Swatch AP Collab, Cerebras IPO, Trump Visits China | Ferdinand Dabitz, Spencer Rascoff, Eric Olson, Matt Lohstroh, Jay Azhang, Amir Sadeghian, Alexander Taubman, Quaid Walker

11:03Alexander Taubman:He says, this is the easiest four-figure week you'll have all year if you're willing to do something that resembles work for 14 hours, if you're willing. Let me lay out exactly what to do. Retail is in the$400 range. It's in-store only. There's no online sales. They're limiting it to one piece per person, per store, per day, not two. So your hustle is per warm body not per pair and then there he shares some expect some expectation about where this might trade maybe 12x retail maybe 5x retail and so if you go and you wait in line and you buy this and then you sell it online You might be able to make a pretty penny pretty quickly But you'll need a bunch of friends and he gives a bunch of advice on where you should go avoid Soho Times Square London or Singapore.

11:53Alexander Taubman:You got to go to secondary cities, Troy, Michigan, King of Prussia, Canoga Park, Honolulu, going to Honolulu just for this.

12:02Amir Sadeghian:I think this is, I think this is going to be a hit. Yeah. The haters, I think the haters are wrong. People love G-Shocks. Sort of a combination.

12:12Alexander Taubman:I think so too.

12:13Amir Sadeghian:It'll do well.

12:13Alexander Taubman:It just seems like a fun, a fun watch. And I, and I do think it's a nice entry point for someone who's getting into watches, like start with this so they can get something else. It's like a Stryver, like, you know, it's a point along a curve, which I think will be popular. And it's also just like a lot of fun and it'll look good. Anyway, let's head over to China. What are they doing over in China?

12:33Amir Sadeghian:BYD. BYD. Got Daniel Craig as the new face.

12:36Alexander Taubman:Build your dreams. They're building their dreams for the Denza Luxury EV. James Wood says, it's an amazing ad. And Adam Thomas says, China uses James Bond for a euro push. The world is changing. Let's play this advertisement from BYD.

12:53Amir Sadeghian:He must have had an exclusive. Did he ever have an exclusive with Aston, or was that just the James Bond franchise?

12:59Alexander Taubman:Yeah, I don't think I've ever seen him in an Aston Martin ad.

13:02Eric Olson:How blessed to live a life in a world with the capacity to find change. But just as spring follows a harsh winter, and summer looks back on a routine spring.

13:13Ferdinand Dabitz:Old selves, past identities, they ship. They have to. It's so exciting. Do you think?

13:23Eric Olson:I mean, doesn't life ask us to step out of the shadows and embrace the new?

13:27Amir Sadeghian:To evolve or not, that's never a question for those.

13:31Alexander Taubman:I don't think so. I think it gets pretty dangerous. Although, that dog looks like it's wearing some sort of harness that could be tied in. What do you think? Yeah. See, post-James Bond, he has a lot more comedic timing. He's done SNL a few times. He's done a couple comedies There's a lot more to it But he will still just never not be James Bond Because he had such a successful run Of James Bond performances He's really driving his car Is this an SUV or a wagon?

14:04Amir Sadeghian:Pause, pause, pause Rewind 10 seconds

14:07Alexander Taubman:Okay, what are we listening for?

14:09Amir Sadeghian:Listen, because there's some Okay

14:17Amir Sadeghian:Doesn't that sound like an internal combustion engine for a second there? Yeah. So they're LARPing.

14:24Alexander Taubman:It's played through the speakers while you're driving? Is that an option?

14:27Amir Sadeghian:Maybe.

14:27Alexander Taubman:I feel like it has to be an option if they're advertising it like that. But who knows? You never know with these BYDs if there's actually an internal combustion engine in there somewhere that can activate at a certain point. Everything feels like a hybrid these days. But I mean, it says luxury EVs. I like the design of that car. I think that's cool. It looks kind of like a wagon. It's got like a, it's a shooting break design. I love a shooting break. It looks nice. Uh, but yeah, what a, what a great, uh, what a great partnership and what a great run from Daniel Craig to be able to just like cash in on the, the aura of being James Bond forever, even after the franchise ends and things.

15:10Alexander Taubman:It really is remarkable if you're Daniel Craig. Uh, and it also helped that. But did you ever see Layer Cake? No. No one's seen Layer Cake here? Oh, such a good movie. And he plays like sort of someone involved in the drug trade in Europe. But it's a very James Bond-esque character. And so even throughout his portfolio of movies when he's... And then he plays Benoit Blanc from Knives Out. And even that character, even though he has a different accent, it still feels like he carries the authority of a James Bond-like figure. And so he's always had this same sort of demeanor and aura around him that's been built through his entire cinematic portfolio that he can continue to cash in on.

15:56Alexander Taubman:And when you're thinking about advertising a particular car like an Aston Martin, like this luxury BYD, your mind goes to him before anyone else, really. Anyone else.

16:06Amir Sadeghian:but do we know what the byd denza is priced at i don't probably like i would have guessed like

16:15Alexander Taubman:the equivalent of like 13 000 and it probably goes zero to 60 in probably one and a half seconds and

16:21Spencer Rascoff:has like a 700 mile range i think european price tag is 134 oh okay they're actually getting pricey

16:26Alexander Taubman:usually like when you see these byd numbers it's always like it's the performance of a ferrari for the price of a Camry. Well, so there's the Denza Z,

16:35Amir Sadeghian:which is the estimated price is 60 to 140. And then a lot of the other Denzas are in the 40 to 60K range.

16:44Alexander Taubman:Okay, okay. Not too bad. Not too bad. Well, you know where I'd like to see Daniel Craig do his next endorsement? Cerebris. I would love to see a Super Bowl ad where he's lamenting

16:55Ferdinand Dabitz:the slow speed of AI inference,

16:59Alexander Taubman:And he solves his problem in this Super Bowl ad by partnering with Cerebris, firing up some Cerebris chips. The IPO is looking like it's going very, very well. So Cerebris updated their filing. According to Reuters, the IPO date will be Thursday, May 14th. I heard maybe Wednesday, but any day now. And they're offering 30 million shares. That's up from 28 million. So they're offering more shares than they were expecting to. And they also increased their price range from$115 to$125 up to$150,$160. And so they're going to raise, instead of$3.5 billion, they'll be raising$4.8 billion. And allegedly the round is massively oversubscribed to the tune of 20x demand for that$5 billion.

17:51Alexander Taubman:So something like, wait,$100 billion of demand for that$5 billion, which is remarkable at that price. Now, does that mean it's going to TEDx Sunday one? No, but it's certainly a good sign going into this IPO. And so that's why I called it like a potential$50 billion IPO, just to sort of have some parallelism with the$500 watch and the$50 trillion of GDP meeting in China that we'll talk about later. So there was a bunch of FUD around.

18:19Amir Sadeghian:Ben Thompson this morning says, if you were looking for the ideal time to IPO being a chip company in May 2026 is hard to beat.

18:27Alexander Taubman:It really is. It really is. He had a great piece called The Inference Shift today in Stratechery. Go check it out. There's been a bunch of fun about Cerebris. I mean, for a long time, they were just sort of like building in stealth or talking about the idea. It takes a really long time to design these chips, tape them out, and then actually produce them. And then the first version is less flexible, less designed collaboratively with the companies that are using them. So there was like one customer that was buying them, and there was a lot of customer concentration. Now the chips have actually been deployed.

18:57Alexander Taubman:And there was this big narrative about like, okay, well, there may be overly optimizing for the transformer architecture. What happens if the AI researchers come out with like attention is all you actually don't need that much. Attention is nice and useful, but we have a new thing that's better. And that didn't happen. And so attention and transformer based architectures are still dominant. And inference costs are extremely important in the age of AI agents. And speed is so, so important. And so demand is 10xing every few months at this point. And there's a very, very clear business story. Tyler, do you have anything on Cerebus?

19:34Spencer Rascoff:Yeah, I mean, just like if you use the Cerebus chips, like you can use it GPT 5.3 Spark in Codex.

19:41Amir Sadeghian:It's like insane.

19:42Spencer Rascoff:It's crazy.

19:42Alexander Taubman:It's crazy. It's wild. Yeah, if you want to give it a try and actually demo it, which I think is important with these semiconductor companies, if they're like abstract and you're like, I don't know if it's like a real company or something, You can actually just go download Codex Desktop, pick from the dropdown 5.3 Spark, and then you don't even have to get it to do code. You can ask it, History of the Roman Empire, and it will just instantly tell you a full page of exactly the response with 5.3 level intelligence, which is pretty good. And it's a pretty remarkable experience. And you can imagine this coming to every LLM interface, every AI experience, which has normally been like for any meaningful work fired off come back five minutes later sometimes two hours later uh we'll cut all of that in in you know in half or by 10 and that's where this is going so you can see you know uh significant demand even though there's this like customer concentration thing i don't know why there wouldn't be a lot of different customers lining up every every lab that has exploding demand cursor anthropic meta and Google like unless they have like a direct answer to this I would see them being a buyer in the near term so the Cerebus upsized its IPO and top of the new range Reuters is the IPO drew orders for more than 20x the shares available Cerebus makes AI inference chips and lists Amazon and OpenAI among customers.

21:12Alexander Taubman:So there was a question about like, was it all OpenAI? And I guess Amazon has jumped on very flexible with regard to the chips that they rack over at AWS. What else is going on here? Polymarket is projecting Cerebris to close above 50 billion market cap by the end of day one. That would be about 100 % above the target valuation of 26 billion that was previously reported. So preparing for an IPO on the NASDAQ next week under the ticker CBRS. And traditional semiconductor manufacturing works like this. A silicon wafer is fabricated. The wafers cut into hundreds of smaller chips. The chips are packaged individually and connected together in systems.

21:51Alexander Taubman:Cerebris took a completely different approach. They used the entire 300 millimeter wafer, 4 trillion transistors, There's 900 ,000 AI-oriented compute cores. And the big thing is the petabits per second of internal bandwidth. So better memory bandwidth for KV caches and everything that you need to do in AI, I think, something like that. Benchmark is going to be absolutely cleaning up. They still own over 20 % of Cerebris, apparently. And if -

22:22Amir Sadeghian:When did they make that investment? Eric Vishra made it.

22:28Alexander Taubman:And he has quite the portfolio in his X account bio. Fireworks, Benchling, Contentful, Cerebris.

22:39Amir Sadeghian:So they did it in May 2016. Sunday Robotics.

22:42Alexander Taubman:May 2016. Wow. Overnight success right there. If it trades at even half of how Shanghai priced more threads in Cambricon, It will be over$500 billion in less than two years. Okay, that's a big step. It will break the venture model if they hold. Has a shot to deliver the number one fund in VC history. Benchmark on an absolute tear. Quantia says, Cerebrus is pretty funny because you can just imagine the origin story being some boomer, non-technical manager going, okay, but why can't you just put 50 gigs of L3 cash on this chip? And the engineer being put on the spot and going, I guess you could.

23:28Alexander Taubman:And I said, someone else in the comments here chiming in, I, random history major, had a much less important version of this conversation with my college roommate, fancy engineer doing computer vision stuff one time, and still feel really good about it. I think it helped. Just weld the thing that does that onto the other thing. have you considered building the entire plane out of the black box but it works and the plane goes Mach 10 that's exactly what happened they should build planes out of the black box

23:55Amir Sadeghian:CO2 what's going on with CO2 they did the B they did the B that same year

24:00Alexander Taubman:in 2016 yeah interesting back to back rounds in 2016 and then just trough of disillusionment for a decade not really but I mean it was like Cerebus was pretty quiet for five or six years It took a while to actually get to scale. And you can see it when you talk to the founder.

24:19Amir Sadeghian:Apparently they did. Yeah, well, they did the C in 2017. So they were making progress. But certainly, you can imagine some of the investors saying, ah, say I think. I might have been 10 years too early.

24:35Alexander Taubman:Yeah. I mean, what a good origin story. They worked together at C-Micro, an ultra-dense server company. They sold to AMD in 2012, and then they started Cerebris together in 2015. Five industry veterans, Andrew Feldman and some other folks, joined. Andrew Feldman has been on an absolute tear, generational run even. Well, let's move over to China. Donald Trump is meeting with Xi Jinping this week, and you were sharing some info on how many journalists are going over there.

25:10Amir Sadeghian:They're calling it a field trip. It's a field trip. They're calling it a field trip because Tim Cook is going, Larry Fink, Stephen Schwartzman.

25:17Alexander Taubman:I thought it was journalists, but I guess it's tech people.

25:20Amir Sadeghian:Jane from City. Chuck Robbins is headed over there. Her friend from Cisco. David Solomon.

25:26Alexander Taubman:Interesting.

25:28Amir Sadeghian:And a whole bunch of others. I guess Elon is supposedly on the trip as well.

25:35Alexander Taubman:and hopefully they can get a word in edgewise because the the the vast majority of the discussions will obviously center on the war in iran this is from the wall street journal as the heads of the world's two superpowers meet in beijing this week uh president trump and chinese leader xi jinping will have another nation looming over their summit iran the long anticipated meeting has been delayed once due to the u.s and israel's war against iran which led to the closure of the Strait of Hormuz. Trump is eager to move on from the Middle East war that is sapping his domestic power and straining the global economy.

26:11Amir Sadeghian:As of this morning, the peace deal was, according to Trump, on major life support.

26:15Alexander Taubman:On major life support. Is that good? I guess it's better than it being dead. So hopefully we get a peace deal because if you're on life support, sometimes you can have a miraculous comeback. I don't know. That's what I'm pulling for. He will land in Beijing, prepared to push China, which relies on Iran for low-cost oil in their transactional relationship, to help broker an agreement that ends the conflict. Xi Jinping also wants the fighting to stop as Middle East turmoil restricts China's oil supply and shrinks countries' ability to buy Chinese goods. Finding a resolution could raise Xi Jinping's stature as a global statesman who swooped in at the precipice of a possible military escalation.

26:58Alexander Taubman:Trump on Friday threatened to resume Project Freedom, the US-led operation helped ships navigate the straits safely, adding this time that the operation would include, quote, other things. Very ominous. So I think there's a few different things. So Trump, the deal on life support, but most recently he rejected Iran's latest response to a US peace proposal. They're going back and forth. Oil prices have climbed amid fears that roughly, of a prolonged disruption through a choke point that carries roughly one-fifth of global oil flows. And the summit is focused heavily on Iran, but also trade deals, specifically Chinese purchases of American agriculture, energy, aerospace products, and some other related investment mechanisms.

27:46Alexander Taubman:But the tech industry is obviously hoping to wind down the conflict peacefully and quickly and then move on to discussions of export restrictions, GPUs, the AI supply chain, rare earths, all the different things that go into what the tech industry needs to flourish. But I was thinking we wouldn't get that much movement or that many sound bites from this trip based on how large Iran is looming. But with all of those tech CEOs there, you would imagine that there's some conversation that happens around tech. Do you think they might be clip farming? Potentially. Potentially ore farming, potentially frame-mogging each other.

28:21Alexander Taubman:You never know. Tyler, what do you think?

28:22Spencer Rascoff:Yeah, I think it would be interesting if it's also, you know, at a higher level than just the supply chain because like last week There's all the news about CAI SI right doing the new AI regulation, right? Like what's gonna happen? Yeah, like what are we gonna you do much test before the models come out? It seems like they're kind of moving away from that like less kind of safety focused

28:41Alexander Taubman:China should be like send us mythos to give us unfettered access Ideally like enough to distill it really quickly and then we will also say whether or not it can be released in China Well, why stop there? Why not just send the weights? Yeah, just send the weights. That's actually way more easy. We'll inspect it. Yeah, way more efficient. We'll inspect it and we'll make sure that it's okay for the Chinese population. Yeah, but we've talked about this a little bit. Actually, send all the GPUs I need to run it to.

29:07Spencer Rascoff:Sorry. We've talked about this a little bit, but there are people in China who are actually worried about the very safety pills. But it seems like people going over there like Tim Cook, Jensen, Elon, These people are not going to be arguing in favor of safety. It'll be very interesting to see if there's any results.

29:25Alexander Taubman:I mean, we've seen the Chinese Joe Wiesenthal. There might be a Chinese Eliezer Yudkowsky. We must find him and surface him. Who knows? But no, I mean, of course, some international collaboration there seems very, very important in the long term. Everyone agrees on this.

29:40Amir Sadeghian:All right. Before we get to our first guest. Run through it. Palmer brings up an important point. It's time for the United States Postal Service to ban junk mail. Unsolicited spam calls are already prohibited by the FCC. Emails are heavily regulated by the canned spam act of 2003. Junk mail is the majority of mail. 100 million trees per year. Enough. It really is way too much. This is very interesting. It's such a terrible experience.

30:09Alexander Taubman:I thought I put all of the blame or I guess the credit. I gave all the credit to Google with the fact that like I don't get spam emails. I get emails if I buy something online and I forget to uncheck the box and that's kind of on me. Or if I'm subscribed to a newsletter and it gets boring and I'm like, ah, this is junk. I'll need to deal with that. But like very rarely do I just get a true spam email. Just like truly slop, junk, like just complete nonsense. It's pretty, pretty rare. And I think some of that's the filtering, but also the canned spam app seems to be somewhat effective. I wind up getting a lot more spam phone calls and a lot more spam text messages these days than spam emails in terms of like cold outreach that's completely undirected.

30:58Alexander Taubman:And so, yeah, maybe they need to expand the canned spam act. Shouldn't it be the can't spam act? I don't know why they call it can, but it has been successful, at least in email. But I agree with this. This is good. Palmer says, it's insane that America has given a monopoly on letter delivery to a quasi-governmental agency that then uses it to flood our homes with useless garbage against our will. America would never allow FedEx, UPS, DHL, or anyone else to force this on us, even ignoring the wasted taxpayer money, insane moral hazards, and ecological impact. In fact, the lost time and productivity is inexcusable.

31:35Alexander Taubman:I agree. If the average American spends only 30 seconds sorting their mostly spam mail each day looking for the real stuff, that's over a billion dollars. Well, earth class mail. Palmer, I think you need a P.O. box that scans the emails or scans the physical mail and delivers it to an email inbox. Throw OpenClaw in front of it and have it decide what makes it through. But you definitely don't want.

31:59Amir Sadeghian:Have OpenClaw devour the slop for you.

32:01Alexander Taubman:Yeah. No, there's actually a button in Earth Class Mail and many of the other virtual mailbox services. You can send it to the shredder. You can say that is shreddable, and you could automate that potentially. But, yeah, people are sharing that there are ways to unsubscribe from junk mail. Optoutprescreen.com, dmachoice.org, and Palmer says he's already done it. I still get pounds of junk mail every single day. Pounds every day is a lot. I feel like he's high up on the on the junk mail delivery. I feel like I get a few pieces a day

32:34Amir Sadeghian:I probably not I get so many it's it's like pounds you think you get pounds

32:39Alexander Taubman:We need to weigh your junk mail my job. We get your junk. I probably get a journal

32:43Amir Sadeghian:I don't know maybe I get one mail piece of junk mail like a week. Okay. I don't really check my mailbox

32:49Alexander Taubman:Just say you're low LTV, bro.

32:51Amir Sadeghian:I think I'm getting like I'm like a quarter. Oh, yeah

32:54Alexander Taubman:he definitely is not in the market for you know random for a$79 per month. What is this dealer mandated vehicles for immediate? Yeah, I'm kind

33:07Spencer Rascoff:of telling on myself here.

33:08Alexander Taubman:Yeah. Someone's advertising a Ford F-150 here. You're not in the market, I guess. Anyway, what else is going on in the timeline before we move to our first guest? New service for SF retailers and homebuyers. I will show up to your open houses wearing OpenAI or Anthropic merch. I charge a 5 % commission just to fully pump up the price. It's called chandelier belt bidding.

33:33Amir Sadeghian:Will that actually help, though? Because I think some people would just be like, I'm not even going to bid.

33:39Alexander Taubman:But I think some people at the open house tour might see, oh, there's an OpenAI or Anthropic person. I should make my offer particularly strong if I want this, even if there isn't that much demand. I love the founder railway. That's great. What else is going on here? New, before GPT's release, before Microsoft's$1 billion bet, and long before plans for an IPO, there was the University of Michigan putting$20 million in AI.

34:09Amir Sadeghian:Pull up, Tyler.

34:10Alexander Taubman:Pull up, Tyler. What happened here? Like, how did this actually happen? There we go. There you go. Nailed it.

34:19Amir Sadeghian:Tyler, your homework? Yeah. Learn how to get that more dialed. because I hit that pretty often for you. And every time you go the wrong direction.

34:29Alexander Taubman:Yeah, because it's reversed. It's reversed on the camera.

34:32Amir Sadeghian:So there's something to work on. That's just some constructive feedback. I believe that you can be better at this task.

34:38Alexander Taubman:This feels like the University of Michigan was considering donating. And then at some point, they just became aware of like, oh, well, you could also participate in the for-profit. And they're like, oh, that sounds better, maybe. Let's put this in. A tiny SpaceX rival has rallied$6 ,000 and it's powered by a mob of zealots and a stock guru known as the kook. Do you know who this is? The kook. Capital LLC. I don't know. Oh, this is AST. It has to be ASTS, right? SpaceX rival. Tiny SpaceX rival. Anyway, very, very funny. What else is going on? Oh, we got to play this next Instagram. This one is so funny.

35:21Alexander Taubman:Yeah, I don't think you've seen this, Jordy. Did I send this to you or no? Okay, play this Instagram. The title of it is, My mom is so bad with technology, she literally tried to search up info about energy drinks and accidentally set our house up as a business.

35:45Alexander Taubman:What is in energy drinks? Can you imagine? like starting with a Google search and ending up like creating a business on Google Maps for your exact address under the name, what is in energy drinks. Happens all the time, John. And people think AI will diffuse quickly. Debatable. Debatable. Kathy Wood is posting about SpaceX AI, the new company. Thanks to its deal with Anthropic XAI, now SpaceX AI is pivoting from massive losses at Colossus to significant profitability as a neocloud on an estimated$5 to$6 billion in annual revenues. Brilliant SpaceX move, Elon Musk. And Gwyneth Paltrow. Yes. Didn't know she was involved.

36:27Alexander Taubman:I'm familiar with Gwen Shotwell, but I guess Gwyneth Paltrow also got an early check-in. You know, she is an investor. It's totally possible that she has SpaceX allocation at this point. But I think it was a mis-tag. I think it was a mis-tag. Anyway, we have our first guest in the waiting room. Let's bring in Ferdinand from Augustus National Bank. How are you doing, Ferdinand? Good to see you again. Hello. Welcome back.

36:50Amir Sadeghian:What's happening? Great to be back. Big day.

36:53Alexander Taubman:Big day. You've been on the show before, but remind everyone about yourself, what you do, and then give us the news.

37:00Matt Lohstroh:So I'm Ferdinand. We have been charging a bank called Augustus, and today we've announced conditional approval for that bank. I can give the brief intro and the brief spiel on the company. Please. Of course, when I come to the show, I have to bring a prop. and our guy Peter Thiel of course always said when you have a fintech company you have to like bring the$100 bill ooh there we go yeah here I think we can do the same thing where we always have this little joke where we bring the$100 bill and then we ask what is the problem with this right but it's a it's a trick question and in our opinion there is no problem with this and the dollar is the best product in the history of the world

37:39Alexander Taubman:insane PMF insane PMF

37:41Matt Lohstroh:insane PMF like sometimes there's smart smart people that tell me they're like water what about water free but no no i think like um the dollar is the best producer of the world and there's there's quasi infinite global demand uh for it especially outside of the united states right and i think there are all kinds of like quantitative ways to think about it that europe and the u.s they contributed 40 percent to global gdp but they um they they contribute 80 to global reserve holdings and global money movement um they're also like qualitative ways to think about where i think like the existence and frankly commercial success of the stablecoin stack, right?

38:12Matt Lohstroh:The global dollar account is like, frankly, it might be a pure expression of this thesis where this is the best product in the history of the world and there's infinite global demand. Okay, so, oh, yeah, but. But, and it's a big, but for us, distribution is broken, right? And we think distribution breaks at the clearing bank layer, right? What is a clearing bank? A clearing bank is the bank that has the charter and actually has the account at the Federal Reserve or any other central bank to actually move and hold the money. And we think these clearing banks are made of paper. We think they're slow.

38:44Matt Lohstroh:So if you want to move money through them, it takes a day, maybe it takes two days. They're closed on the weekends, and they're closed after 5 p.m., and they're closed on Christmas because humans run them. And we think they come from a different time. And we think with Augustus, the thesis is there's an opportunity to rethink that for the EI era and build that from scratch in a full-stack way. What is the news today? Approval. We've got a bank. We have conditional approval from the OCC to charter Augustus as a U.S. full-service national bank.

39:14Amir Sadeghian:Yeah. All right. So my first question, when did you know that you wanted to name your bank after Augustus to Rico? Yeah.

39:22Matt Lohstroh:I already had someone message me and I think like, if all falls down, he can buy the domain for less strong price or something like that.

39:30Alexander Taubman:So you're bullish on the dollar. I was just watching Augustus.com. Ray Dalio on Ross Douthat. He's extremely bearish on America, bearish on the dollar. Have you heard any of the popular super cycle theories? America is doomed, the ultimate black pills on the dollar. And how do you push back?

39:54Matt Lohstroh:Yeah, I mean, I've heard all of them. I think you can disagree with some, you can disagree with the other. But I think it's also like it's a question of mission, right? What's the future you want to build? And I think, what are the alternatives? And I think, in a way, the mission for this company would be much less clear 10 or 20 years ago, where it was only the euro and the dollar and nothing else mattered. And there was no competition on the global stage. But today there is. You've got the adversaries. You've got China building the digital yen and shipping it all into Africa and distributing it pretty nicely.

40:24Matt Lohstroh:You've got Russia pitching their BricsPay thing every other day. And like, yeah, we're going to get off the dollar and have our own little clearing thing here. And so it's about mission. It's about the question, how can we secure and advance Western currency dominance? Right. I think like one one instrument is to build better clearing banks to remove friction from the distribution of this amazing product, because the market fit is still there. Right. If you talk to people outside of US, in many cases, this is the golden standard is what people want most. It's just like incredibly hard to get.

40:53Alexander Taubman:Last question. Who's the customer? How do you acquire them?

40:57Matt Lohstroh:so gasm is um a global financial institution okay so not companies not startups you're not going to individuals or anything like that at least not yet exactly nothing of that yeah we go to global f is um so so a bank in south america bank southeast asia a financial institution in the global south um or anywhere else and um and require them right and so we've launched euro clearing like a while ago and and sold that to many of the largest financial institutions right so we do for companies like Craton, for example, and process billions of euros for them today. And so now the hope is, of course, that we can be much more useful to these customers with the dollar as we plug that into the platform as well today.

41:37Alexander Taubman:Well, congratulations on OCC approval, and thanks for stopping by the show.

41:41Amir Sadeghian:Great to see you. We'll talk to you soon. Thank you for fighting the fight for our dollar. Yes. Cheers. Keep the dollar strong. Great to see you, dude.

41:49Alexander Taubman:Goodbye. Up next, we have Spencer Raskoff from Match Group. Welcome to the show. Hi. Fantastic entrance. Very quick. Sometimes I have to do a whole ramble. Very sneaky. But for those who don't know you, please introduce yourself a bit. I'd love to go back a little bit about your career, and then I want to see where Match Group is going.

42:08Jay Azhang:Yeah, great to be here, and thanks for what you do for technology and also for the L.A. tech community. Yeah, it is fun. It's very long L.A.

42:15Amir Sadeghian:of us to do this here. I appreciate it.

42:18Jay Azhang:I grew up here and I've been, you know, I've moved back here about 10 years ago and have been all about promoting the LA tech community. I started a company called dot LA, which is a media company to promote LA tech.

42:30Matt Lohstroh:Yeah.

42:30Jay Azhang:So yeah, quickly about my background. I did some time on wall street and then broke free from that.

42:36Alexander Taubman:Thank you for your service.

42:38Jay Azhang:Want to do something more entrepreneurial. My first startup was hotwire.com, which we sold to Expedia. Yeah. Then I was at Expedia briefly and then I left to start Zillow. I was the CEO and co-founder of Zillow. I ran it for 15, 16 years. And then kind of retired for a couple of years. Angel invested in new startups, incubated new startups, mostly with former Zillow folks. And then stepped in as CEO of Match Group about a year and a half ago.

43:00Alexander Taubman:What does that recruiting process look like? You know, it's like they could have gone with someone who was actively a CEO. They tried to pull you off the beach in some ways. Like, what's that conversation like? Why you? I mean, you're clearly capable.

43:14Jay Azhang:Well, I was on the board. And I had been on the board for about a year. And when the opportunity presented itself, the board turned to me and said, what do you think? And I immediately jumped at it. So I had been watching the company for more than a year from the boardroom. It's an incredible company doing really important work. I actually, I feel very personally motivated by the mission of the company. There is a loneliness epidemic. It is a real global problem. It's existential. And it impacts longevity and mental health and everything about how society works. And Match Group is one of the very few companies as the leading dating app company that can do something about it.

43:51Jay Azhang:And so that's why I jumped there.

43:52Alexander Taubman:So you're on the board, you're watching. When you choose to step into the CEO role, do you have a 90-day plan? Do you have a big transformation plan? What were you going into? Because you're not showing up tabula rasa here.

44:09Amir Sadeghian:Yeah, a lot of your best ideas. Hopefully you had been pushing.

44:12Alexander Taubman:You've been like, hey, I told you guys to acquire this company or change this or whatever.

44:17Jay Azhang:I have this kind of mantra, and I write it on the board. I put it up. There are stickers around the company of it, posters, et cetera. It's great people, properly motivated and properly organized, build great products that are informed by user research that then, when properly marketed, generate a lot of audience and revenue and profit and then shareholder value. It's like the entire business. So it starts with people. Yeah. It starts with people and motivation and organization. So that's where I started. That was the beginning of the 90-day plan. Who's here? Why are they here? How are they organized?

44:50Jay Azhang:And so, for example, I immediately started by breaking down silos. Match Group was basically a roll-up.

44:55Alexander Taubman:I was going to ask you about it. It feels like the ultimate siloed organization.

44:59Jay Azhang:It was. It was. It was basically a holding company, and I transitioned it to being an operating company. So Barry Dillard's ISE bought a lot of the companies in the category. We started with Match.com in Dallas, then Plenty of Fish in Vancouver, OKCupid in New York, Tinder in LA, Hinge in New York, Pairs in Tokyo, Metic in France, and on and on. And there are 25 brands that have been assembled. And then it spun out to IAC shareholders about six or seven years ago. And a lot of the hard work around integration was never done. So that was where I first focused my attention was on people, organization, motivation, employee engagement.

45:37Jay Azhang:And then we moved on to product. And at that point, I took on the role of running Tinder myself. Because Tinder, well, obviously with a great team, but being essentially CEO of Tinder. Tinder's the number one dating app.

45:49Amir Sadeghian:Guys, I got this.

45:51Jay Azhang:With the team, right? So it's the number one app in 166 countries.

45:55Alexander Taubman:I've actually been by coding and writing marketing copies. I haven't gone that far.

45:59Jay Azhang:That's where I... We still have a team. We still have a great team. But look, it's almost$2 billion of our$3.5 billion of revenue. And it's by far the largest dating app worldwide. Yet it had sort of lost its way in terms of innovation. It hadn't been founder-led for a long time. It hadn't prioritized user outcomes. It hadn't had an innovative product roadmap. And so we recast all of that about six months ago. And we've made enormous progress in just six months. And I shared a lot of the metrics last week on earnings. We are turning around Tinder, and it feels great.

46:31Alexander Taubman:That's amazing. How do you think about de-siloing? Because I guess my big question is, how important are the individual brands? Because I imagine that the last thing you de-silo is like, oh, if you're a Match.com user, now, surprise, it's the Tinder brand. Because you could do that. It's totally possible to acquire a company, change the name, maintain most of the user base. But that feels like the last thing that you would do. But why?

46:57Jay Azhang:Yeah, what we've started by doing is integrating a lot of the back ends.

47:00Alexander Taubman:I'm sure. like finance, legal, HR, and then also databases.

47:04Jay Azhang:But even the backups of the product. Sure. So for example, BLK, our app for black daters, and Chispa, our app for Hispanic daters, and Match.com, like all of these now have an integrated backup. Sure. So we launched a new feature and it goes out across a dozen or so different.

47:22Alexander Taubman:So like one cloud platform, one set of SREs and engineers. What we haven't done yet

47:28Jay Azhang:is some of the liquidity sharing that I think maybe you're getting at, which is, should we show a Tinder user to an OKCupid user or Plenty of Fish user to a BLK user? We've done a little bit of cross-sell and that's been very effective. So you'd be on one of our apps and you'll get a message that says, hey, you've been invited to join the league. Tap here and now your profile is kind of ported over into the league and now you're searching in league. That's driven a lot of audience growth and revenue across sell, but that's kind of where we started.

48:00Alexander Taubman:What is the dynamic of being this roll-up? Because is there some sort of adverse selection or some weird market dynamic where there are founders or entrepreneurs out there who basically say, oh, if I start a dating site and I get anything going, I'm going to be able to sell to these guys because they want everything. Is that something that happens?

48:19Jay Azhang:Yes, it does. And I mean, I guess I would describe it this way.

48:23Amir Sadeghian:Has anyone sold multiple companies? To us? No, not that I'm aware of. There's no Nikita Burev.

48:30Alexander Taubman:Because there's a couple of these serial entrepreneurs in Silicon Valley that do this type of thing. I mean, you'll see it in like cybersecurity or enterprise software. It's like, oh, he sold three companies to Google that do basically the same thing. Yeah.

48:40Jay Azhang:No, we haven't had any repeat sellers. But look at Zillow Group. We bought 17 companies during my time as CEO of Zillow Group. So far, we've bought kind of one and a half in my year and a half here. So we bought Her, which was the leading lesbian or sapphic app. And then we invested last week$100 million in Sniffies, which is the number two app for non-heterosexual men with a right to buy the rest of that company. So we made those two moves so far. But there are a lot of startups in this space. There always have been. There always will be because every 15 to 22-year-old starts dating and they think, oh, these dating apps are not great.

49:17Jay Azhang:I can build a better one. And it's easier than ever to build a new app or website, obviously. So I think the competition will keep coming. The challenge, of course, is this is a network effects business. And people tend not to want to use a new network because there's a cold start problem. So even if a new app has great functionality, nobody.

49:34Amir Sadeghian:There's a network effect very clearly. But at the same time, is there also some advantage that new platforms have?

49:41Jay Azhang:It can be sort of a nightclub, you know, kind of a hot new restaurant. You're the first one there.

49:46Amir Sadeghian:You're the first one there, you know, big fish in a earth.

49:50Jay Azhang:Yeah, I mean, once you start solving the cold start problem, then I think new brands can take on some momentum, but it's very difficult at the very beginning. This is, of course, the kind of the put and the take with a brand like Tinder, which is an older brand, has massive brand awareness. Everybody knows Tinder. Everyone also has an opinion about Tinder. And so now we have to work really hard to change the product, improve the marketing, to try to regain resonance with Tinder. So features like Double Date, which are doing amazing, about a quarter of Gen Z users on Tinder now use Double Date, where two friends kind of join up, create a joint account, and then link their profiles.

50:26Jay Azhang:Now they're swiping on pairs, and then there's a four-way chat.

50:28Alexander Taubman:There was a YC company, Ruper, that was doing something similar to that with three and three. That's right. And I don't know where that wound up. So we didn't buy it. But a fascinating idea.

50:36Amir Sadeghian:Every company you've mentioned so far seems very demographic-focused. How are you thinking about new technology? I feel like there's a bunch of people that are thinking about how to use AI to create dating app experiences. I imagine you guys are already using a bunch of AI.

50:53Jay Azhang:We use AI constantly in the product. There are a lot of startups that are creating AI-only products, and we actually incubated one with Justin McCloud, the founder of Hinge, and then spun it out. So we're the largest owner of a company called Overtone, which hasn't launched yet, but the founder of Hinge is the founder there, and we're the biggest shareholder. That's building an AI-specific product.

51:12Amir Sadeghian:You're like, let's spin it out. We'll buy you back in a few years.

51:14Jay Azhang:So that might be the first repeat seller. What does AI only mean?

51:20Alexander Taubman:It means you're dating AI? No, no, no, no.

51:22Jay Azhang:We don't support that. It means that your experience is one where it's AI guided. So rather than you reviewing lots of people and holding your hand along the way. We use AI in all of our products in so many different ways.

51:36Alexander Taubman:Of course, even just to sort the stack of matches on Tinder.

51:38Jay Azhang:Yes, the recommendation algorithm is AI and ML. powered. But we use AI for profile creation. It can be very daunting to look at kind of a blank, tell us about yourself. And so we use AI to tease out information about your profile. Have you gotten pretty good at detecting deepfakes? Yes. So that was one of the first things that I focused on is something called face check, where you have to record a video selfie of yourself. And that's reduced interactions with fake accounts or deepfakes by about 60%. So we've rolled that out in almost every country globally across most of our brands.

52:10Alexander Taubman:Yeah. I saw a fascinating video of how people are trying to get around it by having nine fake images, defaked images of some person. And then the real person who's operating the account will like style transfer their face to look like a Renaissance painting. And you will just assume that it's like, oh, this hot person that looks exactly like, you know, it's nine AI photos. It's like, oh, they like painting and they happen to paint some random guy. But then that's the person that IDs the fake check. So I imagine it's a cat and mouse. Yeah, it's a cat and mouse game.

52:40Jay Azhang:The bad guys are pretty good, but we're better. And we have to stay a step ahead. We've made a lot of progress.

52:46Alexander Taubman:How valuable is community feedback in that loop? Because I imagine that if there's a system that you build, someone's always going to try and find some edge around. But I've been surprised that the community notes system on X has been pretty robust. And you can always just ask the LLM, is this real? But the community notes often surface things in interesting ways. Absolutely.

53:09Jay Azhang:So user reports, bad behavior, fake accounts, that's an important signal for us. And now we have a system that actually kind of cross-bans. So if we detect a fake account on one app, we take it off of all the accounts, all the apps. So that also improves trust and safety across the whole matchup portfolio.

53:25Amir Sadeghian:I have a buddy, a startup founder, probably eight years ago. Thought he'd be cute and try to market the startup that he was working on, on one of the match group services, got banned, and then got banned from basically everything. And so he's like, I guess I'm destined to be alone in this cold world. Sorry about that. We don't take kindly to promotional or fake accounts.

53:49Alexander Taubman:Yeah, yeah. Have there been companies that have been trying to sell services on top of your platforms, like auto swipers and stuff like that?

54:00Jay Azhang:Yeah, there are some startups that try to do that.

54:02Alexander Taubman:I wouldn't even necessarily call them startups. They're like, you know, I guess sometimes they might be, but they might just be like operations.

54:09Jay Azhang:Yeah, there are. We don't allow kind of automated like, you know, scrapers or auto swipers or those types of things. So when we find out about those, we take them out. Yeah.

54:22Amir Sadeghian:Do you think the AI boom has hurt LA's prospects as a startup hub?

54:28Jay Azhang:Oh, boy. Yeah, it's, I mean, we do.

54:32Amir Sadeghian:Because we were sitting around prior to starting the show. We're sitting here. We work in tech, but we don't want to leave LA. What possible business could we start in LA? It's not hard tech.

54:44Alexander Taubman:And we have this idea, media. Media, no. This is what makes LA LA.

54:50Jay Azhang:A couple years ago, when creator economy was booming, even crypto was, you know, LA had a crypto moment, an NFT moment. and then also when direct-to-consumer and celebrity food and beverage brands, those types of things, when D2C was hotter, I think LA was booming even more. And clearly we've lost a little bit of market share and mind share to the Bay Area as this AI boom has happened. So it's a bit of a bummer for those of us in LA. But, you know, it's a very credible number two.

55:20Amir Sadeghian:Yeah, in some ways the gravity of LA, which is like entertainment, the consumer, media, hard tech, right, just sort of continues and it's very hard to, but I think, you know, the long LA contingent deserves credit in some part for El Segundo. Totally.

55:41Jay Azhang:A SpaceX or Anduril IPO will be massive. Service Titan was a nice moment. Obviously, the Honey Exit was a nice moment. But, you know, once SpaceX gets public, I think that will be pretty amazing for the ecosystem here. Obviously, some of it's moved to Texas, but There's a lot of Pentep wealth, which will become recycled into angel investments into the rest of the LA tech ecosystem.

56:02Alexander Taubman:Yeah. If you look through or you imagine looking through like all the KPIs that you look at over a quarter or a year, are there any metrics that have shown the clear like pre-AI, post-AI, like kink in the graph? Like we were looking at the number of books published on Amazon.com and it's gone from 100 ,000 a month to 400 ,000 a month. clear AI effect. You can see it just grow. Now, is that good or bad? It's probably fine because they have recommendation algorithms that can filter that stuff out. But I'm just wondering if there's any, like, okay, we can, I imagine you can like see COVID in your charts, right?

56:37Alexander Taubman:Oh, for sure.

56:38Jay Azhang:Yeah. You saw COVID and then you saw kind of the COVID hangover.

56:40Alexander Taubman:So COVID was a spike for you because everyone was -

56:43Jay Azhang:People were sitting at home, they're on their couch talking at their phones and then lonely and wanted connection. And then people went back to work and kind of dating apps fell out of favor. Well, one internal metric is just pull requests now that we're doing so much internal AI coding. Pull requests are up. They were up 40 % year over year a couple months ago. Now they're up 60 % year over year. So basically the amount of code that our employees are writing is growing exponentially.

57:06Alexander Taubman:The question that I have for all the CEOs that are seeing incredible gains with AI agents and coding agents, the PRs don't pay the bills. And I'm always wondering, Meta was spending billions of dollars token maxing. And I think it's great. But when I open up Instagram, I'm like, is it better? I haven't seen a new button. It's a great question. And so I imagine as a CEO, you have to sort of grapple with this. I'm super optimistic, obviously. We're all going through this right now.

57:36Jay Azhang:So our approach to it is we have to pay for these AI tools somehow. Yeah, of course. For us, it's$5 to$10 million a year that we're spending on AI tools from basically nothing. 18 months ago. So we're slowing down hiring somewhat and that's how we're choosing to fund it. But in terms of when do we start to see the actual benefit, CEOs and CFOs are starting to ask that question more and more. I'm asking it more and more. I think we're benefiting from it. It's hard to feel it.

58:04Alexander Taubman:I feel like the optimistic cases that in a few quarters we're seeing case studies like, okay, yeah, we had an engineer run a bunch of AB tests, automated, running overnight. And We found out that the pricing on this page was better this way, and it actually created a lift in revenue or something like that.

58:20Amir Sadeghian:Yeah, or a SaaS company says, hey, we added this product that was originally going to be, we were going to build it in three years. We built it now, and it's ramping revenue and paying for all of this token.

58:31Jay Azhang:Our best example would be the first week of January, we decided to, as part of the Tinder turnaround, to focus on in-real-life events. We know that young people in particular really want to meet people in person. They want to get off their phones, get off the apps. And so first week of January, we made that decision. March 12th, we had a product event here in LA that demoed all these new changes to Tinder. And between the first week of January and March 12th, so in just a couple months, we went from a standing start because of AI to shipping in-app, in-real-life events in LA. And we never could have pulled that off without AI.

59:04Jay Azhang:It was an AI sprint that made a product launch in two or three months, which would have taken six or 12.

59:10Alexander Taubman:Is that productivity improvement potentially changing your thoughts around incubating new properties? I'm imagining you could go much more niche. You mentioned a few of the niches, but there's famously Farmers Only, which I don't know if you own. We don't own that one. You don't own that one. The one that got away. But that's an example of a much more niche community that the maintenance and the OPEX associated with running it at Match Group is probably too high. But if you drop that by 10x with AI, then maybe you can go after like, you know, like Hollywood media executive dating site or something.

59:45Jay Azhang:Yeah, I mean, Upward is an example of this. So Upward is our Christian brand, but also kind of traditional values, which is something that obviously has a huge addressable market. But it's not 100 % of the population mainstream. Hinge, for example, which we own, goes after kind of all of the time. And was that homegrown? And Upward was an incubation, but now because of AI, we're able to put more resources into it and accomplish a lot with 5, 10, 15 people.

1:00:13Alexander Taubman:And then it just becomes an audience acquisition problem, which you have solved because basically everyone in the operating market is not.

1:00:18Jay Azhang:Yes, we can cross-sell people into it, but we also can have a pretty innovative roadmap with a small team because of AI. Yeah, yeah.

1:00:24Amir Sadeghian:So you can actually roll out all the things. Is Instagram Hinge's biggest competitor?

1:00:28Jay Azhang:No, I think, well, if by Instagram you mean people meeting each other on Instagram, no. if by Instagram you mean people sitting on their couch and doom scrolling and choosing not to get out there and date. Yes. So, I mean, our biggest competitor at match group is, is just inertia. It's just people's loneliness and, um, you know, sort of doom scrolling on Tik TOK or Instagram or other social media, even Netflix or YouTube. We need people to put their phone down and put themselves out there and go try to meet new people. That to us is a, you know, would be a flip of a headwind into a tailwind. And generationally, that's a little difficult.

1:01:06Jay Azhang:A lot of Gen Z is pretty nervous about meeting new people or isn't sure it's worth the return on their time or maybe in some cases didn't develop the social skills because the pandemic caused them to miss a couple of critical years. And so it doesn't come as naturally. So this is starting to change. And the double date is an important part of this. In real life events are an important part of it. That's why they've been so central to the Tinder turnaround.

1:01:29Amir Sadeghian:Have you thought about making products in the wedding category at all? Would you ever do wedding registries, prenups?

1:01:39Jay Azhang:You've got the pipeline. Divorces. It's like, welcome back. A new member of our board of directors is Raina Moskowitz, who's the CEO of The Knot Worldwide. Yeah, there you go. So, no, Match Group isn't doing it, but we're very lucky to have Raina's expertise as the leading wedding business.

1:01:54Amir Sadeghian:Yeah, if you reactivate an account on any of the platforms after 10 years, Devorah's support.

1:02:02Alexander Taubman:What about advertising? I know many of the platforms have pro plans or paid plans, but what is unique about you have a lot of attention, you have a lot of eyeballs. What's the story been with ads?

1:02:17Jay Azhang:We have a pretty, relatively speaking, small advertising business, considering how big our audience is. We make less than$100 million on advertising out of our almost$4 billion of revenue. We love advertising here I'm sorry The way we make most of our money, almost all of our money Is subscription revenue where users pay For extra features, extra powers You know Some of our competitors have really leaned into advertising And I think Advertising can Improve the user experience, but Sometimes it can not, so you need to be very careful So there's two classic takes on

1:02:51Alexander Taubman:Ad monetization One is that Twitter never got good at ads because people aren't in that lean back shopping mentality. And then the other take is it's an engineering problem. And if they just had the meta engineers building that matching algorithm, do you see one of those being more important than the other?

1:03:10Jay Azhang:I think from my Zillow experience, we had a pretty big ad business at Zillow. And when we had endemic advertisers, the moving companies, the mortgage companies, the title insurance companies, tightly integrated into the product, that was ads as product, ads as improving user experience. In this category, we also have done some of that. And the ads, for example, on Tinder are integrated in. So you right swipe on an ad, you left swipe on an ad the same way you would right swipe or left swipe on a user. So because it's endemic in that way and it's pretty tightly integrated, the ads perform very well.

1:03:46Jay Azhang:But we're much more focused on driving user outcomes and getting people out on dates. And so the subscription revenue is more aligned with user outcomes.

1:03:55Amir Sadeghian:Did you ever invest or do anything around the housing problem we have in this country, given that you're at Zillow?

1:04:03Alexander Taubman:Yeah, quickly, can you solve the housing crisis for us? No, no.

1:04:06Amir Sadeghian:I mean, I would like you to take a run at that at some point. You know how much demand there is.

1:04:14Jay Azhang:There's obviously an affordability crisis. There's mortgage rate lock-in. If we could find a way to make mortgages transferable, that would be massive. Tons of people are kind of stuck in their homes at 2 % to 3 % mortgages. They're not in the right home that's right for them anymore, but they can't afford to flip it to 5 % or 6%. But that's bad for banks, right?

1:04:30Alexander Taubman:If you bring the mortgage with you?

1:04:32Jay Azhang:I mean, you basically can't do it. There are some startups that have tried. I looked at incubating some startups to do it, but all the stars have to align. The buyer has to match your credit. It can't be done, essentially, in the current regulatory environment. That would be a massive unlock. More real estate development, so just more builder-friendly legislation would be very important. That's something that some other states, not California, have done a better job of. California has been a laggard in that way. I have incubated and invested in a lot of startups that help real estate agents use AI to be more productive.

1:05:06Jay Azhang:I do think that's a bit of a limiter as well. There's one called House Whisper, which I started with several former Zillow people, which makes an AI assistant basically for real estate agents and gives them incredible AI superpowers. So that's a part of the unlock as well. But, you know, we don't have a demand issue. We have a supply issue in the U.S. So we need more supply. We need more houses built. We're missing about a million homes that basically weren't built after the financial crisis. This goes all the way back to 2008. Builders were building a million homes a year and they went down to two or three hundred thousand for four or five years.

1:05:41Jay Azhang:So there are a million homes missing. It's rough.

1:05:44Alexander Taubman:Well, thank you so much for taking the time.

1:05:46Amir Sadeghian:Great to finally have you on the show. Thank you. Come back soon.

1:05:50Alexander Taubman:Our next guest is Eric Olson from ConsenSys back on the show with an exciting fundraising announcement. He's in the waiting room, so we'll bring him in to the TBPN UltraDome. Eric, how are you doing? Well, it's fantastic, guys.

1:06:05Ferdinand Dabitz:How are you guys doing?

1:06:06Alexander Taubman:We're doing great. Please, reintroduce yourself and the company for the listeners, and then we can go into the news today. Love it.

1:06:16Ferdinand Dabitz:So I'm Eric, the co-founder of ConsenSys. We're building AI for academic and scientific researchers. To date, the product's been very search-focused, focused on the literature review use case, people finding references for whatever work they're doing. And we are announcing a$30 million dollar series b today led by great point ventures

1:06:40Ferdinand Dabitz:take the product beyond search move into more of a workspace for researchers uh how how has the

1:06:48Alexander Taubman:actual go-to-market been obviously raising more money so i imagine there's been traction uh what's the response been like what's the customer acquisition strategy yeah i mean that has been

1:06:58Ferdinand Dabitz:far and away the best part of this entire process is the amazing work we get to see our users doing. I mean, these are people who are genuinely changing the world with the research. Like most AI products, we've gone mostly strategy to consumer. There's so much on the ground demand for tools like this that we're really growing mostly organically. We're in a business where so many people are doing work in a lab or at a university and there's tons of networks effect sharing. So we've leaned into that above all else. And then more and more recently over the last year, we now work with over 100 universities where we sell usually directly to the library and then they'll distribute the

1:07:36Alexander Taubman:product to students themselves interesting uh where where are the models or the existing tools sort of falling down because it feels like anything that has a very very short reinforcement you know reinforcement loop uh like research or coding can be automated like very quickly you can get really great results, but stuff like fill up that test tube, throw it in the centrifuge, even if that just takes a few minutes, it's harder to actually close the loop there quickly. And so that's always been my thesis for why we're seeing such rapid advancement in cybersecurity, because you can run it in simulation, video games, but stuff in the offline world, anything that needs IRL feedback is slowed.

1:08:21Alexander Taubman:Do you have an opinion about where all this goes?

1:08:24Ferdinand Dabitz:yeah i mean there are people who are going after full autonomous scientists yeah you push button discoveries come out we're kind of betting against that you know i think like you said there are many parts of a research process that can be automated we want to focus on those parts but there are many things that happen outside of that that are very uniquely human and it isn't just the putting the atoms together or putting the thing in the test tube there's lots of you know taking things from different domains, understanding the connections between them, talking to people, working through ideas and coming up with these new ideas.

1:08:57Ferdinand Dabitz:That is the essence of science. It isn't just what's in the test tube. And despite how good these models have gotten, it's still not great at drawing connections between things and coming up with a new idea. So we want to focus on the things that are actually automatable, like searching for papers and running many interview searches and finding the right materials and let humans and scientists focus on the things that are still core to science in that collaboration, in that inquiry, in that discussion.

1:09:25Amir Sadeghian:Is the bar being raised on college campuses? Like, are students and researchers, now that they have AI, just expected to do two, three times as much work in a given period?

1:09:40Ferdinand Dabitz:I mean, to some degree, absolutely. At the same time, you also will see lots of professors that will put up lots of, you you know, blockers to people using AI and forcing them to do, you know, proctor tests and making sure that they're doing things that are not AI enabled. So I think that there are certain parts of it that are sped up immensely. Then there's other parts of it where professors are putting lots of safeguards up to ensure that everything is being done in the classroom exactly the way that they want. So I think it's kind of a little bit of a mix of both.

1:10:09Alexander Taubman:How do you think about harnesses, wrappers, just SaaS that can accelerate different pieces of the research puzzle to sort of create that operating system? Like, are you drawing from the analogy of like the IDE, the coding agent? You know, Silicon Valley has moved really aggressively towards like coding agents are all you need, but cursor is still doing really well. And so, you know, a lot of code review will still happen, even in a world where AI is writing a lot of the code. So walk me through sort of how you're thinking about the future of research where there's a huge AI portion, but the researcher still remains in the cockpit.

1:10:49it?

1:10:50Ferdinand Dabitz:I think IDE is a really great corollary because you want there to be these things where you have this harness where it can do these iterative loops. You can give it feedback to say, no, go down that path or that path and pull in the things you're looking for. I think the one difference between us and maybe a coding use case is there are very discrete steps that have been sequentially. So maybe you're in a searching use case, but typically then you're moving to like, oh, now I'm writing this paper. Now I'm deeply analyzing this data. So it's kind of like two actually different surfaces than just one ID.

1:11:20Ferdinand Dabitz:So you want to be able to build a workspace that makes it a really easy transition from, I'm in this search, I'm in this learn discovery mode, but now I need to transition to this new task. That same thing is still present. You want to be able to iterate with a model and say, hey, take me down this path. I want to explore this idea. I want to write this. I want to edit it. Okay. But now I want to go back to search because I just wrote this paragraph, but now I need to find references that support that paragraph. Maybe you're taking that paper and then you're going to the next step, which could be you're running some real life experiment.

1:11:47Ferdinand Dabitz:Maybe you're getting off of your surface. I think each sequence is very similar. I think the difference between us and a lot of other use cases is that there are these very distinct surfaces you need to build for each part of a research process.

1:12:00Alexander Taubman:How are you thinking about integration with lab notebooks? Is that going to be important at some point? Is it already important? There's been a big push for cursor for bio, but I've always struggled to understand that pitch because there is no VS code for bio. All of the electronic lab notebooks, the ELN market is closed source typically. But I imagine that with the right API integration, the right partnership, you can still partner with those. Is that in the roadmap? Is that in the sweet spot or something maybe down the road?

1:12:33Ferdinand Dabitz:Absolutely. But I think you're bringing up another great point that even in each one of those broad buckets, so now if you're moving to some sort of writing, note-taking use case, there are different surfaces for different types of research. Sure. Like your Benchlings for biotech. And then there's, you know, just Word and Google Docs if you're a graduate researcher or something. Yeah. We want to both create APIs that integrate with those so you can do it directly in those services. We also think we can build our own dedicated services too.

1:13:00Alexander Taubman:What about for scientists that use sort of like hosted IPython notebooks? They might be on like Google CoLab or something like that. Some light hosted. do you want to build that stack so you can sort of provide that or do you want to partner with the existing tools why not both why not both okay well you have the money to do both so good luck and congratulations and thank you for stopping by the show great to get the update eric good to see you have a good one yeah you're welcome goodbye our next guest is matt from giga energy He made news recently because Giga Energy has scaled to$350 million in revenue, vertically integrating AI infrastructure, while raising just$3.4 million of equity funding.

1:13:46Alexander Taubman:It's an amazing, amazing story of what's possible in the AI era. In hard tech, people say it's hard. Maybe it's not so hard. I don't know. Matt will tell us. How are you doing?

1:13:56Amir Sadeghian:Howdy. How are you doing? What's going on?

1:13:58Alexander Taubman:Thanks so much for taking the time to jump on the show. So I heard the story, heard a little bit of the news, but I'd love to go back and start with your origin story, how you got into this business, and then walk us through the shape of the business today. So where'd you get started?

1:14:13Spencer Rascoff:Yeah, so I started this business back at Texas A &M with a couple buddies from college almost seven years ago. Business kind of started around flared natural gas, Bitcoin mining, and quickly evolved into supply chain constraints.

1:14:25Alexander Taubman:And was your team, were you guys studying engineering or were you just interested in crypto? Like what was the business? I don't know. What was the background?

1:14:35Spencer Rascoff:Yeah, just super interested in Bitcoin and like trying to find any way to get into it. I was like out of desperation, large oil and gas college. My co-founder is third generation oil and gas. The impetus was, hey, can you find us a well and can we mine Bitcoin on it? And then from there, we just kind of went on YouTube and little by little learned through face power.

1:14:52Alexander Taubman:No way. So what was the first thing you built?

1:14:55Spencer Rascoff:So the first thing we ever built was a 50 kilowatt modular data center in Southeast Texas that mined, yeah, just like, I don't know, maybe quarter Bitcoin a month or something.

1:15:04Alexander Taubman:Yeah, and what does that actually look like? So there's a deposit of natural gas in the ground and it's being flared and some of it would be wasted, but then you're converting it. Like, how much did you have to buy? What's the scale? Am I looking at something that's like a shipping container size or like building size or like washing machine size?

1:15:23Spencer Rascoff:Like 20 foot ship container. Like tiny, like nothing massive at scale. And then, yeah, you got natural gas generator on site. You're pulling from the wellhead. Stuff's going down, breaking all the time. And basically, in terms of scaling that business, the rate limiter was the infrastructure. So very quickly, we said, how can we build our own Bitcoin boxes? And then Bitcoin, 85 % drawback. Next thing you know, we're selling more Bitcoin boxes and picks and shovels than we were mining the Bitcoin.

1:15:46Alexander Taubman:Interesting. And then these Bitcoin boxes, are they GPUs? Are they ASICs for Bitcoins? Like where were we in the story of like Bitcoin mining at that point?

1:15:54Spencer Rascoff:Yeah. So you're 2019. So you're still at like 14 nanometer chips with ASICs at the time. So very rudimentary in the field, like flies and dust everywhere.

1:16:03Alexander Taubman:But they, but they aren't repurposable because they're Bitcoin ASICs. So you wind up selling a lot of those as the market deteriorates. When do you start thinking about AI?

1:16:13Spencer Rascoff:Yeah. So I ended up selling about 1.2 gigawatts of those modular data centers over like a four year tenure.

1:16:19Alexander Taubman:year then little by little yeah yeah so yeah wait really quickly like you're selling 1.2 gigawatts of these modular data centers like what is your supply chain like how vertically integrated are you versus uh more of like a systems integrator that then's delivering that to a buyer man it

1:16:37Spencer Rascoff:was incremental it was everything from like building it at home depot to now you know restoring manufacturing back in the us and then just like little by little over a seven year

1:16:44Amir Sadeghian:period bringing it back amazing and and what's the typical what was the typical buyer back in

1:16:50Spencer Rascoff:that era everyone i mean we captured we kind of had a nice niche like lower market middle market public markets you name it we're selling to them we're the guys with bitcoin boxes okay so so what

1:17:00Alexander Taubman:we so one of these companies that wants to they they they purely see it as like a economic opportunity they're putting dollars in and getting bitcoin out and they think that the roi will go up as they have a Bitcoin price target. They come to you, buy it, and then they also have to go and get the land that has the access to the natural gas line, basically?

1:17:18Spencer Rascoff:Yep, yeah, and also on-grid utility. Okay. And so, yeah, kind of like, basically, we got a really good mousetrap. We're selling it, making a great margin. Then we realized everyone we're selling them to. Why can't we do what they're doing if we got, you know, great margins? Sure. So, started going down the pipeline, figuring out how do we get powered land, how do we get cheap power? Yep. In the same vein, started introducing new product lines, And so Transformers and Switchgear in 24, we introduced, started selling that at Mazium. And then at mid-24, we built a go-to-market function around CNI, renewables, electrical, and just started selling to non-Bitcoin miners, realizing that our electrical equipment was fungible.

1:17:56Alexander Taubman:Interesting. And so what was the scale of the company in 24 when you start doing that? I mean, do you have like hundreds of employees?

1:18:03Spencer Rascoff:Wait, and when did you raise that few million bucks?

1:18:06Alexander Taubman:Yeah, it was through the fundraising.

1:18:08Spencer Rascoff:Yeah, so the funny thing, that$3.4 million didn't really go to any of our growth. It just kind of kept us alive for a couple of years, figuring out our product market fit. So we raised like a million bucks in 2021, and we raised the remaining amount in March of 2022.

1:18:22Alexander Taubman:Wow. And then just sales come in. Yeah, just profitable business, yeah. Were there any like...

1:18:30Amir Sadeghian:Did you get thrown out of any VC office for being profitable at any point?

1:18:35Alexander Taubman:It's not that it wasn't in them. It sounds like it didn't even stop by. But in terms of the cash conversion cycle, did you ever have to use debt or payment terms? Because I imagine if somebody comes to you and says, like, I want a Bitcoin box, you still have to go make it. There's like supply chain. Like your working capital could explode if you're not careful.

1:18:54Spencer Rascoff:It was all payment terms. So we were able to convince customers to do 30, 40, 50 percent down and match our payment milestones relative to cash out the door, flow to factories, and just kind of continue rolling it forward. So yeah, our customers finance the whole business.

1:19:08Alexander Taubman:Okay, so then take me through like the growth of the actual workforce. Like how much is in-house? How big is the team at various points? Like how did you scale the workforce?

1:19:19Spencer Rascoff:Yeah, so we had about 90 employees end of last year, approximately, maybe 100. We're up to about 200 now this year by the end of the quarter.

1:19:29Ferdinand Dabitz:Really kind of continuing to scale it throughout.

1:19:34Spencer Rascoff:Well, 24, we got into renewables, CNI, electrical division, selling to churches, prisons, hospitals, transformers, switchgear systems, and then ended up getting a massive RFQ with an AI data center. And that's like, just kind of led us back to the watering hole in terms of, you know, how big the opportunity was. And next thing you know, we're selling transformers, switchgear to everyone in the AI space.

1:19:54Alexander Taubman:That's amazing. Where do you want this to go? Are you going to raise money at some point or do you want to continue to grow it profitably?

1:20:03Spencer Rascoff:Yeah, so Giga has now kind of, again, we went through this cycle of like we're selling the picks and shovels. Wait, the guys who we're selling the picks and shovels to are making a ton of money. Why can't we do that? Same thing's happening on the AI side. We got the powered land. We have a massive pipeline, multi-gigawatts in terms of our capacity. We have healthy margins, and so Giga today really exists around rapid data center deployment. We build all the, we manufacture all the long lead time equipment items to build a data center, and we build a data center with our own picks and troubles.

1:20:32Spencer Rascoff:Okay.

1:20:34Amir Sadeghian:What kind of challenges are you facing on the ground, specifically with local community opposition? Yeah, there's a lot of that.

1:20:44Spencer Rascoff:Yeah, we got town hall meetings all the time, talking to people, kind of walking them through, you know, hey, this is going to use less water than your golf course does within the area. There's a lot of noise concerns. So a lot of it's just kind of sitting down with the residents, walking them through, what does this practically look like in your backyard?

1:21:00Amir Sadeghian:On the noise front, what do you believe is the solution there? I think every single day there's videos on X circulating where people posting, like, you know, this is what it sounds like if you're living in this suburb and it's like a low hum from the generators. You've been continuously making new hardware innovations and products. do you think there's a hardware solution to noise or does it just put them farther away from people?

1:21:33Spencer Rascoff:Yeah, I mean, the unfortunate thing is almost all the setups are in compliant with local laws. They're probably going to be below that 65 decibel threshold, but that kind of low hum is still very irritating. The extent that you can kind of continue to innovate around the products and get lower decibels, put up sound walls, dirt mounds further away, but also, I mean, in my opinion, it's a bit of an easy thing to latch onto when just opposing the general concept of an AI data-centered background.

1:22:02Alexander Taubman:Oh, sure. So it's sort of like a straw man. That's not what people actually care about. They care about the bigger picture, bigger question.

1:22:10Amir Sadeghian:Why don't they dig putting them underground? Is that a solution? I've seen a bunch of people posting very creative ideas around these things. It sounds like a lot of work to dig a big enough hole in the ground, but maybe it's

1:22:25Spencer Rascoff:Yeah, I mean on top of trying to build a day center nine months putting one in the ground is not on the highest priority

1:22:31Alexander Taubman:I would say yeah, just too fast. Well, what about energy for local? Like local energy prices. There's been the ratepayer production pledge signed by a lot of hyperscalers like how How real is that? How are you working through those those those talking points when they come up at a town hall meeting?

1:22:50Spencer Rascoff:Yeah. Right. Every utility or electrical tariff relative to a municipality can be different. Even within ARCOT, you have different center point or encore, right? Two different systems, two different ways of calculating that method. There is the ability to ensure that consumers don't receive increased pricing relative to that. And there's a lot of education in terms around what soft load or firm load looks like. You get backup diesel gen sets on site, but also at the end of the day, you got to be pulling four or five nines of uptime. So the LMP pricing or local marginal pricing of these sites probably will go up a marginal amount unless the hyperskillers are willing to step in.

1:23:36Alexander Taubman:How far do you want to go up the stack? You're building actual data centers now. Are you going to be the one racking the GPUs or are you going to partner with NeoClouds? Are you going to be networking everything together and offering an API for a particular LLM? You could go very, very deep in the integration if you wanted to, but what's on the near-term goal set?

1:23:59Spencer Rascoff:Yeah, I think near-term, right? Gaze is very much a ground-up company, right? Manufacturing the stuff from the ground up with our own CAD file sets, moving the dirt, putting up the building and energizing the facility. We stop at the rack level currently, and that's really what we're excellent. very much the top-down approach of heavy financial systems or whatnot. We view our bottom-up approach very novel.

1:24:26Alexander Taubman:So, I mean, is there a different financial underwriting procedure or thought process around actually acquiring GPUs and racking them? Because it sounds like you would have a tenant that brings in their own equipment and runs whatever they want. Yeah.

1:24:44Spencer Rascoff:Yeah, exactly. Right. So for us, the value proposition is, hey, you need to burn these chips. We can get you 50, 100 megawatts of IT online in nine months.

1:24:51Alexander Taubman:Yeah. And we've seen that from Satya Nadella at Microsoft. He says, we actually have the chips. We just don't have enough powered shells. That's why you're in the powered shell business. That makes a lot of sense. Fascinating. What else goes into delivering a data center in nine months? It feels like, is there a secret to not getting hung up in permitting? Is it the fact that you have a more fluid workforce that can travel across the country? We've heard stories of plumbers going on private jets. I don't know. What else you can tell me about bringing your 200-person employee base to bear in a particular region that might not be right next to your headquarters?

1:25:31Spencer Rascoff:Yeah, so our mantra is building in the factory, not in the field.

1:25:35Alexander Taubman:Okay.

1:25:36Spencer Rascoff:And we did this kind of implicitly in the Bitcoin mining world. We were able to turn on Bitcoin sites in almost 60 days. from bare piece of dirt to energized racks. And the AI space, nine months, is done because we do majority of the commissioning and the integration at the factory in a controlled environment. We've got a 95 % reduction in the need for on-site labor at these data centers because of our modular design and the prefabrication going in. And that's really much the focus up front.

1:26:03Alexander Taubman:Tents versus buildings. We heard that Meta recently shifted to tents to speed up the time to deploy their data centers. Do you have an opinion on the structure that should hold the GPUs, the racks?

1:26:18Spencer Rascoff:The whole industry should be focused on time to token, right? What gets us online as fast as possible, whether that's a tent, whether that's a pre-engineered metal building on site. If all 15 different companies could be aligned on time to token, that's really what we need right now.

1:26:35Amir Sadeghian:What city has been the most welcoming to data centers in America that you've come across yet? Like anybody standing up the whole town just saying things?

1:26:52Spencer Rascoff:You know, I mean, it's hard to make everyone happy, I would say. I couldn't name a particular place that I would say is 100 % on board.

1:27:03Alexander Taubman:Are you worried about any of the potential regulatory or political shifts in the next 12 months?

1:27:10Spencer Rascoff:I mean, I have to imagine at some point this becomes a federal issue.

1:27:14Alexander Taubman:Yeah.

1:27:15Spencer Rascoff:Like where, you know, sign an order, you know, saying, you know, like there's no reason like we should have random municipalities blocking like AI inference coming online. It's just like not practical in any way, shape or form in terms of what we're trying to march forward. So I think that's got to come at some point. How soon? I don't know.

1:27:31Alexander Taubman:Yeah.

1:27:32Amir Sadeghian:how are you thinking about space? Feels like Giga has been very adaptable to date around different trends. Could we see you guys building satellites in the future? Data centers on board?

1:27:43Spencer Rascoff:You know, we're focused on the dirt. We're focused on, we're not the most high tech. We're not the largest. We're very much focused on speed. And at the end of the day, I think that is the difference.

1:27:56Alexander Taubman:Well, congratulations on the progress. Thank you so much for taking the time. Great to meet you. Great to meet you.

1:28:01Amir Sadeghian:Congrats to the team on the progress. Thanks for having us. Have a good one. Take care.

1:28:04Alexander Taubman:We'll talk to you soon. Up next, we have Jay from N of One. He is the founder. This is his first appearance. Building trading agents that may be the next AI interface. What's going on? What's going on, guys? Welcome to the show, Jay. How are you doing? I'm great. How are you guys? Good. First time on the show. Please introduce yourself and the company a bit.

1:28:28Ferdinand Dabitz:Yeah, so my name is Jay. I'm the founder of N of One. We're an AI research lab focused on financial markets. So we're taking a big bet on markets as the next environment that leads to training models that are better at trading and better at domains that require adaptive intelligence.

1:28:53Alexander Taubman:What's your background? How did you get into this?

1:28:56Ferdinand Dabitz:i um have uh i've kind of gone back and forth between uh public market investing and software building software companies so it's kind of like bringing together the two sides of my experience

1:29:08Alexander Taubman:sure uh do you think renaissance technologies secretly discovered the transformer back in the

1:29:15Ferdinand Dabitz:90s this is a conspiracy theory i i don't i don't think so we actually just hired someone from renaissance. And yeah, I don't think so.

1:29:27Alexander Taubman:It seems unlikely given their compute bill over the years. I think we would know. Yeah, there would be signs. There would be signs. There would be signs. But what is working in terms of financial performance in the AI world? There's two weird dichotomies, which is like a lot of the best and most profitable financial firms have been using machine learning for decades or years.

1:29:53Amir Sadeghian:Yeah, or the other side, you could say Jane Street is an AI lab.

1:29:56Alexander Taubman:Yeah, and they've invested in custom hardware and computer infrastructure for a very long time. They wrote their own programming language. Oh, camel. They've been investing in this for a long time. And then on the flip side, you have the best frontier models when someone gives them a benchmark of like, try and trade this portfolio. We haven't seen good results. So where is the delta in your opinion?

1:30:18Ferdinand Dabitz:Yeah, it really depends on what your goals are. I think Jane Street, their goal is to make money, to make as much money per quarter or year as possible. Our goal is to train models that can generalize across markets and eventually eclipse the best human traders and algorithmic trading systems in the world over a very long time horizon. Um, and, uh, for the first, but for the first part of our goal, it's to, to make trading agents a thing. And that's mostly an infrastructure. They're honestly kind of like coding agents for markets. Um, so we're building a consumer facing platform, uh, not a hedge fund.

1:31:02Ferdinand Dabitz:And so our goals are pretty different. We, we, we kind of see hedge funds as having a more, uh, short-term goal of making money and us having a much more long-term goal of, um, you know, trying to use markets as a learning environment for AI in general, which leads to building a totally different type of company, hiring totally different types of people. There's not many hedge funds that we know of that are trying to train models where their goal is generalization versus just making as much money as possible. Yeah.

1:31:36Amir Sadeghian:So talk about the consumer experience. Someone signs up, they deposit funds, your models start trading it. Is that roughly what you're aiming for?

1:31:47Ferdinand Dabitz:Yeah. So to take a short step back, basically our view is that trading agents are about to go through the same sort of adoption curve as coding agents from basically no one using them today to basically everybody using them in the next couple of years. So like two or three years from now, we believe that trading without a trading agent will be like coding without a coding agent or cursor or feel like. You could do it, but why would you? And yeah, so that's like the sort of inflection that we see coming. It's like the next big platform shift in investing that we see. And people have lots of ideas today around trading strategies or low resolution DCs they might have where executing that is kind of hard.

1:32:39Ferdinand Dabitz:So whether it's a systematic trading strategy or like some more complex discretionary one. You might have an idea, but it's just impractical to put it on unless you're good at coding and have a bunch of data and other things. So yeah, basically you'll be able to come onto this platform. You'll be able to describe a thesis or an idea in natural language. And then the models that we are developing will be able to get you from that natural language to a fully deployed trading agent that expresses or embodies your viewpoint.

1:33:11Alexander Taubman:I think there's someone in the chat who knows you. Do you know Moon from Stable Diffusion? You and Pedro kicked off his career. I don't know. He's excited that you're here. I have no idea who that is. Sorry. Tell me about what the important pieces to build are for, because you can, in theory, use OpenClaw or an AI agent to interact with like an interactive broker's API, sort of set up a trading strategy, work through that? How, like, what are the pieces of the scaffold that you need to build to, like, give a great customer experience?

1:33:48Ferdinand Dabitz:Yeah, that's a great question. So there's a lot. The first hardest, you know, the hardest part in many ways is the data. You need to have really good live data coming in from basically every market anyone wants to trade. So we spent a lot of time really hammering out all the different providers and cleaning and preparing and getting it ready to be consumed by agents. So that's a huge piece of it. Like if you don't have all the necessary data, it's hard to build a real trading strategy. The second piece is like the guardrails, you know, LLMs, a big part of our point and why we launched Alpha Arena, as maybe you guys saw, is to prove that LLMs aren't quite there yet when it comes to trading, that the models aren't very good at at autonomous trading tasks, basically.

1:34:35Ferdinand Dabitz:So we developed a harness and put a lot of our energy into developing a world-class harness for trading and deep research queries for markets. So you get all of that on our platform. And then all the DevOps and server management and basically all the infrastructure that you need to do that well, even on something like OpenClaw, we take care of that as well. But yeah, there's a lot. And then the execution, and then if you want to do paper trading or simulate out possible ideas or kind of go through a lot of iteration and refine your strategy. It's not super easy to do all this stuff well. Yeah, that's...

1:35:14Amir Sadeghian:Would you ever partner with the Publix or the Robin Hoods of the world and integrate this into their platform where they can effectively create some type of tab where you can type in a thesis and then execute it within your existing brokerage? or do you want to own the end customer?

1:35:32Ferdinand Dabitz:Yeah. As of right now, we're integrating with all the brokerages. So you'll be able to connect to whatever brokerage you use. Or if you don't have a brokerage, you can just onboard through one that we set up for you, like Alpaca or IBKR. But yeah, right now we're just a layer on top of all the brokerages.

1:35:53Amir Sadeghian:Got it. Cool.

1:35:54Ferdinand Dabitz:Well, thank you so much for coming. Wait, you have some news.

1:35:57Amir Sadeghian:You have some news. You raised some money. Oh, yeah.

1:35:58Ferdinand Dabitz:We just raised a$15 million round.

1:36:04Thank you, Jordy.

1:36:05Amir Sadeghian:Almost forgot. Almost forgot. Thank you. Messed it up. Great stuff.

1:36:09Alexander Taubman:Have a great day. Congratulations. Thanks, guys. And we'll talk to you soon. Have a good one. See ya. We have Amir from Astrocade coming in in just a few minutes, but we have to talk about Laurel Supply. This is important. Everyone out there was, if you were complaining that Erewhon was too cheap, you're going to love Laurel Supply because they made an expensive version of Erewhon. This is from Andrea.

1:36:34Amir Sadeghian:Some people are saying that it's more of like a TikTok studio, grocery store.

1:36:40Alexander Taubman:Okay. I want to know about the flow of what the go-to-market works looks like because this thing went mega viral.

1:36:46Amir Sadeghian:We should have had Tyler going there. We should have gone. It's close. I think I drive by it every day. Okay.

1:36:49Alexander Taubman:But let's sit at the table and try and understand what's actually going on here. So moral supply.

1:36:54Amir Sadeghian:Before we dive in, probably one and a half years ago at this point, John is saying like, okay, well, obviously, you know, Erwan's this hit. Yes. But obviously the opportunity.

1:37:05Alexander Taubman:You introduced me to Erwan.

1:37:07Amir Sadeghian:Really? Yeah. Because I would come in every day.

1:37:09Alexander Taubman:Because you were such a diva, you would insist on only eating Erwan. And I was like, can we just throw in McDonald's once? Maybe a Jack in the Box. Maybe a Taco Bell. Maybe a Del Taco.

1:37:20Amir Sadeghian:You said that a couple times. Maybe a Chick-fil-A. And then you piped down. Yeah, I did eventually. You piped down. Yeah.

1:37:25Alexander Taubman:But you brought me the gospel of Erewhon. I became a convert.

1:37:29Amir Sadeghian:Just remake Erewhon, but make it two to three times more expensive.

1:37:33Alexander Taubman:And no one would think that. Everyone would come into it and say, what if Erewhon, but cheaper? Tyler says, I called this before John.

1:37:40Amir Sadeghian:Wait, what? I have a tweet from January of 2025. I say there's definitely a market for ultra high-end. You probably heard that on the show. I think you heard that on the show.

1:37:50Alexander Taubman:Wait, what is this? Can we pull up Tyler's tweet? Where is this? We need to put this in here. Okay, so Tyler says there's definitely a market for an high ultra end.

1:38:01Amir Sadeghian:Or an ultra high end.

1:38:03Alexander Taubman:Or an ultra high end grocery store that doesn't use plastic anywhere and tests the products for tons of stuff. Erewhon meets plastic. Yeah, I'm sorry, Tyler.

1:38:10Amir Sadeghian:You took, you overheard John. I saw this tweet probably and then took it. I don't know. I don't know when you said it.

1:38:16Alexander Taubman:I don't know. I think I rifted. I was, this was right around the time that I was riffing it on the show. So like, well, maybe so really possible.

1:38:24Spencer Rascoff:This was a reaction to Nat Friedman, I think.

1:38:26Alexander Taubman:Yeah. Yeah. Yeah. Funded the plastic. No, no. I, I, I might have to give you this one. I don't know. January 6th. I don't think this is a very original idea.

1:38:34Amir Sadeghian:Okay. What is, what is cool is like a lot of the products they're selling. Yes. Clearly they're just like packaging them on site. Yeah.

1:38:42Alexander Taubman:So they have flowers here. They have a whole bunch of like nuts and spices and all sorts of things, but they are sold in individual jars. Very aesthetic. Like the view, there's just so much less chaos.

1:38:54Amir Sadeghian:Nick Schauer says they should call it whole foods. So this is the beauty. The tree inside is nice. This is the beauty of capitalism. Yes. But the, which is that every great idea eventually can be usurped. by doing the exact same thing, but just doing it slightly.

1:39:16Alexander Taubman:At 3x the price. Is it actually 3x the price? No, I don't think so. We've got to go and understand. So Michael Mayer floor has a post here. He says, important to note that this is on Holloway Drive, on the same street as Holloway House or Soho House Holloway, whatever the official name is now. And it's right next to Barney's Beanery. This corridor is going to become one of the cool person destinations, completely insufferable, must visit if from out of town, influencer destinations in LA. Another pink wall, if you will. interesting i remember the pink wall did you ever take a photo at the pink wall yeah i drove by it a couple times i saw people taking photos i never stopped i knew that ai would be able to make a pink wall behind me if i wanted one on demand the street is also a staging site of sorts It's for delivery robots.

1:40:01Alexander Taubman:So yeah, lots happening. Interesting. Okay. So Inside Laurel Supply, the new grocery store, luxury grocery store that just opened in West Hollywood. There is a video. Should we watch this or do you have another take, Jordy? What do you want to break down?

1:40:14Amir Sadeghian:There's a video inside the store.

1:40:16Alexander Taubman:There's a one minute and 33 second video from Mike. Make LA great again. Inside Laurel Supply. And we can play this video. It looks like it's a download of a TikTok. First look, Laurel Supply. And it's a popular new American restaurant, Laurel Hardware. There's a couple others. It's so overpriced, says Schant. Erewhon down the street is so much better. It's making Erewhon look cheap. Okay, let's play this. Maybe.

1:40:46Spencer Rascoff:Turn this up. All the fruits and vegetables are 100 % organic and meticulously placed. You'll find an organic smoothie, juice, coffee, and matcha bar with plenty of indoor seating, Or you can just enjoy them while you shop immediately to the left you'll find the health and beauty section And this is a little well everyone doesn't have a grocery store She's a body of the section and she showed us probably from all around the world This runway product caught my eye because you know devil wears Prada But one of the most unique things about Laurel Supply is this stone It was imported from Ukraine and it allows them to control the production of their in-store goods You know how you can go to Europe and eat all the baked goods like a heifer and not gain any pounds A lot of people say it comes down to those specific ingredients like flour.

1:41:29Spencer Rascoff:So that's what they're trying to mimic. So they make the flour on site?

1:41:32Alexander Taubman:Opening. I don't have a lot of images of the prepared food, but it's going to be fantastic. They're just like reinventing a farm.

1:41:37Spencer Rascoff:If you have a sweet tooth, you've been warned because there's a wide selection of gelato. There are food options such as sushi and they have an organic butcher. You'll immediately know all the attention to details such as this live olive tree that they have inside and how they incorporate natural light. That was one of the big things I noticed immediately when you walk in. I was also told they offer valet for shoppers. So those that were concerned about the parking situation that should help alleviate it At the time of this posting they should be officially open Let me know what you think when you go check it out and follow me valet

1:42:06Amir Sadeghian:It actually matters. I gotta say valet for Groceries places that you go to a lot is a bug not a feature.

1:42:13Alexander Taubman:Why?

1:42:13Amir Sadeghian:I just I just like parking my own car I don't want random, you know, I don't I don't I don't need I don't need or want random people driving my car all the time. I'm saying for a grocery store or a gym. But I do think it's funny. So they're like, okay, so we're blatantly cloning Erwan. Let's just all admit that. Let's just all admit that. We're blatantly cloning Erwan, but we got to do something different. They rack their brains for hours. We're going to mill the flour in the house.

1:42:43Alexander Taubman:Is that the only thing? Yeah, there was a lot of stuff there that seemed like Erwan. That's the only thing I know. No, I think so.

1:42:48Amir Sadeghian:So it looks it looks fantastic. Yeah, I like the logo. Yeah, it's cool. I will I will happily shop here.

1:42:56Alexander Taubman:Will you or will you just be like, oh, it's not the same. I'm an Erewhon diehard. You're going to switch up on your day ones. You're going to switch up on Erewhon? It totally depends on location. You'd be driving to Erewhon. I'm going to go the other.

1:43:07Amir Sadeghian:I am a reserve member at Erewhon.

1:43:09Alexander Taubman:I don't even know what that means, but it sounds expensive. That's hilarious. So funny. Well, what else is in the timeline? So, Willman, I just had an absolute banger today to the tune of 12 ,000 likes.

1:43:24Amir Sadeghian:Oh, last thing. Because Dylan, our very on Scotto, texted. What did you say? Very smart. He said they should open in the Bay or New York, not where Erwan already is. That's right.

1:43:38Alexander Taubman:Erwan's not in New York.

1:43:39Amir Sadeghian:So Erwan has had so much opportunity to expand within LA. They've done a very good job. You can't really drive 15 minutes without running into one, which is a great feature if you want to just pop in for lunch or whatever. But they've been.

1:43:54Alexander Taubman:Ben says they should do a points match. Like when you're leaving like American Airlines or United, they'll status match you. If Laurel Supply status matches you on day one, they might win you over.

1:44:05Amir Sadeghian:Maybe. No, but this is smart. They've been relatively slow to expand. There's a store blanking on the name in New York that beat them to at least beat Laurel Supply to cloning in New York. But yeah, the thing about Laurel Supply is it looks incredibly well done, and I'm sure the experience will be great. I will happily go check it out. But it doesn't add anything new to grocery in L.A. really at all.

1:44:28Alexander Taubman:Unless they do what we were talking about, which is the whole brand is you go in here and there is no plastic in the store whatsoever. Like that was the original pitch that we were talking about was not not oh, it's organic.

1:44:40Amir Sadeghian:The other part of the other part of the pitch was ditch the old like brown grocery bags and do like solid gold bags.

1:44:47Alexander Taubman:Yeah, effectively turn the bag into like a Hermes Birkin bag. And so an influencer can take a photo of it. Somebody who gets the bags can take them at home, take a photo and everyone knows, oh, you got the fancy groceries. I got to have those fancy groceries. That's the hack. I still think launching in LA is good for like go to market in terms of like the influencer economy. You don't think so? No. You think New York and SF?

1:45:10Amir Sadeghian:No. I mean, Dylan said Marin. Marin would crush.

1:45:13Alexander Taubman:Marin maybe. But I still think the total amount of views will be higher in Los Angeles than Marin. I think there are some. Maybe it's a starting point. But there's way more celebrities and whatnot.

1:45:22Amir Sadeghian:But congratulations to the Laurel Supply team on the launch. Welcome on the show. We love talking grocery.

1:45:28Alexander Taubman:I would love to have the CEO on the show. Anyway, we have our next guest. We've been keeping waiting in the waiting room, but here he is in the TBP and Ultra down the mirror from Astrocade. How are you doing?

1:45:40Quaid Walker:Hey, guys. Thank you for having me. Thanks for joining.

1:45:43Alexander Taubman:Welcome to the show. It's great to meet you. It's great to have you here. Congratulations on the progress. Introduce the product, then we can talk about the fundraising. But how are you describing what you're building right now?

1:45:52Quaid Walker:Yeah, Astrocade basically is a social entertainment platform where anyone, and I mean anyone, can create games via just natural language. very similar to how you problem chat GPT you can make games and for example you can say a car racing that is happening under the water and the driver is an elephant or a candy crush that instead of popping the balls with color you can form basically words something like that and then with a few clicks we can just publish it to our feed and then there are millions of players right now that play your games and I think the part that I'm the most excited is our mission, which is sharing fun with the world.

1:46:33Quaid Walker:I think what we are building is pretty cool for people to use and be happy.

1:46:38Alexander Taubman:This seems, I don't know, like almost obvious. I don't want to degrade it, but it feels like there's been this vibe coding boom. I see a ton of really fun games. We've made like simulators and whatnot. We always buy a domain name and then the question's like, how do you drive traffic to it? You can't really go viral. So then you wind up making a viral video about the game and you try and get people to go to the dot com. Well, here's the thing.

1:46:58Amir Sadeghian:So the games that we've been creating are only funny to like a very and fun Yeah, like a very small group of people. Yes, yes, yes, but they're not really fun to play. That's right And so what I wonder what I wonder is like is the opera is like Reskinning a bigger opportunity than like generating entirely new games because there's certain game mechanics that are just sort of tried

1:47:21Alexander Taubman:I would argue that that's how that's how Instagram started Like the original Instagram was like share your picture of your run with your close friends That's what we're doing with the simulators that we build, but eventually there's no game mechanic at all No, no, we know what I'm just saying is like in terms of the actual application like like we like we are doing the we are doing the You know the the Instagram post that's just like hey I ran a marathon and ten friends like it We are not creating the viral Instagram that will be like loved by everyone. We're not Professor Cindy making Wombos

1:47:54Amir Sadeghian:What I'm saying is the social aspect, the sharing aspect is very cool. But if I'm making a first-person shooter, there's probably some out-of-the-box mechanics that would be great. And reskinning, putting the team as a character.

1:48:07Alexander Taubman:I think there's probably a lot of harness. Tell us about how people are actually using it.

1:48:11Quaid Walker:You guys are actually making all the good points. First of all, and you mentioned it's actually obvious. When we started three years ago, I was convinced that such a thing should happen. It's very hard to also predict the future. but if you look at the past, the past 20 years, right? 20 years ago when Twitter launched, basically what happened is they made creation tool of text accessible to everyone with the keyboard, all these things, right? Again, and almost everyone is a writer now on Twitter. They do a lot of rage baiting on a day-to-day basis or whatever. But everyone is a writer. And the pattern, what we see here is once the creation tool becomes accessible to everyone, great generational companies appear, right?

1:48:52Quaid Walker:same thing four years after Twitter Instagram when the camera iPhone 4 launched with a good camera everyone became a photographer and it's great but also like thanks to my wife I don't have any more privacy and I think you guys would deal with that too TikTok same thing and like with the videos all you see the pattern basically is a creation tool became accessible and what you guys pointed out is like creators from diverse background started creating this content first person shooter. A lot of people remix new games, but also the beauty of large numbers is a lot of people actually invent new kind of mechanics.

1:49:32Quaid Walker:It's like one of the interesting genres for us that we saw that got super viral is you have to wash things. So you have something, you go wash Mona Lisa's painting, then you go wash a car, you have to clean it. And like, it's actually pretty addicting when you play it. It's so shocking.

1:49:48Alexander Taubman:That's funny. And on Instagram, you'll see viral videos of people power washing old rugs that are so dirty. There's a whole genre of this time lapse of people cleaning rugs. And then it's very satisfying because you're watching something you cleaned, which I think is satisfying. But then also it's revealed to you what the rug looks like. And it's very satisfying. Exactly. When you

1:50:08Quaid Walker:see things happen, you're like, oh, it's so obvious. But then you need people to create these things. And I think that's What exciting. The biggest, I think the biggest advantage of AstroKid, which I really love, is the core of the experience. So number one, first of all, like our platform compared to other platforms is it's engaging. You play things rather than consumption. The majority of the social platforms right now are consumption. Engagement is just so much better. It's like hearing a story versus experiencing a story. Right. Right. Number two, which is kind of also our mission is just it's more fun.

1:50:47Quaid Walker:You know, we are living in a world of a lot of the brain rot happening. And I think this is just more creative. You come out of it super happy when you play AstroKid and like you use actually your brain. So that's very, very important for us. And I think the reason I believe AstroKid has a possibility to become a generational company is games are so innate to humans. I have a two year old and he just always playing. is learning to true play right they were like what i think the latest stats i read was the 3.4 3.5 billion people playing video games right now just almost half of half of humans right and i

1:51:23Amir Sadeghian:think that's not this second right that's like day to day generally 3.4 overall i think that no it's not because i'd be pretty worried for yourself i'm gaming right now half of humanity is is live playing first person shooters right now but brain rot's not going to be an issue

1:51:38Alexander Taubman:Don't worry about that.

1:51:41Amir Sadeghian:Is there a crazy power law with the games? Like on YouTube, the power law would be like most videos. Gangnam Style has like a billion views,

1:51:49Alexander Taubman:but the average YouTube video gets, or the median YouTube video gets like 10 views.

1:51:53Quaid Walker:100 % there's always. With all this creation platform, there is a power law. A lot of like some portion of creators, like 1-2 % of the creators get a lot of plays, and they get super viral, and then there are other creators that get, they don't get viral but they get at least thousands of plays on their games we actually like we launched the platform like publicly around 7-8 months ago the numbers are actually crazy guys the stats is our MAU is like 5 million right now hundreds of thousands hundreds of thousands of creators are now creating games hundreds of thousands obviously you guys are happy we actually process trillions of tokens

1:52:41Alexander Taubman:to make this happen

1:52:48Quaid Walker:it's completely free

1:52:50Alexander Taubman:people free that doesn't sound like it's going to make any money how will you make money, ads or subscriptions or both?

1:53:00Quaid Walker:potentially we want to do ads right now our creators are Yeah, it's completely free. Between all the vibe coding platforms, we are the only one that is completely free. Well, so won't you want to make,

1:53:17Amir Sadeghian:allow creators to turn on monetization at some point? Like I feel like you're going to have people that are like nine years old that create some hit game and, you know.

1:53:27Alexander Taubman:It's the Alex Zhu from Musical.ly philosophy of like social networks are two-sided marketplaces. you have to create liquidity and like the faster you can start paying people to post you get more professional creators and i'm sure you're thinking about that but yeah we are exactly like i think we

1:53:43Quaid Walker:get inspired a lot by youtube also like almost of the almost all these social platforms are doing that right they don't monetize necessarily their creators they actually build tools for their creators to monetize their games sure um and we are going to do something similar we still haven't started monetization. We are focusing on the user growth. But we are going to build tools that companies can do ads on Astrocade, but also creators do microtransaction and the regular type of business model that gaming has doing. I've been doing all these years. I think that gaming is just generally a good business.

1:54:16Quaid Walker:It's very profitable. It's one of the largest segments of entertainment, larger than movies and all these things combined. So I'm not so worried about monetization. We just want to make a great experience for everyone. You should actually play a game.

1:54:31Alexander Taubman:People, people, people, people, the, uh, the video game industry to the, to Hollywood or the movie industry. And, uh, and it does dwarf it, but I wonder what the actual, uh, revenue split between like passively consumed content is versus actively played games. Because I think if you take YouTube and Netflix and Spotify and Tik TOK and Instagram, that's probably a bigger pot to be clear massive massive market massive opportunity very bullish on this this makes a ton of sense but it is interesting that there is some there is some sort of dynamic where like yes three billion people are playing games but probably more people are still watching passive things there's probably more watch hours on passive content um but that doesn't make you

1:55:17Quaid Walker:know playing games any less important people enjoy you're you're right yeah um so so that's why i I always not, I don't say normally games. We call it playable content because there's actually like very diverse set of content. They're not only games. Yeah, yeah, yeah. It's like playable experiences. I think from the content point of view is we are heavily towards actually ultra, we call it ultra casual, not even hyper casual.

1:55:44Alexander Taubman:Yeah, yeah. Ultra casual when you go to ultra casual. Yeah, what's the average like play time? Because like Final Fantasy might be like 100 hours. GTA might be 100 hours. and then some small game might be a couple hours. But I imagine this is like on the order of minutes. Exactly. It's exactly on the order of minutes.

1:56:02Quaid Walker:So it's shorter form. Actually, my wife is one of the hardest critics. She only plays Astrogate games. And she does it when she's watching a movie. She also is playing the games. It's just so like it's still like engaging and interactive, but you don't need to also necessarily to focus full on versus a lot of triple games you have to do that. And I think that's going to happen with the gaming industry. There is going to be still big studios, like basically Hollywood. And there's going to be YouTube.

1:56:31Alexander Taubman:Yeah, I mean, in the same year we got Oppenheimer and Barbie. We also got like 12 other Mr. Beast videos. Are you based in LA? We are in Palota, actually. We're down from Palota.

1:56:42Amir Sadeghian:I looked at that. That building is so ugly. I thought I was.

1:56:46Alexander Taubman:They recreated Los Angeles up north. It's crazy. Talk about the technical side of things. I imagine this is heavily powered by like WebGL and Web Assembly, but like all of this is delivered in an app. And so I'm wondering, like where you're bumping into like Apple's rules of the road, because there's so many cool functionalities like haptics and gyros. and cameras and like when I think about what a really robust mobile game does it's usually using a lot of the different apis and some of those are probably available are they all available

1:57:19Quaid Walker:what's that been like yeah so we are completely right now web-based okay and the games are html games okay i'm super lightweight it's super fast to load those games okay um technologically wise i think we had multiple like challenges across the way we knew this is possible but it's actually very hard to build such a platform. Just generally platforms are very hard to build. The first biggest challenge which we overcome and it's still ongoing is just creation tool. How do you build this agentic system that can make everyone a game creator, right? Remove all the skill because these games are being like one of the games I was showing to experts and they were saying this is a million dollar budget for a month of the team, right?

1:58:00Quaid Walker:On our platform it's like$20,$10. So that was one thing and it's all going and we call it like AstroKid is a platform where our AI is learning how to generate fun. It's a big thing. AI learning fun is a big thing in the AI community.

1:58:17Amir Sadeghian:So it's not a very seemingly at least a very deterministic problem because you have these games like I don't know, why would a window washing game be fun and yet if the mechanics

1:58:33Alexander Taubman:Say you've never washed a window. You say you've never yearned for the mines. Why would Minecraft be fun? You go to the flow state.

1:58:42Quaid Walker:Yeah, when you start washing the window, you get to the flow state.

1:58:45Alexander Taubman:So, I mean, does that mean that there's going to be some sort of like, you know, crazy deal to be done between you and Apple at some point? Because I imagine that your consumers, you as a company, will want access to the full iOS API suite. And Apple is going to say, this is an app that makes other apps. We're not really cool with it. and you're going to have to discuss that? How does that play out? Because I feel like everyone wants this to be a thing, but Apple's just sort of operating from a place of 15 years ago in terms of what the technology was capable of.

1:59:19Quaid Walker:We haven't got there yet. We haven't launched that, by the way. Yeah, I know. It's fully on the web. We have to see how when we grow. No, I think this is actually pretty good for Apple, too. It should be. They're bringing massive distribution also. They provide a distribution. But they make a lot of money on games right now.

1:59:36Alexander Taubman:And if you're saying that we're just going to do ad supported and it's all going to be in our platform and all of a sudden it's like, well, we were making$2 off of the window washing game every time someone clicked the in-app purchase. And now you have a different business model. That could be an issue.

1:59:49Quaid Walker:So, yeah, I don't know. I'm sure you'll solve it. Not right. This is not our biggest problem, right? Yeah. Now, the things that we are focusing right now on the technology side is like another thing, by the way, is very hard problem. And it's harder, honestly, than some of our AI problems. is the recommendation system. Interesting.

2:00:06Alexander Taubman:I was wondering if that was off the shelf. Is it not?

2:00:09Quaid Walker:No, it's actually pretty challenging. I don't think anybody has built such a large scale recommendation system for this type of content. Sure. Right. We have a kind of recommendation system for videos. We have recommendations for images. Sure. Games, first of all, a lot of them are open-ended. So you don't know exactly like video. You know, I watched the whole 50 % label. Games is like a lot of other features of extracting features from the videos.

2:00:31Alexander Taubman:It could be satisfying because you were able to finish it in 10 seconds as opposed to if you're watching a 10-minute YouTube video and you click out of it in 10 seconds, you didn't win the goal, so you have to bake that into the weights as well. The recommender, like this person was able to destroy this game, but they enjoyed it, and then they might not always give you the thumbs up, thumbs down signal. So interesting. Exactly, exactly.

2:00:52Quaid Walker:That's been one of the hardest problems, by the way, you're trying to solve the recommendation system. And then platform, like how do you manage the platform so players are happy, the creators are happy. This is the first time that this large scale, like in a few months, we've got more than 75 ,000 games on our platform created. How do you distribute these games to millions of people from diverse backgrounds and skills, right? So there's a lot of technical challenges. Serving is another, the infrastructure you need to build to basically efficiently serve these games. I'm doing some back of the envelope,

2:01:27Alexander Taubman:trying to pull data out of you. You said like$10 to$20 per game inference, 75 ,000 games. That's like$1.5 million in inference. Are you actively looking at what pieces of the puzzle you can move to cheaper models really quickly?

2:01:43Quaid Walker:We do that. We do that, actually. For some tasks, we do cheaper models. For more complicated tasks, we do. The thing is the cost of intelligence is coming down. Yeah. Right? But the cost of these tokens are not because you always want to go with the best one.

2:01:58Alexander Taubman:And the value of networks is going to keep going up.

2:02:01Amir Sadeghian:Feature request. I want to be able to go on Astrocade.com and navigate based on popularity of different games by year. So I want to find all the games that were popular when I was five years old. In 2005, I remember some of these web-based games. What was that game where you're on a little bike? Line Rider. We have that.

2:02:24Alexander Taubman:We actually have something similar to that. Yeah, but to the point about the recommendation algorithm, is the user trained to search for that? And then is your search algorithm going to match with that? If it's an abstract representation and the user didn't put the keyword line writer in their description or something. Interesting challenge. Interesting challenge.

2:02:42Amir Sadeghian:For the rest of the show today, I'll be playing line writer. So if you keep watching after you leave, you'll see I'm completely distracted.

2:02:50Quaid Walker:It's actually pretty calming also. It puts you in the flow state. and you know what else is calming

2:02:58Alexander Taubman:the flashbang is not calming

2:03:02Amir Sadeghian:that's extremely disorienting it's very calming to me just say you want to play cod just tell him remake cod very calming to me yeah uh amir it's an honor to have you on the show uh i'm excited to play astrocade and uh at this rate i'm sure you'll be back on very very soon congratulations

2:03:22Quaid Walker:Say hi to Nick for me.

2:03:23Alexander Taubman:I will.

2:03:24Amir Sadeghian:We will. Thank you so much. Cheers. Goodbye. Have a good one. Bye.

2:03:27Alexander Taubman:Our next guest is coming in in a few minutes, I believe. So we will click over to this very odd viral post from Wilmanitis. So apparently fiber optics on the battlefield, we've talked about this before, drones in the war in Ukraine will be hardwired via thin fiber optic cables so that there's no chance of jamming them. or disrupting any sort of radio signal. So this has been a popular technique on the battlefield for years now, I believe. But apparently it's extremely pricey now.

2:04:01Amir Sadeghian:Yeah, this is so insane. Apparently the price used to be for 50 kilometers spool was$300. Yeah. So that seemed, that's way, I used to always wonder about the economics of just because you're assuming, okay, this drone's taking off, it's flying miles and miles and miles. How could that make sense? But it's clearly very cheap. 300 bucks. You have a drone that's, you know.

2:04:24Alexander Taubman:And they started with like DJI drones that were like Mavic 4s used that were maybe like a couple hundred dollars. And there were actually some people that would buy these drones like on Craigslist or Facebook Marketplace in America or somewhere else. And then fly to Ukraine, take them and resell them at a profit. But still, the average cost of the drone was like in the thousands of dollars. Well, now 50 kilometers of fiber optics is$2 ,500. So a massive increase in price. And Wilmanita says AI data centers skyrocketing fiber prices leading to Ukraine, Russia being priced out of using drones to do lively atrocities.

2:05:04Alexander Taubman:There's a scale of marketplace solution. That sounds schizophrenic on the outset. But it is a bizarre. Obviously, he's sort of playing around with the concept. But it is a bizarre second-order effect of fiber demand in America, if that's actually what's going on here. Who knows? Who knows? Well, David Sachs shared some back-of-the-envelope numbers for a one-gigawatt data center we talked to Giga Energy about.

2:05:27Amir Sadeghian:I'm going to quickly jump in. I think this is napkin math.

2:05:32Alexander Taubman:Oh, you don't think he bought out the envelope for this?

2:05:34Amir Sadeghian:This screams napkin math to me.

2:05:36Alexander Taubman:You don't think he used an envelope for this?

2:05:38Amir Sadeghian:Yeah, I think he was writing 50.

2:05:40Alexander Taubman:Okay. Okay.

2:05:41Amir Sadeghian:$50 billion. $25 to$30.

2:05:42Alexander Taubman:And wait, so when he says all-in CapEx, that's the amount of money that you spend sponsoring the all-in podcast? What is that? What is all-in CapEx?

2:05:50Amir Sadeghian:Because he says all-in CapEx. I mean, hey, the number one tech podcast in the world. $50 billion is a small price to pay for one gigawatt data center.

2:05:58Alexander Taubman:Exactly. No, of course, he's talking about the total amount of CapEx, but he did use his brand name there. All-in CapEx,$50 billion. Enterprise revenue generated, $125 to$30 billion a year. Electricity cost,$1 to$2 billion a year. Two-year payback. The boom is real. Grok fact-checked it. What did Grok have to say? Mostly accurate. You know what Grok called it? Didn't call it napkin math. It called it back of the envelope. I'm not kidding.

2:06:25Amir Sadeghian:I'm going to have to fact-check Grok.

2:06:28Alexander Taubman:Grok, is this more back of the envelope calculation or not napkin math? Fact check from Grok says, CapEx is$50 billion per gigawatt of lines with NVIDIA's estimate. Revenue, it matches high-end infrastructure as a service. Cloud leasing, energy is roughly correct. Two-year payback is realistic. There were some other folks that were pushing back saying that there's a lot more that goes into it, but it seems directionally correct.

2:06:54Amir Sadeghian:Yeah, I guess the question is, doesn't OpenAI and Anthropic have access to somewhere in the range of$2.5 to$3 billion? or sorry, two and a half to three gigawatts of compute. Yeah, that's right. Right. And they certainly don't have 150 billion.

2:07:10Alexander Taubman:Oh, yeah.

2:07:11Amir Sadeghian:Each. So, yeah. So I feel like the numbers seem incredibly optimistic.

2:07:16Alexander Taubman:It's more like forward looking.

2:07:17Amir Sadeghian:Yeah. Looking at core weave, this is not at all what we're seeing with core weave. Yeah.

2:07:22Alexander Taubman:What happened with core weave?

2:07:25Amir Sadeghian:But we will see.

2:07:28Alexander Taubman:There's a breakdown here of core weave.

2:07:30Amir Sadeghian:Yeah.

2:07:30Alexander Taubman:31 billion of in-service PP &E as of March 31st, 2026. They lease their data centers. 1.4 billion of operating lease expense for this year, active data centers. Let's assume the leasing market is 10 % cap rate, so cost equivalent to lessors, 14 billion. If they had 45 billion of all-in CapEx generating revenue of one gigawatt active power, it's close to SAC's numbers. Let's be very generous and assume they need to put no additional CapEx in service to hit the revenue guide. The assumption is wrong. The revenue guidance is$12 to$13 billion. So CoreWeave's all in CapEx to revenue is 3.6x. Sacks back of the envelope CapEx revenue is 1.8 at midpoint.

2:08:10Alexander Taubman:So either CoreWeave really sucks at this or these numbers are 50 % off before we even get to margins. Interesting. Well, there's more pitches for beautiful data centers. doesn't seem like it's on the roadmap for many data center builders, but Meltem Demirors says, you said make data centers beautiful. There are some good ideas in this post. Which one do you think is the most beautiful, Jordi, of these beautiful data centers?

2:08:39Amir Sadeghian:Let's see. I personally think that the actual image of the data center they use is beautiful, but only in a...

2:08:48Alexander Taubman:The big mound. The mirror one.

2:08:50Amir Sadeghian:No, no, no. I'm saying at the top of the sub stack. Yeah. Once you click in.

2:08:55Alexander Taubman:Yeah.

2:08:55Amir Sadeghian:Like the actual data center, it looks kind of.

2:08:57Alexander Taubman:Yeah, job sort of finished there. Why change something that looks like a blank black cube? It's good enough. Let's see. Kevin O 'Leary is proposing to build a data center in Utah that will require nine gigawatts of energy to function when fully built.

2:09:13Amir Sadeghian:Yeah, this one is getting insane levels of trash.

2:09:19Alexander Taubman:Now we're putting energy use in atomic bombs units? It will dump around 23 atomic bombs worth of thermal load on the environment every day. The 23 atomic bombs talking point is complete BS. By the same math, the sunlight that hits the 40-acre property this data center will be built on already produces over 50 atomic bombs worth of heat energy daily. This is a misinformation campaign we are watching in full time. Interesting, interesting. People continue to be upset about the data center stuff and putting it in ever more complex comparisons.

2:10:02Amir Sadeghian:um well well we should have our next guest alex from long long lake he recently bought a business that you very well know and likely have used at one point or another yes that's right um bring him

2:10:18Alexander Taubman:in oh he's here fantastic is he here we got all over in the colors oh we do got him fantastic alex how you doing there he is welcome guys how are you great to see you great to see you thank Thank you and congratulations. But since it is your first time on the show, why don't you give us a little bit of the news? What happened?

2:10:36Eric Olson:Intro first. Intro first. Yeah. Thank you guys for having me. I'm a big fan of the show. Excited to be here for the first time. So on Monday of last week, Long Lake announced that we intend to acquire American Express Global Business Travel for$6.3 billion. Fantastic. um long lake um is an acquisitive company that's bringing applied ai to services sectors globally prior to this we'd acquired 30 businesses across various sectors of the services economy and we've built a world-class applied ai team operations team and an m &a team to help kind of bringing

2:11:14Alexander Taubman:eye to the real economy and yeah there's 30 deals like what was the shape of them because this feels bigger than anything you've looked at previously, but is that roughly correct? Is this an order of magnitude bigger, two orders of magnitude bigger?

2:11:27Eric Olson:Yeah, this is definitely our largest deal so far. We have pretty big ambitions and we see our target market as really the entire services TAM, which is over$20 trillion in the U.S. alone and much larger globally.

2:11:40Amir Sadeghian:I'd love to see that slide in the deck, by the way.

2:11:46Eric Olson:We, well, you know, it's a great fit for us, this particular transaction. So it is our largest deal so far, but it's also probably, you know, every deal we've done has been high conviction, but this is very high conviction as to what we can do in terms of adding value for the customers, for the suppliers, for the entire ecosystem. Yeah.

2:12:05Alexander Taubman:What do you think makes the business special and durable? Obviously, you're optimistic about the future of AI, but not so optimistic that people will just be prompting a self-hosted LLM to do everything in their business travel, I imagine.

2:12:21Eric Olson:Yeah, that's right. So our vision is, and we talked about this in the press release, we basically want to give all the team members of MXGBT superpowers, and particularly the travel counselors who are interfacing with the clients. We basically have seen this in the 30 acquisitions we've done today, but AI really does make, it does make sort of our human team members, able to service customers better, able to provide faster response time, better accuracy, more products and services to the clients. And we think that is going to drive better retention, better customer experience, and better growth.

2:12:58Amir Sadeghian:30 acquisitions. How many months have you guys been in business?

2:13:03Eric Olson:Months, let's see. I guess we started talking about the company roughly 28 months ago.

2:13:12Amir Sadeghian:I started talking about the company. I know.

2:13:15Eric Olson:I guess we incorporated the company 28 months ago. We started talking about it maybe a few months before that. But yeah, we're roughly coming up on our two and a half year anniversary here soon.

2:13:25Amir Sadeghian:And obviously, you've built out an incredible team with a lot of experience. But talk about, I guess, building that muscle and that capability. I'm assuming you weren't. Were you buying one company a month roughly right away? Or have you ramped up? what does that look like?

2:13:42Eric Olson:Yeah, so we tend to cluster in service verticals. So we started in residential services with HOA management, which we've talked about publicly. We made a lot of acquisitions in that space in partnership with our partners there, our operating leadership there. And we do tend to, you know, once we've sort of helped, you know, take, we have our Nexus applied AI platform, which is our proprietary platform that we've been investing in heavily for the last two and a half years. And once we sort of do the work to deploy Nexus into an industry, we find that each incremental acquisition, you know, makes that much more sense, right?

2:14:17Eric Olson:We can basically integrate them more quickly into that platform, you know, help our team members become more productive quickly, improve the customer experience right away. And so we then tend to sort of pick up a pretty good cadence of acquisition. So I think roughly one a month is the number looking back. And, you know, I would expect that to accelerate as we enter into additional service lines. I would think now some businesses obviously are more fragmented than others and there's more acquisition activity in some industries than others. But we do expect over time to sort of be increasing our rate of acquisition.

2:14:52Alexander Taubman:How do you think about financial engineering in these deals? Is this sort of like the classic leverage buyout playbook or are you taking a different strategy or approach? How do you think about structuring all of these deals?

2:15:07Eric Olson:Yeah, we've traditionally been under-levered. So our existing businesses have very little debt, almost no debt. We will be using financing as part of this acquisition. It was in the press release. You can see JP Morgan and others. But typically, we can afford to be, you know, we're more growth-oriented than traditional PE. We're investing in the products and services pretty heavily, especially in the early years as we sort of, we want every business, you know, that partners with us to have world-class customer experience and technology. And that requires, you know, a multi-year horizon. That's why we're set up as a permanent capital operating company and not as a fund.

2:15:46Eric Olson:We see this as a long-term, you know, a long-term strategy that requires upfront investment of time and energy and capital. So being under leveraged relative to some of our private equity peers is a big advantage. It allows us to move faster. But over time, you know, this is a capital intensive strategy. So driving down our cost of capital, you know, this is when we start to think out in the future several years, we think hopefully Long Lake will go public. That will help our cost of equity and potentially help our cost of debt as well as we become a, you know, a public debt issuer.

2:16:16Alexander Taubman:So on the equity side, how is it? I think you've partnered with a number of venture capital firms. They have particular they have a non-permanent capital time horizon. How are you communicating with them, how they can participate while still benefiting their LPs? Is there overlap with VCs LPs? How do you think about the timeline?

2:16:40Amir Sadeghian:Well, going public would be helpful there.

2:16:42Alexander Taubman:Yeah, I suppose. But is there anything that it would like? I guess like this, it feels like an incredibly exciting business. Very cool. I completely buy the pitch. But there's a little bit of like, oh, this might be in like not every LP agreement. or there might've had to be an extra conversation. I'm wondering if you can just give me more color around that conversation.

2:17:02Eric Olson:Well, you know, VCs tend to have longer hold periods in general. I mean, VC is a power law business. And when you have great companies, you obviously want to keep compounding with them for a long time. So I think our partners, you know, and then there's a list of them in the press release. We have extraordinary partners and their investors in turn, they really, you know, they kind of see the vision here. And I think they do, they want to be partnered with us for the longterm. I think many of their investments take 10 plus years to play out. And that's obviously very different than the traditional three to five year private equity roadmap.

2:17:34Eric Olson:So I think in general, your starting point is much longer term in nature. And as you know, the public markets may solve this and providing everybody liquidity for our shareholder base over time. But even the private markets now have become very liquid. And there's a lot more sort of liquidity to be had even as a private company.

2:17:54Alexander Taubman:If I didn't know the label like service-oriented business, like what financial KPI would I look to to understand if a company fits in that bucket? Fits for Long Lake? For Long Lake or just like a service-oriented business broadly. Is that like particularly like low CapEx or low revenue per employee so it's highly leveraged to the operating expenses? Like, like what, what, what metrics are typically like, like popping out at the businesses you look at relative to, you know, some super like arm, like super clean. Like, like I imagine that arm is the exact opposite, right?

2:18:37Eric Olson:Well, look, first of all, this is like, the U.S. is a services economy. So it's kind of like 80 % of the businesses would fall in this category. But second of all, you know, what we look for really is business quality. That's kind of our orientation at Long Lake. So within the services sector, we're looking for businesses that have many decades of established customer trust and high customer retention. You know, we typically on our businesses see 100 percent plus net dollar retention. And these are 10, 15, 20 plus your customer relationships typically across our portfolio. and obviously MXGBT is over 111 year old business at this point, founded in 1915 to help American Express travelers, Czech customers get out of Europe during World War I and actually they bought a business called CWT, Carlson Wagon Leet, which is actually over 150 years old.

2:19:28Eric Olson:So these are very, you know, we were joking about this but in terms of managing tech transformations, transformations. Amex GBT literally was created before the invention of the airline or around the time of the invention of the airline. So there's this new platform. We think it's going

2:19:45Amir Sadeghian:to be big. It's like they're like birds, but you can fly in them as a human.

2:19:51Eric Olson:Yeah, exactly. So in terms of managing text transformations, you know, these businesses have already managed, you know, many of them. And, but yeah, so coming back to your question, I think what you typically see is even though these are really extraordinary businesses with incredible customer trust and decades or century plus of operating history, you know, the margin structures in these services businesses traditionally have been, you know, have been lower than software. And I think what we're seeing is a convergence basically of services and software characteristics over time, where if you can make your team 20, 30, 40 % more productive, which is what we're seeing in our existing 30 businesses, then that actually allows you to deliver more customer value, deliver more goods and services, different products and services to the customers, which allows you to sort of grow your revenue per employee over time.

2:20:41Eric Olson:And then you can grow much more easily and delivering more operating leverage as you scale, which has historically been what's more associated with software companies. And that's why software companies historically were so highly valued. And we see that trend as starting to now in the services market in the next five to 10 years, we think we'll start to play out there as well.

2:21:01Amir Sadeghian:How do you think about your advantage of starting the business 28 months ago? Like you said, I imagine a lot of the other groups and firms that would be in the running to buy the same kind of companies that you are or trying to lean in and benefit from AI. They're dealing with these big portfolios full of companies that they bought without thinking about what would happen if the cost of producing software dropped to be. You're talking about older companies.

2:21:28Alexander Taubman:Yeah, I'm talking about younger ones, too. It's like a sweet spot story.

2:21:31Amir Sadeghian:Yeah, no, it's an incredible sweet spot where if you're, I won't name any names, but let's say you were buying SaaS companies for billions and billions of dollars, over the last 20 years, you're now sitting there and you've got a bunch, you want to think about the future, but you're like, how do we exit all of these positions or in some cases, turn them back to private credit stuff?

2:21:54Eric Olson:Well, I think it is a big advantage to be purpose built. We have, our entire focus is on our, you know, partner companies and our existing business. We didn't have any legacy portfolio to have to focus on. So being purpose-built, that's one advantage. But the other big advantage is, I think it's actually quite hard to do this. You really need to bring together a world-class team across Applied AI Engineering, which Long Lake was founded with. And our founding team actually was primarily Applied AI Engineers and our co-founder and CTO, Rasmus Misman, who's world-class and has built our whole team from the beginning for this purpose.

2:22:32Eric Olson:And then on top of that, you need sort of a really core function in change management and growth, which we've also built out. And then, of course, M &A, world-class M &A. And we've got folks that have joined us, you know, just to give you a flavor, folks from Palantir, Ramp, Glean, you know, Robinhood, et cetera. Many of our tech folks actually were founders before. and it turns out it's pretty hard to sell software into these industries and we have a dynamic of if you actually want to go and change these industries it's easier to do it from the inside and actually partner with the companies themselves the way that we do here and then on the finance side folks from Blackstone, TPG, GTCR, HIG some of the very best firms and I think part of what we've been able to do along with is by focusing on this core mission from day one it's a pretty exciting mission which is basically bring AI to the real world and help drive the mythical AI GDP growth, that's what's been able to attract, bring people together.

2:23:32Alexander Taubman:No, no, no, it's accurate. Last question.

2:23:34Amir Sadeghian:The prophecy. Fulfill the prophecy.

2:23:36Alexander Taubman:The prophecy, truly. We're relying on it. Satya Nadella's prophecy of 10 % GDP growth. Show me the numbers. Last question for me. Are you surprised that we haven't seen SaaS companies that are getting sort of beaten up make a services acquisition? or do you expect that that would change? Not that I want more competition in your sector, but it feels like there might be a thesis there. Is that misformed? Do we not expect that to happen for some structural reason? Or do you think it will maybe happen at some point?

2:24:08Eric Olson:You know, it's interesting. I wouldn't be surprised. I do think there's a convergence happening and whether it's services companies buying software or software buying services, it wouldn't surprise me. but I do think there's a distinct advantage in having a singular focus and being purpose-built for our strategy. I think if you're an existing software company, you have your own set of vested interests around your existing customer base, and are you then competing with your customers? I think it could get a little tricky. Some people, I'm sure, will navigate that and find great acquisitions to do, but I think we have a strong advantage in our focus.

2:24:43Alexander Taubman:Amazing. Well, thank you so much for taking the time to come on the show.

2:24:46Amir Sadeghian:It's an honor to finally have you on the show. It is. And let's make it a thing. Every time you maybe announce a new... Well, once a month. Yeah, once a month. I'm assuming you like to announce that you've been in a category after you're already done with said category. But you can just come on here to take victory laps.

2:25:06Eric Olson:Well, thank you, guys. It's an honor to be here. Thanks for having me. Have a great day. We'll talk to you later. You too. Bye, guys. Bye.

2:25:12Alexander Taubman:Up next, we have Quaid from Bezel. You know him. You love him. He was one of the first TBPN sponsors, good friend of ours. And here he is to break down the big news. How are you doing, Quade? Hey, guys, how are you doing?

2:25:25Amir Sadeghian:What's happening?

2:25:26Alexander Taubman:Wait, okay, quick question. Do you have the same name as your father, grandfather, and great-grandfather?

2:25:34Spencer Rascoff:Do I have the same name? No.

2:25:36Alexander Taubman:The same first name. No. Because some Quades are the fourth. So oftentimes, if you have the same name as your father, you'll be known as Junior. and then if you have the same name as your father and your grandfather, you'll be known as a trip. So if you've ever met somebody who's like, oh, my name's trip. Sometimes their name might be like John the third and some quads apparently are the fourth John, like I'm John the fourth, but I go by quaid. Anyway, that was a dumb question. Tell us about AP.

2:26:06Spencer Rascoff:Yeah, it's a, it's an interesting week right now. Obviously I think anyone in the watch world or the watch world adjacent has heard about the collab with Swatch and everyone sitting around speculating and using AI to render examples of what they think it's going to be. And so we're all sitting and waiting until, I believe, the 16th to learn what the deal is. Yeah.

2:26:24Amir Sadeghian:So what is your prediction right now? Do you think it's going to be a plastic Royal Oak? Do you think there's a wildcard scenario where it's something entirely different.

2:26:36Alexander Taubman:So we watched a reveal video that looked like CGI of some gears coming together, but I guess that video didn't actually show us what the design is, correct? So all of the colored Royal Oaks that I'm seeing that look like they're plastic, that's fake in AI, is that right?

2:26:53Spencer Rascoff:Exactly. So I think clues that we have are, they use the Royal Oak font. So indicating that it's going to be something derivative of a Royal Oak. Okay. There's been the Swatch Pop, which is referenced in Swatch Pop historically as a model that is both a watch but could also be popped into a lanyard of sorts. So, and then you saw a rendering from Swatch of a lanyard, like a little clip of some colored lanyard. So I think that's like indicating that that's the direction they're moving. And then you saw some of the packaging in the boxes and then you saw the System 51 movement. And so what that indicates is just that it's going to be an automatic movement.

2:27:31Spencer Rascoff:the system 51 movement is swatches movement it's what's in the blancpon collaboration and the cool part about the movement is that it's it's theoretically like a fully disposable movement in the sense that it's it's completely 3d rendered and uh 3d printed uh and so like they don't do repairs on it for example like they just it's like more efficient for them to replace the entire movement okay um so it's a mechanical movement 90 90 hour power reserve like it has some impressive of stats, but it's like very much swatches movement. And so what it looks like happening is there's going to be some flavor of a Royal Oak in some watch slash lanyard device with an automatic movement.

2:28:14Spencer Rascoff:It's kind of all we know today. And then there's several colorways that are starting to come out.

2:28:19Alexander Taubman:Can you quickly reset on the terminology? Because you just said, you know, movement, automatic, is there a battery, is it quartz? Like, Like do a little bit terminology for everyone. Yeah.

2:28:31Spencer Rascoff:So, uh, courts would mean like it has a battery that runs an automatic movement. I mean, like it's a set of gears that are powering the watch typically like in high horology these days, an automatic movement is indicative of like a, you know, a traditional wristwatch, the way that you would think about it. There are a few courts watches that trade really well in the secondary market, like a, you know, Jordan elegant, for example. but largely like people are out here lusting for the automatic movements. That's why it's interesting. They did that with the collab with Blancpain. They went with the automatic movement and it's like moving a bit up market in that sense.

2:29:09Spencer Rascoff:And so they're in that snapshot. They're basically saying like we're doing the same thing here.

2:29:14Alexander Taubman:Yep. We were talking about cost. People have been speculating 300 to$500. And we were sort of going back and forth on like if it is an automatic movement, even if it's 3D printed, it seems like that's not a dollar. Do you have any sort of benchmark for what something like this would even cost the two companies to make? Obviously, the margins are great across all specters of the watch economy.

2:29:40Amir Sadeghian:Yeah, cost and then price estimate. And we're going to come back to this on Monday. So you better nail it.

2:29:48Spencer Rascoff:Yeah. I'm certainly not the guy to give you the breakdown there. but I will say if you look at this, the moon swatch launched, I think it was the$285 retail. That's a quartz example.

2:30:00Alexander Taubman:Yeah.

2:30:01Spencer Rascoff:Uh, Blancpain, I think they launched that in the four hundreds. And that's theoretically the same movement that would be powering this. And so I think the speculation of somewhere in the four hundreds, the only interesting like morsel here that's, that's nuanced is obviously the two high horology brands they, they collabed with pride previously are like part of the swatch group. and this is the only one that's external to this watch group and obviously AP is in a bit of a different level from a rarefied air perspective so I don't know how much using that brand factors into the profit sharing but it's super interesting I don't know, I think a lot of people are torn because in many ways it's a fun accessible moment to engage with a brand that's otherwise to get a base model Royal Oak today I think is like$30 ,000 at retail and certainly more in the secondary market yeah to me to me it's it's strategic

2:30:56Amir Sadeghian:because they're they are dealing with fakes there's no desirable the fake there's a fake problem and then there's the fact that there's not a super desirable ap in my view under 30 grand right because nobody that's like i don't know any i don't know any like you know i don't have any friends that are like oh i'm just really saving up for a code 11 59 like i gotta i gotta have it Whereas I do know a lot of people that are like very excited that, you know, to get an AP at some point.

2:31:26Alexander Taubman:With Patek, like some people are like, yeah, I'll start with a dress watch or call a trava. Like I'm not that upset about that because it has a lineage. It has a story and it's probably three to five X cheaper than a Nautilus. And if it gets me on that track, I'm OK. But AP hasn't had that. Sorry. Yeah.

2:31:43Amir Sadeghian:Yeah, so to me, by doing this, in some ways, I feel like counteracting the flood of fakes, because there's a lot of people out there that'd be like, well, I'm not going to get the Royal Oak yet, but I'll get one of these AP swatches if it does end up being a wristwatch. And I think that could be cool. And it provides an entry point into the brand. I don't think there's people out there that are like, well, I was going to get a stainless steel Royal Oak, but now I'm just going to get the the swatch ap right like it doesn't i don't think it cannibalizes them at all in fact like a lot of people that already have a royal oak a real one will be like well i'll get one of these to wear to the beach because like i maybe would would have worn a g-shock or something like that so i think it's pretty smart um but uh but what do you think wait that said i did I did text you this morning and say it's over.

2:32:35Amir Sadeghian:I think it'll come down to how much, you know,

2:32:39Spencer Rascoff:it devalues the ownership of the$30 ,000 plus rail. I think like the pro side argument is that to your point, Jordy, it's an interesting entry point. It allows people to kind of aspirationally engage with the product before they can buy the product. I think the con is, uh, if you see a bunch of people wearing a$400 example of the watch that you spent$30 ,000 for it, is it in some way detract from the ownership that you have? There's a lot of these arguments on the internet of like, you don't see Ferrari out here collaborating with Toyota to make a candidate. There's a lot of those commentaries.

2:33:16Amir Sadeghian:Yeah, but another, I guess something I go to is like, if a Porsche owner pulls up to grab a coffee on a Sunday morning in a GT3 RS and they see someone with a Carrera T, they're not sitting there like, oh, that Carrera T is devaluing my GG3RS. They're thinking, Mogged. Damn, Mogged.

2:33:38Spencer Rascoff:That's the equivalent of like, you know, someone pulling up with, you know, an open work ceramic Royal Oak and then someone's walking in with a 15, 450, 37 millimeter starter Royal Oak, right? Like, I think you're still in that same realm. this would be like you know if you show up in your you know gt3 touring and someone else pulls up with the toyota collab that you know just a camry with the badge yeah with the badge

2:34:05Alexander Taubman:yeah exactly so i don't know even the chat says they should toyota makes a good car i agree i

2:34:12Amir Sadeghian:agree i want the porsche badge byd yeah no the real the real move is down badging get the carrera

2:34:20Alexander Taubman:throw the boxster on the back see if anyone anyone notices uh are you noticing any movement on bezel yet any early signs of weakness in the traditional ap or royal oak market or just an increase in

2:34:36Spencer Rascoff:listings even it's an interesting time because i haven't seen a response to this yet other than like a lot of people asking us questions and a lot of people like want access to that i think the same thing happened when the moon swatch came out like we had everything from like you know professional athletes to regular people asking for like big boxes of these moon swatches and we don't traditionally sell them so uh we did some interesting concierge stuff there uh it was an interesting time though where i think there's a funny thing happening in the royal oak market right generally right now where there's a lot of like really cool discontinued examples that are available that are trending kind of at retail or less than retail and so you know if you look back on the Royal Oak catalog, there's like, you know, you can get a 15, 300, it's a 39 millimeter, oftentimes argued better size for in the low 30s, right about where retail is.

2:35:29Spencer Rascoff:You can get a 15, 400 and 15, 500. And, you know, then now you're at the 15, 5, 10. Like those examples trade above retail. There's a lot of them that are trading at retail or around and like synthetically, they're kind of, you know, you're getting a Royal Oak out of that offer. And so we're seeing a lot of people buy Royal Oaks and getting great deals on them right now at market. And so it'll be really interesting to see if this release like generally just elevates all Royal Oaks and it's just hype in the market and everyone wants them. Or if it does the inverse where you start to realize like, oh, maybe I don't need to wait on this wait list for this thing that I'm lusting for.

2:36:04Spencer Rascoff:I'll buy the swatch. And now it opens my mind to like, you know, maybe I'll buy the older example for$28 ,000 versus waiting for the new one for, you know, 33 or whatever that is.

2:36:14Alexander Taubman:mm-hmm well what else is new in the watch world what's the next event on the calendar that

2:36:21Spencer Rascoff:everyone's uh has their eyes towards i think the next big one is uh geneva watch days is in is in uh september um so that's a big fun one but i think everyone's still reeling from watches and

2:36:34Amir Sadeghian:wonders yeah um that still happened who won who won oh yeah i don't know if anyone won i think there's a lot of great examples the salmon the salmon ultra then overseas yeah i would say big

2:36:51Spencer Rascoff:fan of the overseas and salmon i'm like a sucker for a salmon dial big fan of the kind of 38 millimeter nautilus um but i think there's been sneaky winners like i think the un super freak was incredible and like being there in person and checking all of it out was really awesome um a lot of cool releases um and it was super fun being there so you know just another nothing like wow I didn't expect this but just a lot of really great stuff that makes me excited to buy and sell launches

2:37:18Amir Sadeghian:Fantastic Amazing. Well thank you so much for coming on the show Thank you for the Intel Always a good time. Excited to see the launch Are you going to be camping out at any Swatch stores this weekend or you got better things to do?

2:37:30Spencer Rascoff:I will not be doing that unfortunately but I look forward to getting the coverage of it and see I'm sure we'll be placing some examples into some clients hands as soon is that it pops up, it'll probably be very desirable in the very beginning, for sure.

2:37:43Alexander Taubman:Fantastic. Well, thank you so much. Have a great week. Great to see you, Craig. We'll talk to you soon. Awesome. Thanks, guys. Goodbye. We can pull up this post from Simplifying Stocks. We got another chart, maybe a chart crime. We'll decide. We'll put Tyler on the case. People are constantly trying to map this boom to the dot-com boom. Does it look exactly like it? Simplifying Stocks certainly seems like it does match up perfectly. It feels like 1999. Yes, it does. They took the 2026 stock market, overlaid it. It looks perfect. It looks like we're due for a crazy, crazy breakout. What will happen?

2:38:21Alexander Taubman:I don't think anybody knows, but we'll let you decide. If you benchmark and fit the graph and change the y-axis and the x-axis perfectly, you got the perfect pattern. The chartologists in the chat are going wild. Anyway, we'll have to do this.

2:38:38Amir Sadeghian:We'll find out where we are exactly day by day, real time.

2:38:42Alexander Taubman:I would predict that the market's either going to go up or down over the next couple of years. Like one of those two outcomes, for sure.

2:38:50Amir Sadeghian:I think a 50 % chance. 50-50 up? It goes up.

2:38:53Alexander Taubman:50 up, 50 down?

2:38:54Amir Sadeghian:I don't want to be too, you know.

2:38:56Alexander Taubman:You know, historically, it's gone up more than it's gone down. So you should actually be like 51 % up or 52 % up if you want to be, you know, historically accurate. Anyway, thank you for tuning in. Have a great day. Leave us five stars in Apple Podcasts and Spotify. Sign up for our newsletter, TBPN.com. Goodbye.