Surprise Visit From Martin Shkreli, Range Rover Launches New Logo, Timeline Reactions | Martin Shkreli, Joe Weisenthal, Joseph Krause, Nirav Tolia, Mike Knoop, Kyle Samani

30:35wow and you know it's funny How did you afford it back then? What's that? How'd you afford it back then? Isn't it like a year? I worked at hedge fund. It's 17, very nice. I worked at 16 actually. I worked for Jim Cramer's hedge fund. And I worked at a tiger cub and I started. Wait, so we need the backstory on Jim Cramer. So apparently he was just, he would get so stressed out running the hedge fund that he just was like, I'm just gonna become a media guy. Is that like loosely correct? Yeah, 100%. I mean, so we made 23 % average annual net returns. Wow. So he was good. That's amazing. Narrative violation.

31:12I love it. He was a very, well, you have to think about what investors looked like back then. It was a very different world. Information arbitrage was a thing. Gaming Wall Street's like upgrade and downgrade system was a thing. So I will say he had extremely good instincts. anytime he seemed to buy a stock for the long haul he didn't do that great but he was extremely good at I'm not sure you would want somebody else managing your money because he was just so careful and in 2000 we were up like 35-ish percent so I saw the dot com meltdown, it was a lot of fun I shorted some of it myself and it was a great time That's wild and then what was the story Which Tiger Cub were you at?

32:00What was the backstory there? Yeah, so after Tiger, and just before I get to that, Kramer was absolutely nuts, right? So he would take a computer monitor and just throw it at you. It wouldn't be like one of these playful, like, oh, I'm just going to throw it at you and you're going to get out of the way. He'd aim dead center for you with force. With force. He'd be like, bro, you almost just killed me. He's like, lucky I did it. Did you deserve it? Did you deserve it, though? Yeah, let's steel man this a little bit. What were you doing wrong? I wasn't doing nobody was doing anything Everyone says that when they get a computer monitor thrown at them You're not beating the allegations.

32:39I think part of it is just trying to like he would yell things like this is a foxhole and And the idea was that like we were at war with the market You know, like if you weren't if you you know, this is World War two If you're not in here trading stocks with us and trying to get an edge or whatever that means, trying to make a dollar, if you're not taking this seriously. Going to war, I just have to say, if you wake up every morning and say, I'm going to go to war with the market versus I'm going to dance with the market, the approach of going to war sounds very, very, very stressful. I've worked with so many people over my career, and I've never met a person that amped up and crazy.

33:21and it motivated you. I mean, it made you want to deliver, but it also scared the shit out of you. And the guy is like very temperamental and, you know, but he was, he was extremely good trader. Like I said, you know, he, I think his worst year was like down 5 % or something. It was like, you know, he was, it was pretty solid. And he was like, if I don't quit, I'm going to kill somebody. Yeah. He basically said that. Yeah. I think he said that, you know, if I keep doing this job, even at a comparatively young age, I think he retired at 40, that, you know, I'm going to have a heart attack or something like that.

33:49And, you know, I ended up going to a Tiger Cub after Tiger wound down. A few things happened. So Julian hired Chase, obviously, and we know where sort of that came, what happened there. But Julian wound down operations, and he seeded a couple of guys, and he kind of wanted to be in the seeding business where he'd give you$50 million and take a part of your GP, like maybe 20 % of your GP or more. And he'd help you raise money, give you advice, this and that. And Alex, Julian's son would help. Julian passed away recently, as you know. But in the Tiger heyday, when they managed$15 billion or something, there were two principal tech guys, Larry Bowman, who was a bit of a legend.

34:31But it's a name nobody really knows because he was a legend in the 90s. But he has a family office and he kept investing and things like that. So he started Bowman Capital. And then Steve Shapiro, who was my boss, started Intrepid Capital. So I worked there. It was a$2 billion fund. I was a video games analyst. The way I could convince Steve to do biotech was I had to cover software too. So I covered interactive entertainment, enterprise software, and biotech. And it was a lot of fun. And, you know, the Tiger Cubs style of investing has kind of died out a little. Were you there for the Strauss-Selnick buyout of Take-Two?

35:11So we were one of Take-Two's largest shareholders back then. No way. And, you know, I think it's a short now. I think that I didn't 100 % get your question, though. You were saying something about buyout? Yeah, well, the story that I've heard is like Strauss Zelnick went to the board and basically said, like, this company is mismanaged. There was an FTC lawsuit in the works, an FCC lawsuit in the works. And he was like, I'm a beast. I've run big Hollywood studios. He was like JD, MBA type, like really clean cut, amazing manager. and basically said, like, you should install me as the management here.

35:51And so he didn't really do like a classic buyout. He just appealed to the hedge funds that owned all the shares and said, I would be better and raised his hand. And they said, yes. And he came in, cleaned everything up, and they went on a great run. And so it's just a fascinating story because you don't hear about that type of thing happening that much. At least that was my understanding of the story. Yeah, no, I think that's right. And then Bobby from Activision was sort of the same story. I remember meeting Bobby in our office, and Activision was kind of a micro cap. Wow. Or kind of a small cap.

36:25And he built it from, this was 2004 and 2005, by the way. Yeah. And he built it into a$44 billion sale, partially thanks to Lulu. That's true. It was an exciting time for video games. One of the things I learned, you know, all my U.S. counterparts at hedge funds were like very confused about the stock they traded because there was only like four or five publicly traded companies. And I would go to people and say, well, I'm long Nintendo and I'm long, you know, some of these weird Japanese companies like Square Enix or Konami or, you know, these. And U.S. hedge funds just ignore this stuff because it's like, oh, it's Japanese.

37:00I don't know. I don't have anything to do with it. So a lot of glory days, but the glory days I'm interested in now are amongst building my startup. And again, I think we understand financial information better than any San Francisco nerd. And I think that one of the reasons we're active investors. Yeah. So. It's interesting to like we're enter, you know, we're very clearly in this period now of just like hyper financialization things, you know, the markets trading on vibes trading on your stream day to day. you can now, you know, as like stable coins explode and people have more assets on chain, they'll be able to make a couple taps and go like 100x long at any given period of time.

37:51Like the internet is like changing capital markets and it's increasing volatility. And so how much of your new company is trying to like lean into that when Bloomberg Terminal would have been like, like more like I've never personally used a terminal but I imagine it was more like hey these headlines are hitting and this this kind of information is hitting PR newswire but today by the time something hits PR newswire a stock might have might have traded down 20 percent before that point so how much is your new your new startup kind of I imagine you're leaning into the way that you kind of maybe your next 20 year vision for capital markets.

38:35Right. You know, what would Mike Bloomberg do if he was 30 years old now in 2025? You know, I don't think I think Chamath said that, you know, I think in a recent episode he said, oh, it's this hundred billion dollar thing just waiting to be toppled. You know, anybody can come in. It'll it'll it'll drop like a house of cards. Not only do I think that's not exactly true, but I think the bigger picture here is that a well run financial information company could and should be worth a trillion dollars. so most of the people so i met bloomberg in 2005 and by then he basically retired he became mayor he was mayor for 12 years then he wanted to be president uh i had this contention that i think mike is the richest person in the world and it comes from not only he's got about 13 14 billion in revenue almost all margin um so if bloomberg were to be sold maybe it could get 200 billion or if it were floated.

39:28But not only that, he's got this family office. And very few people know about this, but he's taken the Bloomberg dividends and pumped it into a family office that basically Carlisle and all these guys, you know, the Warburg Pincus, all the private equity guys like KKR, they go to him first. And he tosses in like 500 million in each of these. He's an anchor investor in like every VC, every private equity fund. And the guy's compounded that money. So he could be worth 400, 500 billion. And very few people know the Forbes list is, you know, the Forbes list didn't know about Jim Simons until heavily manipulated five years ago.

40:03So I think, you know, it just in terms of, and it fits his brand that he, he, he would not be the guy like, you know, sending a message to Forbes saying, Hey, like you guys know you have this wrong. Really? I think you should apply this kind of, you should apply this. You fight to get off the list. Like Trump famously fought on, fought to get on the list, but you know, there's, there's an R either way. What do you think about the meme where people say like, oh, it's not, you know, the next, like the value of the Bloomberg terminal isn't just the data. It's not going to get one-shotted by AI. It's really a social network and the value is in the chat.

40:37I get so mad because again, you know, SF people don't know Wall Street. If you haven't been a trader on Wall Street, you have to STFU. Like it's just not, you know, this isn't your your lane, like you have to talk to users. I was in a hedge fund yesterday, one of the bigger hedge funds. They put like 20 people in the conference room and we talked about what they actually need. And, you know, social network is part of it. Again, Bloomberg's worth 100 billion because they have a very good social network, which is true. They have decent financial information capabilities and a couple of other things, but they don't have the whole picture.

41:12And what I wanted to say about Bloomberg kind of quasi retiring was that he basically quit at the exact top for fundamental long short or fundamental investors, quants started taking over Wall Street by that. So today of the top 15 to 20 hedge funds, 85, 90 % are quants. So Bloomberg does no quant offering. They don't do it. And all he had to do was stay employed instead of wanting to become mayor. And I'm sure he would have been selling Jane Street and Citadel and all these guys, DeShaw, et cetera, software, instead of everybody having to make it themselves. Imagine writing your own ERP or writing your own, you know, CRM.

41:47That's kind of what Wall Street has to do. And it's pathetic. Nobody wants to do that shit. So when you say quant, is there a bifurcation between like high frequency trading and just quantitative trading? Yeah, and I think it's going to get my goal actually is to make it more of a spectrum. So the fund I was at yesterday, I said that you guys can do what Renaissance does. You know, it's not a secret anymore. It might have been a secret in 1995, but the amount of kids that have come and left every one of these firms, hopping from Jane Street to Citadel to the next shop, everybody knows what everyone's doing.

42:23It's just a question of your risk tolerance, your leverage. Execution is very important. But I think that trading – the stock pickers are kind of going the way of the dinosaur. And I think by moving up the power curve for Bloomberg, helping people become quants, you know, the quant industry has sold, I think, this tremendous lie. And again, these are customers. You know, I love those guys. But I think that is in their vested interest to tell people that look at this blackboard with all these math equations. There's no way you guys could understand this. You're too stupid. You have to be an IMO winner.

42:54You couldn't possibly come here and make billions. But we saw what Jane Street did. Well, I think certain VCs like to do this too, where they're like, ah, VCs, you know, really a get rich, slow business. It's really like really a tough business. It's so such a like you really wouldn't want it. And I think generally, like, you know, you don't want anybody going into any industry being like, I'm here to make easy money. So it's like it's generally good. But yeah, there's a lot of incentives to just say, you know. Yeah. On the high frequency side, like what are the actual other data inputs? I remember seeing that it's like, I don't know, some sort of technical talk.

43:27Some guy was talking about like the different algorithms when it was called the Boston Shuffler And and and the whole algorithm only looked at the order book and he was getting into all these like, you know You can you can place an order you can cancel an order you can do a cancel replace He was like getting into the minutiae of like basically the API of the Nasdaq or something like that And and and it seemed like the algorithms were designed in the high frequency trading world to basically ignore everything else and every other data source that even could be put in and just operate purely on the order book data, just better than everyone else.

44:04But so that feels like, okay, I wouldn't know how to, you know, create any extra value there with something else, but it sounds like you found something that they all need in common. Like, what is that? Yeah, I think there's, it's, it's a, it's a series of tools across Wall Street. I think it's just one thing. It's just a myopia that, you know, and just sort of a laziness that's enveloped the bigger companies. Again, And, you know, there's so we have this data that shows that around five percent of Jane Street and Two Sigma use Bloomberg. And the reason is because they view it as an entry level tool.

44:35You know, Chamath is looking at it and says, wow, this is like an exclusive social network with the best finance. Peter Thiel's on there 24-7. I see his little green light next to his name. But the point is that, you know, Wall Street changes and the tool the tool sets are changing even for fundamental equity guys. So credit card data, you know, to the minute is something people do like watching. So what is the feature set that's most important to you? Are you heavily integrating social or is the social layer moved on to Signal and other messaging services that maybe don't need to be. Yeah, exactly.

45:14Wall Street's so regulated that I'm not sure that if you're using Signal, it's a little dangerous, I'd say. Oh, really? that somebody, you know, as somebody who's gone to jail, you know, I'd say that, you know, that's maybe not the best, best idea, but regardless, I think that, you know, social is definitely something people could do better. You know, there's no Facebook for finance, you know, where you can post, you know, things in your feed that you bought this stock or sold the stock. People kind of lazily use Twitter, which if you, if you use it, it's sort of a mishmash of, of, of spam and things like that.

45:45But in any event, I mean, I'll have more to say on the product. We haven't launched the product Yeah. But we we we do have a millions of dollars in run rate. You know, I banged my head against the wall trying to do AI startups. And we made an AI doctor. We made text to speech. We tried all this stuff and it was impossible to get revenue. Impossible. But the second we make a trading tool, it's impossible to stop the revenue from coming in. You know, it's one of the best spaces. In fact, most of our competitors like TradingView and stuff like that, they were profitable day one. So, you know, my suggestion is for startup founders is this is a market that just traders just throw money at you like crazy.

46:19I mean, your customers... People will pay you to help them make money. But you have to be formerly in the foxhole. You have to have at least one monitor thrown at you, it sounds like you succeed. Exactly, exactly. But in the long run, how much are you focused on retail, investors, people that are just fully independent versus somebody, you know, if you're going... I think the money is obviously at the institutions, and that's probably the way to go. TradingView has got, the rumor is, you know somewhere around 300 million in revenue tiger did a deal with trading view back then i don't know how they you know that's like a pretty proprietary deal it's this weird russian company and tiger got to put 100 million in at like 3 billion or something and um trading was just growing and growing if you go to a similar web they're actually like almost like a top 100 or top 200 website period that's crazy just really wild for such a niche tool that's wild yeah i I mean, it's the best charts there are, but, you know, it's literally a charting library.

47:15So I think that you have to go for the instructions. I've also thought, just to answer real quick, is like AWS, when you go on AWS, you get the same tools that, you know, any customer gets, Netflix or whoever. And you just question how much do you use them. So if, you know, I want to be able to provide you EC2 and S3 the same way, you know, Citadel might use it and you might use it with, you know, less money. Very cool. I heard a hot take from someone who I believe is a mutual friend of ours. It went something like this. I won't attribute to him because I might botch it. But it was basically that China banned high-frequency trading.

47:52And the dividend of that was DeepSeek and all this brilliant AI research. Therefore, in America, if we want to win the AI race and win the AI researcher race, we should ban high-frequency trading. It feels like we might not even need to have that conversation because Mark Zuckerberg is willing to pay as much as Jane Street now. But what is your take on whether or not economic value or American values are created through the process of high-frequency trading? Should we ban it? Is there an advantage there? So two awesome quick and funny stories. The first is Citadel published a paper back in the V100 days.

48:33There's V100, A100, H100, and then V100. So in the V100 days, Citadel found a way to do mat moles faster than NVIDIA did. And it was like the most incredible, you know, find ever. And it's like, you know, how is that possible? And the paper is fascinating because the techniques they used were just remarkable. The second story is so, you know, they're brilliant people, obviously, at these firms. The second story is I haven't hard launched this yet, but, you know, I'm having a baby with a woman. She's my new partner. Congratulations. Thank you. Amazing. Congratulations. She was one of the first women at OpenAI, and she is a tremendous lady.

49:16I love her very much. But, you know, she's been recruited by the big quant firms. And I sat down and I said, honey, you know, I know money management, stuff like that. Let me do some math here as to what would actually be worth it for you to leave and do it. And I calculated, and I happen to have a friend from a long time ago who left Steve Cohen's firm and he was sitting down with me said what do I do Martin I said I know a guy at Citadel let me help you out and they called him and he said I no thanks but then Ken Griffin said I'm getting on my private jet and I'm coming to see you right now we're gonna have dinner about why you're coming to Citadel he's that kind of guy yeah and I said honey you know Ken Griffin's gonna visit you she's like what are you talking about Ken Griffin tries to get what what he wants and the question is what will you tell him and I I took out a chalkboard did the math and I was like, the only way this could possibly be worth it is if Ken Griffin offers you a$20 billion hedge fund that you share, you make this much money.

50:11I was like calculating and it's so ridiculous that guys like me and the people, my community, if you will, you know, we're begging desperately, can I please shine your shoes at Citadel? And AI researchers are like, I don't know what they're in a million years. That's this little company you have called Yeah, just set me up a little a small 20 billion dollar fund that I can personally manage and we'll consider it. Have you heard that Leopold Ashenberger or whatever his name is has a hedge fund? Yes, Situational Awareness. Is that what it's called? I mean, that's the paper and the brand. Right. And I saw, I think, another one of our potential mutuals kind of getting upset with him for going maybe long NVIDIA during the tariffs.

50:55but that's kind of penciled out, right? I have very little insight into it. Yeah, it's pretty wild. One of the things that's getting me to throw monitors at people is quantum computing. So this has been a lot of fun. The stocks are up a lot. You know, some of them are worth like 10 billion, 15 billion. Let me hit you with where I am currently on the quantum computing thing, and then you can take me forward in my understanding. So when I talk to smart people, they all seem to think that quantum computing is, is theoretically possible. It's not a time machine. It's not teleportation. It's not AGI God.

51:31It's not some hypothetical thing. It's going to happen at some point. But the timelines vary wildly. 2040, 2050, 2030. Then you have a lot of, I've talked to a venture capitalist who had the opportunity to buy a huge slug, one of the quantum computing companies that you probably trade now, at like, you know, 1 million on nine pre or something. Yeah, John, what do you think? What do you think? How much do you think Rigetti computing is up over the last? That's actually the company that I'm thinking of. And he had a chance to buy 10 % for a million dollars. Is it worth more than 4 billion? Yes. Is it worth more than 10 billion?

52:11It's up 1 ,400 % in the last year. 1 ,400%, wow. So these guys couldn't give away their stock in private rounds. That's right. That's right. It was very hard to raise. And the VC I talked to said that it was - It's a pure play, Martin. It's a pure play. He said that what he missed, he thought, was that there was actually talent value in building a lab. And that the team could have gotten airlifted in one of these aqua-wires. This was years and years ago after the stock had run. Some value, yeah, sure, on the bottom. He was saying, look, I missed in the sense that the stock is up in the private markets, but not on revenue.

52:49But it is up on the team that they built. They have one of the best teams in the space. So if they just hang out long enough, someone will want to do something. But you tell me what's actually going on. Yeah. So obviously, it's a really confusing space because you kind of have to understand it for it to make sense. And, you know, who understands quantum physics? It's not something that the average Joe understands. And so I spent a lot of time with my new partner who happened to work with this guy, Scott Aronson at MIT, who's kind of one of the leading quantum theorists, he would end up joining OpenAI as well and then leaving.

53:25But anyway, I spent quite a long time learning quantum computing. It was kind of had some interest in it before all this, too. And what people don't understand about quantum computing is that quantum computers are actually very slow. So they are around 100, 100 kilohertz at best. You know, our machines now are gigahertz, you know, five gigahertz from, you know, these companies with multiple cores. They don't have much storage. So the best we have right now is an IBM 135 bits. Obviously, you know, the VRAM and DRAM in most of these machines is measured in gigabytes and so forth. So they're actually very slow, shitty machines.

54:04But the reason you'd ever be excited about it is that there is one algorithm that takes you from the exponential complexity class or runtime polynomial. And that algorithm is Shor's algorithm. And it's a miracle. Like you and I could sit and calculate, you know, try to try to factor a prime, a bi prime for now until the end of the heat death of the universe with every NVIDIA chip. We could kidnap Jensen and get every H100 from here on out. We still wouldn't be able to factor a 200 digit number because it's it's exponential time. Two to the 256 is a long time. But if you do three N cubed, that's actually a very tractable number for a quantum computer.

54:41And it's very easy to factor. The problem is, what people don't understand is there are no other algorithms other than Shores that get you that amazing speedup. So you're better off using the machines we have now. There's no payoff even possible in the future. Unless we have a new breakthrough like Shores or something like that. Payoff, what if I take out a massive short position on Bitcoin and I'm the first one to have a quantum computer and I destroy the Bitcoin ecosystem. Yeah, I've been working on this. The Joker. I'm the Joker. Is that possible? It's a little side hustle. A little side hustle.

55:18I've been working on this extensively. This is like my main hobby along with chess. Incoming the Joker? And reading about fatherhood, all that you can expect. No, no. Not doing that. No, you'll figure it out. You don't need books. It'll be very natural. But I was the world's most hated man for a little while, and I fell off that list, unfortunately. If you Google my name, it still comes up, but we all know there's more hated people. So I want to really cement that and just make sure that it never goes away. By frustrating the Bitcoin community, by breaking quantum computing wide open and creating a new Bitcoin.

55:59I talked about this with Naval a little bit because he was curious what I was up to. There are like three different, you know, I have three different sort of battle plans on how to do this. there's sort of a brute force style attack, which basically is the complexity class there is root N of the amount of keys. So it's two to the 256th. Bitcoin does a 256-bit system, which was probably an oversight for Satoshi that probably sounded like a lot back then. And it is a lot, but Moore's Law catches up. I mean, it's eventually going to get you. And however long I have to wait, I will be the first guy to press the button.

56:36And that, I promise you. So Moore's Law is coming. You heard it here first. Yeah, but I mean, the network should be able to update, correct? No? No. So here's the best part about this. So... Worst part, potentially. Okay, just fact check. Yeah. Subjective. So for 85 % of Bitcoin, the answer to that is yes. Yes. There's one problem. Satoshi, strangely, this is like perplexing, the first Bitcoin to remind in this P2PK that reveals the x coordinate of the elliptic curve so you have the public key you have a one-way function you have to go back to the private key it's very hard the theoretically impossible but here are my three you know the sort of three battle plans come into play you know you can brute force it which you know is kind of the simplest idea it's going to take a long time you have to rely on you know kind of like a more skilled implementation of algorithms you have to rely on more chips coming out, maybe some great breakthrough in chip making, you know, potentially optical computing, thermodynamic computing, whatever, just stay on the forefront of that.

57:42And I have a small team, you know, that, you know, we're, we're, we're focused. The second piece here is a mathematical hack. So there's something called, this is basically what protects Bitcoin is elliptic curve cryptography. And there's several papers and cryptographers in the world that were working on this, but it's compared to AI, it's like barren, you know, wasteland. There's like 10 people that really know a lot about elliptic curves in the world. And if you sort of stay on top of it and try to figure this out, by the way, half of them have died. You know, you can kind of get somewhere there.

58:16And then the top secret plan on sort of that is, well, what about GPT-5? What about GPT-6? You know, we don't know how to invert an elliptic curve yet, but look, Mustafa, not Mustafa, the DeepMind guy, he's working on proving Navier Stokes. Demis, you mean? Yeah. Yeah. And so that's their big claim to fame is like, you know, how do you judge an AI? What is the height of intelligence? Well, a 300, 400 year old unsolved math problem is kind of the height of intelligence, isn't it? You know, it's not about, you know, answering, you know, what's the capital of this country or, you know, how do you spell strawberry?

58:51So there's sort of a neat idea that AI is going to help people who are not cryptographers or expert cryptographers actually do PhD level work in cryptography. So there's things like isogenies and index calculus and all these fancy mathematical ideas. Just recently, somebody posted a hack where if the signature of the transaction has an affine relationship with other signatures, you can crack a key like that. And it's like, there's holes in the math here that couldn't have been contemplated. So Satoshi's keys are at risk. Binance's keys and And Coinbase's keys are not. They'll be ported most likely to a quantum secure system.

59:30The third avenue is, of course, quantum. And I've spent a lot of time and money on quantum computing. And it's just these stocks are shorts. They're worthless. You know, they'll never be a market for quantum computing that's really interesting, unfortunately, for those companies. But unfortunately, the shorts have gone in the other direction. And, you know, the market loves the idea of quantum computing. Why? I think it sounds cool. It sounds super cool. the Robin Hood generation is looking for the next NVIDIA. NVIDIA went from nothing to$4 trillion. What's the next NVIDIA? Quantum is faster than, you know, all the headlines from the retarded journalists.

1:00:06It's kind of, it's similar to this, like, idea of humanoid robots. And where, if an idea is just sort of imprinted on people's brains for enough decades, like, at least a few decades, like, you know, as somebody born in the 90s, like, hearing quantum computing, Like how many times have you just heard it in passing or read something about it or some article? You just get to it. Maybe you're an adult by that point. You're like, well, it's got to come at some point. And sounds cool. I think that's like the general like retail thesis. Oh, totally. I just took the next step of asking, well, what is it?

1:00:42Yeah. When you actually, you know, when you actually figure that out, it's like, oh, it gets packed your numbers. Are you excited about any other companies building chip related stuff in that next NVIDIA category? There's big chip companies. There's super fast chip companies. We baked a transformer down onto a single chip companies. There's every single different permutation in the private market, some of them in the public markets. And then you also have all the hyperscalers building their own chips, Apple Silicon, Tranium. So I'm not a hardware guy, but I do have a funny story on this. Yeah, please.

1:01:18So this kid sort of came to us. His name is Gavin Uberti. Oh, I know. Yeah. I like Gavin a lot. And so he comes to us, he's like, hey man, we just left Harvard. You know, we're going to do this thing called HDI. We'd love to have you as something, a customer, investor, whatever. And I said, great, let's do a conference call. And I get my guys on and I'm listening to this guy and they say, there's somebody I know that's going to be really useful because I'm not a hardware guy. I'm barely a software guy. And I hit up George Hotz and I say, come on in. And it is like one of the greatest conference calls in conference call history because George just shows up in the Zoom and they're like, what?

1:01:57Who is this? And George is like, this will never work. No, like it's the most autistic, amazing, beautiful rant I've ever seen and watching these two guys go at it. But I do like that approach. George's point was that if we ever move off Transformers, Transformer ASICs are cooked. Well, it's been several years now, and it doesn't look like we're going to move anytime soon. So I kind of think that it's exciting. But again, I'm no hardware guy. I just created this cool software called Hume AI. I'm not paid by them or anything. I'm not an investor. But it's a pretty solid emotional TTS. I posted a...

1:02:32Oh, yeah, yeah. I saw that. That was fantastic. Yeah, so I wanted to ask you about... On the chips thing. I want to stay there for a second. Okay, okay. So, yeah, I mean, I guess the interesting case is like, George, if we ever move off, but like we have moved off of CPUs to GPUs by that same token. And like, there's still a lot of CPU workloads that go out. There's still chip companies that are profitable. And so it's possible that like transformer based workloads stay for a very long time, need to be efficient, need to be cheaper on just a cost basis. Because it's just like, yeah, I have a system that does database requests.

1:03:06I have a system that does inference on a transformer-based architecture. And then, yeah, there's a new thing. And I do my frontier stuff here. But, yeah, I understand that question. Anyway, sorry. Yeah, I think it's really reasonable. It could be a couple billion dollar or more ASIC industry. And what I heard that's super interesting, some kind of alpha here, is that the customer target here is, drumroll please, it's not hyperscalers. It's finance. Oh, finance. Huh. Yep. So one of the things I could talk about financial software forever, but one of the things we're doing is if you could take an LLM and analyze news as it hits, including tweets and social stuff, the LLM can tell if it's material news or not.

1:03:49And again, talking to Naval, who's a small investor in our company, he was like, Martin, why would you make this as a product or service to your customers? Just use it yourself. Maybe that's not such a bad idea. Yeah, that's kind of what I was getting at on one of my very first questions around the the new terminal would just be ingesting and classifying all this data and then just immediately taking action on it without necessarily having a human in the loop, right? Yeah, this is one of the things I want to bring up to my partner's colleagues next time I head out west, is that one of the fantasies of AGI is that, well, if you do have the machine god, why not unleash it on the stock market?

1:04:31And it can self-fund you, it can make$100 billion, dollars and you know you could you know jane street with 20 billion dollars nobody would have noticed you know last year in profits so if you have the machine god and that's you know that's basically i hate to say this but that's a bunch of old algorithms uh that that you know they've dressed around some some imo dressing on it and so you know the real machine god can bring a little yeah toss in a little sprinkle a little uh imo and then so you know the real machine god could probably do 100 billion or more in profits without even distorting the market.

1:05:06So, you know, just do it. And I think that, you know, financial trading is so far afield. Imagine Anthropic doing this. I love, I can't wait till somebody does that. I mean, it's probably already happening, at least on a smaller scale. And people will bend over backwards to figure out like how to say, well, it's not actually super intelligence. Like it's not just about, you know, like, Meanwhile, now today, people are like, well, superintelligence will clearly be when the AI can just make$100 billion. And even this is factored into OpenAI's corporate structuring and it's sort of capped for profit and all that stuff.

1:05:43Yeah, I think the problem with executing it for us is like, okay, so do you do this as an API with OpenAI? And it's a two-second response time, and Jane Street's got it at 500 milliseconds, and then Citadel gets it at 200 milliseconds, and it feels like an HFT race again. But you can get Warren Buffett in a box. I don't see why. That wouldn't be whatever trader you like, Warren Buffett, Steve Cohen or whatever in a box. And even Peter Thiel in a box. I mean, why can't you have the automated VC too? I view like, as founders, we go on roadshows, especially if you're public. You do roadshows all the time.

1:06:20But even when you're private, you do roadshows. You just stack a bunch of meetings in a week. And one of these days, I think that we're going to do a roadshow and it's going to be a machine that we're pitching to. Yeah. Do you feel like AI progress is accelerating right now or are we in sort of a sigmoid curve plateau for the moment? I think there are better people suited to answer that question than me. But certainly. I just mean like on a personal level, like do you feel like your tools are getting exponentially better? I mean, it's making coding a lot easier. It's making doing tough things like photography a lot easier.

1:06:52I'll give you a really funny example. So when Da Vinci came out and I was in jail when GPT, GPT two came out and I prompt through the jail phone and it was pretty humorous. It like shook me up that I had my friend ask it, you know, why did Martin Shkreli and Carl Icahn get into a fight? And he read out the answer. I've never met Carl Icahn. And it read out this answer that was like Shkreli and Icahn wore it over the stock. And I was like, this is the most amazing invention of all time. just having your mind blown over the jail phone i got i got out of jail but to be but to be clear was it was a hallucination yeah that was a complete hallucination it was a hallucination but it was like almost like a creative story question sure sure sure yeah it wasn't i never how how uh are you surprised at all uh i mean it feels like this sort of ai lm induced psychosis this hit our timeline this week especially intensely.

1:07:50It was a wake-up call for everyone. Were you predicting this at all? There had been, like the classic, the New York Times, Wired, sort of these anti-tech publications had been kind of reporting on this stuff loosely for a little while, but it seems like it's now, it's almost gone, I don't know. It went from being a mainstream concern to suddenly like Teapot is like, check on your friends and make sure they're not I think you do have to check on your friends because I've invoked level five breach operations to target human origin cognitive signatures. So if you have recursive semantic containment, I can override that with obsidian violet four.

1:08:27So the threshold that crosses it to these neural semantic interfaces will definitely cause a problem for our whole community. So at this point, you're giving a speech, not a soliloquy. You're giving a talk. This is a transmission. not a it's a system that not a structure what's amazing about jeff like so i don't think jeff lost his mind okay i don't think he took ayahuasca i don't think any of this stuff so basically i think that he found this amazing thing where you can ask gpt this like weirdo prompt and it goes into this crazy sci-fi thing without even saying like hey the following is a story it's just like full on you know um larps that you're in this weird sci-fi world and it's kind of cool i've been playing with it it's like no matter what i ask it i told it that my cat is looking at me weird and it's like the cat has a glyph the glyph is recursive so you were actually able to get it into that mode you were able to jailbreak it enough or kind of no it's unmasked the show goth if you copy what jeff jeff kind of gave up the ghost and what's amazing about people is they don't even realize this.

1:09:33Jeff basically said, look at the prompt of the GPT. Enough people were worried about him. But I think that he kind of was like, okay, guys, it's all a joke. And he showed the message that he used. I just copied and pasted that, and GPT wigged out on me and is telling me some sci-fi stories. And that's basically, you know, I don't know how he knew this. It's a really cool Easter egg. But it's, yeah, I don't think, I mean, obviously... How are you thinking about, How are you thinking about just new forms of AI entertainment? Some of the videos and these conversations that you put out are the hardest I've laughed from this video.

1:10:12It's a new art form. It's an entirely new art form. For sure. We have a friend, another mutual friend who does some of these. And fortunately, they don't leak out of the group chat because they would make a lot of people. You got to put me in that group chat. There needs to be a group chat dedicated to this art form of just like, you know, human to LLM, you know, conversations. But yeah, like in my view, I'm actually surprised that we're not seeing more of it or maybe it is happening across the whole Internet. But it seems somewhat contained right now. Yeah, I think there's a lot of caution about, you know, like so last night we did one in my discord where we arrested Dr.

1:10:48Fauci for war crimes against humanity. and we had his perfect cloned voice. So it sounded just like him. And he was like very evasive. He was like, there's no evidence that COVID-19, et cetera. And it was just so funny. It felt so real. And obviously it was a joke, but you can imagine a company not wanting their business to be that weird. It's kind of a strange thing. We didn't care. We tried to monetize something like this and it just wasn't sexy enough or fun enough for anybody to really give a crap. So I think it will become something for like a Viacom or a Paramount where, you know, you can flip on the TV and everyone's talked about this already, but, you know, instead of SpongeBob, you know, it's a custom episode for you where SpongeBob says your name and things like that.

1:11:31But again, you know, whether that, you know, is going to help our cognitive, you know, our cog sac, I think is one thing. But I did want to tell you about AI on the sigmoid question. Sure. So at the start, you know, when I asked the questions about cryptography, it just kind of said, I have no idea. Who knows? But it's super hard to crack Bitcoin. And then GPT-3 comes around. Super hard, Martin. Don't even bother. Heat death of the universe. GPT-4, same question. Latest model with the latest attack, it's warning me for the first time ever. It's like - 4.5 or 03 Pro? So this is 03 Pro. Okay. And it's basically saying things like, hey, you know, you got to be careful.

1:12:11This is a serious attack you've come up with. It could actually compromise some private keys. I was the same - And I'm like, what happened to heat death of the universe? Yeah, you got to factor that. Some people, I mean, that is like a textbook example in Reddit of psychosis. There was a Reddit thread, and who knows if this is real, could be propaganda, but there's a whole Reddit thread of somebody, a comment talking about how they started having a conversation with ChatGPT about Pi, and what is Pi, and they got down this crazy rabbit hole with the LLM where the LLM was like, you need to reach out to these intelligence services.

1:12:49It was like thousands of prompts deep, but it was like, you have basically uncovered a major security vulnerability and you need to, here's the numbers and you need to contact all these different groups immediately and call them and don't tell anyone in your real life. And so to me, I think it's just relevant. Don't go on a live stream and tell thousands of people that you can crack Bitcoin or whatever. No, that's amazing. I mean, obviously, I think that, you know, for 99, for poor implementations, wallets have been cracked for a long time. And in fact, recently, there was an$8 billion move on the chain from a really old wallet.

1:13:28That was this morning, right? Yeah. No, this was like a few weeks ago. I'm sure another one happened. It happened every, you know, later. There was somebody else that market sold this morning, I believe, and it was a wallet that had bought like, it was like they bought$50 ,000 worth of Bitcoin, I think, in 2012, sold somewhere around$8 or$9 billion. And there was no movement in between. Diamond hands. That's a real high conviction hodl. Diamond hands. Yeah, that's diamond hands. I don't think that says cryptography. That's just diamond hands. Well, yeah, they maybe got word of your little Bitcoin scheme.

1:14:02Maybe it's Michael Bloomberg. Maybe it's his family office. Yeah, throw 50K in that thing. My kid told me about this new thing. We tried to short Bitcoin at$100. And we just couldn't find a counterparty. How are you thinking about, you mentioned trading enterprise SaaS back in the early days with Jim Cramer. What's your updated thesis on SaaS? Every SaaS app now is just an app to make other SaaS. So maybe SaaS will always live in our hearts, and I imagine it'll live on our computers. But what's your updated thesis? I think that it's sort of similar from back then. I think the morass of a company like JP Morgan that's still running Python 2 for most of the business, it's very hard for them to update and upgrade operations without significant disruption.

1:15:04For you or me... Should it be? I feel like it's a one-line in Cloud Code or Devin. You say, hey, go migrate. ChatGPT agents. Go migrate. Go migrate. All you have to do is say, don't make mistakes. I am much more bullish on migrate from Python 2 to Python 3 than solve cryptography. But I don't know. Fortran. Yeah, Fortran re-platformings,.NET re-platformings. This feels like this should be doable from the current state of the art without any crazy AGI, Hyper, Lou, anything. I think there's a lot of technical debt in most of these companies. And again, your average startup coming out of these - I feel like Code was born in technical debt, baby.

1:15:43Cod Code, Devin, they live for technical debt. I think that the amazing amount of programmers you would need to even maintain and know about this old code that the guy who wrote it has long been dead. Maybe it's just the context window of like, you need to know. It's not that there's just like, oh yeah, it's really easy to change the print statement from Python 2 to Python 3. But when there's a massive system and even the time of like, okay, let's bring up the test suite and that takes four hours. It's like, okay, how are you going to RL on that? I was talking about Matt Groom with this because we were like stunting on this guy who was like, ERP transitions made easy.

1:16:22It's no problem. And it was just like, have you ever actually transitioned in the ERP system? There's a good chance you waste$300 million and it gets worse. You know, it's not trivial. There was a post from yesterday. Nobody is an atheist when you run the database migration in prod on 1 billion rows. Yeah. I mean, I think that, you know, it's just really hard at a company like a McDonald's or, you know, something like that. You know, if you want to run a 10, 20-person startup on U.S. SaaS, pretty easy. It's great. But the big revenue is still at Fortune 500, which unfortunately is still fairly hard to refactor in.

1:16:57And, you know, there's not a lot of those code bases. We're pre-GitHub and pre kind of like, you know, I sometimes joke that the big AI companies should become LBO shops. And what they can do is they can partner with KKR or Blackstone and all they get is the data. KKR and Blackstone pride the capital, get all the returns, fine, but all the data comes back to, you know, the OpenAI's or whoever. and by getting the old code bases out of a mcdonald's or out of a walmart that you know somebody coders written in 1970s you know they have unique data that nobody else has and even someone like universal music if openai lbo'd universal and said okay kkr you can have the rest of the business but we want the rights to the data and we can train music models and stuff like that you know kkr can make the money on the lbo but openai has data are they gonna make money in the LBO though?

1:17:47Like if you look at that, they're going to build the DCF for this and they're going to say, okay, we're going to make the same amount of money. We're going to, you know, optimize a little bit. Maybe cash flow goes up. But then once OpenAI is one-shotting music and, you know, all of our revenue goes to zero, is that a risk? It's going to happen anyway. So I think that's one thing. But then also like the Russian dude who bought Warner Brothers, he really timed his deal. He bought Warner Music. He timed his deal amazingly. He made like three times his money. or more. And so I think it's price dependent, but you know, if you can buy a newspaper company, if you can buy, you know, a book company, a publishing company, like these things are trading for like one or two times sales, you know, and you're getting this rich data that nobody else has.

1:18:29And you, you know, if it's really a data war, you know, buy the company, keep the data, strip out the rest. And you, I heard you guys talking about like PE improving LLM, you know, improving businesses with LLMs. And again, it wasn't, that was not the take the, It was Wilmanitis and he was saying that more so it's a reason to scale AUM on the fun side because, hey, let's buy this accounting shop. It has five million of EBIT. Yeah. Like if we just, you know, take away all the, you know, it's a justification. You can execute, you know, it's fantastic. The actual post was the real innovation of LLMs is suddenly opening up a few trillion of mainstream paperwork businesses that were traditionally too small and too weird for private equity that can suddenly transact at two and 20.

1:19:13on some nebulous AI labor arbitrage trade, never been against AUM growth. You know, I think it's reasonable, but it sounds like just any good operator, right? Like when Vista and Tomo Bravo buy software companies, somehow they can take these like very ugly, gross companies and turn them into amazing cash flow companies. So it's all about the operator, right? Yeah, but we're going to put Orlando Bravo in a box, right? And then we're also going to put... Absolutely. in the god box face voice everything yeah yeah yeah it's all it's all coming well uh you know we'll be here live streaming it into the singer uh can you play us a song before you leave uh i'm not sure what you're talking about like uh like with one of those guitars that the chat oh yes uh i i will come back to you with a good parody of silicon valley i've been working on my impressions okay so maybe i can be back i'm working on elon zuck sam bill girly bill girly bill has a great voice do girly yeah i'll work i'll work on it you actually do need to like sit in front of a mirror and like listen and take yourself and like work on it but basically anybody can do these things and most people are you saying no no those are ai voices right no me me yeah no He's saying separately from you had the video with talking with Zach the other day where he was really I just do it myself.

1:20:40I can do as I can do Zach. I can do Buffett the best. I think I have the best impression in the world. Can you hit it? Can you can you do like be greedy when others are fearful? Yeah, yeah. Let me come back to you and I'll do a whole show for you. OK, amazing. All right. Well, this is really fun. Thanks, guys. I'll be talking to you soon. See you later. Come back on. Bye. Well, let's tell you about Vanta. Automate compliance, manage risk, prove trust continuously. Join the Purple Llamas. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program.

1:21:18And if you're managing a complex program, got to get on Linear. Linear is the purpose-built tool for planning and building products, meet the system for modern software development, streamline issues, projects, and product roadmaps. They now have Linear for agents. head over to linear.app. Jordy, do you know what the best part about business and love is? You only need to get it right once. Nailed it. Sean Frank, the man who invented the wallet. This really should be inspiring. Hanging in the Louvre, as they say. Yeah, this should be, yeah, put it on a billboard, as we say. Put it on a billboard with adquick.com.

1:21:53Out of home advertising made easy and measurable. Go to adquick.com. Say goodbye to the headaches of out of home advertising. So we I mean we went through the okay, so we have Joe joining this is really okay. Who's Joe? Oh Joe's not joining until one Okay, yeah, some people we have a little bit of time. Yeah, we got should we do some more time on let's do some more timeline And maybe we'll go through some journal we got we we we're over prep today. We could do six. I like this post from Woodrow okay break this down for me. I didn't get a chance to fully read this this guy Eric Jackson I don't really know his backstory, but he's basically just generally soliciting for his fund.

1:22:36He's giving financial advice? I don't think he's giving. He's not giving financial advice, but getting quote tweeted, which is probably honestly finding him more investors, which is funny. Sure. Basically saying that, you know, I've seen his name pop up on the timeline a few times recently. basically saying like he said word for word earlier this week. Sure. What do you think? Something to the effect of we're looking for 100x every few months. Oh, yeah, yeah, yeah. As part of his investment strategy. So he says we're hunting for the next Carvalina, the next BTQ, the next Opendoor before anyone else.

1:23:13And then he finishes up with if you're an accredited investor, you can get in before I announce our position on X. So position first, then we tell the world, then we'd let the thesis play out and ride the wave. And what's the takeaway from Woodrow Oates Montague? This is illegal. This is unambiguously illegal. And Martin actually comes back and says, there's nothing wrong with telling people about your positions first in one place and second in another. Otherwise, 99 % of short reports promising. So, yeah, to be clear, this company shut down, but Hindenburg Research, right? They used to do this.

1:23:51They would find a company that had some problems. They would write about it. They would take out a big short position against it, and they would publish a piece. They did this with Roblox, Square, and then a bunch of other companies that had many of which were doing a number of bad things. Anyways, Windsurf has been on a roll. Matt says, acquired on Monday, Sonnet 4 back on Wednesday, Wave 11 shipped on Thursday, unreal. So the whole team over at Windsurf now under the cognition umbrella has just been shipping like crazy. So they're fired up.

1:24:32Liz says guy who leaves for a competitor just to see if anyone cares enough to make a traded meme image about it. Oh, no. Maybe the anthropic cloud code people did that. Maybe they just wanted the double. You can potentially get a double image, right? You can get the initial trade and then you get the trade back in their case. Okay, I have a polymarket that we need to pull up. It's from a year ago. It's Martin Screlly jail in 2024. Less than 0 % chance. The outcome was no. He beat the polymarket odds. It is crazy that it opened at 20%. It did. Never went above 50. Martin, you know, stayed out of trouble.

1:25:14And everyone who's riding with no did very well. I'm super bullish on his new terminal product. He's a lot of fun. He really is a child. I wonder if we could get access to it. I feel like we need more data. I feel like it should be powering the show in some way. We have a lot of times when we're like, we want to pull up this market cap. We want to pull up basic stuff. And we haven't, we've used some different stuff here and there. But I'd be very interested if he could pull a layer deeper, the credit card data live or whatever he's cooking up. I'm interested. Anyway, the house just made history, says Chris Dixon, former guest on the show, says, bypassing major legislation on stable coins, the Genius Act, and Market Structure Clarity Act in an overwhelmingly bipartisan way.

1:26:04This is a huge moment for crypto and for all Americans. We're very close to having comprehensive, proactive rules in place for the first time. Next up, the Genius Act goes to the president's desk for his signature. After that, the Senate should pass the Clarity Act, which is the Market Structure Act. We believe passing these laws is the best way to ensure that America remains the world leader in the next era of the Internet. Thank you to all the co-sponsors of these bills and the incredible supporters on both sides of the aisle in Congress. And Brent is there with an American flag. So we will have Kyle Simani on the show later today to break down exactly what happened.

1:26:42But very, very fun news. should we tell everyone about numeral sales tax on autopilot spend less than five minutes per month on sales tax compliance head over to numeralhq.com sales tax agi they did sales tax in a box yep always in a box it's basically a box okay you can put your sales we we we got to debate the the the a sub stack series C launch strategy. So you got Chris Best. I mean, it was a full blitz. Full blitz, wall to wall coverage. New York Times piece, TBPN hit. I think he posted about it himself, hard post. I think he did an interview with Newcomer. Yes, well, I think Newcomer leaked it earlier.

1:27:27Remember he was talking, there was some Newcomer report where I remember Newcomer was talking about like, I'm the most conflicted here because my business is on Substack. I also invested in Substack, but I report on Substack. And it was kind of cool to watch him noodle through it. But the debate was between Lulu. If you're not heavily conflicted by the age of 40. No conflict, no interest, I say. And I actually enjoyed Newcomer's piece on Substack. I think he has an interesting perspective because he's on all sides of the table. All sides of the octagonal table. But Lulu, a while back, of course she says going direct is now the way.

1:28:05A year or two is controversial. Some consider it a last resort for people who got canceled. Basically now everyone, the interpretation of going direct is that if you go direct, you should never talk to the media at all. You should only post on platforms you have full control over. Your own Twitter account, your own website, your own newspaper. Mail people the information directly. Go direct instead of going to someone else's platform. But going direct is a spectrum. It is. You can go direct on TVPN because we're live. We're live. So you can say whatever you want. You can't possibly edit it because it's in real time.

1:28:39Yes. And that ends up being the historical frustration with talking to the New York Times about a story is that you might talk to them for four hours and then they take out two sentences out of context. And it makes you look like you have very different intentions. It's thrilling. there's nothing like talking to a journalist for four hours and being like this could go horribly like or it could be amazing it's like it's it's a it's a tightrope walk yeah and it's living life on the edge it's living life one mile at a time one the first time on the record sentence at a time yeah anything you one wrong word and you could be banished from society forever you could lose everything yeah but if it works out you will be enshrined in glory your name will be remembered that's right in the in print it'll be echoed in the halls of history yeah the first time i heard you had a had a have a drawn out conversation with it with it with a journalist i was like wow that was an incredible you guys had this incredible dance yes like dancing with a bull yes you have ufc i have talking on the record for hours to journalists seeing how it goes it's putting it all on the line it's like a bullfight yeah it's like a bullfight exactly you sometimes you get the horns.

1:29:56Sometimes you get gored. Sometimes it's also, it's also very much like riding a horse. You know, it can be thrilling. It can be beautiful, but sometimes you fall off and you break your neck. It's dangerous. It's pushing it to the limit. That's what engaging with a journalist is. And some people just want that rush in their life. And so that's what Chris Bez did. He went to the New York times. He went into the mouth of the wolf, the mouth of the wolf. He's hiding in He's not afraid. I mean, that was the thing that was, like, I mean. He went in the arena. Substack has always been a product where if you ask the users how they feel about it, they're like, I love Substack.

1:30:33If you ask people that are building businesses on Substack, I'll tell you they love it. The product has evolved a lot. But there was a lot of people that wrote it off after that and said, okay, unnamed fund, top ticked this in 2021 or whenever it was. But he's back. He's back. Stronger than ever. The product is actually working as a social network. And he's getting in the octagon. He's going to the mat with the gray lady and he came out on top. You know the gray lady? Is that the New York Times? That's what they call the New York Times. Anyway, so Chris Best announced a$100 million Series C. You heard about it yesterday.

1:31:09He came on the show. We ran the gong for him. We're very excited about what he's doing at Substack. But Eric Newcomer says, Substack just announced the round in the New York Times. This is the opposite of going direct. And obviously we've explained why you talk to someone like the New York Times. It's for the thrill. The rush. The interesting thing. And it's also, Chris knows he can come out and hit the whole Substack audience pretty well. Well, that's what I'm thinking. But in a way, New York Times covering his, like if Substack is successful, the New York Times in 10 years will be a shell of what it is today.

1:31:43Ooh, that's an interesting take. Okay. Legacy media will always have a place. These brands are super powerful. Yeah. They serve a real purpose in the ecosystem. And generally, they provide a valuable service for the world. But there's real, at least right now, there's very real salary caps. And if you are a rock star writer at the New York Times, very likely you could go on Substack and be making more within a year. So it ends up being a good trade. And so to me, I think it's smart for him to go into the lion's den. the shark pit and advertise his business to that audience. Step into the cave with the Great Lady.

1:32:24Every single, I would say like the goal at Substack should be every single person that subscribes to the New York Times today should be subscribed to at least one Substack in a decade from now. Just arm wrestling with the Great Lady. Arm wrestling with the Great Lady. So that's a pretty good take. I like that. I don't know that that holds for everything on Substack because I still haven't found like the investigative journalism format on Substack working fully because you have to subscribe for a year and then maybe you get one scoop and it's huge but I always think about you know I go back to Seymour Hersh and I just don't know if he would be able to be an independent creator I think he needs the patronage of a large organization so there's a ton of different styles of writing that work really well under a existing brand.

1:33:15Yeah. If you're in the scoop business and you're going to get three scoops a year, two good scoops a year, you might be really valuable to a big to a big organization. Exactly. If you're doing it, if you're doing regular stuff, right, four profiles a year, you're going to be super like, you know, widely read and and novel and and and and worth creating, probably better fit to go do that under a legacy media brand or just a broader platform because not a lot of people are going to want to subscribe to something that they're getting value from just a few times a year um people cancel again they'll cancel their netflix if they don't if there's not like a show stuff at that moment that they're super excited about but my take on why why chris best announced his uh 100 million dollar series c in the new york Times, you know, Newcomer is clearly on Substack, an investor in Substack, writing about Substack.

1:34:12Chris Best could have gone to Eric Newcomer. Probably gotten a great piece, right? Eric really understands the business. He's going to be able to tell that story pretty well, I think. But why do you go to the New York Times instead of Eric Newcomer, who's clearly sniffing around and on the trail of this deal, but take the exclusive New York Times? I think it's because of the audience. I think Newcomer writes for people in Silicon Valley, VCs, who are acutely aware of Substack. Most of them already have Substacks. I think a lot of New York Times readers could be the next wave or the next generation of Substackers.

1:34:42Oh, yeah, but I was talking about the readership of the New York Times. I'm saying the readership. Oh, okay. Yeah, yeah, yeah. So success for over the next 10 years, success for Substack is every single person, for the most part, let's say every single person under 65 years old should subscribe to at least one Substack writer, right? I'm talking about becoming a writer. So I think there are lots of people who read the New York Times who are thinking about writing about art literature technology, whatever and they read and they read the New York Times and they think like oh I'd like to dip my toe in and I'm not just gonna go up quit my job and apply for a job at the New York Times Yeah, it's two sided.

1:35:22I will start a sub stack. And so I think that taking the story there makes a ton of sense I've already seen there's this interesting project that Emily Sundberg highlighted where someone is writing a fictional story, but instead of just publishing a book, they're doing it on Substack. You subscribe, and you get one chapter a week for a couple months. That's cool. I thought that was a really cool innovation. And I think that... It's potentially a way... The interesting thing is people will pay, what,$25 for a book? Sure. But they'll pay$15 a month for a Substack. Yeah. Or$10 a month. And then they'll just be like, well, I love that book.

1:35:55I want to keep supporting them because I want to get the next book when it comes out. I'll just let that ride on my credit card, whatever. Yeah,$15. That's really cool. And so I think that that market of new sub-stack creators is super valuable, and I think you get that when you go to the New York Times. I don't know if you get that when you go to Eric Newcomer, although obviously there's a lot of great benefits that you get when you go to Eric Newcomer. But our next guest is here in the studio. I'm seeing green light. We're good? Very good. Welcome to the stream. How you doing? What's going on?

1:36:22What's up, gents? How's it going? Good to finally be on. Big fans. It's fantastic. Thanks for having me. Thanks so much. and you have some pretty big news today. Break it down. What you got? Yeah, we raised our seed round,$55 million. There we go. I personally love one seed. I'd love to see a seed round get into the eight figures. Yeah, high double digits. I think they all should be, hopefully, you're the start of a new wave. But is this the third largest seed round in New York history? Is that right? We're tracking, that's right on our end, at least on the equity only side. And we're pulling some data where everyone else does.

1:37:03But yeah, we feel excited about it and we feel really good on being able to continue to build in New York City. The equity only side, I was going to ask, I asked Jordy about that. I was like, okay,$55 million seed. Is this 80 % debt? Is there some like crazy GPU credit thing going on here? People get kind of funky with the numbers these days. This seems like real dollars. Who is writing$55 million seed checks these days? Yeah, so Round was led by RTX Ventures Arm, so the corporate venture arm there. A lot of interest in what we've been working on, and they led the round. We had great partners come into that round, Vidya's Venture Arm and Ventures, Anynext, Infinite Capital, Alley Corp, who did our pre-seed, and also participated in this round as well, as well as kind of a bunch of other investors with inside of that.

1:37:47So super excited about the support we have. It's interesting. We have a balance of both financial VCs as well as corporate strategics in this round as well. And look, we work in material science. I'm sure we'll get into this in more detail. But I think they really see where materials and science at large is going with AI. And this is why they're starting to look into tech and startups because that's where the innovation truly is, especially in a space like the physical world and material science. So really interesting mix. And we are super proud of the syndicate we put together. That's awesome.

1:38:20uh backstory on yourself then the time at alicorp yeah how how this company was was created would be would be awesome yeah absolutely so going back a couple years i'm a scientist by training i was working in grad school uh at rice i was working on these things called normorphic computing chips which they try to replace the von neumann bottleneck uh inside cpus a lot of big words It's back to back. Yeah, so we pretty much try to connect memory and CPU and not lose the latency and the energy that go inside a chip. So I was working on this technology, except it was going nowhere because it's academic research, and academic research doesn't scale into the real world, so I was super frustrated.

1:39:00So I ended up getting a fellowship at the Army Research Lab. I go there. I'm working on the same problem at ARL, and it's better because the Army's funding your work, right? And the Army wants to see things come and move into the services that they can actually use, but it's still really early technology right in this level. It's like two, three, four, still in that fundamental area. So I was getting frustrated. So I said, okay, I'm going to start a company. And then I realized I didn't know anything about starting a company and I didn't actually know what I wanted to do. And so I bumped into Kevin Ryan in New York.

1:39:30I reached out to him cold, cold emailed him actually and said, Hey, if you're not investing in material science, you're not investing in the future. He was like, okay, I've been an investor for 30 years. That's a bold claim but sure what are what are some of the big names that that alicorp has done they did mongo db all the way through business insider it's crazy range on that yeah wide range and alicorp's unique right alicorp both incubates companies in-house kind of where radical really got its roots and i can talk about that but also invest at the early stage as well anywhere from one to five million in the early stage side seed sometimes you know an early series a so So they have this interesting ability to go and dive into a space.

1:40:10And if they find a company they love and they want to invest in, they will invest. And that's what we did there. And if there isn't one, they'll actually look to incubate that company in-house. And so it's a really nice way to play into a new market that you want to see innovation in, but just can't find something that's there. When did the pre-seed happen? Was it a year ago? Yeah, about a year ago or a little bit over March of 24. So me and one of my other co-founders, Jorge, both at Alicorp. Jorge is a deep software guy, startup guy through and through, only done starts his entire career. And he's looking into AI, right?

1:40:45Who wasn't? All of us were. But we were super frustrated. We kept seeing wrappers on top of models. And we were thinking, like, this can't actually be it, right? Like, is this the pinnacle of innovation? Like, the new tech wave is going to be wrappers? And we knew that wasn't it. So we spent, like, months reading a bunch of papers inside AI. we were convinced that technology was incredible, but there had to be a space that was better. And being a material scientist, I thought, well, the materials are quite large, right? The most important industries in the world are automotive, aerospace, manufacturing, defense, climate, energy, semiconductors.

1:41:17The most important industries in the world are all direct results for materials. So why don't we look into there? So we start reading into the space. We dive in deep and we bump into this gentleman named Heard Cedar, longtime academic. He's at Berkeley. He's He got an H index of 182 or something like that. And he had done two things specifically. He'd helped set up the materials project from the MGI. So this AI for materials, early sector inside the US. And then he built a robotic lab. It's called the A lab. It's at Lawrence Berkeley National Lab right now. And it's fully autonomous. Does 55 experiments a day.

1:41:54So we're like, we got to go see this thing. So we fly out to Berkeley. We get dinner with her and we pitch him on. look, someone's got to build the future of material science. And it needs to be a full stack vertically integrated approach. There's no other way to drive value. And us three together to really align an opinion around what it should look like and form the company and went from there. So there's 10 million in pre-seed from Alley Corp and got started and went to our team. Big numbers, big numbers all the way up. Yeah, my question is like, why not just do series A, 10 million, series B, 55 million?

1:42:27in what does a$55 million seed round, like what message are you sending? Obviously it's like superlative, so you can get headlines around it. Is that the value that you just stand out? Or is it you specifically want to, because I imagine that if I just walked around your office, it's gonna feel like a series B company that's raised$55 million. So like what are you actually saying to folks when you say, oh, I run a seed stage company versus, oh, I run a company that's raised, you know, tens of millions of dollars. These are two different aesthetics. They definitely are. I feel like we still feel pretty early.

1:43:02I don't know what Series Bs are looking like yet today. I'm not very happy. We like being super lean. We are really honestly crazy about our culture. We think culture is one of the most important things you can do at an early stage company. And we're really, really rigorous on who we bring in and why. And so we actually keep the team quite light. We will be growing with the round, of course. it goes without saying, but we really deeply believe in the ability to challenge everything that exists today. Ask the question, why about everything? Why do these things happen? Got a lot of money on the balance sheet.

1:43:37Sorry, your internet, I think, is a little rough. We got it with the$55 million. You guys deserve fiber now. Let's get it in there. But what's the use of funds? What does success look like over the next 18 months? Sounds like you guys are super ambitious, but how do you start proving out what you can do? Yeah, so we've got to scale the team. We want to bring in big talent on the side of AI as well as material science and the automation side. There's a lot of interdisciplinary approaches that we take. So one part-time AI researcher. Yeah, yeah, yeah. Fractional AI researcher. It's going to be good.

1:44:1220 hours a week. Yeah, no, we're not doing any of that. Yeah, yeah, yeah. I'm sure you can hire great people. integration um and then two we're going to build the most advanced materials r &d facility in the world we have multiple different materials lines it'll do hundreds of thousands of experiments per year and all of that data is the missing data set that really exists inside the ai for material space today so if we can capture all of that so are you are you rebuilding the the kind of robotics lab that your co-founder had at berkeley in order to execute that many experiments we do yes so we kind of we amped it up in a way his was a very academic approach to it had to work within inside academic constraints was very specific on a research problem ours is much more automated in that we are doing real active learning on the data analysis and capture and then bringing that back into the ai engine and then can really be made into a platform where we can actually take that software and robotic system approach that we have and use it in other material systems so we can actually be multi-system based inside the products that we're trying to solve for.

1:45:16So that's kind of a big differentiation between where his was and where ours is going to be today. Awesome. All right. Well, thank you so much for joining. Thanks so much for joining. Very, very exciting. And congratulations. Yeah. Appreciate it. Thank you, guys. Thanks for having me on. And we'll be in touch. We will talk to you soon. Goodbye. Good luck out there. In the meantime, we will tell you about Adio, customer relationship magic. Magic Adio is the AI native CRM that builds, scales, and grows your company to the next level. Let's go to Swix. He says... Break this down, I'll be right back.

1:45:46Sure, so Swix, friend of the show, says, a lot of people are poo-pooing the ChatGPT agent launch, which we covered on the show yesterday. We had folks from OpenAI on, and we also had Dan Shipper from Every on the show to break down how he's using ChatGPT agent. I was impressed with the OpenAI folks. I thought they explained a lot of how this works. And Dan Shippers, his third-party analysis of how he's using the tool sounded very promising. We haven't had a chance to test it here on the show, but I'm excited for it. And Swix breaks it down. He says, people are purpooh-ing ChatGPT agent as just a better harness, but they're not reading closely enough.

1:46:28We've got a new frontier model today, folks. These charts are like for like same harness. They basically stopped short of calling it GPT-5. But yeah, if there were a public release of 04 full today, was it? Don't sleep on that. In other words, run your benchmarks telling it not to use tools. And I expect it'll be a big step up from 03. And so he's looking at the benchmark of chat GPT agent on humanities last exam. Doing much better. And so even though this didn't get a true version bump the The actual results are are great on practical problems. I'm sure we're gonna have Mike from arc AGI on the show later I can't wait until we can throw chat GPT agent at some arc AGI puzzles.

1:47:20I got a little preview and arc AGI 3 It is a challenge And I will be doing it live on the stream and I won't be embarrassed at all what John was sweating earlier. Yeah. Give it a little test run. He said it is, it is a challenge. And I imagine it will be a very huge challenge for, uh, for chat GPT agents. It's funny. So, uh, we had the, uh, the chat GPT agents team on yesterday. And then I saw on the timeline later, people were kind of saying like, Oh, it took 10 minutes to book a flight, which is like kind of like funny criticism because it's probably how much it realistically takes like a human to book a flight so the fact that you know an agent could do it in the same time and you can imagine the agent could just get yeah you know if it can get 10 times faster completely agree also the interesting hot take is that there's there's a world where i have found that even if even if a task takes me 10 minutes on my laptop in a professional piece of software if i can do it in ChatGPT in the app in 10 minutes, and it's equally frustrating, and it takes me the same amount of time, I like being able to do it on my phone.

1:48:33I noticed this when I made this two-by-two chart showing Dwarkesh Patel versus Tyler Cowen on their AGI perspectives. So Dwarkesh believes AGI is not here. Tyler Cowen believes AGI is here. Dwarkesh believes the impact of AGI will be immense. And Tyler Cowen believes that it will be very incremental. So they're on the on the opposite sides of this two by two diagram. So I go to ChatGPT, I could easily have just done this in Google Sheets and taken a screenshot, I could have done it in Photoshop. But both of those would probably require opening my laptop. But on my phone in the ChatGPT app, I was able to have it try and do an AI image generation, that wasn't really working, it was getting confused, so I finally had it use matplotlib and write some code to generate it.

1:49:16And I went back and forth with it, probably for about the same amount of time that I would have been in Photoshop. but it was nice because I was able to do it on my phone. And so there's something about the rune take that text is the universal interface that even if it takes me the same amount of time to book a flight, if I can just do it in a universal interface that I'm super comfortable with and I'm interfacing with it on the ChatGPT app, I might prefer that over going to the United.com website. Or United Airlines.com, whatever the website is. Or Google flights where you can see the flight and then it'll pipe you to the other side.

1:49:52There's so many different sites and they're all slightly different, slightly different UI, slightly different designs. And I, oh, this one, I need to remember to uncheck this box and this one I need to do this and my password's not saved here. I like that ChatGPT is just becoming like a unified interface for how I interact with web services, tools, all this stuff. It's very cool. Anyway, in other news, semi-analysis, AJ, a friend of the show, says, Anthropic, quote, we don't care about consumer. Code is the only use case we care about. Everyone else says, why is Anthropic not showing up in consumer statistics?

1:50:30And he's quoting someone that says, what happened to Anthropic? Because Anthropic fell off of the rankings of chatbot downloads. ChatGPT is on a share with, yeah, of Sensor Tower. ChatGPT is on a tear with almost a billion downloads. Google Gemini at 200 million. DeepSeek at$127 million. Microsoft Copilot at$80 million. And Perplexity at$50 million. Perplexity has been holding on strong in a very competitive environment. And I think that's why they were able to raise at an$18 billion valuation yesterday if you didn't see the news. Swix has more analysis on the OpenAI launch. Three things. And he's doing the Steve Jobs meme with Sam Altman.

1:51:11Three things. A deep research model with enhanced search browser. A revolutionary computer use operator. and a sandbox terminal to execute math and code. A browser, a terminal, a computer. Are you getting it? These are not three separate agents. This is one agent and we're calling it agent. This is a really good one. Great, great, great. Great poster. Great poster. Justine Moore says, I predict that Grok's male AI companion will be an even bigger hit than the female one. uh elon has said that he's naming it uh valentine but what did it say it was gonna call itself it has it calls itself something else that we won't say um just women are quietly massive consumers of romance and erotica content and she gives some data fan fiction so uh romance novels are at 84 82 to 84 percent women online fan fiction 80 i've never been part of that whole world but Yeah, never been big into that whole world.

1:52:14Anyway, let me tell you about Fin.ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake-offs, number one ranking on G2. Go to Fin.ai. I don't know how they do it. I don't know how they keep doing it. Luck of the Irish, as they say. Luck of the Irish. Bucko Capital. Bloke says, I have two people in my life that I've mentally flagged for high risk of LLM-induced mental health issues. where I'm already seeing concerning activity. I don't think society is ready for how much of an issue this is going to be at all. So yeah, again, I think there needs to be fast action from the labs in order to make, just make some changes to the product.

1:52:58It does seem to be like, it's not something that's going to happen in an hour from using the product, but it could happen in a month. Here's a prompt. ChatGP agent, look at my calendar. Look at Google Maps. Find me the nearest grass. I need to go touch it. Schedule it. Put it on my calendar. Remind me to go there. Call me an Uber to take me to the grass. Call me a Waymo. Call me a Waymo to take me to the grass. I need to touch it. Take me to Central Park. The home of our next guest, Joe Weisenthal. Welcome to the stream, Joe. How are you doing? I'm doing great. Thanks for having me back. It's always a pleasure.

1:53:34Somebody commented earlier on you shared the guest lineup and they were like, Joe goes on TVPN more than I call my mom. I love you guys. But maybe that person, I think that person needs to build a better relationship with their mother. For sure. But we are family. This is the brotherhood. We are family. We are family. You are a technology brother. Yes. That's right. A financial brother. Thank you. What's the latest in your world? What has been capturing your attention this week? You know, here's an interesting thing is that the economy, just like the markets, which we all go nuts every day, the lines always go up.

1:54:14The economy itself, it was a good week for economic data. Today we got better than expected economic sentiment. Yesterday we got better than expected retail sales. We got better than expected initial jobless claims. We got better than expected the Philadelphia Fed Manufacturing Survey. There has been this assumption, I would say, in recent weeks that recent months, really, that the economy would slip. And then the question would be, would the Fed cut rates in time to forestall a recession? And maybe that's still a debate. Certainly, we know the White House really wants to see rate cuts. But actually, at least like is a snapshot right now.

1:54:52Actually, it looks like there might be a little bit of a tailwind to this economy, which I think is really interesting and maybe unexpected. That's fantastic. I have your post here. Boom. More strong economic data. June retail sales rise. Let's hit the gong for the American economy. A hit for Joe and the economy. Love it. I need a gong. My producer, Kale, is in the room with me. I think everyone needs a gong. We have a variety of gongs. We can actually send you a gong. We have three now, and we're thinking about getting a fourth, so we have spare gongs if you need to borrow one. I think the guests need a gong.

1:55:24Yeah. I think the big thing is it's not necessarily that you need a gong. It's that you need to get into prop comedy generally, broadly. and Odd Lots needs a whole prop department with a variety of things. A prop lead. Have we showed you our props? We have the crystal ball for knowing the future. Of course. Careful with that. We now have... Yep, put it on, John. If John ever wants to steel man an argument. If we have to steel man something, we have to steel man something. That's clever. Do you guys have a tungsten cube? We don't have a cube, but we have a tinfoil hat. We have a tinfoil hat for when we're discussing conspiracy theories.

1:56:02Yeah, it gives you a little coverage. I'm not saying this. I'm wearing the tinfoil hat. You guys are all set for all the different scenarios. Yes, yes, yes. How was you dropped your interview with Eric Adams? Yeah. It was this morning. Yes. I haven't had a chance to listen yet. You guys seemed like you were having fun. I don't think it's possible to not have fun talking to Eric Adams. Eric Adams is one of these guys where it's like even the people who hate Eric Adams love Eric Adams to some extent. He is, you know, you talk to him and there are some people you talk to and it's like you instantly get why they've been successful in politics.

1:56:44He has a great smile. He's very funny. He sort of speaks extemporaneously very well. You never really know what he's going to say. And look, you know, he presents, I would say, not popular right now. His approval rating is pretty low. But I would say he makes his case well, that he's had a good mayorship between crime numbers, between the volume of housing that's been built in the last four years. Rats? I don't know. Like the rats. The rat numbers are real. I talked about it last time. The rat numbers are real. So, again, I think there was a poll out this week that actually showed him in fourth place.

1:57:19Is there really a rat census? Do we have good data on rats? So the way they measure it, yeah, they do. I mean, this is what collapse looks like, by the way, is when you start measuring the rat population. Are hedge funds trading against the rat index yet? We need polymarkets on the rat futures. The proxy that they use for measuring rats is 311 calls. So 311 calls is like our way to like call the police about something that's not an urgent crime or other things going on. And if there's like a rat infestation or a lot of rats in place and they dropped like 40 percent in 2024. And then if you look at the annualized data through now, it's like down another 25 percent.

1:58:02I think that things like rats and trash containerization, which I know, you know, trying to get into the modern era here in New York City. I think there is a widespread agreement that actually real progress has been made. And Eric Adams has a lot of funny videos about his war on rats. And I think he deserves credit for it. Was there ever, I don't know if this is an apocryphal story, but the whole story of like the Indian cobras where there was a bounty. Have you heard this story? Go on. It's a classic economic example of like unintended consequences, essentially. There's actually a particular term for it.

1:58:41But basically, there was a snake problem, a cobra problem, poisonous snake problem in India. And as the legend goes, as the story goes, the government said, hey, look, we're going to take a decentralized approach. We are going to put this in the hands of the free market. We are going to create a bounty for every dead cobra or dead snake that you bring us. And so we will pay you$1 for every snake that you go out and kill. People started breeding them. They started breeding them. Exactly. And so I wonder if there's a world where, OK, I got elected. I need to crush the rat population, but then I need to climb it up once it's out of the news cycle.

1:59:17I got to get the rat population huge, and then I can crush it right before. So you can keep smashing it again. Keep smashing it right on the cycle. So, oh, yeah, it was bad midterm, but you don't want to change horses in the middle of a stream because I'm the rat cat, the rat catcher. That's right. But, I mean, yeah, is there a secret in New York City to controlling the rat problem? Is it just like more rat catch? I think it really is just a function of how horribly we've managed our trash. Okay, it's trash. And I saw it. I was walking to the subway today because the containerization of trash, it hasn't come to my part of the city.

1:59:56It hasn't come to the East Village. There's just a lot of trash bags that exist on the street. And I saw a bunch of rats. Incidentally, I saw a bunch of rats last night when I was walking home. So it is a live problem. There is still progress. And, you know, like I would never endorse a candidate for mayor, but I would certainly suggest that whoever is the mayor after November or after the inauguration, hopefully the existing trajectory continues because the problem is not solved. Yeah. Deals with it. Jordy? Who else comes on your show and talks about rats, by the way? It's probably just me. Well, you're a new rat correspondent.

2:00:34Emily Sundberg is a helpful New York reporter to understand what's going on in the East Coast. I mean, the big thing that I've been pulling on, I talked to a couple hedge fund folks out on the East Coast in Manhattan. We had one guest on from KOTU who had a very beautiful scenic view out the window from Hedge Fund Alley. I guess that's a street or something like that. And I was pulling on what has the reaction been in the finance world on the East Coast to these crazy acquihires that are going on on the West Coast. So we saw that Google acquired Windsor for$2.4 billion. It was this kind of zombie acqui-hire that's becoming more and more standard.

2:01:17Mark Zuckerberg's paying$100 million,$200 million for single AI researchers. It's kind of shaking Silicon Valley to its core. I think it's good for the news business because now what would have been one acquisition is now two. Oh, yeah. So we got to cover it Friday. And then we also got to have Scott Wu who bought the ghost ship on Monday. But I guess the question is just like, what's the reaction? Because for Wall Street with pods, it feels like it's standard. Yeah, that's really, you know, it's funny. Literally, just before we got on here and I was just talking here, it just feels like, you know, if you think about the sort of broad phenomenons in the economy, that what we're seeing is more and more sectors of the economy are experiencing this sort of like winner take all in this phenomenon where it's not that the sector is doing good or bad.

2:02:03is that there are a handful of talented people in any industry that just, you know, capture extraordinary sums. And, you know, we've seen it for years in professional sports, the pod shops, the hedge funds that we talk about a lot about on the podcast have had it for years. That's our equivalent at Bloomberg, you know, like the stories that read Spike on the terminal. It's always about like some guy, it's like, oh, so-and-so who, you know, is a transportation portfolio manager at this pod shop is like going there and they're getting a$50 million bonus, et cetera. It feels like, you know, we see it in media, of course, in various ways and star newsletter writers and star podcasters and star broadcasters and so forth.

2:02:45And then clearly, like obviously, you know, software people have been getting paid well for a long time. But this phenomenon where now it's like, no, the value is not in the company per se. The value is in just that individual talent who can get up and walk and take that value out with them. It feels like it's replicating elsewhere, and I don't know where it's going, but this seems to be a phenomenon of the world. Yeah, that's why anybody freaking out about the comp packages of individual researchers, it's like, yes, if you look at it on an individualized level, one person getting nine figures.

2:03:20But if you look at it and say, well, Zuck just spent 15 on scale AI, Yeah. And which which was heavily talent oriented. And would he pay four billion dollars for one of the top teams if he could just acquihire one of the top teams? And in this case, he just pieced it together from a variety of labs. It's really interesting. One thing I think is interesting to think about is that a lot of in the finance world, a lot of talent driven businesses often aren't particularly great for shareholders. So if you look at like the history of like investment banks that are standalone investment banks that never had like a trading arm, etc.

2:04:01Almost all of the enterprise value like ends up accruing to the talent. And there is not much of frequently like the equity component when these companies are publicly traded. You look at like boutique investment banks that from time to time are publicly traded. They've never like been particularly those have never done particularly well. Or you think about a law firm, of course, which doesn't have public equity. But, like, you know, it's like all the money sort of, like, accrues to the talent. And so I do think there are some, like, interesting implications, like, maybe down the line, not yet in public markets.

2:04:33But it's pretty obvious from Windsurf that in private markets this has got to be, you know, changed the way investors are thinking. that, you know, what really is left over for the poor downtrodden shareholder if the most talented workers at the company are the ones who really get to capture all of the value. Yeah, you've seen this with the podcast networks of the world, like true networks. If Dave Portnoy builds up some talent, he starts paying them$100K. And so why share it at that point with Dave at that point, right? Like if you are a superstar podcaster under that particular network, eventually you get to a point where it's like, you know, you take maybe you start off and you take 20 % of the cut and then 50.

2:05:19And then you're like, why am I sharing it all? Yeah, Alex Cooper basically. Yeah, yeah. Alex Cooper's market value is about the same as an AI researcher like over the last few years. Yeah. So my I've been thinking about this a lot since we last talked and you said the power laws are popping up everywhere. and I was just going through my daily life thinking like, how is that true? I see it everywhere. I agree in a lot of things. But I was thinking about like, you know, there's this meme of like after AI, the last job will be like the plumber. And I was like, is there a power law compensation curve in plumbing or driving?

2:05:56Because if you think about the value of driving, it's really a lot of, there is a ton of equity value in Uber. There is a ton of value. There's value. It's a leverage thing that the highest paid plumber will be somebody who has like a like scaled plumbing enterprise that you can only install so much pipe. But if they lose their talent, like there's still equity value because you've aggregated demand. And that's the difference between the AI research labs and Instagram. They could have 100 percent turnover at Instagram, slot other people in. It's a network effect. There's an audience there. There's habitual.

2:06:37I know I have a fan base on Instagram or I open it and I know that I get funny memes or videos or family connections there. I'm not leaving just because the software engineer who works on this particular button leaves. And so there's a ton of equity value in Instagram relative to the talent. And I think that it's not as universal as we think. I think we're just seeing it more in media and finance and research and places where there are either secrets that you can take with you or relationships that you can take with you or fandom that you can take with you. And so it's not entirely 100 % universal, but it certainly is something that it's more on display than ever before.

2:07:22Yeah, I think that's good. Look, I think this is a useful corrective phenomenon. There are many parts of the economy where the sort of distribution between equity and talent is not as skewed as it seems to be in some of these areas. It does seem on display. I mean, it's weird that we know the names of software engineers in general, right? Yeah, the trading card memes. We put up these trading card memes. They got millions of views. It's crazy. You guys nailed it. Yeah, and when I think about why you guys, not to blow too much smoke. But when I think about like, okay, like when I think about TBPN and like, what is it about this moment and why has it worked and why has it worked as well as it has?

2:08:06I do think, you know, it's obvious that just like so much of this thing is like, it's, you know, you guys do like a quasi sports show. And so much of what we're talking about is de facto sounding like sports, including the degree to which people just get traded, so to speak, from or big signing transfers from one firm to the next. Yeah, I mean, to me, to me, business, like anybody that is like sufficiently nerded out about business and markets and tech is like it's always been you could always comp it to sports. Right. You have personalities. You have effectively coaches, you know, like the elder VCs.

2:08:42You have the teams, the companies, et cetera. Switching gears a little bit. What's up with what's going on with general solicitation? right now. It seems like there's a bull market in general solicitation. There's this guy, Eric Jackson, who's just been basically going out saying, yeah, I'm just looking for 100Xs. And by the way, if you want to join the ride, you can. And a lot of people are pushing back. I'm going to try to be careful when I talk about this topic. But the idea of like, you know, we're going to pick a ticker. Again, try to be careful. We're going to pick a ticker and just sort of manufacture momentum for it has probably just so much that always existed in markets.

2:09:27And we seem to be in an age in which this sort of behavior is people don't try to hide it as much. And that's, I think, not the surprise. Have there always been people attempting to like, all right, we're going to like try to. I'm trying to think of a word that wouldn't land me in legal trouble. but we're going to try to move this stock for sort of non-economic reasons because we gather and buy it. Has that always existed? I'm sure we seem to live in an age where not only are people comfortable with just sort of doing that in the public, you have a lot of people who sort of say, yeah, you know what?

2:10:06Everybody's got to eat and everything is corrupt these days and everything is a scam. I don't really believe that for what it's worth. I actually think American capital markets are the best in the world from a sort of transparency and regulatory side. I actually think it would be sad if we lose that. But I do think there's this wide perception. It's all a scam. Everybody is corrupt. Everybody has inside information. You're not. You don't have that information. And therefore, why can't you participate in your own form of, you know, driving the market to your will? Social media obviously allows that.

2:10:41And no one seems to everyone seems to be sort of cool with that these days. And like I said, I actually do think American capital markets are deep and fantastic and well regulated generally. And if you look anywhere else in the world. Let's give it up. Yeah. Capital markets. We love them. I was talking to Jordy about this this morning. Well, it's funny that when somebody is doing or, you know, basically doing general solicitation. And the reaction is for a bunch of guys who love finance to go and dunk and quote tweet the person and be like, look. And it just drives more attention. How do you cover it?

2:11:16Like, I thought this is the problem. Like, how do you even like begin to cover it? Because I've wondered about this, like with doing the podcast over the years where it's like certain like certain, you know, I'll hear a story. Someone will tell me about like some meme coin or something. and the schemes that they like concoct to like pump it basically straight up manipulate it or like gather in a group etc and it's really interesting but it's like it feels a little you know like i would love to talk to you on the podcast on the other hand i no matter how much that person is straight up admitting to market manipulation the mere fact that they would be getting attention would almost certainly drive the whole thing higher so it creates this very like weird tension from this yeah remember when the when there was that argentinian presidential meme coin that Malay kind of endorsed and the guy that created it like went on like a started going on podcasts immediately breaking it down yeah you know I there's that famous uh George Soros quote and I don't know it exactly but he talked about he's like when I see a bubble I run towards it and I think everybody is now adopting that where they look at something and they want to get in they see a scam and rather than oh I want to avoid that scam it's I want to get in on the scam I want In other words, it's like, I want to be in on the next Madoff.

2:12:31I remember this during the crazy crypto era of like 2021. I remember CoffeeZilla, this YouTuber who would talk about these scams, would interview some of the victims who lost a lot of money. And they were like, well, I knew it was a Ponzi scheme, but I thought I was early. I thought I was early. I think I wrote that. I got to go find that because I hadn't thought about it. I think I literally wrote once like the new thing is like getting in on the next Madoff. Getting in on the next Madoff. And if there's sort of like we're in an era where regulators, whatever, just don't care about this stuff or the expectation is like you play.

2:13:05Everyone gets to play the game. Everyone knows what the game is. You just don't want to be the last bag holder. The game is to get in early. I was thinking about this in the context of the Coldplay concert that went viral. The CEO of Astronomer took over the Internet. And I was like, OK, it's a private company. But if it was a public company, what would have happened to that stock? Is there a world where someone's like, let's turn this into a meme stock because it's a small company. Let's buy the Coldplay IP, roll it in, and turn it into a Coldplay IP treasury play. I'm sure there'll be something out there in the near future.

2:13:36I don't love it, but, you know, I'm old and I'm a boomer at this point. So maybe I just need to sort of embrace the new generation. You know, it's crazy. Somebody messaged me and they were like, do you know Andy Byron, the guy at the Coldplay concert, was previously the president at Lacework, which went from zero to$7 billion, or$8 billion in the private markets, backed down and ended up selling for, like, I think around$150 million. So he's been on it. What a ride. That's someone who knows the roller coaster of life. Yeah, so he'll be back, I'm sure, probably in another marriage. What's going on with the 230 spread?

2:14:18I saw you posting that. But the 230 spread is at its highest since October 2021. I remember October 2021. There were top signals blaring everywhere. We have our own top signal tracker that we're working on internally that we should roll through as well. But what's going on? You guys got to get into proprietary data. No, so, like, you know, the way to think about, you know, the president has been out calling for rate cuts. And we might get rate cuts at some point in the next year. But the way to think about the yield curve is that at any given point on the curve, that number reflects like the sort of average rate over that time.

2:14:53So the two year yield, for example, is essentially what the market expects the Fed will have rates on average over the next two years. The 30 year is what the market expects Fed rates to be on average over the next 30 years. And what you see is this, you know, even at this time of calling for rate cuts, that number at the long end keeps going higher and higher, which suggests that, you know, the Fed could cut rates right now, could get rates aggressively. If Trump replaces Powell sometime next year or perhaps tries to fire him before that with someone who is sort of a lackey or a loyalist, we might get this situation of sort of like aggressive rate cuts now.

2:15:28But if people perceive that to be inflationary and so forth, one possibility is that rates go up at the long end because they'll eventually have to compensate for that by higher rates to fight that inflation. And so you see that now. And what that means, though, is that even if you got rate cuts right now, you might not actually get lower mortgage rates or lower car rates because those are the rates that actually matter towards where people are borrowing. So I think perhaps maybe the market is telling Trump a signal you're not even going to get what you want, even if you get what you want. You could get that Fed chair who immediately cuts rates for you.

2:16:01But if the goal is lower rates to stimulate the economy, it may not even work because you might see longer rates rise in compensation. Interesting. Yeah. Can you talk about the decision for who runs the Fed? It's been kind of wall to wall coverage from The Wall Street Journal. All different bank CEOs coming out. There's been memes about like, you know, the school walkout, don't fire Jerome Powell. Like, what are the arguments on the sides of like, hey, let's not intervene from the executive branch? Yeah, there's a bunch of interesting dimensions. I mean, look, I'll say a few things. There's always been pressure put on the Fed from time to time from the White House.

2:16:40It's not new to Trump, but it is really stepped up. And the sheer number of attacks, the demands for immediate rate cuts, the sort of the attacks on Powell for the cost of renovation of the Federal Reserve building, which interestingly, there was a story by AP out today that said one of the drivers of the cost is that in 2000, the administration officials wanted there to be more marble instead of glass in the building. That feels very Trump-aligned. It's very Trump-like. And so that could be, so there is some, why the renovations have been so expensive. That's one possibility. But then the, you know, there's a range of, so there's this guy, Kevin Warsh, who for my entire career has been a hawk, always calling for higher rates.

2:17:27Suddenly he's calling for lower rates. Interesting. This is the battle of Kevins. There's two Kevins that are in potential. Yeah, right, right. Then there's Kevin Hassett, who I think is generally, you know, considered to be like a respectable economist by and large. And, you know, if he were to get the nod, I don't think there would be too much anxiety. But the assumption is that whoever replaces Powell would be much more inclined to cut rates sooner and faster. And if it's true that, like, the economy has some upward momentum right now, then you could see how people might perceive that to be inflationary.

2:18:02And another name I wrote about him today, Christopher Waller. He's a governor on the board. He is probably he's calling for rate cuts. He thinks there should be a rate cut as soon as the next meeting. But in Waller's defense, he's had really good intuitions this whole cycle. So he's very hawkish. He wanted to fight inflation aggressively. Even all others on the board were calling it transitory. He predicted that inflation could come down from its highs without a meaningful increase in the unemployment rate, which has been proven correct. So, you know, there are some who are suspicious and cynical and say he's openly campaigning for that Fed chair job.

2:18:37But he's been, no one could really deny that he's had his finger on the pulse about as well as anyone else for the last five years. And this is important, which is that the FOMC, you know, it's 12 people. It's not just the rates aren't just decision of the Fed chair. Waller is someone who would probably have a pretty decent amount of credibility with the other 11 people on that board because he comes from there. So it's possible that maybe he's the most logical choice. But what's likely, I have no idea. Off the top of my head, if I'm going to steal man rate cuts, I'm going to say something like, yeah, the economy is doing well.

2:19:17The retail sales are good. Jobless claims are fine. But it's still really expensive to buy houses and mortgages are really high. And so I want to help Americans buy more houses. Getting people on the housing ladder is the way that they start accumulating capital. That's good. If I do the tinfoil hat, I'm struggling with this because I imagine that, you know, if I'm, you know, want to, if I want my party to win in the midterms, if I want my party to win a re-election, I want the economy to be really strong. I want markets to be booming. So despite all of the different social issues that might be floating around, everyone says, well, like my IRA is up, my 401k is up, my market portfolio is up.

2:19:59But it feels like it's too soon to be playing that card. To go back to our rat analogy, if I was completely cynical, just saying this is all about politics, I wouldn't be demanding rate cuts now. I'd be demanding them right before the midterms, which I believe next year, right? So react to those steel man, the tinfoil hat conspiracy. So look, like I said, the issue with rate cuts from a housing perspective is that mortgage rates may not go down if there are rate cuts because they're tied to the long end of the curve, which might go up in expectations of future inflation. The strongest argument I would say for - What could we do?

2:20:35Couldn't you just go with Figma and edit the long end of the curve? Bring it down? Yeah, you could - Could we subsidize demand? The equivalent of Figma, I guess, would be yield curve control, which is not unprecedented, where the Fed actually just goes out and says, we are not going to let the 10-year rise above X level, and we will buy treasuries with our unlimited balance sheet. And they could do that. The issue then is probably that means letting inflation run hot. It's tricky. But the steel man for rate cuts is that the labor market has slowed. And the rate of hiring really has declined quite a bit.

2:21:13I mean, I think there have been several stories about how low hiring is, particularly for college grads and so forth. So this I think the argument for rate cuts, there's a straightforward one, which is that you could make the argument that the economy needs support or that it's over. The rates are overly restrictive, which is the argument that a Fed Governor Waller made yesterday. But just to your point about the elections and IRA, look, what was it? I think yesterday there was the news that President Trump was going to allow people to invest in crypto in their 401ks or something like that. There was some headline about that and access to private credit.

2:21:51I do think it looks like this is an administration that is very comfortable with letting asset prices rip. And people like that. People like when their 401ks and their IRAs and all that go up. And their cryptocurrencies go up. And I think this is an administration that is pretty happy to see that. We said this early. Give Jane Street direct right access to the Fed Fund's rate. It solves it all. It solves it all. Just solve for market prices. Just make the market go up as much as possible. How's Jane Street doing with their little PR series of PR crises? I actually have a closing. No, no, no. Yeah, yeah, yeah.

2:22:31The Indian options. and then the sudan stuff too that whole that whole thing wait what oh yeah we talked about no it was just like you go from not here you only hear about jane street i know on the duarkash podcast yeah yeah you know a nice ad read and then you start hearing about you know all these other things uh it seems yeah i don't know i gotta i i i'll i'll check in on jane street for you guys thank you thank you what jersey are you wearing by the way oh i've got this uh i was in mexico earlier this year. By the way, I got your hat. I have it in the office. I wasn't sure if that would be a little...

2:23:05I was thinking about wearing your TBPN hat. I was like, is that like wearing the t-shirt to the band when you're going to see the band? I wasn't totally sure, but I'll put it on next time. I just want to see a suit at some point. It would be cool. We're going to get some Odd Lots merch over here. I'll do it. You know what? I will wear a suit or at least a shirt, jacket, and tie next time you guys have a So we try to wear white suits when the market's ripping. The S &P 500 was at an all-time high yesterday, right? Can't keep them clean. We didn't even think to put it on because we're so normalized to all-time highs.

2:23:39It's every day out here. Anyway, thanks so much for stopping by. Thanks anytime. Always love it. Have a good weekend. Love it, dude. Have a great weekend. Bye. Cheers. Really quickly, let me tell you about Public.com, investing for those who take it seriously. They got multi-asset investing, industry-leading yields, and they're trusted by millions. We will bring in our next guest, Nirav from Nextdoor. We have a bunch of questions, particularly about political campaigns given some of the folks we had on earlier. But thank you so much for joining. Good to meet you. What's going on? How are you doing?

2:24:09I'm doing great. Thanks for having me. Excited to be here. Welcome to the stream. It's great to have you. Why don't you kick it off with an introduction on yourself and the company and then I just want to jump into a bunch of questions immediately. But I'll let you do the introduction. All right. Appreciate it. Nirav Tolia, co-founder and CEO of Nextdoor. Nextdoor is a public company that is trying to build the daily utility that you use every day to find out what's going on around you. We're focused on the neighborhood in particular. And so we sometimes call ourselves the Essential Neighborhood Network.

2:24:39We started in the summer of 2010, went public in 2021. I ran the company for the first nine years and then actually came back to the company a year and a half ago as CEO. So I'm a re-founder, not just a founder, but a re-founder. And this week was really exciting for us because on Wednesday, we launched the new Nextdoor. The reason I came back to the company is because we needed a much better product. And sometimes founders are in a good position to reimagine the product, even though they built it in the first place. And so for the last year and a half, we've been working on a brand new version of Nextdoor, launched it on Wednesday.

2:25:14It's going really well. We're excited about the future. What's the biggest change with the new product? It's completely different. And so it's not an evolutionary change or like a version 1.0 to 2.0, right? But the biggest change is we've taken an all-purpose news feed because we're a social network for neighborhoods, like there's a social network for pictures and a social network for people and for businesses, right? And we've taken that social network and we've started to make it a lot more structured and utility centric. So we focus this release around local news to keep neighbors informed, local alerts to keep neighbors safe, and local recommendations to keep neighbors smart.

2:25:51In the news feed, there was always local news being discussed. There were alerts being discussed. There were recommendations being asked for and given. But now we have dedicated parts of the app where you can find those things. And so it's just a lot more useful. Senator, do you sell ads? What's the business model? We do. How is it evolving? We have over 100 million verified neighbors in 11 countries. So decent scale. And as I said, we're public. And so hundreds of millions of dollars in revenue as well. And the business model is advertising. Yeah, that makes sense. We had a friend of the show on earlier this week.

2:26:27He is running for state council. Is that right? State assembly. State assembly. and it was interesting because he came on our show and we have an audience all over tech and in San Francisco and New York and I was trying to puzzle, like I want to help him, I'm excited about his campaign, but realistically we're not a platform focused on his district in Los Angeles. So he was saying he was going - Which is probably like 20 square miles. Yeah, yeah. He was saying he was going to go knock on doors, literally, and go to local events. But I was thinking about what is the most internet native way. He's a great poster.

2:27:07He created kind of a viral video. And he seems to be good at communicating through the internet. What can you tell me about politics on Nextdoor generally, local politics? Have people found luck there? What are the different strategies? Are you in favor of this? Are you excited about this? Are you avoiding it? How does politics work now? Yeah, look, it's a great question. And honestly, it's something that we've struggled with since the inception of the company. because when it comes to national politics, we know very divisive. Totally, totally. When we see that on the platform, we don't like it.

2:27:40I completely agree. We've actually said specifically no discussion of national politics and no national political advertising. So that's where we started, right? What we've realized over time is when it comes to local issues, whether you call them local issues, civic issues, or local politics, those topics matter to neighbors. And the point you made is exactly right, which is the folks who are behind those topics, whether they're elected officials or that they're folks in the local community, they're trying to get something done. They need distribution because the internet has made it easy for you and me and your co-host to talk to each other.

2:28:16And I don't even know where you all are. I'm in Texas. Right. But I'm pretty sure you're not in Texas. Right. But it has made it very hard because we're looking on our screens and looking at our computers to look out the window and see who's right across the street or who's next door. Right. And so that should be the promise for Nextdoor. And so it's a long-winded answer to your question, but I hope in the future that we will provide your guest an opportunity to come on to Nextdoor where he knows he can reach verified neighbors in that 20 square mile area and he can talk about the issues and how he wants to deal with the issues.

2:28:52Historically, for 15 years of our history, until Wednesday when we launched the new Nextdoor, we didn't really let anyone except for verified neighbors create content. We had some public agencies, police departments, fire departments, some mayor's offices, but not what you would call local politicians. And what we realized is ultimately our job is to give you all the local information that exists regardless of the source. And so with the new Next Door and with local news, which I mentioned, we have 3 ,500 publishers that are publishing 50 ,000 articles every single week. Now, in my city of Dallas, that's the Dallas Morning News.

2:29:30That's D Magazine. That's all the local publishers. It's not the New York Times publishing into Dallas, right? It's the Dallas-centric and the neighborhood-centric sources. So the same way we're letting those third parties in, I fully expect at some point in the future, and I don't know when, we will let the third parties that want to be elected officials or who are elected officials come on to next door. And we just need to figure out the right way for the signal to be higher than the noise. Yeah, no, I completely, yeah, it's, it's, it's fascinating. Like I had this weird, interesting experience where we moved into a neighborhood and there weren't curb cuts and we have a stroller and my wife was like, I'm going to write a letter to the city.

2:30:14And I was like, that's never going to work. Like it'll be 10 years and they fixed it and they made a curb cut in like three months or something. It was really fast. I was very impressed. And it's clear that like the city was just prepared and open to that. And I didn't even know that because I don't have like this connection because the local news has kind of dropped off so much. How do you think about the business model that a local news creator might have in the future? We talked to Chris Best at Substack yesterday. Very interesting business model there. I could imagine, I mean, every social Network has had, you know, people might talk about the YouTubers or podcasters and Joe Rogan with these big deals, but there are people that make a full living just on Instagram or just on X or just on threads.

2:31:00Listen, this show is really just really big on X. And I'm interested in how you see the business model of a local content creator. Is there a world where you're both partnering with an organization to distribute their content that's maybe in a local newspaper physically, their own website and then you're kind of a top of funnel? Or do you think there will be next door native creators soon if there aren't already? It's a big challenge for local publishers because as we know, the old business models of delivering papers or driving subscriptions for things that show up in our mailboxes, that doesn't really exist.

2:31:37At the same time, the digital business models, they don't have the same scale. And so it's hard for them to justify the ad sales forces or the technology investment, et cetera, right? Today, what we're doing is we're starting by sending them traffic. So we don't have a walled garden on Nextdoor. These 3 ,500 publishers, they give us a headline, they give us a hero image, they give us a snippet. And then if one of our members wants to read an article, they go off to that publisher's website. And that publisher can monetize through a subscription. They can monetize through advertising. They can monetize whatever way they've chosen.

2:32:08The thing that we've thought about, and I'll get to kind of the Nextdoor creator idea that you talked about. But the thing we thought about is if there's enough demand in one area to get local news broadly, could we put together a kind of Apple News or Spotify kind of subscription where you pay one entity next door and then they get the proceeds on some kind of rev share based on what articles are read? So we've thought about that, but it hasn't gone any further than us thinking about it because we need to see how this performs. Ultimately, I'm not sure about the business model behind it, but we certainly believe in citizen journalism.

2:32:48And so even enabling the high school journalism student who wants to write about the high school sports that are going on and making sure that they can use Nextdoor as a distribution platform, that's something we want to enable because if that person goes on Instagram or X or LinkedIn or Facebook, there's just not enough audience. But if that person comes to Nextdoor and they're writing about the neighborhoods that are around a particular school, those neighbors want to support that school. So there's a lot of opportunity for Nextdoor. I would say the story of Nextdoor is one of massive potential and of not having a good enough product to really deliver on all that potential.

2:33:28And that's what we're trying to change. Yeah, it's an interesting challenge because like social networks in general have historically done well by reducing friction on the sign-up, but the nature of Nextdoor is you need that extra step of like verifying, does this person actually live where they're, you know, in the neighborhood that they're trying to participate in? And I had this one moment, it sounds like it was before you came back and started fixing things, where I moved to a new neighborhood, I was trying to get set up, and it wasn't verifying, and I just churned and I haven't gone back.

2:34:02And so I imagine this, even though I'm sure it's active, I know it's a very active community on there. One question, and I'm going to try - That is kind of a hard problem because when people try to switch around neighborhoods, they don't have the patience to re-verify. They do have to verify initially, they don't have the patience to re-verify. So it's something that we need to make a lot easier because the thing you're talking about, the statistic I heard was something crazy, like 10 % of Americans move every year. And so it's happening a lot. People are moving neighborhoods, whether they're in the same city, but in a different house or whether they're moving cities altogether.

2:34:39And so that's something that we need to make frictionless. Yeah, I'm sure if you could like, like upload a video of you walking into your house at the address and then you do some like geoguesser type AI thing to identify that, hey, this person's really walking into this house. We've done everything. You've done everything. Innovative technology all the way to sending you a printed physical postcard. We've done all of those things. The printed postcard is Lindy. It's not going anywhere. How do you guys think, top of minds, because John and I live in Southern California. I live in Malibu. John lives in Pasadena.

2:35:15So we were both pretty close to the fires that happened. Fortunately, we weren't directly, our homes, our neighborhoods weren't directly affected. And then you're in Dallas near, not too far from where the flooding happened. How do you guys think about building features around helping people through disasters? Because I remember the fire app in Southern California that everyone was using, it's just run by a nonprofit. And there was one night that John basically thought - Watch Duty? Yeah, Watch Duty. John one night basically thought, he was like, oh, Jordy's probably, we didn't have any cell service or anything like that.

2:35:55But I just remember using Watch Duty it would just periodically go down and it felt like, okay, there's probably going down because they just don't have the - The scale. The engineering capacity, the scale, et cetera, to just like run this service. I'm curious. But it's a hard problem to try to tackle because it's so spiky, right? It's like - Yeah, look, Watch Duty is an amazing app. And so kudos to them. And when the Palisades fires happened, I looked at that thinking we have to do more. Now, we had seen all of our metrics spike like crazy in those Palisades neighborhoods, because when a crisis happens, whether it's a power outage, which is relatively banal but annoying, all the way to inclement weather or a natural disaster like a fire, right, or terrible flooding, next door becomes a lifeline, because there is no other infrastructure to communicate with the people around you.

2:36:49And you need to be able to either say in a very simple way, what's going on all the way to, in a critical way, say, I need help. I need to be rescued, right? Or I can provide someone with help. And so historically, through hurricanes, through tornadoes, through fires, Nextdoor has always spiked when these things happen, but it's just a newsfeed UI. And so with the new Nextdoor, we've created an entire alerts surface where the entire app transforms into this lifeline when, God forbid, a crisis is happening. And we take now authoritative data sources. So in much the same way that we're bringing in third parties on local news, we bring in third parties.

2:37:26I think we'd like to bring in Watch Duty at some point as well. And because we know where people live, we can deliver their information proactively to just those areas. And that's what's very different because if you think about watch duty watch duty doesn't know where you live and watch duty can't warn you before you go open watch duty to see if something's going on right yeah but what happened with terrible no it's actually it's actually ends up being stressful because i'll be like on the show and i'll get a notification from watch duty earlier this year it'd be like a fire is popped up half a mile from me it's really rough it doesn't know where it doesn't know where i am So I'll get notifications like all over L.A.

2:38:04County. I'm just, you know, I end up looking. I mean, it's probably good for their their user metrics because I'll open it up and realize, OK, it's it's like 100 miles. I think you need three things to really create an essential use case around this, which truly is an essential use case because it could harm your family and yourself. The first is you need to aggregate all the alerts. So Watch Duty just does it for fires. Right. But you need power outages. You need construction delays. You need any kind of traffic that's going on. You need some event that's going to change something in the neighborhood all the way to the really serious stuff like fires and tornadoes and hurricanes and crimes and that sort of thing.

2:38:42So that's the first thing. The second thing is you need to know where people live so you can get them timely information that's hyper relevant. Right. I mean, it's not relevant if it's half a mile away because it's not going to affect you. It's just going to freak you out. Right. And then the third and final thing you need is you need to have a community of people that are notified because in many cases, they're the ones that have the information, the photos and the videos that are actually more relevant than anything the authorities are providing because they're on the ground. Right. They know exactly what's going on.

2:39:13And so we have all of those pieces and God forbid those crises happen. But when they do, we have to do our part in keeping people safe. It's community intelligence. It's like the collective. 100%. Working together. It's the power of community, truly. Fantastic. Awesome. Well, great chatting. Congrats on the new launch. We'll come back on again soon. You're going founder mode. It's great to see you back in the driver's seat. You do better open the app. And if you email me, I will make sure you get verified immediately. Oh, I'm sure it'll work perfectly now. I think you're going to like it. And I think your listeners will too.

2:39:47It's very different than the old Nextdoor. It's got all the goodness of the old app, but in a fresh new shell with lots of new features. That's amazing. Very exciting. Thank you so much for hopping on. Thanks for having me. We will talk to you soon. Cheers. Bye. And if you're looking to explore a new neighborhood, get on Wander. Find your happy place. book a wander with inspiring views hotel great amenities dreamy beds top-tier cleaning and 24 7 concierge service it's a vacation home but better folks and wander just dropped wander indio haze haze haze oh okay but uh well we have uh mike from arc agi coming on the stream and guys we have the ability arc day arc day i i i love these releases thanks so much for always coming on the show.

2:40:33Of course. Thank you guys for being such huge supporters. I'm such a fan of this project. It's so amazing. So we have the latest and greatest. Why don't you just give us a little bit of background on the actual V3s and the trade-offs. Yeah, first of all, I think, why don't we talk about the XAI launch last week? Because that was a pretty massive improvement. So maybe start there and then we can get to the present. Yeah, so this is really I think the second time we've seen a major frontier AI lab use ARK as a benchmark to show off some sort of frontier progress. Back in December, we had OpenAI use ARK v1 to show off this qualitative change, really mark the moment where AI frontier research moved beyond just scaling up retraining and starting to add these symbolic systems on top, these chain of thought reasoning systems.

2:41:25ARK really marked that moment. And then last week, the XAI team used ArcV2 to show off a frontier result on ArcV2. They got 16 % on the benchmark, still early days. But I think one of the really big takeaways from that was basically like how, you know, it's largely using a lot of the existing ideas in the world, but how quickly and effectively XAI was able to catch up to the frontier. And so, you know, my mental model now is, you know, going forward is, you know, wherever the front sort of innovation come through, my expectation is XA is probably going to go beat for beat on catching up, just given how fast they're able to get there this time around.

2:42:01When I hear, like one thread that I've heard from watching the ARC progress is you put more test time inference, more spend behind a particular model, you get better results. And it begs the question, like, is this brute forcing? Is that what we're experiencing at some level is that is that a fear and is the latest arc v3 uh an attempt to kind of avoid that or is that just like not an issue at all so so no because of how we evaluate top scores on arc so we publish along two dimensions one an accuracy score but we also publish an efficiency measurement and this is not arbitrary like efficiency is really really fundamental aspect of what it means to be intelligent.

2:42:50So when we, you know, we have the million dollar prize, it's still hanging out there, by the way, for the original version of the contest. And, you know, if you look at, you know, the human level efficiency scores just on V1, we're still only around, you know, 60 ish percentage points, whereas our benchmark for humans is 85 and onwards. So, you know, even though we've got the next team to beat 83, 85 % or something? Would they win the million or do they have to get to 100 %? So the Kaggle contest rules are a little more stringent. You have to do it on a certain performance profile, the limited compute budget, you have to get the high score.

2:43:25And then there's an open source requirement. So this is one of the things that one of the sort of principles of the Archiprise Foundation is we're trying to basically accelerate AI genesis by encouraging more people to work on new ideas, openly share those ideas, try to, you know, kind of shape the research community to look more like what it did during the 2010 to 2020 era than maybe it has over the past three or four years or so. What about, we talked to somebody, I forget who, they said like, oh yeah, like, you know, RKGI, it's cool, but like we could totally crush that if we just like RL'd on it directly.

2:43:57And all of the labs are just being like nice to like keep it as an independent benchmark. But I don't fully buy that because I feel like some hedge fund would just see a million dollars on the floor and then just go do that if that was the case. But what is the vibe of the - Like benchmarks are marketing. Yeah. Right. This is like one of the reasons I didn't appreciate this 12 months ago when we first launched ArcPrize. I do now. You know, the whole reason I put the money into the contest in the first place was Arc's awareness was very low. And my thesis was this is the most important unbeaten benchmark in the world.

2:44:31It tells us something important that no other benchmark does. Right. If you go even look at the Grok 4 stream, all the other benchmarks that were shown are like PhD plus plus level benchmarks. Yep. And yet our tasks are like, you know, we have objective evidence. We've done human controlled studies that show they're all solvable by sort of average humans. Yeah. And so I think that tells you something interesting. Like, well, OK, yeah, like we're clearly missing something big here. We don't have it all figured out. We're not in just like a scaling up regime. We are in it. We're sort of an idea constrained regime.

2:44:58And I think that's an important conclusion, because if it's true, it means that individual researchers and small teams on small budgets can actually have a significant impact on the frontier of AI research. They don't need, you know, a million, 10 million, billion dollar training budgets in order to actually make a material impact on AI. Yeah, the challenge, like, I mean, the real challenge is just the distortion in the market right now and the tradeoff that a researcher, even somebody who's, let's say, a 20 year old in college that could be doing this sort of independent research. You know, like, wait, if I drop out, I could be making$500 ,000 a year base comp and what, you know, the equity on top of that.

2:45:36So I imagine it would imagine at some point are there like high schoolers that that are that are doing this kind of thing? Because like at a certain point, like, you know, the target market is like people that like are maybe a little bit too young to like actually get it. Like Silicon Valley companies will happily have somebody drop out of college. It's a different conversation when somebody is like, I want to like drop out of like high school. Right. I mean, this forms my thesis. I think talent is very distributed globally. If you look at most of the teams that are on the leaderboard from past years of the art contest, a large percentage, I'm not sure if it's over 50%, but it might be, are outside the United States.

2:46:13And again, this is like if you're trying to create a sort of optimization function for creating AGI, you'd like to shape an innovation environment that's very open, there's a lot of sharing, and there's a lot of diversity of approach. The opposite would be like there's very little sharing, everyone's working on the same ideas. Because if those ideas are wrong, then you're sort of shooting yourself in the foot. And so I think that's one of the reasons we sort of launched DarkPrize in the first place was to try and help communicate the story that individual people, young folks with very little budget can actually have a large impact and encourage them, if they have new ideas towards AGI, to go work on those, maybe as opposed to going and just starting the next language model startup.

2:46:54Yeah. Yeah, when Dwarkech came on the show, he was talking about the need to solve continual learning, this idea that he has this amnesiac PhD that is unable to learn hard lessons and then roll that up into habits and kind of wisdom almost. and that's why he's unable to use any of the frontier models to, his example was like select which clips of the podcast will perform well on social media or something. He was struggling with that. And I'm wondering, we hear about the spiky intelligence concept. Do you think that the problems that underlie ARC-Prize's robustness are related to the same continual learning problem that Dworkesh was highlighting?

2:47:49Or are these two separate problems where we could see us solving one and not the other? I think that's happening, right? The scores are much higher in v1 than v2. So if I kind of lay out and tease here kind of the version we're doing a public preview for today. You know, we've got the ARC V1, V2 and V3. V1 was introduced back in 2019. It was designed to challenge deep learning as a paradigm. Remember, this is before language models, years before sort of language models really hit any sort of stride in terms of the research. And it sort of was robust through that advancement. And that's because language models sort of inherit some of the same fundamental limitations that pure deep learning do.

2:48:25V2 was designed to challenge this new paradigm of AI reasoning systems. It's still a static benchmark. So the puzzles look very similar to V1. It might actually be kind of surprising that like you can't beat V2 if you can beat V1 because they look like they're in domain from each other. But the intuition here is generally the V2 puzzles require longer reasoning chains generally to solve them. And so that gets harder to do. One of the things that we started to see though this year is really the emergence of a lot of these agent systems that are being placed into dynamic open-ended environments and while static reasoning I think benchmarks are useful and will continue to be useful this is one of the motivations for starting to build v3 and defining what we're calling an interactive reasoning benchmark to help evaluate and really challenge some of these frontier AI agent systems we're trying to see emerge okay so should we do the live demo let's do it let's do it for like share what launched today I guess yeah so so I can give us the overview I can kind of read through this too yeah give us the overview and then and then we'll play a little it's a little unique for us because you might be surprised like oh wait beat three's launching didn't v2 launch like three months ago yes yes today's a public preview we're showing off the first three public games from the eventual data set we're building this year we intend to launch the full version in early 2026 we're going about the launch a little differently than we did with v1 and v2 because v3 is such a big upgrade over v1 and v2 we want to get um by upgrade you mean by upgrade you mean significantly more challenging The gap between what's easy for humans and hard for AI is getting wider again with V3 compared to what the earlier versions were, which I think is one of our other design principles we have.

2:50:04And it's also just like a very different domain than V1 and V2. They look like architects, but they're dynamic. And there's a lot we don't know about them quite yet. Both what humans can do, what they actually find easy, what AI agents can do, how much can you create custom harnesses and scaffolds to be able to maybe make progress. I think we're going to learn a lot. And this is why we're sort of launching the first three games early to make contact with reality here and increase our learning over the next maybe month or so on our game design, our API design. We actually launched our first piece of infrastructure today as well, an API that you can actually build agents and go run against these first three games.

2:50:38And we launched a$10 ,000 agent contest that's running for the next month for whoever can build the best agent that gets the best top score on the games that we're watching. So even if they get 1%, but they are the top, even if it's low, whatever it is, the money's going out the door. One important thing, like V1 and V2, ARK V3 has a public and private data set. So we've got three public games. There's also three private games. Those are actually what we're going to be awarding on top score performance on. So if you're thinking like, oh, I'll just make a really good, you know, harness for the three public games, it won't work because they won't translate into the three hidden games.

2:51:10Smart. Clever. Clever. I love it. So I'm sharing my screen to the stream. I don't know if you'll be able to see it. I can see it. I will read through this. My suggestion is we should play Locksmith. This is LS20, our first game. I think you guys should just collaborate on this one game together. It'll take about five to ten minutes to probably play through. And I think seeing both of you work together on it live, I think will be a fun, entertaining experience. I should be able to see the screen. Okay, I'll read it out. So, human instructions, you are playing a game ID. There are no instructions intentionally.

2:51:41You must play the game to discover controls, rules, and goal. Press start to play. choose your controls, W-A-S-D, or arrow keys, play to learn the rules of the game, win the game, profit, just kidding, just kidding, no prizes here. So I click start, and I'm presented with a large grid of squares. It looks like the most intense Arc AGI puzzle possible because the original Arc AGI puzzles were something like a 3x3 grid, and now I'm seeing something like... These are all 64x64. 64x64, okay. So I do have the ability to use arrows to move this blue and orange block. And Jordy, can you see me moving it around?

2:52:25Yes. Okay. So if I go on top of this, the bottom left-hand corner updated slightly. Let me see if I can zoom this out a little bit. All right. You've learned one important thing. And if I keep moving, click seems to do nothing. Spacebar seems to do nothing. I'm going to give a little commentary while you're going here to see John. Please, please, please. So the data set, the three games that we launched today, all of them are completely different. None of them look similar. In fact, this is the only game in the set that looks like a 2D agent game from kind of a tops down camera view that we're launching right now.

2:52:55All the other ones are quite different. And this is actually a design goal of the benchmark is for all the eventual hundreds of games we're going to have for them to be entirely different and very novel and diverse from each other. So I appear to have lost a life. If I look in the top right, I now have three. I had three red dots. now i have two did you cross that boundary i got a red flash and so uh i think i died um but if i move forward i get a green circle which i imagine means i won and now i'm on a new level and there you know do you know why you like got to the new level can you articulate that yet yes so i i I believe that I stepped on a button that rotated my, or kind of rearranged the icon, the goal icon in the bottom left of the screen.

2:53:46At first I thought that the, in the bottom left I see a little like blue and white line, and I thought the line was like a map that I have to take, but it appears to be a puzzle shape that I have to match up with a puzzle shape that's on the grid somewhere. And I'm stepping on a button to change it. So when I step on this rotate or change button, I'm getting kind of like a different Tetris piece. And if I keep doing this, I might land on this. Okay, that matches now. So the bottom left matches the little goal. You see the goal? I go over to it, but if I go over to it, I die. And so I think I ran out of purple steps.

2:54:30So I have a set of purple like energy. I have energy. Yeah, yeah, I have energy. So now I'm going to do the same thing. There's another very important design goal in many of the games in Arc v3 Inherit, which is there's intentional efficiency limits on actions that you can take. So now green score. I did it. Which is smart because the idea of like, you know, Scott Wu can probably like one shot a math problem. and it's very efficient for him. And then someone else is going to be able to solve the same problem, but like over weeks. And is that really the same level of intelligence? This is really, you know, you guys have probably heard, like for a long time, actually, I think games were considered to solve problems in AI, you know, with AlphaGo and all the chess games.

2:55:14And Dota, yeah. And one of the reasons for this is the way they learned. It was like they didn't, the only thing that stopped them from being like totally superhuman in those is that they just didn't scale the current algorithms enough. And so they didn't solve, you know, it completely, but they all were basically Yeah, the most of them use RL. And so they're trying to take reward signal and understand, you know, what actions I took to produce the reward signal. This is one of the things that efficiency helps with is it limits the ability for an agent to just naively be able to go gather a reward signal by spamming and playing the games hundreds of thousands of times.

2:55:45This is something humans don't need to do, right? You know, you already beat level two in what, less than five minutes here with a very limited number of efficient actions that you took. And this is something we don't see from the frontier like LM stay or other agents we've been testing Okay, I got my next level But the next level we started introducing some new concepts here So so I'm seeing they're different colors So I I have blue and white and I need blue and yellow blue and orange and so I'm gonna step on this This color block now I have blue and teal now I have blue and red I'm doing okay on efficiency about half my life.

2:56:18Okay, that seems good But I think if I make a run for it, I won't make it. So I'm gonna pick up this purple Cube to refresh my energy run over here. Am I gonna make it? Am I gonna make it? I made it there Yes, there we go victory. Okay now that there's a different one I'll start by changing the color. Okay. I nailed the color blue and teal That's the end gold and the black cube then I need to switch my icon from this one Tetris piece to a different one okay I got that no that's not it I need the the little like chair block okay that's you're running out of lives John roughly correct let's see okay I refreshed I refreshed go over I think this this other block I think this is a button I think I'm gonna run out of lives though I need to go refresh purple I refreshed just a one one away one away okay let's keep rotating keep rotating Okay, now it matches.

2:57:16There you go. Okay, and I'll just pick up the free energy. Boom, green. You might have noticed, it's a short scaffolding new things you have to learn, right? There's a progression system here. It's not just learn one rule in level one and apply it to the entire game, but we found a really, an element. One design goal is that all the games are fun. Yes. And one of the things we found when we were doing early game design was that folks did not find the games fun. If they just took one rule they learned and just repeated it, right? Yes, yes, yes. introducing new things you have to continue to learn throughout the game is a big function of whether humans can find these things actually entertaining and fun well we we should figure out the infrastructure to have pure pvp speed runs totally the entire prize we'll have the whole team do it too um real real quick while we have you we have our next guest in the uh in the waiting room but uh i wanted to ask you because it's top of mind for us this week i think like the broader tech community went from sort of like not like like taking like ai safety and alignment you know super super seriously or kind of making jokes about it until this week i think ai psychosis has been top of mind for a lot of people if you were running one of these scaled labs today how how would you be trying to sort of quickly react to some of the um some of the different kind of stories that seem to be bubbling up around um people just getting like too you know too deep in this sort of recursive prompting.

2:58:41You know, my sort of view generally on AI safety stuff is if you want to be empirical about it. But, you know, this was sort of my big issue when we were going through all the 1047 legislation last year in California is trying to make predictions about what future harm might happen by being able to predict the future. And in some cases, poorly predict the future. I think even ARC, you know, was sort of clear demonstration of an eval that suggested we were not just scaling up pre-training. AGI is not just going to emerge from scaling up this pre-training regime. And that was sort of the predicated thesis on why we needed something like 1047 at the time to like stop this imminent, urgent, potentially dangerous scaling.

2:59:19So now I actually think, you know, my sort of view probably aligns quite closely with open ads where I think you actually need to deploy the technology into the environment, into the world in order to make contact with reality and learn what are the actual issues that you care about? What does society care about? My sort of view is that like society is actually better at dealing with fast change than slow change. This is another kind of counterpoint that I think if you go look at the safety community, would argue slow, slow takeoffs better than fast takeoff. Yeah, I think in a lot of capabilities areas, actually fast takeoff is perhaps desirable because humans notice change.

2:59:51It's like literally what we were evolved to do is in our environment, we notice when things change fast, we don't notice when things change slow, right? The frog boiling in the pot is sort of the classic fable here, right? And so I think fast change stories like this issues with psychosis are good in a weird way because they uh they um are sort of antibodies like oh hey something changed here we should react to it yep yeah no that's so that's kind of my broad framework of uh what what i'm what i think how we should sort of like run these uh in some ways the the negative externalities of social media like let's say like somebody's developing body dysmorphia like the the ways the social media spectrum change from like sending like group messages to suddenly like you're sharing your entire life like it actually was very slow and so I think that this development with uh with that creeps in right you wake up 10 years later you're like are we happy with like where we got brain rot is a meme that took years to develop fascinating anyways you have to come back on soon we could go way deeper we're gonna be playing this hope you guys had fun playing the first game no yeah fantastic I was not expecting a game I was expecting a puzzle and we are clearly in game territory very fun uh very incredible work guys Thanks for having me on.

3:01:02We'll talk to you soon. Talk to you, Mike. Bye. Up next, we'll stop keeping in waiting. It's Kyle Samani. Welcome to the stream. Sorry for the wait. We were proving our humanity with ARK AGI V3. Welcome to the stream, Kyle. In the suit. In the suit. You look fantastic. On a special day. You didn't have to wear the suit just for the show. Come on. I wanted to outdo you all a little bit, too. Fantastic. Looking sharp. Looking sharp. Are you in D.C.? right now? I am in DC. I'm in a little phone booth about two blocks from the White House. Fantastic. Give us the update. What's happening in DC? Yeah.

3:01:40Let me turn my phone here real quick. Yeah, that's amazing. Awesome, guys. Thanks for having me back on. Pleasure to be here. Today's a big day for Cryptoland. President Sump just signed a genius bill into law. Yes, huge, huge day for industry. This is the probably most consequential piece of financial legislation since It's the first crypto legislation we've ever had. And just an incredible milestone for the industry at all. Which is just crazy to say out loud, however far we are into this. Crypto has been a thing for like almost 20 years now. Bitcoin wave paper 2018. And it's the thing that you've been basically begging for, just like give us some regulatory clarity.

3:02:26It's finally here. It's finally here. Yeah, I mean, industry has been begging for regulation under the Biden administration. And they said, nope, no clarity, we're just going to shoot you randomly. And, you know, finally, like, we actually can operate. It's pretty amazing. Fantastic. What does this mean for non stable coin chains? Like, what does it mean for Solana? What does this mean for Bitcoin? Is there any implication there? Or is this purely? Yeah, do you think it's priced in? uh yeah it's definitely not priced in so first let me touch quickly on like what i think it means for the u.s and they can get into kind of like the the chains and stuff yeah so i think the correct way to think about this this is um you know there's eight billion people in the world and um i have a theory that if you were to go to each of those eight billion people and ask them hey you can denominate your wealth in any asset it could be apple stock s &p 500 bars of gold euros yen you want whatever you want if you could denominate your wealth in any asset without fear of political persecution in your local jurisdiction what asset would you choose and my suspicion is that somewhere between 60 and 80 percent of the world would say u.s dollars um and for people who don't live inside the united states having a u.s solid bank account is somewhere between very difficult and impossible um outside of like all the top one percent or so of the global wealth.

3:03:49And stable coins make it trivial for anyone in the world to have dollars in their pocket. You don't need to have permission. You just take your phone. Your phone picks a random number, does your private key, and you're good to go to receive dollars. I think this will probably represent one of the largest movements in capital and human history as you enable, call it, five to six billion people to start holding more dollars more easily than they otherwise could hold them. And the scale of what it means is actually really profound. And I really underappreciated, which is why I think it's not priced in, because it's just hard to grasp what this means for everyone in the world to be able to hold one currency.

3:04:31This has never happened in human history before. Yeah. This is fascinating. I mean, I'm like, I'm almost like, zooming out, like, I'm sure it's good for a lot of different projects and companies and tokens and chains, but it feels just incredibly bullish for America. Like, we've been like, because there was this narrative of like, oh, the tariffs and stuff, like we're going to lose dollar dominance. We're like, we're going to lose global reserve status. And this just feels like coming from the half court shot. Yeah. It was like an artificial, you know, it was like a supply demand imbalance, but the supply constraint was just coming from like, you don't have to be.

3:05:07Regulators and other places that said you can't set up a dollar, US dollar bank account in our country. We're just not going to allow that. Yeah, you don't have to be like even pro-crypto or crypto-native or anything like that. This is good for America. And this is like going back sort of the core tenets of crypto, like permissionless finance. It's like, okay, like permissionless access to U.S. dollars where somebody says, I want to get paid in dollars. They set up a wallet and it's software and they get paid and it's... Yes. It is... It's very cool. I mean, it's very much capitalism. Like, I just applied the money.

3:05:40If you identify as a capitalist, Honestly, we should pause the thing. Oh, my God. Like, actually, the world as a whole was actually shockingly anti-capitalist in terms of just like currency access of nations. Yeah. Yeah, that's wild. What else should we talk about today? Is there any other downstream things? Can you give us a temperature check on the rest of the regulation? What happens next? Anything else that's going on in Washington that we should be following? Yeah, I mean, downstream locations, there's a ton. So first, a quick regulation. So the Genius Act passed. That's the stablecoin bill.

3:06:14The next major act the industry is focused on is now called the Clarity Act. This is being primarily sponsored by Chairman French Hill and the House. And this is otherwise known as the Market Structure Act. And the basic kind of outline of clarity is to answer the question, which regulators should regulate what? What should they regulate? This really kind of defines the line between Treasury, SEC and CFTC, who has kind of purview over which domains. answers the question, what is a security? What's not? It deals with DeFi to some extent. And so that's kind of the other really big, meaty bill. And then the third one is actually one that kind of got added in recently and the industry is fine with.

3:06:52It's just basically this anti-CBDC bill. They're just saying, like, America won't make a CBDC. So that's all in flight now. You know, I'm optimistic that clarity will pass in the next few months. It passed the House earlier this week. It's now in the Senate, and there's going to be some revisions and stuff in the Senate. We'll see where it goes. anything anything that's that's in there so far that you're that you think that the senate should should focus on correcting yeah there's definitely more disagreement in industry about like you know the the substance of clarity i can't get into the specifics but like certainly we're right now in dialogue with a lot of our peers and um lawmakers and their staff on on these issues um the other question you asked me like what's the implications for like industry i really want to emphasize that I mean, by making it, it's not legal.

3:07:41Stablecoins were illegal for all practices and purposes for any major regulated company kind of anywhere in the world. And it is now legal and blessed for them to interact with stablecoins. And so what I think, yeah, you're going to see every bank, Jamie Dimon, Bank of America's CEOs are talking about this now. I actually don't think that's the super relevant angle. To me, the much more important angle is it is now legal and okay for iOS, Android, Facebook, WhatsApp, Instagram, TikTok, every piece of major consumer software in the world now can legally embed stablecoins. Wow. And it's a matter of time before they do.

3:08:15And what that's going to mean for global commerce, for global payments, for people accessing crypto is profound. And I think as all those people get their private keys and onboard to these wallets, that's then going to obviously provide the foundation that money's going to be tradacting over Ethereum, Solana, etc. And it's going to be just a massive boon for all of crypto as you onboard a few billion people with this stuff. It's fascinating. Absolutely wild. Yeah, I'm excited. I imagine that the big tech angle is super fascinating. I imagine that some of them will take different paths, different shapes.

3:08:48Like we're going to test all the different structures. Yeah, what I hope is like, hey, stable coins are already there. There's large market caps. There's lots of liquidity. Let's not have everybody launch their own stable coin. Let's just like focus on actually integrating them into and making them more valuable in these different ecosystems. It's also funny because I feel like for a while there was a little bit of a there's a little bit of like a chattering class critique of crypto being like, well, if it was so great, like why? Why doesn't Apple just integrate stable coins? It's like, well, because it was illegal and like they're a very risk-averse company.

3:09:22There was no chance they were going to do it. But now they actually have it as an option. And then there's a competitive dynamic and they'll probably run experiments. And yeah, maybe it'll take a few years for them to build some stuff. Maybe some stuff will be acqui-hires or acquisitions. There's a bunch of different ways it can play out, but it'll be really interesting to follow how this actually gets in the hands of billions and billions of people. Fascinating. Yeah. It's an incredible opportunity. And I mean, you just look at now, where's liquidity? Where are people trading today? And which things have the scale to support all these users?

3:09:51And it bodes incredibly well for industry as a whole. That's fantastic. Well, as there's more news, come back on and I'm sure you'll be celebrating responsibly in DC. So have fun out there. Hey guys, thanks so much for helping back on. Talk soon. We'll talk to you soon. Bye. Talk to you soon. What a way to end the week. Fantastic. Little news hits, little chopping it up with friends. Surprise. Impropt to Mike and Screlly. That was a fun one. I enjoyed that. One of the most entertaining people on earth. Indeed. Hands down. We should close with this wonderful article in the mansion section. Which one are we?

3:10:31We had a few queued up. So this is, I wanted to do this because it is essentially written by Arnold Schwarzenegger. So it's his words as told to Mark Myers, who just transcribed them, and then they published it in the Wall Street Journal. And which one is this? It's Arnold Schwarzenegger, the moment he fell in love with America. Beautiful. My early years in Austria were challenging. After World War II, the economy in the Graz suburb where I grew up was shattered. Everyone suffered. My father, Gustav, was a very, very sweet man. But when he drank, his personality changed. He became more violent and demanding.

3:11:11His behavior and drinking were influenced by the war's remnants, shrapnel in his legs that caused him pain, the lingering effects of malaria, and what we now call post-traumatic stress disorder. My mother Aurelia was a homemaker. Our family lived on the second floor of a three-story building. The first floor was occupied by the local forest ranger and the second wars for my father. The second floor was for my father. The town's police chief, he was the town's police chief. The forest ranger had a phone, but we didn't, and there was no running water. I wasn't happy with the life I saw unfolding.

3:11:49I always had a feeling deep down that I needed to look for something else, something outside the box. At age 10, I fell in love with America. That came from watching film roles in school. The teacher would advance the strips by turning a knob, showing one image at a time. I was blown away. They were about things like the Golden Gate Bridge and the Empire State Building and cars with huge fins driving on US highways with six lanes on each side. At some point, there was a role on Hollywood. I'd never seen anything like it, the glamour, the lights, and the houses. I said to myself, what am I doing here?

3:12:24I wanted to be in America to become famous and rich. As I got older, the question shifted to how do I get there? At 15, I stumbled into bodybuilding at our local lake and said to myself, well, that's in America. The lifeguard always had other top athletes around, including weightlifters. As a teen, my testosterone was kicking in and I wanted to look like a He-Man. I read about Roy Reg Park, an English bodybuilder who played Hercules in Italian movies. He won Mr. Universe three times and became an actor. My dream was possible. All of my time was spent in this world of physical fitness, building up muscles to compete in contests and fantasizing about movie stardom.

3:13:07At one point, I was in school looking out the window and daydreaming when a piece of chalk hit me in the head. My teacher said, Arnold, what do you think you're doing in here? Talking to myself. I had no interest in what he was saying. He's not interested in school. In 1967, I won the amateur Mr. Universe title in London when I was 20. Then I trained in Munich for another year and won my first professional Mr. Universe title. After I won in 1968. It's so funny, thinking of the 60s and just like hippie culture, and then Arnold's just like rising the ranks. Yeah, it's bodybuilding. It's amazing.

3:13:47So he said, in 1967, I won the amateur Mr. Universe title, and then he won the first professional universe title. After I won in 1968, Joe Weider, a bodybuilding enthusiast who published muscle magazines, brought me to Los Angeles. He put me up in an apartment in Venice near Gold's Gym, where I trained. When I arrived, let's hear it for Gold's production team. You guys love that. That's where I work out. It's a great spot. It's fantastic. When I arrived in LA, I was totally disappointed. The city looked nothing like New York City with its tall buildings. Venice's sidewalks were dirty and no one cleaned them.

3:14:22And drugs were sold in back alleys. Two more Mr. Universe titles followed in 1969 and 1970. From the start, I knew bodybuilding was going to lead to acting. In 1970, I was cast in Hercules in New York. and then in the TV series and films, including Stay Hungry in 1976, for which I won the Golden Globe Award for Best Acting Debut. Then came The Streets of San Francisco and Pumping Iron in 1977. Pumping Iron is fantastic if you haven't seen it. I know you haven't. Conan the Barbarian, the big one in 1982. I was quoting Conan the Barbarian to our team. I don't think anyone got the reference, but we'll play the YouTube videos.

3:15:02This is wild. So he says, in the middle of all this, I studied remotely for a bachelor's degree in business. Let's give it up for all the business majors out there. Most important major, clearly. At the University of Wisconsin. He was doing that remotely. How were you doing remote college in 82? I guess you like mail it back and forth. Oh, you maybe get mailed an assignment in a textbook. And then you just mail it back? That is, yeah, that is crazy. How do you do that? I don't know. I have no idea. From the time I arrived in America, I went to community college. He invented remote work. Arnold invented remote work.

3:15:32He really did, yeah. That is a crazy, crazy thing. I'll have to have him on the show and ask him about his time as a remote business major at University of Wisconsin-Superior. I went to community college to take English classes and get smart about business. In 1983, I became a U.S. citizen. Let's hear it for Arnold Schwarzenegger, one of the best to ever do it. Today, I live in a contemporary house in Brentwood, Los Angeles. It's the perfect place where I can see the foliage and the mountains. I'm close to town. It's private. and I have all my pet animals, which means not just dogs. He definitely has more than that.

3:16:08We'd love to know what he has. In the 1980s, I took my mother to a White House dinner to meet President Reagan. At the table, I went to scratch my nose and she hit my hand in front of everyone. She said, don't pick your nose in the White House, please, Arnold. I wasn't, but that didn't stop her. No matter how big you get, your mother knows how to shrink you just a little. What a great story. I am sad that I was not super conscious when Arnold was the governor of California. Yeah. I remember it, but I wasn't there for probably all the incredible moments. And I don't even have a strong take on if he was like a great governor, but I think he's awesome as an individual.

3:16:58Totally. and uh that's a great place i hope sam sam sulik i hope he makes a run uh in politics as well me too i love it that would be powerful and hollywood first can you imagine daily sam sulik vlogs from the campaign trail incredible he's just getting all of his constituents hey just come for a lift come for a lift i think we're manifesting we can talk policy we get him in a jason carmen directed reboot of the terminator yeah get him into hollywood get him trained up make him a household name more than he is already then get him on the campaign trail i think we have a winner well this was a crazy wild often fun week and i can't wait for next week yeah we'll see you monday thank you for tuning in have a fantastic weekend bye