OpenAI’s $1T Buildout, Trump–xAI Alliance | Delian Asparouhov, Garrett Langley, Matan Grinberg, Francis Pedraza, David Paffenholz

28:26Yeah, I mean, I wonder if they have two shifts, 10 hours, does that mean they have two crews that are working 70-hour weeks? Are people taking days off, or are they rotating their shifts so that you get a day off every couple days? I think they would get into pretty hot water. I don't think you could run and say you're working seven days a week forever. I don't think employment law works like that. Gray towers of gas turbines have dotted the landscape since the spring, offering backup power. On a tour with reporters Tuesday, Oracle and OpenAI executives showcased the 1 ,100-acre site, calling it the largest AI supercomputing complex in the world.

29:00Outside, workers wearing dust masks and sunglasses shuttled around in buggies, trying to shield themselves from the 100-degree heat. One of the buggies flew a flag that said, Jesus is the answer. 1 ,100. Not very AGI-pilled. I thought we were getting God in a box. What's going on?

29:21Eliezer Yudkowsky shows up. He's like, no, no, no. They're building God here. You're building God. You're doing the thing. What are you doing here? There was literally nothing here a year ago, said Anuj who works on the OpenAI computing team. They also announced five new data center sites across the U.S. built with Oracle and Japanese tech conglomerate SoftBank. It said the new facilities would help bring online nearly seven gigawatts of power, enough for almost eight million homes, enough for a lot of API calls from Devin, from Cognition, the makers of Devin, the AI software engineer, You'll crush your backlog with your personal AI engineering team.

30:03Company executives made it clear that the Abilene site was just the beginning, noting they envisioned a need for more than 20 gigawatts of computing capacity to meet the explosive demand for ChatGPT, which now has more than 700 million weekly users. I was laughing about, you know how in the ChatGPT, if you fire off Pro, like GPT-5 Pro, it kind of thinks for like 20 minutes. and everyone's saying like, oh yeah, this is good. Like we want the agents to be reasoning for longer and longer. I feel like there's an opportunity for some startup just to be like, we've cracked the code, our model reasons for two days straight.

30:39So send us your request and we'll get back to you in two days. And the agent just like is pretending. So it's just like twiddling at some. Yeah, it just has a progress bar. Twiddling at some until the last 20 minutes and then just starts going. No, no, no. Of course what you do is you have the loading bar there and then secretly you have a human doing the work and you have a human just like dealing with this well i think the thing is like the longer the longer the the the period the higher the expectations and i just don't know that i don't i i think that uh i i guess the thing i would want to know is like if you're running a deep research query for 20 minutes and then if you decide to run it for two days, how much better is it?

31:20Right? Yeah. If it's, if it's 10 times better, could potentially be worth it for different types of tasks. If it's 30 % better, is it worth the wait? Yeah. There is a world where you just route it to the human. There's also the world where for, for the, for the really low. Don't encourage this. People have already gotten into trouble. Yeah, they have. They have. The other funny idea is like for a lot of the, there have to be a certain set of queries that just get asked the same like every single day. And they should just store those in a database and cache them. Because if like you have to imagine that every single day someone is asking like, just going to ChatGPT and lighting the GPUs on fire to just ask like, what's the capital of Illinois?

32:08You know, or what's the capital of California? Can you run a GPT pro deep research report for what is the capital? You can do it for anything. Yeah, you can go to deep research and fire off 20 minutes of compute and say, what is the capital of California? Answer in just one word. And it will just think for 20 minutes and then spit out Sacramento. It won't think that long. It thinks based off how hard it is. No, deep research will continue. I just said, what is the capital of California answer in one word? And it's deep research. Yeah, it's doing a deep research query. Let's see how long this takes.

32:47It's not going to come back in two minutes. It's going to cook for 10 minutes. All right. I was a little bit late, but I just started a timer. OK. So what do you think? Also, there's like a sense where like the like embeddings of facts is basically just the model already. Like you can just think of a model as like a compressed version of the Internet. Yeah. At least like non-reasoning models. Yeah. So it's kind of like. But wouldn't it be even more compute efficient to just do fuzzy lookup of these questions and see if they sound. Siobhan in the chat says cache-based retrievals are. Oh, yeah. But apparently not here because GPT-5 Pro.

33:22Is that fully implemented? Okay, okay. It reasoned for 47 seconds. Okay. And it nailed it. This is Pro. You didn't do deep research, though. I want to see you turn on deep research and do it. well this is the pro which is research grade intelligence no no no that's not the deep thinking no no no you need to click on the little plus button next to the chat box and then check the box on on uh on deep research do they still have this i don't know they might have they might deprecated this i think it's still there it's still there still there okay i'm doing a deep no no this is good this is really verified just to confirm are you asking for the current capital of California or are you interested in historical capitals as well?

34:04Let's see, current capital. Tell it to also design a website in Figma. Think bigger, build faster. Figma helps design and development teams build great products together. Get started for free. While we're waiting for that, let's keep reading from the journal. Each gigawatt of capacity is expected to cost roughly$50 billion, Tyler. $50 billion per gigawatt. That's the number in the journal, meaning the company is laying the groundwork for at least$1 trillion in infrastructure spending. Demand is likely to reach closer to 100 gigawatts, one company executive said, which would be$5 trillion. Which is roughly the GDP of Germany.

34:44Or Japan. Yeah, GDP of Japan is$4 trillion. Germany is$4.6 trillion. Good luck. Good luck, Germany and Japan. You're getting left behind. You're part of the permanent underclass now. It's over for you. I feel bad for lighting the GPUs on fire for this. It says, got it. I'll confirm the current capital of California for you and get back shortly. And it's doing the full report. It's cooking. This is the real pitch for the - I'm getting my money's worth. Brandon Jacoby in the chest is breaking. Jordy discovers the UX issues of every foundation model company. Fix it, Brandon. Yeah. Aren't you doing consulting now, Brandon?

35:23You got to get in the trenches. Yeah. All these folks. If the labs haven't hit you up yet. If someone who spends 10 hours a day studying this stuff. It's reading Wikipedia. Just like, how many drops of water did this use? How many fish had to go find some other home? It should come back and it's like, thought for 15 minutes, made two species extinct. Lit seven gallons of diesel on fire. okay it's checking all the sources it's good i like a detailed report i like to know that the ai did its job don't just sit there clanker and riff off cash base retrieval i want the deep research every single time even for one word fact even for one word fact i want you to be sure i don't want any hallucinations well i mean this is a this is a tough question to a lot of people that aren't from the west coast or the united states would say yeah what's the capital of California yeah San Francisco I was using this as an example about I remember being I must have been like seven years old asking like figuring out that Sacramento was the capital of California and I thought that was the funniest thing ever yeah it is it is hilarious all right it got it it thought for 101 seconds that's not that long for deep research it went for four sources it did 19 searches so this this is why this is why I can't trust you know everybody keeps screenshotting these Google trend reports.

36:52Yeah. I'm not sure that Google has figured out how to exclude agents because this just did 19 searches for a single fact. Yeah. And so if you're looking at the growth of queries on Google, you would think, and if a lot of people are asking this kind of question, every single keyword is going to be spiking. Well, if you want to get your brand mentioned, In ChatGPT, you've got to go to Profound. That's right. Reach millions of consumers who are using AI to discover new products and brands. You can get a demo. I don't think we've figured out the final form of what financing for compute looks like, said Sam Altman.

37:35But I assume, like in many other technological revolutions, figuring out the right answer to that will unlock a huge amount of value delivered to society. And delivered to open AI shareholders. For sure. Yeah, it is an interesting question because, you know, Dario was talking about how, like, each training run looks great by itself, but when you put them all in one structure, it looks like you just have this never-ending money pit because you spent$100 million on a training run, you made$1 billion over the next two years, you spent$1 billion on a training run, you made$10 billion over the next two years, you spent$100 billion on a training run, you make$1 trillion over the next two years, and there's a question, okay, how long until it just completely maxes out?

38:17Are there diminishing returns to these things? But even if the trends hold, you still wind up with this ever-growing money pit that should act as some sort of slowing down force. I think when you dig into this quote, I don't think we figured out the final form of what financing for compute looks like. The question is, will this actually be a novel financial instrument or it will be remixing something that Wall Street has used in mortgages? Maybe it's debt. Maybe it's debt. Who knows? GPU-backed securities. The Tuesday announcement made it clear that SoftBank, once seen as a formidable OpenAI funding partner, has scaled back its ambitions in the data center build-out, which the Wall Street Journal reported in July.

38:59Three new sites, one located near Abilene, another north of El Paso in New Mexico, and a yet-to-be-announced Midwest location combined with an expansion to the Abilene complex, will be capable of delivering 5.5 gigawatts of capacity. Those will be built by Oracle. The other two smaller sites, one in Lordstown, Ohio, and the other near Austin, Texas, will be built in partnership with SoftBank and generate 1.5 gigawatts over the next 18 months. The first completed data center, called Building One, painted a pristine white that contrasts with the reddish dirt surrounding the site. It is larger than two Walmart super centers.

39:33It doesn't feel that big to me, but certainly huge. Entering. Yeah, they said 1 ,100 acres earlier in the article. that's under two square miles. It is crazy how compressed this is. It's obviously huge when you're walking around, but we're not in, okay, we're losing Yosemite over this. Yeah, we're not in the 100 ,000-acre range. I mean, Elias Setskiver told the San Francisco Chronicle that he could imagine a future where the entire Earth is covered with solar panels if the trends continue. Gabe in the chat says, Shout out to Lordstown, Ohio. You factory used to build Chevys. This is your thesis or take.

40:18Re-industrialization is happening. It's a lot less jobs. And it's data centers. But the white pill there might be that if we can build big data centers really quickly at the scale that traditional infrastructure projects would have taken 10 plus years. If we can do that in a few years, it could create a precedent where somebody could decide, you know what, I'm going to build this new rail line in two years. Is Walmart Supercenter really one mile long? QSBS rollover saying that the building's two miles long. Well, no, I was saying the site is 1 ,100 acres total. Yeah, yeah. It's not a, which is like 1.7.

41:11It's huge. Square miles. So obviously massive, but I don't think the building itself is anywhere near that. Well, fiber lines snake across the data centers and underneath the ground, allowing the AI chips called GPUs, in case you were wondering. The Wall Street Journal's got you covered. To talk to one another and complete requests more quickly. Proponents of the infrastructure boom say it will bring hundreds of thousands of jobs and revive American manufacturing. In January, OpenAI unveiled a$500 billion data center project. Stargate, we know about this. The reality is more mixed. While data center providers provide plentiful temporary construction jobs, far fewer people are needed once they are built.

41:48Abilene Mayer said residents had mixed feelings about the site and its power and water usage, though some of the concerns have been assuaged. An Oracle executive said there will be roughly 1 ,700 permanent jobs on site once the construction happens. I think the thing that ends up being a little bit disappointing is these projects get announced and they're saying, we're going to spend$20 billion here and then we're going to create like 1 ,000 jobs or we're going to create 300 jobs. And that is very significant. That will be good for the local economies in these regions. But it's not, hey, we're replaced.

42:28We lost 87 ,000 manufacturing jobs last month, I think it was. We're not really making a dent in that. Yeah, it takes a lot. There's more news on the job displacement stuff from Andre Karpathy. He has a good post breaking things down. But first, let me tell you about graphite.dev. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. You can start for free. So Andre Karpathy. Chat is a cat debating, by the way. What is a cat debating? They said Jordy is a cat. I'm a Cadillac guy. Not true. John has a Cadillac guy. Somebody said, I seem like a Dodge guy.

43:02Hellcat SRT. I love it. Yeah, not quite. Never had a Dodge. He likes the German do it. I had a Ford Raptor, which I loved. Was not super practical. But it was a car that I wanted as a child, so I had to get it at least once. Yep. So Andre Carpathie says, AI isn't replacing radiologists. Tyler, do you remember this prediction? Yeah, was this Hinton? Hinton, yes. Years ago, this was what, 10 years ago now or something? Yeah, because this was based off just like image classification. So this was like early on, like CNNs. This was probably mid-2010s, I assume. So the expectation was that rapid progress in image recognition AI would delete radiology jobs, as famously predicted by Jeff Hinton, now almost a decade ago.

43:55In reality, radiology is doing great and is growing. So what's going on here? Obviously, image recognition is fantastic. These algorithms are remarkable. And there's been a ton of progress. So Andre Carpathie says there are a lot of, in his opinion, naive predictions out there on the imminent impact of AI on the job market. For example, a year ago, Andre was asked by someone who should know better if he thinks that there will be any software engineers still today. like a year from now, like this is how accelerationist this person was. And Andre says, spoiler, I think we're gonna make it. This is happening too broadly.

44:35This post goes into detail on why it's not that simple using the example of radiology. And I thought this was really, really interesting. And it obviously applies outside of radiology. So first off, the benchmarks are nowhere near broad enough to reflect real, actual scenarios. So even though you can classify cancer in a radiology environment with a whole bunch of training data very reliably, there's still tons of edge cases where having a human in the loop is advantageous. And then just in general, the job is a lot more multifaceted than image recognition. Like if you just think about the job of a radiologist, it's not purely just look at image, detect cancer, look at image, detect cancer, look at image, detect cancer.

45:21Can you imagine if you were getting, God forbid, somebody's going and seeing a traditional office of a radiologist and they're just watching a television screen that's reporting, telling them that something is wrong with them, using a voice model to explain it. And then it just is like. No, they're just in hinge mode. Swipe right if it's cancer. Swipe left if it's not. And they're just sitting there swiping all day. Obviously, that's not the job of a radiologist. like you you know so much more we're doing research on what's changing integrating new information talking to cus talking to different uh patients about all the different signals what they could be doing what they could be putting in their body how are they feeling uh what medicines they're taking there's a ton of different stuff that they're probably involved in yeah anytime anyone gets a any type of lab or report from a doctor the first thing you want to do is talk to somebody that's an expert on that your doctor yep and have them explain it to you the implications et cetera, good or bad.

46:21And then he highlights deployment realities. So regulatory insurance, liability, diffusion, and institutional inertia. Like it just takes time to roll these technologies out. But the last one is super interesting to me. He cites Jeven's paradox. So if radiologists are sped up via AI as a tool, a lot more demand shows up. And so if all of a sudden, the cost to get a scan or the time that it takes to actually do the scan drops. Everyone will say, well, I want to be scanned all the time. I want to be on top of any sort of development medical that could be detected by a radiologist. And so he concludes by saying, I will say that radiology was, in my opinion, not among the best examples to pick on in 2016.

47:09It's too multifaceted, too high risk, and too regulated. When looking for jobs that will change a lot due to AI on shorter timescales, I'd look in other places. Jobs that look like repetition of one rote task, each task being relatively independent, closed, not requiring too much context, short in time, forgiving, the cost of a mistake is low, and of course, automatable given current and digital capability. Even then, I'd expect to see AI adopted as a tool first where jobs change and refactor more monitoring and supervising than manual doing, et cetera. Maybe coming up, we'll find a better and broader set of examples of how all of this is playing out across the industry.

47:53About six months ago, I was also asked to vote if we will have less or more software engineers in five years. Exercise left for the reader. What do you think he meant, Tyler? What do you think? More. Of course. He thinks the number of software engineers will increase, but they will be using AI as a tool to leverage. Yeah, I wonder if anybody's done a study on how many more developer people that have done software development this year versus last year. It has to be significantly more just because, you know, if you're using Replit now, right, you are a software engineer. Right. It's it's the somebody might want to get technical and say, oh, well, if you're just prompting, you're not really software engineering.

48:43But how different is that from somebody getting their start and like copying, pasting lines of code? wow uh we we got some news about tiktok that uh china has like more or less signed off on the deal and it has sent larry ellison slash oracle skyrocketing on polymarket to an 89 chance of acquiring tiktok uh this will be an interesting story to see where it actually lands um of course you can go to polymarket if you want to keep monitoring the situation as always can we talk about this new Elon lawsuit? Yes, new Elon lawsuit. Elon Musk is, Andrew Curran is on the timeline sharing, Elon Musk is suing OpenAI again, second suit, this time for alleged misappropriation of trade secrets, intentional interference with prospective economic relations, and unfair competition.

49:42So they say the desire to win the artificial intelligence race has driven OpenAI to cross the line of fair play. OpenAI violated California federal law by inducing former XAI employees, including Xu Chen Li and Jimmy Freiter and a senior finance executive to steal and share XAI's trade secrets. This is a crazy copy. And again, this is from the complaint, right? The lawyers are not using ChatGPT. It doesn't seem like it. This is handmade. By hook or by crook, OpenAI clearly will do anything when threatened by a better innovator, including plundering and misappropriating the technical advancements, source code, and business plans of XAI.

50:26What began with OpenAI's suspicious hiring of Xu Chen Li, an early XAI engineer who admitted to stealing the company's entire code base, that's a bold thing to admit, has now revealed a broader and deeply troubling pattern of trade secret misappropriation, unfair competition, and intentional interference with economic relationships by OpenAI. OpenAI's conduct in response to being out-innovated by XAI, whose Grok model overtook OpenAI's chat GPT models and performance metrics, reflects not an isolated lapse, but a strategic campaign to undermine XAI and gain unlawful advantage in the race to build the best artificial intelligence models.

51:04What do you think, John? This is why lawyers with English degrees are MVPs, according to Gabe. Yeah. Yep. Wordsmiths, word sells. It seems like we are in the territory of economic warfare, lawfare, who knows what actually comes up. Elon's blending the Chinese way, the way of the engineer with the American way. Yes, the lawyerly society is coming out in this case. Yeah, I mean, easy, you know, obviously innocent until proven guilty with Shuchun Lee don't know if this is true or not, that he admitted to stealing the company's entire code base would be crazy and a totally unforced error if he actually did something like that.

51:50Well, no matter what, you want to stay compliant. You want to get on Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work of the security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. I wanted to revisit this internal tech email because this is an important cornerstone of Elon's battle with OpenAI. So on September 20th of 2017, Elon Musk sent an email to the OpenAI team. The subject was honest thoughts. And he said, guys, I've had enough.

52:28This is the final straw. either go do something on your own or continue with open ai as a non-profit i will no longer fund open ai until you have made a firm commitment to stay or i'm just being a fool who is essentially providing free funding for you to create a startup discussions are over interesting and it's gone back and forth because here he's he's sort of predicting so in hindsight he somewhat probably feels like a fool for essentially providing free funding for the greatest startup. And it's been odd because the ask has never, I mean, at least that I've been aware of, Elon's never just asked for pro rata equity based on how much he put into the nonprofit.

53:12I think that creates crazy tax and legal implications, but that feels like what the fair ask would be. Like you were throwing out, like if you put in a hundred million and you just assume that the round that would have been done at that time would have been a billion, you should get 10%, right? Here's 10 % of the common or the preferred or whatever. But remember, it seems like they hit a standstill with the for-profit conversion, right? Because of Elon's lawsuit too. Well, partially, but also people are, you know, the governing body, the nonprofit governing bodies of California were not super excited about the transition.

53:51Yeah. And so Matthew Berman was going back and forth with Elon because Elon took shots at Anthropic. He said winning was never in the set of possible outcomes for Anthropic. And Matthew Berman said, hey, Elon said the same thing about OpenAI. And Elon said, no, I never said that. I told everyone who asked in the beginning that I thought the probability of OpenAI beating Google was 1%, infinitely different from 0%. Good point. And then Elon says, after the defense of the ancients, the Dota 2 win, I raised the probability to 10 % that they would catch up. And Matthew Berman sort of responded and unpacked the screenshot saying, first, I'm a big fan of everything Elon has done to push society into the future.

54:34But I reread his emails with Sam Altman and Greg Brockman. And it really seems like he told them they had no chance of succeeding relative to Google on January 31st, 2018. So after that previous email we read, Elon told Sam Altman and Greg Brockman, OpenAI is on a path of certain failure relative to Google. There obviously needs to be an immediate and dramatic action, or everyone except for Google will be co-signed to irrelevance. And it's played out very differently. They played their hand very well. they got the consumer application that hit product market fit out faster than google only by a couple months like the gemini app dropped i think in february or march just a few months after chat gpt launched and the models have been mean bar neck and neck it wasn't i don't was it bard that dropped i forget which i thought bard was the response but i i feel like in the way i remember of the timeline is that the ChatGPT website comes out and everyone realizes that just talking to an RLHF LLM is a great experience and magical and interesting and passes the Turing test.

55:48And Google had a bunch of models, Palm and Bard, internally, but they'd never really pushed them out in a meaningful way. And it seemed like ChatGPT kicked Google into action and led Google to actually productize a lot of their research that had been more tested and shared internally. Tyler, do you have more context there? Yeah, so it was BARD that came out right after ChediButi, and Gemini was like the following. Yeah, so they still had to do a rebrand, which is tough, because then you have to reintroduce the product. Obviously, it's grown a ton, and we've seen that the empire strikes back. Not a lot of it happening in the United States necessarily, but certainly international.

56:26Sort of an iPhone-Android story happening all over again. anyway Magnus Carlsen tells Joe Rogan about how he treats chess as a hobby he never wants it to feel like work and prioritizes fun and enjoyment the thing is that chess has always been a bit of a hobby for me he's one of the best chess players in the world of course this is how Magnus Carlsen works once it starts to feel like work then it's harder for me turn your work into to fun and enjoyment. You'll never work a day in your life. You might get 14 ,000 likes on X, like Dylan. Yes, and Daniel, Growing Daniel says, having known him for a while, I think Elon Musk is probably one of the least self-disciplined people on earth.

57:10He just really enjoys problem solving. So he just bounces around from one project to the next. Mogging them. Mogging them, yes. Of course, Growing Daniels co-conspirator now runs. Julius.ai, what analysis do you want to run? Chat with your data and get expert level insights in seconds. Loved by over two million users and trusted by individuals at Princeton, BCG, and Zapier. Bayes Lord says, anyone who's naively calling bubble right now has not internalized the physics of our world. Most of them are simply ignorant about AI progress and its implications. Of course, there will be fluctuations, but of course we could stumble.

57:47but history marches on and he shares a chart of the world GDP over the last two millennia. And it's interesting because you can take this in a few different ways. You can kind of look at this and say, okay, nothing ever happens. It's just a kind of a smooth exponential curve. But I'm looking and I'm seeing a hiccup there in the mortgage-backed security crisis for sure where GDP shrunk globally or something happened. But it's helpful. Isn't that 2007, 2008, right? You know, you remember being, I was, you know, basically a kid at that time. And it felt like I could sense the doom and dread in the adults, right?

58:32Yeah. Around that time. I mean, from my perspective, I was completely caught off guard by the mortgage-backed security crisis. Like, it was because I wasn't following the markets. Because you didn't have capital to deploy. I wasn't monitoring the situation. Yeah. You didn't have capital to deploy. I lived in a house with a mortgage, so I was certainly affected. But if you could go back in time, you would have raised and deployed a fund into single family. But I wasn't seeing top signals. It was like I was introduced to the crisis. Were you in college? The crisis, I graduated in 2007. From college?

59:08From high school. Oh. No. From high school. And so when I arrived, I chose to study economics because I wanted to understand the crisis more. And so I was reading the Wall Street Journal trying to understand. And I was introduced to the collapse of Lehman Brothers, which I believe happened in 2008. Lehman. Lehman Brothers collapse. when did that happen the bankruptcy September of 2008 and so I graduated in 2007 and then so it must have been like sophomore year so things were like melting down my freshman year you're like collapse of Lehman is that good is that good did we not like Lehman I mean it was it was a very complicated crisis to dig into because it was all these layered financial instruments mortgage-backed securities and then collateralized debt obligations.

59:55So they would take one mortgage, they'd take a whole bunch of mortgages. This is the famous Margot Robbie in the bathtub scene where she explains that you get a whole bunch of mortgages, you bundle them up, you slice the different tranches of debt so that the best mortgages are in the AAA. But then as you keep re-slicing them, they kept getting re-rated as, oh, well, this is the best of the previous bad stuff so that's good and the best of the worst is the best and the rating agencies had a really bad time throughout the because eventually like the economy pulled back everyone got over levered people were buying multiple homes and there was a whole mood in 2005 2006 2007 that like average people like the the example would be you know when the when the uber driver is pitching you on Cardano, like it might be the top, that type of thing.

1:00:51Like when, when, when, you know, your barber is telling you about the latest NFT drop, like watch out. Uh, the, the, the analogy then was people were saying like, I'm making more money just owning my home and my home equity is going up by more than my salary. So like I bought a$500 ,000 home, I make a hundred thousand dollars a year, but my home, my, my banker just called me and said, your home's worth 600 ,000 now. And the home prices were going crazy. And so obviously there had to be a correction. And it crashed the entire global economy. And you can see it in the data today. But, of course, as we zoom out further, we will see less.

1:01:30The line keeps going up. The line keeps going up. Well, DTC is cyclical but ever-evolving. The back and forth. Locked in shares this chart or this meme. Dropship Bros convert to Supplement Bros, which switch to dropship bros, which convert to supplement bros, which go back to dropship bros and back to supplement bros. Supplements continue to be the economic engine of the manosphere. Weren't we talking to the CEO of Numeral, Sam, and he was saying he owns a supplement company? Yeah, he started a gummy supplement company back in the day. He's like, it's still doing well. That's crazy. Anyway, Numeral, sales tax on autopilot.

1:02:11Spend less than five minutes per month on sales tax compliance. If you're a dropship bro, if you're a supplement bro, you got to pay your taxes. You got to get on numeral. Great. Great. Dan McCormick's company is on numeral. Yeah. He's a supplement bro. Lucy is on numeral. Christina Cordova is quoting our interview with Christina's over at Linear, of course. But we asked Brett Taylor yesterday about the triple-triple-double-double debate and how maybe that's not good enough anymore. He said, the faster you grow is sometimes correlated with a lack of a moat. I'd rather bet on a durable, high-quality revenue business and happy customers than just raw growth.

1:02:55Christina says, fast ARR can be fragile ARR. Earned ARR tends to be sticky ARR. not all growth is created equally. I think Linear is, obviously, they're a partner. I'm somewhat biased, but of course, they've earned their... Just for those who don't know, Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects and product roadmaps, but continue. Use the tool, loved by OpenAI, Mercury, Retool, Ramp, Scale, anymore. more um but uh linear is a perfect example of like a great growth but steady and just systematically earning the trust of pretty much every important new company in silicon valley over the last however many years i think they're um yeah earned arr yeah it does feel like there's a 19 yeah there's like c arr reared its head recently it's kind of gone out of favor but uh contracted arr Basically, you have some sort of LOI or some sort of trial that you're counting into.

1:04:00Yeah, I mean, the people that are abusing the ARR the most right now. It's totally disrespectful to the gap metrics. Well, and I'll just say it's the companies doing data labeling and services for labs, right? Yeah, is that ARR? All the companies that exploded out of. I don't think that many of them are actually quoting ARR numbers, though. Are they? Are you kidding? I feel like a lot of them are just saying. Almost every single one of them is saying, yeah, we got to 100 million ARR. Oh, really? We did this or that. I thought it was just like, we did 100 million. Because if you just say, I did 100 million, then that's just true.

1:04:36No, and they're saying we're at 100 million ARR. Sure. And they're using it, I think, as like annualized run rate. But if you dig into the business, it's like they might have 40 % margins because they're actually having to hire labor. Well, the margin is separate from like ARR with bad margins, completely separate from ARR with bad churn. Like, because I would, I probably, if you're underwriting it at a high multiple, you probably want to pay for lower margin, lower churn than higher margin, higher churn. Because higher churn means that like, if the business stops growing, it's going to start shrinking.

1:05:13whereas if you have 40 % margins but super low churn, you're super sticky it's like okay, well then at least the business will continue to grow you're not building on a leaky bucket you're not getting all the juice out of the bucket you're only getting 40 % of the juice since we're mixing analogies now get the blender out these analogies but I mean obviously these two metrics are linked and you obviously want high margin and extremely sticky revenue But if you're a company like Linear and you see some, which has like true AR, earned ARR, and then you have companies out there saying, you know, throwing out these numbers around ARR, but they're reselling GPU credits or something like that.

1:06:00It's kind of, you know, stolen valor, right? Stolen valor, potentially. From the true enterprise, you know, contracted. Yeah, yeah. Where you could stop the growth strategies, stop the sales team, they could stay home, and you're still printing. That's the gold standard of enterprise software. That's why we love it. That's why we get up every morning. We've got to pull up this video. Let's pull up this video from Paula Rambles. There's this guy on TikTok who video calls ChatGPT, shows it objects, asks how much gram, then weighs it. Before we pull up this video, let me tell you about the generative video platform for developers.

1:06:42Fall, the world's best generative image, video, and audio models all in one place, develop and fine-tune models with serverless GPUs and on-demand clusters. You can get access to our soundboard by going to tbpn.com slash sounds, which is brought to you by our friends. So let's play the video of this guy on TikTok. This is my hand. How do you call this thing? Yeah, I see your hand there holding on to that pet. Okay, pet. How much gram is the pen? How much gram? Look, how much gram? Well, it's a little tricky to guess the exact weight. Yes, guess, guess. All right, I'll take a guess. For a pen that size, it's probably somewhere around maybe 500 to 700 grams, give or take.

1:07:24Let's see if GPT-5 is smarter. No, no good, no good. Hey, it's all good. 34. It's no good, it's no good, man. It's no good. No worries at all. It's just a bit of fun guessing away. I'm worried, I'm worried. Look, I have this oil here. How much gram? We're on a guessing roll. So for that little oil can, I'd say it might be somewhere around 300 to 500 grams, depending on how full it is, but let's see how close we get this time. You said 300 to 500? Man, I want accurate thing, you know what I meant? I get it. You're looking for something spot on. It's a bit of a challenge without a scale on my side, but hopefully that at least gives you a decent range.

1:08:08This is two gnaw-naw. Two gnaw-naw. How much gram? Oh, you've got a mocha pot there. Nice. Those little coffee crackers... How you call it? That's called a mocha pot. It's basically a stove top... Mocha pot? Mocha pot. How much gram mocha pot? So a mocha pot is usually pretty light. I'd say maybe around 400 to 600 grams, depending on the size. But of course, you'll know... I hope you're right. What's the number? I hope you're right. Bro, like GPT-5 is worse and worse than GPT-4. Definitely here to do my best, and I appreciate you rolling with it. Yeah, this is your punishment, man. Talk with him.

1:08:46Hey, Green Coco, any idea where the mayo's hiding? Maybe it's just chilling out behind you in the fridge somewhere. What's the deal with the ketchup and the mayo? Any condiment gossip we should know about? They just talk? No. That's hilarious. that is not a Rocco Basilisk respecter you should yeah that's very rude that guy's absolutely cooked did uh did anyone see exactly what the numbers were how close was he said three no I was saying like 30 I was seeing 35 on the that can't be 35 grams right it needs to be I have no idea I'm worse than GPT-5 for sure if you ask me how much that pan weighs I have no idea anyone have any idea i have no idea um who knows anyway hbo max says nice we still got a couple of months scroll down on this chart this chart is charting 1998 to 2001 like what this is just the nasdaq and it's just following perfectly like what are we doing here this is crazy how how the correlation here is like insane is this on the same like time scale too or is this this is just a wild wild chart that this is so similar um it lines up scarily accurately um but it's just so weird because like if it's this obvious you think it would be priced in you think people would pull back or do something but who knows we'll keep monitoring the situation um it will be interesting let me tell you about turbo puffer we puffin we serve every bite serverless vector and full text search from burst principles on object storage fast 10x cheaper and extremely scalable.

1:10:24Geordi loves his puffer fish. This puffer is used by linear notion. Breaking. WPP. Wait, one thing on this chart, to be clear. I think it's tracking very closely, obviously. You single out individual points on the chart, and it's a little bit ominous. But at the same time, Amazon went public in 1998. date right so like you can do a lot to kind of like if if you're the the the chartsmith here to kind of like pick the dates to try to align it properly right so yeah um i would i bet you could align this to just other bubbles throughout history and find similar patterns right that doesn't really help though i mean that i'm just saying like this doesn't just a couple months Yeah, I mean, I'm just saying like.

1:11:18No, no, it does feel like it's somewhat selective. Like if you started this chart in 1990, you said, okay, the dot-com bubble began when Amazon went public. Yeah. Right? Then this doesn't line up at all, right? Sure, sure, sure. Yeah, you're kind of just selecting. I mean, yeah, I don't know. They're like overlaying it deliberately as close as possible. But this does feel like the crazy part is that the previous earlier sell offs, the dip in 2023 to now is like that peak and valley seems to match as well. And then even like you can see earlier in 2025, we got the tariff sell off and that kind of tracks what happened in 2000, in like the year 2000 exactly, or maybe 99.

1:12:06Lots of people. Yeah, but then again, was there, like, I don't know. I don't know. Well, don't worry. Something you should read. Even if we wind up in the trough of disillusionment, we'll be slopping it up in the trough of disillusionment, grinding to the plateau of productivity one time. We'll probably end up in a position where, like, we're only going to eat fast, casual slop bowls until we get through. When you're in the trough, you eat the slop. Until we get out of the bear market. You eat the slop bowl. Somebody had a great. I got to pull up this comment on Spotify. Someone's asking how much the gong weighs.

1:12:44Gong, how much gram? How much gram? And Aqua says, mania is a crazy gram. So Mika Flouse on Spotify says, wearing the white suits on an off day to rally the bull. Ultimate top signal might just be poking the bear. Well, I'm in a gray suit today. I'm feeling neutral about the market. Could go up, could go down. Who knows? But we'll be monitoring it here. In other news, breaking from us, TBPN, WPP Media has signed Michael Miraflor as global EVP. So congratulations to Michael Miraflor. He has been a fantastic champion. Massive pickup. Hopefully wore his TBPN hat to work today. Hopefully he's not in the chat right now.

1:13:32First day at work, gets a corner office, puts TBPN on the screen. Why not? Fired up. Leave it on in the background. Puts some subtitles on. But big pickup. Yes. And excited to see what he cooks on. Always enjoyed his commentary and excited to see more of it. Paul Enright says, in 2021, Mitchell Green from Lead Edge Capital. Of course, Mitchell's a friend of the show. We've got to have him back on again. I texted him this morning. We'll get him on soon. He said to Paul, this year will be remembered for the GPs that sold stock and distributed capital to LPs versus the ones that raised funds, called capital, and made new investments.

1:14:10It was a wonderful observation I will never forget. Now it feels similar in some ways. Why not both? Why not distribute capital, sell some positions, and raise some new funds? Yeah. I don't know the dynamics of that, but that does feel like the ultimate wizard move is to raise a massive fund at the top. Don't deploy it. Sell a bunch of positions. Get out of the other stuff. Basically just be sitting on a massive cash pile when you reach the trough of disillusionment and then monetize the plateau of productivity. Deploy into the trough. Into the trough. Well, you saw this chart yesterday. Somehow, like one of Andreessen's slides from a fundraising debt.

1:14:51Newcomer, baby. League Master. Oh, yeah. He got two decks. So A16Z returned$15 billion or generated$15 billion in returns, including their recycled fees and carry in 2021. Yep. That was, you know, biggest year on record by quite a lot. Huge return. That's got to be a lot of Coinbase. And who else got out there? I think it was like Solana, Avalanche, right? some of these big... There were a lot of stuff. But Coinbase was a huge position. And they deployed in all these different rounds and then I believe Coinbase went out and was probably distributed at something close to$100 billion market cap.

1:15:39Something there. Andrew Curran has more updates on Elon Musk's reuniting with the Trump administration. Andrew says their friendship is slowly being reforged. OpenAI, Anthropic and Google already have similar agreements in place. OpenAI and Anthropic charge a$1 access fee. Google charges 47 cents because its president is the 47th president, right? Isn't that it? That's interesting. That's cute. Elon is charging the government 42 cents for access to Grok. This is a Hitchhiker's Guide reference. Finally, a competition for who can say the smallest number. It's been a lot of who can say the biggest number.

1:16:20You want to be on the barbell. The extreme ends, charging the least and raising the most. Apparently, that's how business works. Most CapEx, least. Have you seen The Hitchhiker's Guide to the Galaxy? Have you? No. I thought it was just a book. They adapted it into a movie. The movie's pretty good, but the book's probably better. Have you read the book? I did read the book at one point. Yeah, the book's great. But 42, of course, is the answer to the universe, all things, everything. It's a fun, fun reference. The Trump administration will offer artificial intelligence models from Elon Musk's XAI to federal agencies through a new partnership under the agreement with the GSA, which oversees technology procurement.

1:17:01Agencies will get access to models such as Grok 4 and a new fast version called Grok 4 Fast. The deal follows a similar agreement with the other folks in the space. automating state government processes, one of the most promising applications for technology, fueling the battle to be the most popular tool for federal workers. All four of the AI companies also each have $200 million contracts with the Defense Department. Sort of interesting that the government - All four? Yeah. So the government clearly wants an oligopoly here and is like, we're not going to really pick winners, which is crazy because Dario has been very outspoken about the Trump administration.

1:17:39and Elon's obviously been fully in the Trump administration's camp. Google has been a little bit quieter and has leaned left in the past. Open AI, Sam Altman was kind of stayed out of politics, but then has been at dinners and was at the inauguration. And so you would expect, based on like the news of how close the Foundation Model Lab CEOs are to Trump, like just how many photo ops there have been, how close have they been? You would expect a massive contract for Elon and a very small contract for Anthropic, and yet they all got$200 million equally. It's interesting. Just like they're clearly focused on having balance amongst the AI foundation.

1:18:20I want to see the usage in the government broadly and in the DoD. What are people using? If everybody gets a$200 million contract, it's unlikely that they're going to be super evenly leveraged, right? Yeah. I wonder if they would use them for specific things. I mean, you would hope that like, you know, they're using Claude Code over there for something and they're using ChatGPT for knowledge retrieval and stuff. And then they're using Gemini for the things that Gemini's great. Nano banana, I guess the government is just, hey, you don't need to come in for DMV photos anymore. $200 million for great memes.

1:18:53For great memes? Great memes. Oh, great memes. Yes, exactly. But you would hope that, you'd hope that the government's using AI all over the place and they need an actual contract to make sure that it's provisioned and hosted in the proper way. Anyway, fin.ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake-offs, number one ranking on G2. You can start a free trial. Lulu is chiming in about Rick Rubin. She says, I mean, just look at him. Can't media train this. Austin says, the Beastie Boys, Ed Sheeran, Lady Gaga, Red Hot Chili Peppers, The Strokes.

1:19:29Rick Rubin has worked with all of them. Why is no one talking about Rick Rubin? Why is no one talking about Rick Rubin? He's worked with all of them and is considered one of the greatest producers of all time. His process to creativity can be described as looking for clues. He has such a unique aesthetic with that massive. Always has the red, the blue blockers on. Those are blue blockers? Yeah. Oh. He's very light. I feel like blue blockers are normally orange. Orange. But I guess those are just a dark orange that I'm seeing. Dark shade, yeah. Okay. Yeah. Um, well, um, what was else is going on?

1:20:04Scott, your post here. Uh, there was some accusations, accusations earlier that somebody was doing a paid post. The post was deleted. So it was, uh, Mike Isaac at the New York times picked up a device called a brick, which is a little NFC chip that they see. You've seen everyone's seen this on Instagram, right? where it's supposed to brick your phone so that you don't be distracted. And so you have the willpower just once to attach this to the back of your phone. It kind of magnetically attaches and it puts your phone in a do not disturb, don't show me any of the addicting social media apps, turn off everything, let me focus.

1:20:47Let me cook. Let me cook, let me lock in. And so apparently, according to the original post, Mike Isaac picked one up off of an Instagram ad and said he actually loves it. It's helping him write. Of course, he writes for the New York Times. He needs to lock in and write a lot. He can't be distracted. He's also a prolific poster. Can't be caught on the timeline mid-article when he's on deadline. That's right. So he posted about it. And another poster accused him of doing a sponsored post without disclosing it. Undisclosed ad. and if you know the New York Times's standards and who Mike Isaac is he's published a book that got turned into a movie or a tv show like he's probably not doing spawn con for some d2c like you know electronics company undisclosed it's just like so much risk to so little reward like like the post of him saying like oh I got this brick and it's great like it didn't get that many views.

1:21:45It's not like Brick would be like, oh, yeah, we're going to sell 10 ,000 of these things off of this. Let's pay Mike Isaac$100 ,000 to post this organic content, this fake content. He likes technology. Yeah, he likes technology. People like to post things that they test out. Covers consumer tech. Not everything is SpawnCon. But I thought your post was hilarious. You said it's time to come clean responding to this allegation uh john said you need to admit that brick paid you to dunk on this organic post to drive more impressions this post is brought to you by brick i do think there's something funny where you could potentially run some sort of like anti-astro turfing campaign as a brand where you pay a bunch of of influencers to accuse organic ugc of being paid and it drums up way more attention.

1:22:37And so I was riffing on that. But on this show, we don't do undisclosed partnerships. We do disclosed partnerships, like our partnership with Adio. Customer Relationship Magic. Adio is the AI Native CRM that builds, scales, and grows your company to the next level. Get started for free. When we read an ad, you know we're getting paid for that. You know we're not doing it for free. We're not doing it for the love of the game. We're doing it for the love of the game. We do love enterprise SaaS. Nobody loves SaaS more than us. That's true. Um, let's keep going. There is a lot of stuff going on. Um, this was a really funny post because it gave me a total jump scare.

1:23:16I was talking to Brandon about it earlier. Uh, Ben, uh, Podgursky sounds like a podcaster's name, potentially. Uh, Ben says, this is correct, but we should take it to the natural conclusion. He was, I guess he was quote tweeting rune, which we'll get into. Um, But he says, like the Habsburgs of old, the USA should look for synergistic M &A, not through immigration, but with entire polities. In this case, the obvious answer is merge South Korea in as the 51st to 57th states. Totally obvious. That's not the obvious answer to me. When people talk about growing the United States, they talk about Greenland.

1:23:56They talk about Canada, Mexico, Puerto Rico, Fiji, the U.S. Virgin Islands. Like there's so many different territories that are like more closely aligned with the United States than just going all the way over to Asia and just picking up South Korea. But Ben makes the argument. He says merging South Korea in would resolve a wide range of defense, industrial trade and demographic crises. South Korea would not have to hem and haw about building their own nuclear shield. They'd be an inviolate part of the United States. The U.S. from day one would have massive shipbuilding capacity, vastly improving national defense.

1:24:32And U.S. companies could friction-free contribute in the one spot where we genuinely have a technical contribution, small nuclear power systems. The U.S.'s relatively healthy demographics could gradually backfill South Korea's catastrophic demographics. Maybe we could even teach them how to have kids again. And the free flow of labor would allow Korean workers to train U.S. workers without insane visa shenanigans. South Korea is neither unduly liberal or conservative relative to the United States. Small couple, I like the thought exercise, couple small potential problems here would place the United States directly on having a shared border with North Korea and be right across the Yellow Sea from China.

1:25:18it is such a wild move but he lays out a you know a thoughtful case it's a cool idea i mean maybe it's no coincidence that uh the most respectful tbpn uh derivative show inspired show is from korea that's right that's right no how to do it also i love uh have you ever had bim bim bop no i don't know what that is popular dish in south korea it's like rice and protein it's Have you ever been to South Korea? I have not. I've never been there. Have you? Have you ever traveled anywhere in the world? Yeah. Where? I've been to Ireland. Oh, okay. Job's finished. Moving on. Been to Ireland. World traveler.

1:25:59Fuck the Irish. So this was all kicked off by Arun Post. He said, correct me if I'm wrong, but it seems like the theme of the Dan Wang book, who we had on the show. And the general elite consensus now is that industrial process is a technology that lives in the heads of people and that it was a mistake to let so much, quote unquote, low value industry be offshored due to the tacit loss of process capital. TSMC Arizona, which makes the most complex and valuable industrial production in the world, was a massive success. This was a huge surprise to me. I did not expect the TSMC build out. Everyone was saying like, it's impossible to airlift TSMC, but they wound up producing four nanometer chips at great yields on par with Taiwan merely years after striking ground for the first time.

1:26:45This involved a generous federal subsidy and importing thousands of the great Taiwanese semiconductor experts, despite unions trying to quell Taiwanese immigration and some culture clashes in the United States. Aqua hires of whole teams with process knowledge in their heads is very common. Zuck acquiring some of the greatest talent from other AI labs for massive numbers is just one example of this. Also seen in the full self-driving wars between Uber and Google, which was interesting because that is, of course, about the Anthony Lewandowski case that ended in a lawsuit that landed Anthony Lewandowski, I believe, in jail for a little bit, but then he was pardoned.

1:27:23And so he got out. But I feel like it was more than just process knowledge in that case because it was specific patents. And I'm wondering how much of a line you can draw between knowing a specific algorithm, knowing a specific something patentable, and actual process, power process knowledge. But it's certainly an interesting analogy to dig into. So Tesla plus Apple plus big pharma acquires industrial process companies all the time. America is very capital rich, able to levy literally hundreds of billions of dollars for machine intelligence capex. We can afford to acquire whole groups of foreign talent for prices that are unheard of to them in their home countries.

1:28:09TLDR, acquihiring foreign process knowledge for massive sums should be one of the primary goals of any reindustrialization effort. Special visa categories should be made for to scoop up whole teams of Sengen's best. The raids on the LG battery plants in Georgia are the The exact opposite of what we need. Ability to tolerate new arrivals is a technical edge of American capital to be able to assimilate foreign knowledge into domestic industrial processes at a scale nobody else can countenance. I was hearing a story about how, I think, what was it, the Manus team relocated to Singapore? And there's a world where they relocate to San Francisco.

1:28:47Set up in the benchmark office. A little satellite office. Yeah, I mean, there's something there. I don't know how important their process knowledge is, but certainly it worked for TSMC. I don't know how many more of those projects need to be done. Taiwan seems to be in a uniquely precarious position, whereas a lot of the South Korea tensions seem to be a lot lower. Like there's less geopolitical risk in South Korea. So there's less of a we need to move SK Hynix to America. But Tyler, do you have any thoughts on this post? I'm sure you saw it. What do you think? Yeah, I think it makes a lot of sense.

1:29:25I think politically it might be hard to do this, but I've seen a lot of similar arguments just for like normal AI researchers in China. We should basically have some kind of like visa that just like imports them like instantly. And then it's like I assume the salaries over there are not comparable to like MSL level like$100 million. Totally. This is the real AI paper clipping. It's not that you get turned into a paper clip. It's that you get operation paper clipped into a different country. and we need to avoid our best getting paper clipped to a different country and we need to be potentially paper clipping other national champions.

1:30:01I wonder if there's something to do in AI, not just AI, but in the process power around solar. Because we've talked to Casey Hanmer about this. It feels like the vast majority of the cheapest solar panels come from China. We're maybe not, we don't have a national champion there yet. We're not catching up. But fortunately, we have a guest who might be able to get us up to speed on this. We have Delian Asperuhov from Founders Fund. He is back from paternity leave. He's in the Restream Waiting Room, and he will be joining us in the TVPN Ultra Dome in just a minute. Let's bring Delian Asperuhov. How you doing?

1:30:38Yes. Good to see you. Daddy's home. Daddy's home, baby. Oh, there we go. I got my swag. I love that. How is it being a father of multiple now? um you know i feel like you blow up your life once and then after that you kind of you know sort of figure it out where it's just like yeah you got the infrastructure and that's why god gave you multiple hands is you know one baby per hand yes but everything's good everyone's happy and healthy everyone's back to normal oh yeah oh yeah i mean she's still like a you know sort of month old so you know still requires uh you know some work but yeah in the grand scheme of being happy healthy very grateful that uh you know all things pretty smooth yeah well once once uh once she gets to two months, you know, it's cake.

1:31:20Put her to work. She can come on TVPN. We've had three members of your household live on the show. We need the fourth. That's true. Well, actually, I mean, your brother too. That's true. Five. The Asparov clan is dominating. I want at least 10 Asparovovs on TVPN by the end of the decade. What are your parents up to next week? We'll get them on. Really quickly, I want to get a general update on what's going on in your world, but I would be interested to hear your response to this debate that was going on on the timeline yesterday from Rune about TSMC Arizona being a good example of airlifting industrial process from one place to another.

1:32:05He kind of ties it to the acquisition of whole teams at MSL America, being capital rich, being able to actually afford to go and say, here's a$100 million offer to some great researcher come to America potentially. And it gets into the, obviously there's a whole bunch of immigration stuff going on and cultural stuff. But did you have a reaction to that? Are there other industries where it seems like we need sort of a TSMC Arizona-like project where we're just going to an international company and saying, do what you do over there here? Yeah, I feel like a lot of the reason that people are discussing this so much on the timeline lately is because of Dan Wang's new book, Breakneck, where he breaks down basically the, like, at least his argument is that, you know, China is the engineering society, where the sort of lawyer society and everything basically stems from there.

1:32:57Which I think is probably a little bit, you know, I like a lot of parts of his book. That actually particular argument is probably one of my less favorite parts. Partially because, like, look, there are things that China is obviously sort of very good at. I think Like I was hearing your last guest talking about like, you know, mass production of solar panels. They're obviously like phenomenal at that type of like commodity cost curve, relatively complex, but not deeply complex type of manufacturing. Right. Like they've stepped up from like, you know, the early days of Shanghai being, you know, sort of toys and knickknacks, et cetera.

1:33:29Obviously now into like, you know, mass consumer electronics, Unitree is obviously like by far the best, you know, sort of humanoid robotics company. And then obviously in solar panels. But there's, you know, I think some limitations to their approach. Like, you know, when I think about it from like the aerospace perspective, look, a Falcon 9 rocket landed for the first time a decade ago now. The Chinese basically like stole the IP and planes that and clearly have something that is like the equivalent to a Falcon 9. And they're still basically doing the like early days of like, you know, Starhopper, which was, you know, back or Grasshopper.

1:33:57I mean, which is like the SpaceX project in like 2013, I want to say, that was just doing the suborbital little like hop ups and downs to practice for Falcon 9. And so I do think they have this limitation when it comes to deep, deep systems engineering and requiring some creativity that they miss out on. And I think that's why you've seen them partially succeed in semis. They're good at the last generation of semis and reshoring that to China. But I don't think you've really seen any progress on them domesticating cutting edge semis. TSMC Arizona, you know, is at least a very subscale version, you know, of, you know, being able to do actually some amount of cutting edge domestically.

1:34:40And I do think it, you know, sort of shows that there's just some breakdowns and down wings argument where like we are able to import that type of like, I forget what he calls it, like industrial process or process knowledge in the United States and even develop it ourselves, right? The other area that obviously like we do quite well on, you know, it's not the perfect company, but like, look, like the 99 % of commercial airliners in the world are still developed by the West, right? you know, Boeing and Airbus and continue to be. And it's not obvious that China has really been able to displace that.

1:35:05You know, the only other areas that I think about actively that you need to be, you know, sort of reshored, some amount of it is like, hey, if we want to, you know, to compete against China and Taiwan, it is going to be almost certainly like a mass scale production, you know, sort of game more so than anything else. And so when you think about like mass scale drone manufacturing, mass scale metal cutting, mass scale, like fighter jet production, that's something that like we're obviously behind on even like the munitions right like you know ukraine has shown that like you know artillery is back to being relevant again it was not relevant at all in any of the like middle east conflicts but now with like but now with like continuous you know internet coverage and continuous basically you know spy satellites you know you can actually justify basically just like you know anytime that your you know enemy makes a move you just artillery shell the crap out of them and that's actually like back to being you know sort of relevant on the battlefield um and they are far better they have these like you know lights off you know um artillery shell production facilities that basically just like are 24-7, fully roboticized, you know, produce, you know, way more than the United States can.

1:36:04And so I don't know if those are going to be necessarily like the equivalent of TSMC where you're like taking somebody's pre-existing industry and like dropping it here and that like there's not an obvious place to go import from basically for that type of stuff. So I think we kind of solve that on our own. And obviously Founders Fund, we're making some investments, you know, in that space. Isn't it true too that in China, like, yes, there's flagship lights out factories that are truly cutting edge, the kind of thing we just don't really have here in the United States, but yet still the vast majority of manufacturing in China is just a lot of labor, like, you know, assembling cheap components.

1:36:41It shifted. I think that's like a sort of decade out or a decade old sort of thinking where it's like, yeah, the reason that China won for a long time was because of just like the labor arb and cheap cost of labor when you talk to people but but i'm just saying like with the truce like we can't buy the like when you talk about china's advantage of just being able to produce overwhelming mass right across every different sector there's certain key areas where they are just light years ahead and then it's they're still getting this massive benefit of even the components that get made that go to the lights out factory to be assembled you know but with robotics like there's yeah i mean when i think about like their advantages in like you know drone manufacturing it's mostly due to automated facilities right like it's not because they like you know have a bunch of like you know sort of mass assembly super precise small hand you know sort of laborers or something like that it actually is because when you think about like the pcb boards largely basically fully automated the like you know propellers that they make largely fully automated the battery lines largely fully automated and so yeah i just like when i think about like the edge that they have in drones yeah there's maybe some amount that's like you know sort of this like assembly edge but like i'd put that at like five to ten percent of the edge like 90 of the edges that they like have such deep process knowledge across all these individual like different you know basically like sub-component sectors and a lot of those co-location say again like co-location effectively yeah and the co-location is just you know sort of wild right this is also sometimes the problem with like this stuff in america when we like try and re-import it it's like you know the chips act one of the biggest battles was like the size of funding required support from a broad set of senators and congressmen.

1:38:19But then by default, they want, you know, sort of jobs everywhere. And so it's been more difficult to fully, you know, sort of centralize all of the like, you know, reshoring of semis in the United States into a sort of single location. Like, you know, Arizona has definitely been impressive. But like, ideally, it's not just the like fab. At some point, you want to do like lithography there and a bunch of other parts of semis centralized there. But like in the United States, we actually kind of have a bit of a chips hub, obviously still some amount in Silicon Valley. Austin's become like a really big area.

1:38:45Ideally, those would all be in sort of the same place rather than sort of spread out. And so it is just harder given that we're not like China that's willing to sort of like put their finger on a scale to a single city and just be like, you are going to become like the guitar producing city and everything is going to be sort of based there. We don't do that. Need a new guitar executive order. It does feel like we're starting to do that with the NeoClouds, with some of the big data center build-outs, Abilene, Texas. Like we're marshalling capital. But that's still led by individual deal makers going and talking to these local governments and figuring out, can we do this here?

1:39:20Okay, no, I'm going to go across the state line over here. I'll do it over here. Sure, they're chasing. Yeah, we're just much less top-down coordinated. But at the same time, I think you're starting to see the faults and the breaks in that system in China. And Dan Wing talks about this as well, where it's like, look, they clearly still excel in certain areas. But they've also – think about it even over the course of time. that I've been a founder's fund in 2021, like the number of unicorns being minted in China was starting to approach, you know, the United States. And there was like some real risk and fear that it was going to supersede.

1:39:49Now, four and a half years later, you know, the Chinese venture capital ecosystem is effectively, you know, totally negligible. And so, you know, I do think that they've, you know, done a decent job on like, you know, sort of prioritizing the industries that matter the most, but also their like capital markets are like, you know, sort of way worse than they were, you know, sort of four and a half years ago. You know, they have re-imported a bunch of, you know, sort of Chinese nationals from the United States back as scientists into China, you know, pretty good. But they've also like lost, you know, something on the order of, I forget what the number was, but like 25 ,000 Chinese millionaires like are, you know, exporting their capital.

1:40:19They lost the Manus team. The Manus team's over in Singapore now. They might be working at the benchmark office soon. Yeah. Well, speaking of benchmark, I thought it was interesting. Actually, Bill Gurley posted earlier, Game Recognized Game. And it was a quote from the CEO of Xiaomi who said, we bought three Tesla Model Ys for disassembly and research inside Xiaomi earlier this year. what a great vehicle and of course they're announcing like effectively a copy cap but it's insane to just say game recognized game it's game copies game yeah it's just it's saying saying the quiet part out loud is wild but uh recognizing since i was last i was last on was when i have been poking the benchmark bear literally basically like since like you know a week or two after joining founders fund and i remember early on i got a call from like one you know one of the partners at ff being like hey like look just so you know you're definitely making some enemies over there and i was like okay and then they were like but i wouldn't necessarily like it doesn't feel right to tell you to like take these things down because like at the end of the day we are founders fund and you are critiquing them for firing founders and that is our whole ethos so just know that what you're doing is definitely creating enemies and you're creating risk so anyways i've been poking the bear for like five and a half years and then it was just so glorious to have like finally an official response from chetan and it was just like it was an alley-oop.

1:41:35It was the perfect response. It was like, how dare you not basically like, you know, you know, control, you know, sort of a company's choice and, you know, sort of, you know, capital provider. Like, why are you letting them take Chinese capital? And I was like, oh my God, this is perfect. This is like the, you don't even realize how wrong you are because you don't even realize that what you're saying is why aren't you as a venture investor telling the founder to run their fucking company? And that's your critique. And I remember reading it and I was technically supposed to be on this like one week, like Twitter or whatever, like, you know detox um but then like you're on on twitter being like i'm supposed to be on a detox right now but i'm about to go on a bender i got like five texts from friends being like how have you not responded to this yet and i read it and i was like oh my god yeah fuck this detox bro like definitely fucking going in and it was just like it is i think either my top or second best day on twitter in terms of joy provided for me like like a true like existential like identity level like as much as like a child's birth i mean like that is a level of zero user regretted seconds like the least regret you would compare it to yeah holding your daughter it is like it is yeah i think roughly equivalent the only other day that i've had that was that good was the like the day after the ftx blow up and i was the first one to really find and screenshot the sequoia blog post about him playing league of legends and getting that out and it was just that was just that was incredible it was just it was it was like i got to break news yeah i got to like poke fun at a competitor i forced them to like have a response to all their lps about it they had to like take down that blog post it was just like oh that was like weren't you also better than spf at at uh league of legends okay i mean like aoc is better yeah like league of legends so like the bar is very low i just like but at least you at least you gotta respect some of uh so the the highly convicted investments in anthropic robin hood you know he was a gambler but you know yeah dude he was a good gambler i mean like he just you know played the line a little too hard but like yeah there's a world where like yeah i forget who was telling me this it was somebody that was basically responsible for like brokering the like ftx like bankruptcy etc so they're like a you know wall street whatever you know sort of type and they basically like yeah like if he had just lasted another like six months the book like would have been totally fine he wouldn't have got liquidated and today if he just held these investments that he made from like back then he would be richer than elon like he would actually just be the richest person on the planet wait what and so it's just it's wild to think that he was like on a knife's edge richer than elon i don't how's he putting up i i haven't seen that actual number but i mean i guess it makes sense with like the various positions he had yeah i think it was like assuming that ftx continue to go it's ever his best possible scenario there were like i mean again like some of those you know moves were just like really it's like in the anthropic position i forget it's like now like 25 billion dollars i mean the guy was insane yeah i don't know if you remember but he went on tyler cowen's show conversation with tyler and tyler asks him it would you flip a coin where there was a 50 chance of humanity being completely wiped out or 50 percent chance that you double the prosperity of humanity but it's 51 49 the good outcome and he was like i would flip it a hundred times in a row and it's like that's insane like that's not how those things work but he was like the expected value is positive so i must take the ev positive back and it's like no no no no please do not flip that coin like you're gonna wipe us all out uh it's like 99 the best part of spf having to go to jail is dustin moskowitz finally shutting to fuck up about EA.

1:45:10Thank God. We can stop talking about two only net EV positive things. Yeah, it was wild. Well, speaking of net EV positive things, is it no longer net EV positive to invest in a company that's growing revenue triple, triple, double, double, double? Because I have a lot of friends that have been doing that. They previously, they were saying, I'm about to IPO my company, but now they're thinking of shutting down because according to the best venture capitalists. Dellian's a fan of zero, zero, zero, zero, zero, thousand X. But yes, I want your reaction to the state of the software markets. It's sort of an ev take a little bit.

1:45:45Have you done a pure SaaS deal this year? I did just do like a basically pure vertical AI SaaS. Let's go. He had to do one. Can't help myself. Vertical SaaS. Underrated. Criminally underrated. He literally talked to every VC. It's like, go invest in the foundation model layer. Go invest in hard tech. Leave the vertical stats for me. That's great. But yeah, overall thoughts on the triple, triple, double, double, double, being out of date with how fast the foundation model companies are growing. I had this interesting thought that it's like, you could be running a janitorial company. And if you have a foundation model as a client, and they're growing 10x, You're going to be cleaning 10 times as many toilets.

1:46:37Your revenue is going to be 10Xing because they're 10Xing. And if you just are a barnacle on the side of the massive whale, you're going to see massive growth. And I wonder what that means. We're investing in the barnacle economy. The barnacle economy. But in general, what are your thoughts? Yeah, I think with this stuff all the time from the space perspective too, where you can get diluted into this world where it's like the space economy is growing, but if it's only a bunch of other space startups trading revenue back and forth, You can like prop that up for like quite some time trading a dollar back and forth, but at some point it needs to connect into like the rest of the ecosystem, right?

1:47:10And so, you know, I think there was some, you know, memes and jokes going around, you know, yesterday about the like NVIDIA, Oracle, OpenAI, whatever, 100 billion investment, etc. And it's literally just like the same dollar effectively going, you know, sort of in circles over and over again. And that can, you know, sort of work, but like that can also blow up. And I think we talked about this in the last interview. It's like, you have just this crazy dynamic where, you know, the percent of GDP being invested in this category is like, you know, the equivalent of like at the railroad bubble, et cetera.

1:47:38But a lot of the companies that are doing this have like these cash flows from other very large businesses that are driving towards this. Right. You know, Zuckerberg, I think, gave the quote where he's like, look, I would prefer to like, you know, waste hundreds of billions of dollars. Miss spend a couple hundred billion. Yeah. Spend a couple hundred billion rather than lose the machine dodd race. And so it's just like the level of, it's just, it's like nothing we've ever seen before in terms of like the super cycle of, you know, sort of capital going into this. Maybe that has the ROI, maybe it doesn't.

1:48:03When I think about it from like the investor perspective, I mostly think about it from twofold, which is like how you should analyze any business, which is basically like quality of revenue and like, you know, you know, in terms of like durability of that revenue. And then, you know, the competition, e.g. the margins, you know, sort of on that revenue. And so I'll maybe provide like one example that I think is very strong and one that I think is like a little weaker. You guys have had Melissa, John Lutig, your wife on for Cybernetic Labs. I think of that as a great example where she has really great revenue growth.

1:48:32And I believe it to be very durable in that most of her revenue growth is coming from things that are totally decoupled from the insanity of NVIDIA, OpenAI, et cetera, circles. It literally is janitorial companies, right? Effectively, HVAC, plumbers, et cetera. Those people's revenue, their growth, et cetera, is completely economically decoupled. And so in some ways, then Melissa's revenue is completely economically decoupled from the entire AI hype wave. And so when I think about like, oh, okay, let's say imagine a world where all of a sudden the Mag7 decide to reduce deployment into data centers and foundation model training by 100x next year, which companies are affected by that?

1:49:10Okay, well, CoreWeave, I imagine, is going to be affected by that. Oracle, definitely going to be affected by that. OpenAI, Anthropic, definitely going to be sort of affected by that. Yeah, you look at how many companies are now indexed to OpenAI, right? You have Broadcom, Oracle, SoftBank, CoreWeave. Like, these are a lot of them. And I think as an investor, you have to take a little bit of like a bifurcated strategy where it's like, I think it's a generational index. And this is, you know, if there's one thing that I admire about Peter the most is he just does such a great job of even though he has lots of biases, particular, you know, preferences, et cetera, on one sector, another founder, another.

1:49:50He's very willing to very, I feel like, soberly analyze the just like broad macro world and identify, hey, even if like I don't love, you know, whatever boring SaaS software, et cetera, or like the AI stuff, you know, may not be real. still be willing to like analyze it from a purely investment perspective and like take it on and obviously we've you know done decent user checks into this field versus like i literally like find my biases so strong that i can't even like i can't even motivate myself to even spend time on it you know to like you know analyze it as an investor um so that's where i think about the you know sort of you know durability perspective and then there's like the margin you know sort of perspective which is like how much you know competition is there right you're seeing obviously in these foundation models where just like the token cost continues to go down the margin never seems to really be improving.

1:50:30And a part of it's like, there's a bunch of, you know, companies that in capital that's going into this and, you know, some of the, like, let's say like AI for, you know, whatever, you know, coding has maybe a bit of a similar dynamic where it is like, you know, a bunch of companies that are working on it, the foundation models working on, et cetera. I don't think there's going to be like 15 AI for plumber, you know, sort of companies. Right. And so this is where Melissa both has this like great durability and great margins. And so I think you have to take this kind of bifurcated approach as an investor, which is both like invest into the like index effectively.

1:50:59Now our approach has generally been invest mostly into the thing driving the index, e.g. OpenAI. And then you're like, you know, sort of counter strategy is invest in things that are totally decoupled from the index and like super far away. And then basically like nothing, you know, that much in like the, you know, sort of messy middle in between. And to go back to like the, you know, whatever, you know, 332 or whatever it was. I do think that in both categories. Yeah. I do think there's some merit to it where it's like the growth rates and EV growth in these companies just do look very fundamentally different and the bar is definitely higher.

1:51:31It's just been like, I admit like it's been very remarkable to watch Melissa and her company grow at a rate that just like, yeah, I just like, you know, if you had told me, you know, write a distribution of where you think Melissa's revenue growth is going to be like when she like started the company, this isn't like the 99th percentile, you know, and I think it just speaks to how much of a wave this can be. And I think Peter talks about this where it's like the internet wave happened, but then it still took like 20 years to get the internet integrated into the rest of the economy. I think you're going to see the same thing, you know, sort of here where like there might be not as bad of like an AI bubble crash, but the like implementation period still may take might be more accelerated because just generally society is moving faster.

1:52:07But it may take 10 years. And it's companies like Melissa that are getting it integrated into like the broader, broader society. Have you seen any companies where they've done a good job, they're still in founder mode, they've grown like a base of business that then when the AI story came, they could actually act on that in a way that it wasn't like they're a public company and they need to go through this massive transformation of how they bill, but they can just add AI on top and then they're actually growing new quality revenue. are you feeling that at all? What are you pointing to? Let me figure this out.

1:52:46Sorry, I'm having to. Oh, yes, yes, yes, Ramp. There we go. There we go. Ramp.com. There you go. Ramp.com. Great company that has done a great job of like, look, they obviously were growing very well before any of the AI boom. But I just remember this very particular, I think they've announced this now, so I'm not revealing anything, right? They have their AI agent, basically product. but I remember the board meeting where Kareem and crew presented like the vision for it. And I was like, oh, this is like what a very competent, but like larger startup that is still fast moving, knows how to adopt things does in this world where it's basically like, yeah, like, look, we have a bunch of people that obviously use what is a very like beautiful interface that automates a lot of like, you know, finance work, but it still requires people to go in, set up these rules engines, do some amount of tagging, et cetera.

1:53:36We're just going to like basically start to offer for you know some of our beta customers that are gonna try this out we're just gonna like effectively screen record what they're doing and start training AI's on that and it's like I just can't imagine like both if you're a net new company being like I'm gonna make AI agents for the CFO suite it's like well but there's like a whole set of things you have to do you have to have like the corporate card you have to have travel expenses you have to do this expense policy accounting integrations into the ERPs integrations into like their taxi it's like all these systems that you need to build that are like more web 2.0 or whatever you know sort of systems and And only when you have that and you have a ton of usage on it, like, can you then actually start to train the like AI agents on top of that usage, right?

1:54:13And so I do really, I've admired that a lot in RAMP. And so that's probably the one portfolio company that I've seen the strongest in. And then the second is this other portfolio company of mine, Sword Health, that had been doing this like basically, you know, AI sort of physical, you know, sort of therapist. But most of it was that basically you had these like sensors that were strapped around your body. You would go through your physical therapy routine. and then a PT would basically then review your movement data set, et cetera, and message back and forth to you and adjust it. That was a very obvious area where they literally had years and years of training data sets on how their digital PTs were basically interfacing with patients.

1:54:45They basically significantly upped the ratio. I forget the exact number, but my guess would be it was something on the order of, I remember when the company started, it was like 12 patients per PT. I remember by 2022, it was like 1 to 100. And I think now it's something on the order of 1 to 1 ,000. And it is largely the AI wave that has enabled them to do that. And especially because it's like this text back and forth, literally, with a physical therapist. But again, if you were starting from scratch being like, I'm going to make AI agents for physical therapy, it's kind of hard to do just that.

1:55:12The physical sensors, the distribution with Fortune 500s, health systems, et cetera. Yeah, we had a company on, I think a couple days ago, called Filevine that raised$400 million. They were, for 10 years, creating just workflows for different law firms. SaaS for law firms. SaaS for law firms. They have all the workflows, time tracking, conflict checks, et cetera, document storage. Now they can just add AI in a bunch of different places. And maybe they don't have their own foundation model, but maybe Claude or OpenAI models become good enough, right? Give us an update on space, defense tech, stuff that's happening in D.C.

1:55:51It seems like there's a ton of deals there, but they're two orders of magnitude smaller than the AI sometimes. It's like a billion dollar deal for Palantir in the UK. And people are like, I just heard about a hundred billion dollar deal over here from NVIDIA. But there's some amazing stuff happening. What's been top of mind for you in space or defense or DC generally? Yeah. I mean, you know, sort of big macro story for the next five days is it seems like we're very likely headed towards a government shutdown. I think we've talked about this in some of the prior, you know, sort of appearances. Yeah.

1:56:21There's gonna be a lot of people furloughed, RIP. You know, we've talked about this in prior, I think. Can you imagine if we had a precedent like that in the private markets where like companies just routinely like, yeah, we're out of cash. We're talking with the board, but everyone's furloughed. Everyone's furloughed. Just probably it'll be like five days, maybe like 40 days, you know, whatever. Imagine like Xi Jinping coming out and be like, oh, yeah, sorry. Like we couldn't like, you know, with my finance minister agree on a budget. And so we're shutting down the CCP for like, you know, it's just like it's so funny to me that like they so badly.

1:56:56want to usurp America and our system still has us regularly shutting down for extended periods of time unable to find the most basic facts of like what should we be even like prioritizing and allocating towards and we still kick their ass we have the best capital markets we have the best nation the best freedom the best fucking technology in almost every single area if you're a career politician it must feel so good to shut the government down oh my god I just what I feel bad is like now that I we're so like I've already so deeply integrated in all these government programs like there's a lot of people that just like end up having to like continue to do their job but like they just don't get paychecks and it's like and some of these people are like friends of mine now that like have worked in technology and are over there and it's like yeah like you just kind of have to make sure that you have savings because like rent still keeps going you're kind of still expected to work but you literally just like don't get paychecks and at some point you get some amount of back pay but um but yeah the reason we're marching towards it is like look we've gotten into this world we're like you know i think it's something like four of the last 20 years we've actually passed like our budget on time so the fiscal year for the government basically ends you know basically end of september every year um we effectively for many many of the last 20 years we never end up you know basically actually figuring out what the budget should be so we go into these continuing resolutions but when you're in that state and you're doing everything so last minute it means much more regularly we have shutdowns so shutdowns are happening you know sort of more often and so this year it's the these are dems and republicans going back and forth on like you know basically how much should be based just off the big beautiful bill you know how much you know should the you know sort of dems have to you know sort of fold on you know some of their asks around, you know, a lot of it is like healthcare spending, you know, basically related.

1:58:24And at least right now, the like tone in DC is like, there isn't an obvious, like, you know, you know, going to be a path forward over the next week or so. And then Speaker Johnson isn't even necessarily like releasing a schedule on when he's going to call everybody back to even, you know, sort of, you know, fix it. So it's an interesting place where, you know, CRs and shutdowns generally favor incumbents, right? And so, but what's interesting though, this year is like now a bunch of the net new tech companies are kind of the incumbents, right? And so, you know, if you were Andrel in 20, whatever, 18, government shutdown, pretty painful.

1:58:59If you're like Andrel in 2025, yeah, it's, I mean, you'd prefer for, you know, budgets to keep going, but like you can actually probably even continue to beat plan, et cetera, even with, you know, sort of government shutdown. And so mostly what it makes it painful for is some of the like, you know, next gen, you know, companies that have been starting like the last year or two really, you know, sort of painful. So at least as somebody that's closer to an incumbent now rather than a two-year-old company, I don't mind the government shutdown, you know, sort of that much. If anything, it kind of gives me like more room to like, you know, get away from some of the, you know, sort of seed, series A, series B companies.

1:59:31So, you know, Mr. Politician, you know, shut down away and, you know, we'll keep flying capsules. It's also, you know, if the government shuts down, then if it restarts, would be a bullish catalyst. Send us to new all-time highs. Closes out with a white pill. What's the best new development happening in defense tech space? Any positive news aside from the government stuff? The shutdown's kind of disappointing. Will you be buying the Unitree IPO? That's depressing. Here's what's depressing. It's going out at$7 billion. What does that say? If they're the leader and the market says this is a$7 billion company and we have companies that are worth$40 billion.

2:00:14If you look at Tesla, what premium does Optimus give to Tesla? We're clearly valuing the potential of humanoids more than at least the Hong Kong stock exchange. This is kind of related to how I think you could use Unitree for peace, where if I were to provide the analogy, what Apple is to Foxconn, you ideally need some U.S. company to be to Unitary, where it's like both the U.S. government and the CCP are not happy with the Apple-Foxconn relationship, right? The U.S. government is not happy that Apple does so much of its manufacturing with our primary adversary and would like them to ideally push to relocate more of that to more allied nations like Vietnam, India, et cetera, which they're starting to do, and do more of that in the United States.

2:01:00the CCP is not particularly happy that Foxconn puts in all this work, technology, process, etc., ships out these iPhones, and then that just ships a ton of profit dollars over to the largest company that's owned by their adversary. And so both sides are super unhappy with the relationship, and yet the relationship has now persisted for like over 20 plus years, right? And so I think there is the downside case of Unitary succeeds, you know, a lot in China and just makes like humanoid like, you know, soldiers that like end up, you know, invading Taiwan. That's like the downside scenario the upside scenario is unitree becomes a contract manufacturer but like an american company has way better foundation model ai controls you know sort of robot whatever operating system in design and uses unitree basically as like the manufacturer and then you basically get into this like unhappy wedding on both sides in a way that actually makes it even less likely that basically china actually only only downside is a sci-fi scenario where there's a backdoor into the you know millions of humanoids that get deployed into the u.s and yeah i mean Yeah, but my iPhone's not going to get up at night and stab me in the chat.

2:02:02I mean, it could explode. And it's in your fucking, you know, I mean, like, look, you thought the Hamas fucking like, you know, pagers were bad. Let me fucking tell you, there's like a little bomb in each of these. And like, you can explode like just government officials. You know, could be, could be tough. Yeah, I asked for a white pill. That was not close. And I got a black pill. But we'll get you next time, Delian. Thank you so much for hopping on. Great to see you. Congratulations. Congrats on the little one. We will talk to you soon Later boys We heard him talk about 8sleep You can enjoy an 8sleep If you go to 8sleep.com Get a pod 5 A 5 year warranty 30 night risk free trial Free returns Free shipping How did we do last night I got cooked I got a 78 I got a 76 I got a 73 So you beat me Okay I got a 73 There we go I'm back Our next guest is from Flock Safety A Founders Fund portfolio company actually We have Garrett Langley I'm very excited to come in from the restroom waiting room Welcome to the show.

2:02:59Good. How are you? Doing great. We've been super excited to have you on. First time. Why don't you give a quick introduction for anybody that's been living under a rock? Yeah. Or hiding under a rock, maybe. But yeah, Garrett Langley started a company called Flock Safety with a couple friends eight years ago. And we catch bad guys. We will help local law enforcement make just around 700 ,000 arrests across the country this year. All violent, nonviolent crimes. What was the, what year, how quickly, what was the time to first arrest? Yeah, just under 60 days. So we were in YC. Yeah, we were in YC and it was horrible because we had built this product.

2:03:46We had a couple of neighborhoods using it and we were like, Demo Day is going to be a bust because like, yeah, we built a camera, but like what else? and I kid you not the week before this guy broke into someone's home stole a nice road bike DeKalb County Georgia made the arrest and so we went on demo day we had one slide and it was this mug shot and we were like we build cameras that do this please invest wow you already had the mug shot yeah yeah that uh better than like you know we got 2000 MRR yeah yeah real world real world results um that's great and feels more you know more critical than ever with everything going on in the world what is what have you guys been up to lately yeah i mean so We're in live in just over like 6 ,000 cities now.

2:04:35so pretty well deployed um in building a lot so we got into the drone business earlier this year kind of at the end of last year earlier this year we've not now got drones flying all over the country um just kind of launched that also for the private sector so it might surprise you that private enterprise spends north of 30 billion dollars a year on unarmed guards i think drones are a pretty good alternative they're cheaper they're more reliable and so now like if you're and unarmed guards are effectively just providing like a deterrence right they're not meant to engage but they're just trying to show that there's that you're not you know you're not alone basically right and so yeah drone can can play a similar role and potentially even a better role if it can follow a bad actor or something along those lines yeah i know exactly so i mean you think about like a retail example which through the bay area this happens a lot stolen car car gets stolen.

2:05:33They drive it to a Home Depot to Target. We know that car is stolen. Today, we just notify 911. And depending on what city you're in, a couple minutes or 20, 30 minutes later, 911 shows up. Now with our drone, that drone can get automatically dispatched off a rooftop, out of a box, completely remotely teleoperated. You've now got live video streaming to local law enforcement inside their vehicle. This is the vehicle. This is the person. They're going into the store, they're leaving the store, whatever it may be. And so it's kind of the way to think about it is we just treat drones like a camera that can fly.

2:06:07So we're pretty good at building cameras. And now these cameras can fly and chase bad guys. Can you give me some timelines on when, you know, the average American would be seeing just drones flying around? What scale we're going to see that? Are you bullish or excited about humanoid robots or wheeled robots? We've seen what Starship Technologies has done. There's a whole bunch of companies that are putting, you know, more like simpler robots on the ground. Like what's the actual path and what kind of timelines are you kind of operating against? So, I mean, the good news is that these drones fly high.

2:06:47So we fly 400 feet up in the air. Okay. So if you're not looking up, you're not going to hear it. You're not going to see it. Wow. the other thing is our drones can cover up to probably 30 30 square miles effectively yeah and so the sheer number of drones you need actually isn't that many sure so i think about a county near me it's the largest county in georgia i think it's just over 500 square miles they're going to get 20 drones to cover the entire county wow you're and that's a couple million people like you're never going to see these so you would probably wind up either partnering or building yourself like something that looks kind of like a cell phone tower has charging infrastructure maybe there's a human that goes out there and fixes parts if there's does it even need to look like that or can you just put it on a roof of like a walmart even better fire department fire departments are legally required to be equi-deployed in us there's a federal regulation of the density of fire departments which makes them a perfect place to also put drones so you put them on top of a fire department uh they're fully autonomous they live up there It's got HVAC.

2:07:51It's a pretty cozy place to live. It's a drone. And then someone clicks a button from a computer, just like you guys are on, drone flies. And then it can track the car, locks in, tracks the car, the human is locked in. You can do multiple drones to one operator. So even in a county like the one I'm describing with 20 drones, they probably need three or four operators at all times. But they're covering 500 square miles. Insane coverage. Yeah. Talk to me about some of the other robots, robotic dogs, four-wheeled robots, humanoid robots. Like, when does this happen? And before that, like, talk about autonomy timelines.

2:08:27Because if you're flying 400 feet in the air, at what point, like, there's not a lot else going on up there. I imagine you could build these to be pretty fully autonomous pretty fast. Yeah. I mean, the autonomy is already there. The issue is the FAA regulation. It's like right now we are legally required to have a human click a button that says launch drone. And then they need to have a part 107 license that says they can fly. And they're like an actual video game. That's a pilot slice. It's an easier version. It's maybe 20 or 30 hours of, you know, studying. Okay, specifically for commercial drones.

2:09:08Yeah. Yeah. And I think it's good. But the autonomy is there. and the FAA has done a great job over the last few years of kind of like trying to catch up they were a little slow for a while they're catching up now and they're making better decisions like they're now allowing us to fly multiple drones with one operator it used to be it had to be one-to-one it used to be able to you had to be able to see the drone now you don't have to be able to see the drone so in the case of that big county that person sitting downtown they're flying a drone 50 miles away and I think that makes a lot of sense so the autonomy is there, it can automatically track the car, stick to it, so you can avoid a high speed pursuit.

2:09:44But the FA is going to make sure that it's safe. And I agree. Like safety is the most important feature we sell. Yeah, how much of a big thing feels like high speed chases are like definitely a bug, not a feature, right? Because it creates an entirely new danger, right? Hey, let's get we've got one guy that stole a car. let's get six cops driving super fast yeah it's probably thrilling though yeah i think it's like probably one of the highlights of the job um if you're like an adrenaline junkie because like you're driving 90 miles an hour trying to like chase someone no it's definitely a bug and i think most elected officials would agree as they've started to ban it which creates all types of new conflicts so i think high speed pursuits are a really good one i think the other thing that we've been surprised by is the reduction in service calls.

2:10:34And let me try to expand on that. When you call 911, the average response time might be 30 minutes. And a part of the problem is it's just slow to drive. So we'll get there faster because of that, because we don't have to wait in traffic. The other issue is that a lot of the times you'll call 911 and say, hey, these two guys are in a street fight. And then 20 minutes later, those guys are gone. We still had to send an officer. They still had to look around. Maybe they go into the gas station and grab a Gatorade because they're thirsty. And all of a sudden, like we've wasted hours of this officer's day.

2:11:04So one of the beautiful parts of the drone is actually it gets there faster and it can also remove that call for service from the backlog so that for actual critical incidents, we get humans there faster as well. I think the other one that I'm pretty excited about is we have a number of colleges that we work with that are using drones to help escort females at night home. So you can call 911 and be like, Hey, I don't feel safe. Like it's really dark. I just left this party. And you don't feel great. I think it's like a 19 year old maybe doing that because you're now going to get in the back of a patrol car.

2:11:35Now in a couple of colleges we work with, they're pushing this out like, Hey, you can always call 911 and a police drone will escort you home. And we'll have a video, we'll have eyes on you. So that if anything starts to look suspicious, like we're on top of it. And I think there's just a ton of use cases that we're just under covering now to make drones just a more bigger part of our daily life. If you run the economic calculation on the 30 square miles for one drone and there's cost of service that and batteries versus do some sort of deal where every stoplight has a camera on it and you have sort of coverage 360 cameras on every single corner.

2:12:13Is there an economic calculation here that makes sense where the drone's more efficient or is it just more flexible? Like what are all the trade-offs that a city or you think of? Yeah. So the way we think about it is there's a certain cost per citizen that a city is comfortable paying to eliminate crime. And we do think you can eliminate it. Like you can't eliminate emotional crime, like crimes of hate, crimes of passion, but the capitalistic crime. Like there was a really funny No Jumper podcast a couple weeks ago where the guy was like those effing flockers. They're making it too hard to commit crime.

2:12:48in san francisco and i'm like that that that's the goal because like that guy knows on a podcast on a podcast wow he called you flockers that's hilarious it's brutal yeah it's just about like it's about making it so that you know you've arrived somebody could still do it but it's not economically viable random podcast that's amazing yes that's product market fit getting called out on no jumper for for stopping crime for stopping crime so when we look at that though and like you know the probably the most deployed city we have is spending about 22 a citizen per year with flock i think that's pretty reasonable that's not actually not that much money um it's a lot for that that city but i mean as an individual i believe that city is going to solve every single crime that happens i don't think that's too much of a burden but i do think it's about you think about building a cake you got to have different layers you don't want just all cake all icing you want cameras you want cameras that fly you also need software you need trailers because there's a more of a deterrent so i don't think it's a one size fits all fits all but for us right now we kind of see that deployments where you're going to cover your perimeter with cameras that track cars you're going to have that kind of ptz's penciled zooms for your major intersections and they're going to use drones to kind of cover the whole city or county as an overlay how how do you back to humanoids sorry well yeah i know we're gonna get there just yeah i really want to know because cost per citizen is probably really expensive we're seeing stuff from unitry there's companies in america optimus is far away i just give me your human oh sorry so my so my so my human take is like as it stands today they're just way too expensive um so if you think about like an average retailer some of them make a lot of money right if you think about like a big box retailer, they might they might generate a couple million in EBITDA per location.

2:14:35But then you go to do you kind of go down market to you know, an Ulta, Sephora, a dollar general, their box profits just like not very high. They have a lot of locations. Yeah. But their individual stores are actually not very profitable. They can't spend more than a couple thousand dollars at your per store in safety. I just don't see a world where either humanoids or, or dogs work there. And we're seeing that unfold as well, where bigger footprint locations just have both more assets and more dollars. In my conversations with retailers in particular, the kind of two wheeled approaches have been laughed off.

2:15:14They get stuck in a corner, yeah they get kicked over the dogs are seeing more efficacy and i gotta imagine like a biped like humanoid is going to be the most effective because that just sounds really scary yeah well now and you see those videos you can't kick you can't kick them over they come right back up it's it's crazy talk about a scary situation you're trying to rob a place you try to kick it over and just stands back up it's just looking at you just like what next it's gonna be like yeah dark Put the shampoo down. Yeah, dark web tutorials of how to get it to stop. Get around it, yeah. All of a sudden, the bippers bring EMF jammers.

2:15:52It's like you have to cut these two cables on the back. It's going to be wild. Sorry, Jordy. Yeah, I was just curious about just how you think about product prioritization. Because I imagine when you get in working with these cities and police departments, and they start using your products and getting value out of them, they just start coming to you with more problems, both hardware and software. But it feels like the drone opportunity is big enough that it's probably hard to... You have too many opportunities that you can probably pursue all at once. Yeah, I mean, I think we took the company from one SKU to eight SKUs in the last 12 months that all have a clear line of sight to nine figures of ARR.

2:16:35Great. yeah i agree uh and like the pipeline yeah the pipeline is there the error is growth like it's kind of wild this will be our first quarter i think where uh like our core business like won't be the biggest product line which is kind of weird i think that's a good thing um for us because we're not decelerating on that side it's just other products are really attractive but i think it is you're right like uh our bigger concern is the market adoption not our ability to build. I mean, this is a kind of enterprise-y type buyer where there's only going to adopt things so quickly. So even like on the AI front, we have a lot of ideas.

2:17:12We've built a lot of interesting products. They're just, they're really nervous to adopt too quickly. And I think the example I always give is maybe you're trying to book a hotel and you call the hotel and you realize you're talking to an AI agent, but you're kind of like, I don't know, this is better than the alternative because I'm just trying to book a hotel. I don't know, man. I think when you call 911 and you're in the middle of a violent situation, I think there's something warming about knowing there's another human on their side trying to help you. You have to say they can't be augmented with AI, but I think that's a much more challenging societal question of what do we want humans to do and what do we want AI to do?

2:17:49And we are being conscious to not make that decision for the hundreds of millions of Americans we help keep safe. Yeah. But just as a taxpayer, I would imagine that I would want the person to pick up. But I'd love for the calls to be transcribed and then AI to find patterns between what's happening and insights and analytics and all of that. Yeah, there's also something strange. Like if somebody's calling 911 to report like a drunk, somebody that's obviously drunk driving, it's like you're taking up bandwidth from somebody that is a human that could be going elsewhere. where it's like for, you know, maybe it's like you should, there should be no dial times is a clanker immediately picks up and says, what's the problem?

2:18:28And then routes it either to a human or if it's less like, you know, if it's not like immediate, you know, some violent act is taking place, it can actually be solved by a voice, you know, voice model. And I think that's the right approach. But yeah, I think it's to answer your question, like we're pretty focused on doing three things for our customers, solving more crime, whereas right now there's about a 40 % clearance rate for killing someone. So you've got almost 50 % chance of getting away with homicide. That should be zero. Every single person that kills someone should go to jail. Nonviolent crime is even worse.

2:18:59We don't solve cases faster. It takes way too long to solve crime. And we want to do more with less. Most people, I don't know if you all remember, our grandparents, our parents, it was an admirable job to go into policing, to fire. This generation doesn't view it that way, which means 80-plus percent of police departments are understaffed against their budget and it's not getting better, and technology is going to fill the gap. Yeah. People have compared you to, like, the Anderl or Palantir, kind of like, I don't know, American dynamism companies or whatever. People have compared you to good businesses.

2:19:32Yeah. But I'm interested about, we talked to Shamsankar, CTO of Palantir, about some of the difficulties of deploying software into governments. And he gave the example that one time they built a beautiful piece of software, exquisite system, and they went to deploy it. And the team on the other side of the government that was firing it up was trying to run it on a computer that had like, you know, 128 megs of RAM instead of like a gig. And so that was kind of the dawn of the forward deployed engineer. And I'm wondering if you have any unique solves on how to deploy systems, how to deploy software, if you like the forward deployed model or something else, like what's working for you at actually getting your solutions into the field?

2:20:19So really similar example. I remember distinctly we were like launching this product and the designer has a beautiful MacBook and a HD retina display. It's beautiful, right? Super expensive setup. And she's designed this like super slick thing. And I was like, great, Mariana, like you should go like field test this. So he's like, this looks dope. Like let's launch it. And she gets into a patrol car and it's a Panasonic Toughbook. It's a 13 inch screen. It's 1280 by 1024 resolution. And he's using it while he's driving 40 miles an hour. And I'm like, this is the product is not going to work. We've got to go back.

2:20:56That is literally our, we've got, I don't know, hundreds of thousands of DAUs using this product now. And they're very happy, but that's their normal use case. They're driving. They're on a Toughbook. It's a tiny screen. It's low res. It's old. And so you're pretty much treating it almost more like a mobile app, but with a distracted teenager as your customer. And that's been pretty difficult because we want to build these super high fidelity. You're just sitting at a desk all day doing your job and our customers are in the field all day. So that one's been pretty tough. And I also think the other burden, we've done a good job of going around is just it in general yeah like i city it is really tough to work with they're really tough to kind of just like get get going so we tend to build everything we can to avoid it um there's some pros and cons to that but um so far i think it's mostly pros how does that actually work i imagine is that just like you're only looking for like user licensing or like oauth or something like how do you at some point you have to plug into the it systems a little bit i imagine like well is it so it's a good example um historically everything in our world is on prim like we're one of the first cloud only solutions in this market yeah and early on that was painful because people are used to buying a piece of software they install a desktop application that installation requires it support and so building everything in the cloud which for this you know for y 'all it's like well obviously yeah let's say a very it was a very contrarian intake seven years ago.

2:22:25And now it's moving. But I mean, we have a customer that just a few years ago, moved off of paper records. And they had filing cabinets. Like, imagine if you report a crime, like, hold on, we got to go find that file. And this is a big city. This is a city with millions of people in it. Just got off of paper. And I think in Maryland, in 2023, the cloud became legal. It was illegal to use the cloud. Are there people marching? We're going to protest for legalizing the cloud. We love the cloud. If there's any cities that have still banned cloud, we will... And we hate paper. The show is presented by Ramp, of course, and we are strong in favor of ending paper and going to the cloud.

2:23:09Agree. But literally, we didn't do business in Maryland until 2023 because it was illegal to be in the cloud. Yeah. Did you ever get a test environment with a Toughbook and a car that a designer could actually go and drive around the parking lot of your office or anything like that? No. We make all of our employees go do ride-alongs. Okay. Yeah. It's so much fun. Yeah. Because you get to see the whole product in action. You get to meet the customer. You get to go catch some bad guys. It's a pretty fun way to spend eight hours. Yeah. How are you thinking about data privacy? where data lives. There's obviously so many advantages to being cloud-based, but then you have some citizens who might say, wait, why is my image with this private company?

2:23:52I'm a taxpayer. I don't have a vote at your board meeting. I have a vote at my city council. How do you grapple with all that? What's the mood on the ground in various cities? What are the dividing lines? I'm glad you mentioned cities. So our general stance is we don't write the rules. we create the levers for local politics to dictate. And so data retention is the easiest one. In some cities we work with, data retention is seven days. And every single data we capture is purged after it is seven days. But then in some cities like Dallas, it's a year. In New Jersey, it's five years. State legislation for five years.

2:24:27I don't care. I live in Atlanta. I think we're like at 30 or 60 days here in Atlanta. And that's up to the local politicians to decide like what makes sense for them. The other thing that we do that's pretty unique is every single action in our system is audited in perpetuity. So whether you're downloading, you're searching, you're doing something that's stored. So the city manager, the internal affairs bureau, those groups can actually say, hey, has anything nefarious been done? That's a big concern of people. So those two things tend to be pretty good levers for letting local politics dictate versus, to your point, no one elected me the police chief of America.

2:25:03I just built a camera at my house. I want to pitch you a startup idea that Blake Scholl, the founder of Boom Supersonic, he was thinking about doing this. Have you heard this story? He was thinking about building something before he started Boom, probably right around the time you were starting Flock. He wanted to make a smart stoplight that would have a camera on it and it would see, hey, there's no cars here. Why do I have a red light? Switch them. Feels like it would improve traffic flow. So it's a situation we've all been in. You're sitting there at the red light. There's no one coming the other way.

2:25:39Flip the switch. Why is that a good idea? Is that something you could do? Is that something any company could do? What's the market structure of the stoplight industry? Do you need to do some sort of private equity roll-up? Walk me through your, if you were putting on a VC, how would you interpret that pitch? My pushback on that pitch is to show me the incentive and I'll show you the behavior. Who's getting promoted? Who's making more money? If we fix traffic, I don't think anyone. Opportunity cost of the workers. It's all diffuse in the economy. No, but this is the question we think. Don't you think a mayor could run on, hey, we have a lot of congestion here.

2:26:19We have a technology. You'd have to do a study or something to show that you could reduce congestion if you had smarter traffic lights. It feels like someone or something. Mayors get elected on two things. Yeah. Well paved roads and low crime. That's it. That's the only thing that matter. So I mean, I think the product idea makes a ton of sense. But I just go back to one of the only reasons why, because you mentioned Andrew, when we were pivoting the business into local government, Trey Stevens was like, do not go sell to police. It's a horrible market. We tried it at Palantir. It's not going to work.

2:26:56It's not going to work. I was like, well, I don't know, I'm a little bullish. He was an investor. He's an investor in the company. It's kind of, it's quite work. And what I didn't realize is systems like Palantir are too many steps removed away from solving crime at a local level. And like Flockhead coincidentally built a product that solved crime right away. And so for a police department, crime is equivalent to revenue. So we weren't helping them save money. We're helping them generate revenue. And like that does get a sergeant, lieutenant, a police chief promoted. Like it's a mayor reelected.

2:27:28and and that's that would be my pitch to blake is like we got to find a way to make this relevant to a mayor yeah and like just a little bit less traffic isn't going to move the needle yeah and have them move off from having no technology and no cost structure well well he's he's busy building supersonic jets he's got a good for now and for now but maybe maybe that's the next thing he works on uh i have a second startup to pitch you based on your answer to that question uh automated road paving startup i go to the mayors and i say road paving gets you paid and gets you in the job? Would that work?

2:28:00Is that a good idea? How would that play out if you thought that process through? What advice would you give to a road paving entrepreneur? There was a YC company doing the little road paving. I remember this. Yeah, I remember this. But yeah, walk me through your thought process. So I actually think that's a great idea. We're working on something tangential to that. So one of the biggest issues is that to do what you're describing, you have to know where the potholes are and cities have no idea where potholes are and they rely on you calling 311 which i'm sure you both have done many times and said hey i'm just calling it to report a pothole yep no you don't and that that also costs the city on average like eight dollars per call on the 311 so it's a really inefficient system okay and so what we've been able to do is train our cameras to look for potholes and so now we can actually report back general road uh road conditions yep and that is the beginning of them being able to say hey now we can actually be intelligent about where we should send people to go repave.

2:28:56And I think an automated robot that does the paving would be even better. But yeah, I love that idea. I think I'm in. That's a$25 ,000 check. Fantastic. Well, you know where to reach him. He is, of course. Oh, last, did you, wanted your reactions. We had a guy named Riley on yesterday who made a find my parking cops. Did you see that? Oh, that park was awesome. Yeah. Yeah. Did he get shut down or did he back up? It got shut down very quickly. I was impressed with San Francisco's reaction time on that. They shut it down very quickly. It's good fun. I'm a fan of it. I think most people don't pay for parking because most of the time you don't get a ticket.

2:29:38Thank you so much for hopping on the show. This is going to be great to get the update. Congratulations on the progress. Thank you for everything that you do. Come back on anytime. We'd love to talk to you soon. Have a great rest of your day. So let me tell you. Command with 10, nine-figure businesses. Yeah, if you want to reach people in cities, you've got to go to adquick.com. Out-of-home advertising made easy and measurable. Say goodbye to the headaches of out-of-home advertising. Only Adquick combines technology, out-of-home expertise, and data to enable efficient, seamless ad buying across the globe.

2:30:06Before our next guest joins, we did need to acknowledge that Mark Leonard has stepped down from Constellation Software. Very sad news for health reasons. We hope he's okay. interesting timing basically called the top on yeah it was a we talked to carry no interest on the show you can go pull that up if you want to hear our conversation with him about these private equity software enterprise software roll-ups mark leonard was mixed on ai on sort of unclear on on how it would affect the business long term but the market did not like it and the stock fell off and the stock has fallen again on this very sad news.

2:30:44So we are, of course, sending him our best. The health reasons that he is stepping down for are unspecified at this time. But please send your thoughts and prayers. Thoughts and prayers. Mark Leonard. And we have our next guest in the waiting room in the TBPN Ultra Dome. There he is, suited up. Natan, how are you doing? I'm doing well. How are you guys doing? Great to see you again. It's been too long. Yeah, we've seen you before in the TBPN Ultra Dome. Welcome back. It's a pleasure. Give us the news. Give us the 140 characters in the company. Refresh everyone and then give us the news. Absolutely.

2:31:18So I'm Matan, CEO at Factory. At Factory, our mission is to bring autonomy to software engineering. What that means more concretely, we have built droids, which are autonomous software development agents. And more importantly, I'm here to tell you that they are the number one agent in the world. as we just released today in the terminal bench benchmark which evaluates tools like clod code open ai's codex cli factory is number one and also number three and also number five pick any model you want factory is still number one no matter how you slice it um our droids are simply the best agents in the world so what's the what's the secret what got you there is it pre-training, post-training, a bunch of RL stuff?

2:32:05Is it a data flywheel? Like what's driving the growth? Yeah, great question. So I think one of the biggest things is that most, if not all of the agents out there are built for one model in particular. So, you know, Claude Code is built to work with the Claude models. OpenAI's Codex is built for the GPT models. There are some other tools out there that aren't from the research labs that are focused on really like fine-tuning their agent harness for one given model for any given step. But what we've done with our droids is make them fully model agnostic, which actually makes them more performant in the long run.

2:32:40It's kind of similar to if you were a human engineer, and you only, let's say, studied one coding language, you would actually be a weaker engineer than if you studied all of them. It's somewhat analogous there in terms of how we've built these droids that now allows them to be the most performant with any model that you put in under the hood. How are you viewing the market and the customer landscape, automated software engineering? That feels niched down from years ago, which was just the transformer-based LLMs can write code. But as we actually dig in, we see that the needs of a Fortune 100 customer are maybe different than a mid-market company, which is different than a startup, which is different than an SMB, which is different than a solo vibe coder, solopreneur.

2:33:26where are you seeing opportunity in the market? How bifurcated is the market? It seems like you've wanted to be very general on the model side. Are you also trying to be general on the customer size side? Yeah, great question. I mean, I think the thing that a lot of the other tools have missed is the fact that the further you go into the large enterprise, the less overlap there is between software development and coding. So for example, if you're a solo developer, your software development is basically just coding. You're not really doing code review. You're not doing that much in the way of documentation or testing or design docs.

2:33:59And so where we focus and why we call droids software development agents as opposed to coding agents is that we focus on that whole end-to-end software development lifecycle, which is really where a lot of enterprises are missing. Like there's a famous study that came out from MIT that said something along the lines of 95 % of AI adoption efforts are failing in the enterprise. I remember. Yeah, exactly. And so, I mean, it kind of makes sense like if you think about software development sorry i i love hitting you with the surprise sound we'll get some more positive we're not bearish on you it's just no no that was good it was perfect it was just too good um but you know software development is a pipeline right and if you focus on only one part of that pipeline namely code generation yeah and you expand that i used to be a physicist i don't know if you guys are big on fluid mechanics but opening one part of a pipe and doing nothing to the others you don't actually increase the throughput.

2:34:55You just create new bottlenecks. And so the reason why a lot of these efforts are failing for software development is they're focusing on just coding, but then that just punts the problem down to testing or code review or documentation. And that's why a lot of the other tools out there aren't seeing kind of the adoption and the real business outcomes that we are with the droids. How do you see coding agents fitting into the consumer world? This might not your business at all, but I noticed that the, you know, I've seen incredible results just from asking a question that you could hit deep research with, but if I ask it to cloud code or codex, it can build an entire HTML web page with JavaScript widgets and bar charts and it just produces, it instantiates the information in a much cooler, it's interesting way.

2:35:47And I'm wondering how you're seeing a crossover from advances in automated AI coding into a consumer world where they might not even know that they asked for code, but they got code. It's already happening a little bit when you hit O3 Pro, it'll write some code to give you the answer. You don't even see it unless you unfurl the reasoning tokens. But how do you see that playing out in the mid to long term? Great question. I think this is something that people aren't yet fully aware of, but this was actually the very first statement of our announcement, which is the best agents for software development are becoming the best agents for everything.

2:36:27And the reality is because basically every problem can be broken down into some sort of software development problem. And you can actually take it from Anthropic themselves. Literally yesterday, Alex Albert, the guy who runs DevRel at Anthropic tweets out, You know, the best coding model will be the best model for many types of knowledge work. Code is how computers operate. Anything you do on a computer can be done through code. And this is really why factory being the number one software development agent is really going to then lead to a lot of other tasks. And we're already seeing this in the enterprise.

2:37:03So we sell explicitly to developers, but already PMs, designers, even people on the operation side. So like finance, biz ops, that sort of thing. we find that they're like sneaking their way in, even though they didn't actually, you know, put any budget towards it. And they're starting to use droids kind of behind the back of some of the VPs of engineering. And this is really something that we've expected because of this fact that that code is really the language that computers speak. And if you want a computer to do something for you, you will eventually, through some means, need code. A couple of questions.

2:37:37What models are you guys getting the most leverage out of today? Is it a mix? Are you are you focused on you said earlier, I think you're focused on a variety being trying to be model agnostic. But be curious where who who you're paying out on the back end. Yeah. So right now we achieved the number one score across the board on Terminal Bench with Claude Opus. But again, we are, you know, really focused on having the model agnostic stance because org by org, they might have different preferences. is. Also, what the best model is depends, you know, what day it is, you know, tomorrow, there could be another new best.

2:38:17And it's important that we have that ability to quickly swap them in. So that's one thing that I think is important. It's also even task by task, there are certain models that are better. And we want to make sure that the user has that familiarity with the model so that they can go in and, you know, swap it out. If there's a task that they're doing that GPT-5 might be better for a grok might be better for. You forgot to mention, you raised some new money today give us the news right we got a gong here that is right uh we have raised 50 million dollars from nea jp morgan and nvidia jp morgan jamie diamond's getting in he couldn't help you couldn't help himself couldn't help himself i love it congratulations that's our deposits everybody the world's deposits at work uh talk to me about that last question we'll let you get back to your busy day.

2:39:08Talk to me about the branding. It feels like we just got the idea of an agent recently. Now you're kind of pitching droids. It's clearly your term for droids. You're looking for. Yeah. Yeah. People always talk about, you know, being we're not. Yeah. How much of that is like a differentiated brand that you want to be specific to your company versus like a new coinage that you want to describe a different way of working that you'd actually like to see other companies adopt? And if you were seeing the entire industry standardized around that particular piece of language, you would be happy? Or would you be like, hey, they stole our brand?

2:39:47Yeah. I mean, I think generally like agent as a term is here to stay. But the point is, as a kind of general purpose term, it's often synonymous with like poor quality or like a while loop wrapped around LLM calls. And I think what we want to do is to make good on our promise to customers, which is giving them that best agentic experience. And we do that through droids. At the end of the day, when you have a cold and your nose is running, you don't want a tissue, you want a Kleenex. Similarly with software development, you want the droids to come in there, right? Okay. I love it. I love it. Well, congratulations on the round.

2:40:21Thank you so much for hopping by. We'll talk to you soon. Thank you guys for having me. Thanks. We'll talk Cheers. Let me tell you about Bezel. Getbezel.com. Your Bezel concierge is available now to source you any watch on the planet. Seriously. Any watch. And we have our next guest in the restream waiting room. Also, I guess we've got to wait to talk about this. Two new launches. One from Meta. Yes. The Alexander announced Vibes, which is a Meta AI app for short-form AI-generated videos. Okay. Yeah. YouTube launched something with AI-generated shorts, leveraging VO3 recently. What else? And there's a new ChatGPT product called Pulse.

2:40:56But let's get into it with our next guest over at Invisible. Welcome to the TV show. I'm Francis. How are you doing? What's happening? Welcome to the show. Doing great. Excited to be here. Thanks so much for hopping on the show. Kick us off with an introduction on you, the company. Any news you got to share? What's new in your life? Yeah. Well, as you saw in Bloomberg, we've raised$100 million this year, which is a big turn of events. There we go. Woo! $2 billion. Yeah. Crazy thing that when you saw Meta acquiring scale, they had raised$1.8 billion. And we had only deployed$6 million. We scaled profitably to$134 million of revenue last year.

2:41:38That is wild. I remember I heard about you guys. I forget what context I heard about you guys for the first time. But even this was probably two years ago. Even back then, I was like, you guys were somewhat under the radar, I felt like, but I heard some of your revenue numbers back then. I was like, how have I not heard about this company? But yeah, we wanted to... Invisible for not much longer. Yeah, no longer. Now very visible. Now we're visible. By the new domain, you're visible. Visible technology. Give us an... I mean, it'd be helpful to hear where you guys have an edge in the market broadly.

2:42:16And then I want to kind of understand Yeah, problem set, core, like what you're actually replacing, where customers are getting the most value, anything like that would be super helpful. So 10 years ago when we founded the company, there was a question, which is if there's an app for everything, why isn't everything perfect yet? And Salesforce was the first SaaS company in 1999. For the last 25 years, every enterprise software company has been a SaaS company. And this has actually put customers in a pretty absurd situation where if the customer wants a cake, Silicon Valley will not sell them a cake.

2:42:51They will sell them tools to make a cake. And the customer then has to hire a systems integrator like Accenture to stitch together all these SaaS applications into an end-to-end solution that actually works for the business. And so that is what we were disrupting. And Palantir was not public yet, so they weren't a well-understood comp. we were kind of like an ugly duckling because we were talking about AI services. And so it's just a fundamentally disruptive business model. So you were competing initially with someone like an Accenture to integrate existing software systems. Is that right? Yeah, we build custom AI applications for enterprises and governments.

2:43:29And so you can think of this very different than SaaS, like a triangle. We have the horizontal platform, which is very powerful. But you have field engineers and field CTOs and a forward deployed motion that builds custom AI applications that actually solve the problem for the enterprise of the government. And our insight was that even though every solution would be custom, the horizontal platform would allow you to sort of build infinitely customizable software over time. That makes sense. We've been seeing Mark Benioff and Dr. Karp going at it over various contracts, Salesforce, which you already mentioned, Palantir, which you also mentioned.

2:44:03Um, are you, are you in that knockout drag out fight? Have you found a differentiator around industry or size of problem or, or are you just going in the, the arena? So Salesforce was founded in 1999. Palantir was founded in 2003. So way before the Gen AI era. So we were in a sense like the Gen AI native, uh, way of doing this. We hired Matt Fitzpatrick who previously ran McKinsey's quantum black labs. and he's now our CEO. And after years of being capital efficient, this round sort of enables us to go into a pre-IPO motion. And yeah, if you're a public markets investor, you don't really have that many options for buying AI today.

2:44:46So, and this is generally true for the enterprises, the customers themselves. If you want to build custom AI solutions, Palantir is like a data integration and decision-making support company. So they really focus on that. But if you have a problem in anywhere else in your business, how do you build a custom solution with world-class field engineers? It's a very different type of engineer, very different type of go-to-market person, very different type of business that is familiar building custom solutions on the enterprise. Enterprises do not want their data to leave their systems. So they need all the solutions to be on-prem and containerized, and we have the ability to build in that way.

2:45:29Do you think there's a shift in the AI era to large enterprises doing more of these sort of like semi-custom solutions? Is that going to be a continuing trend? Because it feels like the last era was very much like rip out the old custom on-prem solutions and go to some sort of like one-size-fits-all cloud solution. Exactly. Yes. And this is a reversal. We're going all the way the other way. And I think that's because enterprises ultimately need proprietary and custom solutions. So in the SaaS era, like I said, they were stitching together things and they had to do that with some combination of like their internal engineering function and systems integrators.

2:46:10And systems integrators are not tech companies. They're going to overcharge, under deliver. You're going to pay them by the hour. So their incentive is to bill you as many hours as possible without getting fired. And that's not really aligned with efficiency. And so in this era, I think enterprises are realizing it's going to be very, very difficult for them to build world-class engineering teams and to build a platform like the one we have, where we can take the best models, the latest models, which we train. We have an AI training business and deploy them in the enterprise to actually solve the business use cases that they have.

2:46:46Yeah. So how much should we read into you guys transitioning away from training? Is that a business that is? We're not transitioning away. We are fully committed to training. So actually, the move of meta acquiring scale basically cleared the field. And so it's an inherently oligopolistic market structure where there are a few players that have invested as much as we've invested over as many years as we've invested. And so we have like 20 ,000 experts. And that number is scaling very quickly. We can hire like 1 ,000 experts a week. So when you're asking a model a question about the chemical properties of silver or the history of Sweden or whatever you're asking a model, we have PhDs, masters, experts in every subject that are training these models.

2:47:31And there's evals and lots of inputs into making these models great. Got it. So leveraging the experience on the training side in order to help the customers. To deploy it in the enterprise. Got it. And then the business model for the deployment side is, I'm just going to repeat it back to you so I understand, is there's some period that looks more like services, but it becomes a piece of durable software that they can use for a long period. It's a great model. Just like Palantir. Exactly. Yes. Got it. AI services is exactly that way. Yeah. And that puts us in an investing mode. We literally invest in our customers.

2:48:14So we put field engineers, field TTOs in with our clients, and there's an investment period to build the solution. But once the solution's in place, that is very durable revenue. And so you're like a nightmare for someone like an Accenture, some of these big consulting companies that don't really have the true expertise around training these models, and you get to have a lot of organizational bloat. Is that right? Yes. So Matt, who's our new CEO, we bonded over ancient Greek and Roman history, and he calls it the battle of Thermopylae, because even Accenture has like a million people worldwide, has some huge headcount.

2:48:56If the pass is only yay wide, and there's 300 people at the pass, and we're always winning at the pass, then we're going to win every battle. In other words, I believe our technology is dramatically superior already to traditional systems integrators. So if you're a buyer and you're hearing Accenture's pitch and Invisible's pitch, which one are you going to pick? The Battle of Thermopylae, Spartans win. It's fantastic. Spartans are coming for it. What a market. This is just a fantastic market. Awesome. Well, congratulations on all the progress. Great to be on the show. Big fan. Appreciate it. Thanks for having me on.

2:49:30You said prepare to go public. What timeline are we thinking about? Is that multiple years out? Is it? We think in terms of how many hundreds of millions in revenue do you need to have before the story is just obvious to a public markets investor. So we really want to build a business for all markets. So the intrinsic value of the business, the ability to survive in any condition is key, and then we'll take it public. Awesome. All right, we'll come back on anytime. This was fun. We'd love to ring the bell to you. Great to have you on. Thanks. Up next, we have Jacob from, sorry, David from Juicebox coming into the studio.

2:50:12Juicebox. I believe he's in the Restream waiting room. Come in. Juicebox has some fundraising news. The gong's already warmed up. How you doing? Welcome. Thank you. Thanks for having me on. David. Good day today. Introduce yourself. He picks kind of a good day to drop a cinematic launch video. This is a good day for it. But take us through it. introduce yourself, the company, and the news. Yeah, I'm David, co-founder of Juicebox. Juicebox is an AI recruiting platform. We help our customers win the talent war, and we do that by helping them find and engage the best talent. And yeah, today we're announcing our$30 million Series A and previously unannounced$6 million seat.

2:50:54Boom. Hit it a few more times. Let's go. There we go. There we go. Congratulations. Big day. Okay, AI winning recruiting wars. What does that mean? How long until you're out of business because no one has a job anymore? I thought AI was going to get rid of all the jobs. No silly questions. Are you working more with early stage, growth stage, public companies, all the above? Where are you kind of focused right now? As I saw, I admit, I only saw half the launch video. so you had me up until whatever 50 percent nice did you see the the part with the zuck impression i did see the zuck impression yeah you made it through the important part um yeah we we work with all kinds of companies ranging from you know founders doing their first hire all the way to um kind of growth stage companies a few fortune 500 customers as well um some of those companies are perplexity, ramp, Quora, and a bunch more.

2:51:58I think the common thread for where we're able to add the most value is if the right person for the role is actually really hard to find. And that can be because they have a specific skill set, a specific set of experiences, something that makes them unique and uniquely positioned to really excel in that role. I think of hiring as kind of like some sort of chain of events with different point solutions. There's actually finding talent, job platforms, LinkedIn, Indeed. Then there's, you know, you might want to send someone a test or have them fill out a form or process resumes. You need an applicant tracking system.

2:52:33I've seen other point solutions for send a video and then ask some questions and then process the video and let the user or the hiring manager kind of review videos. There's a whole bunch of different things. Do you see yourself as kind of a cross-journey platform? Are you focused on a particular landing zone? Like, where's the product position today? Yeah, it's a great question. I think of the recruiting space is really having two different ways in which you could add value. One is finding net new candidates, people that you wouldn't have discovered or wouldn't have gotten into your pipeline in the first place.

2:53:08And then everything that's carrying through the pipeline and optimizing that pipeline. And the latter is usually about like saving time and optimizing conversion rates. And the former is about making sure the right talent is speaking to you in the first place. We're focused on that part. And so our goal is to help companies discover talent that they wouldn't otherwise. And we do that by combining a bunch of different data sources and then using large language models to run the search and surface those profiles for you. And so if you think about what a recruiter does today on, say, LinkedIn recruiter or like a typical search solution, they set a bunch of filters and then start reviewing profiles one by one.

2:53:43It's super manual, requires a lot of thought still to think of what could make that profile a fit. And that's exactly the process that we're able to do with LLMs. So is this a direct replacement for LinkedIn recruiter? Are you trying to get people to just be able to... Or do you want to puppeteer LinkedIn with a screen recorder or API or something like widget? I don't know if they'd like that. Something like that. I don't know. It depends. I mean, there's been some companies that have successfully some of them got acquired by linkedin but i don't know no puppeteering of linkedin most of our customers are existing linkedin customers our goal is to help you find net new talent do so in a more efficient way so it's really about kind of enhancing the workflow of the recruiter and enabling them to do that search that would just be too manual or too time consuming to do otherwise like looking through 50 000 software engineering profiles is just not something that's like feasible.

2:54:41But for an LLM, it's very feasible and can do it in a couple minutes. So there are, I mean, there are different pools of talent for, I mean, we do media video production here. We might want to hire somebody who doesn't really have a LinkedIn presence, but they might have an Instagram account or they might have a personal website where they've done some, they put up their show reels or what they've worked on. Do you have crawlers that could go out and find those profiles on the internet? Like how, how could I think about the surface area of you going out and finding me candidates and sourcing? That's right.

2:55:13So we look at a bunch of different data sources for different types of roles. So I'll give two examples. One on the engineering side, GitHub profiles, a ton of value on those, especially where traditional LinkedIn profiles or resumes might be a bit more sparse, especially for engineers who don't put a ton of info on there. GitHub's can be really rich and a really interesting data source. Meanwhile, on the sales side, often what we see is, you know, customers want to find sellers who have experience selling at a specific type of buyer persona. And so there it's actually a bit more about the company data.

2:55:44You know, what type of companies does their current company sell into? What type of a platform are they selling? Is it a SaaS product? Is it a usage-based product and more? And so all of that information we enrich and we try to aggregate up front so we can make those decisions for you and help surface the right profiles there. There's another, they put an example. they have a tag on their site called likely to switch, which would be like you have a round of layoffs, funding or vesting timelines. People don't really think about that. You can see like, okay, this person's been here for four years.

2:56:18They're probably getting a refresher, but they're vested out. That's pretty cool. What do you think? do you have a strong thesis yourself around employment over the next 10 years? I'm assuming Sequoia leading this round. I think that says - Sequoia confirmed, not AGI-pilled. Confirmed. No, but it says that we're still going to have talent wars in a decade, right? That's what that tells me. But how do you think about it? Yeah, I think if you're AGI pilled, it actually means hiring the right talent is even more important. And the reason for that is that if you think of the output of a given person is usually constrained by their time, their previous knowledge and context, and then whatever tooling they're using.

2:57:10And so if the tooling that they're using is getting exponentially better, they use LLMs to automate a bunch of the things they'd otherwise do they're much more productive than they would usually do um and that's all a multiple of the person or like the initial person and their kind of raw capacity having the right person that role becomes even more important because if ai basically 10x is whatever you do um you want to have the highest baseline that you can add that 10x to and so it gets even more important to have the right talent on your team and if you think of that in like the context of a software engineer um if a 10x software engineer becomes 100x you want to have as many 10x software engineers as you can And so my view is that the race for talent will become more and more competitive as AI gets better and better, because having the right people on your team has that outsized impact.

2:57:56And I think we're already seeing some of that in the war for talent and the AI labs. But I think more and more of that will trickle down into the rest of the economy as well. Sure. What do you think about outcome-based pricing, famously used in the recruiting industry? Most human recruiters, even if they work for a firm, they might get a one-month salary as a bonus if they place someone successfully, versus LinkedIn, which is a subscription software, completely not outcome-based. What model do you think will dominate in the future, and what are you doing? Yeah, it's a really good question. So we have like a perceived pricing, normal SaaS model.

2:58:37But then we also have an agent product, which is priced per role that the agent works on. And so it's not quite outcome-based, but it's more like usage-based. How many roles are you deploying the agent for? Over time, we want to get closer and closer to the outcome-based pricing as is possible. You know, if you think of recruiting agencies, it's pretty common to do like 20 % to 25 % fee of first-year salary, which on like a dollar value is much, much more than one could probably charge for a SaaS subscription. And so there's definitely a lot of things that are attractive there. At the same time, I think the market's maybe not quite there yet or not quite ready to pay for software on, say, a percentage of higher model.

2:59:18Though I hope we'll be able to push in that direction over time as well. Fantastic. Well, congratulations. Super cool. Really insane progress. Yeah, insane. And congrats on the new round. Thanks for having me on. Cheers, David. Have a great rest of your day. Thanks for coming on. Sam Alton launched a new feature today called Pulse. It's in ChatGPT, initially available to pro subscribers. That's the$200 a month tier, right? Yeah. Pulse works for you overnight and keeps thinking about your interests, your connected data, your recent chats, and more. Every morning you get a custom-generated set of stuff you might be interested in.

2:59:55It performs super well if you tell ChatGPT more about what's important to you. In regular chat, you could mention, I like to go visit Bora Bora someday, or my kid is six months old and I'm interested in developmental milestones. In the future, you might get useful updates. Think of treating ChatGPT like a super confident personal assistant. Sometimes you ask for things you need in the moment, but if you share general preferences, it will do a good job for you proactively. This also points to what I believe is the future of ChatGPT, a shift from being all reactive to being significantly proactive.

3:00:26I completely agree with this concept. and extremely personalized. This is an early look, and right now, only available to pro subscribers. We will work hard to improve the quality over time and find a way to bring it to plus subscribers, too. That sounds compute-intensive. That sounds like they're going to be running, essentially, an O3 pro-level query, a ChatGPT5 pro-level query every night, asking, based on what's going on in the news, based on what this person searched for, based on all the chats recently, let's summarize and put together some sort of dossier for them. And surface that, so that's basically one big fire up the GPUs every single night.

3:01:04You've got to get the customers to pay for it, at least in the short term. But what do you think, Tyler? Do you think he'll use this? It's pretty interesting. I'm wondering, is this the thing that Samoan was talking about, the compute-intensive thing they're rolling out? He said this week we will be launching a couple compute-intensive things. Some of those will probably be announced at Dev Day. This is one that he's just announcing this week. I mean, this feels like it's effectively doing something like, you know, just kind of hanging out in the background, somewhat actively, somewhat passively, just gauging what your interests are.

3:01:39I can see this as almost like having a Google alert set up. Amjad from Replit says, reminds me of Google now, but how do I get started? I don't see it in the app. So it's obviously rolling out slowly. Yeah, you can definitely see like an agent being built into this. Like that seems very natural. Totally. And I feel like ChatGPT was already starting to sort of surface this concept of like, hey, do you want me to do this every week for you? Do you want me to do this every month for you? But I haven't actually set up any of those cron jobs and had it stick around and become part of my workflow. But I like the idea of it.

3:02:17And I think that the big thing is just like for retention, if every time you open the ChatGPT app in the morning, instead of just an empty box, you're greeted with like, here's some interesting stuff. Or you're getting a push notification. Or a push notification. That's going to be huge for retention. Or it's like, hey, this product launch. Do you want to buy this? Yeah. Do you want to buy this? Let's pull up this video from Alexander Wang to share Vibes, a new feed in the Meta AI app. let's see if they beat the the slop allegations I think it's powered by Midjourney, so it looks pretty cool. Yeah, I mean Midjourney, fantastic model.

3:02:55Looks pretty good. Yeah, I wonder how this is actually going to... So separate app is what he's saying? It's a new feed in the Meta AI app. Okay, in the Meta AI app. So you would expect this to be baked directly into Instagram. That's probably too much compute out of the gate to just drop it in as a filter or something, or button in Instagram. Because if you have a billion people pushing that button, and you're just going to get swamped. I think this beats the slop allegations. There's some cool stuff you could do with this. I mean, video generation looks good. Looks VO3 level to me. I don't know.

3:03:36Obviously, these were curated and selected, but... We'll have to get an app. Tyler, before we do the show tomorrow, please use the app for, I don't know, like 12 or 14 hours, something like that. Just straight, no breaks. Just get wire-headed. Just lock in. Just lock in.

3:03:57Max Conrad in the chat says, I'm tired of hearing about fundraisers without business metrics, top-line, bottom-line value created for customers. Okay, Max. Good point. We want to push people harder to say, if you want to come on, you've got to give us some numbers. And if you don't got numbers to share other than the headline. We should have a very small gong. Credit to Juice, I think they've been actually crushing it. For raising money. Yeah, I mean, that is a market where money flows very freely because you're, as a business, you're ready to sign a check for$200 ,000 to hire someone as a software engineer.

3:04:30You're like, yeah, I'll pay$10 ,000 to get the job done,$20 ,000. So the money flows quite freely, and that's why there's so many executive recruiters, software engineering recruiters that make a ton of money just working basically for themselves, just as talent agents moving things around. Well, Meek Mill and Elizabeth Holmes are going back and forth on X. Elizabeth says, thanks, Meek. Currently serving a 137-month sentence in federal prison. Would love to work with you on reform. Here's some legislation I have drafted. Your story inspired me. And Meek Mill says, let me check your story out. And Will Brown says, Elizabeth Holmes, this year is our year.

3:05:08Elizabeth Holmes, we can never forget this, Tiger. Meek Mill. I used to pray for times like this to rhyme like this. I know. Focus on it, too. It's a great one. Yeah, I think they're thinking about different aspects of reform. Well, we don't rap, but we do sing. Maybe Meek Mill would want YC arrest, where she has to lock in and just repeatedly build the device forever. I like that. We don't rap, but we do sing. Find your happy place. Find your happy place. Tyler missed it. I got a second to kind of like hit the right note there. Find your happy place. Find your happy place. Book of Wonders, Inspiring Views, Hotel Great Amandes, Dreamy Vets, top-tier cleaning, and 24-7 concierge service.

3:05:48It's a location. Well, we got breaking news. Trump signs order to approve the TikTok deal and avoid the U.S. ban. The chat was on it way before we were. And let's see. TikTok is poised to be spun off into a separate U.S. entity to comply with the 2024 law requiring the China-based parent company, ByteDance, to divest or face a U.S. ban. Trump said I had a very good talk with President Xi a lot of respect for him hopefully he has a lot of respect for me too and we talked about TikTok and other things we talked but we talked about TikTok and he gave us the go-ahead under the deal a group of U.S.

3:06:28investors including Oracle and Silver Lake are set to take a majority stake in the new TikTok entity let's give it up for Silver Lake good to see them throwing some size around as well as Oracle. ByteDance will maintain less than 20 % in equity to comply with the divest or ban law. Vice President Vance said the company will be valued around$14 billion. Feels clearly low. Just the US business? I don't know. I felt like, I mean, we talked to Sean Frank and it sounds like they were losing a lot of money on TikTok Shop and some of the, I mean, the growth had probably plateaued with wheels and shorts.

3:07:05Well, they were just losing money in general. Yeah, but you got to imagine that that monetizes pretty well. It's such a big network, so much time on site. But yeah, it's trading like a Snapchat or a Pinterest, basically, like a non-meta property, a non-Google YouTube property. Yeah, it's crazy. We'll have to keep checking in on it. So TikTok valued less than perplexity. Okay. honestly now i can see why arvin was trying to get a bid in true yeah everyone was like oh so much bigger but yeah i'm already a merger of equals basically brett adcock should have should have taken a crack he could have he could have absorbed easily absorbed of his market cap easily and roll could have true there's a lot of companies that could have absorbed uh i'd like to I'd like to see Palantir pick them up, run the data.

3:07:59Yeah,$14 billion is crazy. That is crazy low. Crazy low. I'm surprised the CCP said yes to this. Yeah, what's the catch? This feels like it's worth$140 billion to the CCP. It feels like there's other chips on the table that are being traded around, whether it's like rare earths or some sort of deal on tariffs. This is such a multi-pronged deal between different countries and stakeholders. The UN thing just happened. And so there's a whole bunch of different pieces. And the art of the deal is not a single iterated price, a single asset in the moment type thing. Could Truth Social have picked it up?

3:08:42Truth Social is right around there too. No, they've. They've fallen. They're in the single digit. It's still a unicorn, right? Our president is still a unicorn tech founder, I believe. $4.7 billion. There you go. He's a unicorn founder, folks. When's earnings on November 7th? Tune in. We got to lock it for that one. I don't think DJT gives a speech. He should. That would be crazy. What you got, Tyler? Do we know? I think there are rumors that the TikTok algorithm would still be governed by the Chinese, but then it would run on American hardware or something. We're going to do the inference. Yeah.

3:09:17We're going to do the inference. They'll do the training. We'll do the inference. It's like the algorithm with Chinese characteristics. Yes, but I am somewhat bullish on the idea of doing some post-training on top of their algorithm or doing some secondary post-inference. You see the ranking of the feed. You're doing analytics on that and seeing, okay, there's still some propaganda stuff here. Was that confirmed that that is what's going to happen, though? I don't know. I don't know if that was confirmed. But it's not a total black pill if the training still happens there because you can do so much post-training, I think, and monitoring.

3:09:55And even just having the data, you can start running analytics and understanding what type of content is showing in what context. Are there actual, are certain trends or keywords or is there certain censorship of certain ideas or promotion of certain ideas? At least if you have access to the data of what's being served, what TikTok users are watching, you can then understand and then you can apply pressure or post-training or anything else. Anyway, in other news, the Lucy nicotine vending machine has arrived at Palantir. This was a journey. I worked with Eliano on this. And John says, Palantir has a climate-controlled Lucy vending machine for their employees in their office.

3:10:34And you're bearish. It was a lot of fun. So we'll be sending out a few more of those. hopefully getting one in the TBP and Ultronome soon. The last thing was the Financial Times has an article about America's biggest corporations keep talking about AI but struggle to explain the upsides. We'll dig into this another day. But they analyzed hundreds of filings that suggest S &P 500 constituents are clearer about the technology's risks than its benefits. And another one of these data points of Fortune 500 companies being reticent to adopt AI. I'm not sure if it's just blanket bearish for Fortune 500 companies.

3:11:12If you're a big enterprise and you're not able to figure out a way to deliver positive ROI when a magical new technology comes along, it might not be a good sign for you. Jordy, what else do you want to talk about today? Yeah, I was just confused. I was trying to dig in and see. I didn't see A16Z in the announcement anywhere. Oh, yeah, they were supposed to be, right? Maybe they pulled out or something. I don't know. I like the idea of the Ben and Mark show just being hard-coded into the algorithm. First post every time. They got Rick Rubin on there. Show me some Rick Rubin TikToks. Some Tornberg.

3:11:44Little Chris Dixon in there. Some KB. This would be a good TikTok algorithm. I'd be down. They still could be in it, but we'll see. We can ask. I hope the thumb is on the scale, regardless of their ownership position. Putting thumbs on scales. A big fan of thumbs on scales. Anyways, without further ado, we, I think, got to get on with Taipei. I think we do. I think we do. We will see you folks tomorrow. Thank you for tuning in. Thank you for tuning in. Leave us a review on your favorite podcast app if you're listening there. And we love you. We will talk to you soon. See you tomorrow. Goodbye.