Microsoft Chases the Frontier, SUNO on Fire, Project Solara | Mikey Shulman, Samir Chaudry, Tom Farley, Nikesh Arora, Henri Stern, Alex Good

25:02Then, of course, like the rest of the organization, same thing with Canva. I'm sure a lot of people passed early on because they just thought like, yeah, there's just not that many people relatively that do design. And then, of course, like you make the tools more accessible. And so anyways. So there's a couple things here. One is I think actually we'll have a very large fraction of those 300 million subscribers to streaming also subscribe to Suno in the long run. But the other thing that's amazing is that for the first time in a long time in music, there's innovation on the end user experience.

25:34And so you can have something where there are multiple products out there. Like right now, the end user experiences for music all look the same. They all look like a streaming provider. It's just like I have all of the world's music living on my phone and I can listen to it and that's it. in the future when you can do more things and play with it, you probably subscribe to multiple video games. You probably subscribe to multiple video streaming platforms. Why can't you subscribe to multiple music things? And I think the answer is in 10 years, you will. Yeah. Do you think Apple would ever make a play in this space?

26:05I think lots of people are going to make plays in the space. It's almost validating to see that people finally think of music as a growth area again. And so, But again, I think that there's so much room for innovation here. There's so much greenfield to build upon that I'm actually really excited. Can you take me through the story of the Puerto Rico song? What happened there? Like what were the key inflection points actually? I don't know is the answer. You know, this is like a song from a creator and it hits the right cultural moment and the right vibe. And I don't want to say it's a good song or it's a bad song, but it is a platform where so many people can be creative on top of it.

26:41And that is really fulfilling to see. And that's stuff that it's like new use cases for music that haven't been around for a minute. Is AI music becoming less controversial or are there still people discovering it and getting angry? Because I could imagine there was a wave over the last two years where people were like, wait, they're making music with AI. This is a this is meant to be a human creative pursuit or whatever criticisms they've thrown at it. But I imagine over time people start to realize that these are fun entertainment products and tools. And before you form an opinion, you should just try using it and form an opinion based on your experience, not, you know, Internet comments or things like that.

27:22But my expectation is that it will actually become less controversial year over year as it sort of normalizes. It is definitely becoming less controversial. there are still plenty of people who have preformed opinions and then actually playing with the product is the best way to change their minds. The thing that has become apparent in the music industry is that so many people are using it without talking about it and as people realize that everybody knows it, everybody knows it certainly normalizes there and then as a consumer, either when you play with the product and you realize how fun it is or when you realize actually there's some AI music in the music that I love, all of a sudden you're not so anti-AI.

28:00I think this is a lot like people being anti-AI and then they realize that ChatGPT can help them with their homework and they kind of soften a little bit. As a useful tool. I mean, Martin Scorsese came out yesterday in a Black Forest Labs video talking about the value of AI in the filmmaking process. But the video demos, we'll watch it later on the show, but it demos sort of like a pre-visualization step, almost like a storyboarding step. He's describing this alpine town and it's generating visuals for him. He's not taking it end to end. Of course, that's happening more and more. But I think having a filmmaker like Scorsese kind of step up and say, yeah, this is useful.

28:42I can see this working. There's an analog in music, which is that you'll have songwriters make beautiful songs. And instead of making demos for an artist, they can make low fidelity songs, like low fidelity productions, which are demos. with Suno so much easier. And it will get ripped out and produced without AI or with minimal AI when it's produced for the last time. Do you think there's still an opportunity for a major artist to be a first mover in the space? We were talking, I think, a mutual friend of the three of us, and I was telling him he loves Suno, he uses it all the time. And I was telling him, like, why don't you just be the first one to take, like, a proper leap and do this?

29:23and like the first person that goes and says like, hey, this is okay, it's not so scary. I used it in the creative process. We still use a bunch of traditional producers, songwriters, et cetera. I think that person will get a lot of like credit and potentially a lot of attention. It will obviously be polarizing, but then the fourth, fifth, sixth mover won't really get any potential benefit. It'll just be normalized by that point. I think that's totally possible. Like, we've, you know, there are people, there are a few people who are outspoken about it, but I don't know if we've had, like, the moment yet.

30:01I want, like, the project. Yeah. Like, somebody has to make, like, a hit record. There have been, I think what you're going to... And they have to go out and say, they have to be just very upfront. And what I want is them to document the whole process. Like, I want a video camera. How much is enough Suno in there, actually? That's the whole point. It's like a guitar might have only been one little riff in a song, and it could have been some originally, like somebody recorded it on their phone, and then they brought it into the studio, and then maybe it got transformed and made with a difference.

30:35Yeah, exactly. And so to me, there just needs to be, it's always going to be a spectrum, right? There's going to be songs that are heavily Suno, but I would expect for major artists, even if the original idea or some element of the song was made on Suno. Like you said, it'll just get transformed and adapted and evolved. And so I think it's just positioning it as not like a replacement for anything, but another kind of individual artist in the room, another instrument in the room that's contributing to the project. Here's how I think of it. We haven't hit that moment, but at some point somebody will really document and celebrate the use of these tools in making things.

31:19We're already in a lot of very popular music, but at some point somebody will really do that actually proactively, and that will be a huge cultural moment. And then the next amazing cultural moment will be an artist releases an album that is meant to be Suno'd by their fans. And this is the new format. This is the thing that will pull people in, that deepens the artist-fan connection, and that will be a very, very important moment. How spiky is Suno's intelligence? I want to know about the training process. And we know you have to leave, so final question. Maybe that's the last question. But there's this famous story about, I think Andre Karpathy told it, about GPT-441, some iteration where at a certain checkpoint, it was terrible at chess, and then all of the AI researchers just were really interested in chess, and they were like, There's no reason it should be bad at chess.

32:13And so they added a bunch of chess training data. And then all of a sudden, the models got pretty good at chess. And it seems like we're in this spiky intelligence race where coding is really valuable. There's a lot of money there. So the models are getting better at coding. But if you look at the models, it doesn't really feel like they're getting that much better at copywriting right now. Because that's not where the boom is. They're getting really good at coding. And I'm wondering if you're seeing, like, okay, there's an opportunity for us to nail jazz in the next iteration. or us to nail EDM in this iteration?

32:44Like, what fingerprints is the team leaving on the model versus just we're scaling up and it's getting better at everything and there's surprises and it's very indeterminate? We actually try not to leave our fingerprints on it. And we have a, like, the approach is we should not be the arbiters of good and bad music, you know, like a file corrupt or low quality sound recording. But like, you can go and you can listen to a song that has 10 ,000 YouTube plays or 10 million YouTube plays, and you won't actually be able to tell the difference. And so we should not be the arbiters of that. The thing that's different here also is that in the chess and the coding examples, there are objective right answers.

33:21And that's why the models are so good at getting spiky there. Music has no right answers. There's no verified rewards. Not at all. Verifiable rewards. And so all of those techniques actually don't work nearly as well. You can't do RLVR. So we're actually in the regime where it's much less spiky. And actually, when we find a hole, an anti-spike, then we actually try to fill that in. Like it's not like we're amazing at jazz. It's like you suck at jazz or you suck at country and now we have to go and figure that one out Okay, last question. We'll let you get out here What about adding on to the viral fuel when I hear about turn your text messages into a Suno song?

33:52I think why can't I just screenshot my text messages and then you edit the video for me and I get a viral format? That feels like very tool you see very like each video format is going to be a whole process for you It's going to be hard to one-shot the full end-to-end. But what do you think about that? Personally, I want the Slack integration. I want a Suno song at the end of each day. Yeah, why weren't you on the stage at Microsoft Build? I want the workday at the office summarized. You want a workday integration? No, I want the Slack summarized, and I want to be able to listen to an hour-long song on my drive home about what's happening at work.

34:30We'll try to make that happen. We're not doing a workday integration. But I will say, the thing that's amazing is actually this is a platform where people are creative on top of it. And so we're not going to come up with the right cringy text message video. It's like somebody is going to do that. Well, that's a challenge for you at home. Go make the cringy text message. Go make the workday integration. Prove Mikey wrong. He says he won't build it. You can. You can go and build the workday integration yourself. Well, I want to react to some timeline. Imagine keeping up at work through music, John.

35:04It'd be fantastic. What's more powerful than that? You know what's more powerful than that? Console.com. Console builds AI agents that automate 70 % of ITHR and finance support, giving employees instant resolution for access requests and password resets. So we can talk about the, there's a bunch of funny posts in the time that we got to go through before our next guest, Samir, from Colin Samir, joins us to talk about Hollywood. You can tell when a coworker got nothing going on outside of work. Why is that in here? 220 ,000 people like this. Did you put this in to kind of subtweet me, Tyler? I didn't send this in.

35:45The team always asks Monday morning, what do you do this weekend? I always have the same answer. Six million views. Anyway, there's some news on the timeline about GOP rep and Michigan Senate candidate Mike Rogers. there's an actual photo from the campaign trail and then a photo put out by the staffer let's compare these uh it's one of those can you tell can you spot the differences video they made them a little bit bulkier they they just added just a couple pounds of muscle just a couple just a couple he looks huge in this in this photo i mean he looks like he's ready for the olympia yeah uh i don't think they went for far enough so i i took it upon myself to generate an even more accurate photo we can pull up uh because i think this is what he should look like i think like if you're gonna ai your photos just yeah why not just give yourself a stringer yeah get yourself in the stringer and make sure you're looking like you walked off of the olympia stage and still claim natural absolute mass absolute mass monster yeah you can't typical natural politician thing to do I'm not on performance editing drugs.

36:50I just run every single photo through images, too, in chat GPT. People are having fun. It was funny. I thought I was so original for doing this, but if you scroll down the comments, everyone had the same idea and made him way, way more jacked. If you scroll down, there's 25 others. And there are some— Winston says enhanced politics. Jack says the enhanced Senate. Yeah. There are some that are absolutely crazy here. The enhanced Senate. Okay. We got a debate on our hands. We got a debate on our hands. So, Phillip Johnston, friend of the show, founder of StarCloud, says, founders, before you go out and raise, ask all the best AI models this.

37:28Play the role of a venture capitalist and give each startup in the XYZ category of your startup space a ranking from 1 to 10 on how much they would want to invest in them. With 1, don't want to invest at all, and 10, desperately want to invest. Do deep research and give reasons. All the VCs are doing some version of this. He's claiming that the VCs are just AI psychosis letting AI do their job. Maybe it's true. We don't know. Maybe. It's true at a few funds. He says, all the VCs are doing some version of this, and if you're not at the top of the list, you're going to have problems, so it might make sense to delay the raise until you can get closer to the top.

38:02So if the frontier models don't approve of your startup pitch, go back to the drawing board, build a little bit more before you go out on that fundraising journey. Seth Bannon at 50 years says, founders, do not listen to this. You should in no way time your raise based on how an LLM ranks you. The best VCs are not sitting around asking AI, who should I invest in? And then doing that. Well, that's a different question. Are you trying to raise or are you trying to raise from the best VCs? These are two different things. Yeah, I feel the LLM would do a pretty good job of figuring out the relative interest and excitement, right?

38:38You can look at if an agent was running a pretty interesting metric is like headcount growth on LinkedIn. Are people leaving? How many people are leaving the company? All these things. So I actually think an agent could get pretty good at - has this fund's competitor done another deal and that competitor is excluded from your round, but they're looking for something in a category? Yeah, also pedigree, right? This is, whether you like it or not, a big factor in especially kingmaking right now. So if you're in a category and you're a smart, talented individual, but you're at the seed stage and then there's another seed stage.

39:29Did you think of the pet food company? Pedigree Pet Foods? No. That's what I know of a pet food from. Dog food and treats. And you have another company, your same stage, where all three founders just came out of SpaceX after being there for 10 years and you're both competing in some adjacent category. I actually think the model is going to do a pretty good job and say, hey, VCs, very likely, might be three times more excited to invest in this team than you. And that's just reality. So Philip Johnson says, I'm glad I provoked a reaction. This will age badly over the coming few years. He's saying Seth is wrong.

40:15He says, also, I'm not talking about timing arrays based on AI opinion. I'm talking about actually improving your startup, get more customers, for example, which will at some point be picked up in the AI rankings, which is a lot of what you were getting at. So I guess the question is, should you delay a raise based on AI opinion? And would you actually listen to a clanker tell you how your business is doing? Or are you going to say, I know better? What do you think? I think you're arguing it's a good source of feedback. It's worthwhile. But at the same time, I can't see you doing this. i can't see you actually going to a model and being like yeah they're right i am washed no way no way zero shot like i think i think when i was i think i was emotionally i i think that uh earlier in my a decade ago this actually would have been super helpful yeah because i wasn't fully aware of all the different factors that made that went into that went into making a This is a good point.

41:18Yeah, early on, early on, there was like a checklist from zero to one. Peter Thiel, zero to one. You could go through it and say, like, OK, do I have defensibility? Am I building something that will have staying power? How many of these boxes do I check? Because when I go out to raise, a lot of the VCs are going to be thinking the same thing. It's worthwhile. And an AI can sort of help you do that checklist. So that's valuable. Another thing I was talking, I think an LLM, a smart enough model, that's valuable. would be able to do this if it was trained on enough VC blog posts maybe, which certainly I think some are quite well trained on PG's blog and others.

41:57But I was talking to a founder yesterday, two-year-old company has gone through a pivot, figured out a much more interesting opportunity than they originally started with, have a bunch of you know pilots, a lot of positive momentum, revenue is growing, but I had to tell the founder like look you are the VCs that you're going to talk to, if you got to raise right now, are talking to companies that are adding what the revenue you will add in the next year, they're going to add it in the next 30 days. So even though you have a super exciting opportunity, it's going to be really hard to invest right now just because they have a limited amount of capital.

42:38They want to be making bets against oftentimes momentum. And that's just the game. And a really, really good model, a really good model could say, look, your startup is very mid. Don't even bother pitching founders fund, top tier firms. But I got some guys who, they got crazy ASA coaches right now. They'd love to invest. So you should definitely DM this person because they've been posting crazy slop on the timeline nonstop. And they're just ripping checks at anything. And so you fit that category. So go get the bag from them. This is possible. This is possible with super intelligence. Anyway, our next guest is in the waiting room.

43:17But first, let me tell you about the New York Stock Exchange. We want to change the world. Raise capital at the New York Stock Exchange. Yeah! And we are very lucky to be joined by Samir. I'm Kyle and Samir. In the TVP on Ultron. How are you doing? From a cabin in the woods. That's right. You don't want to see where I am. It's been too long. I missed you. You want to see the view? Yes, I want to see the view. There we go. I want to see everything. This looks amazing. Take me home. Take me home. How off the record is this conference? Can you describe what you're actually doing? Never. Whenever you come to Montana, you can't tell anyone.

43:52Yeah, that makes sense. I did just tell you I'm in Montana, but no, I'm actually. Geogassers knows exactly where you are. Yeah, yeah, it's over for you. Let's get Geo Rainbowed on next and we'll dox you fully. What happens in the woods stays in the woods. I imagine you're there for good reason. Hopefully there's been someone there that has provided more context on a story that we've been hunting around. Well, first, thank you again for hosting us at your event last week. It was amazing. Press Publish LA was fantastic. Amazing group of people. Dude, it was amazing. Thank you guys for coming. Also, extremely relevant weekend, you know, to have that event.

44:31I mean, we knew Backrooms was coming out the next day, but obviously we'll get into that. Yeah. What a time for Hollywood and creators. Yeah, yeah. And yeah, it was funny because I was telling you, oh yeah, the Markiplier story is so cool. And you're like, I just talked to him on the stage. And so obviously you've been tracking this for basically your entire career. You've seen this coming. But has it felt overdue to you? Ben Thompson was taking a victory lap saying he sort of predicted this in 2017. It's been a decade. And it feels like this intersection of YouTube and Hollywood, it's been very combative.

45:03But my takeaway is that this feels like the first moment when we're seeing glimmers of real cooperation between the two separate communities and a way that traditional Hollywood can work with YouTubers in a way that's mutually beneficial within the current system. But how are you processing this? How overdue is this? How have you been processing the current moment? I don't know if it's overdue or if it's just happening as it's unfolding, like in real time. where, you know, Kane, when I started on YouTube, Kane was five years old. So like, you know, these are internet native filmmakers. And I think there's three reasons why it's happening right now.

45:42You know, one really important thing when we think about backrooms is backrooms, you guys talked about this, backroom started as a 4chan image that then became like a collaborative story. I think the reality is Gen Z IP is not legacy IP like the Mandalorian. It's IP that is collaboratively created on the internet. So back rooms feels like something that everybody on the internet had a hand in creating, right? Or millions and millions of people on the internet had a hand in creating. So when that comes out in theaters, I want a thing that I had a hand in. I think the other thing is that cutting your teeth as an internet filmmaker, it teaches you a lot about how to earn attention.

46:23Curry Barker, the director of Obsession, talked about this in an interview. they said, what did YouTube teach you about directing movies? He said, the reality is when you make something for the internet, the audience is begging and you have to convince them to stay. And I think historically in Hollywood, there's been an entitlement of, hey, we have George Clooney in the movie. We spent a lot on marketing. You're going to buy a ticket and you're just going to sit and enjoy it. But I think internet filmmakers know when you're making something for YouTube that the audience can click away at any moment to something more interesting.

46:55So I better tell you a great story that's unfolding frame by frame. Yeah. And the third thing is third thing, because I know we both, we all love lists. And the third thing will blow your mind, by the way. It'll shock you. The third thing is that Hollywood talent is, I actually think like the linchpin in this moment in time that there's a lot of talent that's available that are like crafts people in Hollywood who have focused on specific crafts, whether those are DPs or screenwriters. or set designers. Like when that is paired with the acumen of internet storytelling, it's proven to be very powerful.

47:34So I think there's been this like narrative, of course, Hollywood is dying. But I think it just looks very different now. Like we didn't know theaters were available. Like Markiplier put his movie himself. He picked up the phone and put his movie in 4 ,600 theaters. Theaters are available and they're great. you know like Hollywood talent is available they don't have other jobs and they're great so I think these worlds finally coming together there's there's been a lot that's happened but it's it's super exciting to see yeah yeah I look at it as like the last 15 years has been a story there was collaboration happening but it was overwhelmingly a disruption story you look at the market cap, the value creation of the platforms, you know, the YouTubes, the Instagrams, et cetera, how much the explosion of enterprise value in these new platforms, the overall reduction in EV in some of these sort of like more legacy entertainment.

48:33But now we're meeting at a point where both sides can say like, hey, now is the opportunity to figure out how to both win because clearly there's a place for both, right? We still want to see the, I mean, I don't, but John would like to see the blockbuster. Jordy's going to see movies. You're going to see. This is going to be the tipping point because you were never a movie guy. But once the new creators, once there's a Wombo film and a whole cinematic universe around Professor Sandy, you're going to be. I'll be there. but uh but yeah so so this is the moment where i think the i i expect digital platforms to consume more and more and more and more attention that just seems to be they're frictionless right uh they're free they're available everywhere but now is a moment of hey both sides should be you know actively trying to do more and more stuff together yeah the reality is also it's important to note that this has all happened in horror right and this has happened once before with the Rocca Rocca brothers, you know, signing with A24 and making Talk to Me for about 4 million bucks that ended up making just about 100 million.

49:41These are outsized returns. Like Curry Barker making something for a million dollars, you know, Obsession was made for about a million dollars. Focus purchased it for around 15 million and then generating 148 million dollars, not even a month in, is absolutely insane. And so horror has historically been cheaper to produce, right? If you even remember in the 90s, the Blair Witch Project was like this cheap indie horror movie that ended up exploding. And I think there's something to explore about like the absurdity of horror and the absurdity of these movies and the absurdity of our world right now.

50:17And maybe the comfort in going to see something that is more absurd than the world around you. That's just a hypothesis I have around, you know, horror, but horror has historically been cheap to make. I think we're about to see every agent in Hollywood ping their creator talent and say, do you have a horror script? Because it is that moment that's going to happen. There will be likely an overreaction to this in Hollywood. But I do think what was proven over this past month is that internet native storytellers can tell a story that reaches millions of people, that fills theaters, and potentially better than the storytellers that cost you in the hundreds of millions of dollars.

50:58The Mandalorian costs$265 million all in, and it's made$247 million right now. So it's like, it's super hard to make a big blockbuster movie like that. And, you know, even Markiplier making something like he made independently for under$5 million, you know, is pretty incredible. Okay, talk about the state of horror on YouTube or fiction on YouTube. it's somewhat interesting to me that I would put backrooms, like the actual content as it's horror. And the movie is a direct adaptation of that. The original backroom series on YouTube is creepy, but obsession Curry Barker, that was comedy. And Markiplier was horror, but video gaming, he wasn't creating the fiction himself.

51:47And so I'm wondering about how, if we will see a shift, Does this give does this basically does it give YouTubers permission to do things that are more fiction based versus explainer videos, podcast interviews, reactions, commentary, which is like the bread and butter of most YouTube comedy as well? Or will we see more people pulling? OK, this person's talented, but horror is ROI positive. So we should just give a crack at this, even though they're a commentary channel as opposed to someone coming through. okay, they've been telling love stories in a fictional context. They have a rom-com series on YouTube.

52:25Let them make a rom-com. I think animation will be the other space outside of horror and it's already happening. The Amazing Digital Circus is a great example from an animation studio called Glitch. Their first few episodes crossed half a billion views of Amazing Digital Circus. They didn't know that was going to happen, but it did and a community gathered around them. I think horror and animation and anything video game adjacent works really well on YouTube I think some of the other stuff is harder I think that stuff may emerge more on like Instagram and TikTok and whether it can be adapted into feature length stuff I think will be up for debate but I do think both things will happen I think YouTube will be looked at now as a real incubator of IP and a real incubator of talent and I think that's always been like a concept but it was never like I think when you meet with Hollywood execs, they're like, yeah, but we can't make any money off of it, right?

53:22Like, yeah, they can make money through brand deals and a couple million bucks here and there, but we can't make real money. These movies have proved you can make real money. And so I think that's where both things will be true. I think creators who upload to the platform and incubate IP, Backrooms was found by a 27-year-old, basically staffer who was just poking around and seeing what was going on on YouTube and Reddit, I think that will be like everybody will have a young person just perusing Reddit and YouTube to go, what's catching? And I think if I was giving advice to those people, I would say, really take a hard look at Reddit and see where things are being built in real time by big communities.

54:05Another great example of this is like in the Minecraft community years and years ago, the Dream SMP was this like collaborative Minecraft story that had so much lore to it that a bunch of people were involved in. So I think the reason why video games is such a right place for IP to build is because it's interactive storytelling and interactive world building that a lot of people are involved in. And that then, more than just a large audience, that guarantees a mobile audience because they're invested in it. And then there's Red vs. Blue with Halo and GTA RP. There are rich sources. And it's interesting, there's been so many video game adaptation flops.

54:46Basically, Detective Pikachu is the only one, I think, that has a Metacritic score above 80. Last of Us did well. So it feels like we're hitting a tipping point there. But you go back to the original Doom adaptation, a lot of the Resident Evil films. Some of them made money, but none of them were critically acclaimed or really became like cultural moments in the way the video games did. But if you have a creator who actually really deeply understands the community, the content, the lore, and then they build their audience on top of the IP, potentially some of these video game companies that are maybe not as internet, not as like, not as linear storytelling native.

55:22If they have someone in the mix who's already sort of pre-vetted, this can work as a two hour film, then they can unleash them, turn them loose. But of course, it's an IP negotiation. Is there any missing part of the stack right now to meet this moment? You have the, you know, the CAAs, the talent, you know, the talent agencies that can, you know, wear a lot of different hats and help make plays. You have production companies, but is there any, is there any part, is there like financing component missing? Maybe it's too risky to create some type of vehicle just to back creator-led films, but at the same time, maybe having domain expertise would be actually...

56:09I think the missing piece, and this has been historic in our industry, is development. I think there is a lot of assumption that creators with big audiences know what works, and part of that is true. But Kane got signed at 16 years old, and A24 kind of mentored him from the age of 17 to the age of 20. And I think, you know, A24 has a history of making great movies that are culturally relevant and knowing how to make something iconic, knowing how to make us all feel something. And so that I think should not be overlooked is the development step. Like surround me, if I'm a filmmaker, surround me with people who have done this before, help me write the script, which Kane did have a lot of help in screenwriting.

56:52He's looking for a collaborator for part two. but give me the development support to make it long lasting IP or big global IP. And I think that happened with Kane. I think Curry is like a really great talent and what he's done in comedy historically has led him here. But I think development is gonna be the missing step because what's gonna happen is it's going to be a very quick reaction. Let's get creators with scripts. Let's put money behind them. Let's move fast so we can also make$150 million. But you have to remember this is years and years and years of these storytellers cutting their teeth and having good people around them to help them learn how to tell a good story.

57:28So I think the financing will not be a problem because you can finance, creators know how to make stuff for cheap. Last question. It was 20 days that Curry made that movie, which is great. Somewhere out there, someone is sitting in a dark room for like 18 hours a day trying to prompt their way to a hit movie. I don't know if the models are good enough yet. I have a feeling they might be, and it really is about figuring out the storytelling component and piecing it all together to be cohesive. But do you have any sort of personal timeline to that kind of moment where one individual takes an idea through even a 30-minute film that actually gets a positive reaction from critics or something like 20 million views, something like that.

58:28And I mean, obviously we all live in LA. I feel like the first thing that comes to mind for me is the Spencer Pratt mayoral ads because those are like a lot. Yeah, but ads are so much easier to make. It's a glimmer. They're much easier to make, but I'm saying that's where we are in the timeline, right? Like those ads are clearly AI, but they got shared a lot and they did do millions of views. And people just accepted them for the story that he was telling, I think. And so I think if you look at that, like maybe it'll be in a year or two and I think it'll start in animation with short films because we'll accept that more.

59:09But I don't know, all things, I think another element of this whole story is I do think maybe you guys feel this, maybe you don't. I think there's a bit of internet fatigue that is allowing theaters to come back. I think maybe I'm just overstepping there, but I do feel it. I personally feel an element of internet fatigue. screen time finally sort of dropping off a little bit after yeah i thought about yes like running over my phone with my car on purpose just to have a little bit of forced time offline so like the models are really good like we've been playing around with gemini omni obviously we had them at press publish la but like they're really good models they're crazy good yeah uh you know whether you can get that'll probably happen in the next two years we'll probably watch something like that One somewhat related cut on this that I want your reaction to is I found it very interesting that Backrooms started as a purely CGI VFX effort in Blender and After Effects.

1:00:09And what's interesting is there's actually a whole discord for modeling different 3D models that are shared so the community can build around it. And the assumption, if you are worried about the relentless march of technology, is like, well, of course, they had everything modeled. They already had the Blender assets. Like, just hand that off to the VFX team, and you got yourself a CGI movie. Put Chiwetel Ejiofor on a green screen, and it's done. But they didn't do that. They built 30 ,000 square feet of physical set design. And it's interesting that I feel like the CGI wound up being like the audition for actually building and underwriting the build out of that set.

1:00:51And I imagine that that might happen in AI where you get someone that has some interesting idea that they were able to prompt. And then they take that into a CGI that's a little more polished. And then they can go build the actual sets. And it's all just this extra underwriting process. but I was wondering if there was anything else that stuck out to you about the fact that they that they sort of went light on CGI when you think the fans of backrooms are are they're already blender they love blender like they're not upset about CGI but if it was CGI then I would be like just make it for YouTube like the reason why it's an event yeah is because of all that and I think 24 and you know I don't know who yeah I don't know who whose call it was but 824 is very good at making things iconic all the interviews of the cast are done in the back rooms there was a dj set from the back rooms there was people who visited the back rooms like the fact that it was tactile makes it an event that's interesting i'm not even 360 experience i don't like that yeah i've seen five movies but i can tell when i can tell just based on with hardly paying any attention i can tell when a movie's an a24 movie from like the first video that i see the first 15 seconds of a trailer.

1:02:02There's just something about it. Yeah, it's the same with you guys. There's countless shows that try and be TPBN, but you can see I could see something for a split second even without you guys on screen and know if it's TPBN. And I think A24 has that, and that is really hard to do. It takes a lot of focus, and it takes a lot of discipline. But I think A24 has done it again. This is incredible and pulling someone like Kane into this and beating Marty Supreme, which had like a crazy marketing push, shows you the power of the internet. They overpowered the blimp. Powerful, man. The internet's powerful and the communities are powerful.

1:02:49I'm assuming we're about to leave and I just wanted to say I'm thrilled to see ads back. I couldn't tell you how great this looks to me. I'll give it up for that. I'm thrilled. It really is part of the brand. It's part of the brand. It is part of the brand. Do you have time for one more question? I got time, man. I'm just here in Montana. You guys have to go probably. Doing mysterious things. Yes. Next question. Where are you? And don't dodge the question. I want advice for YouTubers in the context of passion projects. There's a lot of YouTubers that have grown off of a single format. They know what works, the title, the thumbnail, hook, the format, the structure of the video.

1:03:30They know they can put up a million views for every video that they do in that series. But they get sort of bored and they want to do their passion project, their series. And then they do it. They take the time off and then it just doesn't quite perform. Maybe the 200 ,000 true fans show up, but it's not getting the viral hooks. I noticed this with Johnny Harris did this fantastic series on Cyprus and he went around these islands, but it just, it wasn't financially the same as all the other videos that he does. And I'm wondering if there's a new format where you should sort of give YouTubers the permission to keep that special project in their back pocket and take it to a different place.

1:04:09Take it to Hollywood where that type of project can live and flourish and go through development as opposed to trying to stuff it down the same funnel that is very optimized for a particular type of video. I think monetizing your passion projects is almost like an oxymoron. right like if if it's if it's a passion project you care about it yeah you should not get other people involved like we are in the business of media you can sell media yeah you can come up with your media product you can sell your media product you can sell your ad integrations into your youtube videos but you have something you deeply care about that you just know how to make it you know what it should be i call right add a bunch of yeah yeah you go or you have a financier that you trust yeah you got a financier that you trust that's not going to hinder it and again curry i think the danger with these creators now is actually having too much money um you know like curry making that for 750 is what makes it special it's what actually gets less strings attached yeah uh and why it's good markiplier making something no strings attached like that's just his money um he gets to make something really special so i think markiplier is a great example like when you have a passion project you you ideally have the cash to do it or can get it from someone you trust who's not going to intervene with it.

1:05:28But I think that is a danger. I think too much money can kill creativity very quickly. And it just becomes a product, of course. And so I would caution. I have one last hot take that I want your reaction to. We need to bring the host-read mid-roll ad to the cinema. Movies should have host-read mid-roll because if you look at the budgets of some of these films,$750,$1 million, if you're watching Obsession and then just at the one hour mark, there's a flip hanger, and you just sit down, Chase Sapphire Reserve. Not just product placement. I want the characters to sit down. No, no, no, no, no. The whole point is that it's not product placement because everyone goes to product placement movies.

1:06:14This is separate. This is a host read ad separate from the content. I agree and disagree with you. I want the characters to sit down and not just use like a Chase Sapphire card to pay. I want them to look at the camera and deliver direct response. Because I'm actually sick of seeing James Bond use the Samsung Galaxy S26. I would rather just James Bond tell me about it separately and then I can go back to enjoying the movie with whatever phone he would use, whatever phone the character would normally use. I love you guys and I love how you speak about advertising. I disagree wholeheartedly. I don't want that at all.

1:06:47I'm happy to have the theatrical runs sponsored by someone like Chase. If you have a Chase Sapphire card, you get it for free. And like you get perks for something. If you have a Chase Sapphire card. The one thing, my hot take is I want movies to be like 90 minutes and under again. I can't do the two hour movie. Like I just cannot do it. I would prefer like 90 minutes and under. I got time for two hours feels like, and I think all of our attention spans are being trained to like be way shorter than that even an hour and a half is like working out like it's hard maybe go shorter 90 second movie vertical well john and i are gonna john and i are gonna start 20 bucks but i i you know i checked the box i saw a movie yeah i went to the theater that would be good 90 seconds and about that'd be good for me that'd be great for you you'd be able to catch up you'd be like yeah i've seen hundreds of movies yeah well we can agree we can agree to disagree on ads john and i will start a media buying a company called Fourth Wall and it's just focused on breaking down the fourth wall and delivering ad impressions during your most sacred moments of entertainment.

1:07:53Yes, yes, yes. The next Godfather will be sponsored fully. Anyway, enjoy Montana. Thank you so much for taking the time on a busy day to come chat with us. Great to see you, dude. Great to see you. Again, not that busy, but appreciate it. Okay. Have a good one. See you guys. I'll see you. Mysterious activities. Goodbye. Let me tell you about Cisco. Critical infrastructure for the AI era. Unlocks seamless, real-time experiences and new value with Cisco. Hey, team, is this, Ben, is this real? What is real? Did you take a screenshot of it? What happened? What is this? Look in the chat. No, no way.

1:08:27He found the target. Just off that one screenshot, our intern, Ben, was able to find Samir's exact location. Okay, we will not dox it, but we do know exactly where it is, potentially. I don't know, this might be hallucinating, but it looks pretty accurate. Anyway, we've been keeping our next guest waiting. We have Tom Fairley from Bullish in the waiting room. Let's bring him in to the CBP and Ultradome. How are you doing? What's going on? Good to meet you. Welcome to the show. Can you hear us? Cannot hear us, but looking sharp. Okay, we're turning on the audio. Hopefully, we'll hear him in the meantime.

1:09:05Let's go to this debate. Okay, Becky Quick at CNBC is getting in trouble because she claimed that GLP-1s are responsible for school budget shortfalls. When I saw this, I was like, what could possibly be the connection? And BioInvesting 5 said she's so misinformed. She fact-checked it. Turns out it's true. School budgets are paying for GLP-1s. They're very expensive. And so that's driving up health care costs in a lot of in a lot of school. Welcome to the show. Anyway, welcome to the show. Thank you so much for taking the time. How are you doing? Sorry about this. Sorry about the audio. I found the little bit about Becky.

1:09:44Interesting. She's not to speak about somebody else, somebody on a different network. But she's a pro. She's a serious journalist. We're very close. Everyone at CNBC. We love the Squawk Box crew. They pioneered this whole format. Invented television over there. Anyway, let's go to you. Tell us about Bullish. Give us the update. Take us through what's recent in the business. And let's get started. Yeah, sure. Just before I do, just to follow on on that, you said you're a fan of CNBC. I, too, am a fan of CNBC. But also, we have our own media business here. No way. And I've watched with some, as both a practitioner and a fan of somebody who's done a lot of it, I've watched with some astonishment the success that you guys have met with.

1:10:24Thank you. By just creating a fresher, more interesting format. You guys do an awesome job. Thanks for having me on. Thanks for saying that. It's been a really wild rise, really fun. And best part is getting to talk to people like you all day long. And again and again and talking to six people a day. A lot of people start podcasts because they want to talk to interesting people, but then they talk to one a week. We get to talk to seven a day. It's great. Yeah, yeah, super cool. Anyway. I'm happy for you and happy for me. Yeah, what can we talk about? Well, why don't you take us through the shape of the business currently and then some of the new deals that you've been working on.

1:11:01Wait, can we get some backstory first? Oh, yeah, yeah. Let's start there. You're at Nicey, right? Yeah, I was born in Bowie, Maryland, just outside of D.C. I thought you were going to say I was born on the stock exchange. I was born on the floor. Home birth on the trading floor. That would be amazing lore. I actually didn't know. I wasn't born with any destiny. I didn't know. I was always interested in business and money. No, nothing was preordained. Yeah! A lot of people are afraid to say that. I was never afraid to say that. Yeah, no, I could tell. My mother would shake her head sometimes. My mom was a nun for five years.

1:11:49And and worked in, you know, I grew up in a place called PG County and she worked at Elizabeth Seaton High School, which, you know, by and large had kids from a different socioeconomic strata than me. And then she would come home and I would talk about making money. And, you know, she looked at me like, oh, he's the black sheep. But met my met my wife at Georgetown. I need a dollar to buy a Gatorade. And she lent it to me. And now we have we have three kids in New York City. And I just fell in love with business. and first couple of years I did like banking and private equity. Honestly, I love that too.

1:12:23But when I really kind of got my mojo is in the markets industry because it's the intersection of tech and business. And that to me is my happy place. And I've been there ever since. I started when I was in my 20s. I'm like granddad now in the digital asset space. I'm 50. And I've been right there at that kind of overlap of the Venn diagram of technology and markets. I had these friends the Romeros and I love them I love them all stay in touch with all of them there's four brothers and they're all super smart super successful and three of them are just like meatheads like you know always had their shirts off and wrestling and playing hoops and then Danny was always like reading Java coding for dummies when he was like 10 years old and I would always keep an eye on him and so in 2013 I'm like Danny are you going back to Duke and he said no I'm going out west to start a blockchain company.

1:13:18And I'm like, all right. I don't know what the hell that is. But if you're doing it, I want in. You know, a few days later, New York Stock Exchange, where I was at the time, we agreed to put$10 million into a little bitty, maybe pre-revenue company called Coinbase. And so I got this bird's eye view of the digital asset space. Dan Romero. Yep. Whoa. Yeah, we know him well. He's been on the show. That's a crazy, that's a deep cut. That's so good. Oh, it was great. It was great. Literally, I'm like, Danny, going back to Duke? He's like, no. He's like, no, Tom, I actually graduated this past May. You're a year off.

1:13:55I'm starting this blockchain company. Meanwhile, I know I'm going in to run the New York Stock Exchange. He does not. And I'm like, hey, dude, you got a couple minutes? Come sit on the porch. And he comes up and he starts telling me about blockchain. And I'm like, wait, you know, I'd heard of Bitcoin, but this is early, right? It's like smart contracts. And I'm like, but what use is there for these smart contracts? He's like, oh, it's going to be amazing. It's going to disintermediate. It's this layer of programmable finance going to disintermediate all the kind of big institutions like the New York Stock Exchange.

1:14:26And I'm like, wait, what? What are you talking about? It can't be. And so I said, I got to put some money in. He said, oh, well, my roommate, Fred, is going to be in New York tomorrow. Why don't you meet with him? And so I met Fred Ersan. I ended up meeting with Fred at Union Square. And we put that dough in. And it was like the best money we ever invested. We got lucky on the return. Just dumb luck. Was this like this Series A stage? I don't know. I can't remember last Tuesday, let alone 2013. I could Google it. But early. I mean, Coinbase was in my YC batch in 2012 and summer 2012. So I think Cedar Series A was right around.

1:15:05We should punch it. we should punch it in you know anyway it was a long time ago punch in new york stock exchange coinbase it'll come up that's crazy uh that must have been what what kind of reaction did you get on wall street from that investment at the time i don't know how public it was but i imagine you still had some some of your peers that were saying you know what what the heck is i'm up to you know it's actually i think if you ask brian or or fred um or or fred of union square i think I think they would all say, with humility, it has nothing to do with me, it has to do with the NYC brand, that it was hugely valuable for Coinbase.

1:15:43It was not only public, it was massively public. So in other words, if you were to look it up, you're going to find story after story after story after story, which is, hey, traditional bellwether firm, New York Stock Exchange, validates crypto firm Coinbase. So on the West Coast, it was like a lot of celebration and, hey, this is finally the coming together of these two worlds. On the East Coast, it was like, what the hell is this? What a weird investment from these guys. And it wasn't as celebrated. I will say just my thesis was this was a programmable layer of finance for institutions. yeah like that was the thesis it was dead wrong if if i'm honest you know there were no institutions there weren't institutions until yeah was that just a uh you had the timing wrong you didn't yeah but pretty darn wrong right yeah pretty darn wrong um yeah yeah but you're only off by only off by what a decade a decade plus and just miss but miss that retail would be the the the early adopters.

1:16:57Yeah. And even some of the late adopters. Yeah. I guess how do you synthesize the fact that crypto did not disrupt the traditional finance system like entirely? Like, you know, JP Morgan, Morgan Stanley, these firms still exist. They're chugging along. New York Stock Exchange is still chugging along. NASDAQ and many others. And yet crypto firms have been very successful. It was sort of a like heads, eye, wind, tails, you lose situation. Like both both sides did well. There was not total destruction of the traditional financial infrastructure and institutions. But crypto was, you know, wound up flourishing.

1:17:39Like what does that say about everyone's preconceptions, I guess? Because there were two sides a decade ago, Either crypto is a zero or it's going to take over everything. And we wound up with the middle road. Yeah, I don't. I agree. I agree. And I'm going to challenge it a little bit. I'm not sure it was. It has been up to this point such a big win for crypto. There's actually relatively, for all the money and attention and time and, you know, ink spilled. and for all that has gone into digital assets, there's actually relatively few successful companies. Yeah. And certainly the disruption to traditional finance has been relatively small and very small, actually.

1:18:34I, and look, it hasn't always been great. Just I'm not a cheerleader. I call balls and strikes. Like not only were there winters, but there were frauds and scams. And, you know, like I'm not in it for the fart coins and monkey drawings. I'm just not, and I respect it, and I understand why they're there. And just to pivot to that, the nice thing is they've brought a lot of attention into the industry, a lot of money into the industry. And I think it's all been a warm-up act. And remember, blockchain's going down, in some cases, once a day. And none of that happens anymore. And they've been battle-hardened.

1:19:11And regulators have now come around, And you've seen broad acceptance of blockchain rails for serious use cases in Asia, in Hong Kong, Singapore, in Europe, in Brussels, Europe, but then in the individual countries. And now in the U.S., not just with Genius, which is the state that, you know, ratifies stable coins, kind of gives them papal blessing. But hopefully the Clarity Act, we can talk about how to handicap that. But if that gets passed, that'll be perhaps the biggest regulatory or legislative step ever. And so I am very, very optimistic that I come on this show a decade from now and the global securities market is it's on blockchain rails.

1:19:53Yeah. And that's a 270 trillion dollar market. So there's no mission accomplished banner behind me in terms of crypto up to this point. But it's it's coming and it's it's coming. It's coming in real time. That's kind of how I view it. Yeah, crypto, you know, the cycles and the hype cycles are so vicious. And yet it keeps creating these opportunities where the true believers, if you just maintain that conviction, like this window right now, where there's some, at least, you know, we primarily cover private markets. And so there's so there's some interest at the intersection of AI and crypto. though.

1:20:38There's been a decent amount of investment there, but I don't see, you know, hundreds of new companies focusing at the intersection of what you guys are doing, which is that like true institutional adoption across, you know, global equity markets and other asset classes. And so I do, I can, I can, you know, thinking on that 10 year time horizon, I very much can see how the best days are yet to come and huge opportunity to just like, you know, be in the foxhole and focus on the opportunity. Yeah. And I think agentic commerce will intersect with blockchain technology. And I'm not one of those who says, oh, and 100 % of, you know, agentic commerce is going to happen on blockchain rails and, you know, fiat rails will see their share.

1:21:32But that's going to be a big driver as well. But you're absolutely right, Jordy, and thanks for doing the prep work and learning up on Bullish because you're absolutely right. We are focused on institutions, really institutions exclusively in our exchange business. Over in our Coindesk and consensus business, of course, we're a media business, so we service all sorts of people and customers. But we focus on institutions exclusively. Yeah. I'm reflecting on the question of, like, should there be a mission accomplished banner behind you? And I take your point. At the same time, yeah, there has been a lot of success in crypto, trillions of dollars in market cap.

1:22:12A lot of that captured by the coins themselves. But there's a number of very successful companies. Yours is among them. But I'm interested in where you think we are in 2026. A lot of the prices are, we're not in some insane falling knife scenario. But stable coin volumes are sort of stable Even though they were growing very quickly The Bitcoin price is fairly stable which is what? Fairly stable micro strategy. Yeah selling but but it just doesn't it doesn't feel like oh, there's this is the FTX moment all over again Like the crypto is about to fall into zero and like people are panicking It's more just like, you know, this is a mature stable industry.

1:22:56That's you know, there's some there's some growth There's some companies that are beating earnings. There's all sorts of different stuff happening. It feels very mature. And so I'm wondering. Yeah, well, it's mature, but still feels like there's an opportunity for pretty parabolic growth as you get real institutional adoption, not just, hey, we're going to hold some, you know, Bitcoin on our treasury, etc. So, yeah, I agree with everything you both just said. I think, you know, what John said is kind of feels like a more ordinary industry. And by ordinary, I don't mean that in a pejorative sense, but it's no longer based on hype.

1:23:39It's based on real use cases like stable coins. And stable coins are being used for trading and stable coins are being used for payment. And stable coins are being used for lend borrow. And they've gone from zero to 300 billion. And, you know, the whole industry is now 2.7 trillion. And yes, Bitcoin's more stable. Now, we happen to be sitting here at a moment in time when Bitcoin's down, you know, 15 % over the last two weeks or something of that nature. But there were times when these, when like there was like the whole crypto industry is down 50 % and people are actually penning the take. Everything's going to zero and it's being debated seriously.

1:24:17And that's not happening right now. No. It is a different time. And then what Jordy said that I agree with. So, you know, you mentioned, John, that crypto is a couple trillion. The last time I looked, coincidentally, I'm not that good at math in my head. The numbers made it real easy. 2.7 trillion. And the global securities market is 270 trillion. Oh, yeah. And that is coming, right? Money market funds have already moved on to blockchain rails. U.S. equities have already moved on to blockchain rails. You look at all the industry bigwigs from my old haunt, the New York Stock Exchange, or DTC, the clearer, or many of the electronic brokers, Kraken, or Binance put out an announcement yesterday.

1:25:03They're all tokenizing stocks. You're seeing more examples of tokenizing fixed income. And so you're looking at the parabolic growth that Jordi referred to, I believe, is going to come from the so-called tokenization of the global securities industry. What's more important there, cost or speed? Because, and when I mean speed, I guess I mean like 24-7 trading. That seems like it's crazy. We don't have that yet everywhere. It seems like a purely technical issue. And yet I've talked to folks at hedge funds that are like, yeah, like we actually can't get traders who want to work at 2 a.m. Eastern on a Sunday.

1:25:42It's hard to recruit the best to actually make that market and provide liquidity at that point in time. But then on the other side, you have, you know, fees and all of the different things that happen with with crypto potentially dropping costs. Like what are the different pieces of adoption? Yeah, the 24-7, what people miss sometimes is actually the investing demand, especially for the most liquid U.S.-based securities. Like, think NVIDIA stock. The incremental buyer comes from abroad. And Singapore, where we have an office, is 12 hours away. And they don't want to trade some crappy derivative or they don't want to trade some IOU.

1:26:25They want to trade the actual stock. And so by going 24-7, you can bring on new liquidity, which drives down the cost of equity of those companies. And so there's a real incremental benefit. I think to answer your question, like what is the benefit that's most attractive? You have to look at the particular constituent. The issuers, they hate little things like what, you know, I say little. They're not little to them. But like this issue of naked short selling, which is illegal, but is possible in a world where trading is obfuscated in a series of Russian dolls of brokers or other intermediaries.

1:27:02With blockchain rails, there is no naked short selling. You just look, are the shares in a wallet or are they not in a wallet? It's done. But also, issuers want the ability to pay dividends in stable coins. Issuers want the ability to be able to reward long-term holders. Imagine you're a company and say, hey, we're going to pay a dividend of a dollar, but we're going to give an extra penny for every quarter you've held our stock. there was a whole exchange on the west coast that started that was really great i remember long-term stock exchange right exactly mark andreese introduced me to eric reese maybe 10 years ago 15 years ago and i remember the first meeting i had with him i thought this guy's on to something like yeah we should we should reward that we should reward long-term holders well it turns out you can't do it if you don't know who owns the damn thing and it's buried within five Russian dolls.

1:27:52With blockchain technology, again, you just look at it. Oh, they own it. It's in that wallet. It hasn't moved. So for the issuer, it's actually incremental functionality as opposed to cost or speed. And then for the investors, it's just the ability to do things at a lower cost. So I guess that's more cost. But then on the speed perspective, being able to settle instantly is interesting. So it kind of depends. Depends which constituent. Short on time. Couple questions. People on the West Coast who know nothing about finance have been excited about compute futures markets or treating compute like, you know, trading it like a commodity.

1:28:39Is that something, you know, how do you think about that, you know, potential market? Is that something that you think could start on blockchain rails because it is a new type of commodity in some way? Yeah, two questions embedded in that. One is, will compute futures actually be a successful product? I think it will be. The issue is standardizing it and commoditizing it. successful the real successful futures contracts with lots and lots of open interest all come down to the question of are you able to standardize it and commoditize it and come up with the cheapest deliver that has value in the world and everybody agrees upon so that's not going to be dead easy it's still probably going to take a couple years but i suspect that that will happen uh the second question is because is that because like an onion is an onion but a gpu is not necessarily a gpu Like an A100 is not a blackwell, so then do you need hundreds of basically submarkets?

1:29:39Yeah, and the providers have a vested interest in not being commoditized. So sometimes it takes time for the market to commoditize, but it's exactly what you just described. Got it. Go ahead. One more random question. uh friday ipos we're looking at a spacex ipo next friday uh my my my sense is like that's does that not introduce like more chaos because you have like one you know real trading day there's going to be so much retail activity then you go into a a weekend of course you know people will trading it over the weekend in different ways. But I know there was Alibaba and Uber that both went out on the NYSE on Fridays.

1:30:30How did those go? Does that make it more complicated or chaotic? Or are the exchanges set up to handle that? The Alibaba IPO in particular was one of the best days my career maybe even my life um but it was also coming from the guy who as a young boy knew he loved money i also was so friggin nervous that honestly when you just said that i like was tingling remembering it i was i was we were in our beautiful uh ballroom that morning and jet lee was there, Masa and Jack and Jimmy Lee, who's departed, who's an iconic and legendary JP Morgan banker. He kind of sidled up to me. He's like, hey, Tom, did you guys test this thing at all?

1:31:21Like, is this actually going to work? Because you're about to get a gazillion retail orders. Good God, next Friday, it's going to make Alibaba look like child's play. So, Adina at the NASDAQ is fantastic. And the NASDAQ is fantastic. Oh, man, it still makes me nervous. But to answer your question, I think a Friday is fine. There will be awesome price discovery on Friday. And you're going to see extreme volatility for the first hour. That's nobody's fault. That's that's called markets. Could it be better? Could there be better mechanisms that could be put in place to smooth it out? Yes. And we should all strive to get there.

1:32:02I just went through an IPO. I have a thousand things that need to change. I think blockchain technology can be very, very helpful in the future. And I think you're going to see more capital formation on blockchain rails because it can do just that. But high volatility to be expected. It's going to calm down dramatically through the day. And it won't be a problem getting through the weekend because there's not going to be any substantive new news. Right. Thank you so much for coming on the show. Maybe you should come back on next Friday. Yeah, we got to do it. This was super fun. This is fantastic.

1:32:34We'll talk to you soon. Yeah, great to meet you. Have a good one. Let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agents to deploy your web apps, servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security. Our next guest is Nikesh Arora from Palo Alto Networks. He's the chairman and CEO, friend of the show. Welcome back, Nikesh. Great to see you. How are you doing? I'm doing great, gentlemen. How are you? We're doing well as well. We're doing great. It's been too long. Let me see those watches.

1:33:04Ooh, I have a Rolex Submariner in TBPN green on. We got them for the whole team. Yeah, not going to be happy to say that. What about your favorite guests? Our favorite guests, we do have some of those. We do, we do. Actually, I can't wear watches when I'm using a computer. Really? It's too annoying to me to have it clacking against. Skill issue. Total skill issue. Insane skill issue. Total skill issue. Well, no skill issues over at Palo Alto Networks, thankfully. Incredible progress. Take us through it. What's the latest in your world? Well, I think the good news is we can officially declare the Sassacalypse dead for cybersecurity.

1:33:45Sassacalypse is dead. There we go. Why? Why is it dead? Like, were you surprised that it took so long? it obviously has only been, what, a couple months? But still. Oh, the good news is it gave everyone of our happy shareholders a buying opportunity. This is good. Yeah, there you go. It took a few months because I think, look, the general tendency in the market was AI is going to eat every piece of software and it's going to be amazing and it's going to take care of it. Now, AI is good, but even now, the false positive rate on unaided models is 25%, right? Yeah. So if I don't explain the harness, is if I don't explain the context, if I don't explain what the code is trying to do, the model still gets one out of four wrong.

1:34:33In cybersecurity, our business will get everything right. If I get one out of four wrong, I don't think I'm going to get replaced anytime soon. It's like having your car driven by open AI because I don't need a Waymo. I don't need to have all the machine learning code that tells you everything. So let's just stick a model in a new car and go drive off. It doesn't work like that. So I think what the market is beginning to realize is cybersecurity is going to get enabled with AI. And if you want to get it enabled, you have to go with the people who have been doing this for a long time, who sit at various enforcement points, because we sit at north of 125 million enforcement points.

1:35:06You need AI to enable the enforcement points with new techniques to go suss things out that allows us to do a better job. But it's not going to come over and take my enforcement point away and replace me. So, are we going to use the world for this future? Yes. There's an alternate reality where the world wakes up to AI being good at, you know, hacking computer systems and all of the cyber stocks just like rip like off of that news. But it was interesting. Yeah. Well, if you saw, you know, one of the core skills of Mithos is this ability to daisy chain vulnerabilities and develop an attack. So, yes, it is not an alternate reality.

1:35:44It's not hypothetical. It is true. It is the capability exists. And that's why they were being so careful, rightfully so, in making sure they don't release the model at large because they know the model unconstrained has the ability of determining attacks based on vulnerabilities. So I think it's the right thing for them to do is to make sure they do that in a measured fashion. But what you're beginning to see more and more capability is getting embedded in the core models. OpenAI has one now. And Anthropic has another one. I'm sure Google has one, too. So just play this movie forward six to nine months from now, it'll be impossible to put the genie back in the bottle or constrain them.

1:36:18We have six to nine months to make sure that if somebody is able to use AI to attack somebody, the infrastructure on the customer end is equally fast to be able to repel it or block it at the same speed. You don't get that without modernizing your stack, without, of course, buying a lot of Palo Alto and having us help you get to a place where we can defend in real time just the way AI can attack in real time. So the cancellation of the SaaSpocalypse is clearly, it was a referendum on - For cybersecurity. Yeah, for cybersecurity. For cybersecurity. But the claim was AI will make Palo Alto Network's business worse.

1:36:58And I think that's been disproven. We've discussed that the bigger question I have is how does AI make your business better? Is it just the demand side because there are more threats than ever? So people have to buy more Palo Alto or are there other things happening internal to the organization that are making you more efficient? Higher growth like what are the other levers that are being pulled in the AI era? Well, like AI going back in multiple places, right? The first place is the amount of build-out that's happening across the world on AI means that more bits are going to be traveling across networks.

1:37:34Everybody's trying to deploy AI, collect more data. Remember, cybersecurity is the inspection business. We inspect every bit. We're the TSA of the internet. Every bit has to go through a firewall. Every bit has to go through a product that looks at the bits like good bit, bad bit, bad bit stay away, good bit can go. If you're going to explode the amount of traffic in technology in the world, you're going to need more cybersecurity capabilities. That's one. More traffic drives more demand. The other part is capability. AI models are good at certain things. The question is, how can we take them, take their false positive rate from 25 % down to zero and leverage them in what we do?

1:38:11That's happening right now. We're all looking at how to take certain categories of cybersecurity, embed AI into them to make sure we build a better product for the customer from a protection perspective. And of course, like you said, there's a third aspect where we can all use AI internally in our business to make it much more efficient. And I always maintain, as I said, perhaps last time I was with you, that AI will democratize intelligence. Yeah. Which means the average. Yeah. Yeah. You said efficient, efficient. And it feels like you're a leader in this efficiency moment where so many companies are token maxing.

1:38:45We saw$500 million bills going out. when I saw the Palo Alto Network's headline of using AI, using mythos to find critical bugs, the bill was token min. I don't know what happened, but you only spent a million bucks. What's going on? Is this a cultural thing? Are you already looking at ROI? Are you head of the ball there? Or are you being, is it more like a scalpel? You use it just where you need? Like, what is the actual token maxing, token leaderboard, token ROI maxing? What are you doing? Well, remember, we have parsed our efforts into what is extremely critical in Crown Jewels. Sure. And we can't let open-source models, open models touch them because we don't want our code to ever train anything in the public domain.

1:39:30It doesn't matter whatever they tell us. I don't want my code training public domain. So for that, we built our own harness. We're using our own open-source sequestered model, which can't talk to the external world. Got it. So we know it's safe. So half our code is going through that. We're not paying anyone for it. We're using it ourselves and built it ourselves. Is it going to be 100 % of what's out in the public domain? Probably not, but it's probably 85 % or 90 % there. And that's okay. I'll go deal with that. And on that, is inference cost an issue yet? Are you burning GPUs to the max and dealing with a half-a-billion-dollar bill?

1:40:01We're just using trained models to run it through because we're using our tasks. We're not using them to go generate new stuff, right? Got it. So that's one part of it. The other part is, when it's stuff that is, I don't need to spend expensive tokens for an IQ of 180 to solve a customer support problem. I can use a smaller language model. I can use an open source model to solve that problem because it's task-specific. So we're trying to be judicious about the use of AI. But at the same time, I think we're not using it as well as we should be using it. I don't think anybody in the world, except unless you're a Frontier AI model company, has got it perfectly right in terms of how we need to use it.

1:40:36So we've got to get up the learning curve, and we'll get there. I think the part which I was trying to say to you earlier, I think it's a very important point. What AI is doing for me internally is, as I said, is democratizing intelligence. The biggest risk in businesses is you hire 100 marketing people. Not all of them are equally good. So you all gravitate towards the 10 good ones. Then you've got to find a way to deal with the 10 really at the other end of the spectrum and 80 in the middle. The good news is, if I train my model right with all my marketing data, I can increase the average intelligence of 100 of them to 95%.

1:41:10And I just need the judgment of the 5 % from them, which means it's a rising tide lifting all boats from an average intelligence perspective. If I can get the outcomes of 3 ,000 customer support people to be amazing and there's no disparity, no standard deviation, I become highly effective, highly efficient, and pretty good at what I do. Yeah. Jordy, do you have something or can I keep going? What's your point of view on AI psychosis in the enterprise? John and I have been talking. There's a handful of our friends that we believe do have AI psychosis. They're heavy users of the tools. And you ask them what they've actually made and they can't give you a good answer.

1:41:56Now, certainly there's an entire other category that is being very productive, making useful things. But there's sort of a... Like Tyler on our team. Tyler's extremely productive. Very low AI psychosis. You ask him for something, he just builds it immediately, and it's there, usable, tangible. But it feels like... But there's a lot of make work. Yeah, there's at least one model that has created a sort of psychosis in the enterprise over the last six months. and but which one we don't need to name the specific model but there's like there's a there's the the same maybe sycophancy that you saw with 4.0 with a consumer I think is touch the enterprise in an interesting way well there's just this risk of having the AI model an employee goes to an AI model says help me with this and then the AI model responds in a sycophantic way, oh yeah, you're making a major breakthrough.

1:42:54You're making a huge impact at this company. And it's just shuffling spreadsheets around, recontextualizing data, building analyst dashboards. It's not actually moving the needle. Again, it gets back to the ROI question. And I feel like as a leader of a large organization that's very AI forward, this is something that you'll have to contend with. Are my employees using AI tools effectively? It's another question on just the effectiveness of embedding these tools? Yeah, that's a great question. I think we're past that stage at Palo Alto. So what we did was we let people use AI models and AI tools to experiment, to understand the art of the possible, train themselves.

1:43:31Thankfully, we did it without token maxing, so people have a good sense. They use all kinds of tools to understand what they are. But when it comes to enterprise efforts, we're past the stage that we've got one great Tyler. I'm sure Tyler's amazing. I have 21 ,000 people. One great Tyler doesn't move the needle for 21 ,000 people in the company. I think he could. I'm going to take the other side of that, but I take your point. You don't want to take Tyler away, so what do I do? Don't tell me about it. You told me last time I was there, don't take my boy. Keep your hands off. Right. So I'm sure we have our own Tyler.

1:44:02Don't worry about that. We'll be fine. But the more important part I'm trying to make is that now we sit and understand what are the 20 things we could do and how much scale impact would they have? Yeah. Right? What if I say, let's refactor customer support? I have 3 ,000 people. Let's train model. Let's train intelligence. Let's build harnesses. Let's build diagnostic agents. Let's understand the problem using AI instead of human beings trying to diagnose it. Now, that's not a usable model. That's almost like a business transformation project. What data do I need to do? How should my product behave?

1:44:35What's the first agent that you want when you get the data? What data does the customer have to give? So it's reimagining how we do the whole activity is a business transformation project. I've got 30 people working on it. They're not using AI tools. They're embedding the LLM in a certain place. They're sort of complementing it with machine learning. They're complementing it with new knowledge bases. They're complementing it with new data that comes from my product. So I'm trying to reduce my false positive down to low single digit. I can't run an enterprise business with AI with high false positives.

1:45:03So to get it to low single digits, a lot of programming goes around it. So the psychosis works or happens if you're just randomly, arbitrarily using models to do certain things. We're not doing. We're building context. Most importantly, the psychosis sets in when you're letting the AI evaluate itself or tell you if it did a good job instead of you knowing the ground truth. If you know that you're looking at a false positive, you're going to remain in reality. If you ask it, is it a false positive, it says, no, it's not a false positive. This is the best. Dude, yesterday I was doing my earnings, okay?

1:45:38I had Gemini up in for my script. I don't like the way it reads. Can you just give me alternate ways to say this? So it has this feature called Refine. So I had to look at it. I said Refine. And I'm reading both of them. My team had written that we simulated a cyber attack and it was possible in 24 minutes using Nupe for TRI models. When I refined it, he said, we attacked in 24 minutes. I'm like, shit, that's not what I'm going to say. Right? So I can't let AI lose and not pay attention to what it's doing. I still need the human supervision. I need the guardrail. Yeah, you have to know the ground truth, the reality.

1:46:13That's the basic thing that it can do wrong. Yeah, exactly. Talk to me about not the crazy AI doom Terminator scenario, but just I think that there is some anxiety around AI and cybersecurity where you see these powerful models. They're able to find vulnerabilities effectively. And there's a fear that there might just be a rash of exploits that result in some emails leaking or some social network data leaking and just a leakier internet that causes people to be upset. But my white pill on this, and I don't know if this is correct, is that the gap between private closed source frontier models and open source models appears to be widening.

1:46:59And that feels like there's going to be an increase. Maybe it's six months right now that you have access to the frontier models before it commoditizes. If that grows, that gives me more confidence because I know you're going to go and clean up the Internet and police it and be the TSA for longer. If that gap was closing and all of a sudden it was, you know, open source and closed source model, you know, gets a new capability and the hackers have it next week. I'm a little bit worried. I think you could do it in a week, but it's much better to have you have six months. But am I interpreting that information correctly?

1:47:36How afraid should normal people be about the risk to a leakier internet, a less safe, less cyber secure internet in the future? So let's step back. All of us test our software on a constant basis before we launch it. We don't want to have vulnerability in our software. Now, guess what? Humans write bad code sometimes. Surprise, surprise. So what AI is doing is discovering that bad code. And we've been testing our products, and so has everybody else in the industry, and every company does that. And on average, we used to find four or five issues every month, and we'd go build a patch, and we'll fix 108 products.

1:48:12We'll fix the patch every month and put a patch out there. What we found in the last six weeks was it would have taken us five to seven years to find. So a huge deluge of vulnerabilities. Now, of course, we have people. We redirected them. We patched them. we had to put out a bigger patch and go patch all of our customers. The point of that is that there'll be a lot of testing happening in the next few to six months, already is, with Opus 4.8 or OpenAI 5.5 and other models out there. There's a lot of testing going on in the industry across the board. Everybody's testing their code. All that code is going to get patched in the next few weeks, months, what have you.

1:48:48Now, there'll be a huge influx of patches to every IT department because you've got to patch everything right away because everybody showed up with all these patches. So it's going to be bumpy. But I think what we're going to be doing in the next few to six months is paying off a lot of technical debt we've accumulated over the last many years. It's bumpy, but it's a better starting point six months from now than it is today. So I'm an optimist. I think if you're a better starting point six months from now, the next model is going to find a lot fewer things than the last one found because we had to deal with all the stuff that we found.

1:49:16Will the next one find something? I'm sure it will. Right? But it may go back to finding five. and we seem to have survived in a world where there were five vulnerabilities found every month by software vendors. Now, the second problem, like you said, is AI might be able to concatenate them or daisy chain them and find a way to attack them faster. For that, it's a different problem. Vulnerabilities always exist. When somebody attacks you, the question becomes how quickly can you find it and shut it down? That is a slightly longer-term problem because that requires you to have a much more modern stack, It requires you to have way more data to analyze anomalous behavior and be able to defend against it.

1:49:53But we'll get there. Pay down all the technical debt. Start building technical equity. I like to hear it. Well, I mean, this is why AI is so exciting. You can do five to seven years of work in a month. It's amazing. I think it's amazing. The only thing we have is we have to find a way of getting 21 ,000 people transformed without AI psychosis to amazing leverages of AI. So they're using it in their day-to-day life and trying to treat it as their assistant as opposed to be afraid of it. Yeah. I love it. Last question. I don't want to get too geopolitical, but I want to know about America's compute advantage or the AI race in the context of cybersecurity.

1:50:37Because there has been this debate over are data centers the nuclear bombs or are the weights the nuclear bombs? If the weights were stolen by a North Korean hacker firm, they could wreak havoc. But I don't know if that's real because I think you have to actually go and inference these massive models millions of times and test every little system to find the actual exploits to actually do the hacking. And so another maybe white pill for America and the American Internet remaining secure is that as we build more infrastructure, more data centers, more GPU racks, we are able to do more of good guy inference, more cybersecurity, more testing, and our systems become more secure relative to the near-peer competitors that might want to hack us but have not invested enough in energy and compute capacity.

1:51:34Well, let's back up. Look, we're all eternal technology optimists, right? We're all in Silicon Valley. We hang out here. 99 % of the use cases we talk about AI are good use cases. AI is doing amazing things. It's going to do drug discovery. It's going to do a whole bunch of positive stuff. It's going to get rid of mundane things that we don't have to do. So generally, being an AI optimist is a good thing. Does America have an advantage? Yes. We are building on the last lead in the technological revolution from the last go-round. Where all the hyperscalers live? Where do all the large consumer tech companies live?

1:52:04Where do all the cybersecurity companies live? 90 % live in the United States, right? We have the core of building the next wave of technology on the back of the last amount of success we've had. I think all the efforts you're seeing, whether you're seeing it from the recent executive orders of cybersecurity, whether you're seeing it around investment in chips, whether you're seeing it around investment in electricity, everything else, we are trying to build the underpinnings of building an amazing future with AI with us. Now, does it mean there will be an edge case of single-digit percentage where people will try and use for bad things?

1:52:36Sure. Every technology, every invention has had people using it for bad things. Can we protect cases? Yes, we will have protect cases. Will there be some notable mishaps? Most likely. It's happened. We have 2 ,000 ransomware attacks a year. We move on. We go solve them. Life moves on. We fix them. We move through it. So I think we have to take an optimistic outlook. Can models be distilled? Yes. Can weights get reappropriated? It doesn't look like you need to because every three months, somebody seems to build the same capability open source. They're picking it out. and do they need the three-month advantage or not?

1:53:08I think they'll get the advantage. I think the key is going to be is we have to keep sort of marching along and making sure that our infrastructure is up to speed so we can actually match sort of defense with the speed of which offense can happen. And it's always been an asymmetric battle. Cybersecurity has always had to be right 100 % of the time and the bad guys have right once. They don't need a lot of compute. They can go rent compute and come after an enterprise if they so choose to do so. And this game of cat and mouse will continue. Last question. How much of your time is spent on quantum?

1:53:40A lot. What's interesting is we launched a capability where we can assess people's quantum cryptography readiness. We built capability where we can wrap your traffic with quantum secure keys. Even if you haven't upgraded infrastructure to quantum yet, there's a fear that quantum is succumbing. and there are nation states who might be collecting data which they're going to harvest later when quantum becomes a reality, hoping they can hang on to classified data and break the keys afterwards. So we're already wrapping the traffic now. Yes. That's really cool. If you know there's classified data and you can start sucking the data outside, I don't know what's in it, but it's classified.

1:54:20But I'm going to break it as soon as quantum's ready. And I'm pretty sure nation states will have quantum capability much before it's commercially available. Wow. That's amazing. I love that you're already working on that. That's so good. We have a quantum wrapper. You can buy a wrapper from us. You can go look and do full cryptographic inventory. We can encrypt the traffic with Quantum Secure today across your sort of traffic nodes and make sure that your data can be intercepted. I love it. Thank you. Thank you for doing that. And then also thank you for coming on the show. It's fantastic. I'm glad to catch up with you.

1:54:50Great update. Congratulations on all the progress. And thank you for canceling the SaaSpocalypse, at least in cybersecurity. We're going to cancel the SaaSpocalypse everywhere. We're going to cancel all apocalypses eventually. Sounds like a plan. Have a great rest of your day. Thank you so much. We'll talk to you soon. Goodbye. Speaking of a company that canceled the SaaS apocalypse, we got Figma. Agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. And we got a timeline post here somewhat related to Figma design. Teddy said he couldn't decide on art to hang on his apartment walls, so he built a drawing machine to decide for him.

1:55:31This is a very cool little hack project, I guess, that it will move the weights so that it can draw on an X and Y axis. It can generate an image, and then it can draw it with a pencil or a pen that you reload, and it can pick an image and draw a different thing every day. I thought there was a cool hack project. Calling it a generative pen train transformer. Yeah. Theodore.net. What a good domain name for just an individual solo creator. It's a generative pre-trained transformer, pen-trained transformer, of course. We'll go check it out. But we have our next guest in the waiting room. We have Henry Stern from Privy back on the show.

1:56:12Welcome back. How are you doing? Are you at the Rainforest Cafe? Are you at the Rainforest Cafe? I'm at the Rainforest Cafe. I'm in Europe because, in fact, TBPN is the TBPN of Europe. Oh, amazing. But I'm calling in from Amsterdam. Yeah. Fantastic. What brings you to Amsterdam? Money 2020. Okay. This is a fintech conference. Yes. And I imagine you're speaking, networking. Yes. All of the above. We launched a few products. We had a great launch with Deal today to enable contractors to basically receive stable coins globally and do a number of things with them. And then speaking, meeting customers, all of that.

1:56:55Yeah. Yeah. That makes a lot of sense. Deal's been really ahead of the curve on that. So Deal's been dealing with stable coins for quite a long time. Oh, yeah. Did they have their own in-house solution? Yeah. What is the nature of the partnership? How does it change? What was the before era like? So I think the before era, they had done a few products to enable people to, I believe, they'd experimented a lot in the space, but this is basically the coming together, I think, of the full package where they're doing three things, really. One is enabling any business to pay out their contractors in stable.

1:57:32So if the contractor so chooses, they can receive basically stable assets as a payment no matter where they are. And they're starting to roll out in Argentina, but moving a lot from there. Two is they're basically putting out a wallet app. It doesn't look like that at all. It just looks like an account where you can receive your payment, but that allows you to basically hold a balance, earn on the balance, so really a savings account in many ways, and then basically spent from the balance. And so this is sort of the whole package coming together in an exciting way. And then the third thing is that they are actually issuing their own stable coins so they can have a lot more control over how the underlying treasury is managed and so on and so forth.

1:58:12And so from the previous standpoint, I've been very focused on the wallets and how do you connect all of these pieces together. But then obviously across Stripe, we've been working with them on a number of products. So it's been kind of fun to watch all these products come in together really well. Yeah. So I imagine this is like the announcement from their side is really they have their and consumer fintech now. Exactly. Very cool. I imagine internationally there aren't like spending the stable coins. I understand, you know, receiving for contractor payments makes a ton of sense. Earning on the money that's in the account, that makes a ton of sense.

1:58:49But I imagine actually living your life in any country, even in America, it is still hard to go and spend stable coins. Or is it not because there's credit card infrastructure that can be tied in very quickly? Like, what does it actually take to, like, run your life if you're a contractor in Brazil or Egypt or Thailand and you make money from deal? They pay you in stable coins. You winds up in a wallet. You're very happy with your your interest that you're getting. but then you want to go live your life. You want to pay your rent. You also want to, you effectively want to be able to send wires and, and peer to peer payments and also buy food and buy, you know, get money from an ATM at some point.

1:59:30Like what, how does that all work? Yeah, that's a great question. And I think this is the part that's very exciting is, is kind of how the whole space is, is getting stitched together. Um, so it's at a high level at this point, there's just a huge explosion in the usage of a stable coin cards that enable you basically to settle directly on, you know, traditional rails like Visa and MasterCard from your stablecoin balance directly. So for the, you know, merchant accepting it, they don't have to think about this at all. It's the same experiences that they were getting a purchase from anyone else.

2:00:00And then obviously in reverse, we're doing a ton of work at Stripe to make sure that merchants can also accept stablecoins directly if the user has, you know, the balance and so on. So we're kind of working on the platform from both angles to make sure that it's completely multimodal. How high is the Great Firewall in China? Like, is there any stablecoin penetration in China? Are people doing VPN stuff? Or is it... Because there were some tech companies. Apple, obviously, wound up working with China effectively. Airbnb was over there for a while if you wanted to rent a place. Because, you know, it's not like the countries are actively fighting.

2:00:40It's, you know, it's a tense rivalry. but there are companies that have been successful there. At the same time, Facebook, not successful. Google, not successful. Uber sort of, you know, was unable to get a foothold there. Tesla, doing very great. Model Y sell over there. So what is stablecoin adoption? Does China have their own ecosystem, or is there some cross-pollination? No, so today, I think the situation has changed over time, but basically today, very much verboten in a sense, and not an active part of what's happening. So we don't, for this particular, you know, speaking for Privy, we don't have customers that we serve there in terms of stable coins because very specifically, it isn't something that's running.

2:01:24So it's, you know, the approach is very much, the technology itself, in a sense, this is a file format for money, right? You're kind of sleeving your fiat into a digital asset. And the way I like to think about it is like different, you know, stable coins are like different formats. So, you know, we accept JPEGs and PNGs just the same. But then ultimately, getting currency on the ground in every country depends on the local regulation. And in this case, China is very much not open to stable coins today. Interesting. Yeah. More and more and more capital controls. Yeah, I mean, yeah, it makes sense because you load up a bunch of stable coins and then you transfer all your money out of the country.

2:02:05Are you tracking any, like, is there like a mirror industry, like an indigenous Chinese, like digital yuan effort that's getting traction? Because like there's been a whole, you know, open source AI movement. I'm wondering if there's, you know, Chinese versions of crypto projects that are actually maybe, you know, six months behind. It's a great question. I mean, to be honest, I don't know. I think the honest take is twofold, which is one, we've seen a ton of adoption. in the US since Genius and with a lot of what's happening around Clarity. And so that's kept us quite busy. Likewise, in Europe, and then the adoption in LATAM and other parts of Southeast Asia is huge.

2:02:47There's a really vibrant set of communities in Singapore, in Korea. So there is a lot happening in the region generally, but I just haven't seen that much by way of companies working in mainland China doing this sort of thing. So I couldn't tell you to be honest. So in terms of maybe other countries that are the fastest adopters, it feels like America is on the frontier here. Clear regulation, some more coming down the pipe. A lot of the companies are based here. Is there who's in second? Like what country is leaning in the most to stable coins broadly? It's a great question. And I think part of it is that today, by nature, at least it's a very cross-border technology.

2:03:28So it ends up being pairs, basically, as you go along. And so there's very good corridors, for example, U.S. to Mexico. We serve a company called Felix Pago. It's doing like 5 % of the U.S. to Mexico remittance corridor. I think that's like$60 billion a year. So it's a really meaningful, the entire corridor is$60 billion a year, but it's a really meaningful pair. Likewise, I talked to a company not too long ago that was trying to help with remittances from the UAE to India. And so you've basically got these pairs as you go. So the most leaned in, though, Mexico is doing a lot and there's a lot of clarity there.

2:04:04And then we're seeing just generally a lot of activity in LATAM. So that's where a lot of the volumes are happening. Very cool. What does new startup formation look like in the stablecoin market broadly look like at this moment in time? I'm sure you get pitched all the time as an angel, but for a lot of these, it feels like in a lot of these categories, there is now a category leader and maybe less opportunity, even though we're getting so much adoption. Yeah, it's a great question. I think basically there's like two types, right? There's very pure software plays. And I think Privy was such a company in that we run cryptographic infra to enable people to do things.

2:04:53And then there's a lot of people who want to take care of the data piping on the ground in various countries. So I think of these as money pipes in a sense, and you've got the software layer, and then you've got the connections into local banking systems. And so we are seeing a lot of things happening, trying to build better APIs, better abstractions on top of the aggregation. But I think there's actually a huge gap in building localized partnerships, because this is really hard, obviously, in any of the individual countries that you can do. So that's one. And then the other, frankly, is we're seeing a lot of stuff around agentic commerce with people basically trying to build better control systems for agents to actually take these assets and pay with them.

2:05:34So this isn't actually stablecoin specific. There's a lot happening in fiat as well, and Stripe's doing a ton in the space. But it's broadly around service discovery. How can you find what you can pay for and actually connecting to it? It's around the actual protocols for delivering payment really easily via sort of agentic interfaces, LLMs and so on. And it's about being able to actually sort of meter spend so you don't get wrecked if your agent hallucinates. So those are probably like two of the super active areas that we're seeing. And then we're seeing just a lot more adoption is something that struck me at this Money 2020 in Amsterdam, which is a lot more institutional adoption, including from like larger banks and players who historically have been kind of waiting to come in.

2:06:17Amazing. Well, enjoy the conference. Thank you so much for calling in. I'm sure it's late there. Enjoy the Rainforest Cafe. Enjoy the Rainforest Cafe. Thank you. And we'll talk to you soon. Great to see you, Henry. Have a great rest of your day. Goodbye. Let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in-store, on mobile, on social, on marketplaces, and now with AI agents. You know, I think the AI agentic commerce could be big because if you get hit with like a$500 million bill for your agentic AI, it might be over the wire limit.

2:06:49So you might need to use you might you might need to transfer like tens of thousands of Bitcoin low fees. This is valuable That's the future of agentic commerce potentially Who knows for all the for all the people getting hit with half a billion dollar bills it happens to the dust of us sometimes Well, our next guest is Alexander good and post via welcome to the show. How are you doing? What's happening? Hey, what's up? Not too much great to have you on a Wednesday. I mean, I can't hear you guys Okay, we'll try and fix that. I want to tell everyone about MongoDB in the meantime What's the only thing faster than the AI market your business on MongoDB?

2:07:24Don't just build AI own the data platform that powers it and let's see if You hear us hear us we can hear you We can hear you you can't hear that we need to put up text on the screen that says that we can hear him and then he will know. We need to update the Chiron. We can hear you. Joe Weisenthal is tracking the popularity of various running shoe brands. He says on r slash running shoe geeks, one out of 18 posts mentioned a major Chinese running shoe brand. Just last quarter, it was one out of 40. Li Ning is the big one. Li Ning, of course, signed a shoe endorsement contract with Golden State Warriors star Steph Curry.

2:08:09very interesting I mean haven't the basketball shoes been made in China for a long time that was like the whole Nike thing but I guess it's like the brand now is bigger Chinese companies have acquired you know a bunch of brands like Arcteryx things like that and the next step is to actually get meaningful what is the best Chinese consumer brand in America the one that Americans like the most that comes from China it's got to be dji right yep drone videographer bernie was using like bernie was using i know it's a controversial company because people see it as industrial capacity but if you're just like i were i my only i don't think about geopolitics but i like that my wedding video had a drone in it and it was a dji drone you think about that very positively has sort of a gopro aspirational brand is there anything else that pops up as chinese brands that are loved in america i can't really think of anything in particular obviously tons of stuff gets made there but anything on the top of your mind every product on amazon that has a name that yeah but that's not yeah i i was gonna say hoverboards but they didn't have a brand uh and a lot of the cars aren't here i believe that they would be popular if you could get a hyper car for twenty thousand dollars like they make over there timu or sheen are those like really loved brands in the same way that like dji feels a lot closer to like a nike brand or an apple brand than sheen or timu uh timu seems more like a walmart brand i i agree with you it's popular like it's certainly brand recognition is there but in terms of brand admiration i don't know can we play this video from instagram explaining the new Call of Duty map format.

2:09:55They're getting into generative level design. It's not Gen AI, it's not fully transformer based, but they're creating a whole bunch of different pieces of the pie and they remix them. Let's play it. Look at this. And we're able to randomize that at runtime when you're playing. Three slabs on the map, they randomize them every time you load into the map. We have that is 100. We have the content to do upwards of 900. When you play a multiplayer game for a while, like you have this sense of discovery each time you play a new map, but that kind of quickly fades, right? You've played that map maybe five, 10 times.

2:10:34You're like, I get it. I know all the places. That never fades with Kill Block. I see this as an existential risk. I think this might be the end of TBPN. I think that once this goes live and we're playing this in the Ultra Dome, we're not going to remember to go live because we're just going to be gaming too much it's entirely possible i don't know i keep coming back to rust yeah if it ain't broke don't fix it i'm so happy okay like rust for me is like a vacation destination that you have so many good memories yeah you don't want it remixed and you're just like no i'm good i like going to this beach this place okay and i'm happy to keep going back he's a lot of it he's a lot of folks uh anyway we We have Alexander Good in the waiting room.

2:11:17Let's bring him in and see if he can hear us. How are you doing? Hey, I'm well. Can you hear me? Yeah, fantastic. How are you doing? And fantastic green screen background or Zoom background. Yeah, it's the new AI. It's very powerful. Great to finally have you on the show. I've enjoyed your posts and some of your rants. You have some of the best rants on the internet. I appreciate that. I've been looking forward to this. Yeah. How would you introduce yourself these days? Like how much of just, I mean, I guess set the table for people. Give us a little bit of backstory and your thesis right now.

2:11:59Cool. Yeah, I used to be a normie. I worked at Citigroup, Palantir, Ballyasni, started a company, sold it. and then I got into crypto and AI changed a lot of obviously what I was working on and what many people were working on and I was really just trying to figure out how to I got very, very pilled early on on the idea that AI would just destroy people's work product and a lot of people are getting on that train now but I guess I was on it in 2023 so a lot of the rants were coming from processing that and going through my my own AI psychosis. And now I'm like, now I'm like post psychosis. Now I'm just like in a code, I'm in a codex terminal, uh, working on, uh, building a protocol, uh, that hopefully can, um, move the needle for, uh, for people who, who own it.

2:12:50And, uh, also, you know, just our investors, a lot of money, like flow, a lot of like attention, money, uh, everything flowed from crypto to AI. There was even that meme, like if you're in crypto, pivot to AI. Has AI strengthened your belief in crypto? Like, what do you think the intersection is? Because a lot of people jump to like, well, the agents will need, they couldn't possibly figure out Stripe, so they'll have to use a token. And I've never really believed that fully. I think that there's some opportunity there, but it feels like the AI trends, you're a believer in that, but also your faith in crypto broadly has not been shaken and you haven't pivoted or gone to the hot thing, which is less common these days, I think.

2:13:36Yeah. I mean, let's be honest. The intersection of crypto and AI has not been a particularly good intersection so far. There's been a lot of hacking events. Every human piece of code that's ever been written is being evaluated by agents right now, which has obviously created an acceleration in hacking. X402 has gotten exploited. You can prompt engineer agents to send you money and that's not a good thing if you're running a protocol. Do you really want a protocol that can send people money? I think the thing that's kept me in the space or kept me excited about the space is I was always fundamentally in this because of something I call the doom thesis, which is that you know, AI might not cause productivity to accelerate.

2:14:24It might actually accelerate, you know, the kind of onset of the surveillance state or, you know, basically a type of world where capital is going to flee the system. And I think that thesis is very much intact. I think that's why you're seeing a lot of crypto like Zcash run very, very aggressively. And I think that's going to continue to be a story. You know, I think that's why Teal moved to Argentina. I think it's sort of like, you know, it's in motion. Where are you on Bitcoin versus other coins? I mean, obviously you mentioned Zcash, like how strong do you think the Bitcoin thesis is these days?

2:15:05And how, how much maxiness needs to be considered in that thesis? The Bitcoin thesis is getting weaker by the day. You have privacy coins accelerating in terms of their adoption. I think it's notable also the European Union and other countries tried to kill Monero and were not successful at that. The tornado cash rulings in the United States have given clarity to coins like Railgun, which are smaller, but are good tech and Vitalik uses it and their big privacy summits. And Bitcoin is fundamentally not private technology. And it also has the unfortunate sort of leverage concentration from Michael Saylor, who has issued a lot of preferred and complex convertible financial instruments on top of it, which have kind of concentrated the ownership and the liquidity profile, and now is kind of driving a market downturn, right?

2:15:59So today's STRC drop, as well as MicroStrategy's equity situation are driving down moves in Bitcoin. And unfortunately, like, it's hard to see that structurally reversing. Do you know if there's been a material impact on crypto from not just the capital markets moving around and founders and employees pivoting to AI, but the actual mining operations pivoting to AI? Because a lot of the neoclouds that we know, they got their start in crypto mining and they're sort of out of that market. Is that actually affecting crypto in any way? I haven't really followed it. Yeah, I mean, it's interesting. CoreWeave, you guys might know Vance at Framework.

2:16:48He had a fantastic return for his fund, partly because CoreWeave literally pivoted out of crypto into AI. And they're the OG pivot story. So they were like pre-Jason Calacanis. They did it. Yeah. You know the JCal post, if you're in crypto, pivot to AI in like 2023. It was post-ChatGPT, so it was a little bit late. But it turned out to be cracked for a lot of people. A lot of companies launched and did very well. So, yeah, I mean, like there is an interesting thing going on right now. You guys are probably going to hear about something called Perl relatively soon. It's aggressively backed. There's rumors that Thrive is in it.

2:17:35And the TLDR is that it's a proof of work AI coin. And basically, there's a paper that came out in late 2025 by S.G. Lange, which talks about determinism in basically GPUs, which allows you to use AI to mine cryptocurrency. And so this is something my brother started working on with Ambien, which got backed by A16Z. And then Perl is an Israeli team, which is doing something kind of like similar. They're using Matmul mining and they have a partnership with Together AI that got tweeted out. Right. And so, you know, essentially the argument that a lot of these crypto AI protocols increasingly are trying to make is something called useful proof of work, which is the idea that, you know, you have a miner that can also deploy a service.

2:18:22So, you know, my brother is delivering verified inference. And then the Perl argument is that you can basically buy GLM, not GLM, it's Gemma on Together AI for a 25 % discount because the miners are subsidizing it. Now, the funky thing is that you can also buy it for 50 % less than their subsidized version on open router. So you're market cap dependent. You need this thing to really, really move in order for it to provide a meaningful subsidy. But, you know, there's an argument that I think the compelling zoomed out argument is that, you know, TSMC back in 2017 or 2018, you know, 10 % of their product was Bitcoin ASICs.

2:19:07And now it's like way less than 1%. And so if you're like, OK, you want to secure money with proof of work, very, very high level. It's like, why wouldn't you secure it with GPUs? You know, their argument is why you wouldn't. right? Because you're like, it's because you're literally burning GPUs, which are productive assets to secure this thing, which is even worse than burning energy for Bitcoin mining. But that's kind of a separate argument, right? How separate is this from the render token, render network from Octane, where individual computers or folks with compute would, would render CGI frames and then earn a token?

2:19:44It was not nearly as decentralized. And then I know Prime Intellect was working on this as well, trying to sort of wrap, spare compute and put it on a network that was sort of transacted with a coin, intermediated by that coin. It sounds like this is at a much lower level. Is that correct? It's at a fun, yeah, it's an architecture level. One render and a lot of these coins, including BitTensor actually, are stake coins, right? So they're not actually secured by the operation of a GPU. So, so this is kind of like this Pearl thing is a regime shift. Um, and it's trading at, you know, like a$2 billion FDV on, on private, you know, there's, there's, there's token sale.

2:20:27So it's starting to move. It's an, it's a relatively new story in crypto AI. Um, you know, I, my, my protocol is like a completely different bet. You know, my essential, I think the, there are some interesting intersections of crypto and AI that people are probably less focused on, which is that all of crypto is open source. So actually when you use codecs or you use these AI agents, they're like phenomenally good at crypto work because it's in the training data and it's all open source. So if you screw something up, you can just be like, hey, can you just double check this with Railgun's implementation to make sure that we're doing the same thing?

2:21:05And then like five minutes later, you have like a working, orchard shielded transaction on a totally different network. As opposed to some Fortran code that's locked in some old financial institution. It's never seen the light of day. Not going to be in the training set whatsoever. Exactly. And so there's an OPEX efficiency argument in crypto. Because historically, crypto has been a very wasteful industry. There's a lot of money spent on conferences. The Ethereum Foundation is a good example of how not to run a company. And it's sort of like there's a lot of waste in crypto. And AI is like crypto is like the ultimate software industry where you're like, OK, I could credibly reduce engineering by like, you know, 60 percent here.

2:21:49How are you thinking about AI psychosis? You said you went through it. You got to the other side. Like, what's the state of AI psychosis? Where is it showing up? Is it bearish if someone hasn't fallen in and then climbed their way out? True. A true Luddite versus the white-pilled got through the trough of disillusionment is in the plateau of productivity. It's like the trough of illumination. Something. I don't know. But how are you thinking about it? Where is it cropping up? Where is it bad? What does it take to get out of it if you're in it? Well, you kind of converge on this conclusion, right?

2:22:24You start with a psychosis. And the threat of the psychosis is that my work is not meaningful and that everything that I've done is basically meaningless because an AI will be able to do it better. And then you actually start encountering the tools and you're like, okay, in the areas I don't understand, AI is really good. But in the areas I deeply understand, AI is pretty bad. There's not like a TVPN where there's two AI avatars that are doing a better job than you guys. Maybe the new A16Z one is that and we just don't realize it. right? It could just be that those guys are running a really, really advanced AI system.

2:23:01There's some evidence of that. I think there's some evidence of that. I'm not going to discount the possibility. But essentially, you're like, all right, this is kind of directionally going to obsolete my work. And so I better be the first person to obsolete it, right? That's sort of where you end up. So the way that you get out of AI psychosis is you say the only way out is through, Right. So you're like, all right, how do I how do I literally automate everything that I did before? And then how do I also just like start to think about network effects that were impossible previously? So so I'll give you an example.

2:23:35Like, you know, I'm working with there's a pretty robust community with my crypto project. And we have what we call the data lake. And the data lake is basically like, you know, hundreds of contributors who are doing tasks all day. And then their aggregate intelligence gets kind of like, you know, summed up by an AI and it comes up with actionable trade ideas. Right. And it's sort of like you're like, OK, you can make all kinds of alt data now. I think, you know, Palantir kind of inspired me originally when they started talking about how well they're doing with corporates when they're like, hey, like we have the biggest strategy, you know, we have the best demand story in history to take unstructured data and turn it into structured data.

2:24:17And I'm like, okay, that's cool in a corporate and government context, but nobody's ever done that with our Wall Street bets. Or nobody's ever done that with trading information. And I'm like, okay, I'm just going to do that. I'm going to take the Palantir ontology method and apply it to a group of individuals who create market alpha. And so then that's how you get out of AI psychosis. you can sort of identify what new capability does AI enable that allows you to generate the type of edge that you would have historically just with a new kind of data primitive. So it's like, okay, you need to have a story for how you use AI to get out.

2:24:57That's the short answer. Yeah, it's interesting. We're sort of at this moment where, yeah, the AI is replacing a lot of things. But I mean, at least as an entrepreneur, I don't know that the moats have actually changed Because people are saying like, oh, like Sasspocalypse, like your big pile of code is no longer a moat. But if you go back and look at the literature, whether it's zero to one or Hamilton Helmer, seven powers, like big pile of code was never a moat. It was always cornered resource, brand, network effect, complex coordination, like these other things that were not just, oh, yeah, you were the first person to build a lot of momentum around a piece of Sass.

2:25:37and you've accumulated so much technology and software that that is your mode. It was always something else. But I don't know. How are you thinking about entrepreneurship outside of trading, outside of the startup? Before, I wanted to ask how you think market cycles are evolving. We were joking in Q4 of last year that we were like, great, the Bears win. The bubble did pop. right it was it did feel like it was a big sell-off deflated you had a big sell-off and then you got a new paradigm that bear trap that came you know it came at the right moment uh and kind of re reignited a lot of you know um excitement and you know revenue and and all the all the good things that you want to see during a technology cycle um but it feels like you know everything's been massively sped up.

2:26:34But I'm wondering what your kind of mental model is for market cycles today. Well, the interplay of AI in the market itself is kind of accelerated. So the way that people interact with markets has changed. So they're now very commonly pasting a transcript or pasting a company's earnings release into an AI system. And those AI systems have biases, right, that are quite separate from the biases that humans have. So I'll give you an example. Like the company ASML is extremely complex. Like as a human listener to the earnings call, you would be asleep halfway through the earnings call. If you paste that into Claude Opus 4.8, it loves it.

2:27:18It's like, wow, this is like the most interesting cutting edge. Like, I don't even believe this is true. Let me web search that. Claude is highly engaged with ASML in a way that a human kind of wouldn't and the really esoteric bottleneck. Well, there are humans that would be. There's just like a very small number of them in the world. And now there's effectively infinite, right? There are. And so some of these stocks that are pumping, like HPE, like I used to trade this thing back when I was at a hedge fund, is the most boring company in the world. And this guy, David Gills, who lives down the street from me, it's like we were trading meme stocks and now he's trading HPE, right?

2:27:57And so it shows you, you know, this is like a buyback, like 70 year old guys, like we're, you know, not nothing against wearing suits or anything. But, you know, it wasn't an exciting story. Now it's like, OK, now it has triple digit, you know, data center growth. And it's it's the things that are going up are kind of historically stocks that retail would have never thought of. And a lot of them like SanDisk and like Micron. I know one woman who's like, I inherited an account from my grandparents that had a ton of Intel, Micron, and SanDisk. And I'm like, yeah, it's literally 75-year-old people were owning these stocks because they thought they were reliable bellwethers.

2:28:37And these are the things that are up 300%. So I think just the market composition is really different. You know, if you look at Coinbase, it's like got substantial sequential revenue deceleration. So, you know, people are not investing in Solana, they're investing in HPE. And so, you know, the sort of B2B focus of the markets has completely changed. And I think that's going to continue to be the case. I think people are going to continue to engage with extremely complex equity stories in a way that they just never would have before. And I think that benefits a lot of, for example, in my industry, I think it is going to benefit coins with more complex technology stories.

2:29:24I think Zcash is a good example where it's like, okay, there are encryption technologies that are moving forward that are esoteric, that are hard to understand, that wouldn't have generated engagement before. But now the UX of the user interacting with it is like, I just copy-pasted this into Claude and it says it's the best. Sure, sure. How does lore play into those stories? I feel like I heard, I don't know if it was Zcash, but there was one about like they brought eight people together and they all had different pieces of the key and they were all like they brought a journalist with and there were different computers and they broke the computers and it was like building all this lore.

2:30:03Obviously, the Satoshi story is like extremely lore filled. Even the Vitalik story is like, you know, build something you want. And it feels like starting the perpetual motion machine of some of these projects is important. How does that change? You know, I want to say lore becomes less important just because the stories that I just shared with you, you know, like HPE or some of the Intel, like nobody knows who Intel CEO is, right? It's like nobody is invested in this story. Are you saying they still think Pat Gelsinger is running the place or what? I think people just don't know, right? I think that's the sort of real story is that Micron, like, I don't think people know what Micron does.

2:30:49It's like a trillion dollar, you know, memory bottleneck company. And so I think lore becomes less important in one way. The more contrarian view that I have is that IP universes become a lot more valuable. And so, for example, you know, one of the there's a lot of stuff about Harry Potter distills. Right. So you can like extract 98 percent of Harry Potter out of Deep Seek or Claude if you're if you're motivated. Yeah. And so it's like it wasn't supposed to train on it. There is the big LibGen settlement with Anthropic like they did train on it. And there is a big multibillion dollar payout. But it's like that kind of multibillion dollar payout creates a strong incentive to kind of have IP treatment in a proper way going forward.

2:31:37and so you know games workshop for example has you know the cinematic universe which is world of warcraft that becomes infinitely generative when you combine it with an ai system and actually like what you get from like amd or where why this is i think interesting is that you've seen like a big structural crowding out of entertainment because of the enterprise focus of ai so anthropic for example like if you listen to dario he's like yeah i'm not going to ever generate videos or images because like that's just a waste of time right like he's not you know open ai shut down uh sora because yeah we had uh we had mikey we had mikey from suno on today announcing a big round but he has had the blessing of a lot of his would be you know the the the most intense competitors he could have have had to just deprioritize entertainment because it might be a 20 billion market instead of a $2 trillion market.

2:32:35Yeah. That's the interesting G-Von's paradox argument, in my opinion, is that right now, for example, Nintendo is down 40 % over the last year. Or Take-Two, even though we've got a new GTA game, it's getting smoked. And there was a narrative that for a while video games would be a big beneficiary of AI, because intuitively we see all these like, wow, what if all NPCs were, you know, LLMs or, you know, what if you had in-game generative content? And the reality is given the cost structures right now and the bottlenecks, you're like, okay, that's just not affordable, right? You can't generate real-time generative characters and expect to break even on that because that would be like, you know,$6 per game session.

2:33:22And that's not a good investment. And as AI gets cheaper, that story is actually going to change, right? So I think that's like an interesting kind of like like where we're going is i actually think we're going to get like a big acceleration in entertainment stuff because the cost of ai stuff is going to yeah you'd have to imagine that uh like the the the most like mildly bullish take on take two would just be like yeah the next gta game is going to take seven years instead of 10 or like our dlc is going to be pulled forward by three months and that's going to accelerate earnings like that seems very that seems very believable but uh yeah people have been caught up in all sorts of oh maybe it'll just generate it all maybe it'll all go to uh some foundation model but that does seem further away uh even when we see you know amazing demos from google but again it's like six seconds here and there very expensive not really persistent a lot of how is roblox done over the last year because That was always my thesis there.

2:34:23Yeah. It's just, it's going to be a lot easier for somebody to figure out how to make compelling games, but down 50 % in the last six months. Yeah. Not good. Yeah. These things are very, very bleak. Shouldn't be. Anyway, hopefully they build back. I'm, I'm optimistic. I like Roblox. Well, thank you so much for coming on the show. It was great. Great to finally have you on. It was a great time. Let's do it. Let's do it again. Let's do it again. See you. Have a good one. Cheers. Goodbye. There's one more announcement we've got to share. Anderle and NASCAR are teaming up to sell a$14 ,000 VR racing rig simulator.

2:35:01Palmer Luckey's back in the VR business. I mean, he already was with the Eagle Eye headset, but he's back in the consumer entertainment VR industry with this. Of course, he's not making the actual headset. I believe it is a... Really, three days after I just put down a deposit on my own sim. Really? Yeah. Did you actually? Yeah. No way. But I don't think that's going to be very specific, I imagine, for, I imagine, NASCAR simulation, right? Because that's where they're focused. Very, very cool. Matthew Prince over at Cloudflare says, Well, that happened faster than I predicted. Thought it would be end of 2027, then early 2027.

2:35:44but agentic traffic growing so fast that bots have now passed human traffic online for the first time in the Internet's history. That's crazy. Lots of agents running around on the Internet. Yeah, bots are now, according to Cloudflare, 57.5%. Every time you fire something off, it's hundreds of pages. You see it in the reasoning traces and the tool calls. Let's watch this demo from Eric Lyman, friend of the show, sponsor of the show, Introducing Stack, the AI operating system that lets accounting firms take on more clients without hiring, learns your firm's process, runs the close, posts the journals, fully auditable.

2:36:26We're living through the biggest shift in accounting since the spreadsheet. That's a good way to frame it. And they did a very cool video for this, all practically produced. I believe this was all shot with an actual camera. They got these actual pieces. They filmed this. Not CGI, not AI.

2:36:48Such a calming voice. I love Eric doing the VO. It's great.

2:36:59This has been the vision of RAMP since they launched. And it feels like, oh, this is the moment. Of course they have to do an AI thing, but they've been pitching this exact thing since, what, 2020, 2019? You can keep working on it longer honestly Go back to parables

2:37:35Ramstack they're saying it's God mode It's God mode for accounters It's literally God mode well go check it out we should also watch this one last video from Martin Scorsese Black Forest Labs I have alluded to it earlier I saw this on Instagram and I really enjoyed it 30 seconds of Martin Scorsese storied filmmaker Jordy name your favorite Martin Scorsese movie doesn't feel modern a town not a village not a city almost medieval Mafia the movie Mafia Yeah, isn't there is a god there is a movie

2:38:16You're thinking the Irishman maybe that is like a mafia movie Gangs of New York Or maybe casino or good fellas good fellas good fellas Anyway storyboard play this I was not paying attention Let's try it and we'll go from from what you think you need a place that doesn't feel modern a town Not a village, not a city. Almost medieval. Even the streets are narrower, cobblestone. The main road through the town is twisting and turning. Put the camera higher looking down. DeMille would have his production designers do oil paintings. This is that, in a sense. Conveys a cinematic, a cinematic intelligence.

2:38:57Cinematic intelligence is a good tagline for Black Forest Labs. I thought that was really, really good. and yeah what a way to like you know hammer obviously I'm filmmaking deeply controversial but you get Martin Scorsese talking about it and he's at least gonna perk up people's ears and they're gonna listen to what he has to say yeah and think about it is it a tool could it be useful in a workflow could it speed something up is it gonna make the next Martin Scorsese movie probably not this year but will he potentially be using it when he's thinking about what to work on next sure so fun fun project and very cool video from black forest labs anyway tomorrow we have a special show but we will still see you at 11 a.m pacific sharp sharp and leave us five stars on apple podcast and spotify sign up for our newsletter tbpn.com and we will see you tomorrow we love you have a good evening

2:40:01you