Shyam Sankar, Delian Asparouhov, Ian Brooke, Gaurav Misra, Ahti Heinla, Daniel Singer, Adam Kovacevich, OpenAI Unveils New Reasoning Models, OpenAI in Talks to Acquire Windsurf for $3B

27:23Spend less than five minutes per month on sales tax compliance. That was our, when Numeral launched, that was the day that we said, okay, AGI is here. It's sales tax god in a box, basically. It's super intelligence for sales tax on your e-commerce website. Great way to say it. It's great. AGI for sales tax compliance. Anyway, if you're tracking all these benchmarks, you got to head over to Polymarket. There's a bunch of great AGI benchmarks. which company will have the best model by which month. That's very interesting. The interesting thing here is that, well, one, benchmarks are clearly hitting some, benchmarks are hitting a wall, it feels like, in some ways.

28:05In many ways, the benchmark that matters, in our view, my view, at least, is MAUs. ChatGPT is steamrolling Gemini. Yet, from a pure benchmark standpoint, Polymarket still has Google at a 64 % chance of having the best AI model by the end of April. And so we're getting to the point where there's just so many different iterations. And it's actually not, at this point, it's not necessarily the right way to think about an individual model. And if it's efforts against a benchmark, we should be thinking about the combination of models to achieve certain tasks and goals, right? Yeah, yeah, totally. Like what is the value of the software?

28:46What is the value of the product? Because, for example, two people that have very diverse skill sets are going to be better at some type of task than just one person who's absolutely best in class in that field. Speaking of people that are best in class in their field, let's welcome Delian to the show. How are you doing, Delian? Bulgarian mafioso just carrying a bat ready to break kneecaps at all times. I was going to bring that up to you. I thought it was a rumor, but how's it going? I think I want to kick it off. I mean, we'll get to the space stuff, obviously. The Delta V with Delian must go on.

29:26But what's the reaction to AGI arriving, April 16th being AGI day? Are you feeling the acceleration? Are you feeling the AGI? Do you still have a job or can AGI break kneecaps? You know, I do think that there are, you know, sort of junior research jobs that, you know, probably got a lot harder to justify both in like the land of like, you know, sort of venture all the way to like, you know, sort of grad school labs. This stuff is getting like really, like really good. Like, you know, I'm not somebody that has been investing in a ton of, you know, sort of AI slop, but I think it's sort of crazy to not figure out how to like integrate this stuff into your workflow.

30:06And like, I very regularly now, like, will read a paper and then immediately go to ChatGPT and use it as like a little bit of like a quiz to make sure like I understood it or like, you know, I've been getting a little bit of like, you know, trying to take some like quantum physics classes and like nights and weekends and same thing. I like basically have ChatGPT, like be my tutor, like structure which courses and videos I should watch, like pull, like even though I can like go pull the homework myself, I'm like, go find the homework on like the MIT website and like pull it for me. and then I'm just gonna like submit the homework to you and you go check it against like the solution set.

30:35That way, like it's like all these things that I just don't have to do. And it's sophisticated enough to actually like be able to read like a PDF of like paper that I put in and it goes and grades it. That's like literally what like the junior grad students are for at colleges. They're like to go grade the PSATs. So you're out of a job once the humanoid robotics drops and then they can break the kneecaps and then you don't have anything to do. That's all I have value for at Founders Fund is just like, I just like threaten people with violence in order to get money in. Yeah, exactly, exactly. Whatever it takes.

31:05Anyway, so in your world outside of AI, what is the top story in defense space? For the normies, I think Blue Origin was top of mind this week. We can talk about that. But on a serious level, what is actually important for people to be paying attention to? Yeah, I mean, I think there's a couple of different stories that have come out over the past couple of weeks that are all kind of, you know, related to some of the Trump tariff stuff where basically what he's done is effectively like implemented the trade war that would have happened if a hot war with Taiwan had started to start to basically preview in some ways.

31:41It's almost like a military exercise in that it's basically like, let's go preview and see, you know, sort of what China, you know, would do if a hot war, you know, kicked off. And so they obviously have like immediately restricted a bunch of rare earth minerals. I think the area that, you know, people should be paying more attention to is basically all things, you know, sort of semiconductor, you know, landscape. You know, the articles that came out yesterday talking about, you know, NVIDIA basically getting, you know, sort of slapped on the wrist because they were like, we're exporting, I forget what the number was, but like$20 billion per year of chips to like Singapore.

32:11Singapore is obviously not buying$20 billion worth of chips. They were just immediately going and reselling those to China. And so, you know, Yansan Huang is going to get a bit of a, you know, sort of slap on the wrist. But, you know, the whole Taiwan story is all around the, you know, sort of semiconductor industry. And there was some news that came out about two weeks ago where the Chinese are working on a synchrotron as a energy source for lithography and semiconductors. So there's a bunch of different components of the stack of semis. But to really, really keep it brain dead simple, you basically have the chip designers of the world.

32:46Think of those as the apples of the world, with their A1 chips as an example. You have the tools providers that make the tools that are necessary for semiconductor processes. By far the most famous there is ASML and lithography. And then you have the foundries. Think of those as the factories that make the chips. And they're obviously TSMC is best in class. The tools and the foundry are where there's been by far the most aggregation, let's say, in the market. right that's where it's basically monopsony um we're obviously you're sort of trying to break the you know sort of tsmc uh monopsony and obviously we're spending on chips act etc trying to get this stuff restored to the united states and get foundry set up here um there hasn't been a whole lot of effort you know just domestically in the united states to really do anything around lithography we've just kind of accepted um that the dutch right is and i think it's a dutch company um you know are gonna you know have that monopoly on lithography um and then people are starting to think a little differently now that it looks like that the Chinese maybe have an alternative effort.

33:50There's sort of one line or like, you know, sort of what is lithography? It's basically like, you shine light at a mask, some light passes through that mask, and then it, you know, basically, you know, inscribes something on a wafer, and that wafer, you know, it's basically what you're inscribing is the chip. The way the like, you know, Dutch people do it is they basically like zap tin droplets really fast and really precisely. And it turns out when you zap tin droplets, They release a very particular wavelength pretty coherently, and you can use that as what's known as the energy source in lithography.

34:22People have theorized for a while on like, hey, are there other potential energy sources, in particular all the linear accelerator synchrotron stuff that for the longest time was purely physics science research? This is like CERN. Think about Spark down at Stanford. All this stuff was just like, let's run particles really fast. Let's try and discover the Higgs boson and stuff like that. That's all that it was used for. And at some point people were like, man, this stuff is actually getting pretty good. Maybe we could actually use this commercially because the reason we zapped the tin droplets is to get XYZ very short wavelength out of them.

34:56But maybe we can just attune these linear accelerators to basically just be really, really, really, really fancy lasers and get energy sources out of them. And so people have theorized about that. And then it kind of looks like the Chinese have claimed that they've started to demonstrate that. And so now there's a bit of a panic in the U.S. where it's like, oh, shit, like they could take over Taiwan. And then in theory, we could try to ban, you know, ASML, you know, from, you know, selling China. But maybe that doesn't fucking matter because they figured out their own way of basically doing lithography.

35:26And so now the United States has got to think about, well, like, do we want to start to spin up our own internal effort that is, you know, using linear accelerators or synchrotrons and try to decouple from ASML and decouple from Taiwan at the same time? We have Arizona doing, you know, the foundries, but then, you know, maybe we co-opt the, you know, sort of Stanford linear accelerator and, you know, sort of turn that into a lithography shop and build a foundry around that too. So anyways, that's the, that's the area that I feel like people don't, you know, sort of think about enough lately. Yeah.

35:54Is there, is there any, and, and I don't have context here. I don't know if you do, but is there any effort to get ASML to start manufacturing here in the United States? Or is it just completely out of the question, right? Because we've seen the efforts of TSMC. NVIDIA came out and is basically doing, I read it as marketing. They came out a couple days ago and said NVIDIA to manufacture American-made AI supercomputers in the U.S. for the first time. Pulling out the supercomputer word. but basically saying they want to make hundreds of billions of dollars of their new blackwell chips here in the u.s which is awesome but i just don't it's hard to read in how much of that is is sort of marketing uh versus like actually super real but i'm curious if you've heard of of anything on the actual uh asml side in terms of u.s operations i feel like we just don't have leverage in that you know sort of relationship like it's not obvious like what lever to pull like at least in like the whole like you know sort of taiwan etc i think it's like hey this is a geopolitical enemy like you know you know all the western allies agree generally you know sort of with that if you start to sell to them we're gonna like you know sanction the shit out of you you know nvidia is like a u.s company there's like you know we can slap them with u.s fines with asml it's like okay this is like a you know sort of european company and like if we start to try to like sanction or slap fines on them they'll be like okay great the very limited number of machines we were selling to the u.s we're going to stop selling them we're going to keep selling to taiwan because they're obviously, you know, by far our biggest customer.

37:21And so why does like the America have that much influence in this like Dutch to Taiwanese basically relationship versus at least with like, you know, NVIDIA and Korea, that's like a US to Taiwan, you know, relationship. And we can, you know, sort of influence that. And so, yeah, I haven't, you know, I'm not even sure if I were in Trump's shoes, like what angle I would even try to take to like, you know, do that. And also these ASM machines are like so complicated to manufacture. I mean, it's like it's it's it's extremely complicated to operate them. Right. Like that's what Taiwan has basically sort of figured out how to do manufacturing them is like even more complicated.

37:57And so somehow figuring out how to like pull that out of, you know, the Netherlands. Man, that seems like a really herculean effort. That's where it's like, I think actually you're sort of better off starting with a blank slate on a totally different technological approach and just like domesticating that rather than trying to like, you know, try to force them to move manufacturing operations to the US. How do you think about the role of the government in actually winning some of these really key industries? We did this whole dive yesterday on China's investment in the domestic semiconductor industry, and they've poured tons of resources into that.

38:37But I'm always reminded of the, there's that segment in Zero to One about Solyndra, how the government tried to kind of pick a winner. They gave them this, I think it's a$535 million loan guarantee. And any physicist could have told you just the basic math on the Solyndra was not going to win. And meanwhile, China, it's not that they were like, let's let the free market win. They had the Golden Sun program. They subsidized photovoltaics super aggressively. But were they just smarter and they funded the right thing? Or do they do something differently? It feels like I want the linear accelerator, if that's the right path in the tech tree, to happen.

39:15And I want to win. But also, I don't necessarily want us to just get scared and mimetically invest in exactly what the Chinese are building. And there's like this dance of like, you know, low taxes versus like, okay, sometimes the government does need to step into these things. Like, how are you thinking about the role of the government in like driving R &D right now? Yeah, if there's a way to like, you know, sort of distinguish between the two potential strategies government can take. One is like, you know, sort of subsidize inputs or, you know, you know, match investment efforts or something, you know, broadly in an entire market.

39:48But don't take a particular stance on like what technology tree needs to be a part of. just like subsidize this portion of the market. And then the other half is like subsidize a very particular, you know, path in the technology tree where there is no market whatsoever. And so if you did like market level subsidies, I think the right answer is like, you know, probably a balance, right. Where, you know, on all things, let's say like, you know, sort of rare earth, you know, sort of minerals. There it feels like there's sort of market level things that one could do. Just like slash some amount of regulations, you know, you know, encourage you know or you know um uh guarantee some level of you know sort of purchasing power from the u.s government on like certain rare earth minerals that way you say hey however you refine lithium you know whether it's you know sort of you know you know pulling it from the slag from the great salt lake or sort of mining in eastern california great however you do it like a reserve like building up a reserve yeah exactly like we're gonna build it has to be american-made we're only gonna buy it from domestic suppliers in order to buy it like this like fixed rate right In relation to space stuff, this is kind of what they've done with the lunar payload services program.

40:53NASA has just said, I don't care how you build your lunar lander, but we are just going to guarantee that we're going to buy X amount of basically lunar payload services, and it's going to be at XYZ price and up to you how to go to do it. And so I'm definitely a big fan of those approaches. I do think there are the occasional warranted, hey, here's a huge next step in the tech tree. it's just totally uneconomically viable for anybody to step into that tech tree without knowing that there's going to be government support you know sort of basically from the get-go right um in some ways like you know nuclear weapons were that there was never going to be like a private company that was going to go invest into you know figuring out you know sort of the fission or fusion bombs um without knowing that there was basically going to be government support yeah i do think that like linear accelerator is sort of one of those now there's a big question of like is it cylindra you know is it you know you know fearfully copying the chinese memeticism But it's like, I'm not sure if there's any other option where, you know, I'm not sure that there is any other credible, you know, approach to domesticating lithography.

41:48Like, I don't think that like trying to just copy the ASML tech tree makes any sense. I'm not sure that anybody else has come up with an energy source that like, you know, sort of is an option. So there probably needs to be like, some, you know, sort of bet. So if we were to assign XYZ budget to like domesticating foundries, I mean, probably 10 % of that equivalent budget should be assigned to trying to domesticate lithography. And there's really only one bet on that tech tree basically either sort of to make. And so, I mean, it's kind of a lame answer, but I think the answer is like there needs to be a little bit of a blended approach to like, you know, national reserves guaranteeing demand in, you know, refined lithium domestically in the United States.

42:23There's also some questions on like look like, you know, with like, let's say magnets. we do a lot of like you know the rarest mineral production of those you know magnet precursors but the actual like you know sort of final synthesis and refinement that all happens in china but a part of why it happens in china is like the current processes are like crazy destructive for the environment and so it's like it's like actually a question of like i mean do we want like where how do we want to like try to come up with a different process but it's like better for the environment but like 10x more expensive like you know there are questions like that where it's We were kind of looking into the magnet supply chain recently as we were debating an internal investment.

42:57It's like you look at that stuff in the supply chain, and I'm like, man, it's not particularly technologically difficult. It's really easy for us to replicate, but it literally just releases poison into the environment. Yeah. Taking it back to space, it seems like the helicopter on Mars, the massive James Webb telescope, Like these are things that are not economically viable, but I could totally see them paying off and being like, oh, that was a great investment. Even just like inspiring the next generation, but also like probably commercializing some technology down the road. On the flip side, we saw Blue Origin with the space tourism thing.

43:36It's like barely space just past the Carmen line. But how do you think that plays into the overall like space economy? Do you like that strategy of growing that business? Is that a business that can stand on its own? Or is it just kind of like a fun side project for Bezos? I don't know what you know about that whole industry as it's growing. Because we've seen it kind of play out before with Virgin Galactic. And I'd love to know what you think about space tourism generally. Yeah, I mean, I want to also touch on the earlier point that you had around the helicopter on Mars, James Webb telescope, et cetera.

44:08I'm not sure if you know, but the White House actually recently released its proposed NASA budget after future, you know, nominated administrator, you know, sort of Jared Isaacman after his confirmation hearing. And in it, they, you know, significantly slashed all, you know, sort of science missions at NASA. And so that includes future telescopes that we have in the works. That includes some of those helicopter on Mars missions. And so the White House is at least taking a stance on that is not something that we see as being valuable. Those are definitely things that clearly don't have any economic feedback loops, like more deeply understanding the universe.

44:48I don't know if you recently saw, we found an exoplanet where it looks like there are organic compounds on Earth are only made by marine algae. and the planet is very large and in the Goldilocks zone of a red dwarf star that would be at a temperature zone where liquid water would be possible. And so it's like, yeah, what is the value of that? Hard to prescribe economically. And the White House has at least thought, hey, we don't see the geopolitical significance in this. It doesn't get boots on the moon, and it doesn't return to an economic use case. So that's at least the White House stance, which is also for what it's worth, it was different than what Administrator Isaacman said in his confirmation hearing.

45:29So, you know, it's interesting to see that obviously there's maybe some disconnect between the administrator and the White House. On all things space tourism, I don't think it's sort of an economic, you know, sort of use case that is going to be what really, you know, drives us to the frontier. You know, whenever I've thought about VARDA, I always go back to this 15th, you know, sort of century analogy, which, yes, sometimes people think is a bit of a stretch. I think it's actually pretty reasonable. But if you look at the early 1400s and the Portuguese and the Chinese empire, they both were in the early days of investing into basically their naval capabilities.

46:01And they took, you know, sort of radically different approaches. The Chinese basically took the approach of build these very large and ornate ships and go and sail along the African coast. You know, capture elephants, you know, bring back some gems and, you know, bring them back to the Chinese emperor as basically displays of power. Right. And so the Chinese emperor would now have a pet elephant for the first time. They would have these gems. They would have these African trinkets. The Portuguese took a very different approach. The Portuguese built very small naval merchant flotillas. They would basically dock along the African coast.

46:35They wouldn't tour the entire coast like the Chinese did. They would say just stay there, make a trading outpost, basically find economic means and reasons for that naval flotilla to be around. And then only once that initial merchant outpost was established, would they move basically 50 miles west down the coast until they eventually covered the entire coast. So fast forward to the late sort of 1400s. Where did these naval empires basically end up? The Chinese emperor ended up deciding that this was basically a waste of resources. He didn't see any economic value for his empire for having elephants around.

47:04And so ultimately basically shut down the entire naval sort of power for China for the following, I think, almost 300 years. the Portuguese, as you could probably guess, became the most powerful naval power in the entire world and led to significant growth of their empire. And so I think about space, pretty similar to the naval frontier in the 1400s and 1500s. I think you want to find these clear economic use cases that involve trade and resources versus the like, so Katy Perry going above the Carmen line is probably kind of like the elephant for the emperor, where Bezos gets to you sort of pop some champagne.

47:41And, you know, I'm sure his wife is super happy that, you know, Katy Perry feels indebted to, you know, them as a couple. But like, I don't know that that like generates a ton of economic value. And so the economic incentive around space is obvious. Let's maybe talk about the national security incentives, specifically China in 2030. They've come out and said very clearly, we want to put, you know, our astronauts on the moon. You know, I don't know if it's by 2030, but in the early 2030s. So maybe, you know, how much can you speak to? Do boots on the ground actually matter? Or would it be viable for them just to send up so many landing zones that they start building?

48:24We've heard about this. When you land, you kick up a bunch of dust. And so you're kind of de facto claiming an area. And there's only so much ice, water there. So if they could just send a bunch of rovers, they could effectively start claiming. and they may not even ever need to send humans to really claim the resources. What do you think? Yeah, let me give you this sort of China bear versus China bull case on this. The China bear case is this is China repeating the same mistakes from the 1400s. So they're going there. They haven't really figured out economic use cases. They don't even have even really figured out economic use cases in Leo, right?

48:55They have nothing equivalent to like Starlink generating billions of dollars of commercial revenues that you can use as infrastructure to build off of, right? And so they're the sort of Chinese with, yes, they're building big fancy ships. Yes, they're landing rovers on the backside of the moon, but they're not connecting this into capitalism whatsoever. And so this will all sort of fade away versus the United States, the Portuguese. While we maybe haven't more recently succeeded as well as they have on the moon, we've got Starlink, we've got Starship going up. We have all these things that are built off of commercial infrastructure.

49:23and so while we may not have as big of a ship soon if you fast forward over the course of the next 30 years the Chinese will shut down their program and will be the most powerful naval empire e.g. space empire in the entire universe um trying to you know sort of bull case um nobody's landed you know sort of on the you know sort of backside of the moon ever and returned samples perhaps they're finding you know helium-3 deposits they're finding lunar ice deposits um you know they're taking a much more concerted approach to trying to get you know sort of human boots on the moon and forcing it from top down.

49:53And if they get those first handful of boots, like you said, they can sort of claim, you know, particular land areas. And there's only a handful of crater craters on the moon today that are clearly known to have lunar ice. If they claim those first handful, if they start mining that ice, they can turn it into propellant. They can turn it into economic value where they can send that back into low earth orbit to some of their satellites they have set up there. They're setting up, you know, sort of Starlink, you know, sort of competitors. And so there's definitely a world where, you know, they establish the first, you lunar presence, while we get distracted by this dual path between moon and Mars, that permanent, you know, sort of lunar presence turns into a mining operation.

50:26And so they do connect it back to economic value, even though it has a lot of like, you know, strong, you know, from top down state power, you know, getting it established, it eventually transitions to something, you know, sort of fully economic. And so I think there's a way to, you know, sort of take both those angles. I tend to think, I think you should never underestimate, you know, sort of your, you know, enemies. And so I tend to take the China bull case and assume that is the default. and I think we're a little, you know, sort of, you know, lost in the rudder right now. I think, you know, it'll be interesting to see how, you know, Administrator Isaacman, you know, comes in and starts to put together what our plans are for, you know, getting boots on the moon, you know, over the course of the next four years.

50:59Do you have any insight into like the timeline of actually generating propellant on the moon? I've heard like, oh, there's water and at a certain point you can draw out the chemical process for turning like carbon and hydrogen into some fuel, But like that's hard to desalination is hard in America, in California. I can imagine that actually taking the resources on the moon and turning the propellant is like a massive industrial process that looks more like a Tesla gigafactory than like a little science experiment. But maybe I'm wrong about that. Like, is this something where we could actually build a box that starts doing this, get it up there in the next decade?

51:38Or are we talking about like 20, 30, 40, 50 years? I think this is where like exponential equations always sort of catch up on you in a way that's sort of unexpected. If you look at the total mass to orbit basically over the past decade, it's basically following a perfect exponential equation. And so I think this stuff is sort of way sooner than people expect. Like I actually think with a concerted, concentrated effort, I think we can get boots on the moon again before Trump is out of office. And it's not like you're sort of betting on a bunch of sort of new sort of radical programs. It's Starship maturing at the the rate that it is maybe a little bit more aggressive, you know, sort of the current, you know, Artemis vehicles, Orion, et cetera.

52:16And some of the current lunar lander companies are developing, you know, sort of larger landers. I think that's all, you know, I'm not saying that's going to happen, like, in the next year or two, it would be like late in the Trump, you know, sort of presidency, but I think it's possible. On like conversion to fuel, not that complicated process. There's like five or six groups that are sort of already, you know, sort of working on it. You know, I'd say the desalination thing, that's, you know, sort of more of a economic challenge than it is like a technical, you know, challenge to like basically you know justify the amount of water that you need the benefit of water on the moon is like on a per kilogram basis it's so incredibly valuable because it's just so much easier to shoot water from the moon into low earth orbit than it is to bring water um you know from earth surface up into low earth orbit um and even to start you don't need anything more complicated than water like you can use water it's not a very good propellant but you can basically just spray water and it is a rocket you know propellant um now there's you know better things you can do you turned it into, you know, atomic hydrogen and stuff like that and hydrogen gas or liquid hydrogen.

53:10But, you know, you can start with very sort of basic things. And so, you know, I think it's like an end of decade problem, totally solvable. Now, depends on, you know, taking a really concerted focused effort. And again, maybe a part of it is you do have to sacrifice the Mars helicopter, you have to sacrifice, you know, some of these telescopes, etc. to get the country really, really focused on getting lunar infrastructure set up as quickly as possible. What's the probability that you or I go to the moon in the next 20 years?

53:38um specifically you or i yes what's your p moon i'd say our p moon is like you know 30 35 percent is my p i love it yeah i've been talking to my son about that we look up at the moon and i'm like do you want to go with me and he's like yeah of course i'm like i think it's possible i think if you extend that to 40 years I would put like P moon at like 98%. Awesome. Uh, so wait there, so there's this conspiracy theory that the blue origin launch didn't happen, that they didn't go to space, that it's impossible to go to space using only family friendly language. Uh, what would you say about the people that don't believe they went to space?

54:19Well, um, yeah, there are certain conspiracy theories, uh, that, uh, you know, always have some truth or merit, Tim, you know, JFK probably was killed by the CIA. You know, NASA may have had a soundstage for the lunar landing as a backup. And, you know, Katy Perry probably is not an astronaut. You know, you could probably just, you know, fly a fighter jet, you know, up and then down. And you probably roughly get the same experience that she did. Very different to be going, you know, a little up, a little down versus, you know, 15 ,000 miles an hour. so i'd say god bless the conspiracy theorists they're always helping us find the kernels of truth in the uh um the stories that they weave yeah that's legitimate uh going back to uh space and geopolitics um china has their national space day uh on april 24th so next week is that something significant in the space community that that people are like really paying attention to like they feel like there's going to be like real signal or exciting results or is it just kind of do people kind of uh write it off or not write it off but just kind of look at it as this sort of like uh kind of like a demo day kind of marketing uh keynote style event where where it's you know not a lot of signal they're delivering like you know if you look at you know sort of china's you know sort of plans from 2018 and sort of where they are today they're not totally off track on you know, sort of what they promised they'd be able to do, right?

55:54They've established their own, you know, low Earth orbit Chinese space station. They're regularly flying astronauts up and down to it with cargo. They're attracting international partners to that space station. They've clearly gotten a coalition of folks willing to sign on to their, you know, sort of lunar, you know, station or lunar base plans. And so I do think it's something that, you know, people pay a lot of attention to. They tend to, you know, sort of, you know, re-update or re-reveal basically what their next, you know, sort of five, 10, 15 year goals are. And it's something that everybody from like, you know, sort of NASA to Space Force definitely pays a lot of attention to.

56:27They're not always fully transparent about obviously, you know, sort of what they're up to. There's no guarantees that there'll be anything new. But I would expect that there will be given, you know, all the tensions that have risen over the past year between the United States and China. And so how do some of these partnerships happen? Right. So one of the things that they're going to be reporting on next week is is related to a partnership they have with france on like a joint satellite program is that a uh is that is that like due to nasa's shortcomings like is that a missed opportunity for us to not be partnering with france on something like that or like how how do these sort of like how did the and and are the geopolitics of space almost like disconnected in some way between with Earth.

57:14Oh, no, very connected. That entire French thing, I'd basically, you know, sort of pinpoint back to the nuclear submarine contract. Basically, the United States ended up moving a chunk of nuclear submarine contracts out of France over to Australia. The French were furious. Macron, you know, sort of went on and, you know, gave a bunch of public talks about it. And then basically like the Chinese collaboration started less than a month later. And so it was clearly like a, hey, you're going to slap us on the wrist as an ally. Great, we're going to go to your geopolitical adversary. Um, I don't think obviously those things are, you know, one, one is like purely economic, like we're moving the place that we're making submarines.

57:48The other one is saying like, we are partnering with your ally. Those two things feel like one is like a business decision. The other one is like very clearly like, you know, picking, uh, aside. Totally. I mean, from France's perspective, it's like, you know, it's billions of lost revenue for one of their, you know, major defense primes. And, um, you know, they see that as a, you know, sort of slap on the wrist. And so, you know, they feel like they need to, you know, sort of slap back. And so, yeah, I'm not sure that, you know, it's the smartest geopolitical move. I don't think like, you know, a Western democracy should be, you know, sort of cozying up to, you know, an authoritarian dictatorship.

58:23But I also don't think the French are the most intelligent people in the world right now. Well, they have the opportunity to turn it all around, because if they don't, I will be boycotting Dom Perignon. You heard it here first. Then that will crush sends shockwaves through LVMH. Through the French economy. I will not be vacationing in Lyon or Nice or Burgundy. I will not be spending my time on the French Riviera. I'll be in Nice late June, no matter what, no matter how dumb the French are. Cancel it. Cancel it. Unless it comes back to America. No, he's going to turn him. He's going to turn him.

58:57Yeah, yeah. You got to go over there. You're our plant. I'm going to check it on there. I'm going to look at those Airbus facilities in Toulouse and take a look at that Chinese satellite project. Wait, last thing. if you don't have a hard, hard stop, how do you think about the Chinese aerospace industry? Specifically, earlier in the week, they canceled or paused some Boeing orders. Someone else on the show was saying, well, they'll probably just move those orders over to Airbus, something like that. But at the same time, how long is it until we're all going to be aborting? Was it really that hard to build a jet engine i feel like they should have copied that by now this is kind of a bear case for them well up until a year ago my like one line would have been you know there haven't been any commercial airliner deaths in the united states for like 16 years and so the reason that it's really difficult is because it's like the safety bar is so so high that basically nobody wants to touch anything they're like everything's been perfect yeah now obviously you know sort of dca and uh you know sort of toronto um uh well toronto i think it didn't end up leading any deaths but dca obviously did um and i'm not sure that it's really going to change the culture like you know faa aviation you know um uh regulations are just so so stringent because they do have in some ways a great track record but man it just sets the bar so high will the chinese ever really manage to get any traction i don't know it's like definitely not in the united states ever there's no way that like the united states is ever letting united states airline buy like a chinese either jetliner it's The Comac C919.

1:00:29Yeah. And there's no way France is going to let them buy anybody other than Airbus. Same thing with the entire EU. So who the hell are they going to sell their Chinese airliners to, like Africa or something? I don't know how big of an aviation. Malaysia. Maybe Malaysia teleporting airplanes. Oh, did you see that there was some revealed potential documents of four UFOs surrounding the Malaysian airliner and then disappearing it? Okay. Well, we'll have to dig into that next time. We can do another half an hour here. I'll get Jesse to come talk about it. Yeah, yeah, yeah. We'll break it down. I really appreciate you stopping by.

1:01:02Thanks so much. This is great. See you next week. Cheers. Bye. Next up, we are going to the founder of a company that Delian is in love with. He's obsessed with these AI apps. He can't get enough of them. So we're very excited to have Garam on from Captions. I'm actually a huge fan of this app and this company. I use it all the time. Anytime you see me post a clip on X and there's captions there, I'm using the captions app. That's right. It's fantastic. And there's a bunch of other cool features. And the company has been just maniacally adding functionality. And as you saw with ChatGPT, you wanted to generate a video.

1:01:40It couldn't do it. These tool usages are increasingly difficult. And they're not something that you can just... It increasingly looks like you can't just one-shot it with tokens out of an LLM. And so building up traditional software around the system actually improves the AI. And so these products are very complimentary. So we're excited to welcome him to the show. How are you doing today? Boom. Hello. Hello. What's going on? How's it going? It's great. Thank you so much for being here. Thank you so much for creating the captions app. I use it very, very regularly. DAU, basically. Oh, my God. I'm obsessed.

1:02:18Yeah, yeah, for a long time. I mean, we make a ton of clips. You've probably seen. We make a few clips. It's always a hassle to put captions over it, but you made it much easier. A lot of that, I want to talk about the history of the technology, the whisper turning point, and then get into value creation and the application layer. There's so much we can talk about. But why don't you kick it off with just like introduction on like how you're describing the company these days and then the most recent announcement. Totally. I mean, so love that, by the way, you're an OG user. So thank you for being a user.

1:02:48But, you know, it's a pretty young company. Like we're our product market fit was like two and a half years ago. Right. So like we were four people two and a half years ago and things have grown really, really fast.

1:03:01Adding captions, you know, the most basic thing. But it's evolved quite a bit. And so today, I mean, the way we think about the company today is like, you know, video creation is hard. And we've identified two problems, actually. Right. One is recording the video is hard. You guys know this, right? And editing the video is hard, too. Right. It's pretty technical. And we want to solve these two problems. Like these two problems, we want to help people jump over with AI. Right. So if you want to edit video yourself, if you want to record video yourself, go somewhere else, basically. Right. We're going to actually do it for you.

1:03:35That's the value. Right. So not going after DaVinci Resolve, not going after Premiere, an entirely new market. Exactly right. And we think of it very similar to Canva. Actually, like, you know, Canva for video as an idea has been sitting around for a while. And I think it's actually finally possible because of AI, right? Because the real value of Canva is you start with something, right? You don't have a blank screen. And, you know, it's not built for the designer, right? Most designers will look at Canva and be like, I could probably do better than this, right? But it's built for the person who's not a designer.

1:04:07And that's the same value that we provide. So on that note, last year, we started working on essentially foundation model technology for video generation and for editing. That's going to help us achieve that. And these are big projects, very expensive, but also very cutting edge. I think the most exciting part on the video gen side for me is we're very much focused on talking videos. right which is and by the way like i'm also like kind of surprised almost in a way that we've spent so much time and so much money doing text to video on silent videos right like what what's the point right like just stop video like that's that's the negligible part of what a video is yep almost no time spent on videos with actual communication so that's kind of what we've been focused on for last year.

1:04:54Yeah. Uh, what, what, uh, like what, I don't know what, what like breakthroughs are, are the most interesting to you? Obviously like whisper is super important. I feel like whisper is great. And then all of a sudden it came down to like, okay, well I want real time whisper on the show. And then I got to go build that or a notebook LM. I like notebook LM, like it still doesn't have an app, but even though Google is paying people not to work and stuff, it makes no sense to me. And I'm imagining that captions could be an app where I'm getting a notebook LM style YouTube videos. YouTube's talked about this a little bit.

1:05:27They haven't rolled anything out. But you're starting to see a lot of this stuff. A lot of it's in the slop tier. But what I like about captions is that you can still inject enough of the human element to take it from, it's a tool that's used in partnership with a human. So it still has that art in there. But what is exciting you and what's the most interesting in terms of where you want this to go? Yeah. I mean, honestly, like there's a pretty clear distinction that's developing that I'm starting to see, which is like amongst the foundation models, right? Like there's the text generation, like LLM type models, right?

1:05:59And those are solving a very difficult problem is intelligence, right? Like unsolved problem, but no one's solved intelligence before. Right. So, and by the way, we don't even know what the bound is, right? Like where does it end? Who knows? It could never end, right? It could go on forever. Right. And then on the other side, you got, you know media generation like this is everything from like video generation to music generation sound audio like all this stuff right these are solved problems like we can do rendering today right like we can literally render anything you want with like cgi and stuff right yeah of course it's just becoming a lot easier and it's also bounded right which means that there is a limit of realism right and then you've kind of solved it essentially right you can't get more real than real.

1:06:42And once you're there, you kind of have achieved what you set out to achieve. Right. And so I think it's a different type of problem. And also it means that it's not about replacing the human, right? Because what's actually happening is the craft is evolving, right? The craft is different, but the creativity is still there. Whereas on the LLM side, that's actually potentially replacing the human, not gonna lie, right? That's potentially what it's going to do, right? So these are two different types of use cases, almost two different types of value that are being produced today, I think we fall definitely much more in that sort of media generation category where like our goal is not to replace anybody.

1:07:17Right. It's actually like empower a bunch more people potentially. Right. And who knows, right. People come in, they use captions to make their videos. Right. And we edit it for them. We like generate the video for them. And, you know, that just gets them started. But like two, three, four years down the line, they, you know, they move on to Premiere Pro or something like that's awesome. Nothing wrong. Right. So how do you on the developer side, we're seeing a bunch of startups where it seems like everything is just converging into this like one shot, right? Where it's like, you have lovable bolts, uh, rippling, uh, sorry, uh, ripplet, replet, sorry.

1:07:51Um, rippling is a one shot for your HRIS system. That's right. That's right. Um, so everything's kind of converging onto this like text box where you just tell it what you want and then it makes it, it makes a website or an app or things like that. I imagine content will maybe go that way for some use cases. And that's kind of like there's a lot of sort of momentum and convergence around that moment. How do you see? But that's just my point of view. What's your point of view on how all this evolves and how you're looking to continue to differentiate captions over time other than just sort of like chasing perfect realism?

1:08:32Totally. Yeah. I mean, so a couple of things there. Like, I think generally kind of to, you know, make a comparison of what you're talking about, right? Like I think of it as like Canva for everything. That's actually what's happening, right? Because the magic of Canva, you know, awesome company. I think the magic of it is not about how simple the UI is or something like that. The magic is that you start with something. It's not a blank page, right? And really the biggest enemy of anything creative is the blank page and not the UI and stuff, right? I mean, think about like design software in general.

1:09:04You look at like Figma and stuff, like Figma has like six buttons, right? Like it's not a hard UI, right? But it's really hard to make something good with it. Like it's really hard to figure out how you use squares and circles to make something that looks good, right? And I think the magic of Canva is you start with something, right? You're already 90 % there when you enter and then you kind of make some tweaks to get it to a hundred, right? And by the way, like think about ChatGPT, it's kind of the same thing, right? Like we're using it all over the place today, but it just gets you started. It's like, boom, I already have something.

1:09:30I need a job description. Boom, there's job description for whatever job you want. And then it may not be perfect. You make a few tweaks, change things here and there, and you're done. And so it's like Canva for everything. That's what's happening. And I think same for music generation or video generation, all these things are going there. Our goal and our mission in this, we're focused on specifically the communications or vertical. So think about this. If you think about a movie or you know a tv show or anything like that right any kind of like media today um only a small part of that is b-roll right like if this was a movie like i'm in new york so like it might open with like a shot of the empire state building and then the next scene like oh there's a new york taxi cab on the street passing by really quick in two seconds and then the camera is in the room and we're talking right and that's actually the movie right and so so much time and money has been spent on making the shot of the empire state building and almost nothing on like actually getting the dialogue going right and that's kind of the the weird thing right and like our thing is like let's get that communication that dialogue problem solved right that's one and on the other side just footage isn't enough so let's get it edited to make it actually an asset right can you talk a little bit about growth for captions.

1:10:49There's a weird dynamic where it can be extremely valuable to go viral with like a one-shot thing. I'm thinking of Lenza, those magic avatars. It was just upload a couple of photos and you get a photo of yourself. Then we have the Studio Ghibli moment, which was a huge growth vector. It's not OpenAI's product, but it was still probably massively beneficial just to drive a bunch of extra installations and chat GPT use, right? And so I could imagine you guys thinking like, hey, let's go make a one-click Harry Potter Balenciaga generator. And we are just really good at making Harry Potter Balenciaga style videos.

1:11:25Of course, you need to put in your own tweak, but that's what we're great at. But you don't want to get pigeonholed into that, but it can be a good growth driver. Are you thinking about that consciously? Are you thinking about how can I get the next Studio Ghibli moment to happen in the Captions app? Yeah, I mean, so we are. But our philosophy on this, honestly, like think about both the Studio Ghibli thing, but also think about like original ChatGPT, right? Like I remember the time where, you know, GPT was available. Like I would use, I would show it to my friends, like check this out, like check how cool this is.

1:11:57People would be like, oh, wow, cool. Okay. Right. And then suddenly ChatGPT came out and like, by the way, I think it was very clear that they hadn't prepared for the amount of virality that thing got, right? Like even the name ChatGPT kind of gives that away. right and so it wasn't a planned thing it kind of just happened right so you give me the same thing i don't think they planned it like it just kind of happened right so i think if you create the right environment where people are given the creativity to go try something that's like an awesome technology right they they can play around with it make cool things with it like these types of moments kind of happen naturally it has happened for us several times with different technologies we've released in the past and a lot of times it's been unplanned it's just like you know when we plan for it too much it doesn't happen when we don't plan for it it just like suddenly explodes like completely right so that's kind of what we've seen um and it's something we think about of like how do we create that wow experience because at the end of the day a lot of the growth and virality is happening because people are just blown away it's just so impressive right it's beyond anything anyone's ever seen right and i think that is a pretty high bar so building on that building in private until we reach that bar releasing it as like a wow this is like crazy like that's the type of stuff that we've seen work really well uh question do you have any sort of visions around uh what the just video content on the internet in 2030 because i have this uh right now there's not a huge incentive to make a video for one person right especially in a business context if i if you want to explain something for 10 minutes to somebody in a business context you pick up the phone you call them you spend the time to send an email or whatever.

1:13:34Now with something like captions, it's like, well, I could just generate a video of like how my product works and why it's relevant to this industry and all that. And so I have this sense that content generation is going to like 100x, 1000x, but human attention is not going to 100x or 1000x, right? It's just not possible. There's only so much time in the day. People use their phone for six, eight hours on average right now. They're still spending two hours a day on Netflix, but we're not going to suddenly like get, you know, a hundred hours a day, even though people on, you know, TikTok, entrepreneur influencers might, might want that.

1:14:08So I just have this kind of question around like, do you think the average video in the future gets one view, two views? And, and maybe it's not the average, right? Because certain views will, or certain videos will still go super viral and be sort of cultural phenomenons. But, but yeah, I'm curious if you think that's kind of like where we're headed. Right. I mean, I think for what it's worth, I think the average video today is getting probably one or two views, right? Because like, think about Snapchat, like a lot of video, probably a billion videos a day, but sent to like, you know, a few people are seeing it basically, right?

1:14:41For the most part, private communication. And honestly, like Snapchat pioneered that, like they kind of missed the TikTok part of it. It wasn't part of their ethos, to be honest, right? But like, they were more about the private communication. But I think the future is more video, like for what it's worth, like, you know, the way. I think there's an interesting sort of like move that I think will happen towards more video in AI as well. Because think about like how communications changed over time, right? Like we're not sending letters to people as often anymore, right? Like text messaging is kind of like very prone to miscommunication, right?

1:15:16Audio is definitely better phone call, goes a longer way. Video call is like one step further, right? And then real life meeting is even beyond that, right? Oftentimes, there's like, even within companies, like, right, there's miscommunication and like, mistrust that builds when there's remote teams or things like that, right? And you got to watch for that. Whereas an in person team just trusts each other so much more. So there is definitely something to be said about like, these more sort of multimodal forms of communication, right, to use the term. But I do think that actually, even on the AI side, right, like, sure, chat GPT makes me a great writer, but like what makes me a great communicator, right?

1:15:53And we're really not thinking about that, right? Because communication is multimodal in itself, right? Like the words that I'm saying right now, where I'm pausing, what I'm emphasizing, how my micro expressions are moving, like how my body's moving, like all that is communicating in multiple forms, right? A message. And that message changes if I change any of those things. Like words might be the same, right? But I can change the message completely by just changing the delivery of it, right? So I think today's technologies like just aren't capturing right like how broad uh communication actually is and I think it will all evolve towards video over time just as we've seen like this is not new we've seen this happen before right so and by the way like I was at snap when like tiktok took off right uh 2019 that era and initially like tiktok grew a lot on the back of snap and A lot of people know this, but they were running$100 million a month of ads on Snapchat initially.

1:16:49There was no presence. Let the fox into the hen house. There was concern in the company. People were concerned that, are we creating a competitor here? People were running A-B tests. Narrator, they were. Exactly. We ran A-B tests to test if someone sees a TikTok ad, are they less likely to engage in Snapchat? Tests didn't show that, right? But the reality is that it wasn't true, right? They did spend less time on Snapchat. So - Well, we got to run. This was a fantastic conversation. Thank you so much for hopping on and we'll definitely talk to you soon. Yeah, great talking. Thanks for coming on.

1:17:28Bye. We got Ian in the waiting room from Astromeca. I believe I'm pronouncing that correctly. Astromeca. Great. Mechanica? Astromechanica. Sorry, I mistyped that. Astromechanica. Anyway, we'll let him explain it to us. Come on in, Ian. Sorry for the wait. Sorry for the wait. Yeah, how do you pronounce the name of the company? Let's settle this today once for an hour. Yeah, Astromechanica. Astromechanica. There we go. Can you give us a breakdown of what you do? And I'd love to hear the brief history on the launch. I remember there was a video you posted of building something, maybe in a garage.

1:18:06It went viral. It was very cool. and there was some debate over it and now it's a real company you raise a bunch of money so just take me through the little journey yeah yeah i you know i guess it starts with my background of like i'm lifelong aircraft builder pilot fly jets the whole nine on that yeah and uh yeah you flew uh you've where what kind of jets did you fly like private private jets um i built like i built my first plane when i was 17 i did experimental airplanes drones and like the early 2000s before drones were thing so it was from that like i and i think with like a lot of good companies, you're really just building the thing you want.

1:18:39This is just not a thing that exists. Unsurprisingly, one cannot just go by a bleeding edge fighter jet. So yeah, going to that, I'd always been obsessed with all the technology. Interestingly, I was working on this hybrid electric architecture, initially coming from the private jet world for lower cost of operation. It's just simpler systems. And it turns out there is a really neat technological unlock for supersonic flight so that's where a lot of this kind of kicked off and it was an especially novel architecture i think this is why it was just so alien like i had just been spending so much time in all of the the various like sub components and disciplines there it's like there's this really unusual combination when you combine all these things together you get this totally new architecture so uh the big one for us is like transition up to what we call a ramjet mode yeah so you know like there are really good solutions for like i really like what the hermias guys are up to like there's definitely other good solutions out there but this it hits this kind of interesting sweet spot where like we're getting a lot of performance with a relatively I mean it's still millions of dollars but like relatively inexpensive system and the other thing that comes up a lot is like people are seeing all the engine stuff and yeah you know some people think we're an engine company it was more it's like if you want to have a computer you have to make the microprocessor first okay uh but this round getting this done is like finally shifting it to us going to the aircraft development.

1:19:59So, okay. So you're building a plane. Yeah. Yeah. I mean, that's my background. Like I was a plane guy that just needed a better engine. Uh, and so, yeah, we're, we're at that stage now with the round done. Um, you know, and like people had always seen me kind of like, I was like this guy in San Francisco that was like, I had a machine shop at a manufacturing business previously. So like people knew I was good at building stuff. Um, but we've had just this like compounding effect of like the, the talent that I have been very lucky to accumulate here and just the people that have joined on. Because good engineers see an interesting technical solution and thing to work on.

1:20:34So I mean, I love my team. Everybody's incredible here. So we've now got that. That then makes it easier to get more capital. Then we've been spending some time in DC. Andreessen's been great with this. And it's also very important to have an actual customer. I think this is the other way where I came from more of a small business world. and like I wasn't interested in just, I don't know, like developing things for the fun of it. Like I like my business. What I'm hearing is like you, like maybe the company's like very clearly at this moment shifting from, you know, science project that you would have worked on for free to like, okay, like real commercial opportunity.

1:21:10Let's go full send. So yeah, I mean, in a nutshell, it's, you know, make the engine. So you go in the initial like demonstrator phase. So demonstrated the engine, back up the money to now build the demonstrator aircraft. the one we're pushing for is the world's first non-stop trans-Pacific non-stop supersonic aircraft so we could do you know california to taiwan without refueling in under four hours okay so i don't know it sounds like direct competitor boom it's been a decade and boom so so yeah i mean you know blake's going for like airliners and he so we're we're focused on again my world is more private jets and yeah so is this a gulf stream are you are you coming for a gulf stream or yeah yeah it's more like we're coming for net jets if you know something like that sure okay cool we're gonna spend the next seven to ten years doing dod so interesting like you need to have an actual it's so expensive to make an airplane of course it's not hard to make a thing fly it's hard to make a thing fly that is safe enough to put people on it so my strategy on this is you go to a space like well you know unmanned drones military were like technology and capability matters first yep totally put out there you can you know there's going to be things that are going to come up and you're going to learn it it's just it's a cheaper place to learn yeah then you're in a position where like well you have an actual business you've been making i mean the the drones unmanned aircraft we're making are like at the smallest 20 000 pounds like they're not small planes yeah yeah and i'm curious is is the right place if you're developing a new airplane to start with, you know, autonomy, just because in theory, after you fully develop it, it's like, will pilots even be flying or they'll just kind of like, I mean, I am a pilot, so I have feelings on that, but it is, it's definitely something of like, no one, this is another kind of odd thing.

1:22:55No one has ever used autonomy in the certification and development of a manned aircraft. And I actually think this is one of the ways we can make it a lot cheaper because ultimately it's about getting data and proving this thing is safe. The only way you really prove it safe is you've flown it. And so if you have a human on board from day one, you can't take the risks that you want to like SpaceX proves this with Starship You're like, you know, the actual cost of the hardware is not that high So you're better off being really aggressive getting things in the air De-risking and again, you're saying this a Hermes of like they're making, you know Like the plane is a bit more rough for the point is like they can make a new plane every year Yeah, like by the time it's like if you want to get to very good things you want to do more iterations so this is our similar strategy i mean we we develop new engines every like four months yeah uh and i think i mean waymo waymo kind of took a similar path where like there weren't random passengers in the back for years and you'd see oh there's just a safety driver in there and then eventually they pull the safety driver out and put the passenger in the back exactly yeah you just want to spend time where you can map you can map out all these weird little edge cases things like that so so that's you know a big part of how how we tackle this and like it's so yeah You always want to go for big lessons, very important lessons as inexpensively as possible.

1:24:06Because eventually you kind of lock into a point where everything will be so expensive that you don't want to make any changes. It's just too costly to do it at that point. So that's where I think ultimately we can actually get to the passenger flight point quicker and cheaper by starting an entire unmanned aircraft business first. Because it's functionally quite similar in the technical challenges. And yeah, we can de-risk it all, learn all the hard lessons. and you know in the meantime like it's also very cool just getting to make these things so you know it's photogenic work everybody loves seeing the engines on twitter and stuff like that no it looks it looks incredible um i'm curious uh a16z makes sense in the round lower carbon was a big logo there is uh is that saka and his team saying like this is really cool we want to back it or is there a uh is it a fuel efficiency you know kind of kind of thing in the long run yeah Yeah.

1:24:59So my very first institutional check into the company was actually Lower Carbon. Xiao at Lower Carbon was my guy. And he was betting on it was just me and the machine shop. And I was getting close to that first prototype. And so, yeah, from there, the system, we get the range because it is more efficient. So, yeah, there's just an obvious efficiency argument here. The other one for civil applications, not for DoD, but for civil is taking a page out of the Rocketbook, we don't plan to use jet fuel. So rockets have switched to LNG or liquid methane. If you just swap to that fuel, it's 30 % less CO2 just as direct fuel swap.

1:25:38It's more energy per unit weights, 50 megajoules versus 42 per kilogram, a whole bunch of benefits. There's a reason the Rocketbooks went to it. So this is another one of those kind of insane bets for if you're Boeing or someone. You're not going to suggest a thing like that. But when you're starting from nothing, doing, you can make these bigger bets. If you were to do the combination of the engine plus the fuel change, you're around 60 % less CO2. And then there's guys like I love Casey Handberg, Terraform, there's a lot of folks working on synthetic fuels. If you have an engine architecture around LNG, I think that's the best fuel for electrosynthesis.

1:26:15So if you want to have inexpensive decarbonized fuel, it's also your best option. So options First solve for economics of like LNG is a tenth the price of jet fuel. So first make it affordable. Then you can go for the clean stuff after that, where, I mean, it is already cleaner. And then you can just fully decarbonize from there. Or, you know, but first stay alive as a company. So first solve for economics, then go for that. Smart. Bit of a random question, but I'm curious, since you're an aviation nerd. China earlier this week dramatically canceled some Boeing orders. uh they have their own internal uh aircraft uh it's like comac the c919 yeah do you see them like permanently trying to shift over to that uh or is it just so hard to build a plane that they're going to kind of kind of keep coming back to boeing and airbus over time yeah yeah it's tough to say on that i would say well engines are harder and to that end we're i think you know even they're using just as we actually use pratt whitney and ge components things like that and what we're doing that's sort of like being tsmc that one i don't think they could get figured out anytime soon and the comac uses you know uh still american engines so um i'm pretty sure at least so that one's harder on the whole airframe i think they could get it figured out i'm sure it just depends on how as with all these things it's just a money pit how much do you want to throw into it um but but why Why is it so so what what's the componentry of like the J35 then?

1:27:44Why why can they do that? But but which is like a defense application versus a commercial. It's so again to this thing of it's not hard to make a thing work and fly. I mean, I did this in my shop kind of as proof of like getting a thing to initially go. Not very complicated. The economics of air travel are dependent on it never breaking. and that is a you don't really know that like even pratt pratt with the recent gear turbofan is like it's going to be like a decade until they get payback on that and they know how to make things like that so this is the sort of challenge you run into of you know what is going to come up you know after 5 000 hours after 10 000 hours and it turns out this thing it's like oh there's cracking on this component and now the engines and like meanwhile use what we've got right now you're like, yeah, it's good for 30 ,000 hours.

1:28:34The CFM 56, it's like 50 % to 60 % of all airliners are narrow-body ones. That engine can stay on wing for almost 30 ,000 hours. It's just so proven. This is the thing you see in aviation where there's always these things that seem really appealing because it's a performance optimization. You're like, well, of course, I want to burn less fuel. When you try to implement this thing that's technically better, It's like, yeah, but it turns out it broke at some slightly higher rate and you already had terrible margins and now it doesn't work. So that's where that that's going to come up. It's just not something that's like obvious on day one.

1:29:12Well, congratulations on the round. Yeah, congratulations to you and the whole team. An overnight success. Overnight success. Thanks for coming on, Ian. Seriously, I appreciate you coming on and breaking it down for us. Thanks so much. We'll talk to you soon. Bye. Next up, we have Sham Sankar from Palantir. There's a ton to talk about with him. He's published 18 theses about the defense reformation, the primacy of winning, and also just sits in a very interesting place as Palantir's first forward-deployed engineer. And so I want to hear what he's hearing from Palantir customers, mostly. Anyway, Sham, welcome to the show.

1:29:50How are you doing? Thank you guys for having me. Yeah, thanks for being here. Yeah, I wanted to kick it off with what is the biggest topic of discussion over the last two weeks? Tariffs, H20s, NVIDIA, something else. What is driving conversations through the partners that you work with at Palantir? I think it's enterprise autonomy. You know, it's like there's a normative view of the most valuable application of AI is clearly towards autonomy in the enterprise. And then you can think about it, you can reason about it by analogy. If you thought about the self-driving car journey, it took us 20 years to get from a prototype that drove through the desert, 120 miles, pretty good demo in 2005, to a commercial self-driving car service.

1:30:36And no one wants to be on that 20-year journey. What have we really been doing over 20 years? We've been handling edge cases. Yeah. Right. So really investing in the tool chain that allows you to get from a mandraulic world to one where you have AI agents that are totally automating your business. Like we've automated sepsis monitoring at Tampa General, where deaths from sepsis have reduced by half. We've automated how AIG underwrites insurance. What used to take three weeks and you'd only get to 10 weeks, 10 percent of your submissions. It takes less than an hour and you get to 100 percent. So I think and it really is going to feed into this winner take most dynamic.

1:31:11It's not just about cost savings, about your competitive advantage. And you see that play out in very stark in real terms in defense, where in some sense, there's nothing new under the sun. There's just John Boyd's OODA loop, observe, orient, decide, act. Or sometimes my favorite admiral says the American OODA loop, observe, overreact, destroy, apologize. How do you bring lethality to that? It's just doing it much faster. And you're going to do that way faster with AI. That's amazing. Okay, Tyler Cowen called April 16th yesterday, AGI Day, he has called it. What was your reaction to the opening line?

1:31:48It probably happened internally at Palantir like months ago. Months ago. But yeah, I mean, how are you processing this idea of AGI? Obviously, it accelerates everything you're doing, but what is your take on model scaling, reasoning, agentic workflows, all these different things? Like, what are you looking for? Where are there breakthroughs that remain versus what are we just need to go implement? Well, I think we're well past the threshold where the models are powerful enough that you can be using them to automate massive things. I think at this point, really incremental improvements to the model changes how you decomp the problem.

1:32:21How many agents do you need? Do you need 80 because you've decomped it in a way where it succeeds or do you need eight? Like the coolest stuff that I've been seeing is like multiple teams internally at Palantir are building AI FDEs and it's really compelling. It gets really far. It attacks different parts of the stack. You know, so like if every user could have their own on demand, infinite, essentially, AI, FDE, like how much more stuff can you build? How much more quickly can you adapt? What's your OODA loop as a company now? So I think we're deep in the implementation phase. If AI is electricity, like in electricity, all the value didn't accrete to the people who made the turbine generators.

1:32:54It went to the people who made the tools that ran on electricity. And I think there's just, we're just so excited about proliferating and building those tools out. Yeah. How are you thinking about just commoditization of the model layer? Obviously, it's like a horse race. Every different month, the different models comes out. How has Palantir approached integration with different foundation models? And then is that the same as other kind of databases and different tools that might be deeper in the stack or like even the migration to the cloud? Does this feel like cloud to you? Does this feel like mobile to you in terms of like your agnostic approach or is it different in any way?

1:33:34There are parts that definitely rhyme with it. It's more agnostic than not. I said early on in the AI revolution that we thought the right approach was KLLMs. Like why would you pick one LLM when you can have K? And then you really can start thinking about the tool chain that you need to build around that. There's a number of reasons. At first, like very clearly you've had model commoditization. If you look at both open and closed models over time, you know, the ELOs are just up and to the right the open ones have converged and even in some cases surpassed closed models and at the same time the price of inference has dropped like a rock so that's clearly happening and you even see that in the frontier model companies where they're they're expanding further and further into the app stack because they realize that selling you a raw api is probably going to be a raw business yeah so then there's a question of like okay you're just being very pragmatic if you're building the machines running on this like what model is right for what job the model is improving rapidly How are you going to safely be able to evaluate the relative performance of models as new models come out?

1:34:34So you need that sort of tool chain. And even more deliberately, these models get end of life. Like you can't get the original GPT-4 anymore, right? You have 4.0. And so if you've built an entire enterprise that runs, assuming some model is going to exist in perpetuity, that's probably not going to work out that well for you. So you're going to have to have this constant ability to evaluate and run these models in parallel to develop the conviction you need, not only for the optimization of what's incrementally better, but can I safely migrate in the future? How are you thinking about integrating robotics?

1:35:09It feels like AI today is just rapidly transforming the way work is done online, specifically knowledge work. But how are you thinking about, you know, what's your vision 20, 2030 and kind of beyond about, you know, how different robotic systems are integrating with the Palantir system? Specifically, the example you mentioned earlier around sepsis monitoring is like, cool, that's one, you know, sort of hardware integration, but it's not its own autonomous, you know, system out in the world. In many ways, we already do this. You know, we have like more than 300 ,000 workers, blue collar workers who turn wrenches in our software every day.

1:35:46Everything from the factory floors of Chrysler to every Airbus airframe, every HD Hyundai ship. If you think about a company like Rio Tinto, so much of the mining operation is actually autonomous. The railroad cars that take iron ore from where it's mined to the ports, that's completely autonomous. The three-story tall dump trucks that are actually trucking out the ore, autonomous. And so I don't want to trivialize it, but in some sense to me, it's more of like a difference of degree than kind. You're machine to machine communicating to a system. That system just happens to be smarter and smarter every single day.

1:36:20During the metaverse boom, Satya Nadella was talking about building digital twins. is that an unnecessary abstraction or like reference point for humans? Or is there some actual value in representing all of these real world assets, like the Rio Tinto mining example you gave in some sort of like virtual space, or does it not matter? And it should all just be weights in a model that we're querying through an LLM or something like that. Where I think it gets to be really valuable is if you kind of thought about it, like a CI check in programming, where it's like, I'm proposing a change to a system here.

1:36:53How can I understand it? like, is that change going to work? What are the unintended consequences of it? If I make that change, what are the new bottlenecks that different functions have to think about? The simple example I always use is the procurement guy is really excited because he bought, you know, discount raw material, 30 % off the list price. And the production guy is pissed off because this discount material has 40 % less yield, right? It is at the end of the day, one value chain and where the digital twins have been hugely valuable is the ability to integrate the chain and the decision-making across it.

1:37:21So you know when the left hand is robbing from the right hand. Can you talk about the early days of Palantir, maybe one of the first major wins or setbacks or kind of like, what's the story that you tell to new Palantirians to kind of set them up for maintaining the culture? Because I feel like Palantir has done a great job of like maintaining the quality bar. You haven't become that place where people kind of go in like rest invest basically, but you are like kind of a big tech company now. What's the story that you tell to kind of set the culture? I mean, there's so many stories. I really, I'll tell you how I set the culture at the end, I promise.

1:37:56But I think one of the things that I felt like we kept getting punched in the face in the early days on is that someone else's execution would end up screwing us. Like I remember we had this gatekeeper between us and a government customer and he installed an early version of our software and he wanted to test it out before he passed it on and it crashed and he blamed us and it crashed. I mean, in those days, this was a server with two gigs of RAM trying to run a four gig Java heap and he didn't understand why it crashed, right? It's like we just developed this extreme ownership mentality because anytime we outsourced even an iota of responsibility, it blew up in our face.

1:38:32And that's, you can see for deployed engineering as like the extreme manifestation of that, that we're going to somehow have total control over the implementation because that's how you get the feedback and the quality and the improvement. And you're actually responsible for your own destiny. But the story I tell to kind of spill the beans on, so your first AMA with me when if you're onboarding in week one, I always end the AMA by reminding people that Palantir is a flat place. What does flatness even mean? Well, to me, it means that every single employee is willing to tell me to fuck off to my face.

1:39:04And I all say fuck off in unison out loud at the very end. I think it's important. I want to institutionalize the notion of rebellion, that I don't have all the right ideas. There's so many things we've done over time. I didn't think we're going to be right. And they were right. And you got to bet on talent and the people and give them the space to run. And really preserving what's at the core of this is like, this is an artist colony, not a factory. I don't really know what your career progression is going to be. And if you want certainty on that, this is definitely not the right place. But I can promise you, you'll have access to the most motivating problems and compelling colleagues.

1:39:39And I'll give you all the canvas and paint that you need. Yeah. Can you talk about what's going on with the cultural transformation in Washington right now? You've written like maybe it's transformation going into founder mode, but within some of the more nitty gritty, maybe swampy institutions, is there a need to be able to tell each other to F off or just be more confrontational? What should DC learn from Palantir and maybe even vice versa? Well, I don't know if DC, I would say it seems like very presumptuous for me to say, what should DC learn from Palantir? But what it makes me about the present moment is, in Palantir terms, the primacy of winning.

1:40:22Like you feel that in the people there. They understand that they're working backwards from what could actually work instead of some anodyne notion of how we wish the world works but doesn't. And that's like allowing us to reexamine a lot of assumptions from first principles. I think founder mode is the best description of it. When I talk about conserved across commercial and government, kind of our diagnosis of the current legitimation crisis. Why did doors fall off airplanes? Why does it seem like these institutions aren't working? you have a c-suite that is if you steel manned it diligently trying to steer the ship and their steering wheel what they don't realize is a prop from the jungle cruise ride in disneyland it's not connected to anything and then you have people hard-working people on the metaphorical factory floor who kind of look up and say how could they be so disconnected how could they not understand what's actually happening here and so much of that is like the levers of orientation are somehow filtered through a lot of people in the middle.

1:41:21Leadership doesn't have access to real-time information. If you were navigating a car and the latency of understanding where you are was an hour, you'd crash. And so this sort of manager mode playbook, it works really well for the managers, but it's like a way of having a well-managed company into the ground. Do you think we need more individual champions? Peter Thiel has that quote about, we need ticker tape parades. uh ezra klein is now talking about with the abundance he's he's uh he's highlighted the failure of the california high-speed rail system and what i found interesting about that is that it's very hard to pin down like california high-speed rail everyone kind of agrees like project's not going great but no one can really say like who is even the champion of that at any point in time like no one's really responsible at any point in time um it does does the government need more individual accountability or like i don't even like project level ceos or something I don't know.

1:42:15Well, yes. The short answer there is absolutely yes. Like I think about it in terms of heretics and heroes. You know, it was Somerville who built the Pentagon in 16 months. You know, it was Gene Kranz who led the Apollo program. There's something about our kind of Midwestern Calvinist sensibilities as a country where like it's the Apollo program and not Gene Kranz. It's the F-16 and not John Boyd's plane. You know, it's the nuclear Navy, not Hyman Rickover's Navy. That's great. I appreciate that sensibility tremendously, but it shouldn't obscure the fact that actually these projects working or not come down to a handful of really exceptional individuals being present, taking ownership and leading the way.

1:42:54Yeah. Can you give me a little bit expanding on that? Can you give me a little bit of history on the dollar a year men and that story? Yeah. In World War II, we actually had a program for very skilled people, corporate leaders, engineers. They could, for a dollar a year, because volunteerism was illegal. You could not volunteer to work for the government. So as we were preparing to go to war, as we went to war, they would actually join the government as dollar a year men. They would get one dollar of salary, and they would actually be able to be deployed on the nation's most important and impactful problems.

1:43:29and sometimes they would retain their old job. Sometimes they wouldn't. It would really depend. But you could get the right person on the job. And I think that's really important because if you think about even World War II, our mobilization came down to one man, William Knutts, a Danish emigre who actually invented mass production. He was the number two at Ford where he invented mass production. He got in a fight with Henry Ford and went to GM as the number two. And FDR asked Bernard Barsch, who should I choose to do this? He said, I have three names, William Knudsen, William Knudsen, William Knudsen.

1:44:01It's like it really came down to a counterfactual. We had like one guy who could actually move all of American industry. And the way that he assessed, you know, he was an engineer himself. He would like meet people and understand, like, is it believable that you as a steering gear company can start making artillery? Are your engineers smart enough? Can they answer my questions? Boom. Here's a contract. Let's get going. And, you know, it wasn't a fiction writing contest. It was really a pressure test mind to mind. Can you talk about the executive order from last week, the defense reformation? You had a great post on it, but I'd love for you to kind of break it down live for the audience.

1:44:38I think it is the single biggest change that could prepare us to avoid World War Three here. You know, if you look at, you know, what has happened to the U.S. since we won the Cold War, we've really had the rise and empowerment of this monopsony, a single buyer that is the government. and an addiction to that monopsony telling us what to build at what price and how it's all going to work. That's very different than the free market. At some fundamental level, you either believe in the free market or you don't. And I like to quip that everyone, including the Chinese and the Russians, have given up on communism except for Cuba and the DoD.

1:45:13We still have five-year plans. And this luxury of having the monopsony grow to the scale it has is a consequence of having no peer competitor. But that world really went away arguably in 2014, the militarization of the Spratly Islands, the annexation of Crimea, Iran's pursuit of the bomb. Like deterrence is lost and we need to rise to that. And I think this is a clear acknowledgement of very much that in this administration. But the EO says we prefer to buy commercial items. We prefer to buy items that have been proven in the market that have that have to withstand brutal competition that happens out there every day that reward entrepreneurs for what they're building rather than custom building and developing things on our own.

1:45:57And we have we have a long history. You know, a monopsony is always going to desire control. But it goes all the way back to Andrew Higgins and the boat that won the war in World War Two. Andrew Higgins was a guy from Louisiana. He spent some time in China and he was inspired by bootleggers in China and the sort of boats they had for amphibious landing to quickly land, get goods off, get goods on and then scurry away. And at his own expense, he built the Higgins boat and he showed up. He showed it to the Navy. The Navy wouldn't even let him compete. They kind of dismissed him. Then a young Marine who became very famous, Krullach.

1:46:32He later he got him into the competition. He won the competition. And then instead of buying the boat, the Navy stole the plans and tried to build the Higgins boat themselves, which they failed to do. And then finally, you know, at the 11th hour, of course, we do the right thing. That's a classic American trait. And Eisenhower said that's the boat that won the war. And so, you know, the Predator was developed as a commercial item. It was not developmentally done inside of the government. Abe Kareem built it. General Atomics picked it up. They financed all the R &D themselves. You know, the Air Force, of course, hated it because it was unmanned.

1:47:06It's kind of emasculating. And, you know, when 9-11 happened, it was the thing that met its moment in a massive way here. And there's so many examples. Like now we have whole companies built around this company. It's like Andrel. The entire approach is commercial first, investing private taxpayer capital into R &D, absorbing, putting the pebble in the right shoe, you know, putting the pebble in the entrepreneur's shoe rather than in the taxpayer's shoe. So this EO, it's actually this law. In 1994, we passed a law called the FACET, the Federal Acquisition Streamlining Act, that said it is the law that if a commercial item exists, you must buy it.

1:47:40It's actually a very stringent test, three-part test. So if a commercial item exists that meets your requirements, you must buy it. If it doesn't, you must see if you can change your requirement to meet the existing commercial items that do exist. And if that's not possible, you must see if you can ask the company to change their product to meet your requirement. And only then are you allowed to go custom developmental. So this is the most violated law on the land. And I think having the administration say, look, this is statute and we agree with it and we're going to enforce it is how we're going to field a huge amount of deterrence between now and 2027.

1:48:12There's not a lot of developmental things you can do between now and then. There's a huge amount that you can do with the innovation of entrepreneurs and the commercial industry. That's amazing. do you feel like cyber warfare has been too normalized on this planet? It feels like you have a major cyber attack and maybe you hear about it on X because somebody says they can't log in to Zoom or something like that but it doesn't even make the mainstream news meanwhile there's any type of kinetic conflict globally it's immediately front page or it's on CNN, things like that and do you think there's ever a point in the future where people start to view them and countries truly view them with the same level of significance as everything sort of continuously sort of comes online.

1:48:57I think you're spot on. There's something very strange in how little we talk about it. They don't photograph well. Yeah, it doesn't photograph well. It doesn't photograph well. But my concern is that in the future, if we have 100 ,000 humanoids, you know, going around a single city and suddenly they all are stopped. That's bad. That will start to photograph pretty well. And so I imagine in the future, it won't be just kind of brushed under the rug. And yeah, of course, you know, companies have to respond to it and the government responds to it. But I just imagine at some point it will start to really be news.

1:49:33well one of the most devastating consequences of it being so kind of below the waterline something we don't want to talk about is the normalization of like what can you do about it a sort of nihilism and acceptance uh uh a pessimism that anything can be done about it which is obviously not the necessary precondition to like rising to the occasion and we should have very high standards for what can be done about it not this of course this company got breached or this thing happened and all these people have my information all the way to you know sure our water systems are compromised and we'll be brought to our knees within the first few days of conflict.

1:50:06We're not able to hold ourselves to the high bar that we ought to because it's not popular. We're not popularizing it as a concept. Speaking of popularizing, just general shifts in thought about defense and the importance of public-private partnerships in the government, can you take us through the Defense Reformation 18 theses, your thesis there, and then the impact and is it a jobs not finished situation or has defense tech become enough of a meme now? It seems like Silicon Valley is like fully on board in my opinion, but at the same time, there's a lot more that we could do. Yeah, I think we've earned the right to have an at-bat.

1:50:50So like we've got to perform now for sure. I'd say the fuller, I've touched on some of the themes, but the fuller diagnostic is the government has kind of historically made it a bad business to work with the government. You think about our examples from the past. At Intel, Bob Noyce would not let more than 4 % of his R &D budget come from the government because he, as the inventor of the transistor, wanted engineering control over the roadmap and what he was going to build. He always had in mind a broader commercial market that was going to drive the price performance that was needed. Even though in 1969, something like 96 % of his revenue came from the Apollo program and DOD.

1:51:28At that point, they looked like a government contractor, but his aspiration was bigger. In the same way that Elon Musk's aspiration for SpaceX has always been to get to Mars and to make us an interplanetary species. It's not just about launching rockets and satellites into orbit here. And we really lost so much of defense innovation. Kelly Johnson, who built 40 plus airframes in his career, including the U-2, which we still fly, in the SR-71. He is this heroic figure. So much of this innovation has come from these legendary engineers, these heretics, as I call it. Today, you think about it as Northrop Grumman, but it was Jack Northrop and Leroy Grumman.

1:52:05It was not Lockheed Martin. It was the Lockheed brothers, and it was Glenn Martin. And it was really so founder-driven. The aerospace industry subsidized its own existence in the interwar period between World War I and World War II because the government didn't think it needed it. So, you know, but for private industry being willing to lose money for a decade plus World War II, we would have been in a very, very bad place. And what excites, so I think the Last Supper, people look at the Last Supper, which is this dinner at the Pentagon in 1993, where they said, hey, look, we have 51 primes today, you guys are not all going to survive.

1:52:40Today, we have five. For every dollar we were spending in defense, we started spending only 33 cents overnight. It was a huge cut. The peace dividend, as it's called. The consequence that conventional people take away from this is, oh, that's when we lost competition. We went from 51 down to five. I don't think that was the actual issue. The real issue is that consolidation bred conformity, and the conformity pushed out all the heretics. It pushed out all the founder personalities that you need to make this stuff really work. My reason for immense optimism in this moment is that the founders are back.

1:53:14You know, more than$100 billion have been deployed in the national interest. You have Palmer Luckey, you have the Tseng brothers at Shield AI, you have Dino and Saronic, you have all these crews of really, really compelling humans, really, really compelling founders working in the national interest, again, pursuing heretical ideas, waking up every day, banging their head against the wall, you know, fighting the bureaucracy to do what's right for the men and women in uniform and for the nation more broadly. Can you talk a little bit about the startups that are building on top of Palantir and take us through AIP?

1:53:46Yeah. So we've always, it's a little abstract, but I've always felt like the ontology, which is our secret sauce, is it's really, you can think about it as like a declarative backend. It's a way of saying, look, this is the shape of not only my data, but the logic of my enterprise. And that's all you have to do, as opposed to the imperative approach of having to actually go create and wire this up and do it together and figure out how to get it to scale. And so if you had this declarative backend, if you could just say, look, this is what I need to exist in the world. Now I can build applications on top of that that manage all of the entropy that usually sits behind it.

1:54:19And it gives you a radical speed advantage for these companies. So these companies are building everything from like the European cricket network to people who are building pharma companies, hospital operations companies. in defense it's very popular because we can give you an SDK that wires you into 20 years of data that has been integrated into the instances of Palantir that exist in the defense community that your users can authenticate to so it just speeds a lot of the kind of brain damage you would get from having to to deal with the bureaucracy and allows you to compete on the quality of your product rather than your game and getting through the wickets of a Byzantine process that probably needs its own reformation.

1:54:57But it's really about speed. And that ability to build on top of the platform, it's not just for third-party developers. When Hurricane Helene happened in North Carolina, green suitors, like folks in the Army in the 101st, built their own hurricane common operating picture on top of the platform. So that ability to respond to the need, it's the code version of the OODA loop. Yeah. What advice would you give somebody maybe graduating college today that's evaluating joining, you know, maybe a seed stage company versus a scaled company like Palantir or something like an Anderle? I imagine you at times had a ton of different pressure from VCs being like, leave, we'll give you 10 million bucks to do whatever you want.

1:55:43Like, don't you want to be a founder? Yet when I look at opportunities in anything defense related, it seems like if you have a founder mindset, there's so many great opportunities to just go to a great company and kind of take on that sort of like founder level ownership over a specific problem area or product set or things like that. Yeah, I mean, I think the, of course, I'm biased here. But if I if I get would give general advice, the way I would think about it, what I would tell my son is like, where can you go that you're going to work with the most compelling people, because like your rate of learning is going to be a function of those people, and have access to the greatest surface area around problems.

1:56:24Like my model for growth is not progressive overload. You know, the Incredible Hulk did not become incredible by just lifting a little bit more weight every single day. it's like a near fatal dose of gamma rays that probably has like a 50 % chance of killing you. So which help is they're going to like throw you off the deep end and give you that opportunity to have like superhuman superhero growth. That's like, that's the value maximizing thing. And I would remind my son that like your point of, of extreme growth is going to be coincident with your point of maximal pain. So like your ability, like, you know, it's like, as Greg Lamont says, one of my favorite quotes, championship cyclists, it doesn't get easier.

1:57:02You just go faster. You know, it's just understanding that like, that's what it looks like. So don't sell out for the opioid of a linear career progression with a clearly mapped out path. I'm pretty sure that's retarding. Like that's lead shielding. That's preventing the real gamma rays from getting to you here. You know, find places you can throw yourself off the deep end. And I bet there are some C stage companies that are perfect for that. I bet there's some C stage companies that are horrible for that you know it really is pretty specific does that tie to the the primacy of winning mentality is is that like uh all is that essentially like derivative or like the same concept yeah i think it's it very much relates to that and i think i think it's like one of the things that i had to i feel like it's one of the most important things i learned at palantir you know we're all kind of programmed in our conventional education to feel like there's a process.

1:57:50There's an approach. If you follow the playbook, you know, you'll win. But it's actually like, it starts to conform to how you wish the world would work. It becomes hard to decide, is that actually the cargo cult? Or is that how the world does work? Like, you can keep marching around these fields in Micronesia, the planes aren't coming back, you've misunderstood the physics of the universe here. And just if you just anchor yourself, like, but is this working? Like, is it winning? And then blow up anything that's not working. Okay, last question on cargo culting. Cargo culting the forward deployed engineer, good or bad?

1:58:24When does it work? When does it not work? Who should be doing it? Well, I think all carcoculting is bad. So I think that, you know, it's, I think the forward-to-point engineering methodology is, is exceptionally valuable. Akshay's description of it is the best one, I think it's like solving through back propagation. It's a very elegant metaphor. But if you just slap a veneer on it, where it's like sales engineering, my favorite things like ex-Palantirians will be like, people are asking me like, what is an echo? And I will describe an echo and they'll be like, so you mean customer support? support customer success.

1:58:59And it's like, wow, you've lost the essence of this whole thing. This beautiful concept you've, you've completely cargo-culted away. Well, thank you so much for stopping by. This is a fantastic interview. Yeah, this is great. Have a, have a great rest of your day and we'll talk to you soon. Cheers. Bye. fantastic so many great stories and man like encyclopedic knowledge of american history there's so many times we need to have him on for yeah yeah of course Lockheed and Martin like the I know their first names like I don't know their first names I need to brush up on this stuff I need to do some like space repetitions and flashcards or something yeah but uh next up we have the founder of Starship coming in to the building welcome to the show how are you doing boom hello good to meet you all I am doing fine I'm doing super exciting thing and I like it Yes, thank you.

1:59:51Would you mind kicking us off with just a little bit of background on the company and explain not just what Starship is, but kind of the footprint, the rollout, the strategy, all of that? Yeah, yeah, yeah. All right. Yeah, sure. So what we are doing, we are a company developing and building and operating delivery robots. So robots that transport stuff. And stuff, that means burgers, milk, packages, and so forth. So in science fiction movies, you don't see UPS guys knocking on your door. You see things coming to you, things flying to you. That's the future that we are building, that's the present that we are building.

2:00:33And we have many competitors as well who we have inspired to do similar things with drone deliveries and so forth. We're doing it on the ground with robots that drive on the ground, small robots that drive on the ground. And we are actually not like a, like many people think that, you know, this sort of futuristic thing is like a pilot or test, you know, somewhere in some limited area or something like that. We are actually in full commercial operation with thousands of robots in hundreds of locations. It might not be, you know, we are not there, not yet in every place that, you know, all of this audience that's listening to this right now is, but we are in some places.

2:01:15And in some of these hundreds of places that we are in, you know, our robotic delivery is completely commonplace. It's something that people are completely accustomed to. It's something that, you know, people don't really use, you know, like human couriers to deliver things. They use robots. Yeah. can you talk about all the different things that you've seen around the way humans treat robots I try to say thank you to robots when they help me out with different things but some humans we've been seeing a lot of vandalism of the birds, scooters the big thing with birds in LA is I think a lot of birds issues locally here just came from a culture of vandalism you did the hard thing in making sort of cute robots which I think probably helps.

2:02:03It's important. How do humans kind of present a challenge to trying to automate delivery, which should be in everyone's best interest? We get that question a lot, but we don't actually get a lot of vandalism itself. The truth actually is that people really love our robots. Yes, I see that with scooters and some of the other modes of transport, people don't really treat them nicely. But they actually do treat our robots really nicely. Like, for example, we often get the question that, oh, are your robots stolen? And actually, none of our robots have ever been stolen from the street. And we have done eight million deliveries.

2:02:48Like, we are doing millions of deliveries. And it's just not happening. You know, kids feed our robots bananas. So the treatment is completely different than with, you know, like scooters, for example. I understand. We get that question actually a lot. People sitting at the table very often say that I treat things nicely, but there are some other humans out there that do not treat things nicely, just like you said. But it's not actually happening. It's not actually happening. How often do you vandalize a UPS vehicle? You don't really. right you know sure sure you can do it yeah you can puncture and puncture the tires of a ups vehicle you don't really do it right yeah you know and you know our robot actually our robot has 10 cameras it's constantly connected to the internet it's really it has a really loud siren when it's tampered with and so forth it's not actually really happening well can you can you uh talk a little bit about the rollout maybe because um i think that the locations in which the robots are doing deliveries is like really going to impact, right?

2:03:56If you're rolling through a suburb and it's a family friendly neighborhood, something like that, the robot is going to run into different challenges than rolling down a street in Manhattan, for example. So how have you guys approached your kind of like go to market and kind of picking what regions are sort of top of the list in terms of getting robots on the ground? Yeah, great question. We are operating our robots in 60 cities and 60 college campuses. So we have learned a lot about different environments. And yeah, like different neighborhoods are completely different. Like there's a lot of difference in the world.

2:04:39We are operating in six different countries, like five countries in Europe and U.S. And U.S., of course, is varied as well. right? So we have learned a lot on how the different sidewalks look like, how crossings look like, how traffic lights look like, what the traffic patterns are, all of these things. We've learned a lot of these things, a lot of data for our machine learning algorithms and so forth. But in terms of actually how people treat robots, there's not much difference actually. People are actually really friendly towards our robots. I understand it's really hard to believe, but that is actually true.

2:05:16It's completely true. And you're operating a completely commercial quality service. We are cooperating with most of the major delivery apps in the world and with a number of tier one retailers as well. And it just works. Can you talk about the progression of the technology, specifically the path to end-to-end? There's a single AI model, but there's probably teleoperation in the early days. Then there's some mixed. There's some C++ for pathfinding, but there's some AI for image processing and world modeling. How have you thought about developing the technology and do you see teleoperation and end-to-end AI systems playing nicely together in kind of a centaur mode for a long period?

2:06:05Or are these specific gates that you have to go through? Yeah, we are operating quite a hybrid model. We have been working on this for 10 years. And we built this at the time where AI was not actually as developed and we have obviously reaped the benefits of all of the AI development that has happened since. But we also recognize that safety, for example, is super important. Yeah, super important. You know, like, for example, our robots, you know, cross roads. They are generally sidewalk robots. They drive on the side of the road as well when there is no sidewalk, but generally they drive on sidewalks.

2:06:49But they cross the roads. They cross roads similarly as a pedestrian does, you know, using crosswalks, right? Our robots cross roads 100 ,000 times a day. 100 ,000 times a day, right? We have thousands of robots operating, right? We have been speaking right now for eight minutes. During these eight minutes, our robots have probably crossed the road about a thousand times. Wow. Probably just like that. About a thousand times during these eight minutes that we have talked. Safety is super important. Suppose we have something going wrong in like 1 % of the crossing. That's too much. That's about 1 % or 0.99 % too much.

2:07:27So we need safety. We need to prove that it's safe. We are actually not operating an end-to-end neural network, but we are operating a combination of, yes, C++ and neural network. When you see hard tech founders claiming online that they're operating an end-to-end neural network, which some people have done, does that surprise you? Is it almost unbelievable? It's not surprising to me at all that you can do it. The downside with that, it's very hard to prove that it is safe. it's very hard to prove that it is safe and you know we are actually operating in also some pretty challenging regulatory regimes i mean not just you know is actually beneficial there right like if you have the ability to remotely take over that's going to make your safety case so much easier because you're going to say hey yeah it is kind of crazy there is a robot piloting this a little bit but at any moment we can hop in and beam in and there's a human exactly exactly for us it's a combination of remote assistance which happens you know more and more rarely all the time right but it still happens it's there there's a human you know somewhere yeah that can take over in difficult situations or complex situations unusual situations then there is c++ and there's end-to-end neural network as well sure sure uh has the combination of all of these yeah has the transformer architecture or any of the other like kind of foundational innovations in AI been important to Starship and what you're building?

2:09:08Obviously, we see hype around the Studio Ghibli moment and diffusion in image processing. But does that actually make it easier for you to understand the stuff of like, where am I in the world? Where am I going? I need Should we be tying all the amazing progress in LLMs and AI to your business? Yeah, it is definitely helping and improving our stuff. I think we were in commercial quality operation already before that. But it is helping us tremendously for sure. Uh, uh, primarily it is clearly something that is, uh, is it dramatically reducing the need for this, you know, human, uh, somewhere in the loop.

2:09:55Sure. Uh, absolutely. What about, um, have you thought about, uh, giving, you know, embedding some sort of LLM or voice, voice model into the robot? So if a, if a pedestrian bumps into the robot, they can have a little conversation and it can kind of explain like, hey, I'm just going across the street. I'm delivering a burrito. Like it can answer some basic questions. That seems like - I'm just the burrito guy. I'm just the burrito guy. That seems like maybe silly, but also like maybe great from a user perspective, but also like wildly extra. I don't know. Have you thought about that? Yeah. Yeah.

2:10:30Yeah. So we do not have like a personified LLM in the robot right now, but I think it is conceivable that that will be the case. Sure. Our robot does speak, but the speaking is not actually driven by an LLM. Yeah, it's more like business logic, decision training. Exactly. It's a little bit more business logic that, yes, every time the robot does delivery, it says thank you. It doesn't take an LLM to do that. Yeah. Can you tell me more about trade-offs in robot production? Elon has been anti-LIDAR from a cost perspective. I'm sure there's a bunch of different trade-offs in terms of size, weight, speed, battery life, all these different things.

2:11:14You have probably like a base hub where these things go to charge, and then they have a certain amount of range. What are you optimizing for? What are some of the pitfalls to avoid? Yeah, great, great question. So our robots actually do not have a LiDAR. But that does not mean that we are anti-LiDAR. The thing is, though, that the reason we have not used LIDARs is that LIDARs are a perfect sensor for an autonomous vehicle. Autonomous vehicle needs to see quite far away. And it needs to see, you know, it doesn't really, well, it does need to have short range sensors as well. but you know it does need to you know see you know like you know 200 yards 300 yards because it's moving fast right our robots are moving much slower than a car right they don't actually need to see that far so lidars are actually not perfect sensor for us and the downside with lidars is that lidars typically have a narrow vertical field of view they have like this narrow you know, rays effectively that see very far, but it's a very narrow, the angle, the vertical field of view is very narrow, like a couple of degrees or so, right?

2:12:35We actually need to have perfect vision from immediate vicinity of the robot, like very wide, you know, vertical field of view. We need to see, you know, down in front of the robot and also, you know, up and, you know, So we need to have that sort of vision. So LiDARs are not perfect sensors for us. That's the reason we are not using LiDARs. But the moment that a LiDAR with suitable spec appears on the market, we will absolutely use it. So we are not like religiously anti-LiDAR at all. Jordi, you have a question? Changing gears a little bit. Skype is shutting down on May 5th, end of an era. You were the founding engineer there.

2:13:20Is that emotional for you, the shutdown? Or at this point, you've been doing something else for a long time? Yeah, I've been doing something else for a long time. I'm not actually an active user of Skype anymore. Sure. For actually quite some time, I still have the app in my phone somewhere, but not really using it all that much anymore. Skype was an amazing ride. I mean, it was one of these startups, you know, which is actually rare, you know, one of these startups that just took off like a wildfire immediately from day one. Right. From outside perspective, all startups seem like that, that they come out of nowhere and then it's just a boom, you know, it's like that.

2:14:02But, you know, in reality, as a startup founder, most startups are not like that. Most startups are hard work, hard work before things actually start, you know, getting off the ground. Right. It was not like that. You know, it was like, for me, it was easy work. I just did what I love to do. And boom, you know, loads of users came and, you know, it just kind of happened, right? So it was an amazing journey. But also, you know, frankly, I mean, it was a journey that happened 20 years ago. 20 years ago, literally 20 years ago. What are the key lessons that you took from the Skype story and applied to building this business?

2:14:41Is it just the engineering culture, the pace of play, or is it wildly different because it's a completely different growth curve? It's both of these things, but it's also, I would say one fundamental thing is that with a lot of products and a lot of services, you kind of, you know, it's a very simple service, really. Like, you know, one delivery app, a major delivery app founder, you know, told me that, you know, look, you know, if your robots really work and you can give me cost savings because it needs to cost less than human delivery for me, then I will use your service any day. And, you know, that's how it is for them.

2:15:27That's how it is for us. You know, we have no demand problem. Right. If we prove to them that it really works and that we give them cost savings, they will use us for billions of deliveries. That's how it works. And that's the traction we are seeing on the market. And Skype was like that as well. If you actually put out a product that exactly fits what people want, and it just works. It just works. It doesn't have some sort of major downside. right you know then it just takes off like wildfire granted it's harder to do with the self-driving robot right clearly much harder to do you know like we built we built skype you know like we we were like a team of like how many engineers we were like you know 15 maybe 15 engineers nine months of work and we have a beat has a beat out there that everyone loved and just took off like wildfire right yeah sure you can't do like a self-driving robot with like a team of 15 engineers and line miles, right?

2:16:25And it does take longer, right? But it's also harder for competitors, right? So we are, I said, we have done 8 million deliveries. I'm not sure our closest competitor, there are lots of competitors, tens of competitors. Our closest competitor probably has done 200 ,000 maybe or 300 ,000, not sure, something like that, right? Like an order of magnitude difference. So we started this trend, let's say, 10 years ago, and we're still number one. Because whatever is hard for us, it's also hard for our competitors. I have one last question, then we'll let you get out of here. Why is Estonia so successful in producing technology entrepreneurs?

2:17:10Great question. I think I don't have a full answer. So I don't know. But one thing out there is that, you know, I was occupied by Soviet Union for like 50 years or so. Right. And I was, you know, my age is such that I just turned 19 when we regained independence from the occupation. Right. So I spent my childhood in Soviet Union, but my adult life has been in a free country. And turning 19 and finding yourself in a free country that actually doesn't have a lot of establishment built in, that means that you kind of grow up with an assumption that there are no obstacles. There are no obstacles for you.

2:18:08There are no big companies out there that you need to kind of compete with. You're just free to do whatever you want. So that's the culture. I think overall successful startups can be built by any end, but it helps that if you don't know what's impossible. If you don't know that it's impossible, you're going to have a better success. that's great that's amazing that yeah that's amazing thank you so much for joining the show congratulations on your first eight million deliveries and uh looking forward to the 800 million yeah to have you back on then next year yeah next year let's hear it thank you so much we'll talk to you soon cheers bye um before we bring in yeah uh well i will bring him in and i will let him give his introduction.

2:19:00Daniel, if you're in the studio, welcome to the show. Good to see you. It's been a few days since we hung out. Still looking great. How are you doing? What's the latest? You're doing fantastic. How are you? Doing well. Well, Jordy's Way, would you mind kicking it off with just a little bit of intro on yourself and what you're working on? Totally. Well, one, blessed to be in the capital of capital. Couldn't imagine a better place to be today. I've been building various consumer tech stuff for the better part of the last decade. Most recently, attendees with the company I started many years ago sold that.

2:19:39I think there was a quote from Shawshank Redemption of, you better get building or you better get busy dying, something like that, if I remember correctly. But reconnected with the folks at Coco a year ago, Zach and Brad and the whole amazing team there. And he was sitting there and realizing I grew up in LA. I kept seeing all these robots going all over the place and all these different cities and just figured I had to get involved. So, you know, we're, we're Coco, we're bringing, uh, you know, sidewalk delivery robots to all the biggest cities, uh, and markets across the world. Uh, I've had a lot of exciting success there and, uh, yeah, that's what we're up to.

2:20:15Can you compare and contrast your approach to Starship? We just talked to the founder of Starship. But every time there's like this race for a new technology, it looks similar on the surface. And then you dig in and you usually realize that the companies are taking very different approaches. How would you explain what Coco is doing differently? Yeah. So I think, you know, first off, I have a huge respect to the Starship team. I actually think I ran into them at an investor's office like 10 years ago. Wow. I ran into them when they were starting the company. So I think the biggest differences are kind of where we operate.

2:20:51I think Starship has had tremendous success on college campuses and various other parts of other markets. But solving the complexity problem, right? If you look at the delivery market, you've had kind of, even if you think back five, ten years ago, delivery costs were an order of magnitude lower, both on the back end and kind of what consumers are paying. You have a fundamentally inflationary cost structure. But all that problem of most of the delivery volume is in the kind of big urban cities. And so I think we've really just drilled on our execution of handling the kind of complex situations there.

2:21:28There's a bunch of different regulatory hurdles, dealing with even distribution, right? We're kind of the only company that's partnered with Uber, DoorDash, and a bunch of other partners that we're announcing soon. And being able to have that kind of broad-based reach, I think it's super important because you can actually get the volume. Customers can use you in those cities. You don't have to go through a first-party app necessarily. So those, I think, would be the biggest kind of on-the-surface differences. What do you take away from the Waymo strategy? They were out in – was it Phoenix, Arizona?

2:22:00They were out in Arizona for a while, I believe, in like the easiest mode for self-driving, like huge streets, no weather. And then their second market was like the hardest place to drive in the world, San Francisco. There's hills. There's random people on the street. There's bikes. And I think like the telling that some people would get would be like, if you can solve San Francisco, you can solve kind of anything. Maybe not Boston in the winter. But is that the story you tell or is there something else? And what are you pulling from their strategy overall seeing what Waymo's done? Yeah. I mean, just on the commentary of kind of hardest cities to drive, I would love to see Waymo's in Riyadh, Saudi Arabia.

2:22:37there is it is bananas to take car rides there yeah but what what i think is interesting is we've always compared it the kind of waymo and the tesla strategy right the the waymo because i think yes they operate in san francisco which is you know lived there for many years not not true to drive them but the cost structure of you know how much does that vehicle cost right the amortizing that capex against all the vehicles right if you have this really expensive spencer suite you really like cost optimized uh the vehicle um and it's hard to when you're kind of reliant on a lot of these sensors and kind of advanced computing um it makes it difficult to really get it to be substantially cheaper over time um and to deploy a bunch of you want to deploy a bunch of these right like the question i've always asked is why doesn't wayla deploy you know you have google's budget right why wouldn't you deploy you know a thousand of these tens of thousands of these right um we've always been more in the tesla approach right of like if you can make kind of camera-based uh autonomy and kind of driving work um you can have substantially a simpler cost structure, right?

2:23:37You're able to, and with that simpler cost structure, you can deploy far more vehicles in far more places. And if you've seen the latest kind of Tesla self-driving, you know, full self-driving version, it's an incredible driver, right? And so I think that's the kind of biggest delta in the strategy that you'll see in kind of some of our competitors is like, and everyone on the team is incredibly ruthlessly cost optimized of how do we get this additional, you know, three cents a mile, et cetera, right? Yeah, that's kind of the thing. Yeah, yeah. So what does that mean practically? Is that just, hey, we're staying away from LiDAR because LiDAR is expensive?

2:24:08Or is it like we got to build a gigafactory and just drive down the cost of mass manufacturing these? Like Tesla is kind of the story of they did both. But what other decisions have you made to drive that cost per mile down as low as possible? I think it's both. And then there's a really interesting thing. Everyone thinks of the comparable of like, well, it costs a human X dollars to do this. And then with a robot, it's cheaper. Right. But that's only one half of the equation. The delivery business is a logistics business, and it's all in that 98th, 99th percentile. Every single time you mess up an order, human or robot or otherwise, that is incredibly expensive to the merchant, which might have a food cost deducted, to the delivery operator who has to refund the order back to the consumer.

2:24:54So being able to be more reliable is kind of the other half of the cost structure. And I think what really impressed me kind of when getting involved was, you know, the focus on reliability and kind of making that work. And that, you know, obviously involves, you know, the robots were kind of human operated entirely for a long time. And as you kind of roll out autonomy, right, you're able to do that piecemeal while kind of maintaining that high quality service bar. I think that's like the one thing, you know, we know from a lot of our partners is like really exceeding on kind of quality of service.

2:25:25So it's both cost, which we nail, but then also quality of service as well. Do you guys have any projections on when you think autonomous delivery will be the default, right? There's like all these new systems coming in, Coco, Zipline. We're going to have lots of solutions, whether you want to order something from, you know, Walmart 30 minutes away with Zipline or you want to get a burrito. Have you seen Pipe Dream? Yeah, there's Pipe Dream. We're going to put it through the ground. The pipes in the ground. So there's lots of ways that we're going to get stuff, which is what Americans love. But at what point, what's your kind of like internal pacing around when you think these systems can be so ubiquitous that when you use a delivery app, you just sort of assume that it's going to be coming through some type of like autonomous platform?

2:26:17I mean, I think it looks really lopsided, right? Like if you're on the West Coast, like if you're in LA, like if you talk to people in Santa Monica, like this is their norm. like to a lot of people that get predominantly robot to the right uh if you look at other markets we're not in you know it's not i think it's the same for self-driving cars yeah um i mean my answer is is as fast as humanly possible like i think that's metered in years uh if not sooner but i think it's really market specific right like uh you know if you're in the big cities i think i think you know hopefully for us right in the in the span of a year maybe two um but you know i i tend to be aggressive on that front but i think it really depends on kind of which markets you're in as that kind of rolls out.

2:26:56But yeah, I think this proliferation of all these solutions is incredible, right? And I think for rural environments to spend a lot of time around Wyoming, Zipline's going to be amazing, right? But especially in the urban environments where the real, like, there's a huge push, right? Of like, there's a real business problem for a lot of delivery providers of like, we need to solve this. I think that makes a lot of sense. Can you talk about anthropomorphic design? How do you make the robots friendly and seem like they're going to be fighting alongside us when we're fighting the AGI Terminators versus, because I imagine if it goes poorly, I'm going to want a Coco in the foxhole with me.

2:27:30It's a cute, I mean, it's a cute, even the name, like, you know, Starship, cool name, but very different than Coco. I think that's deliberate. What else are you thinking? Where does this go? We were talking about maybe like, do you throw an LLM with a voice mode on it and you can just talk to it as it's driving past you? Maybe ask it the weather, ask it the time, or ask it for the news. Where does this go long-term? So I think a few things. One, right, I think actions matter a lot more than words, right? What someone says to you versus how they behave towards you. And like, you know, we have this idea of this cone of courtesy, right?

2:28:03And really being courteous to other, you know, sidewalk users, bicycling users, whatever the surface might be, right? And I think what's interesting is you've seen, right, like I saw the kind of previous interview, there really is basically almost no incidence of vandalism or kind of people interfering with the robots because there is this like almost adoration. The name is very purposeful, right? And the second most popular dog name in the US, at least at the time, right? And I think kind of thinking through that of like how something behaves towards you and ends up building the brand more than like what it talks to you.

2:28:39But then I think there's always been this kind of sweet, jovial culture at the company that really just flows out to the robots. I think there's a lot more stuff you're going to be seeing soon in that vein. I think I've been really focused on let's get the economics and the operating model right. But there's a ton of really fun stuff coming there that I can't quite share yet, but we will talk. Can you talk about your guys' partnership with OpenAI at all? I don't know how much you can speak to it, but that was a cool announcement. What do you do with that? yeah yeah what's up with this this whole ai thing i heard it was cool i heard there was this model that came out yesterday that people were doing some cool stuff with uh if you have not tried oh three it's amazing but yeah i mean they're fantastic partners uh i can't speak to too much about what we're doing with them um but it's very exciting and and you know we'd love to talk more about it later yeah it's a cool partnership because you're not immediately worried about them uh just building the same thing that you're doing it's kind of like a bigger you know jump to to go and say you know open ai is going to start building delivery robot networks then uh you know somebody building a coding uh platform unfortunately i got shot down at our weekly business review i thought you know we should get into the kind of vs code fork business but unfortunately good business it's a great business especially today yeah it's fantastic um uh what what else is on your mind uh broadly in venture right now what are you what are you seeing i know you do quite a quite a lot of investing historically um what's been exciting i was at this conference uh this weekend and and i i i want to share probably the funniest bit uh that i heard from that i was talking to a guy manages kind of tens of billions of dollars and we're talking about spvs he's just gonna never say that word again it's a dirty word sounds bad he's like you should call it a co-investment vehicle and it's a great idea.

2:30:31And so I think we should try and promulgate co-investment vehicles over SPVs. It's better. It's like the scene from the social network. Yeah, I mean, a lot of I think what's going on behind the scenes in the industry is really exciting, especially on the kind of delivery side. There's a couple announcements that I'll be back very short to talk about. Fantastic. Yeah. Very cool. What's the vibe in Jackson right now? Is ski season wrapping up? Or when even is spring break? Right now, we've got mud season, which is all the snow melts. And it turns a really delicious color of brown and muddy and gets all over everything.

2:31:16So I'm actually... But you're still out there, right? I'm in New York right now. All right. which you will see the seasonal migration of all the Jackson people. But it's a fantastic place. There's actually an article in the journal this morning about how tech bros are starting to dress up like cowboys. I thought they were going to say suits. I was hoping for suits. This is terrible. All the work I've put into this get nowhere. I always thought about wearing a denim. I mean, this is like Chris Sokka's dream, right? Everyone dresses like a cowboy. he's been doing that for 25 years. But I wonder if you have to find a new bit, right?

2:31:54Once everyone starts doing it, like, does that... Of course, yeah. Bring suits to Jackson, all right? Yeah, yeah. I would love for you guys to come visit and wear suits, and we can record the looks that everyone gives. Yeah, yeah. People don't ski in suits enough, right? They don't. It's like skiing is a serious endeavor. You should dress the part. We've done in suits, yes, exactly. You guys should partner with Xenia to make, like, a ski suit, and it's like a Gore-Tex ski suit. There we go. Need to measure. That'd probably sell really well on Instagram. I think we got another business. Put together one of those co-investment vehicles for us, okay?

2:32:27Yeah. Yeah. Going to need at least 100 mil to get that off the ground with the tariffs. Yeah, exactly. Actually, that's an interesting question. Speaking broadly, how have you seen the robotics industry kind of responding to some of these tariffs? I mean, I'm sure a lot of this stuff's made in America, but it's the supply chain, right? Yeah, but especially with instant delivery where it's really an economic equation, which is like, is it reliable and is it cheaper than human-based delivery? How do you think the industry is responding? Still a shell shock?

2:33:08Yeah, I mean, I can speak only internally and I can kind of give you some things I've heard across the street. But, you know, internally, we have thousands of vehicles already kind of like in the U.S. built and we're kind of actively deploying more and more of this. So, you know, from our standpoint, it was kind of like, OK, like this doesn't actually disrupt us that much right now. But I think, you know, the speaking of broadly to the supply chain, right, you have a lot of the consumer electronics supply chain is primarily in Asia, not a whole ton of like alternatives. And so I think it'll be really interesting to see, like, as the administration kind of rolls out the kind of other branches of this policy, do you start to see some carrots to kind of move that over?

2:33:49You know, a big thing that I think is was discussed this weekend that was interesting was, you know, what happens if you just drop capital gains on kind of investing in kind of these key sectors of the economy that we want to bring manufacturing back to the U.S. on? I think, you know, don't have the U.S. sovereign wealth fund to try and pick winners. I think we're getting to a little bit too much time in there. This is a great team. Yeah, I was thinking about this for all the venture capital firms that have been adventuring all over the eastern hemisphere. You give them a cap gains boost in American investing, you're going to see billions flow into national interest investing.

2:34:25They already eliminated capital gains in some form. Yeah. but uh but uh but that would be a cool policy how yeah they didn't say how um awesome well thank you for coming on come back on i know you guys have uh some good news coming down the pipeline yeah we'll talk to you soon great to see you bye guys cheers uh next up we have uh adam uh coming in from the chamber of progress talking about the google lawsuit that just happened and the ad tech verdict. I think we'll be able to have him pop in and give us hopefully some background. Adam, welcome to the show. How are you doing? Oh, good. Sorry. I had to unmute myself.

2:35:11Can you hear me? Okay. Yeah, yeah. You're all good. I'd love to start. I mean, quick background on yourself would be great, but also just, can you take us through the very early prehistory of this lawsuit? We'll build up to your analysis that you dropped today. Sure, sure. Well, thanks for having me, guys. Yeah, great to meet you. Loving the podcast. So I have been doing tech policy in D.C. for 20 years or so. I spent a dozen years at Google in their Washington office. And about four years ago, started a group called Chamber of Progress, which is a center-left tech industry policy group. And so I worked on a lot of these issues.

2:35:49I have a lot of familiarity. This case is interesting. So this was the second case that the Department of Justice filed against Google on antitrust issues. And the topic was kind of a niche one, which is really which is ad tech, the ad tech industry. And it really was alleging that Google had improperly linked the different parts of its ad tech business together in a way that had given it a monopolistic position. And and the case moved relatively quickly. It moved for what's called the rocket docket. this court in Virginia that goes generally pretty fast. What does fast actually look like? When did it kick off?

2:36:27And obviously, this one was filed by the Biden administration. The other Google case, which had to do with Google's search distribution deals, was actually filed by the Trump administration. So this one, I think, took maybe a year from the time it was filed to the time it actually went to trial. So that's like relatively speedy. speedy. And there's a whole parade of people from the ad tech industry who testified as witnesses in this case, as well as advertisers and publishers and people from that world. But the trial ended, I think, in December, and then it just came out with the verdict today.

2:37:06And there were some points for Google, but it was mostly a loss for them. The court found that they had improperly tied some of their ad tech products together, and they have a monopoly position in what's called the ad exchange, as well as the ad server, which is the tool that publishers use. Can you break down? Yeah, can we kind of like go through a little bit more of your analysis? I'm curious to get kind of really your, I'd like to honestly hear your personal opinion on it. I don't know how much you can comment specifically. But do you think this was the right outcome? I know there was advertisers that use a platform that were testifying saying like, look, we tried to use a lot of other alternatives and they just delivered inferior results.

2:37:57But what's your read on it? Okay. So, well, I think the first thing you have to say is you have to back out and look at this industry, the ad tech industry, because it's sort of like famously complex. There's this famous chart called a Loomiscape that shows all of the players in ad tech. And so on the one hand, you could say, okay, well, there's a lot of players. That's great. But on the other hand, one of the things that advertisers and publishers have said over the years is like, it's a little too complex, right? And what an advertiser cares about is basically like finding the customer who's most interested in their ad.

2:38:30What the publisher wants is basically the best return on their ad space, right? And so the way that this industry evolved was frankly, a little bit contorted, but Google stitched together several products that basically ideally gave the publisher the ad that performed the best and ideally put the ad for the advertiser in front of the person likely most interested in it, right? Now, other players in the ad tech industry complained. Basically, they said that Google made it too hard to interoperate with different parts of its ad tech stack, like the ad exchange or the publisher ad server, right? And essentially that Google hadn't provided enough interoperability between these different parts of the ad tech stack.

2:39:18And so that was kind of the key question. Like in antitrust law, there's this kind of doctrine of tying, right? Which is basically, do you force people to take one product because they really want this other product, right? And that's like the heart of the case. And the judge today found that Google had improperly tied its ad tech products together, specifically the ad exchange, which is sort of the matching piece of the puzzle with the ad server, which is the tool that publishers use. And so I think that like, we don't know, there'll be a second phase of this trial, which will look at the remedies, like what happens now?

2:39:55What has to change in Google's business? That'll happen later this year. But to me, the other, the big kind of strange thing about this case, I will say is that like, if you look at this part of Google's business, this is part of what's called their network business, which is basically like serving ads on other people's websites. This is the part of Google's business that's actually shrinking. So it was like 16 % of their business like five years ago, and now it's down to like 11%. And you start to say like, okay, why? Well, what's happened is that that business of placing ads across the internet has just declined because people are...

2:40:36Wasn't it because of Google's product? They're doing AI summaries in some way. It's like, I don't need to... And people are on YouTube and social networks, right? And one of the things is there's so much less purchasing activity being driven by these ads because the targeting is worse. And you're there on a website usually to get information or to do something, not to... You're not just sort of passively scrolling. See more ads for other stuff, right? You're nailing all the reasons, right? Which is basically like this market that, you know, in antitrust case, you have to define what market you're talking about here, right?

2:41:05And here, really, they were talking about, I think it was called like the open internet advertising market, right? But like that's shrinking, right? Because people are spending more time on within ecosystems, right? Within Google, within meta services, within Amazon, right? And those are actually increasing their share of digital advertising. So, you know, one of the critiques, I think, of antitrust, sometimes you hear from people is like it moves too slow. It's like fighting yesterday's battle. We saw that right here with the FTC lawsuit in Meta about Instagram, an acquisition that happened a decade ago.

2:41:38Totally. I mean, it's probably very funny because like these things are all happening. This is like high season for antitrust right now in DC where I live. Yeah, totally. Because the FTC trial is going on downtown. next week the the remedies phase of the other google case starts and then this and then this one comes down so it's like high season for this stuff yeah but yeah i mean they have to yeah go ahead yeah with google specifically like what's your how does this play out what is the remedy it clearly matters to the businesses that feel and the judge says have been sort of wronged by google's actions but for the average consumer it's just you know i don't even know if it And I don't see this sort of hitting even headlines in the same way that obviously Meta's Instagram issue has.

2:42:27That's totally right. This has always been a very kind of in the weeds, more obscure case. And one of the things that is kind of interesting is that there's no doubt this is a loss for Google. It's probably a win for Google's competitors in ad tech. The big question mark in my mind is like, is it good or is it bad for advertisers and publishers? Right. Because I think on the one hand, like advertisers and publishers say some of them say like we feel a little bit beholden to Google and we don't like that. Right. On the other hand, like and this came out of trial, like advertisers say like their performance placing ads in Google is really good.

2:43:01Right. Google's putting their ads in front of people who need it. They're getting good clicks. Publishers are getting good revenue. and it could be that in breaking apart like this system that's working well for advertisers and publishers that they end up kind of regretting you know what this this whole thing right so i'm interested to see whether that happens but you're right they're like the next phase is going to be remedies trial and what happens i mean it kind of depends on how aggressively the government wants to pursue remedies against google right because you can sort of see and the judge said today basically like you have to submit initial proposals to her within like the next week.

2:43:40So this is going to come pretty fast. And so the most aggressive is like Google's ad tech business is broken up, right? So she says Google has to sell maybe its ad exchange business or its ad server business, the part that works for publishers. That would be probably the most aggressive. um the less aggressive and to be clear for the audience that's not like ad sense that has nothing to do with with that's not ad words it doesn't have anything to do with like uh they might is it possible that google could say like cool we're you know uh yeah it's not going to like materially damage the business one way or another so it's maybe a little carrot that they give or Or is that even not the right way to think about it?

2:44:30Well, in fact, there was some reporting before this trial started that Google had supposedly tried to engage the Justice Department in settlement talks. And so you could have imagined, like, OK, maybe they would have gone for something there. I don't know. I think we'll see what happens. But you're absolutely right. It's not AdWords. It's not AdSense. This is their publisher side tool and the ad exchange, which most people do not know about. Most even, you know, it's really like publishers and advertisers know this. The less aggressive remedy, I think, would be something like, okay, you can continue to operate these services, but we're going to mandate like maximum interoperability.

2:45:08Basically, like every part of your ad tech stack has to interoperate with other services, basically. And so that would be like the less aggressive version. We'll see. We'll see which one prevails. Is the consumer harm standard just like completely out the window now? did Lena Khan just like completely wipe that? Because I understand that if I'm a rival advertising platform, I'm upset about this. But if you're a consumer, there's maybe hard to prove harm. And even if you're an advertiser, you're probably like, hey, as long as the ad rates are good and I'm getting good ROI, I'm happy. So how did this come together?

2:45:41And are we just completely past the consumer harm standard at this point? I fear that we're kind of beyond it. I think in In this case, the consumers were the advertisers and the publishers. There was never really any serious allegation that this had an effect on the end consumer. Sure. The judge's decision, her argument, her ruling was that Google's link between these products was unfair to Google's advertiser and publisher customers. And so I think in her way, she was applying the consumer welfare standard. But whether that, you know, Google's going to appeal the case, right? That'll definitely happen.

2:46:22And one of the big cases that's a challenge for the court here is this case called Trinco, which is old, old Supreme Court precedent, which basically has to do with what's called the duty to deal, which basically says, like, do you as a business, even like a dominant business, have an obligation to help your rivals? And she, in her ruling today, she did what I would call a creative interpretation to kind of get around that. That is the biggest question about whether this ruling survives appeal and even up to the Supreme Court, because, you know, that that that the creativity, you call it, of her ruling may not survive appeal.

2:47:00we'll see. Yeah. Do you think that there's a, just zooming out, like a shift in the government perception around just big businesses, even if they're, they maybe are monopolies, but they're not causing consumer harm. We saw this Lena Khan taking a shot at Amazon. Like they're clearly dominant, but is there consumer harm debatable? But it's still, let's put the screws to them. And J.D. Vance kind of said the same thing with Google. He said, yeah, that's a big company, maybe too big. Maybe we'll keep some of that pressure on them, even though it doesn't necessarily fit the previous definition of the monopoly test.

2:47:39Just market concentration is enough to merit a response from the government. And how do you think the perception around that shifts? And do you have a particular take on just the idea of big companies that are dominant? Well, so it's just very interesting. So like when I worked at Google, one of the things I really admire this because I don't think it's necessarily true today. Like my boss said, look, we're a big company. We have a lot of power. We're very influential. Like, let's not try to fool anybody. Right. Yeah. I agree with that. Like big companies should absolutely be more scrutinized, be held to a higher standard.

2:48:13Like, absolutely. That's true. But what happened with these federal antitrust cases, so now every big tech company has an antitrust case pending against it from the federal government. Apple, Google, Meta, Amazon. What happened was about six years ago, the FTC and the Justice Department, they share responsibility for antitrust. They got together and they said, they basically struck a deal. And they said, OK, FTC, you get Meta and Amazon. And DOJ, you get Google and Apple. Right. Right. And so they split up the companies based on like the like the target, not the subject matter. And I think like just human psychology, once you've done that, you're going to bring a case.

2:48:57So I think what happened in those cases was like they had the target in mind and then they worked to find a case they could bring. Right. And so I think that's why, like, you know, these cases have like varying degrees of strength to them because they started with the target in mind. And then they figure out the case rather than like looking holistically in industry and seeing if there's a problem. So I don't think that was the most principled way of going about that. But but I think that that's what happened. Now, one of the things that is very interesting is that like, OK, Trump, Trump crowd, like the thing they actually care more about, most about is censorship and speech.

2:49:32Right. So it's really kind of strange, bizarre. I think today, Pam Bondi, the attorney general, she did a statement about this ruling. And she said she made some reference in there about how this is great because, you know, we're cracking down on Google because they've censored, you know, conservative speech. Like the case has nothing to do with that. But it is tit for tit. Well, I just think I just think like this wasn't the this wasn't the Trump crowd's case. Yeah. Right. But they but I don't think the Trump crowd really cares about Google. I mean, looking at other motivations, is there a world where, you know, the current administration seems very fixated on increasing revenues and decreasing costs?

2:50:14And is there a world where if you can just go around and get, I think they were asking Meta for$6 billion to settle that case. Is there a way that it's just like, hey, it was$30 billion. Oh, yeah,$30 billion. $30 billion. Is there a world where it's like, hey, like, we're just going to give out some parking tickets to try and raise some revenue? Is that like a rational thought experiment? Yeah, to me, the fact they were willing to settle it for$30 billion kind of shows that they didn't really care about the case they brought in the first place. Because it was like, all right, we'll make it go.

2:50:43And it's just like putting a price tag on it, right? Yeah, yeah. Wait, yeah, let's pivot to the meta case because you were sharing about that yesterday. You had said that the$30 billion settlement offer is seven times the FTC's annual budget, so outlandish that the point would be humiliation, not restitution. how do you think the trial went yesterday for Zuckerberg? John was sharing that he looked absolutely fantastic in a suit. He looked great. It's unfortunate that anytime you see a tech CEO in a suit, they're in trouble. They're being punished. Yeah. But what's your read on the whole situation?

2:51:24And I'm curious, did you think that the original$450 million offer was a good starting offer for Zuck? and maybe they could have found some middle ground between 450 and 300 billion because he was being kind of like run through the mud for even offering 450 million dollars but yeah he's a businessman i imagine he expected them to counter and like kind of meet the middle or something like that but um what's your take yeah i mean so you're absolutely right can't can't blame him for trying like look he like in the worst case they lose the case they're forced to spin off Instagram and WhatsApp, like if you could avoid that outcome, you know, every CEO would try to avoid that outcome, right?

2:52:08Through a settlement. So don't begrudge them that. But if he was, but if he was truly worried about WhatsApp and Instagram being spun off, wouldn't he have come in and said, yeah, we'll pay like$10 billion because I really don't want that to happen. Yeah, that's a good point. Um, I don't know. I mean, the reality is like, I think what they have to balance that against, like how confident they are, they in their own case. And frankly, I think the FTC has a really tough case there. This is a dozen years ago, right? Yeah. No, I was saying specifically, they have to feel pretty confident in their case if there wasn't a middle number that they were really wanting to anchor.

2:52:51Just for reference, Meta has$77 billion in cash and short-term investment. No, that's what I'm saying. And And they're willing to spend... Give us half. Yeah, yeah. They're willing to say... No, and they're willing to say we're going to spend$80 billion a year on CapEx. CapEx and the metaverse is going to be a huge R &D expense. Yeah, I have to imagine. Well, by the way, just because it didn't get settled now doesn't mean it won't get settled later. Yeah, that's true. And sometimes that depends on how the trial goes. Yeah, makes sense. And frankly, if the FTC at the end of this trial feels like they might lose, maybe they'd accept a lower number.

2:53:26So you kind of never know how that's going to play out. But yeah, I think the challenge for the FTC, they have two problems. One is they have to say essentially that Facebook, that Meta doesn't compete with TikTok and X. That's a problem for them. But the other is that they have to prove monopolization, basically, that if Meta hadn't acquired Instagram or WhatsApp, WhatsApp, they would have gone on to like challenge them and be great competitors. Like they were really, these were really small companies at the time they were acquired. Right. And credit where it's due. I mean, uh, Meta did a great job of integrating those companies, making them successful.

2:54:09And, you know, I, I, I'm sure you guys have seen plenty of failed acquisitions where it's just like, you know, it's like, it just doesn't work. Like it's really hard to successfully integrate a company and like legitimately like one plus one equals three, you know? Um, yeah. And what, One interesting data point. So when Instagram was acquired, they had 300 million users. And BeReal, which was the last breakout consumer mobile app, has 40 million users. And I'm going to go out on a limb and say that it's probably not worth anywhere close to a billion, right? Even for someone like Meta, who has a consistent playbook of integrating that kind of business into the platform.

2:54:52yep well they also like meta knows like they're in this business where like you have the most fickle customers ever right like no young person is on the facebook app right and then like very few really young people are on instagram right so like social social networking is a very like kind of like generational thing right and so it's very hard to like maintain kind of the zeitgeist in in their business for like multi multiple generations i think that's like a structural challenge for them. So anyway, so I think I think FTC has has an uphill battle with that, with that case. Do you think do you think these are kind of the wrong problems to be working on generally as we like, you know, the entire internet is about to be steamrolled and economy is about to be steamrolled by AI?

2:55:38Like, do you think it's a big distraction to just be arguing, over acquisitions that happened more than a decade ago when it feels like we have this revolution in many ways that has already started? Yeah, I think so. I mean, look, I think a lot was very popular for politicians to say things like, we got to beat China in AI. Well, who do you think is going to do that? It's going to be Google, Meta, OpenAI, right? It's going to be those companies, right? Yeah, arguably a Meta without an Instagram is a much weaker product. They can't invest as much in CapEx. They can't invest as much as in Llama.

2:56:17Like maybe Llama 3 doesn't get built because they're making half as much cash flow or something. There's a bunch of interesting ways where you get a piece dividend from the market concentration. That's the question about monopolies. Like if there's no consumer harm, the product's free and it's really good and their whole North Star is like, let's please the customer. Like Bezos always says, customer comes first, all that. But then you also get these crazy dividends when they go and build cool stuff out there. It's kind of an awesome system, even though it makes it hard to compete with them. But I don't know.

2:56:48What's your take? Well, I guess the way I come to it, I tend to think of all of the big companies intensely paranoid about each other. Sure. And they're always getting into each other's spaces too. Oh, yeah, totally. And so to me, that part of competition is sometimes overlooked in the way I'm like, yeah, these guys are at each other's throats. Yeah, yeah, yeah. And that's good, ultimately, because then that competition is leading to them add them to add features and like good for product innovation. Yeah. Yeah. I mean, every single big tech company overlaps with another one in one way or another, whether it's Amazon overlapping in ads now, you know, Bing has a search engine, Google has a phone, like everyone's in everyone's spaces constantly.

2:57:27Yeah. And it's inevitable. I think that's great. Yeah. I think it's wonderful, you know? Well, it's been great chatting with you. This was fantastic. We'll have to have you on the next time that there's a big FTC case or big case. Yeah, just DM us when you think there's a story that you're excited about talking about and you can be one of our Hill correspondents. Yeah, congressional correspondent. All right. This is fantastic. We'll talk to you later. Great to meet you. Well, we should close out by talking about another acquisition. OpenAI is in talks to buy Windsurf for$3 billion. What do you think?

2:58:00Future Instagram. OpenAI and Windsurf declined to comment. future uh future instagram situation uh look are you long this situation uh takes me back to talking to sarah guo and she said look at what the foundation model companies care about and one of the things she talked about was coding yep it was just she said like if you look at all their actions everyone besides grok seems to be very and just xai broadly seems to be very oriented around code generation. And so I don't think this should be surprising. There was also some reporting that opening, I had allegedly tried to buy cursor on a couple different occasions.

2:58:44And then in that time, Windsurf just kind of took off, really grew revenue quickly. And yeah, if this deal gets done, I think it makes a lot of sense. There was people pushing back and saying, okay, how does a$300 billion company not know how to build an IDE? There was a good post about that. But my take on it was like, my take on it was just like, you know, it's probably a timing thing. I'm sure that OpenAI could build a fantastic ID if they wanted to build it from the ground up. They're also just growing the organization so fast and they're becoming a product company. People think about OpenAI as like, oh, it's this like 10-year-old company sometimes.

2:59:20But it's like, no, they're seeing insane growth. They want to hoover up talent and people that are good at designing products and just integrate more and more into the system they're building. And I also think there's something that very real is happening, which is the underlying models are starting to not perform as well in places like Cursor and Windsurf. And it's possible that's an accident of the way the models are evolving, but it's possible that verticalizing is what makes sense over time. And I think that they've done a good job of, OpenAI has done a good job of filling that gap of like the empty text box that you start to prompt like Google search.

3:00:03Like the first ChatGPT app was like a direct Google competitor in many ways. You talked about it, the knowledge engine. But there are clearly going to be several layers where the LLM will be vended in. And coding is a distinct one from the Google search box. And so you've got to be in the ID. You've got to be in the Google search box. You've got to be in a few other places like in your camera role, essentially, is where you ultimately want to be for image manipulation, image generation. Of course, a lot of that will happen in the ChatGPT app and in those chat workflows. But let's go to Dylan Patel because he broke it down a little bit about why he thinks OpenAI is buying Windsurf.

3:00:42What's the strategy behind the revive of Codex? Cursor and Anthropic had a mutually beneficial relationship, but labs realized that controlling the main application of a model is as valuable as owning the model itself. With this acquisition, OpenAI gains greater ecosystem control and can build better products. Anthropic's Claude code was very well received. Keen on not missing out, OpenAI released Codex CLI, which is strikingly similar as a product. Both of these products have terminal level access and code editing capabilities. The competition goes beyond just products. OpenAI opened up free access to the plus tier for university students just one day after Anthropic announced their education initiative in early April.

3:01:21A little fast follow. So the game is on. There's not a single multi-billion dollar AGI market. There are probably many pockets of value that will be discovered. And the interesting thing here is that I think it's a narrative violation. It was actually fine, potentially, to build a wrapper. In many ways, these companies were derided early on when they launched as, oh, it's just a wrapper. You're going to get eaten. This is going to get one-shotted by the foundation models. Well, it seems like there at least is a way out via an acquisition. These companies are valuable. We've seen the ARRs grow.

3:01:56And then also, I think it's interesting that there are – you can probably think of like a power law distribution around value creation at the application layer with like the blank box in ChatGPT, like just go and talk to the LLM. That's probably like the most dominant. That's the Google, right? But then Windsurf, Cursor, Devon, these are all super valuable in that category. But then there's probably a really long tail and there's probably some value in the application layer deep down. So I think it's another maybe bull case for rappers, depending on how you're structuring the business. You probably are not going to disrupt OpenAI with a wrapper, but you could build a very, very great business.

3:02:34Yeah, and for Windsurf, I mean, I'm sure they, in many ways, would have loved to just keep building and building and building and building, compounding. But they also, I'm sure we're very aware of the competitive dynamics. And this is one of those things, right? When you talk to, we talked to the founder of Captions earlier, right? A fantastic app that you're using all the time. Yep. how far away are we from you being able to upload a video to chat gpt and just say like it's possible yeah you're already a pro subscriber right and you're you're like okay i have this but at the same time with the cursor analogy like it's possible that there are more features and you just stay ahead long enough to lock in that customer as like well i like their ui i'm familiar with that like this is the same thing with like davinci resolve is free in many cases and people don't I would just say buttons are in a certain place and the certain features that are nice.

3:03:29I would just say like people. you know people were were uh i even saw daniel who we had on the show talking about how yeah obviously value accumulates to the app layer. But I don't, you know, I still think we're going to see this back and forth battle where, oh, value is accumulating to the app layer. But OpenAI has an app. Like models are everything apps, right? You can ask it to do something absurd. Yeah. You can ask it to now go, you know, do the, you know, book you a flight, make me a video, write some code for me. They are a new form of everything app. Sure, sure, sure. And I think that big companies, even if you have a lot of traction today, you need to look at how fast they're evolving.

3:04:15There's a funny post by Bern Hobart here. 03 is a quality improvement, but at least on financial topics, it's definitely the frattiest model. Returns don't increase or rise. They get juiced. And retaliatory tariffs are described as China-blasted hogs and soybeans. This is great. This is my only real complaint about frat GPT is that it hyphenates too much. But other than that, it almost perfectly captures the style. So funny. Blasted hogs and soybeans. I love it. I love it. Well, we got to tell you about public.com. Investing for those who take it seriously. Multi-asset investing. Industry leading yields.

3:04:50Trusted by millions. So get in on the action at public.com. What else? I mean, Dan Shipper, he kind of had the most viral review of O3. He says it's absolutely amazing. It's already his go-to model. fast, agentic, extremely smart, and has great vibes. Some of his top use cases, these are things you can kind of steal from him and adapt into your own workflows. It flagged every single time I sidestepped conflict in my meeting transcripts. It spun up bite-sized ML course that pings me about every morning. It found a stroller brand from one blurry photo. That's cool. It coded a new custom AI benchmarking record time.

3:05:30It x-rayed an Annie Dillard classic and found writing tricks I'd never noticed before. It even analyzed Evry's org chart to tell me what we'd be good at shipping and what our weaknesses are. So he's having a lot of fun with it. Anything else here? Oh, A24. A24 Music. Yeah, they launched a music label. That's really exciting. And they're getting venture-backed, right? Yeah. Didn't they take some money? From Thrive. From Thrive. Very cool. And then, gosh, I feel bad for blanking on his name, the guy who was at Adobe. Oh, yeah, Scott Belsky. Belsky. Yeah, he went over there. Belsky's over there. incredible organization i mean people have been so bearish on hollywood and the idea that you could build a new studio violation in a special way is just fascinating to me and they've been able to do it really well all the a24 films have been fantastic taste it's taste and it's it's clearly such a interesting differentiation and now they're getting and i wonder i'm sure they'll be publishing about who knows i'd be cool if uh belsky was involved with this i wonder if there's an ai angle yeah i don't know music it would be kind of silly to launch a new record label and that does not embrace the that's not embracing that so yeah um uh anyways deal ceo we got to talk about this we've done two episodes on the deal rippling drama uh but matt levine says has anyone booked a demo with deal recently just to see what lines their salespeople have been fed re the situation it's a hilarious manifestant manifestation of natural versus corporate personhood that the entire exec team are wanted fugitives but the rest of the company just keeps chugging and that's like yeah yeah this is something that's probably missed is like so the deal ceo has been they've been trying to subpoena him and he's maybe in dubai and it's very controversial about whether or not he'll stay at the company because there's all these allegations not much proved yet but the i mean the the signed affidavit was pretty crazy spy turned on them the spy turned on them it's not looking good but what does that actually mean for the company like the crazy thing is like even after all the zenefits drama and and parker stepped down like zenefits didn't do well, but it did continue as a company for a long time.

3:07:30People don't like ripping out their HRIS systems like ever. It sucks. Yeah. I mean, I think the fact of the matter is I imagine Rippling has an extremely strong sense of who uses deal, right? For sure. There's a lot of companies in the world, but there's not a lot of like, you know, there are a lot of high value enterprise targets, but I doubt there's many at this point that Rippling hasn't had like some comms with that have confirmed like okay they're using deal and so taking the line right now to to basically have your sdrs bdrs you know sales leaders reaching out to these people that you've had a point of contact with and said hey you know i know you're running on deal the years you know we should you know consider having you guys switch over and um and then just sharing like a headline that's it's kind of like it's fair it's uh it's it's not it's fair game yeah it is crazy that they haven't responded even, or at least that we've seen.

3:08:26Yeah, I expected them all to step down purely because it's probably in the long-term best interest of the company. Yeah, I thought so too. It'd be interesting to see what's the actual board structure, because they've obviously raised a lot of money. They probably don't own more than 50 % of the shares, but they might have super voting or something or board control. Who knows? But even then - But still, if - Yeah, and just in your self-interest of preserving the financial capital. you if if all the pressure's on you get out it's not like you're necessarily going to lose all the value there you could very easily maintain some of that if the company survives yeah again the other thing is the other thing is thinking about uh the example i think you gave early on which was uh you know if somebody comes to you and they go john you're using michelin tires did you know that michelin was spying on bridgestone you're gonna use those tires i'd be like that sounds like a hassle and you're like okay like you seem way too interested in the tire market i'm gonna keep you know driving my car thank you and so it's very possible that you know who knows maybe it doesn't have as much of an impact but yeah i'm sure it's going to have an impact from a uh recruiting standpoint which will have an impact long term yeah right well i want to close out with two more posts uh congratulations to raul from julius he announced collaboration He was talking about this Figma for data analytics.

3:09:50He also put out a cool photo of him teaching data analysis at HBS. He's been fantastic. It was great having you on the show. I love watching the videos he puts out. He always looks like he's about to smile, and then he doesn't. Yeah. But I think he's just smiling inside because he's - Yeah, he's just happy. He knows he's cracked. It's great. And they're building a great product. And so, I mean, this makes so much sense. You build an IPython notebook, or you do some sort of data analysis. You want to share it with all of your team members. And you want all of your team members to be able to edit on the same file and the same analysis.

3:10:20And this was interesting. John Conkle called out that we posted back on February 4 of this year, Masa dropped his crystal ball while pitching the SoftBank OpenAI partnership with Sam in Tokyo last week, sending many analysts into a panic. Has he lost his vision? Was this an omen? Only time will tell. and that was basically the top. John actually commented back and said, time has told hypothetical performance of a tactical short-selling strategy triggered by the very impressive Stargate presentation and the crystal ball drop. There you go. Well, we should close out with some news that will be very important for all of our listeners.

3:11:02Gulfstream has announced the G800 certification today. This was rocking the group chats. Yes, everyone was talking about this. So 8 ,200 nautical miles at Mach 8.5, 7 ,000 nautical miles at Mach 0.9. Max speed increased to Mach 0.935, all in the same body as the G650ER, but faster and longer range. I'm sure a lot of you folks who are listening are going to be upgrading. So call your Gulfstream rep today because these are going to be flying off the shelves. Any other advice? Yeah, I mean, you're going to want to get ahead of this. Yeah. This thing looks fantastic. It really does. By the time you get the jet and then outfit it, it's going to be a little while, but it'll be worth the wait.

3:11:47Yeah, it's a lot of money, but it's a lot of jet. And again, you can sleep in a G800, but you can't fly a house. That's right, John. And it's going to be a few more years until Astra Mechanica can get us the Gulfstream equivalent of a... Yeah, that's a good way to justify this. You're just holding yourself over for the Astra Mechanica, the Boom, the Hermeus, one of those guys. But in the meantime, pick up a couple of these, rotate them out every few years, and just use this to get around. Anyway, that's our show. Thanks so much for watching. Thank you, folks. Hey, this was a much more stable show.

3:12:23No cyber attacks today. No cyber attacks. This was great. Thank you to the brave soldiers and cybersecurity experts who kept us running. We'll see you tomorrow. See you tomorrow. Thank you.