in the wrong direction. Now you have to like overcorrect back.

1:25:45And so if you were consistent with the story and then with doing it over and over, that's a lot better than trying to put everything into one moment.

1:25:53Vlad Tenev:well said do you think we are at peak i forget what the word was i got asked this recently it was like uh are we at peak like transparency in terms of uh ceo communications because we're certainly at peak volume in terms of if i go back and i'm like oh i'd love to just like listen to 20 hours of podcasts from jeff bezos while he was in the middle of building amazon on, that's not really an option. There might be like a 10 minute hit on Charlie Rose and then a four minute hit on a letterman or imagine Steve jobs on Joe Rogan. Yeah. Imagine like, like Steve jobs on Lex Friedman for the third time.

1:26:40Vlad Tenev:And you're like, ah, that one I didn't actually get through because it's like now we're in hour nine. But, uh, I, but do you think we're at like peak, like maximum amount of just founder content and founder like interviews in terms of just the volume? It feels like this should be the peak, but I don't think it is. I think people consider it to be an arms race where now the peak is the new benchmark and benchmark. For a fun fact, I learned English from a book called English. So sometimes I still do stumble into like English. She read the book on English. I did. There's a book. It's called English.

1:27:23I read it. And then I knew English, like Neo in the Matrix. So forgive. Benchmark is the new peak is the current benchmark where it's like everybody is loud all the time. So if I'm launching and talking, I have to talk more and louder. but to your point, it's very different from actually learning new things. So I've seen the same CEO maybe go on 10 different podcasts and I still don't know what they're doing. Sure. Or like, is the six podcasts marginally useful compared to the fifth? There was one week when Demis went on like a whole podcast tour. That's right. And this is no shade to Sir Demis.

1:28:05This is like planned around he released a book or whatever, But it still was like, am I going to get anything new from the sixth podcast that I didn't get from the fourth podcast that I already listened to? And each one of these is like two hours. I'm really invested in time. Well, and the other criticism there is like that podcast tour and the book launch and everything coincides with them like completely falling behind the frontier. So now in hindsight, it's like maybe you should have been working on.

1:28:31Vlad Tenev:I thought you were going to say that there was no Rogan or Theo involved because that was the real criticism. Yeah, I should have done Theo Vaughn. He needs more Theo. Yeah. No, but do you agree that if you're advising a founder and the choice is between 10 tech podcasts that are going to ask roughly the same questions or 10 varied podcasts where one might be cultural, one might be more political, one might be business, one might be finance focused, one might be technology focused, that having more of a breadth. because there was a moment where the CEO started going on Rogan and Theo, and I was like, oh, this is so fresh and different.

1:29:09Vlad Tenev:It's just a very different conversation for them to have. It's not the same as a door cash or like a serious interview, but it just shows me a different side, and I like to see how they interact. Not every CEO is set up for it, but how would you solve that problem? So I would approach it from the obverse, like almost the opposite of what you said, which is if you have five podcast opportunities in front of you or five, whatever, publicity opportunities, and they're all different. Think about who do you actually need to reach? Like, what is the best use of your time? And if you don't need to reach the general population, and if you don't need to show some fun side of your personality, then it's less about finding a way to show your range, and it's more about focusing on what do you actually need.

1:29:48Instead of doing five podcasts that are all different, just cut the other three. The three that are either duplicative or are reaching people that you don't need to, literally just don't do them. I think CEOs need to be thinking about what is like minimum viable effort where I can get my vision and persona and build trust with the people that I need to without actually going on a press tour. Because at a certain point, the same way that it wastes my time to listen to the fifth podcast, it wastes you, the CEO's time to do the fifth podcast. Because the marginal value of one hour of your time there is like$30 ,000 or more.

1:30:25I mean, what's an hour of a CEO's time worth, right? The only thing that I would push back is I think the reason that you see some CEOs once they just get on this, the podcast treadmill, and then it's like every week new episode, is when you actually think of if it's a virtual recording and they're using one hour of their time, and even if all that happens, let's say the podcast is like decent size, right? Like top 25 tech podcasts in the world. If you have a hundred customers or potential customers that listen to that, I would argue, and they'll listen to the whole episode. I would argue that it is like well worth the time to go on, even if that's the only group that actually, and so that's why, that's why, that's why you end up.

1:31:11And it's like, it's, it's, unless you're in a period where it's like you actually don't want to share anything, then I think every incremental progress is like, is it a better use of time for the CEO to talk to a warm lead that's just coming in, talk to your customers, or talk to 100 customers and they listen to you talk for an hour in the sort of like passive sales motion, right? Yeah. See, that's very true. And I agree with you there. And the difference is we're making the assumption that it is one of the top podcasts that your customers are listening to and you're saying something that is going to be worthwhile to them.

1:31:49That is an amazing use of time because you use one hour or maybe on TVPN, you use like 20 minutes if you're a busy CEO. And then you get clips and clips and clips out of it. And you just were able to amplify the equivalent of having a thousand meetings into this setting where someone is able to pull better responses from you than you might have been able to give on the spot. That's true. But what a lot of CEOs also do and founders in general is just try to maximize for volume at any cost. And that leads to going on a podcast that nobody listens to. Going on a show that is actively detrimental to your vibes.

1:32:25There are shows where it's net negative. It's not just a waste of time, but you literally leave with a worse reputation than if you hadn't gone on there. Or just being boring, wasting people's time. Or you're making people angry and you're building a brand that you actually don't want. And now you have to put in extra effort to unwind the brand and walk it back versus if you had just been more focused in the first place. So I think that optimizing for volume and sheer quantity leads you down the road to all of these perils. Whereas if you're just focused from the beginning and say, here are the things that matter to me, here are the podcasts and shows and venues that I actually respect and people listen to.

1:33:02I'm going to focus on those. That's a better use of your time than just to go like hungry, hungry hippos with it. Yeah.

1:33:08Vlad Tenev:It's also sometimes cool when the CEOs are sort of like, I don't know, like almost kingmaking a little bit where they jump onto a show that hasn't hit that inflection point before it's obvious. And they take the risk of going on some small show. And then that show blows up and you're like, wow, that CEO went on that show that early. That's crazy. They took a real risk. Yeah, I think Elon did this with Lex very early. and there's a whole bunch of other examples. You know who loves doing that? Brian Armstrong loves doing that. That's right. And he went on TVP on when you guys had already blown – like this wasn't a show that nobody heard.

1:33:47Vlad Tenev:I think he was our first public company CEO, first Fortune 100 CEO. He was very, very early. And it was huge. It was great for us. It was cool. It was probably not in the first like 100 or 200 guests. Yeah. But definitely – I think you're right that it was the first public company CEO. to be going on there. A lot of public CEOs are so risk averse that they're like, show me. If Satya and Jensen have done it, I'll consider it. Otherwise, don't even bring it to me. Brian just never asked these questions. He just asked, do I like this thing? And so TPPN wasn't that early. Still a nice milestone. But he went on this one podcast called Pod of Jake.

1:34:24Vlad Tenev:Oh, yeah, I know Pod of Jake. It's a podcast by a guy called Jake. Yeah, yeah. It's a great show. Great name. He had like 50 listeners and he just liked it. Yeah, no, no, no, no. That's so cool. And Toby Lukey did that too with like some StarCraft podcast. which was like crazy. I was like, this is selection. This is taste. I know that like, you know, he was involved in this. This wasn't something that came through a committee, which is just so refreshing. The opposite of volume and, and the spray and pray do every podcast is, is like just being mysterious and having aura. Do we need to move to, I think of Jeff Bezos does it very well.

1:34:56Vlad Tenev:Jack Dorsey does it very well. Ilya Suskever does it very well. Do we need to move from a world for certain CEOs where instead of media training, we're doing mystery training where we are coaching them to be mysterious and have high or is that possible or is it innate with those people it's innate because people who are too thirsty for attention cannot help themselves like you can tell them i have coached founders to do less and there are some people who just cannot be held back because they get excited and that's okay you can be a very respected, excited, public-facing archetype. But what Ilya has cannot be taught.

1:35:35And in fact, if you tried to coach him to be the opposite, that wouldn't work. And Leopold is in the category too, where there are people who just are a certain way and then that reputation gets out and it benefits them. But this is why it's such a mistake for CEOs to try to copy another. Because if you just say, I want to copy Ilya and I want to be able to have a five-word tweet that gets 10 ,000 likes and everyone has us and whatever well you can't because you're not him you have to make this

1:36:01Vlad Tenev:new thing that suits you yeah yeah uh yeah it's always funny when uh when his tweets get completely taken out of taken out of context and people will be like wow like this is about asi it's like actually he's just happy about his family or something like that okay i'm sort of i'm sort of inclined to try to workshop some some ideas let's do it if if we were doing comms for situational awareness okay what's the next move it's an interesting situation yes because he was very very quiet right he basically had like a couple podcasts and a billion dollar a billion dollar literally just one a billion dollar pdf and then went on the most insane run all of his predictions coming true you know vindicated and then total annihilation uh in a very short period of time I think that one I think he's got to start kind of shit posting a little bit like you're going to advocate for the SPF like what I think it works I think it works well one SPF was different in that in that he was very he was always talking a lot this is like wildly different because he's been effectively silent and to come back you know maybe after the wedding and say, what did I miss?

1:37:24You know? No, I just, I think that he's clearly brilliant. Yeah. He, I think is, from everything I've seen, will probably be an incredible venture investor. And he'll probably -

1:37:39Vlad Tenev:Also, minus leverage, he's just correct. Like, minus leverage, his whole thesis is correct still. Yeah. Everything went up. It was just the leverage thing. Yeah. So one thing I think you should not do that now is start doing things differently. Because when people change how they operate, it shows that they're in a crisis. And obviously, it wasn't a good day. But there's a difference between market movement, portfolio management, versus repudiating your underlying worldview and your underlying long-term thesis. And so a couple of thoughts on my end is like, one, going direct doesn't mean you just have to tweet into the void or to the public.

1:38:15Like going direct can mean picking up the phone and calling your LPs. And the people that matter to him most today and always are the LPs. So if he can call the LPs or if he already has and make sure they understand two things. One, that day-to-day market movement and portfolio management, even in pretty extraordinary circumstances, don't change the underlying thesis and worldview. And that his vision for what happens in AI still stands. That's one. And two is that he has this kind of hidden jewel of his portfolio in private companies. This is an unusual thing that he does that he has access to and that what is happening in the public market is actually the peripheral padding around this really interesting core of his private investments.

1:39:01Now, people know about Anthropic, but he has all these other private investments that are super interesting that haven't even really hit their peak at all. And so if his employees and LPs know these two things, then I think it's like weather Twitter for a little bit and then come back and two weeks later, some other thing will happen and people will be like, he's the goat again. Yeah. And I also think that I don't know about institutional LPs. I don't know about that whole world, but I think knowing a lot of the founder types that are just allocating a very small amount of their portfolio to situational awareness, I think they give them another roll of the dice, personally.

1:39:45I think after that run, a lot of them would be like, yeah, I'll just, whatever I got out, I'll let it ride kind of thing. Just because, again, it's not like the underlying thesis has ever been wrong. It's a timing thing. And if you're just thinking of it as like, yeah, basically like, you know, high stakes gambling, then why not keep rolling the dice?

1:40:07Vlad Tenev:You've been through this, I think, loosely. I mean, you've certainly seen Scott Wu cognition come in as sort of the savior in a messy situation. And we were talking to Martin Scully about this, where Ken Griffin is starting to play this non-bank role of backstop lender of last resort. This was a situation where the liquidity crisis could have bled into the big banks, Goldman Sachs, Morgan Stanley, JP Morgan. It did not. It stayed within the shadow banking system of Citadel. And it's interesting because it feels like what Martin was saying was that Ken Griffin is beginning to position himself as like the next Warren Buffett.

1:40:51Vlad Tenev:In a crisis, he can be the lender that brings stability to the market. The market is up. And I'm wondering about your advice for founders who are fortunate enough to be in the situation where they are rescuing another founder, another business, a market even in this case. What is the right communication strategy where you are reassuring the world? With Scott, it was the social contract in Silicon Valley, in Ken Griffins. Yeah, one year ago. One year ago, right? But at the same time, you don't want to take too much of a victory lap and rub it in everyone's face. And you don't want everyone to believe, oh, well, maybe I can actually go and screw over all sorts of founders because Scott Wu is always going to be around to save the debt.

1:41:36Vlad Tenev:So how would you balance that? So the highest aura move is always to just chill and not make a big deal out of it. you know, like when you, when you see someone dance a little too much after getting a touchdown, it's like, Oh, this is someone who's not used to getting touchdowns. This is a big deal for them. Is this their first ever touchdown? But for the people who kind of like do a little something and move on, then you realize that they're just, this is just part of their day. And so, um, I think one, just not getting overexcited as if this is the best thing to ever happen to you by sheer luck.

1:42:11Two is, I think a classy way to approach this is to stand up for principle or to stand up for the other party. So in the case of Cognition Windsurf, Scott's instinct was to protect and stand up for Windsurf employees as opposed to some big treatise about here's why I did this and I, I, I. It was all about here's what Windsurf employees deserve. And by the way, you're not appreciating how talented this group is. It was all about defending them and about the social contract. So I think for, for Ken Griffin or anybody, the best move here is like, defend the principle, defend the people that you're trying to help, and then just don't make a huge deal out of it and be chill.

1:42:52Vlad Tenev:Yeah. Uh, and, and I loved that, uh, when, when Scott put that announcement video together, he was there alongside with the team. It was not all about him. Of course, that's his nature. He's a very humble person, but, uh, it would have been very easy to just say like, Like, oh, yeah, we can only schedule Scott for this video. And that's not what happened. And it was intentional very clearly, which was great. One thing I'll say, there's one thing that I've learned from Sheryl Sandberg. I don't know or I've never met her. I didn't read. Wait, okay, here's what it is. When I think that I'm going to super duper hate a book, sometimes I'll read it so that I can hate on it with more credibility.

1:43:29So, like, I thought I would really dislike White Fragility and Between the World and Me. So I made sure to read them so that when I hate on them, nobody can rebut because nobody's read those books. And so I thought I would super hate lean in. So I read it and it was okay, but there was one part of it that was actually really useful. And she was saying this in the context of women have to do this, but actually it's just anybody. And what she said was, if you are advocating for yourself and defending yourself, that gets totally discounted because it's just self-interest. But if you are able to do that on behalf of someone else that represents what you want, represents what you believe in, or principles that represent how you want the world to work, just that small shift allows you to go really hard on being full-throated about them in a way that doesn't get discounted for self-interest.

1:44:16And so same for any founder who's standing up for another person or for an idea or anything else.

1:44:20Vlad Tenev:Yeah, that makes a lot of sense. Well, Jordan, anything else? There was an interesting comms crisis and resolution that happened effectively in the last 24 hours. I don't know if you guys saw it. The founder shared out a picture of someone getting a tattoo. A tattoo! We told everyone that would get a tattoo of our logo. Again, a company, I'm not a big fan of logo tattoos in general. There's a few that I might consider myself, but I certainly wouldn't encourage other people. Wait, what are they? I think like a Coca-Cola across the back. I thought you were going to do a whole sleeve of the Bottega Veneta Roman Weave on your arm.

1:45:03Yeah, exactly. Like a sort of black. Something like that. But that's less of a logo. A Roman Weave sleeve. It's like if you know, you know, tap to. Yeah, quiet luxury. A Roman Weave sleeve. no I just saw this and I was like absolutely shocked that someone said this out loud basically a founder was telling anybody that got their again I think sub seed stage startup logo tattooed on them got guaranteed an interview which just felt like so so wrong they posted it everyone was like how did you say this out loud and then I saw the I think it got deleted but I saw the correction of like we're now paying for tattoo removal for anyone that um wait no there's another one i didn't see the paying for tattoo removal but he posted this like mea culpa tweet

1:45:50Vlad Tenev:that was fully written by claude did you see that no i didn't see that but uh i mean the steel man here i'm i'm not gonna give you the steel man helmet but the steel man is that uh there are people that just love tattoos and if you offer certain people free tattoos they will say yes because they just want as many tattoos as possible. Yeah, we don't know. Maybe he was at a tattoo convention. I've seen free tattoos given out before and people lining up. And it doesn't math for me. I'm not in the market, but there are certainly people who are just like, yes, I want more ink. I want more tattoos. If there's a tattoo artist here that I don't have to pay, sign me up.

1:46:28Vlad Tenev:You're going to have to get something silly. But yeah. That's true. There's like cyan with her andrel tattoo. But these were not people. She's a shareholder. Anderil didn't say, like, we're not giving you the allocation unless you get the tattoo. We'll only give you allocation if you get the tattoo. That was the thing. It's like, are you maybe exploiting desperate job seekers? And also, do you not have a different and better bar for whom you want in the company as opposed to the people who make the most rash, poor decisions in the moment? You're, like, optimizing for people who can't decision-make to advance in your interview round.

1:47:01so it obviously wasn't great but i think the real crime was the cover-up which was in this case yeah yeah i don't know if that's still up there but it was a slopology rough well good luck to

1:47:15Vlad Tenev:them hopefully they live and learn and hopefully those folks who didn't want the tattoo can get removed smoothly and thank you so much for coming on the show always great to see you Thanks, guys. Always great hanging. Talk soon. Have a great week. Cheers. We'll talk to you soon. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. Up next, we have Michael Kim from Sindana Capital. He's the founder, and I'm very excited to dive in to your story. Welcome to the show, Michael. How are you doing? Thank you. Great to be here.

1:47:47Vlad Tenev:Thank you so much. Great to have you. Would you mind taking us through a little bit of an introduction yourself, your background, and then what you're doing today to sort of set up the conversation? Yeah, so I started Sindana in 2010. It was specifically to focus on seed and pre-seed stage funds. The thesis was that these new super angels were starting to institutionalize and bring outside capital in. Guys like Mike Maples, Steve Anderson, Michael Deering, Jeff Clavier. And so we were very early in identifying seed stage investing as becoming de facto early stage investing. It took me 18 months to raise the first fund in 2012.

1:48:27Today, we have almost$3 billion under management. Our LP base is largely U.S. endowments and foundations. We feel like we are now solid LP focused on very early-stage venture. A lot's changed, and we can get into that. Overall, we are convinced that early-stage investing is still the way to go in this world of AI. Do you think that if you look back, you weren't even thinking big enough about how much the category would emerge? Because clearly the initial thesis was right. But in some ways, it feels like early stage venture has gotten bigger than anyone really could have predicted. Yeah, I mean, back then there weren't opportunity funds.

1:49:13People weren't standing up SPVs. I spent time with Josh Kushner when he was raising his first fund. He was talking about ultimately running billion-dollar funds. we were a little bit too disciplined perhaps where we didn't, we really wanted to have people play in the sandbox of seed. And so did not invest with Josh, did not invest, you know, in Ribbit, Mickey Malkus fund, you know, that's like a 50 X fund. So, you know, I think perhaps I was a little bit limited in how I was thinking about it. So exactly, you know, should have thought bigger. But, you know, the market's grown obviously, and there are probably 2000 seed funds now.

1:49:50And, you know, we're investing out of relatively large vehicles.

1:49:53Vlad Tenev:So, I mean, 2 ,000 seed funds is so much smaller of a pool than the broader startup ecosystem. And I'm wondering about what the day-to-day looks like. If you're familiar with the venture capital fund that might be having a founder stop by the office every hour, on the hour, every day of the week, and then partner meetings, and they might be taking thousands of meetings over the course of a year. what is your firm's day to day what does the heartbeat of the firm look like yeah well just to give everyone a sense of how we invest we want to be the lead investor so we're the largest LP in over 80 % of our funds so we work very closely with our fund managers we're always on WhatsApp we're talking to them we do monthly calls I would say also one way to think about this is you know it's similar in early stage versus is late-stage investing.

1:50:46Late-stage investing, there's a finite set of companies that investors want to be in. At the earliest stages, there's an infinite number because new companies are being started every day. That actually transfers as well or translates to what we do. There are always new funds being created, whereas if you look at the Sequoias and Excels and Index and Founder Funds of the world, that's a finite number that LPs try to get into, whereas we're actually discovering new fund managers. Sure. Sure. How many great new seed funds are born every year? Is it like two? That's a really good question. When you think about venture investing, when you look back throughout history, there's a very small number of companies every single year that really matter.

1:51:31And you got to get in those companies. And then if you look at all the venture investors that actually break out and build big platforms or just deliver really great results year over year or fund over fund, a lot of them got into those 10 companies. And sometimes all it takes is really getting into one in a significant way. And that's what allows their career to blossom. But I'm wondering when I, you know, we have six companies a day on to announce fundraisers, probably on average, sometimes a little less, sometimes more. And venture feels so competitive but when i really narrow in and look at the seed market like true seed practitioners it actually in some ways doesn't feel that competitive because i can kind of clock these sort of rising stars and i just know like i have a good intuition like this person is i don't know if they're going to back like two out of the 10 next breakout companies but i know they're going to back at least one and they're going to break out.

1:52:33But I'm curious how you view the market. Yeah. I mean, with a fund, obviously you get 20 to 30 shots on goal. And the idea is that we're indexing on fund managers that have access to amazing founders. And one good example that is Neo, Ali Partovi. He was the first check into Cursor, first check into Kalshi. He has cognition, he has deal, he has ramp, amazing track record, but he had a sourcing engine. He created this Neo Scholars Program, so he was going to Harvard, MIT, Stanford, CMU, all these different places to identify the top CS students. And I think right now we've been investing along this thesis that there's an arms race for younger founders.

1:53:15And part of that is AI-native companies, small teams can actually generate substantial revenue, so the next round is actually a growth round. And so that actually translates to some of our fund managers that really focus on finding young founders. So a good example would be Carlo and Coco at a fund called Nova. And they're 25 and 23 years old. Their third partner, Henry, is 19. They spend a lot of time with kids in college. We have Corey Levy at Z Fellows, all over the college campuses. And Josh Browder, he's a Teal Fellow. And he's on the selection committee, so he gets access to this. So you're absolutely right.

1:53:58Venture is a power log game. I think with fund investing, they have more shots on goal. And the other element dynamically is that one fund may be good, but the next fund actually might be better. And so it's multiple layers. And so what we have to do is track who are they investing in, how these companies are performing, and then decide whether we continue on with them or not. And, you know, NIO is a very good example of one that we have continued to invest in since fund one.

1:54:30Vlad Tenev:If you want to be the anchor LP in a new fund, you're excited. What does it actually take to win that allocation? Is it different than winning a seed stage venture round for a startup? Are you identifying value add or strategic advice? Like what is your pitch to new fund managers? I imagine it's like there's way less scarcity and there's way less urgency. Yeah, that's absolutely correct. Yeah, I mean funds are raised over a period of time. They're not raised in a week, so there's not competitive term sheets, et cetera. I think one of the things that we benefit from is that we know what we want.

1:55:12We know what to look for. We have good pattern recognition. So with Kirsten Green, her first fund,$40 million, we were the first to commit. We did$10 million, and she was off to the races. And I would say that because of the 16 years of pattern recognition, we kind of know what we want in a fund manager. Again, it's indexing on people who have amazing access to tremendous founders. Obviously, we want to see some picking ability or proven picking ability. We've never invested in a first-time investor, but we've invested in plenty of first-time funds. We think that networks and domain expertise have a shelf life.

1:55:59You could have been the VP of whatever at Google 10 years ago. That's not as relevant today. Unless someone has hustle and they're building on those networks and they have the intellectual curiosity, I think that's what we also look for is sort of like the it factor. Yeah. Are you – so maybe to try to repeat it back to you, is like volume of deal flow and access your preference over like just raw picking ability? because when you think of like Z Fellows and Neo, sure, they clearly can pick great companies, but it's also they just have like insane, they have insane access, right? They've built these sort of like pipelines of talent and that feels almost easier to bet on.

1:56:44But then you have other investors who just like clearly know how to pick winners. We have a buddy who like, I think the first two companies he ever angel invested in, like both became unicorns. And so he has like, clearly has access and picking ability and a little luck, but you definitely need that as a VC. Yeah, I mean, luck is definitely part of it, but you've got to be in the right rooms. So we're investing in this one guy. He worked with Nat Freeman and Daniel Gross. He's a very smart person. I can't mention who he is because he's still fundraising, but he's someone who has the intellectual curiosity.

1:57:19He's seen what great could look like. He's learned from really good investors, and he's in the right rooms. Now, do we know if he's going to be an amazing fund manager? No, but he's got the ingredients there. To your point, because there are so many companies being formed, you've got to be able to have some sort of competitive advantage, some sort of discernible edge in finding these and accessing these founders. Carlo and Coco, for example, have that. They have the hustle. They're in the right rooms. they have the right access, not only just at the founder level, but also with Sequoia and the downstream capital.

1:58:00Mm-hmm. Sure. So how much do you value if someone's a former founder? Because a lot of people like to talk and say, oh, yeah, former founders make such good investors. But when I think about it, some of my favorite investors across stages have never started a company. They've never had a job other than, you know, just looking at deals and trying to pick good ones. And that's it. Yeah, for sure. Like Mike Moritz, right. Legend was a journalist. and Bill Gurley. He was an equity research analyst. I will say at the earliest stages, a lot of our fund managers are actually ex-startup people or operators.

1:58:45That's because if you're a founder, you want someone who can actually help you. I know it's a total VC meme that, hey, how can I help you? What kind of value can I add? I think at the earliest stages, founders do want that help. even the best ones, although they probably don't need as much. But if you look at late-stage investing, they're typically ex-investment bankers, consultants, and lawyers. So there is some sorting, and we do see a lot of ex-founders. We actually have current operators. We're invested in Ahmad's fund, CEO, founder of Mercury. And that perch gives him really great perspective, and he's a founder of Magnet.

1:59:23People want to work with him.

1:59:24Vlad Tenev:Yeah. Can you give me a little bit of history on how venture capital alternative investments became attractive to LPs, endowments, universities? We often talk briefly about the Yale model. How real is that as a story that gets told? What were the other key turning points in endowments sort of waking up and starting to allocate towards venture capital? Yeah. David Swenson at Yale, legend, he obviously pioneered the endowment model of having significant exposure to private markets. I think 60 % of their endowment is private markets, including private equity. But I think 25 % alone is to venture.

2:00:10And you mentioned a word that I think describes venture. It's about stories. If you think about asset allocation and small-cap value investing or these public funds, the standard deviation of returns is pretty tight. In venture, because of what we just talked about, power law, a handful of companies do generate most of the returns. I think a lot of endowment and institutional LP types get attracted to those anecdotes. I think for kids, the Facebook movie actually inspired a lot of people not to just go down the Goldman Sachs, McKinsey path, but try to do something new. And so it is narrative-based.

2:00:55It's anecdote-based. But when it hits, it really hits. I mean, I don't think Neil will be upset for me saying this, but they had$4 million in Tekashi. It's worth$1.5 billion. Wow.

2:01:08Vlad Tenev:Seriously. Yeah, that's incredible. Yeah, wow. um that's wild he's goaded um going to the midas list um the another question for you how much time how much time do you spend looking through a fund's portfolio and trying to apply or understand what you're like a real like fair value to different assets because as as an angel investor I've done like 70 some odd companies. And there are companies out there that I'm up like, you know, 10, 15 X, and I believe the company is probably a zero, right? And knowing the way that the venture game is played, there's a lot of, you know, I'm not in the venture business, right?

2:01:55So I don't have to report to anyone. I'm just like, I do it for fun and I enjoy learning from the process. But I know there's venture investors who are out there in the same exact situation, and they're not exactly probably raising a hand and being like, Michael, I know I'm up 15x here, but I'm probably getting wiped out. Yeah. I mean, there's a couple things around that. All the SaaS companies and vertical SaaS companies in 2016 and 2022, before ChatGPT came out, we call those the messy middle. Those are companies that raise probably at 50 times revenue, maybe at a billion or more. And today they might have$100 million in revenue, growing 10%.

2:02:40You look at the SaaS apocalypse, you look at the re-rating of software multiples to three and a half times. Those companies are probably, at best, worth$300 million to$400 million. So the question then becomes, have our fund manager, and everybody has those companies in their portfolio, But have the fund managers been proactive in marking things down? We've had fund managers, for the most part, be proactive and mark things down. We've had other fund managers that haven't, and we know that those are unrealistic marks. The other thing that we do, just to give you a sense of this, is when we diligence a fund manager for the first time, we are very founder-centric.

2:03:21So we'll call all of the founders that they've ever invested in and really get a good sense of like, can this person help you or how does they help you? But also importantly, and this gets into some of the inside football, a fund manager has to come to us with a plan, right? Portfolio construction. We're going to invest in 20 companies. We're going to invest a million dollars in each. What we do is we assess the credibility of that. So if you're an angel and you're getting$25K into a bunch of companies, that's one thing. But if you're running an institutional fund and you're saying to your LPs, I'm going to get a million bucks into each company, that's what we want to hear from the founders.

2:04:01So we run a very founder-centric diligence process. Yeah, my best ever investment is roughly at 150X to 200X right now. and I would love to think about a world where I could have, I put 25K in. I would love to think about a world where I could have put a million in. But like, honestly, at that time, this was a few years ago, 25K was the, like I was begging for 25K. So I could never go out and be like, yeah, like a million.

2:04:33Vlad Tenev:There was someone else. They wanted to give me a million. I turned it down. I was like, no, it was like I was getting the last slug and I'm very grateful for that. But yeah, that's... You've got to fight for that allocation. It's so interesting to think about the path into building the next site. I have those regrets too. I've invested in two of the three best venture returning funds ever. We're not in lowercase one, but we're involved with lower carbon now and I've known Chris Saka for probably 12 years. But the other two funds are Founders Fund 2, which I'm in personally and also Blockchain Capital 2 which is Brad and Bart Stevens so Founders Fund 2 is approaching yeah Founders Fund 2 is probably going to be a 300x fund I think Blockchain Capital right now is a 157x fund and it's on its way to being 250 and Chris Sacco of course was 204 so I didn't realize FF2 was that good SpaceX it's amazing amazing no it was a lot yeah yeah not having more in those yeah wild but uh yeah thank you for coming on thank you so much for talking about the anti-portfolio the wins the losses this is like what makes a great interview so thank you so much it's been a lot of fun yeah i appreciate it we'd love to have you back on and talk more about venture the different landscape how rounds are changing how fun yeah next time what what what i think what we would appreciate because you have a bunch of interesting data is like a regular interview where you're talking about the current actual market dynamics from an LP standpoint, because like super getting that kind of read all the venture stuff and the venture deployment is, you know, a lagging indicator typically of, you know, LP activity for, you know, historical LP activity.

2:06:21So this was great. I appreciate it. Yeah.

2:06:24Vlad Tenev:Thanks for having me on. Yeah. Have a great rest of your day. Have a great rest of your week. And we'll talk to you soon, Michael. Thank you so much. Let me tell you about Cisco. Critical infrastructure for the AI era Unlocks seamless real-time experiences And new value with Cisco And our next guest Is June Sung Park From Simile Co-founder and CEO With a huge fundraise June, how are you doing? Welcome back to the show Hi everyone, great to see you all Great to see you Dude, you've been cooking It must be about a year I don't know. It's blown by, but congratulations. Why don't you give us the news first because it's the first gong hit of the show.

2:07:10Vlad Tenev:I got to warm up the gong and then you got to tell me what happened. How much did you raise? We raised$200 million at$2 million.

2:07:21Vlad Tenev:Thank you so much. So where is the company today? Take me through the footprint. How big is the company? What really unlocked this new round? So the last time I was at TVPN, I believe it was about five months ago. Since then, the company, literally the team itself has quadruple. And one amazing thing that we're seeing here is the pure market demand. The Simile is a company. It's an applied AI lab that is creating foundation model of human behavior, where we create models that can predict human behaviors across different market segments in the future in the multi-agent simulations. And this particular area of study and model is seeing extreme amount of demand across retail.

2:08:05So we've been working together very closely with CVS, but other Fortune 10, Fortune 50 retailers, but also in finance, in some of the largest financial banks that are out there today. and also in CPG companies and more. So the market demand has been incredible. Demand for AI products is insane everywhere. And clearly no different here. How are you grading yourself? Because it sounds like this feels like the product, the kind of product where like the value prop, if the product works, is like almost too good to be true, right? Try to understand people's future actions so that you can better serve them as customers and all that kind of thing.

2:08:48And I feel like humans want to believe that they have free will and you couldn't possibly predict my next move, June. I'm too unpredictable. I'm sure you disagree. But how good is the product today and how much better can it get from an accuracy standpoint? And on that, what gets a CVS or one of these big logos confident in your product where they're like actually changing their roadmap based around your data? That is a great question. So there's a technical side and the market side. On the technical side, today we may have already seen many models that are trying to be amazing reasoning models.

2:09:30So many of the labs are working on this. So they would go to more core skills of the world, get expert data in coding, natural sciences, mathematics. These are trying to solve the objective problems in our lives. Similarly, doesn't actually care about any of that. The models that we create are models that are trying to be as human as possible to actually represent the human values, preferences, taste, all the subjective half of human brain. So what we do is we get into a partnership with places like Gallup of the world that are amazing at creating a representative sample of human population. And we try to understand what is the real behavior and distribution of our human population.

2:10:13So really, on the technical side, the success here is can we predict that distribution? Can we predict people's behaviors? And can we represent them at the scale that we want? The vision here is to actually represent all 8 billion people along the way. And we're very much going aggressively towards that momentum. And right now, we are representing tens of millions of people as we speak. So that's the technological side. How much? Yeah, yeah, continue.

2:10:40Vlad Tenev:I have another question, but continue. And of course, on the market side, this technology is now having real impact. So we've been in deployment. So we're obviously a fairly young company. However, the simulation technology has been in deployment in some of the largest markets in the world. And companies are making real decisions. They are usually starting from actually replicating what they know to be ground truth, the studies they have run, the behaviors of their customers they're aware of. Now we run them in simulation. We see that they replicate with extreme accuracy. And once they replicate, we go on to test new markets to basically help them test pre-deployment testing on new markets, new product, message testing, and actually show ROI on those predictions.

2:11:24Okay. Very, very cool tool. Sounds like it's working. This feels like there's one scenario here. the sort of sad scenario is like big companies get access to the crystal ball that allows them to just like compound their scale and their growth and their customer bases. And they have access. You're building like predictive super intelligence or predictive intelligence. The biggest companies in the world have access to this. Meanwhile, the like long tail of, you know, Shopify brands and smaller companies are just stuck, you know, guessing. I'm super curious. Do you think there's a product to be built that, you know, the long tail of companies can leverage to get access to that same intelligence?

2:12:10Because I feel like a big company can afford to spend$20 million launching a new product and like swinging and missing. So they have the advantage of scale and being able to take different shots on goal. And they have this sort of like base of successful products, whereas you have a young startup that's just trying to get off the ground and you have maybe one, two shots to make something, you know, thinking about consumer brands. If you're a consumer brand and your first or second product aren't a hit, like you're probably not around to launch the third. So I'm curious about how many people you can get this to.

2:12:42So this is a great question. I would actually look at this as the way to democratize access to people. If you look at how Insights really operates today, if you're a large enough company, you have a budget and you have access to your customers to go after those customers to better understand them, to actually talk to them, get their feedback. But especially if you're a younger company that is small, that doesn't have a big budget, that is very cost prohibitive in many ways. Simulation is the way to get access to people in a scalable way. So it is actually a way to democratize this function. You can also think about this from the people's perspective, people who are represented by simulations.

2:13:20There are so many decisions that are being made today where we would love to be able to listen to people and actually see and get their feedback. However, in practice, it's very difficult. You cannot actually go talk to millions of people every time you need to make a decision. But if you can create simulations of people, then that is representation at scale. So in the grandest sort of scheme of simile, what we are really trying to achieve is to bring human voices to the rooms where the most important decisions are being made or our society. And what does that actually look like in practice? Is that like, uh, people are developing a product.

2:13:57I'll get, I'll use like a big CPG company. They're developing a product and they can actually like pitch, uh, like effectively, like, like I'm wondering how much this is like tech space right now versus actually conversational. Like, can you simulate talking to your customers. I'm sure the YC folks would laugh at this, like stop simulating talking to your customers and just talk to your actual customers. But it feels like very valuable. You know, there's every founder's had the experience of like having a big customer meeting and it either going great or not going great. And sometimes you wish you could have like just done a bunch of simulations of that conversation before you actually went into it.

2:14:41So what is this actually like? How are people interacting with the product now and where will and what are the other kind of interaction formats of the future? Truly, right. So our customers come in, and what they see is an interface that allows them to filter down to a population of their interest. So they can describe the population to be whatever they want it to be. Let's say male living in California in their 30s. And then they can literally ask any questions. That can be a behavioral environmental question. What about male podcasters in their 30s in California? You know, you must have guessed, you know, I simulated both of you before coming on today.

2:15:18You did that last time. Just like last time. You're like, we've had this conversation thousands of times. This is my thousandth first time I'm having this conversation with you. Yes, yes. But our customers can literally filter down to any population of their interest and they can ask questions. It can be survey form. They can also send images, if it's image asset, videos, if it's a video like advertisement. It can even be a product demo, whether it's a Figma or real website. And our agents will actually traverse through those websites and Figma mocks and basically give feedback once they have seen it.

2:15:55Now, that's how the product is being leveraged today. But one of the things that I also find to be quite exciting is as agentic development goes much more prevalent, the cost of production is going down every single day. Now, the real alpha in that case really is to understand what do people actually care about? We can generate 10 ,000 variations of this product. Which one actually matters to people? So in that way, Simile also has an opportunity now to actually inform not just human decision makers, but also agentic decision makers who have delegated power from real humans. So this is done through MCP, API.

2:16:34These are the kind of products that are also getting built instantly.

2:16:38Vlad Tenev:So, yeah. Oh, okay. Very interesting. Thank you so much for coming on the show. Congratulations on the progress. Really, really awesome. Yeah, one of the most, I love how sci-fi the company is, but also grounded in practical business objectives. Yeah, that's a great way to put it. Yeah, it's like very, very sci-fi, but then it's like CVS is a big customer driving actual value, which is great. Next time you come on, I'm sure it'll be soon, given the trajectory. but I want you before the conversation to predict, you know, 10 questions that you think John would ask 10 that I would ask. And then, and then let's, let's compare at the end.

2:17:20I have a feeling you'll be able to get at least like 60 % accuracy. Yeah. But this was great. Well, thank you so much for coming on the show.

2:17:28Vlad Tenev:Congratulations. Talk to you soon. Let me tell you about Shopify. Shopify is the commerce platform that grows your business. Unless you sell in seconds, online, in store, on mobile, on social and marketplaces. And now with AI agents. And our next guest is in the waiting room already. We have Karen Concher from K2 Space with an amazing update. How are you doing? Here he is. Good to see you again. He's back. You're back. Welcome back. Give us the news. The gong's warmed up. I want to hit it again. Yeah, so we just announced a$500 million round. Congratulations. Congratulations. So for anyone living under a data center here on Earth, what's going on in space?

2:18:08What's the latest on the space economy? Anything happening? Any big deals? Not that much. It's been a quiet year. You know, a lot of like seed stage investments, nothing much going on in space this year. But no, yeah, we started K2. We want to build giant satellites. Since the last time we talked in December, we flew our first giant satellite. We called the mission Dramatis, if you guys remember. And it's gone well. We're 120 days in. We proved that we could do a lot of really hard things. And yeah, this round comes on the back of that.

2:18:37Vlad Tenev:What was the very first satellite that you thought about putting up in terms of actual use case? Like if I go back to the very first deck or memo you put together, obviously there was a vision for building satellites, putting them in space. But were you thinking cameras or Internet or data centers? Or like what was the earliest prediction? So when we started the company in June of 2022, our pitch deck was all about Starship. And it was all about building physically what's the largest possible satellite you could build using Starship. And we were thinking about data centers, we were thinking about orbital fuel stations, we were thinking about giant telescopes.

2:19:17And our pitch deck, to show you how wrong we were, we were like, oh yeah, in 2024 we'll be using Starship on a monthly basis. A little bit wrong on time in there, but it's all right.

2:19:27Vlad Tenev:And those delays, I mean, there have been delays, everything. I mean, the video of Starship Landing that dropped like a week ago is incredible. Everyone's like, I can't believe this isn't CGI. Are you set up, do you set up your business to be insulated from those delays? Is the overall space economy broad enough and diverse enough that at this point, slight delays, everyone sort of adjusts, all the different actors from employees to investors. No one really freaks out when there's a slight delay there because everyone prices it in. Yeah, we got fortunate. We had a few very smart people tell us in 2022, maybe don't go full send on Starship.

2:20:06Vlad Tenev:Okay. Yeah. Thankfully. And so we built something that's compatible with Falcon 9, our entire business. We announced that we also cost a billion dollars in signed contracts. All those contracts are tied to Falcon 9, right?

2:20:23Vlad Tenev:That's a big number. So I have heard, I think we've all heard the pitch of lots of small satellites, potentially data centers networked together. We've all seen how well Starlink works. It's an incredible technology. And it's an incredible technology because it works with Falcon 9. It also works with Starship. But is there an actual use case or a world where you see basically the starship fairing filled with just a single satellite, some huge thing that goes up, stays there, and it's massive, and there's benefits of the scale to that degree? Yeah, I think for us, at least we're going to use it for proliferation, like lots of big satellites.

2:21:05I think there's probably some military use cases that might get interesting where you go even bigger and maybe fewer per starship. but for the most part we're going to stick to like okay let's put up like 50 of these in a starship and think about how to max out how much power per satellite and power per launch vehicle sure um maybe on the telescope side like it starts to get like giant giant telescopes

2:21:24Vlad Tenev:but even those with the hubble like you can usually like assemble things in space which sounds even more complicated than anything else but uh but it has been done before like the iss didn't go up in one big piece it was assembled over time uh which is uh remarkable to think about. But congratulations. Walk us through the energy density or energy, the power output that comes from these satellites, because there's this big vision that Elon's been very good about laying out. The timeline, you know, who knows, might slip or whatever, but there's this idea of like gigawatts in space that would be meaningful to the AI inference market.

2:22:04Vlad Tenev:But there's clearly going to be a walk, crawl, run. Starlink has a certain amount of power. We've seen that that can work, but what is the scale up and build out of just getting more energy in space before you start running into crazy heating and what the solar capacity can be? Yeah. I mean, power drives everything in space, right? If you think about communications, power drives how much throughput you can put down on the ground. It drives the strength signal. If you think about compute, power drives how much compute you can host. It is like the fundamental metric that kind of ties of every development to.

2:22:36And so, you know, I was telling people, like, four years ago we started this company called the K2 because we wanted to help make humanity a type 2 Kardashev civilization, right? Like one that's able to harness massive amounts of energy, right? Our hallmark is a Dyson sphere. At the time, I had to explain, like, what is a Kardashev? Right, like, nobody knew what that was, and now everyone, Elon, is like, I know exactly what that is, I know how it works. And so for us, like, the whole idea is keep pushing the bounds of power so that we can have even more compute. We can have even more comms. And over time, like every single infrastructure play we're going to want to do in space is going to tie back to power, maybe a bit of mass as well.

2:23:12But like all of those require going built, you know, building bigger effectively on heat radiation in space.

2:23:20Vlad Tenev:That's been sort of one of the sources of like fear, uncertainty and doubt around the data center in space plan. There's I've seen really thoughtful takes from scientists on both sides. My question is more on where that intellectual property, that R &D, will happen. Because if this were 50 years ago, we'd probably be like, it will be done at DARPA and NASA, and it will be in the public domain, and every company will be able to benefit from it. We're now in this world where some of that might happen at SpaceX, and that might be sold or licensed. But are you going to be working on that particular technology?

2:23:57Vlad Tenev:Do you see multiple companies creating standards around it? Or is it just sort of a horse race between every company where everyone will have their own solution? Maybe the best one wins. How will that play out? Yeah, I think the evolution is going to be there's a conventional way to solve the thermal problem, even at the 100 kilowatt class satellite, right? Like you can do it with the existing technology. It's just an engineering problem more than a physics or R &D problem. Over time, I think we're just going to get more optimal. and we're also going to be pushing up power more and more where everyone's going to try the new science.

2:24:27So I do think you're right. We're going to see a massive amount of capital investment invested in managing thermal and space in a way that was never going to happen in a world where NASA was the only one pushing the R &D forward. I think it's going to be pretty cool. I think we'll see how different strategies play out. For now, in the next five years, I think it's going to be relatively conventional. It's just engineering that's solving some problems that should be solved.

2:24:51Vlad Tenev:Yeah. Yeah. I feel like a lot of maybe it's all hard tech, certainly space companies, they sort of go back and forth between the dual use opportunities. They'll do some government work for a few years while the commercial sector sort of catches up. Then they'll flip it and all of a sudden the revenue will be 90 percent commercial. Are you on that sort of roller coaster as well? Do you see you do you see the company going through phases of, well, we're doing a lot of government contracts, but we ultimately want to have a big commercial business or vice versa? How do you see the trade-offs there playing out?

2:25:23Yeah, we've always seen it as like both, right? Like I'm going to be about 50-50 in our business. Like the first big contract we announced this year was a massive commercial contract for 30 satellites that we're going to deliver in 2028.

2:25:34Vlad Tenev:Yeah. The second contract after that was partnering with Andrel on Golden Dome. Sure. So for us, the whole goal is to be able to build this like super performant platform that we can use for national security and commercial. Yeah. Yeah, that makes a lot of sense. Do you think hyperscalers and big telecom companies over time will feel like they need to in-house space in a more meaningful way? Like right now it feels like having a specialized partner makes a lot of sense. But then as space becomes a more important part of like, let's say, cloud and on the telecom side is just like general communications.

2:26:13Like you'd imagine them thinking like, wait, we should try to buy a company like K2 because this is too important for us to just be entirely reliant on an external partner. I can see it going both ways, but I'm curious your view on it. 100 % is going to be a mix, right? If you look at like how comms and compute happen on the ground terrestrially, right? Like Meta is rolling out their own deep sea fibers, right? You know, Google's partnering with certain neoclouts in a certain way. And I think the exact same thing is going to happen as we take those applications and put them in space.

2:26:45Vlad Tenev:Yeah. It is funny looking at the Mag 7, I guess Mag 8 now, if you include SpaceX. Like if the question is just like going up high, doing things off of Earth, like Google has the balloon project and Facebook was doing solar powered planes for a while. Bezos obviously has Blue Origin and Amazon. Not directly linked, but there's a play there. And so the big tech companies are certainly waking up more and more doing deals, but also having stuff in-house and outside. It's a fascinating market watching it evolve. Yeah, it's interesting to compare launch to just the frontier labs. A lot of people realizing like, whoa, it's kind of it's interesting not having a frontier model and being reliant on another partner.

2:27:28And then on the space side, it's like, hey, we don't necessarily want just one highly competent launch party. Yeah. Or sorry, launch company. Yeah.

2:27:37Vlad Tenev:And we've seen that with Rocket Lab and a bunch of other companies in the space economy. But yeah. I think that's the coolest part about this, right? Like we're seeing like a purely capitalist reason to go invest tons of capital in things like launch vehicles. Yeah. Right? Like that's something that didn't exist five or even 10 years ago and, you know, outside of SpaceX. Right? So I think that's probably one of the most fun dynamics of this whole orbital compute dynamic that's happening now is everybody's like, wait, to your point, hey, launch is just like a model. And if I'm the only one that has it, I'm going to be in a lot of trouble.

2:28:08Yeah. Well, congratulations. And I can't stop thinking how you're kind of office studio mogging us right now. We have a pretty big space here. That trust. You have a K2 space.

2:28:19Vlad Tenev:Yeah. It's amazing. Go bigger. Go bigger. Go bigger. Excited for the next one. Great to see you and congrats to the team on all the progress. Yeah, thanks so much for taking the time to come chat with us. Have a great day. Cheers. We'll talk to you soon. Let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Just do it. Stop making excuses. Up next, we have Vlad Tenev from Robinhood. He's the co-founder and CEO. Back for the third or fourth time. Vlad, how you doing? Welcome back to the show. What's up, guys? We got new sound effects.

2:28:51Vlad Tenev:We got new sound effects. Great to see you. How's it going? The market's in turmoil. There's obviously crazy news with situational awareness, but how are things going in your world? Things have been strong. We announced earnings and we had a really strong quarter. Record revenues,$1.31 billion. Total platform assets, all-time high. over a 30-year-old. I'll buy you. Yes. And we had more records on trading. So records, again, with equities, options, prediction markets. We launched Trump accounts as well as Robinhood chain and tokens. So we're doing a lot of stuff. I think the thing that I'm most excited about is wrapping everything together.

2:29:43I don't think any company is pushing broad individual ownership as much as Robinhood is. I think that's important, not just for individuals, but also on a societal level. I think we're in a very fragile spot right now, and plugging more people into owning real assets, giving them more of the upside, more of the benefit could lead to a more stable and prosperous society.

2:30:13Vlad Tenev:How difficult is it to actually, when you say unify everything, I imagine that there are regulatory considerations. There are also just UX trade-offs that feel like, I don't know, it feels like it's more human taste than AI. It feels like it's not so much like the code that goes into the app, but real decisions about the hierarchy of different products in your app on the website, for example. how much of your time is spent thinking about the like the Robin Hood super app like how you actually design these things how human is that versus you can sort of a b test your way there we spend a lot of time thinking about that and you can't a b test everything right like you can't a b test the name of the product the front door what's on the app store pages yeah so yeah I'd say up until a couple of years ago, we were very much trying to rev up the product engine, putting all the pieces in place.

2:31:21Now we've got so many pieces. We launched 13 new products at our previous event. The world is flat and an increasing amount of time is spent on kind of this coordination and how many apps should we have the main app, like what goes into it? How do we surface the right things to the right people? How do we push personalization? So yeah, I spend a lot of my time on that. So we've been in this AI, the bottleneck cycle, the age of bottleneck investing is probably not over, but symbolically maybe over with the situational awareness situation today. But something I think that there's a lot of American retail investors that for the first time was like, oh, wait, I want to own this Korean stock or I want to own this Japanese stock because this toilet company is in the bottleneck path.

2:32:19How is that changing how you're thinking at Robinhood? Obviously, you want to make sure that if there's an asset that investors want to buy, like your job is to make sure that they can do that. But markets are complex and, you know, all these regions are quite different. Yeah, I mean, I have many thoughts. I think that, you know, we were hearing from customers that they wanted Korean stocks, right? And so international stocks were one of the features people wanted, but I don't know, it was probably like top 15, top 20. It wasn't one of the top features. And then suddenly, maybe last quarter, every single conversation I would have, people are like, when are the Korean stocks coming?

2:33:13Why can't you bring them faster? And then you saw some of them started getting ADRs listed, leveraged ETFs. And I think I had two minds of it. One, obviously, we intend to offer every asset. If people want to trade it, we'll offer it to them to trade. But also when you start hearing that everyone wants Korean stocks, it should raise alarm bells that maybe something could be slightly overheated, at least temporarily, which I think is what ended up happening. I think it's interesting, too, that Ken Griffin is in the middle of this. A lot of respect for Ken Griffin. You can tell he has a pure love of the game, loves what he does.

2:34:04Maybe in the way that Pavarotti is the art of the opera singer and Trump obviously makes deals. Ken Griffin provides liquidity in the most challenging and uncertain of times. So, yeah, him being in the middle of this, buying the Constitution. Yeah. Yeah, I thought that was very entertaining. I view him as like a shark, like a very large shark, like a megalodon that has an important role in the ecosystem where sometimes he, you know, is, you know, you maybe don't want to be. being fed on by the shark. Well, this is just the second or third time that he's been like the final

2:34:55Vlad Tenev:boss of tech stories where the constitution, Dow, all the energy was in tech. It was this thing that happens. And then at the last second, it's like, let me introduce you to Ken Griffin. And then the same thing with the situational awareness story. It's like purely a tech story for, you know, months and months and months and the domain of Twitter and podcasts. And there's like one or two Wall Street Journal articles about it. But then all of a sudden it's Ken Griffin at the very Yeah, how about a month or two ago, there was like this sort of narrative bubbling that like the West Coast had just like eaten the East Coast and like the East Coast was having less relevance.

2:35:30Right. And you can see this in the performance of all a bunch of the hedge funds on the East Coast. You look at their performance relative to Leopold's and you're just sitting there like, you know, what is what's what are they doing on the East Coast? Are they just sort of asleep at the wheel? And then, you know, the events of the last 24, 48 hours, or at least since Friday. have shown that like yeah maybe the east coast like has learned a lesson or two about the way that that markets work in these cycles and um and i feel like robin hood's been in a position where it's like very much a west coast company to me but at the same time you guys have i think now at this point like probably more respect than any west coast tech company for traditional finance and that whole world.

2:36:16So I'm curious how you, did you ever kind of like buy into that narrative that tech was eating finance or did you always see it as just wishful thinking? I mean, I think certainly there's some truth in that technology, which had at its epicenter, Bay Area, Silicon Valley has disrupted lots of industries. I never really looked at it as a coastal thing. It's not like, you know, rap music or anything like that, where you're kind of in your neighborhood, you know, offering the technology. Everything's fully global. And, you know, I'm sitting here in New York. Usually I'm in Menlo Park. We've got offices all over the world.

2:37:04New York's probably our second biggest. And now it's increasingly a global thing. And I think a lot of these people are, you know, a lot of the hedge fund folks are working remotely and now out of California. So I don't know if, yeah, I don't know how much of it is actually location-based. Well, I think part of the interesting story for, you know, we were talking with Shkreli earlier and he was like kind of walking us through like if you're a hedge fund that's getting margin called, like what that's actually like. And it's like for being a technology focused hedge fund, it's still the irony of it all.

2:37:47And even an AI focused hedge fund, the irony of it all is like it sounds like if you're a hedge fund that's getting margin called, you're spending a lot of time on the phone with your prime brokers. and you're trying to like, it's not really as much of a technology problem as like you're working with a lot of people and a lot of different buyers. And there's all this game theory of like when, you know, trying to exit positions without letting other funds know that you're, you know, it just seems like this. Yeah. It's like a very fascinating, like. When the stakes are high, right. It ends up being down to relationships.

2:38:24Yeah, I think algorithms and automated processes are great for the typical case, the 99 % scenario. But I think humans still have to get involved at the extremes. Yeah. It feels like retail crowd, for the most part, is extremely – I mean, it's all just very power law driven. So I would imagine like even though oil has been like a super interesting market this year, it wasn't quite as interesting or didn't have quite as much attention as like the bottleneck trade. and certainly like you know crypto has been uh has probably gotten less attention uh this year than than many of the years prior just because it was like well if you can buy some stock that's trading at 100 million dollars and it can go up to 2 billion in the span of a couple months like that's what gets people really interested is that um is that is that is that track with with what you guys are seeing?

2:39:31And like how on the commodity side, like what, what are you guys doing on, on that front? Is there a lot more things you can do at the product level? Or did you, had you already sort of established, like, is, is trading oil on Robinhood as good as it, as, as it's going to get? Yeah, I think there's, there's obviously more we can do. We have great futures trading products. We have a great mobile experience. We have a trading ladder. I don't know if you guys have tried it, but it's like very tactile, easy to use, particularly on mobile. Futures business has been growing quickly as well. One of the things we announced this quarter is we've got 13 business lines.

2:40:17So lucky number 13, generating$100 million in annualized revenue or more. So we added two more this quarter, Robinhood Legend, which is our pro trading platform. And a big part of that is actually futures. Futures traders love the desktop interface. And it's just much easier to see the chart and have the news and everything all in one place. So Robinhood Legend got to north of$100 million annualized. and the Robin Hood gold card crossed into a hundred million as well. So the last number I remember was nine. At some point last year, you had nine business lines doing over a hundred. So added even more.

2:41:00You added four since then. It's like I had this analogy that it was like adding cylinders to a high performance vehicle. So now that we're at 13, I'm probably close to needing another analogy. But yeah, it's remarkably diversified. Bentley's got the W16. Or no, sorry.

2:41:19Vlad Tenev:That's the Bugatti. Bugatti. It has the V16 now. Maybe I've got three more, yeah. Yes, yes. It's somewhat related to Jordy's question. It's very interesting that when you identified a new product request, Korean stocks, you were just stack ranking it based on customer demand. Not really financial volume. It felt very much like when you talk to customers, that's just what they're asking. and it's just maybe showing up in forms and feedback and requests. And I'm interested in other markets that might sort of pattern match to that where there's a lot of money moving around, but it's maybe lower on the priority stack.

2:41:58Vlad Tenev:And I'm interested in how you're thinking about compute futures because that feels like that could be a very big market sort of insuring data centers and providing some sort of derivatives market on top of compute, which is a massive market. But when I think about it, I feel like some of those big numbers might just come from a hyperscaler who gets an insurance contract from their bank when they go to build a big data center complex. And it might not actually be the vast majority of the volume might not be driven by retail at any point in the future. And so I'm wondering how you deal with new financial markets that are going to be big, but you don't see a lot of demand from them.

2:42:45Vlad Tenev:How do you think about reasoning through how you should play in that market? Yeah, I mean, I think if we have strong conviction, we'll add it even before it becomes a huge asset class in terms of volume. I think we did that with crypto. You know, we added crypto in 2018 and it was many years of next to no volume until end of 2020 when suddenly it just really inflected. So compute futures. Yeah. If there's a lot of demand and if people are trading them and if institutions are using them to hedge, of course, we'll look to add that. I don't know if we're seeing much of that yet. I think the tricky part about that is it's typically a rapidly depreciating asset.

2:43:39So I think those tend to not make for very good markets. But, you know, you are in a unique situation where compute on a per, on like a given architecture tends to be increasing in the short term. I don't know how long that'll last, but I think that's rather unique in history. And we'll see if it's the same in the next two to three months.

2:44:07Vlad Tenev:Can you take me through a little bit more of the story of the Robin Hood gold card and how it's changed, how you're positioning it, how it's evolving? what's driving the growth? Yeah. So what's driving the growth is a very simple value prop, 3 % cash back on all categories, which is much bigger than what you'd get with a typical credit card. It's market leading. And so when we find that the best products are easy to explain to your friends. They grow through word of mouth. And if someone asks you, well, why would I use this credit card? You have a very simple answer, 3 % cash back on categories.

2:44:50And of course, the user experience is nice and you have virtual cards and family features and we make it really good around the edges. But I think the clear reason that's easy to explain is a big part of it. So we're now at above a million cardholders with the gold card. I mentioned earlier$100 million in annualized revenue for the card business. And last week we started rolling out platinum.

2:45:18Vlad Tenev:So we have a growing card portfolio. I think the platinum card is really, really good. If you haven't checked out the website, sometimes I just scroll through the website and look at all the great things that we're offering. The Platinum card is a highlight, I think. I love it. Robinhood Social, what's the latest there? I've been seeing some screenshots. It's already providing a lot of entertainment, even for people that are not using the platform yet. But how's it going? Yeah, I've seen those, too. Yeah, yesterday was a big day. Yeah. So Robinhood Social is something I'm really excited about.

2:46:10It's growing. We're rolling it out. It's not out to everyone yet. And the reason for that is we've just been iterating on all of the details. Building a social network from scratch is pretty complicated, right? There's a decision about what type of content you want to allow people to post. And at first we started with only trades. And we came to the conclusion maybe that was a little restrictive. You want to give people a little bit more freedom to post charts and things like that, to post comments, maybe news stories. But you don't want to give too much freedom. So we've been iterating heavily.

2:46:51We just added politician trades as well, which have been doing quite well. And, yeah, now you're starting to get to the point where you have legitimate influencers on Robinhood Social with, you know, thousands of followers. And we're still rolled out to a relatively small portion of the customer base. So I think we've got good signal that will do well and it'll be useful. And, yeah, yesterday it sort of like transitioned to people posting Robinhood Social content on X, which is very interesting. I think the unique differentiator that we have that makes it compelling to people is that there's actual trades and real portfolios tied to the account.

2:47:35So we can combine these two things, real transactions with opinions, and that gives you a primitive that you can't find easily in other social networks. The same content, you know, you see somebody post on X, like just closed out this position, like, you know, can my updating my thesis or whatever doesn't have the same weight if they are doing that and they either printed on it or, you know, are took a meaningful loss. So it's great content.

2:48:05Vlad Tenev:I have one last question. You've been very early and very bullish on mathematical super intelligence. There's been a whole bunch of conjectures solved. It feels like a total validation of your idea that AI would be very good at mathematical problem solving. How have you processed the recent conjectures that have been solved by various models? How does this update you? Do you have like a next hurdle that you want the AI to solve? Because it feels like, I mean, I know people are still throwing like the Riemann hypothesis and P versus NP at it. But aside from that, do you have like an idea or vision of where this goes?

2:48:49Yeah, I think that's an awesome question, John. So the next thing is in the same way that I applied my mathematical skills to computer science, you know, I was a mathematician and then I became a business person. What we found is that math skills and coding actually go hand in hand. So what I'm really excited about now is applying mathematical superintelligence to software. So in the same way that MSI can be used to make sure that your math is correct, when you have a computer program or a piece of software, it can be used to make sure that's correct and that there's no mistakes. And I think particularly now when we have Mythos finding security bugs and you see all the scary stuff like we saw last week with the hugging face breach, rather than it being a cat and mouse game of just escalating model capabilities, finding breaches and preventing breaches from happening, verification and proof that software is immune to these types of bugs, I think, is the future.

2:50:06Vlad Tenev:So you're going to see a verification of software systems that you use. And there could almost be like, I mean, you know, you go to those websites and it's like there's a security certificate at the bottom and no one really knows if it does anything. But in the future, you could actually land at a website where the entire code base has been formally verified. Yeah. And now the absence of the security certificate is a red flag. Browsers will block it. I think you're going to see it first in domains where accuracy and correctness are critical. So you're seeing it a lot in crypto, actually, with crypto formal verification is having a bit of a moment.

2:50:44You're going to see it in semis if you're producing a chip. And, you know, the process of producing a chip is you get to tape out and beyond. If you find a mistake, it's incredibly expensive to reverse. So you'll see it in chip design. You'll see it in system software. A lot of software, legacy software is written in languages like C, C++. So yeah, I think you'll start to see it in these systems languages, critical software. And then from there, as the price goes down, I think it'll be ubiquitous.

2:51:23Vlad Tenev:Yeah, that's exciting. There's a lot of fear about the cybersecurity questions. And I think it's great that the mathematical progress can actually apply, even if it takes a couple of reasoning steps. and I think people will need to digest it. And then they'll actually have to see it in, the proof is in the pudding. If we go through a whole period where we're like, wow, yeah, there haven't been any incidents, even though everyone's been piling zero days of every system, but we're still in a good spot. Very exciting. White pill. There you go. Thank you so much for coming on the show. Congratulations.

2:51:58Vlad Tenev:Great to catch up, Vlad. Always good to chat. Cheers, guys. Have a great rest of your day. And we'll talk to you soon. Goodbye. Let me tell you about MongoDB. What's the only thing faster than the AI market? Put your business on MongoDB. Don't just build AI. Own the data platform that powers it. I have one last post I want to go through. Jordy, have you seen Spider-Man No Way Home? Absolutely no. Not. Absolutely not. Should I? I think I have. I'm pretty into movies now. But we were. I saw The Odyssey, and I appreciate film. You're a film buff now. You're a film snob. I'm somewhat of a, yeah. Honestly.

2:52:31Vlad Tenev:No. There was a question on the timeline from Rob Felt. Rewatching. He was rewatching Spider-Man No Way Home to prep for Brand New Day, the new Spider-Man movie. That is actually insane. What? Right as you said that, a white spider landed from the ceiling on my microphone. You see this? Yeah, yeah, I do. Wow. You said Spider-Man. Maybe you are the next Spider-Man. And this spider just landed. I'll try to show everyone. Yeah, you might need to turn down the console. Put down your laptop. Swing it out more. Oh, it's really going around. Oh, it's on the ground. Whoa, there we go. Can you see this at all?

2:53:08Vlad Tenev:I don't know if people can see this, but there is a spider crawling on Geordi's microphone. You'll have to really. Oh, yeah, you can see it in the monitor right there. That's a very good omen. I think that's a good omen. Anyway. Spiders can hear. Yeah. They can speak English. Well, let's. You feel free to deal with that. I'm going to talk about this. So in Spider-Man No Way Home, the movie, the prequel to Brand New Day, I think Homecoming is in this in this series. Right. There's a whole series of new the latest round of Spider-Man with Tom Holland. Right. Daily Bugle web show scene pops up. And all I can think about now is a question.

2:53:52Vlad Tenev:Is the TBP anesthetic inspired by J. Jonah Jameson's web show? And if you look at it, it does sort of look like our show. And so it's a good question. Did we see this film? Did Jordy, who is the brand architect of the TVP anesthetic, watch Spider-Man No Way Home and say, I like that color. I like that design. Let's bring that into our studio. And the answer? No. No. No. Lots of other influences, but this was actually not one of them. I believe I have seen this. Yeah, we like the color green. I remember Jordy one morning, we were working out, and he's like, we should do green. And I'm like, okay, yeah, that sounds good.

2:54:32Vlad Tenev:I like green. And he's like, no one's done green. And I'm like, that's not true. Like, Robin Hood is green. There's plenty. He's like, no one in tech has ever used green before. Not TBPN green. I'm like, it is a white space in the sense that, like, yeah, I couldn't think of another podcast with the green, dark green background. and we and we did find our own space uh we we looked at pinterest a lot for different references some photos some catalogs ralph i didn't look at pinterest what what what images were you pulling from because i know you had some references i mean obviously f1 but just your brain just your brain you don't let much go in there but certainly certainly not movies but i gotta figure out where this spider went this landed it was on the mic i lost it i think it's I think that's a good place to call it.

2:55:23Anyway, it is a coincidence, Rob. Amazon had a good quarter, it looks like. It is. They're up almost 9 % after that.

2:55:29Vlad Tenev:And the market is way up. The Nasdaq's up 2.78%. Should have been in white suits. In white suits, but it's a very sad day because we love situational awareness, and they're going through a really hard moment. We're wishing them the best, hoping that good things come out of this ultimately. But it didn't feel appropriate to wear a white suit. Yeah, I'm in a black suit. He's in a black suit because it's a very disappointing moment. But, of course, everyone has a long career ahead of them, and there are many ways to build back better and do more big things in the future in the world of AI and technology.

2:56:02Vlad Tenev:So thank you for watching TBPN. Tune in tomorrow at 11 a.m. Pacific. That's right. Thanks for hanging out with us, folks. Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter at tbpn.com, and we will see you tomorrow. Goodbye. King in the castle. King in the castle. It's 10.37 on Wall Street. Money never sleeps. You shouldn't either. Call me back.