Weekly Recap: Casey Neistat, OpenAI Cracks Math, The Future of ChatGPT, Apple x F1, Intel Layoffs

28:31And then you go into the appointment room and they're over there on the equivalent of Dr. Google. Totally. It's nothing new. People used to go to WebMD and like the meme was like, you go to WebMD and no matter what you type in, it says like, could be cancer, like could be like the worst possible thing, but it might just be a cold and maybe you should just take some Advil. But for whatever reason, WebMD felt the need to give you the full picture and all the possibilities. And then they'd, of course, say go consult an expert or talk to your doctor. But yes, I definitely see it replacing that type of health experience.

29:07Also, I'm using it as a Photoshop replacement a fair amount of time if I need to just quickly generate an image, quickly generate something that I would have normally gone to a 3D rendering program or Photoshop and kind of created a collage to kind of illustrate my idea. Huge tailwind for the meme industrial complex. Huge tailwind. Still a lot to work out there. I do find that sometimes when I go to images in ChatGPT, I'm going back and forth on the prompt for 10 minutes. And I'm like, I could have just done this with traditional tools. So it's not perfect, but when it gets it, it's so amazing.

29:41And the final product often looks a lot more cohesive than what I would get if I was like collaging and the shadows didn't match and they were like rough edges and stuff. So certainly great there. The last three are a bit more vague. We'll have to read into those. But OpenAI is set up to win pretty big in all of these categories. So semi-analysis, clocks, chat GPTs, share of queries at 71%. Meta is in second at 12%. And that's with billions of users on Meta products. And so OpenAI is certainly running away with consumer. So there's this question of like, it feels like the rest of consumer AI plays will be, I would say like horizontal in the sense that it won't be a new app on your home screen.

30:27Meta won't have Meta AI as a home screen app. Loses their lead and becomes the Yahoo of AI, but that doesn't feel likely. Yeah, it feels tough. Like why did Yahoo lose to Google? it's because there was an entirely new paradigm in PageRank. Like a new algorithm emerged. Sure, if that happens from SSI or super intelligence, meta super intelligence, like there could be a leapfrog moment. But so far, they've been pretty good at staying near the frontier to the point where it's like, okay, Google got them on this one or Grok got them on this one today. But there hasn't been a time when I've been like, okay, like there is a dramatic difference in the results such that it's worth it for me to go over.

31:13There was that moment for Claude for a little bit. Everyone's like, Claude's way better. I went over and used Claude for a bit, and then I went back to OpenAI just because the product was better and had more of an ecosystem. Product lead is very real. Yeah, I was thinking about this. If you played out a hypothetical scenario and you went and you had the keys to OpenAI HQ, you went and you exfiltrated all the code, everything, got an app into the app store, Geordi GPT, you have the exact same model, the exact same inference, the exact same UI, everything. Could you win? Because people would say, well, it's not better, so I'm not going to switch.

31:57We live on a part of the internet where people are constantly debating the merits of the leadership teams and the approaches and the philosophies. But then downstream, you have approaching a billion users that are just like, yeah, I like the product. I use it a lot. Yeah. And so even if you ran a Super Bowl ad saying like, we have a product that's exactly as good as ChatGPT. It is feature for feature. Feature parity. People would be like, but I already have it installed. You're asking me for two minutes to uninstall this and reinstall the new one. And then I don't get any benefit. I wouldn't do it.

32:31Even if you match my capabilities, you got to leapfrog. It's funny. So Jason Fried had a great post. relevant yesterday. He said, feature parity is just another way to say we don't need to exist. So if you come out and you're so good at what you do that you can create as good of a product as OpenAI, models that are as good, you still don't need to exist. And so that is the challenge for anyone competing. If you, let me tell you about ramp.com. Time is money, save both, easy to use, corporate cards, bill, payments, accounting, and a whole lot more all in one place. Go to ramp.com. Really quickly, so it feels like the rest of consumer AI plays will be horizontal.

33:12There won't be a new AI app for Meta that really takes off. Instead, AI will improve everything Meta does across Facebook, Instagram, WhatsApp, Quest, etc. And I was thinking about the initial takeoff of Facebook. The other tech companies, they didn't really seriously get to compete in social networking. Google Plus never really took off. I guess Microsoft bought LinkedIn, and that's kind of a niche social network, very profitable business, great business, but it is like its own thing, it doesn't directly compete. But graph databases and the idea of storing efficiently connections in graph networks like Facebook kind of pioneered, that became really widespread and was used all over the place.

33:57And the same thing with Google search, like this page rank, just better search algorithms, those wound up manifesting in better search in all sorts of products. And so when a new company comes out and builds a whole paradigm, or they break through in terms of front end development, or database development, or some sort of structure, it winds up improving everyone. And so I think AI will have these horizontal benefits all over the ecosystem. And I think it makes a ton of sense that Meta's investing so much in super intelligence. But it's not, I don't really think the narrative should be like, they need to play catch up to chat GPT.

34:38I think it's more like they just need to implement LLMs in every single crack in all of their different systems like they do with great databases, great infrastructure. I'm not sure. I still think there's, I mean, remember Meta made some early experiments of making digital clones of big celebrities on Instagram. I still think they'll take more shots on goal around companionship. Will they go grok waifu mode? No, I don't think they want that revenue line. But there's a bunch of other ways in which they could kind of go after that market that I don't even think. I mean, ChatGPT is such an interesting product because it's designed to be a functional tool around knowledge retrieval, creative expression.

35:28just unlocking consumer surplus, giving people access to expertise, et cetera. And the way in which people are using it as a companion is sort of not the sort of default. It's not like you name your chat GPT, right? People will give it a name. Yeah, it doesn't really stick. It's certainly not baked into the UI in the way that it could be. I know people do talk to you. And so again, I've said it before, but as chat GPT user hours or just, or sort of user minutes still. But as they're ticking up, I do think Zuck will look at that and say, I want some of that action. Yeah, yeah. And maybe some of that, but I still think some of that happens inside of the platforms.

36:10I don't know that they're going to do it. Yeah, not necessarily in that new app. It would be very difficult. And Meta has yet to really do it. WhatsApp and acquisition, Instagram and acquisition, but Stories massively successful within Instagram. And so I would expect, I agree with your take, that I think there's an opportunity for a lot of AI stuff to live within those apps. And then also just on the monetization side, like they're in a very unique space where they can give great products away for free, but they can't be charged an inference cost to another company. And so if they have their own open source model they can inference very cheaply, they can give it away for free, and then they leverage their massive ad network.

36:51So let's go through what Fiji Simo over at OpenAI is building. So in a few weeks I'll be joining OpenAI as CEO of applications. We've all been waiting for this moment. Helping to get OpenAI's technology into the hands of more people around the world. I've always considered myself a pragmatic technologist, someone who loves technology not just for its own sake, but for the direct impact it can have on people's lives. That's what makes this job exciting, since I believe AI will unlock more opportunities for more people than any other technology in history if we get this right. AI can and give everyone more power.

37:25And so she has a fantastic career, eBay, Facebook, then Instacart, and is now at OpenAI. And she was heavily involved in building the ads engine at Instacart, correct? Yeah. And obviously at Facebook as well. So on knowledge, she says, empowerment starts with understanding the world around us and our place in it. When we have the right knowledge at the right time, we can make better decisions, advocate for ourselves and change our path, but for most of history, access to expert level knowledge has been limited to those with more resources. I mean, even after the invention of the printing press, like you still had to be in a big city that had a library to go check out a book for free, still had to have the time to do it.

38:06And certainly buying every book and being able to index it was very expensive and difficult. Now it's even easier. It's already working. People who use AI tutors learn twice as much as they do from human ones, and the gains are even bigger compared to learning in a traditional classroom. In a 2024 OpenAI study, 90 % of users said ChatGPT helped them understand complex ideas more easily. I agree with that. On health, she says, personally, I'm most excited about the breakthroughs that AI will generate in healthcare. A few years ago, I faced a complex and poorly understood chronic illness. Oh, that's sad.

38:39And it became painfully clear just how fragmented and inaccessible the healthcare system can be. Even with access from some of the best doctors in the world, I found myself acting as a connector, They're piecing together insights from multiple specialists who weren't speaking to each other. I actually had a friend who got a very, very rare form of cancer and did all of the research pre-CHAT-GPT, actually downloaded all the frontier science and all the different papers, figured out that it was this one very rare condition, found the expert, went to that expert. He was like, yep, you have this thing.

39:10I'm the only one that studies this thing. I'm gonna help you. Did the surgery, saved your life. Crazy. I had an issue. I was 18 traveling. I was surfing in South America. There was flash flooding. I was in this tiny town. I got an antibiotic-resistant staph infection from that. and then was getting repeated infections over the next year. And the doctor kept prescribing antibiotics that were so, I mean, such an intense antibiotic that doctors won't, it's like a soap, they won't touch it without gloves on. And they use it before surgeries. And they just said, use this twice a day over your entire body.

39:52And I kept having issues and eventually found an erratic community that was like just like obsessed over this issue and the thing that fixed it was avoiding uh gluten yeah they like actually just fixed everything that's so crazy and i just imagine if i was like even now if i was dealing with that issue i would have been able to um i would have just been able to like talk with chat gpt about it they would be able to surface all that kind of thing build it build a picture of it so very interesting um well uh let me tell you about restream one live stream 30 plus destinations, multi-stream, and reach your audience wherever they are.

40:28We use Restream. The backbone of this show. So she closes out health saying, AI can explain lab results, decode medical jargon, offer second opinions, and help patients understand their options in plain language. It won't replace doctors, but it can finally level the playing field for patients, putting them in the driver's seat of their own care. Very excited for that. And also, that feels like something, I don't know, So yeah, just like, I don't know. It'll be interesting to see if that manifests itself. And like all of this is like, will there be any fracturing in the actual product? Because right now all the fracturing that's happening in the ChatGPT product is in like what model you're using, you're using agent or deep research.

41:10But so far all the different products. Yeah, they're all chats. And none of them say this one's for health, and I'm in like a safe health territory. It's like that's all driven by the prompt. I would imagine that over the long term, everything's driven by the prompt. I would love to be able to go to ChatGPT and just say, hey, quickly, what's the population of Canada? And it knows to use 4.0 for that. And then if I say, hey, I want you to give me a full report on the history of Canada. Give me a deep research report. I wouldn't need to select it. It would just know from the prompt. And you can go to ChatGPT, agent, help me annex Canada.

41:46And then it just goes and starts. Yeah, don't mistake. And then it just keeps working. So the third one, she says, creative expression. I believe we're all born creators and that the ability to imagine something and make it real is a big part of what makes us human. The problem is that our ability to express that creativity is often limited by our skill sets. Completely agree, I can't draw at all. Not everyone has the resources, time, or training to paint, write, compose, or build. When I imagine the future, it often comes to me in images. I paint in my spare time. But the, ooh, we gotta find some Fiji Simo originals.

42:17Put it, hang them on the wall. This is interesting. It's a lore. But the images in my head are much more realistic and complex than what I am able to paint today. Now AI is collapsing the distance between imagination and execution. With AI and image generation, I can prompt and iterate until the output matches the complexity and realism of the vision in my head. Unless it's a Where's Waldo. We gotta solve the Where's Waldo challenge. We do. It's coming for sure. The Where's Waldo eval for image generation. Today, nearly one in three Gen Z users say AI tools have helped them express themselves in ways they never could.

42:49So this is another fun, viral, obvious, valuable, like we know it, we love it, everyone's using ChatGPT for creative expression. Well yeah, and this presents a massive challenge if you are a ChatGP, a GPT rapper that's trying to go compete in the creative expression space because you have to, it's not enough to generate a cool image or generate a meme. it used to be that if you could do text well, that was maybe an advantage that people would use your product. But ChatGPT image generation has just gotten better and better and better. It's fantastic. If you haven't played around with it much, drop your group chat, the profile pictures of your most popular group chat, put them in there and say, make them all GigaChats.

43:40And then you can share that back. Bodybuilders. Yeah. For sure. Well, you start with generating an image in ChatGPT. Then when you're ready to go pro, you move over to Figma. Figma.com, think bigger, build faster. Figma helps design and development teams, build great products together. You can get started for free at Figma.com. Fourth, she says, economic freedom. When people can independently create and capture value, they gain power over their own economic destiny. But starting a company isn't easy. The average cost to start a small business in the US is around$30 ,000, an impossible threshold for most aspiring entrepreneurs.

44:12And until recently, building a product or launching a service required technical knowledge, especially coding. That was a problem for hundreds of millions of people who had ideas for tools, apps, platforms, etc. That could have made an impact, but they didn't have the technical skills to bring them to life. The classic ideas guy, I just need a programmer to build it for me. Well, now you can vibe code it. AI now gives the people the power to turn ideas into income no matter their age, credentials, or zip code. a single person can now brainstorm, prototype, market, and launch a product with tools that control themselves.

44:43A 2024 Shopify report showed AI-enabled solopreneurs launched businesses 70 % faster than peers without AI tools. I've seen it with my nine-year-old daughter who decided one day she wanted to be a party planner for kids' birthdays. Let's give it up for her. It's amazing. What a great story. In one weekend, using AI tools, she created a fully functional website showcasing her party ideas, shared it with her peers and started taking on clients. Amazingly, my husband and I didn't have to help her, but we did have to intervene before the confetti cannons were ordered. Ben, good reminder, we should get some confetti cannons.

45:22We do need confetti cannons. Except last time when we had confetti cannons at YC Demo Day, my eyes were in pain for days and days and days. We need goggles next time. Yeah, there was so much dust in the confetti cannon. We left it all in the field. We did. We did. In the future, people will be able to build new things without waiting for permission, capital, or credentials. This, of course, will mean a meaningful shift in the workforce. Companies will hire fewer people. So you get more smaller companies. That seems pretty cool. Yeah, my first real company, skateboard company, J-Man Designs, probably, I don't know if I would've done it if my lovely mother wasn't a graphic designer and I needed a logo to print on the decks that I was getting made.

46:05and I just would sit with her and tell her, you know, do this, do that, do this, do that. And yeah, it's pretty cool that you can now just talk through that process in natural language and how many more people can do that. It was pretty crazy you ran a skateboard company without doing proper SOC 2 compliance. I know. You should have got on Vanta. Automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process. Huge alpha just starting an extreme sports company and saying, look, none of our competitors are serious enough about this to really take compliance and security as seriously as you should.

46:44Yeah. I mean, I do think for kids especially, I mean, the ability to just use AI tools fully to go and solve problems. And it's almost like your town's McKinsey consultant. I remember I had an early job of just like scanning photos for someone they needed a whole bunch of photos and there's like pretty manual labor but like I actually wasn't that good at it I kind of messed it up there was like too much like the the scanner wasn't configured properly so a lot of the side to redo a lot of them it was learning spritus learning process but it's probably the first one I feel like the only thing that that's maybe boring and repetitive that that you that I can imagine you doing is the bench press no It should basically be the same every time.

47:32But yeah, those type of tasks I've always struggled with. But I don't know that we're at a point. I still think if you were using, I don't think that, I think that job still exists. I think it does. I think there are bigger companies where you can just like send in a ton of stuff and they'll just professionally scan it for you. But they're pretty expensive, I think. So I think the kids still have some alpha if your opportunity cost is low enough. as many kids are. Fifth, she says, time, regaining control over your time is one of the most liberating, empowering shifts a person can experience. The ability to control how you spend your time is often what separates people who feel in charge of their lives from people who feel overwhelmed by them.

48:16Wealthy people who have always bought back their time by hiring personal assistants, household staff, private tutors, chefs, and more, building full infrastructures to reduce friction in their lives. Meanwhile, the average household spends nearly 20 hours a week on domestic work, logistics, and errands. While leading Instacart, I saw firsthand how technology can shift perceptions and behaviors around time. In 2012, the idea of paying someone to shop for your groceries felt like a luxury, something reserved for the ultra-wealthy. But with the right product design, logistics, and pricing, we made it accessible and indispensable for everyday families.

48:48Today, the Instacart user base mirrors the U.S. population with millions of families getting hours back each week to spend on higher-value activities. The question is, will OpenAI build a gig worker network where when your agent runs into a wall and needs somebody in the real world to accomplish a task, will you be able to delegate tasks like that? Feels like a stretch, but I don't know. They could plug into the Uber network or any of these other networks. Yeah, maybe they'll. I mean, they already have like an Instacart integration. so maybe they will rely on other gig work platforms to solve those problems and actually handle that side.

49:28And they will stay in the full software. Like the package delivery where you can get an Uber to just pick something up and take it across town. You could imagine that being integrated. Yeah, I mean there's a host of services and companies and APIs for shipping, mailing, moving things around, hiring someone. I mean, in theory, you could hire a personal chef and be communicating. Your agent could be emailing with them and say, hey, you know, be here at this time. There's this party. Here's and it's kind of, you know, it doesn't need to be. It doesn't even you don't even maybe need a gig work platform because the agent can go out and scroll Instagram in theory and find someone who's advertising that service or Google it and find a listing of local people providing that job.

50:14and go and retain their services directly. Interesting, I believe AI will allow for a similar shift in many areas of life time consuming activities like researching decisions, planning vacations, scheduling a tutor and more can be done by an AI agent that anyone can access as we build new products. We have a chance to make these time saving capabilities feel not only useful but routine. In doing so we can empower people to regain control of their time and attention. And I certainly feel that something that I would need You need to sit down 15 minutes looking for a new studio space or something, fire off agent and come back with some interesting results.

50:50Anyway, let me tell you about graphite.dev, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster, get started for free, graphite.dev. Last one, support. For many people, the biggest barriers to progress aren't lack of access or opportunity but self-doubt, isolation, and burnout. Sometimes what's most empowering is support someone or something that can help us reflect feel seen or simply move forward with clarity and confidence My business coach Katya has been transformative in my career I've joked with her over the years that everyone needs a Katya in their pocket Personalized coaching has obviously been a privilege reserved for a few but now with chat GPT it can be available to many This is something I have not used this feels like we're getting further out on the curve of like like defining what the product is.

51:36Knowledge retrieval is so concrete. Generating image, very concrete. Now support is much more of an amorphous product, and there's some companies out there that are doing it right now. It's not a drop-in replacement, and there's much more to define about what this product looks like or how people actually use this. Yeah, it's very general. There's gonna be vertical, specific companionship products, right? We've seen this. What's the founder that we had on? the the replica was one of the original ones started like a decade ago yeah grok uh grok heavy four uh has their own there's also specific iteration but then this is also to be clear yeah the area of greatest concern sure right where um it's very clear if you have a business coach he's telling you john you got this you're incredible you're probably you're built different that's great but then when you tell them that you've discovered you know how to break the you know space-time continuum and they tell you yeah you're actually right right now you're right you're good you're absolutely right you you did figure this out and so I think they need to figure out the guardrails for this category and I'm sure that's top of mind for everybody at the company right now yeah for sure AI coaches on the other hand can be available throughout every day she says this isn't about replacing human connection but but filling a gap that often goes unfilled.

52:59Many people don't feel comfortable opening up to family or friends, and most people don't have access to a therapist or coach that can call regularly. Even people who do have access often spend an hour a week or less with these professionals. At the core of philosophy and religion is the idea of self-knowledge to become who we want to be. We have to understand who we are. So very interesting. Apple and F1, that's the story that we're talking about today. We've talked about this before. So F1, fantastic race series. We're big fans. But the actual streaming rights to the races has been kind of hotly debated.

53:38There was an article in the Journal a while back that they were going to ESPN saying, hey, we want something like$80 million. And ESPN was like, I don't know if that's worth it. And we were going back and forth. And they wanted something like$200. Yeah. Yeah, yeah. They wanted a lot. And so the stack of content to go through is growing. So we will be thinning out the guest lineup in the future. But for today, we're going through. Let's kick it off with Ben Thompson. He had some good analysis here and has some details from reporting in The Athletic, which is a New York Times property. Formula One is trending towards choosing Apple for its United States broadcasting rights for 2026 onwards.

54:24The technology company's bid being in the$120 to$150 million range. Market clearing order inbound. That is a market clearing order. Probably will clear. ESPN has held the rights since 2018, but its current deal is up at the end of the year. The sports media giant's exclusivity negotiation period expired before February 2025, leading to interest from other broadcasters, including Netflix and TVPN. Yes, we would love to. We decided to sit it out. ESPN has remained in the mix for US broadcasting rights, though its bid is lower. Apparently, ESPN's offer is in the$90 million per year range. Which is still wild because this is the US broadcasting rights.

55:07And I believe in 2024, Formula One had around$1 million. Total viewers. 1.2 1.3 million race viewers on average per race. Yeah. But Ben Thompson puts it in a different perspective. He says F1, on the other hand, has a meaningful audience versus MLS, which was averaging around 200 ,000 viewers per year on linear TV before the Apple deal. And that wasn't growing. So this is six times as big as MLS. Yeah. Again, I think there's more games than or more race, more games than races. So it's not exactly apple to apple, but every race but one has seen a year over year increase in viewership, so F1's getting more popular, a lot of that's driven by Drive to Survive.

55:54And this is the crazy thing, given when races are televised, usually early Sunday morning, and the fact that they aren't promoted by ESPN in any meaningful sense, so it's not like you're getting the Pat McAfee show talking about how you gotta tune in, there's a ton of coverage on ESPN throughout the week, they just kinda show up Sunday morning, and people turn on the TV and they schedule it. I always like the timing because any parents out there, you're certainly not sleeping in on the weekends. Kids wake up. And I find it's a nice background noise or viewing in those early hours. For sure. And so he says you can make the case that F1 makes its own audience, which by extension means they will be able to pull people to a streaming service.

56:39basically f1 fans are strong enough that they'll go search it out and when i when i was really getting into f1 after getting into drive to survive i was like okay i'm gonna have to subscribe to f1 the app and like jump through all these on your phone and it was yeah it's it's like as many hoops as f is ufc but people still do it yeah and they're still they're still a big debate but and i think netflix had done the analysis and realized that all of the potential viewers of f1 were basically already subscribed to Netflix. And so it was a more difficult kind of equation to make work than someone like an Apple TV, potentially, that could potentially drive new subscribers.

57:17I think someone called it like a streaming backwater or something like that in here. We'll dig into it. But somebody had some not nice things to say about Apple TV. Although I'm a subscriber and I think it's nice. So he says, this is Ben Thompson writing in Stratechery. What makes this all work is the fact that for F1 races. F1 races are at the bottom of the funnel in terms of fan engagement. F1, at least in the US, has by and large grown its audience via Netflix's Drive to Survive. Netflix pays F1 a pittance for rights, apparently single digit millions for that. But it's okay for F1 because the way they ultimately make money is by converting Netflix viewers into race fans.

57:56So if you're F1, you see that as a marketing channel. Yeah, and F1 has sponsors at the sort of league level. and also the individual teams, all of those sponsors are getting more viewership and engagement through F1. So it's sort of added value to them and they don't have to pay. They're actually making money on, I mean, not a super consequential amount. I mean, of course the sponsorships are like such like 360 deals that it's like, you know, car livery and also a whole bunch of other, you know, advertising assets. But I wonder if they broke out, okay, how much lift, how much benefit, how many impressions are we getting from Drive to Survive?

58:35Would that be when you total up all the value add to all the different advertisers from being in Drive to Survive and being seen by people on Netflix, how much would that be more than the couple million dollars that Netflix pays for the rights? It might be. It might be. There's a lot of people that see ads that are for specific F1 sponsors in Drive to Survive. I've seen Saudi Aramco like hundreds of times during Drive to Survive. Exactly. Yeah, it's like pretty valuable ad space. So interesting deal that kind of works both ways and everyone makes money. Anyway, making that model work, however, means actually monetizing the races, which means that it actually is actually quite logical to go with the company willing to pay 30 to 60 million dollars more for those rights.

59:19You have to capture value somewhere in the funnel. Moreover, you can make the case that many F1 fans aren't necessarily ESPN subscribers and this is where it gets interesting because the cable bundle is shrinking and the F1 did this global fan survey so it's their data so Ben Thompson's kind of taking it with a grain of salt but this is from the F1 global fan survey they conducted a study every four years to track how fan engagement is evolving across the sport they got a hundred thousand responses from self-identified, highly engaged fans in 186 countries. That's basically all of them. The findings offer a detailed snapshot of the modern fan mindset and show that Formula One is increasingly attracting new, younger, and more female audience with growth in markets such as the United States.

1:00:10Gen Z is helping shape the rhythm of the modern fandom, engaging with the sport more frequently and on a deeper emotional level. female fans now account for three in four new fans interesting i would not have predicted that that's very very interesting well the drivers are often chads that's what's driving it that that could be uh part of part of the factor yeah it's also interesting that there there are no female drivers on the grid right now there was danica patrick in the in the nascar series for a while, but somehow it's breaking through. Maybe it's through Drive to Survive being more accessible on Netflix, more storylines, pulling people in, and they're just going down that funnel.

1:00:52I don't know. Well, there's also the WAG industrial complex around F1 that is an aspirational lifestyle. Maybe they should do a spinoff of Drive to Survive. Don't they do that with NBA? Isn't there a show about like WAGs or something like that? Maybe. That's kind of informally what the Housewives series is, right? Maybe they should do that. With the largest country share of respondents, fans in the U.S. continue to stand out for their growth, youth, and digital fluency. They over-index on content engagement, sponsor responsiveness, and daily touch points, signaling a market where fandom is evolving rapidly and is commercially primed.

1:01:28Saudi Aramco is like, why? We seem to be getting a lot of female American Zoomers and buying oil. Following our content on Instagram. They seem to be really into this. What's happening? Maybe, I don't know. So basically, Ben Thompson's conclusion from this survey is what are you talking about when you're talking about a younger, more female-focused audience? Those don't sound like ESPN subscribers. Those actually sound like Apple TV subscribers or potential Apple TV subscribers, certainly cord cutters, Certainly people who are not going to buy a big cable package and get on ESPN 2 and Red Zone and all of that stuff.

1:02:10That's typically the Gen X male, the maybe older millennial male that probably dominates the ESPN audience. And so. Yeah, that's that's really interesting. Apple kind of has an edge where they can build out a service for some of these more lifestyle oriented sports. some of these alternative, you know, you could imagine them doing things in tennis over time because maybe that's a different audience than like the hardcore ESPN Red Zone subscriber. Yeah, yeah. So he says, I could definitely envision a scenario where F1 not only doesn't suffer from being on a streaming service instead of ESPN, but it actually grows further.

1:02:51So this is an interesting bull case. Given Apple TV's lower price point relative to a standalone ESPN streaming service, much less a cable bundle. What is clear is that this deal certainly makes a lot of sense for Apple than the MLS deal did. If the company can capture all 1.3 million of those current viewers and they are incremental to current Apple TV subscribers, then the company will break even on this deal. Those are very generous assumptions, of course, but not nearly as generous as whatever assumptions drove the company to spend double the money on a sport no one watches, which is MLS. So he's taking shots at MLS because there was an interesting quote in here from something else.

1:03:28What was this? It was from The Athletic, again, talking about the North American Soccer League general managers. One common theme from general managers, the Apple deal, which is Apple's deal to air MLS, is proving to be too much of a barrier for new fans. Wait, they want the content to be completely free? New fans just don't want it on Apple, apparently, or the GMs don't want to be limited to the Apple audience, apparently. They want to be on ESPN or something. Oh, okay. Apparently. So the GMs say, hey, if we want this to grow, we're the general managers of a bunch of different MLS teams. If we want to grow soccer in America and grow MLS, change the format, change the salary cap.

1:04:10Why don't they just pivot to football or basketball or baseball if they want to? Yeah, what's wrong with just throwing around a pigskin? Yeah, change the format. Just turn it into American football. I have to say a football is one of the best things you can buy under 50 bucks. Sure. Period. For sure. that's non-food. I mean, the value you can get out of pigskin is absolutely insane. The return on pigskin. Yeah, it's fantastic. He says, allow us to bring more attractive players. I didn't realize that MLS had a salary cap because I thought they were signing massive deals with these legacy, famous players.

1:04:49Who is the player that went to Galaxy? Isn't that Messi or something? Yeah. Is that right? I don't know. Well, this is bad because I don't know. out of our territory. There was someone who went to Miami. There was someone who went to the LA Galaxy. I don't know. Anyway, this GM says. Yeah, so Messi plays for Inter Miami. Yep, and it's a huge deal. It's like AI researcher money, remember? That's how we were comping it. And the GM said, but they also have to end the deal with Apple. It's bad for the fans. Yeah, so David Beckham. David Beckham, that's right. in the MLS. And then you have Zlatan Ibrahimovic as well.

1:05:29So they'll pull in some superstars, but usually towards the end of their runs. So the GMs of the North American Soccer League MLS, they say, I think we have to be on more linear outlets. We have to be on ABC, NBC, Fox, or more regularly. More regularly because I think a lot of people, a lot more people watched our games when we were in that space. I think Apple and the whole streaming thing is really innovative, but it's probably where things will be going. But I don't think MLS is the leader of that. I don't think enough has been put behind the subscription model. You're in a different league when you're a subscription-based league.

1:06:08I don't think the effort has been put in like it should be. It's like selling tickets. You need people out there selling. You can't just hope that people are going to sign up. And so, yeah, interesting. The risk for F1 is that the series, which has massive growth, is going to conscript itself to the streaming backwaters, says Ben Thompson, just so it can make a few more bucks in the meantime. So that's the risk, is that F1 goes and gets stuck in subscription land and no one can just turn on the TV and see it, and the 1.3 million fans don't actually migrate over and they say, I'll just catch the highlights or I'll just watch Drive to Survive on Netflix, instead of setting up a new subscription.

1:06:48but if it's truly F1 truly does have a younger audience, does have a more female audience, they might be, that might be what gets them to turn on Apple TV streaming at least. Yeah. Anyway. I still get so confused by all the different cable plans. I watch F1 on YouTube TV, which I guess is through ESPN. It's like, I guess that will go away. And then I would have to subscribe to Apple. So they would get a net new. I actually don't subscribe to Apple TV. You don't. I don't. Not, not for any reason. I just, I never want to go through the, I just don't watch a lot of television. And I don't want to go through the hassle of like signing up for a new service.

1:07:26Yeah. I feel like recently I got a new iPhone and it just like came with Apple TV Plus. And I just like clicked the button and didn't unsubscribe. And then I've been on that for a while. So let's go over to Ben Thompson talking about Google earnings. He has said, I've repeatedly laid out the theoretical case for why AI is potentially disruptive to Google, and we asked him about this when he came on the show. My question was like, is there a world where revenue and profit from generative AI products is actually not as counter positioned against Google in the sense that like if they had launched the Gemini app first and become the ChatGPT, they'd probably be seeing a drop in search volume, but then also seeing revenue spike from an even more popular Gemini that's monetizing even better.

1:08:14And was it a question of them just like not being able to take that pill or was it more about like the risk and PR nervousness than actual structural? The thing that Ben said that stood out the most to me, and I'll probably butcher it a little bit, but he effectively was saying like, it's really hard for companies to change who they are. When you look at Google's mission statement to organize the world's information and make it universally accessible and useful that is so deeply aligned with ai it's like what does chat gpt do like organizes information and makes it useful right agents like chat gpt agent is making that information useful yep um and so it just feels like again like generative ai is like deeply aligned with the core mission and so it's easy to see you know them continuing to win here yeah i i I think the problem is disruption comes when you create a product that is not as good, but the financials are structurally different.

1:09:17So the idea of if AI disrupts a law firm, you look at this product, or even, I don't know, what's the classic example of disruption that people go through? I don't know but like this idea of like the big thing was innovators dilemma yeah in the in the innovation the example is like a new product comes to market that does something 90 % as well and and so it's like unacceptable to the people that are buying the current product but then over time it gets better and better and better until it replaces the current product and And so there is a world where if they had just changed the Google search bar to just be like, this is just an LLM now, people would have been really, really disappointed with that shift.

1:10:08And they would have been like, I want to go back and ripping that Band-Aid off to the tune of, what,$300 billion a year in search revenue would be really painful. So they had to take a more iterative, like, step-wise improvements. But it seems like they're doing well. And Ben Thompson is kind of echoing this. He says, once again, and however, I have to come to Google's defense. All available metrics suggest that the company is doing quite well. Indeed, I would go further. You can make the case that the company's biggest mistake is not going harder. And so they flipped the switch on cloud. Their infrastructure spending is through the roof, as we mentioned.

1:10:46So after the Q4 2024 earnings and their announcement that they were spending$75 billion on CapEx, then Google Cloud's revenue numbers disappointed, but this was because they didn't have enough GPUs and they were actually constrained. So they missed on top line, like they didn't bring in enough revenue, but their margins actually improved. And so what that means is that there was so much demand that they had pricing power and they could say, no, we're not giving you any discounts because everyone wants these GPUs right now, or the TPUs, they want our infrastructure. So we don't need to sell them at a discount.

1:11:21And so their margins were really good. And what that revealed was that they were capacity constrained. And that justifies the bigger CapEx spend that they're going into right now. And Google is still the polymarket. Which company has the best AI model end of 2025? So December 31st, there's been$1.5 million in volume. And Google is still sitting comfortably at 46 % chance of being at the top of LM arena at the end of the year. Yeah, this is such a crazy supply constraints metric. So the Google CFO, Anat Ashkenazi, said on the earnings call, in cloud, as I mentioned, the demand for our products is high, as evidenced by the continued revenue growth and the cloud backlog.

1:12:06Guess how big their cloud backlog is? Just the demand for Google Cloud products that they can't fulfill because they haven't built the data centers. But if they had more capacity, they think that they could deliver this. $106 billion. dollars. That is so much money. Great. Honestly, more businesses should try to put themselves in the position. Yes. $160 billion of demand. $106 billion. We try to not give business advice. Yes. Well, it's just like every business is different. Every founder is different. But in general, if you can develop a demand. It's a good call for like a YC company. Like if you go stage of demo day and you say like, yeah, we have LOIs and we have some demand backlog.

1:12:50We have$106 billion of demand. But we're unable. There was actually a YC company yesterday or two days ago that was getting a little bit roasted because they were like, they launched a product and they were like, wow, today was insane. Our servers, our servers went down immediately and you could see the user chart and they had like 250 users. And some people are like, wait, like your entire product went down on 250 users. That's ridiculous. Anyways, but happy for their success. Yeah. Well, let me tell you about Figma. Think bigger, build faster. Figma helps design and development teams build great products together.

1:13:26You can get started for free at Figma.com. And so this, so he keeps going into the CapEx. Wait, before we do that, Figma Make is generally available today. You can go to figma.com slash make and just start building various products. Tyler has been using Figma Make to make a product that we'll be releasing very soon. Very excited for that. We will announce that soon. So from the earnings call, given the strong demand for our cloud products and services, we now expect to invest$85 billion in CapEx from 2025, up from a previous estimate of $75 billion, just a$10 billion incremental investment. Absolutely massive.

1:14:08Our updated outlook reflects intestinal investment in servers, the timing of delivery of servers, and an acceleration of the pace of data center construction, primarily to meet cloud customer demand. The challenge, Pichai cautioned in an answer to an analyst's question, is that it takes a while for these investments to come on board. So of course the risk is like you overbuild, but there's certainly no evidence of that given the massive backlog. So the other interesting thing that Ben dips his toe into, so Ben Thompson, Mr. Techery, famously does not get caught up in trade deals and non-CEO employee shifts.

1:14:49They're below his line. They are below his line. They're below his line. But he had to chime in on the CFO change that happened at Google. So he says, I'm always hesitant to delve too much. I like that he's thrown in a delve. You know it's not written by AI, but he's baiting. Yeah, he's baiting for sure. He's like, how dare you accuse. He's like, you can go back and look at how many times. I've used Dell a million times. I created Dell. I coined that word. I love that there's a YC company called Dell as well. It's doing well. So he says, but it's interesting that the earnings call was Ruth Peratt's last one as CFO.

1:15:29So Peratt earned a lot of plaudits for getting Google's spending under control in the late 2010s. But what seems clear in retrospect is that$52.5 billion that Google spent on CapEx in 2024 was too little. And so he's kind of like noodling on this idea that maybe the CFO was too cautious going into an AI boom. You could lose your job over that. called, maybe Ruth Peratt was calling top signals like us. It looks terrible. Fortunately, we don't lose our job. There's nothing wrong with calling top signals. There's something wrong with underinvesting. You get in hot water if you're specifically calling the top.

1:16:12Yes. Trying to identify top signals is more of a metagame. Yeah, yeah, yeah. So basically, Google, it does seem like Google underinvested in CapEx in 2024 based on demand, wound up with that massive backlog, missed on top line, couldn't make enough money, couldn't generate enough revenue, had higher margins, that's great, but didn't deliver on the cloud side on the actual scale. So Ashkenazi's calls, meanwhile, have repeatedly reiterated that Google Cloud is particularly supply constrained, they don't have enough servers, and the company has now surprised investors twice in six months with the scale of its CapEx plans.

1:16:51Let's go. It says, this, in my opinion, is incredibly bullish for Google. Go back to the disruption lens, which we were kind of noodling on earlier. The exact avenue from which you would expect management resistance to a disruptive innovation to flow is the CFO office. The CFO should be resistant to disruptive innovation. And when you look at the history of companies that got disrupted, the CFO is saying, we have a good business. Let's just keep printing cash like this new thing. Let's not worry about it. Let's not know. We know you see Exactly. Are you guys seeing the numbers? Yeah, but like for a lot of those companies that got disrupted It's like they were printing cash high dividends for decades even after the disruption happened the next the iPhone comes out and in order to actually Do something to compete they have to completely go into startup mode They have to burn a ton of cash cut their dividend stop stop stockpiling cash, issue debt, do a ton, raise more equity maybe.

1:17:48Like they have to become a new product development company. And it would be very, very difficult, usually. Blackberry's annual revenue in 2005, 1.9 billion. Blackberry's annual revenue in 2024, 580 million. It's a cybersecurity company now. They bought a couple cybersecurity assets while they were valuable, while they were like, you know, while the stock was up. And then eventually they wound down the phone business and just kind of became a cybersecurity company. Because obviously they had a ton of enterprise contracts because Blackberries were sold into like large enterprises as, you know, work phones.

1:18:30Very few people had Blackberries as like everyday phones. But so they had all those, they had like solid sales team, solid connections, bought a new asset, and were able to continue the business, even though obviously it's not the company that it once was. So Ben Thompson goes on to say, there does seem to be a major shift in mindset in terms of the company's willingness to lean into AI, particularly for a segment Google Cloud that even in the best case scenarios is significantly lower margin than the company's core business. What's interesting about that margin point, however, is that it too is another reason to be bullish on Google's prospects.

1:19:07Google is the only company, we talked about the TPU thing, They're the only company with an at-scale ASIC alternative to NVIDIA's GPUs, which should give them a meaningful cost advantage to that end, to the extent that cloud compute becomes commodities. At scale to a point where they're going to be able to support SSI. Which is crazy. Not just their own needs. And then there's also another question. The dynamic that's interesting is like OpenAI needs to massively scale infrastructure. And as we covered earlier this week, commit to spending tens of billions of dollars with Oracle. And their revenue today doesn't support that.

1:19:44Obviously, their growth trajectory is absolutely insane. But OpenAI being in a position where they are competing head on with Google for this very, very critical consumer use case, search, knowledge retrieval, and ultimately usefulness, it is an extremely tough position for OpenAI to be in. Yeah. So the other hyperscalers are working on ASICs that are alternative to NVIDIA GPUs, but they all seem to be following the similar path, trying to get line time at TSMC, not fully at scale. Then there's also the question, and I think a lot of people's mind is like, is this the end of history? Is there something that's coming down the pipe that could disrupt the NVIDIA GPU monopoly, the CUDA ecosystem, or even the Google TPU.

1:20:29And Semi Analysis has a funny meme here, way down in the stack, about the next generation of chips that have been pitched from startups like Etched and a few others. So Semi Analysis says, although baking transformers into silicon may sound cool, it's mostly just a marketing slogan, 90 % of transformers, flops, are just GEMMs and 256 by 256 or 128 by 128 systolic arrays in TPU and in TPU Tranium are already optimized for these. Even modern GPGPUs with tensor cores are optimized well for GEMMs. Even if you bake transformers into silicon, aka just create a giant systolic array, most of your dye area will still be taken up with SRAM cells that's the memory, and you will still face the memory wall since your HBM memory bandwidth will be the same as GPGPUs, TPUs, and Tranium.

1:21:26And so the meme is transformers are just 90 % matmoles. George Hatz had a similar analysis or take just saying that if you look at the actual energy use of GPUs right now, there isn't that much opportunity to squeeze more value out of them. They're pretty efficient and most of the most of the energy that goes in goes into these very very specific math Calculations that are already pretty optimized we did hear from someone something about the This is from Martin Scully that Jane Street or was it was a Jane Street? one of the high frequency trading firms figured out how to run one of those very very basic math mole Calculations on a GPU more efficiently and I guess kind of open-sourced it or something or got out into the into the research world So it doesn't feel like at this moment, I still think that there's a interesting bull case for the etch crew in some ways, in some niches or something, some specific models.

1:22:23But it doesn't seem like there's some new disruptive chip architecture that's gonna come out and obviate the need for both Nvidia GPUs and Google TPUs. And so Google's very well positioned, as Ben Thompson is writing. So he says this should give them their position that they have an at-scale ASIC alternative to NVIDIA GPUs should give them a meaningful cost advantage. To that end, to the extent that cloud compute becomes commoditized is the extent to which Google actually has a margin advantage. Because if all of the clouds are commoditized, but all of them are on NVIDIA, and then Google is taking the NVIDIA margin basically from their TPU, they should be in a very good spot.

1:23:04This is to be sure a bit weird Perot gained these plaudits those plaudits because there was so much waste in Google to cut Which was downstream of the company's amazing monopoly and margins and search Which hardly seems like the recipe for a structural of cost advantage But here we are Sundar is gonna tell every employee we're cutting your daily massage allowance three massages down to one We're deeply sorry, but we need to get fit Got a good fit and you got to get on Vanta automate compliance manage risk improve trust continuously Vantus trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation.

1:23:39Whether you're pursuing your first framework or managing it. It was great talking with Christina yesterday. She's an absolute dog. Boardroom general. Boardroom general. She put the KPIs in orbit. She really has. She really has. Did you see that? Did you see that chart that Reed shared? Yeah, this chart. She says, Andrew said, Christina often talks about stacking rice on the chessboard. And I didn't see this until after the show, but I was like, it seems like you guys are just chopping wood. Like, yeah, just out there, like putting in the work. Just, you know, a couple percent here, a couple percent here.

1:24:14Just very consistent growth, very consistent growth, very smooth growth curve into a monster of business. So congrats to everyone over at Vanta on the new round. And we will go back to Google. Google. So, more broadly, the way in which Google seems to have flipped the switch in terms of going all in on AI along with meta spending on AI talent really does strongly suggest that AI in the end is a sustaining technology that favors the incumbents most of all. Both see a line of sight to new revenue streams and critically, both can fund AI from profits, not speculative investment or debt. And, of course, both have distribution, including search.

1:24:50Sometimes the empire strikes back. I love that. So there were other takes from Search. You'll have to subscribe to CertEquery to get the full analysis. You've got to go and subscribe to CertEquery. If you're not subscribed, what are you doing? But the interesting takeaway from Search is that it seems like Google's being a little squishy about, hey, we don't want to report certain KPIs anymore. So they used to report paid clicks. And now the chief business officer, Philip Schindler, is saying, and on your paid click question, look, to be very clear, I think we said this before, we manage the business to drive great outcomes for our users and attract our attractive ROI for our advertisers.

1:25:33We don't we actually don't manage to pay clicks or CPC targets, which is fair and good. But it's funny because Ben Thompson's like, but I want that data. That would be helpful to me. I mean, when a business has a metric that they tell you is important for a long time and then they suddenly tell you it's not important. Don't worry about that. But it does make sense. They're a huge business. They've moved on to bigger and like higher levels of abstraction. Just look at the growth in tokens. Yeah. Don't worry about anything else. What he says is that there are product changes and policy changes that actually drive better monetization, but at the expense of paid clicks.

1:26:07And that's probably AI searches and stuff like that. You'll see in the 10Q paid clicks were up 4 % year on year, but a number of factors affecting this these metrics from quarter to quarter Such as advertiser spending product changes policy changes user engagement So it's really important when it comes to pay clicks and CPC to avoid drawing overly broad conclusions solely based on these metrics Don't put me in the truth zone on this he says So Ben Thompson's hey, this is exactly what you said I don't even think you were you pre read this but you basically have Ben Thompson working in your head because this is what I said When Ben Thompson came on the show, I was like, I think your way of thinking has been so ingrained into my mind that I think that I have an original thought and you've already thought it.

1:26:49Okay. So this is what he says. I haven't read the article. It says, the more that management tells me not to pay attention to paid click rates, the more I want to pay attention, which is exactly what you just said. Regardless, once again, the fact that paid clicks were up 4 % and search revenue was up 12 % makes it clear that search growth is primarily being driven by higher prices. And so the actual number of clicks is up 4%, but revenue is up 12%. That means that they're monetizing each click better. But people are obviously going to read into, oh, paid clicks aren't growing that fast. Like the actual pie isn't growing that fast.

1:27:27They're just getting like, it's basically like, you know, once Instagram reels is popular, everyone's watching it, then you just got to put more ads in the feed. Right. And that's kind of that seems like what they're doing. And that's what's driving search revenue up 12 percent. AI overviews is another question. This is a funny one where basically the chief business officer, Philip Schindler at Google, basically says that AI overviews are monetizing as well as other Google searches. And Ben Thompson says, given the fact that the vast majority of Google searches don't monetize at all because people just click on a link and that doesn't monetize.

1:28:07Yeah, oftentimes if you're searching for information, you can have very low purchase intent. Yeah. Like how many times a day do I search for a specific fact and never would have... You could show me the best ad in the world and I wouldn't click through because I'm just looking for a fact. Yeah. So if you're looking for something like, you know, Hulk Hogan's age, that's not a purchase intent. If that comes from an AI overview or it comes from a... you know how they used to have those like knowledge boxes or like we would pull from Wikipedia. Or if you click on Wikipedia, none of that is making Google any money.

1:28:42So it really doesn't matter the UI or the actual underlying technology to get you that answer. And then Gemini is on absolute tear, really remarkable. How many monthly active users do you think the Gemini app has? These are MAUs, not DAUs. On the mobile app, web app combined? The Gemini app, yeah. I think this is probably across mobile, web, and desktop, but I would assume mobile. 70 million? 450 million. Oof. Big, right? And it doubled. And that's signed, like, I guess, I mean, they kind of get the, it's kind of a, they have a cheat code because everybody already has a Google account, so they're, like, signed in.

1:29:21Yep. But in terms, I don't know. They're monthly, and what we know from semi-analysis is that they're not taking share of queries that much, but 450 million downloads on an app and monthly active users is pretty, pretty high. And so if there's a world where Google can build a business around, if they can bring in ads faster and keep the Gemini app cheaper and offer better products and you get deep research, you get agent, you get the$200 tier, the ad-free, if OpenAI and ChatGPT has a$200 tier that's ad-free, and then Google's giving you the same product and the same experience but with ads for free, like that feels like an Android iOS battle going on.

1:30:06That feels like something that could actually be pretty sustainable and kind of drive this like little bit of a duopoly. I don't know. We'll have to see how it goes. But daily requests grew over 50 % from Q1 to Q2. And I think everyone is pretty surprised by that. And I was also surprised when I went and pulled up the Gemini app, when I went to go download it, the number of five-star reviews is like hundreds of thousands. And I was like, okay, this is very serious. And that reflects the actual number that they shared, 450 million monthly active users. So still a lot of work to be done. I was very frustrated when I went to go get VO3.

1:30:48I got the Gemini app, and they were advertising VO, but I couldn't access it. Is Gemini a default in Android yet? I don't know. I imagine that it has to be pre-installed in the next round of Android phones that go out. Why would you not want that pre-installed in there? But I would be surprised if that's what's driving it. Because, I mean, how many Samsung Galaxies have they sold in the last quarter? Probably not 200 million, right? I doubt that that's what's driving the growth. But maybe that might be an interesting thing, how many of them are pre-installs, pre-loads. But even then, you have to open it to become an MAU.

1:31:24But yeah, maybe they're testing. Maybe people will churn and go back to OpenAI and ChatGPT. Android users have had access to Google Assistant for a long time. That's getting phased out. It's just going to be Gemini. Yep. Intel now expects to have 75 ,000 employees at year end, down from 116 ,500 in June of 2024. That's basically one year ago. That's a massive cut. Nvidia is on the other side of the trade. Nvidia CEO said they now have 42 ,000 employees yesterday, up from 36 ,000 in January of 2025. Massive shifts. It's crazy to think about the market cap per employee difference there. It's pretty remarkable.

1:32:07If you're cutting costs, you've got to get on ramp. Time is money. Save both. Easy is corporate cards, bail payments, accounting, and a whole lot more all in one place. So the news is that Intel has a ramp problem. Yeah, they really should get on ramp. Lip Bhutan. I know you're listening. You should get on ramp, Lip Bhutan. So this is from the Wall Street Journal, the business and finance section. Intel is going to lay off 15 % of their workforce. Chip giant stands at a strategic crossroads. The CEO warns, no more blank checks. Intel detailed dramatic steps to revive its sagging fortunes, outlining layoffs for 15 % of its workforce and scrapping plans to spend tens of billions of dollars on new chip facilities in Europe.

1:32:46Ooh, bearish for Europe. I didn't realize that was going on. The chip making giant said Thursday, it would refocus its strategy on the highly competitive market for AI chips, regaining market share in personal computer processors and developing its advanced 14A technology to sell to large customers. It's like, okay, we're gonna narrow down. We're just gonna do three incredibly difficult things. We're gonna compete in the most aggressive AI chip market, where we're not just competing with Nvidia, but also the TPU from Google, all the upstarts, Grok, Cerebras, all these different companies. So we're going to like go from zero to one there.

1:33:25And then we're also going to turn around our personal computer processing market. Bold. Bold. Intel, which has long dominated the business of making chips for laptops and desktop computers, fell far behind competitors like NVIDIA, AMD, and TSMC after it failed to anticipate the surge in demand for the powerful chips fueling the artificial intelligence boom. Lip Bhutan, the CEO, the new CEO of Intel after Pat Gelsinger stepped down about a year ago, I believe. He said, there are no more blank checks, he wrote in a memo. Every investment must make economic sense. Love to hear that. Exactly what you want to hear from us.

1:34:04What is the nominative determinism of Lip Bhutan? I hate to put you on the spot. Hitting the beach, getting a tan? I like that. I can see it. I can see it. Maybe if Intel doesn't work out, he can get into cosmetics. It's like get a tan with this tanning oil, get some lip balm, lip balm tan. Yeah, there's something called lip blushing where I think it's like a mild tattoo. So maybe if this whole semi thing doesn't work out, he could get into the lip blushing franchise game. Yep, I agree. Revenue in the June quarter was roughly flat at$12.9 billion, beating Wall Street's expectations. The quarterly loss, though, widened to$2.9 billion for the quarter from a$1.6 billion loss in the year earlier period.

1:34:53The results represent the company's sixth consecutive quarterly loss, extending its longest streak in 35 years. It's got to suck to be in a position where, computing broadly, computers are doing incredibly cool things. AI is magic. We passed the Turing test and you're not a beneficiary. you're losing money and it's because of a bet on you know the server and these large-scale cpus and not getting into gpus and then missing mobile there's a whole bunch of things that went into it um so sales and intel's pc chip division the company's largest segment fell three percent from the year earlier period i remember about a decade ago i built a new you know massive pc rig to do uh cgi rendering on it sure was sure john you weren't you weren't building it to game as a gaming rig i did use it for a gaming rig that's john's vice yeah john's vice he said uh you there's market research i need to understand what the gaming market's going i need to understand uh the future of vr i actually to your credit i think i think uh you you beat your video game addiction I did.

1:35:57I haven't played in years. And so it's an interesting time for Intel. I have some more information here. Do you remember six months ago there was the rumors floating around that Elon was a potential buyer? I was propagating those rumors. And ultimately it feels like, you know, he, he got the, got the fun experience of a turnaround at Twitter. Does he want to do that again? Yep. I don't know. I mean, my take when, when he bought Twitter and turned it into X was that it was exciting. I thought that he could make it a lot better. He has in many ways made it a better product. We stream on it now and it feels like it's still a vibrant community and there's a whole bunch of new features.

1:36:46Good stuff, bad stuff, but overall, I think he put the company back in startup mode. They're shipping very quickly. Interesting things are happening, and he's making plays in an interesting way that I like. But at the time, I was like, okay,$44 billion. There's something like$50 billion from the CHIPS Act, maybe going to Intel and foundries in America. Run this back and marshal the same amount of capital. Let him buy Intel, turn that around. That feels like something that Elon would be uniquely equipped to turn around. and would put us on a very different path if he got into semiconductor manufacturing.

1:37:21But it would be a huge challenge and maybe it wasn't as important to him. So I don't know. I mean, only a week ago, a small company called AOL, AOL.com, was posting that is Elon Musk about to buy Intel? So this feels like very, you know, Dylan Patel on January 17th saying Elon's jet is in Florida, Global Foundry's jet is in Florida, Qualcomm's jet is in Florida. But ultimately, a lot of people were in Florida at that time. Well, if your jet's flying around the world, you've got to take your jet to a wander. Find your happy place. Find your happy place. Book a wander with inspiring views, hotel-grade amenities, dream events, top-tier cleaning, and 24-7 concierge service.

1:38:00It's a vacation home, but better, folks. And so Dylan Patel, speaking of Dylan Patel, he actually hung out with Lip Bouton at a conference, and he has this hilarious story where he clearly wanted to meet Lip Bouton and spend some time with him and everyone's coming up to Lip Bhutan asking what the future of Intel is and so he goes up and offers to make him tea and makes his tea for him and they sit down they have tea and they like and I think Dylan Patel really understands like tea culture and knows what makes for a good cup of tea in the same way that someone like a coffee snob knows about good coffee so they they have tea and he and Dylan Patel is kind of picking his brain and um and it It just feels like Liputon's overall goal is just layoffs, reduce costs, right the ship, refocus.

1:38:44And so what's interesting is that we talked to Ben Thompson that I wanted a clear narrative. I wanted something like, oh, it's obvious, just split the foundry and the design business, split up Intel into two companies, and that will solve all the problems. But everyone seems to agree it's more complicated than that because part of Intel's foundry business is that they design their own chips. And so they're both their customer and their supplier, and breaking those up might be more difficult. It's not a cure-all. It's not a panacea. And so it is more complicated. So there's not a super clear path forward.

1:39:18It's a lot of hard decisions. It's a lot of cuts to employees, and that's what we're seeing today with the 15 % layoff. There will probably be more in the future as Intel continues to downsize the workforce. Really, really rough for morale, knowing that the workforce will just be, you know, continue to get cut into, you know, like you said, probably not the last. Yep. And so they are focusing on the direct quote is refocus strategy on the highly competitive market for AI chips, regaining market share and personal computer processors and advancing the 14a technology. Now, the problem is that Intel is still more expensive than TSMC on a normalized per wafer basis.

1:39:57This comes from semi-analysis. So they have the Intel 3 node, the 18A, and that goes up against the N5, N3, and N2 nodes from TSMC. And across the board, Intel is more expensive on a per-wavere basis. So this is at their own fabs. They're trying to catch up. They're trying to create chips that are as powerful. But the name of the game is always cost. Yeah. Semi-Analysis says the company has cost discipline in its DNA. Talking about TSMC, Intel, not necessarily. This manifests in many ways. TSMC has more aggressive cost down targets and exercises its leverage on suppliers. It does not use the copy exact dogma that creates unnecessary overhead and resistance to improvements.

1:40:45Hence, Intel is now moving to copy smart. Are you familiar with the copy exact strategy? No. So when Intel built the original fabs, what they would do is they would build this. I mean, it is a incredibly precise process. So you can think of lithography is basically etching. That's why that company, that semiconductor company is called Etched because they, that you're etching grooves in a silicon wafer. And that's where when you put electricity through it, it goes through a series of gates and that's what a semiconductor is. And that's how you create magic. That's how you create magic. Yes. It's the, It's the spice.

1:41:19The dune analogy is the most important one here. But basically, you have to etch these grooves at its smallest scale as possible. So three nanometers. Silicon atoms are one nanometer. So you, in theory, cannot go smaller than one nanometer chip because the space between the atoms is only one nanometer. So this is incredibly small. And so you basically have to shine a laser or some sort of light or some sort of radiation to actually etch into the silicon to create the grooves basically. This is very, very high level abstraction. But in order to do that, they get these mirrors from a company called Trumpf, which is unrelated to Donald Trump.

1:42:02And Zeiss makes these lenses and they focus all this stuff and this liquid tin gets dispersed and then they bounce light off of it. It's this crazy process. The mirrors are so flat that if you blew them up to the size of the moon, you still would not be able to see a groove even this high. It's like the most precise process in every single one. By the way, Intel missed opportunity to create the TPU. Google's obviously owning that right now, but if Intel had said we're making Trump processes. The SPAC. That'd be good. I mean, they're already public, so it's kind of hard. What's the chip that's gonna be in the Trump phone?

1:42:42the golden the golden american-made phone that should be an intel processor really should who knows american-made so the the the semiconductor manufacturing process is so precise that apparently at tsmc like if there's an earthquake or anything like that everyone they don't even need to send out a notification everyone just knows go to tsmc because deal with everything because the slight change in like the road noise or slight could like miscalibrate the machines if it like rains too much there will be extra salt in the parking lot that will get tracked in even when they go into the clean room it'll get tracked in and the small sodium particles will throw off the yield so all of this is about yield they'll make a ton of these wafers there'll be small imperfections it ruins the whole wafer that's been a big problem with the wafer scale which is why tsmc getting any yield in arizona despite setting up you know this new facility so recently was very unexpected it's It's a miracle.

1:43:35Yes. And so the copy exact dogma was it is so hard to build a fab that manufactures semiconductors reliably at good yields that when Intel figured out how to make one fab, they said, let's make a second and let's change nothing. And so they build a building, they build the exact same foundation. They build the bathrooms would be in the same place. If there was two urinals in one bathroom, like there would be two urinals at the other one. Like everything was exactly the same. Basically extremely superstitious. Yeah, basically because they were like anything that changes, like if the water flows through the pipe in the bathroom at the wrong flow rate, it might throw off the amount of molecules in the air over here and the atoms over it.

1:44:21It's like, it's crazy precise. Right. And so that worked for Intel, but it had this problem, which was that every once in a while you do You want to make an iterative change when you're building the next fab, and you do want to increase yield by maybe not copying exactly and doing things slightly differently. And so now Intel's pivoting to copy smart, only copy what's actually improvement instead of just copying everything exactly. And TSMC has never held themselves to that same standard. And so customers are likely baselining the 18A Intel node against N3, three nanometer nodes, TSMC, given the characteristics.

1:44:59but Intel will have to be aggressive on pricing if they want to compete because they are not competitive on the actual cost of the wafer and so they would need lower margins if they want to compete and so you can think about Intel as having kind of like three feature products that people are focused on it's Intel 3 which is their 5 nanometer class that one is fabbed in Arizona and Oregon and Ireland these are at Intel facilities. Intel also has the Intel 18A, which is at the same sites plus Ohio, and this is competitive with the 2 nanometer class from TSMC, and then they have the 14A, which is supposed to be 1.4 nanometer or below.

1:45:41This is the most cutting edge, extreme ultraviolet, really, really aggressive lithography, and this is also made in America, which is great and these will compete with NVIDIA's Blackwell's and then the next generation Blackwell successor and so they're going head-to-head but the real question will be can they go head-to-head and still squeeze out a decent margin because the in the NVIDIA TSMC partnership is really really strong they both have good margins and they've really optimized for cost and reliability and yield and Intel has kind of lost a step there and so they will probably need to get on linear to make this work linear is a purpose-built tool for planning and building products meet the system for modern software development streamline issues projects and product roadmaps so lip bouton if you need an intro to the folks over at linear reach out no we'll make it happen reach out and and we'll figure it out so and Intel is of course down almost 10 % today market is not loving much of anything happening over there right now Yeah.

1:46:49So Semi-Analysis continues saying Intel, the home of Moore's Law, Gordon Moore, of course, worked at Intel and coined Moore's Law, the idea that the number of transistors will double every few years on a silicon chip, allowing for more compute power, basically at the same price. They're evaluating if it will continue at the leading edge. This is what moves the stock, in my opinion, more than the 15 % layoff. The layoff seems like reasonable downsiding, but deciding, hey, we're not even going to compete on the most advanced semiconductors, which is what Elon, Google, Anthropic, Sam Altman, every single company is like, give me all of the best and give me hundreds of thousands of the best.

1:47:31The rest of the stuff is like, okay, I'll go to anyone because I need a Wi-Fi chip in my toaster. So the quote from the 10Q, from Intel's 10Q is, however, we are unable to secure a significant external, if we are unable to secure a significant external customer and meet the important customer milestones for Intel 14A, we face the prospect that it will not be economical to develop and manufacture Intel 14A and successor leading edge nodes on a go forward basis. In such event, we may pause or discontinue our pursuit of Intel 14A and successor nodes and various of our manufacturing expansion projects.

1:48:12just and semi-analysis says just like that we could be talking about a tsmc monopoly and the death of american-made semiconductors forever very dark up next we have casey neistat recently the youtuber the creator he's over at mod retro now working on the chromatic which we've been playing in the studio working on the m64 how are you doing casey there he is Edelman, good to see you. Welcome to the stream. What's new in your world? How did the are those the nothing ear one? Give us a little review. Oh, yeah, these are fantastic. I had to take them off because the noise cancelling on these is it's like too good.

1:48:57And I'm at home right now. And my kids were screaming two seconds ago. But yeah, these things are fantastic. Yeah, we had Carl Paye on the show a week ago and he put them down. and I was like, I was too afraid to ask like, Oh, are those for me? Like, are you gonna leave those? I kind of want those. I need a new pair. I'll have to pick one up. You know what it is? I'm not enough of an audiophile to know what, if something sounds good or not. Like it's either good or it's not good. Yep. But physical switches, like buttons you can touch. Yeah. I really like and the like the Apple, I don't know what they're called.

1:49:29What are their AirPod Max's maybe? AirPod Max's. There's no on off switch. Yeah. Like I can't. There's a digital crown. I need an on off switch and these have that. I like that. It's key. Yeah. Are you a big teenage engineering guy? It feels like kind of like that, they're almost coining like a trend that's like becoming more mainstream now. Teenage engineering is the only company whose products I buy religiously, even though I have no idea how to use any of them. The same thing happened to me. I bought the little keyboard. I'm a musician now. Couldn't figure out how to make a song. I use it. I love it.

1:50:05It's amazing. It's just so beautiful. It's so beautiful. Someone that cares that much about the craft, I want to be part of that. Support them unconditionally. Yeah, so tell me about Mod Retro. How'd that come together? What is the news in your world? You know, the Mod Retro thing is really funny because my video says all this, but I'm a big retro gamer. I'm guilty of sometimes playing Call of Duty on my Xbox but it doesn't work out when you got a wife and kids. You're not being guilty every every man should have an allocation of time daily for Call of Duty you know getting on rust with your boys.

1:50:43I'm so close to that W and then the door comes flying open the children come running in it's challenging but I'm 44 so like Apex of video games for me was like 1989 i think getting a game boy the first year they came out for my grandmother for christmas and like you guys are younger than me but before that all we had were those like led lcd games that were like really janky like the tiger games and they were terrible and the first time i turned on the game boy and like saw the nintendo come down i was like holy this is such a moment um and then nintendo 64 came out when i was i was in like just getting into high school as a freshman we used to sneak out of high school get on the city bus like the the regular bus and then drive two towns across and then walk a mile and a half to toys r us to sit in toys r us and play the demo of mario 64 when that thing came out i think it was in 94 so i was 12 or 13 years old yeah so i love that stuff and mod retro when i first learned about it when I first learned about the Chromatic, their Game Boy, I thought it was really stupid.

1:51:54I didn't understand. Because you can get those Chinese ones off of Amazon for$50. And a friend of mine was like, no, this is great. They're doing great things. Do you want to talk to Palmer about it? And I'm a huge Palmer Lucky fan. And I was like, I'd love to. And I don't know that I've ever been evangelized so much in my life. Like by the end of that call, he didn't just convince me, but I was like, I felt like an idiot for not seeing what Mod Retro was. And then as I got to know Torin, who is the CEO of Mod Retro and understand the vision for the company, I was just so like overwhelmed. I was like, this is the most like beautiful vision ever.

1:52:36I don't understand the business of it. It makes no sense to me. But the fact that these guys have the guts to do this, like, can I be a part of it? And I think I pitched back to them what I understood the company was. And they're like, that's it. that's what we want to say and i was like all right give me a job and my job will be to figure out how to communicate that and we'll make videos and stuff and they're like sure but we're not going to pay you and i was like great i'll take a business card and um it's been great working with it i'm also i'm an investor in mod retro i have a vested interest in them succeeding but i mean that's not the that's not where the passion to be a part of what they're up to comes from for me.

1:53:14Yeah. So many places we could go with this. This is fantastic. What, yeah, do you think that there's a world, I mean, I love the handheld gaming stuff. My experience having kids was I stopped playing console games. The N64 was actually my first console ever. And, but once I started - What was your game? Super Mario 64 for sure. GoldenEye was big. Big head, golden gun. You got to do that. and then a couple other donkey kong and uh was never really into the mario kart racers but then smash brothers kind of took over and that was the real competition with everyone eventually um i think what i think what's exciting to me is like building new new heart consumer hardware that will still turn on and work and bring joy 20 years from now i had i had the the game i have like my game boy pikachu edition from growing up and i when mod retro came out i went and found it and I turned it on and it worked.

1:54:14And that was like such an amazing moment for me because like when like I haven't, I've got old iPhones laying around. I've never been like not one. I've never been like, oh, I should turn that on. It's going to be fun, right? Because it's like it's not evergreen. It was of the moment and you just move on. And so I think if Mod Retro can do anything, which is like make consumer hardware, which is so disposable today across all these different categories and make it so that, yeah, you're going to get your Mod Retro or your M64, you know this year and then you're going to turn it on in 30 years and like you know bridge generations yeah yeah you know it's i think there's there's it's easy to sort of shit on um planned obsolescence because it is real i think of that like we woke up my house woke up this morning at 7 30 a.m because the refrigerator repairman finally showed up and was banging on our door at 7 30 in the morning the dog was freaking out because our two-year-old refrigerator doesn't work and this is a refrigerator that has wi-fi there we go let's give it up for wi-fi everybody's always everything it doesn't work it doesn't work and when i think about that it's like that refrigerator that we had as kids with the one big heavy aluminum door like it just worked it worked forever but in order to keep selling shit you have to keep coming out new things i think that's the negative of planned obsolescence but i think when it comes to consumer of technology, there is an argument for having to keep up with the rate of innovation.

1:55:43You know, like the new phones that come out every time you get a new phone, it does do something that your other phone didn't. So there's maybe a reason for that. But I think with that sort of tidal wave of innovation that feels faster now than it ever felt when I was young, I think we lose some great things. And, you know, my understanding of mod retro, at least what I want it to be, and I think what Palmer and what Torin also want it to be is like, let's identify consumer electronics that people just love, like had an unbelievable relationship with. The love I had for my Game Boy, I don't know that there was another thing that I owned through my adolescence that I treasured more than my Game Boy.

1:56:25And let's bring them back and let's do them justice. Let's build them so they last forever. I think Palmer's quote when I was interviewing him was, we don't want to build another game boy we want to build the last game boy like the last one that ever needs to be built and that's the vision with m64 as well like you can get emulators that kind of they kind of work um but let's let's build the thing that that you know you and i had john when when we were kids and let's have it last forever and i you know i just think there's some so much romance in that when you start digging deep you can start to see products everywhere and you know Mod Retro is tiny for a couple of people working out of a small office.

1:57:04But like the list of products that we want to build, the list of ideas that we have is endless. And that's like a that's a really exciting thing to take on. It's also such an interesting company because you're trying to recreate things of the past that were good products and you want to improve on them. But you need to stay true to the original product. otherwise you know what do you I mean it's not to say that that mod retro couldn't one day create you know novel so totally novel products but it is like an interesting constraint and challenge and you actually have to it's it's really it's in some ways it's easy because you know exactly what you need to build but in other ways it's harder because you're taking a product that was almost perfect in its original form and still like you need to make it it needs it should be better otherwise you know what are you doing Yeah, you know, like one interesting challenge, and I'm not the right person to speak to this, I'm not the technical guy, but to make the screen match the old Game Boy screen was an exhaustive process.

1:58:08So when you buy one of those handheld emulators that looks like a Game Boy, the Chinese made ones, they have fairly high pixel density screens on them. So in order for them to give the look of an old Game Boy, you're using multiple pixels to emulate a single pixel. So it's inaccurate. And real psychopaths, I'm not one of them, but I appreciate it, real psychopaths on Twitter have done like this super zoom into a pixel. and you realize that Mario is like jumping a half a pixel too low or a half a pixel too high within the frame because of the limitation of the screen. And Torin and Palmer's like religious obsession with matching that screen was one of the hardest things to overcome.

1:58:50So it was actually harder to build something that matched the quality of a product that's 20 years old than it would be to actually get the latest and greatest screen and just plug it in there. Yeah, I remember Palmer saying something about like a couple of the companies the screen is actually rotated 90 degrees So instead of the scan lines coming down this way they go across this way and then they just transform it at the last second But it's like this bizarre bizarre thing that you would never really notice of but it's this craftsmanship that actually you feel I feel like and it feels like something that's just like been lost in this like everything's disposable Everything's junk everything's a knockoff culture and it feels like I I don't know, like it just feels like it's worth it to have stuff that exhibits craft and taste.

1:59:36And even if I don't, even if I'm not the one that can tell that Mario is one pixel too low when I do the jump, like the fact that the craftsman worked on the product means something. It's hard to put an exact like quantitative value on it, but you feel it, right? That is the gamble that is the company. Palmer said that in my video, but he's like, you know, maybe nobody cares about this, but but weirdos like you and me, but that's enough. And I think it's like, there is an argument that's like, well, who cares if it's off by half a pixel? And if you're one of those people, totally cool. You're well, there's plenty of products in the market for you.

2:00:11But if you're someone who does care, if you're that weirdo that buys teenage engineering products because you just value the integrity of the product so much, you want to have it, then, you know, there's a place in this world for companies like Mod Retro. Yeah. What do you think about, like, the temptation to just make, like one small change, like the chromatic has a USB-C port on it. That's a huge upgrade. But you could easily turn this into like, well, like, you know, we have the technology to make the M64 handheld. And then, you know, then you're in switch territory. And all of a sudden it's like a completely different product, right?

2:00:45Look, that's ever present. And that's the problem with sort of limitless, you know, like when Nintendo was building this, what was almost 40 years ago, 35 years ago now they were so limited by what the technology enabled them to do like when you think about the sega game gear i don't know if you've ever had one of those great product yeah it's this big but it was the first one that had really great color screen on it and it took six double a batteries instead of four like the game boy but the battery life on it was like 40 minutes yeah and um do you remember the n64 like expansion pack that you put in to like double the memory that was yeah dude i remember that what about the rumble pack that shipped with starfox that was like the greatest innovation ever my mind exploded when the controller shook yeah dude he's like uh like these add-ons because like they couldn't bake it all into the first product and that's that's indicative of the limitations of what tech can do totally and when you look at like you know i don't know what samsung announced last week at two weeks ago unpacked and you're looking at what the limitations are today of like a folding screen that's as thick as 10 sheets of paper you realize how far we've come.

2:01:51But when you go in the other direction, there's kind of no limits and you're looking to make something that was made 30 years ago. The problem is like, where do you draw the line? And I think that's a really, it's a really interesting thing to try to overcome and confront. Yeah. What can you teach me about the lore of, in the video camera world? I was looking at a cool new music video and it had this fisheye lens and this grain and I was kind of digging in. and it seemed like they shot it on like a Sony skate camera with mini DV tapes. Like this feels like something that I was looking like maybe I could buy one on eBay, but it's probably broken and I want someone to go remake it.

2:02:27But then of course you always have like, oh, you could just like throw the filter on there and premiere or whatever. But what are some of the iconic video cameras or just like creative tools that might, you know, be worth revisiting at some point? Yeah, it's such an interesting examination. And your question's great because my family and I are out. We're in Massachusetts for summer vacation. And there's a lot of kids around. Like we went and got ice cream last night, a lot of teenagers around. And a lot of these kids come up and they ask me for selfies. And the amount of teenagers that come up to me and ask me for selfies, and they're carrying the point and shoots that we had in like the 2010s, like before your phone camera was good enough, they all carry them.

2:03:12No one makes that camera anymore. which means if you have one you have an old one yeah and every one of these kids has it and when i i ask them because i'm curious like why do you carry that they're like i love the way it looks and i think we've reached this point like iphone cell phone photography it all looks still perfect in a way that it almost becomes artificial like i think the iphone 5 was the last iphone where when you took a picture just sort of took a picture and then after that every time you take a picture now on any modern smartphone it takes a picture and then runs it through an algorithm to make the picture sweeter and cleaner and sharper and better for you.

2:03:47And I think there's sort of this yearning for something that feels more real and authentic. It's like you look at a, you're at a store looking at a picture, you know, a camera from a picture from, from 2010, uh, or a camera or a picture from an iPhone today is like you're at, you're at the grocery store and there's the organic apples and they look, they look good, but like they're a little fucked up and, and, and, you know, they may be like whatever part of it's kind of rotten and then you look over and you see the perfect apple and like intuitively you know that you're like it's a little bit too good to be true that apple over there you know yeah and i think i don't know the other thing that's real is removing the camera like adding the camera to the phone has been one of the greatest innovations of this century right in in many ways but now removing it removing the camera from the phone and being able to leave your phone and just bring a camera around is also an innovation, right?

2:04:43Going backwards. And I think that's the other thing that kids like and I've found that's nice. If I'm going to the beach with my kids, it's nice to be able to bring a camera but not have my phone. Yeah. My daughter is 10. This is the first summer she's allowed to walk around with her friends without a parent. And she has a flip phone. And she had this whole argument for getting an iPhone that has nothing on it but the phone and messaging and my wife and I had this discussion and the reason why we said no it has to be the flip phone is because of the camera like it introduces a new level of sort of attention and why you're in purpose and the reason why we wanted to have a phone is simply to stay in touch with us no other reason but the minute you introduce this other sort of novel aspect of it it becomes much more of a social dynamic and a social consideration and the way that you're trying to get away from that um but i think just going back to the camera things is such an obsession of mine i think that we are quick to quick to ignore or look past the relationship we have with with the aesthetic that a camera yields and when you see those pictures off those old point and shoots they look like something specific like when you were talking about that old skateboard fish eye dv look it looks like something specific you have a relationship with that when we see stuff that looks like it's vhs we think of the 80s or the 90s and i think now there's just sort of this generic aesthetic across the board this like crispy flat 4k phone thing and there's this desire to have something that that it has some sense of identity attached to it and that's why we're seeing these sort of gen z types you know looking for older tech that's that reflects more of who they are more individuality and i think that's a trend that we're going to see continue.

2:06:30It's this generation's vinyl. Yeah, I've joked that I want to film the first podcast on Panavision film or something. Just spend a fortune developing the film. What other consumer tech categories are you excited about? We're having the founder of Wave on in 20 minutes, and they got like 12 million views yesterday for launching like sunglasses that will just live stream constantly. Do you have a ratio of positive to negative mentions in those 12 million views? I mean, I think everybody, people had a viscerally negative reaction to it. That's my take on it as well. And it makes me think, you know, my software development company, Beam, my startup, we started that company in 2014.

2:07:22And a little known aspect of that company is initially it was built around Google Glass. And we actually, you know, we rewrote the code, we rewrote the software that Google Glass ran. So it had a singular function, which was you push a button like this, it captures 10 seconds and immediately shares it to your feed. That's where we started with that. And I remember meeting with Google and they were excited about it. And they showed us what google glass 2 was going to look like and we're like fuck yeah we started raising money based on that and then a week later they announced they were killing the entire google glass program and we we backed off we'll just do it on the phone now um but i think when you ask about sort of the social impact of being able to live stream all the time or the negative reaction that we're seeing based on on waves uh video they posted yesterday i think the social dynamic is something that is often overlooked in the hardware startup world.

2:08:15I think of the Humane AI pin, you know, a really good friend of mine worked for Humane and obviously super excited about new technology. Yeah, Sam. Which parenthetically you joke about Panavision for a podcast. Sam Sheffer has in his studio for his live streaming setup, a VHS camera hardwired into his deck so he can be live streamed from VHS. That's amazing. But Sam would be around. I tried to hire Sam, by the way. We worked with him on a project. He's way too hot. He's way too hot. He's got to be solo. He's way too big of a deal. Sam's the best. But when I'd be around him and he had his AI pin on, I was always sort of looking down at that or thinking about what I'm saying and uncomfortable about speaking openly to him.

2:09:01And I think that's what I mean by social implications. My phone is on my couch right here, but if we're sitting together and I'm holding my phone like this the whole time we're talking, you're uneasy about that. And so when I think of a pair of glasses that are live streaming or at least have the capability of live streaming the whole time, when I look at them, I'm uneasy. And I think of this, maybe the most extreme example of this is Apple Vision Pro, which blew my mind when I got that thing. I made the most glowing video about it because it was the greatest technology I've ever used. but later that night because i made the video the same day i got them i'm at home using them and my wife is like casey take those fucking things off your face and pay attention to your kids and i was like oh you can't wear these around other people yeah and i was like how did they not see that and so i i think about that because like we're sort of accustomed to people using their phones and it's kind of okay like we're used to this this is not okay and so when i think about wearables i think that that is going to be a gigantic thing to overcome which is well the crazy so so amazon acquired a company uh it got announced this week called b which is a brace after after all everything they faced with siri siri's listening to me the b band just listens to you all day long every single conversation everything and uh and i and it's and it's cool like i think all new tech for the most part is cool do i want my team to be wearing a b bracelet are we going to allow people to wear b bands this might be a b free zone you know i'm not going to have any friends that wear bees i don't have any friends anyways but if you have a bee it just means like we can't hang out yeah because it makes it makes me uncomfortable and look i think There's an argument that's like, get over it.

2:10:53You fucking Luddite. This is the direction everything's headed in. You're being recorded all the time anyway. Sure. But in the interim, I do think there's a learning curve. I think that Meta's decision to put wearable glasses with a camera on them in Ray-Bans, the most common sunglasses in the world, was brilliant because we're all familiar with this pair of sunglasses. There was no learning curve. There was no like, what's that thing on your face? We know what it is. I think how emphatic they are about having the indicator light. There's no way you can turn it off. If you cover it, they don't record.

2:11:26There's some degree, at least there's a tactic. My question for the Wave founder in 20 minutes is, should your glasses be bright red and have like, you know, a circle in the middle of your head that's flashing that says I'm recording? Yeah, I mean, if someone shows up with a TV camera, like I don't feel like, oh, this is in violation of my privacy. I'm like, I know exactly what's going on. The news is here. And if I step in front of that camera, I'm on the news. Like we have a social understanding of that. You still might not want to be around it. Yeah, and it might be like, actually, I'm going to turn around and walk the other way because I don't want to be seen on this camera or whatever.

2:12:01I don't know. But there's an understanding there. Yeah, and look, on Wave's website in the Q &A, there's a question like, is there an indicator light? And their answer is, yeah, but you can turn it off. And so, like, you know, I don't know. I read that and it makes me a little bit queasy. Yeah. As a guy who has a camera on him all the time and so much of the videos that I've made is about filming everyone in the whole world around me, I still think there's something honest about having that camera on your shoulder, pointing a camera at someone versus the glass hole movement of Google Glass, which by having this on your face, everyone was uneasy around you.

2:12:38I think it's even a big hurdle to overcome as we eventually figure out what this hardware AI future is going to look like. Yeah. What do you think about like airplane demos? It feels like there's so much tech where the demo is like, you'll love this on an airplane. The Apple Vision Pro is a great example. A lot of the handheld devices. But it doesn't work when it's dark? It's not too dark on planes. It does work very well on planes. But it's this like weird niche use case that feels like killer application. And then you actually get out into most of your life is not spent on airplanes usually.

2:13:10and so yeah look if that's the best you've got like i travel more than most people i know we're still talking about you know maybe double digits maybe maybe 10 hours a month tops yeah so you know 4 000 bucks for a face computer that i use 10 hours a month on an airplane which by the way it doesn't work for me on an airplane like i didn't like it at all okay no it will work like no when you're on an airplane you're surrounded by strangers yeah so the idea that like i'm just gonna go like that and watch Avatar with all these people around me you know I don't fly spirit that often but I have this lone spirit and I know it goes on on those flights like it just again like live to tell the tale yeah social implication of it you know I think if that's the best you've got then maybe you know maybe you're not thinking holistically enough about your about your hardware yeah how do you how do you spot talent you you you discovered Sam Sam, someone in the chat was asking if you have a framework for it.

2:14:12It's a difficult question, but I approach it the same way that I approach investments. It's seldom the work, and it's almost always the individual. I think Sam is brilliant, but he's brilliant at everything that he does. He's brilliant with the work that he did at Humane. He's brilliant with the work that he did at The Verge before that. he's brilliant with his own youtube channel you know i've got a dear friend of mine a kid named hunter who works in the building with me but hunter's a hunter's a friend and we invest together so hunter's hunter's fantastic and like i don't know what hunter does because every time i have a conversation with him he's starting some new business or some new endeavor like the work is almost irrelevant it's the individual and i think it's like it's that mentality that you have or you don't have.

2:15:00Not everyone has it. I do think maybe you can get it if you don't have it. But when I see that in people, I have a tendency to sort of gravitate towards those people. And when I look around at the friends of mine that have some sort of professional relationship with a professional admiration for, they all have that thing, that sort of desire to see it through, whatever the it may be. So I guess the short answer is like, it's always the person, never the product. That's great. Hunter's in the chat, by the way. He says hello. The another question I have is we've been thinking about AI generated images, video, etc.

2:15:42is getting so good. If it stays at this pace, you're going to be able to generate characters consistently. You're already seeing this on Instagram, people just creating entire personalities for influencers and different verticals. Do you have any type of strong thesis around how that will play out if we're going to have sort of organic influencers, regular humans, and then these synthetic? I've been thinking about it in the context of an example. It's like, I don't want the AI Andrew Huberman. I want Andrew Huberman to get health advice from because I know Andrew, and I trust that he's making the best decisions and studying, you know, and making, you know, these recommendations and understands the weight of that.

2:16:31And you have like a synthetic Andrew Huberman in five years. Doesn't care if he convinces a million people to do something dumb with their health because he can just shut the account down and turn a new one on. But I'm curious how you think. Yeah, okay, my cynical take on it, which I believe is accurate, I'd wager that this is accurate is that it's a tidal wave that none of us will be able to overcome we can hold our breath for a while it is a tidal wave and I wish I had a better analogy but it's a little bit like when Toy Story came out in 1999 it was the first computer animated feature film and it was great, I loved it but then five, six years later there was just this onslaught of computer animated films and I was like, you know what?

2:17:13The hand-drawn stuff is better, I miss that when cgi first started getting introduced into films i was like no practical is better um i like practical better that's going to be the thing and it's like no you're gonna lose and i think ai is probably the most existential version of that i think that it's just going to be so good that it's going to become irrelevant and old people like us might appreciate you know real human things and we might keep it alive but the generation behind us my children when they see hand-drawn animation, they're like, what is this? They don't care. It means nothing to them.

2:17:48So I think it's just going to get so good that it really doesn't matter. And that tidal wave is going to consume everything. And I think that the progress that we've seen over the last couple years of how good it is and how quickly it's developing is incredible. But when you look at the capabilities of the latest GROC and the latest GPT, you look at how smart these things are. You look at the sort of conversations you can have with any of these agents. And then you look at how good the images that can be spit out by Google's video or whichever AI you might be fond of. It's like they're just going to marry really, really quickly.

2:18:29And I think five or six years from now, we're going to start to see real sort of erosion in the space because what they're delivering is going to be so good. You know, like another example is like we haven't had a number one song yet that's completely AI generated. but it's going to come out of nowhere it's going to be like gangnam style which like the novelty of it allows us to dismiss the lack of humanity that this song has the first ai song that's going to be a number one hit is not going to be a bob dylan-esque song that comes from the soul it's going to be something fun and outrageous and we're going to forgive that ai made it and then slowly it's going to start to chip away but i think it is a losing battle and the optimistic take on that is I think that there is going to be an extreme premium, but on the humans that are able to sustain because of what they represent uniquely.

2:19:21Maybe another bad analogy is it's like, I love Marvel movies. They're fucking fantastic. But as far as cinema goes, there's an argument that said it was like those kind of artistry that we saw in the 70s or 80s, like the apex of cinema where it comes from one. When you think of a Tarantino movie, You think of a truly great filmmaker with a voice. Marvel movies are something else. They're fucking great. We love them. We all show up to see them. We're all paid with that. And I think that's going to happen with AI, but it's going to happen at a rate of acceleration that we've never encountered before.

2:19:55And it's going to be so good that we're willing to forgive it. And I think it's going to leave a handful of people out there. Maybe Andrew Huffman will be one of them. I hope so. I'm a fan of his as well. but it will put an extreme premium on the sort of human voices that are distinctly human that distinctly represents something that ai could never when you look at the landscape of media a lot of that shit could be replaced by ai so the power law gets steeper yeah absolutely intense well that's like a five-hour conversation by the way well we'll have you back on again soon this was awesome and congrats on your new your new uh fake but very real role at mod retro i appreciate it thanks for the time guys yeah have fun in massachusetts we'll talk soon we'll talk soon