Microsoft to Take On Muse, Trump & Xi Dinner, The Mansion Section | Diet TBPN

0:01John Coogan:We got some debates on the timeline. I identified four debates for you. You don't want to call them debates, though. You want to call them arguments? Fights? I thought arguments. Okay, we're throwing down. We're throwing down. Wouldn't someone rather listen to an argument than a debate? Okay. First one, Microsoft. Is Microsoft about to have their Muse moment? They've launched Copilot. Now they're launching a new product today. Is it going to be a breakout success? Is it going to compete directly with Meta and Muse, or will it be a different thing entirely because it lives in the enterprise, it lives in the Microsoft ecosystem?

0:37John Coogan:Let's go to Tay Kim. He says, shots fired. Pum, pum, pum. Microsoft will go after Meta's Muse. From Alex Heath's interview of Satya Nadella, he's doing the rounds. Quote from Alex Heath. He wants to bring Autopilot's AI chief of staff to your personal life, too. It's not staying in Excel. It's not staying in Outlook. It's going to be cooking dinner. Big move going from a co-pilot to autopilot. Autopilot, yeah. It says a lot about their intentions with the product. Yeah, yeah. It is actually sort of the, like, is this AGI, is this not AGI? Like, if you're in the co-pilot mode, you're sort of signaling we're not really in the AGI era.

1:15John Coogan:Autopilot feels more like, although it's a term, it's a vague definition, it is significant in the brand term. So, it's a hardened version of OpenClaw. The agent gets its own computer, workspace, and memory to work continuously. Virtual machine for everybody. It'll have its own computer, workspace, and memory to work continuously. When I ask about Microsoft's consumer strategy, he points to its 100 million plus consumer subscribers. Microsoft broadly, they're going all in with Autopilot. Autopilot should also go to the consumer side. He sees consumer agents potentially cutting out today's middlemen, making that market more zero-sum.

1:57John Coogan:In the enterprise, he thinks agents will make the market bigger than cloud by orders of magnitude. We got room to run. Satya said it himself. He's going to 300T,$300 trillion company. I like it. What do you think? So first thought is that, again, everyone is building the exact same thing. So we went through this for the last few years. where everyone was a chat app. Everyone's billing it. The funny thing is the lore on GPT-4, that was first available in Bing. GPT-4, the thing that, like GPT-3.5 powered the original chat GPT, GPT-4 was only available through Bing. And then everyone was like, oh, I guess like Microsoft's going to make a plan.

2:39John Coogan:Bing's going to be doing AI and like this is going to be a challenge to Google. And then they sort of like pulled back. Well, and at that time when Microsoft was backing up the Brinks truck, or OpenAI, they certainly, I don't think it was, it certainly was non-obvious at that time that they would be creating a company that they would ultimately compete with as much as they are, you know, partners. Yeah. Yeah. Peter Steinberger, the founder of OpenClaw chimed in. He said, Microsoft shipped a really compelling product on top of OpenClaw today. We worked with them since March to make the code base ready for large scale deployments.

3:12John Coogan:And of course there might be some IP sharing agreement, right? Because didn't, oh no, because OpenAI hired Peter, but they didn't acquire OpenClaw, OpenClaw's open source. So anyone can build on top of it. But what's odd is that I think Nat Friedman stated that they didn't fork OpenClaw. They built something from scratch. But there are just conventions. And so you wind up having similar looking.md files. It's just like if you build an e-commerce site, you're going to have a product detail page. You might have a similar site map and architecture. It doesn't mean that you forked Shopify to do that or whatever.

3:47John Coogan:So the debate point is how big will this be? What is the actual impact to Microsoft? There is the cool macro tech story, which is just that the models have advanced to a point where there is a new use case. Like they're useful in a new way, not just knowledge retrieval, not just go and write a bunch of code. They are useful, but that requires a new type of harness. Just like when the models got good at code, the harness became very important. We saw Cloud Code and Codex and Cursor and a bunch of other companies. Cognition really defined that era. Now the models are pretty good with personal agent stuff, sending text messages, talking to people, integrating with Slack, et cetera.

4:30John Coogan:So the harness and the integrations and the partnerships matter. So we're talking about partners with Amazon. Who's going to be Amazon's dance partner? Who's going to be Walmart's dance partner? Who's going to partner with Shopify? How big is the open ecosystem? You need a different harness, you need different integrations, and you need a lot of new user education. Because I think there's a lot of people, I mean, there's people that are still online being like, these things hallucinate. Like, they have a knowledge cut off. Yeah, the main thing with this launch is that I don't think there's anyone on X that's seeing Microsoft launch an open claw powered agent and thinking, I got to use that.

5:05I'm so excited. I really want it. That's my view, and I think it's correct, and you're free to steel man it. That being said, they have such incredible distribution, they can still roll this out to a bunch of people who are going to try it and be like, wow, that's really cool and useful and helpful and be the first way that they experience this new paradigm of agents. And so as much as like I just think there's basically zero excitement from like the core insider agent maximalists, there's going to be just natural excitement from everyday Windows and Microsoft users.

5:37John Coogan:Yeah, it is uncommon in tech, and maybe it's uncommon in X to run your entire organization, your enterprise on Microsoft. The default tech stack for most startups is Google Enterprise, Gmail. You set up the Gmail account for your employees, and then you add Slack, so then you're in the Salesforce ecosystem. And Microsoft is there, but usually with one-off Excel licenses here and there for the finance team. does that resonate with you in terms of like how these products like fit together there's usually some microsoft but you have to go to a financial company or like a real economy company to see like okay these guys are all in on microsoft as a tech stack like outlook down to bang down to you know uh the databases and like fully integrated microsoft it feels like it could be more successful than the old co-pilot.

6:32John Coogan:And a lot of that's driven just by capabilities. The models are better. The harnesses are better. The integrations are better. And so the big question is like, when is Google going to fire back? Because are they going to wait until the next IO? Like that's a long way away, but they do love releasing on, you know, those annual schedules. So it's like, we might get a Google, like a crazy Google open claw agent, personal agent in mid 2027. And then Apple's close behind in like 2035, something like that. would they would launch something i mean google does have there is gemini spark which is like a 24 7 always on agent but like no one does it have a vm does it have a real virtual machine i mean it says even if your phone and laptops are turned off it'll still keep working but i've seen like very little yeah like no one's really talking about this anyway it'll be it'll be interesting to see if there's like you know a niche community of like yeah i'm a i'm a microsoft autopilot guy i mean the cod integration could change things it just depends on how you're positioning it.

7:31John Coogan:Like if the brand, if you talk to somebody and they're like, oh, you know, are you a clog guy? Are you a Kodak guy? A cursor guy? Like all those things say certain things about you aesthetically. You're a muse. Okay, we get it. You're like the boo-boo guy. But if you come out and you're like, yeah, I'm actually a Microsoft autopilot guy, that could say two things. It could say Excel jockey, king of the financial markets, apex predator of the economy. Or it could say, you know dropping a nuke on cod prestige max prestige max don't you think i agree we spent way too long on that we got three more and our first guest is joining noon so we still we got to figure out a way to to make the tensions go up and actually get an argument going here because you're fighting a little bit that was too friendly yeah okay well you wanted to argue that everyone all the tech insiders were couldn't wait to get their hands on autopilot that was your stance right Yeah, that's a tough one.

8:27John Coogan:Tough to steal, man, that. Anyway, Doge Designer shared a photo from a dinner that happened at the White House featuring important tech people and none other than Xi Jinping, the Chinese president. So Elon Musk, President Trump, First Lady Melania Trump, China's First Lady, AMD CEO Lisa Su, NVIDIA CEO Jensen Wang, and Apple's Tim Cook got the prime seating right in front of Donald Trump. And they were at the prime table together. No translator that I can see in this image, although there is an empty chair. So it's possible that there was a translator at this point. The empty chair would almost certainly be for Donald.

9:11Oh, yeah.

9:12John Coogan:Yeah, that's right. We're going to put the translator just between Xi and Milani. Yeah, because Xi Jinping, whenever he speaks, he gives his speeches, even in America, in Chinese. But he seems to be able to hang with Tim Cook, Elon, Lisa Su, Jensen. Although maybe those tech leaders at least know that one important phrase, if you want to really ingratiate yourself with a Chinese speaker, what do you say to them? Well, hun, she wants Pedro, right? That's what she got. Always worked for me. If you're ever seated with Xi Jinping at a dinner at the White House, just throw that down and he'll be like, one of us.

9:52One of us. Now it's time to get a deal. Notable that Elon and Tim, no plus one. They're locked in. Okay. No time for guests for them.

10:04John Coogan:What's interesting is that Dario wasn't there. He sparred with the administration before. We've seen this. He's also attended plenty of meetings in D.C. And Tom Brown, the co-founder of Anthropic, has been on a reset with the administration and even went as far to praise Trump's Let Data Rain post on Truth Social. This was September 1st. He said to Howard Lutnick at the G20 Innovation Ministerial in Chapel Hill, quote, I really loved President Trump's post from earlier this week. And so there's clearly olive branches going out, but they haven't been fully received because the dinner invite was maybe didn't materialize, or maybe he turned it down.

10:51John Coogan:We don't actually know. But I was offered 15 plus ones, maybe 10 plus ones, maybe five plus ones. And he decided to lock in and grind for the grind for the ASI. Well, you know who was there? Who was? Lynn Martin. Lynn Martin. From the New York Stock Exchange. President of the New York Stock Exchange, our friend. You learned to see it. But yeah, it was a stacked, stacked list. There's a lot of folks. Sam Altman, Greg Brockman, Anna Brockman, Sergey Brin, Satya Nadella, Sundar Pichai, Cristiano Aman from Qualcomm. Our guest this week made it to the dinner, came back from Hawaii. David Solomon from Golden Saks.

11:28John Coogan:Tons of other folks. Exxon Mobil. It was really a who's who of the global economy. A lot of people are saying Tai Lopez was snubbed. Yeah. I would have liked to see a Jocko Willink. I would have liked to see a Joe Rogan on this list. Sort of disappointing that they didn't include podcasters, except for David Sachs. He did make it. And also... Yeah, he's a podcaster and a venture. Secretary Kennedy also has a podcast. There's actually a fair amount of podcasters. Brad Gerstner podcast. Sam Altman ran the Y Combinator podcast years ago, startup school. So former podcaster. The question is, like, should should Dario have been invited?

12:02John Coogan:I think even though they're having beef with the administration, like it's such an important company. It's important that he's in the conversation. He's also has like a very, very hard line on China. And I would feel better about his positions on China. He's like, yeah, Majesty Jinping, I really do hate him or something like that. I don't know. You know, it's informed from like a 30 ,000 foot view. Wait, Dario? Yeah, Dario's like... He worked at Baidu. Yeah, but since then, his positioning has been like, we got to win the race against China. We have to dismantle authoritarian regimes, et cetera.

12:39John Coogan:Maybe he looks Xi Jinping in the eyes and gets a stare and he's like, oh, wow, I had you all wrong. You never know. Yeah. But I want to see the sit down happen. Has the AI slop gone too far this time? That's our third debate. The third debate that will shock you. So we can pull up this Kalshi ad. It's their latest direct-to-consumer direct response ad. And for everyone at home, this is a karaoke moment. Yeah. You're sitting in the office. This is going to be on the— Open floor plan. Don't be afraid to start singing. Yeah, add it to the Spotify playlist. So Brian Pempis says, This Kalshi ad is among the most dystopian ones I've seen from any betting app.

13:20John Coogan:and you can sort of hear the AI song over the Pixar-inspired AI-generated video. The lyrics are also odd, not to nitpick, but it says, like, he sends his girlfriend money and then he's handing her money. Every month I send her money from groceries. So there's a lot of, like, it lacks the polish that removes something from slop. Every once in a while you see a video that is AI-generated, but you're like, okay, there was enough attention to detail there. This was, let's just rip it. This is actually a popular format of AI swap that's been going very viral. It starts with a really dramatic hook. In this case, the man thinks his partner is having an affair.

14:02But actually, she's just hedging food prices on cow cheese because she has inside knowledge on the market from working at a bakery in the morning. Yeah, so that even though egg prices are going up,

14:17John Coogan:she's able to net out and remain even because she is profiting on trading the egg futures market on Kalshi. I don't know how deep the market is. I don't know how real those markets are. Do they really have egg futures markets on Kalshi now? That's kind of interesting. I don't know if you can actually head your groceries. I want to see a version of this ad from the Chicago Board of Trade where she goes a lot further, gets a Bloomberg terminal, establishes a relationship with J.P. Morgan, Morgan Stanley. She's visiting the Chicago Board of Trade regularly, trading in size. She's talking to counterparties, Millennium, Citadel.

14:54John Coogan:She's on the phone constantly moving huge volumes of commodity futures at scale, kind of elevating herself past just the prediction market small ball and getting into the big leagues. That's the future. Jane says, would you rather your girlfriend insider trade egg futures or cheat on you? No. So this is not insider trading. Like you can actually do this. You can be a baker and realize that prices are going up and trade the commodities markets. In fact, the commodities markets are designed specifically to give that signal. And that is the purpose. The purpose is to understand, OK, the weather is bad.

15:34John Coogan:People can trade that. Fundamentally, there's no law against insider trading in commodity markets effectively. but there's a question of like, is this a consumer ready product? Like, is this something that someone who is maybe doesn't have, you know, a desk and a research team and a Bloomberg terminal? One interesting thing is I found egg prices up in September, the market right now, there's a 72 % chance, but there's only$417 of volume. Yeah. But if you're only buying$20 of eggs, that's enough depth. So it is a viable use case. It's not, it's not fraudulent. I think most people are responding to just like the sloppiness and like the the the clickbaitiness of like the weird hook my current concern about the state of the hyper casino that our world has turned into is that like as an adult i feel like confident in my own decision making ability and the ability to see ads for gambling all the time everywhere and still make the call that it's not for me i'm not interested.

16:39John Coogan:You've never lost a dollar.

16:44John Coogan:I've tried one weekend. John, John got to witness me one weekend. I was like, look, I think I should, I think I should try this gambling thing. It seems super popular. I got to get to the bottom of it. I tried it. I'm running in the running in the red. And this is, but that being said, like, you're, you know, as, as a 30 year old, I'd been advertised gambling products for a decade now. And my concern is that while adults have the ability to just make the decision like, Hey, this isn't for me. And you have like more, yeah. Start young. You're more likely to stick with it for a while. Yeah. But, but, but young people today are going to go through that growing up on the internet are going to go through this just like, they will probably be served like a million gambling ads by the time they're 18.

17:27It's a lot.

17:28John Coogan:Yeah. And so I guess I didn't get it. So, so normalized. It's so a part society now. It's instantly accessible. If you're getting advertised stuff like this, that's basically saying like, you're sending this message that like, this is your way out. The deep irony is like the way out is to not participate and be one of the people that makes it through without forming the addiction. But maybe we need to rent a slop ad about that. We want to do a slop ad like this where it's the same premise. Oh, I think my partner's having an Affair, and lo and behold, they're just watching TBPN for three hours every day, getting informed about technology and business news.

18:07John Coogan:What do you think about dopamine sites, though? Because dopamine sites, which is where... Explain this. Dopamine sites are fake shopping experiences. It's an e-commerce site where you can buy luxury goods, but you don't actually have to pay them, and they don't arrive. So this is from an article shared by Adonis on X. The final frontier of consumerism has arrived in South Korea. Quote, this week I placed orders for a$44 ,860 Patek Philippe hand engraved watch, a$12 ,500 Hermes bag, a$9 ,800 Tiffany diamond ring. Cha-ching. Oh, I like, I didn't realize that was the analog one. That's great. And a$7 ,350 Cartier love bracelet in yellow gold.

18:54John Coogan:I don't need any of them. I certainly can't afford them. Thankfully, they'll never arrive. Instead of Amazon, this individual spent the past week browsing a new breed of website known as dopamine sites, a trend that emerged in South Korea. These websites like Dopamine Shop and Food Never Comes recreate the entire ritual of online shopping. You search for products, compare reviews, add items to your cart, enter a shipping address, place an order, and even track your delivery but it's all imaginary is this not as bad as sports betting is this not bad at all what is this uh it's sort of strange and sad and a reflection of our society that is so infatuated with uh pure consumption yeah instead of creation yeah uh and it's dystopian but I don't think it's...

19:47John Coogan:We should do a dopamine site for TBBN merch because we never sell it. You just don't work on credit card. So our fourth debate, our fourth and final debate. To what degree is the AI build-out driving interest rates upwards? People are going back and forth about this. Interest rates are spiking. Specifically, the 10-year yield has jumped 12%. So it's actually, what is that? 1 ,200 basis points or something because you're trying to explain the move in the rates. So it's not that we're at 18%. We're at 5.18%, but we were down much lower in the fours earlier. And it's causing nervousness. Last time interest rates went up, the venture capital world collapsed, and nobody likes high mortgage rates.

20:36John Coogan:Can you afford a home? There's a lot of knock-on effects. The vanilla explanation is just the Iran war was unexpected. It caused an energy crisis. That caused inflation. That caused interest rate hikes and expectations for future interest rate hikes. And thus, interest rates are higher. AI is important in driving the economy, but mainly a sideshow in this story around interest rates specifically. But in tech, there's a view that the data center debt is simply too good to resist. and so the capital markets are flooding over there. But there's a lot of debate around this. So Rune said, Iran oil prices is short-term driver, but broadly this is due to demand pressure from extremely attractive AI CapEx opportunities that are borrowing at nation scale.

21:22John Coogan:They're certainly hoovering up trillions of dollars. I think the total data center CapEx hyperscaler debt is now almost 20 % of what the U.S. government is buying, something like that. No, so it's actually higher. I looked this up. So basically, hyperscaler and NVIDIA debt issuance as a percentage of total treasury bond issuance through 2026 has been like 70%. Whoa. And I think 2025, it was like around 30%. Yes. And so Astrid Wild says, this is correct. Global yields will continue to go higher because why would you invest in literally anything other than data centers when they have such a short payback period and you can throw tens of billions at it?

22:00John Coogan:I mean, we saw ClusterMax 1, I think, had a few dozen neoclouds. ClusterMax 3, which we talked to Jordan Nanos about yesterday, had 326 neoclouds. And they reviewed, I think, or they rated 200-something of them. And then that's not to mention that there are also data center construction projects from the actual hyperscalers. The labs weren't on there. And then the chip companies, Jordan called out. He said, like, Cerebris will have a neocloud, and Positron and Etched will have neoclouds. And so there's going to be a lot more of this. At the same time, there's the flip side of the argument. Deep Dish Enjoyer says this is definitely currently not true.

22:45John Coogan:Those opportunities are not riskless. And importantly, you can't use private illiquid AI capex as collateral. So if you're a bond investor and you're looking at two different markets, are you really shifting out of government treasuries that are historically the risk-free rate, that they have a monopoly on violence, they have the ability to tax their citizens to pay back the debt, a neocloud that's doing a data center, they go bankrupt, you might actually suffer a capital impairment and get back 70 cents on the dollar, maybe 90 cents on the dollar. So it stands to reason that there is more risk associated with the AI buildout, and so they're not completely apples to apples.

23:25John Coogan:But I still think that there is probably some sort of effect here. He said it's true that as real GDP growth increases substantially, rates should rise, though, but we aren't there yet. Colin Roche has lots of scary talking bonds these days, but it's mostly recency bias. Since 1960, the 10-year is average 5.8%. We're at 5 % below average. If you'd fallen asleep 20 years ago and woke up today, you'd think nothing happened in the bond market the entire time. Ignore all the sovereign debt crisis talk. Inflation expectations are adjusting to something more historically normalized. Carry on. Carry on.

24:02John Coogan:So the Wall Street Journal is sort of putting the higher bond yields in context, saying the robust U.S. economy powers through rate hikes and rising bond yields. The U.S. economy keeps powering through inflation, tariffs, and higher borrowing costs, defying a run-up in Treasury yields and a Fed rate increase that has the bond market spooked. The usual economic breaks aren't slowing growth, hiring, or an AI investment boom that looks to be unstoppable. To some, AI's potential returns seem so bright that even steep interest rates won't slow down tech companies' investments. And it does seem like the math on the AI build-out is wildly different.

24:42John Coogan:and I was talking to somebody who was saying, like, he knows a lot of people that are falling in love with the spreadsheet, and so they want to start neoclouds and data centers because the payback period is shorter. I also saw an Instagram sort of, like, course hustler talking about how he bought a bunch of GPUs and is renting them to a data center and saw that as an attractive opportunity, a la, like, oh, I bought a multifamily apartment complex. You must have watched the Dylan Patel interview, the recent Dworkesh one. Oh, yeah. Yeah, yeah, yeah. I mean, this is all related to that. for sure.