Windsurf Chaos Aftermath, NVIDIA Back in China, Richard Mille Deep Dive, Apple Buying $500M in Rare Earth Magnets | Zak Kukoff, Brian Venturo, Tyler Cowen, Austin Hughes, Kris Fredrickson, Dick Lucas

27:45The news came during a visit by Huang to Beijing, where he was meeting senior officials. I'm very happy, he told reporters. Shares in NVIDIA rose more than 4 % in early trading on Tuesday. So, big turn of events. Also coincides with Gurley's in China right now. We've got to have him on to give us a breakdown of what's happening on the ground there. But yeah, a bit of a surprise. This also feels like something that Sacks would have been heavily involved with as the AI czar. So it's good. Whatever people, a lot of people have their feelings about Sacks, but I do believe he is a patriot and would have had a lot of different people around the table working on this decision.

28:41So obviously China Hawks in shambles, very upset about this. I imagine not all of them commented on it, but I imagine that with people who take the vanilla view of sort of like zero sum competition between the U.S. and China, they're going to be upset because they say, hey, just restrict the NVIDIA chips. They won't be able to train AI. And for a variety of reasons, AI is dangerous. It's going to be super intelligence. We need a democratic, a capitalist super intelligence. We don't want a communist authoritarian super intelligence that's controlled by a single person. We want it to be controlled by humanity or controlled by the American voters, something like that.

29:23On the flip side. We want it to be freedom-pilled. For sure. And I agree with that to some degree. The question is, is there a potential world where selling NVIDIA H20s into China actually hurts Huawei more than it hurts America. And so it's somehow advantageous for us to get the entire world standardized on the CUDA stack and the Nvidia stack. And then we are able to have more leverage over the Chinese AI ecosystem. And that gives us more control to basically shift the overall amount of America pilledness in AGI generally. I don't know. There are multiple sides, but we're going to talk to Zach Kukoff, our first guest of the show.

30:13He's been on multiple times now. You know him. You love him. Zach Kukoff. There he is. How are you doing? He was almost the first guest to do a three-peat three days in a row. He made it two. But we got bored. Depending on how. Not with you. We got bored of the swamp. We got bored with the swamp. Sorry. It happens. That's all right. We want to talk about trade deals. Today gets a little bit, you know, if this week gets more chaotic on this topic, maybe we'll run the yeah you'll get it's a really perverse incentive like i'm really hoping for horrible things to happen so i can come back and complete the three feet here yeah yeah take us from the swamp to the tsmc clean room it's the swamp meets clean room segment of the show uh so kick us off uh what how would you characterize the news exactly what's happening and then we'll go into some analysis yeah so i think everybody knows the uh h20 chip was specifically designed by NVIDIA to meet Biden-era restrictions on what chips could be exported to China, right?

31:11So if you zoom out and go back to April, the beginning of Trump 2, what you have is basically a little bit of regulatory uncertainty where NVIDIA spent a lot of money producing chips that are specifically designed to go to China. And the admin comes back in April at the last minute and says, sorry, you can't export the chips. We're putting in export controls. We're having a licensure requirement. NVIDIA takes a huge$8 billion revenue impairment, basically, on the cost of producing and not selling this huge swath of chips. By the way, at the same time, huge domestic market for H20s, a lot of demand, even though they're weaker, a lot of demand from startups domestically for the same chips.

31:47Last night, basically between April and last night, you've seen a full court press by NVIDIA for the last X number of months where Jensen has been doing a winning campaign, a successful campaign of influence in Washington, trying to make two points exceptionally clear. The first point is we need to export these chips because the same reasons John just said, the stack, American dominance, we want everyone to standardize, so on and so forth. We're losing the biggest market besides America. And also he's made the point of, look, we can also comply in a more regulatory, aggressive way. Right. So there's the Chip Security Act was introduced in Congress in May.

32:24It's working its way through the House. It's moving through the Senate right now. Basically, NVIDIA has helped shape that act aggressively. And it says, look, we have to make sure that there are ways to track the diversion of these chips, track where they're going. And this is still up in the air. Is there going to be a kill switch built into these chips? This is all to say last night, huge win for NVIDIA. Admin comes out and says, OK, or really NVIDIA comes out and says, admin has told us we are going to be allowed to export these chips to China for the first time with some checks on them, but almost an unfettered way.

32:55Markets are up. Obviously, Asian markets are up quite a bit. Nvidia is up quite a bit on this news. Huge economic win for Nvidia. Huge question mark from the national security folks who say, look, there are some real risks with these chips going out. Is there a horse trade going on? Is this part of a larger bargaining discussion where we, even if it's not explicitly NVIDIA chips for rare earth minerals, something else might be happening behind the scenes and this just looks like a little bit of a give from the United States and we might be expecting something or maybe we already got something.

33:33Talk to me about kind of the trade imbalance and just the overall deal making that might be happening. It's a really good point. This is the backdrop of all of this is the trade war between the U.S. and China. And as much as it is to you and to me and probably to most of the TBPN folks, the most important question is AI. It is one of many questions the admin has to work through. Rare Earths, by the way, is a huge one. Obviously, tariffs on a number of American products are a second one. So the big question is, look, in April, the reason we stopped and we actually put in, the admin put in, these export controls on NVIDIA chips to begin with is in large part because of their ratcheting tension with the United States and China.

34:12And now part of the reason they're reducing some of these is because the Chinese market is opening up. We're having great progress. Ironically, Japan has been difficult to negotiate with. China has been a good negotiator on trade. And China really wants these chips to come in because even though they want to wean off NVIDIA and go to Huawei as quickly as possible, the H20s are a bridge to get to Huawei's Ascend architecture, right? To get to a homegrown. Is the meme that we're going to get China dependent on U.S. chips, is it really just a meme? Like the idea that they would just play, basically, Jensen makes a good point, which is like we want them to be dependent on our infrastructure.

34:54Totally. But the Chinese government and industry will likely just say, okay, great. We're happy to depend on these for another few years while we ramp up our own. Did they promise not to reverse engineer them this time? Yeah. That's the question? This time, not this time. You know, we've done it. We've done it thousands of times now, but this time will be different. That's right. Lucy promises this time Charlie Brown can hit the football for once. That's right. So I guess, you know, some of the pushback was somebody yesterday when this news broke, Walter Bloomberg, you know, prominent journalist who always follows, you know, journalistic standards, says NVIDIA CEO Wong expects Chinese military won't use it.

35:40AI chips, which is a good thing to expect, but probably unlikely. And then somebody quoted it and said, the increasing willingness of Jensen Huang to boldly play both sides makes NVIDIA one of the most serious threats to U.S. national security and global technological dominance currently running. So very dramatic, but valid point of view for this person to have. How do you think, have you been surprised at how Jensen can effectively go, you know, I mean, I wouldn't necessarily play both sides, but, you know, the first thing he did when the initial H20 ban happened is he flew over there and he started working on a new R &D center in Shanghai.

36:27Yeah. So so he he is definitely a capitalist. But but it's been interesting to see. The other factor here is like you're running the most valuable company in the world. So you do have quite a bit of leverage. And he almost in some ways he's sort of like holding up the, you know, the entire global economy. Right. It does a couple of bad quarters and everything. It does feel like the good ending that I'm hoping for is like this is a stabilizing force for the world in general. And it's not it's not escalatory. And even if it's like, OK, we're going to be competing more on chatbots and tech companies and stuff.

37:11It's like this moves like the potential for a Taiwan invasion down. And like, I care a lot more about that than did did Huawei ship a lot of chips? I don't know. Yeah, I don't know. I don't know if I agree with that. Well, I'll say a few things. You guys had the Apple in China offer on, right? Yeah. And so a big part of Apple in China was the whole shtick of Apple comes in, says we're going to teach the Chinese how to do what we do domestically in America. And then they do it. They get better at it. And they no longer need Apple. They have a domestic market that can produce in the same way. Yeah, that's the risk of this export, right?

37:45Which is that there's no dependents think Jensen's a really talented operator And by the way the evidence for that is there was a big letter that went out critiquing his trip to Beijing Only two senators signed it right it was banks on the right and Warren on the left And if you think that they didn't try to get other people in Congress to sign that letter to you You would be shocked at how few people were willing to go on the record on the anti-nvidia side of this Right interesting the other thing I would say to you is if you think these chips aren't going to get diverted to to CCP use, to military use, to PLA use, I think that's a little bit of a naive perspective.

38:16It's impossible to prevent them. Yes, but my question is, if Apple - Let's just not use them for the thing that's most critical to national security. Yeah. It's like - Right, exactly. It would be great if they could set up a local instance of XAI's new - Wayfuba. Crazy mode and really ramp that up in China. Okay, so the slight difference that I'm kind of steel manning here is if Apple goes into China and teaches a bunch of CNC engineers how to mill aluminum to make iPhones, and they explicitly demand that those manufacturers have other clients like Huawei for smartphones. They are building up an internal capacity.

39:10If you're just selling in GPUs that are fully assembled, yes, you could tear them down and rebuild, but maybe there is enough lock-in in the CUDA ecosystem that you can't just swap out and just shift off. to john is here's another headline from the journal just a couple months ago nvidia to set up research center in shanghai so they are setting up and investing in r and that's right locally yeah that's right all of that whatever whatever they know how to do there whatever they learn how to do there it will all disseminate broadly into the chinese economy and that's correct that's just a And if somebody disagrees with that, I think it's...

39:55And I guess we are seeing cracks in the CUDA ecosystem lock in right now with AMD and ROCM, Rock M. And so people, and the GPU and Tranium and Amazon, and I'm sure Meta's thinking about custom silicon and on-device inference at Apple. So it's like, yeah, if you can go and train a frontier model on these H20s and then distill it down and run it on Huawei Ascends, that does pull their capabilities forward. What is the mood in DC around the idea of AI as being a really impactful military technology right now? because for most people, it's knowledge retrieval with ChatGPG and CodeGen with Cursor, CloudCode, Windsurf, Devon.

40:50And beyond that, it's like, okay, my B2B SaaS company is a little bit more efficient and I have some AI agent stuff in there. But people aren't really saying, oh, it's transforming everything yet. They're not showing those examples, even though that's kind of the narrative. of concretely besides like, you know, prompt defeat America, you know, like, get me from where we are here to there and walk me through the mood in Washington around AI as a military technology specifically. I think people on the military side are probably some of the earliest to realize the value of AI for a couple of reasons.

41:29One, there are already real battlefields today. there are theaters of war where automated decisions are being made that are life and death decisions. And putting aside perspective in any of these wars, whether you're looking at Russia, Ukraine, or whether you're looking at Israel in the Middle East, there are already real instances today of AI deployed on frontier live to operate things like drones, to operate things like targeting infrastructure. That's happening today. It's not happening in America, but that is happening today. The military is very good at keeping abreast of what our compatriots are doing overseas.

42:02That's the first thing. Second thing I would say to you is the big unlock for a lot of this is the decreasing influence of humans in warfare, right? Like in 10, 15 years ago, 20 years ago, if you were an Air Force pilot, that meant you were actually sitting in a plane doing Top Gun shit. Today, if you're an Air Force pilot, it means you're in Arizona in a cooled warehouse piloting a drone that's like remotely dropping bombs on things. That unlock, there's no reason that should just be the case. We take them out out of the cockpit, put them into the warehouse. The next step on that is why have the human piloting at all, right?

42:35Why not have the autonomous pilot of the drone making those decisions effectively and actually fighting the frontier of war for us? So there's no risk at all domestically to our people going into war. So there's a lot of enthusiasm, maybe enthusiasm is the right word, there's a lot of awareness of the value of AI in warfare. I think the double-edged sword of that is if you're looking at, if you're concerned about an invasion of Taiwan, it's far more concerning thinking about a China, the PLA army is not an up-to-date army in many respects. It's far more concerning thinking about a PLA army that has access to supercomputer clusters built by H-20s or other kinds of American ships, it would be H-20, that is able to more effectively fight in Taiwan rather than a PLA army still fighting conventional warfare where it's never been able to excel.

43:19Yeah, I guess my pushback or question is just around like I hear you that AI is being used on the battlefield when I think of AI on the battlefield I think basic image recognition look at a satellite image pick out the missile silos or if you're a drone like it's a very very small neural network I'm not I haven't heard a lot of concrete examples of like yeah we're running a large transformer based AI system to make wartime decisions but at the same time like well yeah feels like a year away Yeah, but who's going to, you know, what government is that? Is that good PR for any military or government in the world?

44:01Hey, by the way, we're building the biggest super cluster ever, and it's for killing. It's a killing machine. Yeah. Like, who wants to go out and say that? One question I have is part of why NVIDIA has been so effective on lobbying. You mentioned not being, only being able to get, if you can only get Elizabeth Warren to sign your doc, you're in a rough spot. But I saw, so in 2023, they spent about half a million on total on lobbying. 2024, they spent - This is NVIDIA? Yeah, they spent 640 ,000. But then in Q1 of this year, they spent nearly a million. So they clearly ramped it up. But how much do you think they benefit from just being the largest company in the world and everybody being an NVIDIA bag holder somewhere or another, right?

44:51I mean, success against success. If you're the largest company in the world, people want to be a part of that. Also, look, the number of dollars you spend is not always the proxy for lobbying. The hard thing to understand is Jensen is spending more time than probably any other of his peer CEOs. Yeah, that's right. Yeah, his travel budget is probably bigger than his lobbying budget, right? That's exactly correct. Why would you need to have 30 registered lobbyists running around when your CEO has a personal relationship? This is the new thing. This is the sort of unique aspect of this admin relative to other admins, which is there is a retail politics relationship-based component of a lot of this work that did not exist before.

45:32And if you're Jensen and you can have the great relationship with POTUS yourself, you don't need 30 lobbyists running around. You can fly to Mar-a-Lago. He's in founder mode. And let's not forget, Donald Trump, Vacheron Historique's owner, watch guy, Jensen, recently spotted with a$1 million Richard Mill. So. God, I've never felt more poor in my life. If you go to shake a hand in Washington and you got a bare wrist, you might be getting booted. But if you pull up with a hitter, you're going to the moon. What are you guys, what are you boys rocking today? What's the watch? I actually forgot to put on my watch.

46:06Oh. Bare wrist today. But I typically wear Vacheron Constantin Petron. Oh, very nice. And Jordy wears the Audemars Piguet Royal Oak. Anyways, anything else we should be looking out for this week? Only thing I would say to you, look, just, John, to your point on who's using actually sophisticated AI, it's not going to be today, at least what's declassified today is not going to be, hey, we blew up this thing. It's a lot of cyber warfare, right? And as more and more things are about, hey, I want to disrupt the infrastructure of my opponents, their water infrastructure, their electrical infrastructure, their banking and financial infrastructure, that's where LLMs are increasingly being used.

46:46What you should look for is, look, do the chips get exported? This has actually happened. Or does it get flipped again? Right? What are the gunks in the works, the requirements on licensure that enter? And then also what happens on Ship Security Act? Does it make it through? Does it actually get through House? Great momentum. Senate, TBD, truly to say. Okay, that's a great take because I feel like right now, today, I would be more worried about a CCP-controlled, large language model, transformer-based large model just spamming the United States internet and social networks with a bunch of AI slop that's slightly anti-capitalist than Xi Jinping querying.

47:31please invade Taiwan. I don't think that the... Yeah, when... Xi Jinping is in... Don't make any mistakes. Please invade Taiwan. Don't make any mistakes. Don't lose any troops. Yeah, make it better. Make it better. But yeah, I think that that's maybe even... It's more of a clear and present danger today. That's right. That's right. And by the way, that's TikTok. That's TikTok today. If you're opening up TikTok, it's not AI, but that's the soft power component of China's influence over America. Yes, and being able to train that model, which is large and is probably the next version does require a lot of NVIDIA chips, was probably trained on a lot of NVIDIA chips, doesn't have the same quantifiable, you know, oh, this many parameters, this many gigawatts, this many tokens went in.

48:19But if it gets 1 % better and you have control over it, it is a risk and it should be considered. Last question. Any any chatter on the ground in DC about the Windsurf Google deal or are they going to find out next week on LinkedIn? So funny. I had a conversation over the weekend with somebody who's part of this like neo-Brandeisian movement, which is to say a very sort of Lena Kahn orientation. And I asked her, I said, what are people waking up to this? Like, what's going on? Why is nobody talking about it? And her only answer to me was stay tuned. So my only answer to you is stay tuned. Mm-hmm.

48:55Ominous. Last question on the TikTok sale. Polymarket has a TikTok sale announced in 2025 at a 35 % chance right now. And TikTok banned in 2025. I guess it was already banned, but it's just like been... Yeah, enforcing it. But have you been hearing anything on, or do you have any interesting takes or insight about what might happen to TikTok since we just landed on this topic randomly? I don't know. We didn't prep this. I mean, there's no political demand for it. There's no constituency who is making the argument of because if you were pro TikTok ban, you got what you wanted in theory, not enforceable, but you got what you wanted in theory.

49:31And you've now taken the wind and you've gone home. And if you're anti TikTok ban. What about what about my American flag toting Mag7 CEO Mark Zuckerberg? Is he not a constituent that wants TikTok banned? I think it's if he comes out to publicly pushing for that, it's like an antitrust nightmare. That's exactly right. I mean, like the whole TikTok story proves that you potentially can build a new social app if you're willing to spend, or at least you could in the rise of vertical video. You could in that moment create a meta competitor if you were willing to spend$20 billion, you know, incinerate, you know, incinerate$20 billion or whatever they did to just spend money to acquire all the users and build your own.

50:14Yeah, that's exactly right. And there is nobody on the ground in D.C. who's using their limited lobbying dollars for the TikTok ban. What Zuck wants is better data construction, better data center construction, right? Fix the energy policy in this country. And it's, by the way, it's a negative sum system. You can only work on so many things during every congressional term, every admin term. Negative sum, not zero sum? It's even worse. It's even worse than zero sum. Everybody's got to lose. It's even worse. It's zero sum system. Whoever loses the least wins. That is unfortunately true in politics.

50:46Welcome to the swamp. Zucks says he's building a one gigawatt cluster aiming for a five gigawatt cluster. I love this should count as a three-peat because you've told me three times now. Last question. Last question. This is fun, though. Yeah, I know. I appreciate it. I'll take the three-peat. He said five gigawatt cluster in a few years, in several years. That feels further out than most of the AI hyper-accelerationists. Is that an energy policy thing? What are his clear asks? What would he want to change in Washington around energy policy? This is a huge energy policy problem. Energy policy is annoying because it happens both at the federal level, but also at the state level and even at the local level.

51:28You get things like zoning. If you guys read the Abundance book, you get things like zoning that impact you at the very local level. And the critique on the left right now for a lot of these questions, it's a hard one for these folks to work on, is, gosh, look at all the environmental problems of building the data centers near communities and so on and so forth. And I would expect that in an Ocasio-Cortez administration or a Buttigieg administration to be a big problem in four years. What Zuck wants today is make it easier for me to build, reduce regulation at the state and local level for me to actually construct data centers.

51:58Let me bring new nuclear reactors online, bring new sources of energy online faster in this country. And set one federal standard to regulate many of the rules such that you don't have different states and different localities who all have patchwork systems. Because if you need multiple people to coordinate all at once, that's where you get these long timelines and complexity. It's going to be the Delta smelt versus super intelligence. That is really the battle to watch. That is wild. Great having you on, Zach. Thanks for having me, boys. Hope to have you on again very soon. We'll talk to you soon, Zach.

52:31Have a great day. Take care. Well, if you're looking to pick up a hitter and you're heading to Washington, go to GetBezil.com. Do not visit the swarm with a bare wrist. Available to source you any watch on the planet. You can go to your bezel concierge and say, I'm heading to Washington, D.C. I'm talking to the big dog. I'm talking to the big man. I'm going to Mar-a-Lago, and I need a hitter, and they will hook you up. Go to getbezel.com. And don't, if you get a meeting with Jensen, show respect. Yes. And wear an RM. Wear an RM. Wear an RM. I want to talk about the history of Richard Mell. It's fascinating.

53:05There's a, I found a good thread. I also did a chat GPT deep research report. I found an interesting conspiracy theory. And by the way, little note in there. I forget what the line was, but we said it's the cold emails, the warm intros, the deep research. The deep research. And the deep research for the show, in some instances, is literally deep research. So the watch business here says, Richard Mill has no history, no tradition, and looks like a Happy Meal toy. So how did it become a 1.7 billion dollar brand in 20 years selling watches that cost more than a Ferrari? Here's the wild story. And so Very very interesting story most the thing that popped out to me was that there is a so that does not look like a Happy Meal toy I think it looks fantastic.

53:53So I will not take that global juggernaut of ultra luxurious Watchmaking they they call it the billionaire's handshake in elite circles And so he was born in the south of France in 1951. Richard Mel is the name of both the founder and the company. He became obsessed with precision machinery and fast cars at an early age. As one does. As a teenager, he was such a motorsport enthusiast that he would take the train to Monaco for Grand Prix weekends, even sleeping trackside to snag a prime view of racing legends like Jackie Stewart. That's probably not possible anymore if you try to sleep. Yeah, you can't be homeless in Monaco.

54:36Are you crazy? Where's your$50 ,000 wristband? Yeah, exactly. Yeah, but I mean, back in the 50s, I mean, racing and even F1 was a total, like, it was just like a bunch of dudes being guys, basically. It was not, it was not, it was not like heavily sponsored, heavily organized. Like, I don't even know if the FIA existed at the time. Anyway, so Jackie Stewart called the Nürburgring the green hell because it was so demanding and it stands to this day. It's a great quote. And so in 1967, he is 16 years old and he is, Richard Mill is there and he witnesses this famous crash. Ferrari driver Lorenzo Bandini's car bursts into flames right in front of him.

55:20And the incident left a vivid impression of the extremes of engineering and danger in racing. So he winds up joining the, in 1974, he joins a small watchmaker, Finn Hoare, and then in the 90s, he'd become the head of watchmaking at the Parisian jeweler, Maboussaint, where he successfully launched a watch line for the firm. and so he had extensive experience handling luxury jewelry and fine chronographs, but he was dissatisfied. In Mill's own words, working with others meant he was often held back from creating timepieces that could break boundaries. He felt the watch world was too conservative, too boring, and too self-centered, as he later put it.

56:02And he longed to push design and engineering far beyond the status quo. by the late 1990s with decades of industry know-how under his belt. He was nearing 50 and facing a now or never moment. He decided to create his own watch brand as a sort of 50th birthday present to himself, one that would realize his wildest ideas without compromise. So in 1999, he co-found his company. He has a trusted friend. They establish this new firm and Audemars Piguet, they partner with the R &D firm, the R &D arm of AP. which is Renaud et Papy, A-R-R-N-P. And they get this legendary engineer, Julio Papy and Fabrice de Chanel, to help turn sketches into reality.

56:48So AP got a small stake in the venture, but otherwise to this day - They own about 10%. Yeah, they own about 10%. So they own like pretty much everything. So the whole idea was to apply the cutting edge materials from Formula One, aerospace, and other advanced fields to high horology. And to be clear, this is the opposite of an outsider story. This is an extreme insider leveraging every possible advantage that he has, but then winning on a massive scale and effectively doing the impossible. Yeah. Because for most people today, if you said, I want to start a luxury watch brand, you could raise a billion dollars and it would be very difficult to do it.

57:25And that's why Rolex and Patek and RM and these brands actually end up being very valuable is the amount of money that you would need to incinerate to try to recreate a brand with legacy like that. a brand that could be 200 years old. The other thing is time, right? So you can create a luxury brand, but it's not that appealing as an investor or founder if it's going to take you 100 years because you won't be around to see your, you know, really achieve your goal. I was texting with Sean Frank from the Ridge Wallet, CEO of Ridge Wallet today, this morning, and I was kind of explaining to him in this piece that Richard Mill is considered like an overnight success, like the startup, like the massive quick winner in watches.

58:11And he's like, only in fine watchmaking is grinding for 20 years to become successful, like an overnight success because every other firm is hundreds of years old, basically. And so they struggled a ton to actually build the first watch because they wanted to build a three-dimensional object, showcasing this extreme technology, and they wanted to create a racing machine on the wrist. And they did. And they did. And so there were blood and tears in the startup phase, innovations that took a long time to become reliable, resulting in years delay for the launch of the first model. It took them two years from the company's founding to perfect their inaugural watch.

58:49Which is not even actually that much time. It's a long time if you think about, I raised money, and the seed investor is like, so when are you guys launching? You got 12 to 18 months of runway. And you're like, it's going to be two years. Yeah, but I think true R &D, true product development can take, easily take, even if you're moving really, really quickly. Open AI, Figma, plenty of other companies. Figma was like four years to build a piece of software. Plenty of great companies took a long time to build and actually deploy the thing. But it's certainly a narrative violation around like, okay, I got into YC, I'm launching my company in three months, launch early, get feedback.

59:26It's just like, it's a different thing. Rora was a similar story. It probably was 18 months and it took... You know an incredible amount of back and forth with the design firm that we work with and Charlie who really led the product development. and then you have a certification process. And again, I think good things take time. So 18 months doesn't really sound crazy at all. 24, bro. Two years. But he was prepared for this. He had plunged into the project knowing it would be exhilarating, exciting, challenging, fun, and a lot of hard work. Finally, in 2001, the Richard Mill brand unveiled its first creation, the RM001 Tourbillon, and immediately sent shock waves through the conservative Swiss watch industry.

1:00:13Only 17 examples were made, but that was enough to make history. It wasn't just the bold tonneau-shaped case. I was looking for the word of the shape. It's the tonneau-shaped. And the skeletonized dial exposing futuristic guts that grabbed attention. It was the audacity of the whole package. It was high complication. It had a manual tourbillon, which is the little spinning thing that keeps the time more accurate when your wrist is moving around. packed with technical innovations, a base plate of reinforced carbon fiber, a torque indicator, and a dynamometer to monitor the movement's performance.

1:00:51Dynamometer. Sounds like some American dynamism. I love it. How American dynamism-pilled are you? I don't know. I'm seeing it everywhere. My dynamometer. Dynamometer. Yeah. If you don't have a dynamometer on your wrist and you call yourself an American dynamism investor, get out of here. I just did the math. It's they've averaged making 2 ,500 watches a year since their founding. Wow. So low volume, but but it's like 50 ,000 of all time. Yeah, crazy. And also they, you know, the engineering stuff really comes through. Most watches have 48 hour power reserve. RM went with 72 power reserve. And there are some crazy, crazy stories here.

1:01:32So this is where the conspiracy theory comes in. So the price tag. John, I got to tell you, one of our one of our dear friends who I will not name, who is a is a size Lord and capital allocator in real time, just sent me a picture of his RM on his wrist while a helicopter is taking off in the background.

1:01:54So anyways, beautiful, beautiful piece. It's a fantastic piece. Okay, so anyway. So RM launched, and it was$135 ,000 for the first watch this guy ever launches in 2001,$135 ,000. This is twice as expensive as the next most expensive tourbillon. So just take the most, tourbillon watches are already really expensive. It's incredibly complicated. Take the most expensive one and just double it. And so there is a, so people are protect fans. They're shocked. They bluntly asked Richard Mill why he thought anyone would pay such a sum for his newcomer watch. And Richard Mill said, very easy, because we are not competing with Patek Philippe, nor anyone else.

1:02:40In other words, he's playing in the league of his own. So that line doesn't typically work on a pitch call, at least in the software business. We're not competing with Cursor. So you're charging, you're building this database company. you're charging twice as much as a full enterprise snowflake deployment and you're going to win because you say you're not competing with them. Yes, yes. And so orders came in as soon as the first watches went out the door. But there is this interesting conspiracy theory, which is that there was a mistake. And the reason that they are so expensive is because the someone.

1:03:22Someone is doing a print ad. Yes. And so, okay. So a rumor has floated around that Richard Mills first advertisement, which was in the Financial Times, baby, you know, you love it in the pink sheets. In the, so he buys an advertisement in the Financial Times and the advertising department misprints the price. They added a zero. They added a zero. He wanted to sell the RM001 for$13 ,500. They printed in the ad$135 ,000, 10 times the price. and what's interesting is that so the ad goes out according to legend the rm team is like you guys botched it like who's gonna buy this it's only a 13 000 watch you're trying to sell it for 135 this is crazy but then they start getting calls i gotta have it i gotta have it 135 i i've been i i have 135 000 burning a hole in my pocket right now and i would love like this on my wrist i want it on my wrist.

1:04:25And so Mill received so many inquiries at that price, he decided to stick with the higher number. And so this is why it's a conspiracy theory is because Richard Mill as a brand denies that this ever happened. But the legend - Because it would be obviously terrible - Terrible. If it came out that - Yeah, they wanted to make a$13 ,000 watch, and then they accidentally charged 135, and And then they look around, the orders are coming in. They're like, wait, we just, you know, 1 ,000x are, you know. Yeah. But this is a classic example of what's called a Veblen good. So in economics, typically, as price increases, demand decreases if supply is constrained.

1:05:09So if you raise the price, people buy less. With a Veblen good, a higher price actually increases demand. And it's reserved for perfect examples of this, like luxury goods, where it is a status symbol. And now when you see the billionaire's handshake going on, you know that's a$100 ,000 watch at least, potentially much more. Pricing is intimately tied with the way in which people feel about a product, right? 100%. And, you know, a good example of this is the GT4 RS. Yeah. It's incredible to drive, but people want it maybe. I know very few people that can honestly say if price wasn't part of the equation, would you want a GT3 RS or a GT4 RS?

1:06:00And there's an aesthetic component as well. But even though many people, if they just drive both cars, find that the mid-engine version is fantastic and enjoyable, they'll still decide. Well, the GC3 for the status. An even stronger example in the car world is probably like the Lamborghini Reventon or the Lamborghini Veneno. Are you familiar with these? So these are extremely limited Lamborghini releases, and they're built on the existing platforms. So they take a Huracan, and then they restyle it, and it looks way more extreme, way more, and they tune it, and they improve it as much as they can.

1:06:41but these limited Lamborghinis sell for millions of dollars. And really, you're buying it because it's signaling that you have that much money. I mean, and to some extent, a Lamborghini is a Veblen good to begin with, but this is the most extreme. And of course, a Veblen good is not purely binary. You can be more Veblen than the other, and more of the decision-making can be driven by the higher price than others. Anyway, Richard Mills conviction proved infectious despite industry skepticism. The RM001 found buyers almost immediately. Orders came in and a GQ later observed Richard Mills' very existence knocked some of the stuffiness out of luxury watchmaking by showing that expensive watches don't have to be staid or classical.

1:07:31And so... Yeah, they've always been controversial. but for what RM does, they do it extremely well. Yes. They own their category. They truly don't have competition. Any other watch that I've seen that tries to emulate what they do, it does look like a cheap knockoff. 100%. And yeah, it is true. They basically, anytime you have a situation where insiders come into an industry and have every possible advantage, but then absolutely hit such a grand slam, you just gotta appreciate greatness. Totally. And I think that what matters with the story of the actual watches, like the RMs, is that it's not just a knockoff Nautilus with twice the price.

1:08:20It's differentiated on price, yes, but it's also differentiated on shape. There's no other major watch that looks exactly the tonneau shape, in my opinion. The putting skeletonized so forward doesn't exist anywhere. So that's like the fourth, the third or fourth point. And then the last point that's interesting is that every luxury watch brand, they're not telling you this is a rugged watch. And Richard Mill was all about ruggedness. So there's an interesting point in here. He says, one of his breakthrough strategies in establishing credibility was to demonstrate the ruggedness of his high-tech creations in a way that bordered on outrageousness.

1:09:00At watch fairs and presentations, he would literally take a prototype and throw it on the ground to prove it wouldn't break. This stunt wasn't just for shock value. It was making a point that a Richard Mill wasn't a delicate museum piece, but a luxury watch that could withstand anything. The company engineered every component for durability. Cases were curved for strength and comfort. Movements were torture tested with massive G-forces and stocks. As one company monograph described, prototypes were subjected to simply brutal trials, including a device nicknamed the goat's foot. A heavy pendulum hammer that smacks the watch from all angles.

1:09:38If a part failed, Mill's team iterated until it survived. The result was that these extravagant watches could truly be worn during intense activities. Yeah, yeah. This is why people see somebody playing tennis in an RM and they're like, oh, I can't believe they would be, you know, playing, you know, doing some sport with a watch like this. And it's like, no, it actually was designed to do this and it does very well. Yes. The tennis thing is a very interesting example. The first athletic ambassador was F1 driver Philippe Massa, who joined the Richard Mill family in 2004. Related to Massa. Yeah, the last name has two S's.

1:10:19He flipped it. It was so powerful he flipped it. And so in practice sessions and races, he wore a prototype RM chronograph to see how it held up under high G-forces and vibration. So even if it's not going to destroy the watch, it still might throw off the time and actually having a watch that could hold up. Maybe it's not remarkably important for a watch, but it's a cool stat. It's novel. It makes it special. It makes it different than everything else. But this partnership paid off dramatically during a violent crash at the 2004 Hungarian Grand Prix. Moss's car was wrecked, but both the driver and his Richard Mill RM006 Tourbillon walked away unscathed.

1:10:58The watch's carbon nanofiber movement proving its toughness in extreme conditions. And then the other tennis example that I wanted to get to was in 2010, after years of experimentation, the brand introduced one of its most famous collaborations, the RM027 Tourbillon with tennis icon Rafael Nadal. This watch became legendary for its absurdly low weight, under 20 grams with the strap, achieved through lithium alloy movement and skeletonized design. Nadal, a fierce baseline player, put it through its paces in Grand Slam matches. In fact, Nadal reportedly broke five different prototypes of the RM027.

1:11:34So that's probably like$2 million worth of sales. It's not like the prototypes actually cost the retail price, but yeah. Remember, these things have 99 % margin, apparently, if the rumor is to be believed. And so this allowed them to test it, and the engineers perfected it to withstand his powerful swings. The finalized watch accompanied Nadal to victory at the 2010 U.S. Open, visibly strapped to his wrist as he hoisted the trophy. The sight was astonishing. a$525 ,000 tourbillon on a sweat-soaked wristband, surviving every smash, every serve, it sent a clear message that wearing a Richard Mill was compatible with even the most intense athletic pursuits, a perfect melding of luxury and performance.

1:12:22Another perfect example, our friend who sent us this video is actively heli-skiing. Really putting it through its paces. Is he actually? Not at this very moment in time, but in the recent video. That's hilarious. Okay. And then, of course, once Richard Mill became kind of dominant in sports, they wound up, you know, breaking out slowly. So in 2011, this is over a decade after into the buildup of the business, they partnered with Hollywood actress Michelle Yeoh and co-designed the RM051 tourbillon that featured a diamond set Phoenix motif. They did a collab with Natalie Portman on the RM1901 with a dramatic spider design.

1:13:07And they're just doing all these, anything they can do to create something that's extremely unique, identified with equestrian polo players, yachtsmen, extreme skiers. So just really focused on this brand and willing to do anything, even if it means building something from scratch, like a piece unique. Uncompromising functionality under real world stress, which is just, It's a promise that no other brand is even trying to make. Yeah. They own their category. They found a new category and then they dominated it. That's absolutely beautiful. I'm pissed there's no Harvard case study, Harvard Business School case study on the business yet.

1:13:44There are some GQ articles. There are some Hodinkee interviews. I need a proper SWOT analysis. For sure. For sure. I guess we should go to Grok4Heavy and say, write a Harvard Business School case study on Richard Mill. please include a SWOT analysis. Don't make any mistakes. That's kind of what I did with deep research. I basically asked for that. No, it's such an incredible story because it's effectively, it was incredible execution all the way from founding until today. But still doing something that most people would have said was completely impossible. Yeah, no discounts ever. 5 ,000 watches per year.

1:14:26Only sold in elite boutiques. Dubai, Monaco, Beverly Hills, partners with athletes in rich sports, F1 tennis, golf. To be clear. Yeah. There's a certain podcaster that we really want to get. I want him to start, you know, because he gets really into his shows. Having, you know, an RM on the wrist. Well, that one would just make sense because of the weight. And the performance, yeah. And the performance, yeah. He's putting up five, six, seven hours in the studio. But it gets hate. They call it a Happy Meal toy. They call it the Rich Man's Invicta. They say it looks like plastic. They say it has a lack of heritage.

1:15:00It's only 24 years old. But it doesn't matter. RM is here to stay. It's redefining luxury in real time. Anyway, fun story. If you're planning to build a new watch brand, get on Linear. Linear.app. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development. Streamline issues, projects, and product roadmaps. Start building at Linear.app. Linear really is the Richard Mell of product management. you know platforms and tooling. People have been saying it. We've been saying it since about 10 seconds ago. And when you go to sell a watch online, got to use numeral HQ, sales tax on autopilot.

1:15:37Spend less than five minutes per month on sales tax compliance at numeralhq.com. Anyway, David Protein, crazy stuff happening there. I still don't know what's going on. I don't really know what's, I have some people texting me with their theses. I want to hear yours, but let me kick it off with some basic background. So David Protein announced yesterday, our commitment to protein has led us to a strange place, boiled cod. We're selling it now. And a week ago, it seems like Peter Rahal, the CEO, friend of the show, was teasing this by saying, what should we make next? We will make what wins. And he said, cookies and cream, salted Calmer, Caramel, Key Lime Pie, Frozen Cod, and Cod Lost by a huge margin, but they made that.

1:16:22And Ryan Harmon says, Cod Lime Pie. So maybe he's in on this stunt. I'm sniffing a stunt here. We'll figure it out. We'll get to the bottom of this. So Andy Rosenberg says, David teased the boiled cod product on its website months ago because 75 % of the calories from David come from protein, and the only thing that's higher is boiled cod, which has 85 % of its calories coming from protein. The Built Bar is at 52%. The Quest Bar is at 47%. And the Bear Bells, which is delicious, but it's more like a candy bar, is something like 40%. That's your dirty little secret? Oh, yeah. If I'm picking between David and Bear Bells, it's like, you know, how hard am I going today?

1:17:03Well, let's be real. You've been known to have three in a day. So you might do two Davids and then a Bear Bell. That's true. as a little treat. Also, the Bear Bells, there's some that, like, they get you down the funnel of, like, this one's, like, actually a protein bar, and then you get, like, well, like, I tried them all, and, like, the one that's just, like, pure caramel tastes the best, so I'll stick with that, and then you read the back of the label for the Bear Bells caramel one, and you're like, wait, this is actually just a candy bar, but it's delicious, and it does have some protein, and they have a great product.

1:17:31I think Bear Bells is fantastic, but there's a time and a place for everything. Sometimes you gotta eat boiled cod, apparently, but there's a big question. So they put up an out-of-home ad campaign. Hopefully they did that on adquick.com. Out-of-home advertising made easy and measurable. Say goodbye to the headaches of out-of-home advertising. Only adquick combines technology, out-of-home expertise, and data to enable efficient, seamless ad buying across the globe. I don't know if they went with adquick. They should have. But the ad says boiled cod. It has a picture of the cod. And it appears to be in New York with a gray – is that a Boxster driving by?

1:18:06That's some cool car. So I think they're actually selling cod. You can just buy it. Are they actually gonna buy it? Okay, so first off, my reaction. This sounds gross. I don't like this. I don't care how high protein it is. I'm not into it. So what's going on? They bought a billboard, hopefully mad quick, and it feels like maybe a stunt of some sort, but they are such a young company, this might actually confuse people, because people are still just learning about David. But I was talking to a friend of the show and he was saying to me that at a certain point, a little inside scoop on boiled cod view from perspective of an earned media earned discussion, as opposed to paid media slash ads, a segment of TBPN like this one proves that.

1:18:55If people are talking about a company, that's usually a win, especially when the convo is about cod having the highest protein to calorie ratio of any food. David Barr's are second only to boiled cod, Can't beat them join them and so that's an interesting take is that hey all earned media is good media But if this gets out of control and all of a sudden people think of David bars is cod flavored and when they go to grab the next David Barthoing that could be a risk, but it's a order if I order a pack of these will you I will I will eat one on the show I will test it for sure work on it And then holding you to that then then the other question is like It seems like they're in a battle with some other brands over their suppliers David Barr, it seems like they acquired their supplier.

1:19:39The key ingredient supplier makes EPG or esterfied propoxylated glycol, a fat alternative developed by EPIG and made from modified plant-based oil. It's a controversial ingredient choice because it's less natural than raw meat like boiled cod. Boiled cod seems like the other end of the barbell, but I need to know more. And I'm curious to know how this played out, how this is working and are they seeing results from this campaign because it's uh it's exciting stuff it's cool um anyway uh if you if if they do wind up buying that uh epg supplier and they need to get some new clients they got to get on adio okay well then they got to get on adio custom relationship magic adio is the ai native crm that builds scales and grows your company the next level and get started for free um in other news what else we got we got a bunch of stuff we got Fin AI, the number one AI agent for customer service.

1:20:35You are on a number one performance benchmarks. Number one in competitive bake offs. Number one ranking on G2 fin dot AI. High Yield Harry says this is going to end in tears. He's quote tweeting Jim Cramer, a new acronym for the meme stocks. It just won't quit. Park. Park your money. Palantir, App Lovin, Robin Hood and Coinbase. The four wolves of this bull market. They are the four wolves of this of this bull market. How's App Lovin doing? And you haven't seen people posting charts. Well, there was all that conspiracy theory that they weren't making any money, but we talked to Sean Frank, and he was like, I'm using Apple, and it's maybe not the best, but it's pretty good, and I'm actually paying them, so it is real.

1:21:14Year-to-date, they're flat, but they're still$118 billion business. Okay, okay. Well, that's pretty good. Interesting. In other news. Yeah, their 2024 revenue was$4.7 billion. We'll see what they put up this year. We had there was an interesting post here. So this founder that has been beefing. Yes, Sean McGuire, Sean McGuire, creating a bunch of websites about him, emailing his his boss, emailing his LPs, things like that, has been going around claiming that he's a portfolio, a Sequoia portfolio founder. When in reality, he got a 10K scout check and then his company shut down. so kind of throwing stones from a bit of a glass house there.

1:22:05But yeah, if you get a scout check from a venture scout from a fund that does not qualify as getting an investment from that company. Yeah, that's true. This is a violation of the social contract in Silicon Valley. Yep. And Sean clearly looked this up and was like, wait, did we invest in this guy a long time ago? dug through it. I mean, the whole thing with Sequoia is like, at this point, they have a lot of companies in the portfolio. But I think if you actually look at the stats, it's like 99 % of companies that they've done are still operating. And so he would know if they had done the deal.

1:22:45So Sean really rose him. How much did Sequoia invest in your company? What partner led the investment? And what happened to your company? Can you please enlighten me? The answer is Sequoia invested zero. Sequoia Scout invested 10K. and the company failed. Rough. Well, don't get in the mud pit if you don't want to get muddy. If you hate mud wrestling. If you go in the mud pit of X.com with Sean McGuire, you're going to get muddy. He's going to roast you. Brian Singerman has a new fund. Yes. PT is a big backer. The TechCrunch is reporting. Interesting strategy. Did you read this article? Yeah, I was going to get into it.

1:23:23So former Founders Fund GP, Brian Singerman and co-founder and managing partner of Quiet Capital, Lee Linden, are seeking over$500 million for a new fund called GPX. Love the name. Three people familiar with their strategy, told TechCrunch. So it sounds like TechCrunch is scooping them, which I'm sure they're not happy with. But it makes sense that these kind of things get out. So GPX uses a two-pronged strategy. The firm will invest approximately 20 % of the capital into funds managed by emerging VCs who are targeting pre-seed and seed stage startups. And the remaining capital will go towards partnering with emerging managers, the same emerging managers you would imagine on leading later stage investments, most likely at series B of their breakout companies.

1:24:06So oftentimes, let's say a pre-seed focus or early stage fund does a pre-seed round for a company. They end up growing really quickly. GPX can come in and basically provide the capital in order to help that manager actually lead later rounds versus that manager having to raise an SPV from 50 people. It constantly happens. And it's kind of like it's awkward. It's harder to actually win the deal because it can take a lot of time. Yeah. the capital is not actually fully ready to deploy. I've been in that situation where the early stage seed fund is like, yeah, I would love to lead this next round.

1:24:46Just give me six months to actually close all the money. I'm going to go around. Then you have this weird, I've got to talk to this person, then I've got to talk to you, and then I've got to talk to this person, then I've got to talk to you, and then I've got to talk to this person. And it's just so much back and forth. So if you have this fund-to-funds backer who just lets you stretch one round further, really, really cool concept. and I think it could work out really well. Yeah, Brian Sigmund, great investor, great person. I always had a fun chat with him when I was at Founders Fund, so excited to see him launch this fund and kind of get it going with a new strategy because it seems really cool.

1:25:23Anyway, we should talk about Eight Sleep. We launched a partnership with them. New ad today. Let's play it. And I want to play our advertisement for Eight Sleep. This is the big challenge for our production team is just playing videos on the show. They can do everything else. It's pretty complicated. But it's not easy. It's no joke. We got this. So let's play the ad and then we will tell you more about Eat Sleep.

1:25:48People see the three-hour streams, the hundreds of guests, the thousands of clips. For us, it's the work that happens off mic. The cold emails, the warm intros, the deep research. Sleep is the edge. whether it's tracking down a viral poster or interviewing a fortune 500 ceo staying sharp is non-negotiable podcasters sleep on eight sleep it's so funny that we did the white suits that day because it was just complete chance that we were in white suits that complete chance um it's it's funny system some backstory on this uh andrea uh was on xing this is what you get when you're allowed to have creative freedom with advertising can't wait to see more of these well more are coming so you can look out for that.

1:26:32But the cool thing here with the Eight Sleep team, we didn't tell them the concept for the shoot. We didn't get them notes on the shoot. All we did was actually send them this final cut that we posted and they were like, this is awesome. Rip it. And that's part of what we're doing. I mean, we make these for fun and it's a good creative process for the team. Yeah. And it's cool. Yeah. Yeah, it's also like an homage to the other Eight Sleep partnership announcement between Charles Leclerc and Eight Sleep that they clearly spent a lot of time concepting and shooting. And we were just like, let's match that one for one.

1:27:08And it'll be a lot of, it'll be cool. And it'll also be funny. And so we had a lot of fun shooting that. So you can go to eightsleep.com to get started. Five-year warranty, 30-night risk-free trial, free returns, free shipping. Code TBPN. In other news, reindustrialize is this week. Happening tomorrow. Happening tomorrow, yes. And they have been on an absolute tear posting interesting things. They said, we exist to reverse this. Pull this chart up. The top employer in each state. Back in 1990, you can see the map is almost entirely green because almost every state, the top employer in each state was manufacturing.

1:27:43In 2024, the top employer is healthcare. And there's a few states that are holding on to manufacturing. A couple that are, Utah's in retail. Nevada has been in hospitality the entire time. surprise surprise staying strong Hawaii is the top employers hospitality that makes sense is a tourist destination but you know for a long time America was a manufacturing powering powerhouse and this is a really striking chart or visualization of what can happen in 34 years of neglect essentially so if you're headed to re-industrialize let us know how it goes we couldn't be there because of travel schedules and whatnot.

1:28:22But I hope it's a fantastic event. And we're very excited for everyone who's over there. Well, our next guest is ready to join us. This is Brian from CoreWeave. We will be talking about the NeoClouds and AI training. What it's like being a public company. Yeah. So good to meet you, Brian. How are you doing? What's going on? Pretty good. Thanks for having me. Congratulations on all the success. Can you just take us through like a brief introduction, kind of maybe a little bit of history on the company, but then kind of where you are today, because I imagine we can jump into a bunch of stuff. Most people are probably familiar, but.

1:28:59Yeah, sure. So first off, my name is Brian Venturo. I'm one of the founders. I'm the chief strategy officer of CoreWeave. I started out as CTO until they found me out. I've been demoted to chief strategy officer. So it's great. Promoted. It's gotta be more fun. More fun. No, it's demoted, dude. Definitely demoted. Well, I'm just saying day to day, I imagine you still have the stress of running the business and all that, but maybe you're not on call, which would be nice. Nothing's changed. They just don't let me write code anymore, which is probably better for everybody. But I'm the chief strategy officer.

1:29:34I run a lot of product strategy, infrastructure strategy. I work with clients on big deals. You know, probably half the company indirectly reports to me. So I'm on the board of directors, et cetera, et cetera. So I've been involved in pretty much every aspect of the business. But I'm happy to talk about whatever you guys would like today. I want to talk about naming every strategy. I want to talk about the overarching strategy. Walk me through how you would think about defining the current strategy. What is the highest priority relationship with hyperscalers, new companies creating a fluid compute layer?

1:30:15All the different like government incentives like what what is top of mind for you? On a day-to-day basis in terms of positioning core weave against competitors or just broadly solving a problem in the market? Like how do you actually break down these problems? So it's two things, right? The first is serving the customers and partners that got us here. That's the big AI labs. It's the hyperscalers. It's the people that have an insatiable need for compute infrastructure. They're the ones that are blocked from delivering to their next customer, from growing their user base, because they don't have any GPUs.

1:30:53That has been insane to be a part of. It's because every time it increases an order of magnitude, you're like, it can't go again. And then it goes again six months later. Yeah. And, you know, I was listening to the show before you're talking about, you know, metas, five gigawatt data center campuses, et cetera. You know, it's like we're headed there. Right. And I think that right now it's the question of, you know, everybody's in a race and how quickly you can build that like that large. But it's also understanding what are the local constraints? What are the actual grid constraints? What are the supply constraints to be able to get there?

1:31:28you know you run into things like labor constraints you know there's not enough electricians in the world to go out and build these things in the timelines these people need how do you modularize the data center construction um you know everybody's kind of solving this as the planes in the air already yeah right um and you know it's it's a race you know i always say internally like i can always i can solve any problem with enough time or capital right and a lot of times you don't get both um so it's choosing you know what's the right path to go oh, how are we going to solve this for them? So that's kind of one side, right?

1:32:00It's like, okay, how do we build to everything that they need? How do we understand what their demand's going to be? And when you look at, the thing that I think the world misses is that everybody on the hyperscale side and in our seat as well, we're looking at it going, we need to build X number of gigawatts of data center capacity, right? We know the demand signals are there, but the capital and the speculative capital isn't there to do it. Interesting. Right? Is I can go out and I can build X gigawatts capacity for the next two or three years, right, from my balance sheet. But any more than that, and the demand doesn't show up and I put my entire company at risk.

1:32:34Right. So we're basically having to haircut the demand signals that we get and only build to a certain extent of it. And then by the time we get out there, we're in the same constrained position we're in today. Got it. Talk to me about... How do you, real quick, how do you think, so it was 2019 that you guys decided to focus more on AI and cloud infra broadly. Is that correct, roughly? Yeah. So the reason I ask this is because I saw a company as, you know, there's been a bunch of companies that were effectively came to the conclusion that you guys did, but maybe six, five, six years later in terms of, hey, we're going to sort of pivot away from, you know, Bitcoin mining into AI because that's where the real growth is.

1:33:21And it feels like a lot of those companies from an outside looking in, you know, it feels like those companies are going to be at a massive disadvantage. But I don't know if I have if I have the right read there. Yeah. So we when we started out in 2017, we made the decision that we were never going to be as good as the ASIC producer and mining Bitcoin. Yeah. Right. And the idea there was, you know, there's always going to be something they don't release, it actually wound up being true. They had released like their low power mode. I forgot what it was called in 2018. And everybody found out that they were hashing 30 % better power efficiency.

1:33:59The world lost their mind about it. And it was kind of like, okay, we were actually right. Like we were kind of were paranoid about it, but we never actually knew until then. So, you know, we said, we're not going to do it as good as them. Where is there a level playing field? And we thought there was a level playing field in GPUs. And we also thought, okay, hey, if crypto goes to zero, the GPUs are repurposable. They're used for gaming. They're used for graphics rendering. Like we could either sell them on the open market or we can build another service with them. What we were most surprised by is when we first launched our, you know, let's say first non-crypto product in 2018, 2019, it was a rendering service for an open source 3D graphics platform called Blender.

1:34:42Blender. We had like a thousand people sign up in the first day. Wow. And I was just like, oh boy, like there's a market here. People need this stuff. And like we had never expected it to be that large. And people would come to us and they'd send us like support tickets saying, hey, just want to tell you it's so awesome. I was able to do so much more work because I got access to GPUs I've never had before. Yeah. Right. And that was like signal number one. And we're like, okay, we convinced our early investors like we're going to go all in on this thing. We're going to use crypto to pay for it as we're building out more compute.

1:35:13And we set it up so that as we didn't have actual cloud or compute workloads, it would turn back to mining. And the mining would cover all of our fixed and variable expenses. And all of the cloud stuff was just upside. So we were able to show over time this constant penetration or constant growth of our margin, which was really easy to grow. We were able to lever the cryptocurrency into a massive resource base. So the timing played a lot into our success there in that we had that permissionless crypto revenue to lean back on. Yeah, but also just having, I think, incredible foresight to some degree, which you're being a little bit more modest about it.

1:35:57But the fact that companies, you know, even I saw a company that was getting pumped on X last week that is still in the process of transitioning from Bitcoin mining to, you know, something that will look like a neocloud. And the idea that you're going to come into this market six years late and really be a key player feels like a long shot. It's I think it's even worse than that. And it's even worse than that because the talent pool is so small. And to be successful as the technology has gotten more sophisticated and harder to run, you have to be the best in the world. And we have some of our low-level hardware engineers.

1:36:44They're amazing. I've seen them solve problems that nobody even knew existed. They identify the problem. They're able to say, okay, this is what the problem is. they go back to NVIDIA and they jointly develop a solution for it. Right. That's really important as you're building at scale. Right. You know, anybody can run 100 or 500 or 1000 GPUs. But if you're running hundreds of thousands of these things, like it's really, really hard to do, especially at high quality. Right. So people think that there's folks that are 12 to 18 to 24 months behind us. Good luck. Really quick question. I have to ask, what's the story with the wheels behind you?

1:37:25All right. So there are F1 wind tunnel tires. Yeah. And we just did a sponsorship with Austin Martin. And we also executed a computer agreement with them. I'm so excited about this one. You know, when I talked before about like the way that we think about our first cohort of clients, it's the AI labs. The second is the enterprises. Yep. And I feel that if we can walk into Aston Martin and help them modernize their AI and ML stack in the most hyper competitive sport in the world with so much data and so many eyeballs already on it, we can do it for anybody. Yeah. So being more concrete there, you have an F1 car, you need to simulate how air flows over it.

1:38:10That's a particle simulation. And that's perfect for accelerated parallelized computing, GPUs. They're probably doing it on premise at some point. they're going to take it to the cloud they're going to take it to your cloud it's so much yes but it's so much more than that it's not just the cfd workloads it's also things like taking radio data from other teams and trying to decipher what their strategies are in real time i mean it's running tire degradation simulations like how does track temperature change with cloud cover how does weather come in and actually impact this stuff it's helping them make better decisions on track in real time.

1:38:46It's the coolest confluence of the technologies that I can imagine. And I'm like, I'm totally into it. That's amazing. Yeah. Translate all of Ferrari's comms from Italian into English. Yeah. Well, I mean, good luck with Ferrari strategy. Talk about sort of data center build out timelines. I think Colossus and the XAI team were getting a lot of credit for bringing a lot of compute online very quickly, a lot of energy online. How much was that an outlier or are they just really good at marketing? I think it's both, right? You know, one of the things that I admire about Elon is, you know, he sent an email a couple of years ago on Thanksgiving and it was like the biggest problem that we have right now is there's nobody to turn a screwdriver on the line i'm gonna go turn a screwdriver in the line right and he is so good at identifying what the bottleneck is and breaking through it and if you're the richest guy in the world and you don't really care about the consequences you can do that a lot more than you can as a director of a public company is what i've learned um is you know they're able to go and i think some of what they've done is a bit of the you told me i can't build it but i already built it it's already there and they're like no you can't build it no no it's there right um and when you're in a race like this that bravado matters yep right um i i don't know i don't think anybody knows the truth of what's actually there uh but they've definitely been incredible in how they've been able to execute yeah yeah i mean the the that data center seems like it's performing very well but what i learned from Dylan Patel over at Semi Analysis with the ClusterMax ranking is that not all clouds are created equal and 100 ,000 H100s is not perfectly substitutable for another 100 ,000 H100s over here.

1:40:44And CoreWeave did extremely well on ClusterMax and I'm interested in peeling back a layer deeper into understanding first, how do you think you did so well? like what concretely makes CoreWeave stand out as a NeoCloud on the features level from a customer perspective? And then internally, what's the secret sauce? Like, is it just great employees? Are they aligned? Are they working harder? Is there key insight? How do you actually deliver that product at a higher level than competitors that Dylan Patel reviewed? Yeah, so let's not get off the XAI thing yet. I'm going to transfer into that. You know, if they have 100 ,000 GPUs and they get 60 ,000 of them running and they don't care about the other 40 ,000 of them, it's kind of enough.

1:41:37Got it. Right. And if they're looking at it saying, I don't care how much this costs, I have to win. And they're in the position to do that. And if you're Elon Musk, you are. Right. That's a powerful position to be in. Sure. Now, the clients that we serve are typically going to be more cost conscious and are going to look to optimize their spend and make sure they get whatever they need out of their investment. And what we found is that these jobs and this infrastructure, it breaks all the time. right and um when you accept that something's going to break all the time and you design for it your solution is going to be very different than if you're just kind of um you know square peg in a round hole after the fact saying i have to go deal with these failures yeah right so what we did initially is we built uh with a incredibly high level of observability at the bare metal layer right and the bare metal visibility is really important because things do fail and you know you have uh memory failures you have thermal failures you have all these things that impact your jobs but if we're able to help our customers identify what's happening triage it for them and explain to them why something failed you know they don't have to go back and say oh was it my code or was it one of the 700 000 connections in my cluster right they can immediately point to our software stack that says oh it was this link flap over here we took it out of service you restart your job you'll be totally fine.

1:43:00That's been very, very, very powerful. And it's not just that visibility layer. It's also the storage and networking and the quality control that we put around those things. I have to give credit to our now CTO, Peter Solanke, who used to work for me until they found me out. He is incredibly focused on the low level visibility and quality and drives a lot of that culture throughout the company right of like if one of 500 000 things is going to break i need to know immediately so i can go in and fix it to make sure my customers back up and running like three minutes later um so it's it's building from that low base and understanding what the problems are going to be uh and then culturally you know we have people that are here that take so much pride in being first and being best right and you know if we're not first to market with a new release, like they're like, they're going to cry for a week kind of thing.

1:44:02So when we did GB300 a couple of weeks ago, or maybe it was just a week ago, like people went out to one of our data centers, like all of our low level engineers went out there and they lived there for like two weeks to get it done. Right. Like they go and they work from 8am to 4am every day and they love it. And it's a cultural thing. And I think we're really lucky to have that. a bit of a tangent were you an h20 buyer at all over the last few months or not needed no and and there there was h20 sales happening in the united states from what we heard who are the kind of uh players that are that were making use of that i don't know um if that did happen i don't know who it is um but for us you know if we had any power available we're going to buy the best and the best accelerator we can.

1:44:52There's no reason for us to buy the cut-down accelerator if we have power available. Yeah, that makes sense. You mentioned that one of the key things is the insight into what's happening in the data center. What, if a specific chip is failing, you want your customer to be able to know, you want to be able to, I mean, we talked to Dylan Patel, he was saying like, sometimes you just need to turn it off, turn it back on. Or like, there's a whole bunch of different things that can happen that feel very abstract when you're looking at it from the outside, but are very concrete when you're on the inside.

1:45:24And that's actually what separates great data center performance is just like the hand-to-hand combat that happens on an inside day. My question is like, we've talked to some people who were like, we're going to put data centers in space, or we're going to put data centers like on the moon or on a boat. That doesn't seem to align with your framework of being like, we need to build it in a way knowing that it's going to break often and we're going to need to fix it and hard to do that if it's it's yeah i don't think space is the right place for a data center okay um but you know to the point there of sometimes you have to turn it off and turn it back on to solve the problem um we don't find that to be true okay right is if you if something needs to be turned off there's a reason why it needs to be turned off sure and that like that one comment maybe what separates us is you know our engineering team if they're like i'm not going to reboot the system that doesn't solve problems.

1:46:14I want to know exactly what happened there because we have to go solve it. Because if it happens one time, it's going to happen another time. Like the scale that we run at these, like these skeletons come out. Yep. Right. And, you know, making sure that the data centers on earth and is acceptable by is accessible by like human technicians is really important. Yep. Because sometimes you have to make judgment calls on like what's actually causing this and how do you fix it? Yeah. So the one kind of, I mean, there's a few things that the space data center folks will tell you about like free energy or free cooling or something like that.

1:46:51We don't need to go too deep into that, but I guess the question that I'm more interested in is how are the recent results from different training runs? We saw this with Grok4 that the reinforcement learning post training was 50 % of the overall cost, that's kind of the rumor, and there's been kind of mutterings about, hey, maybe in the future, you'll need a whole bunch of distributed compute all over the place, generating reinforcement data, and doing rollouts, and bringing those back, and you won't need as much of this hyper-concentrated compute in one place, and so maybe having building 10 one gigawatt data centers is better than one five gigawatt data center.

1:47:36It's just power and compute all over the place. How do you think like the shape of distribution of compute clusters will evolve over the next few years? If you have any insight there. Yeah. So great question. Let's put it into perspective because you said one five gigawatt or 10 one gigawatts. Those are insane, by the way. Yeah. Okay. Okay. Like even building a gigawatt data center and its impact on the local grid, like that's, we'll see. I mean, you talk to people and they're like, there's going to be 100 gigawatts data centers in three years. Like the crazy AI people get crazy. And so maybe I'm a little bit on, you know, like out in space here, literally.

1:48:16But bring back time to Earth. Yeah. So people definitely want to build at that scale, right? When you think about 100 gigawatt data center or a 10 gigawatt data center, the capital required to build these things and install the compute inside them, that's country level capital. And I don't think that the broader market understands the investment required yet to do this. But back to the question of, is it going to be more distributed? Is it going to be more centralized? I think that right now, while the ability to centralize it exists, people would prefer to do that because the optionality of having it all together is, you know, is worth more than having it distributed.

1:49:01I think that as you have workloads that become more latency driven. Right. So, you know, we're starting to see customers and say, hey, I need something that's actually local to a metropolitan area because I'm running, you know, agentic AI for one of my customers or for a banking customer. I need to make sure it's there. That's a very different story than 12 months ago where people didn't care where inference was because your first response wasn't for like two or three seconds. Yeah. You actually want it on the other side of the world, ideally, where it's low load. Then you're managing to optimize for cost.

1:49:31Yep. Right. But there's a group of people that are going to optimize for cost. There's a group of people that are going to optimize for performance. It's, you know, for us, one of the products that we're really excited to develop is, you know, almost like a global load balancer product that helps people choose what they're optimizing for. Right. And, you know, we've been thinking about that for a long time now, because like you said, you have to have that compute distributed. And it may not be because you're trying, like, if you could choose, you'd always have it in one place. right but when you build it distributed then you have to have the software services that can intelligently say okay where am i going to run this what am i optimizing for uh where's the data that i need right and that's where um you know we've been investing in you know we've built a massive global network backbone we have a ton of our own dark fiber um to be able to move workloads around what does that mean what does that what does that exactly mean you're um so uh we've least dark fiber between a bunch of our data centers across the United States and in Europe that allows us to install our own optical optical optical gear so that we can you know flex up bandwidth as we need to you know we have some customers that need things like 64 terabits per second between sites like crazy amounts of bandwidth and the idea there is that they're they're moving synchronization data they're synchronizing models between sites yep so you know, that's where we have to make these big capital investments knowing what's coming.

1:50:58Right. So when our customers start asking for it, it was like, oh, yes, we already have it there. So, you know, some of that is just it's the focus that we have and the specialization to know, hey, like we better start investing in this because a year down the road, like we're going to be screwed if we don't. Yeah. Yeah. How has it been, you know, what are some of the differences been in building out data centers in Europe? I know you guys have Norway, Sweden, Spain, and the UK. Is that correct? What's it been like developing new data centers there versus what you've done in the United States?

1:51:34Not so different, actually. Right. Everybody was initially saying, oh, it's going to be so hard to work in Europe. Are people going to show up and work as hard? And one of the things that we've done, I think that we've done really well in our onboarding process for employees, is we've actually brought all the European teams over to work with our tiger teams inside of our data centers. You just blare the Star Spangled Banner just loudly. Yeah, if you blast music continuously all of a sudden. And the culture is infectious. And one of the best things about the company is that all of our – like the company is so young that there's been no real attrition.

1:52:14Nobody's left. Yeah. So the people that are running the data center started as data center techs a couple of years ago. Like everybody's still fired up. They still have like the same drive. They want to be first. They want to be best. And when you have new employees that walk into that environment and those people are genuinely happy to teach them, it transfers pretty well. Right. So I think our European investments have gone a lot better than I thought they were going to, which I attribute largely to our people. That makes sense. A couple years ago, I feel like everyone in tech had to learn about NVIDIA, and then everyone in tech had to learn about TSMC, and then everyone in tech had to learn about ASML.

1:52:51And now people are kind of getting familiar with SK Hynix. What do you think the next big company in the semiconductor stack or data center stack or even networking, like what is the next big theme or subcategory of important foundational technology. People are starting to dig into the rare earth materials and what's going on. What is on the horizon in terms of like underexplored or misunderstood as important as having a role as we try and build out these one gigawatt, 10 gigawatt data centers? What are we going to be hearing about? That's such a good question and the kind of question, man, I don't even know um i'm not sure i have an answer for you yeah maybe maybe it's networking gear i mean you mentioned you're putting optical gear at uh and and just hearing what was it 42 terabits a second like that seems like something that could be become very important not that you have to call out a single company just like the the the overall industry is interesting to be like oh you know everyone's gonna be thinking about this industry yeah you know that's definitely one of them um Fiber capacity between metros is going to be an issue.

1:54:09I don't know that it's an issue that's insurmountable. There are definitely some gotchas that I can see coming down the line at people. I don't want to say it because then I'll give them warning. And since we've already identified what they are, I feel like I'm in a better position. Sorry. I don't mean to put you on the spot too much. No, no. It's okay. What about electrical transformers? I've heard a little bit about like there there is sometimes there's a shortage they're very complicated like it's this is this like big technical thing that's big piece of hardware is that like an important thing for people to be aware of going forward or like an important industry to understand so a bit of a tangent off of that everybody talks about how there's no power left in America yeah right and if you actually look at the data there's a tremendous amount of power available from base load and load following generation that's great thank you um and the the problem exists on peak days right and like what solves peak load problems is solar like solar and batteries will solve peak load problems like you're worried about you know five o 'clock on the hottest july day when everybody gets home to turn their air conditioning on sure like that's that's the thing um and you know everybody wants to talk about how they want to use demand response as a way to, you know, bring supply back to the power grid from data centers.

1:55:35You know, this stuff is really hard to bring up and bring down. It's, it's not really intermittent load. Right. You know, I think that a lot of this shortage narrative from a power perspective is coming from the fact that everybody and their brother has become a data center developer in the past year. And there's a lot of people out there squatting on power, right they're squatting on power rates and i don't think that the uh local regulatory commissions understood what they were signing up for when they started doing load studies for free and giving power allocations um you know but it goes back to my point earlier that the biggest constraint is speculative capital to build out to meet demand that we expect interesting right so like yeah transformers are a problem but they're not outside the lead time window um you know ups is everything's a problem if you need it tomorrow sure but if you're able to plan and make the investments in like in a reasonable period of time and you trust your demand forecasts and the market is there and believes in it um like this is all fine yeah right do you still uh i feel like the chart that people have been tracking is like china bringing on you know you know basically like copy and pasting nuclear reactors.

1:56:46Do you think that the U.S. should be seriously, you know, there seems to be enough people now from tech to Washington that care about nuclear. It used to be very contrarian. It was very, very edgy to say, oh yeah, nuclear, it's safe and we should do it. And people are like, it's still scary. But yeah, in your view, would you like to see more focus on, more attention on nuclear or more attention on solar if you had to pick? I mean, so nuclear, they solve two different problems, right? Nuclear builds your base load and you're in like, it's not, nuclear is not load following. It's really hard to bring those things up and down.

1:57:21They have long outage cycles. It's a base load solution, right? So as your data center demand is going to increase so much and you're shifting your base load requirements up, that's the solution. Particularly if you want to retire old coal or you want to retire some of the base load natural gas, nuclear, I believe is the solution there. But as you're dealing with peak loads, right, you're looking to match that load profile. And, you know, solar is a great one to do it. You know, wind doesn't necessarily solve that problem during peaking, like wind doesn't peak during the afternoon, it peaks overnight.

1:57:53So you just have to match, like, what's the load profile you're trying to match? And which part of the curve are you trying to solve for? Is the load profile for AI not perfectly matched with nuclear? And is that because of inference demand from actual customers. Like I've heard people use ChatGPT during the work week, but they don't use it when they're sleeping. So there's actually maybe it follows more of like the solar load profile. Because when I think of training, I think of we're going to run this entire data center for months. I don't know how far off I am on that. But like that feels like perfect.

1:58:25Oh, build a nuclear power plant right next to the big data center. Run it continuously. Just keep training. And then when you get done with one model, train the next one. Just keep it running perfectly matched forever. But how are we actually like the actual AI workloads, how do they match to different load profiles? Yeah, so if you're in a global constrained environment, you're serving as much load as you can around the clock from anywhere. Yeah, yeah. So I don't think that you have any load shape right now. I think it's just flat load and it's like, it's pinned to 100%. Got it. As. Bullish. Yeah, it's insane.

1:59:00You're like, it's stressful, stop talking about that. It's incredibly stressful, but it's a good problem to have. I have people yelling at me every day, like, where's my stuff? Where's my stuff? Where's my stuff? And I'm like, I promise I'm doing everything I can. But I think that as you have the investments where things are more latency sensitive, you'll see that the load curve may not change. It may still be pinned at 100, right? But the types of workloads may be more shaped. I'm not sure how it plays out, right? I think that the problem that you're trying to solve there is not necessarily data center load shape.

1:59:38It's residential and commercial load shape. Because you're not running like your big commercial buildings in New York aren't running at 3 a.m. They're running at 3 p.m. That's the problem.

2:00:20It makes a ton of sense. Investing for those who take it seriously. Multi-asset investing. Industry-leading yields. They're trusted by millions. Our next guest will be joining us in just a few minutes. But first, we can tell you about Wander. Find your happy place. Find your happy place. Book a Wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, and 24-7 concierge service. It's a vacation home, but better, folks. Okay, I got an update from a friend. Friend of a friend. which says that his friend, no, no, no, sorry. Our friend says that he has a buddy that owns some RM boutiques and has not heard of the conspiracy, which is interesting.

2:01:05Maybe it was hallucinating. It might have been conspiracy. I don't know. I need to find a source for that. Where was that actually in here? I will figure it out. And we will get to the bottom of the conspiracy theory. But we will do that later because our next guest is here. It's Tyler Cowen. How are you doing Tyler? Which conspiracy theory? So this conspiracy theory is that you'll actually like this one. Okay, so Are you familiar with the high the ultra luxury watch brand Richard Mill? Only by name. Okay, so have one you may have seen it on a on a sailboat or something like that Yes, so Richard Mill is famous for selling watches at ten times the price of other luxury watch brands So a Richard Mill, the first one was$135 ,000 for a single watch.

2:01:53And at the time,$13 ,000 would have been more appropriate for that kind of tier of watch. And the conspiracy theory is that when Richard Mill went to promote their new watch, they took out an advertisement in the Financial Times. They sent over the copy for the advertisement saying, please promote Richard Mill. Our new watch is available for purchase. and the price is$13 ,500. And there was a mistake in the newsroom and they added an extra zero and they printed$135 ,000. And what happened was instead of getting no offers, they got flooded with offers because people had to have it, a classic example of a Veblen good, and the rest is history.

2:02:39And to this day, the brand denies it. But what do you think? Well, it sounds like the opposite of a conspiracy. just an innocent mistake. And then it worked out well for the company and bad for the buyers. Yes. I believe it. The conspiracy is that the brand now obviously denies it because it would not be a good look for them now to be like, well, we actually wanted to price it at$13 ,000 and then we actually, you know, now that you're willing to pay$135 ,000, well, good deal. Let's do it. There'll be a deathbed confession on that one. One or the other. Well, it's great to have you here. It's great to have you on video.

2:03:17Super intelligence. Yes, yes, yeah, yeah. We had some technical difficulties last time, but I'm glad. You look great. How are you overall? Let me take your temperature on. The last time we talked, you said AGI was around the corner. Two days later, O3 released. We now have O3 Pro. How are you feeling on artificial intelligence progress overall? Do you feel like we're accelerating, decelerating? Are you happy with the products? How are you using them? Take me through kind of the state of the union. Everyone has a different definition of AGI, but the definition I grew up with, which is that it can pass a Turing test and do at least as well as expert humans on most endeavors, intellectual endeavors, it clearly passes.

2:04:00If you want to call it AGI, you can. I don't insist on the term. Maybe it's more misleading than useful. But O3, O3 Pro, I use them every day. I ask them questions about history or music or travel. My wife and I did a trip through Europe, France and Spain. We asked it about our hotels, our restaurants, the churches. We saw everything. It just keeps on working. It's amazing. Much better than having a historian guide with you. So to me, it's like AGI. It's better, in fact. Are you what is your prior for hallucination at this point? because that Richard Mill conspiracy theory that I just relayed to you, that comes from a ChatGPT 03 Pro deep research report and we're getting text messages that many people hadn't heard of it.

2:04:52I haven't checked the sourcing yet, so I'm not sure if it's real. I haven't gone down and done all the fact checking, but just in terms of your prior, how likely would you believe that it's a hallucination? Well, just ask it, right? If it's something important, you double check with another AI and or you ask and you find out. So hallucinations should not be a practical problem. They end up one because people are silly or they'll ask it questions where there may not be any answer at all. And that is by far when it's most likely to hallucinate. They'll just make something up to please you. But if you know in advance, that's when it's most likely to hallucinate.

2:05:31Again, you take countermeasures. So it's a way overrated problem. I agree. I agree. And I just fact checked this and it does come from a 2021 GQ report, which again might be wrong. Hallucinated by the off-money. But GQ never hallucinates, right? Gentlemen do not hallucinate. No, gentlemen do not hallucinate. What do you think of Dwarkesh Patel's new formulation that there's sort of a two axis diagram between you and him? AGI is here. AGI is not here. The impact of AGI economically will be massive in his mind, and the impact of AGI will be more muted in his assessment of your assessment. And I think your general stance, which is we should hold ourselves accountable to the definition that we set out to achieve decades ago when this work started and not constantly just be pushing out the requirements, moving the goalposts is important.

2:06:37And then there's this new definition, super intelligence. I'm waiting for super duper intelligence. Giga intelligence. Ultra intelligence. We're already past it. Everyone, folks like us, we know what superintelligence is. We already have it. We're waiting for the next one. Maybe the best measure is how much of people's time are they spending with this thing? And that's rising steadily, right? So that to me is quite impressive. Dworkesh understands my views perfectly well. He and I use the term AGI in different ways. So it all ends up being confusing. I just think the human bottlenecks are so significant that it's not going to be fast progress anytime soon.

2:07:15That's my core view. It's not based on any kind of bearishness about AI. It's that I've spent my whole life working in human institutions, and there are plenty of much simpler developments, like don't be a jerk, that would boost productivity immensely, but we still haven't gotten around to really implementing. Yeah. But I mean, on the topic of superintelligence, I think what people are kind of getting at is that it feels like we have 15 minute AGI. It feels like we have spiky intelligence. It feels like we have intelligence that can, you know, memorize every book in the English language and yet not tell you a funny joke or, or put a novel connection together between two disparate disciplines.

2:07:58And potentially more important is this idea of, of intelligence with amnesia, right? It's like, uh, you know, we've been talking about this on the show and Dwarkesh, talked about it last week, which is this idea of PhD level intelligence that, you know, can't remember what you told it, you know, yesterday, right? And so it's difficult to sort of build real momentum and real agency. I think it can do all those things. Now, it might require a little smidgen of work from you. Like you might need, for one thing, you can turn on memory. That's maybe not as much memory as you'd like, but you can just reinsert the dialogue you had with it and tell it to start from there.

2:08:38So, okay, it's a slight inconvenience, but my goodness, people, they're so unhappy. Like it's incredible what we have. And with modest effort from you, it does all these things. So I completely agree. I love these systems. I enjoy spending time with them, even if they're not directly providing economic value. I find them entertaining. I find them just interesting. I learn things, it's fantastic. I guess the question is like, yes, you can stuff the context window, but increasingly folks are saying that there's some sort of fundamental limitation with the size of the context window, that yes, you can do needle in the haystack analysis with a big context window, but even if you have pages and pages of all your best practices, the current systems are more likely to forget some hard-won lesson early in working with you than just an average employee.

2:09:34And that feels uniquely unhuman. I don't know. I've worked with a lot of employees. One generous way I would put it. The things are not perfect. If you compare them to smart humans on intellectual tasks, they're basically ahead. They can't dribble a basketball. They cannot do most jobs, that's for sure. It's a big reason why progress will be slow. If nothing else, those jobs intersect with the physical world. Robots are far away. And there you go. I think it's a pretty clear prognosis. I don't really get why anyone disagrees with it. Well, if you need to raise a billion dollars, it's not super convenient truth if robots are far away, for example.

2:10:18And specifically, economic growth is far away. this is the Satya Nadella position, which I think he agrees with you on the economic impact that we're currently seeing and potentially the economic impact for the next few years. And so he is underwriting a very different investment strategy in artificial intelligence. Yeah, it says a lot in our view that everywhere you look, there's just blaring top signals in the market, both like literal all-time highs, but then just other more indirect signals. And at the same time, Satya is like doing layoffs, being seemingly very pragmatic. And I read that as more aligned with your view, which is transformative, impactful, incredible, wonderful magic, but also potentially incremental.

2:11:08And going to be transformative in the fullness of time, but not next quarter. Forgive me for not sounding like a complete capitalist, but this is all so important. People should just be doing it. And to some extent they are. The labs are working very hard to make progress. You can debate how much the motive is profit. But look, these are driven people. They get how important it is and they're doing their best. I think that's amazing. Are they all going to get rich? I'm not predicting that. I don't know. Yeah, I think the trade-off that people are debating broadly in the market is if the next training run that's a little bit of a stretch for the market.

2:11:53We were just talking to the co-founder of CoreWeave, and he was saying that the capital markets just aren't really ready to absorb what it means to 10x data center construction. And at the same time, if AI researchers are saying that by 10xing data center construction, we will lift ourself off of the GDP baseline. And we will see breakout economic growth. And we will get through some of the problems that you've identified about actually restructuring the economy and speeding up economic growth. If all of a sudden, like that question and that how much should humanity as a whole invest as a portion of GDP, that becomes a very important question for the overall market to solve.

2:12:38Well, let's go talk to United Arab Emirates. They can either buy some more parts of sports teams or do this. I think they're going to do this. The growth rate, I think, will go up. I've offered the very speculative estimate of half a percentage point per quarter. But that's an enormous sum of money. That's massive. Now, you know, is it captured by the capital markets, the shareholders, and so on? No. Just the free time liberated by ChatGPT and the other services already is enormous money. So remember, Satya had that challenge. When will it earn$100 million? Well, it has many times over. It just hasn't earned it for him.

2:13:14So people get their work done more quickly. You add up those valuations of time. I'd love to see a study in the number, but it's way, way above$100 million. right now. Well, on that point, there was a study last week about does AI code generation tools, do these tools actually improve developer productivity? And they did, I believe, a double blinded trial with or maybe just like a split up trial based on talented software engineers working on open source projects, kind of trying to work on some of the harder problems in software engineering, not just build me a new web page, actually advancing open source projects.

2:13:58And they gave half of the developers access to tools like Cursor and Windsurf and Cloud Code. And then the other half didn't have these AI-driven development environments. And they said that the AI-enabled engineers expected a 20 % speed up, but they in fact experienced a 20 % decrease or 19 % decrease in productivity. What is your take on that? Do you think that there's a world where we're fooling ourselves into believing that we're actually sped up by these tools? Or do you think that that's completely ridiculous and it's obvious that these tools speed us up? That's BS, that paper. First, only 16 data points.

2:14:38Second, only one of those people had experience working with AI already. And that person's productivity went up. It's the other fools who are just trying to get a handle on it at all where the productivity went down. So we need to throw that out, get it out of our minds. It's obvious from marketplace tests that AI speeds up developer productivity. Of course, you have to do it right. You need to learn some things, but it's working. Overwhelming real world evidence to that effect. Do you think that there are particular tasks maybe that you've encountered where you've gone to AI and then afterwards realized like, well, for this particular task, not just planning a vacation or trip or something, I was actually slowed down.

2:15:22Sometimes I like giving stupid dogmatic answers. I'll just say no. I think it's a correct stupid dogmatic answer. No, it's never happened to me. I love that. Because it's definitely happened to me when I've said like, generate a two by two chart. And I'm like seven prompts deep. And I'm like, I could have done this in Excel or I could have done this and just taken a screenshot or I could have done this in Photoshop faster. It does happen to me. But I agree on that. I feel sped up and I feel very happy to use the tools and I'm enjoying them. I use it to prepare for podcasts. Sure. It cuts my prep time in half.

2:15:56Sure. No real doubt there. I don't use it for charts. I just tell a human. Maybe the human uses it. I don't even know. I get the chart back. It's great. I love the world. I love it. What is the labor economist in you think about the AI talent wars? Have AI researchers been historically underpaid? Are we in some sort of odd intellectual property theft ring where we're paying for trade secrets to change hands? What is your read on kind of all the talent moves that we've seen at staggering numbers by comparison in what's historically happened in Silicon Valley? Yeah, and then specifically, do you think that an AI researcher in the year 2030 will be getting a$100 million signing bonus or do you believe that things will maybe normalize and researchers will go back to being paid well, but maybe not more than Fortune or MAG7 CEOs?

2:16:55Probably normalize. Now, I'm an NBA basketball fan, and what I observe is the top teams need some time to gel. So you look at the Miami Heat. They got LeBron, Dwayne Wade, Chris Bosh. The first year, they lost. You look at Chicago Bulls, Jordan and Pippen. It took them a few years. You look at the Lakers, what they had, Karl Malone, Gary Payton, was it Shaq and Kobe Bryant? They didn't win a title. So it's not as easy as you think. Not that those aren't great, great players, but there's something about how it gels and the process and what part of people's trajectories you get them at that all has to fit together.

2:17:34I think it's a fascinating experiment. I'm dying to find out how it's going to work. What do you think of the missionary versus mercenary debate? A prior guest on the show highlighted Tom Brady in the sports world, taking a lower salary in order to build a better team around him. A bit of an economic sacrifice for greater performance, longer legacy, ultimately reap the rewards economically. But a lot of people have been saying, you know, buy great missionary talent that will stick with you during the hard times and really advance the frontier of artificial intelligence. In the case of Brady, you know, he has these contracts for shoes, jerseys, footballs, other things.

2:18:18He probably made a lot of money from that pay cut by staying more focal. So maybe for some of these AI companies, you know, we need more endorsements, a line of tennis balls or something. It'll be cheaper to hire talent because the outside market will pay them. We're not at that point yet. Maybe we'll get there. I think I want a game worn jersey. Here's what Ilyu wore when he, you know, built the key parts of GPT-4. Exactly. I mean, we've we've been putting out these little trading cards, sports, you know, whenever an AI researcher moves from one firm to the other. And I mean, it seems like an insider their joke, but these posts are getting millions and millions of views.

2:19:04It really is turning into sports in terms of the attention of the entire tech industry on these trade deals. Maybe it's just the big numbers, but I think it's also the fact that this is an important technology and people are excited about the developments and they want to know who will win. What product will I be using in five years? Will it be open-air, will it be meta, who knows? All of the above, I hope. Yeah, probably. How did you, how would you try to value the Dutch East India company? And the reason I bring that up is NVIDIA crossed the$4 trillion market cap. Everybody's calling it, you know, one of the most valuable companies ever.

2:19:43But I think a lot of the people that run the kind of valuation analysis and inflation calculations and things like that believe that the Dutch East India Company was worth somewhere around 2x of that. Have you spent much time thinking about that business? I look at all the numbers. In general, I don't feel I can outguess the markets. So the market is a better estimator there than I am. But look, markets are always wrong. That's why the price changes all the time. So the fact that NVIDIA is priced so high shows the market is paying attention to AI, which is good. But the fact that everything else is priced more or less normally, I think is evidence for my thesis of slow takeoff, that it will matter a lot over time, but not that much right away.

2:20:31Yeah, makes sense. It is interesting. We just had one of the founders of Core Weave on, which is now a$70 billion public company. And I was thinking about the advantage that he has as a public company where he doesn't have to raise capital from the private markets that are and tell the story this like 10 year story. He can kind of focus on the next quarter and just say, like, how do we deliver more compute to our customers? And it's like this interesting change where a lot of the companies today, let's say you're a lab with a 10 billion dollar valuation and you need to raise billions of dollars.

2:21:06you kind of need to tell the story around superintelligence. Meanwhile, if you can just get out in the public markets and have billions of dollars of revenue, you can kind of go back to telling the story of, yeah, we're hoping to bring more compute online, more data centers online, and just actually focus on the business. That can cut either way. But look, if you're selling socks today, public market is fine. But as you well know, fewer and fewer companies want to go that route. So that does suggest to me the public markets are somewhat broken, overregulated, too much disclosure required, too much bureaucratization.

2:21:41Shareholders themselves can be kind of nutty. So, you know, it's good to have the two compete. But I'd like to see us make the public markets easier to be in. What about Delaware? We saw Andreessen Horowitz moving to Nevada. We've seen some other high profile exits. Do you think Delaware will try to turn it around? I know about a pretty meaningful amount of their budget comes from, franchise taxes, things like that. I say get out, send them a message. They're not feeling enough pain yet. Let's make it really tough for poor little Delaware. What do they call it? Small wonder? Well, small wonder that they haven't gotten their regulatory apparatus into better order.

2:22:22Wow, that's a great thing. That's hilarious. What about in this? I want to talk more about the public market distortions versus private market. It feels like Elon has kind of run an A-B test with Tesla and SpaceX. They're like within an order of magnitude of each other, maybe within like 2x in terms of valuation. And now Elon seems to be building some sort of a Japanese-style caretzu between all of his private market and sometimes the public market companies as well. Would a hallmark of a well-functioning public market be that there is just one ticker for Elon, Inc., and all the companies are under one umbrella?

2:23:00or is there value in the public markets to having like pure plays? I hear some public markets, hedge fund investors are like, I just want a pure play on the robo-taxi. I just want a pure play on humanoids. And I don't know if that's actually like an economically valuable thing for our society to have or what would be best for Elon or the shareholders. I'm just kind of struggling with all the different stakeholders. I suspect the pure play idea is useful. So you get a market price signal, what's working, what's not. So Elon obviously has become less popular. So the value of Tesla goes down. You see that quite directly.

2:23:34If they're all bundled, the signal is far more muddled. So I think it's better separate. So ideally, if it was easy to operate in the public markets, we would just see SpaceX and companies would be going public once they hit like 5 billion or 10 billion, something like that. I'm not sure if something like Neuralink would be. That's just weird to begin with, non-legible. Who are the customers? What are the products? Yes, the disabled, but after that, that I would think should be in private markets. Wait, wait, are you sure about that? Because I feel like it's also in many ways like a classic biotech drug, you know, FDA approvals.

2:24:14Once it's approved, it goes out to everyone. It feels like that's one place that the public markets are particularly functioning as they always have, where new drug comes, goes through phase one, phase two trials, but goes public very early. We're not seeing the stripe of biotech hang out in the private markets for two decades. What am I ever going to buy from neurotech? No insult intended, by the way, but it's not transparent to me. I think it's amazing. I'm all for it. Maybe it has to be not so legible to public shareholders, and Elon wants to do it. That's great. You might not buy a particular cancer drug.

2:24:50I would hope that you'd never have to buy any of them, but that particular drug for some certain indication, some certain illness could be taken through FDA trials. They could go public. Their stock price could trade on the basis of the FDA results. And then when they get approved, they start selling that drug. Maybe they get acquired by a bigger drug company, but then they live or die by the market size of that particular illness. Well, if it was a cancer drug, sure, I'd buy that. But a brain-computer interface? I don't know. I don't want one. I'm happy with it being there. And again, it seems to me that's probably not a good matter for public shareholders.

2:25:28Oh, OK. Yeah, I'm more just thinking, I mean, yeah, I guess if you're thinking about valuing it as like brain-computer interface for the masses, that's a different story than it is a treatment for the illness of being a paraplegic. Or if you are blind, it can cure blindness. And that is a medical diagnosis and it is a medical product. But obviously Elon's telling a much broader story about that. So that's a different thing. Were you surprised to see Uncle Sam put up a surplus in June? Or were you expecting that? I wouldn't say I expected it. But, you know, month to month fluctuations can be so severe.

2:26:05Nothing like that should surprise us. The debt and deficit, they're still out of control. It's like a startup. It's a startup that's like, yeah, we're profitable. because they had one month of free cash flow, or one day annualized. Yeah, that makes sense. How about stable coins? There's been new regulation. We have an issuer that's now public. There's a massive amount of excitement. It seems like a lot of the use cases outside of, you know, as a value transfer to facilitate investing in the U.S., but then the potentially, you know, more interesting use cases internationally. But how are you thinking about adoption?

2:26:56And do you believe that the U.S. and specifically the traditional dollar will be a major beneficiary of the tech? It's been great. The rest of the world wants access to dollar-based systems. Our government makes it hard for them. Stable coins are a workaround. I'm not sure what their long-run fate will be, because keep in mind, regulations can change, and other payments methods can innovate as well. But they're going to pass the Genius Act, it looks like. I'm all for it. It's not perfect legislation, but it will give people a chance to experiment with these things on a legal, transparent basis and let it rip.

2:27:36Right? Why do you say that our government makes it hard? I always thought it was an authoritarian government or just a foreign government that wants the ability to inflate away their own debt. And so they're keeping dollars out of their economy. They're trying to avoid dollarization. They don't always avoid it successfully. But you look at the U.S. government, know your customer laws, for instance. It's a pain in the neck to deal with an American, say, who wants to open a bank account in Germany. I've tried to do this. That's because of the U.S. government putting reporting requirements on the German bank.

2:28:11They don't want your money. So a lot of the problem is USG, not Argentina, Russia, whatever. It's both. But in fact, if people just hold dollars, that is usually tolerated. And it's a workaround for both. I want to talk about Google's acquisition of Windsurf. Google paid a licensing agreement. They acquired 50 or so engineers from Winsurf. The CEO and the preferred shareholders got paid out by Google. Roughly 400 or something employees were left in a ghost ship in the Remain Co. They also had$150 million roughly on the balance sheet. And so they were scooped up by cognition. I'm not sure how closely you follow the drama, but my question was, is this a Pareto improvement or a Caldor-Hicks improvement for Windsurf stakeholders as a whole?

2:29:07It raises the cost of capital, and we're going to need more covenants to limit this happening. Like, say I start a company, raise money, and then just pay myself a huge dividend for all the money. Well, that's typically against the law because there's a covenant in the contract saying I can't do that. So we need new covenants to cover these cases. Those will be harder to write, But the market will respond. In the meantime, it's a problem. Do you believe that the problem should be solved by employees demanding a new covenant, employees demanding more strict employment contracts? Where will this solution sit?

2:29:46It depends how you're doing the financing. But very often in other settings, it's done by the bondholders. The bondholders want a covenant that you can't just drain all the resources out of the firm. The more the firm is based on human capital, the easier it becomes to do that because human capital leaving is not monitorable in the same way that a big cash dividend is monitorable. But we'll figure out ways of doing it. Maybe it will require arbitration. But this absolutely needs addressing. Otherwise, you just keep on starting up companies, ship the talent out somewhere else, and in essence, sell it twice.

2:30:19A bunch of different people are screwed over. For the next person who tries it with no intent of doing that, the cost of capital is too high. And that's the longer run problem. But again, markets are very good at solving problems like that with covenants. So this will be solved by the market. This is not an FTC issue? I would not involve the FTC. I don't like them. I don't trust them. Their previous boss, their current boss, they're both bad news. Neither knows any economics. My goodness, they're a nightmare. Why would you call them on the phone? They're going to make it worse. well thank you for the for the for the solid breakdown and being very clear about your opinion this is fantastic tyler thank you so much for coming on the show thank you for the pleasure and your wisdom good luck with the rest of the day we appreciate it have a great day we'll talk to you soon bye always a great segment and we have our next guest already ready to join the show.

2:31:20Austin, welcome to the stream. Let's play that. I want to play that intro song a little bit. I like that intro song. Oh, maybe he's already here. Maybe you just get the Ashton Hall. We got an issue with the soundboard, but we're going to make a sound for you. Yes. A handcrafted sound. Kick us off with the news and an introduction on yourself. Thanks for having me, guys. Honored to be here. Everybody, I'm Austin, co-founder and CEO here at Unify. Today, we just announced a$40 million Series B led by Battery Valleys. Led by who? Doesn't matter. Congratulations, awesome firms. Leading awesome firms along for the ride.

2:32:04Awesome. A bunch of questions, but give us a quick history on yourself. You said earlier, was it the proudest day of your father's life was when you signed an offer to work at ramp and then the second is today it was yes it's uh it's been it's been a big couple years for me with me and my dad um took a lot of years going through college to get to that point but um quick background story so originally joined ramp back in 2020 uh on the uh on the growth product team uh really attracted just like the talent density that existed even back in that period of time spent a couple of years there working on the growth product team with a bunch of incredible folks.

2:32:42I know you all know well, including Sam Buck, you know, folks like Pavel you had on the show, the Crosby guys, et cetera. So a ton of great folks. Spent a couple of years there and spent a lot of time thinking about distribution from an engineering-led perspective. And so joined, saw everything that was happening with OpenAI in 2022, and it felt like the nexus of go-to-market and AI was starting to happen. didn't know that chat should be tea and things like that were about to drop, but ended up starting Unify beginning of 2023. Pretty quickly raised the seed round from a combination of OpenAI, Thrive, Emergence, and we're off to the races.

2:33:21Fast forward two and a half years, we're a 50 person team today serving a bunch of incredible companies like Cursor, Perplexity, you name it. Just grateful to be here. Okay, explain the product like I'm a new grad SDR. So if you're a new grad SDR, the pitch of the product is you used to have to push a million buttons just to get to the place where you could actually do something that was valuable to talk to a prospect. We take care of all that on your behalf. So example is you might show up in the morning, you're going to make your list of the 25 people that you want to reach out to based off of, okay, this person started a new job.

2:33:56I reached out to John in the past. He's now at this new thing. He started a new job or he got a new promotion. We'll make that list for you. We'll automate all that research. We'll also deploy agents to go get 50 other data points for you. So you can start from the 90 yard line and then you can just be polishing the messaging and the actual work that we've done for you. But you don't have to you don't have to start by just like manually combing through LinkedIn or manually combing through a database like Crunchbase. So we'll do all that work for you. That makes sense. What is the sentiment like among sales leaders, all the way through kind of the entry-level roles, SDRs, BDRs, et cetera, just around AI broadly.

2:34:36I think there's been a lot of dialogue recently around the core challenge with a lot of AI tooling right now is this amnesia. So the model is really smart, but it can't remember sort of lessons from at any point in history. You know, there's some memory, but not the sort of hard won lessons that you get from going out and doing 100 phone calls with customers, things like that. Yeah, that's a really great question. So the evolution of the sentiment has changed over the years. So 2023, we started the company. There was a lot of aversion to using AI to do the end to end job because it just wasn't there.

2:35:13Wasn't remotely there. Agents could sort of you could see them coming, but we weren't in a place where it felt like that value was tangible. And so it was really in early 24 where it started to feel like the world started to believe that even as a seller, the best thing for me to do was to adopt AI to try to automate a bunch of what I'm doing. But to your point, exactly 24, it's been this like version 1.0 of AI where products are dumb. They can do basic research tasks for you. They can do them over and over again, but they have no context that they've done that task four times in the past. One of the things that we're really excited about that we launched a couple months ago is something we call our observation model, which is actually this underlying primitive that looks very different than anything else that's existed.

2:35:53Basically, it looks like you have a memory associated with every person you've ever talked to. And that memory is not a database. It's actually a flexible set of contexts, just a big tech stock, basically, that is every interaction and every piece of notable information between you and that prospect. And so as an example, let's say we're talking about perplexity. perplexity has maybe reached out to, I don't know, Ford, Ford Automotive in the past. And they've got some record of all the sellers that they have, and they've contacted them, they've gone back and forth, they may be like, maybe exchange a few ads, all this sort of data has usually existed in a bunch of different silos.

2:36:26But we actually built this observation model to join a lot together. So you actually have one clear set of contacts. And then when Unify wants to understand, hey, what should I do next, it can ask that set of context, what do I know? What's the most relevant thing that I can surface right now. And let me go ahead and hit on that. And so we really see that as being the evolution of where these AI products are going to go to just make them that much, that much smarter and more powerful. It feels like one of the really like just layup use cases for artificial intelligence in a sales context is just data hydration, cleaning up the CRM.

2:36:57But I'm interested to hear about how high the walled gardens are in a business context. We've heard stories about Glean getting pushback from different big tech companies. And it's one of those weird things where every company says, yeah, it's your data until I want to give it to their competitor, potentially, that's overlapping. So what data sources are particularly like AI friendly these days? And what is the shape of the garden and the walls of that garden these days? it really depends on i think the overall data strategy for the company and just like what their strategy is built on and so to give you one example salesforce historically their advantage is built on being a fairly open ecosystem so salesforce um the app exchange launched call it like 10 20 years ago at this point it's been building moats around salesforce as people have connected tens of applications into the product and that's sort of built the stickiness you have 25 different products that all integrate through salesforce that happens through this open ecosystem of connectivity.

2:38:01My gut says that the platforms that are built much more on open-endedness, like something like a Salesforce, are going to continue to remain open as that's the core value prop of the product. And that's the reason why they have a moat itself. But I think products that have historically been a little bit more walled off until Slack is an example of that, will probably continue to stay that way and trend even more in that direction. Generally speaking, people haven't been super privy to give out Slack information. They wanted to keep that in, especially within an organization. And so I imagine we're going to see those things clamp down even further.

2:38:29And case in point is the Glean example you brought up. Do you have a thesis around sales co-pilot type products? You can imagine this is a sales call and you're running an LLM in real time to give you the next answer. I don't think you guys have one of those in your suite of products, but I'm curious how you think about that category. It's definitely super powerful. I mean, you see what's happening with Cluey right now, right and what's going on. You're like, that's a great question. Let me just real quick. It's wild though and I think we're only at the beginning of that period of time and I think the way in which people absorb information is going to dramatically change over the course of the next couple years as we get more and more used to these products.

2:39:15Today, the closest that we get to that in our product is that we've got a composer for emails and for anything you want to do in Unify and next to that you've got all these AI, all these AI nuggets and AI research tidbits that we've done for you alongside that. We're generally speaking believers that the faster your product is, the more real time it is, the more addictive it is to users, the more helpful it is to users in that context, especially in a work context. And so we're going to keep pushing the product in that direction. Something like a clue is like the far flung example of that. We're not quite there yet, but I imagine the world is going to keep moving in that direction.

2:39:51That makes sense. I want to talk about your website's tagline is scale your revenue team's creativity. And I'm wondering if there's any sort of really creative sales solutions. I was talking to Sam Blonde a while back. He was working with Parker Conrad for a long time and said one of the best campaigns he ever did as a sales guy, he's like a SDR for a long time, was, and head of sales, was like sending bottles of champagne to people because like they just open it, then they have a phone call, they have this nice thing. And so it becomes incredibly rude not to respond to the email. Exactly. And so I'm wondering about these like weird, squishy, like the handwritten note.

2:40:35And in many ways, I feel like these creative deal closers, like the unexpected text message from from a friend who's already using the product is the thing that gets you to actually go and say, yep, I'm ready to onboard fully. I get my company on this new product. But is there, are there any like world, I feel like a lot of the creativity in sales is specifically showing the client that I'm not using software for this. I handwritten that note. I sent your, I got your address, I sent you a bottle of champagne. And so is the goal to more just like remove all the barriers to let the humans do the creative things?

2:41:18Or do you think there's a world where we can use AI tools to speed up those creative out-of-the-box solutions that might be uniquely tailored to just this one company strategy? They're the only one that does this weird thing, but it's working. And they found this alpha and they stick with it for a long time. Yeah. Big fan of Sam's. And he's done a bunch of incredible outbound campaigns over the years. my thinking is that what will happen is what always the thought behind all these things and the reason why it matters this all comes back to taste right i think people and more and more are talking about taste in the world of ai and it's all about knowing what's relevant at the time knowing what's going to resonate with someone personally and being able to do something that feels really delightful um so as an example like one thing that we did as part of our fundraise announcement today we put out uh about 25 cameos that we had custom built for everyone we've got one for you guys on the way right now.

2:42:07So we'll have it to you later. But like things like that, that are based off of someone's personal experience and show you thought about it, it doesn't really matter if you use chat GBT in the brainstorming process, right? What matters is that you got the idea that originated from something special. And then the actual end delivery is the same quality you put out as a human. It's what the person feels. Yep. Exactly. Exactly. But I think ultimately today AI doesn't feel. And so it can't really use that judgment. There's a reason why like in the world of content and in the world of the stuff that we do here, It's like you just can't AI that.

2:42:37It just feels bland and generic. I think that's going to continue to be true in a sales context. What you need is a human behind the scenes who's providing that little touch of like what it means to be a person, what it means to be a friend. And so we'll continue to lean into experiences that make it easier to stay on top of those friendly experiences, but but just get easier over time to actually execute. That's great. I got a bunch more questions, but we'll save it for another time. Thank you for joining. Congratulations. Congratulations on the new raise. Get back to work. Get back to the grind.

2:43:06And I'm sure you guys have a bunch of people to hire who deploy that capital. We'll talk to you later. Thanks for having us, guys. Thanks for coming on. Appreciate it. Cheers, Austin. In other news, Apple is reportedly planning to invest$500 million in a rare earth magnet startup. This is MP Materials. They're going to build a new recycling facility in Mountain Pass, California. Currently, they take recycled materials and they make rare earth magnets in Texas. There's a huge Wall Street Journal profile on MP Materials. And now there's news that they're working with Apple. My takeaway is that it shows that Tim Cook is actually thinking about long-term supply chain strategy.

2:43:48And it's this funny thing. How much do you think MP Materials is up in the past five days? I have no idea. 85%. Let's go. Ring the gong. 500 million. Do it. Let's do it. Hit that gong. Let's do it. I'm gonna warm up the gong properly. Yes, yes, yes. We've gotten some notes that you must warm up a gong before you hit it. Also, hit the gold part, not the center. Really? Yes, that's what somebody said in the comments. There we go. Is that better? It's about the same. I don't know. I don't know enough about gongs. I'm sure I'm gonna be an expert in 20 years when we're still doing a show. But I thought this was interesting because Apple's a huge company.

2:44:25Tim Cook's a legendary operator. And there's just something about being a big company that even if you're seeing, oh, the current thing on X today, everyone's talking about supply chain in China being a risk. It's going to take years to actually build up another supply chain. So this kind of tied to the reindustrialization story. You can start a new company, you can actually build something before Apple can really turn the massive cruise ship or the battleship or the aircraft carrier that the company is. But it seems like it's happening, and this seemed like a huge white pill. So I was excited to talk about it.

2:45:08And we should dig into MP Materials more deeply soon. They're up 22%, I guess, just the day that this profile came out. and seems like a very, very exciting company. And honestly, when we were talking to the co-founder, CoreWeave, I, you know, there's this, you know, we all learned about chips and then ASML and then SK Hynix and memory. And I feel like rare earth minerals and rare earth magnets are going to be the next thing where everyone's learning about it at the same time. And a lot of people already have, and they've done pieces on it, but I want to learn more. I could see AP doing a rare earth Royal Oak.

2:45:48That would be incredible. Yeah. Like instead of the, what was meteorite dial? Yeah. The meteorite dial, you get the rare earth. The rare. Go through some timeline. I'll be right back. Well, we have our next guest. We'll welcome Chris into the studio. Okay. Yeah. Yeah. I'll go through some stuff. I'll just welcome Chris in and get the intro from him. So welcome to the studio, Chris. Good to see you. It's been far too long. What has it been? Over a week? Over a week. I think that sounds right. I'm excited to be here. I'm glad to have you. Kick us off with an intro and a little bit of an overview of the news today.

2:46:22Well, look, before I get started, I should say that if at any point during this interview, Windsurf gets acquired for a fourth time, cut it off and there will be no hard feelings. Quick intro on me, though. I've been in the Valley for 15 years, working with tech companies the whole time and kind of every stage and variation and just about any role that you could think of. So most of my career was as an investor. I worked at Benchmark, working with early stage companies. Cotu focused on some later stage companies. Before then, I founded a healthcare company called Curology. And before that, I was an investment banker working with big tech companies and helping them, taking them public and do M &A transactions and all that kind of stuff.

2:47:00Okay. We'll get into the news in a bit, maybe when Jordi gets back. But the question I have is, is as an investor, as a board member, there is generally a, you mentioned WindSurf, there's generally a duty to be founder friendly. But what do you do when the founders and the employees are misaligned? As a board member, are you supposed to vote in favor of what's best for the whole group of founders plus employees as a class? Are you supposed to back the founder if they want to do something that's less employee friendly, vice versa? This feels like the modern debate that we're having in Silicon Valley is like the social contract is is re-evaluated.

2:47:39How have you processed the windsurf news? What how do you think this change is going forward? What what are the next questions that you think venture capitalists and founders need to be talking about to make sure that you know when amazing deal happens everyone's happy about it? Yeah, well, I think your first goal is an investor. You know, we rarely have a lot of power. We have sort of in the best case influence, but I think your first duty is to try to help the founder understand that what's good for the employees and what's good for everybody is sort of the right thing for everybody over the long term and the ecosystem and your reputation and all that stuff is really critical.

2:48:13And so I was delighted to see that everybody got to a very good outcome on this one. And I think that's where it should have landed. This feels like a one plus one equals three kind of thing. Yeah. Yeah. It seems like, I mean, when the Cognition News broke, we had been talking about like, oh, where could the Remainco wind up? Maybe it lands at like a more legacy tech company like the Humane team wound up at HP and people were kind of memeing about like AI printers and stuff. And that seemed like, you know, it probably would have been a fine outcome financially, but it would have been like, okay, a lot of those people kind of need to restart their careers and kind of get back into the high aggressive Silicon Valley, high growth startup world that they probably fell in love with.

2:48:55And that's why they wound up at WindSurf six months ago or 10 months ago or 15 months ago. But with cognition, it's just a complete Complete continuation of that aggressive take over the world, build something new mindset. So, yeah, I agree with you. Amazing outcome for everyone involved. Obviously, a tumultuous weekend, but we're glad that the plane landed. Well, let's get into some better news. We've got to talk about the new vehicle. It broke in Forbes this morning, but we're happy to have you on here today to talk about it. Give us a story. Give us the number, and I'm going to stand up and get ready to do something back here.

2:49:28So,$175 million debut fund. Let's go. Congratulations. You guys, is the gong like individually miked? Because that sounds incredible. I don't know about miked. It's got its own camera. Yeah, yeah. It does have its own camera. But yeah, we're always working on the fidelity of the gong. Yes. It's really important to the... Congratulations. $175 million? Thank you. $175 million. Stage agnostic, sector agnostic is the idea. Okay. I'll make a very small number of investments, so sort of 8 to 10 core positions. A normal venture fund might have 30 or 40 positions or something like that. Yeah. And the idea behind that was my favorite part of my career was when I was just making my first few investments that were going to matter a lot for me.

2:50:09And because it felt like there was sort of a symmetry between what I cared about and what the founder cared about. Like for the founder, this company is their whole life. It is everything. They live and die with it. And I think one of the problems as you get more senior as an investor, you naturally have more companies that you've invested in. Every individual company is going to matter a little bit less. And so with this vehicle, the idea was create a vehicle where structurally everything will matter to me. It's eight to 10 core investments. Every one of them is going to matter. And I'm going to work really hard on each of them.

2:50:35Stage agnostic, sector agnostic. Still, I imagine not an RIA, not playing in the public markets, not putting more than 20 % of the fund into secondaries. Is that roughly correct? It's crazy I even have to ask that question, but we are in crazy times. Is it even possible to start an RIA at this scale? Or is that something that only the mega funds are thinking about? No, it's definitely possible. It just, it eats into some of your management fees and it requires some various compliance obligations that you have to get used to. You probably have a second phone and some things that are like, you hire some compliance consultants and all that kind of stuff.

2:51:12I had looked at it because I do like buying secondary from time to time and just decided against doing it. There's also some additional rules around how you can market the fund and stuff like that. You have to be a little bit more careful when you're an RIA. And so I decided to go the ERA route. It's a flexible vehicle. So I'll do things just kind of of any stage. I will often not be leading rounds. I'm willing to lead rounds. The idea was because I'll be so selective on the company quality, I think I have to be flexible about everything else. And so I'll try to just show up in a way that is useful and easy to work with.

2:51:44How is the concentrated strategy resonating to founders so far? I imagine it's a very real differentiator of just saying, hey, you can be one of 40 bets or you can be one of 10 and I'm going to do everything in my power to help you win. You can see how that would resonate. But what's it been like on the ground? I think so far it's working well. I have founders who text me 10 or 20 times a day. I also have founders who want to be left alone for the most part, and I'm happy to do that also. But I think so far it resonates. I tell every founder when I make an investment, I just want to be along for the ride and things will be good.

2:52:22Things will be bad. A lot of the time they'll be difficult. You know, building companies is mostly pain. And I will just try to be someone who eases that along the way and helps you navigate the difficult moments and all that kind of stuff. Is there an alternate world where you launched this fund prior to Curology? And I think it's sort of funny because if you were in that situation, you would have said, I had a non-traditional background for venture capital and it's HBS and Co2 and Benchmark. and sort of a traditional background, but you went and did the hard thing and built a big company. But did you have it in mind that I'm going to go be a founder, do this, and then come back around to venture?

2:53:07Or was it all just kind of an accident? I think I was always built to be an investor. I enjoy it, and there's a lot of sort of features of investing that are well-suited to me. But I just think it's kind of a rite of passage. If you haven't operated inside of a company, if you don't know what it's like when things are difficult and bad, I think it's kind of difficult to give good advice to a founder. And so I think it was an important thing for me to develop some empathy. Like I try to understand that this is one of the hardest and loneliest jobs in the world. You'll have weeks where everything is going wrong.

2:53:36And there's sort of, you know, playbooks for navigating each of these things that go wrong. But I think you have to have been through them before to understand how to do it and who to call and what the foot faults are and that kind of stuff. And that's sort of how I thought about it. What was the fundraise process like? $175 million for a first fund. Uh, it's a, it's a big number, uh, but I heard from a little birdie that you got some pretty insane LPs in this one. So it sounds like you were doing something right. Well, I think that's that I will thank you for that. And I think it's right. The, um, I, it went relatively quickly.

2:54:07I was real lucky because I had a few LPs who were just fast and early believers and everything else sort of, uh, um, ended up forming around that. And so I ended up sort of many times oversubscribed, uh, and ended up with a group that I'm very, very happy about. I think most of them I'm not allowed to say their name, but the ones that I can say are Adam Street, Common Fund, Northwestern University, Howard Hughes Medical Institute, and a bunch of causes that I'm very excited to be working for here. That's really cool. That's exciting. What do you think, how do you think about investment kind of time horizon?

2:54:41If you have such a concentrated fund, very possible that you'll meet five companies in the next six months that you'll invest in, but it feels maybe unlikely. Maybe it's more like one a quarter, but it's hard to plan these things. Yeah. When I was raising, everybody says they're going to deploy the fund in three years and then they end up going a lot faster than that. And so maybe this ends up being two years or something like that. But I just don't have that many amazing ideas every year. And so part of the reason for the way the fund is structured is it's kind of how I like to work, that I develop a lot of conviction around something over a period of time.

2:55:16But then I like to have a bet that matters. I think the single most painful thing for me is if I find a company and I sort of am able to persuade the founder, I'm able to win the right to invest, and it ends up working, and it still doesn't matter in a material way for my limited partners. That's something that I think is something I don't want to deal with. And so that's the reason for the sort of bigger bets, the concentrated strategy. And that requires, I think, going a little bit slower also, because there just aren't that many companies that will meet the bar. That makes sense. I have a question about venture markets generally, loosely in the context of Winsurf, but I'm wondering if it feels like right now the labs are on a buying spree, not just OpenAI and Anthropic, but DeepMind, and you could see acquisitions happening all over the place.

2:56:06And one framework to think about it is that they're all just buying call options. Anyone who's got a unique technical direction or unique technical talent, the labs are just happy to pay any price because maybe it's 1 % of infinity if you solve super intelligence, or maybe it's, hey, we already have, Mark Zuckerberg has a massive business in delivering ads. If you make that 1 % better, you've added$10 billion to the market cap. So what's a couple billion in acquisitions going out the door? Totally makes economic sense. But my question is, does this change venture capital underwriting at any particular stage?

2:56:48It feels like you really want to be backing, I guess teams that could be, you know, aqua higher talent because it gives you this like liquidity option, but then maybe the real alpha is finding the - But at the same time, very - Founders who are on missions or something. If you look at the capital deployed into Windsurf, obviously the majority of the capital didn't get a tremendous return despite it being a big headline number. Is that just because Green Oaks was the seed and they didn't return their fund? I think like the majority of the capital came later. And then I think it was probably at somewhere around a billion.

2:57:24Okay. Yeah. I don't know. But yeah. I mean, I think on the underwriting question, I think in the history of our industry, there was always like a hard and fast rule that you always backed one company in a space. There was always going to be one winner. And then I think as the markets have gotten progressively bigger and, you know, there's like one winner in search for a long time and one winner in operating systems. As the markets got bigger and bigger, you started to have like two player markets. Like you have iOS and you have Android and then they got bigger and you have three player markets and you have, you know, the cloud AWS and GCP and Azure.

2:57:56And I think AI is going to be the biggest market of all of these. And I think one of the ways that it changes underwriting is that there's probably going to be more winners in each space than we expect. And I think you see this a little bit with Cursor and with Windsurf and you see some like really high quality companies. I also think it changes underwriting because it feels like M &A is coming back a little bit. And I think there's sort of a cause for optimism around that. That's great. Anything else, Tori? That makes sense. No. Join any boards recently? I don't know if you can talk about that kind of thing.

2:58:25Yeah, yeah. Join the board of perplexity recently. Congratulations. Let's go. I wanted to give you an off-ramp there in case you weren't ready to talk about it. It's a product I use 20 times a day and a half since it came out for investment research and everything else. And one of the best executing teams I've ever been around. So I'm very excited to be a part of the effort. Fantastic. We love Arvind. Yeah, I find myself using it every time we record. You guys got to try the browser if you haven't. We demoed it live on the stream. Tyler, our intern, used the Perplexity Comet browser. Had some good feedback for it.

2:58:59It was good. Amazing. Awesome. Well, congratulations, I would say, to the full partnership. But you are the full partnership. Is that correct? Are you going to be adding anybody to the team? Just me and head of operations. Very cool. Amazing. Bet on yourself. Love it. Awesome, Chris. Well, congratulations. Thanks for coming on. I'm sure we'll have you back. Thanks for having me. We'll see you guys. We'll talk to you soon. And we have our next guest already here in the waiting room. Dick Lucas. He had a video going viral today. There he is. Wow, look at that background. How you doing? I'm good.

2:59:35I'm good. How are you guys doing? Looking sharp in the suit. You look like you haven't changed since the viral video. I know. I know. Actually, my shirts are dirty. This one's not. So this is the same outfit, same pin as well. So congrats on the success of the show. It's been awesome to watch you guys cook. So thank you for fitting me in today. I appreciate it. Yeah, thanks so much for hopping on. I saw your name for the first time this morning when you started going viral. Great silhouette on the video. You look like you're in the Palisades somewhere. Just give us the full history on yourself and maybe what inspired you to get involved in politics or mud wrestling, as we call it.

3:00:16Awesome. Well, I think it really starts in high school when I got my first computer in the dig.com days. That's when I got really into technology and got really into software and saw this whole boom taking off. I was like, this stuff's really cool. I didn't think computer science. I thought that was only for smart people. So I didn't declare my major for CS until sophomore year of college. It was a history of mine. I was like, you know what? I'm going to just do the CS thing. It kicked my ass, But I got through it. You can get a Bachelor of Arts in Computer Science if you can believe that. And that's what I got.

3:00:46So I have a long belief in technology. And then from there, started doing software stuff. I was an Android developer for several years. So I was in the code mines. Started an agency with a homie, with Sawyer. And now we're cooking on that. And what inspired this really is I was creating voter guides. I was like, okay, California's obviously run horribly. Maybe if I just read all what the candidates are saying and go deep on, like, you know, who's running for waterboard, who's running for this, who's running for that. And actually, no one even knows what a state assembly person is. I'm running for state assembly.

3:01:20Most people don't even know what that means. So I'm like, okay, if I go and, like, look at these candidates, there's got to be people that are out there that are good. And I'm going through these campaign websites, and they barely even say what they believe. There's no competition. There's not even debates at these local levels. And I was like, there is a huge opportunity here for someone that is willing to just get themselves in the game, put a couple videos out there, say some common sense stuff and shake things up. So that's that was really the inspiration. And so tell us what tell us what running for state assembly means.

3:01:56What is the role that you would like? What does that look like? And then what are the what's the process to get there? OK, so the primaries in June. It's in June of this year. And next year. So there's 80 Assembly members in California. Each state has something different, but it's basically like a mini Senate and a mini House of Representatives, just like the federal government. So you have 80 Assembly people and you have 40 state senators. And unlike in California, there's 80 districts. I'm in the 51st District, Santa Monica, West Hollywood, Westwood, other parts of Hollywood, Beverly Hills. and each district has assemblymen and then each and there's also state senators as well.

3:02:37So same thing, the federal government, there's stuff that comes out of the Senate, state Senate, there's stuff that comes out of the state assembly. And that's how legislation gets passed. That's how the machine works. And right now what we've seen is it's basically one party state. Now, I'm not I think the left has good ideas. I think the right has good ideas. I think that there's opportunities on both sides. The problem is when you lack competition, a system, which is what we have in California, it becomes sick. It becomes ill. I mean, we see this in every single institution or system since the dawn of time.

3:03:06You need to compete. There needs to be pressure on the system or it collapses from within. And that's what we're seeing in California. We're starting to see a small shift, I'd say. But you know what? What really broke the camel's back for me was fires happened and people wouldn't even hear about the wildfires in the Palisades, the Eaton fire out where I grew up. People wouldn't even hear. They wouldn't even want to listen if you said, yo, maybe we could have done some things better. like the Santa Yanez reservoir that went dry in the Palisades was down for eight months. I talked to a state senator.

3:03:38I went to a meetup with him. I was like, bro, what happened there? He said, well, it's unclear how much that would have actually helped. It's like, dude, if it helped 5%, if it helped 10%, if it helped 15%, like you couldn't even really have a discussion about it. And I said, okay, this is, the system itself is completely sick where we had a whole of stuff burned down our mayor in los angeles was gone on a trip we had fire hydrants go dry and and people even in my network people didn't want to talk about it so i guess the only way to talk about you got to run yeah no i love it taking action we we covered the fires we john and i are both here in la uniquely john lives in pasadena i live in malibu we both had to uh get out of town for a while uh i missed a show john was covering one day it was really the only show i've missed missed this year.

3:04:26But yeah, but the the my reaction to the fire is it seemed like there was a lot of excitement around clearing PCH because that was the thing that was most obviously a reminder of the competency of the government. And so but that's only a very small percentage of the of what the over overall response should should look like. I'm curious, do you know who your real competition is? next year. Yes, I do. Yeah. A Democrat. He's been in the machine for several years. And that's the other thing, looking at these people, what they've done, a lot of these people, with Wild Havis audience, if you are considering running, you should run for office.

3:05:07You should look at who your local person is and you should run because, not you two, all your listeners, but you two as well. Because you look at their website, you look at their CV, you look at what they've done. A lot of these guys are community organizers. I still don't know what that means. And also people, they're lawyers or they're people that haven't built anything or created any job. So it's like, this all my smartest friends no one even thinks and i'm sure it's the same with you guys no one even thinks about going into politics so it's like if if you if all the people that are smart or driven in your network aren't going in to politics who is going into politics and well we see players basically yeah no that makes sense what's the top of the stack in terms of low hanging fruit you get in what do you want to push on what do you want to change what are the the most exciting or like tractable problems that you think you could.

3:05:53I think the biggest thing that is resonating right now is the cost of housing. You know, there's the phrase that the economy is stupid and obviously we need to work on that, too. But housing in California is 100 percent the national average. Same with our similar gas prices, our gas utility prices. Gasoline is the highest in the country, as you know, which is not a which is is not partially due to the market, but also due to just massive taxes that the government has voted to apply to every gallon. Oh, for gasoline. So you drive across the border. It's not like a supply-demand thing as much as it is.

3:06:29Or a top-eight oil-producing state. It had the highest gas price in the country. It doesn't make any sense. Obviously, there's also some good things. We want clean gas. So California puts a lot of restrictions on refiners. They want to pay for the top-quality clean gas. so we don't have smoky valleys and it doesn't look horrible like it did in the 60s. So I get all that, but it's completely out of whack. So the other thing, housing, we need to make it easier to build. They did just pass, the Dems did just pass something. And I tried to understand it. You can go read the, you can read these bills and they talked about it as a big win, but it's difficult to even understand what's going on in terms of what they got done.

3:07:11They're making it easier to build now recently as of like July 3rd near transit areas. And you go read the bill and it's like 30 pages of, it's like, is this making it easier? Why isn't it just say like, you can build here. If you own the land, you can build here. Like this is, it's completely out of whack. So we have a supply problem here. We need to just make it a whole lot easier to build. And, you know, there's people talking about freezing the rents. We can do better than, the funny thing is, is the people that lie to you will say, oh, we're going to freeze the rents for everyone. That's not even that good.

3:07:41we can do better than freeze the rents. We can actually lower if you add supply. We've seen this in Austin. We've seen this in other cities. And my view is there's 50 different experiments going on everywhere in our country, every state. You just look at what works, where our price is coming down, where our business is going, and you just fall. Yeah. So it's like we have the tools right here. I don't, I'm not the smartest guy in the world. I know that I have a lot of respect for people in technology because I think they're epic. I think they're smart. I think they raise the standard of living for everyone.

3:08:06And I'm not going to invent the next nuclear reactor or whatever. So I'm looking at this. I'm like, this is an opportunity that I can actually, you know, I'm smart enough. And it's like, we have 50 experiments. Let's follow what works and let's just do it. How can people support you? How do people like who, who are your constituents? Who will actually be voting for you? It doesn't sound like it's just everyone. Do you cover, are you going to be covering the gundo or is that out of range? No, it's out of reach. It's out of reach. Unfortunately, I'm going to be, you know how to represent those guys, but, um, dicklucas.com.

3:08:36Um, my biggest following is on x damn you got me sweating boys i'm fired up um let's go uh yeah i'm stoked on that um uh yeah i'm not taking any money right now we're just gonna see what noise we can make the people that will vote for me the people like i said in my district yeah and i don't i think very few of those people have seen this viral video so i want to do two things i want to get the word out with you guys and with technology people the people my network and the second thing is ground game i gotta knock on doors i gotta i gotta talk to people now that i have a website my video up I'm gonna just go door to door and be like, yo, let's talk.

3:09:09I actually wanna hear what people, obviously, what's their biggest concern. But I think that - When you say knock on doors, do you mean literally knock on doors? Yes, yes. Door knocking is very effective in these local races. You just have to do it. Yeah, how many doors? Yeah, you have to quantify how many doors it is, break it down, I guess. But you do have a long time. Well, I think there's a hundred, I think my district's 490 ,000 people, something like that, or eligible voters, something like that, so it's pretty big. You do 100 ,000, you do, you know, yeah, I mean, you got, what, 300 a day?

3:09:37Okay, you can go through a bunch of those. I mean, it's huge. And I'm going to be working while I'm doing this, so it's like I'm going to do. And I have a kid coming in November, so I'm like, let's just see what kind of noise we can make. And, yeah, I'm excited to start knocking on doors. Let's just see what we can do. Technology is the only way you get more for less. There is nothing else. Yeah, you can make processes better, but fundamentally, that's the only thing that you get more for less. It's the only thing that raises standard of living for everyone. So I don't know why people have such an aversion to it.

3:10:04I'm just trying to be like, this isn't left or right. Let's just implement things that make our lives better and make everyone more rich and prosperous. I love it. I love it. Yeah, California, despite shooting ourself in the foot over and over and over for decades, it's still an amazing place to live. It's still amazing. So let's just stop shooting ourself in the foot. 100%. Get some common sense policies. I think we can have a bigger economy than China. I mean, straight up. Let's go second. Everyone, Newsome, fourth. We're top four, top five. And yeah, we are. Not because of you. I think we can.

3:10:35Let's just do this. It's possible. Let's do it. Have you met Gavin Newsome? You've got to get on the pod. No, I have not. I have not. You've got to reach out to him, get on his podcast, because he's had all sorts of people. I know. I don't think I'm big time enough for him yet, but I think now that I've done this, I'll send him this link, and he'll say, okay, I know it. I know what Jordy and John are doing. Okay, yeah, come on. It's time. It's time. Well, thank you for doing this. It is truly a sacrifice. It is going to be an absolute slog, but it's worth doing. And somebody's got to step up and do it.

3:11:05And it can start in your district. And we'll have to have you back on as the campaign gets closer. Appreciate it. Appreciate it. Thank you. Thank you, gentlemen, so much for having me on. Really, really do appreciate it. Thank you so much. We'll talk to you soon. Great talking. Bye. What a sign of respect. Joining with a suit, with the flag. Totally. I mean, he checked both boxes. A lot of people bring the suit. They don't bring the flag. Yeah. And he should get a California flag up there too. That'd be great. Yeah. The bear. We love the California flag. What else we got? We got some timeline.

3:11:34So Michael Truel, the founder of Cursor, released a very cinematic, kind of like a podcast conversation with Patrick Collison, the founder of Stripe. And it's very cool for a few reasons. But it has the aesthetics of the Johnny Ives, Sam Altman video. So you just immediately assumed. Immediately. I was like, oh, there's a deal they're acquiring, Cursor. And I don't, that's not the news. I don't even think there's a rumor. But there's something about when you film two CEOs walking into a coffee shop with cinema cameras. I just permanently think acquisition now, thanks to Sam Altman. But I didn't get a chance to listen to this whole thing.

3:12:17I'm definitely going to. It's like a full hour, 45 minutes or something. Seems very cool. I love these kind of conversations. And I think this is like an interesting untapped media product where it's not cursor starting a podcast. It's just a one-off really cool thing between two CEOs and they're... Yeah, they're not making a commitment of putting out a video like this once a week. No, it's just like... You know, a couple of times a month. Yeah, they're just like both technical CEOs. And so you look at the list of topics. It's like writing your first startup in Smalltalk, Lisp, Chatbots, Brett Victor in Dynamicland, Coinbase's, Codebase's Big Bang Moment, and MongoDB, rewriting Stripe.

3:13:01How do you, Patrick Collison, use AI? Changes to GDP slash total factor productivity, unexpected beneficiaries of AI. So they're just having the conversation that they probably have when they just hang out and get dinner together, but they're just recording it with cinema cameras and great audio in a coffee shop and then just putting it on the internet. I think this is a very interesting new form of going direct. It really helps me understand who Patrick is and who Michael is. And it's in this like, they're both insiders, they can just have the conversation they want to have. I feel like this is great for both of them for recruiting.

3:13:37I don't know, I was just like, I haven't watched the full thing but it just felt like a cool new modality of content in the startup world. So aside from the confusion about potential acquisition announcement, it seemed really, really cool. And I was excited to see it go out. So go give it a watch if you're looking to spend 45 minutes hanging out with two absolute amazing CEOs talking about AI and coding. In other news, Andresen Horowitz managing partner Scott Kapoor has been traded to the US Office of Personal Management. Potentially poached. Potentially poached. No. Of course not. This I'm sure had been in the works for a while.

3:14:26He was officially sworn in today. I think it was announced. I think he passed confirmation or something. But very exciting news for Scott. Congratulations. Going into the government is not very sexy. It's not high status. Yep. But like Dick just said, it's important. Smart people have to step up and make sacrifices to serve their city, county, state, country, et cetera. Yeah, we applaud him. The AI war has opened a new front on Wall Street. We've talked to a number of founders that are building AI tools for Wall Street. And today, AI giant Anthropic announced the launch of Claude for Financial Services.

3:15:06Finance is a natural fit for AI. given the reams of structured data, says NIC. The industry processes, the big platforms are focusing more and more on fintech products. Anthropic already signed Bridgewater and S &P Global. It's here for Anthropic. And we saw earlier that Devin got hired at Goldman Sachs. You'll love to see that. It was Citi. Was it Citi? Both. And Goldman? Both. And yes, so Kaplan, the president of Cognition, I believe that's his title, he said, like, this was the news that we were hoping to launch on Monday. We had this all queued up that we did this big deal with Citi. We're very excited about this.

3:15:41But no one saw it because we were acquiring the current thing. And that became the story. But that was very exciting. So all the big AI companies are figuring out how they can plug in to the big Wall Street companies. And there's going to be some big launches and announcements this week from some of these labs. And we'll be covering them as soon as they're ready to share more. TBPN was in the ringer this morning. Thank you to Katie Bakes for shutting us out. Talking about the AI trade wars and tying them into sports, which we know nothing about. But it was cool to see Katie break that down. And then in other news, Shane Copeland over at Polymarket says, It was eight months ago on election night.

3:16:32We were on top of the world after Polymarket called the election. Eight days later, the FBI broke down my door at 6 a.m. and took all of my computers and phones, looking for anything that could imply foul play. While traumatic, it etched the story of Polymarket's accuracy and the ensuing resistance into the history of American politics. And today, I'm happy to announce that this chapter of the story is over. After cooperating and engaging, we've been cleared of any wrongdoing. Justice prevailed. God bless America. And of course, Polymarket Probe ended by Department of Justice and win for CryptoBets under Trump.

3:17:03So very cool for Shane. I think we were live recording when the news broke that he had been raided. But we were not live yet. Like we weren't actually live. So we were recording. Interesting. And we got off the show. We looked and we were like, wow, it's insane. Well, I have one last post. Do you have anything else you want to go through, Jordy? Or can I close it out? A councilman has been charged with petty theft after allegedly removing a Palantir advertisement from the baggage claim area at Freedman Memorial Airport. Trip Hutchinson pleaded not guilty. If convicted, he will face up to one year in county jail and a$1 ,000 fine.

3:17:40So did he take this because he wanted it for his garage? Game-worn. It's a game-worn out-of-home ad, and he must be an out-of-home ad fan. Maxie. He must be a huge Palantir fan, and I think it's probably just an honest mistake. but I think all these great out of home ads they should find a resting place they should be auctioned off and you should be able to get them we should be able to do them on our walls so if you run a great out of home ad put it up in the airport you're taking it down send it to us we'll throw it up here in the Ultra Dome in the Ultra Dome and we will see you tomorrow in the Ultra Dome I cannot wait at 11am Pacific Sharp thank you for being here on Apple Podcasts and Spotify and thank you for watching today We love you soon.

3:18:24Bye.