Weekly Recap: The Soham Parekh Drama, Meta Attacks OpenAI, The AI Talent War, Trump's Mega Bill

26:40I think I think the reason this struck such a chord is, you know, again, it's this remote angle, the international angle, the ideas around a 10x engineer, the potential of new AI tools. but this has been really helpful to get to know you. And I think you were getting, you provided entertainment for a lot of people the last 24 hours. So I'm glad to hear that you're going to apologize to everybody that you misled. And I am excited to follow what you do next. Yeah. Thanks for stopping by. Thank you so much for having me. Cheers. We'll talk to you soon. We'll talk soon. Bye. How are you doing? Good to have you back on the show.

27:22Yeah. Thanks for having me. no redemption isn't possible when people show you who they are believe them uh no there's plenty of very honest people like what are the odds that someone who's been lying compulsively and being been confronted about it for three years like two or three years and like look it's a special kind of person too who can do this thing to people who trust them right then you have a relationship with an employer you know and and my understanding is that he basically has been averaging like getting fired once a month for the last three years. Like it's a special kind of person who can do that.

27:55So he could have learned his lesson like two years, three years ago. Yes, yes, yes. Like the first time he was called out. Totally. Totally. I wasn't tuning in. I didn't hear what he said. To me, the argument of sounds like he has some situation that's bad, but it's not a justification to go steal money from a bunch of Silicon Valley startups for years and years and years and years and use them as a piggy bank to solve his own problem. So really quickly, how long did he work with you? Two weeks. Two weeks. And what was the result of that? I mean, I imagine you paid him for those two weeks of work.

28:32Did you get any good results? I am literally out of a meeting like an hour ago where the engineer described his impact as negative. Negative. Well, because we had to onboard him. Yeah, you had to onboard him. So yeah, he wasted our time and money. Has he apologized to you? Not yet. Okay. He said he would apologize to everyone else. He would go on an apology tour. We'll see if that actually pans out. My big question is, is somebody like this, you could have them working in your office as a full-time employee and they would probably still, there's a good chance they would still keep doing this thing with people on LinkedIn that didn't see the whole Soham gate.

29:14We never compromise on ethics. That's just a thing I don't fuck with. He's going to apologize. Is he going to give the money back? Yeah. That's a good question. I don't know. Because stock is cheap. Yeah. That's a higher bar. If he wants to make a statement, that's what he would do. 100%. Yeah. Makes sense. How do you prevent this in the future? How does Silicon Valley prevent this in the future? Obviously, the Valley is built on trust. This is a violation of trust. there's been discussions about like maybe we need a reddit for are we dating the same man are we employing the same software engineer uh maybe we need an ai tool to you know check the github commits and see that oh they're coming in at the same time i was wondering if this could be done at the hris level it's like this this employee oh yeah yeah why are they in two instances of of rippling that doesn't make any sense uh yeah how are we solving this i i don't want to over rotate on it.

30:10I think a large part of what makes Silicon Valley tick is its culture of trust. You know, there's this whole game theory around like hawks and doves, you know, and it turns out there is no stable equilibrium. You're like in a constant state of shifting because if everyone's a dove, then the returns of being a hawk are very high and vice versa. If everyone's a hawk, then you can have these like cliques of doves that start emerging. So I'm really careful not to tip Silicon Valley towards this attractor state of like the hawk. And like a lot of industries end up in this state of like low trust. And I really don't want to do that.

30:43Like, look, you're going to get screwed over every so often. We had a good laugh. You know, the memes are amazing. Like, I hope I hope your your viral posts at least drove a bunch of new signups and maybe he paid back a little bit. Yeah, a little bit of it. Some customer. Yeah, I mean, I completely agree. Like, yes, the handshake deal protocol is built on trust. Do some VCs violate it? Yes, every once in a while, a term sheet falls through. It's not the best thing that ever happens, but the alternative is so much overhead on everyone that it's probably worth taking the risk of, yeah, occasionally the handshake deal is going to fall through.

31:21You're going to get screwed over every so often, and it's not worth over pivoting on it and looking over your shoulder your entire life. So it sounds like he's announced that he's taken a new role as a founding engineer at a single startup. He says he's not going to work at multiple companies. It seems like the jig, even if he is a pathological liar and continues to lie, like people, like his SEO is terrible now. Like it will forever be like very easy when you go to Google search for the person that you're hiring. He's like, oh, that's a different Soham Parikh. There's a lot of people in this.

31:53and it's going to be really complicated for him to get away with this longer. My question is like, if we were kind of saying like the Soham Parikh dev shop makes much more sense here. Does that make sense to you? If he was saying, hey, I've been working at all these different startups, I'm starting a developer shop and yes, you can hire me, but I'm a contractor. I don't think Flo is hiring dev shops. Why are dev shops bad for startups? Why would this not work for him? I actually think for him, the real move is to start a course on how to crack coding interviews because he's really good. And he's incredible.

32:33He's actually incredible, right? So he can actually make lemonade here. Like, he should do that and he can make a lot of money. It's very highly - And do you think he was cheating? Yeah, it was that in the cold email strategy. It was like, he had a very dialed in cold email approach where he would be, you know, he'd be like, say something nice and really clearly he researched the company. I use the product. I love building. The funny thing is in his message, he said, he said, I'm pissed. And I was like - About what? What? But you're pissed you got busted and you kind of gave himself. Yeah, he was saying like, oh, yeah, like I'm going to put, you know, there's going to be a great reversal here.

33:10And he came on and was like, the mainstream narrative is basically correct about me. But maybe I'm sorry. The redemption of being like, I'm going to prove everyone wrong by working at one company. It's like, you don't get, you don't get, you don't get. Yeah, yeah. We don't give. That's like a second. The fourth place trophy. You worked at one company. yeah i mean uh look he's he's not sorry he just got cut like it's that's it it's really simple um and and why do dev shops not work for startups i mean it's like i'm a nerd when it comes to like the the theory of the film because of my experience at uber and so forth sure there's a book that's called managerial dilemmas that explains why dev shops don't work okay it's it's fascinating yeah but can you unpack it a little bit more because uber is interesting because didn't wasn't the very first version of Uber done by a dev shop.

34:00And wasn't that part of the early Uber lore that the code base was written in Spanish. And so everyone at Uber had the Spanish to English dictionary there, which is hilarious because I'm pretty sure Google Translate existed at the time, but they still had the dictionary for some reason. It's like amazing lore, regardless of how real it is. Yeah. I think people add a little bit to it. This is the first time I hear about it. But next next time I hear about it, there's going to be a guy with a sombrero in the oven. Yeah, exactly. Yeah, Travis was in Tijuana pulling random devs off the street. Yeah, really, really amping up.

34:33The apocryphalness of the story just needs to grow and grow and grow. It's a tall tale at this point. The reason why dev shops don't work is because there's a complicated game theoretic argument which goes, basically, the reason why you employ people is because they know things you don't know. And so there is an information asymmetry which always makes it possible for someone to cheat because they can basically bullshit. They're like, and you see it with engineering all the time. It's like, oh, this is so complicated. You said it'd be a day, but actually it's going to be a month and you have no clue.

34:59You have no way to verify. And this is ineffable. Like the reason you hire them is because there is this information in the distributory app, because otherwise might as well just do it yourself. And so basically it is, in a way, it is always possible to cheat, which is why we are not fucking around and hiring people who do cheat, because there is no way you can always prevent them from cheating. If he doesn't cheat by doing this hill cheat by doing something else. So there is always a way to cheat. So you could say that to some extent, not cheating is irrational. You can cheat, you can get away with it.

35:30He's made millions, he's made so much money, right? Like you can cheat, you can get away with it. And so in a way, you've got to solve for the equation where it's like, I can't cheat. I can make a lot of money, I can get away with it. Nothing is ever going to happen to me, but I'm not going to do it because of X. And you have to solve for X, that's your job as a founder. You're like, why would you act irrationally? And the way you do that, thankfully, is we have that pit that you can flip in our brains as humans. We have these tribal pro-social tendencies that are like, I don't want to cheat because I like these people or because I'm bad into the mission, which is why they always say every startup is like a religion.

36:06Like the mission, the culture really matters and the camaraderie really matters as a startup. And that's what you lose when you have dev shops. Well, yeah, to be even more specific, the dev shop gives you a scope. They say it's going to take me X, Y, Z time to do roughly this, or maybe they're on a retainer. And then if they come back to you the next day and they say, well, actually, it's going to take more time and it's going to be more money. Well, an employee is going to say, well, it's going to take more time maybe, but I'm not going to necessarily charge you astronomically more. Right. I'm just a salaried team member.

36:36And because they have that equity compensation as well, they're bought and hopefully bought into the mission. it ends up working out. Thank you for jumping on. Give us the update on Lindy. I know you guys moved quickly. It's been a couple months maybe. What's the latest? It's going well. We are currently grinding. To my point about dev shops, we were at the office last night until like 10 p.m. You don't get that from a dev shop. So we're currently grinding. We're growing fast. We are making a big launch on August 4th. Okay, we've got to come back on the show then. We've got some really, really exciting stuff coming around.

37:10I couldn't be more excited. Amazing. Incredible. Last question on Soham. What should he do? What should he do next? He should totally start a course. And he should raise a round for me, 16, and 16. Start a course. Okay. We'll see. Maybe he'll drop a course. Yeah, we've got laugh tracks around here. But yeah, it is part of why the whole thing was so controversial is the average new CS grad, even from elite universities, is not having the easiest time in the job market. So it's got to be disappointing for them. But clearly, Soham has cracked the entire flow. The interview code, yeah. He's figured it out, so he should monetize that.

38:03It is a monetizable skill. Interesting. well thanks for hopping on this is fantastic good to get the other side enjoy the talk to you soon cheers bye we have to sing her a song happy birthday to you happy birthday to you happy birthday dear emily we're hitting the size gone for you congratulations it was yesterday it was yesterday but july 1st she didn't come on the show yesterday So welcome. I would have come on yesterday if you asked. We should have. We should have. We could have had a cake. We could have had a cake. What did you do for your birthday? I had a few meetings. I went to the YMCA.

38:45It was empty, which was nice. And then my husband took me to dinner. Oh, that's nice. YMCA, underrated. Mine is nice. This New York weather, it's one of the only places blasting that air conditioning. Oh, interesting. What is the gym tier list look like in New York today? You know, Equinox had a moment. Lifetimes making moves. Lifetimes making moves. So I kind of do a high-low thing. I live in Park Slope, so the YMCA makes a lot of sense for me. But I'm also a member at a club called Casa Cipriani, which is really nice. Small members club. Yep. That's fun. The high-low. The high-low. John's in favor of that, too.

39:29We just started going to a new gym. but John is like actively wants to be kicked out so he can go back to gold, which I'm like, no, we're not, we can't do this. There aren't, um, there don't seem to be as many YMCA's on the West coast. No, no, not, not that many. Lots of 24 hour fitness. Oh yeah. I mean, gold's gym. It's the, it's the staple of Venice. It's where Arnold Schwarzenegger works out. You know, RFK is out there. It's a good crew. John, John thought Equinox was like a$75 a month gym while we were actively going there for a brief period. And I just loved how out of touch you were. It felt like premium, you know, but not ultra premium.

40:08It's not the besties all on tequila level. Yeah, the location matters a lot. Yeah. What else is new in your world? Yeah, give us a Hamptons update. I assume no one's in the city right now. So, yeah, I got out here this morning. I don't want to brag. I recently inherited a car from my late grandfather to 2006 Camry. Okay. Very nice. There you go. Iconic era of really great vintage. Very reliable. Yeah. Awesome. So I drove out here today. It's crowded. It's really crowded. I'm hoping that this sort of level of crowds is due to the holiday weekend, but it might be a mistake that I rented a house out here, but we'll see.

40:53um what else is new since two weeks ago is the well so so the hamptons broadly yeah people a month ago were saying that rentals were down massively year over year does it feel that way yeah i i don't know how much of that was because of weather or or or people's finances i think some people were less motivated to like make the move on booking a house because we had really bad weather the past few months in New York. It was really rainy and gross. It was sort of a late start to summer. But I'm sure people's financial situation. There was also a trade war that's still ongoing. And if your portfolio is down tremendously, you're not exactly saying, yeah, I'd love to spend 100K for two weeks.

41:38Yeah, I had a friend who was dating a Wall Street hedge fund guy. And she was like, yeah, it's going so great. It's amazing. And then a couple of weeks later, she's like, yeah, he's just really weird. Like, I don't think it's going to work out. And I was like showing her the stock market chart and being like, so his emotions perfectly mapped to the 10 % sell off that we just saw. You're telling me that this guy, his entire, his entire personality is derived from the state of the market. The state of the market. And she was like, oh, this makes so much more sense now. Okay. Yeah. I'm sure there's a lot of women who went through similar situations as her.

42:13I'm sure. I'm sure the kangaroo market's not good for the dating scene. is that crazy white party going on? That's a Hamptons thing. Is that a July 4th thing or is that canceled? I thought Michael Rubin was like pulling back from that because it was like maybe too flashy. Is there an update thing? Yeah, I will see. Is that supposed to be 4th of July? I think that's like wearing, she's like white party. What are you talking about? Yeah, I was like the Ditty one. Can't comment. No, not the Ditty one. Oh, no. Oh, yeah. I think that might've been a factor in pulling back from that. But I always see like everyone's like spying the watches, spying like you know what cars people showed up in all this stuff there's a lot of paparazzi there's a lot of tiktokers okay see everything happening in real time interesting nobody can really like leave with another man's wife anymore like there's so much uh coverage of these events now it really takes away the mystique the mystique somebody might what's up with uh what's up this with this place drugstore you were covering it it's trying oh yeah this is awful um bloomberg broke news yesterday that there's a new movie smoothie pop-up chain from like a Jay-Z invested celebrity chef.

43:27And he's these like very Instagrammable smoothies, which obviously Erewhon started, but now there's a lot of places that are kind of hopping on the bandwagon of treating like smoothies as a billboard. Like brands can collab with them. And then whoever's serving these smoothies is like making extra money from an advertising business, which is crazy. Like I think to get an Erewhon smoothie for your brand, it's like 200K for a month or something. We have to do this. Yeah, we've been working on it. You say that's crazy. You guys don't have to do this. I think that's worth every penny for the TBPN feed me Erewhon smoothie.

44:02You're telling me that's not going to net out? No, you should do a drink at like the US Open or something. Like don't do the smoothie. Don't do the smoothie. It's played out? Yeah, it's played. It's probably played out. Okay. Didn't everyone have a collab with like Volkswagen or something or some really funny like car company they did? Yeah, you're right. They did do a car comp. I think they also do like beauty brands, like sunscreen and stuff. Like it's not. Yeah, Chevrolet. They did a Chevrolet drink collab. And what the worst part is that I wouldn't have had a problem if they did the ZR1, like the really crazy Chevy sports car.

44:35But they did the 2025 Equinox EV. What was in this movie? According to the manufacturer, the collaboration between it combines Chevy's commitment to emission-free vehicles and Erewhon's mission to promote sustainability as a merchant of organic foods and wellness products. The drink called the electric juice consists of choo-choo, choo-cho? I don't even know what this is. Which is the most protein-rich plant source and blue spirulina, the superfood that matches the Equinox's EV's blue color. The drink's ingredients are designed to energize and recharge consumers according to Chevrolet. The winner here was the ad agency that got paid half a million dollars to set this up.

45:18I don't know. I feel like everyone's getting the Haley Bieber smoothie. I'm about to rock the Equinox EV smoothie. I think it has a certain badge value. They're like 70 grams of sugar. It's like four Cokes. I'm long sugar though. Four Cokes is a lot. That is a lot. But I'm going long sugar from here. I did an experiment. My wife was very afraid of - It's the worst experiment. I continue. Yeah, but anyways, people are very afraid of sugar. To prove a point, I drank a soda every single day. I drank a Coke every single day for six months straight. I know that's not - If you're young and you work out every day, there's like a million ways to offset that.

45:57It wouldn't be good. No, a lot of people think - No, I agree. It is overblown. People think a single Coca-Cola was terrible. Yeah, of course, of course. Everything's in the dose is the poison with all of this stuff. What about so this week on our side, we've been covering the AI talent wars, how basically AI researchers are being comped almost like pro athletes and sort of like, you know, these sort of nine nine figure massive offers. The reason I bring it up is because you obviously cover a lot of the media landscape. And we had Derek Thompson on who left Atlantic. I imagine that he's already like run rating well, well beyond.

46:39I don't know what his metrics are, but I would imagine he's already. He's catching up to me. Oh, really? Yeah, it's a problem. Go subscribe to Feed Me right now and help win the race. But I was curious if you, it feels like if legacy media companies, I won't call anyone out, want to want real attention not just the sort of attention that comes from their logo to some degree in the prestige but like actually quality content uh at some point they'll have to like kind of re-evaluate their comp structures i think the atlantic was like 300k was being reported as like the kind of range and when you can go on sub stack as a superstar writer and immediately be making somewhere in the seven figure range at some point or another just becomes really difficult i see uh traditional media companies more likely to start doing like handshakes with substack writers than starting to completely restructure how they're paying their staff i don't understand so like syndication basically indication or like i mean i've talked to so many editors from traditional magazines and papers who are like trying to figure out how they can work with feed me is it like a co-publishing thing is it like creating a podcast together and it's it's been very interesting to experience firsthand like talk to these people because i don't i don't really need that like derek doesn't need the atlantic because the people who are reading him are reading him for him not the whole surrounding yeah i mean just to set the table for the folks who might be listening when emily comes on the show we pay her a hundred thousand dollars for her appearance so yeah just just to say kind of set the bar uh just so and it ramps up yeah yeah it obviously ramps up um but uh but yes i am interested in like the dynamic of like you can still go and publish in in traditional media um is that just like freelance what is the difference what do you mean like when i write for gq yeah exactly are you a reason that i'm doing that besides that I adore my editor there.

48:48And I think that it's just like, it's a, it's working like a different part of my brain. Like I don't, it's like a gift to get, to be edited by GQ's editors. That's cool. Yeah. Do you, so are, are you a columnist over there or are you a contributor? Like how does, with the actual shape, do you get assigned things? Like I've had reporters reach out to me and be like, I was assigned a story on nicotine. So I need to talk to you as an expert or whatever so with gq specifically my editor dan um when i wrote the zinn story and when i wrote the story about members clubs last year both were because i i had written about both of those topics in my newsletter and he was like i think it would be interesting for you to expand upon this in like a larger feature in a in a print issue um and that's how that's happened i i don't really but like I'm at the point now where if I have an idea of a great story that I want to write like it doesn't make sense for me to pitch it to the times or to New York Magazine because it I can get it done faster on feed me sure I can outsource an editor if I need that I can outsource legal services if I need that and it it's better for me to get to be like breaking those sorts of stories you know yeah um I just have like a good thing going with GQ it's kind of fun that's cool I want to bounce an idea off you.

50:05There is this narrative that like when you go direct, when you're on Substack, like it has a different texture, a different vibe, different, maybe more objective, maybe more pro tech or pro, you know, creator or pro whatever the topic is being covered. I think that it's less about the personalities or the views of the people and maybe just more about the economics that essentially when you're in legacy media, you basically have a salary cap. And when you're outside of it, you have no salary cap. And that actually defines the economic terms shape the type of content more than anything else. Do you think that's reasonable?

50:47Do you disagree? How would you wrestle with that? Can you keep expanding on that? I want it. So, so I think that there's, there's something where if you, if you're working at a, at a particular outlet and there's some sort of like salary cap, it's like, imagine if there were two NBA teams playing against each other and one had a salary cap of$300 ,000 per player and the other had no salary cap. Like who would you expect to produce better basketball? Who would you expect to produce better content when you have one where a person can make 10 million or Joe Rogan can make 100 million? You're just going to attract the absolute top because that's where the - Yeah, I think that's right.

51:34They're extremely ambitious. Yeah, and they're extremely incentivized to just work extra hard because if they work a little bit harder and they compound a little bit more and get that extra guest and write that extra piece, it doesn't mean, oh, here, you got a$5 ,000 Christmas bonus. It means Spotify signed you to a$100 million contract. And it's the difference between like when LeBron James shows up at midnight to shoot more free throws. Like that could be the difference between like a$50 million contract and$100 million contract. So going that extra thing produces better content. Yeah, it's really interesting to see so many traditional journalists, you know, give Substack a shot and like they just plateau.

52:14Yes. But I'm like, I'm an animal. Like when my eyes are open, I'm working like this letter goes out every day. It's I'm marketing it. I'm editing it. I'm pitching stories. But I've always had a really high tolerance for being told no. Like when I was getting paid 60K at a job and when I'm making like 10 times that now. Right. Like, so I think that Substack and these sorts of platforms, even what you guys are doing also attract personality types that are had less boundaries and rules in the ways that they work. and then when people who don't think like that think that they can find the same success like they get disappointed or confused or think that it's rigged or something like that um when really they're just yeah i mean going going above and beyond for a job where the cap might be like what did that new york magazine story say about the atlantic 300k that's what they're paying their journalists like okay so like you're you're gonna go as hard as you can to make 300k and get those benefits and whatever.

53:16But the other thing that I'll say, like, is you have to be willing to not have insurance. You have to be willing to, you know, have months where you're not having, like, the support of a team. And it's just, like, a very specific type of personality. But I think you're totally onto something. Like, I think I'm playing a different game than my peers who are working in an office at a magazine or a newspaper. Yeah. Yeah. Also, the insurance thing is real, but it's also a problem that is very quickly overcome. And you can quit your job and say, I'm going to pay out of pocket for insurance for two years.

53:56And if this doesn't work out, then I'll get a rollback. I'm curious, you were commenting on Vogue partnering with Nutri-Grain Bars. bars and I'm curious if you think as people are so used to influencer creator-led advertising like if you were to partner with a brand and people are like wait like what like why did she partner like that makes no sense like that's clearly a cash grab yeah that that feels like it seems like legacy media brands could get away with that kind of thing for a long time even though we're saying you know why is nutric grain needs better marketing because the first thing i think about when nutric grain shut down oh yeah i i i always think about the the the i i think that nature valley meme where it's like effing crumbs everywhere i don't know if you've seen that one but that's not nutric grain and so my biggest association with a long big newton yeah they gotta work on that yeah it's like it's like is it a fig newton is it the crumbs one like i just No, it's not good.

55:02So they got to step it up. But yeah, the Vogue audience. I mean, do you think that there was ever a pitch where it's like, okay, we're going to go after the moms that read Vogue and get them to buy it for the kids? And so it's some sort of like bank shot strategy. For me, what stopped me in my tracks was it wasn't a banner ad in a newsletter. It wasn't like one of those. It wasn't like somebody writing about their wellness routine sponsored by Nutri-Grain. Nutri-Green. It was a produced video of a stylist sort of like gallivanting through the streets of New York City. And I really liked this girl, Michelle.

55:33And I saw her post it and I saw that it was between Vogue and Nutri-Green. Who was in the room? Who sold this ad? And how much was it for? And how much did Michelle get? And how much did Vogue get? It was very confusing to me because there were other ways that that could have been executed and made a lot more sense. And they probably didn't think that somebody would screenshot it and start that conversation. But the conversation was started. Yeah. There's so many media reporters. If I didn't pick up on it, somebody else would have. But I think that Condé, Nast overall right now is on life support.

56:09Like we had this conversation when Vanity Fair is looking for their next editor. Unfortunately, like it's happening immediately right after that with this new Vogue editor. Um, it's a lot of, it's a lot of pressure for like, I don't know what, like a few more years of running this magazine. It just doesn't really seem like how, um, it doesn't, Vogue doesn't seem, I don't know what I would look to Vogue for right now. Yeah. Yeah. It kind of goes back to that idea of like the, the independent media creator versus the legacy media creator. Like we just released an ad for Wander that they, we said they asked us, they barely even asked us to make it and we just wrote it, shot it, directed it, edited it.

56:51We just did everything. We sent them the final thing and they were like, yeah, cool. And so I think the brand carried through. There was like a second that they asked for a tweak. Yeah, they were like, actually our font is this one instead of that one. And that was it. And so that is the type of entrepreneurial energy that I'm sure the particular partner that worked on, whether it actually starred in the commercial would bring to a partnership and select and coordinate with a brand that was actually aligned. But there were just like too many spreadsheet monkeys in the office that day. And so it just wound up being very awesome.

57:25Yeah. I was like, why wouldn't you just hand these to the hungover girls at Barstool and like have them talk about like how this is like the hangover snack? Like that I think would have moved the needle more. Totally. I don't know. When I think of logical Vogue partnerships, I think of luxury brands. Are luxury brands pulling back from that type of partnership? Have you seen anything there? What are the innovative things that you're seeing from the really top tier brands out there? Have you seen anything cool? You know what I saw today? Do you know those David bars, like the metallic? Yeah, we had him on the show.

58:01I love them. I saw that Balenciaga at their show this week. somebody posted a photo of like Balenciaga bars, like the same sort of metallic, metallic label. I took a photo of it. I'll send it to you guys after this. That's very cool. Um, so I mean, like, is that going to move their, their hoodies? I don't know, but like, that's those sort of fun, weird moments are more exciting to me. Um, if we're talking about nutrition bars, Yeah, I mean, it certainly shows that like Balenciaga is still on the, you know, hip or just aware because like Peter Rahal, he's kind of, you know, known in consumer packaged goods world and a little bit in tech.

58:42And some people know the story of RX Bar and then David Bar with the revenue ramp, like the business is doing well, but it's still like a complete insider industry story. Like the average person on the street doesn't know that. So Balenciaga is kind of signaling a little bit to that. Yeah. Yeah. Yeah. And I'm sure that that took them like a couple thousand bucks, like put together, like, you know, it's not difficult. Um, as far as what, what luxury brands are doing, I think it's a lot of events now. Like they're putting a lot of money into events. Like I was just at a Chanel event. They do a lot of programming with Tribeca Film Festival, which is cool because everybody's in the city anyway.

59:20So they, they throw events and make sure the people show up to that. I think that a lot of my social calendar in New York right now is dominated by brand events. It just seems to be what's moving the needle because people go and they get photos of themselves and they post it and it's like, the brand is the background. So you end up being like, New York just feels like a billboard every every time you go out now because everything is a brand event. It's like dominating how people are organizing their social calendars. I don't go to events. I don't go outside. I just stream. What makes for a good brand event like is this just a happy hour is that what we're talking about is there dancing it's actually interesting that the thing i'll say we were talking about svb uh earlier they would they would throw dinners that sure like there's an entire founder dinner industrial complex that are just like financial or you know uh companies that that throw these dinners the funny thing is that within tech the company has historically failed to make them social moments so it'd be like it'll say the name it'll say svb on the menu and people aren't like taking a picture of the menu as much as they're just like taking pictures so i think what the luxury brands do well is you're saying hey we're going to invite 200 people into the space photographer and you're not going to be able if you post any photos at all we're going to be getting exposure we're going to have a moment yeah um i i threw a brand dinner or i i feed me dinner with my friend Paul from the infatuation last year and Andrew Ross Sorkin was sitting next to me and I gave him a feed me keychain that was my brand moment that's a great moment so that's another thing like at those dinners yeah how are brands being creative are we seeing like ice sculptures or step in repeats like like how can brands stand out with one of those like the worst possible brand event is a dj and free drinks like just people standing in front of like a 22 year old dj with like free drinks and then um more innovative things are like

1:01:43And that was like some before the first is actually. Um, so like these mini expeditions or like J crew last year took a bunch of people on a gorgeous sailboat in the Hudson river off of like the seaport. It's basically like, take your customers on a date, right? Like on an extravagant, adventurous photo. Yeah, exactly. Um, and then if you level up, then you're, you're going to start talking about like brand trips, like Hermes took people to Aspen last summer. And yeah. Yeah, I mean a ton of VC firms do that all the time it could come with us and we'll do a track day or movie night or we'll go out to You know the some, you know, ranch will play some ranch and like shoot shotguns and have dinners and it's a whole weekend Where's my call?

1:02:32I want to do that. They should get you on the calls. We'll introduce you folks post-mortem on the Democratic primary, but just on the marketing right there was a lot of coverage of Zoran's basically film, you know, vertical video making abilities that seems to have played a key role in the campaign. I'm curious. Are you talking to any like TikTokers or content creators that are like, I want to build a business around this for politicians. That'd be interesting. Yeah. I had a friend who I used actually used to work with at Condé Nast who worked in the White House for Biden. And I think that she helped out with Zoran's campaign.

1:03:13Like there are people who know i think like you have to be excellent at that job if you're working for um a political political campaign especially in the white house because the turnaround times are insane and the levels of approvals that they need to go through are crazy as they should be um so i think there's like a mini network i mean there's there are a lot of people that worked in the white house under biden who used to work at instagram like they were recruited straight from meta so that's definitely a thing um but i think that organizing is a tremendous amount of work and like part of that is digitally now like and and zoran did that really well yeah yeah it's interesting to think about how the presidential election felt like the podcast election and then the the this primary felt like the short form election uh and that sort of it makes sense especially as you're trying to just appeal to younger and younger voters.

1:04:09Yeah. I mean, his team invited me to start covering his campaign back in February. Like I was I was at a party, I think, in March for him. But he's he also went on like Throwing Fits and a few other podcasts. And he did like a Q &A with me for Feed Me. So his team knew where to where to go. That's good. We've been talking a ton about the AI talent wars. There's a lot of people in Silicon Valley making$100 million for in signing bonuses. Silicon Valley, notoriously bad at spending money. New York, famously good at spending money. What are some recommendations that you can give to these PhD researchers that have$100 million burning a hole in their pocket?

1:04:54They want to get in the game. They want to step up their fashion, their cars, their houses. What would you recommend? It's funny that you go to fashion and cars because I think there's a real Louis Mangione situation on our hands here with this kind of job. So I feel like you need a security guard. Okay. Security guard. For sure. Yep. Plain clothes. Security guard, which means like those tight Lacoste polos, you know. Okay. Maybe they should be carrying too. Maybe they should be, you know. Definitely. You got to be everyday carry now if you're making$100 million. California has gotten more lenient.

1:05:33Yeah. So I feel like you have to staff up in a position like this. You want a driver who's trustworthy and isn't going to leak your information, a personal trainer who's trustworthy, a Feed Me subscription. Of course. And then I think it's like removing friction from areas of your life with staffing up like that. I recently learned that on this neighborhood in the Hamptons called sagaponic is a micro climate and I'm I feel like that's a good place to invest your money Wait break that down a little bit but a little bit more. It's just it's just on an average day. It's nicer there I think it's not really nicer I think it might be like wetter and more humid than other areas like I am in a different neighborhood than that and And if you were there right now, it would feel different than here, even though it's not that far away.

1:06:26Like you could be like Long Island as a whole is hot today, but Sagapona could have a different weather report because it's this micro subclimate. Because of the dunes and the tides and the trees. There's different parts of LA that have the same kind of dynamic. Yeah. I mean, isn't San Francisco like that too? Yes. Famously. That's why in the summer it'll still be foggy and stuff, but then it's really warm later in the year. Right. Yeah. So I feel like investing in a microclimate is a good way to spend your money. That just sounds wise. Yeah. They're not making any more of them. And then I think that you need to use your money to start taking some experts to dinner because you can't just start buying watches and clothes.

1:07:07There's a really high chance that you'll miss and go for like trendy items. So I would try to hang out with like, do you guys know the watch dealer, Mike Nouveau? Like somebody like him or, you know, like take him out to dinner and talk to him. and get some advice. I bought a watch from him last year and he seems like he knows his stuff. What'd you pick up? I got my husband a nice watch. Okay. Let's go. Let's hear it for the husband. Two size gongs, one of you. That's how you know it's a good one. A birthday and a gift. And maybe like befriend Chris Black or like another stylish guy and get him to advise, consult on the closet.

1:07:51Can you get us Chris Black on the show? Because the only podcast merch I've ever bought was their merch that they released where it was a cease and desist from the New York Times. Because they copied the cover art and they just printed, made a shirt, sold it. It was a work of art. Chris would definitely come on. I'll connect you guys. Yeah, I think that the biggest mistake that people who come into a lot of money quickly make is just, you know, doing that automatic Apple pay on on while they're shopping and then you end up with stuff that doesn't fit you or it looks horrible or something. Yeah.

1:08:27So stylists, tech, stylists, but just like paid friends, you know, take people out to dinner, host parties, like keep them around, you know. Do you think it's good to surround yourself with yes men? What do you what's how do you. So if you surround yourself with yes men, then whatever ideas you have, all your yes men will just tell you, yes, that's the best idea ever. A lot of people say, don't do it. But maybe it sounds good. I would not do that. Everyone around me has been saying that it's a good idea. No, I would not. That's not good. Okay. So stay away from the yes men. Yeah. You want yes people on your team where you say, I want to do the impossible.

1:09:11And they just say, yes, we're going to do it. But there's a line, you know, you don't want to cross it. Well, thank you so much for stopping by. This was fantastic. Thanks, guys. Send us the invoice for the$100 ,000 appearance fee, and we'll look forward to doing it soon. Yeah, send the next few, too. Happy Fourth of July. Yeah, happy Fourth of July. Have fun. We'll talk soon. Bye. Other news. The Senate passes Trump's mega bill, the big, beautiful bill, after an all-night session. They went all night. I like that. and it's got to get through the house still, but Elon is fuming. Play the Ashton Hall sound effect for Elon coming for the bill.

1:09:51It's absolute war on the timeline. The timeline's in turmoil because Elon Musk said, anyone who campaigned on the promise of reducing spending but continues to vote on the biggest debt ceiling increase in history will see their face on this poster in the primary next year. Pinocchio mode. Liar. Voted to increase America's debt. It's actually never been easier to make your enemies look like Pinocchio. Yeah, but I feel like if you put, like, I don't know, I don't even know who voted for it. Like, let's just say, like, Ted Cruz or something. If you put, like, Ted Cruz's face on here, like, are you going to lose the Pinocchio-ness?

1:10:27AI will find a way. I feel like it could be a little bit rough. Anyway, Elon's upset. He's trying to start a new party. The America party. He said, Vox Popula, Populi, Vox Dei. He wants to start the American party. And he is pissed because Polymarket is showing that the is expecting the reconciliation bill, the big, beautiful bill to pass by July 5th and 62 percent. Yeah. Sixty percent by July 4th and almost certainly by the end of the month. So this will be the one to watch. They're voting. I guess the first vote is tomorrow. Yeah. We'll be following that. Yeah. Be interesting. Lots of pork. But if you're AGI pilled, it doesn't matter.

1:11:12Yeah. We are going to be printing a 10 % GDP, folks, in just a few thousand days when superintelligence arrives. These debts are going to matter. We're weeks, if not days away. Many people are saying. And so if you're against this bill, you're just telling yourself about your AGI timelines. You're like, oh, I don't really think superintelligence is coming. Yeah, it is. I think Teal was pushing, generally pushing on Elon a bit in the interview he did last week around like, OK, so are humanoids, humanoids are going to be important, obviously making them. Are they going to impact the economy? Are they going to accelerate growth?

1:11:51Yeah. You know, this is the post 1970s stagnation. You know, we've been growing at 2%. Satya Nadella is asking the question of will AI accelerate GDP growth? Because if GDP growth accelerates a lot, it changes the dynamic around everything. Like not just this debt, which we've been kind of lightly joking about, but also like redistribution. To Elon's credit, he's also said when he initially exited Doge and just stopped being a special employee, he did say the only way out is growth. So he knows this too. But I think he can hold both of these ideas, which is we need to grow, but he's also frustrated.

1:12:27The Hegelian dialectic, of course. Yeah. I mean, if GDP is growing really, really fast, you could even keep tax rates the same or lower them and still pay down the debt and do more redistribution. Like you could be paying people, like you could have like something that feels like a massive social safety net, something that feels like UBI or socialism, but to actually attack people less because the growth is so significant. So it all changes when super intelligence arrives. Maybe Zoran is just so AGI-pilled himself that he's like, yeah, we're going to have plenty. We're going to go around. We're going to have such high levels of production that sure the state can just seize a little bit.

1:13:08Or alternatively, maybe he's a hardcore Bitcoiner. And so if he wants there to be no billionaires, No, it is impossible mathematically to be a billionaire in Bitcoin because there's only 21 million of them. So the richest you could possibly be is a millionaire if you owned over 5 % of the Bitcoin supply, right? So there will never be a Bitcoin billionaire because there aren't a billion of them. Whereas there are billions of dollars. Maybe he doesn't want people in the network to vote to expand the supply. Yes. So he's probably against the expansion of the Bitcoin supply, but maybe he's a hardcore Bitcoiner.

1:13:41He's a hardcore Bitcoiner. He's against inflation. Yes, yes, exactly. Zach Kukoff. Thanks for having me. Live from Washington. Mr. Washington. Washington correspondent. Mr. Washington. I even set up, I don't know if you can see, that's the monument right there. Wow, no way. There we go. Beautiful. That's great. We'll just have our production team zoom in. Zoom in just on the monument, so you won't be on camera. I'll get out of the way, but you can see the good stuff behind me. That's the important thing. So, yeah, break it down for us. The Wall Street Journal has a story. Senate passes Trump's mega bill after all night session.

1:14:20Tax cuts and Medicaid spending reductions head to the House with a July 4th deadline reachable. What's interesting in the bill? How likely do you think it is to pass? What are the major reads on this? And then we want to get your takeaway from where the dividing lines are around the bill. Yeah. So there's a couple trip lines. The first trip line, I would say you guys have been tracking the moratorium, the 10-year moratorium on AI development. This was the on AI regulation. This was the first it was in. Ted Cruz put it in. Then it was out. Then it was back in. There was a compromise. There was a five-year agreement instead of a 10-year agreement.

1:14:56And Blackburn has been sort of the key driver of getting it back out again. It's out. Now it was done 99 to 1 in the Senate, almost unanimous in the Senate to get this out. this was a big win for Dario of Anthropic, probably the number one beneficiary. And by the way, somebody who certainly used a fair bit of political capital pushing for this, that's fault line number one. I would say fault line number two. So really quickly, stay on that. It's a potential ban on AI regulation that was removed. And so So the current bill does not have a has a does not have a moratorium on regulation. So it's kind of a double moratorium on federal regulation.

1:15:41That's right. So you can have California states, whatever, who wants you. Marsha Blackburn, her home state, Tennessee, passed last year something called the Elvis Act, which was cutely named, but basically said, look, if you are building like a, you audio business, you cannot use any likeness of a real performer's sound. So if you want to have John singing the blues or Jory singing the blues, I cannot do that without a prior deal. That's because in Tennessee, Nashville is a dominant industry. The music industry is a dominant industry. And so part of Blackburn's opposition to the moratorium, which would have prevented bills like that from taking effect, is that it ended up superseding the work that her home state has done to protect its dominant industries by the way net net this moratorium the time that they got to a compromise was so watered down it really wouldn't have impacted tennessee or california anyway but it was a very dramatic swing from in out in and now out once again for good and and what do you what do you expect uh at the state level around ai safety going forward is this going to is the fact that this was removed going to inspire certain governors to say you know make this a part of um their platform and i guess like i want to know more about like if i'm 11 labs and i'm and i'm training a voice agent and i can't be sure that some clip from you know elvis or you know some justin bieber worked its way in there uh does that mean that i just turn off tennessee at like the DNS level or do some geo fencing?

1:17:22Or is it more risky than that? Where I have to comply kind of at the national level, and they're kind of forcing me to comply everywhere? Or can I just pull back out of that state? Because we've seen this with Apple intelligence not being available in China, not being available in Europe, for example. But yeah, what would the impact on something like that be? Well, think about states in two categories, right? There are some states that are so large. And by the way, the analog that I would think about here is what happens in the textbook market. So if you're a textbook publisher and you want to write some textbook about biology or whatever, if the largest states in the country, this is category one, pass a law mandating something needs to be in a textbook, suddenly you're going to comply nationally because they are so large, they warp the market.

1:18:06Exactly. You have to. That's right. And so if California tomorrow says, look, we're passing a European style bill to severely curtail, which I think would be a disaster, to severely curtail AI development, that would in effect be a national bill. And part of the, in my view, mistake that's happening tactically right now is this self-imposed July 4th deadline is so restrictive that it forces all of these more nuanced negotiating points to fall by the wayside, right? It becomes blanket, either it's in or it's out. There's just not time to get to a more nuanced middle ground. So 11 labs of Tennessee has the Elvis Act probably says, look, we just squirt around Tennessee.

1:18:48I don't, I haven't spoken to 11 labs, but if California passes, then suddenly you have the whole country warped by this. And Gavin Newsom and the California legislature are certainly ambitious enough to try as they did last session, uh, to try to pass something that would impact the whole country. Yeah. Wasn't, wasn't there news out of California this week or last week around some of this stuff? Yeah, yeah, there was a huge fight, which had an unlikely set of bedfellows where you saw Andreessen and others leading the anti-legislative, anti-regulatory brigade against some other folks who are much more pro-curtailing.

1:19:21By the way, I will just say the other interesting takeaway for tech, not to totally dovetail away from your question, but the other interesting takeaway for us, I think, in this is the deciding vote in the Senate on the overall package, the reconciliation bill, was J.D. Vance. And so if you're a Vance head looking at 2028, right, you already see that Ocasio-Cortez and others, AOC and others, are going to use his deciding vote on this bill, which includes huge amounts of Medicaid cuts that Tom Tillis from North Carolina, in particular, thought were politically toxic as a wedge against him when he comes and runs for president in four years.

1:19:58So sorry, you asked the question about California, and I dovetailed it back to the federal level. No, that's super interesting. That's the yeah, yeah, that's the big the big shock. So you asked about tripwires. The AI tripwire was one Medicaid cuts, which are politically really toxic, right? Because who wants the idea that you voted for the government to take away your health care? That's another huge tripwire. And then there's a package of things that maybe we care about that are nuanced, like, for example, IRA tax incentives for clean energy, right? Or new taxes on wind and solar from China.

1:20:29These are all things that might enrage the Republican, the very conservative Republican. faction in the house which now has to still pass the bill and now complicates the negotiating posture because the senate watered down the senate preserved the ira tax incentives and watered down some of the tax cuts got rid of some of the tax cuts on chinese imports which means basically you have a bill that's actually financially harder to pass because it's less balanced and at the same time you've now alienated a huge faction of the gop the super conservative gop side of the party who still have to vote for the bill to happen.

1:21:03So it's up in the air if it passes or not. Can you tell me about the EV tax credits? I know Americans are struggling more than ever to buy naturally aspirated V12s. I'm hoping that there's some move there to subsidize things like the Ferrari 12-cylindri, the Dolce Trilindri. It's a multi-hundred-thousand-dollar car. Even if we can't subsidize that, maybe we can just take away the subsidies from electric cars to tilt the playing field in favor of the larger engines, the supercharged V8s, the twin turbos, the G63s, these types of cars that Americans deserve to be driving. So what's the news on the EV credit front?

1:21:42I agree with you that the backbone of the American economy is the Ferrari, right? It's impossible to me to imagine a world. Thank you for the last track. I appreciate that. Where a blue collar factory worker cannot own a sports car is beyond me. this bill doesn't address that i wish it did okay great if it did it's not going to solve that huge unsolved problem yeah what it will do by the way is continue to drive a wedge between elon and trump right then you saw elon take the twitter i imagine you guys probably mentioned earlier you saw elon take the twitter and start to really crusade against people voting for this that is in part because at least the house version of the bill was much worse on a lot of the subsidies for electric vehicles than the senate version the big challenge is going to be going into now the conference committee.

1:22:27It's going to be how do they reconcile these two challenges so that they can hopefully tilt the market back in favor, of course, of Ferraris and supercars nonetheless, while also not alienating one of the two power centers of the GOP, at least today in Elon, who could easily primary somebody who votes against. Yeah, that makes a lot of sense. What about how are the Democrats feeling about EVs these days? Because I used to feel like it was a democratic cause to be pro-EV incentive. Let's save the environment. Let's get people out of the gas cars. I'm joking about the V12s, obviously. But now it's become maybe let's punish Elon.

1:23:05But is this a cut your nose to spite your face situation for the Democrats? I think it's a rough spot. I mean, you guys remember when Elon wasn't invited to the big EV summit under the Biden administration, right? That's part of what kicked off his political awakening is he doesn't use unionized labor. And so he was excluded from this EV summit. There's been a huge polarization and negative polarization against EVs among not only Dems in office, but a Democratic base, too, which is to all the points you brought up, quite ironic. You're not going to find many Dems willing to cross the aisle in support of electric vehicles to save this bill.

1:23:38This is a bill that will live or die by Republican whip count and Republican unity. If the whip count isn't there, it's going to be really hard to get it done before July 4th. What about Elon's America party? You think that's real or just exciting? Are those my only two options? Real or exciting? There's no door number three? Yeah. I mean, we were talking earlier, third parties haven't historically done well. Well, he has the America PAC. So when you say Elon could primary someone, he could potentially primary a Republican on the Republican ticket with the American pack. And he could almost like be kind of like a head fake, like, oh, this is part of the America party, but it's not really a third party.

1:24:24Is that more what we're thinking here? Yeah, maybe one historical analog. It's not perfect, but think about like a Theodore Roosevelt, like a Teddy Roosevelt with the Bull Moose Party, right? You think about it's a faction within a larger established party, to your point, that can serve as an engine to primary people who are in disagreement like the tea party exactly like the tea party or frankly what's happening now look at zoran maga maga is also like a wing of the republican party that's right that's right maga the tea party and now on the left the polarization from the zoran and democratic socialist world all of these folks are new factions in a way that by the way we haven't seen before the same way that 50 years ago you basically watched mash on television that was your only option and now i tune into tbpn while i play subway surfers and have 30 other things hitting me at the same time.

1:25:11This is the political version of that, right? Where you say, okay, it used to be my options were a platform that I accepted wholesale on the Republican side or the Dem side. Now I can be a MAGA guy, I can be a tech right guy, I can be a populist guy, I'm a new right guy. And on the left, I can be a Democratic socialist, I can be an abundance bro. I have an infinite menu of things. The America party is more likely, if it sticks, one more menu on the side of the right. Sure, sure. That makes a lot of sense. What, what, what time, What do you expect out of the next 24 hours? So tomorrow morning at nine, House Rules Committee votes.

1:25:45That's going to be a key vote to see how this thing does. What I would say is if this gets done by July 4th, the thing that you're going to have to look to is that 9 a.m. Eastern vote to see how much unity is there in the Republican Party. They can barely lose any votes that this thing goes through the House in its current form. But I think it's unlikely that it's going to happen immediately. It'll happen. This will get passed. But on their timeline, I don't know. In the next 24 hours, if you see more senators like Murkowski from Alaska who are saying things like the bill is flawed, please send it back to the Senate so we can work on it again.

1:26:16That's a key indicator. This thing may not have the legs it needs the next couple of days. Yeah, we heard about I mean, everyone's saying like it's the biggest bill. There's all this pork. Are there any like green shoots where there's some random startup out there that's just super excited because maybe it's not a headline grabbing, you know,$10 billion thing, but it's like, that's$100 million that I can go after in energy or in defense or in shipbuilding or anything. Have you seen any of these like, they're called riders, right? Yeah. Yeah. It's a good question. Biden was famous for stacking a lot of these, like the Inflation Reduction Act had a million ways you could go participate.

1:26:53this one's got fewer i'll say one funny piece of pork and i'll say one actual opportunity the real opportunity i would say is for fintech folks who are looking at the trump accounts right which is giving huge amounts of new americans who are underbanked or not banked before access to capital for the first time if i'm robin hood i am loving that's a big change for me funniest piece of pork in the bill murkowski who was the key holdout in the senate from alaska got a tax exemption for native Alaskan whalers. She said basically native Alaskan whalers need to be... Yeah, that was honestly big delivery for her constituency of people who kill whales in Alaska.

1:27:34Let's give it up for the whalers. They don't get enough attention in Washington. Well, I mean, we've talked about it before, but energy is really important for the AI data center race. Whales, they produce oil that you can burn. Wasn't it Chase who said he would burn whale blood? He didn't say he would do it. But he said that the hyperscalers are so desperate for energy right now that they would burn whale oil. It's more fun to think about Chase personally. Launching Crusoe for whales. Yeah, that's right. Crusoe blubber. VCs are the new whalers. Yes, yes. They really are. And the old whalers. And the old whalers.

1:28:08That's true. Zach, this was so much fun. We'll have to have you call in tomorrow or Thursday. Yeah, when there's more news. Please. It's my first wedding anniversary, so I'll be around. Oh, congratulations. Of course, plenty of time to call in. Thank you very much. Fantastic. Incredible. we'll talk to you soon see you soon next up we have Matthew Prince from Cloudflare coming in to TBPN welcome to the stream some huge news from Cloudflare we'll let him tell us the story how are you doing? good to meet you welcome to the stream I would love to start with the news today and then I want to go into some of the the history of the company and when you faced similar junction points and kind of turning points in the past.

1:28:56So why don't you kick us off with the big announcement, the big news today from Cloudflare? Sure. So about 18 months ago, we started getting approached by a number of content creators saying that they faced a new threat online. We spend most of our days, most of our business trying to fight cyber hackers, Iranians, Russians, North Koreans. And so I was surprised when the new threat was AI companies. And frankly, I kind of rolled my eyes at publishers. I was like, publishers are always complaining about the next new technology. And they said, just pull the data. Look at what is going on. And it was really striking that over time, you could watch as the sort of deal that publishers had made with Google starting 30 years ago, which was, you can copy all of my content and in exchange you send us traffic, that deal just didn't hold up anymore.

1:29:49Where they were copying the content, but because they were providing answer boxes, AI overviews, they just weren't sending nearly as much traffic. And that was the good news. As you looked at OpenAI, it was about 750 times harder than with the kind of Google of old to get traffic. With something like Anthropic, it's 30 ,000 times harder. And the reason why is because people are reading the derivatives. They're not reading the content. It'd be effectively like if I asked an AI system, you know, summarize what happened on the Technology Brothers show today, I have less incentive to actually go and watch your actual show.

1:30:22And that means that if you're making money through advertising, if you're making money through subscriptions, if you're just, you know, getting value out of the ego of knowing that people are watching your show, that's going away in an increasingly AI-driven web. And we worried about that quite a bit. And more and more as we talk to publishers, we realize there was something that we could do about it because Cloudflare runs one of the world's largest networks. A huge amount of the Internet already sits behind us. We could partner with literally publishers, everyone from Adweek to Ziff Davis and everything in between to say that let's change the way that the Internet works.

1:30:57And let's change the sort of model where if you're going to take content, you should actually compensate the content creators for it. And so starting on July 1st, we flipped the script. We made it as a default that if you're using Cloudflare, that you can by default for free block any crawlers from taking your content without compensating you. And I think now the hard work begins where we have to figure out now the business model around how we get compensation back to these content creators and make sure that folks like you who are creating real original content can continue to be compensated for the hard work that you're doing.

1:31:32yeah well we used to joke saying that uh the labs are welcome to scrape our content because we want to influence uh the outputs of the model but no it's it's a serious it's a serious issue we were covering one of ben thompson's pieces about this whole debacle a few weeks ago and it was funny because at the time we were like this is there's so many different stakeholders here who could possibly try to figure out a solution to this problem and i obviously the answer you guys are a key player in this and you have the scale in order to kind of make changes happen. Can you, yeah, can you, I guess, like break down more kind of like the kind of the market structure between and how you see this actually working out and who really - Yeah, I mean, I guess what deals have been done over the past year?

1:32:21Because I know, didn't News Corp do a bespoke deal with OpenAI for that exact thing? It sounds like you are more equipped to kind of handle like the longer tail, but also some of the bigger publishers. So talk to me about kind of the state of the art of what those deals look like when they're one-to-one and then what things might look like going forward. Yeah. So I think that, first of all, I think for some time to come, large publishers will do deals with large AI companies where there might be places that people need help or either small publishers or small AI companies and figuring out what has to happen there.

1:33:00But I think even in the case of places where deals have been struck, what the challenge is, is someone like OpenAI is paying a lot of publishers for their content and doesn't actually object to the basic idea that they should pay for the content that they're using. But they do object to the fact that they're paying where all of their competitors are getting content for free. Any market that exists has to have scarcity. And the problem, the reason why there hasn't been a market in this space is that there isn't scarcity. And so what changed yesterday is scarcity was introduced really for the first time.

1:33:38And I think the closest analogy is if you think back to before iTunes launched, we were all downloading music on Napster and all the free pirate services. That's effectively how the AI companies are taking data from any content creators today. And what you need is an iTunes. You need someone to come in and say, okay, let's provide a way where people can pay for that content and they can go back. Now, that's evolved over time. I think our first version in the marketplace will probably be relatively naive and we'll figure it out. We know it's paying 99 cents for songs anymore. We've moved to something that's closer to a subscription model like a Spotify.

1:34:14And I think that that's what we will evolve to have over time. And if we do it right, I think that we can have a large number of sellers of content, obviously, but also a large number of buyers of content, both the big sort of general purpose models, but then also very specific models. And we've got to make sure that new entrants can come into this market and have a vibrant way of participating and competing. And so I think that for now, most of the deals will be one-on-one bespoke deals between publishers and AI companies. You'll need to have some way of enforcing those deals and making sure that if you're charging someone, they can get access, but their competitors can't.

1:34:52And then over time, I think we'll develop something that looks much more like a robust marketplace where content providers can set sort of what their price is. There can be a bid for maybe getting that content exclusively for some period of time or whatever else. And that's going to develop over the next, over the coming months. Is that the correct model to think that the content producer would set the price? I mean, that's certainly what happens on Substack and, you know, the New York Times, the Wall Street Journal set their price. But I've always thought that this might evolve a little bit more like YouTube or like Spotify, where there is a pool of dollars that are going into ChatGPT subscriptions.

1:35:32I personally pay$200 a month and occasionally I fire off queries that probably land on the Wall Street Journal or the Financial Times and I would be happy for them to send 10 cents or a dollar or split off 50 % of what I'm paying. So you have$100 to kind of be a parcel out in the pool and then you see how much inference pulled what data from what what sources and and kind of have it all be driven by the same volume, like the volume algorithm that you see on YouTube or Spotify. Does that seem like kind of what the long-term outcome might look like, or do we need to also get to some sort of like ad-driven marketplace because that's ultimately where YouTube, how YouTube prices these things?

1:36:21Yeah, you know, I think it's going to be, I think that there's a lot that we still have to figure out. I last week traveled up to Stockholm to meet with Daniel Ek, the founder of Spotify. And it was, you know, it was really, it was interesting. He said, you know, the ultimate model that Spotify settled on, I think it's, I don't want to put words in his mouth, but it was basically like, it was sort of the most naive of all of the different options that he had come up with. And it is a pool of funds, and then they divide it up based on basically how many minutes of content you consume. And there are different rates for music versus podcasts versus audiobooks.

1:37:02And it was fascinating to see. So you could imagine a version where Cloudflare effectively negotiates on behalf of all of the content that sits behind us with the big AI companies. People can opt in or opt out of being a part of that pool. the more content that's part of that, the more valuable it is to the AI companies. And then we would look at how we could split that up across how much crawling is actually done across that. I think one of the real keys will be, how can we give hints to the AI companies on what is the content which is the most valuable to them? So, for instance, if Taylor Swift releases a brand new song, maybe does an interview about it, that's incredibly valuable content if you're a chatbot for lonely teen girls, right?

1:37:47On the other hand, it's probably not so valuable if you're sort of a chatbot trying to be the world's best doctor. You know, maybe there's some value in sort of bedside manner, but largely, you know, that's not going to be a big deal in your care. On the other hand, if a research study comes out on acetaminophen's effects on, you know, different types of chemotherapy, very little value for the chatbot for teen girls, but incredibly valuable for the doctor. And so what we have to do is actually, I think, on an LLM or an AI model by AI model basis, be able to give them signals back that say, this is the sort of thing that you should be paying attention to, that you should be indexing, that you should be actually scraping and paying for.

1:38:28And the same way that in the music industry, we've got reviews, we've got different types of music that people are, you know, that you might be into country, you might be in a classical, and it kind of allows you to compartmentalize that. I think that whole ecosystem has to develop. But once that does, something very much like Spotify could be the right answer long-term. And again, I think we're in a unique position to pull it together. Rudy? Talk briefly about stablecoins. I remember in this Ben Thompson piece, people have been suggesting this idea that stablecoins could be some part of the solution or a backbone for a new business model for the internet.

1:39:05At the same time, while I'm bullish on stable coins, someone like a Cloudflare can set up the infrastructure to just use traditional financial rails to process payments. So I'm guessing that it's not part of what you're. This was Ben's reaction to the original sin of the Internet was advertising and this idea that Mark Andreessen, when he built the browser, didn't build in payments because it was this multi-party discussion to figure out how to actually integrate payments. into HTTP didn't happen. The first MCP spec, that's the model context protocol spec for AI agents to interact with each other, doesn't include payments, but he was kind of saying that it might be on the horizon, but would love your take.

1:39:48Yeah, you know, I think the answer doesn't have to be 100 % one or the other. And so I would guess that there are going to be very traditional, kind of traditional financial rails that will be ways to pay people out. But there will also likely be something that is blockchain-based or stablecoin-based. And again, I think we're looking at all of the different providers that are in this space, including potentially creating our own stablecoin that would be part of how these transactions take place. And I think you're exactly right that there's a natural extension from what we're doing here to how we figure out around what the payment rails look like for MCPs.

1:40:29Because as your agent is going around interacting with things, that's also going to be something that is either, you know, charged for or that you actually get paid to do. And there's got to be a way for those transactions to take place. and to the extent that you can reduce the transaction costs for those transactions as far as possible, then that's a pretty interesting way of being able to process very high volume, low dollar amount transactions. So I think that's right. My only one quibble is that I think that the original sin of the Internet is not that it didn't include payments. It's that there was no privacy built into it, and your IP address reveals far too much about you and who you are.

1:41:14we don't even have to get to cookies but that's another story no we totally can what about we we've talked about content creators publishers what about uh the the apps of the world that ubers the instacarts that actually have really meaningful advertiser businesses you know businesses built on top of them uh do you expect there to be any type of this functionality rolled out to them over time or is that something you think they're thinking about quite a bit because if i can go to chat gpt and that's my default daily assistant let's say in a few years from now and i'm like hey order me groceries and order me this uber uh you know i'm not in the app seeing ads potentially you know being upsold and and that could be a problem for those types of companies yeah totally and i think that i mean um you know robots don't click on ads uh and and so and so the the sort of model that part of the revenue stream to support these services has to come from somewhere.

1:42:19And if today Uber is able to monetize the time where I'm waiting for a car to come by showing me an advertisement, that means that they can effectively charge me less for the ride. And so it may be that if that ride is booked through an agent instead and they don't get that advertising experience. And again, I don't know enough about Uber's business model to know how important that is to them. But if they don't get that, then maybe it is that there's some sort of premium that an agent-booked ride receives versus a human-booked ride. And again, I think that we've got to figure out what that looks like.

1:43:02I think that's going to be less up to Cloudflare. Our job will be how do we provide those payment rails? How do we provide the systems? How do we make it so that we can have guardrails on as agents interact with applications that are there that you as the application provider can set those rules and controls and then agents can interact within that system? And MCP is sort of the leading candidate for providing that. But you're right that it's a sort of draft version of that specification. And there are a lot of things that have to mature in order for that to be something that is the real kind of agent to agent system that is likely to run what will be an increasingly AI-driven web.

1:43:45Yeah. Can you talk about any previous crucible moments for either Cloudflare or just like the internet history broadly? This feels like a moment where you're potentially trying to, I mean, deal with a shift in the overall internet structure or the incentive structure, but it's a reaction, but it's also an action that should reshape the relationship between different parties on the internet. Are there different moments in the history of Cloud Flare or the history of the internet that you think we could draw on as historical analogies to learn from to see how this might play out? You know, I think that Google really, 30 years ago defined what was the business model for the web, which was you create content, search drives traffic, and then you monetize that content through advertising or subscriptions or ego.

1:44:47And ego and monetization, not quite the right thing, but you drive value from it in one of those three ways. And that's held up for the last 30 years. I think that this is the first time that I've seen something where I thought, wow, there are really going to be very, very, very fundamental changes to the structure of how the internet works if we move from a search-driven model to an AI-driven model. And I think that what I hope is that we can actually make this something where what gets rewarded is not what gets rewarded today, which largely is, you know, who can write the headline that produces the most, you know, sort of inflammatory response in all of us, you know, who basically drives the most cortisol, you know, gets the most clicks, and therefore the most ad revenue or the most subscriptions.

1:45:46That's not a healthy way of looking at the world. I think the alternative is if you imagine that kind of all of the AI models together are a good kind of assemblage of an approximation on human knowledge, if we can identify where the holes are and then create incentives for content creators to actually fill in those holes, that actually is going to move humanity forward. It's going to make the AIs better. It's going to be a much more interesting thing. And that's, I think, how we're going to be creating it. I can't think in the last 30 years of a seminal moment. I think there are some things that are along the way.

1:46:21I think 2016 was a really big turning point year for a lot of reasons. It was sort of the year that technology went from being able to do no wrong to being able to do no right. And sort of rise in populism around the world. You have Brexit in the EU. You have the first Donald Trump election. You've got Xi and Modi consolidating power in Asia, the Filipino election. And I think that that was a point in time where, you know, also driven by Snowden shortly before that in 2015, that that a lot of the world lost faith in kind of the U.S. model of Internet governance. And it wasn't quite ready to adopt the Chinese model.

1:47:01But that's that's definitely been a shift, which is substantial. And I think we're still watching that play out. That, I think, probably still remains the biggest threat to the overall Internet. But this shift to AI as well, again, I think is a real challenge, but it's also an incredible opportunity. If, again, we can make the rewards incentives for content creators not be who can produce the most cortisol, but who can produce the biggest sort of incremental improvement in human knowledge, that would be an incredible win. And something that, you know, I don't quite know how to get there yet. But I think yesterday or today and, you know, we took in July 1st, we took a real step in moving in that direction and making sure that content creators can be compensated for really producing information, which is valuable to advance human knowledge.

1:47:56What do you think about the future of investigative journalism? There's been a big shift in just content creation into independent creators, but a lot of that is actually downstream or separate from the type of work that investigative journalists do. I'm thinking of like Seymour Hersh hanging out at a local army bar for a year before he gets one scoop that he can write a book about. And these investigative journalists, they tend to, you know, John Kerry Rue was on the payroll of the Wall Street Journal for years. He was writing stuff, but then he blows the Theranos case wide open, eventually a book and then a movie.

1:48:33And I imagine that with artificial intelligence, the value of a scoop could actually go up because you could use an LLM to read through the clickbait repurposed version of the article to find, wait, they're sourcing actually, this person posted it on the internet earlier. They're the one that actually did the hard work to get the scoop. They should get 90 % of the value and 10 % should go to the repurposed rage bait version as opposed to the economic model now, which is maybe you get 90 % more clicks on the viral repurposed content and the scooper actually gets 10%. Do you think that's possible or how do you think that investigative journalism will evolve?

1:49:14Yeah, I don't know if this is an answer to your question, but I thought it was interesting. As I said, I met with Daniel Ak up in Stockholm, and he told me, he said, you know, we were talking about this, and he said, you know, one of the things we do at Spotify is we actually surface all of the different queries that are sent to Spotify that we don't feel like we have a really good response for. So if somebody searches for, you know, I want a song to a reggae kind of beat with, it's all about how much it sucks when your sister steals your car and your dog. Not to get too specific. I don't know what these things are.

1:49:59But there are musicians who take this list and they actually write songs based on what people are looking for. No way. And that they make tens of millions of dollars a year doing just exactly that. And there's something about that that I think is really beautiful, as opposed to the alternative of just, you know, just trying to do a little more me too of what everybody else is doing. Like taking a different twist, using signals from the market in order to go find that. So, you know, again, that's not investigative journalism by any means. But I think it is actually advancing kind of the sort of good of humanity where it's taking a place where there's a missing need and it's filling that missing need.

1:50:43And so I am hopeful, you know, and I mean, I'm a relatively optimistic person. And I'm hopeful that if we get this right, that we might be on a golden age of content creation where people actually are rewarded for doing things that advance human knowledge as opposed to just doing things that produce as much cortisol as possible. Yeah, the idea of a knowledge bounty, right? It's like, hey, there's groups of people or a single entity online that will just pay you to produce really high quality information around this specific topic. And the internet always did this sort of organically, but it would just be somebody spinning up a blog or maybe an Instagram account or something like that.

1:51:24And they would just start blogging about something that was niche. And then an entire network would form around it and other people would contribute to it. So I think there's quite a lot of precedent, but it would be exciting to like put that reward out before and not saying, hey, you have to do this and then maybe you'll get some ads associated with it later. But like basically like the pool of capital is here and you just have to deliver that knowledge that that people already want. And we know it because they're searching it on LLMs and things like that. I think I'll tell you the sort of black mirror kind of dystopian outcome.

1:51:59if we don't get this right, which is I don't think that I don't think journalism goes away. I don't think that research goes away. But you could imagine a world in which we go back to something kind of like the Medici's, where there are five big AI companies, and they basically employ each of them, all of the journalists, all the researchers, all the academics, to be able to do the research to feed their systems, because you're still going to have to have original content, people are still going to have to be able to produce that in order for the AI systems to, to fill in the holes in their kind of effective block of Swiss cheese that is their model.

1:52:33But I think that that's a pretty bad world where, again, because you then probably have the conservative AI and the liberal AI. I mean, all these things that the internet kind of broke apart, you could imagine AI as a system that is just this massive consolidator in the future. And I think that's a bad outcome. And I think a better outcome is if we can figure out how can we reward people for, again, driving knowledge, but not get to a place where all of them have to be employed by one of the five, you know, big A. Yeah, I actually talked to somebody very high up at one of the labs who said that it was saying that, like, if you take the total salaries of all the journalists in America, it would be a fraction of what the AI labs are spending right now just acquiring data.

1:53:23And so it's not a financial question. It is a political, cultural question. It's interesting. That's also the argument why I think that, and I've been really positively surprised as we've talked with, because we've talked with all the big tech companies, all the AI companies about this, and they all, with maybe one or two very small exceptions, they all say, yes, we understand over the long term we have to pay for content. And so they get that. What's key, though, is it has to be a fair playing field. And that fair playing field, everyone sees that slightly differently. So if you're a new incumbent, you want to say, well, Google can't be advantaged.

1:54:01If you're Google, you have to say, well, we have to be respected for the ecosystem that we've helped build and flourish and we should be able to do this. And so everyone's got a slightly different take on this. But I'm actually encouraged that the dollars are there, that there is an acceptance that this is something that needs to happen, and that if you ask them, everyone says, yes, we need to do this as long as you can create a level playing field. And again, that's where I think our role comes in is how can we create that level playing field? How can we create scarcity? And then how can we make sure that content creators are being compensated for the hard work that they're doing?

1:54:40Yeah. Zooming out just for a second, And what is the state? How's the Internet been for the last few weeks? It's been a busy month and or last month in geopolitics. And I know that makes your job a bit harder, or at least I would imagine things get a little bit busier. Keeps it interesting. I mean, it's whatever whatever you see sort of in in a in the sort of kinetic side, the physical side of a conflict is usually replicated in the in the cyber side of the conflict. And so, you know, we as the hostilities ramped up between Israel and Iran, first of all, we saw very clear signals that that something was coming ahead of time, which is it's interesting how there's sort of a digital residue, which shows when there's going to be kinetic action taken.

1:55:29And so we were watching that pretty carefully. Big attacks targeting both Iran. One of Iran's largest banks was hacked by what looked like a group of Israeli hacktivists. The largest cryptocurrency exchange in Iran was hacked and all its funds were drained. And again, looking back, it was either by the Israelis or Israeli sympathetic attackers. Iran has tried to do the same thing against Israel. Israel's cyber defenses are much stronger. But we're starting to see that Iran is targeting other largely U.S. financial services firms, critical infrastructure firms, to try and see, to sort of try and strike back from what is, you know, how do they strike back against the US in a way that is harmful, but doesn't start World War III.

1:56:25And I think that increasingly, unfortunately, cyber will be a big piece of that. And so we're, you know, we're doing everything we can to stay in front of that, make sure that anyone who needs it has protection, and that we can keep the lights on everywhere in the world. Last question for me. Go for it. There's a number of larger overarching tech narratives. I'm interested in if you're losing sleep over any or tracking any in particular focus. The AI talent wars and kind of pay inflation for top performers, is that an issue or something you've been tracking? Or the difficulty to build larger data centers and infrastructure, the GPUs short of the chip wars?

1:57:06Any of those topics kind of particularly relevant to you or your business or we're kind of keeping you up at night? Yeah, you know, I think we're not trying to build a foundational model LLM. So we're not as much competing for the bleeding edge AI researchers. I will say that I've been really amazed at both from an academic side and then also just, you know, pure talent side. how many people are interested in working on that problem of something like how do you score content in order to be able to create a marketplace and so and so that that's something that's been um you know pretty exciting we're very excited about the uh the the people who are coming to apply to work for cloudflare to to work on problems like that and like today has been a record uh applicant day for us uh on the on the congratulations record sorry i hit the air Air horn for you on the record applicant day.

1:57:59But it's good. It's good news. And then, you know, I think, you know, we tend to put a little bit of equipment in a lot of places. And so we don't tend not to have kind of massive multi. Yeah, you're not running into like power constraints or rare earth element constraints or water constraints. We do, but in kind of a micro way where, you know, we put GPUs at the edge of our network. We have to live with a power envelope that we're given by an ISP. And so we're doing things to try and figure out how to just get the best power efficiency out of the GPUs. The answer to more and more need of GPUs can't be everyone has to turn up their own nuclear power station.

1:58:38So I do think the place where we're pushing suppliers and AMD is doing some really interesting things in this space. Qualcomm is doing some interesting things in space. Fruit company down in Cupertino is doing some interesting things in space. How do you focus on, yes, performance, but performance per watt? And we've seen this game before with Intel saying, oh, that doesn't matter. Like, just get the most performance possible. You can water cool things, all kinds of things. That tends to not be the winning strategy over the long term. And so we do think that there will be a renewed focus on just energy efficiency around GPUs.

1:59:12And we're really pushing that in a way that, because, again, we can't build our own data centers in the business that we're in. And then chip shortage, the chip shortages are funny. Like it's, there's never been a chip shortage in any time in the history of silicon that doesn't turn into a glut. Hey, but this time it's different. Yeah, this time it's totally different. So I think you're going to see both. You're going to just see shifting demand that's there and a lot more. NVIDIA is not going to be the only chip supplier of GPUs. There are some really, again, great, great other providers that are out there.

1:59:50Yeah. Well, thank you so much for stopping by. I really enjoyed the conversation. Congrats on the launch and come back on again soon. Yeah. Yeah. Thanks for having me on. Good luck filtering through all those job applicants. We'll talk to you soon. See ya. Bye. There's no decency anymore. You can't even take a summer weekend in June off. You can't even send an email to a 3 ,000-person organization without it leaking to Wired. Mark Chen, the chief research officer at OpenAI, sent a forceful memo to staff on Saturday promising to go head to head with social giant in the war for top research talent.

2:00:22This memo, which was sent to OpenAI employees in Slack and obtained by Wired, came days after Meta CEO Mark Zuckerberg successfully recruited four senior researchers from the company to join Meta's super intelligence lab. I have a visceral feeling right now, as if someone has broken into our home and stolen something, Chen wrote. Please trust that we haven't been sitting idly by. I mean, I mean, this makes sense. You need to tell the troops that we're prepared to go on the counterattack. We got attacked, but we're ready to go back. What's interesting is I don't think that Meta is necessarily gonna try and go eat ChatGPT's lunch.

2:01:00I was revisiting that conversation that we had with Jeff Huber, and he was saying, he was kind of reiterating, never bet against Zuck. He's working on an open source model, but a lot of it is more of this B2B applied AI necessarily than trying to go and disrupt ChatGPT because Google's already running that playbook. Mark can see that and see that what happens when you're a trillion-dollar company and you roll out basically a direct clone of the ChatGPT app. It's like, yeah, you can get a decent amount of users in a notional terms. Like I'm pretty sure the Gemini app has like a hundred thousand user or a hundred million users and like lots of five-star reviews But it just doesn't have anywhere near the penetration of chat GPT And so when you pull someone off the street you say what do you use for AI?

2:01:48They say chat They don't even say chat GPT anymore. Yeah, so dominant And so I think mark knows that he shouldn't necessarily try and go after that But he should be going after the next thing and the next next thing and have a model that he can yes pipe into all sorts of different features within the meta ecosystem. But yeah, the crazy thing is there's not, it doesn't seem like there's clear precedent for a raid of a talent raid of this magnitude, right? We covered Ken Griffin rating Enron, but it was post the collapse, right? Yep. Apple heavily recruited out of Xerox PARC in 1979 in the early 80s, but like it was kind of a downswing.

2:02:30Yeah, it wasn't anything of this magnitude, nor was it, hey, we're going to come in and just give you these nine-figure off packages and things like that. Yeah, and it's very common for a startup to be able to pull people from the big legacy company that's kind of sclerotic. And we've seen a lot of people that were at Apple or Microsoft or Xerox, and then they went to Google, and then they went to Meta, and then they went to OpenAI. I mean, Brett Taylor, who's the chairman of the board at OpenAI, was the CTO of Meta, right? And it's like, okay, he clearly just wants to be in like the hot thing.

2:03:09And he's like a startup guy almost. And I believe he was at Google before because he worked, yeah, he redid Google Maps. And so like the story of Brett Taylor is really like the default, I think, for most like startup people. It's like he's early at Google. He works with Paul Buchheit on Gmail. He works on Google Maps. then he goes over to meta cto there then he goes to open ai's chairman of the board there and it's like he is a he's a startup guy and so he's always riding like the new wave you usually can't poach them back into the older company that's rare yeah uh one one other some other precedent here in 2011 in 2010 and 2011 uh zuck and facebook went super aggressive poaching from google yeah so facebook had crossed half a billion users.

2:03:56They were in that period of transitioning from a super scrappy startup. And they went heavy into Google. So they went and got high performers from ads, search, mobile, on the Android side, and some of the social product people from Google+. And Zuck did something similar, not to the same scale, but just went with these sort of heavy, heavy, heavy comp packages and was very successful. Well, Google had to respond and increase comp in a number of different roles. Did they poach any designers, any people that use Figma.com? Any people that think bigger or build faster? Anyone that, you know, because Figma helps design and development teams build great products together.

2:04:34It would be a different place. But fortunately, you can go to Figma.com. You can think bigger. And you can get started for free. You can build faster. Anyway, what do you think of the buzzword superintelligence? This whole like they vote they really rebranded it is it a goalpost shifting I think it's smart I think he poached the word super intelligent it's fine now because uh and he's not saying he's not saying he's safe super intelligent team is just saying super intelligence. Reckless, safe, super intelligence implies reckless, reckless super intelligence. I like that. Um, but it's funny because, uh, you know, uh, everyone was focused on like AI as a buzzword.

2:05:15Then it was, uh, AGI that it was now it's super intelligence, but like, you know, within our group, like we all think like super intelligence is kind of the old thing. Like everyone, like me and you, like we, we know the secrets to this stuff. Like, Like it's kind of already priced in. The real killers, they're focused on the next thing. You know what I'm talking about, right? Giga intelligence. That's the one that people are getting, right? Really? Like the real killers are like, yeah, well, like AGI is basically here. Super intelligence is basically here. But Giga intelligence, that's the one we're working on.

2:05:45Because we're going to need a new buzzword. Because we're burning through buzzwords and increasing rate. And so we just steamrolled the Turing test, completely blasted through AGI. No one talks about AGI anymore. AGI is here. But you know, super intelligence, we're going to solve this buzzword. We're going to churn through this in a year or two. We got to start working on giga intelligence now. Yeah. This is the way. Start adopting it. Chen promised that he was working with Sam Altman, the CEO of OpenAI and other leaders of the company around the clock to talk to those with offers, adding, we've been more proactive than ever before.

2:06:20We're recalibrating comp and we're scoping out creative ways to recognize and reward top talent. still even as open ai even even as open ai leadership appears desperate to retain its staff chen said that he has high personal standards of fairness and wants to retain top talent with that in mind while i'll fight for to keep every one of you i won't do it at the price of fairness to others he wrote um it's such a brutal dynamic if you're mark chen yeah if you're sam because not everybody at OpenAI is getting poached, but presumably Zuck is working with all the people he's poached already to identify who are the best people at OpenAI, who do we really want, and then going to them and making the maxed out offers.

2:07:04Meanwhile, you can't... The team dynamic, if you have a few researchers on a team and somebody gets... Somebody's potentially getting poached by Meta, and you say to retain them, you're like, okay, we're going to give you this sort of massive incremental grant and the other people on their team are going to be like, wait, well, is that my market value? I didn't go talk to Facebook or I, I didn't, I turned down, I never took the meeting or whatever. So you should pay me the same thing too. Yeah. Right. I'm loyal. Shouldn't, don't you want to pay? I'm a missionary. Yeah. I'm a missionary. Why are you paying the mercenaries more?

2:07:38You should pay, you should pay them and the missionaries the same price just because they're missionaries rough for sure. Anyway, let me talk about it. No, the other thing is it creates this like really nasty incentive to basically be like, oh, yeah, you know, you maybe got hit up by a meta recruiter like many months ago. And you can be like, yeah, I mean, they reached out to me and suddenly they're like hovering around you being like, all right, what's it going to take? We really don't want to lose you. Yeah, it is a. Yeah, I mean, it's crazy game theory. Like every single conversation in a company is like this constant game theory.

2:08:17And then timing that with this summer break that I guess opening AI was saying, like, hey, everybody should take the week of the 4th off, or not the week of the 4th, but anyways, you wanted to say something more important. Well, I mean, if you want to see who your high performers are, just look in the linear, right? Linear's purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps. If Zuck were able to gain access to OpenAI's linear, it would be illegal, but it would also tell them a lot. Yeah, you don't want to do anything illegal, Zuck.

2:08:55You want to be 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 and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. So the news comes as competition for top AI researchers heating up in Silicon Valley. Zuckerberg has been particularly aggressive in his approach, offering$100 million signing bonuses to some OpenAI staffers, according to comments Altman made on a podcast with his brother, Jack Altman. So this$100 million signing bonus, this just got baked into the lexicon.

2:09:32But I was listening to Dylan Patel on Jordan Schneider's China Talk podcast. It's actually a transistor radio, but it goes out on China Talk anyway. And Dylan Patel was saying that that might be a kind of a game of telephone a little bit in the sense that it's possible that you could maybe be making$100 million over a number of years in stock based on appreciation. but he was very skeptical that anyone was getting a hundred million on day one without any sort of strings attached for like a true signing bonus so i don't know how real yeah and remember that the zurek team came out and said uh the zurek team explicitly said said they didn't get but i know i know the way that he phrased it it could have been more clearly we're getting no no no no No, I do think that the round numbers are easy to latch on to.

2:10:27Like, why is Mom Donnie talking about billionaires specifically? He doesn't have a problem with 999 millionaires because that's not easy to grasp. Like, people latch on to round numbers. 100 million is so much. A billionaire is so much. And it's easy to quantify. And so the 100 million, if it was 80 million, it wouldn't be going nearly as viral as 100 million. And so I don't know how real that is. Maybe that was thrown out as a total package and then it got kind of telephoned into, well, it's basically a signing bonus because they got the deal as soon as they signed, but they do have some sort of earn out or the shares are locked up in some way.

2:11:08But there's a bunch of creative accounting that can go into basically delivering someone what feels like$100 million of value, which is not far off from, okay, what would it take? Like, you know, Johnny I've got, you know, a huge offer to go to open AI and it was structured in an interesting way with like an acquisition and, you know, but he got, well, it was a few, it was a few percentage points. And when you think about the scale of open AI and the scale of Johnny I've legacy, like, yeah, like what would it take to get someone like that to join? He's a founding designer basically. So it's a couple, couple percentage points.

2:11:44So multiple sources of open ai with direct knowledge of the offers confirmed the number to wired so i don't know because it kind of benefits like both sides to to have that number out there it's kind of unclear who would who would really want to confirm that and then what the nature of these things were the other thing that's interesting though the other thing that's interesting is if you're working at open ai and let's say their top researchers have on average a hundred million dollars in open ai shares that they're like the truly top people. And then you get an offer that's like a$20 million signing bonus, but it's, you know, it's kind of paid out over time and that, or, or they can claw it back if you don't stay past a certain date and you're kind of looking at it and be like, okay, I'm already a centi and I'm getting an offer to like go to a new team that I don't know if I'm going to like and it's and it's unclear like the vision is not quite as clear at meta right i'm joining the super intelligence team it's going to be an incredible group of people with a ton of resources that's exciting but it is a big switch if you're already happily vesting out tens of millions of dollars so it would make sense that these 20 million dollars you know if it's 20 million dollars yeah i can see that if it's 100 million dollars for the for the top top top people it makes total sense yeah i mean like what was the uh i mean the the deal to bring on alex wang was probably like way over 100 million dollars to him personally based on his ownership in that company which was acquired and so like that number doesn't feel impossible uh i would just be surprised if there's not some structure around it um based on based on what dylan was was talking about.

2:13:33There's just enough precedent here that again, going back to Zuck raiding Google in 2010, 2011, he was offering tens of millions of dollars in stock packages to mid-level engineers just because he was like, I need a really good ad product. I want to make my ad product great. Yeah. I mean, have you seen the, why am I even asking this? Have you seen the Blackberry movie? Of course not. But in the Blackberry movie, there's this whole story about they go and they try and poach someone and then it was controversial because they like backdated some stock options for someone to basically give them more uh like cash but without having like the the initial impact of that cash it's kind of interesting um but yeah i mean uh to poach top talent it's expensive um it kind of benefits both maybe i mean i don't know like on on the meta side do they want does zuck want the idea that he's willing to pay up to 100 million dollars out there like maybe because that that certainly leads to more people taking the phone call of like oh wow mark is really taking this seriously i should i should talk to meta's recruiting team i should actually hear them out and then if they wind up coming back to me with a 50 million dollar offer or a 10 million dollar offer like you know we can discuss that and i can see it and they can evaluate how much i'm worth they can make an offer but um at least it got the conversation started but i don't know there was also the theory that sam altman put that 100 million dollar number out in order to kind of like poison the well because if if mark comes to you and says hey you're a top ai researcher come over here and then the top ai the ai researcher says like yeah great i hear i hear 100 million dollars at the going rate and mark's like no no no that's like fake news that that sam was spreading like we're actually paying 15 then you're like oh no like i was i was hoping over 100 but it kind of benefits both machiavellian people and yeah you see it could be like 40 chess on both sides i don't know yeah um over the past month meta has been aggressively building out their new ai effort and has repeatedly and most unsuccessfully tried to recruit some of our strongest talent with comp focused packages chen wrote on slack a source close to the efforts at meta confirmed the company has been significantly ramping up its research recruiting with a particular eye toward talent from open ai google uh open ai and google anthropic while also a top rival is thought to be less of a culture fit at meta one source tells wired they haven't necessarily expanded the band but for top talent the sky's the limit which is funny because yeah of course like anthropics like so missionary driven like it's going to be very hard to to go to anthropic and uh research scientists and be like ads better ads they're like we're building god here yeah anyway 100 million dollars is 100 million dollars not for not for anthropic guys anthropic guys are true believers they don't care what's 100 million dollars in a post-scarcity world doesn't matter you want to be on the you want to be on this on the on the post-scarcity train uh chen's note it is so it is so telling though like how how you like sort of like try to you you know, pinpoint like Zuck's views on AI.

2:16:46He's like, I'm not even going to bother with those people. Not a culture fit. Too AGI pilled. Yeah, that's great. Senator, we sell ads. Anyway, if you're looking for sales tax, super intelligence, go to numeralhq.com, spend less than five minutes per month on sales tax compliance with super intelligence for sales tax the official sales tax automation provider for lucy yes that's true uh chen's note included messages from seven other research leaders at the company where they wrote notes to staffers in an apparent effort to encourage them to stay one leader on the research team encouraged staff to reach out if they received an offer for meta if they pressure you or make ridiculous exploding offers just tell them to back off it's not nice to pressure people and potentially the most important decision wired is not naming the leader as they are not a c-suite executive this is weird where's the where's the end of this quote that's odd i'd like to be able to talk you through it and i know all about their offers uh the remarks come as open ai staff grapple with an intense workload that has many staffers grinding 80 hours a week open ai is largely shutting down next week as the company tries to give employees time to recharge let's give it up for opening eyes grind set it's really fantastic also extremely american to give a full week off right around July 4th.

2:18:06Like I'm normally pretty anti taking time off, but if you're going to go really hard on a particular holiday, make it July 4th, you know, give a week off around July 4th. I love it. Um, I was, I was posting, you know, the over, I need a poly market on, uh, whether or not we get a Zuck American flag video on July 4th. Do you think it'll happen? I actually think they're a hundred percent should be a poly market on that, right? It's kind of 50, 50, right? Like he's definitely locked in very busy probably not a lot of time off he sees that he knows from this that open ai is down this week so that's probably like really encouraging to be like i want to go harder this week they're off yeah my my uh at the same time my advice for founders one of the greatest pieces of content he puts out think about how hard zuck is going right now the week of july 4th and just don't get outworked by him yes just don't get outworked by zuck this week it's going gonna be tough he's in year 20 what excuses do you have you're you're three months into your startup yeah come on go harder go harder i love it uh yeah meta knows we're taking this week to recharge and we'll take advantage of it to try and pressure you to make decisions fast and in isolation another leader at the company wrote if you're feeling that pressure don't be afraid to reach out i and mark are around and want to support you so while opening eyes leadership is taking meta's efforts seriously chen also said that the company is getting too caught up in the cadence of regular product launches and in short-term comparison with the competition the sentiment is backed by a former open ai staffer who worked closely with altman and this and said the ceo wanted to see buzzy announcements announcements every few months this was a really this was a key to their strategy was like always have a buzzy announcement ready if the competition does anything just drop a oh google io is happening wouldn't it be crazy if we acquired a company they called IO the day before or something like that.

2:20:00Like, we're like, Oh, there, Google's announcing the new Gemini. Let's just steamroll them in the timeline. Oh, 24 hours. Yeah. I'd love to introduce you. Deep research. I mean, it's, it's masterful and like, but that's the game you got to play. That's the game on the field. Like I, I, I think he's being aggressive, but he's not doing anything wrong. He, he, um, is up there with Elon in terms of creating and riding hype and constantly delivering enough real product value to justify the hype that was being sold six months ago, basically. So like staying on the bleeding edge. And this is why the anti-tech people hate him and Elon so much because they're like, they're like, it's overhyped.

2:20:44It's not useful. And then like a year later, it's like, there's Tesla cars everywhere. The rockets are landing and like 90 % of people are using Chachipity every day. Tens of billions of visits monthly. Okay, so it was real, but also he was over promising, but he delivered at a higher level than anyone in human history. And that's just like, those two things are in conflict. Someone said this, like Elon is both Thomas Edison and Barnum and Bailey, or whatever, PT Barnum. Like he's a circus man who can put on a show and put a robot in a human in a suit acting like a robot, but then he can actually go and deliver the thing, which is just, it just breaks people's brains.

2:21:24Anyway, we need to remain focused on the real prize of finding ways to compute. A lot more supercomputers are coming on later this year into intelligence. Chen wrote, this is the main quest, and it's important to remember that skirmishes with meta are the side quest. Last but not least, I'll be around this week, recharged and ready to go pound for pound. DM me anytime. I love it. He's ready to go. He's fired up. Get him in the ring. I love talking with Mark. Yeah. That was a fun conversation. Also, I mean, guys in shape. Let's get him in the octagon with Zuck. Mark on Mark Violence. Let's see it.

2:21:57I mean, if there was a pound for pound list for the top AI researcher in the world, he's in the conversation. He's in the conversation. It's amazing. It's really been amazing to watch Mark's leadership and integrity through this process, especially when he has had to make tough decisions Altman wrote on Slack in response to Chen's message. Very grateful we have him as our leader. I mean, it can't be overstated making these decisions, right? One of your best people comes to you and says, hey, I'm really happy here at OpenAI. I have$80 million of stock. And I was just offered$150 over the next year.

2:22:40And it's highly liquid, or over the next few years. It's highly liquid, meaning that I can market sell it quarterly forever. And meanwhile, you're going through this for-profit conversion. Do you think the liquidity thing is real at all? I mean, obviously. What are you, I mean, like if you want to, let's say you want to buy a$50 million house and you have$100 million in illiquid open AI. Is that going to be hard at all? I feel like Goldman Sachs and Morgan Stanley, private wealth management, are going to be beating down your doors to give you a loan that's backed by the shares. You're only going to have to put down 10%.

2:23:16Sure, but meanwhile, the company is failing to go through a for-profit conversion. Yeah, but I mean... Satya has taken 20 % off the top. I mean, that applies... No, I'm just saying... That applies like a small haircut, I would say. I'm just saying there is always going to be a tension of somebody having massive wealth but not having greenbacks. There's always going to be that tension. And people seeing that Meta is one of the most liquid stocks in the world can constantly trade in and out of it. And it's ultimately just it's stable. Yeah. So, I mean, if you're interested in liquid stocks, go to public.com.

2:24:01Investing for those to take it seriously. Multi-asset investing, industry-leading yields. Good old-fashioned stocks. Trusted by millions. And who knows, maybe they'll have open AI soon. Anything's possible. Yeah. We should. Robinhood has the tokens around private companies. Maybe we should tokenize nonprofits. I want to be able to trade, you know, uh, uh, PETA, you know, let me, let me, let me go long PETA. Let me get some, let me get some leverage on that. I want some leverage levered options on PETA. Look at Tyler right now. Let's get on the Tyler cam. Oh, how are you doing? I think I'm, I think I'm in the right mission.

2:24:42Oh, you did it. No way. 15 minutes left. Let's I can't believe he got it set up so fast. That's amazing. He's sitting at 26 minutes so far. All right. Well, have fun in there, Tyler. I just look over. I didn't realize he was on VR. It's amazing. I think he's actually playing it. This is crazy because my number one complaint with the Quest was that it just takes a long time to set up. And I think that it could cause a lot of dust. You intentionally did this challenge. and made it seem like, oh, I'm going to happily give away my new VR Xbox. Thinking that there's no way he could finish it in 40 minutes.

2:25:23But now he's speedrunning. Pillar of Autumn, it's happening. Anyway, Swix has the story. He's breaking it down. Yeah, some good highlights here. The Mark V. Mark War has resulted in going from, oh, the good people don't leave, to someone has broken into our home and stolen something one week company shut down question mark question mark i mean i i was going back and forth here i wouldn't be surprised if the shutdown was somewhat strategic yeah in that hey people already need a break we shouldn't have them walking around the office with the way they were writing it it felt like this had been on the table for months because the company has been working really hard launching a ton of stuff uh and it seems like if it just seems like an odd, an odd choice to, if you're in the middle of this Mark V Mark war, that that would be what you choose to do would be a one week company shutdown.

2:26:20But I don't know, maybe. I'm just, I'm not a hundred percent that like the AI talent war has resulted in the shutdown. It's more just like the shutdown is happening at a weird time. Anyway, this third point is very interesting. Pivoting product launch calendar to AGI race, especially when Stargate comes online. Dylan Patel says December is when Stargate's coming online. And that should be a big, like the biggest cluster ever and unlock even more maybe pre-training scale. But there's a question about how important that is. And maybe you can do more reinforcement learning in a more distributed way.

2:26:58So I don't know. Also, like it's not exactly like Zuck is GPU poor. So I don't know. I don't know how big of a deal it is the Stargate thing we'll see but number four uh for some reason meta is ignoring anthropic don't care about safety if this is true of course uh the anthropic point was very funny uh anyway uh there's other posts in here that we should cover uh Sattwick Singh says what Sam never understood was that Zuckerberg torched 20 billion over VR headsets with Nintendo Wii graphics and didn't even flinch didn't even flinch you know what's so funny like those the the Nintendo Wii graphics thing that was like, that was like three months.

2:27:36And then after that, it was, he was doing that, that Lex interview in the metaverse. Did you ever see that? Where it's like, it is like photo real immediately. We got a wild demo at meta HQ of all the new products and we were blown away. I'm not even sure. I don't think we can say much about it in like the abstract, but, but yeah, I mean, none of that was like Nintendo Wii level graphics, but, but, but I mean, that, that was that one picture was like iconic and kind of like it felt like oh this is kind of a step back in terms of well many more people saw that picture than actually use the product yeah and so yeah because there were plenty of there were plenty of vr games that didn't have nintendo we graphics like the hero game for the for the quest when it came out was robo recall which looked super sci-fi and just looked awesome and it was it was it was great and there were a bunch of other games but yes i mean the point is is that like uh mark is totally ready to spend 20 billion dollars on a big project if he thinks it's valuable and here he clearly does and so he's going after it um anyway uh similar founder led company that's building amazing ai stuff finn the number one ai agent for customer service we've had own on the show before he's been on number one in performance benchmarks number one in bank offs number one ranking on g2 let's go So if you're looking to do customer service, head over to Finn.

2:28:59I'm saying this. They're not saying this. But I'm going to say this is the official AI CX tool of both AI safety and being AGI pilled because Anthropic uses. Oh, really? No way. There we go. Okay. Awesome. Yeah, I'm sure Anthropic will love that. They're like, we said you could put our logo on your website. So we didn't say these technologies. Two podcasters. Two podcasters could go way over their skis on this endorsement. It's the official CX agent. Anyway, Rune had an interesting take here, diving into why these trade deals are so, they're not really trade deals, but these poachings can be so damaging.

2:29:45And he's trying to put it in broader consumer terms. We're going to debate whether or not his point is well taken. He, of course, works at OpenAI and has for a number of years. Rune says, intellectual property, by default, is a market failure. Single, well-informed, talented defectors can walk away from organizations with billions of dollars of tacit value of knowing what works and what doesn't. The athlete metaphor is somewhat wrong. In industries where patents and such aren't viable, market participants will drastically underinvest in R &D efforts due to IP seepage. Just like the I drink your milkshake milkshake effect of oil seepage and land rights.

2:30:27There is a compelling pro-consumer case for non-competes. Interesting. Very rare that you hear a tech person argue in favor of non-competes. Interesting. I mean, the immediate impact of non-competes in this context would be dramatically lower wages for AI researchers like Rune, which is interesting. um the other question is yeah it's interesting you'd have to move ai out of california oh people would then maybe or they or they i'm just saying i'm saying if you really want to use non-competes go where they can be enforced right yes but then as uh historically yeah but then as an ai researcher you'd say i definitely don't want to leave california because i'm gonna get a much better deal here school here yeah my question is like i've always been interested in like why can you know like the consumer packaged goods industry like patent like a tab on a can for 25 years and like walt disney can own like the shape of mouse ears for like 80 years but like google can't own the transformer for like even a minute like i get that it's like some sort of fundamental discovery but I've always been interested in how little IP works in technology.

2:31:44So that's interesting. Do you think it just is a byproduct of hacker culture and sort of like positive sum culture of Silicon Valley? Yeah, but you'd think that would change if there were tens of billions of dollars on the table, right? Yeah, I mean, there's a culture of competition doesn't kill businesses. So I agree with you, and I'll give you an example. So pull to refresh on the iPhone. was created by a Twitter employee, like a Twitter UX UI developer, built that user interaction, and then Twitter had a patent on it. Lauren Brichter. Yes. American software developer, best known for creating Tweety and the pull to refresh interaction.

2:32:28So he created that design pattern, and then he had a patent on it. Twitter owned the patent, and Jack Dorsey and the Twitter crew were libertarian and said, you know we're not going to enforce this and then it got baked into instagram and it's it's now natively in ios and it's in in all of you know it's basically like one button to like if you're if you're true if you're truly terminally online you're using it hundreds of times a day true but now we've actually moved past that we've moved into endless scroll uh where you actually don't need like if you're on tiktok you're never pulling to refresh you're just keep you just keep scrolling to the bottom.

2:33:04So we're actually post-pull to refresh, and now we're in the endless scroll. But endless scroll, I believe, was developed by Pinterest, and they had a patent on it for a while, I think. I might be wrong here, but endless scroll was also something that was not able to be owned, which is just odd to me. And then there's the other question of like, Coca-Cola's been able to keep the formula as a trade secret for like 100 years or something, and it's just odd that tech companies can't seem to do either. They can't keep the secrets. You can have trade secrets. It's not like an open AI researcher can go over and say, here's a bunch of code.

2:33:41Let's roll it out. It's basically the sort of way of doing things that they've internalized from being at a company for a certain amount of time. Tacit value of knowing what works and what doesn't. And so my naive read on this is that if you had had a top tier open AI researcher at meta during the Lama 4 build out, that researcher would have said, hey, don't focus on pre-training scale as much. We need to get a reasoning model out and we need to focus on RL and post-training much more, much more. And when you talk to Dylan Patel, I was asking him about DeepSeek and how DeepSeek was doing all these innovations and like moving to floating point eight, like smaller, basically smaller numbers storing the weights.

2:34:29And he was like, oh yeah, but OpenAI was doing that like two years ago. DeepSeek just open sourced it. And so it's like the world found out, if you found out the best practices from DeepSeek because they open sourced it, like you were not on the cutting edge and you should have been coaching AI researchers from the top labs earlier. So two things could be happening here. One, Zuck is right to just go and overpay and try to recreate some of the magic and get a leading model or set of models out of it that he can use in a bunch of different ways that we've discussed. Or none of this matters and Rune is baiting Zuck into just overpaying.

2:35:10paying. The 4D chess is like, oh yeah, this is, they're getting everything. They're taking everything. Yeah. No, I don't, I don't necessarily believe that because I did talk to Rune like years ago and I was like, but like, is this going to commoditize? Like is the foundation model layer going to commoditize? And he was like, they're like, they're like the secret to open AI in many ways is like the Thelian secrets. Like they understand things at a lower level that other, that other people just don't. And so that will compound and stay at advantage. And he hadn't even predicted the dominance of the consumer and like the aggregation theory that happens when you're the front end to consumer AI.

2:35:50That's incredibly valuable. But just on the research side, just on the research side, like they can stay ahead just by understanding like the secrets of what works and what doesn't. But it's interesting. Anyway, let's tell you about Adio. Customer relationship magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level. Next level. Next level. Well, I mean, you know, we have a light guest booking today. But, you know, we're spending an hour talking about one story because it's fun stuff. We can continue. We can go over to the Wall Street Journal because in the exchange section, there is a fantastic article related to this.

2:36:32It says, it's known as the list, and it's a secret file of geniuses. And I'm looking at this, it says Mishka Belenko, Yu Zhong, Mark Zuckerberg's been reviewing this list, Lucas Byers on this, the new guy. It says Jordy Hayes, John Coogan, Tyler Cosgrove, Ben Kohler, a couple other folks, but you know, just the usual people that we know. Anyway, it's known as the list, and it's a secret file of geniuses. Only select AI researchers have the skills for the hottest area in tech. Mark Zuckerberg and his rivals want to hire them, even if it costs ungodly sums. We love ungodly sums. We should be ringing the gong more this episode.

2:37:11All over Silicon Valley, the brightest minds in AI are buzzing about the list. A compilation of the most talented researchers and engineers in artificial intelligence that Mark Zuckerberg has spent months putting together. Lucas Beyer works in multimodal vision research, which Tyler broke down for us. Can you imagine if Zuck spun up like basically like a hot or not style tool that just pins two researchers together. He makes other researchers just do the test and then just puts out a list of, this is the top 50 people. Yep. This is so good. So Lucas Beyer describes himself as a scientist dedicated to the creation of awesomeness.

2:37:59Very Reddit coded. but he's a poster on x as well yeah yuzhong specializes in automatic speech recognition and barely has an online presence besides his influential papers misha bilenko is an expert in large-scale machine learning who also enjoys hiking and hill climb hiking and skiing or as he puts it on his website applying hill climbing search and gradient descent algorithms to real world domains. That's very cute. The recruits on the list typically have PhDs from elite schools like Berkeley and Carnegie Mellon. They also have experience at places like OpenAI in San Francisco or Google DeepMind in London.

2:38:39They're usually in their 20s and 30s and they all know each other. They spend their days staring at screens to solve the kinds of inscrutable problems that require spectacular amounts of computing power and their previously obscure talents have never been so highly valued. The chief executives of tech goliaths and heavyweight venture capitalists are cozying up with a few dozen nerdy researchers because their specialized knowledge is the key to cashing in on the artificial intelligence. It is funny. It is funny. Some of the, you know, some of the losers out of this talent war are just VCs because how do you compete?

2:39:10How do you compete when, you know, historically you could have gone to some of these and really overpaid to invest. You could have come to them with a ridiculous, what would be very ridiculous for a which is i will spin up a new company not ridiculous it happens but it is kind of ridiculous in some ways spin up a new company i'll give you 200 on a billion and you can take 10 million personally in secondary immediately yep and that is no longer even that compelling of an offer if the odds of actually winning are low and you just want the most access to compute and be traded. Will is in the studio.

2:39:53Welcome back to TV. Yeah, how are you doing? How's it going? Congratulations on the trade deal. So what supercar did you buy? You got a Shiron or you go F80. I mean, we hear that the numbers are huge right now for folks like you. I mean, I'm taking a plane more so like, okay. Yeah, yeah, yeah, yeah. People say, you know, we wanted flying cars. We got 140-year characters. The fact that you would imply that Will drives himself is offensive. I mean, Waymo for the first time recently. I'd been to SF, but I hadn't been around SF proper that much since the Waymo craze took off. And so that's been the car experience, really.

2:40:42Self-driving cars, damn. Yeah. So are you in SF full-time now? Still back and forth New York. I'm like kind of slowly starting to spend more time in SF. It's on brand. You're decentralized. You're decentralizing AI. It's a perfect fit. Perfect fit. Anyway. Did you touch grass at all this weekend or were you locked into the timeline? A lot of stuff was happening on the timeline. I mean, I'm in New York right now. I did some New York stuff on Saturday. But yeah, I mean, it's been good. I've had lots of drama, intrigue as usual, the trade deals. I know I've been tuning into earlier. I know you guys have gone over all the major roster updates, but yeah, it's exciting times.

2:41:31Open AI, open model soon, hopefully, but not this week. Yeah. So, yeah, I mean, the first place I want to start with is the actual trade deals. do any of these people jump out to you as particularly interesting? Have they been on your radar? Have you met any of these folks? Can you give us more context on how academic are they? How product-oriented are they? It feels like this is purely research, beefing up of the research team, and Meta kind of has products solved. Is that the right model to think about this? What how can you characterize or even the shape of the team that sucks? Even There's Thousands of really great at software engineers that work in AI Yeah, sure and but what you know even kind of getting a sense of like how many people was was suck really going after was it?

2:42:30250 was it a hundred the list that came out today is you know somewhere somewhere? I don't know. There's like 20 people on it something right right. Yeah, yeah I mean, it's a great list. It's a lot of like very senior, senior researchers who know, who have like been through some like real product cycles who like, I think the goal is people who can bridge the gap and research your product. Because like, like one thing meta has a strength of, but I think doesn't translate in like this era is they have a lot of really good like academic researchers. Like Jan LeCun's whole org has a lot of very talented, very capable researchers who write important papers.

2:43:06but it's the kind of stuff that doesn't really turn into exciting products. It's like more betting five or 10 years out. How do we want to do things eventually versus like going through a pre-training cycle for a Gemini or a Claude or an opening model? Like that has a different set of considerations. And so this to me looks like they want like 10, 15 great people who have been through those research to product cycles in terms of the model being the product. And it seems like they probably got Alex and then supposedly Nat and or Daniel to kind of handle a little more of the business side, but product the business stuff.

2:43:54Yeah, it's a management role. Yeah. Yeah. What is your take on Yann LeCun right now? How should we think about his position in the AI world? I see these memes of he's a non-believer, he doesn't believe in super intelligence and AI god, he's a little more practical. It seems like he's been right about some things, in the sense that we're not feeling a fast takeoff right now, so I think you gotta give him some credit for that. At the same time, Ben Thompson's been criticizing on Lacuna a little bit for not driving the product side of the business. It's one thing to say that, hey, we're not going to go straight shot to AGI God.

2:44:41But then the downstream implication of that is that if you believe that we're going to be living in B2B SaaS world of AI implementation and productization, then go do that and make sure that the models work really well for business. And so I don't know. What is your take? How would you describe Jan LeCun in his history and kind of where he sits in the organization to like a layman? Sure. Yeah. So I think people over-index on thinking of Jan as the meta guy like too much. Sure. I think it's a shame that they didn't necessarily have someone in the Lama org who was as visible as him because he was not involved with Lama at all.

2:45:21Like FAIR, Fundamental AI Research is like a whole other group that they mostly write papers and do very academic work. Jan LeCun's work is very academic. And it's really like, it's, I think he's like, I think on one hand he like is right in the sense of like, we don't have the full picture yet. Like we don't have full on AGI that can like do a human's job forever. And I think that's kind of the drum he's beating is like, there's more work to do. There's more science to do. It's not just productize the current set of techniques in terms of like the end of AI forever. um but his goal is not to do the productization like he like the org he's in at meta is really isolated from product um he's there to kind of boost the uh reputation of the org academically um as well as to be able to potentially advise on other stuff that's more productive but his job is not to like go train a business model to train a model that is going to be used by businesses and And I think people, like that org fair, the friends I have who are there, are there because they essentially wanted to be a professor, but they want tech company resources and not have to teach.

2:46:36And that is essentially what that org is. Yeah. Does that lead to better recruiting on campus, essentially? Like you can go get researchers because Jan LeCun can come do a really powerful lecture? maybe but i think of it more as like the same way that zuck did metaverse stuff zuck is very willing to make 10-year bets yeah um and so that org for meta is not about what product they're releasing next quarter it's what are our 10-year bets yeah um okay uh i wonder what about sorry yeah you can so meta shares just hit an all-time high really so the stocks the stocks performing. I'm curious from your time at Morgan's...

2:47:21Thank you for that, John. It's incredible. But generally up 5 % over the last week. How did Wall Street generally process the meta AI story? Because now, obviously, at least the market seems generally excited. It may get to the point where we did with VR, where people are like, hey, whoa, whoa, whoa, cool it on the metaverse, you know? Well, it's funny because like, you add all this up, even if the$100 million offer number is real, it's like, okay, so now we're at like$1 billion in spend. It's 5 % of the metaverse hole that was burning. And it's like, you know, from a Wall Street perspective, you're like, I don't care about, I don't care about$1 billion.

2:48:09I care about$20 billion because that was what was weighing on the stock during the metaverse buildup. But this is like AI is so much more productizable. You can make so much more money from it upfront. And it seems like even though it's a big number,$100 million offer, it feels like the spend is maybe less. But I don't know. What do you think, Will? Right. Yeah. I mean, I think the, I don't know the context fully of the$100 million. I know people have all these theories. But like the scale AI numbers, we do know. Yeah. And like that, that's a big chunk of their like, I don't know. They don't do those every day.

2:48:42Yeah. um but they've done a handful in the past at that scale like whatsapp was 20 billion or something like that um and i mean it's hard to read into like the the charts like i yeah i think people are generally like expecting that meta will take ai seriously and are kind of happy to see change um whether that is like justified or not i mean we'll see um yeah it was interesting the product side is going to be interesting because like yeah they're not a b2b sass company um well so i want to push back on that content they're an entertainment company and i think that that i i don't i don't think that people are are fully understand the potential of gen ai around entertainment like it gets talked a lot around oh you're going to be able to generate you know an entire movie or generate video games or things like that and i and i think that we haven't seen we've seen some fantastic examples so far but nothing nothing that that is i i think like george hots was on our show and he was talking about how like basically ai is going to be like having five cia agents follow you around all the time convincing you to buy products and like that is like one kind of a dark bowl case for dark bowl case dark bowl case for meta in the context of AI because it's like, it's possible that, that Facebook is already the best ad advertising product in human history, like period, hands down, there's nothing better.

2:50:18And then could you make it like two, three times better? It's very possible. Yeah. I want to push back on the B2B thing because yes, yes, they don't sell B2B software, but I was thinking about it in this terms. Like If you were running a company where you only had one client and that client was meta and you sold them CRM and infrastructure and LLMs to improve the back office and do censorship and reality checking and looking for bad words and looking for improper posts and recommendation algorithms, how much would that company be worth? and how much revenue would they be making just from that one client?

2:51:05And I think it's in the billions because it's just such a large organization that it's potentially like just the B2B applications of AI inside of Meta are like it's a multi-billion dollar like cost center or revenue driver or something like that. I don't know. I think a company at Metascale has already rewritten all that stuff themselves for the most. Like they probably have some services that they're using, but like they could they rebuild their own cloud? like because they use AWS for a lot. Yeah. Yeah. Um, can, they're not a compute company though. And in terms of like platform stuff, I feel like those companies, once you hit a certain size and you just like have so many engineers that you want everything, like Google rewrites all their own stuff.

2:51:46Yeah. Um, Microsoft rewrites all their own stuff. Um, and can they, is there another like a tale of end of that that has not been done yet that they can squeeze some more money out of her? Um, entertainment will be interesting. So one thing that just, i was just reminded of um have you seen the italian brain rot videos oh yeah love them yeah yeah so like i know people it's like silly it's stupid but there is something there in terms of this like communal narrative storytelling with a level of vibrancy that we haven't seen so far it's like looney tunes um but people just like come up with these where you could imagine meta Kind of eating a good chunk of the like video gen market If they have an answer to like the O3 Where that becomes part of the platform it ties into the whole metaverse thing of like creating stories and sharing these stories with your friends But instead of like Instagram stories, it's like okay.

2:52:43What's what's the evolution of story? Yeah, have you have you seen Higgs field? No feel they I I think it's an X snapchat team. Yeah their new image model is basically already at a point where it's creating images that are photorealistic but in the scent photorealistic it looks like instagram photos i'm not like full-time influencer generated it after spending hours trying to create it and you can't tell that it's not real and so it feels like um it feels like meta integrating that kind of thing where it's like yep it'll be interesting to see how this actually plays out because everybody will be able to be a super tasteful creator or like generate these sort of unique styles and i'm sure at that point it'll switch everybody will be like well i only follow organic farm to table influencers who knows yeah yeah i feel like they they're uh ai integration so far have all been kind of weird like there's these like instagram accounts you can chat with and then there was the whole meta AI homepage disaster where old people were like leaking personal info without realizing it but I guess Facebook's always had that yeah I think it'll they'll have to thread the needle on product in a way that they'll have to get creative because they haven't like it's been a while since they had a product innovation that was homegrown that really stuck like yeah it is interesting that they haven't tried to create a studio ghibli moment by you're like going i was saying this they should just pre-render everyone's profile picture as a ghibli and just when you open the instagram app it's just like here we did this for you it would be incredibly expensive from an inference cost but then it's just like you could share it and it's just more virality around it but i don't know and and like even baking that down into a filter no it can't be so like open ai branded now they have to yeah I'm not saying yeah I'm saying like an entirely new but yeah yeah basically like the the filters in the Instagram app should be like style transfer or like fully generative instead of just like color grades um that's clearly the next thing and they should just and they should just do that um but what what do you think of uh Sam Altman's ability to get through this like he's had a series of exoduses and seemed to continue to march on the anthropic departures, then SSI and thinking machines like XAI.

2:55:20This is not the first time. It's not his first rodeo. It's not his first rodeo. And so there's this whole narrative like never been against Zuck. He's been down on the metaverse, came back. He's been down on mobile with the HTML5 thing. And he came back from that, went native and super dominant and bought Instagram, WhatsApp, app super dominant and mobile and so never been against Zuck but then also maybe never get it better get bet against Sam maybe they both win and maybe like the real loser is like I don't know some some other company or something I don't know I think as long as opening I doesn't totally drop the ball on product or research like they have the center of gravity for the AI world like in the same way that no matter what Android ships people are not going to switch from their iPhones like someone that have to go very wrong for people to not see open ai as the winner i think or there's the kind of the default um yeah i mean the other thing is uh the average chat gpt users not waking up today being like oh i can't believe open ai lost a handful of its top researchers right there.

2:56:26They're just still using ChatGPT as a Google replacement or they're talking with it as a companion. So, yeah, I think the lead is still very, very real. And and I just and again, it's going to create opportunities for people to say, hey, I want to go work on this product that hundreds of millions and soon billions of people use every single day. Right. And I do think it'll get to a point, especially with like 2025 into 26, where there's a lot of product stuff that people seem like, I think we're early on products and we'll keep getting better versions of the same things in a way that's like, kind of predictable, like the image models will keep getting better.

2:57:10the agents will mess up less but like we can already use those things and we can start building a group of concepts around that and the question is like okay what are the winning apps like I imagine that like the real time clearly kind of thing some opening eyes going to do their version of that at some point other people probably will too like does that become modality that people really want like live overview on their screen on their phone like what's the what's the way that people are going to be interacting with AI generally? Because a lot of those use cases, like it's, they're already smart enough.

2:57:48It's not about making the models like way smarter at whatever. It's like, how do you have the model be useful or fun, engaging? There's a bunch of paths here going back to the Cluey thing where one, Roy is like right about the UX and like wins the market. and the other option is like he's right about the ux but like doesn't win the market and then there's like you know it's just not the right form factor or whatever but any of at least the first two outcomes are hilarious and that and that roy lee ushers in the new the new paradigm of uh for for engaging with with language models i'm curious uh any um is all the stuff around every B2B SaaS player descending on this sort of like single interface like a chat interface that generates software was that predictable to you do you think that's do you think that that's like part of a multi-year trend or is that just FOMO I mean like copilot was early it was like 2020 2001 like the first GPT-3 copilot came out and like that was already one of the early like LLM applications that people were interested in at all.

2:59:05And then it took until Cursor for it to really, like I think Cursor plus like 3.5 Sonnet was when it became a thing that was good enough that people were excited about it. And it really ushered in the trend because people were starting to find it more useful than a toy and like a thing that I actually want to use day to day. And so I think that's one path is like, and then the more background agent kind of things are like starting to take off now, which I imagine like those will get reliable enough that they're like useful for cranking stuff out They already are kind of depending on what you're doing Yeah, like I think yeah We're about halfway through the year What what are what are kind of like the big moments that you're kind of tracking the the open ai open source model could be one whatever Meta launches next right i'm assuming they're going to be dark until this new team can can really cook and bring something great it maybe they don't do anything this year but i would assume they they come with with something what else are you are you tracking yeah i mean for me the o3 release in chat cpt was like a pretty like game changer kind of thing where it was like we saw with like deep research that like okay they kind of figured out how to make agents work but it was also just like this one version of an agent and oh three you can kind of get it could be a pretty general agent where it can like do some pretty complex stuff that was kind of new to see from like the geoguessor thing was crazy um and having that as a like vision of like what agi starts to look like i think it's pretty cool of course from the like research open source world there was a deep seek as like the rl craze taking off but like i mean i work on rl so i like obsess over it and like think about it a lot but i do think we're really starting to see these recipes at least in the broad strokes of like okay here's how the lm thing can go we figure out what we want it to do we give it some tools we set up these environments we figure out how to evaluate it and then we can just kind of like let it go and these things get better at doing those things via trial and error um and so like i like i think that is one way to kind of forecast where things are going is just like what are the plausible use cases that people want to use elements for they want an agent to do XYZ and then how do you make this a thing that you can help climb and I think like you see a lot like there's been a lot of news about opening I trying to like sell their RFP service there's these startups popping up there was a was the RG service to me reinforce my name okay yeah and so like they're pushing this pretty hard you're spending over$10 million like Palantir, OpenAI will also customize a model for you?

3:01:53So they have like a serious heavy, like a heavy paying customer one, but they also have like a more like in the thousands of dollars service where you are getting to essentially do fine tuning on OPPOR Mini. And that is a little more self-serve, but they're also like doing consulting around that before we're deployed, staying around that. Is that an important strategy for OpenAI to kind of stay in the game against open source models like LLAMA? Yeah, but I think also against other thinking machines. There was some report that this is a version of the strategy they're getting. It's like, go to enterprises, talk to them about their problems, turn these problems into things where you can create really good customized agent models.

3:02:45And if the like that's one potential roadmap for it's like having more like AI everywhere is just like having services that were whose job is to like come in whether or not it's fine tuning or not just like make them into agent shaped tasks um where you can then optimize the model have someone craft the model experience like for you because like i think a lot of enterprises are still like in the spot where they don't really like there's there's nothing as you see by the like the talent or there's just not that many people in the world or in the market who really understand this stuff at a level where they can go make it happen.

3:03:29And so like the open source thing, on one hand, it's cool that you in theory can go do it. But it's also like, there's not that many hands who can who are equipped to like, go make the thing happen. Actually fine tune Lama for whatever. Yeah, we actually talked to a startup that's doing basically that like small models for specific business use cases like okay you just have a ton of csvs that need to be turned into json and we build you an llm that just does that or whatever um interesting how do you after the the scale news and then there's a bunch of players um popping up or you know everyone from uh mercore to label box uh to handshake a lot of different people competing for that market.

3:04:15How do you see that market evolving over the next one to two years? I think there were certain people saying scale got out at the perfect time in many ways. But clearly there's a lot of at least gross revenue up for grabs right now in the near term. Yeah. I mean, I think like the broader sphere of like creating stuff to train models on with humans in the loop to do that curation is going to be important especially for these uh domain specific applications um i think it's going to be less like oh we just need more tokens and it's more about we need uh curation of goals and objectives um because like tokens you kind of hit diminishing returns pretty quick in terms of just like more internet texts or more like human written math solution examples um and it doesn't scale super well but the thing but nice thing about the past specification is you can kind of like pour in more compute without necessarily needing more data um it scales much better with compute um whereas we don't really have like a of like spending 100x more compute per pre-chain token other than make a giant model yeah do you think uh llama will stay open source for the foreseeable future we'll see i wouldn't surprise me if they go kind of the google route where like they are still they still do open source they still have the llama brand but it isn't like their flagship thing where they start doing whether it's for internal products or it's they really want to show that they're the winner um releasing using closed models via API or other services where not all the services.

3:06:07Do they have the infrastructure to serve a closed model? I mean, you mentioned that they use AWS, so it'd be kind of awkward, right? Yeah. I mean, I don't know that they really want to that much. I think that it'd be something that comes in a product. Sure. Yeah, that makes sense. Or maybe they partner with, like, you could see them partnering with someone like a Corweave or NVIDIA directly. NVIDIA is hoping to get into the inference serving game, it sounds like. Yeah. Do you think, so one of SWIX's takeaways from the Wired article was that one big development that's coming is when Stargate comes online, OpenAI will have the largest single cluster for pre-training, but it feels like we might be at the end of that game and we might be doing more compute intensive work in a distributed fashion.

3:07:03And so maybe having it all in one place is a little bit less relevant to just, you know, oh, trump card, Stargate, boom, I win. I have the best model by far. How do you think about the impact of Stargate on like the AGI race? I mean, I think the biggest experiment that they're definitely going to do is take a pretty big model. I don't know if it'll be like quite as big as like a 4.5, but like a big model and do way more RL on it than anyone's done yet. Like what does like an O5 level of RL look like? Okay. See how good that is. See what do you want to do that though? Or could you do that just across a bunch of data centers?

3:07:43Cause I've heard like a lot of RL is like you're generating, you're doing verifiable rewards. You're generating in a bunch of different data centers. You could do it completely distributed and you don't necessarily need a stargate to do that you can do it distributed like it is very inference heavy there is still like a lot of weight updating you have to sync the model across you have to keep sending the training model to your inference workers okay um and so having it co-located certainly makes it easier you sure it's easier to do it in a distributed way if you want to versus pre-training um but it's not like trivial um but i think like a lot of this is just data people are building the data centers without necessarily knowing exactly what experiments they're going to run they just know more stuff is coming but also a lot of this is going to be inference where like they want to be able to do like meta has a ton of gpus they just use for insta ran ads um recommendations um a lot of stargate will probably be serving ghibli like i mean that makes a ton of sense like i'm i'm running into rate limits on literally everything.

3:08:46Like Google, it's like, how do they run out of TPUs? They spend 60 billion on CapEx every year, at least. And O3 Pro, too. I mean, I get timeouts on this stuff. Last question. I'm guessing you weren't surprised to see OpenAI leveraging the TPU for inference or reporting to be starting to use it? Was that kind of... I mean, it makes sense that they are considering all options given the friction with Microsoft. Like they don't have a core cloud that they're super close with. They're not like there's they need to both try to lower their cost for inference as well. Like that maybe was a factor behind the because the O3 had a big price drop.

3:09:32That might have been TPU related. I don't know. Pure speculation. but like Google has TPUs and they can serve Gemini really cheap and really well, really fast. If open AI wants to compete at that level, they kind of have to consider all options. Yep. Makes sense. Well, great day to have you pop on. Yeah. Thanks so much for helping. Knowing how things are unfolding. We'll probably, we'll probably ping you to jump on again later this week. Stay ready. Great to have you. Cheers. Yeah. Bye. The talent wars continue to rage on. Sam Altman slams Meta AI's talent poaching spree. Missionaries will beat mercenaries.

3:10:14He says, quote, what Meta is doing will, in my opinion, lead to very deep cultural problems, said Sam Altman in leaked memo sent to OpenAI researchers. So big, big question. Paula says, with all the AI labs and SF being in the mission, who called them members of technical staff and not missionaries? Oh, wow. This is an old post. Yeah. From over six months ago. And there's a bunch of other new details emerging from the new meta super intelligence team. Didi, who's coming on the show, right? In like three minutes. Okay. Wow. Yeah, we've highlighted a lot of his posts. Every single one of the 11 meta super intelligence hires is an immigrant who did their undergrad abroad.

3:10:59Seven from China, one from India, one from Australia, one from UK, one from South Africa. Eight are PhDs or PhD dropouts in the US. Immigration is key to US AI innovation. Beth Jezos has a hilarious post here. The foreshadowing here was insane. And it's Sam Altman interviewing Mark Zuckerberg. And Mark Zuckerberg says, the thing that I think Facebook has done exceptionally well is hiring. This is an incredible series, the startup school series that Sam did while he was at YC. He interviewed Zuck, Elon, a ton of really interesting folks, and got these really definitive interviews from the top tech leaders of the next generation, like right as they were uh kind of on the on the biggest uh moment in their come up why are you laughing it's just i love i love this business you're like tearing up looking how happy how happy no it's just it's um watching this great power conflict play out in real time is is wildly entertaining.

3:12:09It's entertaining. And the consumer is going to be the net winner. I was about to say that. And also America. Yeah, it's extremely this is a pressure cooker of the highest. It's it's so competitive. But the good thing is that at the end, don't like we aren't playing this game where someone goes to jail or someone gets, you know, like goes to the gulag if they don't perform or they get locked up. Like this is, this is, you know, the difference between being a, having$10 billion or a hundred billion dollars. It's like, it's kind of all fake, but it's all, it's all like, it's super high stakes, but it's still capitalism.

3:12:45And it's still like the consolation prize is still being able to build something cool, even if you get beaten. But the end result is that we have this hyper competitive race to build the best thing with like kind of a safety cushion so that you're not, you're like, it's not like the government's putting a gun And it's global, right? It's greatest minds from all over the world coming to compete in this market.