SpaceX Takes Off, Cursor's Wild Rise, Snap Bets on AR Glasses | Diet TBPN

0:00The big news is that SpaceX ran like absolute crazy after hours last night. I kept getting push notifications and thinking that that can't be right. And then I would double click in, check a little bit, and I would say. Yeah, the headlines are crazy. Yeah, so the big one is SpaceX. There's so many of it.

0:21John Coogan:It's just like it's passing this company, passing this company, passing that company. And you're like, whoa, this is a crazy, crazy time. So SpaceX sitting comfortably in the top five companies. You got NVIDIA at$5 trillion, Alphabet and Apple right around$4,$4.5. Then Microsoft and SpaceX neck and neck, just shy of$3 trillion. And it basically makes their cursor acquisition free. They paid$60 billion in new stock for the company. And their market cap, SpaceX's market cap, more than quadrupled More than added, more than 4X'd the price of a cursor acquisition. I believe they had until Q4 to actually pull trigger on the cursor deal, like they built in a window.

1:05I bet you there was some terms that weren't public that cursor would have wanted to make sure that they got in as quickly as possible. Sure, sure. Because the idea has done really well. Who knows where SpaceX will net out? I mean, I thought we'd be at$2.4 trillion by the middle, by basically the last hour of trading on Friday. I was incorrect at the time, but it's obviously continued to run. And there was another scenario where SpaceX could have effectively acquired Cursor at an even higher valuation. But I think it's a great, fantastic outcome for the Cursor team. Obviously, OpenAI is a big cursor investor, Thrive, A16Z, Koto, and others that I'm unfortunately forgetting.

1:54What was Remy saying about this?

1:56John Coogan:He said it's the biggest, in the past five days, we've seen the biggest VC-backed IPO ever and the biggest VC-backed strategic sale ever. We've never had an M &A of a VC-backed company, young startup, north of$50 billion. $60 billion is so, so big. We sort of lose sight of it because we're talking about$1 trillion for this company,$3 trillion for that company. But$60 billion is beyond a home run. And it happened in an M &A, which is crazy. And there's, I would assume, a large number of the retail investors investing in SpaceX. We're not necessarily even that familiar with Cursor up until today.

2:39I did see the headline today. If you're waking up today, you're like, wait, SpaceX just acquired one of the hottest AI companies in the world with billions of dollars in revenue. Like, this is so bullish. Obviously, a lot of the more institutional investors or people that had been following the company privately were well aware that they had the option to do this, that they would almost certainly take it.

3:04John Coogan:Yeah. The takes are all over the timeline. Quinn Thompson says, this is brilliant corporate finance. Use your newly printed, low float, retail inflated currency to acquire real businesses ahead of the lockup expiring. probably the most creative, accretive way to sell as much equity as possible into IPO pump. I wonder what acquisition is next. That's very interesting. Nick Carter fires back and says, you'd think the people buying the equity would also be aware of this. And that's a good point. But the question is like, are there more acquisitions in the pipeline? Because Tesla has not done a lot of acquisitions.

3:38John Coogan:Elon's always been a build, not buy operator or founder. But Tesla itself. Yeah, that's a very different scenario. What I'm talking about is like there are companies, Meta is very acquisitive, Google, Apple. Apple's like on the smaller side, but they still do deals more frequently. It would be very interesting if we're seeing one deal a month and he's sort of putting together the pieces of buying up Neo Labs and compute capacity and Neo Clouds and rolling everything up. That would just be a completely different operating philosophy. but given where the stock is, given how smooth this deal went and where the market cap of SpaceX is, it's not the craziest thing.

4:20John Coogan:It would be a big pivot in his strategy though. Business Insider has a deep dive on Cursor's wild ride. Michael Truel didn't pay himself for years. Interestingly, Cursor once made up 40 to 50 % of Anthropics revenue. That is a crazy gyration in the market. It just shows you how quickly things are changing. Went from, you know, it's all cursor. That business is just funneling to cursor. Cursor is the front door to this business. Then it's like, oh, it's all these hyperscalers that are spending a billion dollars, half a billion dollars a month. And so the whole landscape is changing. Nothing tells that more than Anthropic telling cursor that Claude Code was just a research effort.

5:00John Coogan:This goes back to the Dillon field, like where they consistently can it, or maybe they really just did think, hey, yeah, this is just a research effort. Like you do you. and then realized later like, whoa, whoa, whoa, we need to be a player in this. We cannot be in the middle of this situation, so we've got to do our own thing. Owning the end customer relationship. And so wild, wild ride. Yeah, similar to I think the messaging to Figma and Canva around the Robbix design tool. Yeah, it's tricky. Every AI company is a general use technology. They're using it for everything. There's questions about, like, will you maintain value if you're in the token path?

5:38John Coogan:Do you need to be, like, do not build a company that depends on the models getting better. But if the models get really, really good, like, what can't they do? And so constantly we see every company competing with every other company as, you know, every hyperscaler has an LLM at this point, and every SaaS product has other products because they can launch features faster. And so the competition is heating up across all these different companies. Next time we have Michael on the show, we got to ask how he paid the bills for all those years. What was he doing? Crashing on couches or something? Got to ask.

6:11Taking out massive loans against the company, maybe. Ryan Peterson says with yesterday's 20 % SpaceX pop, Elon made more money than Warren Buffett made in his entire career.

6:23John Coogan:These headlines are going to get crazy. because I mean, I see some of them getting community noted, but it's like a single day will move more than like all of Bill Gates' current net worth, that type of thing. Those headlines are going to pop off consistently. The crazy one is like there's going to be down days. Like there's going to be just randomly. Elon lost more money today than any person in history combined. He lost more money than Brazil makes in a trillion years, you know, because like whenever the big numbers get contextualized, it's always very entertaining. meaning it was up another 14 % after hours, though.

6:57John Coogan:But the numbers are staggering when you're in the$1 trillion club. JB says, is this everyone's first IPO? It's silly now as it approaches Amazon valuation. Well, we passed that. But the float is low until the lockup of nearly every retail investor on Earth wants to be involved. You're going to get stupid moves. Then the float opens up and all the retail people are stuck for years. What does that mean? Just say you haven't seen the MassDriver demo, buddy. Or the next data center. I mean, that's the really interesting thing with Cursor. There's all this debate over like they have a deal with Anthropic, they have a deal with Google.

7:31John Coogan:Cursor obviously wants to compute. But talking to Gavin Baker, it sounds like there might be a lot more terrestrial compute coming online in the very short term. And that is valuable. They're monetizing this very effectively. And so you could see a short-term revenue ramp just driven from sort of the boring NeoCloud stuff that monetizes really well. and then that provides, you know, it's like the Model 3. It's going to be the economic engine that provides the capital for data centers in space, mass driver on the moon, all that stuff needs fuel for the fire. Anyway. Adludlow has some data. SpaceX, the current approximate price to sales is 150x.

8:10Amazon is 3.6. Microsoft, 9.2.

8:15John Coogan:See, people read this as a bear SpaceX take, but imagine if Amazon started trading at SpaceX's price of sales. Yeah. It'd probably be like a$100 trillion company. This is from Evan Spiegel. The Germinator. Yes, and the Germinator reporting. The Germinator says the Snap specs are official. $2 ,195 all-in-one AR glasses that Evan Spiegel has dubbed the next computer. $2 ,200. That's almost Apple Vision Pro numbers. That's expensive. It's going to be a lift. I feel like it's a lot. It seems like a lot of money. It's got to be very... Apple Vision Pro starts at$3 ,499. So a bit of a jump. But this is a product that seemingly is trying to compete in the realm of like a...

9:04It's a mobile device. It's naturally a mobile device. Unlike the Apple Vision Pro, which obviously is some viral images on launch of people walking around with it.

9:13John Coogan:I'm just thinking about, like, there are a lot of Apple fanboys who buy every... Get this. What? Get this guy on right now. What? Pull him up. Hey! What do you think? Are you buying the Snap Specs,$2 ,200? Are you spending your paycheck on that? I mean, I think they actually do look really cool. I don't know. Like, I was looking at some of the product demos earlier. Some, like, the game features look really cool. There's, like, ping pong. Yeah. 2.2K is, like, a little pricey, personally. But if you can watch Lawrence of Arabia from start to finish. If we traded you your phone for a pair of these for a week, would you demo them for a week?

9:51No phone.

9:51John Coogan:No phone. Do you like texting on it? Can you call? You can go without texting for a week. You have Lawrence of Arabia. You don't need a phone. That's true. I can watch Lawrence of Arabia like five times a week. What's the battery life for a week? Snap, specs, battery life. Specs, battery life. I got to know. So what happened? Wasn't there some conversation that specs might spin out? Up to four hours. That's Lord's Arabia right there with a little intermission. If I remember correctly, there was some rumors that specs would be spun out. I remember at least one article. That has not happened. I don't think so.

10:29And so the stock is down 7 % today. I don't know.

10:35John Coogan:The trick is that you have Apple fanboys who have a lot of Apple fans, but some of them are wealthy. Some of them buy every product. They buy a new iPhone every year. They buy the top of the line MacBook. They have the Mac Studio and the Mac Mini just for fun. And like, that's a whole class of consumer for Apple. And so when they come in with something that's a little crazy, like a$10 ,000 gold Apple watch, like they'll sell a couple of them when they come in with a$3 ,000 VR headset, like a couple of people will just be like, yeah, I'll give it a try. When you're talking about a new company entering hardware, Meta, I think did a better job coming in with like, yeah, it's just a pair of sunglasses.

11:16John Coogan:You need a pair of sunglasses anywhere, anyway. We put a camera in it. We put a camera in it. It's$100 for the version that you know and love, the Ray-Ban Wayfarers that don't have a camera in them. Ours are, add a couple hundred extra bucks. It's still something you could give as a gift. And Meta can afford to lose money on every single device effectively forever. Totally. Yeah. And so it's a lot easier to get into that meta ecosystem just saying, yeah, throw a camera on my Ray-Bans. I'll give it a try. Maybe I'll churn. But if it's collecting dust in the cabinet or in the sock drawer, you're a lot less like, ah, I really got burned.

11:52John Coogan:And the Apple fanboys, a lot of them took them back. But they're like, yeah, that was still a cool experiment. Except me. Because I got to watch. Well, Tyler, once you're back in town. Wait, what was that? Lord of the Rings extended cut. I think that's even longer than North Arabia. You can't watch the whole thing. Let's do this. Once you're back in town, let's pick up a pair. Tyler can live with them. We won't say a week. We'll say 48 hours. Exclusively. Exclusive. Do everything. I think you need the phone to do anything. I think a lot of the compute... 48 hours, I think, is actually not very hard.

12:26John Coogan:That's just a digital detail. That's like one weekend. You're down? I could do a week. I could do a week. That's like 10 showings of Lawrence or... I'm not asking you to do a week. If you want to do it, we can do it. Okay, he's doing it. I'm here in four weeks. I'm here in a full month now. Four weeks. All right, it was great to see you, Tyler. We missed you. Great to see you. Ultra Time's not the same without you. Yeah, it really is. John and I were kind of messing around before the show, and we realized when Tyler's not here, there's nobody super close by to laugh at our bad jokes. Yeah. Spiegel called the specs both very, very wearable and highly capable, which he said gives snap an opportunity in a market that's focused on either very large and clunky headsets that are super capable or very lightweight glasses that really don't do much.

13:08John Coogan:So it is interesting. I was reading the coverage in there's some videos here in Upload VR and it shows sort of the process of this. The HoloLens 1 from Microsoft 2016 was 580 grams. Snap specs are 132 grams. So they are light. Now, the meta Ray-Ban display is 70 grams, so about half as heavy. So these are heavier, but they're nowhere as heavy as a HoloLens or a real VR headset. And it checks a lot of the boxes on field of view, and we'll see. We'll see what the developer ecosystem's like. I hope someone comes up with some interesting thing. I hope that there's a YC company that builds on top of this exclusively and has some sort of breakthrough user interface experience, some killer use case that comes from the community.

13:59John Coogan:Yeah, gotta wait to see how many of these sell. Yes, that will be very. I mean, even with a million sold, it's not a very big user base. It's a lot of money. Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents, whether you're writing code, analyzing data, creating content, or automating business workflows. Codex helps you move projects forward from start to push. Over on X, Daniel's advocating for banning social media for over 65s. Yes, yes. Yes, the inverse of the UK's project or the UK's initiative to ban social media for under 16 over 65. I think that would ruffle some feathers.

14:36John Coogan:That would probably be pushed back on more by the social media companies because the purchasing power from 65 onward is so high. There's so much wealth with the boomer generation. That would actually be very devastating to Facebook and YouTube and TikTok even. The young folks, I think all the social media companies have an incentive to get those users as early as possible, keep them on the platform. But I think more than anything, they want a level playing field. So Connor Hayes can duke it out with every other social media site as soon as someone turns 16, try and acquire them, try and get them on board.

15:17John Coogan:But we'll see as that rolls out and where the guardrails are set. John Frank, everyone is doubting Meta. Spenders are mad at bugs and model changes. Investors think they are missing AI, like the AR saga, all over again. But as a large-ish customer who will spend something like$100 million with them this year, Meta is working and no ad space comes close to their level of scale. Don't doubt the Zuck. The fact that you can buy that you could have one SpaceX or two Metas for the same price is pretty unbelievable. and certainly not something that most people would have guessed even a year ago. Yeah, it is a crazy, crazy situation.

15:59At the same time, rockets, they're inspiring.

16:03John Coogan:And social media is sort of like... Totally. I mean, I can see what we got here, but it's still surprising. But yeah, obviously, fantastic business. And yeah, people probably need to reality check with Sean Frank because he's in the trenches. He understands the business better than most. So thank you for tuning into TBPN today. It's been an honor and a privilege. Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter at tbpn.com. We'll see you tomorrow. Goodbye. Cheers.