Mary Meeker's AI Report, Ukraine's Operation Spider Web | Soren Monroe, Connor Love, Melisa Tokmak, Jordan Schneider, Maxwell Meyer

29:27Because you're getting into developing nations and there's less propensity to spend. The advertising dollars go further and realistically there's just lots of countries where you can't sell$200 a month subscription. Yeah, or even 20. or even 20. And so AI user plus usage plus capex growth is unprecedented. Internet versus leading USA-based LLM, total current users outside of North America. And so the internet share of total current users kind of grew slowly. And you can see that LLMs came out and they started at 50 % of internet users and rocketed to 90%. And this is a big part of the AI narrative that we already have the internet.

30:09It is the world's, the greatest distribution engine in history. Yeah, and you know, like bits move faster than atoms. And even though the internet was a bits movement, it was bound by atoms in the sense that you had to put pipes in the ground and you had to make and sell phones to get the penetration out. And now when you're leveraging on top of that, you actually, it's like, OpenAI might build a device, but they don't have to to get 90 % penetration. This is a funny one. You're going to love this. So AI user plus usage plus CapEx growth is unprecedented. The big six USA technology company CapEx.

30:52Big six. That's what people say about big tech. They don't say Magnificent Seven. Yeah. Big six. And she. So it's Apple, NVIDIA, Microsoft, Alphabet, Amazon, AWS only, and meta platforms. Just ex-Tesla. just writing Tesla out of the Mag 7 to create the big six. And normally you might say, okay, well, it's like a car company, but Tesla has an AI division that is scaled very aggressively. They changed the name of their self-driving economist to Tesla AI. Exactly. So a little bit odd, and maybe you should put that. Maybe Tesla isn't investing at the same level as the other big six, I suppose, but it's still just funny to coin kind of like a new term.

31:34but obviously CapEx is increasing very quickly and we track that during earnings to see that it's really just a few of the hyperscalers that are driving this but there are multiple big tech companies that are investing at the $60 billion a year range now so total CapEx is over$212 Tesla's total CapEx for 2025 across the entire business was projected at just$11 billion so not just Google which is spelling like Google, Microsoft, and AWS are all in like 60, 70, 80 range, billion. Yeah. Gotta get those numbers up. CapEx for ants. I mean, it is when you think about the CapEx that goes into a car plant as well.

32:16That's definitely significant. That's what I'm saying. Yeah. But at the same time, Elon's getting this sort of off balance sheet CapEx through XAI. With XAI. Yeah. And so there's trends in declining cost of inference, this is interesting, 72 years that you can see the cost curve here. So the cost of, it's kind of an odd metric here because we're talking about AI inference cost, which was so high to begin with. It's kind of apples and oranges, but basically electric power went through this pretty slow driving down the cost over time. Computer memory fell off on more of an asymptotic curve and AI inference is just basically a line straight down as it got incredibly cheap.

33:04Let's go. And monetization threats, rising competition, open source momentum, China's rise. China's obviously growing in LLMs, but interestingly, it seems like went way up from 0 % penetration in February of 2024 by February of 2025 had grown to maybe 10%, but then had fallen, or maybe it was even higher, maybe it was 15%, and then it had fallen. So the pushback against deep seek is maybe working. Interesting. China versus the rest of the world here. I don't know where else we want to go with this. AI monetization threats equal rising competition plus open source momentum and China's general rise.

33:45But you can go through the whole thing. There's a lot to dig into here. Global GDP, the computing cycles over times, the AI era. um all it's interesting it's all focused on um just telling a story almost to like the public markets yeah this one's interesting ai plus and physical world ramps equals fast plus data driven doesn't really say much but they're charting a rideshare versus autonomous taxi provider so this is lyft versus waymo in the san francisco operating zone market and so you can just see uh waymo really running away with the market. I was over by LAX yesterday, and I saw like five Waymos all in the same block.

34:30They're really dominating LA now too. They're everywhere. They're everywhere. It feels like they're every 10th car. Yeah. I mean, it makes sense. People prefer them. It's a better product. Yeah, I was barbecuing with a buddy last night, and he was like, yeah, I was, you know, I watched this Waymo. Paul was parked in a red zone, and then just like ripped out and ran a red going left and he was like yeah like you know just me I sort of don't fully trust them right now I'm like you drive around LA that's like normal moves people in LA like you know there's people that go out and they're like I am gonna break a lot of traffic laws today and they just do that so it's like yeah it's not great that um yeah it's not great but uh but but coming along i yeah i was talking to a friend who over the weekend uh who's been saying that that waymo is like completely cooked for a long time and now he's like no waymo's gonna be fine because like apparently there's one guy that did the company who's just insanely cracked and is basically like solving all the technical problems and so he's like yeah i'm actually kind of bullish on it but he still maintains that it's uh that it's pretty it's still heavily human in the loop.

35:44You think the AI is anonymous Indians? No, kind of. He says that, I think the number he quoted was, I was like, so he was saying it's not remote control in the sense that it's like hands on the wheel, right? It's not like somebody's remote control driving like it's a video game, but they are watching a screen and then they can press a button to be like, okay break or like go around or like throw the warning lights on or like you know okay this is fine or i'll draw on the screen it's like they they can intervene very easily but well i i think i said this maybe last year early this year if you're waymo it's worth five dollars an hour to have somebody exclusively focused on the one car yeah to not you don't have that many disaster yeah Yeah, and so apparently the ratio of support humans to Waymos is less than two, but more than one.

36:41And so they've proven that it's not fully just one-to-one, but it's close. I think it's like 1.7 or 1.4. They kind of need to make it not one-to-one. But even I think that pure teleoperation is cool. Totally. I would love to be able to pay somebody$5 an hour,$10 an hour to drive my car. Yeah. It's also funny because it's like everyone kind of knows that this is happening. that there's some sort of teleoperation involved at least. And most people who understand it at that level think it's a good thing. But then you'll see like a headline about like, oh, it's actually like anonymous Indians or whatever.

37:15And it's framed as like a bad thing, which is very odd. But I've always felt like maybe Google is like keeping it as an ace up their sleeves in case there's more pushback on like, oh, this Waymo is too risky. Then they can say, well, actually, we do have a human loop. We didn't even tell you, but like we're even safer than you thought we were. So like you should, or maybe they tell it to regulators behind the scenes to say, hey, we're really, we're really. But that also presents like a whole other set of problems, which are okay. Do the teleoperated people need to get, do they have international driver's license?

37:47Yeah, I have no idea. Well, they might not be international. They might just, they might be in the San Francisco area. That's true. Or they might be, yeah, Wemo HQ or something. Or Vegas. I mean, we fly the drones remotely from Vegas. I just think we would have had one of those people leave already and be like, Whistleblower? Yeah. Maybe, I don't know. Maybe the exit package is too delicious. You just can't get out of it. You don't want to give up on that sweet.

38:16This was an interesting slide for a few reasons. 260 % annual growth over 15 years of data to train AI models led to an absolutely exponential increase in the size of training data sets, which feels less important now that we're in the post pre-training era, I guess. But you know who's up here right at the top? Aramco Metabrain AI. I love that Saudi Aramco just trained a massive LLM somehow. It didn't make it to my news until this moment. But there's a whole bunch of these here and you can kind of see that the curve is changing. but then at a certain point you run out of tokens on the internet.

39:02There's some interesting stat. All of GitHub is I think like 10 million tokens or maybe 100 million tokens. It's just not that big of a data set. Yeah, and there's pretty massive data sets you can get off Hugging Face that is like almost the entire internet that's like 44 terabytes to put in a context, which you could get like a 50 terabyte hard drive. Yeah, and so I was talking to some folks about, like, is there a world where, like, what we're seeing with VO3 and Google's cornered resource, which is the YouTube data set, could something like that happen with Microsoft that owns GitHub? Because they have the best code data set in theory.

39:45And they're just like, well, it's not that big of a data set. It's already been exfiltrated. And so plenty of people have, like, all of GitHub just saved locally, basically. And so it's not as much of a cornered resource. Very few companies have been able to scrape all of YouTube, even if some have maybe tried to do stuff here and there. It's clearly not the same as the resource that YouTube has. What else is interesting in here? I mean, we could go through other stuff. Impact of improved algorithms on AI model performance. this is the the classic like chinchilla scaling laws just kind of breaking down all the different all the different trends here but let's go back to the timeline and let's do some more I think so is there anything else you wanted to talk in here you're really hitting Mary with the boring no there's just there's just a lot in here and like I don't know if we have enough time to like dig through each slide we should have her on to give us the highlights yeah we should have her on This is pretty interesting, the AI milestone timeline.

40:51I've covered this before, but 1950, 1950, Alan Turing creates his Turing test to measure computer intelligence, positing that computers could think like humans. In 56, Stanford computer scientist John McCarthy convenes the Dartmouth Conference on Artificial Intelligence, a term he coined, great coinage, artificial intelligence. Arthur Samuel in 1962, an IBM computer scientist This creates a self-learning program that proves capable of defeating a top US Checkers champion. Precursion of the chess stuff. 1966, Stanford researchers deploy Shakey, the first general purpose mobile robot that can reason about its own actions.

41:32Then there's an AI winter that goes from 1967 to 1996. Unclear these AI winter narratives because that was like the craziest moments in tech. True, but also... More of a moon landing winter. Yeah, I guess. But there was an incredible amount of underlying technology built in that period that was directly correlated with artificial intelligence. Even if you just go back to linear regression got faster during that period of time. Computers got faster. This was the era of... This is like the rise of Intel. Like NVIDIA was born in this winter. And so the AI winter narrative is always a little bit odd because you can always go back and draw a pretty smooth line after the fact, but in the moment it feels very flat.

42:25But anyway, the AI winter ends with Deep Blue in 1997. IBM's chess playing computer defeats Garry Kasparov, the world chess champion at the time. in 2002 Roomba the first mass produced autonomous robot vacuum cleaner that can navigate homes is launched I didn't realize Roomba has been around since 2002 it's a vintage robot and now they got some competition with Matic the Matic founder came on he sent us some cleaning robots and they've been working wonders it's actually crazy Toby Lutke was posting about it yeah Toby was posting about it it's amazing how my children have have completely welcomed the robot into the family.

43:06Like they say, hi Matic. Really? They like chase it around while it's working. It's like, it's totally a member of the family. That's incredible. It makes me very, even more robot pilled than I already was. It's great. 2005 Stanford, a Stanford team builds a driverless car named Stanley. It completes a 132 mile course winning the DARPA Grand Challenge. That of course starts the great rivalry we've talked about this right we and we'll get excited about we'll really get excited about way mo when it can win le mans yes right yes like just 24 hours waymo has so much money they really should get an f1 team yeah it would be amazing yeah and just be like yeah there's still a driver in there we like we just bought you know some random team and and we're winning because we're putting a lot of money into the car imagine an f1 race but it's like a roller coaster so you're not actually like driving you're just like experiencing like insane oh yeah i think it would i think it would be deeply uncomfortable if you weren't properly trained for sure uh 2010 apple acquires siri voice assistant and integrates it into the iphone 4s model one year later uh 2014 eugene guzman a chat bot uh passes the touring test with one of three judges believing that eugene is human Wow, I thought we didn't even get close.

44:26I mean, that doesn't feel like passing. I thought passing would have to be greater than 50%. So I don't know about that exactly, but I thought that the Turing test was basically impossible right up until GPT-3. But I don't know. I guess they were doing some good stuff back in 2014. I'm sure everybody had a different definition of passing. Yeah, they never really had an official organization body, like an Olympics of that, like some some recognized like we will be the ones to do the turing test on everything it's always just been like a phil like a philosophical test uh 2018 open ai releases gpt one the first of their large language models 2020 open ai releases gpt3 an ai tool for automated conversations microsoft exclusively licenses the model yeah that's a good summary of uh the relationship And then in 2022, OpenAI releases ChatGPT to the public.

45:19And let's go. Became massive. Fantastic consumer product. Yeah, I'm interested. I actually, now that we're here, I want to see the entire. So this is the timeline from 2023 to 2025. So this is 70 years here on this slide. And then this is three years. So OpenAI in March 23rd of 20, or sorry, March of 2023. opening eye releases gpt4 multimodal model capable of processing both text and images same month microsoft integrates copilot into its 360 degree uh 365 product suite i i remember that day i remember exactly where i was yes it was it will echo in history will echo in history you know you know the funny thing is that it actually would have if they did clippy that day yeah if They have been like, we're bringing back Clippy, and Clippy is good.

46:08And he's now God. Yeah, he's God. It's also so funny with the paperclip narrative. You know, everyone's all paperclip. Do you remember? So this still feels so long ago. So that same month, Google released Bard, its ChatGPT competitor. Oh, yeah. Hello, Bard. You don't hear about Bard much anymore because it was rebranded to Gemini. Same month, Anthropic releases Claude. its AI assistant focused on safety in interoperability. Yeah. A few months later, in November, 28 countries, including the USA, EU, and China, sign the Bletchley Declaration on AI Safety. Sounds dramatic. Of course. The conclusion was that they want it to be safe, not dangerous.

46:53Yeah. We all agree. Which I think we can all agree on. Yeah. March of 2024, the U.S. Department of Homeland Security unveils its AI roadmap strategy. I don't remember that actually. I don't remember that at all. It's hard to say that that was, you know, one of the most consequential moments of the last years. Lama 3 was though. April 2024, Meta Platforms releases its open source Lama 3 model with 70 billion parameters. This is so funny. So there's two stars after the open source. And if you're in tech, you would think that the stars would indicate like, oh, well, the difference between like open weights and open source code and open data set, right?

47:30Like that's the nuance of like open sourcing and LLM. And also like they did open source it, but they set this limit where the other hyperscalers couldn't use it. What does the, what does the - It says open source is AI models and tools made publicly available for use modification and redistribution. Yeah. So that's who this, I mean, this is, again, this is just very, yeah, very, very oriented towards the East Coast, specifically the world of finance. But we love the world of finance. And they got to get up to see on this stuff because they're going to be able to invest soon in a lot of this stuff if they're not already.

48:04So they got to learn. So May of 2024, a year ago, OpenAI. It's so fast. Yeah, things are moving quick. OpenAI releases GPT-4.0, which has full multi-modality across audio, visual, and text inputs. Same time, Google introduces AI overviews to augment its search functions. This is actually very important for Google because that product has grown super, super fast. Yeah, and I will say now, I got to give them some credit that I use AI overviews. Totally. Because when they pop up, they're usually pretty good. They're usually very effective. And they do hallucinate and there's ways to jailbreak them and stuff.

48:41But that's accepted. But if you're not trying to do that, you can get a pretty good experience. I did see a hilarious UI mock-up that was just, Google has the opportunity to do the funniest thing ever. And it was just go all the way back to the original Google search bar, but just have it be a Gemini text box. And so it was like the same aesthetics as the original Google, but it would just be a text box that you would put the Gemini, and it would say like, do you want to think, upload PDF? Like what model do you want to use? And then it would be like send. And so it would just be, actually you go to google.com and you just get Gemini.

49:14Which would be aggressive, would destroy a lot of the revenue in the short term, but who knows, maybe it happens at some point. at least it would be interesting if it happened like on a per user basis. Like if they know that this user would retain longer and actually be better monetized by seeing a Gemini prompt, they could serve that to you. Because they have like an advanced search product now that you can kind of like opt in or out of on google.com. But doing that dynamically. If the PMs really knew how much we love big tech, they would start to experiment with us more because they know we'd give them a chance to really iterate, improve.

49:57We're not going to just try something and churn. I would never churn off Google. Out of respect. Anyways, Apple on July of last year releases Apple Intelligence, an AI system integrated into its devices. Is that when they released it? I thought they announced it then and then released it over the next, Well, I think it was available in beta. It wasn't fully released until they released the new iPhone. Yeah, it was delayed. On September of last year, Alibaba releases 100 open source Quinn 2.5 models with performance in line with Western competitors. Will Brown, big fan. Yep. Loves all the different research models.

50:43Big Quinn guy. Big Quinn guy. And then December, OpenAI announces O3, its highest performing model ever. and we basically are in the present now. Deep Seek at the beginning of the year. Yeah, Deep Seek, I guess that was January during the fires. That was really kind of the Deep Seek moment for Deep Seek. Yeah, it was. Deep Seek released R1, R1-0, open source reasoning models. And yeah, the O3 versus R1 moment was really crazy because R1 was so free and accessible and O3 was like really paywall-gated. And so a lot of people's first interaction with reasoning models was R1. And so OpenAI had to fire back very, very quickly.

51:28Also, Alibaba unveiled Quen 2.5 Max, which surpasses the performance of other leading models, Claude 4.0, Claude 3.5, GPT 4.0. On some reasoning tests, OpenAI releases GPT 4.5, Anthropic releases the Claude 3.7, Sonnet, and then ChatGPT reaches 800 million weekly users. Let's hear it for ChatGPT. I mean, that's just, it seriously is unprecedented in so many ways. Yeah. 10 years from now, somebody, some kid will be raising, trying to build a research company, and they'll be like, well, OpenAI started as a research lab and then became a consumer internet hit. It's like, absolutely wild. Anyway, there's a ton in here.

52:17We could go through. Let's go back to the timeline. Let's go back to the timeline. I'll stop sharing. We got a post from Dennis. Demand for VO3 has been off the charts. Millions of videos have been generated in the past few days alone. Now available on mobile and in more countries, including the UK. So the funny thing here with the timing of Mountainhead is that the entire plot of Mountainhead is based on a VO3-like product being so good that people can't tell the difference and it causes global chaos. It feels like VO4 will be that good. Well, depends on the rate limits. That would be an important plot device.

52:59Well, that was part of the plot. It was like people were saying you need to contain it more. And he's like, oh, the metrics are so good. Sure, sure, sure. Yeah. But I don't think the VO3 is causing global chaos at the rate you can go. Except I did. I thought briefly. I mean, I had seen the movie Saturday night, and then Sunday I saw some of the protests happening in Paris. And I did think for a second this could be, you know, it's shaky video. There's a lot of chaos, smoke. It's at night. Yeah. If I just glanced at it. Yeah, I always just wonder how important is fake video? Because there are so many other tools for misinformation that have existed for decades.

53:46So just lying in text, like instantiating fake text has always been possible, right? Photoshop has existed. I made it up. I made it up. Also, I mean, one of the classic misinformation things, especially during like riots and times of misinformation uh during uh during a lot of these like protests and different moments is uh they will just take a a photo or real real video from three years ago or from a different location yeah and be like look like this is this is you know or another classic this is the los angeles fires and you're seeing like a wildfire from like montana or something yeah or you just do a freeze frame or it's an image and then you write text that supports a different narrative than what actually happened.

54:32There's so many different tools in the misinformation tool chest like I agree that that VO3 and generated video will be one but it will very quickly you know turn into okay well like I need to I need to treat this video just like I would treat just like a block of text or like a screenshot or an image that could have been photoshopped. Yeah I I mean, it is going to be a very interesting question. I mean, we were talking with a friend of the show, and he was like, the worst part of Mountainhead is that it's real, this idea that, like, tech, you know, the tech elite are destroying, you know, humanity, and they don't care, right?

55:16Boo. Boo. Boo. But it is, I mean, there's so much about the Internet that isn't real or that is embellished in different ways. Anyways, speaking of social media, we have a meme from Eddie Kwan. He says, I often think of this. And it is a woman saying, thank you for ruining my life. And it is the Instagram octopus saying, I'm literally an algorithm designed to maintain your attention by learning from your behavior and mirroring back that which consciously or not captivates you and the social worlds through which you move. I am literally one of the most fascinating tools for collective and personal shadow work ever created.

55:56That is, only if you can learn to recognize that you aren't disturbed by social media, you are disturbed by your own reflection. So what does it mean that my Instagram Explorer page is entirely bodybuilding content? And golden retrievers. Yeah, I think it's my own reflection. So it's saying like I could be a generational bodybuilder. Yeah. I potentially am. And I've told you that many times. Yes. I've told you that many times. Elite level genetics, fantastic insertions. That's the only thing that if you said, I'm going to quit the show, I'm going to be a bodybuilder full time. I would be like, yeah, that is your purpose.

56:35Yeah, 100%. Exactly. It's that and super cars and watches. It's really so ridiculous.

56:44Anyway, let's do an ad for Linear. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps. Let's go. I'm bored. They got Linear for agents. Start building. Do it. Check out Linear. Do it. We are pushing Linear to the limits internally. Yeah, we're excited. Antibiology says, Gave a talk at Edge Esmeralda on the scientific history leading up to Ray Peet today. Going to post soon. Stay tuned. Very excited. I think I include this more as a mental note, but I want to do a deep dive on Ray Peet just because he's influenced so much of a lot of the current thinking around health.

57:32And we should have Anibology on. Yeah, we should have a few different people in that space come on while we do some deep dives. Yeah, Peter's. But I met Anibology at this event last year, a friend of Justin Mayer's. Yeah. Oh, back to Mary Meeker, Buko Capital Bloke says, I asked Gemini and Chachapiti to construct a portfolio based solely on the new 300 plus slide Mary Meeker AI trend report. Here were the results. Who do you think wins? And so we have Gemini says 15 % NVIDIA, 10 % Microsoft, 10 % Alphabet, 9 % Amazon, 6 % Meta, key enablers and differentiated AI leaders. They got TSMC, Apple, Tesla, growth in AI, apps and infrastructure, Salesforce, Oracle, Palatras.

58:19Pretty good company. I don't know. This seems interesting to me. What do you think? Waiting. Weighting meta at 6 %? That does seem low. But again, it's like all of the, I mean, there's some stat where like the Mag 7 grew revenue at something like 30 % annually over the last like two quarters. And the rest of the Fortune 500, if you average all of them up, they grew at like 5 % or something, 8%. And so like, yeah, you can say like, yeah, the meta feels underweight there, but you got to take it from somewhere because every point you're adding to Meta has to be out of NVIDIA, and that's a great company, or out of Microsoft, and that's a great company.

59:04But yes, I would agree with you. Very interesting. Anyway, let's go through a real quick overview of what we're about to talk to our first guest about, the Trojan truck, how Ukraine just made nowhere safe across 400 kilometers. We should have had Pat on the show today. We can do it tomorrow or something. Across 400 kilometers of Russian territory this morning, delivery trucks completed what looked like a routine stop near five Russian air bases these Trojan trucks with cargo containers disguised as garden sheds opened upward to release clusters of first-person view quad quad copters into the bright morning sky minutes later the over 40 aircraft were burning including irreplaceable strategic bombers that form a core component of they release this image this had to just come out of this is like where they prepped i think yeah i think it's like but it's an interesting dynamic for ukraine to be like marketing totally world totally to show hey we did this and we're giving you enough to actually tell the story completely because i mean we want to send this whole plot is extremely crafty it is for sure uh well we have a great guest to discuss it with us today we have soren uh from niros who builds drones and has been to the ukraine and so we'll bring him into the studio and uh ask him how he's doing how you doing there he is welcome great how are you guys we're good we have a new soundboard so expect some wild some wild cards wild stuff um but yeah uh we we we missed you on teal fellow day i hope you're doing well um maybe you can kick it off with just a brief uh overview of what you're tracking in the news i mean we just we just covered this uh this incredible ukraine operation um what information how are you processing it let's let's have him do a quick one minute intro for anybody that didn't hear him the last time and isn't familiar with your background.

1:00:52That's great. Yeah, absolutely. So I am the co-founder and CEO at Neuros. What we're doing here is building massively scalable defense systems, starting with drones. My personal background is I was a professional drone racer for a long time. I've been building and flying FPV drones, first person view drones for about 10 years, competed with Team USA, won the world championship, started a company in drone racing, and then got really, really pulled into defense a couple of years ago. And now Niros has been around for about two years. I've been over to Ukraine many times. We have a lot of products deployed there.

1:01:27And we are now the highest rate drone production line in America. So we've been really trying to ramp production, looking at what the Ukrainians are doing and taking a lot of inspiration. And how much of the drones right now are FPV versus fully autonomous? Is that an important distinction for what you're building? Yeah, it is an important distinction, although the line is starting to get more blurry. The vast majority are FPV. And in Ukraine, too, the vast majority of drones in general are FPVs, and the vast majority of those are completely manually piloted. Yeah. I had no idea that you started a drone racing company before this.

1:02:05Did you ever get that to scale, or was it still just like benchtop? I remember the first time I saw your facility, you were kind of hand assembling. It sounds like now the supply chain is much more robust, but what was that early experience like? Yeah. So the company, it's actually still operating primarily. We were focused on, at the beginning, we were focused on building the materials for race courses. So there wasn't a really good place to go for serious racing pilots to buy, like the gates are what they call what you actually fly through. So this was a lot of actually working with the Chinese industrial base, figuring out where we can go to get these better materials.

1:02:45And then a lot of the arbitrage was actually in the shipping, figuring out how to do shipping all over the United States of these very heavy items without driving the cost super high. And then we moved into other types of components. We like to collaborate with the top racing pilots in the world. So we make frames and motors and other things that are really tailored to the needs of the best pilots. But it's still operating. I've passed it off now. But it was a really good experience. Also to see how easy it is to go on Alibaba and get something done in a matter of weeks. Basically like zero to full product in a matter of weeks versus working with U.S.

1:03:24suppliers that would maybe get you a sample. Yeah. Those gates are somewhat tech enabled, right? Because I've seen like the LEDs on them. And do they actually have a sensor that can tell if the drone went through the circle? So they do. That's usually on the kind of hobbyist setups. That's more on the like just start and finish gate. And it's a separate system. Ours were purely just a fabric. But that is a key part of it as well. Yeah, that makes a lot of sense. Before we dive into the news, specifically the news over the weekend, Could you give us a high-level overview of the history of drone warfare in Ukraine?

1:04:04Because I understand it's been progressing super rapidly on both sides, and it'd be helpful to understand kind of the different stages. Did they ever have like predator drones, like the global war on terror type of drone? Or did they jump straight to quadcopter and kind of like leapfrog the technology? So, you know, you've had this Russian aggression war in Ukraine since 2014. Obviously, the full-scale invasion was 2022. But even during that period before the full-scale invasion, there was some usage of drones for surveillance and dropping explosives. These are primarily still small drones like what you're seeing now.

1:04:42But this was not a proliferated technology. Then when the full-scale invasion happened, within a few months, the Ukrainians started thinking about all these ways that they could use inexpensive drone technology to get an asymmetric advantage. And that is where FPV drones started becoming a really, really big deal. So they pioneered really this idea of putting an explosive on a racing drone and using that as a precision strike weapon. There were instances of this happening in other places, but they really scaled it and they've really refined it. And then Russia was much slower to take it seriously, although now they tend to in some ways outproduce Ukraine and they have a much more direct line to China.

1:05:26where most of these components are coming from. But since 2022 and FPV is just starting to get used, now it's reached an unbelievable scale. It's estimated Ukraine is going to produce four and a half million FPV drones this year. And those are ranging from ones that are this big to 15 inch propellers, fiber optic controlled drones, many different types and sizes of warheads, different configurations. And I can talk more about the drones that were used in Operation and spiderweb as well, because those were really interesting. But what we've seen is just this vast technology landscape where new clever ideas like fiber optic are going to be the hot thing for a few months.

1:06:08And then they sort of just become another tool in the tool belt. And it's just this constant arms race. Yeah. Talk about this attack was unique in a bunch of different ways. But is this something that had been, to your knowledge, or just more generally known to be something that had been attempted multiple times or, you know, maybe like I'm curious to know. Yeah. Kind of the backstory on this type of attack, because it seems, you know, it's a massive difference to be using this technology way behind enemy lines versus using it, you know, at the front line. Yeah. So primarily FPV drones are used on the front line, say the kind of 30 kilometer band across the zero line.

1:06:53What was so unique here is that it was FPV drones, short range drones being used 4000 kilometers inside of Russia. It was this unbelievable application where, you know, you've seen Ukraine using long range one way attack drones that are going, you know, 1500 kilometers to strike targets deep inside of Russia. But here, these were small drones actually driven in on on trucks, basically in the tops of shipping containers. And I don't know of any operations that were similar to this beforehand. I think it was not something they wanted to give away. And the drones were actually operating on cellular.

1:07:35They were not operating on local, like the normal low latency local radios you use for FPVs typically. And so I think this is going to be something that a lot of people are going to look that and see if you have drones that are operating on cellular, you can't really tell them apart from cell phones. That's really hard to defend against, really hard to detect. But now it's going to be part of air-based defense is thinking about drones that are operating on cellular being piloted from basically anywhere in the world. Yeah, talk about the Russian response, the immediate response to this incident from the footage that I saw and I think most people saw that tracked it, it seemed incredibly challenging to respond to it quickly, right?

1:08:22By the time you could sort of organize a response, a lot of the core damage had been done. What do you think the question I think that every country is asking themselves now is how do you defend against this type of attack, whether you're at war like Ukraine and Russia are, or you're just, you know, of thinking, you know, long term. Yeah, this clearly poses a massive threat to critical infrastructure. I mean, being blatant, the U.S. does not have any defenses in place that would stop this from happening. We already know there's already news stories about drones that are flying over our Air Force bases and we can't do anything about it.

1:09:02And I think the only approach here has to be a multi-layered system where you're looking at all the different types of electronic warfare and also considering things like satellite communications and cellular communications, where you're basically able to turn those off on the flip of the switch, which is a huge inconvenience and a huge thing to build into the infrastructure. But clearly, that's going to be required. And you mean that just to drill down there, you mean asking Verizon or AT &T or every cell provider in a certain area to turn off cell coverage because a drone took off? you know is is or fleet of drones or fleet of drones but either way it's hard to tell if they're a threat or just you know some recreational use i mean i'm sure many people on the internet will tell me why this is a very stupid idea but when i think about this uh it's clearly the russians were not equipped to jam drones operating on cellular that is totally possible and we could have uh better cellular jammers um but if they had been able to recognize this threat and complete and turn off all the cellular networks in that location, then it basically would have stopped this operation completely.

1:10:14And so that's where my mind immediately goes with something like this. Do you think they had electronic warfare or radio blocking equipment set up at that air base and it just, you're saying it wasn't functional? Or it wasn't for that particular band. It wasn't blocking cellular. It might have been blocking low latency. I forget, what's the actual frequency for the radio that you were using with the heads-up display that we were playing? It depends. So that is the point. So basically, you can actually see in the videos, the drones take off and they have GPS. And once the attack starts, they lose GPS, which means GPS is getting jammed, which makes total sense.

1:10:52That's a common way of defending against these one-way strike drones. So air bases are going to already be set up with GPS jamming. And so is Moscow, so is Kiev. That's common. but they're not set up to just obliterate cell phone usage on airbases. And they probably do have jamming for control links in the 915 megahertz range, video links in the 5.8 gigahertz range. There's other common ones that are probably, they're more well-equipped to jam. But I think what caught them so by surprise was the use of cellular. Yeah. I mean, we talked about some of the different, You said there was kind of like an ensemble approach to stopping these types of attacks.

1:11:34Walk through some of those because I remember seeing like, oh, we're going to train eagles to catch the drones. We're going to just have guys with shotguns that shoot them or anvil drones or nets or electronic takeover. There's so many different approaches. And it feels like at least in the U.S. defense tech space, there's a whole bunch of startups going after different counter drone, counter UAS strategies. and it feels like there might be an ensemble one, but what do you expect to kind of be the mix or the roadmap or the tech tree that we go down to kind of prep for defense against this type of thing?

1:12:15First off, our strategic bombers should be inside of hangars. I think that would be a great start. But as you mentioned, there are these really basic things like nets that do help against FPVs, but that's not going to last very long, right? Sure. I think you're going to see a mixed layer, especially with electronic warfare combined with interceptors, combined with the sort of kinetic defeat like the bullfrog system where you have an automatic machine gun turret that's able to shoot drones out of the sky. The last line of defense is really guys with shotguns. And that can actually work against an FPV drone, but you don't want to be relying on that.

1:12:55So I think it's one of the things that worries me the most is that I've never seen a jammer in the United States made by a U.S. company that can reliably take out FPV drones. And I think we're very, very far behind in the practical application of electronic warfare, especially with these local radios. So I believe this is a huge area where we need to start investing dramatically and putting way more attention. Yeah. Okay. So I want to walk through a little bit more of this. You mentioned GPS gets jammed, then they're going over the cell network. there's probably a way to provision almost like licenses to operate on the cell network that might make it harder.

1:13:37I imagine that they had to effectively buy Russian SIM cards and set them up in the drones. But talk to me about the actual flight experience of flying remotely over cell because I imagine that it's high latency, low bandwidth. So is this, like when you fly, it's remarkable. It's like super precise. I imagine this is a little bit more jerky and a little bit slower. And so you could probably take advantage of that. But can you characterize the type of flying that we might have seen if we were on the ground that day? Absolutely. So I spent a lot of time looking at the flight videos and the pictures of the FPV drones.

1:14:12And these are not normal drones. These were very special builds to accomplish this. So one of the key characteristics of these systems that are operating off of cellular where you do have high latency control is they are fully stabilized. So they're doing altitude and position hold, which is not actually normal for an FPV drone. Normally you're running on a firmware called Betaflight, which was developed for racing applications. And it's really precise. It flies really well to a human pilot, but it doesn't really have built-in stabilization. They were using ArtiPilot, which is another open source firmware, and it's used widely across drones, but not usually for racing drones or for FPVs.

1:14:51And so you can see that it actually shows in the onscreen display from the videos that they're doing that position hold. And you can tell it's not like a normal FPV drone where they're putting it at kind of any angle. And what was also really interesting is they set these up to not fly into the target forward like you would with a normal FPV strike drone. They descended flat onto the target and they had a camera on a gimbal that can point down. So what you would usually do is have a warhead that's pointing basically in the same direction, forward direction as your FPV camera. And on these drones, they had two warheads that were basically pipes between the motors.

1:15:29That way they could descend with that camera looking straight down and descend onto the area with the fuel tanks of those bombers. And the other advantage of that is that those drones inherently were flat and stable when they were sitting in the container. Instead of having one big round warhead on the bottom, they had these two smaller ones on the sides, which made it much easier for them to pack them flat inside the top of that shipping container. Interesting. And so having a relatively larger target than a FPV drone would typically had enabled that, right? They just had to land kind of within a, I don't know, I don't know what the surface area was, but 20 something feet to really have the effect.

1:16:10They were landing on a pretty precise location, but they were able to do that, especially because they knew the targets were stationary. And it's pretty easy to descend onto a flat wing versus if you're going after a moving vehicle or a soldier or anything like that. Descending flat onto them is going to be really, really hard, especially in that full stabilized mode. Yeah. What do you think the pipeline is for identifying targets? Are they using satellite imagery to see that the bombers are not in hangars and then they can clock that in? Wasn't there, there was a treaty at some point too that required bombers to be parked outside?

1:16:47I don't know about that. No. I think it was, I'll look it up. Well, that might be rolling back soon. No, I think it did get abandoned already, but there was some historical precedent for nuclear assets needing to be visible. Yeah. I want to talk about target identification, and then I want to talk about just essentially complete offline drone flying and targeting with computer vision and kind of closed loop, basically doing GeoGuessr on the fly. And just popping up and realizing, like, look around, okay, I'm in, I'm like, I can kind of guess that I'm a thousand miles outside of Moscow. There might be a target somewhere nearby.

1:17:27I'm going to fly over there. Okay, I see. I can identify a hangar. I can identify a bomber. Before we dive into that, let me give some context so I don't leave people hanging. So there was a treaty, the Strategic Arms Reduction Treaty, START-1, signed in 1991 by the United States and the Soviet Union, included provisions for transparency and verification, such as placing strategic nuclear delivery vehicles like bombers at declared satellite observable locations to ensure compliance with the treaty's limits on nuclear arsenals. So it was broadly it was suspended by Russia in 2023, but there was still this sort of global infrastructure for storing these types of assets in a way that you wouldn't store them today if you were sort of building systems from first principles.

1:18:15Yeah. So to answer your question, John, I have to imagine that satellite imagery and also just, you know, this was a very well planned out, planned for a year and a half operation. And it was clear that Ukrainian SBU was operating inside of Russia on the ground. And so it was pretty easy for them to gather that intelligence of where the bombers were and, you know, when would be the right time to strike. So I don't think that's the, you know, that's not the main challenge here. But there was a lot of talk on X about using AI and training models to identify the planes and people saying that this was autonomous drones.

1:18:59To me, I watch these videos very closely. There is nothing to indicate that these were autonomous drones. It actually to me looks very obvious that they're fully manually piloted. And that also makes sense where you have a one-shot mission and you spent so much work to set up the cellular network or these drones that work on the cellular network. It would not make sense to trust that to some kind of unproven terminal guidance on a completely new set of targets. Where we will get to is drones that are able to accomplish missions like this completely autonomously. And what you were kind of alluding to is like this GPS-deny navigation world that's getting a lot of attention right now, where basically you have kind of your known map, and then you have what the camera sees, and you're able to match those together and say, look, this is where I am.

1:19:48Typically, you need to do that in a pretty confined space because you have to preload all of that map data. But that's really, really useful if you, especially on these one-way strike drones, the larger drones, when you're trying to do deep strike and hit a precise target, and you've accepted the fact that GPS is just gonna be completely useless. And cellular as well, right? Right. So total signal jamming, but you maybe don't have to load like all of Google Street View from all over the world, but you could load in just this thousand mile region in Russia, and then you kind of know that we're gonna start here, so you need to be grounding, and then you can compress that ideally with some AI maybe or just some general compression to load as much as possible on the drone.

1:20:30But I'm wondering about like if we're if we can't do that without like an NVIDIA GPU on board, that's going to change the weight and cost and all the economic equations around this. But it sounds like we're maybe close to that already. I can speak from the nearest perspective, which is we are speccing all of our autonomy to work on a computer that doesn't kind of ruin the inherent nature of an FPV drone. It needs to be small enough. It needs to be low enough cost. And that doesn't tend to be an NVIDIA GPU for the systems we build. But you can still do a lot with that. And there's also these much more traditional forms of navigation.

1:21:10Inertial navigation has been around for a very long time and works quite well. And so what you want to do is actually combine these different things together. And it's going to depend on the user and the doctrine if they will be okay with drones just fully autonomously going after targets. But we are getting very close to the point where you could have a low-cost FPV-style drone that's completing a mission basically on its own, flying to a certain area, scanning four targets, identifying those targets, and then basically just saying like go or no go, and then you just have to click a button. That's what I think we're actually approaching quite quickly.

1:21:48Yeah. Are there international treaties around that? I mean, it feels like the decision to maybe not destroy a military asset that doesn't have a human on board, but certainly to like take a human life, that feels like a pretty distinct Rubicon that would be discussed in the global order at the UN before it happens. And yet it does seem inevitable as technology progresses. But where are we in that type of discussion and like Geneva Convention stuff? I think the line gets blurry with AI because we've had weapons for a long time where you press the button and once it fires and it can be flying for hours and you're still never calling it back, right?

1:22:32Like a cruise missile, right? Exactly. Or even just like a mortar shell, right? Exactly. And so my opinion here is that the systems that Nearest builds and these systems that are enabled by AI and drones in general are much more precise and cause much less casualties of civilians. True. And that idea, I think, is starting to proliferate. But it's heavily debated. I don't think anyone could give you a perfectly clear answer of this is exactly what everyone's agreed upon. Because when you get in a situation like Ukraine where you are just defending your territory and it is an all out war, those things don't seem to matter as much.

1:23:14Right. You're just you're you're coming up with the most clever solution to get it done with your limited resources. And so I think it's really the only thing that matters is what is actually going to happen in a real conflict. And we can look to Ukraine for that. And we can think about what potential adversaries the United States has in the future. Yeah, it does seem like if the Ukrainians had the choice to send a couple more mortar shells and kill 50 Russian people, they would have much rather just destroyed the capital assets of these exquisite bombers that are very hard to build and are not strictly speaking more valuable than human life, but certainly more strategic to the war effort.

1:23:55So, yeah, it makes sense that like a precise instrument like a drone would actually favor targeting the bomber, the asset, as opposed to the human, which is potentially good. How are you seeing, you mentioned a little bit about how the warhead this time around was different and that it was flat so it could be packed into the truck. What is the, what's the general evolution of, that you're seeing on the warhead side? So the classic image of a Ukrainian FPV drone is a 7, 8, 10 inch FPV drone with an RPG-7 warhead, duct tape or zip tied to the bottom, and some type of homegrown initiation board to actually trigger that.

1:24:42And then there's a blasting cap that just goes in the back of the RPG-7. That's like the most common setup. And there's a lot of images of that. For a long time now, Ukrainians and Russians have been building purpose-made FPV warheads, and these can be basically from scratch. We on our systems have warheads that are very purpose-built for the intended target. And so that's really just depending on the mission. You're able to quickly swap on, swap off various different warheads. And I think that's the ideal scenario where you can support a wide array of different effects and swap them out quickly.

1:25:20Can you talk about the economics between the drone and the munition? It seems like the disposable drone was quickly adopted. And is that a function of the fact that the warhead costs more than the drone or they're roughly 50-50? What's the evolution been there? Because you could imagine if you wind up in a world where munition cost is driven to five bucks and the drone is still hovering around a couple hundred, well, then it might make sense to release the munition and try and return the drone, even if it's somewhat low probability. Yeah. The costs are roughly 50-50 on an FPV system. And it really depends.

1:26:01But I would put it roughly 50-50. Why you don't want to release the munition is because the point of an FV drone is that it's the cheapest and most precise guidance system you can have. So as soon as you decouple that, even if it's very close to the target, you're losing precision and it's not a great cost to actually blow up the drone. Right. And you we do have bigger bomber drones, which makes sense because those are much more costly and they're able to carry very, very heavy warheads. But to me, the reason why an FPV is so good is because it is actually just kind of a guidance system around a warhead.

1:26:39Yeah. When you say we, you mean the U.S. Armed Forces, not NEROS? I mean, the collective. Yeah, yeah, yeah. So, yeah, what is in the NEROS portfolio right now? How is how is scaling production been? And I'm interested in specifically knowing, like, what are the downstream, what are the frustration points that you've experienced building that manufacturing line that you maybe even expect someone to build a startup around to make it easier? I've been talking to a lot of defense tech friends who are employees and I've been telling them like if you just go into the most hyperscale, the most aggressive startup, like if you want to be a founder but you crush it there, like you might discover something that needs its own business instead of like looking at a market map and trying to decide that way.

1:27:35Like go experience the pain. So where has the pain been? Where's been the opportunity? And how has that process been scaling up the manufacturing line? So speaking to our current products, we produce Archer, which is our FPV drone built on an allied supply chain. It's certified by the DoD for usage and to be cyber secure and supply chain secure. We have Archer Strike, which is the version of that, where we actually integrate the warhead system. And then we have our various different ground stations for different use cases. Crossbow is more tactical and portable. Longbow is our max range, max anti-jam ground station.

1:28:10We have other things in the works, but the main focus has been scaling the production of Archer and the ground station. It was quite painful earlier this year. We went through sort of the first version of a production ramp, which I think for any company ends up being a really, really painful time. For us, it was all of our, not all, but we have all of these custom electronics that we bring in from a board house in Arizona. And we were finding these really high failure rates in some of the designs. And sometimes it wasn't even because of something we were doing. And so we had to spend a lot of time to get those components to a really high first pass yield.

1:28:49So for a while, it was lots and lots of testing, lots of drones failing at the end of line test. Now we're in a really stable spot. And that is going quite well. We're shipping very consistently about 1 ,500 drones a month, but ramping that actually very fast. On the ground station side, there's also been a lot of engineering challenges. But I think what's more interesting, what you were alluding to, is the supply chain. And one of the big things that I think you'll probably hear a lot of drone and defense tech people talking about right now is the supply chain for brushless motors. We have worked with a partner outside of China to scale up their capacity.

1:29:27But even right now, that's still a game where we're pushing them to go faster, pushing them to make new specs. And they are not prepared for the volume that we're doing and that we're planning to be doing quite soon. So this is one that I've seen a lot of folks getting interested in. I think there's some really good efforts that are starting to appear within the U.S. and allied countries for making brushless motors. But there's probably going to need to be a lot of people serving this because there's many different sizes, many different specs. One of the challenges here is also the neodymium that goes into the motors and the other raw materials are also typically controlled by China.

1:30:05So there's a many, many layer supply chain problem that, you know, one single drone company isn't going to fix on its own. Yeah, I talked to a friend who was doing business with an international founder who had experience in the brushless motor industry in China and was thinking about setting up an operation in America and was asking this other friend, oh yeah, we want to get set up, but of course we want to be where the action is because we have a supply chain. we'd love to set up in the brushless motor district in America. Like wherever the district is where all the brushless motor companies are, like we'll go set up there so that we're just walking distance.

1:30:45So if we need a specific material and they had to explain like, no, no, no, no. Like America doesn't even have a district for that. That's not even a concept here. Like we don't have any companies, but we also don't have the rest of the supply chain. And China's really, really done a great job of like creating not just the power law outcomes like the DJIs of the world, but also all the minor supply chain companies. They're all right next to each other. So if you need some piece of equipment, you can just go across the street. It's kind of like what's happening at El Segundo right now. You guys are building it up where you can go over to Cameron at Rangeview and say, hey, can you help me with this part or something like that?

1:31:20But we're a lot earlier on that curve. So hopefully it's solved. I know people have flagged the brushless motor industry quite early, and so people are definitely working on it. Yeah. Anyway, thank you so much for coming on. I'm sure you're going to have a very busy week. Yeah. I'm sure we weren't the first people to shoot you a text and ask, get your thoughts. So thanks for coming on and breaking it down. And thanks for doing what you do. Yeah. We'll talk to you soon. Cheers. Thanks, guys. See ya. Quickly, let me tell you about Numeral. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance.

1:31:52What is this? It's just a cool sound effect. Go to numeralhq.com. Put your sales tax on autopilot. Next up, we have Connor Love from Lightspeed coming in. He's been on the show before. We're going to get an update from him on all things in the defense tech world, what he's thinking about and how he's seeing things in the government. Welcome to the stream, Connor. How are you doing? I'm good. I'm doing all right. Good to be back, guys. Yeah. He's got a suit this time. Oh, looking great. We love to start. I won't say I dress up just for you, but I would have taken the suit off far before this if I wasn't coming on.

1:32:25Fantastic. Thanks so much for jumping on. have you been tracking the Ukraine story closely? Any insights there, anything in the portfolio that's at all relevant in the defense tech world? Do you expect a response from the US government or guidance or change to any strategies? Really any takes on that? I mean, first shit, what a time to be alive. I mean, I'm sure your Twitter feeds and your group chats were blown up, pun intended over the weekend. I mean, it's pretty crazy. I mean, let's be honest, like, first, I'm not shocked that the Ukrainians did this. I mean, the execution seemed to be flawless from what we can pull from open source intel.

1:33:06I do think, though, I mean, again, it's not a surprise that the Ukrainians have been mastering drone warfare for the last handful of years. And you want to call it that, you know, they called it spiderweb. Like, this was their Trojan horse. This was their, you know, Israeli beeper. And the outcome is pretty impressive, to be honest. I mean, from the outside looking in, like the Russians woke up over the weekend and they thought they were getting their$4 TEMU orders. And what did they get? They got a thousand, you know, FPV drones, you know, blowing them to smithereens. So it's pretty impressive.

1:33:39I mean, my takeaways from this are really twofold. The first is like, there's never been a clear signal of where warfare is going. And to be clear, what I view this from both the entrepreneurs in my portfolio, but also from my perspective, I mean, the world is about cheap, attributable, a lot of times autonomous systems. And that's, you know, playing out in warfare, that's playing out in other areas of life. And then the second thing is, you know, candidly, it's like it's really hard to defend yourself at the pace at which things are changing. And again, like I know we do some things here in the United States and are trying to be on the front end of a lot of this innovation.

1:34:18But when this happens, I think this almost just resets everyone again and says, all right, how do we respond to it? And I think it's to your point, it's not a it's not a direct U.S. response. It's more of, hey, what do we need to buy? What do we need to develop for our own fight in some way, shape or form? Yeah. What do you think? Obviously, you're a venture capitalist, not a geopolitical strategist, but what's the right Russian response to this? Is it, hey, we suddenly need to be wary of having cell coverage anywhere near strategic military assets? I mean, it seems like Ukraine and Ukraine in Ukraine's perfect world, they could run this style of attack a bunch and copy and paste and hit other targets.

1:34:58But it feels like something that was dependent on cellular technology, that that's something that the Russians can revoke, you know, fairly, fairly quickly. Sure, it'll be inconvenient, but I'm curious if you have have a take. Yeah, I mean, you know, to be honest, when I think about how do you defend against this, I think there is, you know, I wouldn't call this the easy answer of just, you know, turning off the cellular network. I actually think the only way to do it kind of practically is in layers or in a multitude of different ways. because, you know, yeah, the, you know, the reality is if you looked at how the Ukrainians carried out this attack, they did so on the local, you know, Russian cell network, which again, I don't think any Russian kind of defense unit, any of these bases was ever thinking that they would have to turn off their own cell network.

1:35:48And then there's just a practicality of how you do it. I mean, I think there was what four or five different attacks that hit all at the same time. What do you do? You turn off the network for tens of thousands, hundreds, thousands of people. And And oh, by the way, this is like a dirty little secret that nobody talks about. You know, yes, you have your military systems that are protected and all that. But a lot of coordination is happening through WhatsApp. A lot of coordination. And so all of a sudden you turn off the cell networks, you're actually inhibiting your own defense, your own response, the first responder, you know, getting your own people out of there.

1:36:20So I think it's a bit more complex than that. And then the last thing I'd say is just like, even if you do this in layers, you know, you you need to be resilient in a way, but you're not going to stop everything. I mean, this was just brilliant masterclass of, you know, again, if maybe there was a plan, we didn't know this, but maybe there's a plan for, you know, a hundred bases and we only hit five of them. And so if you think about just the broad, you know, geopolitical, you know, geographic coverage you have to have, I think to be a hundred percent certain on anything, it's just, you, it's impossible.

1:36:52You can't do it. It's interesting. There was like that Huawei narrative for a while about 5G towers and potential back doors. It was always about the narrative is always about spying. And I think now you have to consider sabotage, not just espionage. And the idea that if you could even just provision a tower that has some sort of just just if this SIM card comes through, just let it go through. You know, don't don't worry about this. This this SIM card can always communicate. That's that's very scary. So I wonder. This is a funny aside, but it's real. I mean, back when I was in Iraq, you know, we would go by like burner phones to be able to like check the news and, you know, catch up with your family on obviously non pertinent things.

1:37:35and every now and then I was in northern Iraq and every now and then I would go just pull up my Google search on this burner phone and my location happened to be Tehran, Iran almost every time that I would go to search there and I'd be like, oh, this is weird. That's where I am. So again, I think it's really hard to do in practicality. I think the manner is like you just have to have resiliency. You just have to have a bunch of different options, both on the defense and the offensive side. I mean, look at what the Ukrainians are actually using for the majority of their drones in Ukraine right now.

1:38:07Fiber optic cable, they're not even using networks at this point too. So yeah, it's a fast migration cycle. Can you go a level deeper on what that fiber optic infrastructure is? Yes, Soren mentioned that, but I don't actually understand. Is it like a cable that flies through the air? 100%. I mean, think about it. It's arguably unlimited amount of fiber optic, really thin filament cables that all it's doing is it's transmitting data to the drone. And you know, you're inhibited, um, you know, arguably by how, how much fiber optic cable, how much, how much kind of filament can you lay out? And so, so it's actually like a spider web that they're just drawing across the sky.

1:38:47A hundred percent. So you could have, and it's, I'm so curious to actually understand, you know, we don't have to talk about it today, but the actual mechanics, is it like effectively on a spool that's just running out? That's literally what it looks like. I mean, I, I haven't been on the ground in, in Ukraine, but when I talk to my portfolio, founders and companies that either are or have kind of partners there. I mean, you literally drive around the front lines of Ukraine right now, and all you see is just miles and miles of clumps of all this severed fiber optic cable. So again, I think that just to zoom back, like, I actually think the takeaway here is that the pace at innovation that's happening both in Ukraine, but like, let's be honest here, what we are watching in Ukraine and in Russia is a precursor to what life looks like in the Pacific.

1:39:32And I think that's, you know, maybe sounds a little bit doomsday in a way or another. But if you don't think that the Chinese are watching what happened to the Russians and either changing their own kind of defensive plans, you know, building new kind of technology and equipment, you're just, you're wrong. Like they are, we know that for a fact. I remember because it was somebody at Andrel was responding to one of these posts, but a Chinese official was posting this video, a render, it was a render. They were getting roasted for using a render, but it was like this mothership style aircraft drone that was launching hundreds of drones off the side.

1:40:08And so that's like the scary thing is, you know, could you have, you know, stealth aircraft at some point that can actually do the same type of deployment that these trucks did? Like a new B-52 should be dropping FPV drones instead of just untargeted bombs. They'll just be a lot more targeted. I mean, I think there are many, I mean, again, I think the reframing that's happening both on, in my mind as an investor, but kind of like also in the DOD and in the government side, is before we used to think about deterrence, just by like, hey, let's buy the big new exquisite system. Let's buy the thing that if we stack, you know, head to head, like, again, I think I showed this with you guys before, but back when I used to work in the Pacific, we created this really kind of popular and widely distributed unclassified, you know, slide that was literally just all of the US ships stacked up against the Chinese ships.

1:41:01And just like you look at the math, it's this crazy, crazy metric. We're, you know, grossly behind by hundreds of ships. And that's just one example. I think the frame, the mindset we had then was like, oh, well, then if we get more systems and we get more of these things that could have these big effects, then we're going to win. We're going to deter conflict. We're going to win. I just think the paradigm has changed. Now it's about, okay, what are the means that we actually have those effects? And it's not just about, I hate to say it, buying another F-35 or buying another aircraft carrier squizet system.

1:41:32It's let's think about this as a parts of a whole thesis and say, okay, if I can build a missile that costs a 10th of what we used to have, if I can use a drone that costs a thousandth of what we have, but have a thousand of them, have 10 ,000 of them, you actually achieve, if not a better end outcome in just a different means. And by changing the modicum of how you deliver it, the enemy has to change how they defend against it. So again, I just, I think that's the future of where we're going. It's not going to look just like what happened over the weekend in Russia, but it's going to rhyme. It's going to look very similar to that.

1:42:03Do you think this speeds up DoD procurement in any way? I mean, it's certainly such a visceral and tractable problem. We've seen Andrel working countering UAS for years, but there's also a ton of other startups taking different approaches. We had the Secretary of the Army, Dan Dershko, on and he was mentioning that they are ready to see demos from even early stage startups. They want to see things. And you think about not even in great power competition with China, but just if there's an army base abroad, they're going to want to fight against this and they're going to want a really robust ensemble of counter UAS technologies.

1:42:40Well, yeah. Why don't you give us, I'm curious how you think of the market map of counter UAS technology, because we've had Steve Simonian from Allen Control Systems, that can be a great solution if you're on a battlefield, right? But if you can't, you can't, you know, protect against an NFL stadium for like counter terrorism by like shooting, you know, rounds into the air in the middle of a city, right? Unless you're in Texas. Yeah, Texas. I don't know. I think the way to, you know, back to kind of my defense in, you know, multiple layers comment, I think the way you look at this market is almost like a spectrum.

1:43:15on one end of the spectrum you have what i would define as like the non-kinetic stuff that in a weird way can be kinetic but this is you know your ew jamming this is your you know laser-based systems and then on the other end of the spectrum you have like something as simple as like shooting a bullet or shooting a shotgun at something and i think again there's there's a there's a middle ground here which you know you start to take both like ew resilient things but then also like you know you mentioned the anvil drone from from you know anduril of a drone flying and hitting in another drone. I also just think there's this layer that no one else really talks about.

1:43:51And when you look at this, what happened over the weekend, there's a full, like, how would you have solved this in the first place? You can be like, oh yeah, we can shut down the cell network and get a bunch of shotguns. We can get a bunch of different systems that shoot down systems, or you could just do better counterintelligence and understand in some way, shape or form. And that's hard to do, to be really honest, because one truck gets in, you still have an effect in some way, shape or form. But in the end, I think the US military is not just going to buy one of these systems. They're not going to be like, oh, let's go with Andrews Anvil.

1:44:23They're going to buy a litany of these things. And if you think about just the sheer complexity of the locations at which we are at and where our critical infrastructure sits, a single solution doesn't solve the problem. I mean, go talk to, I know you guys were talking about the cell network earlier, but you guys should get a famous John Doyle, who's now building a business called Cape, but used to be an early Palantir guy. You know, he's building a private cell network. And, you know, part of what he's doing is enabling for when, you know, we call it a pace plan in the military, when you shut everything off, you still have a way to kind of communicate and talk.

1:44:59But yeah, in the end, I think you're going to see this litany of many buys as opposed to like, one solution that that that solves them all. Yeah, I wonder if there will be almost like adversarial camouflage for computer vision-based models. Because I mean, I've seen situations where people were worried about facial detection. So they would wear specific makeup with triangles. And it would look very odd to a human, but to a computer, it would read as just, I can't process this at all. And so I imagine - It's crazy because in a way this isn't new. Go back and look at World War II. What did we do?

1:45:33We built literally wooden towns across the channel because when people were looking or doing like, you know, it looked like it was real. Now it's just, you know, the technology has flashed forward so far. But, you know, in the end, I think, again, it's one of these things where it's like, you know, there's going to be no single solution that fits them all. I do think that and this is like worth commenting. I think a lot of times when we look at, you know, we as investors or entrepreneurs building or even just the general public thinks that the DOD has truly autonomous systems. And the reality is, is like you have humans in the loop on 99 percent of what's happening.

1:46:09And that's not necessarily a bad thing. I just think the scary thing is like, you know, call it our doctrine, call it our Geneva Convention laws, call it whatever you want to call it. But the reality is when shit hits the fan with China, do you think they're going to have a human in the loop and making decisions of how to kill or not kill something? They're just going to kill things. And so to me, it's like, you know, we need to be thoughtful about how we do it. We are a beautiful democracy who cares about life and kind of human nature. But at the same time, like we're not really doing autonomous systems yet.

1:46:41And that just makes me a little scared, to be honest. Yeah. Put this in the context of DJI and TikTok. the TikTok ban was always a little abstract. It was like, well, it's kind of brain rot for kids and that's not great, but people watch Instagram Reels and that seems maybe equally as bad or maybe fine. But maybe they're steering the algorithm to influence our policy. It was all very like four steps away from something bad. And so it kind of didn't catch ground and didn't really get off the ground. But DJI has been in the news as a potential ban target. it, this seems like it concretizes the feeling of danger so much more intimately than TikTok, where it was like, oh, well, like the, you know, the CCP could find out that you are into luxury sports cars or something, and they could do something with that.

1:47:33They could blackmail you. But that's very different than drones explode. And so maybe we don't want drones. So do you have any take on that? I think even more important, it's like, look who's using those drones. I mean, And again, this is what we did. I mean, I was in the military not too long ago, but I remember on some of my first training exercises, this new team, and I don't even know who they were off the top of my head, but they came to us and they're like, hey, we're gonna try this new thing that's drone warfare. I was like, oh shit, we developed a new smaller predator or something like that.

1:48:02They literally just pulled the DJI out of a box and they said, hey, go screw around with this in the woods. And like we did, it was like super cool. We innovated on some stuff. But I think you're right. It gets super scary when we're taking the feeds and the data and the information from that drone, you know, not necessarily touching it, putting it into our classified system because there are controls for that. But again, even some of the, you know, again, you should talk to, you know, Soren, you should talk to the Orca guys, you should talk to, you know, Andy from Vector about like, there's a lot of open source tools that are actually used as, I think everything from, you know, navigating, you know, the fight computers of these drones.

1:48:36But even in those situations, like we just have to be thoughtful. Again, I am on the side of, you know, Again, when I was in the military, everyone gets so scared about classifications and no one wanted to get in trouble for this reason or the other. The reality is if you're so scared about using some type of tech, then you're going to lose. It's going to be the different way. It's not going to be the information leakage way. So there's some middle ground of like we need to just set a policy and hopefully the policy is broad enough. And then, oh, by the way, hopefully like U.S. builders are building at the same time so we can build a capacity that actually meets it.

1:49:09But, you know, the story is not clear here in the future other than, you know, we need a U.S. version of that to be able to operate in similar ways. Yeah, the capacity issue is so interesting because it's like, even if DJI is just a friendly consumer drone company, by virtue of buying$100 million worth, this massive demand signal to scale the supply chain results in an industrial capacity that is dual use, even if the products that reach America are never dual use. I mean, this, you know, again, I said I'd put on a suit for you, but I was talking with a member this morning, a member of Congress this morning, and this is actually what we spent 90 % of our time talking about, which is just, okay, say we all agree and say the DOD in Congress fixes our acquisition pathways, say these are the right things to buy.

1:49:57you can't just snap your fingers and build these things i mean this takes time i mean go look at what what andrel's doing in ohio i mean i think they're doing it at a pace better than anybody else but like you know same thing with seronic on the on the boat building side too but it it takes time you know what i mean you can't just have thousands of systems tomorrow you need to make decisions today yes that are doing everything from the supply chain to again like you know congress gets gets a little scared sometimes or the duty gets a little scared sometimes it's like Well, if you're not a prime, we can't trust you to give you a bunch of money upfront to develop it.

1:50:28And finally, that that's like changing. That culture is changing and saying like actually giving a hundred million dollars to Castilian or Anderil or whoever in advance of them building it is probably a 10 times better answer than, you know, giving it to a prime. But we're not there yet. Like we're still pretty far off. Yeah. Soren said they're the highest producing U.S. manufacturer right now. In the class. And they're putting up 1 ,500 a month or something like that. But the Ukrainians built millions. Yeah. I mean, the Ukrainians are building thousands a day. Like in just a, and again, it's a different ecosystem.

1:51:03People come to me a lot and we're just like, well, isn't the U.S. DoD going to do this? And, you know, part of me says like, no, because I know how slow we move. The other part of me just thinks that like there is some value and, you know, what we call interoperability. and again i think that's kind of somewhat an old school way of thinking but like you need to know that if you give a thousands of one type of drones to you know one unit that the next unit is going to fight in a similar way where you know the tactics and techniques kind of all align because in the end like what we aren't talking about with these drones what we aren't talking about with these new missiles or systems is like there's an entire downstream integration and there's a training that happens it's not just like okay once we have them in the warehouse we press a button and we win the war with China.

1:51:49Like, no, we need to train, integrate. And again, that's just another problem. Again, like there are some companies trying to go attack this. Like Andy at Vector is doing this. He calls it like warfare as a service model, which I think is like really interesting. It looks more like training with a little bit of tech. But yeah, I just think there are big gaps. And, you know, I'm optimistic about the future, but, you know, I have a one-year-old daughter. It's like, this is what I think about. Like, this is what keeps me up at night, man. Talk to me about nominal. any news there and and really like how does that type of product uh and interface with like just the the general news and tenor in dc right now yeah i mean um i i know you guys have had uh cam on your show a couple times the the founder of nominal i think um i think what we're um what's what's super interesting is like we are seeing this wave of new hardware uh development in the u.s And historically, it's been in a manner and in a way that's very much like, you know, hey, here, Lockheed, here's your hundreds of millions of dollars, go build, go iterate slowly.

1:52:53And now we're getting like, you know, what looks more like the SpaceX, like build the thing in flight. This is what Castilian's doing. This is what many other companies are doing. And so there needs to be this like software, you know, both, you know, telemetry and observation layer. But it's also just like the tools that if we want to get to this end state of having a million drones in the hands of our warfighters, having hundreds of thousands of autonomous systems, having thousands of missile systems, you kind of need to build all the infrastructure and enable it below it. That's both on the supply chain side, like I was talking about, but also on the software and development side.

1:53:26So I just think what you're seeing, you know, Nominal is one example, but there are many other examples of this is like you're seeing the picks and shovels built out for this ecosystem. I guess there will be big winners in like the hardware categories that's owning the product. But I think there's going to be just as many winners on the downstream, both, you know, infrastructure side and call it supply chain, call it software, call it whatever. And again, like I just I'm optimistic about the market. I'm not necessarily optimistic about the outcome of our security and safety in the world. But, you know, that's my job as a venture capitalist, I guess.

1:53:56That's rough. Always paranoid. What was your reaction to the meta and roll news last week around VR? I'm sure it wasn't a surprise, but I'm also curious if you think we're going to see more if that gives, you know, other big tech giants kind of bold permission to lean in to that kind of partnership. Yeah, VR is a weird one for me personally. And again, like back in my time in service, there was this, I'd call it a research project through Army Research Laboratory, where they were trying to develop and again, really old school, you know, bad, you know, VR at the time, but use it for like planning purposes.

1:54:38And the idea is like in the military, you get out these two dimensional maps and you look at something and say like, hey, this is how we're going to plan. This is where forces are going to be. And it's really slow. It's obviously not optimal when you talk about terrain and kind of other things. so I was part of a unit in the Pacific actually where we were testing this back then I remember taking it to like the brigade commander the guy who I don't know was in charge of 5 ,000 or so soldiers and you know I have this I still have this photo of on my phone of him with these glasses on like standing there being like what do I do with this thing you know and again like it's part of this is a cultural thing that we need to shift but you know I think when I see the the you know Palmer you know going back with Mark and I put a it puts a smile on my face because to me it's like this is the best of what we need.

1:55:20We need the best technology companies and the best defense technology companies working together in some way, shape or form. And the reality is where, 10 years ago or more than that, when I was in and we tried this and technology wasn't there, I know for a fact that the solution and the hardware and the software around it is 10 times better now. So I look forward to see what Andro comes out with. I mean, shit, if anybody's going to do it, Palmer is probably the right guy to do it, but we'll see. I haven't seen the outcome yet. So I'm excited to give it a try. Yeah, I really just feel like if it's anyone's game to win, it's Palmer.

1:55:51It's like the perfect merger of everything he's done in his career. In my view, he was going to win that category. It was just whether or not he would have to reinvent the full production capacity, reinvent the technology that he already created. And the patents that he patented there and gave to them. What is your take on Golden Dome? What companies or industries are you tracking related to that? Obviously, we have a missile defense system, but we're planning on ramping it up. what do you think is interesting if that project kind of gets off the ground? I mean, I won't bury the lead. I don't think anyone knows what Golden Dome is or isn't, which is okay.

1:56:27I mean, the thing that I give President Trump a lot of credit for is he has these big audacious things and he just goes and wills them into happen. And again, I'm not an expert in from the inside the DoD, but like, that's how you have to get a lot of stuff done. I mean, you have to almost make it not too big to fail, but put the cart before the horse in order to align both Congress and DOD support behind it. I think from a principled kind of like what can it do perspective, it's an absolute no brainer. I mean, again, like to look at the technology that has happened in Israel and to understand that like one, Israelis developed that, but we had a say and input in that as well, that we don't have that in the United States just seems that again, other things that make me feel uncomfortable.

1:57:13I think the reality is, is there's, there's going to be a lot of different components of this that still need to be built. I mean, there's, there's an entire space component, there's an entire, you know, kind of missile and effector component. I mean, in a perfect world, when we can see and know everything coming, we actually need to be able to do something to it. And if you think we have enough missiles to respond to, you know, everything we see potentially, you're wrong. So again, I think it's a goes back to my statement before. These things take time. And I'm glad that President Trump has these audacious goals and getting it done before his third term.

1:57:45I just think it's arguably, in my opinion, if done correctly, it will be a Manhattan Project-like undertaking where it's going to take multiple different departments. It's not just going to space missile defense and saying like, hey, solve this problem for us. I mean, this is going to create a new line of budget. It's going going to create new kind of work streams, going to need new congressional support. The beauty is we got a bunch of awesome space companies and a bunch of defense companies that can respond to it. I just don't think anyone knows what it looks like yet. So excited and optimistic, I would say.

1:58:15It's interesting. As soon as we were talking about Golden Dome and like the space based ICBM weapons, like the big guys, now we need like a golden spider web defense system to like stop like the local drones and do. I mean, it's layered, like I said. We need both. Yeah. Like, you know, to some extent, a missile defense system. I mean, probably not with, you know, I don't have the full specs, but probably not with the height of those drones we're kind of flying at. But you fly a one-way drone, a thousand kilometers or, you know, 3 ,000 kilometers, you throw it up high enough in the air, like 100 % something like, you know, Golden Dome can help with that.

1:58:44It feels like a missile attack, honestly. And again, like, this is the last thing I'd leave you with, which is I do fundamentally believe back to my full spectrum on defense. There's also a spectrum on offensive weapons, too. Like everyone thinks that the answer is a$10 million missile and that's the most exquisite, best thing that's going to save us every time. If we can get better both, you know, on the low cost, high-performance missiles and in drone-based systems, I actually don't even think we need those, you know,$100 million,$10 million systems in the end. But again, something optimistic to look forward to.

1:59:17That's great. Well, thank you so much for coming on. This is a fantastic conversation. Always a pleasure. Yeah, guys. All right. We'll chat soon. Have a great trip. Talk to you soon. Bye. Let's tell you about public.com, investing for those who take it seriously. They got multi-asset investing, industry-leading yields. They're trusted by millions, folks. And we have Melissa in the studio. She has some massive news, and we're going to need to hit that size gong. Can you introduce yourself? Welcome to the stream. How are you doing? Let's go. We're going to have to hit the real size gong. So break it down.

1:59:48What are you announcing today, and why should we hit this gong? Yes, we are coming out of stealth with Netic today and announcing our$20 million fundraise from Founders Club and Greylock and Mike Volpe amongst amazing other investors and visionary founders and growing our team to serve our success. Hit the wide. Hit the wide. Hit the wide. Let's go. That's what I'm going to ask. Here we go. Back to background. Let's go. Congratulations. Thank you. Thank you, guys. Now that we've gotten the important stuff out of the way, what does the company do? Yes. We work with the backbone of America. We're building for the essential services industries like home services.

2:00:34Podcasting. Yeah, exactly. You guys are essential. That's why I'm here, right? Yeah, exactly. I could be doing a lot of different stuff today. But, you know, we give them an AI revenue engine so that when they are, these are industries, even though they're super important, they're affected by labor shortages, external circumstances and demand changes, physical infrastructure. So when they have high demand, we help them handle it. So you get all, they get all the dollars and help their end users. And when they're low on demand, we help them generate demand so that you can always maximize the revenue.

2:01:10What is a good example customer? Like we hear about these SMBs and like this abstract context, but is that, Is it actually like one guy who owns an LLC who has a few employees or is the median customer more of a small business or medium-sized business with dozens or even hundreds of employees? And then I want to walk through how they actually use the product. Is it replacing or augmenting an existing kind of sales force or someone that they have internally? Or is it just kind of helping individuals do more with less? So we work with actually pretty large customers that would be owned by private equity from, you know, hundreds of millions of dollars to a few billions of dollars, as well as well as smaller companies that are around like 10 to 20 million dollar, 20 million, 20 million.

2:02:01board we started with the larger ones to really um you know demonstrate the impact of our platform at the end this is also a business but now actually this is a life life passion for me because i do want to help with smaller companies as well that's how i came across this problem as a customer myself for hvac in my own home so we just announced a very large uh partnership with next star network to be able to help a thousand companies that are more on the mid-market side as well. And for the smaller, you know what, we want to support everybody. I think we would start with some materials for them to get ready for AI before maybe they roll us out.

2:02:40But, you know, we want to really help across the board. So one example would be how are they using it? They're actually completely integrated with our platform. So we would use first party signals about their customers, as well as third party signals, like we find from weather to, you know, really property information or different types of things to help any of the customers that are coming in so they get help immediately and these are complex jobs right like there's actually quite a bit of information you need to collect to be able to deploy the right labor and then based on that data we predict the user's next need you know so i'm almost building for myself i'm like i would never think about these things for me i wish somebody told me melissa you're gonna need this next month because, you know, I don't know, a storm is coming or San Francisco weather is again terrible, so you've got to fix this.

2:03:34And then we turn that into predicting the next need for their end users so that the companies can really cultivate the relationship with their customers, but based on need versus random promos, right? So everyone wants their HVAC system like tuned up before the big heat wave hits. Exactly. You can do essentially outbound sales to existing clients and potentially new clients before that hits with the correct information, the correct pitch. Exactly. What is the actual medium? Are you sending text messages, emails, phone calls, all of the above? What does that look like? For inbound, we're really integrated across the board on all channels.

2:04:15So voice, text, online widgets, web chat, third-party integrations. Okay, everything. Because revenue doesn't come from one channel, right? It comes from all channels. And, you know, the same customer, if I'm in a meeting right now, I might be texting an essential service provider right now, even though I'm busy. But a few hours later, I might call them, right? On the outbound campaigns, we really do see a lot of success with especially text since it's much more respectful. So we started from there and we'll be rolling out to more channels. So I'm intimately familiar with all the tooling in email.

2:04:49You have MailChimp and all the different AWS, SES, and all the different systems that have built up to make that easy. And I can imagine how you would automate that. Talk to me about automating a phone call. It feels like with Whisper transcription and then text-to-speech, we're now kind of past the Turing test on that. But are you building stuff yourself? Are you training your own models? Are you partnered with other AI companies to provide that piece of the stack? Or is that so integral that you're handling it yourself? Yeah. This is actually the integral part of this, is that certain technologies have passed the Turing test, but actually for really, you know, mission critical workflows like this, where you are absolutely like utility and you can't drop, all the work and, you know, engineering really focus goes to the orchestration right so what does it mean is that like when depending on whatever workflows that you're handling which models are the best when they're not the best how can you actually fine-tune only for that task and how can you make sure not only it looks good in a demo we actually a culture we don't ever do demo we show real deployments and let you test but it's very different out there when you're talking to somebody with an accent or That person doesn't even know what they need, right?

2:06:12It's actually very complex. So all of the engineering work not only goes, you know, improving and integrating machine learning advancements, but also doing our own orchestration, fine tuning, as well as evaluations so that you can be like utility and really reliable when you're replacing these systems and augmenting the teams that rely on this, right? Yeah. What's the process like selling AI to SMBs? We've had a bunch of people on the show that sell to larger corporates, Fortune 500. There's an excitement from the Fortune 500 to just buy AI, even if they're unclear of what the value is. I could imagine you see two scenarios.

2:06:55One, where owners or operators are excited about potential efficiency or more revenue, more leads. And then another side, which is like, well, I don't know about this AI stuff. Why are you doing an accent, Jordy? Why are you doing an accent? You know, you'll be surprised. This is why I'm building for these industries. These are probably the best founders and entrepreneurs I have ever met in my life. and I'm in the heart of Silicon Valley and I worked very hard to get here. And all these founders, truly, they are extremely ROI oriented. They're extremely customer oriented. And incentives are very aligned, right?

2:07:35Like they only do better if they serve their end customer better. And I only do better if I help them do better. So it's extremely aligned. So we actually don't see, you know, they might ask questions, but everybody is extremely open about it. They know that that future is here. They can't stay behind. It's not like the enterprises you're a little bit alluding to where, let me just put this on my board deck and have like a few million spend here and there to show how AI oriented I am. And then they won't actually use it. No, these people actually are absolutely incredible and partner with us so closely to see it in numbers.

2:08:09Right. We let them even track it. This is how much you generated from only AI handled jobs or interactions. So we've been very happy about it. And it's the same from a$20 million revenue business to a billion dollar revenue business. Obviously, there might be a few steps here and there. But I am pretty happy about how incredible entrepreneurs I'm working with in this industry. I think I choose to do that. yeah i always i always think it's it's funny when when people in silicon valley like look at these maybe trade businesses and they think oh i can just you know get a better yeah yeah software and it's like you realize the person that was operating this business for 20 years is like a is like a fixture of their community like they are like respected and also extremely hard working they're working 14 hours a day their overnight success comes over 20 years yes not just like various um yeah i don't know and like tonight in my bedroom i built this and now yeah yeah i went viral and now i'm the hot kid on the block and all of these families right like everybody really investing in this and even when you work with a larger company or owned by it like everybody's truly invested in this to give you a sense like um i have brainstorming calls with my customers on sundays they'll call me with really cool ideas and i'm like interesting so try to the next day I'll follow up with a try this one try this uh let's see if you like it and then we'll actually launch it this week for you right so I absolutely love that um what what's how are you do you guys leverage your own tools at all or do you have your own internal tooling to be more efficient I from what I can see you don't have very many employees and yeah what do you use for very quickly I know hopefully you'll help with that we're hiring across the board especially with for our engineering, but also go-to-market teams now and products.

2:10:06So we actually do utilize various tools internally just to increase engineering output, but also still, especially when it comes to various coding tools, I will say because we ship for really mission-critical workflows, you need to make sure that it might accelerate you and augment you, but you still have to make sure everything is ready for production because we're handling a lot of large volume customers that are really deploying these services to help somebody maybe after a storm. Like a few weeks ago in St. Louis, it happened after the tornadoes. So we have to make sure everything is really getting that check from us.

2:10:43And like the best engineers we have hired across MIT, Stanford, scale, Palantir, HRT. But yeah, I mean, you're a fool if you're not using augmented tools for your team. And you are right. We are a small team. And that is by design, because I think all of us are also here to create the best things out of nothing, right? And really keep our culture and grow in that way. You mentioned you worked really hard to get to Silicon Valley. Can you give us a little bit of the journey and the background to get here? Yeah, I will say building a company is almost as hard as getting to here from a small town in Turkey.

2:11:22I grew up in the Mediterranean. This is like a tiny town, actually, in Turkey on the western coast. And, yeah, I think it is an incredible community, but there is absolutely like no opportunity, especially for someone like me who's focused on math and computer science. So I tried to first leave. Actually, I went to boarding schools that I got in starting age 13. So I haven't lived at home since 13 and then spent some time in India when I got into United World Colleges, actually, for two years. And I thought that's how I would learn English because my English really sucked. And I did, you know, I'm doing pretty fine.

2:12:03And yeah, from there, it's been my dream to come to Stanford. And I didn't know anything about it, actually. I only saw it through a summer camp I came to on a scholarship. And even my flights were funded by thousands of emails I sent to businessmen in Turkey. And one of them responded and sent me here to California. and when I saw it I was like I have to be here and since then there's no you know easy way of explaining this it's you I think probably I fought tooth and nail to be able to really get here and I'm glad because I love this place and mainly for me it's about the people everybody's interested in your ideas everybody's interested in making them possible for the world and if anything I wanted to change one part of it when it came to my own company is that I want to build for the real world, not just for Silicon Valley or other startups.

2:13:01I want to build for America and then the world, like this country that gave me a lot of opportunity. And then hopefully globally, the real world economies that run everybody's lives. Yeah. I know you worked at scale. Can you talk a little bit about human in the loop or business process outsourcing or any sort of like the Centaur model of AI and how that might play a role in your current or future roadmap? Yeah. So actually, labeling does not play a lot of role for our roadmap. Like right now, obviously, it was big, especially when you're improving these models. There was a lot of labeling and then it turned to expert labeling.

2:13:39Now you really focus these models in terms of how is it going to be better in physics or coding, etc. But for us, human in the loop actually comes from collaborating very closely with the teams of our customers because they will have actually many times what we see in these industries that they won't have like BPOs, what we call, or outsourced call centers. Sometimes they might have, but they'll have also internal teams, which are very valuable resources. So what they can do with us is that they spend their time only for mission-critical interactions when they need to take over and actually see the context from the conversation.

2:14:17about the person, about the home, so that they don't have to repeat anything. They can build rapport immediately. And for the remainder of time, since AI is really handling everything else, that they can focus on more important and high leverage tasks, whether you're helping with accounting, whether you're helping with actually making intelligent business decisions about where to grow. And believe it or not, a lot of people start from there to build their careers in these industries. For example, our engagement management lead, she actually joined us from our earliest customers and she started at the CSR.

2:14:53Right? Don't worry. They're amazing. Still a customer. And, you know, she was making a location change. We did everything right. I love, you know, like he's immediately coming into that. Did you do anything? No, no, no. I mean, it's great. It's like you could just say, we're going to take your star employee, but we'll give you the greatest software that you've ever experienced. No, no. Now they also get to interact with her, but just now supported by us. Off-balance sheet R &D. All right. It's off-balance sheet R &D now. Exactly. I'd like to think that they got a lot of tools from that. But she started actually as a call center employee 20 years ago.

2:15:30And she's so smart and incredible that really built the domain knowledge and went to consulting from there and a VP of customer experience and really built her career. That's what we want for the people, right? Like actually focus on the things that you can shine in and build your career in, not just the menial tasks you don't want to do and only spend time on customer intake. Sure. Talk about business model, pricing model, Salesforce. Mark Benioff's been talking about cost per resolution in the customer service perspective. There's other companies that are doing consumption-based pricing, seat-based pricing.

2:16:10What's working? What's not? What are you seeing resonate with your customers best? Yeah, I think we don't do cost per resolution. It's actually an interesting pricing model, but I think works better for customer support companies for tech when it's all about tickets. And even then, I think it's a little bit iffy because, I mean, what's the resolution? You're able to close the ticket. How many of us have been in a situation where I'm like getting this automated email that my ticket is closed? And I'm like, well, I am not closed.

2:16:42I need that help. So for us, we really work in enterprise contracts with our customers. So they get on a, there's a platform kind of package that they choose based on which products they want to use and how expanded of channels that they want. And then on top of that, they have a volume package that they add so that they can spend it across any channel that they liked. and this also gives them that ability that we're not just signing and goodbye because in a lot of these industries or quite frankly in any company AI is not just like I got on it and now it works it doesn't you really have to make it work ensure that it is working for their operational workflows so it gives us the ability to do that and closely partner and then as we go to mid-market that was something that's why i was super excited about this next star uh partnership because they have decades long experience in these industries and they have accumulated so much knowledge that today we're able to deploy a netic tenant with that knowledge for their members so that you know a lot of the like maybe they won't have any lift to do they can really roll it out directly from the business insights they would be getting from an amazing membership like them anyways so yeah So there was like a meme for a long time about like the search fund going to buy a business, going to do a roll up in these S &B markets.

2:18:11Is that, have these markets been already rolled up? Like, are we past that? Yeah, there's quite a bit of roll ups. I'm sure you'll be interested in it next. Yeah. No, we're going to roll up all the podcasts. I'm sure. I'm sure you're looking into it already. Yes, there's quite a bit of roll ups, to be honest. it like really became popular recently because there's quite a bit of capital out there as you also know even from venture capital there's so much capital that they're looking at these things are crossing over and being like yeah we'll play yeah they're looking at ways to deploy yeah only either deploy to startups that don't need it or do roll-ups right now so um yeah there are quite a bit but i think again the winning strategy becomes even if you have a roll-up right it's a lot about how are you creating value?

2:18:59What tools are you using? What tools are you not using? Where was the company or this combination of companies you have gotten when you got them? And how are you really implementing changes to serve your customer better? So we work with various companies that are owned by incredible private equity partners. Let's hear for private equity. Thank you. Yes. Yes. Finally getting some recognition. We love private equity on the show. Yeah, they don't get any recognition at all. They don't get enough credit. Private equity is really the backbone of America because it finances many of these S &Bs. But I'll tell you what happened.

2:19:39I think 20 years ago, maybe it was all around in all of these industries, it doesn't have to be one, a lot of companies to be picked up. So today, that's not the case. You're not really looking for that perfect business. everything is stellar and like waiting for you to be picked up and somewhere in the heartland of america so i think private equity actually have to be very innovative and i think they're obviously already numbers focused so they are looking for true partners and that's how many of our engagements started with these companies like actually wasn't even about our company was about talking about ai honestly straightforwardly what's going to work for you what's not going to work for you and i think they are really seeing that for value they have to change it's not just about using one playbook and it works for you for 40 years.

2:20:25And they realize now that a lot of them have to make it work for these companies with the right partners and take good decisions. So I think I love that we are coinciding with that change, right? So it's kind of harder to compete there as well because everybody has capital and not much to really roll up around, right? Well, let's hear for the capital. I mean, at least there's a lot of capital. and let's hear it for you and the team. Thanks so much for coming on. This was a fantastic conversation. Thank you for having me and we're so excited to be here, especially for the two people who also work very hard and especially you, John, have built companies that optimizes performance left and right with Soylent and Lucy.

2:21:11So hopefully we take that from that culture. Yes, yes, yes. Thank you. Well, we'll talk about it. You'll have to send some. Thanks so much for coming on. Thank you. Bye. Have a good one. See ya. Next up, we have Jordan Schneider from China Talk coming on. Jordan. We're going to ask him. An absolute dog. Is China important to talk about? Yeah. Bring it down for us. Who's talking about China? Yeah. Who's talking about China? Jordan, welcome to the stream. Jordan. How are you doing? Can we get a sound effect? Oh, he's got it. Oh, we got the horse now. Oh. Is it the year of the horse? What year is it in China?

2:21:45I don't know. We're playing around with sound effects. you're playing around with backgrounds too i think it's the rat you're the rat that seems last year was last year was dragon so it's like it's worst after okay okay um i want to start with a victory lap i said uh i said tariff war gonna not be a big thing we're not gonna be talking about it in four four years uh push back we're not gonna be talking about it in four years So when you came on last time, we were talking about how it seemed like complete doom and gloom. Like the Trump tariffs were absolute chaos. It was complete disaster. And I was saying that like this is within Trump's control.

2:22:28And so he could potentially roll them back and the market would go back up and everyone would be breathing a sigh of relief. Like, oh, OK, that was a crazy time. But we're not in this insanely high tariff regime. So things aren't that bad. And we would look back on it like we looked at the previous trade war, which was a crazy time, but did not like permanently change the structure of America. And so it feels like we walked to the edge and then we walked back from the edge. And it's less of a story now, but am I right or wrong? Let's be clear. Who's walking him back from the edge? The justice system.

2:23:04The Supreme Court is going to take the decision out of his hands. Sure, sure. And then it'll just kind of be slower and more awkward. And his lawyers will actually have to do work to write these section to 232 investigations, which like I guess they'll just have chat GPT. Right. Because like there are no lawyers right now. And USTR. But come on, man. I mean, look, two days ago, like some reporter asked him about the taco trade. And then he said, fuck it. We're going back up to 50. So, look, I mean, it's the story. The saga is not done. We have four years of this. old men don't change their habits all that often.

2:23:41This is clearly the thing he enjoys most about being president. I've taught old dogs new tricks all the time. I got a 10-year-old Newfoundland at home. He just learned to balance the ball in his nose. He's doing great. No, I hear you. Bring him on the pod. Yeah, yeah, yeah. He should. Well, then what else is driving the news? Obviously, the Ukrainian drone attack is very interesting in the Ukraine-Russian theater. Is there a reaction from your community in China world yet, or are we waiting to hear how that plays out? Already we're seeing defense tech companies talk about counter UAS more seriously, DOD procurement modernization.

2:24:24You can imagine that this brings DJI into focus, but how should we be framing it within the China lens? i got a um uh i got a line from a group chat please um what uh don't ask a woman their age and don't ask a teal funded defense tech startup where they get their batteries from okay um so spicy i don't i don't know i mean it's it's uh it's a brave new world we're walking into and i'm worried that we're not ready i think there are um definitely a lot of advantages is that the U.S. has, but one of the big ones is manufacturing and sort of, and like speed and agility of procurement. And if you look at what's happened in Ukraine over the past two years, like the amount of iterations that all of these drones have gone from and the different electronic warfare, like responses and counter responses and the sort of the size and scope and of these different drones and being able to scale up manufacturing of them.

2:25:28And then now we have fiber optic drones. And now we have like things to cut the cables of the fiber optic drones. I mean, just the speed at which you have to innovate when you are fighting and dying is so much faster than what the U.S. does. And because the wars in Iraq and Afghanistan were We're not against high, you know, we're not against like great powers. Thank God. The sort, like the new things that the enemy was able to bring to the battlefield was much less challenging. And you could kind of be like fat and lazy and still mostly be okay and not have. Well, I mean, even IEDs massively transformed the battlefield at the time.

2:26:13And that was another kind of asymmetric trade in some way where, you know, a small homemade device could could take out, you know, cause huge loss of life. But but you're totally totally taken. It wasn't like four million drones a year being produced and flying through the sky. and taking out billions of dollars. There's so many IEDs that it did kind of breed private sector defense innovation in the sense that one of the first use cases for Palantir was map all the IEDs, see that if the ones in this area have nails and the one in that area have TNT and dynamites over here and C4 is being used over here, you can kind of cluster those and see that the bomb maker must be in this city and then you can go and find them.

2:26:59And so, I mean, yeah, it is this like cat and mouse game, right but i think if you just if you look at like the story of the procurement side of all that with the mrap and the other sort of like physical uh uh like hardware changes that the u.s government needed to to supply its troops to supply the troops like it was so fucking slow um sure and uh you know not not the best showing i think um if like even even like al-qaeda and can kind of get you on your toes when it comes to technological innovation. So I don't know, it's a bummer, but hopefully folks are waking up and doing their best on this.

2:27:36I mean, I gotta, yeah, you mentioned like the drone battery thing, but like, it feels like people woke up to that after Skydio, the Skydio battery ban. And so I would imagine that there's probably dozens of companies working on reshoring drone batteries right now, right? I hope, I hope. I mean, I'm sure they are, but it's, some uh it's uh yeah i mean it's it's it's look it's an obvious thing um but what what's interesting i think is like to what extent uh on both the ukraine and the russia side of this there are just like chinese parts that are that are driving both of the uh both of the armies okay let's let's switch to a kind of a less contentious issue immigration what's going on uh what's going on in terms of the students, students, research labs?

2:28:26What's the high level update? Well, I want to challenge you guys a little bit because you have a lot of CEOs and investors in the Silicon Valley broader ecosystem. And they, as well as anyone else in this country, understand just how important international talent is to the future of American science and technology flourishing. So I would be really curious, um, for, to, to get these folks on the record to just even talk about their experiences, kind of like coming to America, uh, and getting their, you know, getting their first H1V visa and, uh, the sort of the, the challenges and the opportunity that, that like you have to, in the sacrifices you have to make.

2:29:10I mean, the woman, the woman The thing we had on right before you was from Turkey, made it to Stanford, had some random Turkey businessmen pay for her flight so she could just get here and is now building an incredible company. So we certainly recognize the importance of international talent. And I'm broadly in favor of brain draining the world, as I think you are as well. I don't follow immigration law or trends nearly to the level that I imagine you do, specifically around China. And it's an interesting time. I mean, we had some Stanford students on that had written that article that was widely— Pressure from the CCP.

2:29:57Yeah, well, it was widely read, and it was also controversial because many of the sources were anonymous. but it also seems to be something that people just take as fact that there is a lot of, you know, sort of low level espionage information gathering happening on campus. But I was more less less trying to get your take, your take more trying to get like the late the core. The 101. Yeah. Development. So I think I think there are two. Well, it's it's there are a number of things going on. Um, first the Trump administration is threatening, uh, like revoking Harvard's ability to take international students.

2:30:40We'll just, we'll see how legal that is. Um, but that is a remarkable development and something that I think is sort of like spread. If it like ends up being a, uh, a tool that's used across a lot of different universities is really dramatic. Like if you look at a lot of the sort of top 10 lists of publications, there's like Harvard and then there's MIT and then there's eight Chinese universities. And the fact that, you know, they're going after like what is the like one of the four most important centers of research in America is really concerning. And I think part, you know, if you look at these, if you look at the STEM programs in America, oftentimes I think CS is like over 70 percent foreign.

2:31:26And the programs aren't stupid. Like they want more American students because they understand that there are a lot of challenges by having, you know, you end up having this sort of exposure. But the fact is just the talent isn't there. and you want to have the best and brightest in your programs go on to do amazing research and start amazing companies. And so this is sort of the world we live in where American primary and secondary education is not going to fill up these slots fast enough, particularly for, you know, CS is kind of an exception to the rule. A lot of the hard sciences are grueling.

2:32:04They don't pay particularly well. And the sort of the options to just like, you know, be a CS major in college and like go get a degree for the past 15 years have been much more lucrative than like studying mechanical engineering or electrical engineering. So kind of if we're trying to sort of like re-industrialize and build the future, like you need PhDs and you want the best PhDs and scaring them off by having the nominee for the head of the immigration process say that he's in favor of revoking OPT, which is like the ability for students once they graduate for any major, I think you get a year.

2:32:45And if it's a STEM major, you get three years where you just have a blanket work authorization. So you don't need your employer to get you in the H-1B lottery and sponsor you is a big part of the value proposition for going to school in the U.S. alongside being able to go to the best research universities on the planet. So you have, on the one hand, from like the demand side, I guess, students being a lot, you know, just having to price in an uncertainty factor of whether or not they'll be able to stay in the U.S., much less stay to finish their program. And then on the on the supply side, I guess, the Trump administration having the NSF spend half as much money as it's authorized to spend and kind of blanket cutting off universities, which are on the shit list for whatever reason, to the tunes of, you know, billions of dollars, just like, sorry, Johns Hopkins, sorry, Harvard, sorry, Penn, which is leading to layoffs and worse research.

2:33:47And I'm annoyed because the future is going to come slower and America is going to be worse off. because we're taking these incredibly unfortunate errors. Have you seen any pressure on the O-1 program? We talked to Sigil Wen, Teal Fellow, who's been trying to speed up the O-1 process for those extraordinary candidates, and it seemed like he was pretty optimistic about that program continuing and flourishing, but maybe that's just not enough in your mind? O-1? That's been a year ago, right? Yeah. And other thing, like, I mean, we have 500 ,000 foreign students in America. I mean, aside from like a like this is the thing that is funding the universities.

2:34:31Like there are there are like maybe 10 schools that have billion dollar endowments. I mean, you're going to start seeing a lot of universities go under, which is like just sad in general. But this is like education is not a zero sum thing. And I think that's kind of like one of the more sad talking points. It's like, why are there more slots for Americans? It's like, no, like the American slots in all these universities are being subsidized by all the undergraduates and master's students from abroad who are paying full ride to this where, you know, we have like, you know, in-state tuition and whatnot.

2:35:09I mean, it's a different ballgame. How would you think about changing higher ed? I mean, there's been this idea that, you know, like Harvard, for example, was founded hundreds of years ago and was servicing a population of maybe like 30 million people. And now there's probably a billion people that have heard of Harvard or maybe like in the candidate pool. But the class size hasn't scaled. Would you scale up these elite universities and try and get the elite pedagogy into more hands or into more minds? Or are there other things that you think we could do? Because this feels driven by some sort of dissatisfaction with the results of higher ed.

2:35:54I don't know if you agree with them. Maybe you think it's perfect, but certainly there's the first question of like, there might be a flaw. There's a lot of student debt. There's a lot of people going to schools and taking on debt to pursue degrees that don't necessarily pay and they don't make economic sense. How would you change higher ed without disrupting like the brain drain equation? Sure. I mean, I think at a macro level, it's important to recognize that like anti-intellectualism, like beating up on the universities is has like a long and storied tradition in american history of you know going uh going back to mccarthy and even before so like the fact that politicians are making hay shitting on uh academia is not like something that is particularly novel um should uh you know if i was like the the secretary of education and i wanted to use a stick i would do the exact thing you said, John, and say like, you need to spend down a percentage of your endowment every year if you want to stay tax eligible.

2:36:55And does that mean, you know, growing your class size by 25 % every year? Sure. Absolutely. Like there are, there is a glut of professors and there is a demand glut and like, who are like, who is gaining by Harvard staying small, like the few people who get in who like get to feel more special about themselves. Yeah. What is your model for higher ed? I mean, like Tyler Cowen kind of mentioned, he posited that higher ed is a bundle of goods. It's both a daycare for parents to get their kids out of the house. It's a dating service. It's also, you know, a series of textbooks that you are forced to read.

2:37:34It's also like a music festival. It's a bunch of different products kind of bundled. And it's prestige and signaling and essentially a one-word summary of your SAT score. And you could potentially unbundle those. I don't know if that's necessarily good. One-word summary of your SAT score. I like that. Right. If you say Harvard, people know, okay, potentially you've been filtered for IQ at some level. And so is that the correct model? Do you disagree with that? Or do you think that's a good thing? Because I'm hearing higher ed is perfect, and I don't really buy that, but I'd like to know what vectors you would improve.

2:38:14Well, I mean, I think there is a real golden goose aspect to what we have, particularly when it comes to science research. right okay so um you know look i was a history major um and uh i think a lot of the sort of like soft they don't teach us any anything like real stuff like critique baked into what you said is is a lot more applicable to the humanities i mean thinking back like could i be where i am today would i have the mind i have if i just like read all the books they assigned me in college instead of taking the courses? Like, I think so. But, you know, could I become a biophysicist without like having access to a lab and professors to like train and tutor me?

2:39:02I don't, I'm, I don't really think that's the case. So, so particularly when it comes to, to sort of science and engineering disciplines, like there is a real aspect of mentorship and like handholding that needs to exist. And I agree with like half of that. I agree with the bio side. Like CRISPR came out of academia. The transformer did not. And in fact, the one, the one academic lab that, that is listed on the transformer paper attentionals is all you need Canadian. It's a Canadian. Elizabeth Holmes had never been in a lab before she started a$10 billion company. If you actually go back to the transformer paper and look at the, um, the authors, most of them, by the way, have PhDs and PhDs were in labs that were funded by the national science foundation.

2:39:49So I don't necessarily think you can like write off AI, um, as not being something that like had, had government funded basic research behind it. I think that was absolutely a crucial thing. Um, and you know, we've had a lot of, uh, AI winters over the past few decades where people have sort of, where industry has basically given up on the technology and the only folks that were still funding it and doing the research were in government, you know, given government money and working in universities. So like, yes, like it's the place where not where the stuff that you can't get venture backed funding happens.

2:40:24And, you know, I think that everyone can get venture backed funding. Now there's unlimited venture. There will never be enough venture capital. Let's just venture fund everything, even the basic research that won't return ROI. Yeah, I'm sick of VCs preferring a deck. Like, don't even prefer it. Just idea. Yeah. Check. This is the long-term solution. Just trick the VCs on the football. I want to go through a couple. And be like, I'll make it for you guys. You got executive order for DJI ban in the next two months. Yes or no? Sure. Sure. I'm worried about my drone racing league. Yeah. I hope they stop.

2:41:04Do you actually race drones? Chinese, last one, Chinese AR VR. Should we be paying attention to it? Oh, interesting. Yeah, man. I wrote a whole feature about the Chinese AR ecosystem. It's a really interesting development because basically what happened in the US was meta consolidated. And you had a handful of startups that all kind of gave up because there was a trillion dollar gorilla in the room. But China is a much more dynamic ecosystem. You have like six or seven players who are all exploring all these different hardware trees of like where to put the battery and do you need the screen on the glasses?

2:41:39Do you not need the screen on the glasses? So, you know, Chinatalk.media, it's one of our more recent articles kind of looking at Rokit and a number of other Chinese startups, which like all have products that are$300 to$600 and are really cool. Can I show a book before we go to the next guest? Okay, so it's coming out tomorrow, I believe. the party's interests come first joseph terigian it's a 500 page uh biography of xi jong shi who is uh xi jinping's dad and it is this incredibly detailed um like wild ride through this guy's life he started as a um he joined the communist party when he was 15 in 1926 and the first half of the book is like all these crazy war stories where he is like fighting and executing nationalists and Japanese and then um you know he becomes he's like the he's like the highest flyer in the 1950s like he's promoted faster than everyone in his 30s and then the culture revolution hits and his life gets completely ruined um Xi Jinping's 15 his dad is this like black stain on the party and the amount of sort of like family trauma um that the the dad and then the son by proxy like ingests over the course of their life is just a is is is kind of an unfathomable thing that you can only really experience by just like living day day through day through this guy's life and the fact that he was able to write this book um you know i see i see books with this level of detail about folks like stalin because the archives have opened at this point um but joseph did an incredible job like reading all these memoirs and talking to people and digging for stuff and um if you want a sort of window into what chinese elite politics looks like um it is a really um uh a really special piece of scholarship and something that comes around really rarely in the um uh in the china studies space so however you guys should get them on the pod i would love to talk about choosing things dad sounds amazing i highly recommend everyone check it out thank you for the plug that sounds fantastic let's do it thanks for coming on jordan we'll talk to you soon always a pleasure.

2:43:54Cheers. See you guys. Next up we have Max from Arena Magazine. We are surrounded by journalists. Hold your position. We have Arena Magazine right here. Always. You always have to keep one. Welcome to the studio, Max. We always keep your Arena on you. There he is. Oh, he's got it behind him. With the tie. He was ready. The bolo. Looking good. What's new? Well, we just moved into a new Arena Magazine world headquarters. world headquarters the pensabolo um uh and you know it's not arena magazine headquarters though it's the intergalactic media corporation of america correct wait don't you have a new website too oh that's the other big thing we launched our new website during the first hour of the show congratulations or actually it may have been the second hour it wasn't ready during the first hour okay we wrapped it up in time for the third hour of the show that's great let's go So we took a look at all of our favorite websites for sort of consuming long form text.

2:44:58And, you know, Silicon Valley won again. We couldn't find any superior form than the software documentation website. And so initially we actually thought about like hosting the website on GitHub and just using markdown files for all of the essays. Wow. We didn't literally do that, but we built a site that's based on engineering docs. So it's in dark mode. It's a science-y vibe, and we think that people are really going to love it. Wow, yeah, this is great. Oh, very cool. I like how I can decide if I want to focus or not. There's a little button. That's right. Oh, focus just puts it right in the center.

2:45:34Okay, cool. You can get rid of all of the prompts for you to send us money by subscribing, or you can leave them in there. Oh, no. We got a lot of fun stuff. and it's sort of almost a relaunch of the magazine. After we did the first four print issues, we're now going to really make a big push to get a lot bigger and that happens mostly on the internet. So what is the flow for specifically windowing? I know Taylor Swift is very good at this where she goes on a tour and then there's documentary that comes out later. So you have to see her in person and then you go watch the movie in theaters and then you can stream it.

2:46:15And a lot of the streamers made the mistake of allowing you to binge all 10 episodes right up front and it doesn't create these like shelling points, these moments. Are you thinking about gating articles to the physical magazine first, then putting them on the internet later? How are you thinking about that? You know, it's great that because our readers who pay us get the print magazines first, we really don't have to be in a rush to put things up on the website that are in the print magazine. You know, until now, there's basically been 100 % overlap between what's on the website and what's on and what's in print.

2:46:47That's going to change a lot because we're going to do a lot more stuff online. But, you know, we had something very funny happen in the first few months of the magazine, which was subscribers emailing us upset that we had posted an article online before they had gotten a chance to read it on paper, which is it's sort of it's sort of sort of sort of strange, but also really made sense. And so, yeah, we put things in print first. and we're not really sure how the cadence is going to go. We'll figure it out. Are you going to increase the frequency at all as you go bigger or just trying to go bigger with the stories?

2:47:24For us, quarterly is about the right pace. We might go more than that. But the truth is, in order to publish every week or even with us every month, you'd have to reduce the paper quality to get the printing time down. It takes us multiple weeks to go from submitting the files to the printer to the magazines ending up in mailboxes. Whereas something that's arriving in your mailbox every single week on what I call glossy toilet paper, which is the sort of very, very light paper where it's falling apart, it's been stapled together. You can do that at a very fast cadence. It's no good. So what we're gonna do, increase the online volume quite a bit, do a lot more stuff there.

2:48:07but keep the print magazine sort of, you know, spare in four of them per year and super high quality. You recently wrote a profile about Brian Schimpf, CEO of Anderol. What stuck out to you about him? What was the most interesting takeaway from spending time with him? He's definitely a genius and a stand-up guy as well. I mean, I just thought it was sort of funny to, like, write a piece about a man that, like, most people are unaware is the CEO of this company that they all know. And, you know, even some of the people that I was sort of like discussing the piece with in advance were like, who is the CEO?

2:48:45And all of the other co-founders are like emphatic that Brian is the CEO. Brian has the best decision making. Brian is absolutely in charge as everyone expects the chief executive officer to be. I mean, Trey said something, you know, like, you know, I trust his judgment more than my own. And there's a lot of fun stuff in that profile. Even stuff about Palmer. Palmer has zero direct reports at Underall. And it was Brian who told me that. And I thought that that was amazing. Zero. That's fascinating. I mean, it's probably the perfect situation. You can just go around the company and invent and do what he does best and evangelize and tinker and also just like drop into certain projects, be an individual contributor if he needs to be, be a manager if he needs to be, but doesn't need like a standing staff.

2:49:34Right. One of the other things that this is not about Brian in particular. In fact, Brian thought it was sort of funny when I pointed it out to him. He must not have noticed before, but everything on the honor roll campus has been set in the same typeface with the exclusion of the government mandated parking signs. And so it's like everything, the signs on the gates, the room labels, the stationery, It's all been set in Helvetica now, which is sort of a, you know, 2000s recut of Helvetica. And you don't see like design discipline like that anywhere. But now that I'm a magazine man and I'm thinking about letter forms and typography all the time, it's like you notice it very viscerally walking around on a roll that they've done everything to like exacting specifications.

2:50:19And they also use the same typeface. That's real brand. Brand is not a logo or a website. It's it's it's like showing up with that level of consistency, which makes sense for products. And, you know, it's it's the idea that, like, don't you dare try to design something. Let the design team do it because there's like they're protecting the identity. And even the, you know, the drones, the missiles, the tanks, the submarines, they have the exact same typography as the stationary and the meeting room names. And I just I had never seen it before. You know, you go on like an airline or whatnot. The typography is all over the place.

2:50:54And that was like that was my sort of one of the standout things from from visiting the from visiting the Onderwood campus. How are you thinking about growing the magazine in terms of balance between full-time writers and contributors? It's an interesting place to send a thought or an essay or something. And so I imagine that it's more tractable to be a contributor at Arena than have a column somewhere else. It's probably a little bit more manageable for someone who's maybe not writing all the time. but at the same time you probably want a steady heartbeat of writers so how are you thinking about balancing those things yeah well so first of all we want anyone and everyone that's got something to say about you know technology capitalism civilization to send it to arena we're very very good editors and it's you know it's very useful to have editors and and we provide that service to anyone to help them tell them get their word out some of it will end up in print some of it will just be online you know we have some full-time people We'll have some more full-time people.

2:51:59We have some contributors. We'll have a lot more full-time contributors. I think that it's on the extremely polarized ends of this spectrum that you start to get into weird stuff, which is way over budgeting for having full-time writers. You can sort of create this Frankenstein where it's some full-time people and some contributors that will create the most interesting balance. It's not going to be the most interesting balance if it's all random contributors or if it's all full-time staff. and so we mix it up. How do you think about the different types of pieces that you want to, like what is the shape of the different type of coverage?

2:52:37Like obviously you have profiles, you probably also have like op-eds, you're not really doing breaking news or investigative journalism. What is it called? Not news. Not news, anything but news. But what about, like what are the other areas that you're interested in exploring? like Forbes famously has the Midas list and the Forbes 400. Are there going to be list products or anything like that? One of the things that we talked about at the very beginning was like how to do lists in a non-awful way. Haven't figured it out yet. So we're not doing lists yet. Well, maybe there's a future contributor in listening right now who can come up with something.

2:53:17Yeah. I don't know how to figure it out. If someone can figure out how to make a better list, then I'm all ears. Switching gears. Yeah, switching gears. Switching gears. What's AI adoption like in Iowa? You know, it's, well, Google was just, just yesterday, put$7 billion into like a campus there, but it's just, you know, it's just for server racks or whatnot. I'm not sure that the people are really, really, are really following suit.

2:53:45That's similar in Abilene in Texas. There's, I mean, Stargate's going to be staffed with like not tens of thousands of people, like hundreds maybe. yeah yeah it's a very very small organization yeah um you know my mom uh my mom just retired as a teacher and all of her teacher colleagues are complaining about the kids using chat gbt so that's good there you go the kids are the kids are up to it um but i mean i i sort of doubt whether any of my neighbors are are paying are paying attention to it uh i sent one of them a poem that i had written with with claude uh he was like how's this so funny uh uh that's such That's like the biggest alpha right now is just using models to generate like super thoughtful, creative work for people that aren't online.

2:54:34Yeah. I mean, I assume that there are some like, you know, people in Iowa that are on Facebook that are looking at the sort of AI images and being, wow, that's beautiful. Yeah. Did you have a did you watch Mountainhead yet? Did you have a reaction? I haven't. I'm sorry to say I heard you talking about it earlier. I guess. Yeah. It's just it's it's the main kind of narrative of the story, besides being a critique of the tech elite, is that, you know, it's it's this global catastrophe because AI has gotten so good that nobody can tell what's real and what's fake. And, you know, I so disagree with the framing.

2:55:12People already have a lot of trouble figuring out what's real and what's fake. AI is going to be an improvement over the status quo in certain ways. Okay. How are you using AI at Arena? I imagine that you're not using LLMs to actually write whole articles, but what about proofreading or even just transforming? Well, they trained a model to remove MDashes after they generate. Yeah, yeah, yeah, yeah. And then problem solved. And also the word delve is just find and replace. But I imagine that the problem of typesetting and transforming text from just a big block of text into something that fits nicely in columns, that feels more tractable and more tactical than the artistry that goes into writing an actual article.

2:56:01Is that useful? What about AI images for collages? Has that been useful? Anything like that that's kind of popped up? Yeah. So on the writing front, I'm prepared for the day, which it is better, but right now it's not, at least not compared to what we can do. And based on the way that the LLMs operate, they tend to be pretty – they'll use the same sentence structure over and over again. For me, it's a tell. I'm not saying I could judge it 100%, but A, no one wants to pay to read something that's taken zero sort of marginal minutes to do. It can be very useful for brainstorming. it can catch some of the copy edits.

2:56:43My mother tends to be better at copy editing, though, than any of the GPTs now. But yeah, we have subscriptions to all of them out the wazoo to use them. But yeah, I mean, people are coming to Arena for a bit of an analog thing in the first place, which is a print magazine. And so it's like, to the extent that the AI can help us do more with less it's great um but the core sort of writing work is something that is you know we're also trying to keep that you know art alive we were just talking to jordan schneider trying to talk about higher ed and some of the problems there um how would you kind of diagnose the problems if any in higher ed right now I mean, I think that people tend to focus on the elite institutions because of their cultural power.

2:57:39But I mean, clearly, the biggest catastrophe in higher ed is that we agreed to indefinitely fund higher and higher loans at the federal level for students to pursue degrees from universities. And it's really not the Harvards that are the problem in that equation. It's the universities that can't offer much, but that were allowed to sort of way over inflate their budgets with the federal loans. And so this is this is a related to the China point. I read a funny story that the University of Illinois took out an insurance policy in 2018, hedging against a decline in Chinese enrollment. Oh, wow. But the lawyers messed up the contract.

2:58:23And so it was invalid in December 2019. And then it took them like five months to renegotiate it, during which time the covid pandemic happened. happened yeah literally nuts so always have the lawyers read the fine print uh i think it's possible that claude would have been done a better done a better job than those lawyers in that instance maybe or maybe harvey and so somebody somebody you know that wants to go super risk on in china should bet on a rise in american students because right now there are i guess roughly 800 u.s students in china in china which is very low unfathomably low yeah I have no idea how to diagnose what goes on inside China or why people would want to go over there.

2:59:06I don't know how to price that one. You think we're getting a DJI ban in the next couple of months? You feeling excited? I think that people will be upset if they ban the best product available. I say this with like a fervent desire that we have one that's like that's like amazing but I'm but I'm not I'm not I'm not sure that I'm not sure that for random civilians it's going to it's going to fly yeah it's hard if it's not popular anyway anything else Jordy I think we're good this is great congratulations congratulations on the new website good luck we go to arenamag.com We actually always keep, we've kept an arena mag on our desk at all times in the entire history of TVPN.

2:59:49We got it. We love physical media. It's a very good desk object. And I'll just say, we're going to have even better desk objects in the future. Oh, can't wait. Yeah, I'm excited. I mean, I know you can take it up a notch to where it's more of a book. Totally. These are sort of like chapters in technology and industry. Well, I legitimately have no inside knowledge. I'm just speculating. I'm just going to speculate. So excited to see what you do. I'm coming to anything. Anyway, thanks so much for coming on the show. Wait, before you leave, before you leave, we've got some new sound effects I want you to hear.

3:00:20You're surrounded by journalists. Hold your position.

3:00:25We're working on these. Anyways, have a great afternoon, Max. Thanks for going on. We'll talk to you soon. Bye. I see multiple journalists on the horizon. Stand by. I still don't know where these came from. These are from COD. Yeah, but how do they change the voice? Is this like AI generated? It's effectively like the Captain Price voice. Okay, but you can just do a Captain Price generator. But it's Ben making. Is that Ben's voice? That's Ben's voice. Wow. I see multiple journalists on the horizon. Market clearing order inbound. I like the kill streaks. Those are great. I see a large IPO on the horizon.

3:01:01That's so good. I love it. Really good impression. I love it. Anyway, thank you so much for watching today. Do we not have more timeline? I'm going to be devastated. Oh, yeah, yeah, yeah. Let's do some timeline. Let's do some timeline. That's great, yeah. Congrats to Jacob Kimmel. We generated the most visually striking data of my career at New Limit this week. We have a real opportunity to create medicines that add healthy years for everyone. Jacob's been on the show before, of course, started New Limit with the help of Brian Armstrong, or in partnership with Brian Armstrong, founder of Coinbase, and really pumped us up.

3:01:31But he barely teased it, but it seemed like something happened that was very good there. We also need to tell you about AdQuick, out-of-home advertising made easy and measurable. Go to AdQuick.com. Say goodbye to the headaches of out-of-home advertising. Only AdQuick combines technology out-of-home expertise. I'm about to buy every billboard in SF. Market clearing order inbound. Let's do it. I love it. We covered the attack. James Cadwallader says, GG TriRamp, which startup in the U.S. is known for shipping new features the fastest? This is ChatGPT. Ramp gets the top spot. These are hotly debated.

3:02:11This is the generative engine optimization, the GEO that Andreessen's been writing about, the AI SEO. Like you got to be AI SEO. Well, this is what James, you remember we had James on. This is profound. Oh, this is, okay, that makes sense. And they're absolutely cooking. I mean, this kind of thing isn't by chance. Sure, sure, sure. Yeah, that makes sense. we have a post from Kareem Carr says wild to me how much of a nothing burger AI has been so far it's been 2.5 years and the most tangible effects of AI are students cheating more and slightly higher more realistic Facebook slot I don't want vibes or speculation or demos I want one concrete real world achievement from the current generation of AI that's not potentially a big deal but actually a big deal right now because I got nothing and uh yeah it's just very funny because obviously like llms have been vended into like every enterprise everywhere and and are like basically exposing that you're not a business person yeah yeah but also just like like day-to-day use of like you know for a lot of people like open ai has just replaced yeah this uh kareem doesn't clearly doesn't respect how insane it is that people are using something else for search besides Google, right?

3:03:30That alone. That is crazy. That is the entire effect of AI. Like Microsoft, which is currently, I think, the biggest company in the world, has tried for two decades to unseat Google. Yeah. And they now own a large part of a company that is unseating Google in some way. Yeah, actually kind of did it. Yeah, exactly. In some way. And yeah, pretty remarkable. Let's also tell you about Wander. Go to wander.com. Find your happy place. find your happy place book a wander with inspiring views hotel great amenities dreamy beds top tier cleaning and 24 7 concierge service it's a vacation home but better folks uh 50 million dollars it's great that we can talk about it now yeah we basically leaked uh weeks ago but uh john andrew was on and broke it all down and he's going for 300 000 homes let's go in a decade love to see it uh we had patrick asking what is the lightest thinnest most comfortable and simple watch.

3:04:23And the best recommendation that I saw here was from Will Bonitas. What do you say? Recommending a Richard Mill. Richard Mill. And I agree with him. I think it's a great option. Otherwise a Royal Oak. Yeah. Extra thin. Why not a Graf Diamond's hallucination? Yeah, he's getting up there. It's not the thinnest, lightest, or most comfortable simple watch, but you know it makes a statement will recommended the rm66 manual winding flying tourbillon is a good entry level piece yeah so uh skeletonized it is i think i think patrick should go with like an urwork that would be that would be interesting that'd be interesting um but i mean seriously if he's looking for something like in that category it's probably patek philippe calatrava uh vacheron constant patrimony or jlc ultra thin probably something along those lines is going to to be probably what he's looking for.

3:05:21He didn't really specify dress watch versus sports watch in the thin, but I think he'd look good with a dress watch. So hopefully he can pick one up on Bezel. Go to getbezel.com. Your Bezel concierge is available now to source you any watch on the planet. Seriously, any watch. I think that tweet is just permission for us to introduce Patrick to the CEO of Bezel over text message as soon as the show wraps. Yeah. Hey, you guys should really talk. You guys should talk. It's not a double opt-in intro. It's just happening, Patrick. Zero opt-ins. Yeah, you posted that. You got 140 ,000 views on this post.

3:05:57It's happening. It's happening. It's happening. We got a post here from Gabe. He says, quote, LMAO has survived and even thrived over years, but its cousin, ROFL, Roffle has faded into indignity. The cruelty of fate. The cruelty of fate. 120 ,000 likes. Wow. I didn't notice that. That is wild. A 120 banger is really good. Really good. But it's so true. It's so true. There were all these different acronyms. Let's bring it back.

3:06:31Rafflecopter, LMAO really stuck around though. Yeah. There were a bunch of other things. Hey, TB Nation. Underrated is that LOL is still around. You know, LOL made it through. See, I adopted LMAO really late. Yeah. Like within the last two years, I never had a huge amount of respect. Yeah. For LOL? No, LMAO. Yeah. But do you draw upon LMAO more frequently than LOL? Less frequently. Yeah. I'm sprinkling it in, you know. I think I like the – I also like the – Like it's honestly – The variation of the ha-ha-ha is also good because you can go, ha, that's like not good. Ha-ha is like barely trying.

3:07:14once you get into three haws it's like okay i'm actually giving you some positive feedback here lmao is usually i usually use it when something's actually ridiculous exactly like somebody is doing something that that is just silly yeah yeah it doesn't really have any of the eye roll that the ll does the ll can just be like oh i can be kind of laughing at it lmao is like a little bit a little bit higher but yeah maybe we got to bring back our rofl roffle yeah rolling it on the floor Well, we got to tell you about our newest and today our greatest sponsor, the greatest sponsor of today's episode in many ways.

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3:08:36It's fast, it's flexible. it reminds me of if the linear team was going to build a crm product cool that they feel uh similar in many ways and uh yeah also redpoint backed you know so you know it's a banger yeah you got logan barton the deal just attributing he's like he's the main guy i know in redpoint so of course he let every deal at redpoint of course he let it classic no jeff brody but go over to adio.com let's go what's that the founder red point went to my high school oh no way yeah jeff brody and so what a dog yeah just being like yeah i've never met him but just be like shout out red point yeah shout it out i i i would die for red point i would die for big tech um and i uh and also i want to give a shout out to captions app the founder's been on the show big fan of captions they introduced mirage studio powered by our proprietary omnimodal foundation model.

3:09:31They can generate expressive videos at scale with actors that actually look and feel alive. Our actors flinch, laugh, flinch, sing, rap, all of course per your direction. Just upload an audio, describe the scene, and drop in a reference image and create energetic content in minutes built for marketers, creative teams, and anyone serious about crafting great narrative videos. I'm excited to get that started and check that out. It's actually a new URL, mirage.app. So they're kind of like forking the two products. A lot of companies have been doing I'm doing that with, I feel like that's a more recent occurrence where they'll spin up kind of a new brand and app to kind of test something.

3:10:08Yeah, yeah. More news. Please. Apparently, Elon is doing some type of share sale, $300 million share sale that values the company at$113 billion for XAI. Oh, XAI. And the official Neuralink round actually got announced today. Oh, oh, that was just like lead or not? earlier yeah it's actually out now that's great yeah so well congrats to everyone at neuralink i believe it's nine billion now is the valuation is that right yeah crazy speaking of things that start with nines my sleep score 91 i'm back in the game back in the game you did get an eight sleep five-year warranty 30 night risk free trial free returns free shipping i had a fuel your best days i didn't issue the power went out in the middle of the night saturday my neighborhood and so i don't care about saturday i want sunday i got a nine i got a 90 90 oh Oh, let's hear it for me.

3:11:02Let's hear it for John. Let's hear it for the big dog. Once a week, I'll give it to you. Once a week. I got back-to-back days coming up. I got you. Let's see what you do tonight. Let's see what numbers I put up. Anyway. Nobody out sleeps me. Nobody. Anyways. Thanks so much for watching. We will see you tomorrow. Go leave us a five-star review if you like the show. And we appreciate all of you. We're excited for tomorrow. See you later.