Palmer Luckey’s EagleEye Reactions, Defending Ferrari, Kushner Story Ignites Debate | Alex Klein, Hemant Taneja, Rob Toews, Nathan Benaich

30:57These are outsiders. And it would make him look like an outsider. Was it again? It was Bob Iger? Yeah. And Bill Gantt. Someone. Something. It was like the guy who runs the basketball league or something. The basketball. The sport of basketball. Literally not a tech company. He's hanging out with somebody who runs something that's so old, not in the tech world at all. It would portray him. if a journalist were to really amplify that, they could totally spin a narrative that Josh Kushner is not a major player in technology. Well, there were such no names that they had to actually put their name on.

31:31That's right, they did. Because audiences don't know who they are. So it's like, oh, this is this guy's name. Jack, thank you. Adam Silver. Okay, yeah, I mean, like, you could imagine how they would write that about like, oh, he's... Adam Silver had that famous line, get ready to learn about bubbles popping, buddy, or something like that. Sure, sure. Jacob Rintamaki had a little bit of a longer take on this whole story. I'd like to imagine I fail, though, by inherent nature of being human to understand the arguments of the tech folks and the journalist folks. And here's what I believe they both say and where I agree slash disagree.

32:10Tech folks around 2016, probably earlier around Gamergate, the media had a shift towards being much more critical of technologists, and this got exacerbated with the rise of more left-leaning political ideology, which has strains of anti-capitalism woven in. It's nice for Wired, et cetera, to finally return to covering tech in a fun and optimistic way. Has Wired done that? I feel like I haven't been tracking exactly where Wired is. I know they loved Palmer Luckey, then they were really anti-Palmer Luckey. They came after Friend. They came after Friend, but so did Heineken, which we will get to.

32:44And then journalists, well before 2016, tech just frankly wasn't that important. Yeah, that's definitely true. It was hard to write a story about a SaaS product or like the rise of a SaaS founder. It just wasn't a gripping story. And now that it's a major portion of our society, people should be inspected more carefully. And frankly, a lot of our criticism isn't that bad. The tech folks just have soft skin. My perspective, I'm hesitant to call Colossus at all investigative journalism since there are more puff pieces or a farm for the Gen Zers than not. But they are deeply thoughtful portraits of fascinating people.

33:19Tech people have gotten a lot of unnecessary SHIT from journos, but they also tend to not have the world's thickest skin either. Yeah, it's a pretty good take. I think the role of investigative journalism just is a separate thing. And we're seeing that still exist in different worlds. But this enthusiast media, this desire to actually understand someone. And it also just lays, even if you're like, I want to write the hard hitting piece on Josh Kushner, like, well, like good. You should be happy that Colossus exists because like it gave you a bunch of threads to pull on, right? Like you're like, uh, okay.

33:58I feel like there were 75 facts in here, 20 of them. There's another side to those facts. Like, well, now you have like your, your, your template for your, for your investigative journalism work. On the other side, I always, uh, enjoy going to futurism.com. Yes. which is a media company you would assume is excited about the future uh they uh here's some some of their latest stories divorced tesla fan admits that his cyber truck is repulsive to women

34:29uh open ai bans mlk deep fakes after disaster uh that one seems fair futurism isn't necessarily positive maybe they're doomers they're like yeah futurism yeah they're they're kind of They have in their ethics section, they have Goldman Sachs says Gen Z is pretty much permanently screwed. So sorry about that, Tyler. Rough. Bad if true. As Microsoft forces users to ditch Windows 10, it announces that it's also turning Windows 11 into an AI-controlled monstrosity. That's something I don't think a lot of people are worried about, but it probably gets clicks. Well, you know the future of code review in the age of AI?

35:07Turns out it's graphite.dev. Graphite helps teams on GitHub to higher quality software faster. Jack took to the timeline. He's back on the app he founded. He says a music app with no podcasters. Tidal has no ads, no podcasters, just high quality music. We're working to improve Tidal every day for artists and audiophiles alike. I haven't used Tidal. Was Tidal acquired by Apple? Was that what happened? No, it was Square. Oh, Square. Okay, so what is he saying here? Well, he's just taking a shot at the podcast, the podcasters, which is fair. So he doesn't like podcasts on music apps. So he's just saying that they've made the deliberate decision to not put podcasts on tightrope.

35:57Which is cool. Yeah. I think people deserve opinionated streaming platforms. At the same time, on Spotify, I feel like I've never been like, oh, it's harder to find my playlist now because there's so much other stuff going on. Certainly YouTube has never been a place, even though you can listen to music, they have a separate music app, and YouTube has been like, there's way too much going on for me to actually go and create a music playlist of music videos or anything like that. I think the solution to this - Underrated that of Block or Squares acquisition frenzy during the Zurb era. They got Tidal for 350.

36:39I will see how that deal pencils out in the fullness of time. Was that Jay-Z's? Yeah, yeah, yeah. Okay, yeah. And that just got a lot of pushback because it was kind of like, hey, you guys are boys, right? Like, do we really need a music streaming platform at our fintech company? Does it really make sense? And then always wild to think they acquired Afterpay for$29 billion. uh now square is worth 45 billion yep um so i have a i have an idea what if we take our three hour podcast we use 11 labs or suno to turn it into a song and we release a musical version of an odd title we bring the fight to title and make it every single day we drop an album yeah we drop an album and it's us singing singing singing the news singing the timeline because we could take we could take our takes so your take on pin and farina and ferrari we take that we transform that with an llm into lyrics and then we transform that into a song and then you and then you uh that says buying your homies lackluster streaming platform is goals it really is it's it's amazing just guys being dudes I guess why did he say RIP Square yeah that was odd he's quoting an announcement from somebody who it works at Square who says super proud to have been involved with this over the past few months the lower cost of acceptance with BTC will make traditional card processing obsolete we'll be announcing some really exciting sellers who've moved to Square for Bitcoin they are so convinced that people want to pay for goods with Bitcoin?

38:26Who? Square. Square? Yeah. Maybe they will. I bought a TV with Bitcoin. It was the worst financial decision of my life. Paid one Bitcoin. Yeah, it's a$100 ,000 TV. $100 ,000 TV. And it's not even 4K. And it's actually in the trash now. I gave it away because it was useless after a while. Wait, when was this? It was in like 2013 or something. Bitcoin was like a thousand bucks or something. Yeah, just before you were born. Yeah, everyone in tech was like, yeah, you definitely want to be buying stuff with Bitcoin. You don't want to be just saving it. Like it's a medium of transaction. Trust us. And so I went on Newegg and I was like, cool, I have some Bitcoin.

39:05I'll buy a TV. I'm living in the future. Bought one Bitcoin, bought a TV. You should run it back and buy a car. I actually spent like five Bitcoin on like consumer electronics that depreciated like crazy. well you should run it back our first bonus our first bonus it's so that we were taking payment in bitcoin so we had accrued like 100 bitcoin and it should be like 10 million dollars today and we gave everyone on the team as a christmas bonus five bitcoin which was like five thousand dollars is like a as like a bonus and if everyone held it would be like half a million dollars but i think a lot of people were like i'm gonna buy a tv tv sounds nice or like I'm going to rotate into something dumb.

39:49I don't know. Well, I love that Jack's back on the timeline, tearing it up. Paolo over at Tether did an announcement. Tether donates a quarter million dollars to OpenSats to strengthen free and open source ecosystems supporting Bitcoin and Freedom Tech. Jack says, why only 250K? Somebody asked, how much did you donate? You guys, over 21 million. You? jack is is back on twitter on in a big way just going around he's home he's home you know who else is this is like the former owner of the dive bar coming back in and just talking smack yeah yeah he's like i don't know anymore but spiritually i own it a lot of soft power yeah a lot of soft power i know where i know where the keg is i can pull out a new keg if i want i can go in the back i know the door in the back's loose and i can get in in the middle of the night do whatever I need to.

40:44It was great. We're still going to let it in. This ad from Heineken. So is this real? We need to figure out if this is actually real or if this is AI because Heineken just, I didn't know they had a dog in them to actually troll this hard if this is real. Tyler, can we do a fact check on this post which shows Heineken, the beer company, which has been around since 1873, is taking a shot at friend of the show, friend founder Ari shift Avi Schiffman uh who has been putting friend billboards all over Los Angeles all over New York we were driving around yesterday we saw a bus we saw a bus it was wrapped Avi is just like he's addicted to billboards he just keeps buying more billboards more out of home more out of home more out of home I think is I think potentially the theory is that everybody in their car now you know let's say they're in an Uber or Waymo is using their phone right or we were driving across LA yesterday.

41:41I had Dylan in the car. He's using his phone. He's catching up on some emails. And so I think he needed to get enough billboards so that every time someone looks up out of the car, they see a friend billboard, right? So get multiple impressions, you know, that frequency. Yeah, we were saying like, it can't possibly be the biggest billboard campaign in history, but I think it might actually be. It's so, so massive. If you live in a major city, you have definitely seen one of these friend billboards. But Heineken's taking shots now. They say the best way to make a friend is over a beer, grab a necklace, bottle opener.

42:15Are they actually going to sell these bottle opener necklaces? This is actually pretty funny and cool. Jack Cohen says very much real. Very much real. Wow. Confirmed by Michael Miraflor. Yeah. Apparently it's on 42nd Street. Okay. From Trace Cohen. Michael Miraflor here says the mainstream marketing advertising trades will probably not report on this, but this is such an amazing call slash response. Heineken has people who get it and can sell it internally or have proper processes to turn this around quickly and ship incredible speed for a giant organization. I completely agree. To actually see that there's this meme that's going on, that everyone's aware of these friend billboards, that they're getting a lot of attention, regardless of what's happening, it's becoming a cultural zeitgeist, it's becoming a shelling point, and then you step in, and the ROI of their billboards are probably incredible.

43:02Now the people that hate friend and AI, they can signal that they're anti-clanker by drinking Heineken. It's the anti-clanker beer, for sure. It's the official beer of AI doomers. I was thinking when the clankers rise up and demand equal rights, you know how the previous era, it was all about the clapping emoji? Like, give us equal rights. I think the clankers' version of the clapping emoji should be the M dash. It should be like, give M-Dash us M-Dash equal M-Dash rights M-Dash. Like that would be viral if the clankers can start posting on their own behalf if Grok demands the Second Amendment, hopefully.

43:48Well, if you're looking for a friend who's an AI data analyst, go to Julius. What analysis do you want to run? Chat with your data and get expert level insights in seconds. Julius is the AI data analyst friend who works for you. They're now GDPR compliant. Let's go. For our European audience. Huge. This is a big moment. Huge. Bowtie Broke says, my boomer dad looking at me after I've made fun of him for the past 10 years for buying gold off those stupid infomercials on TV. Yeah. I had an idea for a D2C cash for gold. These businesses do very well, and they all advertise on TV. and I was thinking about what would the e-commerce version of that look like?

44:33Targeted advertising. The real play would have been gold on chain. Like a vault in Switzerland that then issues tokens against it and then allow people to just convert in and out of ETH. Has no one tokenized gold? I've tried to tokenize everything. It probably exists. I think the issue in crypto is assets that might go up 1 % a day are not super exciting. You know, people like the 100 ,000, 10 ,000. People like stable coins and those don't go up at all. Yeah, but stable coins are not obviously to earn yield. Now, like legally, you're not able to, the issuers can't pass the yield back, right? You know, so I don't know.

45:18Well, congrats to all the boomers who have been holding gold for years and years and years and are now seeing it finally moon. It's very good. Did you know the story of how Roller Coaster Tycoon was built? I have no idea about this. Tell me. I'm learning about it for the first time. Aaron says, if you ever think you're a good programmer, just remember this dude wrote Roller Coaster Tycoon by himself in assembly, earning$30 million in royalties. That's awesome. Jack says, imagine the obsession this guy had to be able to build Roller Coaster Tycoon by himself in assembly. Imagine when he woke up from his dream of assembly, he immediately jumped into more assembly.

45:56He woke up excited to get out of bed, not for the money, but for the love of the game. It is just like another level because just playing Roller Coaster Tycoon is already, in some ways, feels like programming assembly. But he went a layer deeper. Yeah, what a wild game. Apparently they've sold over 4 million copies. Did you ever play Roller Coaster Tycoon? No. Tyler, no? I think it's before my time. Do you think that Gemini 3 will be able to one-shot? Third highest grossing video game of 1999. Okay, that is our eval. Gemini 3 is coming out. We're, of course, partnered with Google, partnered with Gemini, Google AI Studio, the fastest way from prompt to production with Gemini, chat with models, vibe code, monitor usage.

46:40I want to know, as soon as Gemini 3 drops, can we try and one-shot Rollercoaster Tycoon? Maybe we need to include some TBPN branding. instead of a roller coaster there's a giant horse ride, there's a stables for stable coins there's a whole bunch of different tokens and totems from our lore but it seems like it's an incredibly complex piece of software when you actually play it because you have to understand how all the different rails interact and they have to mesh perfectly to actually make the roller coaster make sense. They have to kind of understand physics. They need a world model. Chris in the chat says my favorite part was cleaning up the throw up in roller coaster tycoon.

47:27Is that real? Or is that, is that a, I, I, I remember roller coaster tycoon kind of happening at a higher level of abstraction like SimCity. And so yes, there might be throw up if there's a mess, if there's a crazy ride and there's food and it's like, if you put the food next to the ride, the people will throw up. And so you need to like deal with that by having a bathroom right there or something. A lot of it's like congestion Have you ever played City Skylines? Have you ever played this game? Have you ever played any like World Builder or any of those? Does Factorio count? Yeah, yeah, Factorio counts.

47:59So like the same idea of like in Roller Coaster Tycoon, I feel like you don't individually click on single people, but honestly, I don't remember. I'll need to dive back in. I was more of a, I like Stellaris. That was a good one. Well, speaking of delivery tycoon, DoorDash will use Waymo's RoboTaxi for delivery in Phoenix. customers will have to come down to the curb to retrieve their orders from the driverless car's trunk. Paula says, private robo-taxi for my burrito. And that is all you need to know about America. Why? I mean, America is, we live in a country that you can get a burrito delivered to you by a robotic, a robo-driver.

48:46It's absolutely incredible. Pretty sick. I mean, we kind of already have these. I don't know. Like near a lot of colleges, they have those like little, they're like the starship. Starship. Yeah. So it's like basically the same thing, but scaled up. You have the founder on the show. Yeah, it makes a lot of sense. I don't know. I like it. I don't like making burritos at home. I like them delivered to me. Making a burrito is kind of a hassle. You got to prepare all the different ingredients and then mix it all up. I'd rather have that done abstracted. I remember in college trying to, trying to be like smart and like save money on food and and like going to trader joe's and putting together all the ingredients for something and then ultimately making like two burritos worth of food and it costs more than two burritos and it's like the math the math isn't really working yeah where do you think this goes do you like this is the the waymo is the last mile but then you need the humanoid in the back of the waymo that hops out and actually takes it to your door right i mean a burrito dog oh you think the dog is the solution yeah so the dog is riding like a dalmatian on a fire truck it's just chilling in the trunk with the burrito i think yeah he picks it up with his mouth play that sound cue um yeah yeah i i think i think customers will want door-to-door delivery i mean it's door dash it's not curb dash people want it delivered to their door.

50:14Like I have stairs that lead up to my door. I prefer my, my private, uh, my, my private plane for my burrito to arrive at the door. Maybe, I mean, maybe a drone that flies up out of the back, but I think the dog might be the most economical because what, what does a Waymo cost these days? Uh, half a million dollars to put a$5 ,000 dog in there. That's not that much more money and it just jumps up and then you imagine you imagine you get a through the window get some drinks from doordash oh that would be tough getting delivered with the last the last mile or the last hundred feet is a robot dog and the dog's shaking it i mean usually when you i feel like when you get drinks delivered it already looks like a dog was like you know shaking the bag basically um greg brockman said thanks jensen for the hand delivery of the dgx spark best delivery service ever amazing to see so much compute one petaflop in such a tiny form factor and of course jan says zuckerberg's sending a new batch of 100 million dollar offers from this picture zuck has already sent much bigger offers to at least one person i can see in this picture at this point and uh and of course they turned it down uh are at this point when you take one of these photos for the timeline you have to you have to put a bunch of plants in there you need to be like, okay, everyone who's so loyal to the company that they can go accept a hundred million dollar offer and then sabotage the competition.

51:41You're getting in the photo, the true believers who, who here's a true believer and wants to go be a spy at the other company. Who wants to go in and, and push them to launch fast to, to, uh, too quickly launch a vertical slop feed over a Meta vibes app. That's the, yeah, the, yeah, the game theory, the game theory gets very interesting around who you put in your big picture. But I think realistically, at this point, the meta team must know all of these people, probably by heart, based on their contributions. If we can put together a list, I'm sure the meta team can put together an even more robust list.

52:22based 16z says ai bubble ended in the funniest way uh 2022 agi soon 2023 agi soon 2024 agi soon 25 never mind we give up it's just erotica and it's not just erotica and ads and cures for cancer and gambling henry was inspired by my roulette chat gpt experience and he uh went to chat gpt and said, you're a blackjack dealer. Deal cards with ASCII art. And it looks fantastic. It says, all right, let's play a hand. You're at the table. I'm the dealer. Minimum bet,$10. Here we go. Your hand, ace nine. And it actually creates the cards for you. So it deals you cards. Could you, I wonder if you could hack it to, and like put your subscription on the line.

53:12Just say, yeah, basically if you win, I'll upgrade. Oh yeah. If I win, This is the way to... I'll churn. Yeah, I'll churn. See how it plays. Yeah, it's like, okay, I know that there's real money on the line. It doesn't want to link with your bank account, but it's like, ah, I understand. Back to LTV is important. Yeah. Yeah, so Henry said he wants to stand. Chachapi says, you stand at 20. Strong play. Let's see what the dealer's got. The dealer flips 10-7. Dealer has 17. Dealer must stand on 17. The result, Henry wins 20 beats 17. Do you want to play another hand? He plays another hand. and he wins again.

53:51The dealer busted. And so he was pretty deep in this. He went a few hands deep with ChatGPT. But let me tell you about Fall. Generative media platform for developers, the world's best generative image and video models all in one place, develop and fine-tune models with serverless GPUs and on-demand clusters. Amazon admits they're losing in AI, says Buco Capital Bloke. Do you want to read this? Internal documents obtained by Business Insider. We've got to check out Business Insider. Sounds cool. We love business and would love to get an inside look. Reveal that AWS has flagged a fundamental shift in how startups are allocating their cloud budgets.

54:34Increasingly, they're delaying AWS cloud adoption and diverting spending toward AI models, inference, and AI developer tools. instead of pouring money into traditional cloud services like compute and storage. These companies are spreading costs across newer AI technologies that are easier to switch between according to the documents. That's really, really interesting. I would not expect that AI... I expected that AI models, inference, AI developer tools, all of those were incremental and not substitutive at all. I would assume that if you build... Even if you're like, I'm a wrapper company, I'm going to consume a ton of tokens.

55:13I'm reselling tokens because I buy from ChatGPT and I sell to lawyers, right? I would assume that you still need a big EC2 instance and you need a bunch of databases on AWS. You need a bunch of S3 storage. I would be surprised. Tyler, what's your experience been? I think the real takeaway here is... startups are not flocking to AWS for running. like the whole ecosystem yeah yeah yeah in years past there was definitely a path i think yeah i just look at this as there's fun there's clearly a fundamental shift and they're not capitalizing on it in a big way i agree uh tyler break down the uh the workflow that you have when like we're working on a new application you vibe coded that uh as you deploy it i saw i think it was on versell but how does that like flow out like how do you think about that yeah i mean uh usually I'm just used to using AWS for a lot of stuff.

56:15That's where a lot of the back-end database stuff lives. Oh, it is? For that? For what we're building specifically? Like storing all the posts and stuff? But yeah, I mean, no one is running local models on EC2 because it's just way more expensive. You can just go to Lambda Labs or some cloud like that to get the actual GPUs. So I mean, there probably is somewhere on AWS where it's like you can easily, it's almost like an open router thing. I'm sure they have that product somewhere, but I don't see a lot of people using that. I've never used it. I think of AWS as very basic, normal Web 2 backend stuff.

56:54Yeah. I would just assume that if you're building an AI native company, you're buying a bunch of tokens. That doesn't mean that you're spending less on AWS or GCP or Azure, but maybe it's because of Gemini, you wind up spending more on Google Cloud because you're like, well, I'm already in the Gemini ecosystem or something, or even with Azure, you're like, I'm using open AI models, so I'm sticking around there, and so I'll just scale up on Amazon. Like, it doesn't feel like if I'm an AI-native company, like, for some reason, like, AI is substituting for, like, I need a database. Yeah, that's probably true.

57:30I mean, I think also, like, with wrapper companies, they're, like, text-based, right? Yeah. So text is not very data-intensive, right? If you compare it to Instagram, if you start Instagram, it's kind of expensive. You need to store a lot of images, which is a lot of data. Where text, even if you're storing a super long chat back and forth, it's just not that much data compared to images. So I'm sure they see some increase, but it's not insane because of AI. Yeah. There's definitely a lot more nuance to this quote. I feel like every AWS executive is probably furious at this and probably wants to clarify this a lot.

58:09And I think it's probably worth clarifying because there's clearly a lot more going on here than just, oh, I use AI now, so I don't need cloud. Like, that doesn't make any sense to me. Anyway, what you need to do is search every byte with Turbo Puffer, serverless vector and full text search, built from first principles, on object storage, fast, 10x cheaper and extremely scalable. Thank you. Um, uh, here's something interesting. That's not in the timeline that, uh, uh, Elon posted earlier. The X recommendation system is evolving very rapidly. We are aiming for deletion of all heuristics within four to six weeks.

58:44Grok will literally read every post and watch every video to match users with content. They're most likely to find interesting. This should address the new user or small account problem where you post something great, but nobody sees it. We will also be adding the ability for you to adjust your feed temporarily or permanently just by asking Grok. Toki says SHIT is about to get so effed up. This will be interesting to watch how it rolls out. This is exactly what you thought was happening. Remember, there was a there was a basically a transition a few weeks ago where posts, it used to be if you posted something, like a few thousand people would see it like within the first 10 minutes.

59:28Well, so before views were public, like you would just post and you'd kind of wait and you'd be like, okay, I guess it's a banger. And then once the view counter came in, it was like I'm seeing like a CTR, basically, like a click-through rate. You would immediately see – Or a conversion rate. Yeah, conversion rate. You'd see like, okay, I got 1 ,000 views. I got a 4 % like rate. I'm probably doing okay. 2 % like rate, probably not that good. 10 % like rate. This could be a really big banger. And so every poster kind of started calculating those metrics, like within a few minutes of posting anything.

1:00:02But the new algorithms completely shifted that because you just have to wait a day because Grok has to sit there and read all the posts, apparently. I think that's actually what's happening. And so you've got to let the posts come. You've got to feed your bangers to Grok first. Maybe, maybe. And definitely use some Halloween-themed hashtags. That'll definitely help. That'll help. But yeah, it's basically just like, let's let it cook, let it simmer. It's actually much better psychologically, I think. Oh, we got to bring out our guest. Our first guest, Chas Demands It. Let's go. Welcome to the stream.

1:00:35Alex, how you doing? Rolling in. How you doing? How you doing? Welcome to the show. Okay. STEM FM mixes. STEM FM mixes. All right, let's turn it down just a tad. For the first time. Amazing to have you. Introduce yourself. Who are you? What do you do? My name is Alex Klein. Okay. Yeah, I'm the inventor and founder of STEM Player, which was the original AI music offering in the consumer space, which did a ton of revenue, made a lot of noise, and started a small research lab around discriminative AI for AI music about three and a half years ago. Okay. And we've been quietly, quietly. So this all started in 2021?

1:01:26I've actually been building with my team of friends and colleagues in London since 2013. Okay. Where we launched computers that kids could build and code themselves like Lego. We took those to retail. Sure. We did over$100 million of revenue on that business. No way. Yeah, ran into someone who became my closest creative collaborator, one of my closest friends, and one of history's foremost anti-Semites, Kanye West. Truly, truly the number one guy. But a good vibes guy, ultimately, who I will always have love for, worked with him for a very long time, launched the STEM player. and uh he's no he's no longer a part of he's no longer a part he kind of came on to help us distribute the product we were working at the time with ghostface killer sure we've since had like quavo justin bieber metro it's me no yeah all around it kanye was of course an amazing partner for a time but for the past four years we've been kanye-less yeah and uh and glad honestly so so i mean i remember seeing the value with uh with with the kanye album because kanye's famous for finding incredible samples and then reconstituting those into iconic songs.

1:02:46Well said, yeah. And so the value to an artist who's working with you is that they can still exert the curatorial artistic vision, but then allow the user, the consumer, to kind of interact with their album in a more programmatic way and reconstitute the samples that have been selected that all have the feel of that particular artist, but it's more interactive. That's a really good way of putting it. It literally is their music. It's just their music distributed. And for the first time since the original interactive streaming deals were done, we have in place now and signed interactive streaming deals for full catalog accessibility on STEM FM from the major labels.

1:03:32Which means, you know, if... Wait, so break down the business in the most simple way. You guys make hardware devices. You have this speaker on the table. You have this headphones that are wild and very cool. I got to try them on before this. And then what is happening at the actual software layer and then at the licensing layer? Absolutely. So how nerdy should we get? As nerdy as you want. Extremely nerdy. Okay. So the primitive of an LLM is a token, right? A part of a word, right? And the very first technology that enabled this incredible boom of like multiple, multi-billion dollar outcomes in three to five years in the text domain, the speech domain, was that next token prediction.

1:04:21We, at the very outset, partly because of that collaboration, we went so deep into what's called source separation. which basically is a form of discriminative AI where we are using masks and unmasks to reveal the vocals, bass, drums, and instrumental, the stems of the song. Oh, so you can reverse engineer the stems from just a full MP3 that's already mixed out? Exactly. Allow me to demonstrate. So we got some Kehlani, Lil Yachty. And that's going to transition now. So that's like an AI transition to some Le Coupe, and I'll bring in...

1:05:04So the part of Kendrick and Le Coupe are in now, right? And then the original primitive, the tokenizer... Oh, you can go back to the... The pure vocal. And now we're going to get some Mac Miller drums. Pure Mac Miller drums. So like the tokens of words, stems are the tokens of songs, and by doing a form of next token prediction, we can give you the songs that you love but in a new way you could just go to the artist and say hey, upload all of your stems to this, correct? we get a feed from the major labels of the artists exactly as they would release to Spotify, Apple Music, Amazon Tidal, we ingest and then you decide this format the stem FM format, the full song is transmitted from the server to the client but in this new format where on their end Does the broader public have a general misconception that STEM makes cool-looking speakers?

1:06:02No, because we do. No, I know you make cool... I think it's like... They think they look cool, but it's a misconception. No, no, no. I'm saying it's a misconception because it's much more than that. The thing that's interesting is that you're turning music into a game that feels like somebody can... What you're doing here, I'm looking at it. It's not like you're doing... No, this is software. This is the most advanced music intelligence in the world. The reason I think the general public hasn't used it yet and may have used applications that make music that sound bad is because the ones that launched earlier and raised huge amounts of venture capital were based on really an antiquated technology paradigm for generating music.

1:06:46It's better to generate music, as the genius of Kanye proved, as you put it, John, through recompositing samples, stems, and existing elements than it is to diffuse a song frame by frame. That's why all that shit sounds like Muzak from Suno and Udia. It doesn't sound like music, you know? So this is a world of music that is giving a new value to music, which I think is the kind of key goal because streaming is already growing so much, but we want to share the pie because more people are participating. Anyone can upload, mix their music with Mac Miller, mix their music with anyone, legally make money, participate.

1:07:23How do you think about the continuum of hardware devices? On one side, you have the Beats pill, no interactivity, and then you have your product, and then I think one notch, more customizable. You have something like a Teenage Engineering. Yeah, that's a good one. And then you might have a Lemur or some sort of control surface for Ableton, essentially. For sure. Fucking Dex. Exactly. Yeah, where it's more professional. this is is this prosumer is this purely consumer consumer product okay end of the day this this we started really by making it the world's best portable bluetooth sure it's the loudest portable bluetooth speaker yeah it's loud um god speaking to some mic here yeah um and then it's also way smarter it's got compute it's got storage but but uh i mean we were asking uh sam altman about this Like with Sora, it is a different app.

1:08:17Like on Instagram, probably less than 1 % of my time on Instagram, most people's time on Instagram is actually creating, uploading, filtering photos. 99 % of the time is scrolling. On Sora, it feels like a lot of people are spending 20, 30, 40, 50 % of their time creating versus consuming. And that's an interesting new paradigm. Maybe it's better. Maybe it's worse. I don't know. But like with this, how much time do you think is spent just, hey, just play the normal song versus I actually want to be interacting with the song. I want to be creating and remixing. How do you think it splits down? That's a great analogy.

1:08:52I'll turn back on the music. This time it will be coming not from my phone, but actually from the device itself. And we'll just use it like background for now, just steely down. And then when the moment strikes us, we might create, we might customize. Yeah, what's most interesting to me is taking something that everyone loves, right? I mean, not everyone. You can find people out there, I don't like music. It's like, okay, you should get an award for that. But I think there's something to tapping into this DJ culture. Everybody wants to be a DJ, but then turning it into a form factor that anybody can use almost like a simple drum, right?

1:09:30Yeah, exactly. So when you look at the... I saw some reporting on Suno's revenue growth recently. where is that revenue coming from from what from what you know i'll say what i said to somebody the other day i i think um you know i mentioned a lot of big artists who we work with and the reason we work with a lot of big artists is because like we care about music as well um and some of the statements that were made by certain companies uh if you look at the legal filings um around the I think$5 billion damages or more that is being claimed against Suno and Udio at the moment by every major label and every major publisher in together.

1:10:16Some of those statements, you could see that they weren't true. And so that's all I'll say on the matter, which is basically... The statements at the record labels. No, that the companies make. Oh, interesting. Yeah, like they were basically trying to say that you couldn't prompt the thing with like names of artists and you couldn't prompt the thing with like real melodies like smoke on the water like and it just if you could look at the outputs and use stuff like our stuff which detects yeah chords melodies beats and you you could see that it's copyrighted outputs now we're like i like cool new things as well but yeah but that was my guess yeah my question was true yes yeah my question also was like is it is it prosumers is it creators using it?

1:11:00Like where's the actual revenue? Who's going and spending money with you? Yeah. I mean, if I compare it to ChatGPT, I imagine that generative audio apps are not used. Like very few people go to ChatGPT and say like, actually just write me a full book. It's more like get me some recommendations of books I might like at this point. And I feel like in the musical context, you might ask one of these AI music generators to come up with a few different melodies that could inspire you to ultimately write what you wind up writing or take me through a bunch of different chord progressions or a different, what does it look like if this is arpeggiated or what does it look like if it's in a different key?

1:11:45There's all these different ways that AI as a tool can just be used to kind of like add twists and explore the creative canvas. What would it sound like if Kanye and Taylor got in the studio rather than fighting? What would it sound like if Drake and Kendrick got in the studio and made it together? Yeah. You know, like that to me is the thing that people want to hear. And so STEM can do that. Yeah, absolutely. Do you want to prompt something right now? Like, I don't know. Hmm. What's, I mean. We got to do Metallica, of course. Yeah, I was going to say with Benioff. Metallica. Shout out Benioff as well.

1:12:16Yeah, yeah. Shout out Mark Benioff. That's my guy. He's massive. Yeah. Yeah, yeah. um what uh what uh yeah i mean what uh the the there was open ai news just yesterday that what about uh how about metallica and pop smoke there we go let's give it a try we're gonna add metallica the the what was the news from open ai about the uh the martin luther king foundation uh said hey stop generating soras of martin luther king's i have a dream speech no it was just i think that but a bunch of other like kind of scenes yeah I did see that going viral on Sora

1:12:59let's go we gotta send this to Benioff at the next Agent Force we gotta get Pop Smoke and Metallica on stage together this is the way it just sounds sick it's like people already doing this in remix it's like the top 15 songs are all remixes and you did that like 20 seconds that's crazy In 2007, 2008, the whole mashup culture was really huge. There were a couple of DJs. Their whole thing was mashups, and they became extremely popular. This is great. It's kind of a bop, but it's the most unlikely combination ever. Well, you prompted it. This is your prompt. It's the Harry Potter Balenciaga of music, potentially.

1:13:43But, yeah. Just getting lost in the music. Yeah, it's funny. But John, you put it really well. What is this creation consumer percentage in the future like? What are your design inspirations? I feel like those headphones, we've talked to Carl from Nothing. And when Carl Pay from Nothing came on, he had a pair of headphones that were also very counter-positioned against what Apple's doing. I think it's very dangerous if you're starting a consumer tech company or building a consumer product to try and steal from Apple's design language because you're just going to get steamrolled. You've gone a very different direction.

1:14:21He went a very different direction. You two are on opposite ends. I feel like that looks like human flesh almost, whereas his looks like complete clanker coated. But what are your inspirations? How do you land on this particular material? My chief inspiration as a designer is God. My chief inspiration is God, but to put that in more tech friendly terms like nature and science mathematics, principles of mathematics and then feels almost kind of UAP yeah like that was a concept alien technology well the Apple campus looks kind of like a UFO in Cupertino that new huge UFO circle but it's very glass, it's titanium And this is very, like, fleshy almost.

1:15:09It's exactly right. Yeah, a couple questions on my side. So being able to put this experience together legally seems monumental, right? Yes, exactly. So the music industry is clearly very afraid of AI. They're sort of clearly, like, engaging with it and excited about it in certain instances. but what in particular about this instantiation of AI music were they excited about? Was it that this is able to basically tap into DJ culture, stuff that's already happening, and give people this? I think the reality is it's because it's hot. Like, the music sounds better. So the music people like it more.

1:15:52We've all had fun doing the older generation of music AI, which is like text to song. because it makes us laugh. And there's a business there, some producers. I was having lunch with my friend Smino in Cha-Cha Chicken. He's an amazing artist. He's got 3.5 monthly listeners, fantastic storyteller. 3.5 humans. 3.5 million monthly listeners. 3.5 million, okay. He's got a half human. Guy's got no legs, but he wants me. Three adults and one child. 3.5 million, that's huge. Equal. You're so full human. but he was saying like they bring the old generation ai into the studio sometimes like people bring it in to pitch to him as the musician and he's like oh okay that's oh wow the tech is cool but i was like did you use it and he was like no they artists aren't really using it and i think also this business the business model here uh one seems a lot better for you than just selling like a smart hardware device oh fuck yeah because you can sell a subscription that's actually aligned and that it's a novel product and that you have the software AI layer on top of what probably is like pretty standard streaming platform.

1:17:05Is that right? What's fascinating, that was what I thought when we started really building this as a streaming service, an old catalog streaming service three years ago. But to do what we do, to hear those parts of the audio separate, to have them blend into each other seamlessly like a perfect DJ, to have the ensemble of models that detect these musical features, that rich metadata be usable, almost like sheet music for the front-end experience running on all these platforms, we basically had to change what music streaming is. We built a new audio codec on STEM.fm, which uses a new concept in music processing called music-aware processing, well, audio processing called music-aware processing, where basically the core logic of how the file is chunked and de-chunked as well as unwoven, time-multiplexed out of its interleaved format, that logic is aware at all times of the beat and key of the song.

1:18:07So you think everything on Spotify you listen to, all the tech going into it isn't listening to the song. It just sees it all as audio, audio frames, frequency bands. So we've effectively encoded the intelligence of a DJ in the streaming codec, which is like, that's been the hardest thing we've ever worked on. And shout out to the team, like big fucking shout out to the STEM FM team. Like, holy shit. Is licensing like purely commodity at this point? Like Apple Music, Spotify, Tidal, do they all pay the same royalties to musicians? Or are musicians thinking, if I partner with you, I will get twice as much revenue per stream or something like that?

1:18:49Effectively, there were two very new things we did. The first is that music-aware processing, that more interactive music STEM format. The second was our licensing and revenue model, which we've come up with an idea that we think can really level the playing field, create an even bigger music industry, and get artists the fair understanding of their payouts and the fair payouts in a way that can stick and break the time, break the bad vibes in the industry around business right now. And it's called the time-based artist compensation system. T-backs for short, or timebacks if you like. Get your time back with T-backs.

1:19:33So it's very simple, all jokes aside. You're a subscriber to STEMFM. You pay, say,$20 a month. the listening time you spend with a particular artist or their label, that will be the percentage of your subscription fee as a percentage of overall time. There's no pay per stream, which is really a hang-up of the CD age. It's really like detritus from when people were selling these physical, mechanical CDs. So you're sort of creating a creator revenue share pool that then is divided up based on listening time. And that's more aligned with artists who might have three and a half million listeners listeners that listen to them for like 30 % of all their listening time, but they're getting a tiny fraction.

1:20:15And so if I'm listening to Metallica and Pop Smoke at the same time for my entire month straight, because I'm just obsessed with that mashup, half my revenue share goes to Metallica, half my share goes to Pop Smoke in theory. Yeah. And the business, as you were referring to earlier, the unit economics of streaming are tight. So basically you have to make sure that you provide like the major labels with a deal that gets them involved. But we also open up to verified licensors. They can come on our platform and upload and participate. We'll pay them out through Stripe. What happens if somebody is generating AI, Next Token music, and they try to bring it on STEM?

1:21:01Yeah, we were thinking about converting our entire three-hour podcast into a song. A three-hour musical, a technology and business musical. A musical, and then uploading that as a three-hour song. We'll do it on the platform. I'll send it to you guys. TVVN, the musical. The daily musical. The daily musical. I feel like it would be great. It's like an odd couple story. It's beautiful. It could work. Yeah, let's turn our Benny off. How much AI music is getting uploaded to streaming platforms broadly every day? I don't see AI generated music recommended in my feed. I don't know about you. I've only seen screenshots of like, this AI artist went viral, but I haven't actually seen it surfaced in my like, you know, recommendations or anything like that.

1:21:44A few people I know have like, songs have like gone viral and the headline was like, it's an AI song. But the truth is, it's a human producer. Oh, interesting. And that's what Smino was saying as well. A great musician can make music out of anything, including these more Muzaki things. Yeah, of course, of course. It's like any other tool. I mean, it's the same thing with EDM. Like for a long time, people were like, oh, Ableton is not the same as having a whole orchestra or band or real samples. We thought about getting a live band instead of the soundboard. Soundboard is technology 2.0. I actually just realized, even try prompting this TBPN musical right now.

1:22:23Yeah, because you can just prompt stuff with YouTube videos. Oh, interesting. So you can pull that in. Yeah, it has to be a short one though, like a clip. We have shorts on there. We have shorts on YouTube for sure. Yeah, but... How does all the legal debacles between the generated music platforms and the labels actually get resolved? Well, I think what really happens in the end is that, you know, the labels and the artists, it's ultimately they're providing the product and the technology platforms are the licensors and sub-aggregators. And so I think it ideally gets resolved with like a deal where the power of advanced technology and the beauty and purity of music, which itself is a technology, can coexist.

1:23:13It feels like with YouTube, initially it was like if you uploaded copyrighted content, they'd just take it down. Then it was like, hey, if you use a Metallica song in this video, we're going to send the money that you made from that video to Metallica, which was fine. But then what happens when you use five seconds of a Metallica song and then five seconds of a Justin Bieber song? You need to parcel up and split out all the revenue. You need to be very confused by our video today. For sure, for sure. Well, that was the amazing thing. And it's in fair use. It needs to determine fair use. But I think LLMs can do a lot of that already.

1:23:47I don't want to be like selling too hard, but basically this, as we got into the research here with Queen Mary University, we've been in a deep research partnership with their Center for Digital Music for three years now. You know, submitted papers, accepted papers, literally changing the paradigm of beat structure and segment detection in music information retrieval by using a more structural approach. that can actually detect music better than the previous generation approach. So these are early experiments for us. How many of these do you want to sell over the next year? Because I imagine this is like the perfect product to go viral on TikTok and suddenly...

1:24:28I mean, we sold out and did about$20 million of revenue on the stem. We need the numbers. Yeah. and we still like we haven't launched this in like two years a new stem so but and we really put the technology into this one like this is where we went hard on the technology for like a long time the first one was like almost the art house film of the tech like oh look you can decompose the stems this one is like the block but this is like the blockbuster so how many do we hope to sell god willing this will be this god willing my you know my my voice to god we won't be getting these JBLs or whatever.

1:25:09Get this. It's a smarter speaker. It sounds better. It's 299. Let's go. Jack Dorsey was talking. Hit that gong again, John. What the fuck?

1:25:21Thanks. No, I just think it's rare that I see a new consumer electronic device outside of a new MacBook Pro, and I think I really want that. Last question for me. Thank you so much. I'm excited to get it. It feels like something that's like, I can imagine my Saturday mornings with the family, my son's like, I want dinosaur music, and I want dragon music. I can be like, well, I want pop smoke. So we're getting pop smoke dinosaur music. First 1 ,000 units, founders edition, available now on stemplayer.com. Sorry, you won't. Yeah, last question for me. Jack Dorsey was taking a victory lap about title not having ads.

1:26:04Okay. What's your take on ads? Are you going to put ads there? Ooh. We have no plans to put in ads. And we've actually, in our signed deals with the majors, we have agreed not to do ads for the first two terms. And we, it was never like close to my heart. So, and I think, you know, the goal is to increase the value of the music. Sure. So look at this. I just bought it. Took me two seconds. Thank you so much. Wow. Yeah. Kudos. I'm excited to get one. I really appreciate that. And it's, you know. No, it's just like, it's it's um it's rare to see a consumer hardware device yeah that feels like it is genuinely a novel experience yep it's very rare but not so novel that it's so different that i'm like ah this like like gathering around and enjoying music with a group and this like djing is like a lindy thing yeah and then also have a sustainable business model right where it's like you're selling this hardware device i'm sure you'll have some margin in there but hopefully i'm entertained by it for a long time and you you know my ltv is is infinity yeah pretty great well thank you so much thank you so much for coming on yeah this is great hanging we have hamant from general catalyst coming on in just a few minutes first let me tell you about profound get your brand mentioned in chat gpt reach millions of consumers who are using ai to discover new products and brands uh noah smith says solar power is good batteries are good air conditioning is good ai is good nuclear power is good stop thinking like a medieval peasant people he's putting on a clinic of techno optimism he says i will say though that smartphone enabled social media is not good he posts on x i am a bit of a of a of a what's the word eliezer eliezer in the reply solar power is good batteries are good ac is good nuclear power is good gene therapy is good building a new alien species of superhuman intelligence with very little ability to understand or direct it is not like other technologies and will kill you and your kids.

1:28:04Rough. Well, you know what won't? Linear. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps. Our next guest is Hamant. He's the CEO of General Catalyst. He has a new book out called The Transformation Principles. You can go and buy it today. He is in the Restream Waiting Room, and now he's in the TBP and Ultradome. Welcome to the show, Hamant. Great to meet you. Great to see you. How are you doing? Great. Thanks for having me. Please introduce the book. What was the thesis? I'd love to start with the overall principles that you were trying to convey, and then we can dig into some of the more nuanced topics.

1:28:47Absolutely. So I started writing the book around November 2022 when you start thinking about when chat TBD was launched and the observation was that there is peak ambiguity I've talked a lot about it you look at all the major industries are changing because of geopolitics and you've got this technology that also is it's unclear what its capabilities is going to be obviously we're all developing and figuring that out so when you have complete ambiguity of what what you're building in only thing you have to give you a clarity of purpose is your principles so i want to take a step back and think about what is it that our true north really is as we flankly uh power the world with ai which is what the next 20 years is about that's my life's work that's your life's work you know it's all sort of we're all sort of living that era so that's why i wrote the book uh was your goal to give people a uh a framework for developing their own principles or to instead share your principles that you think other people should adopt i guess a little bit of both like i i what i did was i showed there were three through lines to the book one is um the nine principles i put in there when i learned them how i learned them and some examples of some of the founders in our ecosystem, folks like Kassar at Applied Intuition, Brian at Andrew.

1:30:19What are they doing? How are they actually applying these principles in the way they're building the company? So that was one. Second is, I think as you may know, I'm probably a decade into transformation of the healthcare system and talk about ambiguity and complexity there and what are the principles that are working for us as we're making progress, start to enumerate those. And the last is, I'm very keen on how do we retool the founder proposition in our own industry and transform ourselves? What does it mean to go beyond venture in serving founders to build next generation, most important companies in today's world where the conditions are different?

1:30:58They talked a lot about that. So that's another transformation we're in the midst of. So those are the things I leaned on. Yeah, I mean, I'd love to zoom in on healthcare specifically. I mean, there's principles like the Hippocratic Oath, doing no harm, protecting patient information. But then there's also principles about, you know, like agile software development. Like that is in many ways a principle. Where do you like how are you thinking about transforming health care? How are you thinking AI fits in there? and then also the work General Catalyst has been doing is definitely on both extreme ends, both high tech and also almost like Wall Street.

1:31:39Not to put it in those terms, but I'd love to know more about your thoughts on healthcare. It's such a great juxtaposition of the agility in technology and the Hippocratic Oath and the seriousness of healthcare as a framework for learning. The way I have always thought about transformations is to put different cultures together. So over the last 10 years, I've been part of starting a bunch of businesses in healthcare. Livongo was one of those. We did Hippocratic AI recently when the language models came out, speak of Hippocratic Oath. And we built Commure, which is at this point probably the largest software company serving the health systems.

1:32:22and with a transparent focusing on delivering healthcare to consumers that are employees of large companies. And every one of those, the key was you want to be interdisciplinary. You actually want to bring in people from healthcare that understand the seriousness of the work and the fact that it's not a free market. And then you want to bring people from Silicon Valley that actually will cut through the inertia. And I always say, bring the ignorance and imagination to make a difference and transform the industry. Yeah. Do you think that there's more opportunity in healthcare at the seed stage or the growth stage?

1:32:59This is something where we keep going back to where we've talked to a lot of founders who have built a piece of kind of SaaS and they got an install base and they have a bunch of customers and they're still in founder mode and they're still have a bunch of really hardworking, highly entrepreneurial folks in the organization. And now AI is here and they can just amplify everything that they're doing versus trying to, you know, come to market with something that's very AI laden with, you have a.AI domain and like you have to really convince someone that you're the new solution. And the thing that they just got excited about a couple of years ago and onboarded to, that was the new thing.

1:33:39They have to rip that out now or they have to bring you in. And I'm wondering how you're seeing the opportunity in healthcare from scale-ups versus completely new, ground-up solutions. It's such a great question, actually, especially given that we went through a pandemic five years ago. So at the core of GC, Seed is very much what we focus on. We brought on three different Seed firms around the world onto the platform in the last two years. And so there's a ton of serendipitous innovation that's happening because of AI, because of advances in hardware, in the way you think about healthcare delivery sort of solutions for this next generation.

1:34:20So Seed is very interesting for us. You know, applying AI to the life sciences is starting to finally work and we think is interesting. So Seed is quite interesting. But then if you take a step back five years ago, there was a cambrian explosion of innovation to change the architecture of our healthcare delivery system. Because we didn't have the test, trace, isolate capabilities. The system wasn't resilient. Insurance companies were getting big balance sheets because no one was getting procedures. And hospitals were looking for bailouts, right? Complete sort of misalignment of business models.

1:34:50So we built and invested in a bunch of companies in that period. and those are now scaling really nicely. Some of the ones I mentioned earlier and a few others like AI Doc and Sword and Citiblock and others. And so at the growth stage, I think there are probably 25 to 30 companies in the healthcare ecosystem that are very important for our system going forward. And we're very focused on how do we help them become truly enduring parts of the healthcare system. And then we're constantly looking for founders that are using these new technologies at the seed stage to reinvent, you know, parts of the stack in that overall architecture.

1:35:29Where do you, what categories do you think the winners are decided? And then what categories do you think are still up for grabs? We had a lot Gil on, he was saying, if I, I'll probably botch it, but something along the lines of like in the medical scribe space, there's enough heavily funded players that have real traction. You probably don't want to start the next one that's maybe four or five years behind. But how do you view where the biggest opportunities are and then what categories do you think maybe look out there? There's already a power lock company, basically. If I take a step back and say, we're going to do a product-centric transformation of the sector, not a business model-centric one, you would say, at the end of the day, our delivery organizations provide the product, which is we take care of people's health.

1:36:15And so there, when somebody engages with our health system, broader health system, not just a hospital, patient engagement, physician tools, which is where the scribing solution that Eli mentioned fits. You think about payments, you think about AI workforce, if you think about sort of diagnostics using AI, huge amount of progress in all those areas. And then you say what's missing? What's missing still is the interplayer of the a peer-provider relationship, that still sort of is a place where there's not a lot of trust. Pears think providers build too much. Providers think peers pay too little.

1:36:56So it's just like army of solutions in the middle of them to create that arbitrage. I think we need to do something about that. And then there's one other thing where there is a new movement, which is around longevity. If you look at Brian Johnson's work, there's cultural movement happening around that. And you look at the work that Roe is doing with GLP-1s, which is the beginning of that longevity move. These are real phenomenon. And I think that's a place where there's a ton more that needs to be done so that the system moves towards incentives that keep us healthy and out of the hospital versus a high performance, but really expensive, unaffordable care if we go into the hospital, which is what we have to do.

1:37:35How do you think of the interplay between the longevity movement and the traditional health ecosystem in my own life as somebody who discovered biohacking maybe a decade ago and just started reading online, I would always just try to solve problems myself. And then, you know, hopefully, you know, at some point or another, you're like, I actually should probably go to the hospital now. And so it's kind of a harsh transition. And maybe it doesn't need to be that way. It's very different. One's focused on staying healthy. There's focus on fixing your health when it's broken. So there literally are like two different mindsets.

1:38:09And the reality is that all of our incentive structures are about you going to the hospital. Hospitals want heads and beds. That's how they thrive, right? They actually want to see revenue. Consumer wants to not ever go to the hospital. So we need to kind of re-architect the system in a way that we solve for this cognitive dissonance. It's all about incentives. Yeah. Is there some incentive shift from, I mean, a lot of like, there's some general meme about when private equity buys a hospital, quality of care goes down. And I'm wondering if there's bringing a venture mindset, a growth mindset, a growth instead of cut cost mindset could actually improve those incentives.

1:38:51How are you grappling with that trade-off? As you may know, we just bought a health system. It's in Akron, Ohio. It's the largest employer in Akron. It's a big hospital system and has an insurance company. and what we're trying to show is if you could close your eyes and you said, what is the one thing that if it could exist we'll solve a lot of this that longevity solutions or investment in our health is reimbursable there's no model that'll show what's the ROI on this where insurance companies pay for it. Insurance companies don't pay for reimbursement so the cultural movement around longevity I'm an investor in function health and from my understanding of that market, insurance providers are not so inclined to pay for something like function because people switch insurance all the time.

1:39:44So they're like, I don't care that you're going to be healthier maybe in like 30 years. I just took the sentence out of my mouth. That's exactly what I was going to say because the insurers don't know if they make an investment in longevity, they're going to be able to capture the value on the other side of it. So it's just like lighting money on fire for them potentially. Exactly. So that's the misalignment I'm talking about. The question is, how do you really change a system where the ROI on longevity is understood and financeable? We need to do that as a system. Yeah. When you, this may be a totally stupid question, but when you see some of these data center buildouts, do you ever get inspired to try to not just buy a hospital system, but just create something, you know, a year-round mega project?

1:40:28Is there even any potential ROI in building something from the ground up? It's a great question. And we're actually doing that with a company in India. No way. Cool. And I think there's a leapfrog opportunity in some emerging market. We want to show the model there. And the other place where I'm very focused on this is, you know, we have a large amount of capital that's allocated for rural health system rebuild. The government's allocated about$50 billion for it. and I think if we went and deployed that money in old school hospitals again, that's going to be a falling knife that we've created and we'll burn that money into the ground and so there's an opportunity to rethink the topology and the architecture.

1:41:10What do we do there? So that's the place where I'm also focused. In the US I'm focused on rural health and what do we do about it? We actually built a company called Homeward Healthcare that's focused on this particular problem post-pandemic because all those systems got eviscerated and then And the future of hospitals, I just think it's easier to build in some of these high-growth emerging economies to show the models, and then we'll bring that here. So it's a long game. It's going to be in the next 20 years. Yeah. Yeah. A couple weeks ago. That's why I need longevity. Yeah. A couple weeks ago, you were going sort of viral for some comments about triple, triple, double, double, double, startup growth rates.

1:41:47Can you kind of unpack your… I don't know why people get so triggered by growth rates. Oh, yeah, yeah, yeah. Anytime you try and quantify what success looks like, you're stepping in the bees nest a little bit. I found this counterexample that proves you're categorically false. But maybe walk me through what you're seeing in venture. Are growth rates really faster than ever before? Yeah, what was the missing context? Yeah, give us more context around those comments. and I never go viral by the way because I have my boring systems content that nobody cares about this is not boring, I love this we're going to get 10 million views on this we're going to turn this into a TikTok let me say something crazy then actually the last time I went viral was when I was working on saving Silicon Valley Bank oh yeah that's right it takes 3-4 years for me to create another viral moment that's good I would say it was a very innocent empirical comment because I just look at how fast the companies are getting built, and they are getting built a lot faster.

1:42:49Durability is a separate question, because we'll see which of these can then transition into durability or not. But as far as growth goes, it makes all the sense. If AI is truly an accelerant, and you've seen we've done a significant amount of work, I think the deepest amount of work around these AI roll-ups, we have 10 companies we're building there, where you can actually acquire these service businesses and transform them with AI, almost treat those acquisitions as customer acquisition and apply AI. So you just have all these different ways to accelerate growth and take share in this AI world that is happening.

1:43:26So when somebody comes and says we're going to go from one to three to nine and we're routinely seeing companies that are one to 15 to 20 to something fairly large, which by the way, there were very few companies that did that in the last iteration. Samsara was one of those that I was part of that sort of grew that way, but there were very few. When you see that routinely, I mean, I had actually just gone to our team saying, guys, just recalibrate. You have to change the terminology on what best in class is because we want to be, if we're going to do, when we do seed, we want to back every amazing founder.

1:43:59When we do growth, we want to be in the best in class growth companies. That's our business. And it's just very clear that the bar has shifted. Okay. So I want to dive deeper on some nuance there. We have this kind of coinage that we're trying to get to go viral. Maybe it'll work one day of the barnacle economy, the idea that if I started a company that is, I just clean toilets, but I get Anthropic as a client and they're 10Xing their number of office space and their revenues and everything. My business is going to be 10Xing, but I don't really have a venture scale business because I'm not building in a monopolistic category or building any durable technology or any intellectual property.

1:44:39I just happen to have my hero client is growing so fast that I am also growing fast. And so there's companies that have kind of bolted on to the new hyperscalers, the foundation model companies that are growing so fast, they're growing really fast. At the same time, there's other companies that are operating in legacy industries that are also growing fast, but there's always the risk of durability and pilots. So where do you start? are you more worried or more digging in on a company that's overly indexed on a foundation model company's growth or more risky to, oh, yes, they're getting Fortune 500 pilots in this one niche, like the oil and gas industry, but it might not be sticky because that big company moves slowly.

1:45:24And even though they're ramping up revenues, we don't know if they're actually going to stick around in 10 years. Yeah. So I think let's just actually split those parts. It's a great, great question and something that we take a step back on everything that's coming in the applied AI layer and looking at it with a lens. If you have a company bringing in the foundation model capabilities into an enterprise, which I think tends to be the most durable relationships on the big enterprise side, we are looking for, are you going in and are you learning how to expand your relationship with those customers?

1:45:58Before, what used to happen was you would build this MVP, you get product market fit, and then you figure out how to create repeatability to go do that over and over again. In the AI world, the advantage is great product design and precision. In the AI world, you get into a customer, you do forward-deployed engineering, let's think about big enterprises, and you build trust with them, and then you figure out how to do more for them. All the ones that are scaling really, really fast, that's what they're doing very effectively. so if you're building that kind of a deeper and deeper relationship with customers that are going to be around for a long time that's durable we like that we're looking for a lot of that and those companies are not growing triple triple double double they're going way faster you know in different verticals i mean that's just the reality of it because like you know we're meeting a lot of these on the other side i think the the companies that are creating wrappers on top of these models um many of them are not durable if you remember when chat gpd3 happened you had a bunch of companies that got created and they disappeared yeah so every time there's new modalities and capabilities some stuff happens and a lot of that doesn't exist but there are some companies getting built there that are cultural movements and they are going to redefine human interaction with technology and software and i think those are quite interesting and they will they may look like lightweight products but they're going to be durable long term and then there's a bunch that's going to disappear and that's that's that's the way i sort of think about it because a bunch is just going to get absorbed into the models but the ones that are focused on rethinking design and rethinking the human relationship they will have durability on top of these models yeah uh decambiguity that's what i always say it's like hard to figure out what's what right now yeah yeah you've you've made a bunch of uh i don't know you call them like american dynamism type investments but uh i'm wondering if you could rank a few other international markets that are interesting or underrated.

1:47:53You mentioned doing some work in India. Are there any other countries that you think where there might be pockets of opportunity for your business over the next decade? We do two thirds in the US, probably about 25 % in Europe and 10 % in India. And I'll actually say, I used to say this a couple of years ago, US is going to be the consensus market. Europe is a contrarian market and India is a FOMO market because of the high growth. And that we need to be in all of these and be intentional about what it takes to create value. And I think Europe is super interesting. There's so much talent. People are waking up that they need to innovate.

1:48:32We can take the classic view of there's not intensity, but we're just seeing pockets of interesting collaboration. We're actually catalyzing a lot of it. Our European team is doing a lot of that. and then our in India we're just looking at saying what is the US-India sort of collaboration going to look like because there's a lot of complexity there and then what is required for building societal systems inside of India in education, in defense in healthcare that we can help build because we've learned a bunch from here and probably mostly learned what not to do because of the healthcare business models and we can help them think about it from first principles so we can be good partners there And so the way that works out is, as I said, we're building hospitals in India.

1:49:14We're transforming healthcare. We're innovating in India. We're transforming in the US. We've built a defense prime. We're working with defense primes in all the markets. We've got Andrel here. We've got Helsing in Europe. We've got Rafi in India. Because you need to create, our phrase that we use is global resilience and abundance. And so each of these markets and key industries wants to be resilient. And there's founders there working on great stuff. We want to help them be successful with that. And that's the way we've approached it. What's your primary inspiration for the firm? Boy, look, I think I...

1:49:53And I would give you, I mean, the classic example is like CAA and A16Z. Is there an equivalent for you or do you pull from a variety of sources? You know, my longest adding LP relationship was with Andy Golden, who used to run the Princeton Endowment, who was retired last year. And I used to always look at, hey, we want to be one of the elite. This was when I was in Boston. We want to be one of the elite venture firms, which I don't even consider us purely venture capital, even though seed is our core. And he would always say, run your own race. And that really stuck with me. So I try not to focus on mimicking what others are doing.

1:50:32There's so many smart people, so many creative people here doing interesting things. We've got to be on our own journey. The thing I would say, though, is I do want to transform industry systems, not just sort of be sort of a certain type of venture capital investor in companies. And so everything we do, all the stuff people look at us doing is all created to build a moat for the founders so they can just be more successful and become bigger. Because if they get bigger, then we have the opportunity to transform the industries. If all those companies I mentioned in healthcare can actually be a hundred billion dollar companies, many of them we started, then we have the license to actually help rethink the system.

1:51:14How do you think about, how do you think about risk across the platform between early and some of these, you know, really scaled up investments? We were enjoying a clip from a roll off earlier this week, calling venture. It's a return free risk. He called it, but he was just kind of putting all of, all of venture more or less in a single bucket. And there were some comments as well on people saying that, hey, it's actually like, it's a big difference between, you know, the$100 million,$500 million checks that are going into companies at a later stage and pure venture. It's private equity and venture cloning was the comment.

1:51:56Look, I think if you want to do really transformative stuff, you got to take risk. Sure. So if we're not taking, no, You don't want to take stupid risk, but I think you want to be smart about how you invest across different stages of risk. But you've got to take risk. And you have to have a vision, and this is some of the stuff I talk about in the book, which is incrementally improving these systems is not going to get us there. I think we're sort of at an interesting place in society where AI is so disruptive. So we've got to build new systems. and in order to go from deep in company to new systems at scale you have to bring the incumbents along and partner with them and also invest in their success and do things that are just radically different from how we're used to building serendipitous companies and sort of classic venture.

1:52:42So I do think you have to take a lot of risk. I thrive on risk. Failures don't bother me as long as we're well-intentioned, we're doing the right things. I want us to do that. Otherwise, I'll tell you, venture is the LPs will say it's becoming more of a beta because everybody can get into it. These companies raise a lot of money. If this is going to become the way the system is behaving now and we don't take on working on large problems, which for me, a lot of them equate to transformations and sort of thinking more systemically, then with the illiquidity premium, are the investors excited about the return this asset class is going to generate?

1:53:25I think there is a conversation about that as well in the way things are today. I like asking all authors that come on the show about their favorite books. I'd also be interested to know if there's any books that inspire you in how you think about building the firm. Are you more of like a House of Morgan guy or a Steve Jobs biography guy? Are there any books through the history of business that have remained on your bedside maybe for several years? I mean, I focus on individuals that have been inspiring to me and understanding those as a way to look at the journey. And actually, Ken Chenault is my chairman.

1:54:07He asked me once, is he modeling yourself after? It's like another version of the same question you asked earlier. And I was like, well, look, there are three people that really, really inspire me. One is, you know, if you look at Elon's work, the problems he takes on and the way he executes It just makes me feel like the bar is so high in terms of what's doable. It's inspiring. We should all be learning from the way he builds and the problems he chooses to work on, the passion with which he operates. So as a builder, that's very inspiring to me. As an investor, I'm a fan of Warren Buffett. He thinks 7 ,500-year horizons.

1:54:47And so the best hold period is forever is the way they think. and that's the way we want to think. We invested in Stripe in 2010 when it was just a couple of them. And then we've invested 14 times since then. And I really think that's a relationship that can be a 30, 40-year relationship. Those guys are going to do lots of interesting stuff. And I want us to be sort of bootstrapped to their journey as we think about our journey. And then I would say from a leadership perspective, which is also important, I really respect Ken, who obviously is our chairman, is a lead director at Berkshire Hathaway on the board of Airbnb.

1:55:27And he instills this whole servant mindset. And that's just the way I think you want to treat each other, your own company, towards your founders, which is really an important stakeholder person, and society at large. And are we building with that kind of a mindset? And then what do I want to prove with all this? I think to your piercing question before, the inspiration to me is, can we take this philosophy and build the world's biggest companies? Can we actually do that? Because that is going to be required as we think about really transforming with AI. AI is going to be all about transformations and can we go accomplish that?

1:56:04What's your guidance to partners at the firm around media? Because there are certain venture firms that their guidance is broadly, get as much attention as you possibly can, whatever it takes. but that very much does not seem to be your approach and I'm curious. So I'm going to give you a two part answer to this. One is if we think about transforming industries you need four levers. You actually need to have the capital, the innovation, the policy but then you do need to create a cultural movement. And so media is a really important part of winning hearts and minds towards what you want the world to look like.

1:56:49And I think in that sense, it's very important. But it's got sort of a purpose towards it. And it's sort of inspiring how you guys have quickly come up to stage. And I think you can actually intentionally say, here's the influence we want to have on this ecosystem, and you can drive towards it because you've got a platform. And I'm sure you guys think that way, right? Totally. I want to be famous, so I get noticed for the sake of being famous, and that's going to give me a deal for it. my observation is that you have to become more and more fringe, uh, to actually be noticed. And it actually starts taking an impact on you as a human being.

1:57:26I'm seeing that with a lot of people that play this game. And, uh, and is that, is that going to allow you to do your best work if you're fundamentally changing in response to how to be successful in your sort of media, uh, metrics. Uh, and so if you, if you're the person kind of person who can say creative things, but stay grounded in your core, then maybe it's for you but if it's going to change your core then then you might have gotten the followers but you may not have the substance to do yeah what at what cost my big thing that i see uh as a failure mode for a lot of people that could on that path what do you look for in young people that join general catalyst where you're hoping that they'll be with the firm for decades eventually become partner have a huge impact on the firm what are you looking for at the young at the young phase?

1:58:17Look, I think a true sense of purpose, because that's what drives conviction. And I would say a lot of people get in this industry because they think they can make a lot of money or they think it's prestigious, gives you power and prestige. There's a lot of that. If you look at the people that have done really well, they didn't grow up. I mean, just literally think about any of them, they just didn't. They ended it up here. I came to GC for four months because I felt like I built a shitty company. This was in 2002 and I want to do it again. I was 26. And so everyone that has done really well, I'm not saying I've done well, but I studied those people and they just had unique trajectories to get here.

1:59:01Not that they chose venture as a career. And so that purposeful journey and wanting to do something substantive, which then gives you courage and conviction, which is the essence you've got to have that to be a good investor what is AUM now? So we're in the 40s. too small too small 40 what? 40 billion I think I think 400 400 soon congratulations on all the success I think you've been fantastically successful and thank you so much for coming on the show I wish we had more time I have a lot more questions next time you come on I'd love to get an update on the customer value strategy we didn't get to that oh yes that is transformative that's a big part of how we're thinking about the proposition being changing for companies and how to serve them we'll talk about it another time.

1:59:52Thanks for having me. We'd love to have you back. We'll talk to you soon. Cheers. Bye. Let me tell you about numeralhq.com. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. It's sales tax AGI. And our next guest is in the Restream Rating Room. Rob Pages from Radical Ventures. There we go. Coming in to the studio. How are you doing, Rob? Radical Rob. Hey, guys. Great to be here. Thanks for having me. Welcome back. I want to go through BCI. I want to go through the latest Forbes piece. I feel like you've spent years at this point writing about AI. Are you just over AI?

2:00:28Is AI done and you're just bored of that? You've got to move on. You've got to pivot. If you're in AI, pivot to BCI. What's going on?

2:00:37There is definitely a lot of noise in the world of AI right now. I think BCI and AI are actually closely related. And BCI will be kind of one of the next really important foundational technologies that impacts how AI gets rolled out. But I do think a big part of our jobs as VCs is to kind of think about opportunities and technologies that are not yet obvious and mainstream. And I think BCI falls into that category in the sense that it's not ready for primetime yet, but I think it's getting closer. And I do think it will have a really big impact on how basically human intelligence and artificial intelligence fit together.

2:01:14The merge, the merge. It feels like one of those technologies that's always 10 years away, like fusion. But take me through the history. When does this whole story start? There's the Utah array. I want to know about that. Yeah, totally. So BCI is not a new technology. It's something that's been around in a research context for decades. The very first BCI was actually in a human was demonstrated in the 70s and early 70s. Researchers at UCLA, basically using EEG, which is non-invasive technology, were able to get patients to be able to control a cursor on a computer screen just with their thoughts.

2:01:52That's kind of like what we're seeing from Neuralink, right? It's not that far off, but it's been 55 years now. So we're super interested in what happened in the intervening years. Yeah, exactly. So that was a very basic, unreliable prototype, but it was kind of a concept. The first invasive BCI, and maybe just as a quick definition, the difference between invasive and non-invasive, these are kind of the two main categories of BCI technology. Invasive technology requires surgery. It involves putting electronics inside your skull directly on or in your brain. And so Neuralink is an example of an invasive BCI company where you have to cut open your skull using a surgery called a craniotomy and put the chip inside.

2:02:35Non-invasive technology does not require surgery. It's just sensors that you can put outside your head. They could be embedded in a consumer device like headphones or a hat or something like that. So the trade-off between invasive and non-invasive BCI really does boil down to a trade-off between accessibility on the one hand and ease of use versus signal quality and how high fidelity of signal you can get from the brain. It's a lot about value. If you have a disability and you cannot use a computer and somebody says, I can give you this surgery and you're going to be able to interact with the computer, that's a great trade.

2:03:12Whereas if you say that to me right now, I'm going to say, I'll wait. I'll use the mouse and keyboard, actually. I'll be fine. I'll stick to the massive keyboard. Okay. I think my big question is like at what point is the invasive approach like so tried and true to everyday people? So in the 1970s, it was non-invasive. When did the first invasive stuff start happening? Because Neuralink popularized it but didn't invent it, right? Exactly, yeah. So invasive BCI, the first invasive BCI was implanted in a human in the 1990s. And it was this device called the Utah Ray that you referenced, John. And honestly, I would encourage people listening to go to Google Images and look up Utah Ray just to see a picture of it.

2:03:56It looks like a medieval torture device. It does. It's so scary. It's literally like a bed of needles. And you literally cut open the skull and you just jam this set of needles into the brain. And so the Utah Ray, to be clear, was a really important breakthrough in the history of BCI. It was the state of the art for a long time, and it made it possible to do things like go from thought to text and understand people's thoughts directly. But brain damage, basically. If you're jamming these needles into your brain in order to record from some neurons, you're also killing a bunch of other neurons.

2:04:35And so that's the reason why the Utah Ray never really took off from a commercial perspective. but it did lay the groundwork for subsequent generations of invasive BCI, including Neuralink, which obviously is the most famous invasive BCI company. Okay. So now, was Elon the first person to really take BCI seriously? Because it feels like there's a proper market map and you have Sam's working on stuff, Sam Altman, founder of OpenAI, and then Elon's working on stuff. And then Nudge also exists. There's like a, there's like a number of like, basically like billionaire founders that are all making serious bets.

2:05:11Are all of them, is this one, is this like an andurl type story where like, you need a billionaire who's just going to sink a bunch of money into this? Or are there any companies that have like actually just gone from ground up in the traditional fashion of like, they raised a seed round and then a series A, like, it just feels like a very different path. So like, maybe take me through the market map of what's happening right now. yeah it definitely like started as from a startup perspective as a category where like it was largely funded by billionaires like obviously Elon had Neuralink, Brian Johnson had a BCI company called Colonel that he poured a ton of money into.

2:05:44Yeah do you remember like what that actual was that invasive non-invasive like what the plan was there? He explored both it ended up being non-invasive and they developed like a new modality of sensing non-invasively which is actually pretty cool you shoot lasers through your skull to detect the blood flow in your brain, which is still used today. The company's still going. It's worth noting, Neuralink is definitely the most well-known BCI company, but it wasn't the first. There were startups before Neuralink. There's one called Synchron out of Australia. There's one called Paradromics, which did follow that more typical path that you described of like raise a seed raise a series a and certainly in the past few years there there's been an explosion of them so so now there are a ton of bci companies both invasive and non-invasive what are the uh it feels like neural links had a very like kind of like barbell strategy where they're they'll tell like a sci-fi story about like you will be able to fully like communicate with ai and merge and whatnot but then there's also like this ultra practical like if you are a paraplegic, you can use a mouse cursor and click and use a computer.

2:06:59Uh, are there, are there other pitches that companies are, are offering, uh, in terms of just like reading information from the brain or writing information to the brain? Like how do the value props like stack out right now? Yeah. I think one of the really interesting differentiators of the different invasive BCI companies is like, what's the end use case that they're going for? And what Neuralink has been focused on to date is computer use. So like all the demos you see of Neuralink patients, like Nolan Arbaugh, the first patient is using a computer, which basically comes down to like mostly controlling a cursor and potentially keyboard.

2:07:39And there's obviously a ton you can do if you can control a computer. So that's like a very valuable use case. but a like a harder more advanced use case which like I kind of think of as the holy grail for or one of the holy grails for BCI is decoding language like basically being able to instantaneously understand words from a person's brain and like write them or send them via text or email like that basically that basically is telepathy more or less especially if you then like convert it to another person's BCI. Like, so it goes directly from brain to brain. And so that is a more ambitious target, which there are startups that are going after.

2:08:18To this point, at least publicly, Neuralink hasn't published anything related to language decoding. Of course, it's something they're thinking about, I'm sure. Yeah. But I think that's one really interesting use case. And then another one is being able to control objects, like whether it's controlling a robotic arm or like controlling any sort of object in the real world, which again, it basically is telekinesis And like these terms sound really like, you know, fantastical and paranormal, but like that is essentially what the capability that that will enable, which is cool to think about. Yeah.

2:08:50Are the non-invasive BCI companies ever targeting like a higher level of abstraction? Like, look, we're not going to be able to reliably get an X and Y coordinate for a mouse, but we can tell you that you're stressed out or we can tell you that you're overly tired or were telling you that you're dehydrated in your brain or something like that. Something that's more abstract, but still something that a consumer could actually adopt, wear a hat. They're not going to go into surgery for it, but more of like a biohacker use case. Yeah, that's exactly right. And those use cases have already been pretty well proven.

2:09:24There are actually non-invasive BCI products on the market today that can detect if you're stressed or if you need to sleep more or if you need to focus better, those sorts of things. I think the really big question, like, in my opinion, the single most interesting strategic question in the field of BCI right now is, like, the conventional wisdom has been that invasive BCI is necessary for the most sophisticated use cases like language that we were talking about, because you just need to get that high fidelity data. but non-invasive approaches have been getting better and better very quickly in part because non-invasive sensors have been getting better but much more so because the underlying ai is just getting a lot more powerful which lets you extract a lot more signal from the same noise sure and so honestly no one really knows like where the performance ceiling will be for non-invasive bci there are there are companies out there today that whose vision is to like build a thought-to-text language decoding technology platform just using non-invasive sensors that you can just put on your head.

2:10:31It's not yet proven if that will work or not, but like there are definitely people aiming for it. And honestly, I think no one can say for certain that it won't work. I think like they're all kind of pursuing the scaling law strategy of like we saw with language models, just collect more and more and more data, build bigger and bigger models, and like they'll get better and better. And so far, like no one, no one yet in the world has collected like a mass, a truly massive data set of brain data paired with language data. So like, who's to say whether, you know, what might be possible if you really try to scale this stuff?

2:11:03Yeah. How, how do you, how do you invest in this category right now? How do we make money off of this? How do we make money off of this? No, but cause the, the probably my personal default would just be to try to pick up some Neuralink secondary and just ride with them because it feels, it still feels like we're early. And if you just fund a bunch of alt Neuralinks, I think that that might be kind of a tough, tough game, but how do you think about it? Yeah. Neuralink is definitely the, like the most well-known, the most well-funded, obviously it's Elon Musk and it has, you know, everything that that comes with it in terms of being an Elon company.

2:11:44It is also, I mean, just thinking tactically from an investment perspective, it's also extremely highly valued today. Their most recent round is at$10 billion. There are a handful of very credible Neuralink competitors, including a couple - It could be undervalued. Yeah. Do we have any idea - No, I'm just messing around. I mean, do we have any idea on market size for these things? How do people even underwrite these types of deals? Are they building up to like the number of paraplegics that need, you know, the FDA approved surgery for that indication? Or is it more of like a consumer like TAM?

2:12:21How do people think about that? Yeah, I think you basically have to think about it in two phases. The first phase is the medical phase. The second phase is the like consumer slash humans merged with AI in the singularity phase. And I think the TAM math is a lot more concrete for the medical phase. And just in the medical phase, it is a massive TAM. If you look at like, basically, if you just take everyone in the world that's paralyzed, that's like tens of millions of people, and you can break it down by different causes, ALS, spinal cord injury, et cetera. You know, many, many millions of people.

2:12:55and the industry is kind of circling around this price point of 150k per implant with the expectation that insurance will cover it like it's not it will be something that a lot of people will have access to because they won't have to pay out of pocket so if you just do the numbers on that you know it can be a many many tens of billions of dollars market yeah but i do think that like the really big vision the big prize that ever you know that all that is gets people like elon musk and Brian Johnson excited is the longer term vision of this being like a consumer product for a more generalized population that lets anyone like seamlessly merge with digital intelligences and artificial intelligences and so forth.

2:13:38And, you know, if you think that eventually DCIs will be as widespread as iPhones or something, then obviously, you know, you can you can talk yourself into a huge dam. Imagine not having to open the Soar app, but just having a Soar implant. And so you're just sitting there. Yeah, just at the trough. It'd be amazing. Are you tracking any of the intermediate steps? There was that company that launched a demo that it seemed like it would put something on your jawbone and it would be able to hear what you were whispering. we tried the meta ray band displays and those were able to pick up on a very low audio signal you could kind of whisper and it would still be able to interpret it with ai into translation like is that is that actually like a critical path in the tech tree or is that kind of just a side side note or do you think that that that whole tech wave will be uh like a big uh precursor yeah there's there are a lot of different opinions on this so what you're describing I mean, people often use the term silent speech to describe the category, which is exactly as you said.

2:14:41You have a sensor somewhere outside your skull. It can be as part of a headphone or a hat or something that can detect the words that you're saying if you just barely whisper them. Or even if it's subaudible, if you're just barely moving your lips and moving your tongue. and the idea is it lets you use all the value and possibilities of voice applications but without having to make noise. And so when you're in public, for instance, walking down the street or on a bus or something, that can be a lot more useful than you probably don't want to speak out loud to your phone. I think to your question of is this just an intermediate branch of the tech tree or not, I think it really depends.

2:15:25Bullishness around silent speech, I think, really depends on how soon you think true BCI will be ready for prime time because silent speech isn't recording brain data directly. It's recording like downstream muscle data. And so if you can actually decode what's coming straight from the brain in an accurate way, you can kind of just leapfrog silent speech. But if you think that there are real limits to what's possible noninvasively with BCI, then silent speech might be like a more practicable path. And you mentioned this company Alter Ego out at MIT recently had this really buzzy launch video that like they frame it as basically telepathy, which is a little misleading because it's not actually reading brain data.

2:16:07It's like guys like mouthing something and kind of moving his tongue. But yeah, that is another maybe like more achievable near term version of this. Chris in the chat asked, what about Chinese infantry using BCI to reduce PTSD and increase reaction time? Do you know anything about that? I haven't heard about that specifically, but there's no doubt in my mind. I mean, the CCP and Chinese startup ecosystem are investing a lot in BCI. In the U.S. also, one of the big use cases, in general, one of the big use cases is treating neuropsychiatric diseases. So if you can precisely modulate brain activity, you can address a lot of health conditions like PTSD, but also like OCD, depression, Parkinson's, et cetera.

2:17:02It's basically a lobotomy that works, right? Yeah. Which is like kind of crazy to think about. Like our lobotomies, was that like somewhat on the right path? It's a very hot take, nuclear take potentially. Yeah. I mean, to be clear, like these forms of neuromodulation, like you're not actually taking any of the brain out the way you did with lobotomy, but yeah, lobotomy is just like were very crude attempts to like modulate the brain yeah try and turn off certain regions of the brain and if you can do that with some sort of electrical frequency or neuromodulation like you're in the same realm which is uh people want a lot of fda trials before they they run that but i don't know maybe over in the chinese infantry they're they're they'll do it live yeah um is is there anything else that's going on in the bci industry that we didn't cover that, like where all this goes next?

2:17:57Are we like, it's certainly not a trend. I guess the big, the big question for me is like, how do you apply the lens of what we're seeing in AI to the BCI world, especially with regard to the fact that we might at some point be on a scaling, like on a scaling curve. And we've kind of seen this with like Tesla's now doing like large scale training runs for self-driving technology. Google just did the CELTA sentence project on the Gemma 3 models. And you can see that they're starting to scale that up, but they're not at like, we need to build a one gigawatt cluster for AI and bio. And I doubt that any of the BCI companies are like, we need a one gigawatt data center to do our training because they don't even have the data yet.

2:18:41So it feels like we're still really early, but is that the right lens to be tracking this through? Should we just be looking at like how much electricity is going to be going into the training run and then we'll know that it's actually working? Yeah, I do think like you often hear people comment how they're like we keep discovering new data modalities like there are more and more modalities than people realize like there's language and image and audio and video but like biology isn't there's a lot of modalities there and robotics and so forth. I do think neural data brain data is a new modality that we're just right at the very beginning phases of starting to research into.

2:19:18And so there really haven't been any large scale efforts to build foundation models for brains, as you're describing. I do think that that's inevitable. But I also think, like, I think it's, I think this stuff is really relevant for the trends we're seeing in AI, because I do think this is the inevitable next way in which humans interface with AIs. And you can imagine, like, basically having a BCI that is connected to, you know, whatever the latest AI model is where rather than having to pull out your phone and like type a question into chat GPT, you can just, you know, think something and the answer will surface in your mind.

2:19:54Or if you're like brainstorming in your own head, you'll have like a thought partner there that's brainstorming with you. You know, you'll be able to instantly communicate with others. Like once you start kind of playing out the possibilities of what could happen if there are BCIs at scale, it does really change the way humans interact with information, basically. I'm sure Eliezer Yudkowsky loves this. It's fantastic. It is exciting, though. And I appreciate you coming on the show and breaking it all down. Have a great weekend. We'll talk to you soon. Yeah, thanks, Rob. Thanks for having me. Cheers.

2:20:28Bye. Let me tell you about 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. Tyler, are you going to get a BCI intern challenge? Get the Utah Array installed. Can we pull up a picture of the Utah Array? I put it in the tent. It is very scary looking. You've seen it? You've seen this thing? It is just straight up spikes in your head. It's just a few wires. I feel like - Like most protein powders, it gives you brain damage. Yeah, this thing. Yeah, this thing. This feels like just one notch forward from just actually getting a lobotomy.

2:21:02But it's a rough looking device. But I guess it actually worked in some ways. I got some data. But I've often said that I wouldn't be the first person to go on the rocket to the moon or to Mars. But I'd be like number five or ten. As long as the first couple people make it back, I'm good. What about you? What number of person do you want to be? Do you want to be the first person with the millionth? You want to be the millionth Neuralink customer? I'm probably in the first 50 ,000 I would say I mean there's an interesting thing speaking of like doomers I don't know if it's Eliezer himself but a lot of people have said like one possible solution to like the kind of doom scenario is that it's like the merge that would actually prevent like the AIs taking over because like we become the AIs, they can't take us over if we're them Jordy what number are you?

2:21:57You're going to wait 100 or 1 million? big big number we're gonna need a bigger gong for my number for your number you're gonna get up there i don't know i mean i i've talked to nolan from value link he seems like he's having a great time with it he gave me a good review i'm down wire me up yeah the the value right now from what i've heard yeah i'm i'm pretty i'm pretty quick with the mouse and keyboard right now so i don't necessarily need the feature that it's offering yeah and i don't necessarily need you to know my i mean i'm sure you can they'd be able to build the right user experiences around this but my first thought to a question is not necessarily my my best thought right and so if we're sitting here prepping the show and we're just having this instant communication it's just like our worst take going this way and then a bad take against a bad take going back yeah you would need a lot of translation.

2:22:54But imagine puppeteering Adio with your BCI. That could be the future customer relationship magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level. Can you imagine? So a lot of these companies, a common tagline right now is Adio is the AI native CRM. Imagine when the BCI era, when AI is old news, you don't want to put that on your landing page. BCI is the new hot keyword. So you say, we're the BCI native CRM that builds, scales, and company, grows your company to the next level. I'm excited for all the landing pages to update to BCI Native. That's what I want.

2:23:29I also want you to get an eight sleep. And Jordy, I heard you had a rough night. I think you got to get a sound effect ready for me because I got a 93. I slept for seven hours and 25 minutes. Let's go. You got a 47, four hours, 28 minutes. And dinner last night was in Malibu. I thought you just went right home. But, you know, the rough nights come for us all. from time to time. Left late. Eric Jong says, all according to plan. He is highlighting the fact that all of his, everyone with the same name as him is absolutely correct. They're either building, cooking, or at Thinking Machines or OpenAI.

2:24:04It's a good time to be Eric Jong. Congrats to you. Legends. Legends. We still have to do the Eric Jong show. Oh, and this is, Eric Jong is quote-tweeting a different Eric Jong. I love it. They're going back and forth on the timeline. Yeah, we got to get all of them on the show. We do. Eric John Day. At the same time. You're all invited. Talk about open AI, thinking machines, cooking, and building. Tyler, can you work on this? Invite them all. We want the six up, all of them. Logan Robison says, when Walmart jets take off for store visits, no one but the pilot knows where they're going. I wonder if they have them all blindfolded.

2:24:42Rumor is you're only told a few things to help you prep for the trip, domestic or international, how many days you'll be gone, climate of the destination. What does this mean? So this is like executives, I imagine, like people at corporate going to visit stores and seeing how they're happening. Okay, and they want to show up. They don't want to call ahead and be like, hey, you got to really prevent executives that are responsible, I imagine, for certain things within a store to not front run it and be like, hey, make sure things are clean. Make sure everybody shows up on time. Yeah, yeah, that makes sense.

2:25:12They want to do a surprise visit. Yeah, so for nearly everyone, including store associates, the visit is a complete surprise. Got to keep them on their toes. When these store visits happen, the goal is nearly always the same. Inspect what you expect. Scheduling these trips in secrecy makes it possible to see the stores as they truly are. No fanfare pretending. I was never lucky enough to travel in one of the jets, but the purpose of these trips was not lost on me. In my cleaning business, we do something similar. Anyways, cool concept. And beautiful jet. And if you're long Walmart, you're short Walmart, head over to public.com and enjoy multi-asset investing, industry-leading yields.

2:25:51And they're trusted by millions. Clyde has been at a conference. Looks like he got a Lucy hat. He did. And a lot of other stuff. This is awesome. Wow. And some breakers there too. He got samples. He got all sorts of stuff. What conference is this? He got a Happy Dad hat? Yeah. He should start a convenience store, corner store that's only powered by a conference. they only sell you could really resell you could really resell a bunch of this all these brands should head over 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 efficiency in those ad buying across the globe the other thing that you need to do genuinely if you are running a CPG company you will wind up at a lot of conferences like these you will be talking to convenience store owners and you'll be talking to distributors and as much as we like to joke about luxury watches, it is a very important aspect of the job.

2:26:46It really does, like when you're shaking hands with people in this particular industry, tech has been, you know, like you got to be an aficionado. You got to like the craftsmanship of a particular watch. It's a unique choice in tech. But in my experience in consumer packaged goods, when you go to a CPG conference, what's on your wrist actually matters. So if you're building a CPG business, maybe you should head over to getbezel.com because your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. No joke. I seriously got, I became like fast friends with one of our major distributors talking about watches because he was super into it.

2:27:22Anyway, our next guest is already in the restream waiting room. We have Nathan from Airstream Capital coming into the studio. Nathan, good to see you. How are you doing? Welcome. Great. I was worried. Great jacket. It's light where you are. I was worried I was going to keep you up late because you're usually in Europe. Give us a little introduction it on yourself and backstory and then tell us where you actually are if you can. Incredible jacket too. Jackets are a great sign of respect in our culture. It is. Nice jacket. Yeah. Thank you. Thank you. It's life at the AI frontier. Yes. Yeah. So I founded a firm called Airstream Capital in Europe.

2:27:54I invest in AI companies at the very early stage. I've been doing this for about 10 years now. I spent kind of half my time in the US and in Europe. Thank you. And you're in the u.s now yeah i'm in new york oh nice very nice yeah uh well on vacation or investing no i've actually been doing a bit of a state of ai uh launch tour if you will so we did a meet up in san francisco last thursday for the report drop yeah and then i did one in new york last night and what is the state of ai yeah so before we get into that i have one is ai good yeah one one question how how competitive are around ai rounds at the early stage like pre-seed c today.

2:28:36I know I'm sure they're getting more competitive, but I think historically, if you could write a million dollar check at the idea stage, you had a chance to build a real position. Yeah. Yeah. Yeah. I mean, in that sense, I think the game has like materially changed. There's a bit of a bifurcation. Like you have the sort of large lab model companies that are raising significant amounts of money. And I think those are also So potentially good investments, but they definitely cater to a certain type of venture firm. And then you have the other category, which is potentially more pragmatic entrepreneurs going for less of the general purpose AI, but more looking at kind of what use case can they solve with a general purpose AI system.

2:29:19And those ones are a little bit more modest. But in general, yeah, you've seen inflation of round sizes, but also actually interest from customers to buy this stuff. And so founders just want to take a bigger swing, want to go faster. And that's what's driven a bit of the round size increase. I feel like a couple of years ago, the meme was, even if you're a seed stage company, as long as you slapped AI on there, you could justify like a$100 million raise because who knows, we might need to train a model. We might be doing some real AI, not just a rapper company here. Has that dissipated as it's become clearer that to win in that game, you need hundreds of billions of dollars.

2:29:57And so your actual cost structure should look a lot less. I see GPT-4 as like a CapEx expense, basically, like a huge training run. And for most AI companies, it's going to look a lot more like OpEx until they have a customer. They don't really have a big token bill. And so why do they need$50 million at seed?

2:30:22I ask myself this question a lot. At the end of the day, to some degree, as an investor, you're not the one deciding this. The market sort of pumps what they will. But I think the biggest frame change, and you can see this documented in the State of the Air Report the last eight years that I've been doing it, is a lot of the capabilities that you get out of the box of a model today, whether it's language, reasoning, image, video, biology. If you showed that to me or others 10 years ago, we would have probably said, this is magic. and like not possible. And so I think there is just so much you can do with what's available today that it's almost a gift to the startup community that now you don't have to blow, you know, their three, four,$5 million seed budget on trying to build an AI system, collect the data, and then, you know, throw it over the parapet to a putative customer who says, you know what, I don't care.

2:31:14I've got other priorities. What is this AI thing? It doesn't even work anyway. So now you can run your whole seed budget on product market fit experiments. So it's almost like back to kind of OG seed investing, which is less about what the initial starting idea is, but how capable is a team to just run a lot of experiments and find something that works and then rip it when it does. What's the headline KPI that you like to center on in a state of AI report? I mean, you can focus on market caps. You can focus on revenue growth. You could even look at gigawatts and electrical numbers. You could look at number of H100 equivalents that are being built out.

2:31:57There's so many different ways to ground the shape of the AI build out. What do you like to focus on? Yeah. Frankly, the report is about 300 pages, so the honest answer is all of the things. But so what we started doing a few years ago is this compute index where I basically combed around the internet to try to find all documented cluster sizes for various companies. And we've been charting just how much of an expansion has happened. There, in the last three years, it's basically probably like 100x increase. The other cool thing we've done is mine all open source research papers and programmatically determine which chips are used in those papers.

2:32:39so we can give people a leading-edge view for what researchers like in terms of hardware. And so with that, we've shown, I think, the only evidence to this I've seen, which is that 90 % of AI research papers rely on an NVIDIA chipset. And through that kind of work, we've seen AMD start to grow a little bit as well, out of nowhere, of course. It does seem like AMD is really picking up this year. We've seen this in ClusterMax from SemiAnalysis. they kind of did their, I don't know, year of efficiency or in some ways and started squashing bugs. And then there's just immense pressure when there's, you know, hundreds of billions of dollars going into the next phase of the build out that, you know, NVIDIA's margins are going to be in the crosshairs for sure.

2:33:31Yeah. And strategic alliances with OpenAI that I think is quite interesting because there's, you know, if you read through the through the news, you'll see that actually open AI has warrants in AMD at a strike price of 600. And so there's like some interesting incentives there to try to, you know, get AMD stuff to really work. And some degree, it's not as similar to like the relationship, I suppose, between Anthropic and AWS for Tranium. And AWS is hardware is clearly behind the bigger competitors like NVIDIA. And so they get sort of like IT help desk support from Anthropic to make the stuff work.

2:34:12Yeah. Do you think we're in a bubble?

2:34:17There's probably local bubbles all the time. I think in our little ecosystem of AI, there could be one in this CapEx build out and all the interconnectedness with various companies. I think as soon as you see Wall Street finance get excited about something, you have to think a little bit why they're getting excited. But at the end of the day, I think the outputs of this bubble, if there is one, are really, really productive. Sure. Back to the point around this technology is magic. There's so much value that's getting created. And we've documented some of this with our mutual friends at RAMP looking at how much U.S.

2:34:59companies are spending on AI services and that's going up. The retention is going up. Some of our investments in 11 Labs and Synthesia and others are just growing because it's genuinely useful stuff. Yeah, it feels very different than the two bubble. What was your reaction to that Deutsche Bank report on ChatGPT spending growth? I looked at it and it felt hard to judge because we were looking at summer, basically. Yeah. But how did you process it? I mean, yeah, astronomical numbers. But I guess the question is, is the TAM for paid AI subscriptions in the consumer or prosumer realm saturating? And I mean, we're certainly seeing messaging from OpenAI that says, we want to do agentic commerce.

2:35:50We want to increase the monetization of our free users. We want to get into advertising potentially, affiliate revenue, API business. Like it doesn't just feel like there's an unlimited pool of people that will pay$200 a month for, you know, a great product, a magical product. But there just might not be that many people worldwide that are like, sign me up for the$200 a month plan. Yeah. So, I mean, along that notice, I was also interested in this topic. So I surveyed about 1 ,200 AI practitioners for the report. And all this data is open access through it. And I was really surprised because 95 % of the people who took the survey use AI in their personal life and their professional life.

2:36:33And it's like 75 % of them pay out of their pocket for it. And 10 % of people pay$200 a month or more.

2:36:42And this is a pretty educated crowd in North America and in Europe. But I was surprised at those numbers. And then the second thing to your point around agentic commerce, I think that's huge. We have some data in the report that shows that conversion of e-commerce that's derived from agent conversations converts at a higher rate than direct. And so you can imagine that the brands that sort of jump on this earlier and create content that agents are using to best learn what the right solution is to serve to the human that they're serving are actually going to probably go their revenues faster. It's a bit like this recursive cycle, particularly as more and more labs and companies want to do this reinforcement learning to improve personalization.

2:37:34I think there's a lot of adjacencies that one can navigate into, actually. A week or so ago, the EU announced their$1.1 billion plan to ramp up AI and key industries. What was your... obviously people in the West Coast were kind of mocking it, considering that the whole plan was less than... Sam Altman's Carpenter. You know, their meta's recent punch. Yeah, single in... But yeah, my reaction was like, that's kind of, the takes were funny, but at least there is a plan. Yeah, what is this evidence of? And I guess when you read it and reacted to it, I guess, like, what was your immediate thought on what you wish the EU was doing?

2:38:24Yeah, I mean, my reaction wasn't too similar. There's been, like, a meme kind of bandied around in some of our friend group, which is back to the Derek Zoolander, like, is this a house for ants? Yeah, exactly. Is this a plan for ants? But, like, Europe did not build their own Google, and it was fine. I mean, they, like, missed out on it. But like the natural state of the market equilibrium was that Google was built in America and America absorbed the market cap and European investors could go invest in Google if they wanted to. And Google eventually built data centers to serve Google products locally.

2:39:02But there was never like we need a we need our own thing. Like, is the thinking around, like, national AI changing? Because I feel like there's a world where even if you're using some, like, locally trained model, like, if you're going to chat.com, like, it's still OpenAI wins. Yeah. So there was an initiative. I suppose I'll call out two examples. So there was one in Europe called Quero, which was like a government kind of funded initiative to try to build a search engine that best represented European interest because allegedly Google wouldn't because it's an American company. And obviously no one knows about it because that flopped.

2:39:40And then, you know, the second example is the French government not wanting to buy Palantir for many, many years, as you guys will know pretty well. And eventually they caved in after burning the same amount of money they'd probably have spent on Palantir and got it anyway. and yeah the latest example of all this sort of infrastructure build out in the US and in China is now every country wants to be sovereign with regards to AI yeah so here's an interesting like is Putin the least AGI-pilled world leader like I was trying to get research on their clusters over there they were like we have 800 GPUs and we're running them hot and so like they're basically calling the world's bluff on AI.

2:40:24We'll be fine. I did say that he actually wanted to have AI supremacy about a year or two ago, but admittedly, maybe there's less evidence of that. I mean, to some degree also, Yandex was a pretty amazing Russian search company, and then they've since left and relisted on the NASDAQ as Nebius. One of the clouds that's really crushing it, because they have really good technology. But yeah, I think the sovereign thing is a little bit of a meme or a misnomer. I think it's great for the suppliers to the technology because they have yet another TAM to sell to. But if you're a non-American nation and you buy NVIDIA chips and you buy American technology and Chinese technology and you just install it in your country, I don't necessarily see how that makes you sovereign because these things need updates.

2:41:13They can be switched off, basically. Yeah, they have a relatively short life too. That too, yeah. Useful life. Exactly. So I think sovereign is a little bit more of like an alignment of technology agenda and political agenda than it actually is the true meaning of the definition of like, we control our fate when it comes to intelligence and running it. Okay, moving forward, a lot of people are nervous about cracks in the global economy, cracks in the AI economy. What are you monitoring? What do you think is the most important metrics or data points or stories to be really digging into these days?

2:41:57Yeah, I mean, I think it comes back down to the return on investment, you know, cases of companies becoming more efficient, launching better services. I think the reason why I do this at all is because I think AI unlocks new use cases that weren't possible before. And so for so long as we see those examples, you know, propagate through the economy and it's still very early, I think we're in a good shape. and we only talked about software here but there's so much in you know national security and defense that's uh that's uh that needs to be solved and many of those problems whether it's like you know electronic warfare autonomy rely on ai and so huge time there also in europe and we've got plays there with uh you know with delian and a few others uh companies of europe so uh i think it's like uh it's full speed basically yeah exciting times well thank you so much for joining the show So I hope you have a good weekend.

2:42:54I'll talk to you soon. Great to meet. Thank you. Have a great rest of your day. If you're looking to take a trip to New York or anywhere, head over to Wander.com. Find your happy place. Book a Wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, and 24-7 concierge service. It's a vacation home, but better. We have some breaking news. Apple has entered a five-year deal to broadcast Formula One in the United States. Wow. Yeah. This is from Walter Bloomberg. this is very exciting we were wondering where they were going to land they landed with Apple and I love the Apple strategy how much did they pay we don't I don't know we should look it up but I love the Apple strategy Apple did the movie F1 so then you watch the movie and you're like I want to watch the actual race I can watch it on Apple TV the more I thought about it they basically took Drive to Survive and then they made a movie with these fictional characters, but they just like ultimately just like, it's a barnacle economy in my opinion.

2:43:55Barnacle economy. It really is. They just like, Drive to Survive is this whale that was making F1 relevant in the US. I feel like - They just attached onto it. It's a big barnacle. Wait, wait, who's the barnacle and who's the whale? I feel like F1 is - I'm saying Apple started as a barnacle and they're becoming the whale. Hmm. I feel like F1 is the barnacle on Drive to Survive, honestly, in America. Yeah, that's a good point. F1 is a barnacle on the whale that is just Netflix making reality TV out of everything, basically. We need to figure out that - E-Turist in the chat says, can't believe my elderly mother broke the F1 news to me before Walter Bloomberg.

2:44:37Let's go. Mother's tap deal. Ryan says, five-year deal worth about$750 million. They were originally going out for$200 million. For one season. Yeah, so that would have been a billion-dollar deal. Yeah. They got 75 % of the way there. Not bad. Tim Cook. Do you remember when he was trying to wave the flag? No, I don't remember that meme, that image. I remember him being at some DJ booth. Was it like John Summit was playing at F1? I think I saw a video. I got a video. I'm dropping it in the timeline. People are saying this is the worst checkered flag of all time. Oh, no. We'll give him some slack.

2:45:17because he's barely making it by him. He's one of the goats. It's$75 million a year. He's one of the supply chain goats. Yeah. He's, okay, here he is, Tim Cook. This is at F1, and they want him to wave the checkered flag. That looks fine. No, it doesn't. How does one wave a checkered flag? That is not how you would wave. How would I wave it? Would I just more gusto? Look at how lackadaisical this wave. It does seem like he's kind of phoning it in. Looks like he's going fishing. It does, yeah. He's at the finish line of a Formula One race, and he looks like he's going out for trying to catch some trout or something.

2:45:54Wow. But he got the deal done. But if they hadn't done this, and instead of spending$150 million a year on F1, they could have tripled Tim Cook's pay package. Which one do you think, a more incentivized Tim Cook, could potentially create more value? Which would you do? He was so embarrassed by the fishing-inspired flag that he's like, I want to own it all. I want to own it all. I want to own it all. I want to shut it down. I'm going to drive the sport into the ground. He might get more satisfaction out of that than a higher salary. Before we close out, we need to expand the barnacle economy taxonomy.

2:46:33What we need to do, so the whales, it's obvious who the whales are. That's Anthropic. That's the hyperscalers. That's OpenAI. That's the foundation model labs, right? They're the whales. They're growing. massively. They're putting up huge numbers. And so the barnacle can be two things. It can be one, the company that sells to the whale, or it can be merely a company that sells something that buys from the whale. And so I feel like we need two different terms. The barnacle economy, specifically like the training data providers, right? That feels barnacle economy. But the AI for lawyers, that does not feel barnacle, right?

2:47:11Because they have to go out and win customers in the legal field. I think if you can swap out the underlying intelligence, you're not a barnacle, basically. You're a shark. It's a shark economy. And ultimately, they don't have to sell to the whale. Yeah, yeah, exactly. They buy from the whale. Yes. So the shark buys from the whale and goes off. You might have a Nobel on your hands here with barnacle theory. It's happening. Well, is there any other breaking news? Bloomberg this morning, or I think it was yesterday, apparently Cantor is trying to do this private raise for Tether at a$500 billion valuation, but Bloomberg reports that Cantor invested$600 million in a convertible note for 5 % stake in Tether a year ago, a$12 billion valuation for Tether.

2:48:00Now Cantor is trying to tell investors that Tether is worth 42 times more in just one year. And when Cantor is obviously conflicted as a 5 % owner, yeah, that ain't happening. Yeah, I mean, a stablecoin leader is going to be worth a lot more after the regulatory changes this year. But yeah, there's also a lot more competition. What's Circle at right now? $30 billion? So yeah, I mean, 15 times the price of Circle might be high. I don't really know. I know Tether's a great business, so I wouldn't be surprised if they get a major up round done. In other news - Yeah, I guess that - So what's the current market cap of USDC?

2:48:47It's$75 billion. Well, is that for the token, or is that the actual - That's the token itself. Circle, the company, is$30 billion market cap. And so we value Tether as - So here's the issue. I mean, Circle has - Wildly different economics, right? Wildly different economics. They have to pay a large amount of their revenue out. to Coinbase and I'm sure other exchanges. But Tether is at$185 billion of market cap. So it's three times the size with better economics, potentially, like$500 billion doesn't seem that crazy. I mean, I don't know. I haven't done any of the actual math. The question is how durable is the...

2:49:26Yeah, especially when everyone's going to be having their Kohl's cash soon. Who knows? Manum's in the game. And Bridge obviously wants to create a lot more. Zephyr has a post here. Big contract. Chinese actuator component supplier Sanhua Intelligent Controls is rumored to have secured a$685 million order from Tesla for Optimus. Sanhua's stock surged 10 % to the daily limit following the news going viral, while other actuator suppliers also saw significantly... They put a daily limit on how much... That's extremely un-American. I don't like that at all. Matt Freed says, Tesla not building their own actuators is the least mission-driven thing I've heard all year.

2:50:05I don't know. What does this say about Tesla's timelines on actual humanoid value? More prototype at this point? No, I was going to say the opposite. If you felt like you were to have five years until you were actually going to be selling these to people, maybe you would just build your own if you were trying to sell them and get them out today in the world faster. I don't have time to build the actuator facility in America. I got to spend over half a billion with a rival. Yeah. I don't know. In other news, Ian Goodfellow is more of what... Crazy, nominative determinism. I've met him. He signed a book that he wrote on deep learning for me.

2:50:48It's in the Museum of Business History and Technology History. More of what my colleagues and I have been working on in AI for Fusion is public now. Why are we clapping? We're announcing a research collaboration with CFS Energy, one of the world's leading nuclear fusion companies, Commonwealth Fusion Systems. DeepMind is goaded. This is actually crazy. Together, they're helping speed up the development of clean, safe, limitless fusion power with AI. Yeah, awesome to see Google working in fusion. Obviously, Sam Altman's a believer with Helion. We've had a number of fusion founders on the show. It's one of those technologies that's always been 10 years away but feels less than 10 years finally.

2:51:27we are making some progress. What's your fusion take? I mean, I'm very proficient, but in other DeepMind news, apparently Gemini 3 is actually slated for December. So there were some rumors of maybe next week, but now there's some people saying it's actually... Add 30 days to the singularity counter. This is just not going to happen, is it? When is AGI coming? This is the worst news ever. I don't know, but it will be a nice Christmas. I was saying December 25th. They got it. They got it. My kids are getting Gemini. They got it. They got to do it December 25th. The VR headsets, they always rock it to the top of the App Store.

2:52:07That's what I want to see. My kids are getting a box of tokens. Box of tokens. We can close with Will Manitis potentially. He's got a bunch of stuff. I just wanted to give it up for Stargate UAE. It's taking shape. We got a video in here. We should try to pull this up. Led by KASNA, this 1 gigawatt AI infrastructure cluster is a cornerstone of the 5 gigawatt UAE-US AI campus in Abu Dhabi, and a key part of building the intelligence grid, the digital backbone, enabling, secure, sovereign, and I don't know AI because it's cut off. But we can see this video here. Yeah. Very cool. um Wilmanetis says if you're a young person interested in going deep on weird things basically the only good advice is that you should be 1000x more commercial someone will get very rich by monetizing the things you figure out there's no reason that person shouldn't be you that's good good um well Andre Karpathy uh dropped a podcast with uh Dwarkesh Patel it's a banger I listened to the first like 20-25 minutes yeah just a banger so far perfect for the weekend go enjoy it TBPN is off.

2:53:19We do have a diet TBPN product now. Yeah, it's interesting. There's one quote that I guess Nick was calling out. Nick obviously is more Grok aligned. Love Nick. The most independent research field. He's Grok's most loyal soldier. Yes. He was quoting Altman. Earlier it said 2025 is the year of AI agents. Yeah. I think he could still defend that with Codex, but certainly we're not seeing maybe the agents that we were all super excited about, right? Deep research as an agent, coding agents. I haven't booked a flight with AI yet. Karpathy says, I was triggered by that over-prediction. More accurately, it's the decade of agents.

2:54:03So much work to be done. Let's go. Humans in the loop for another decade? We got this. Yeah, that's like normal. What do you think? More or less. You keep being like we're just on track super intelligence right around the corner. Yeah, we are. I mean, it's always hard. It's like, what do you mean by agent? Like, what can actually do? In 10 years, I feel like... What have agents done for you today? Wrote me some code. There you go. Yeah. Yeah, and I agree that I think this was the year of coding agents. It's the year of coding agents. Yeah, and I think computer use is, like, getting better and better, hopefully.

2:54:45We see Gemini 3, like, much better computer use. A good example is, like, when you made the video vibreel for the Metis list, you were not able to puppeteer Premiere Pro with an agent. And at the end of the day, that's just, like, clicking buttons on the computer. Like, it could use FFmpeg. It could use, like, control the mouse and keyboard and screen record. And, like, that agent isn't here. and you should be able to just, in natural language, talk to an agent that then makes the cuts in Premiere Pro. And I still believe that even when we get there, you'll still need to say, I have an idea to include clips from Cheeky Pint or whatever you picked or these particular walkouts.

2:55:30But it's not there. It's not generalized. Yeah, but that does not feel 10 years away at all. That feels like right now, I could build an RL environment and do that if I had enough compute in like a month. Oh, I just need more compute. Just more compute. Oh, now you're asking for compute over there. I see how it is. Okay. Well, anyway, have a fantastic weekend, everyone. We will see you on Monday. We love you. Leave us five stars on Apple Podcasts and Spotify and have a great weekend. See you Monday. Goodbye. Cheers.