OpenAI to Remain Non-Profit, OpenAI to Buy Windsurf, Jon Voight's Plan to Fix Hollywood, Kelvin Yu, James Blom, Santi Ruiz, Jacob Kimmel, Fil Aronshtein

35:49Masa on there. All of them. Good people. You know, SoftBank actually, fantastic board governance. You know, people talk a lot of trash about SoftBank for a variety of reasons. When they come into a company, they run it like a public company. It's like compensation committee, conflicts committee. The board meetings are full day events, like very well organized because they take that stuff seriously. They're professionals. Professionals. High risk. Risk on professionals. Extremely risky, but professionals, which we respect here. At least one OpenAI investor seemed satisfied with the outcome and told us that it's the best outcome given the parameters that exist right now, especially because of the scrutiny and pressure that came with Elon Musk's lawsuit opposing the restructuring.

36:28The investor added that even as they awaited the potential IPO in OpenAI's future, large secondaries, which OpenAI has already done, could be another way for stakeholders to cash out, keeping control in the hands of the nonprofit board is significant. The restructuring endeavor began because the nonprofit board's goal to make AI for the benefit of humanity may or may not conflict one day with shareholders' desire for hundreds of billions of dollars in profit. You might remember that when OpenAI announced the restructuring four months ago, the board, which oversees OpenAI's nonprofit, said they couldn't adequately consider the interests of investors who were pumping tens of billions of dollars into the for-profits subsidiary that runs chat gpt imagine you're an lp in one of the funds that has deployed billions and you send uh you know a little saturday afternoon email being like hey by the way what do we actually own of open ai and then you as an investor have to try to you know yeah untangle this this web they had a name for it it wasn't for a while it wasn't it was like credits or something or like fun coupons it wasn't shares it wasn't stock it was units units that's what they were calling it absolutely that's that's an l you know terminology standard with lcs absolute units absolute units absolute dogs yeah no no no it makes sense anyway um i'm sure they have to plan all these secondaries plan all of these uh all these share sales and what are they using to plan well i don't know if I doubt they're using Linear for corporate governance, but I bet you they're using Linear for purpose-built planning and product building.

38:08Linear is a system for modern software development, streamlined issues, projects, and product roadmaps. You guys know already that we use Linear for running the show, and we are very grateful to have them as a sponsor. We are also going to be live in person tomorrow in SF with Kari from Linear and a bunch of other people. So very excited for that. Well, there is more news. We'll stay on OpenAI for a little bit. There's so many stories around this. So Microsoft, we'll go to the Microsoft angle. Sharon Gaffare says, Microsoft has not yet agreed to OpenAI's restructuring plans and is a key holdout in negotiations needed to get the restructured deal done, along with approval from state AG offices, still being decided how much equity Microsoft gets.

38:55So such a wild dynamic. This is, let's see. Microsoft has invested$13.75 billion in the startup and they remain the biggest holdout among investors as the ChatGPT maker tries to restructure according to several people familiar with the matter. Now, that$13.75 billion, was that cash that ever transferred and was wired or were those credits or did they transfer and then go right back to Azure? Like, I'm very interested in the anatomy of that deal. I hope that someone digs into this more and actually asks for the structure because... Yeah, I mean, I think it was... I know it was both. The question is, what is the actual ratio?

39:34Yeah, and how does... I guess, how does Microsoft feel about how much they invested? Do they feel like, hey, we're owed$13.75 billion at this valuation, at the last valuation, a new valuation, a post-dilution valuation? Or are they like, yeah, it was really only like$5 billion in total cost because we gave you credits at like a two-to-one ratio, right? yeah i mean the the the thing here uh that that's apparent is it's non-standard for a 3.2 trillion dollar company to invest 13 billion dollars in another company that then is restructuring and it's unclear how much the 3.2 trillion dollar company is even going to own of the underlying uh investment uh haven't seen this at least in my lifetime yeah for sure they're they're there really has never been a tech like it's funny they kind of have to just like get around the table and decide okay how much is satya gonna get you know how much does sam get right because a part of this i think sam needs to get some personal exposure because you know if you check back to the senate hearings he at that point in time uh had nothing had nothing then he got a bunch yeah it does seem like they're gonna make a movie out of this but it might be more complicated than the big short or uh might be like a four-hour documentary it's just gonna be margot robbie in the bathtub for six hours explaining how all these different entities interact because it's more complicated than mortgage-backed securities and credit default swaps combined it's gonna make the 08 financial crisis look like two plus two it's like by comparison this is so much more complex anyway microsoft is still actively negotiating details microsoft not commenting uh they said in a statement open ai said we continue to work closely with microsoft and look forward to finalizing the details of this recapitalization the near future i mean the good news is like like microsoft and open ai are pretty well aligned on like what they do best like open ai clearly is fantastic at at consumer product development breaking through with the with deep research, like all this.

41:43And then in terms of the API, it's great to vend that through to Azure. And that's the relationship and it seems like it's a really fruitful one. And it's okay for them not to dominate on the Azure side or take some sort of, like not really build that out. It doesn't seem like they're, no one would say, oh, they're just gonna be a consumer tech company. They'll only be worth three trillion. Yeah, it's fine if they just become just Google or just Facebook, right? Like that's a pretty good outcome. Anyway. Just eat some percentage of search volume. Yeah, seriously. Microsoft isn't the only party that OpenAI needs buy-in from.

42:20They're fighting with the attorneys general of California and Delaware. OpenAI needs to do a fair market valuation on the nonprofit stake in the future for-profit entity and is asking state AGs for input. So how much are we worth? So this is kind of like a 409A situation or like a 83B. Like let's figure out what the base valuation here is. But that can be so wild. I mean, imagine you're an attorney's general. Trying to value OpenAI. It's like on one hand, you may have created a machine god. That's worth infinity. That's worth infinity. On the other hand, you're burning$5,$10 billion a year. And the world's richest man is actively trying to bury you.

43:05you know run into the ground yeah so it's either infinity or zero one of the two it's so funny i'm using oh three yeah and i asked how much cash has microsoft invested in open ai and it's basically stuck in a doom loop of searching the web and then trying to understand it and then just looping back to searching the web it's been going it's been going for about five minutes now wow so we'll Just O3? Not even deep research? Yeah. Just O3. It's just five minutes into this figuring this out. Well, I just want a pretty specific answer. This is humanity's last exam. Yeah. How much money... Make sense of OpenAI.

43:45If you can do that, you've passed the real Turing test. AGI is here. So Microsoft's approval will be key. Only OpenAI insiders, Microsoft and other early investors, currently have a direct say in approving the restructure, according to two people. As a result, only that group gets to weigh in on the restructuring plan, the people said. But among investors, OpenAI is currently only negotiating with Microsoft. Microsoft has a unique relationship compared with other investors because of its licensing and revenue sharing. And they also had that AGI clause for a while, but I don't know where that went.

44:16Anyway, I'm sure Microsoft, OpenAI, they all got to manage risk. They got to automate compliance. They got to get on Vanta. And they got to prove trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation. Whether you're pursuing your first framework or managing a complex program, I can't imagine anything more complex than doing compliance at OpenAI. And yeah, if you're working on anything important. Pretty much any company, it's very painful. Start to finish support for 35 different compliance frameworks, SOC 2, HIPAA, you name it.

44:56Head over to Vanta. Head over there. Tell them the technology brother sent you. Fantastic. Anyway, founder of Windsurf posted big announcement tomorrow. As if the biggest announcement wasn't going and doing a podcast with a double, you know, double collar on. Yeah. And so the OpenAI agreement to buy startup Windsurf for$3 billion is finalized. It's been reported in Bloomberg. We need a massive size gone. Katie Roof has the story over at Bloomberg. Just go. OpenAI has agreed to buy Windsurf, an artificial intelligence coding tool, formerly known as Codium, for about$3 billion, according to people familiar with the matter, marking the ChatGPT maker's largest acquisition to date.

45:41The deal has not yet closed, said the people who spoke on condition of anonymity. Both companies declined to comment, although the founder's out there tweeting and wearing two polos. The acquisition could help OpenAI take on rising competition in the market for AI-driven coding assistance, systems capable of tasks like writing code based on natural language prompting. Bloomberg News previously reported that the two companies were in discussions. WindSurf, formerly called ExaFunction Inc., has recently been in talks with investors, including Kleiner Perkins, General Catalyst, to raise a$3 billion valuation.

46:14Last year, they were valued at$1.25 by General Catalyst. And OpenAI came over and scooped them up. So I have a little bit of a history deep dive if you want to go through this to break down on Windsurf, how they wound up there. So 2021, ages ago in the AI race, but a real, a true overnight success here to go from starting a company in 2021. Yeah, they could have gone into crypto. They decided to go into AI. So their MIT friends, Varen Mohan, ex-neuroautonomy infrastructure lead, and Douglas Chen, who had worked at Meta and Oculus as an engineer, incorporated ExaFunction Inc. in California to abstract away the challenges of managing accelerated hardware like GPUs.

47:00They're basically a GPU wrapper. It's funny, like wrapper is in their DNA. Yeah, so basically what they were doing, I actually have a post up from Bruno from X. And at the time, Exifunction customers connect to the company's managed service or deploy Exifunction software in a Kubernetes cluster. the technology dynamically allocated resources, moving computation onto cost-effective hardware, such as spot instances when available. And so anyway, it's pretty wild to see. Yeah, so you can get cooked if you're on AWS and you're just using like the reserved instances. And so sometimes if there's specifically, you know, cloud hardware that's underutilized, the price falls in the spot market.

47:40And so you want to dynamically move over there. So they're using this like server-side virtualization to do that. but it really is a GPU wrapper. Yeah. But it's funny because Kubernetes is also supposed to do that. Don't stop wrapping. Yeah, but they wrapped the wrapper. So they raised a$3 million seed from Green Oaks to build this server size. I have another post up from Shai who highlighted, Shai Goldman, he highlighted that the round was$3 million on$23 million pre. Wow, pretty good on the dilution front. Yeah, not bad. Watch out, Sotheby's. These founders are going to be bidding against a lot of you folks.

48:16Yeah, VC's creating their own competition at Sotheby's. Seriously, yeah, this is dangerous. Of course, they went on to do many more rounds, including some that we'll get to. Yeah, so a year later, April 28th, 2022, Series A, ExaFunction emerged from stealth with a$25 million Series A. It says Green Oaks and Founders Fund. Is this really the FF company? I never knew that if that's the case, but I know Lee Marie was in, and so maybe that got kind of confused, I don't know. Hallucination. Who knows? It's a bold claim to, and they had a bold claim to be the reference infrastructure for service, serverless deep learning.

48:55And so they're going deeper into AI specifically, promising customers faster inference and lower bills by multiplexing workloads across thousands of GPUs. So there's a lot of idle GPUs out there and they're going to find and allocate your inference workloads to the lowest ones. This is a famous story from Mid Journey, which was like getting started around this time. Mid-journey, obviously very inference heavy in the sense that you generate an image and it generates four of these images and they diffuse very slowly and you're getting these little streaming updates while the images kind of depixelate.

49:31But famously, mid-journey, because it doesn't matter that it's low latency because it takes a minute and so it doesn't matter if it takes a full second to stream you the final image, they would render those images on servers across the world because they're like no one's watching netflix at in 3 a.m in taipei or whatever so they would have a well here a few people are but uh but you get the idea like the american servers were used for the international audience and vice versa and so this idea of like load balancing is is a tale as old as time but clearly there was a market here and so they raised their 25 million dollar series a um early pilot customers in autonomous vehicle and vision startups reported 5 to 10x hardware utilization gains, but Mohan worried the business world would become, the business would become a commodity once every model looks the same.

50:25Interesting. So they make a decision to pivot in mid-2022. Watching GitHub co-pilots debut, the founders concluded that their application layer AI, not infrastructure, would capture real world value. They chose to pivot, betting that their low latency serving engine could run an AI code assistant cheaper than anyone else. Fascinating. So like in the, at this time, like the meme was don't build a wrapper. The value accrues to like the hardware layer, like go deeper. And instead they're saying, Hey, we're actually set up really well to serve a fantastic AI code assistant and cost competition is going to be very important.

51:01Even though we've been in this era of like free VC money and cons and people are paying a ton of money for everything, but having that margin and that optimization really makes sense. And it seems like that's increasingly the way you break through is like the deep seek. It's like the optimization on the inference, optimization on the hardware, like the economic gravity of these projects really does matter. So in December 6th of 2022, Codium launches. On Hacker News, Mohan announced, we just released Codium to open up access of generative AI to all developers for free. Try it in the browser. The extension shipped for VS Code, JetBrains, Vim, and more, trained only on permissively licensed public code and promising to stay free forever for individuals.

51:44Very cool. So Speed wins fans in early 2023. They're getting up and running. Kleiner Perkins leads a$65 million Series B at a$500 million valuation. And the response on Hacker News is very good. Folks are saying that it's noticeably faster than Copilot, an edge credited to exa functions GPU scheduler and so there I mean this is the time when everything was scaling up and like I mean even chat GPT at the time would be like well I'm I'm cooked yeah GPUs are melting I'm cooks yeah I mean I'm sure you saw this at the studio Ghibli moment there would be tons of times and it would just be like failed connection or just come up with an excuse not to do the work lazy lazy and so by mid-year codium had grown owned organically to tens of thousands of daily users without a dollar of marketing spend.

52:35Super viral, especially in tech Twitter and X. Kleiner Perkins leads that series B, joined by Green Oaks and General Catalyst. Kleiner Perkins partner, Lee Marie Braswell, called Kodium a secure, personalized productivity multiplier deployable on-prem or in the cloud. We gotta have LM on, she's great. I worked with her for a couple months at Founders Fund. And then she got poached over to KP. Very dramatic. Poach alert. Yeah. So they hit 300 ,000 developers in just 15 months. VentureBeat reports that Kodium already wrote 44 % of new commits for over 300 ,000 developers and dozens of Fortune 500 teams.

53:15So the CEO at this time gave a quote to TechCrunch saying, even though we've barely made a dent in the B money, this lets us ramp R &D and make larger strategic bets. You love it. Just scaling. so they add self-hosted and air gap deployments which is pretty cool sock 2 type 2 compliance post-generation license filtering features that won cautious customers like andrel zillow and dell and so yeah if you need to be in a in a uh in i think they're we've been talking about this with like some of the llama instances going into the dod like at a certain point like like you can't just be like calling out to some random server all the time like it has to run locally and so having that optimization background makes a ton of sense uh they become a unicorn in 2024 just uh what six months ago august 20 august 29th 2024 they do their series c tech wrench breaks the news 150 million dollar series c led by general catalyst valuing them at 1.25 billion total funding hit 243 million uh gc's quentin clark praised the customer follow ethos and and multi-IDE coverage.

54:18They're at 700 ,000 users then, a thousand enterprises. Scales are wild. Crazy. And they were the leading independent rival to GitHub Copilot this time. To signal a bigger vision, the company rebrands the product and domain as Windsurf, which is interesting. Yeah, this happened in November of 2024, and that's where, like, so it felt like Windsurf kind of came out of nowhere, but we're now like three rebrands into this. It goes from exa function, which you might have heard of, and Codium, which I think I'd heard of a little bit, and now Windsurf came out, and then it was the big launch, and everyone's talking about Windsurf being so great.

54:56A new AI native IDE bundled inline completions, whole repo search, and Cascade, an autonomous agent that plans multi-step fixes and starts working before you ask, aimed at keeping devs 10 steps ahead. And Windsurf is a beautiful name. It is. windsurfing kind of fell off used to be a thing it's moved on to what's the new one kiteboarding kiteboarding maybe that's next next uh yeah i company yeah one editor unlimited superpowers marketing touted windsurf tab a command palette that surfaces context-aware snippets test docs and deployment from a single keynote keystroke heralding the ide wars of 2025 we will never forget those uh they hit 40 million i mean we're still in the midst we're still in the midst of them i mean obviously the other news out of the last 24 hours is that cursor is raising 900 on 9 billion 9 billion that was initially rumored to be at closer to 10 yeah but has a bunch of big names in it too so the ide wars will continue the show will go on yeah and uh yeah i don't think windsurf is not going to back down in terms of their ambitions i am interested to see if they just sort of continue the windsurf brand or it's just rolled into chat gpt completely but also interesting that they have this freemium funnel uh converting to 12 to 60 per seat enterprise contracts like even doing per seat here instead of consumption is very interesting because that doesn't necessarily like you have at least in the short term like real variable costs like you could sell in a bunch of seats and if you have some power user who's just sitting there hitting tab every two seconds like they could burn through a lot of inference cost yeah but i guess that they are just really comfortable dealing with their infrastructure scaling yeah and i and to be clear i don't think any of their investors at any point over the last two years was really saying hey you could focus you should really focus on margins yeah because it was clear that inference costs were dropping off a cliff yeah during that you know entire period yeah yeah i mean we've certainly with the new O3 models.

57:02And it seems like something that's very, very solvable in the midterm as you bake the models down, distill them, optimize them, all those things. So certainly something you don't need to worry about. It's just interesting that they're betting on this per seat model. I wonder if that will stay, because you could imagine that the margins could be the same and you could still do it on a consumption basis. Like AWS is mostly consumption basis, not seat based. Yeah, it's one of those things at some point, if companies are hiring less engineers, but doing significantly more engineering work, you would want to effectively be an index on engineering labor, AI-led.

57:39It's like number of lines of code changed is what you want to be comped on or just raw inference cost, right? Just pay me 10x what it costs to inference this thing. I don't know. So there's some funding rumors. We talked about this. Kleiner Perkins was thinking about doing another deal, but they get this acquisition agreement for 3 billion. and observers called it a distribution grab, owning Windsurf hands open AI direct channel to millions of programmers and keeps a prime asset away from Anthropic, Microsoft's GitHub, and Cursor. Before the sale, Windsurf and Cursor were neck and neck in the agentic IDE space.

58:11One analyst quipped, begun the IDE wars have, as Cursor sought a$900 million round to stay independent. Mohan credits weekly five hour walk-in talks with his co-founder for intellectual honesty, The habit that enabled a radical pivot from infra to app. Well, competitors will meant manitis method. Yeah, yeah, totally. Probably putting up 30 ,000 steps a day at that pace. It's great. Uh, so they still own the proprietary LLMs on a GPU virtualization layer. It owns end to end, allowing sub to a hundred millisecond suggestions and cost structure cheap enough to keep the individual tier free. Um, company filters out GPL and other restrictive licenses, blah, blah, blah, blah.

58:50Anyway, uh, pretty fun, pretty fun. Really good outcome for everyone involved. Just a couple of years, billions of dollars created in value. It will be interesting to see what they're doing. For, again, this comes back to this kind of question for all these platform investors around needing a lot of Windsurfing in a single fund to return a fund, even potentially a 1x. I do wonder if WindSurf will get rolled into OpenAI and ChatGPT in any meaningful way. Because just from a product perspective, OpenAI has been kind of bifurcating the apps a little bit. So the latest Studio Ghibli moment happened via Images and ChatGPT.

59:39The previous images project they worked on, Dolly and Dolly 2, those were separate URLs. So separate apps. They eventually brought some of that into ChatGPT. But Sora is still its own domain. It's its own editor, basically, because you want to be able to adjust the timing on certain cuts and add music. And kind of a nonlinear editor just makes more sense for video editing. certainly you don't want to be writing code just in the chat gpt app but you know they have a bajillion users right yeah probably makes sense to bring to leverage that distribution one way or another my my bet as of right now is windsurf by open ai not open ai code yeah yeah not like oh new button where i could click deep research or i could click windsurf and if i click windsurf it just builds me an app.

1:00:34I don't know, I think that might be cool. It's already writing code pretty frequently. When you ask it to crunch some numbers, it'll go and crunch the numbers down. And tool use seems to be really important, so I can imagine some of the stuff getting ported back. But it does seem like Windsurf just by itself is its own great product. You know, it's popular, and so they will continue to do that. Anyway, we were tracking this on Polymarket, sponsor of the show, and Polymarket had will OpenAI acquire Windsurf before August? shot to 99%. It was at like 60 % yesterday, right? Yeah. I think the big question was just trying to understand how, uh, yeah, if this actually was a rumor, it was at 80 % a week ago and then somebody bet big no and cratered.

1:01:23And then it just steadily ticked back up until yesterday. Yeah. So, so yesterday when we talked about it on the show, uh, that was May 5th and it was like noon it was at 67 and we said that the double polo told the story yeah and the double polo was evidence that the deal was going through that you wouldn't throw on the double polo if the deal with sam outland was going south yeah and we were correct and there were a couple posts about this later in the show we'll we'll maybe dig through them but anyway uh cool to see that polymarket you know predicted it and was what was uh was edge positive right up until the the final confirmation.

1:01:58I still think it's interesting because like, yes, they have an agreement, but there's so many things that could fall through post. So 99 % maybe feels even a little bit too high now. I don't know. But yeah, who knows? Go and express your own view on Polymarket. Check it out. Oh, it's so funny. Varun is hilarious. So 34 minutes ago after we started the show, last night he posted big announcement tomorrow and everybody's just saying like, congrats. Like this is amazing. And the big announcement is Windsor wave eight. It's so big. We're doing it over three days. Today, we have a bunch of updates that make Windsor Windsor the best product for teams.

1:02:36Windsor can now automatically review your code, use internal knowledge sources, share conversation and deploy apps internally and more. So anyways, I think this is great. I think if you are just acquired, that's that it is weighty and it is important. But no, no, no. Focus on the focus Focus on the company, focus on the product, focus on the customers. Like, job's not finished. Like, yes, you have new shareholders. And you're aligned with a new team. You have more resources. But continue to grow that. Yeah, it's so interesting because now Bloomberg and a bunch of other media outlets have said OpenAI reaches agreement to buy startup Windsurf.

1:03:14But we haven't seen anything from the Windsurf team or SAM or anything. Yeah. Yeah. So Dakesh Gupta said, so the windsurf guy wore a double polo on the YC podcast, which was last worn by the open AI guy when he was working on his first startup in the early 2000s, signaling that the rumors of acquisition are in fact true. And it's like the guy yelling in the girl's ear and spore says, so this was correct. It actually did happen. Anyway, should we go through Apple's iPhone woes? The prices are going up. They're getting hit by tariffs. Apple won't be able to avoid price hikes for long. The iPhone maker is absorbing$900 million in tariff costs this quarter, but the hit to profit margins could still get worse.

1:04:02So Apple's latest earning report shows the company is choosing to eat the additional costs and not raise the prices. But Raymond Jane's analyst says, looking ahead, our base case for Apple is to raise prices, which should help offset the tariff impact to an extent. Now, Apple hasn't raised prices in a while, even in the head of inflation, even in the face of COVID stuff. So I think they have some room to raise the prices, but they are getting expensive. Once you break the$1 ,000 price point, psychologically it's different. It feels more like a laptop. At the same time, spend more time on your phone than your laptop, right?

1:04:34So I'd rather have a$4 ,000 phone and a$900 laptop, honestly. A laptop can just kind of do whatever. I went to the Apple store to buy this laptop. It is amazing that a device that you can be so dependent on still costs less than$1 ,000. Use it more than your car. If it was$30 ,000, I think people would still buy it. Of course, there's pricing dynamics of will the iPhone stay competitive? Because it can't be 10X an Android. People will switch. Blue Bubble's probably not worth that much. But in terms of the value that's created in your life by your phone, it's up there. It's up there with the best of them.

1:05:17The tariff impact so far is actually pretty slight in Apple's earnings call. Tim Cook said the company expects$900 million in additional costs. That would add less than 2 % to what Wall Street was projecting for Apple's cost of sales. And so, yeah, the cost of sales is in the, what,$50 billion range to make all those iPhones? If it goes up by$0.9 billion, not that big of a deal. But few believe Apple's tariff. Tim's like, we're going to eat it for now. In the next quarter, we're going to raise prices. and hopefully people forget. Yeah. Given the prospect of tariffs, of Trump's sectoral tariffs, we think it is prudent to at least double the$900 million hit to COGS for a few quarters beyond June, says one of the researchers covering Apple.

1:06:01Concern about Apple's margins in coming periods helped drive the stock down nearly 4 % following its earnings report. The stock lost a further 3 % on Monday after the information reported that the new ultra-thin Apple iPhone, iPhone Apple is planning to launch later this year will include compromises such as shorter battery life. Interesting. I didn't realize they were going thinner. That's kind of a cool story. I might do that. I don't know. I never run out of battery. I would, I would, I'm not going to go as far as to say, I'm not going to go as far as to say I would stand in line for an ultra-thin iPhone, but I would hurry to get one.

1:06:37So you would be okay with shorter battery life? Yes. I think so too. Well, because the battery is always good in the first six months. Yeah. But can you imagine? So it's going to be a thinner phone, but the camera bump will probably be like three times longer. It's a telescope. It's a telescope. Imagine a little telescope. Just people are like, yeah, the camera lenses keep breaking off because they protrude so much. Ridiculous. Something. Anyway, there's a chart here about the iPhone prices. as they went up almost to 1 ,000, and they've been down for the last couple years, hovering around 900, can't really go too far.

1:07:13Anyway, Apple shed more than 350 billion in market cap since President Trump's announcement of new tariffs on April 2nd. Most other mega cap stocks have since recovered from their post-tariff losses. The company's been making moves to offset the hit from tariffs. Cook said Thursday that most of the devices shipping to the US will come from India and Vietnam. They're getting out, especially as it looks to enhance the iPhone with new cutting edge designs, such as a thinner body or bendable screen that pose more complicated manufacturing challenges. Yeah, they gotta spice it up. They gotta do something different.

1:07:44I feel like there's, you know, people have the Mac, the iPad, the phone, throw something else in the watch, you know, just give me something in between. I was thinking about - Yeah, Polymarket has, will Apple release a new product line in 2025 at 24 % and will Apple release a foldable iPhone in 2025 at 7 %? but bendable iphone is not on the list yet even if it's worse a little device i just want something fresh i'm bored yeah i don't care something just give me something yeah exactly uh anyway bendable iphone is really funny because you can imagine people just putting it in their back pocket and then it's just sort of full thing yeah i mean i think bendable means foldable in this context but okay i don't know i was thinking more like bendable like you know a stick if you try to actually fold the stick you're gonna break it i want something new i was hoping they'd do a tv i still like the apple vision pro i'm excited for the next one how about a backpack yeah that uh that uh you know operates as a you know desktop you know computer in a very you know an extra large mobile phone you know what you know i was talking about something like if you could get like make just the largest mobile phone on earth there's all this there's all this boom because you can put it on your back.

1:08:57There's all this boom about humanoid robots. I was posting about this on May the 4th, my birthday, Star Wars Day. May the 4th be with you. May the 4th, I was saying we should make R2-D2. Your birthday on the show, everybody's going to be like, what the heck, you didn't. Yeah, you didn't. For your birthday. We did, we did. We talked about it on Friday and Thursday. Oh, right, right, right. Not the exact date. Some people were kind of left singing. But making an R2-D2 seems trivial at this point, right? Yeah. It's like a bunch of car batteries. The battery technology is definitely there. The LLMs are there.

1:09:31You throw a Starlink on that thing or a bunch of cell signals, like a bunch of cell phones in there. You're going to have great connectivity. It's going to be able to follow you around. The wheels exist. All the tech is there to build RTD2. That would be a great product for Apple. Just$10 ,000 and it just follows you around and tells you the weather. And it was like, oh, you wanted me to play this? You wanted me to play U2? I still don't have a good AI but I don't know something like that would be fun and different I'd be into it R2D2 R2D2 put it on the roadmap anyway I hope that next time we can get press passes to an Apple event we'll we'll stay at a wander we'll pull Tim aside and we'll say hey look R2D2 make it happen yeah for sure we've got the fortress balance if we go to the BBC we'll be staying in Cupertino and we'll be in a wander that's right we'll be finding our happy place find your happy place find your happy place book a wander just on a tear it's actually insane it is every single day they're in the conversation they're greatest of all time you mean yes that conversation right book a wander with inspiring views hotel great amenities dreamy beds top tier cleaning and 24 7 concierge service it's a vacation home but better anyway uh you were telling me about this the uh the the bringing hollywood back to america this whole thing john Voight has a plan which is isn't John Voight Angelina Jolie's dad that's right really yeah I have no idea cuz I've never seen any movies you haven't so actor John Voight presented his plan to boost US jobs in the entertainment industry to President Donald Trump over the weekend laying out a proposal and included federal incentives for US theater owners to upgrade their facilities let's go universal basic is that gonna fix that issues I mean judging by the commentary that i hear from people in hollywood yeah the issues are around how much regulation there is yeah and the costs associated with said regulation in making movies in southern california and revitalizing theaters and making the lack of technology podcasts in hollywood okay it's no that's another that's another story that's why it's falling apart no but but the idea that uh i'll give him a chance to kind of get into this but the idea that just fixing the bathrooms and old theaters is not necessarily going to revitalize you know the domestic entertainment industry yeah it's a tough model when you have but nice bathroom i like nice bathrooms i mean you think about you think about when hollywood was in its heyday and like you didn't have all like you couldn't watch anything in hd like you had a tv with three channels on it and it was 12 inches and it was like crackly.

1:12:15If you wanted to see something actually big and beautiful with good sound, like you had to go to the theater. Now you can just buy a home theater with a projector for two grand and you can also just scroll YouTube and TikTok and streaming and your phone all day and there's unlimited content. It's impossible to keep up with it. And so the excuses to go to the movie theater are getting less and less. You really got to have a federal incentive for taking your boys out to the movies guys guys movie night really will be the thing that will will be the thing that brings hollywood back for sure yeah uh you've been leading the charge here i have i have highly recommend it just text everyone who's at who's in your town get get 20 tickets on fandango that you can always refund refund the ones if people don't show up send out the text message to everyone hey we're going to this jason statham movie next Friday.

1:13:07Are you in? Are you out? Be there. Be there. And then just, you know, Venmo everyone at the end and you're all good. Have a fun time. But other than that, if it's not like an event, it's really hard to justify going. Totally. Anyway, this is John Voight was, was appointed a special ambassador to Hollywood by Trump in January. I feel like these special ambassadorships are just like up for grabs. Like, could we become special ambassadors to technology podcasts we really should be like yeah we can make it happen so uh voight was appointed in january and he's detailed the plan along with his manager steven paul and scott carroll the president of paul the president of paul's company to trump at mar-a-lago the proposals include changes to the tax code to encourage investment in u.s films and job training initiatives according to carroll the incentives for cinemas if approved could help buoy theater chains such as amc entertainment holdings cinemark holdings and marcus corp that have struggled since the pandemic with films being released online sooner than in the past they're basically saying we're going to bail out the theaters which have been struggling because of something that we're not addressing like oh which is like competition films are being released online sooner people want to are happy to just watch them at home everybody has a massive hgtv yep and there's just and i would argue that films are just not how you know often often you know the last few years films have been good enough to warrant going to a theater when you could just want to bring back film to america here's an idea give jason carmen 300 million dollars to remake the terminator starring sam sulak today today if you if you do that it will generate five billion dollars in ticket sales i think that's very possible it's entirely possible so anyways filmmakers who co-produce pictures with foreign companies would be allowed to obtain credits for their u.s spending for quote-unquote bad actors who take all their production overseas there would be a tariff that equated with the incentives they were getting from the foreign countries carol said in an interview here's another idea trade war in hollywood the president loves the entertainment business and this country and he will make help us make hollywood great again yes okay i recently watched almost famous i'm trying to learn about journalism almost famous is a story about a young boy who goes on the road to write a profile about an up-and-coming rock band for rolling stone and it's a bill dungserman it's a coming of age tale so he he learns and he grows and he experiences all the vicissitudes of life on the road with this uh with this rock band learns you know the good and the bad and writes this fantastic profile eventually gets them on the cover.

1:15:50Spoiler alert. I think we need a almost famous style movie about Ashley Vance going on the road to write the first big profile of Elon Musk becoming a man, becoming, you know, a real, real tale of his journey on the road. A real, a true, an elite journo. Yeah, a Bill Dungserman. Yeah. A coming of age tale about Ashley Vance doing technology journalism. This is the next thing after we've made some movies about tech. Timeline's been begging for it. We haven't made enough movies about technology journalism. yep this could be big this could be very very big a movie executive produced by julia black yes get her in um and but mainly it needs to be the story of ashley vance yeah telling the story of elon musk elon musk is ashley vance exactly yeah exactly uh trump posted on social media sunday evening that he would impose 100 tariffs on all films produced overseas the comments sent shares of u.s entertainment companies tumbling on monday as investors tried to discern what types of because the issue is it's the u.s entertainment companies that have been paying to produce films overseas as investors tried to discern what types of films would be subject to terrorists and how the levies would affect the profitability of producers in a press briefing on monday trump said he planned to meet with entertainment industry executives to discuss his plan i want to make sure they're happy with it because we're all about jobs the president said california senator ben allen said he would he was given a heads up about voight's plan last week he said he would support a tariff but that should be crafted to encourage u.s productions not harm foreign films i understand why the president was moved to want to take some drastic action allen said we've been facing so much damage as a result of other jurisdictions throwing all sorts of incentives at productions to pull movie production that really ought to be happening here in the united states and that ought to be happening in la and again you know what i hear is just the the dynamic that the logistical complexity of producing a film in la why are you laughing i have another idea to save hollywood michael bay directing the ramp movie the ramp movie so it's like the switch your business Yes, the evil receipt personified like Transformers.

1:18:10The corporate receipt malaise has fallen upon the American economy and only Eric Gleiman, played by Vin Diesel, can revive the American economy by streamlining your corporate cards. And there's a Godzilla-sized receipt. Yes. Maybe we go Chris Hemsworth for Eric and Vin Diesel can play Kareem. Yes. I think that's a good pairing. That's right. We need some AI generated movies to like kind of really sell this to Hollywood, but we'll get Michael Bay in there. It'll be high stakes. It'll make the... It's time to tap in Bay. Yeah. Yeah. It'll make the social network look like a snooze fest. Yeah. It's going to be great.

1:18:49Okay. You're onto something, John. Anyways, we should have somebody on that actively has tried to make movies in LA over the last few years. We should have Michael Bay on. He's making a really cool movie. I don't know if it's public yet, but it sounds awesome. well he's been making movies for a while so i'm sure you're not leaking anything too significant but yeah we should have him on i'm very interested to hear the actual updated details on why if you're an american film producer you decide we're going to go to portugal or we're going to go to london or wherever to actually make this just because the costs to do it locally are so high so i think that the local politicians you know state county level need to take some responsibility as well because I don't think you can just say oh federal government time to step in and make movies a part of the trade war.

1:19:41It was almost more important. We saw that with LA versus Atlanta. It's kind of a domestic issue almost. Toronto is in there but Toronto is not this is not some massive global geopolitical. A lot of the people I know in entertainment have been spending a ton of time in Atlanta for years now. Really? Yeah. Just generally right? Yeah. I'm not joking. if you're joking i'm not joking i'm like if you're actually it's a big thing working to you see it at the end of movies it's like the peach and it's like made in atlanta because they they like the folks in atlanta were just like let's build that business here yeah and so they gave a bunch of incentives uh baby driver was filmed there there's a bunch of movies um yeah i mean it it's economic war on like the state level which is interesting which is like totally fine that's the way the states are supposed to work it's just like hollywood was mismanaged and just like played the game wrong basically and it was like oh we're so cool and powerful and lindy like we'll never lose this so we don't need to play the game of tax incentives when in fact like no no they did people would just leave like they didn't really have the loyalty that uh clearly the hollywood policymakers and lawmakers like thought that they would yeah very rough uh and uh yeah yeah rough for you know i think it was rob lowe who was talking about it how he's always he always has to go to like toronto and he doesn't like it because he's away from his family is the other one probably away from his bed, probably away from his eight sleep.

1:21:00Go to eightsleep.com. What's new in pod four ultra? Well, pod four ultra has all the signature features you love about the pod plus new groundbreaking updates. They got a five year warranty, 30 night risk-free trial, free returns and free shipping. We are incredibly back. Oh yeah. I wonder how I did. I feel like I slept a ton last night. I'm feeling good. Finally back in it from the previous weekend and travel and whatnot let's see tuesday i got a 93 how'd you do 87 87 smoked you wait is that two nights in a row you said it was impossible you said it couldn't be done okay uh to be clear a little asterisk for the for the sleep oh i'm sick i did have food poisoning on sunday oh skill issue um and uh what happened i yeah i i'm good i'm i'm moving through this i'm gonna be i'm gonna be rock solid this week except going to sf tomorrow but i think i'll be i'll be on my eight sleep every night which is yeah cool uh awesome i don't i don't know if we have time for this next story we do have time for an ad quick ad of course out of home advertising made easy and measurable say goodbye to the headaches of out of home advertising only ad quick combines technology out of home expertise and data to enable efficient seamless ad buying across the globe out of adquick.com.

1:22:19Size gone. One of our best yet. That is the best. We definitely got to talk about Co2. Adquick is coming out with an AI product. Yeah. And we were in a cameo in the video. Can't wait. They're launching Adquick Copilot. Yeah, very cool. To help you more efficiently buy ads out of home. Yeah. I mean, there was a lot of stuff with Adquick. Like if you actually go through the process, like they will pull up the map. They'll pull up all their tools. They'll provide kind of an idea and report, and there's no reason why that shouldn't be a little bit more self-serve. Even if you do wind up working with an AdQuick representative directly, there's no reason why you shouldn't be able to just investigate their whole database via an LLM.

1:23:01It's very obvious. Anyway, let's do one or two posts, and then we'll bring in our first guest. We have a great one. Evan McCann says, With so many people going no alcohol, there is a lot of alpha in drinking again. you love it i thought this was hilarious i saw it earlier and i laughed contrarian yeah it seems like alcohol fell off but at the same time it's just so lindy there's an opportunity to bond with other people that love alcohol yeah so uh it's just it used to be so common to drink alcohol that you wouldn't have a meeting and somebody else says you want to have a drink and you say yes and it's like oh we now have some common ground we gotta send now you can find some common ground furious uh no it's funny i i've just gotten to a point where i i stopped enjoying alcohol you know i went from drinking maybe you know having a drink one day a week on average to realize to going down to probably one bottle of dom every time you double that's right that that Most of the drinks I've had this year were on the show.

1:24:11Yeah. It needs to be tied to celebrations because then you just start grinding harder and harder and harder. Yeah, but I think the alcohol decision, like you shouldn't let the timeline decide whether or not you like drinking alcohol. Because some people can have a few drinks and their body can process it and handle it well. For me, it's not for me. People perform better when they're drinking. Yeah, the Balmer Peak. I've been I've been very pro alcohol is a new performance enhancing drug for sales reps yeah the power lunch that's a hour lunch you got a John Coogan house and up yeah I have a couple of martinis with a client yep in could deal in good deal this is how business used to be done it's coming back yep going back coming back anyway indeed Cory Levy was over at Y Combinator game respects game very very funny picture you of course run Z fellows us direct competitor to y combinator in many ways cory's running around the valley signing deals before companies get to yc sometimes yeah but i'm sure cory's generally excited when companies he backs totally end up joining yc yeah this is one of those things where you know they are like they are competitors but the nature of competition is that sometimes like when you see two competitors take a picture together do some sort of collab it's like they either hate each other or they love each other you know yeah i feel like i feel like a lot of people experience this where like yeah you could be like competitors but if you guys if you understand your business at a deeper level than everyone else on the outside you can wind up having like a beautiful partnership and friendship with someone who is ostensibly a rival because you actually see the world in a more nuanced way than someone just on the outside being like oh you guys are just capital and you guys just invest like they actually probably view their businesses very, very differently and very complimentary.

1:26:03Totally. Yeah. I think Z Fellows had an interesting wedge and it's just consistently found great founders. Oftentimes I think even before they have an idea, which is not the same model as YC, even though YC will in small instances. Yeah. Even though they are somewhat in the same world. The way I would say it is the Z Fellows of Z Fellows is Z Fellows and the YC of YC is YC. Yes, yes, yes. And those things can overlap. Totally, with an X. Yeah. X, Y, Z. X, Y, Z. Cool. Well, we have our guests ready in the waiting room. Let's bring them in. They're both in the waiting room. So do you think it's...

1:26:37I wanted to bring in Kelvin first. I will text Santi and tell him to give us 15 minutes. We'll go back to back. I think that's probably what's best. Let me text them and let's bring Kelvin in. and oh FYI Kelvin is with FAI we are going to do Kelvin first then then Santi Santi at 12

1:27:15cool we are good for that let's bring in Kelvin whenever he gets a chance and let's update his lower third. The Chiron is ever evolving. All part of our mission to bring media to Hollywood. I like that stinger. That's very Michael Bay. There's something about the Ashton Hall one that just hits so much harder. Yeah, it's just so much better. It's so much better. It's night and day. It's night and day. Anyway. If you have any sound effects you want us to add to the soundboard, reach out to ben yes he's a soundboard maestro yeah we really got to get on you know tiktok instagram whatever wherever these sound effects are coming from we need to bring them into the show because the soundboard has been a delightful upgrade uh and we have our first guest of the show welcome to the stream kelvin how you doing boom gentlemen good to see you guys what's going on great to have you music yeah oh yeah we're big fans of soundboard uh expect the unexpected during this interview.

1:28:18It'd probably be the loudest, most interruption-riddled podcast you ever do. But it's fun. Can you, anyway, can you give us a little bit of a backstory on you and specifically the announcement today, some of the work you've published and kind of just give us the high-level overview? 100%. I'm Kelvin, kind of pro-typical Silicon Valley tech bro. I dropped out of Princeton, moved out to the Bay Area, was a founding engineer at two companies. And then a few years ago, just started reading about industrial policy and the history of technological progress in the States and recognized that we were in the moment of intense techno-industrial decline and that this was in large part facilitated by bad policy choices.

1:29:02And so in the movement to DC, we got to meet people like Santi and we released this playbook after six months of long, hard work. And it's a recognition of the fact that techno-industrial decline is a policy choice and that we are in a moment where with the rise of China, with the stagnating industrial base, there are intense changes that need to be made to the existing system. And this playbook has 27 very concrete ideas for how to change things across the industrial base, across the national security apparatus, and in the ways the government funds frontier innovation. Cool. I want to go into the playbook, but first give us a lay of the land FAI, IFP, what are these organizations?

1:29:47What are their goals? How are they funded? They're nonprofits. Can you break all that down? And then we'll go into the actual playbook. I present. So there's four institutions involved in this project. FAI, IFP, American Compass, and NIA. A lot of acronyms here. So FAI is the Foundation for American Innovation. The center-right tech policy think tank focused on tech policy, emerging technologies, industrial policy, um ifp is a uh non-partisan think tank focused on a lot of similar topics um also around um particularly around meta science uh and energy as well and then um american compass is more of a new right economic think tank they do a lot of other stuff beyond just industrial policies and family policy um workforce policy etc and then naya is the new american industrial alliance It's focused on a new trade group started by a bunch of really sharp builders focused on bringing the best of Silicon Valley industrialists to Washington, D.C.

1:30:48So this project is kind of a merger of all these different circles of the new conservative folks all the way to your Silicon Valley builders. Got it. So we we talked to Catherine Boyle yesterday about American dynamism broadly. We've talked to Chris Power about Hadrian and building manufacturing in the United States, Anderl, and some of these themes. But what are some of the more concrete steps that you're advocating for on the road to reindustrialization, techno-industrialization? What does that actually mean? Yeah, so this was born out of a kind of growing bipartisan consensus over the past two administrations that something's deep need to change.

1:31:31And the Biden administration really took a pillar approach where they looked at things like chips, energy, manufacturing, and past really large scale subsidy programs that were had been like unseen in generations. And the Trump administration has recognized that there's all these systemic barriers to industrialization beyond just subsidies, things like trade policy, non-trade barriers. And so where we wanted to get into the conversation is that is recognizing that there is in all these different critical industries, whether it's critical minerals or hypersonic missiles, all the way to biotech manufacturing, there are unique industry nuances that prevent more things being built faster and cheaper.

1:32:20And so the goal with this playbook was to really channel this newfound energy on both sides of the aisle in advancing these issues and elevate folks who could write up very specific policy proposals along these lines to advance specific areas. So the way we categorize the playbook is we have three sections, industrial power, national security, frontier innovation, and we have senior domain experts right on each individual piece of this pie with proposals spanning from developing hypersonics testing infrastructure to demand side support for critical minerals production to how does the Navy improve its ship, streamline its design of ships.

1:33:02there's all these really wonky things that this playbook gets into in each of these specific categories yeah do you have a like a an overarching theory around tariff policy versus subsidization of american industrialization versus kind of the doge stuff which is like do more with less efficiency driven these three pillars seem very different very they're typically advocated by very different political groups. We're kind of seeing all three happen right now. Do you think that all three of those are equal tools in the tool chest or are you advocating for leaning one way or the other? Yeah, this is what we're most proudest of for this playbook is that it is a synthesis of all these ideas.

1:33:51And it's a recognition that for all these deeply, deeply important questions, you just need an all of the above approach. There is no one silver bullet. The things that are required to restore American shipbuilding are going to be slightly different than things required to do a more broad-based re-industrialization movement. But it's a recognition that for all these different topics, there's all these things from regulatory fixes to state capacity fixes, subsidies, they're all critically important. On shipbuilding, can you give us a concrete example of what the playbook looks like? Because I feel like shipbuilding is pretty, you can kind of wrap your hands around it.

1:34:35It's a pretty simple thing to understand. We make a certain amount of ships. We want to make more. But what are all the steps that lead to actually increasing shipbuilding capacity? Yeah, so shipbuilding in America is in a dire need of a fix. We produce, China produces 230 times more ship tonnage than the United States. This is due to a lot of different factors, everything from constantly changing requirements from the Navy to a lack of workforce to a lack of automation in our fifth yards compared to other countries. And so the particular proposal that Brian Potter and Austin Bernard vote for our playbook was around streamlining the way the Navy actually designs its requirements for ships and the way the Navy actually goes about planning the design of certain naval vessels.

1:35:26and it gets pretty into the weeds on those topics. And really, this is not a comprehensive plan to restore American shipbuilding, but more of a specific deep dive into one particular underrated aspect of the problem that policymakers may not realize. And so there's a great bill out there called the SHIPS Act, which gets into a bit more of a broad-based plan. And so the goal with this particular proposal was how do we complement the existing discourse with things that are more, it'd been more of the weeds that people aren't paying attention to. Can you talk about some historical precedent where America was maybe behind in certain areas and managed to turn it around?

1:36:07Like, basically, like, obviously, you lay out a bunch of very kind of proactive solutions for a variety of these issues. But I think it'd be helpful to understand at what points throughout history, Maybe we recognize that big, big changes were needed from an industrial policy standpoint, and we actually effectively made those changes. Yeah, the Cold War is the best example of this, right? You had a space race where the U.S. public and our intelligence agencies were shocked when Russia launched Sputnik. It was really a it's really hard to just fully articulate how deep this shocked the American psyche and how fast we got our shit together.

1:36:53In a matter of less than a decade, we directed 400 ,000 people, 20 ,000 companies, and 4.4 % of the overall federal budget towards the Apollo missions. And we went from being laggards in engine technology, missile technology, space technology, to getting to the moon first. Is that part of the challenge, though, now? Is that we don't have sort of a stunning visual of industrial decline? It's sort of this sort of slower, insidious sort of process that's been happening that we feel in different ways. But it doesn't strike, you know, fear into the hearts of Americans in a way that Sputnik did. That's 100 percent a challenge.

1:37:37You know, there's some people who don't believe America really gets serious until there's a Taiwan scenario. But, you know, there's been instances of there's been flashpoints over the past few years. Ukraine, COVID, October 7th, where people have realized actually like the lack of a of a robust defense supply chain, the lack of the ability to make basic things like medical masks are problems that affect us today. And so that's where the work you guys are doing is so important. That's where the work of these three think tanks and other folks like Catherine Boyle, the whole American Dynamism movement.

1:38:12The more the more we talk about these things, the more the more I think people will recognize the seriousness by which we need to take these issues. Did you ever explore the idea of, I don't know exactly how this would get implemented, but some sort of incentive for American investors to focus on re-industrialization? We were kicking around this idea of the carried interest tax was kind of up in the air. Maybe that would hurt private equity firms and venture capital firms. but what if carried interest that that deduction didn't exist for investing outside of America but if you invest in America all of a sudden you get a much more favorable tax treatment something along those lines or even just anything like we've seen the American dynamism movement take hold in the venture community but we haven't heard nearly as much on the private equity side that seems like the private equity firms are still just kind of dollars and cents maxing But do you think there's any moves that could kind of lead to more just decentralized American capital driving reindustrialization?

1:39:19John, that's such a fantastic question. There are so many levers. It'll take a long time to go through all of them. But Julius Klein of American Affairs wrote a great piece for us on that very question of how do you get large-scale capital institutions to invest in industrial finance. There's also, you know, Sam Hammond wrote a piece on utilizing the SBA's authorities to incentivize investing in small, medium-sized manufacturers. You know, one of the greatest strengths of America is that we have the world's strongest entrepreneurial base. We have folks like Jeff Bezos, Elon Musk, and we also have a state that is capable of doing a lot of things, right?

1:40:01Tesla being a great Tesla and SpaceX being the prime examples of what can happen when you combine effective industrial policy, effective tools of statecraft with amazing entrepreneurs who are building the future. Yeah. Interesting. interesting i had some sort of like do you have any yeah i'm curious as you guys were putting this together uh what kind of announcements or policies maybe sort of shifted your priorities because over the last call it six weeks there's been a lot of announcements you know on sunday uh we had 100 tariffs on the 3d chess board has been flipped yeah we're just flipping the board constantly but no i'm curious was there anything that you were you know wanting to to to write about or include in here but you felt like already had enough momentum or kind of coverage from existing uh policies yeah to give the trump administration credit like we we had it we had a few things uh written up around uh defense procurement reform energy reform where they put out some eos and we were like oh man we gotta we'd add some more things uh it's a it's been a very fast moving administration but uh you know with you brought up liberation day like the way that we view um tariffs and like every every each of these four think tank partners have their own opinions but we're all in agreement that tariffs alone are not enough right these are it's a it's a stick but if you actually want to be serious about doing the very specific things like critical middle production or should building or whatever there's a whole host of unique tools you need to apply to that particular problem so that's really what this playbook is trying to provide are there any lessons that you think America can learn from how China does industrial policy?

1:41:42We've seen, you know, what, 50 years of investing in semiconductors over in China in the midst of never really being on the leading edge there. But now, even around planning, right? So they plan in these sort of five-year cycles, right? You know, let's make a five-year plan and another five-year plan and they just sort of compound. I know we're adversaries, but like, what can America learn from China on the industrial policy front? Yeah, it's a fantastic question. And I mean, to your point, there's been a lot of waste over there, right? You have all these state-backed private equity firms that kind of are just black holes for capital.

1:42:20You've got, I mean, they use a bunch of slave labor, which helps drive down industrial costs. Yeah, it's, yeah, Yeah, they do a lot of things that are really effective. Like, you know, I think a lot of narratives around, oh, China is just a copycat or China is just, like, using distilled models to produce beefsteak. It's all to cope. I mean, you know, they're leading in electric vehicles. BYD is an absolute beast. Drones. Crickle minerals. Like, these are real advantages. And the number one thing, I think, is just we should be taking things as seriously as they are. Like, Chinese leaders routinely come out.

1:42:55not just Xi Jinping and the top level CCP brass, but even like the CIA equivalent in China and their like internal think tanks, they're constantly producing essays and giving speeches on how the foundation for world power is industrial power and technological power. They view this as, they view the lack of technology as the reason they suffered this century of humiliation. and so they are deeply serious and throwing the entire state behind developing the future of all these different emerging technologies. So, you know, the thing that we can learn is just the degree of seriousness by which there is a political class is taking.

1:43:38That's a really good answer. Yeah, thank you. Yeah, well, we'll move on and we'll let you get back to your day, but thank you so much for hopping on. This is really interesting. Yeah, I'm excited to fully read the report myself and yeah, looking forward to it. Let's have you back on in the near future. Yeah, we'll talk to you soon. Sure, cheers. Thanks so much. And next up, we're continuing our deep dive into the techno-industrialist play policy playbook. If you haven't had a chance to go, see, it's all over X today. And it's rebuilding.tech. Rebuilding.tech, what a good domain. www.rebuilding.tech.

1:44:14Yeah, so Santi Ruiz is joining, and he can share the techno-industrial policy playbook. is the united states still the world's leading techno industrial power the answer is no longer obvious and that should worry us let's bring him in to have him break it down for us how you doing welcome to the dramatic entrance fantastic great to see you what's going on how you doing good i'm good guys thanks for having me long time listener first time caller yeah yeah great great to have you on here uh yeah we got a little bit of an overview of how the uh the little uh do what think tanks cinematic universe came together in the infinity stones uh came together yeah the infinity stones adventures of thinking uh but uh but so so let's just jump into it um what what what what uh i i know that there's a number of policies but which one uh do you think is the most relevant today there's a lot of things in the news around tariffs tiktok is still in the news but has kind of faded uh if there's just one takeaway that you uh want to dive into first what where should we go totally let me get to that in one second i just want to say kelvin did not vlog the hard copy of this thing do you guys want to go you gotta get that but it's really but it's really nice like uh i'm really happy i got a hold of it yesterday and i'm like really feeling my house on this so yeah we'll we'll put up we'll put up the uh the uh the drop shipping link soon yeah we love we love the printed word we're big fans of the wall street journal we love we love books we love everything printed and the playbook should be in print i mean it's it's you know it's more deserving uh just air just dump it out of a c-130 all over washington right right now you know while we're talking a couple of my colleagues are doing hand deliveries to every congressional office so we're doing amazing trying to do trying to do that that's great um yeah so so let's go into uh some of the top topics uh in the report and what we should be focused on first and foremost totally so kelvin pushed on this project and the and the way he broke it down which i thought was really useful was basically you've got like your national security recommendations which are what they sound like you know a lot of the defense acquisition stuff a lot of like uh making it easier to do hypersonic testing for instance the u.s so like really defense specific stuff then there's like a broader you know industrial based section called industrial power um that's you know critical minerals it's like small business administration to make it easier for small manufacturers to get going um the trunk that we really owned ifp and again for context i'm at the institute for progress we're a non-profit or sorry a non-partisan think tank we focus on like uh largely kind of the innovation policy side of things so our section was like frontier science and technology so we not all those submissions are by us but a lot of it we source most of those submissions.

1:47:03And a lot of that stuff is just how do we get more out of the marginal dollar that goes to R &D in the US, whether that's a federal dollar or R &D through like the NIH or the NSF or the Department of Energy. In a lot of those places, we think there's some really actionable stuff where you just want more bang for your buck. Let's say whether or not, agnostic of whether you should be cutting NIH funding by 30 % or whatever, I happen to think you shouldn't, But like agnostic of that conversation, we think there's still a lot of ways you can get more juice for the Swedes. So a lot of the stuff that we were really championing in that section was, for instance, one of my favorites is my colleague, Caleb Watney, who's got a piece about X labs for science funding.

1:47:44He's got a new proposal, but basically the way the NIH and the NSF and to a certain extent DOE are set up, it's really easy for them to give money to universities and academies and really hard for them to give money to other kinds of institutions, even if those other institutions might be better at the kinds of basic research or the really kind of hardware intensive high, you know, basically high capex research that you might need for certain manufacturing fields or science and tech fields. There's, Caleb gets into it pretty well, but it's basically existing authority that all of these agencies can use to just start setting up another kind of grant structure.

1:48:19There's no statutory text needed, no EO needed. They can go do it right now. and you can basically you know whether it's the arc institute cool biomedical stuff that's frontier where there's some of the best stuff is not happening just at johns hopkins or just at these academic institutions so that's one example i can go i can go all day but like there's a lot of stuff that we really try to be as actionable as possible most of this stuff either needs small statutory tweaks or president or the executive branch can say let's do it right now or it's already kind of firmly in agency authority and it's just culturally or for whatever reason it's hard to get going yeah we were talking to delian about this last week this weird uh dynamic where uh arguably the greatest new innovation in science and technology came from open ai's non-profit arm which is now spinning out this for-profit and everyone's going to make a ton of money off of it uh is is the open ai i guess like what lessons are uh the the think tanks on this project or even just what you're seeing in Washington?

1:49:20What lessons are they taking away from that experience? Obviously, it's very different than doing basic research on the human brain, for example. But at the same time, the government didn't really fund the transformer that happened at Google. They didn't really fund the development of the initial large language model that happened at OpenAI. And yet, the research did get done. And so is that coloring how policymakers are thinking about allocating funding towards research and development in kind of the modern era? I definitely think it is. And I think you've got a really live debate right now in like, if you want to talk about the meta science fields, right?

1:50:00People who want to do more science on science, figure out how you get the most bang for your buck, basically. We, at NIP, this is one of our, you know, our five verticals and the five areas that we work on. And you definitely get people across the spectrum, people who think like, I've heard people say, you know, like all federal R &D is like down the drain. I don't think that's true. I think there's good evidence that's not. But you get people in this space who think you have to overturn the apple cart completely. I think the things that most people agree on is increasingly you're seeing institutions that are not universities being much better at leveraging AI.

1:50:30And I think that's a pretty straightforward argument. You're seeing nonprofits set up often by folks from the West Coast who want to be able to leverage a lot of capital. They have a lot of capital. They don't have a lot of the other institutional ties, but you can build kind of new institutions and you're not constrained by the tenure or, you know, whatever. And if you can affiliate with, say, a Stanford, then you get the grad student pipeline. And so you still get a lot of the great talent from the academic system. I think you've seen, you know, focused research organizations or FROs where the idea is, hey, we're going to spin up for like five years to tackle one basic research problem.

1:51:04We're going to see if we can just crack this. We're going to be a nonprofit because we're not going to commoditize ever. It's just like it's too fundamental, but it's either a basic research thing that we think is upstream of some like whole field that other people will be able to tackle or it's we're going to build tooling. We're going to build like an open source like map of the brain at a level that hasn't been done before. And we're never going to make any money on it. So there's no reason to do it as a for-profit company. And we're going to move at a pace that you can never do at the academy.

1:51:29And so we're going to try and like build the institution to solve the kind of problem instead of starting at your institution and saying how far can we take this institution. And I think that instinct that like you want to just solve the specific problems and build an institution that's like built to solve that rather than try and pick up whatever you have and squeeze it in. I think you're seeing a lot of that in Washington right now. Can you talk a little bit about the replication crisis? Is that front and center? What is the replication crisis in your mind? And is there actually a plan to solve it?

1:51:59Is it something we should even be trying to solve? yeah um we've got a great uh recommendation in here from uh our good friend stewart buck where he basically pushes us to to get more serious at the federal level you know investing replication i think it's a really plausible idea it's funny you ask but my my first uh on-campus job over over the you know i think my freshman summer was working at a place called the center for practical wisdom which was like a site research lab and about halfway through that job i kind of realized it's a great name but i think i kind of had to come to jesus know where i realized this this research is like this is not going to hold up like two years from now this is going to be poke full of holes like what am i what am i doing here uh narrator it was not practical it was it was you know uh i still i still think you can probably study wisdom but maybe not with like these small end studies about how people appreciate paintings um it was really bad i tend to think that the replication crisis stuff is more of an issue for the soft sciences for the social sciences i think a lot of the hard tech that you really want to push on you can get yes or no and replication is a lot easier um i also think there's a lot of uh basically regulations or like encouraging of gating of science the federal government does if you loosen that you can make it easier for people to try and replicate stuff and to basically crush bad science quicker what you really want is just faster turnaround cycles like you're no matter what in a thriving scientific ecosystem i think you're going to get a lot of kind of crap you know the question is like how quickly does that stuff get flushed out of the pipeline by good replication or by incentives that make it easier you know if if if there's a got a bunch of great scientists out there you're still going to get random stuff that doesn't replicate but you just want to kill it early and have the strong incentives for that killing to happen how do you think about timelines for all these issues it it you know one of the potential disadvantages of our democratic system is you know potential turnover every four years uh or two years in in leadership and uh we we were talking with Kevin about sort of China's ability to do a bunch of consecutive five-year plans that are kind of building on each other's.

1:54:03So across the board, how do you make sure that these kind of policy recommendations can really, outside of getting immediate changes implemented, have sort of longevity? Because in many of these, we're not going to fix shipbuilding in the next three years. We're not going to set up, it's going to be hard to set up a meaningful amount of special compute zones in a few years, right? So maybe talk to the strategy around for you guys in terms of making sure there's like really, these become kind of organic movements in Washington. Totally. There's a few different pieces. I think one is go on a lot of technology podcasts.

1:54:48You know, that's really essential here. There we go. No, I would say at the top level, you just have to sell this to a democratic public. And what Kelvin mentioned about you don't have the Sputnik case short of a Taiwan invasion. There's not one single thing that's going to wake up the American people to this where they weren't on before. I think you're just going to have to sell. You're just going to have to keep making this argument. I tend to be pretty bullish on the American people's perceptiveness about this stuff. But you just do have to go sell. a lot of the recommendations in here are around shortening timelines for stuff there's a lot of things i think you can do to just make that kind of change administration democratic accountability problem easier by just saying like for any given thing that you work on can you make it last you know two administrations instead of three like and what are the kind of technocratic things that are standing in the way of that like what are the actual regulatory things that make you take four and a half years to get you know your initial need to permit for a for infrastructure and I think that's like a that's like a real issue here right on a long enough timeline anything is going to get vetoed if you have veto points throughout the process like the longer the timeline is doesn't matter what it is someone's going to kill it um and so i think you have to have like an affirmative democratic case for like look people voted for this we're going to do it and it's going to be done and we're not going to let somebody 15 years from now kill it and then there's a lot of stuff in here that i think is bipartisan where it's wonky it's technocratic you know there's not like huge rifts on critical mineral production you know it's not huge rifts on like the small business administration should would be really effective um but you need to exercise political will to do it and so some of it is just like really fine grain technocratic stuff that we think like you have agreement but you just need to push and you need a really clear action plan for how to do it it's not enough to just say like hey shipbuilding should be better you need to be able to lay out like here are two things you could do tomorrow to improve it nct yeah i mean staying on shipbuilding um what does the vibe feel like around uh advanced manufacturing automation humanoid robots let's not worry about the workforce at all versus let's go into reskilling, upskilling.

1:56:53Let's bring back the idea that you can have a beautiful American dream career in an industry like shipbuilding. Yeah. Thanks to our friends at American Compass. I'm an IFP, Kelvin's an FAI. American Compass is kind of the third part of this, but they spend a lot of time thinking about workforce skilling and redevelopment so there's a lot of stuff in the industrial power section here about like what do you actually do what's worked because there's you know it's easy to say okay workforce retraining but like it's it's not an easy problem there's lots of failures there so what do you actually what do we actually know about how to do that i think everybody on this uh on on this team like the venn diagram is there's not going to be as many manufacturing jobs five years from now as there were at a you know at the peak of american manufacturing even if we improve output and i think you know your listeners will know this that you're going to have to lean on automation pretty heavily to kind of get close to competing with china at the same time i think there's absolutely room to say like if you if you re-industrialize and automate that's going to be a lot of jobs there so i think the question is just like on what scale is that is that you know a world war ii level mobilization i don't think anybody here is pushing for that you know that that more than half of you know all able-bodied men should be working in the factory but i think there's absolutely room to to push to push that even without even without looking at those kinds of orders of magnitude they should be in a warehouse in el segundo honestly maybe everybody yeah making it rain uh what what what topic in the playbook do you think is going to get the least attention this year that will get the most attention let's say in in in five years is there a specific area because right now it feels like you know a big a big part of this is around you know is is all encompassing around kind of industrial policy but you know we were in washington last week and there was you know it was very bipartisan event around re-industrialization so it seems like everybody is is uh not not everybody but it feels like there's a general alignment there and a lot of attention there but of these kind of subtopics where do you think is being kind of like underrated or under discussed yeah i think probably in the discourse there's a couple i would point to one is just nobody wants to talk or think about pandemics anymore you know there's just like no energy to like relitigate covid or to kind of think ahead and plan i think it's one of these weird lessons of covid is like operation warp speed is a massive success in a lot of ways we learn a lot about like what should we do to prevent future pandemics or minimize them and then just nobody has any energy left to talk about that so i think there's some really good ideas here on like pathogen sequencing and i think there is real movement in dc on uh like all-purpose like viral vaccines and a couple colleagues put together some really good work here but it's just like nobody wants to talk about that right now i think that's like you know and i get it to be honest then the other one is you know the high-skilled immigration fight is going to keep happening uh you know throughout you know over the course of this admin i think uh you've got different parts of the coalition you know in the admin to have very different views on this obviously even among the orgs that put this together we know we don't all agree on everything on immigration but there's a proposal in here that i really like that's basically uh uh dod could be much better tracking like who are the top scientists maybe the top thousand scientists out there who we would like to have stateside and just like keep it keep it tight you know this doesn't have to be lumped in with the oh one or the other just kind of general like high level talent but if you have like a specific list of here are the people we would love to poach from china and then just like make it extremely easy for that specific list of a thousand or two thousand people to if they ever want to come over here you know they've got the the kind of golden ticket path and i think there's you know if you think that science is like long tail the the really the rock star scientist the best founders, the best R &D people are just a few orders of magnitude better than some pretty good people.

2:00:51This is not a kind of crazy idea. I think like let's, you know, poaching the highest, highest value people would have an outsized impact. Awesome. Makes a ton of sense. We're staying on shipbuilding, but thank you so much for hopping on the stream. This was great. Great to have you. Come back on again soon. Yeah, we'll have to talk more soon. And yeah, congrats on the launch. Thanks, fellas. See you. Cheers. Bye. And we got Phil from Dirac coming in the studio. I want a sound effect for Phil Phil the man I once called a child I didn't call him a child you called him a baby no you referred to him as a five year old you said he was a toddler no it was very rude you're going too far you're going too far we've all had mistakes we won't say it I made a big mistake we eat things make mistakes I've also mispronounced oh tons of mistakes now we're boys but now he's here in Washington last week for the third time joining the stream there he is yes Yes, gentlemen, how is it going?

2:01:46Welcome to the stream, Mel. Oh, it's great to see you. Welcome to the stream. It's been ages. I haven't talked to you on stream in three days. It's terrible. Yeah, I'm so glad to be back. You back in New York? Yes, I'm in New York in the Empire State Building. Capital of the Empire. Capital of the Empire. I love it. Okay, quick intro. Explain like I'm five, what the company does, and then the announcement today. Absolutely. So we're Dirac. We have some software that automatically generates assembly instructions for manufacturers. We like to say it's all about context-aware production planning.

2:02:23That's not the, you know, five-year-old wouldn't really get that part. Lego instructions for ships. Yeah. Imagine IKEA assembly instructions for planes, cars, engines, and now boats. And that's what we're going to talk about today. Okay. So what happened? Break it down. So we're talking about yachts, right? potentially transitioning Alcatraz to a yacht, a tax haven, yacht Harbor. Yeah. No, sorry. Go on. Go on. All about yachts, specifically yachts that can launch projectiles. There we go. Got it. Okay. The best kind. Yes. So unfortunately, shipbuilding for a while in the U.S. has been slowly slipping.

2:02:57We at Dirac have decided to partner with a company called Fairlead, who is a captain of maritime production in the United States. They're based out of Norfolk, Virginia. They're sort of the Norfolk shipyards. They run the place. They work with all sorts of different tribes. They're a massive shipbuilder. We're talking submarines. We're talking destroyers. We're talking carriers. Fairlane has selected Dirac to basically modernize a lot of their production planning and infrastructure. So I'm really, really excited to work with them. They are super tech forward. Funny enough, they actually launched their own venture fund earlier today.

2:03:33It's a great timing for them. And, you know, we're excited to announce this partnership. This looks like us basically getting into the forward deployed engineer game. We're going to have a guy deploy down there, modernize a lot of their infrastructure, and deploy the latest and greatest RAC technologies to their production plan. So if we, yeah. Yeah. So break down the, you know, the massive onion that is the layers of building an actual ship on Fairlead.com. I see they have an aircraft carrier, but it seems like they build systems that go into the aircraft carrier. So are they like a, are they under a prime contractor?

2:04:09Do they work for Lockheed and Northrop or someone else or hunting technical goals? Is that right? Yes. So I, you know, in the, in the interest of preserving Fairleads confidentiality, I will, I will say exactly which primes, but they have many, many, many prime contracts that they put systems directly onto. I can tell you the biggest shipbuilders and maritime producers that are primes are Huntington Ingalls, Bollinger, General Dynamics, Electric Boat. These are potentially the types of companies that hypothetically fairly would be working with. And so, yes, they support that. And then what are they actually building on the ship?

2:04:45I see some systems, variable speed drives, switchboards, control systems. Can you concretize this and break it down in more simple to understand? Is it the steering wheel that they're building? What are they doing? So basically when you get a boat, right, you're saying it's time to ship, right? We're going to make a boat. A shipbuilder makes a hull, right? They start to make the hull, they start to make various systems within that ship, but really they're making like a ship. What then happens is a integrator needs to come in and actually soup it up with the latest and greatest technologies. You know, they need to integrate software.

2:05:24They need to build in the control panels. They need to build in all the infrastructure and weapons platforms and then go on that boat. So it's different as an industry in the way that you produce than automotive, than aerospace, than a variety of other industries. But when you look down at the types of things they make, these are sub-assemblies that you can see on any type of platform out there in the world. So that's shipbuilding as an industry, if we were talking about it relative to other industries. They build, obviously, the largest systems on the planet because those are basically boats.

2:05:56If you look at automotive as an industry, automotive is fairly modern. You have automated facilities. Automotive is fairly modern. aerospace and defense as an industry is probably like around 20 years behind automotive and then shipbuilding is probably 30 or 40 years behind them so you know cad as an example of like a metric or the cad adoption like 3d modeling adoption as a metric for you know how advanced the industry is you know we're talking you know automotive everything is counted up aerospace and defense the majority of things at this point over the past 15 20 years have been catted up in you know digital representation in shipbuilding you know these these guys are largely on paper processes and they make you know some of the most advanced pieces of technology that come out of an engineering department but they're still looking at 2d drawings they're still you know basically drafting pieces of paper and that is what we're getting maritime off of the rack is leading the charge captaining that ship what does that design kind of work and production workflow look like from a you know prime to a fair lead to the actual uh you know manufacturing engineers that are making you know individual parts and i imagine oftentimes the the the initial designs or the specs you know you're actually uh i'm sure that fair lead and fair leads engineers realize at different points like hey this worked uh in you know a cad file but it doesn't actually work in practice we need to re-engineer it.

2:07:26What does that kind of collaboration process look like on a general level without going into detail on Fairlead's specific process? It looks a lot like a lot of plane tickets bought to Virginia. You know, a lot of folks flying from D.C. to, you know, from Norfolk to D.C., from Boston, all over the place, you know, to California. It is very difficult for these folks to communicate technical designs digitally right now. and it is because it is all on paper. And so it looks like a very angry phone call down to the docks and saying, hey, we got that system that you guys shipped. This thing don't fit.

2:08:06What's going on? So it's unfortunately a very frequent occurrence. If you look at the average delivery date for a submarine, on average, submarines are three years late. So it is really, really bad because the barrel that everyone in maritime is staring down at is the year 2027. It's a big year that the Navy, that the Army, that everybody in the U.S. military is focused on because that is the year that we think, you know, some crazy stuff's going to happen with China. And so, you know, they're thinking, OK, it's 2025. We need submarines yesterday. You know, the annual production rate for submarines in the United States is one and a half submarines a year.

2:08:46China makes more than 10 a month. And so, you know, that is a terrifying number because the, as you were kind of asking about. Red alert. I mean, that is staggeringly bad. That's terrible. Can you give me a little overview of the executive order restoring America's maritime dominance? What's in there? What does it mean for shipbuilders, you, America broadly? And yeah. And does it make you more optimistic about that problem? Yeah, I would say it makes me more optimistic. The administration, current administration is taking it extraordinarily seriously that we need to upgrade the modern American shipbuilder.

2:09:26These are things that are named like that statistic that I mentioned. Statistics like this are named specifically in the executive order. And they're basically calling out the shipbuilding industry saying, if you are 15%, I forgot the explicit number, but if you are late by a certain percentage on your contract, you will be fine. You are subject to losing your prime contract. Like it is not okay to ship late anymore. You know, unfortunately, not too many Jira tickets flying around ship building, but they ought to use something like that at least. It is a staggering problem that at least the EO is taken seriously.

2:10:00Yeah, yeah, that makes sense. Well, thank you so much for hopping on. Do you have anything else, Jordy? No, this was great. We are going to hop over to talk to Fairlead, the other side of this deal and get Jim's take over at Fairlead. Put the screws to him. We're going to pitch Fairlead on leading a hundred million on one billion posts into Dirac. So wish us luck. Good luck. Well, thank you guys. I will catch you later. We'll talk to you later. Great to see you. Bye. Cheers. And let's bring in Jim here on the other side of this. We don't talk. I mean, Fairlead is not a company that a lot of people know about private.

2:10:33It's been in business since the eighties. But fascinating to hear from a true industry insider who actually works on on building these ships. We've seen in Silicon Valley a lot of companies kind of nibbling around the edges. There's some bunch of ship building companies that are building smaller systems or more swarm based systems, not really focused on the exquisite systems. Well, Fairlead is the company that actually works on the big ships, which we need to keep making, even as the landscape of the battlefield changes. They do ship repair, maritime manufacturing, privately held, veteran owned, controlled by its founder, They're still in founder mode.

2:11:13You love to hear it, Jerry Miller. And they have a new venture fund. They do. I'll have to ask about that. It was founded by a former U.S. Navy surface warfare officer and longtime Hamptons Road ship repair entrepreneur. Owns the company through closely held Miller Group. In 2014, he rebranded his previous Miller IMG operations as Fairlead Integrated and has remained chief executive officer and majority shareholder ever since. In 2019, former General Motors CEO Dan Ackerson bought a small equity stake and serves as a minority owner. strategic advisor but no outside corporation holds a controlling interest anyway is jim available let's bring him into the studio welcome to the show jim nice to meet you thanks so much that was fantastic yeah we appreciate and privileged yeah we're really excited to have you here uh would you mind introducing yourself and a little bit about the company i gave a little bit of an overview but i'd love to hear it from you uh certainly uh james blum i run corporate development on behalf of Jerry Miller and Fred Pasquin, the president, who's running Fairlead.

2:12:13And we've rebranded into, we've now turned it into Fairlead. And we have Fairlead Ventures, which we announced earlier today and very privileged to also partner with Dirac. And that announcement is coming out at any moment, as I understand from Phil and the team. And at Fairlead, we're very privileged systems engineering, shipbuilding, ship repair. And then we work on many different advanced energy challenges that the Navy has experienced and wants to integrate and adapt and apply. And we're very fortunate to do what is known as commercial off-the-shelf integrations and then harden those integrations from the world's leading industrial manufacturers and integrate them into Navy platforms.

2:12:56I'm very fortunate to support the Navy and work on a number of different key initiatives across the maritime industrial base. We're part of the submarine industrial base, and we're fortunate to work on some very important problems around Columbia and the Virginia class. And then we do a lot of modular shipbuilding around aircraft carriers and all the latest designs that are coming out and applying a lot of different autonomous capability to our aircraft carrier fleet. And then we're working very closely to destroy our class as a platform and working on applying a lot of next generation energy capabilities so that they can be integrated for lasers and hypersonics.

2:13:36And then lastly, we worked very closely across the USV space, really applying very, very hardened military industrial systems engineering and critical engineering capabilities where you're really classifying a new set of software-defined infrastructure that's being cascaded and fused across all the different platforms so they're more intelligent, more capable, and move faster and address a different lethality capability that we faced in the past. And now we're upgrading and ready for maritime dominance under the executive order that our president just announced. And then obviously with the opposite shipbuilding coming in, shipbuilding and ship repair, maritime dominance is something that we're privileged to support the community around.

2:14:25And so we're really augmenting, accelerating what I would call that next generation of hardening and that capability of engineering that is critical from a quality control and speed perspective. And so that's what we're doing at Fairlead. And that's why we created a venture arm and we actually launched it and announced it today. And we're backing emerging managers who are leading in autonomy and AI and applying autonomy and AI and machine learning. some of the most important weapon systems for our country, and as well as to afford us that capability and deterrence and all the key theaters that our commands are responsible for addressing.

2:14:59So very nice to be here on the show. Yeah, thanks. Yeah, so is the new fund, would you call it a fund of funds, or you're investing in managers and direct investments, or what's the focus? Yeah, the two-ladder. So we're really focused on backing the best emerging managers in the space and the best founders and entrepreneurs in the space. And that's what Phil from Dirac is an amazing example of. And we're just really, really fortunate to bring that kind of model-based manufacturing into shipbuilding now. And one of the key areas in the country, which is Norfolk and Hampton Roads and Virginia Beach and then Portsmouth.

2:15:39So how is one of the, you know, Phil is extremely eloquent and brought up a bunch of interesting data points on the 15 minutes he was on before this, one of which was the United States. What do we make one submarine a year at this point? Takes about 18 months. 18 months, he said. China makes around 10 a month. How does Fairlead think about helping close that gap over time? Well, we believe that the key is workforce development and capacity planning. And these systems are very exquisite, and they require an extraordinary amount of testing and certification. And when you want to apply next generation technology, you really have to have all those processes in place.

2:16:29So we're fairly just sought out from a strategic planning perspective. We've really, as a brand and under Jerry Miller and his leadership and Fred Pasquin, the entire company is dedicated to quality and to speed at scale. And so for us, we sought out, you know, a company that was doing exactly what Phil and Pete and, you know, Jared and Trevor were building. and BuildOS for us was the software that was going to help us really accelerate that schedule and address that schedule risk you were just talking about. And so, yes, the Navy and all of its partners across the defense primes, you know, across the Navy, all of them, shall I say, the Heritage Primes and the new Neo Primes, everyone has to actually help, you know, General Dynamics and Electric Boat move faster, as fast as they can, and they're an extraordinary company with extraordinary leadership.

2:17:21but there's a lot of technology and complexity that has to be integrated. And then, quite frankly, from a shipbuilding perspective, that production schedule is very challenging. And so getting it to a position where it can introduce effectively two to three more subs over the next five years, so instead of deploying and introducing one new submarine or two in a year to up to three to four, that's going to take a very, very, very heavy lift from the ecosystem and fairly just part of that ecosystem. And we think with Dirac and that modernization and that single source of truth that they bring will help a firm like ours cascade and accelerate that entire industrial defense supply chain base around the Columbia and Virginia class submarine manufacturing process.

2:18:10And we think we should be able to advance it rather significantly. significantly. But what we're talking about is really moving in production schedules from 2035 and 2030 into 2028 and 2027. And so that's a very hard lift for the Navy for its defense primes. And we're certainly with DRAC going to impact that schedule. And we think we can have a major impact, not just on the acquisition and delivery side, but also the sustainment side, which is a really important part of actually, if you look at how all wars are won, they're won through sustainment in their supply chain. And we're really excited about that at Fairlead, it really reducing and mitigating a lot of that risk across the suppliers and across the defense industrial base, supporting the great submarine industrial base that we have in our country and that leadership.

2:18:57I'm sure a lot of founders of new defense tech companies would love to do a deal with you or sell into a company like Fairlead, can you walk us through what it takes for a young company to prove that they would be the right choice for a partnership with a more established company like yourself? What's the conversation like? What are the KPIs? What are the things that you need to do to de-risk taking a chance on a new and growing company? Sure. Such a great question. Succinctly, they believe in a center of excellence. So from our perspective, the leadership team and their engineering, and I'll just say all across product, all across engineering and the founders have to be committed to addressing the ecosystem.

2:19:48So what that means is literally actively having the forward deployed engineers be there to build up that new system of record with their own solution engineers and architects, but they literally will advance training for that workforce development. that workforce education, and then scaling that over a 36 to 48-month timeframe. So as a result, that means that the founders and their founding investors have to have patient capital and capital from what I would call remarkable venture firms and growth equity firms. And then they have to have a deep capital base because these are three to five-year sprints.

2:20:30and the goal is to move at scale and then you're training and upskilling and then really attracting extraordinary engineers, the best builders in our country, to actually a new space for them, which is maritime and this maritime industrial base for maritime dominance. That requires a heavy lift on an earlier stage firm. So what I would say is almost series B and series C firms in general are a better fit unless, of course, they have leadership that is extraordinary and deep like Dirac is and is a great example of significant expertise in the maritime industrial base, significant understanding of how electric boat and general dynamics actually works as a company and then having that knowledge and then being able to scale that knowledge, build that into a software system, which is a platform that we can integrate all of our shipbuilding and our systems engineering in a lot of the product development that we do, and then applying a lot of autonomy and AI stack into that from a work assembly perspective, from a modularity perspective, that's a heavy lift for most companies.

2:21:41Dirac had all of the above, and then they had extraordinary founding investors behind them from a seed perspective. And then they have a broad ecosystem support across what I would call the venture capital stack. And that capital investment partnership that they have of cascading across the country, both on the East Coast and the West Coast, meant for Fairlead, they had mitigated all the risks for us, as well as the maturity of their software, and then their commitment to build a center of excellence in Norfolk around that entire community where the Navy has a very significant amount of its fleet and manufacturing base.

2:22:12So those were the key requirements. And I would say that they also had the technology roadmap that we thought was absolutely core and critical to us. And we'd been seeking that out for the last nine months under Fred Pasquin and Hal Barsh and Hal really leads that for Fairlead. And he was extraordinarily impressed with the presentation by Jared and Phil. And just to give you a sense of how fast we move, we moved from meeting them to actually executing a purchase order and agreement and a commitment to getting trained and scaling this Fairlead in under three and a half weeks. That's how fast we move at speed and scale.

2:22:47So for any founder out there who believes that they have the next piece of the core tech stack that will unlock capacity, scale, and autonomy, and manufacturing for our country. Yeah, we move much faster than most industrial enterprises. And that's why we have a venture arm that we launched, because we wanted to back that with capital in addition to being a great customer and a great partner. That's very cool. How is Fairlead thinking about opportunities to support various primes on smaller autonomous systems? It's obviously a very different manufacturing process to make a thousand of something versus one or two of something.

2:23:32And I know it's top of mind for you guys. Yeah. So well said. But we began this journey back in 2015, really trying to back as many new founders who were really early in that smaller autonomous stack. And so we've just been very fortunate to back a number of new and traditional players in the USC space. And we really started really on the system engineering and systems integration side. And we have found now that we're really, we've been very lucky that the Navy has been so supportive of us that we're now working with many of the brands who are out there who are well published, doing an incredible job raising capital, doing an incredible job pioneering in what I would call smaller hybrid fleets and introducing new port capabilities, terminal capabilities, the full value chain.

2:24:26And so we're just really privileged to work with, you know, what I would say, the new entrance to the space as well as the heritage players. And what we're fortunate to say is we're working with almost all of them. And we really take it from a software and systems engineering perspective. And what we're really trying to do is harden the navigation systems, harden the autonomous systems from cyber attacks, building out mission modules and payloads to support them. So as you know, many of these remarkable firms with remarkable capital are really building out these new vessels, which we need and are fantastic.

2:25:02But actually integrating that from a payload and cargo and high-value, high-consequence cargo perspective, that's actually an extraordinary, shall we say, level of systems integration that's needed. We just feel like we're just a natural partner, and the majority of the industry has selected Fairlead. So we look at everybody as a partner and we're really looking at their timeline to accelerate production so they can field and get tested and certified and introduced into theater. And so that we can address that schedule risk that our president and, you know, our new secretary of the Navy is very, very adamant about reaching.

2:25:37And so we just feel that we're just we're very lucky to be in that position to have the resources, the assets, the real estate, the capital, the leadership, the expertise. And quite frankly, we're now actually a prime ourselves. So it's been very, very fortunate. That's great. Congratulations. Yeah, thank you. Well, James, if you've ever, if you ever want us to come podcast on a submarine, let us know. We're here. We're here. We're ready. Gentlemen, we'll introduce you to all the right people. Fantastic. Great. Well, thank you so much for helping on. Congratulations. And the partnership. And it's great to chat with you guys.

2:26:09Thanks for all the contacts. Yeah, we'll talk to you soon. Have a great one. Bye. Thanks so much. Take care, guys. Cheers. And next up, we have Jacob from New Limit talking about life extension. Can you live forever or are we trapped in this mortal coil? We will get to the bottom of it. But I mean, it's a fantastic company. Brian Armstrong has been working on it for a while, brought in a fantastic team and they've been doing a bunch of stuff. So Jacob, welcome to the stream. Thank you so much for joining. Could we start with a quick introduction on yourself and the company just for those who don't know?

2:26:42Yeah, absolutely. Thank you all for having us today. So my name is Jacob Kimmel, one of the co-founders and president of New Limit. So New Limit's working on a new type of medicine to try and extend human health span, by which we mean we want everyone to have more happy, healthy years in their lives than they do today. And we're doing that using a technology called epigenetic reprogramming, which we're happy to unpack if it's of interest. Absolutely. Let's unpack it. Let's unpack it. Okay, let's unpack it. I think it's an interest to all of our human audience. There might be some AI agents listening that are not so much the androids.

2:27:11audience could also benefit if there are any who are currently tuned in. So all the cells in your body, they've all got the same DNA code, which is both kind of trivial. You probably learned that in like third grade biology class, but it's also presents a wonderful question, which is then, well, how do your eyeball and your kidney and your tongue all do different things? They have the same code base. It turns out on top of your DNA and some of the proteins your DNA wraps around, there are these chemical modifications called epigenetic marks. I think of these kind of like the control flow in software, where not every line of your code base runs every time a user hits your application service.

2:27:43You use some pieces of the code base sometimes and others other times. And so your genome is the same way. Some cells express some genes from your genome, others express a different set, and that's how they do different jobs. Turns out as you age, all of those epigenetic marks get, for lack of a better technical term, messed up. And so your cells stop using the right genes at the right time, they use the wrong genes at the wrong time, and then they degrade in function. And that actually precipitates a number of the diseases and pathologies that arise with age, including things that we don't even traditionally define as disease, but that you or I would certainly like to remedy about our experience if we could.

2:28:14Is the plan here kind of traditional FDA biotech? I'm thinking like some research, then some mice, then dog or monkey, then human trials, then phase one, phase two, phase three, maybe you're a public company at some point, or is there some sort of Silicon Valley twist or different approach that you're taking? Yeah. So all of the downstream steps are pretty much what you just laid out. Ultimately, in order to get a medicine into humans, we have to first do no harm, demonstrate that the medicine has some reasonable chance of actually helping a person, and then definitely isn't going to harm anybody when you put it into them.

2:28:44So we do need to do animal trials. We then eventually need to go into the clinic. I think the Silicon Valley twist here is that the problem we're trying to solve with how to basically rewrite these epigenetic marks back to the state you had when you were young, really wouldn't have been tractable even 10 years ago without basically two technologies. One of those is something called single cell genomics. So we can actually take a cell out and sequence all of the different RNAs in that cell, basically telling you which parts of the genome it's using. And then the second, which I'm sure your listeners are intimately familiar with, is AI.

2:29:14There are more ways we could try and rewrite this epigenome than we'll ever be able to test in the lab. It doesn't matter how clever you are. The number here is about 10 to the 16, which is a stupidly large scientific notation number to put it in context. That's like 10 ,000 Milky Ways worth of stars. You just can't test all of those things. And so by building AI models, we're able to actually prioritize which of those potential reprogramming medicines we even go bother to test in the lab. And that helps us get to these discoveries much faster. I really don't believe this company would have been a good idea prior to the advent of really those two key technologies.

2:29:46And so we're trying to parallelize as much as we can early on so that by the time we get to that traditional drug discovery process, we have a lot more conviction around the molecules we're moving forward than you might otherwise. Can you talk about the different kind of milestones that have been important to you and important to your partners to get to this point? It's much different than SaaS, where maybe you get funded with an idea and a deck like every company does. And then you get to maybe$2 million of ARR, you do a Series A,$10 million, you do a Series B. I imagine the milestones have been much different here, but I'm sure you guys hold yourself to a pretty extreme standard around continuously de-risking the opportunity and getting more and more convicted.

2:30:34But I'm curious what those have been to date. Yeah, absolutely. I love to let you let that out. One of the challenges with hard technology and biotech in particular is the milestones are not quite as legible as revenue for quite a while. You know, famously, some of the largest companies in the space took quite a while to even get to revenue positive. And the reason these bets still make sense is that once they do have revenue, you really start printing it. There are more drugs making a billion dollars in revenue today than I believe there are software companies. So it's truly amazing to recognize like a single product is transformational.

2:31:04So all of these hard bets make sense, even if there is a challenge in making them legible along the way. So for us, really, there were a few key milestones. When we started out and built the company, all of this was effectively an idea. There was an existence proof where we knew it was possible to reset the epigenome of an old cell back to a younger state. But that existence proof was something that in the field we often call a tool compound. It tells you that the biology is tractable, but it's not a medicine you can put in people. It basically works, but it's not safe. And so we had to first build all of the technology that would even let us run these experiments in the first place, just to give you a sense of scale.

2:31:37Before New Limit, people had really only tried 19 different ways to do this sort of epigenetic reprogramming intervention, make an old cell look young. 16 of those I had done in my old lab with my own hands. Like really, this was just a goldmine that not many people were digging in. It's just like me there with like a tiny little plastic shovel. And so at New Limit now, we've tested about 14 ,000 of the different ways to reprogram cells. So we like to say it's 600 or 700x, depending on if you let me round up or not. And we had to build all the molecular tools to even let us run those experiments.

2:32:06That's sort of step one. Step two is we then have to demonstrate that actually, even though I'm really proud of the fact that we can run 14 ,000 experiments, It's way smaller than 10 to the 16. We can build AI models that are sufficient to actually prioritize which of those experiments are worthwhile. If you imagine that there's some gold out there, but there's just way more places to dig than we can really exhaustively search through, we need a way to find where those spots are. So we were able to demonstrate that now. We think we have the most performant models in the field, really thanks to just the scale of data we've generated.

2:32:35We have hundreds of X more than anyone else does to train these types of tools. And then one of the final pieces, and this was the last unlock, that actually came a lot faster than we thought it would, is we demonstrated in the biotech communities known as a preclinical proof of concept in layman's terms. We've built some molecules that are actually drug-like. So you can actually hold these in your hand. You can hold a tube of a potential reprogramming medicine, put that into an animal model of a disease and rescue the function of that diseased animal. We can do this both with human cells. In our case, we're able to take old liver cells from old people and restore them back to a youthful function so they can regenerate and repair a tissue the same way young ones do.

2:33:12And then likewise, we can put these molecules into animal models. And one of the diseases we're going after is alcohol-related liver disease. It's some damage that accumulates from alcohol exposure over the course of your life. Not only can we make those cells regenerate better, but we can also just make them much more resilient to alcohol. It turns out that as your hepatocytes, the cells in your liver age, they become much more vulnerable to alcohol when you drink. That's an experiment that I've run in my own life. And so I believe the data, even without having to replicate it as many times as we have.

2:33:38And we're able to really improve the protection they have against that type of damage in a way that we think will really benefit patients. So to our knowledge, that's the first time anyone's really made a reprogramming medicine you can hold in your hand that demonstrates efficacy, something you could imagine carrying forward to the clinic. Can you talk about the Series B,$130 million? I want to know about the round, but then I also want to know about what's the use of funds look like? Because you're doing a lot with data. Are you going to spend$100 million in some sort of like large H100 cluster to crunch all these numbers?

2:34:11Are we at that scale yet? Or is it just R &D salaries for engineers, scientists? Are there legal folks putting together FDA applications? Is it a bunch of money on like lab mice and monkeys? What is the shape of the business right now? Yeah, absolutely. So everything you noted is some expense. Thankfully, our compute budget quite isn't$100 million yet, though I hope we're generating enough data to get there soon. Jensen can donate some GPUs if he's feeling so kind. If he's serious about living to 150. Yeah, I mean, it's in his own interest. He wants to be running NVIDIA for the next 40 years. Why not?

2:34:45It's true. So yeah, the breakdown is basically the main costs are R &D. So we have a couple, we have three different therapeutic programs. Our most advanced program I told you a little bit about is focused on restoring function in the liver. We hope that can treat some advanced liver diseases and eventually treat everyone who's livered ages. You probably have a little bit less energy than you did when you were 21. I certainly do as well. And that turns out that as we age, over half the population starts to suffer from something called metabolic syndrome. Basically, your rates of heart attack, diabetes, obesity all shoot up.

2:35:14We see this in our own lives with people we know. It's just we don't necessarily have the language for it normally. And we think those medicines could treat a very broad swath of patients. We also have programs in immunology, trying to restore youthful functioning in your immune system, and more recently, vascular trigger, trying to basically fix your kidneys and other portions of your body that degenerate when you can't really move blood around the way you did when you were younger. So that's a large fraction to spend. And then another big fraction of use of proceeds is really to take these molecules toward the clinic.

2:35:38As you start to do experiments in humans, things get very expensive very quickly. It turns out even just manufacturing the molecules that you need to go take into a clinical trial has to be done in a really controlled way. You're also just making very large masses of this stuff, and it's very expensive to do. And so because of that, you know, we try and really upfront de-risk everything before we get to the clinic, but we still have to reserve a fair amount of the dry powder to make sure we can do right by the patients we're going to treat, produce the drug in a sufficient quantity, run a sufficiently sophisticated trial to really gain evidence that it's working.

2:36:08Can you talk about the pressure of working on technology that so many people are effectively betting on and in some ways feel is inevitable? I feel like if you ever have a conversation with a loved one, you know, a parent, you know, you're talking with let's say a parent they'll be like you know maybe a young person is thinking on a 30-year time horizon and the parent is thinking well i don't you know i don't know if i'll be around then and then the the the you know uh younger younger uh person says oh well by that point like we'll have life you know i just feel like there's a something that comes up constantly that people i are like maybe maybe it's um you know maybe it's misguided but i i feel like there's a general sense of inevitability with these types of technologies.

2:36:57But when you guys are actually doing the research and fighting to make this possible, I imagine that at times, maybe in the fullness of time, you feel like it's inevitable, but it's certainly not pre-programmed. It's knowledge that needs to be earned. But it's a much different level of pressure than somebody raising$130 billion for a SaaS company where if it fails, there'll be another note-taking app that just sort of like takes a place and will still be able to organize, you know, words on, you know, digital documents. Maybe for your note-taking app, Jordy, my note-taking app is going to be entirely unique and irreplaceable.

2:37:38Yeah, exactly. Yeah. I love the way you set this up. It is something we think a lot about, which is the responsibility we have as we're trying to work on these tools. You know, I think in biotech, you don't get many opportunities to take really audacious bets like this. The science we're working on is earlier stage than you typically start a biotech on. There's more inherent tech risk here than many companies are willing to underwrite. And so because we do have one of the unique opportunities to take a shot on goal at potentially a thousand X outcome, a medicine that everyone would benefit from over a certain age, we feel really a burden to make sure we're using that opportunity responsibly.

2:38:14And so I do think there's some amount of stress in it, but I think it's mostly positive in that I feel like often we're presented with challenges where if we shrink the scope of the ambition a little bit, we can make our lives a lot easier. Well, certainly we can get to the clinic faster if we're comfortable just having a medicine that maybe doesn't apply to as many people or doesn't work quite as well. And having that burden to say, no, we've got one of the few rare opportunities in the industry, stewarding this capital, working with these generational investors to be able to try and take a shot where really we are optimizing for the scale of the outcome rather than just the marginal basis point on probability of success, which I think is something that biotech has maybe forgotten over the past decade or so.

2:38:50We've really optimized on probability of success, but forgotten the other half of the EV equation. If you multiply even a high probability by a low potential value, your outcomes aren't generating as much as you'd hope for anyway. So it is something that's always front of mind for us. Makes sense. How do you think about the potential impact of, you know, improving the function of of the kidney by 10 percent could have some, you know, additional externality in the body that could actually have a really meaningful. So how do you think about kind of complex systems and sort of unintentional impacts of certain sort of effects of the type of drugs that you guys will develop over time?

2:39:37Yeah, it's a great question. It's something like we don't have a super rigorous framework for this because these questions are very difficult to answer quantitatively. I guess in short, we like to treat those sorts of knock-on benefits as pure upside. So before we launch into a program, we need to convince ourselves that just making one type of cell in your body younger is actually going to benefit you. And that might sound kind of obvious, like, sure, I definitely want younger cells. But if you then step back and realize your body's hundreds of complex cell types, they're all interacting. Well, maybe one really solid link in an otherwise pretty busted, rusted chain isn't actually all that useful.

2:40:12So we try and find examples where if we're able to demonstrate that restoring function in just that one cell type helps individuals, especially helps humans, then we can get conviction around starting a program. And then everything in terms of the knock-on systems benefit, maybe if you had a healthier liver or a healthy kidney, we'll see benefits elsewhere in your physiology that maybe we haven't even directly measured yet. We just treat as upside potential for the long term. Yeah. I have a little lightning round. I want your reaction to three kind of biotech projects or technologies. And I want to know if they're at all relevant to the work that you're doing, if you're learning anything from them, or just the overall impact on health and just general biotech community.

2:40:55Ozempic, CRISPR, and AlphaFold. So I'd love to start, I guess, with Ozempic. It feels like, you know, it's not necessarily life extension, but in terms of health span, could be very good. But how have you been processing the story of GLP-1s? And are there any learnings from GLP-1s that you've been able to kind of port back or update your philosophy or strategy at New Limit? Absolutely. I think you're entirely right in saying these are some of the first health span medicines. I'd argue we actually have a couple already. This isn't like a totally crazy idea. There's another type of medicine called statins.

2:41:28They're a bit older. One brand name one's called Lipitor. You've probably heard of. And between statins and GLP-1s now, I think it's quite plausible if you do some napkin math, we're adding several healthy years to the median American's life, which very few other medicines can claim. You know, if you look at the rest of therapeutics development over the past decade and add up, how many years could you, I, Jordi, maybe expect from these benefits? It's actually quite small. So I think one of the things we've internalized is that, you know, the scale of the opportunity really does matter. The difference between the GLP-1s and many other drugs is that the axis of biology they're targeting actually is dysfunctional in a huge swath of the population, at least 30 % of Americans, probably more, depending on exactly how you define that.

2:42:09And when you strike those really high-value opportunities, I think exactly as you alluded to, you start to see knock-on benefits maybe you didn't even plan for initially. You know, GLP-1s are now showing benefits in cardiovascular diseases. There's early data in neuro that I don't think anyone quite understands. ends, but does seem to be reasonably consistent. And so trying to keep your mind open to this. That's the gambling stuff specifically? Like the addiction and gambling stuff you're referring to? No, no. So there's actually even neurodegeneration. So there's some early trials that like folks on GLP-1s are having lower, sort of slower disease progression for Alzheimer's and Parkinson's.

2:42:44Oh, wow. That's huge. And as of my understanding right now, it's like basically no one knows how that works, but you're starting to see results like that pop up just because these drugs are out into such a broad swath of the population, we're kind of running these experiments without even necessarily intending to. And so I think really, we've just tried to internalize the scope of the opportunity really matters. And then also the strategy they took to get the GLP-1s into the market is one we're trying to emulate. They didn't start by trying to dose the GLP-1s into a huge population. You start with a small patient pool that you know will benefit a huge amount.

2:43:12So in the case of GLP-1s, certain type of diabetics. Eventually, you expand to the obese. Eventually, you expand to other indications from there. As we're really trying to mirror that stepwise with our programs, where maybe as an example, we're starting an alcohol-related liver disease for our metabolism drug, but that's the beginning. We don't intend it as the destination. And we've tried to plan this in such a way that with steadily increasing quantums of capital, you can unlock larger and larger opportunities rather than just trying to shoot for the home run right off the bat. Yeah. Do you want to stay on Zempik before we move on to CRISPR and AlphaFold?

2:43:42Oh, yeah. I want to get your take on CRISPR. Obviously, it was extremely hot technology about a decade ago. Is that at all relevant to what you're doing or have you learned anything from the story of CRISPR and how that was ultimately commercialized and baked into the rest of the biotech community? Yeah, absolutely. Maybe two things. I think the impact of CRISPR is somehow both over and under hyped in different places. It's maybe over hyped a bit in terms of direct application to therapeutics. I think if you go out and look at sort of how the panoply of different CRISPR companies are doing, there are a few really stellar examples like Beam Therapeutics that we really admire who have managed to make compelling medicines and others have struggled.

2:44:21And so maybe there's a bit of hype there, but it's really undervalued on the research side. So we've used a lot of CRISPR tools on the discovery end to be able to ask questions at the level of very basic discovery experiments. What happens when I turn this gene on or off? And maybe we're not going to take those CRISPR tools and try to actually put them in a person as the medicine itself, but they certainly help us accelerate the discovery of other therapies. And so I think maybe the lesson to draw out of that is when we have breakthrough technologies, often people rush to what is the most direct application therapeutically, but undervalue sort of the knock-on benefits of that technology underlying and accelerating a lot of trends that are already at play.

2:44:56And then similarly, AlphaFold, massive breakthrough in terms of AI and bio, didn't really move the biotech markets when the news broke. And my interpretation of that was that maybe protein folding as a cost center for biotech development was actually not that much of a cost driver in the sense that it's mostly just farmed out to grad students maybe. But I'm sure there's things where you look at that and you think this is on the path to really, really powerful AI and bio working together. But are you using AlphaFold or anything like it? Or are you learning anything from it? And overall, do I have a right understanding about the impact of AlphaFold on biotechnology broadly?

2:45:42Yeah, yeah. I think you've hit the nail on the head with the direct impact. I think solving protein folding itself, like actually taking a sequence, predicting a structure, hasn't been rate limiting for drug discovery in the traditional sense. It is painful to get structures, but usually we work on few enough molecules that getting the structure is not really what slows you down for most traditional therapeutics. That said, I do think it demonstrates we're able to learn much more powerful representations of biology than others thought possible. And so maybe by analogy to CRISPR, the direct application is predicting structures itself really going to solve therapeutic development?

2:46:15No, probably not. Is learning the language of life in a way that we can actually work with tractably going to accelerate everyone in the ecosystem? Absolutely, yes. And so to your question of, are we using something similar? We definitely do. So one of the tools that we've built, the models we've built, they try and take in some notion of the genes we're manipulating, transcription factors, and you need to learn an embedding, just like an embedding in natural language processing we're all familiar with that you can get from LLMs, and then predict what will happen to a cell's age as a result. And it turns out some of the best embeddings we've found are from these protein language models that really are often deriving from that basic premise of the alpha fold-like tools.

2:46:51And so I don't think if you see the alpha fold announcement, you'd ever intuit, oh, solving protein folding is going to make it easier to find reprogramming drugs that make old liver cells act young. But it turns out that that underlying substrata of learning these representations actually does accelerate a whole bunch of science you don't expect. And so I think often the headline is a little overhyped, but the subtext is underhyped and probably more important. That's an awesome framework. How much does the biotech industry broadly pay attention to biohacking and citizen science? I know you can't read too much into what one X account is experimenting with on any given day, whether it be Cialis or sleeping nine hours a day.

2:47:38But the other one that was interesting recently was a guy, I think it was last Friday, he let like hundreds of snakes bite him over time. And so I feel like there is alpha in citizen science, but there's also 99.9 % noise. Yeah, and it's also not, they're not running scaled studies. With a spoonful of cobra venom. That guy's a legend. I wish I had the opportunity to shake his hand because he's definitely underappreciated. So writ large, I think the pharma and biotech ecosystem are actually fairly receptive to using the results of citizen science because it's so hard to get data in humans that even if the data you're collecting in a human is confounded in some way, yes, this person didn't do a perfect controlled trial, et cetera, it can still be better than having no data at all.

2:48:27So I think the two qualifications on this and maybe the examples you gave are good ones. One is when you've got a very small trial, like a single person, but you've got a huge effect size, like this guy who's immune to basically every snake bite. That is such crazy outlier biology that I think that wakes people up to, okay, there's something to learn here. And the other is when you actually have this replicated, maybe unintentionally. So a good example I think you alluded to earlier is the Glyp1s and alcohol use, where this wasn't something that the companies were exploring, Eli Lilly or Novo.

2:48:56It's something that started getting reported anecdotally from patients. Hey, I just don't want to drink anymore. And so the amount of drinking I've done has gone down a lot. And so that was, in a way, a type of citizen science, people recording, reporting on their own behavior. And now those are actually going through clinical trials in a more formal process. And so in the industry, people call this reverse translation. It often has a lot of fancy words dressed up on it. But the basic idea being that the place we can learn the most biology in humans is in humans. And we should try and treat every piece of data we have preciously.

2:49:26i think most people would appreciate um there's probably not as much active work trying to collect this sort of citizen science data as there could be but i think there are a few strong examples where it's really changed drug discovery no this is fantastic this is fantastic i really enjoyed the conversation uh i i do want to let you kind of give an overview of the company like i imagine you're hiring what type of roles are you hiring for what's uh next on the agenda for new limit yeah absolutely so over the next few years part of the use of proceeds here is actually to take these prototype medicines we have today and move those into the clinic, actually take them to patients for the first time.

2:49:59And so we're hiring across the board really for drug developers and therapeutic area leaders to help run some of our therapeutic programs for scientists who are skilled in functional genomics. And on the computational side, we have a growing ML team. And for those sorts of individuals who might be excited about AI and bio, the carrot we can offer is we have some very differentiated data. We have the largest data set of this kind by hundreds of fold you really need to get to this scale before you can train meaningful models and we think new limits one of the few places you can go and and expend your valuable talents where the predictions of your models are actually going to get tested in a real laboratory fairly soon so you've got real contact with the universe you're not too far from the metal um so we'd love to be in touch with anyone who's interested in any of those verticals amazing uh well thank you so much for taking the time uh thank you fantastic for doing this work thank you for saving my life in the future because I'm putting the cart before the horse on this one.

2:50:51We're making, you know, our sons are about, you know, under five and we're making succession plans with them in about 30 years. They'll be taking over the microphones. But if we could get another, you know, 30 years at a new limit, that would be ideal. The world needs parallelized technology brothers podcast. It's required. So we'll try and do our best to make that happen. Thanks. Great talking, Jacob. Congrats to you and the team. We'll talk to you later. Thank you so much. Bye. Let's run through some posts. Get out of here. Thank you to Brian Via, who went ahead and started a list for following everyone that has ever been on TBPN.

2:51:28I thought this was really cool. Working through the TBPN feed slowly to add all the guests they've ever had. He said, give me a few days so you can go follow this list. We'll quote post it. But we were thinking about doing this, and he's just doing it for us. So thank you. Citizen journalism there. Citizen podcasting. Citizen journalism. journalism journalism we think of ourselves as corporate podcasters but uh corporate media but it takes a village thank you brian very cool i'm gonna go follow the list uh also eric dungan says i swear tbpn has me wearing a nice watch and buying dupont registry at the airport if i start wearing a suit then they won oh it's great cracking open the and he's got the wedding ring on you know he's a family man you love to see it there we go i can't clock what watch that is but it looks fantastic eric's a day one fan i see uh great having you as a technology brother And it's nice to have a watch on.

2:52:17It looks great. And DuPont Registry, I'm a big fan. I follow them on X pretty much every day. I'm always tagging my friends in it. This is a good option for you. Anyway, we saw Greg Brockman at the Met Gala, which we talked about. This was a fun one. Brex had just launched a podcast with the CEO of Deal. And I feel like they must have recorded this before all the drama. And then they just decided to release it once things had kind of cooled down. But anyway, I invited Alex from Deal on the show. He got back to me and said he can't come on right now. Obviously, things are a little chaotic, but we would love to have him.

2:52:53There's a bunch of interesting questions. I want to know about the business. I also want to know about the drama. And it's a live show, so we won't edit you, Alex, if you come on the show. We can't. You can deliver whatever message you want. Always interested. And who knows? It would be a great comeback story. Certainly a dramatic way to launch a podcast. It is a crazy episode one. Yeah. Like, of all the people. Like, this is who people want to hear about. I wouldn't be surprised if this is a really, really popular episode. Although it seems like it's more focused on the run rate, the scale, the employees, the business.

2:53:25But I hadn't really heard much from Alex before all the drama. But interested to hear about him now, you know? Yeah. Anyway, Shweta says, never underestimate the power of one good tweet. Rourke's founders were$15 ,000 in credit card debt. Been there. and sleeping on a friend's mattress when Matt's post went viral. 15 minutes later, Austin Allred wired 100K. By the end of the day, they closed 350K, leading to a$2.8 million seed round led by A16Z. Conviction is crazy. And Matt says, my jaw dropped. Rourke lets you create entire iOS apps just by describing them. Zero code required. This changes everything for app development.

2:54:01Rourke blows Bolt out of the water. And yes, I invested immediately after trying it. Watch this. It's crazy. What a great viral market entry. I mean, this really does seem like just part of the standard playbook of launching a seed stage company at this point is like figure out a way to go viral and just fill up that first, you know, batch of customers to test on. Yeah. Might not be a sustainable growth mechanism. It's almost getting to the point where if people, people will judge you as a founder CEO, if you can't nail a sales call, right? It's extremely bearish. Totally. Even if you're not, every founder should figure out how to sell the product, right?

2:54:41Because you have to sell employees, partners, investors, you know, the list goes on. Being able to manufacture virality and just figuring out how to go viral is getting to the point where it's going to be required in the same way that just being able to nail a sales call is, right? Yep. so 100 % well speaking of that watch we saw earlier if you're looking for a new watch you want to join the ranks of our listeners with fantastic watches head over to getbezel.com your bezel concierge is available to now to source any watch on the planet seriously any watch head over there Kion at Nucleus Genomics friend of the show is over at the Ramp office another friend of the show doing a little collab all Ramp employees can use their wellness benefit to get the world's most advanced DNA health test He'll be at Ramp's office for lunchtime.

2:55:34I love how he's just setting up a little stance. He's just selling to Ramp employees. I love it. A pretty nicely designed little partnership. Little graphic there. I thought that was cool. So congrats to him on that. Michael Dempsey says, okay, maybe the best venture swag of all time from Hootie R. And it has a badge here that says, what? Hasho Capital Fund LP. What do you think of this? You're the merch guy. You have put together some fantastic merch drops. I like it. I think it's pretty cool. I like the pockets. I think it's a different look. You get a lot of t-shirts. And t-shirts are great, but they do get played out.

2:56:07This is interesting fabric. Very nice. Something a little different. Looks like it's got some weight to it. Didn't Bain Capital get in trouble for doing the Carhartt? And it was a little bit too LARP-y, Stolen Ballard. This feels like it evokes the workmen. You could do some work in this, but it's not trying to be perfectly aligned with another cohort of individuals. And so it's just kind of its own thing. I thought it was cool. So congrats to those. And we'll close with this post from Paula over at XAI. Recently joined X. Yeah. Dramatic move. Congratulations, Paula Rambles. So who's building the app at the intersection of AI and astrology?

2:56:42I actually told Sean over at My First Million when I went on over a year ago that this was a prime area for LLMs because there's something called the Barnum Effect. Yes. PT Barnum. So the Barnum Effect is essentially there are a set of phrases that you can say to someone that sound hyper-specific, but in fact apply to everyone. So an example would be like, you have a complicated relationship with your family. sounds like i know you but really everyone kind of has a complicated relationship with their family in one way or another. Yeah. Or you think you're meant for more. Sounds really specific, but really everyone thinks that they could do more.

2:57:23You know, everyone has these aspirations. What's your astrological sign, John? Metaurus. Bull. Okay, I'm asking you, O3. My business partner is a Taurus. How should I communicate with him today? But yes, I think that astrology and AI go hand in hand in the sense that you can download this app. And with only knowing a little bit, you can start producing really tailored responses that feel very specific to the individual. Create this. And even if you're just regurgitating generic life coaching advice, everyone needs to hear, you got this. You can do it. Your astrological sign says that it's a fortune cookie.

2:58:12Yeah, I mean, the thing here is I think there's an opportunity to build a thin, a relatively thin wrapper on top of whatever your preferred model is. I believe that many people will just use their preferred LLM for a lot of this stuff. Yeah, totally. Like I just asked 03. You might not need to go get a separate app, but at the same time, if you're, if you design the app with the right aesthetics, right functionality, you do the right customer acquisition on Facebook, and then you get in the app purchase, a subscription, like it could be its own thing. I think a lot of the astrology apps that have raised venture have actually done very well.

2:58:54So here's my dues for communication with John today. What to do? Open with appreciation. Hey, John, you know, I think you did a really great job on the podcast today. Everything from the prep to your zingers to your interview questions were fantastic but we got to talk after the show because uh present no no no present concrete tangible data you know john the number of times you said hit the soundboard you know it meant a lot to me so thank you for that you're welcome jordy frame ideas as we projects you know john the prep you did for the show today i think we did a great job common and again i think this is like the the challenge here is this is like probably very general advice uh but it can all work out if you're into who knows if you're into astrology go check it out go go let us know funny it says here no rush deadlines but you're actually very good with deadlines i love deadlines oh we have to go live in 30 minutes we don't have prep done done no problem done you're the kid who waits until the last 30 minutes Always do your homework same day in the hallway before you go into the class.

3:00:00Anyway, thank you to Ramp, Polymarket, Public, Numeral, AdQuick, 8Sleep, Wander, Bezel, Linear, Figma, and Vanta for supporting the team. The incredible partners of TBPN, more than sponsors. And we're going to be up in San Francisco with the Figma team tomorrow at Config. Config. Config. Config. Config. Config. Config. We're excited to be up in the bay tomorrow if you're an SF. If you're at Config, let us know. Seriously, hit us up. We'd love to have you on. Talk about design. Talk about Figma. Talk about Vibe coding. Vibe designing. We're going to do it all. Anyway. Thank you for watching. Fantastic show.

3:00:42We will see you tomorrow. Have a great rest of your day. Can't wait. Bye. See ya.