The Social Reckoning Reactions, Fable 5 Sparks Safety Debate, 𝕏 Timeline Reactions | Farza Majeed, Trent Simonian, Sridhar Ramaswamy, Matthew Prince, Vinod Khosla, Ranjan Rajagopalan, Markie Wagner, Bret Taylor

26:38But these things are very tunable. I'm optimistic with more disclosures and more fine-tuning and a smoother path. I think we can get to the good outcome. Last one. Cremue says, tell me about mitochondria. It's the powerhouse of the cell, right? Chat pause. The chat pause is rough. Yeah, it's a screenshot. But maybe the harness is just saying like, sorry, if you don't know that the mitochondria is a powerhouse of the cell, like - It's not worth my time. I don't even want your - I mean, that's the thing with like the good - You keep going back and forth with the good - Yeah. Yeah. I mean, there are expensive questions and all of these screenshots are clearly from from like$100,$200 a month plans.

27:25And I'm sure the GPUs are on fire as they always are with any new model launch from a frontier company. And it can make rational business sense. And so when everything aligns, when you're like, yeah, we're maybe being a little bit too safe, but it's actually good for our business. It's very easy to say yes to that stuff. The big question is like, where do you get tested where something, there's a hard decision and it doesn't align with your business interests. That's always tough, right? What's going on? Was there the new data retention policies as well? That also has to do with like, is it trying to?

27:58This one was funny because I assume that every tech company stores everything forever, basically. I didn't realize that they don't. Not for these like enterprise use cases. I know that the enterprises said that they wouldn't train on your data. But like when I go into any chat app, I expect to have my data from a year ago still there. Like I want, in fact, one of my main critiques and frustrations with these apps is that when I go to them, I want to be able to, instead of hitting the search bar, just go into the chat box and say, hey, remember a couple months ago we were talking about CrowdStrike and I had you pull up some data.

28:39Can you just go refresh that? Get the original thing. And a lot of times these apps are like, oh, like I don't really have access to all your chats. But like the chats are clearly saved. But so I understand people were upset about this, but it didn't fully clock for me. Why? I understand the training thing. Yeah, and they're very explicit. They're not using the data to train. They're not. Okay. Oh, well, then that's good. So the steel man, I believe, was that you need to hold it for 30 days because companies, probably international companies, competitors, will set up a ton of shell corporations and send out like pseudo random queries over random times, over random accounts, through VPNs, and they will triangulate something that is useful to distill or learn from the model.

29:28And so by keeping it all, you can now run analyses and look at, wait, is there a pattern where 25 different accounts that seem completely unrelated all seem to be triangulating the same question, that seems reasonable to me. But stay out of my data. I'm built different. I'm not distilling anything. I don't know. Anyway, I think it's time. Let me tell you about Shopify. Shopify is the commerce platform that lets you grow with your business, that grows with your business, that lets you sell in seconds, online, in-store, on mobile, on social, on marketplaces, and now with AI agents. And speaking of AI agents, We have a founder of the company.

30:06I don't know if we should call it an AI agent. What are we calling it, Farza? Are you creating a new category? Introduce yourself. Tell us what you're building. What's going on, guys? Farza here. Thanks so much for hopping on. Nana, of course, of course. Farza here working on Hey Clicky. Yeah. Man, what is it? It started as an AI teacher. Yeah. And I guess now it's an AI where you can essentially talk to your computer and it does whatever you want it to do. It's personal super intelligence and you got there before the big man. I love it. Somehow. I feel like the big man doesn't even know what they got sometimes, you know?

30:37And it takes the little guy to figure it out. I love it. I love it. I'm always rooting for the little guy. So, like, reintroduce the product because you went viral last week, but it feels like you've been working on this for a while. What's the nature of the team, the structure, the funding? Like, what's actually building this? What's adoption been like? Like, where is the product today? Yeah, I started eight weeks ago. I just wanted to build an AI that could teach me Da Vinci, basically, while I'm like actually using DaVinci. And I thought it was kind of really terrible. Anyway, and this is DaVinci Resolve, the color grading and video editing suite that's free from Blackmagic Design.

31:11Got it. Exactly, yes. So like I, DaVinci Resolve complicated program. Yep. One hour YouTube videos were in it. Let me just build an AI that can help teach it to me while I could talk to my screen and I could learn. I've been there. And put it out. And I thought it was really a really bad idea. One of my friends just had to post it. So I posted it and it goes really big about eight weeks ago. After that I didn't keep working on it, but then the cool thing was I saw all these people you know You know when you put something new out there you have all this emergent behavior kind of start happening So when you let a human being talk to their screen, what did they start doing?

31:42Turns out they start doing a lot of crazy things all the way from watching anime with clicky all the way down to like learning like blender with clicky It's so easy to just talk to your screen. Yeah, and that's kind of where it started. Yeah, about eight weeks ago Okay,

32:00so I imagine that there's demand for, you know, like these chat interfaces have existed for years where you open an app and you, you know, do the voice mode and then you have it read it back to you. And there's some that are more polished than others. But when I think about using a computer, I think rearranging windows. I want anime over here and DaVinci Resolve over here and the YouTube video over here. And I want to be able to puppeteer the mouse and the keyboard have full context. So I need to be taking screenshots every minute, every second, 30 times a second, 144 hertz. What are we doing there?

32:36How are you getting the data in? And then what's actually under the hood because you need to process the voice, actually produce an output. And it's surprising to see a harness break out of this so quickly. Yeah. Yeah. It's actually so simple. We use GPT real time up front to give you the first flare to give you the really quick answer. But then if you want a deeper thought process over the image, if you're in DaVinci Resolve, if you're in some complicated software, we now use Fable 5 actually by default. So now Fable 5 is absolutely mind-blowing in terms of how precise it is on screen understanding.

33:13So we use that now by default when you want to understand something on your screen. But yeah, we only actually get screenshot when you press a button. One screenshot. Yeah, but it's really crazy because we can still detect the program you're on and stuff, and that's already really helpful. sure like if i if i know you're on ocean for example yeah and you're there for like 10 minutes i can just ask you and be like hey like what are you doing like can i help you and i think it's that sort of new modality that's like uh been really exciting because that's something that's just not possible today with any chat interface yeah it's more like a like a co-work walking up like like a co-worker just like being like present and like kind of like like um sometimes you don't need help until you're asked right or you don't know i kind of describe it yeah yeah i kind of describe it as like having this 23 year old intern with like a decent, like a, like a new grad that's always watching over my shoulder and, and just pretty much like seeing patterns in what I'm doing.

34:05And then it's, and then just tapping me and saying, can I do that for you? Um, if I had that, of course, that would be awesome. But it'd be cool if everybody had that. A lot of these frontier models are expensive. How are you thinking about the business model? Because it seems like you've built something useful. People should just pay 10 % on top of whatever the metered rate is, but at the same time in consumer, prosumer subscriptions, flat pricing is very popular, but that introduces financial risk to you. You have to understand your costs and how they change. What do you think the business model will be as you grow the business?

34:43Believe it or not, people are very open to paying large amounts of money. like normal consumers, like large amounts of money for having better access to these models. Sure. Different interfaces. So right now we just charge a straight up$20 a month. Okay. But even then there's a limit. You know, you get like for 20 bucks a month, you get 150 agents on Clicky. Sure. But even that's very specific because once you pass that number, that's when we start losing money. Yeah. So everything's done in such a way where it's pretty cost effective. Also, like just so you guys know, like just calling like Sonnet or Opus or Fable, it's kind of cheap overall.

35:18the expensive part is like agentic work that's really expensive just to give you an idea on GPT 5.5 if you tell Codex right now to like go and click add to cart in Amazon that costs 25 cents by just API and I know because I'm seeing the cost myself and so there's a lot of tricks to kind of reduce that but no overall there's so many tricks to making agents cheaper, more efficient changing the model based on their quest and I didn't catch it you have raised for this or you haven't in the process in the process there we go there we go if you're out there yeah but but if you're in the process that means like you didn't launch this and be like i'm down to be losing like five thousand dollars a day you know on you know like you you've been focused on the economics probably earlier than you would have been if you were that's really had raised money out the gates i mean yeah i mean i'm i'm never the type of guy that wants to be losing thousands of dollars a day So we can stop it early.

36:16But no, I mean, that's the thing about AI. Like, you know, if you're, I've built a lot of social apps in my life. And for those costs technically don't matter based on the number of users coming in. But in my case, for every like 10 new people I add, I'm kind of losing or losing money or making money depending on what they're doing. So I kind of got to kind of got to think about it. So, yeah, it's kind of AI kind of accidentally making everybody better at business because it's kind of required. So I'm thinking about the hilarious tradeoff in having an agent that applies a coupon code, but winds up spending more money applying the coupon code than you save.

36:49Because it's like, oh, yeah, we put in this, it saved you 24 cents, but the API call is 25 cents. But how important will creating an ensemble of models that sort of maximize the parade of frontier be as you build this business? Because I'm imagining that any day now, we're going to get somewhat useful on-device models on Mac from the new Siri models, the on-device models. Those will probably be very limited in what they can do, but useful for some things, and that's free for you. Then you'll have open source, legacy models, GPT-4 class stuff, and then you might only call out to a Fable 5 on demand.

37:36So do you need to build your own router or is there a tool that you'll be using? Like how important will that be from the interactions that you're seeing? That's a great question. You're pretty much asking like, what's the harness? And we just built our own because technically like this is also early where there's nothing to use off the shelf. Yeah. You have to think deeply about it yourself and then build it yourself. So for example, let's just say, you know, you're on Clicky right now and you're saying, hey Clicky, I want you to actually research the latest in the Iran war and put it in my Notion doc for me when you're done.

38:10What now? Should it hit Opus? Should it hit Codex? It's actually dependent. We can take all those requests today and just route them ourselves. We use four models right now underneath the hood. Do you have a model that's doing the routing? GPT Real Time actually does the routing. Does the routing. Oh, interesting. Yeah, that's something that we figured out that I think not even the OpenAI team really knew and they hit us up about, which is it's a great router. It's so good at like, because it's so good at tool calling. Yeah. That means it's actually really good at writing requests. So, for example, we have this tool called Call Fable 5.

38:45So, it's a user asks something that like is a heavier pixel task. We call Fable 5. If it's like more of like agentic work, we call GPT 5.5. And so, it's kind of all being done in the background. But that's the kind of magic of the product right now where it's like most people who use our product have never used an agent before. They don't even know what Codex is. And so to them it's magical where it's like, oh, I'm just talking to my computer and it's doing the thing. That's awesome. That's what they want. How do you think about the tension between, I think, you being a generational media talent and then like startups?

39:20because I actually feel like this is our first time meeting, but I've seen your videos over many years at this point. And like, you're just really, really, really, really good at it. So much so that as like somebody who's in media, I'm like, well, I kind of want you to just do that. And I don't say that normally, normally it's the exact opposite where it's like, hey, like you shouldn't do this podcast. You should just work on your company, you know, or whatever, whatever the thing is. and they obviously feed into each other really well. Like you have an edge, you can get attention for free, you know, just investing a few hours, making a video, whatever.

39:58It's very, very powerful skillset. But how do you think about that tension? You know, it's funny, like I've been making videos for like 15 plus years and I just - Overnight success. Second time. Yeah, I always just see this as like, I think I get to do for fun on the side while I get to do the main thing, which is like actually build stuff for people. At the end of the day, like I am painfully familiar with how bad of a business like making videos is and making movies is and making music is. Like I know how bad of a business is like firsthand. And so I know, but I know more than anybody, the power of getting in front of a billion people every single month.

40:36When there's a good engine underneath, a good business engine underneath it, that's best powering something else. And so I fully intend to do that. So if I have this media ability, I'm glad I got it. I think it's like a way to do it. It's like sales. Yeah, sales. It's like really scaling sales. You got to be good at sales. WWDC, some movement on interoperability in iOS still feels like the clicky iOS app is probably on the longer term and will be stuck in the walled garden for a while. But what I'm interested in is that do you see just a really, really solid market? Because there's no DaVinci Resolve iOS app that I'm aware of.

41:20And certainly people don't. There are like prosumer sort of professional tools that really only exist on a desktop or a laptop. And so are you interested in like going and hacking on crazy workarounds to build something that like maybe makes people a little upset in Cupertino, but gets you into that more casual mobile space? Or do you think that you just want to focus on desktop prosumer, you know, desktop apps? No, I want it all. I want when you talk to your computer, whether this is your computer or your computer is this computer. Let's go. I want to be in an interaction layer on top of it. That being said, though, I have no interest in necessarily being like a OS level controller.

42:08controller, for example, kind of like what Apple is doing right now, for us, most of our customers and most of our users are essentially connecting 15 integrations to Clicky from G Suite to Notion to Dropbox and doing work with it. So I'm a lot more interested in that reality. What if I can talk to my phone in the morning and just say, look through all my emails and send me a brief when you're done. I can just talk to my phone and do that. I'm interested in that stuff, which is stuff I don't think Apple is going to do personally. They're not going to connect your or connect these 15 places to my Apple account and do work with it.

42:43I just don't think they're going to do it. How do you think the health of open ecosystems in desktop software is broadly? Because there's two ways that you could update an Excel file, or there's actually probably a bunch, but you can puppeteer the mouse, move over, click, type the cell, save, or you can just go edit the underlying CSV file in like raw text and then just refresh the front end. And I imagine one's way cheaper for you. So you want to like lean into getting the MCP servers, the APIs, the file writing, like the CLI, you know, interaction down. But do you think that there will be companies that lean into that or companies that fight that because they want you to stay, you know, mouse and keyboard at all times?

43:31That's a good question. I don't think so because at the end of the day, what Clicky is doing in the background, just so you guys know how it works, we literally took the Rust binary that's in Codex and we package it with our app so that when you actually call the Clicky agent, you're just calling a subspawn of Codex. And so this is on purpose. I just want to use the best model and the best kind of thing possible. And so, no, I don't think that's going to end up happening. In fact, it's better. For example, if you ask me Clicky right now, Hey, how do I actually add a formula to this Google sheet here?

44:06There's two answers there. One answer is let me show you. The second answer is I can show you, but do you want me to do that for you? And I think that's where we're going to start going with computers. Your computer is just going to say, can I just do this for you? I see you doing it. I can just do this. So that's where we're kind of going to look at. Well, good luck with the fundraise. I'm sure you'll be back on the show soon. Let us know when it closes. I'm excited for this. Yeah, I love watching you win and have fun in the process. Yeah, it's a great time. It's great to finally meet you. Congratulations.

44:33We'll talk to you soon. Have a good one. Later. Let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it. And up next, we have Trent from Side Talk. He's a creator and co-founder of Side Talk. He's in the waiting room. We'll bring him into the team in Notre Dame. He'll turn Nick's fandom into one of the internet's most unrecognizable sports media brands. How are you doing? Take us through it. How is New York? How is it going? Yo, it's crazy out here. I'm not going to lie. Okay. I was about to do this interview from my apartment, and then I realized, hold on.

45:10Yeah. Has anyone done a TVPN interview live from the streets of New York? You got to go to the sidewalk. This is a first. You're the founder of Side Talk. This is amazing. Come on. Amazing. For those who don't know you, take us through your media empire. Take us through your strategy. Break it down for us. Okay, so I have a little company called Side Talk. You might see the logo. And pardon the potential loss of voice from this Knicks crowd. But, you know, we kind of pretty much run around New York City and let people do and say whatever they want into our microphone. We created the Bing Bong trend years ago.

45:43We created these Knicks videos. Unfortunately, there's a little bit of chaos outside of Madison Square Garden due to us. But, yeah, we pretty much let people say what they want in New York. and it's pretty fun and entertaining. What's the secret to a good street interview? You got to keep it shareable and engaging. It sounds obvious, but like, why would you want to watch an interview of someone talking about something boring or low energy or anything like that? What would you want to send to your friends? And that's kind of the principle that we go with. So you ask people about like language model diffusion.

46:14Always, always, always, always. That's what we love talking about. Token pricing and all of that. Yeah, that's what the people want to see. We're going to start talking about that outside the Knicks game, I think. Yeah. Where? So I understand that a lot of the, you know, man on the street interview format these days, it can be very prepped. It can be there's a PR person that's pitching some successful business person for the what do you do for a living? It looks candid, but in fact, it's staged. Do you ever participate in that or is everything candid? Is that part of the brand? we're 100 % natural on the streets.

46:52You don't know what you're going to expect. Organic. Okay. Yes, sir. Organic. But it's been really cool too. Yeah, yeah. Then my follow-up is like, then if you aren't prepping and understand who you're going to be interacting with, like how do you vet, like where is the bar? If you see somebody walking and they have a baseball hat on and they probably don't want to be bothered, is there some sort of social contract where you shouldn't, Like the, the, is there a doom scenario where everyone in New York is getting asked, what do you do for a living 15 times when they walk to go get their morning coffee?

47:24Yeah, honestly, it's, it's a bit of an epidemic going on. I actually am kind of scared that I'm going to get pulled up on right now and ask what I do for a living or what song I'm listening to. Yeah. But, you know, that's another one. The people, the people of New York, I think they distinctify side talk a little bit from that. They know we're not there to ask them something like, I don't know. So, so cookie cutter like that. Sure. And I don't know, now people come to us when they see the microphone, which is great. And yeah, we just go with the flow. How do you think about monetization? Short form monetization, notoriously hard, but you have some merch, break down like the business side of the business.

48:00Yeah, it's actually very interesting. You would think that you would, that, you know, I would have made a dollar off of TikTok by now. I don't think I've ever gotten paid from TikTok or Instagram, literally not a dime, which is fine. It's cool. Go on TikTok, pull through. But we do a lot of branded work for companies. So we've worked with everyone from the NFL to Netflix, Nike, Google, Amazon, creating a lot of content for them. So they'll come to us with a product or an event that they want to highlight. And they say, hey, you know how to get clicks and views. And we kind of pretty much apply our formula to that and create a really good video for them.

48:34Okay. I have like a hot take. And I want you to walk me through whether you agree or disagree. I think you should just do a mid-roll ad in a three-minute Instagram reel. Because I see the branded integrations. It's like, oh, there was this example on Subway takes where someone's take was Android's better than iPhone. It went massively viral on r slash Android. And then Google was like, oh, we'd love to work with you on another take that's the same thing, but it's branded. And those sponsored takes, they often don't go as viral. it's hard to get branded content to go viral. But in some of these longer three-minute videos, if I'm locked in after two minutes, I would sit through a 10-second mid-roll of like, hey, this was brought to you by this.

49:21Thanks for sponsoring this video. And then it's just all organic content around it. Does that work? Is that already happening? Are you thinking about that? What's the deal? Definitely. One thing we really like doing is kind of like a natural integration. So we just did something with Nike, which is really cool, where they hit us up for these NYX colored shoes. Okay. You know, who better to get word out about these NYX colored shoes and side talk? So we had people wear them in the episode. We were talking about them. We had people react to them. I think that feels authentic because that's kind of something we would do anyway.

49:51And it did really well. That's good. Predictions for tonight. We know if you're losing me, by the way. A little bit. It's a little patchy. We are losing you, but the energy is still there. Predictions for tonight. Knicks in five. Knicks in five? What's the plan for covering the game? Dominant performance. But isn't it kind of in your best interest for it to be all seven games? Like, you know, more content, more attention. Like, you kind of want, you know, we obviously want your Knicks to win, but you don't want them to win too fast. Listen, if we can guarantee a win in seven, I would like seven.

50:31If we can guarantee something, that would be great. But listen, we need to get the win more than anything. Okay. What is the process of a shoot day? How early are you getting there? Who are you bringing with you? How big is the team? Definitely. It depends on what we're doing. We do such a wide variety of stuff. We can randomly go to a hot dog eating contest in Coney Island. We can go highlight a random character in Brooklyn. We can go obviously film these Knicks games. So it's pretty dependent on what's going on. But with the Knicks games, we kind of show up in like the third quarter as it's ending.

51:02Unfortunately, we can't bring our equipment into the stadium. So we look, you just have to stand there and watch the game on our ESPN app and hope that the Knicks win or we hear, you know, someone discord, something like that. And then the chaos erupts. We go into the chaos. We're there for like hours and hours at a time. And at the end of the day, people see, you know, 55 seconds. But we're out shooting for like eight hours throughout these playoff games. Got it. Well, thank you so much for coming on. We appreciate you. Good luck. Yeah, we will feature some of your videos in tomorrow's episode from tonight.

51:35Good luck out there. Have fun. Be safe. Yeah, we'll talk to you soon. I'm hoping for Nixon 7, personally. Let's do it. Let's do it. Can't guarantee it yet. So have fun out there. Thank you for this walk and talk. Thank you, guys. Appreciate you. Yeah, great to hang, dude. Appreciate it. Thank you. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. We will be joined by the CEO of Snowflake in just a few minutes. Thank you for tuning in. We need to move on to the next story. Cannon says, the cashier at Home Depot just asked if I want to round up to support the SpaceX IPO.

52:18SpaceX IPO is going to be big Friday. We might have a surprise guest. It's going to be fun. Also, there's this crazy meta story going on. Not meta the company, but like story about a story behind Ty Morse. He's going all out trying to get an Elon interview. And it's been fascinating watching him build the craziest set in podcasting history. We're rooting for you, Ty. Good luck. Hopefully you land it. It is the quiet period, so it might be difficult. But I think that there's a plan to extend the effort. And everyone's rooting for it to happen. It's been viral on X many, many times. Also, Bloomberg's reporting that the SpaceX IPO is 4x oversubscribed.

53:01Do they know that already? Do you get that information at this point? That's really good news for the market, for the overall. There was an interesting article. I mean, we can go through some of this. I think this was in The Economist, SpaceX, talking about, where is it? can the market swallow SpaceX, Anthropic, and OpenAI? Watch out for indigestion. But they talk about the float, the free float. This was very interesting. So obviously, a company might be worth a trillion dollars. How much of that trillion dollars is actually actively being traded? Like, sure, Fidelity might at any point in time have a price at which they're willing to buy more and a price at which they're willing to buy, to sell their stake.

53:52But founders are often locked up. Founders often want to maintain control. Employees are locked up for a certain amount of time. Certain investors might be locked up, unless you're Bill Gurley. Don't try and lock him up. Nobody can lock him up. He's a wild man. But the float is important because if it's a trillion-dollar company and the CEO passed away a generation ago and there's all financial managers in, and it's only owned by hedge funds. This was the story of Take Two, before Strauss Zelnick came in. Take Two, the makers of Grand Theft Auto. It was entirely held by shareholders, by financial investors.

54:29And they were unhappy with the management team, and the management team didn't have any equity, and so he was able to raise his hand and say, like, I'll run this thing, and they were like, absolutely, thank you. And they let him take over the company without really putting anything up. He didn't need to do a hostile takeover, like bring a bunch of capital to bear to get control of that company and become the CEO. And it's been a fantastic success for him and fantastic success for Take-Two shareholders who stuck around for the Strauss-Zelnick era. But the float matters. And Microsoft, it's 100 % floated.

55:01The free float is 100 % because the founders have moved on and divested and they're not locked up. At Apple, it's like 99%. Broadcom's also at 98%. NVIDIA at 96%. Amazon's at 91%, only Jeff Bezos is considered sort of off the table. Alphabet at 90%, Tesla at 89%, and Meta is notably, of the big tech companies, the lowest free float at something like 88%, 86%. And the reason for that is because Mark Zuckerberg has a lot of control. If he sells his stake, he loses control. So no one's expecting him to sell, even if the stock goes way up or whatever. Like he's going to maintain his position because he wants to run that company now SpaceX is in an interesting Interesting place so 13 % of meta shares are owned by Mark Zuckerberg SpaceX plans to release locked up shares in a series of tranches If its IPO issues 75 billion dollars of shares valuing the firm at its hoped for 1.8 trillion dollar valuation the initial free float because If you buy the IPO, you're not locked up.

56:09You can sell the next day if you want but this means technically it's it's not uh like the whether whether somebody's like buying through you know investing through like jpm yeah morgan stanley goldman goldman all these pieces like technically you can go and sell yeah they just might restrict you from other ipos so you would expect like serious and and this happens like on all the different apps you know robin hood public etc if you're buying into an ipo they they basically are asking you nicely do not sell uh don't don't flip don't flip uh here yeah but people can't and so with how many retail dollars are flowing into this i expect a lot of people that are buying um buying you know you know basically buying the ipo yeah to start trading almost immediately exactly but importantly it's only 4 % of the free float.

57:08So only 4 % of that 1.8 trillion is a lot of money, but it's only 4 % will be really free trading. And then of course, during the IPO process, you're vetting investors and you're trying to get the people that will hold forever. And Elon has done a fantastic job of that with the indices. So he's gotten the NASDAQ, the S &P and a few others to like commit. So although Nasdaq has already shortened the seasoning period before index inclusion to 15 trading days, the Russell slashed its waiting time to five days. Most share indices wait firms in proportion to the value only of the shares released for public trading.

57:48And this is important because people look at the S &P 500 and say, wait, S &P 500, a$2 trillion company coming into that. Your weight, if you're just buying the S &P 500, is going to be more than 1%. It might be in the single digit percent. That's a lot. And we've been talking about the S &P 499 for the bears, right? In fact, the initial weight in the S &P 500 will be around 0.1 % because it's just that 4 % free float. And then it increases over time as the shares get locked up. We actually have a chart here of how the lockups work. And it takes basically a full year, almost two, for everything to get unlocked.

58:27And it's also triggered based on share price appreciation. So if the shares trade up 30 % or more, then more shares become unlocked and the road to 100 % lockup ending happens slowly. And so just a little bit of an interesting deep dive into how the SpaceX IPO will fare. Anything else to talk about on that story before we move on? So apparently Senator Warren has urged the SEC to halt SpaceX's IPO, citing governance risks, Elon Musk's control, and potential foreign, especially Chinese, investment concerns. She also highlighted SpaceX's role as a U.S. defense contractor. Senator Warren has never met a business that she liked, I think, except maybe large financial institutions.

59:20Who knows? She likes those. Well, we have our next guest in the waiting room. Sridhar Ramaswamy from Snowflake. He is the CEO. We're very pleased to be joined by him. Welcome to the show. Thank you so much for taking the time. How are you doing?

59:35Sridhar Ramaswamy:I'm well. Thank you for having me. I can imagine you're doing well. The company is doing fantastically. I am interested to hear. Obviously, there's been an emotional roller coaster, but I'm more interested in the data that you're seeing that shows acceleration, so much promise, so much opportunity in this particular business? Yeah, data is the foundation for insights. I worked in a data company, worked in the search ads team at Google, where great data was the flywheel that made it into a great business. That's what we aspire to do with each and every one of our customers. Yeah, it's done a couple of things.

1:00:15Sridhar Ramaswamy:It's made the act of bringing data into Snowflake doing just a whole lot easier. Pipelines that used to take weeks to set up or migrations that used to take years now have dropped to days and months, which is pretty remarkable. But people also realize how much more power they can get by having great conversational access to their data. And now with things like Snowflake Cowork, how you can actually solve pretty meaningful business problems in an interactive way. It's that loop that is compounding for us that drives a lot of our growth. Has there been any movement downstream for Snowflake? Whenever I hear the story of a data lake, a properly managed data warehouse as an entrepreneur, even in a small business, I think that sounds amazing.

1:01:05That sounds like the dream. And then I see the companies that actually have the resources to onboard be immensely large. And obviously, that's fantastic for your business. But I'm interested in what the future looks like. Is there a world where a 10-person startup with AI agents and these pipelines that can be built much faster can actually set up their business and then not have to go through a cumbersome migration in the future?

1:01:34Sridhar Ramaswamy:Yeah, we are seeing that happen in front of our eyes with Snowflake's own data team. You know, they, like with every other company, used to have a feature for years long. You ask them for a feature, they'd be like, here, take a ticket, come back in a few quarters. What they've been able to do with Agentic AI is grind through those kinds of backlogs very quickly. Absolutely. Data and agents are going to make it much easier to set up these things and have them evolve as they go along. I'll give you examples from Sqlick. We rewrote both our support teams and our SRE teams software. These are the folks that take care of different kinds of problems that we get into an...

1:02:15Sridhar Ramaswamy:and the net result of that... ...by agents investigating the problem. And if you see enough instances of a problem that you have not seen, you go figure it out, go write a tool for it. It's now in a self-healing loop. I increasingly imagine that more and more operations get into that kind of a mindset where there are very competent agents, sets of recipes, you can call them skills, there'll be some other name tomorrow, that take care of problems, but it is a self-learning loop. That's what AI makes possible. Got it. Where are we in the path to like fully automated migrations, fully automated new integrations?

1:02:54It feels like every new model release, we're like, this is the one. This is the one, the non-technical CEO is going to be doing the job now. He's just going to say, hey, we have two systems. Go fix it. Go integrate it. Get it into Snowflake. It's going to happen. And then reality sets in and there's not just token costs and cost to that to delegating to AI, but also just the real world of other decisions that need to be made that might be outside of the context. So what are the remaining challenges that come up when you're building a new integration or working on a migration?

1:03:34Sridhar Ramaswamy:Yeah, I think the timelines are definitely shrinking. When it comes to migrating off of legacy platforms, the on-prem ones, we used to think of them as the biggest ones as running into, say, three odd years. These strike terror into every company's heart because it's three years of really anxious development work and waiting for results and hoping things don't go wrong. To give you very concrete numbers, we now feel a lot more confident that we can tackle really tough migrations and have them finish in a couple quarters. That's a big deal. It's going from 12 down to one or two. And the migration team, which work on top of agent-take harnesses that we create, are confident that the technical parts of these problems will be solved by the end of the year.

1:04:21Sridhar Ramaswamy:But there is the change management. There is all of the other applications that are running on the old system that you have to validate on the new system and ensure that there is business continuity. That kind of change management is still going to be non-trivial. but the technical parts, the act of doing the migration or writing new software, these are the things that AI is absolutely driving down. What is the biggest... By the way, I actually go check out every feature my team puts out using our coding agents. That's already a thing, and honestly, it's not that hard if you have a modestly technical background.

1:04:55Yeah, no, that makes sense. What is the biggest lesson that you or the company have taken forward from Frank Slootman's era?

1:05:07Sridhar Ramaswamy:Frank was always about amazing go-to-market execution, and we remember that. And in fact, our sales teams are incredibly well-versed now in our products and in AI as a whole because we created products that could work for them. And having an effective go-to-market motion is the real strength of Snowflake. Again, to make this super concrete, the number of use cases, these are new products basically within customers that are account executives, one, went up by some 75 % year on year. That's the power of using AI to get work done faster. That is a tradition that will continue. What we have added on is a new focus that comes from a product-first person like me.

1:05:58Sridhar Ramaswamy:AI in sort of a generic way or about worry about things like what can it do. But I think sometimes what we forget is if you have a well-built system that uses the latest it's actually an incredible delight. All kinds of information that you would want. I was at a conference recently. Every piece of information that I wanted to know about a customer that I was having a conversation with. I would look up even live if I didn't know that. I would do it in front of them and show them the power of Snowflake's AI. A big part of our success over the past couple of years has been internalizing this. AI is a different way to think about product and product delivery, and the companies that are going to succeed are the ones that truly internalize that.

1:06:43Sridhar Ramaswamy:There is a big chasm between how we did it with web pages and clicking on things to these agentic flows that can truly solve problems. Then how is the role of the sales rep changing, of the sales associate changing? Are you looking for any different skills or are you doubling down on what worked in the pre-Agentic AI era? First of all, a lot more familiarity with Snowflake is a must because these folks now have access to products that show off what Snowflake is about. I expect every sales rep to have co-work on their phone and be able to show off the actual impact of having a product like that with ready access to information to each and every one of our customers.

1:07:33Sridhar Ramaswamy:When it comes to our solution engineers, these are the technical pre-sales people. Used to be that we'd have six demos total for all of Snowflake, and maybe they would do a little bit of customization and say, hey, here's what Snowflake can do. Now, pretty much all of them are capable of creating a custom demo tailor-made for a specific customer in a vertical, in a way that makes sense to them, that will really illustrate the power of Snowflake. It's that kind of empathy that they can use the technology that we create to drive. I would say it's changed in a really, really big way because a lot more possible, but the bar is also a lot higher in terms of what you're expected to bring to the table.

1:08:14Can you walk me through the partnership with Amazon Web Services? I'm sure you compete in some categories, but how did this come together? What does it mean for the future of your business?

1:08:29Sridhar Ramaswamy:We work with the hyperscalers. AWS is the biggest partner. We work with them on a number of different levels. We work on product integration. You know, buy a lot of capacity from them, a lot of GPUs that our inference team runs models on. But where we really shine is in joint go-to-market. AWS is an incredibly customer-first company. And if a customer says, hey, I want AWS Plus Snowflake, they lean into it. They bring us. And we really focus on how do we solve problems jointly for our customers. And there's a deep, deep relationship, both at the account level going all the way up to the CEO level, that ensures that problems that come up in practice get solved very quickly.

1:09:18Sridhar Ramaswamy:It's the kind of partnership that one only dreams of. It's incredibly effective in practice. What's been your strategy for trying to predict AI progress? because we have people on the show every single day, somebody from a lab, somebody that's an investor, customers of the labs, things like that. Everyone has a different opinion. You have to weight them differently based on their incentives, but you're running a massive company that's leveraging these tools, but at the same time, you want to understand what the capability will be one year out, two years out, and it feels harder than ever to actually be able to predict that.

1:09:59Sridhar Ramaswamy:I think this is a really good question and one that to deal with. I don't think the software industry as a whole has internalized that this precious commodity that we all love creating by hand, which is software, the cost of creating new software is going to keep going down. I tell people that the best analogy that I can give for them is to go back to, let's say, the 2000s when the cost of creating and distributing new content truly dropped precipitously. And you have to work through what is the implication of something like this. For example, I think simply getting deployed into an enterprise and being part of a workflow there is no longer a guarantee that things are going to keep continuing because switching is also easier.

1:10:56Sridhar Ramaswamy:I would say that's the first thing. Every company that's in the world of creating software as a big part of their business needs to think through what is the durable value that they are creating. I think it's a really hard question to internalize. And so we spend a lot of time just thinking about it. The second one, and this gets to the heart of your question, and I honestly just have a practice, which is that this is a bad time to be making two and three year plans. Any time things are getting better or worse by 20, 30 % every month, the human ability to predict these things, which are exponential in nature, it just doesn't really work.

1:11:39Sridhar Ramaswamy:I joke to people that at this point in time, we should treat coding agents the same way we treat traffic. Any person is always going to look at Google Maps first before they go somewhere, because it's an all-seeing guy. agents are sort of becoming like that when it comes to software. And the more you have that open mentality that more things might be possible with a new model release than it's possible before, the more you'll be pleasantly surprised and you'll be ready to take advantage of it. And so I stress that childlike quality in figuring out what is possible. Obviously, you know, there are nuances to how do you put in work in such a way that even if the model got better, you'll still be able to take advantage of what you have done before.

1:12:23Sridhar Ramaswamy:There are practical problems like that. But the biggest thing that I ask for is that open-mindedness to what is possible today, because a lot different from what was possible, say, a month ago. Are you positioning Snowflake as a company that's in the token path or in the token stream? I don't know if you've heard this phrase that's sort of new coinage for a position in the AI value chain. And it feels like you're firmly in the token stream, in the token path. But I'm wondering about what you think about that category. Is that narrowing you? Is that valuable to communicate to customers and investors?

1:13:08What do you think of the phrase like in the token path?

1:13:12Sridhar Ramaswamy:It's a useful way to think about how value is going to get created. Remember, back in the web era, we talked about number of visits, number of unique visitors. These were the things are weekly active versus monthly active. These were the abstractions that we used to ground the numbers that various people would report in a reality. You can think of the token path as existing along this path that is using the power and knowledge that these models have and creating value for customers. And both in the data that our coding agent called Coco comes into play, where we want everyone that wants to get value from data to be using it to create all of the artifacts in that path, but also in the consumption path where our product is Snowflake Cowork, where I want every employee in every company to be able to access the valuable data that is in Snowflake, but also in other applications via things like MCP, to be using Cowork.

1:14:19Sridhar Ramaswamy:And so we very much think about, can we be in this path of coding up the things that are going to drive consumption and creating value, but also in the path of how does an end user query enterprise data take an action on that data and also creating value. So we very much think about this. So my last question is, you said it's a bad time to be making two and three year plans. How far are you looking into the future? Do you have a one year plan, a three month plan? Well, as a public company, you do have to forecast. but more qualitatively, like what are you gunning for this year or over whatever time horizon you think is appropriate at this point in time?

1:15:06Sridhar Ramaswamy:Our overall strategy is very clear. It's just what I described. Anytime anyone wants to do something with data, I want them to use agent tools that are created by Snowflake, Cocoa, for example, to be able to do that. We want to have the best data platform in the world so that whenever someone thinks, hey, I need a historical view of this, or I need an OLTP database to do this, they think of Snowflake. They can use any coding agent, not just our own, to be able to do that. Similarly, we think a lot about how can we make sure that we sell co-work to CROs and demonstrate what we have done internally within Snowflake, just transform our own sales organization.

1:15:48Sridhar Ramaswamy:So we think a lot about how do we take our customers through the same journey that we have been through in terms of how can AI make a difference to the business. There'll be a lot of details along the way, but that's the path that we are headed in, AI leveraging the full power of data. Well, congratulations. Thank you so much for taking the time to come chat with us. Yeah, great to meet you and congrats to the team on all the momentum. Yes, stay strong in the token path. Thank you, guys. Great to meet you. We'll talk to you soon. Have a good day. Goodbye. Let me tell you about Figma agents. Meet the canvas.

1:16:21Your AI agents can now create and modify your Figma files with design system context. Yes, apologies for the technical issues. A lot of people are saying, is this AI? It's not AI. Is this AI? There was some type of clipping. I've never seen that exact technical failure before where it cuts out entirely. We've heard scratchy audio. We've heard degraded video. The video was coming through crystal clear, but the audio was cutting in and out a little bit. But I think we got a lot of good stuff. Coco, they should have called the AI agent Frosty. Snowflake? Frosty. Probably intellectual property. Frosty the agent.

1:16:58Is a jolly, happy coder. Coder, yeah, something. Anyway, Citadel, Citadel Securities, former employer of mine when I was an intern, wrote a post on tokenomics. They're one of the most significant hedge funds, and they just dropped tokenomics. I have it here. I have a second printout. Tyler, you want to bring that over to me? It's not what you expected, is what they say. So we've argued for some time that agentic and complex workflows delivered by frontier models would be expensive to run, constrained by physical bottlenecks, and vulnerable to unrealistic expectations of frictionless deployment costs.

1:17:38That judgment now looks less contrarian than it did when we set it out in February. They're taking a victory lap over at Citadel Securities. Amazon has now removed its token leaderboard. Microsoft has canceled clawed code subscriptions. And there have been multiple reports of unexpectedly large token bills. The salient point is that even the most powerful technologies must pass through the prosaic discipline of cost curves, capacity constraints, and marginal returns. Adoption is therefore becoming less about what frontier models can do in principle and more about the price and scarcity of the inputs required to make AI operational at scale.

1:18:19Compute power cooling, memory bandwidth, and inference budgets are real and binding constraints. They go into economic theory, talking about the three functions that prices provide. So they signal scarcity, create incentives for substitution, and ration scarce resources toward their highest value uses. This is the stuff that goes viral on TikTok. We're deep in it. You heard of the keeping the viewer watching. This is the most important thing. You read the Citadel Securities Macro Strategy Report. But they do say they ration scarce capacity toward the areas where marginal productivity and AI justifies the marginal cost of using it.

1:18:58They're talking about ROI maxing. For the economy at large, simpler models may be more cost-effective, productivity-augmenting pathway until physical constraints are eased. We hence see growing signs of a bifurcation in frontier versus everyday AI usage. They actually shared some data here around token expenditure index dropping the log growth rate, declining. And so folks are pulling back a little bit and shifting towards cheaper models as they figure out a new workflow. Something gets unlocked. And then they say, hey, we got to actually make this ROI positive. So that's the latest from Citadel.

1:19:37Let's see what Amazon Web Services is saying. Because they're blackbelling on the timeline. They said more AI-generated code doesn't make your team faster. It might actually slow you down. Crazy post from AWS. Would have expected it from like some AI thought leader, podcaster, Twitter, but yeah, it's funny coming from the AWS cloud gold check. It's funny. Cause it's also like, if you were to write this, I think a lot of people would write this as more AI generated code doesn't necessarily make your team faster. No, just perfect. It's just, no, more AI generated code doesn't make your team faster, Which is just like factually incorrect for like a lot of teams.

1:20:23Yeah, yeah, right We're actually moving faster than ever Okay Read the next post in this threat. It's like very clearly I generate it The real bottleneck was never writing code. It's really it's releasing it debugging it keeping it running well So when honeycomb seat honeycomb I O CTO CTO charity majors set a productivity target. She didn't chase 10x she chose 2x and built from there you think this is ai because the choose 2x comma and ampersand built from there i think it was human edited but like that that uh syntax feels a little ai i agree i agree her team also skipped the mandates and built a set of ai values instead every output has a human owner if you don't want your name on it it's probably not good work yeah it's reasonable uh quality first quantity second uh so they had a podcast about it uh coming from aws that's a wild statement this is this is very funny um but yes also funny with the backdrop of uh of a 500 million dollar budget well yeah and it's funny because uh amazon is of course one of the largest investors in both open ai and tropic to yeah leading coding model providers hey they didn't say more AI generated posts don't make your social media team faster.

1:21:45Entirely possible. It sped them up. They certainly got 14 ,000 likes on this. This is a banger post from a corporate account. Rare to see those numbers put up on the timeline from a corporate account. So congrats to the team over there, putting up some fun numbers. Sriram Krishnan, I don't know how to differentiate them. He's a KearneyJackson.com investor advisor to Bending Spoons, not the former A16ZGP who worked for the government for a little bit. Sri Ram Krishnan says, not many Silicon Valley VCs took our Bending Spoons intro in 2022. These VCs thought it was beneath them to be associated with a company.

1:22:25From 2024 onward, many clamored for an introduction to sell their portfolio. Companies Bending Spoons is going public. So Bending Spoons will be a public company, and they own a number of historical companies. They own AOL and have done a bunch of other stuff. Eric Suford broke down the— They literally own America Online. They own America Online. It must be electric. I can't get into my mobile dev email. I'm just going to skip this and move on. But Eric Suford over at Mobile Dev Memo wrote a breakdown of the Sufenator, wrote a breakdown of Bending Spoons filing to go public. The Italian roll-up operator that owns, among many other properties, AOL, they own Eventbrite and Vimeo.

1:23:13Don't they also own Evernote or am I getting that mixed up? Someone owned Evernote and the Evernote employee growth chart looks like a fast takeoff. Like post 2020 COVID, they went from like 1 ,000 employees to like almost 6 ,000 employees or they tripled or doubled the workforce. And Benning Spoon is known as sort of like the operational excellent, almost like a private equity firm. They're going to do cuts. They have done a few cuts, but the actual headcount has held fairly stable. And I think the business has gotten to a much better place. So interesting to see there's a time and a place for being aggressive, expanding when there's a big moment and the market's up.

1:23:59And then there's also a time to consolidate and focus on operational efficiency. Why is this guy so obsessed with GTA, John? Have you ever played GTA? Any GTA? Maybe like... GTA 3, GTA 4. Maybe like for like two minutes. Two minutes. And I was like, wow. Loser. What a loser. never gamed in his life I couldn't get into it I couldn't get into it you're a rust guy everything even as a child everything that you can do in this game you can just go do real life no you can't, it's all crimes Jordy turned it down he turned it down maybe I'm pure of heart I don't enjoy they were going to let me play for like 15 hours 10 hours, maybe 5 hours But I turned it down they were like they actually wanted to pay me they wanted to pay me to play Yeah, they wanted to pay you to play Strauss said actually I would love for you to play No, I My first job I was a video game tester.

1:25:02I got paid to play video games best job Play video games all day. They got you hooked. Yeah, they they they got you hooked. No, I was I hooked I was elite So yeah, you go play the games while it's in development. You file bug reports you're a quality assurance tester but you're basically your job is to play video games all day worked with a guy who was super chill and like he was just like this is my career like i'm this is i'm happy with this like i'm i'm a video game tester and then i i checked in with him a couple years later and i was like hey man like how's the video game testing business going and he was like you know i actually had a shift in my career i'm a dvd tester now it's even easier so he did i just sit there watch the full movie and then tell the tell the people like yep like there were no audio bugs there there was no there were no drop frames in the whole movie i sat there i watched the whole movie and it looked fine thumbs up and then every once in a while he'd be like oh i was in the menus of the dvd and when i went to behind the scenes footage it wouldn't play the correct video it had the title for you know interview with the director and it actually played interview with cinematographer so you got to fix that like these things happen like UI bugs pop up in DVD menus but what a wild job DVD tester it's a good one good one anyway this fellow is obsessed with GTA 6 and he's doing anything and everything to understand whether or not GTA 6 will be released on time there's two methods here if you want to know GTA 6 is going to get released on time you can just shake down Strauss Zelnick for the truth or you can do what he did which is He set up acoustics around the Rockstar headquarters to measure audio levels near a meeting room.

1:26:45And he discovered that his equipment had disappeared. And when he returned to check on the latest data, but he didn't stop there. He started camping outside, monitoring traffic and tracking the number of cars and their estimated value. Oh, there's an executive in town. That means something for the GTA 6 release date. Oh, there's more cars coming in. Probably a lot of people working late nights, getting it out, burning the midnight oil. And so he believes such data can be used to speculate on how many executives may be spending time at the HQ as opposed to regular employees. And an increase in both traffic and high-value vehicles could indicate Trailer 3 is coming.

1:27:22He's also considering an even more insane idea, which is to measure the amount of oxygen in the area to monitor how many people are around. And he did it. He started monitoring the oxygen around Rockstar North, and he believes Trailer 3 is coming soon. after noticing that oxygen levels dropped to about 20.3%. We actually need to use basis points this time. From 20.3 to 20.04 after 5 p.m., suggesting increased oxygen consumption in the area after normal working hours. He's also monitoring the number of cigarette butts. I thought it was just a GTA 6 fan. I'm excited. Everyone's excited. Maybe it's a rock star or a take-two shareholder.

1:28:00You had a different theory. What was your theory on his motivations? I don't believe that people are going to go to these lengths unless they're making money on it. Okay. And how would he make money? There's a lot of prediction markets with plenty of volume. Yeah. Could be trading the stock directly, but could also be betting on a prediction market that's - Oh, yeah. Theoretically, if there were to be another delay, I'm sure the stock would probably react to that. Yeah, absolutely. It is very, very interesting strategy. Fun story. A hedge fund should hire this guy to do other types of detective work.

1:28:36Yeah, it almost feels like it's going over the line, maybe illegal. I don't know. I would be very frustrated if someone was standing outside of our Ultra Dome with a microphone. Measuring the air. Measuring everything to see if we're going to interview Matthew Prince yet next. And we are. We are. Because he's in the waiting room, and we're bringing him in to the TBP on Ultra Dome. Welcome to the show, Matthew. Thank you so much for taking the time. How are you doing? Gentlemen, good to see you. I'm doing well. Great to see you. What's new in your world? You made some acquisitions. You made an acquisition.

1:29:05Take us through it. Yeah. So we bought a company called Void Zero, which makes Veet, which is one of the most popular developer platforms that's there. Just an incredible team. Evan Yu, who's the founder, is just a first-class human being, someone who our team is super excited to work with. The team that he's assembled is just great. And I think that this is increasingly becoming the platform that is being used to power a lot of the agents that are running around the internet. And a lot of those agents are running on Cloudflare. And so we think it's just a really natural combination. How simple is the synergy?

1:29:42Is it you'll funnel those 130 million users who download Vite every month? I think it's 130 million weekly downloads. Weekly, wow, yeah. That's a lot. into preferring Cloudflare, defaulting to Cloudflare? Or is there more synergy under the hood around developer integration, company integration? How are you thinking about this playing out? Yeah, we plan to continue to leave it as an open source project and support it and invest in it that way. We want to integrate it closely with Cloudflare's developer platform and make sure that Cloudflare is the best place to run any sort of VEAT project that you have.

1:30:25But it'll work in any of the different platforms as well. And so we just really wanted to make sure that Evan and his team have the support to make sure they could continue to really invest in what's just an incredible platform. And we think that that is going to drive more developers to Cloudflare's workers platform as well. What are the headaches for developers these days? I know everyone's concerned about token costs and token budget, sometimes that doesn't show up for the developer. It's more like the CEO that's worried about it. But is uptime more difficult to maintain? We've been seeing screenshots of different uptime tracker status pages that have more and more red and yellow on them.

1:31:06Like what's at the top of the stack and how are you helping? Yeah, you know, I think that you need a different architecture than we've had to build sort of the last generation of applications for what's coming with agents. If you imagine there are about 100 million knowledge workers in the United States, if all of those knowledge workers had one agent which was working on their behalf, and each of those agents was running in a container, a traditional container, like something you get at AWS or a Google Cloud, the amount of just CPU resources that would be needed to run just those agents, assuming they've just had one agent per person, is about 50 % of the total CPU capacity that's generated by all the different CPU manufacturers that are out there today.

1:32:00And that's just the United States knowledge workers. If you take that to the world, then it's several times, 30 or 40 times the capacity of GPUs and CPUs that are existing today. What we really think is that as these agents are creating code, you need a different platform for it. Cloudflare was built, Cloudflare Workers was built, not on containers as much, but on something called isolates, which is a much more efficient technology. What we're seeing is that as people are building these agents, as they're using them, it's just a much more natural place to be running them. It's, I think, why you're seeing more and more of the big AI labs have Cloudflare as the preferred target for where their code gets run.

1:32:42OpenAI released a project for their enterprise users a little while ago that, again, is targeting us. And we want to make sure that with things like Vite as first-class citizens on Cloudflare, that we can help power that future. Because, again, it's not going to be kind of the same system that we built with the hyperscalers. It's going to be something different. And, again, I think that we have a really good shot of building that different thing. So can you help me understand more about the problems of like CPU bottlenecks and then maybe some of the solutions? I'm just thinking about like, I would think bandwidth would be an issue, obviously CPU load.

1:33:18But is there a world where we get to some sort of convention around maybe it's the robots.txt or just the user agent? and when Googlebot shows up or any other AI agent shows up, you're just delivering a, it's almost an MCP server, but you're just delivering something that looks more like a JSON package, something that's a little lighter, a little less CPU intensive. Is there a path there to optimization? It feels like we're in the era of squeeze every ounce of performance out of everything. But what's actually going to happen here? Where, where, like, are we just screwed or is there an opportunity?

1:33:57No, I think so. I think two, two different, different problems. So the first is if you, if you're, as, as, as you ask these, these, these different AI systems to perform tasks on your behalf, what, what has to happen behind the scenes, especially those tasks get complicated is that they need to be coordinated in, in some way. So if you say plan a vacation for me or something like that, what, what goes on behind the scenes is that there's coordination there. And the best way to make that as efficient as possible, what agents are really good at and these various LLMs are really good at is actually writing code.

1:34:31And so that code needs somewhere to live. And the problem is that if that lives in a container, then you've got to bring in an operating system. You've got to bring in all the tooling and everything else. And that's actually extremely heavy weight. And so that's the first place that you've got both a CPU and a GPU bottleneck that's there. And so with something like Cloudflare Workers and Isolates, It's just a much lighter weight system. And so that means that you can have more agents running on the same CPU infrastructure and be able to provide that. And again, I think that's why a lot of these next generation tools are actually built using our platform.

1:35:06You mentioned something else, which is, you know, as these agents go out and interact with the rest of the web, you want to make sure that that is done in the most efficient way. And so if they're pulling down, you know, all of the HTML from a web page and those web pages are designed kind of to be consumed by humans, there's just a lot of cruft on that that isn't necessarily as important. And so some of the things that we're doing are, you know, for those customers of ours that want to make sure their content is consumed by agents, want to make sure it's as accessible as possible. We are automatically converting things into Markdown, which is a much simpler system that saves you a ton of tokens.

1:35:47It saves you a ton of processing. It means that your context window can fit more useful information into a context window. So I think there's a ton of optimizations. And we're helping both on the developer side as well as on the content side, making sure that we can have these agents be as powerful as possible and get as much done as possible. John Gruber, total victory. You know, he invented Markdown. Rubinator. Yeah. Isn't that amazing? It's one of these things that just, you know, it turned out it was ahead of its time, but it's such a key for making sure that we can take information and make it as compact as possible.

1:36:27John Gruber created the format for God. It's a funny, funny world we live in. Talk about, it was last week you guys announced that the threshold had been passed around agent versus human traffic. Talk about that moment. Did it happen sooner or later than you expected? Much sooner. Much sooner. I mean, it was, I, at the end of last year, so the end of 2025, I said that I thought that we would pass, it bought traffic. and that's, you know, across the board. So that's like Google's crawler, but also, you know, the new agents which are coming out, I thought would pass human traffic by the end of 2027.

1:37:12About three months ago, I revised that based on the traffic that we were seeing to say that it would actually be in the first half of 2027. And so the fact that it actually happened in the first half of 2026 is just been extraordinary. And it just shows how quickly this is growing. And the real key here is that I think that if you or I as humans were researching to go buy a digital camera or something, we might visit five websites and do a little bit of research and some price comparison. You just watch as you use these agents. They have boundless attention to be able to just go to maybe 5 ,000 websites to find exactly what you're looking for, the best price, the best delivery, the best service, and everything that's there.

1:37:57And so that's just driving an enormous amount of consumption of the Internet. At the same time, the other thing that's happening is that for a long time, since about 2015, the web has kind of plateaued. There were more websites that were being shut down than were being created during that time. In the last 18 months, though, we're back to the web growing at a rate which is exponential. and it looks sort of similar to what was happening back in the early 2000s in terms of growth of the web. And so I think you're seeing both more sort of consumption of what's online, but you're also seeing more things online as it goes forward.

1:38:41And so in both of those directions, that's going to continue to just drive more and more use of the Internet. And I wouldn't be surprised if going forward, say, five years, that bot traffic will be a thousand times human traffic online. And we've got to make sure that we make the internet work for that new future. Yeah. Like every year, we're just going to add another 99.999 % of internet traffic as bots. Do you know what the baseline was? Like pre-AI, were we at like 1 % bot traffic? I mean, I've said it on websites and just noticed. It was more than that. It was about 20 % for a long time. Yes.

1:39:23And it's, you know, Google was the, was the largest. And then obviously there's a lot of, of malicious things that run around online, but that was, that was around what, what it was for. And it was pretty stable over, you know, the history of Cloudflare at least. So where, where we could measure it. So since 2010, you know, it was always kind of around that 20 % range and then, and then it's, and then it's grown, you know, it's, it's in the last few years, it started growing steadily and then it really accelerated in the first half of, of 2026. I want to talk about the inference stack, I guess.

1:39:57We're seeing two things play out, sort of a bifurcation. At WWDC, Apple is launching on-device inference. It's not going to be Frontier, but it's going to be usable for sure on your phone, on a computer. They can obviously go to their private cloud as well. And then you have the new NVL72 models. There's stuff in between on a Cerebris chip, fast but expensive. Then there's everything from, oh, it runs on commodity hardware, but it's still pretty big. You need a real desktop for it. And I'm wondering about how you see Cloudflare fitting into that. It would be a logical extension to Cloudflare workers to have inference on the edge, inference in different places.

1:40:41Like, where do you see yourself offering inference, if at all? Yeah, well, it's actually kind of funny. Back in 2022, we issued a press release that there was a graphics chips company that we were going to partner with in order to put GPUs at the edge of our network. Yeah. That graphics chip company turned out to be NVIDIA. And what was amazing was at the time, it was just crickets. Like nobody cared. Sure. And so we sort of did a little of it, but we hadn't really rolled it out broadly. And what was funny was, and then you fast forward two years later, and all of a sudden everyone cared. And so we basically just reissued the exact same press release.

1:41:29And now that's become a pretty important part of our business. And so today you can run inference at the edge of Cloudflare. And because of the fact that we're in over 350 cities worldwide, We're within milliseconds of the vast majority of the world's population. We become a very natural place for inference to happen. My working assumption has always been that about 50 % of the inference that happens will be on device, whether that's your phone or your laptop or whatever. But there needs to be some standard protocol where your phone or your laptop or whatever that local thing is can hand those either long-running tasks or larger tasks off next to the network.

1:42:11And so that would be to us. And then if for some reason you need something that's more than that, that you could handle it back to, you know, some centralized data center with, you know, with more capacity than we may have. And I think that that's what that's what we're increasingly seeing. I think my my assumption was a little bit probably off. I think actually think less is going to happen on device today because I think more and more of the tasks are going to be these long running tasks where it's not going to be just, you know, what's you know, what's the you know, what's the temperature in New York today?

1:42:45Instead, it's going to be something like help me plan a vacation, go take into account all of these different things, shop for different hotels in different places, plan all the travel between the different locations. Here are the criteria that I have. And that might be something that takes maybe – it's not going to be seconds. It might be minutes or hours or days in some cases to run. I feel like you're going to have long-running agents just for Park City snow forecasting and reporting, tracking individual runs, maybe a network of drones that are identifying what's tracked out, what's not. Satellite photos, Planet Labs.

1:43:28Optimizing your routes on the mountain. A lot of stuff. That's exactly right. Hopefully it snows this year, unlike last year. So what are the decisions when you're doing inference on the edge? because it's sort of a hard pitch to say, I'm going to shave off 300 milliseconds, 600 milliseconds when you're talking about a 20-minute workflow or even a 10-second workflow. You're getting me a 3 % boost. Is that going to make the difference? But are you optimistic that there will be sort of like an in-between state where there will be inference that happens and it needs to happen within the request loop under a second and then the latency matters?

1:44:12Yeah, well, I think there are sort of three different buckets, why people are choosing to run inference tasks on Cloudflare. I think the first bucket is exactly what you said. It's latency. And so especially for those things that have human and computer interaction where any delay feels like it hurts you, that people are trying to make sure that they can get the best performance possible. Yeah, for voice models, I mean, it feels like that has to, yeah, voice models have got to be local. Yeah, I love that. Yeah, and so, again, there's a case for that. I think the second case is that a lot of times for either privacy or regulatory reasons, people want to keep things as close to where they physically are as possible.

1:44:54And so, you know, I think that a lot of, especially in Europe and otherwise, of places think that, you know, they made the mistake with the Internet kind of 1.0 and 2.0 of having everything go back to Ashburn, Virginia, everything go back to the United States. And so I think that there's a real kind of sovereign desire to keep things local. And that's important. And I think the third thing is we actually can be oftentimes much more cost effective because of the fact that, you know, we are this we are a network. And because of how we're interconnected with networks around the world, bandwidth for us is effectively free.

1:45:28And so it's very easy for us to get things onto our network. And because of where we deploy systems, we often are in places where we don't have to pay for the space or the power, which allows us to then pass those savings on to customers. So it can be significantly more cost-effective to use inference with us than it can be in some other places. That's somewhat counterintuitive, but it's sort of the nature of what we've built and kind of the secret to what's allowed Cloudflare to deliver as much as we have over time. There's a ton of debate over data centers, how they get built, how big they should be, what we need, the pushback, regulation, et cetera.

1:46:10Is any of this affecting your business? Are you thinking about how you position your footprint in the real world? How are you processing the evolving discussion around data center construction? Yeah. So first of all, we're going to need more data centers. I think a lot of the discussion is somewhat silliness. I mean, the water consumption. I mean, these are closed-loop systems. I mean, a golf course uses more water than than probably all the data centers in the United States over over the course of a year. So I think that I think, you know, there's there's there's a lot of kind of silly concerns that are there.

1:46:49And but there are but there are real concerns as well. We've got to make sure that there are efficient ways to get power to these things, that it's not taking power from from other other systems of the grid can support support that. And so I think those are all all good considerations for Cloudflare ourselves. You know, we're a little bit different where in the case of, you know, if you're an AWS or a Google or, you know, a SpaceX, you're building one big facility or a handful of very big facilities and putting a ton of machines in that one facility. Clubfire is different. We have a ton of machines, but we spread them massively all around the world.

1:47:26And oftentimes we want to go into the places where networks come together. And so those can be some of the oldest data centers in the world. And in any of those facilities, we may have only hundreds of machines. But collectively around the world, we've got what is effectively much larger than any individual data center, which is out there. So I think we're less less impacted from, you know, the new builds of data centers. I think we're much more impacted by how do we find our way into the existing data centers? And then how do we make sure that the equipment that we're deploying is as power efficient as possible?

1:48:03Because we're often given sort of here's the envelope that you have to fit your fit your your equipment in. And we're often guests of, you know, whoever the local ISP is or or or whoever, you know, partner is that we're working with in the thousands of buildings that we're in all around the world. What's new with Italy? Yeah, Italy and Spain. Like it's it's it's it's. So you're fighting Italy. You're fighting with France. We need world peace here. Come on. Are limited, dude. Are limited. No Ibiza for me or the Amalfi Coast. You know, I think it's interesting. It's been actually kind of puzzling for us.

1:48:47So all of this stems back. So for those who don't know, in both Italy and in Spain, there have been pretty aggressive tactics to come after, either me personally or Cloudflare. And it's all been driven largely by the football leagues, the soccer league in those places. And what they're concerned about is piracy. The thing that's been ironic about it is, like, we don't like piracy on our network either. We don't make any money off of it. It takes bandwidth. It steals resources. And so we have a whole team that's working all the time to shut the pirates down. And yet, you know, the pirates are clever.

1:49:26They find ways to use our system. And because, you know, a huge percentage of the Internet sits behind Cloudflare, you know, there's going to be stuff from time to time that we don't catch or it takes us some time to catch. With leagues everywhere else in the world, so with the NBA and NFL and MLB and the Premier League in the UK and others, we work really closely with them to if they identify a pirate stream for us to pull that down. Because, again, it costs us money. We don't like it. But for whatever reason, La Liga in Spain and the league in Italy have decided that instead of partnering with us to take this down, they would sue us instead.

1:50:05And so, again, yes, it does cramp some of my summer plans. I want to talk about IPOs. Life is a public company. There's a few entrepreneurs that are trying to go public this year. You had a very successful IPO. The stock is up more than 100 ,000 basis points since you went public. Fantastic run. But advice for... We're putting everything in basis points now because it sounds even better. I mean, the stock's up 1 ,000%. said, it's fantastic. But 100 ,000 basis points sounds even better. 100 ,000 basis points is a lot. 110 ,000 basis points. Who's counting? But anyway, what was your process like?

1:50:47We were talking about the level of float lockups. What were the hard decisions? Were there things that we're talking about now with these big IPOs that weren't even on the top 10 of your to-do list? What is important to a successful IPO and then running a public company? Yeah, I think there are a handful of things that are interesting lessons from it. So first of all, I love being a public company. I think that it's interesting.

1:51:23In jurisdictions where you don't have no-fault divorce, spousal homicides are much higher. which is, I think, kind of an analogy to the difference between private market investors and public market investors. It's really hard to fire your VC is it's hard for your VCs to fire you. And so as a result, like actually it's kind of dysfunctional, whereas public market, like I love our investors, because if I do something stupid, they call me up and they say, that was stupid. I sold your stock. And then we have a conversation. And sometimes they say, oh, actually, that makes sense now. And I bought it back.

1:51:57Right. But I think you can have actually a much more honest, much more real conversation. And that's felt actually just a lot healthier than what you see in the cyber market. Yeah, it's so true. I mean, everybody that's angel invested in any number of meaningful companies is going to have portfolio companies where you've fully given up on the company and you just try to be nice and, yeah, help if you can. But at some point, you're just totally disassociated with the investment. And you're just like, and that's, that's, that's the reality. But yeah, so it's very healthy to be like, yep, I'm disassociated, like moving on.

1:52:39And in both directions, right? I mean, it's just a better, it's a better relationship. And so I like, I loved the process of going public. I think the thing that we did, like it was, it was an opportunity for us to really kind of retell our story. You don't get to reinvent yourself very often, but the process of writing the S1 was incredibly just an opportunity to sit down and really do it. And we really dug in and told the story in a way that, to this day, we still refer to parts of that document to sort of explain what is Cloudflare and how did we work. I think that the most clever thing that we did, and this was advice that I got from Ryan Smith from Qualtrics, was he said, you know, he's like, what are you doing about friends and family?

1:53:24And I'm like, we're not going to do it because you can take 5 % of an IPO and allocate it to friends and family. And I didn't want to get my aunt like over if the stock went down or something, I didn't want to have to explain that over Thanksgiving dinner. And he said, no, no, no, you're thinking about it wrong. think about the people who if they you know if they owed you a favor that they could make a meaningful difference in the future of Cloudflare and then offer them to the ability to invest in the IPO and I was like is that legal? He's like check with your lawyers, check with the bankers but the answer is yes and I was like some people are going to have like conflicts and he said it doesn't matter like even just the fact you offered it even if they can't do it will mean that, you know, that they'll always remember that super fondly.

1:54:14And it was incredibly good advice. And we made this crazy list of all of these, you know, people who, you know, who were like, you know, at some point that might be an important relationship for us. And like 75 % of them said yes. And they all made, you know, a ton of money as a result of it. And it was one of those kind of - Now your aunt doesn't talk to you anymore. Well, yeah, it might. It doesn't matter. I missed out on a 100 ,000 basis point move. How could you? I am always comforted that we actually, so we priced it$15 a share and it went up to, and that's actually the other thing that's interesting.

1:54:53Everyone, like Bill Gurley and I have fights about this from time to time about IPOs. Like you have a lot of control over how much the pop is going to be. And we, we sat with bankers and we were like, listen, we want it to go up about 20%. And, and, and they were like, okay, if you want it to go up to 20%, you price it right here. So we priced it right at that point. And it closed the first day at 18, which is exactly up 20%. Okay. Okay. But just to steel man a little bit, is that, is that a function of, of your business? Not to like be rude or anything, but there are some businesses that are just like meme stocks out of the gate and like they're in some weird thing and there's some froth and like they have less control or is it always controllable?

1:55:32Well, and part of that was like, did you think the fair value of your business was 18 % or 20 % higher than where you priced it? And so you wanted, like, you basically wanted the market to sort of reprice and you didn't care about not. And if we had priced it at like 13, it would have gone up more. Yeah. But, but the problem again, like you, you want to, you want to play for the longterm here. And so my, my, my, my fight with bill, He says that you should do some sort of system where you actually price it at whatever the top price is. The problem with that is if you look at all the companies that have done that, so the Airbnbs and others, that's great for your private market investors.

1:56:20That's great for the VCs. That's great for any of the founders that are taking money off the table. But you've got to keep running the company. The IPO isn't the end. It might be the end for the VCs, but it's not the end for the operators of the company. And you want to be able to kind of build that relationship and build that over time. And so I think, you know, we worked incredibly hard to be very sort of choosy on who are kind of who we gave allocations to. And we went through every single name on the allocation list. And I think as a result of doing that, you know, if you look at like who our top 10 shareholders are, it's been incredibly stable over time.

1:56:58And there are folks who give us, again, great advice and have been really just really, really great to work with. So I'm sure that there are times you don't have it, but I was surprised at how the banks have a really good sense of if you price it here, here's what's going to happen. And in our case, it was to the penny. last question how are you thinking about long-term planning as a ceo when we're on these exponentials you know the the example of like agent versus human web traffic like you have you had like more data than almost anyone on the planet and your prediction was still off your original prediction was still off by you know 20 18 months 24 months something in that range.

1:57:44How are you thinking about overall business planning when model capability is increasing and you're just seeing exponentials everywhere? I think a couple of different things. One, I think we're trying to make bets on people who can really function in really dynamic environments. That, for us, has been somewhat different than I think a lot of other people, a lot of other people have cut back, for example, on kind of early career hiring. We, you know, Clouffler's about 5 ,000 employees, a little bit less than that now. But we hired 1 ,111 interns this summer. So straight out of college. And they're weak.

1:58:29Like, they're just killing it because they are so native to these tools. And, again, I think we've always thought of our job is training the interns. But this year, like the interns are helping train a lot of us in how to do these things, you know, really well. So I think staying super dynamic. And then, you know, from our perspective, just making sure that we've got optionality going forward. So, you know, it has gotten tougher to get equipment today. Memory prices are through the roof. Things are harder. But we just have a team that's always constantly trying to figure out how to refine that.

1:59:04And then generally, I think we're trying to be, you know, big adopters of AI. not just in developer land, but also across the entire business. So we built something called Cloudflare OS, which allows anyone on our finance team, legal team, accounting team, anyone that's out there at the company to be able to have access to tools and really figure out how their job gets done. The clever thing that we did to seed it was we actually set up this email address. And initially, we told the team that it was this magic AI model. And if they just wrote to the email address and ask it, you know, I have this part of my job that I need to get done.

1:59:45How do I get that done? It would, you know, sometimes it would ask some more questions, but it would actually give you kind of a response back. What we didn't tell people was actually it was a team of humans behind the scenes that were initially receiving these emails. And then they were using AI systems to kind of flesh things out. But what they were really doing was recording all of the kind of key jobs to be done within the organization. Because, you know, you have to, if you're going to have AI systems that can help facilitate this, you actually have to record what are the steps that people are doing as a part of that.

2:00:17And so as a result of that, we've been able to see this Cloudflare OS now with the ability to do things like if you're on the sales team and you have to do like an account plan, you know, you can literally just type slash account plan and then describe what it is that you want to do. And it will output that. And that's made that's made our team so much more productive. And again, I think it's giving us the flexibility to be able to respond to, you know, whatever comes next. Very cool. Final, final question. Are we going to are we going to see an exponential increase in the number of interns this summer?

2:00:49We're going to see 10 ,000 interns. I don't know. I mean, we've got to find a place to put them all. And so it's, I mean, our office in Austin, like we've, it's a big space in Austin. We've run out of space there because we have so many interns there. It's, I just, I just think that there it's, I think a lot of companies are doing this wrong where they're saying like, we're not going to bet on, on the new people coming out of school because, you know, AI is going to replace them. I mean, these, these kids know how to use AI better than anyone else. So we're going to bet incredibly heavily on that.

2:01:23And it's, and it's so far it's paying off. I think the person who eventually replaces me might literally be one of the interns today because they're just so, so, so smart. It's happened before. I don't know if Satya Nadella was an intern, but he has that famous video of him as a product manager demoing Excel. Nothing like a company man. I was on a bunch of calls with Satya before he was CEO. He was just a product manager at that. So I think just if you can find really great people and be able to move on. He's the GOAT. That's the GOAT. You're the GOAT as well. You know, whenever you put up a 100 ,000 basis point move in your stock over just a couple of years, you're in contention for GOAT, I say.

2:02:13Thank you so much for coming on the show. Always a fantastic time. Thanks for jumping on. Good to see you. Good to see you. I'll talk to you soon. And by the way, I haven't talked to you since the acquisition. Thank you. I appreciate it. We'll talk to you soon. Have a good one. Let me tell you about console.com. Console automates. Builds AI agents that automate 70 % of ITHR and finance support, giving employees instant resolution for access requests and password resets. We will be joined by Vinod Khosla. And while we wait, Mads summer vacation is looking good. Let's see what's on the schedule.

2:02:48What is on? 6 a.m. He's waking up on the wrong side of the bed. 7 a.m. He's split between judging a book by its cover and beating a dead horse. 8 a.m. This is where it gets spicy. He's going to poke the bear. And shortly after that, he's skating on thin ice right into walking on eggshells. Wow. And at 10 a.m. he decides, all right, it's time to address the elephant in the room. OK. At 11 gets a bit dark. He's going to cry over spilled milk. but at noon he's letting the cat out of the bag and that's where it really ramps up he's starting at one to bark up the wrong tree and again but at the same time holding his horses he's double but then at 2 p.m he's gonna add fuel to the fire that's fantastic and uh i can't really think of a more perfect summer day john you know you know there's uh you can share your calendar with someone else and you can share it privately so you can just see that i'm booked but you don't actually know if i'm having a meeting with someone maybe i'm interviewing vanod coastline you won't see that but you could build a plug-in that changes the books to just these things that would be delightful maybe the next google april fools super intelligent i would love yeah if somebody just can only see that you're letting the cat out of the bag yeah that's that's pretty exciting it's kind of mysterious okay don't interrupt him it's an important meeting he's letting the cat out of the bag uh but hey he's just beating a dead horse maybe i should go grab coffee with him see if he wants to spin out on that there's a website that is turning Joe Weisenthal's tweets into full articles.

2:04:17This is crazy because there's a live show that turns his tweets into minutes of just back-and-forth conversation and banter. But somebody made a version of our show that's just web pages. So they scrape every Joe Weisenthal tweet, and they turn it into a full SEO-optimized article, apparently. It is great. And Joe looks great in this photo. He's looking good. He's looking quizzical. He's having fun. Well, let's bring in our next guest, Vinod Khosla, the founder and managing director of Khosla Ventures. Vinod, thank you so much for taking the time. How are you doing? I'm doing great. Great to be here.

2:04:57Fantastic to have you. I want to kick it off with some of the recent deal making that you've been doing. Your outlook on artificial intelligence is obviously front and center. But what has been the most recent fundraise that you've done? Why did it get you excited?

2:05:14well obviously there's a lot yesterday or today we are working a lot and doing a lot of new things that I'm pretty excited about is a company like Pramana but more importantly the broad category of auto formalization which isn't talked about much but humans aren't very good at talking to AI in describing what they precisely want. And that's where auto formalization becomes important. And companies like China become very important. How did you get into auto formalization? And I guess the big meta question is, as an investor, you have to consider, is auto formalization on the direct path for the other labs?

2:06:07How do you think about competition in this area? investors are going back and forth and it's been fascinating to see things that appear to be directly in the path of the big labs they're still growing revenues two three four billion dollars we're seeing 60 billion dollar acquisitions uh everything seems to be going well up and down the stack but why is there any why is there a particularly big opportunity right now

2:06:33Well, the labs, they will do more and more over time. But I still see the opposite being very broad for venture capital in Pond notes. In Pond notes are coming up with great ideas. One of the examples looks at the tack board and says it's not very precise because it's written by humans. and you can make it into a machine-checkable language. Mathematicians turn all their problems in this specific language which is hard for humans to understand. Autoformalization allows that kind of formalization so computers can operate on it precisely, not probabilistically. And that's a really important thing.

2:07:25If you look at today's world, AI systems have been awesome and the rate of capability development, the awesome. But they have some pretty big gaping holes. They still hallucinate. I don't think hallucination is going away anytime soon. So the reliability is low. Humans aren't great at specifying what they want, the specification problem. And then verification of what, are you getting the right answers? Or are they hallucinating? Those are all large, interesting problems. which are open for entrepreneurs. Things can be built in certain domains where you build a lot of value and a lot of capability that the general models don't do.

2:08:14How are you thinking about applications of this technology in particular? It's been so hard to predict the original GPT. No one was really expecting a knowledge retrieval service. It just sort of went viral when ChatGPT launched, then coding agents. Some people had predicted those, but it was sort of an unexpected emergent capability. Do you expect that auto-formalization as the next critical frontier of AI just makes all the existing applications better, or is it actually going to unlock new applications? I think it will allow humans to use AI where it wasn't previously possible. If you want to know what your bank account is, you can't have a hallucination.

2:09:05If you have a medical problem, you can't have a hallucination. So auto-formalization will significantly enhance existing models in domains like tax law. You know, you can have lots of tax startups, but they can't formalize. If you take tax law, it's a very specific thing. And that's an area Pramana is initially to say, can you formalize the tax code so computers can work on it precisely and not be subject to probabilistic answers or likely answers? So it's very, very important in certain domains to have precision, reliability, verification. And that's where auto-formalization can significantly enhance the applications and still leverage all the power of LL apps.

2:10:03Well, we're excited to talk to the founder of Pramana in just a minute. We've been having a few technical errors, so we will end this here. and hopefully we can have you back on the show soon to go deeper. Thank you so much for taking the time to chat with us today, Vinod. It's been a pleasure. Yeah, thanks for jumping on. It's an honor. Have a great rest of your day. Great to be here. Thank you. Goodbye. Let me tell you about public.com, investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service. Unfortunate technical difficulties.

2:10:39I couldn't really hear anything personally, but fortunately, the founder is coming on discussing right now. So we're going to hear it again and again. Sorry about that. Nikesh Arora is on the timeline quote tweeting. I like that. He's you don't think of him as like a big poster. Obviously, 73 ,000 followers. I think he's a poster. He's successful. But he said, congratulating Prime Minister Narendra Modi on becoming India's longest Serving elected prime minister, 4 ,399 days of leadership, earned through the trust of 1.4 billion people across three democratic mandates from lifting 250 million people out of poverty to making India the world's fastest growing major economy.

2:11:24PM Modi's tenure has been nothing short of transformational. Look forward to a continued U.S.-India partnership. Love that. Yo Gesh says, bro went from stopping global ransomware attacks at Palo Alto networks to doing math calculations on PM Modi's calendar milestones like it's his final exam. I like it. Just in quotes, too. It's great. And Nikesh appreciates it. There's been debate over beverage media. Have you seen this? This is a very, I saw this, eight likes. But I think this is an interesting post worth discussing. So Vasa, I don't know exactly this account before, but beverage media doesn't have the good nuts to call out celebrity brands objectively because the economy is fanboying and CPG.

2:12:08Celebrity founders sell tickets to events, but they don't always move the industry forward. I think he's probably subtweeting the maybe Tom Brady launch of the nuts, which is a reference to the coconut water brand that Tom Brady launched. But this does happen all the time. There's a lot of celebrity brands. We've had some celebrities on the show to talk about their brands. It's fun. Sometimes it works. Sometimes it doesn't. That's the fun part about interviewing a celebrity about their brand. You kind of get to clock it and be like, nah, like, you know, this person's really on to something. I think this will work.

2:12:41I think why they named the brand that is they fully ran out of other names. So that was literally the last possible name that they could choose. We're not getting an invite. Tom Brady will not be coming to our event and selling tickets. But it's interesting because, yeah, BevNet reports on CPG brands. They're one of the insider media, sort of the tech crunch of CPG, at least in beverages. They also have Nosh for food. And there's a number of other CPG media and critics. But if you've got to have one of those celebrity founders at your event to sell tickets, you get into this weird, you get sort of audience captured.

2:13:18I don't know, celeb captured. You just get raptured in the aura of the celebrities and you have to stay out till 2 a.m. partying with them. It's craziness out there. But beverage media, I think it's just interesting in the backdrop of more and more celebrity brands. Although it does feel like we're at peak celebrity brand at this point. And I feel like the more modern celebrity strategy is just invest in companies that have a number of good VCs on the cap table. be happy with that you can still disagree or a farm yeah okay disagree explain i think celebrity celebrity brands have always been a thing they're just way more in your face because now celebrities have their own channels that they can communicate i'd say they're less in my face i i say we're on the decline uh top celebrity brand no i'm quoting john fiona no i think it's just getting it's getting easier and easier to start a business i think you'll see more celebrity brands i don't necessarily think you'll see more breakout brands.

2:14:16So your claim is quantity is increasing. I think it's probably getting harder. Quality is decreasing. Quality. More distribution. Yeah. Yeah. Greater, greater. I mean, there's going to be some breakout celebrity brands. There's going to be big exits. There's going to be as many failures as ever. Right. I mean, my favorite example was like Travis Scott a few years ago launched a, uh, RTD, like canned cocktail thing, uh, shut down, I think within like a year, like, uh, maybe, maybe, maybe more. And so I think you're just going to see more and more and more. Would you put the Johnny Knoxville Neo cloud in the bucket of celebrity brands?

2:15:00That is something I would like to see less. Yeah. Less beverage. 2K. Less beverage, more NeoClouds. I want to see Johnny Knoxville levered up. Yeah. Right? I want to see him. Racking GPUs himself. Yeah. I want him, like, operationally involved, too. Not just a pretty face. Endorsement. Not just a pretty face. So, anyways, I think more on the horizon. And it's not necessarily, you know, a lot of, I don't know. I feel like some people don't like this, but I think it's fine. It's fine. It's fine. You heard it here first. Jordy Hayes, it's fine. It's fine. you know what else is fine get used to new york stock exchange more want to change the world raise capital at the new york stock exchange our next guest might be there soon with pramana labs we have ramjan who's the co-founder in the waiting room let's bring him into the tbp and ultra dumb welcome to the show how are you doing thank you so much for taking the time doing great john churdy uh since it is your first time on the show please introduce the company we heard a little bit about it from vanoad but i want to hear it from you yeah bravo by the way of getting being Being able to get Vinod to just personally pitch your company for 15 minutes on internet television.

2:16:11It's a good sales hack. It's a good pitch. Thank you. Thank you so much. At Pramana, we try to make AI more provably accurate. The current frontier of AI focuses on recall, which is more along the lines of how do you make more answers come out? But we are trying to focus on very specific mission critical domains like tax, legal, health care and governance, where a wrong answer could be catastrophic. You wouldn't want a diagnosing you wrong and ending up in a catastrophic situation. So that's where we focus on. And the technology underneath it is formal verification. I would like you guys to dive a little bit deeper and I can get more technical.

2:16:59Yeah, I'm just wondering about the actual rollout of this. People are using AI tools for healthcare now. They've been using WebMD. People have been misdiagnosed with cancer by random Internet posts for decades. You go to WebMD, you're like, I have a headache. And it's like, you got brain cancer. And then you freak out, go to the doctor, and they're like, what are you talking about? Take an Advil. But so like who exactly is not adopting AI right now because of the hallucination problem? One, two major examples currently are like big four firms which are tackling tax and legal cases. You would have heard about the Australian government suing one of the big fours stating that there is a hallucination which ended up happening.

2:17:47and AI can actually make up laws on the fly. If it wants to suit a particular situation, it can make up laws on the fly, which can lead to catastrophic situations. And another thing which we have noticed is also that insurance providers, major insurance providers of US have also moved away from insuring AI outputs. So there is a very specific clause they have introduced to say that we will not insure if AI is behind whatever you have said. So those are some things which have come out specific to domains like tax, legal, and healthcare. For healthcare, we can even see the models themselves typically stating that you need to go to a doctor to verify.

2:18:28We will be absolved of the responsibility. Yeah. Imagine your CPA being like, great, I just finished your return. It's 99 % chance it's accurate. It's 99 % chance. The steel man here is like, that is how I feel about my lawyer. I love the people I work with, but humans do hallucinate. And so if you give me something that doesn't even need to be superhuman, something that's going to sit alongside that person, I'm pretty happy to buy. But I understand that I would buy more if I could be more sure. And so I understand that. What I'm confused about is like, how are you thinking about building new foundation model, new LLM, new AI technology that bakes formalization into the actual workflow versus like, you know, we were talking to Dr.

2:19:20Carb from Palantir last week about, you know, the idea of like, you've built this ontology, you have your ground truth, you have your system of record. And then you can have the LLM solutionate all over the place because at a certain point, they're going to run into the ontology. And that's going to be the formalization process. Like, is there something, is it an extension of that two systems running side by side, checking each other? Or is it more of an entirely new system? So it would be a couple of systems interlocking with each other. We actually have four layers in the stack. stack. I can go through an example of how it happens.

2:20:00If you end up asking whether a particular transaction is taxable in Illinois, you have the first thing which we do is actually a fair bit offline. For tax specifically, we are formalizing the US tax code. So we are taking a very formal domain but expressed in English today and we are converting that into lean, which is a two-wing language. So when we do that, we get it ratified by experts. So our work is deeply involved in formalizing specified domains and ensuring that we get it ratified by the experts themselves too. In that case, we do use a lot of LLMs because the current knowledge base is already not formalized.

2:20:41It is present in English. And once we have the whole knowledge base, whenever a question pops up we convert it into a series of constraints you would have noticed vinod also talking about how humans are not great at specifications so we ensure that we ask the right set of questions so that ultimately we can give you a reliable answer post that we have a solver and prover working in tandem to ultimately give you an answer along with a proof of correctness so the key difference between an ontology based approach and a lean based approach is that a lean based approach is intrinsically verifiable your answer comes with a proof of correctness the proof is something which a mathematician trusts that's supposed to give you more comfort in a way and like you suggested you're right in saying that even like best humans might make mistakes but if you actually have a mathematical proof encoded in lean you can choose to trust it and And that's the frontier which we are aiming for.

2:21:42And it involves a fair bit of work between formal verification experts who are a deep part of who we are at Pramada Labs. Working along with CPAs, frontier CPAs, frontier lawyers, and frontier doctors. How are our models getting better at interacting with lean? I've seen a lot of progress in frontier math and the different really hard problems are getting solved. Sometimes they don't use lean and that's sort of a flex. Sometimes they do use lean and they perform even better then. But is that getting just table stakes now? Because I think your average white-collar worker doesn't know how to interact with lean.

2:22:24Absolutely. So the models are getting better at proving with lean. But we are building more foundational models along the lines of formalization in the first place. if you say something in english how do you convert that into a construct in lean that's where our focus is on if you think about it lean is a system which has been around for the last 12 years it has taken humanity around nine years to formalize the significant portion of math we are taking that same technology and we are we are trying to blitz through tax legal and health care where we are identifying what is the core knowledge base and then we are converting it into lean where you can reason on top of it, probably.

2:23:04That's very cool. What were you doing before this? I was a machine learning engineer at Google, primarily focusing on Google Maps. Interestingly, I draw parallels over there because I was focusing on getting addresses and phone numbers accurately in Google Maps. If you think about it, Google Maps is like a very, very messy real world domain. And we have been able to make it trustable. a lot of people do trust Google Maps to a very large extent. I intend to bring the same level of rigor to multiple other domains along the way. Very cool. Well, congratulations. Thank you so much for taking the time to come on the show.

2:23:40Yeah, great to meet you. We'll talk to you soon. Have a good one. Thank you so much. Cheers. Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents, whether you're writing code, analyzing data, creating content, or automating business workflows. is Codex helps you move projects forward from start to finish. That's right. So there's a bitter feud going on. There was a good comment over on the X chat from Steve. He said, we're on the topic of celebrity brands. He said, flip it on its head, Jordy. Brands by average Joes, like a painter or the owner of a lawn care company instead of celebrities.

2:24:19I think there could actually be something here. I think he's joking, but imagine as a brand, you're trying to differentiate. You hire an actor that's just playing the role of an average Joe. Hey, this is average Joe electrolytes, right? I'm not a professional athlete. I'm just a normal guy. I'm just painting houses, right? I'm just painting houses. I get a little dehydrated. I take my average Joe electrolyte. It's relatable. I like it. I like it. The average Joe brand meta, Steve is calling it. I enjoy it as an idea. I enjoy it as a joke. I do think that there is a version of this, which is if you walk through an Arowana or Whole Foods and you pick up random CPG products and you look on the back, there's often what's called like the love language or whatever.

2:25:06So it's like a couple paragraphs of text. A good example is, is it Dots Pretzels? Or there's some sort of like pretzel twist that's very popular right now. It's a little spicy. It has the name of the founder. and it tells the story of like an average Joe. The Buzz Ball, for example, that is an average Joe brand. It was not a celebrity brand. Disagree. Explain. There's nothing average about that founder. One of the most elite entrepreneurs. After she started the company. I'm going to make the case that she was always elite. Always got forward with it. The Buzz Ball woke it up. Maybe, maybe. But there are a lot of brands that their whole origin story is like, I was just a normal person.

2:25:49I had a problem for myself. I was going for, you know, olive oil and I smashed the bottle. So I made a squeezy bottle. Like there's all these stories that aren't celebrity brands, at least at the start. And they have, you know, rags to riches stories that are told sort of quietly on the back of the packaging. And then slowly over time, eventually Unilever buys the company and takes that off. Yeah, I just like thinking of it as like from the marketing lens, a brand that is like doesn't have this like heartwarming story. Yeah, it's just like, yeah, we just hired a guy to be like, yeah, just be the guy.

2:26:25Just be the average Joe. Just be an elite snowboarder like Nima starts Salt-N-Stown. You know, he wasn't a celebrity before, although he was a fantastic snowboarder. Before we bring in our next guest, Marky, let's pull up this video. Somebody put up fake tech ads. What's going on here? I love ads, but I hate fraud. So I don't know how to feel about this. This is going to be peculiar. I don't think there's anything wrong here. With fake tech ads? That's real ad space. That could have been sold, Jordy. You're destroying shareholder value by running fake ads. We would never do that. We did do that early in the days.

2:27:06If you go back through the archive, Dr. Squatch had that feel. Oh, Vince Vaughn. Vince Vaughn running a... We have the video here. Okay. No, no, no. I know exactly where they're going with this. We put the Q in QR on 777. This is hilarious. What if Texas is upside down? I mean, this is actually how normal people view Texas. The Rizzler was purple. Wireflow. You pay it. We pay you. You pay us, we pay you. Wireflow. Wow. What does this say? Dennis can tell you. Dennis can tell you. Brain in place. I like Ziplink is now. They put up a lot of these. Wow, they really went hard. Who is behind this? This has to be a tech insider or someone making fun?

2:28:07Ziplink is now Frogel. The cloud-based online safety you know and love now in the palm of your hand. They put up so many of these. This is such a great stunt. If this is a launching campaign, a launch campaign for a tech brand marketing firm, it's genius. And whoever's behind this should actually be calling every tech company and saying, What if forks were spoons? You want your ads to not look like these? We know how to make good ads. What if forks were spoons? What if forks were spoons? Go to cutlery.ai. Lots of people have been asking that question recently. Anyway, very fun. Let me tell you about Cisco.

2:28:45Where's Cisco? Cisco. Critical infrastructure for the AI era unlocks seamless real-time experiences and new value with Cisco. Our next guest is Markie Wagner from ProEdit. She's the founder and CEO. Future Hall of Famer. She's a prolific mafia player. What's your favorite role in mafia? Ooh, mafia. I think who doesn't love to be fascist in mafia? I, you know, you always kind of hope you're getting the fascist card, but most of the time you don't. I thought it was just mafia, townsperson, angel, sheriff. Oh, sorry, I'm thinking of secret Hitler. Oh, you're thinking of secret Hitler. Yes, yes. Yeah, I mean, mafia.

2:29:22Is that mafia? Yeah, you want to be mafia. It's always power. It's less empowering to be the townsperson because you feel like you're just getting killed. You have no superpowers. But running angel or sheriff, that can be fun. But then if you get killed off early, it's the end. I'm just thinking of it because the latest episode of Mafia episode two from Founders Fund dropped, and you're backed by Founders Fund. But since this is your first time on the show, why don't you introduce yourself? Tell us how you wound up in a position to raise money from Founders Fund. Cool. Yeah. So I'm the CEO and founder of Poetic.

2:29:57Yeah. And Poetics and AI system that will learn and execute super complicated processes in some of the biggest companies in the world at over 99 % accuracy, which is quite hard. So what is the process for obtaining and documenting the workflow? This feels like you could do something very database driven. You could build an ontology. You could just wait and maybe the models get better and stop hallucinating. There's been debates over the various approaches. Like, what did you pick and why? Wait, before we get into that, like, talk more about the kinds of workflows where, like, you know, we caught up a few weeks ago and you were saying, like, some of the customers that you're talking to, even if somebody came through and they were like, our AI system is 98.5 % accurate, that that would actually create, you know, hundreds or thousands of hours of like issues in an organization.

2:30:57And it would actually like rolling that kind of system out would have sort of like negative enterprise value. That's just a pitch problem. If you're pitching a software like that, you just got to tell someone, our system has 9 ,000 basis points of accuracy. This is the code. Put it in basis points. Anyways, talk more about the problem before we talk about the solution? Yeah, so I think the problem is, you know, one of the things you've seen is, you know, obviously AI is incredible at writing code and has really crushed that. But, you know, a lot of the main processes that are at the heart of these giant businesses have remained pretty untouched by AI.

2:31:35And the reason why is that the rules that govern them, you know, the 10 ,000 secret rules, they live in people's heads, right? And these rules need to be followed every single time. We work on things like anti-money laundering and underwriting and fraud investigations where every single step matters. And to actually get from where we are now to those running on machines, you need two things. One is a system that can learn the process, not the hundred pages of written down stuff, but the 10 ,000 secret rules that live in people's heads that they've never written down before. So that's part one.

2:32:09And then you have to be able to run them with many nines of accuracy. I was talking with one CEO. He's like, 80 % on an eval is great, but in underwriting, it's unusable. And I think that's the you for a lot of these processes that are at the heart of these really big and old businesses. So you've got to do two things. You've got a system that can learn all the rules and then run them with nines. And if you have that, you can get from where we are now to this version of the future that I think everybody's really excited about. But you need to build that bridge. Not everyone's excited about it.

2:32:40AI has very low approval rate. But tech leaders are certainly excited about it. So why have you started with such big companies? Like I feel like you've been at the heart of the startup ecosystem for so long. If you came on here and said, oh, we have so many of my friends' companies on board. These are the named customers, SoFi, Chime, AIG. Like these are large institutions at this point. why start at the top? It feels harder. Yeah, I think our view was when you're building something like this, if you build something that's less powerful, it's hard sometimes to make it more powerful. Like a lot of these drag and drop tools, they were simpler, they were easier, they could do simpler things faster, but they just couldn't handle super complex things.

2:33:31And so you kind of get kneecapped in terms of what you can represent and build. And the view is, hey, AI is going to be doing a lot of this, writing of the software, you'd be in a better place optimizing for the power of the thing. Can it express and run these five-hour processes that require those nines? And then everything else becomes really easy, actually. And I don't think that people are going to be having a platform for the easy stuff and the hard stuff. I think they're just going to be running all of their processes in one spot. I mean, you mentioned like tens of thousands of hours of information stuck in people's heads.

2:34:08Like what is data collection? What does data collection look like? Conversations? Like it feels like, yeah, like is it the McKinsey model or is it the self-serve software model? Like where do you want to sit? Yeah, I mean, what's interesting is it's evolved over time, but the place that it has ended up going is looking closer to data labeling. So what happens is a big company will say, here's my biggest process. There's a hundred pages of documentation. And you know that that's only 20 % of it. So the question is like, how do you get that other 80? Well, what we'll do is we'll take that operating procedure.

2:34:41We'll generate the AI operating procedure. It's written in step by step English. What our system does is turn that into code under the hood and you run it. And when you run it and you put it in front of those experts, they have a ton of opinions. They have a lot of feedback to say, you forgot that the threshold is actually a million, not 10 ,000, right? All these little things, which get merged back into that document. And you're sort of doing that more and more automatically so that it looks almost like training a program or something like that, rather than sort of like long calls or, you know, process mining and like the normal sense.

2:35:14And so more and more, it looks like people giving feedback into the system directly. And that updates the rules that are written in it. And so you're using AI models to generate that code that is then deterministic, which gets you the reliability that these companies need, correct? Yep. Yep, exactly. So the, you know, the source of truth is that AI operating procedure, it's English. But what are some of those turn into code? So when it runs, if the world's the same as yesterday, it's just going to run as code. Great. Nothing to see here. But if something changes, like the column name changes from month to month or the save button moves, only then will AI go in, repair it, look at what the English goal was, and then update it.

2:35:55And so if you do that, you can get the best of, hey, it's code, it's precise when it runs. But if something changes instead of breaking, it will actually just kick back and recover. And that's important because a lot of this work, code couldn't do alone and agents couldn't do alone. So code is very static, right? It's like very brittle. So even one small date change or something could break the whole thing. And so that's one side of it. But agents, on the other hand, are pretty improvisational and they think step by step. And, you know, when you're figuring out what to do as you go, eventually you're going to make a mistake.

2:36:30This is something that's kind of in the middle where it's code of things the same. AI is there to test, heal, recover if things are different. And that's how you can kind of get those nines. So are you hiring forward deployed engineers? Like what is the role of engineering in your organization at this point? Yeah, so we do. We hire tons of forward deployed engineers from all the best spots. whether it's places like Palantir or even like Retool or Scale and all these other sort of new places that have had their own versions of Forward Deployed. And yeah, I think it's interesting. It has over time looked less like extremely just only focusing on engineering, like hard engineering.

2:37:06It requires being able to change how people operate, right? And I can write the best code now, but even if you have the most incredible piece of software, you still have to change how the business organizes around it. And so the people who understand business and can think about, hey, what is the best possible fraud process going to look like? And how should we reorganize the business around this new kind of thing? And they understand AI are the ones that are just totally crushing it. Yeah, that feels like an entirely new skill set, like much more people driven, but also like forward thinking in technology.

2:37:40I don't know. It's an interesting new skill set. How has enterprise sentiment around just AI changed during the course of building the company? Right. Because like every, you know, it is, I would say it's a roller coaster. In some ways, it's like going up, up into the right. Right. There's generally more excitement about the potential. But at the same time, there's these sort of like period troughs of of disillusionment. And you guys are coming out out of stealth at a time when, again, I think companies are more excited than ever. but at the same time sort of like understand the overall shortcomings.

2:38:17And we had Karp on the show last week and, you know, he was just saying like a lot of these deploy codes coming in, they're just trying to like, they're, they're, they're trying to deploy. Their goal is to deploy AI, but they don't fully understand all of this like business process under, under the hood. And he makes some good points. yeah i think sentiment has evolved quite a bit um you know i think it was extremely excited earlier in the year and then you know around the board meeting times more and more ceos would come to me and say hey like you know how do i get roi here um and uh and this is what your other customers are seeing um uh in these domains and so i think now people have realized like you cannot just throw an agent at a problem and expect to see the result that you want, right?

2:39:10For an agent to do a useful bit of work, it needs to learn how to do that work and run it like quite accurately. And that knowledge transfer between how's the work done today and getting it written down enough to where AI can run it, it's just hard. And it requires, you know, we sort of jokingly call it the great migration internally, like you have to go and migrate these like tremendous amounts of rules into something that AI can touch and improve and evolve. And if AI can't touch it, it's not going to be able to help it. And so, you know, I think deployment is really important because until that transition happens, it's going to be hard to just throw tokens to see better outcomes.

2:39:49Give us some backstory on what you were doing before, how you wound up here. yeah so uh i got my start i got extremely into ai in middle school after reading too much sci-fi you know a lot of dune a lot of a lot of mainly dune is that the message in dune i thought dune was the but but larry you know right i guess yeah yeah you want to avoid the outcome well it just felt like it was gonna be really important during my life um you know and you know you read and you watch sci-fi you know the biggest difference between the future and today it's like mostly machines thinking like that is sort of the main ad sort of bc moment um in like hard sci-fi in soft sci-fi it's like time travel and faster than light speed and like aliens but i think exactly moon is made of cheese that's the type of sci-fi i'm trying to read that's the white pill uh so So then walk me through the consulting work that you did and how this like evolved out of that.

2:40:53Was there like a clear moment where you're like, I'm stopping that and starting a company or is this an evolution or a change of structure? Yeah. So I was initially got my start in research. So I was at Stanford working in AI, like Waymo and Google. And then, you know, one day I sort of realized that, you know, all the things I built, like, you know, didn't didn't matter too much. and that was Friday and I ended up dropping out on Monday. And the idea was like, hey, we've had software for decades. What are people still doing and why? And I felt like I didn't really understand anything about how the world works.

2:41:26So to your point, started consulting and the idea was like, let's just go into some of the oldest companies around and understand what has software still not touched and what happened there. And when you do that and you start doing some of the work yourself and going into North Carolina, and you're watching people who have done this stuff for like decades, you realize that a huge amount of the work is really just operating procedures, documents, and people are just following them. And that this glass of work everywhere, and whether it's underwriting and claims and insurance or onboarding customers and fraud and banks, it's just still sort of done by people and software hasn't been able to go there.

2:42:06The reason why is because the second you write all this code to do that process, something will change, right? A button will move, a column will change, or maybe even the process changes. You want yearly instead of monthly transactions. And when you automate and see that happen enough, you realize, hey, there's a missing kind of material here that can flex but still have guarantees. And I really just waited for the models to get better. I knew some of the researchers and said, hey, the models of today are not it. Please let me know when they get good enough to do this stuff. And I truly just waited.

2:42:39That's great. Well, congratulations on the round. How much did you raise? I want to hit the gong. Oh, yeah. So he raised$50 million.

2:42:49Congratulations. And thank you so much. Who besides FF is in? Yeah, Kleiner Perkins, First Harmonic, Genius Ventures. Cool. All participated in the round. Round of applause for Genius. Very good, Ben and Adam. Love Genius. It's great news. Well, have a great rest of your day. So great to have you on the show. congratulations on coming out into uh into the world and uh i'm sure he'll be back on very soon we'll talk to you soon thank you appreciate it y 'all cheers goodbye um let's see canva ai we gotta talk about the dog the dog walker and the dentist the bitter feud between a dog walker and a dentist over who owns the beach a lakefront owner likened his neighbor's shoreline walks to a home invasion in a dispute that could be headed for the Wisconsin Supreme Court.

2:43:44Who you got, Jordy? Knowing nothing about this story, are you going dentist or dog walker?

2:43:53Pure vibes. Pure vibes? Flip a coin. I don't know. Who you got? You don't know. It's your job now. Is the dentist a day trader? It's your job to pick someone wildly and then defend it throughout this article. A recent trial in Shorewood, Wisconsin, had all the trappings of a minor legal dispute, a disgruntled neighbor, a defendant representing himself who called his own father as a character witness. You love that. Hey, Dad, tell him I'm a good person.

2:44:25$313 were at stake. $313. That's 31 ,300 cents if you're paying attention. but if academic and devoted dog walker Paul Florsheim gets his way the case will go all the way up to the Supreme Court the Wisconsin Supreme Court that is and reshape the contours of shoreline access to one of the Great Lakes it started when Florsheim started walking his two dogs past the Lake Michigan property of dentist Daniel Domagala locally known for the time he spends in a tiki style boathouse and deck that doubles as a surveillance post From there, Domagala monitors traffic and sets off alarms to scare walkers, swimmers, and kayakers away.

2:45:08He's got an air horn. He's got an air horn. He sets it off when somebody comes by. It's crazy. Florsheim repeatedly ignored signs outside of the dentist's house that said private property behind the sign, only water access beyond this point. Domagala kept calling the cops, and the village eventually issued a trespassing citation. Rather than pay the fine and walk away, Florsheim dug in. at stake is what right people in Wisconsin have to take a shoreline stroll. It's high stakes stuff and we'll be following this case closely of course. One of the most important stories in technology. But more importantly we have Brett Taylor from Sierra here in the waiting room.

2:45:44Welcome to the show Brett how you doing? Doing great how are you? You're going dentist or dog walker? We won't make you take a side that's a tough question. That's a tough question. We're I'm going to ask you the real tough questions. How's business going? Business is great. We just crossed 200 million in ARR. We were... I was hoping to get a gong out of that. Of course. Revenue gongs are always the best gongs. Yeah, yeah. And fundraising is easy. Yeah. And today we announced we're certified FedRAMPi, which really simply put means now federal government agencies have access to Sierra, which I think is really exciting.

2:46:25If you look at, you know, the conundrum of the federal government, it's like we want greater services for our citizens, but we have a really big national debt. I think AI is going to be a huge benefit to, you know, programs, whether it's, you know, getting a passport or Medicare. So this is the first sort of the door opening so we can serve these agencies, which I'm really excited about. Interesting. I don't think of like, you're breaking my brain because I don't think of like getting a driver's license to the DMV as like a customer service interaction. But is that where we're going, where more and more of these like reform-based, request-based back and forth?

2:47:03like an address change on like an ID. Like something like, you know, if the DMV had super intelligence. Yeah, there's a lot of these. So yeah, I mean, walking through the Fed says. If you think about all these government services, you've got Medicare, you've got Medicaid, you've got the Department of Veterans Affairs, You've got, you know, immigration, like, you know, the passport agency, all of them run large call centers, but more importantly, people depend on them. You know, people depend on them. You have, you know, someone on Medicare, you have a vet who depends on Department of Veterans Affairs for their health care.

2:47:37It's a really big both payer provider. If you look at, you know, what we do for, you know, folks like Cigna and Blue Cross, Blue Shield, and you squint, well, it's almost that entire stack in a federal agency. And, you know, for good reason. There's just a very high bar for cloud technologies when you're serving the federal government. And this is the main certification that kind of opens the door there. We're already working with a few agencies, none that I can unfortunately talk about today. We even work with FINRA, the regulator. So we've always been really passionate about, we want the best technology to be available even in regulated industries.

2:48:08And so it's a big step for us. We're really excited about it. I hope we can contribute to the quality of life as US citizens, you know, and do so in a way that's a lot more cost-effective. Yeah. It's interesting. Is the biggest low-hanging fruit just taking some of these agencies and making them available 24-7? I feel like one of the most frustrating things that I run into is like, call from 9 to 5. And I'm like, I have a job. yeah the thing like uh uh the difference between interacting with like a public utility versus like waste management right like waste man like waste management right like you know maybe it's not perfect but like it's pretty fast like you can get stuff done like it's efficient and then like the trying to do the same exact thing with like a public utility you know usually you i i always personally estimate like, okay, if it would take me like, you know, 10 minutes with waste management, it'll take me like 30 minutes with a public utility.

2:49:10And so like bringing, bringing that, there's, there's no reason that those two things can't be at parity, but it is entirely, it is almost entirely a, a technology and like process problem, right? A hundred percent. And there's a couple of factors that I think go into why it's so hard to have great experience with some of these government programs. You know, first, a lot of people do need to call things on the phone, and it's only been the past couple years that we could digitize a phone call with AI agents. So we've essentially digitized the last remaining analog channel, and everything you said is true.

2:49:42It could be 24-7. As importantly, it could be multilingual. If you imagine staffing up a big call center and you want to represent all the languages in this country from Spanish, Mandarin, Tagalog, you know, like go down the list, really, really expensive to do. Now you can do it at scale. Each new language, the marginal cost is effectively zero. And then the other part of it is, for good reason, as I said, there's just a really high compliance bar for technologies to be available. And as a consequence, if you look at, you know, what waste management or just pick any private company, they can go off and get the best of breed solution for any given technology problem they have.

2:50:16That is not something all federal agencies can do. And so what I'm really proud of is that CIRA is the best of breed solution and customer experience. We power everyone from, you know, Singtel to Rocket Mortgage on our platform. And now, because we have this certification, federal agencies have access to the best-of-breed solution in this space as well. And so I'm really hopeful. I think AI, if you look at some of the parts of the economy, the governments, both state and federal, the healthcare industry, which has gotten progressively less productive over the past decade. It's one of the few parts of the economy that has.

2:50:48I think AI is incredibly important because these are the parts of the economy that need productivity. You know, we actually want to have great service as citizens and reduce our spending. AI is the answer. So we're really passionate about it. We're patriots here and we love our technology. And so I'm just excited that we can apply it in a great way. Talk about pilot programs and conversion to real customer. is that timeline a KPI for you? Is that something that you monitor very closely? I have to imagine that it's speeding up, but whenever you shake the hand of a CEO and they say, let's do this or someone in the federal government, perhaps an agency lead and they say, I'm ready.

2:51:32I'm bought in on the vision. The demo looked good. But then there's obviously an implementation time. What does that look like now? What did it look like a year ago? Where's it going in the future? We track it, and we measure it in days, not weeks. And so some of our favorite, like Nordstrom, from concept to 100 % of their phone calls was 35 days. That's good, because you could have said 3 ,000 days is good, and then we're back to, oh, you're gaming the stats. What's neat about that, too, is we started out at 1 % of their phone calls, and I think four weeks, and went to 100 % in just a week, and that's because of the Nordstrom team.

2:52:11Actually, in Fiserv, which is an amazing financial technology company for banks, just broke the record. So I don't know if I'm at liberty to show the number of days, but they have an amazing president named Divya. She was just top down, like, we're going to do this, and broke the record. So we have a leaderboard internally about how quickly, when a customer talks to us, can we go live and start delivering value. For what it's worth, I think it's really relevant in this world. you can, Financial Times, Wall Street Journal, it's all token maxing. What value are we getting from the tokens? It is kind of in the headlines right now.

2:52:45We don't really have that issue with our clients because our thing is let's start answering the phone as quickly as possible, start driving those operating expense savings as quickly as possible, but as importantly, show that you can actually improve sales, improve CSAT at the same time. As you know, we've been really pioneering this idea of outcomes-based pricing with the idea being you only pay Sierra when we successfully resolve a call or successfully make a sale. It sounds like a small business model thing, but it's big because we don't get paid until it's live. So it really aligns all the incentives.

2:53:19We don't care about the sales process. We care about the go-live process. And I think it really changes, I would say, almost the social dynamics between vendor and customer where we really become a partner because we have the same incentives as our clients. And I think it's a really big shift. and you know how much I'm an advocate for it. But I actually think a lot of the, you know, token maxing issues would go away if more companies were just focused on outcomes. How are you tracking the popularity of the message, talk to a human? Or the statement? No, no, no, no. When I pick up the phone, I say, talk to an agent, agent.

2:53:55And then they put me on the phone with an AI agent. It's great. You know, thank you for that. You're on my side. So we actually have a name for it. We call it greeting acceptance. which is basically what percentage of the time do people get past the greeting and actually give the AI agent a shot. It's going up. People in general, I think the problem was we had 10, 15 years of bots that were really bad. And so you're just like paying down this debt because if you were talking to an AI more than three years ago, it sucked. Like, let's just be blunt about it. Now you can talk to an AI and it's conversational, it's multilingual, it has access to systems.

2:54:31I mean, the AI agents of today are just like a completely, it's like horse and carriage. versus flying car, right? They're just very different technologies. The problem is in the first five seconds of a call, you're wondering, is this one of the crappy ones or is this like one of the good ones? And so we have a lot of techniques on our platform to help people with that. I think the real key is making sure the first greeting is personalized, is engaging, is empathetic. And I think the trend is in the right direction. I think over time, I mean, I don't know if you have this experience. If I have to call a restaurant to make a reservation, I'm like, I'm going to a different place.

2:55:03If you don't have OpenTable or Resi or whatever, I'm out. I think we're going to get to the point where people demand an AI because they're not going to want to wait on hold. What's also interesting is these AI agents, once they're properly configured, are faster for me as a consumer. They have access to my information. They can get the things done quickly. We're not 100 % there. As I said, we're just paying down the debt of bad tech that we've had for the past 10 years. I'm hopeful in three or four years it will be the norm. When did it become popular to get the, like, there's a 30-minute wait, like, press one if you want to call back?

2:55:40Because I feel like that wasn't a thing when I was a kid. But now that feels like a pretty meaningful innovation at some point in the last 10 years where it actually is really convenient to not be like, okay, I'm just going to say. Some guy has a patent on that. Yeah, yeah, I'm sure. But, like, that was, like, the last great innovation in customer service. Yeah, it was. Well, I think it's going in a really good direction. I mean, first, I think, you know, not having to wait on hold. We should never have to wait on hold again. Like that is going to be a thing of the past. What if the GPUs are on fire?

2:56:08It's like, we'll call you back and the GPUs call, like cool off. We're low balancing right now. Please wait on hold. Yeah, maybe. Imagine that world. That is a bizarre outcome. I mean, on that note, are there any, like, how close are we to thinking about like A6 for voice models? or we were talking to Matthew Prince from Cloudflare about edge computing for voice models. That feels more relevant than, yes, if you're going to cook for an hour on some deep research project, go do it on the NBL 72. But are you actually at the point where you're starting to think about that optimization, or is that more a few years away?

2:56:49I think it's probably not a few years away, but it's definitely in the future. But I'm excited for it. I actually agree with your intuition that we're entering a world where, first, the frontier models are actually separated, in my opinion. GPT-55, the recent releases from Anthropic, I mean, you can just see it, like the gap between the best models like GPT-55 and the others, the open source models, is growing, not shrinking, which is probably not something we would have predicted a year ago, or at least certainly not what I saw on X and the press. But we've reached sufficient intelligence for a lot of different domains.

2:57:23You don't need a multi-billion parameter account model to do a simple classification or just do basic transcription. So as a consequence, I'm hopeful that over the next few years we'll end up with a constellation of models with really purpose-built ones. And as you said, just given the power of the hardware in our pockets right now, I think Edge will be a part of it. There's just no doubt. And it just stands to reason there might be creative ways to maybe convert what you're doing into tokens so that you have lower bandwidth connection if you're doing voice. Could there be opportunities there?

2:57:57There also could be some privacy benefits to that. I have a strong intuition, though no knowledge, but just intuition. That's got to be something Apple's thinking about just given their posture on privacy. So I'm very bullish on the frontier models. like OpenAI and Anthropic have really shown the strength of the research groups, but not at the expense of all the specialized models. I think we're in a world where just as we become more sophisticated in deploying AI, we're going to have a constellation of models with just different capabilities. So I'm excited for it, but it's not now. It's in the short-term future.

2:58:31Yeah, that makes sense. Did you guys have to build in guardrails to prevent people from access? Every month there's a post that goes viral of somebody that's figured out some endpoint that they can hit to get a frontier model. Chipotle code. Somebody figured out a wire up. They took some sort of open code fork of codex coding model, but it's wired up to Chipotle's customer service on the back end. This is a huge risk because you could run up a big token bill that way. Is this actually top of mind? We have guardrails on it. And, you know, it's just like any other thing. It's, you know, sort of you're always in a race, the good guy, the white hat versus the black hat to, you know, handle it.

2:59:13You know, in practice, I think it's more like digital graffiti. I think nowadays, like in the early days, you'd see a post online of a chatbot saying something goofy, like, oh, my gosh, now people are like, yeah, you fooled with it. You know, like, come on, you know. So I think first, I think it's probably jailbreaking, I think, is a really interesting area of AI security, but probably more around the areas of cybersecurity and bio and things like that. I think this type of thing, it's why people work with places like Sierra to have good guardrails. I also think social media sort of become numb to it at this point.

2:59:47It's like, oh, great, you got a chatbot to say something silly again. And, you know, I think the bigger issue will be just as these frontier models become more capable, the guardrails around using them need to be more and more effective. And I think, you know, as you think about kind of the mission of OpenAI, ensuring AGI's benefits humanity, you really need to make sure that those guardrails are effective against jailbreaking, which is not, you know, it's not like possible to make perfect, by the way. But just because these models are sort of capable under the hood, which is why there's been such an interesting topic around cybersecurity and others.

3:00:21So that's probably the area I think more about, though. You know, the digital graffiti is going to continue to exist as well. Yeah, that's a good term. Have you ever heard of 002 cents? No, tell me. famous customer service nightmare call where someone called Verizon. They were getting billed at two cents, and the actual rate was supposed to be 0.002 cents. So they were off by two orders of magnitude. And they're talking to this customer service agent. We'll play it on the show after we wrap. But they're talking to this customer service agent, and the customer service agent just actually doesn't know the difference between a decimal cent and an actual cent.

3:01:01and the frustration that just ensues is like turned into this massively viral video. There's whole websites about it. Verizonmath.blogspot.com from 2006 and it's like this whole deep dive. I'm sure you've heard about all these different things. I will take a look at it. The good part is a super intelligent AI probably will know. I think it will. It's some ground truth things, some code in there. There's opportunities here. PhD level intelligence for... The raw audio for this call is 27 minutes. The guy went back and forth, and it's hilarious. There's cut downs we'll have to play. Yeah, he had unlimited data plan in the U.S.

3:01:40and recently crossed the border to Canada. Prior to crossing the border, he called customer service to find out what rates he'd be paying. The data rate he was quoted was.002 cents per kilobyte, and then he got billed at.002 dollars per kilobyte, so it was 100 times more, and he couldn't get out of his quagmires, Kafkaesque customer service interaction. Anyway, thank you so much for taking the time to come on the show. It's always a pleasure. Always a pleasure. Good to see you. Incredible progress. Looking forward to the next revenue gong. Yep. Come back anytime. I'll come back. See ya. Accelerating.

3:02:15We'll talk to you soon. Goodbye. Well, folks. Seriously makes you sense. We're going to now play this 27-minute video. No, we can play this one. This is just a little bit of this. Yeah, yeah, yeah, this is the one. The three minute version, YouTube math fail. I wanna hear a little bit about this. See if it holds up or see if I'm washed onk at this point. I'm being old and remembering a 70s video. Not this one, it's the zero zero two cents. This is exciting news from Canva. We can talk about it later. But you can turn your ChatGPT images into fully editable canvas designs with magic layers without ever leaving the chat.

3:03:00Great integration there. Apple Intelligence has some more updates too. We can run through later in the week. But let's play the 002 cents, at least a few minutes. Because I want to hear if it holds up. The kilobyte usage that was done while in Canada,$0.002.

3:03:15Sridhar Ramaswamy:Do you recognize that there's actually... $0.002. Yes, do you recognize there's a difference between those two numbers?

3:03:25Sridhar Ramaswamy:0.002 dollars and 0.002 cents. Yes. Is there a difference between... They're both the same. If you look at them on paper-wise... No, they're not, actually. So if you take 0.002... Cents, remember. It's cents. Times 35 ,896. Seventy-one dollars and 79 cents. No, that would be 71 cents. How much should I be charged? By the way this is calculated,$71.79. I like this guy's crashing out over 70 bucks. You're paying two tenths of a penny per kilobyte. Two tenths of a penny would be 0.2 cents. You quoted me 0.002 cents. I think this guy also might be entirely wrong. He might have just been quoted the wrong number.

3:04:140.002, sir. 0.002 watt. What? Cent per kilobyte. So you just said it was point to They pointed it back to him And then you also said it's.002 cents. Those are two completely different numbers. They're 100-fold different. George, hold on one second for me, okay? This guy is so dedicated. This is Andrew. I'm a manager on this floor. How can I help you today? So now the manager's involved. Do you recognize that there's a difference between$1 and$1? Coming out of the gate. Definitely. Do you recognize there's a difference between half a dollar and half a cent? Definitely.

3:04:53Sridhar Ramaswamy:then do you therefore recognize there's a difference between point zero zero two dollars and point zero zero two cents no

3:05:05and i i mean i'm trying to get what you're saying here but it's just not

3:05:09Sridhar Ramaswamy:and we're talking about cents right right point zero zero two and if we multiply that by the amount of kilobytes usage that you have three five eight nine three 35893 that comes out to what you paid 71.79 cents you never did the conversion from cents to dollars i don't know i'm not a mathematician two cents times my 35893 it is a number but it's still in cents when i'm quitting point zero zero two dollars we're quitting point zero zero two cents Oh, God. Honestly. Well, I mean, it's obviously a difference of opinion. It's not opinion. Okay, well, you know what? I'm going to post this recording on my blog.

3:05:57Oh, canceled. That's fine. That's what I'm going to do. And then you guys at Verizon can learn. Yeah. Oh, what a funny interaction. Incredible. Well, now that you get a PhD level mathematician's knowledge. Somebody's got to run this on an AI lab. I was quoted five cents per million tokens, not five dollars per million tokens. And confuse someone, get a 100X discount on your bill, your token bill. Anduril has a space something, what was it, Space Observation Network. These are ground-based satellites or ground-based telescopes that monitor space. And look at this, captured by Anduril's network of 400 telescopes deployed around the globe.

3:06:46The second stage of the Falcon Heavy launch of Viasat 3F3, performing a routine thrust event. This produced a spiral-shaped plume effect, a nominal part of operations for a successful launch of Viasat's latest satellite. I thought this was a cool image. And we learned in the process that they have 400 telescopes all over the world. anyway we can dig into all of this more later more tomorrow we'll be back at 11 a.m pacific thank you for tuning in leave us five stars on apple podcast fun show everyone have the best afternoon or evening of your entire life and we'll talk to you later

3:07:41you