xAI’s $20B Raise, Semafor’s $30M Round, America’s Tech Decline | Ravi Gupta & Pat Grady, Vincenzo Landino, Nigel Vaz, Ben Smith, Jacob Rintamaki

26:46They did bring in the free press. But Barry is a really important talent. And so you have to imagine that she's on some pretty big contract for a long time. And you sort of take that out of the... That could be, yeah,$50. Yeah, but then also the acquisition is part of paying a little bit of that up front. But then there's still some... Free press was$150. 150. Okay. Well, some of fours at 2X that, and Jordan Schneider from China Talks says, must have richer friends. Jordan's been on a tear. He did a great show with Joe Weisenthal where they just hung out. They did a show about nothing. And Joe Weisenthal's just an underrated guest, I think.

27:23He's so often in the – he's been in the interviewer seat for 10 years. Goat Weisenthal? Goat Weisenthal. Play that goat noise. But I like just hearing him talk about his business and his view on media and his view on whatever food. There's something good, I'm going to have a term here, wise and tall. How tall is he? Goat, wise and tall. He's actually not that tall. But he has a sort of a tall aura. He does, he does. He fills the room. Yes, yes, yes. uh that is like a famous thing uh about like legendary uh people all the um bed chairman they're all super tall like paul volcker um yeah jerome powell super tall yeah i didn't know that interesting maybe we have a future there um but uh but there's a there's a consistent uh powell six feet tall what okay i swear i heard that's super tall i swear in this office in this offense that's that's yeah but maybe he's wearing in this office you're getting brutally height mogged well do we know if jerome's uh getting leg lengthening surgery anytime soon maybe he's maybe maybe it hasn't updated not turkey where do they get the leg length is it china yeah usually yeah so maybe maybe jerome got got leg lengthening surgery okay someone lied to me that someone told me that all the fed chairman are they're always tall well i mean six foot is tall it's it's the start of being tall.

28:46Six foot, you're really the shortest tall guy. Paul Volcker, he was 6 '7". Okay, there we go. Still short in this office. Yeah. Janet Yellen? How tall is she? Forget what I said. CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. Tyler is letting memes dictate his height. Estimate of Powell. Ben Bernanke was only 5 '8". This is a total, I swear, I saw this. You've been lied to. No, this is a thing throughout history. The great men of history who have long biographies written about them, oftentimes their heights get inflated because of their egos and their reputations and whatnot.

29:31I will give you access. You can write this book, but you got to say that I was 6 '10". Yes, yes, yes. And that I could have played in the NBA. People will say, oh, you're shorter than I imagined when they meet, when they meet these like amazing people or these powerful people. Um, there's also the opposite happening where there's a, there's like sort of a war to make people appear shorter in the Google height snippets. This was like a JD Vance thing for a while. People were going back and forth on his, he five, nine, five, eight. And I met him and I'm pretty sure he's six foot at least, but, um, but people, people like war back and forth.

30:09You're like, it's got to be at least six foot. There is a problem when you're six foot. Literally everyone feels at six foot. It's not like six, eight. It's very silly. Very, very silly. Anyway, some of four generated two million in EBITDA. It is interesting. EBITDA is an interesting figure for media companies because like, do you have appreciation and monetization? Just to be very, very, very, very clear. This is not like they were – the valuation was not – clearly they were willing to sell about 10 % of the company. Sure. And investors believe that it will be worth way more than$330 million at some point.

30:46Yeah. Or it's enough to just be owned 10 % of a strategic asset. Yeah, yeah. No one does these deals based on EBITDA at this stage. It's a few-year-old company. They're clearly looking at growth rate, how much influence it's having, how much impact it's having, viewership, revenue. who even does probably the last number that you look at to get to a number for valuation, at least. But very exciting for them, and we will be talking to them later today. Before we move on, let me tell you about LabelBox, delivering you the highest quality data for Frontier AI. Get in the box, the LabelBox. Get in the box.

31:22They're like, we didn't ask you to say that. Francois Chalet. Arc AGI, co-founder of ArcPrize. I hope he enjoys our goalpost moving. We might have to move it after we read this post. So he says, if you're wondering whether saturating Arc AGI 1 or 2 means we have AGI now, I refer you to what I said when we launched Arc AGI 2 last year, which is also the same thing I said when we announced Arc AGI 2 was coming in spring of 2022 before the rise of LLM chatbots. The Arc AGI series is not an AGI threshold. It's not even a goalpost. I don't even know if we need to move it. Why is it called that? Why is it called Arc AGI?

32:03It is a compass that points the research community towards the right questions. ArcGi 1 is a minimal test of fluid intelligence. To pass it, you need to show non-zero fluid intelligence. This required AI to move past the classic deep learning. Should I just disassemble the goalpost? Disassemble the goalposts. The LLM paradigm of pre-training, scaling, and static models at inference toward test time adaptation. ArcGi, the camera moves are wild today. I love it. Arc AGI 2 is the same, but with tasks that probe deeper levels of reasoning complexity, particularly with regard to concept composition.

32:39Still, these are tasks that are solvable in minutes by regular people with no external tool use. We hired our test takers off the street. So imagine just walking down the street and saying, hey, come take Arc AGI v2. That sounds fun. So it does not represent the upper bound of what human fluid intelligence can achieve, say, solving a millennium problem. ArcGIS 3 launching March 2026. I thought it was already out. Was that a preview that we played with? Because I remember we put you on this task, Tyler. We made you. Yeah, I think they were still adding new games. I only played, I think there were just three.

33:16Because I was really wondering, we've been seeing the V1 and V2 benchmarks get sort of dominated. I was wondering how are these models doing on V3? Well, now we have the answer. It hasn't launched yet. So March, mark your calendars, folks. ArcGIS 3 launches is then. And ArcGIV 3 will probe interactive reasoning. We evaluate how systems explore unknown environments, model them, set their own goals, and plan and execute toward these goals autonomously without instructions. We have also started to work on ArcGIV 4 and 5. Two more sequels. You thought it was a trilogy. I mean, nightmare scenario for everybody.

33:52It's a cinematic universe, Folks, it's not just a trilogy. There's gonna be a whole saga, the Arc AGI saga, and he's pretty excited about it. So congrats to Arc AGI team. Fantastic benchmark. Very interesting. Very fun that you can actually play it. A lot of these benchmarks are just not fun to go do hard math problems all day. Arc AGI is something that anyone can go and toy around with and understand, oh, well, I am better than AI at this weird thing that is just a simple puzzle that a kid could do. So it's a lot of fun, and we've enjoyed working and hanging out with the Arc AGI team and expected to move the goalposts many more times in 2026.

34:29Before we move on, let me tell you about Figma. Figma Make isn't your average Vibe coding tool. It lives in Figma, so outputs look good, feel real, and stay connected to how teams build. Create code-backed prototypes and apps fast. Sholto says he spent a week over Christmas making an RTS. Yeah. And his Twitter algo has fully switched into game dev Twitter. It's incredibly wholesome. People are making some insane things. In particular, image to mesh models mean some indie devs have created absurd production quality. And he shares some examples. Where are the AI risk people on this? Because what if he creates a game that's so addictive that all of humanity just plays his vibe-coded RTS endlessly?

35:11It's going to be nothing wholesome about that. And ceases to go outside. It's the true wireheading scenario. And if Sholto's not taking this seriously, I want answers. This is the wellness checks I do on you. Sometimes I'll call you late. Are you gaming? John, just, how are you doing, buddy? You called me last night. I was literally in bed. Yeah, yeah, I called you last night. Hey, just checking in on you, buddy. You're not playing video games, are you? I'm not. Unfortunately. I'm not. I'm off the sauce. Mark's safe. Back on the wagon. Doing dry January. Dry January. Off the sauce. Colin Frazier says, I don't really believe in LLM psychosis.

35:44I think LLMs mostly just have a lot to offer to people experiencing regular psychosis. This is an interesting take, and I could see this being actually what's happening, right? Typically, if somebody's suffering from any type of psychosis, they start going to talk to people. people can kind of walk them off a ledge or or kind of like talk them through the situation help them get help etc uh but an lm's just like i love yapping let's yap forever let's let's go down every possible rabbit hole let me validate some of your um yeah i had a friend in high school that that was was going through this and and he thought that uh uh deers were uh deers were like um Gang stalking him?

36:32Yes, actually. And so he started telling... Did he ever get to the bottom of that? He started talking with people about that. They were like, let's figure this out. Let's go hunting. He's back. He's fully recovered. I feel like a deer hunting trip would be actually the correct thing to do in that scenario. Super... Just reclaim the authority, and then you know who's in the driver's seat. You're like, yeah, they might be stalking me, but they should not be. The whole house is deers, the heads. that's mounted like trophies or whatever. That might be the cure. It might be a cure to male loneliness, all sorts of things, deer hunting trip.

37:08This is an interesting thing. There is a natural problem that sort of happens when a new technology gets adopted very quickly, which is you get all the good and all the bad. So if you just look at iPhone penetration, it went from, or smartphone penetration, it went from zero in 2006 to 100 % in 2015 or something. and basically everyone had a smartphone. And so you get all the top CEOs and brilliant people and scientists are using them and you get all that. And that's good. And doctors are using them to text their patients and you get all the good, but then also all the crazy people are using them.

37:44And everyone who's doing crime is using them for crime. And so you get the good and the bad because you just got everyone. And so you really need to look at the Bayesian product. Or if grocery stores didn't exist and they suddenly were everywhere, you'd see videos every day of people going insane in grocery stores and people would be like, well, our grocery stores making people go insane, right? They'd be like, we're seeing all this video where there's all this evidence that people are going insane and acting insane in grocery stores. It must be that the grocery stores are causing it. So you have to look at the prior weight.

38:18So what's the base level of psychosis in society? What's the incidence of psychosis with LLMs, is it higher? Then you have a problem. And I do believe that it's possible that there's a problem. I think that some of the models work sort of crazy and would just tell you yes to everything. Like the glaze gate was a real problem. They've sort of fixed it. It seems like it's pretty fixed now. It also seems like a very tractable technology problem to have another LLM review it and be like, is this a weird conversation? Yes or no? And that's like a very easy thing to train. So I think that they should be able to drive this way, way down.

38:51And also just some of the newer models that I've been interacting with, They do push back. They hallucinate even less. They just, they feel like way, there's a whole bunch of tests that I've seen where people have thrown, like there used to be a time when you could go and say, explain to me the definition of, you know, like the time old adage of a purple newspaper to start the day keeps the doctor away. And it was nonsense, but the LLM would just be like, Like, oh, well, the user came to me saying that this is a real thing. I have to assume it's a real thing. So I have to make up a definition.

39:31And they would just make up a definition. But now I've seen screenshots where people have come to it with these weird tests. And the models will actually say, ah, you're trying to trick me. That's not real. And that doesn't exist. And if you think that's real, maybe go see a doctor or something. Anyway, Railway. Plot Friendly says correlation is not causation. Yes, yes, yes. good railway railway simplifies software deployment web apps servers and databases run in one place with scaling monitoring and security built in get on the train get on the railway get on the boat uh scoops i i had this pulled up i kept uh i kept seeing it laughing at it over the last like two minutes so if i was like cracking up for uh the wrong at the wrong time this was why scoops has been using gemini as a calorie tracking app oh i didn't even see that I just thought he just went to Gemini and said another beer.

40:24And it's just funny that you see the little thinking thing. And it's like thinking about how to process that. And that alone was funny. Just imagining the chat, just another beer, another beer, another beer, 15 beers. Another beer, another beer. Yeah. You know, a lot of people are doing dry January. Other side of that, drunk January, potentially underrated. Everyone says if you can do dry January. That's the real contrarian move. Yeah, you proved to everyone, oh, I'm not in the pocket of big alcohol. I'm not boosting the alcohol stocks. But if you can do drunk January, drunk the whole time, hold it together, and then go back to normal life, that's potentially even more willpower.

41:04Potentially. I don't know. So I saw a picture yesterday. Apparently, there's a female college basketball player whose last name is Beers. And so on her jersey, it says Beers. It says the number 15 or number and beer. So it's like a jersey that just says 15 beers on the back. That's great. The alcohol economy is suffering, by the way. This is in the journal. Here's to unloved booze stocks. The five-year total return through 2025 for the S &P 500 is 96%. If you just bought the S &P 500, you're up. You doubled your money in five years. Not bad. Everyone else is down in the alcohol industry. AB InBev, not doing that bad.

41:51They're only down 4 % over the last five years. But Heineken, down 21%. Diageo, down 38%. Pernod Ricard, down 50%. Remy, down 75%. Boston Beer, the backbone of Boston, is down 80 % over the last five years. So the chances are way higher that you celebrated New Year's Eve with an adult beverage.

42:16The chances are way higher that you celebrated New Year's Eve with an adult beverage than by smoking a joint, says the Wall Street Journal. I don't understand this. But the popularity of cannabis, along with the effects of drugs like a Zempic and rising awareness of alcohol health risks, have investors in the sector worried. An equal weighted basket of 11 global alcoholic beverage producers has lost a third of its value in the past five years, including dividends. A dollar invested in the S &P 500 nearly doubled. Dry January might be an odd time to think about alcohol's appeal, but it's often a good month to snap up unloved stocks that other investors dumped toward the end of the previous year.

43:02In a market with few bargains, booze looks interesting, says the journal. Interesting. Anyway, moving on. Vibe.co, where D2C brands, B2B startups, and AI companies advertise. Guys, streaming TV, pick channels. Target audiences and measure sales just like on Meta. Nikita responded to your post. Yeah, I want to go in. Yesterday, he said the point of CES is maximalist futurism. It's all concept art to show. If things keep going in this direction, this is how the world should work. Once you understand it as a museum exhibit and not in any way commercial products, it becomes more enjoyable. That's a good take.

43:40Ray showed me. Thanks, Nikita. I liked it. No, no, this was a very interesting thing. And I think we were sort of - He also responded. I know, the next thing is crazy. Apparently there's a Zoom face station. I don't know what this is actually meant. So I think if you put this on in a crowded coffee shop, you can talk, hear, and see, and no one can hear or see what you're doing. I think if you put this on in a coffee shop, you're getting tackled. You're like, not today, Bane. It really does look like you're, It looks like a special forces, you know, like a rebreather unit, a scuba diving unit like that.

44:19That'd be tight if you could wear, if it was, you know, if you could spend like 20 minutes underwater with something like this. People are not fans of this. Tyler says the first X hardware product right there. Just locked in. And yeah, I mean, I think that looking at more of like novelty is fun and making it just a fun showcase of all these interesting things. And the problem is that I think people still associate CES with like, this stuff's going to work its way into my life and it's going to be just rough around the edges. Like the smart home, if you really dial it in, it's maybe better than just analog light switches.

45:04But for a lot of people, it's worse. We've talked about Sonos a lot. The app was great. And then it just degraded and degraded and degraded. Now there's a lot of stories about you going to a hotel room and all of the buttons, everything's smart connected. And it's just like the lowest quality product. And it doesn't have the polish or the network effects because it's from some mid-tier company. And I think people are a little bit disheartened by that. But Jason Fried went hard on smart homes. Oh, yeah. He called it the big regression. My folks are in town visiting us for a couple months. We rented them a house nearby.

45:38It's new construction. No one has lived in it yet. It's amped up with state-of-the-art systems, the ones with touchscreens of various sizes, IoT appliances, and interfaces that try too hard. And it's terrible. What a regression. The lights are powered by Control 4 and require a demo to understand how to use the switches, understands which ones control what, and to be sure not to hit that one because it'll turn off all the lights in the house when you didn't mean to. Worse. The TV is the latest Samsung, which has a baffling UI just to watch CNN. My parents aren't idiots, but definitely feel like they're missing something obvious.

46:12They aren't. TVs have simply gotten worse. You don't turn them on anymore. You boot them up. The Malay dishwasher is hidden flush with the counters. That part is fine, but here's what isn't. It wouldn't even operate the first time without connecting it to an app. This meant another call to the house manager to have them install an app they didn't know they needed either. An app to clean some peanut butter off a plate for serious worse. Thermostats. Nest would have been an upgrade, but these other proprietary ones from some other company trying to be Nest-like or baffling. Round touchscreens that take you into a dark labyrinth of options just to be sure it's set to 68.

46:48Or is it 68 now? Or is that what we want it at, but it's at 72? worse the alarm system is essentially a 10 inch ipad bolted to the wall that has the weather forecast on it and it's bright i'm sure there's ways to turn that off but then the screen would be so barren they would just be filled with the news instead why can't the alarm panel just be an alarm panel worse and the lag lag everywhere everything feels a beat or two behind everything lag is the giveaway that the system is working too hard for too little uh and he says now look I'm no Luddite, but this experience is close to conversion therapy.

47:25Tech can make things better, but I simply can't see it in these cases. Yeah, I think there's an opportunity to make a beautiful, modern, ultra-analog system for the home. I'm sure some people are working on that. But we've seen this in cars, too. A lot of the new higher-end vehicles that are coming out are actually analog. Yeah, they're like people like buttons. Yeah. Yeah, you still want some displays, but a few buttons that you can have more memory around, more muscle memory. What do you think of Smart Home? Yeah, I mean, I was just going to say, like, I feel like it's just a barbell. Like, if Apple made your thermostat, it would be good.

48:03Yeah. And, like, otherwise, I don't want any screens. Yeah, yeah. There really is some benefit. Either way, it's, like, very good, but in the middle. To just, like, the power law, the monopoly, just being able. And then just, I don't know. Apple, they get some things wrong, but they have just a brand standard and a level of polish on most things. Imagine if Sonos made a home security system. Underrated about Apple. How many people are complaining about liquid glass today? Me. No. No one's complaining. It's fine. It's fine. It's worse. Eh, it's not worse. The only thing I don't like is Safari. I don't like that.

48:38It's hard to get a new tab. Yeah. That's annoying. That's the only thing I don't like. Is there no shortcut for that? Like if you press and hold hard or something, like I feel like there's some sort of, a lot of these things, they suck on day one, but then once you learn the new flow, it's actually better. Like I noticed to get into the reader view, you can just hard press on this and it goes straight in there, which is nice. So there's a few upgrades, but you have to learn the flow. And like for the photos app, I know we doggone it a lot. It does feel like if you're, it's getting, the search is getting better if you know how to search, if you get really better at it, it will do what you want, but you have to lean into the expectations of it, and there's still times when you know it doesn't know who Jocko Willink is in this video, so you still have to scroll down to find that particular video.

49:26Let's save time for fun. What were you saying? Is there a way? We should look this up. So if you hold it, and then it'll open the thing, and then you keep holding it, and then you press it, then you can kind of get it to work. That doesn't count. Anyway, Graphite, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. The other interesting thing is, do AI agents, do Vibe Coded products, like, wind up making the smart home great again? Andre Carpathie was talking about this. Did you see this? He went, I believe, to Cloud Code and asked it to basically, like, backdoor its way into his smart home, and it went and scanned the network, wrote, like, custom software and custom API integrations to turn on his lights and do everything that he wanted.

50:14So he was able to sort of make his own dashboard and like smart layer on top of it. I wonder if you can still get rid of the latency because I feel like some of that latency is happening on the server side of the particular smart home app or company, but it was very cool to imagine this future where if there is a company that's not moving fast enough to update their app, like the notorious new United app, If it was really bad, well, maybe you can just use an AI agent to interact with it on your behalf and you're never touching it. George Hotz was talking about, I think he was using clog code to order room service in a hotel or something like that.

50:57And it like went and scanned the hotel menu and placed the order and did everything for him. and he was able to just command line his entire life, which I think is an interesting evolution. And there's some other posts in here that we can go into. Yeah, how quickly do you think they renamed Cloud Code? What would they rename it to? Well, Didi had used it, Didi Doss used it to create an Hermes ad, and he was saying this is the worst name because it's signaling that it's, people are realizing that you can do a lot of things with it. Well, I mean, the logical thing would be to just bake it into the Claude app and not have it be called Claude code anymore.

51:38Like there are lots of problems that people use agents for where it should exist directly in the app. And I mean, OpenAI has done this with ChatGPT. Like there is an agent mode in ChatGPT. People just don't. And there's codecs, but codecs can't just be used on your phone because you have to spin up an actual instance and link it to a GitHub and stuff. But there's no reason. I saw some other workflow where someone set up a remote terminal with Cloud Code running and then had an app on their phone that could run commands in the terminal. And then it would take push notifications and send those back to your phone to tell you, hey, Cloud's done with doing whatever.

52:18It needs a question. It has a question. You need to talk to it. And you would jump back in so you could use all of it through your phone. And then whatever it builds, it creates a website that you can interact with from your phone. so you get the results from your phone. And I think that all of the companies, but especially Anthropic, will sort of roll the Cloud Code functionality into something that's more like a consumer product in the Cloud app. It'll probably be a little bit more expensive, but could be very cool. And I think it'll be another interesting moment when a whole new wave of people who, because over the break, we got the second wave of, there's the early adopter developers who have been using Cloud Code and agents for a while, and they were very happy when 4.5 came out.

53:02Then over the holiday break, you got a lot of executives who have access to terminals and can hop on a laptop and do a vibe coded project. They understood the power. They really enjoyed it. But the phone class has yet to really experience it because if they're not willing to go and open up their laptop and sit down and learn the terminal and make sure that they have a couple things installed, there's still a little bit of a barrier to entry, that melts away when you go just, it's in the phone and it's just a button that you activate and then it's like, oh wow, like I vibe coded this web app on my phone, which is a couple of prompts, which you should be able to do.

53:37Well, Luke, sorry, not Luke. Will Monitis has an essay, The Decline and Fall of the American Technology Industry. Before we read it, let me tell you about phantom cash, fund your wallet without exchanges or middlemen and spend with the phantom card. Continue. Will says, in 2004, if you asked a technology investor where the best software companies in the world were, they'd give you two answers, Boston and San Francisco. This is obviously no longer the case. San Francisco has produced$14 trillion in enterprise value over the last two decades, while Boston has produced a measly$100 billion. If you told the same investor that New York, in all its cocaine and gray pinstripe suit financial glory, would usurp Boston as a regional technology center, they'd think you were nuts.

54:21the question of why Boston lost is worth studying. From an inputs perspective, the city should have everything going for it. Two of the best universities in the world are based there. YC was founded there. It is without a doubt one of the most beautiful cities in the country. Mark Zuckerberg went to college there. So did the Stripe founders. So did the Cursor founders. So did the Dropbox founders. So what went wrong? To understand the scale of the collapse, you have to remember that for decades, Boston's Route 128 was the center of the software universe. DEC was the second largest computer company on earth with 140 ,000 employees at its peak.

54:57Lotus was the essential app that brought the enterprise to the PC. Akamai built the modern internet. Where did it go wrong? This is a question worth answering, but any attempt to answer it gets you one of two answers. The city died when Zuck tried to raise money there and couldn't and had to go west. What do you mean Boston is dead? We just led the series F of turbo logs at 15 million posts. Of course, neither of these is a useful story. Figuring out what really happened is not only an existential question for Boston, but for the U.S. technology ecosystem broadly. My answer is simple. Boston is a story of what happens when negative cultural and regulatory feedback loops align.

55:36The city as a technology ecosystem was killed by three simple forces. One, a progressive regulatory state that treated business as a coffer to loot for the benefit of property owners. For decades, Massachusetts refused to conform to federal QSBS rules. The state finally conformed in 2022. That same year, they passed the millionaire's tax. A founder who sells for$10 million in Massachusetts owes$860 ,000. The same founder in Austin owes zero. Massachusetts also charges 6.25 % sales tax on SaaS revenue. Most states don't tax software at all. A Puritan culture too enmeshed in elite institutions to police itself.

56:16Post-2010, main activity of Boston-based venture is not building companies. It is extorting founders and running organized crime cabals. The culture that should police this, the endowments, the large LPs, the people who show up to the galas, is too intertwined with the perpetrators and their networks to say anything. This meant a constant trust tax on conduct in the city. Nikita says, I got scammed by a cabal of Boston investors in 2017. Never again. Three, from an inputs first view. Also, he clarified what this actually means. And I think it was structured that when he sold his company, there was like a side deal where after he got paid, he was going to have to pay the investors like personally extra money, which is a very weird structure of a deal.

57:01That's kind of how he phrased it, which is. That's wild. Yeah, not great. Yeah. Three, an input's first view of technological progress. We have the best universities. We've built a ton of lab space. Even if 40 % of it is now empty, we have the best talent in the world. So why isn't it working? Can't we build another innovation center? Is our soil alone not magic? It is three-factor. If this three-factor explanation seems simplistic and maybe even something you've heard before, it's because it is. It's the very same problem that's facing technology industries across the entire U.S., and I suspect it will be similarly fatal.

57:37Technology ecosystems are fundamentally fragile networks that generate trillions in tax yield for their hosts who can't keep themselves from killing the golden goose every few decades. Let's play out what happens when a host rejects the organism. First, talent networks dissipate. Need to hire a VP of engineering who's taken a company from 25 to 500 people? There are 600 to choose from in SF. There are five in Boston, and soon those five will leave for SF, where they can demand higher comp and better odds of success. On the junior side, new grads no longer stay local. They catch the first flight out every summer.

58:10As the network evaporates, the state sinks its teeth in tighter to capture equivalent yield from whoever's left. As the ecosystem dissipates, seedy market participants enrich themselves. Through preferential pricing, who is flying to Boston to win a seed? Fine, we'll pay up at$10 million. where shadier tactics of extorting founders with off-market and often illegal tactics. See Nikita and other tweets for stories that can legally be told. You see this character even in firms that started in Boston and left. Les Matrix, they're good guys, who maintain a certain organized crime complex, even after they've been very dramatic.

58:49These are complex flesh-and-blood problems. They destroy cities' lives and trillions in taxable enterprise value, all because of short-term thinking on the part of state governments, and the worst part, you can't undo them. While I'm sympathetic to calls to reclaim Boston as a great technology ecosystem, I would love to move back and not deal with New York. I struggle to see how the remaining ecosystem doesn't enter complete freefall. Brian Halligan over at HubSpot was saying, I'm starting to worry about Massachusetts. One, biotech is way off from a few years ago. Two, only one of the top 50 AI companies are in Massachusetts.

59:22Three, the Fed research funding cuts hitting MIT, Harvard are brutal. The millionaire's tax is working in the short run. Let me pull this up. But I know a lot of wealthy folks preparing for a Florida move. Five, a glut of empty condos. Six, it's not cool for young folks. Seven, it's very expensive. I honestly don't think the Boston government can do that much as these are kind of macro issues. I give them big credit for working on building more housing and fixing the T, which will help. So Will continues, you cannot legislate your way out of a collapsing network. You cannot cold start a network already folding in on itself.

1:00:01And yet San Francisco and the U.S. technology ecosystem as a whole is lining up for the exact same fate. A regulatory state that treats technology as a cash cow, Prop M, the office vacancy tax, a culture too enmeshed in its own elite networks to police itself. AI has attracted dozens of bad actors into the ecosystem, and the same stodginess that made Boston impossible to clean up is setting in. An input's first view of progress, we have the best AI labs, we have the most GPUs. Hell, the president even bought us some GPUs. We have the frontier models, so why would anything go wrong? The difference is the stakes.

1:00:34Boston's collapse cost the U.S. a few hundred billion in enterprise value. San Francisco's collapse erases a third of the country's GDP growth over the last decade. But the failure here is not just economic, the failure is existential. Our technology industry has failed to provide a coherent argument for its own existence on the national stage. If this is not solved, 2028 will become a referendum on caging, killing, and looting the technology industry over the water and power libels. The popular image of the AI boom is not uncertain. Recent polling suggests the average American understands AI is a thing that wastes water, skyrockets power costs, and scams their grandparents in exchange for exposing children to deviant sexual content, sports gambling, and all other manner of sin.

1:01:17If the best answer to why we should not imprison technology executives, burn down data centers, and kill the American technology sector is so we can build better chatbots for your sports betting, voters will vote to do so. In a zero-sum world, voters do not think long-term. They envy and they loot, and we do not loot the sewage system or the power grid because we understand they're the bulwarks against chaos. We accept their costs because they hold back chaos. Does the median voter believe the same to be true about technology? Technology is the only mechanism we have for escaping the Malthusian trap, but we have been too cowardly to articulate this because we have substituted rationalism and AGI for a coherent theology of progress.

1:02:00The state sees the industry as only a parasite to be consumed. If we cannot articulate why innovation is a moral imperative, we can expect the entire technology industry to end up like Boston, first taxed, then looted, then exhausted, and we'll be stuck wondering where it all went. What a black pill. Major black pill. We need a black pill sound effect. We need a white pill. That white pill can be gusto today. The unified platform for payroll benefits and HR are built to evolve with modern, small, and medium-sized businesses. Start a company, get on gusto, build something. Probably not in Boston.

1:02:37Will worked in Boston. His first job was like 2004 in Boston, right? Something like that? Yeah, maybe late 90s. Yeah, late 90s. Yeah, so I mean, you can't... Will send some pictures from Boston. He really liked the architecture. Obviously, this is written to be dramatic, but I think it is... There's lessons from it. There's lessons, and it's hard not to feel that insane pressure right now in California sort of just descending on the technology industry. And this goes to, I mean, this goes to what I was talking about over the last couple of days, which is the tech industry broadly needs better narratives, right?

1:03:15We were talking on the way in today. How would Steve Jobs pitch AI? Like imagine an hour of talking of Steve Jobs on stage talking about the potential of AI. He'd be saying, you now have a free doctor in your pocket that can diagnose a wide range of conditions. He would be painting this optimistic, empowering, sort of real potential for AI that's already here today. He wouldn't be. uh you know you can imagine all the things he wouldn't be uh talking about and and we don't I don't think we have a lot of people that want to be seen as Steve Jobs of AI and yet it doesn't feel like that is a lot of Steve job and I don't think that's a lot of Steve job and I don't think that's a lot of Steve Totally.

1:04:16We have a Steve Jobs video in the timeline that we should play. Let's watch this. You know what stock options are? Very interesting. Yeah. Yeah. No? Okay. Very quickly. What you could do is if somebody came to work for your company, you could let them buy some stock in the company. The problem is they might have to shell out$100 ,000 to buy stock in your company. If your company went broke, they'd lose all their life savings or whatever. And so that doesn't work. So what you do is when somebody comes to work let's say the stock's trading at ten dollars a share you give them the option to buy you know a thousand or ten thousand shares at ten dollars but they don't they have four years to exercise that option so if the stock goes down or stays the same they never exercise it they don't have to put up any money they don't lose anything but if it goes to a hundred dollars a share they can easily go out to a bank and borrow the money to buy it at ten because it's worth a hundred in exchange for that privilege of not having to have them put up any money and take any risk we only dole out their ability to exercise that stock option 25 % a year, thereby locking in people really for four years if the stock goes up.

1:05:18It's a pretty standard thing. A lot of people are doing it. Look at this casual seat. Before we went public, over 80 % of Apple was owned by the employees. Right now I'd say over 50 % of Apple was owned by the employees. There's some larger blocks in there, but still. And again, I don't think finance... It's very interesting. When you look at the leaders of when people, when normal people that don't work in tech, even if they use AI tools, when they see Elon talk about AI, when they see Sam talk about AI, when they see Dario talk about AI, they just get brute. Like the reaction is almost always terrible.

1:05:56Yeah. Like if you look at the comment section of any content on them that is broken containment and that isn't in the tech industry, it's just like F this guy. Yeah, yeah, yeah. Stop it now. Yeah. Even if they're saying optimistic things, it's not getting through at all. Yeah. I think my formulation of this was that Steve Jobs cornered the market on earnestness. He's very earnest. This is a somewhat technical tax question about why stock options are used instead of just granting stock directly. And he's explaining it in very plain terms, being very earnest about it. And when he talked about the role of the computer and stuff, it would be very interesting to hear.

1:06:40I've seen a couple of posts that are like, imagine, you know, Steve Jobs today, iPad kids and AI slop and all this stuff. But I think it would still hit. And what I mean by he cornered the market for earnestness is that because he was so larger than life and then he passed away, anyone who wanted to play the earnest tech optimist was seen as doing a Steve Jobs impression. And that was seen as hack and like lowbrow and not really – everyone was like, why are you doing that? Do something new. Do something different. And so everyone fell into different roles, whether it's a little bit of childish humor or, you know, more like rationalism or more nuance in how they talk.

1:07:29They don't really paint the same type of picture, certainly not in the same way. And it's left a big hole in tech narrative production. What do you think, Tyler? Yeah, I mean, I think if you think of like AI as being broadly influenced by like rationalism, a big part of like rationalist culture or whatever you want to say is like there's this strong sense of like in group and out group. Right. So if you have all the people in the in group, right, they sometimes like already understand that AI is going to be great in all these ways. So the real thing you do is you need to convince them that it's bad.

1:07:58Yeah. So it's like you assume that people in the in group already have this prior that the people that, you know, the layman does not have. Yeah, yeah, yeah. Their understanding of AI is from Terminator, where it's like, oh, this is going to kill me. And then also the leaders are saying, this is going to take your job. It's kind of all bad news. Yeah, yeah. It jumps straight to the consequences instead of actually dwelling and spending enough time in the tactile impact of a technology like Steve Jobs was uniquely good at. He could talk about the future and the long-term implications, but would spend a lot of time just talking about the bicycle for the mind.

1:08:40And he had these great metaphors that really stuck with us for a long time. Yeah, he'd be talking about how this chatbot in your pocket seems simple, but it will teach you languages. It will help you become an artist, help you become a musician. It will diagnose a condition for somebody that actually can't afford health care, wherever they are in the world, right? like these are magical magical things and yet but even if you go and you say those exact words people will say oh he's being too earnest it's some steve jobs impression like it's hard for that to land i think it's just not yeah i don't know i don't know maybe maybe it's just i think there's space for it it's going to take uh it's going to take a future hall of famer yeah yeah maybe and i don't know it's also interesting because uh i mean the business of apple was was different than today.

1:09:33There was, I mean, it was much less CapEx intensive, so you needed less fundraising. So you didn't have to message to the financial markets as much as you do now. You could just kind of make a widget, and if you sold it at a profit, the business would continue to grow. And so with the CapEx dynamic in AI does make it a little bit different because you have to message to everyone that they need to put their money in to actually get this future, and then there's the consequences. Yeah. The Wall Street Journal had an article. Sure. First, let me tell you about Fin.ai, the number one AI agent for customer service.

1:10:06If you want AI to handle your customer support, go to Fin.ai. The Journal had an article at the end of the year, December 29th. PhDs can't find work as Boston's biotech engine sputters. A job in life sciences was once a sure path to a high-paying career in the city. But empty labs and unemployed grads now herald tougher times. uh jeremy lou 31 years old moved to boston from new jersey in 2018 to study for a phd in chemistry and he hoped a career in the city's bustling biotech industry we have a very depressing image here of cambridge if we can pull that up but after earning his uh university of massachusetts boston degree last year lou said he has applied to about 500 local jobs with no luck raised in Hong Kong.

1:10:53He said he had also started considering LinkedIn messages from biotech recruiters much farther away. The industry is really booming in China, and that's what a lot of people have told me that I should consider applying there. Boston's biotech sector, long a vital economic engine for one of America's wealthiest metro areas, is sputtering. A double whammy of cutbacks and venture capital and government funding have taken a toll, leading to layoffs and struggles for job seekers. For workers who thought they would easily launch into a well-paying science career, The downturn has been especially harsh.

1:11:22Lou temporarily signed up for a government food assistant. Food assistance kept a tight budget and later started working part time for an AI startup so he could continue to afford rent in a Boston suburb. Massachusetts experienced a slight decline in its roughly 65 ,000 biotech R &D jobs in 2024 after years of mostly strong increases, including during the COVID-19 pandemic. The numbers indicate that job losses continued through at least June, while hiring remains sluggish. By the end of September, nearly 28 % of Greater Boston's lab space sat empty, according to the latest estimates from CBRE.

1:11:59Every stage of the life cycle has been impacted by policy or regulatory uncertainty this year, says Kendall O 'Connell, chief executive at MassBio and Industry Trade Group. The impact has hit startups especially hard. And so, anyways, hopefully they can turn it around. But I think what Will is saying around kind of network collapse is very real. If people graduate from your universities and immediately bail, it's hard to stop that. Yeah. I went to college in Boston, and there was like a flourishing tech community because of MIT. Microsoft had a massive, the NERD, the New England Research and Development Center, and a bunch of interesting tech and tons of like tech talks.

1:12:44and the default path was you would meet people at Boston Tech Fairs and it was easier to get a job in tech in Boston if you went to school in Boston. But quickly, I did get out of there and went to San Francisco. Went straight to the tenderloin. And a lot of that was because of the internet, because of Twitter and meeting tech people on Twitter and seeing tech people on Twitter and just sort of like understanding the networks. I remember interacting with, not Sean Parker, but Sean Parker did an interview with a few VCs, and I was able to go back and forth with them on Twitter, just being a reply guy, basically, in 2011.

1:13:24I wish I got to experience your reply guy era. Reply guy era was strong. It was electric. Who was it? The first VC in Facebook or something? Someone liked my post and replied, and it was the best thing ever. I was like, I'm a king made. Wow, I'm goaded. I'm goaded, exactly. But it did just illuminate the networks of what's going on. It gave you a much easier picture of who the live players are. And even if you couldn't just ask them for jobs directly, you could at least be aware. Ben in the chat is saying the person in that article actually just has a terrible resume. Look him up. Yeah, who knows?

1:14:06I mean, plucking one person that's struggling to find a job. You sort of have to do that in these articles because you don't want to just do the article with the chart. And so you have to do the chart, the data point, which is that employment is declining in Boston R &D jobs. Seven years into his PhD and only published one paper. Time to lock in, brother. Let me tell you about Plaid. Hit me. That's a white pill. Plaid powers the apps you use to spend, save, borrow, and invest securely connecting bank accounts to move money, fight fraud, and improve lending. Brian Halligan is organizing a session with the governor at his home in Boston.

1:14:41So the governor is paying attention. Well, we have some breaking news. There is a new tab in the ChatGPT app. That's right. Greg Brockman. Adult mode. No. Health. ChatGPT health is now live. Fiji gave some amazing stats here with more than 40 million people globally turning to ChatGPT every day for health questions? What does that mean? Does that mean 40 million people are asking health questions every single day? The founder from Doctronic yesterday said like 20 % of all the queries are health related. So yeah, the question here is how quickly does ChatGPT Health try to do the other things that Doctronic is doing?

1:15:28Doctronic is actually trying to be an AI doctor. He talked about being able to effectively be a doctor, write prescriptions in Utah, going to fight to expand that. The question will be from a strategic standpoint how they have their own doctors on staff as well. They're operating a telemedicine business and I'm sure they do referrals out. It's hard to see OpenAI ever employing doctors themselves, but they probably would try to build a network around it. So we'll see where this goes, but it's going to be an exciting space to watch. Yeah. So they say today they're launching ChatGPT Health, a dedicated private space for health conversations where you can easily and securely connect your medical records and wellness apps like Apple Health, Function Health, and Peloton.

1:16:17We have the founder of FunctionOn, right? So you can put all your blood results in there. That feels like a really enduring place. One of my big pushbacks against the Quest Lab wrappers is that they haven't historically been very enduring. So you go and do them, and then a few years later, the product's sort of degraded, and then you're like, oh, well, I have six different amazing web UIs for my health records. But if I keep importing them to ChatGPT, I feel like I'll have an account on there for a very long time because it's an enduring company. Makes a ton of sense. This allows ChatGPT to offer more relevant, personalized support, like when you're preparing for a doctor's appointment or looking for guidance on a meal plan or exercise routine that fits your needs.

1:16:58That's very cool. ChatGPT Health is another step towards turning ChatGPT into a personal super assistant that can help support you with information and tools to achieve your goals across any part of your life. We're starting at the very beginning of this journey, but I'm excited to get these tools into more hands, says FijiSimo. You can sign up to request access. Interesting. They're not just rolling it out. And they talk about their input from physicians and privacy protections. interesting. Yeah, one of my big questions for this year is like, there's always been this narrative of like, if you build a wrapper that depends on the models not getting better, you're going to have a bad time because the models will just get better.

1:17:41So if your thing is, oh, it can't do long context windows or it can't answer in pages and pages and pages, well, the models are going to get better and they're going to do that or they're going to do better math. So don't build the math wrapper that's just a little bit better. but if you're building something that's unique and special and off in the side and doesn't really depend on that maybe you're good for a long time but obviously chat gpt has matured a lot and they are going after certain verticals and i wonder if we'll see one of the foundation labs go after legal since they're already going after code so effectively like and people are that would be definitely and they're making money there so it's a big pool of opportunity yeah and i wonder if People are using LLMs to do legal work now, but they're just on these standard subscriptions.

1:18:28You can imagine a lot of companies would pay$100 a month for kind of a more robust version. And Sam's talked about this, where your conversations with ChatGPT are definitely admissible in court. And so it's like a Google search. It's not like talking to your lawyer. So if you go to ChatGPT and you ask, how do I do crime? You don't have client privilege. but maybe there could be a tab where you sign up for some specific plan and you are getting legal advice effectively. And it is attorney client privilege in some ways. Now, I'm sure that's a whole rat's nest of legal problems, but maybe they'll figure it out.

1:19:06Who knows? Anyway, Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in-store, on mobile, on social, on marketplaces, and now with AI agents. very excited to see everything that Shopify does very excited to have Robby Gupta back on the show Andrew Reid says he may be Unk but he's our Unk Andrew and I were texting the other day and someone had told him that a Gen Z person told him that Unk meant uncool and he felt very Unk because he thought it meant like uncle I think it's related isn't it it's definitely Uncle I'm pretty sure it's Uncle Well, you might be unk, and that's just why you think that.

1:19:50Maybe you're unk, yeah. It's the connotation and the denotation. It literally means uncle, but the connotation is that it means uncool. Yeah, it's a clipping of uncle originating in African-American vernacular English. Okay, there you go. It is a, yeah, it's slang. There you go. It's society. Speaking of slang, Tyler, can you take us through what you've learned about looks maxing slang? because we're trying to get, this is our 2026 resolution to ascend. And so we need to be up to speed on all the terms. What do you have for us? Yeah, so I've been getting into looks maxing. Obviously, it's clearly working.

1:20:27I've been, I asked some people for some peptide advice. I'm a fucking weight, 50 plus pounds. Oh, yes, yes. And I think we have an image of what that might look like. Yeah, let's pull it up. Let's pull it up. Let's pull up the image of Tyler. This came from Brandon Gurrell. Tyler's looking very prosperous here in the timeline. You said, are there any peptides for gaining large amounts of weight, 50-plus pounds? Tyler's like, yeah, I'm trying to gain 50 pounds of muscle, and then just gains 50 pounds straight to the neck. That looks like more than 50 pounds. That looks like 100 pounds. I like it.

1:21:00People say AI is slop. You look elite. You look elite. This is truly art. And the grit on your face is so funny. It really translates well. What a beautiful AI image. Anyway, so you're not going this direction. You've got to update the Kyron. You're trying to ascend. What's the plan? Take us through it. Okay, yeah. So I mean there's a couple things, especially when you're looks maxing, it's a lot about your face, right? So there's a bunch of terms you want to be looking at. So the first one you hear this thrown around, the maxilla, right? Yeah, the maxilla. Where is the maxilla? Some people have a recessed maxilla.

1:21:30Okay. So the maxilla is kind of the bone that goes around your nose, right? Oh, okay. The bone in your nose, right? So it's kind of this area right here. Yes. And then your upper maxilla is basically the top part here. So when it's recessed, it means you kind of have a flatter face shape almost. Okay. And you don't want that? So you don't want a recessed maxilla. Okay. You don't want a recessed maxilla. And is bone smashing a way out of having a recessed maxilla? Yeah. I mean, you got to be careful with bone smashing because sometimes you hear about, you know, they ruin their nerves, right? Oh, yeah.

1:22:01I'm sure. You get nerve damage. Do you really need the nerves there? Yeah. See, like a lot of people. Tradeoffs. Personally, I think it's fine. Yeah, yeah. I don't really need them there. Do not listen to Tyler. And it's kind of worth looks-maxing, right? Yes. So, okay, so the next thing, you want to look for your infra-orbitals. Infra-orbitals. Okay, what are these? So your infra-orbital is kind of, it's like part, it's actually kind of similar to your maxilla, but it's basically, there's two, like, kind of points right here below each of your, you know, eyes. Yeah, eyes. And so sometimes these can get slightly inflamed.

1:22:33And these are bones or muscles? I believe, yes, they are. What even? Is this actual science that they've adopted and twisted, or is it entirely made up? It's like a section of the maxillitis. Got it, got it, got it. What else we got? Okay, so also, this is a pretty obvious one. Everyone knows this, but your kind of facial width-tide ratio. Yes, the mid-face ratio, or just the overall facial ratio. Yeah, mid-face is kind of... Okay, it's like, do you have a long face or a wide face? Exactly. Got it, yeah. You want to look at your nasal labial folds. Nasal labial folds. So this is, on older people, right?

1:23:09you'll see these kind of wrinkles. Oh, yeah, yeah, yeah. So you want to be looking at those. Minimizing those. Generally, if you want to look younger, yeah. Okay, yeah, I think so. You want to look at your bimaxillary protrusions. Bimaxillary protrusions, okay. Yeah, so this one, actually, I'm not exactly sure what that one is, but... But it's got to be good. But you've got to look out for it. You've got to look out for it. For sure. Your nose bridge, right? You don't have to be too wide. This is something you can see. Yeah, yeah. And then your interpupillary distance, right? this is how far...

1:23:39IPD. That feels like something you can do nothing about. So I actually... Is there a way to make your eyes wider or narrower? I think there are ways to do it. No way. Glasses, right? Because it changes how big your eyes look. Okay. I think actually... Also, potentially with makeup, you could maybe accentuate the IPD. I only know about IPDs because of VR goggles. Different VR goggles need different IPDs. Timothy Chalamet. I've got to interrupt you guys to talk about the Universe 25 experiment conducted by an ethologist John B. Calhoun between 1968 and 1973. The experiment was the rodent utopia experiment.

1:24:24Calhoun built a paradise for mice where every physical need was met. They had unlimited food and water, so there was no competition for survival. There was no predators. They were completely safe from external threats. They had climate control. So it was a perfect environment for living and reproducing. It was disease free. Initial mice were chosen for their health. And so despite having space for 3 ,800 mice, the population peaked at 2 ,200 and then began a rapid irreversible decline to extinction. there was a specific group called the beautiful ones. It was a generation of males born during the peak of overcrowding because the older dominant males had become hyper-aggressive.

1:25:12These are the boomers in our society. And the social hierarchy had collapsed. These younger males never learned normal social behavior. So I think we see this with like clavicular and people like that. Like defending territory or courting mates. They were called the beautiful ones because their physical appearance, of course, unlike the older alpha males who are covered in scars. Again, these are the boomers, right? They bought their homes for like 20 bucks and maybe were in the military, et cetera. The alphas were covered in scars and bitten tails from constant fighting. These males had perfect healthy fur.

1:25:49You can see Tyler's hair. He's got perfect healthy fur. Behavior, they withdrew completely from society. So again, you see these streamers. They're just like in their rooms, smashing their face with hammers. They spent their entire lives doing only three things, eating, sleeping, and grooming themselves. Asexuality, they lost all interest in mating or interacting with females. Again, you see these with the looks-maxing guys. They're not looks-maxing seemingly for women. They're looks-maxing to try to mog other dudes. This is Plavicular talking about Gavin Newsom mogging JD. Um, and, uh, so anyways, something, something to think about with this whole trend.

1:26:32So the lessons become the beautiful ones. Like in, in that colony, you want to be the beautiful one? Absolutely not. I think Tyler's on board. Absolutely not. You want to be the, you want to be the scarred alpha. Okay. The scarred alpha. But you want your tail to be bitten. Yeah. Well, I, I've always said I want to be wizened. I want to be old man maxing. I want to look like Warren Buffett because I feel like there's a lot of people that are doing the younger thing, look maxing. There's Brian Johnson, obviously. but I feel like if I could become more austere, I would hold more, my words would hold more weight.

1:26:59And I feel like that's actually what's valuable. The wise one. So I want to look as old as possible. I want to be leathery. I want to be, I want to be whizzy. I want to be leathery. Just one more thing though. I should dye my hair gray. I forgot about this one. They mentioned in the chat, but your cantal tilt. So cantal tilt is kind of the angle of your eyes, right? So you want, I think it's called hunter eyes. Hunter eyes. Okay. Yeah. All this for nothing. Yeah. Yeah, all this for nothing. What a crazy time. Well, we have our first guest of the show joining. I'm sure we'll continue the looks-maxing conversation while we bring him in.

1:27:31Let me tell you about public.com, investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries, and more with damn great customer service. We have Vincenzo Landino in the TBP and Ultradone. Welcome to the show. How are you doing? There he is. Thanks for having me. I've listened to this conversation, and I'm like, do I have the ring? You look fantastic. something. So you, you, you're one of the people that's actually been doing this. You've been look maxing for years, clearly. Oh, of course. Yeah. Yeah. I didn't even know I was doing it, but okay. Yeah. I do agree with you though, John, there is something about looking a little older so that people take you seriously.

1:28:08But you, you just graduated high school. You look about like 1920. Is that correct? Uh, yeah, actually I turned 21 yesterday. Congratulations. That's fantastic. That's fantastic. Yeah. You look very young. Uh, anyway, uh, for those who don't know you, please introduce yourself. We'd love to get the introduction for everyone. Yeah. I run business of speed. So podcast newsletter and a consultancy for brands that want to get into motorsport or businesses of speed, actually. So it's more than just motorsport, but we call it businesses of speed. So mostly racing. That's a good brand. I like that. How'd you get into this?

1:28:42You know, it's to keep it short. I was, you know, I was a motorsport fan for a long time and formula one years and years ago like when i started watching it back in the early 90s like right after drive to survive happened you got into it right after that's when you got into it i'm sure just yeah i just jumped in right then there yeah early early to the sport really yeah real early on which actually is really funny because now people that came in maybe two years before yeah the drive to survive boom are considered like old heads in in watching motorsports yeah Exactly. But now back, like I said, 35-ish years ago, there was nobody watching it in the United States.

1:29:26And being of Italian heritage and whatnot, I had a lot of motorsport fans in my family, and we used to watch it. We used to go karting. We used to go to racetracks all the time. As I got older, I saw there was an opportunity that not many people are talking about the business side or at least the behind-the-scenes aspect of, in this case, Formula One. but everyone wanted to talk about how hot the drivers were. And, you know, the engineering aspect was another, you know, or even just handicapping who's going to win, like the actual results of the sport. The actual results. Yeah. As opposed to the businesses behind it.

1:30:03That's everywhere. Yeah, it's everywhere. Exactly, exactly. Amazing. What was the first piece of content? What was the first initial, like, go to market with building content in the category? I don't even really. It was probably, it was Twitter for sure. and I would I mean I was just tweeting about different things you know deals that were coming through and whenever you could get any information about race fees or whatever you know a bridge track was paying for to host an event you're like okay this is interesting and you start building a following people thinking like wow that's ridiculous or wow that's crazy didn't had no idea what went into it and then just kind of snowballed into what it is now which has become I'm still building it but really an opportunity for me to keep a tab on the business behind it.

1:30:49Can you give us a broad view into the health and state of motorsport, the business of motorsports in America? Because a lot of people in tech are just not that into automotive racing broadly. Maybe they watch F1 here and there. Maybe they go to an event with some SaaS company that they're involved with. But maybe zoom out for a second, and then I want to get into a bunch of the subcategories. I'll say anecdotally, this is something I heard in Las Vegas just a couple months ago. Tech company in San Francisco, CEO, wanted, this is literally the conversation I heard, wants to get involved in Formula One somehow, knows nothing about motorsport, knows nothing about racing, just knew that it was somewhere where there was a tension and he wanted to get his brand in front of it.

1:31:43And so hearing conversations like that happening and partnerships and commercial deals happening just because they think it's cool. Again, from someone who's been, who's seen the tree directory over decades, not just like a few years, that's fascinating to me. It's still fascinating to me that that level of interest is there. Um, but that's not the overall health. I mean, Formula One is definitely healthier than most. In the United States, you still have series like NASCAR that dominate, at least in viewership, but there's issues there as well. IndyCar, great racing, but still trying to work out who they want to be.

1:32:25And so there's changes coming. Has the increase in popularity in F1 in America actually hurt IndyCar because is it feels like some potential overlap or is it kind of a rising tide lifts all boats i think it's actually so i think it is there is a level an aspect of rising tide is raising all boats but it's also hardened the diehards like they are the indycar diehards i feel like have come out more now um because they're like we don't want to be run over taken over by this european thing this formula one which is the actual conversations that happen i mean it's yeah it's kind of funny but But so IndyCar has seen it.

1:33:05But what no one has been able to figure out that Formula One did was the content aspect. Drive to Survive was one of many, many things that they've done behind the scenes, right? ESPN didn't get enough credit for the growth. You know, everyone said, oh, Netflix Drive to Survive effect, all of that. I mean, including myself at one point, it was like, wow, this Netflix thing is really, this is what's causing all of this. But it wasn't. ESPN did put a lot into it. And so I would say that you have seen a lot of rising tide, but no one's figured out the content aspect. It's for whatever reason, it's like not for whatever reason.

1:33:46I know that, you know, we know what the reasons are. Formula One is just the attractive. It's the flavor of the day, month, year right now, maybe the next couple of years. But it's sexy, right? It's European. So if you want an audience, it's global. Let's not say it's not just European. is global. Yeah, it's a travel show in addition to being a race, in addition to being a reality TV show, in addition to being a dating show. It sort of scratches every itch so a household can sit down and everyone in the family is watching it for a different reason. I always appreciated the business side, seeing how the owners were kind of processing, being in that, understanding that dynamic where you have this desperation to win, you badly want to win and then every single decision that you're making throughout a season is like okay how much like technically like you know how much do i want how badly do you want to win how much do you want to actually spend how much do you like how how how much are you willing to personally invest so that happening at the owner level and the athlete level yeah and at one point it was you know it was whoever could just keep spending right now we have the the the salary or the salary, the spend cap.

1:35:00And the spend cap has created more competition. You can't spend over 140-ish million. It's going to go up a little bit more. But you can't spend over that amount of money. And so that's caused better competition. Everyone has to kind of get to a point. But at one point in Formula 1's history, it was just you spend, spend, spend. There were way more teams on the grid, way more drivers. We actually had on our podcast, um mark blundell who was a driver from the late 80s early 90s he drove with senna and some of the other greats and he was saying you know it was like we had to qualify to qualify you don't have that now you've got now there's gonna be 22 drivers on the grid they all will start yep come sunday that didn't happen you know 25 years ago 30 years ago it was you had to qualify just to get onto the grid and there was plenty because there was so many cars that were just like they would allow anybody that could come up with a car would be on the grid and it couldn't compete it wasn't reliable whatever it was or they'd be so slow they obviously wouldn't put them on the grid to qualify and so all of that has led to the popularity but also the financial health of it look at the valuations um yeah i wanted to get your read on like team valuations because obviously the people that were like just pure enthusiasts in it for the love of the game have benefited to some degree just based on the appreciation and the value of the teams.

1:36:28There's so much more attention. They can bring in a lot more sponsorship. We were at the Vegas event and just walking around and seeing how... It's a tech conference. Yeah, it felt like being at a tech conference. Every team has a major tech company on it. Or multiple. That's a lot of dollars. Multiple. Yeah, multiple sometimes. Yeah, valuations. But yeah, valuations of teams. uh george over at crowdstrike uh we we work with crowdstrike saw you know he recently uh uh bought into mercedes in a big way after being a partner for a while but uh how do you how do you uh do you think that uh do you expect valuations to actually trade down at any point could we be at a at somewhat of a local top i think at some point we it has to max out right like some of the valuations seem almost insane to me.

1:37:21Mercedes, just the team itself,$6 billion is what it's right around. McLaren,$4,$4.5. Ferrari's a little bit different. They've got this global brand. They're a little over$6.5 billion. And even at the bottom of the grid, you're still looking at$2 billion. I remember Zach Brown, CEO of McLaren, had said, and I actually had a conversation with him in Vegas, but he had said 2024, 2023, maybe it was at one point, all of the teams will be valued at a billion dollars. And we all thought that was like, no way. This is like, are you kidding me? And here we are not even a full two years later. And every team is, has a valuation of roughly, you know, 2 billion.

1:38:08Of course there's private equity now investing you've got some big you know bigger players that want to put money into these teams and so valuations just shoot up i think it it has to cap somewhere i don't know where that cap is i i have said 10 billion i thought it was like absolute max but i think i think even that might be ridiculous but you know yeah i know that if i say that now then in two years when... So the average net new investor, are they really going into this expecting a return, or do they want to be an owner of a Formula One team? They want to be the owner of a Formula One team.

1:38:46I mean, it's cool. You can't put a price on cool. You can't put a price on being in the suite. Like you said, it's a tech conference. It's who's who. It's who can I be seen around. Look at all the celebrities that show up. Look at all the major tech companies or all the player network. It's a level of networking. and you can't really put a price on. And that's what you're buying into. You're buying into the opportunity to entertain your clients, entertain your friends, entertain other executives to be seen as, well, I'm the CEO or I'm the founder, whatever it is, I'm the boss. Yeah, there's so many levels to it.

1:39:21Our friends at Public who we went to Vegas with are their multi-year sponsor of Aston Martin. But then the level beyond that is like, yeah, actually buying into the team and becoming it. Yeah, I noticed over the holiday, the global elite were in St. Bart's, and they all pulled up their yachts. And when you read the articles of whose yacht is there and who they are, it'll say the person's name. And then probably half of these people, they're described as owner of the Pistons or owner of the Red Sox, owner of some sports team. And you always look them up, and it's like, they didn't make their money starting that sports team.

1:40:00They started some boring oil and gas company or software company or something. But as soon as you own, it's like writing a book. As soon as you own a sports team, that's what you're known for forever. And like, you're just the Dallas Mavericks guy. So it goes back to, you guys were talking about Steve Jobs earlier. We don't have, and how they're right now where we don't have somebody that is like Steve Jobs for AI and to just like snap a finger, tell a story. It's the story. And I don't know if that's what you were looking to say at one point, but it's a story. It's an instant story. You go and sponsor Williams or you go and Atlassian, you go partner up with Williams.

1:40:37Now you're going to be part of their comeback because Williams, the team, is coming back and they are more financially healthy. They've got great investment now, great team, great leaders in place. Well, Atlassian is going to be right behind. They are right there. Built-in story. People that didn't know them outside of Australia, which are maybe even like the U.S., whatever. Don't know. Globally. Instant global recognition, right? You can't buy that anywhere. You can't buy that story, that level of story. There's no price that you can put on that. And so I think that's what we see with Formula 1 specifically.

1:41:11It's also a guaranteed story. What is the dynamic of Audi's joining the grid this year? How does that work? Is the number of teams going to effectively be fixed forever, like part of the reasons why NBA and NFL teams are valuable is because you effectively have a monopoly, right? We're not creating more teams. So you don't have new competition and pricing pressure and things like that. How did that dynamic, how do you actually, they're taking over from another team, like break down that dynamic and will we see more? Could we see a future where there's 30 cars on the grid? so sauber was the team that audi bought to get into so they they took a spot right and so that for the i'm trying to think of how many years but let's say at least the past decade maybe 15 years you've had a pretty fixed number of teams on the grid 10 cadillac is entering the grid as team 11 and that was a big, big deal.

1:42:11In the charter from 2022, the dilution fee was$200 or$300 million because no one thought that the team didn't work that much. And that's a fee that goes to all the teams? That's a fee that goes to all the teams for diluting. It split up, so everybody gets like$10 million, which is nothing, and that would have to be updated, I imagine. and it did it did it got updated and when this was there so the big issue that came up was when they were looking for team 11 cadillac was uh came in it was andretti that was trying to put in their offer michael andretti uh mario andretti his son michael um and a group was trying to buy in there was politics behind the scenes that were going on they they had the money they had all the things together ducks in a row.

1:43:03They did. Some people don't like them. And so they got kind of pushed out. Now we have Cadillac to enter. But at the time they came to the table with their$300 million dilution fee and they had facilities and all the things that F1 wanted to see. Well, they quickly said, wait a minute, 300 million is not enough money. Like, wait, this is, this is crazy. The sport has completely ballooned in valuations and how much revenue we need to do something different. So I think it ended up around$600 million, so double, just to enter, just to say. Now, that's not to say that you're done at$600 million. You need to have facilities.

1:43:39You need to invest in people. So you're all in way over a billion dollars. Yeah. Wow. That's the price just to say, like, yeah, we'll entertain you. Yeah. So$600 million now. So you're not going to have anybody just come in and say, I want a team, because you need to have a few building. Is there a hard cap at all in the charter? Obviously, you could update the charter. The charter says 12 is the max right now. That's what the chat was saying, too. How does the manufacturers, how much do they try to track or how much do they worry about how on-grid or on-track performance impacts car sales? I had a Ferrari at one point, and, you know, any time I'm watching F1 and I see Ferrari with technical difficulties, I'm like, yeah, big surprise because I had a lot of those.

1:44:26I had a lot of those things too, right? You'd think that would be disconnected, but I don't know if it's just some sort of cognitive bias, but it really feels real. If we have a team and we're just terrible, who, yeah, why is somebody going to want to go and spend$400,$500 or more on one of these cars? Yeah, so I remember Lawrence Stroll in 2020, what year are we in? In 26, so about three, four years ago, he made a comment that because Aston Martin had the safety car, they actually split safety car duties with Mercedes. But because they had one safety car, he estimated about$80 million just from having the safety car in sales.

1:45:11So I think it was the Vantage, and they had the Vantage F1 edition. He sold about 300 units, whatever,$200 ,000 a piece, whatever they were. And they sold out pretty instantly because it was a car on the grid. uh mercedes has really pushed the amg badge a lot over the past i'd say five to seven years while destroying what made amg great in the first place and i had you know i had an amg loved it uh it was great until i started seeing everybody with an amg i'm like well amg doesn't even mean anything anymore it's just kind of like it's the standard car they don't even yeah you don't see a regular mercedes everyone's got an amg at this point but that was they're gonna make a v a v four AMGs.

1:45:53Well, not anymore. No, no, I know. They are starting to... Was it the C43? It was the one that people really didn't like. I mean, for what? It was kind of pointless. I mean, I had... Mine was an eight, and it was the last eight in 2019, and I... It was very desirable to aftermarket folks because of that. When I think about Aston, if Aston can win a championship, I do think that that could be very beneficial for the brand in america mclaren mclaren i'm sure i'm sure that they've they're they're going to benefit in some way but aston i feel like really like i mean that dynamic's interesting because you have kind of the same owners in both the formula one team and and the and the actual manufacturer which are different entities and so there's a real incentive to like hey let's actually win a championship because uh they make some of the most beautiful cars in the entire world, but they're just not as desirable as the Ferrari at the same price point.

1:46:53Well, Ferrari is also, I mean, what Ferrari does to buy any Ferrari is just, it's like, it's the luxury playbook. You know, you can't buy the one you want until you buy 10 others, and then maybe we'll let you buy it. I mean, it's just the scarcity thing, but I'll say with Aston Martin and McLaren specifically, they're still, I would say they're buoyed by Mercedes is doing well because they're they're amg power plants so that makes that makes a difference especially to the level of enthusiasts or the the collectors that are buying these cars but they are beautiful and they're gorgeous there is a direct correlation and you will hear have conversations with folks within the teams that are are absolutely tracking that kind of thing it's what is the lift i don't i don't know the number you know for every car maker but um it's you know red bull doesn't make a car, right?

1:47:41So they've got nothing to worry about. Williams doesn't make a car. What about the RB17? They made two of those. Well, all right, all right, all right. To be fair. To be fair. Yes, yes, you're right. I just meant like an regular car. Well, that thing does look pretty incredible. What about what's happening in sim racing broadly? Like how is the, I mean, do you look at sim racing as its own kind of sub industry? Is there? I don't, I mean, so I don't track it as much or I'm not paying as much attention. I know that um it is there's a higher interest in sim racing because most people realize well it's too expensive to go get a track day it's too expensive to um just try and even go racing right to be to go from karting to you know to the different series levels and then to get to f1 it's almost impossible right and you need yeah people were running the numbers on like how much lando's dad had spent to get him actually in the game and it was like they clocked it at like 40 million dollars over the career.

1:48:38Yeah. Either you have a very rich parent or a sponsor. But I think you need both. You need both, right? Or you don't need both, but it helps to have both. It's not just one or the other. It helps. I mean, it's a different lifestyle, right? So it's a lifestyle that is you're traveling. You're oftentimes, unless you're already in Europe, you are likely going to Europe. We had Connor Daly on our podcast, IndyCarDriver. And actually, that episode comes out in a couple weeks. But he did say to us in the conversation that he had to go to Europe to race an open wheel because that's where it was. He couldn't do it here.

1:49:15There was no ladder. The ladder system wasn't robust enough to get where he wanted to go. That takes dollars, right? Now, his dad raced in Formula One. But could I do it? Could you guys? I don't know. Would we be able to start? Would my kids be able to start? So that's where sim racing comes in. And sim racing is made more popular because the current batch of drivers are very tapped into the sim racing world. Max Verstappen races sim cars in between races, between qualifying and the actual race the next day. He's like, I'm going to go home and I'm going to go race on the sim. And he takes part in competitive racing.

1:49:49uh lando races uh charles they all they all they all race and most of them are racing pretty competitively on sims so that's also made it more popular the the allure of being able to maybe race with max verstappen or lando north or get you know boot up online and play that those that's all increased tremendously um i'd have to actually look at the numbers i want to see if they're what about the what about the the health of individual tracks around the u.s we're going to uh we're going to uh doing a track day out at willow springs later this month and i think they changed ownership recently yeah uh and uh but but yeah how are how are these doing as businesses are they the kind of things where it's like fun to own but actually just a terrible uh business or is anybody actually doing really well it's a tough business is anyone doing really well it's the ones that are you know are backed by dollars that have big races at them it's it's hard to maintain a pure enthusiast track you're saying a pure enthusiast track yeah you you really have to uh be like a coda right now to be immensely successful now that's smaller regional tracks are still hosting you know plenty of racing but to say they're extremely healthy is tough also there's a lot of folks that think oh we want f1 to come race at our track or we want f1 to come to road America, F1 to come.

1:51:12It's like, no, you don't because it's a whole spectacle to come build this. And oftentimes it destroys what makes your track unique or appealing or charming. So there's a lot of, and those are conversations I'm always tracking. I have a kind of a not quite baked thesis, but an idea that the track business might actually become a great business in the future if it becomes effectively illegal to drive cars on the road just via autonomous vehicles, where guys and girls are not going to suddenly... At some point, it's like humans can no longer drive. It's just too dangerous. You can imagine that scenario happening in the next 10, 20 years.

1:51:53And people are still going to want to drive, so they're going to take their cars to tracks. And you could see a resurgence of enthusiasts driving because it just made illegal on normal roads. yeah i mean that's actually i that's fantastic i didn't even think about the autonomous driving aspect of that and how if people can't drive people that like us that like you know have gotten a taste of driving we know what it's like also driving on a track driving your car on on the road versus the track is just it's complete it's incomparable yeah totally different totally different i mean you you know you wonder sometimes how people get their licenses but you're like, I'm not going to drive.

1:52:32I'm not going to drive the way I want to drive on a track on the I-95 over here. It's just not going to... No, and then there was that tragedy recently. Oh, yeah. Was it the Activision? Founder of Call of Duty. Founder of Call of Duty was driving. I've driven Angelus Crest a bunch. I had the scariest moment of my life in a car on Angelus Crest at around 6 a.m., probably five years ago, driving a 997 that I had. And yeah, you can imagine at some point that, I mean, what a lot of people do at ACH is already effectively illegal, right? They're driving 30, 40, 50 miles, you know, 60, 70 miles above the speed limit, tailing each other very closely.

1:53:15It is like reckless driving. But yeah, if that same situation had happened on a track, like everybody would have been fine. Yeah, for sure. usually um walk me through uh a circuit conversation real quick please no i just want to add one last thing to that there's a lot of the um you know private members only yeah clubs coming up now at racetracks for enthusiasts yeah i think that's an opportunity for racetracks to become maybe a little more popular or increase their health because they can offer and coda's doing it right they're offering luxury condos and garages and a club membership or a membership.

1:53:54So I think that's something that can happen more. Can you take me through what a successful F1 track build looks like? How is Vegas looking? We went and they were very much bragging that it was a permanent facility. It's remarkable. It feels like it's working, but how does this actually work? Who's paying who and how is it penciled in Vegas? I mean, you've got some public money, public funds needed. And of course, there's plenty of complainers about that nonstop. Just open up Twitter and you'll see people complaining, locals complaining. The permanent facility in Vegas is actually a new thing.

1:54:35So there's really not much to compare it to because street tracks don't usually have anything permanent. You go to Monaco, they're putting that together months ahead of time. So that for Vegas is pretty unique. They're filling it with the Grand Prix Plaza while it's not race. I think they cut off around September, October. And so then it becomes a business with the Grand Prix Plaza. They have the F1 experience. It's kind of almost like a museum. There's simulators, there's a restaurant. So they're trying to keep people tied to the F1 brand all year long. That's unique to Vegas. In terms of the layout of the track and whatnot, I mean, the build of the track, the permanent pieces of it, I believe they are trying to add some permanent lighting fixtures so that those don't have to go up every single time.

1:55:28But, I mean, you guys were there, so you saw it. I mean, there's so much of it that has to go up in real time because you can't close down the strip all year round. You can't have all the things they have up around the track. The stands, there's not even really stands. Everything's like luxury over there. You're either in a suite or you're not. So yeah, all of that has to go up in real time. When you have a permanent facility, like a CODA, Miami's kind of half and half. But when you have a permanent facility like CODA, it's obviously there. those are more expensive to maintain overall um because you have to keep them occupied and you have to do something in them year-round after that one race vegas you know you kind of take the good and the bad you have to take the locals complaining and you have to do the shutdowns and all that so i mean you guys were there so you remember how like they had to shut down from like wednesday at two o 'clock basically from two to midnight every day after that was was closed down.

1:56:32I mean, those are things they have to deal with. And I think that's just unique. Las Vegas is really, really unique. It's also new to Las Vegas residents. whereas you take like a Monaco that's been around since the 20s those folks are they're used to it it's part of the identity and that's that's where I think there's still room to grow. The difference in Monaco too is like if you're a resident and you and you own or rent like a condo or an apartment and then F1 comes to town it's super exciting but if you're a Vegas resident and this track springs up and everything gets more expensive and you're kind of like boxed out it's not as much of it's and you're not necessarily an f1 fan it just becomes much more of an annoyance than like a celebration of the city and i think that's where the like we still haven't gotten peak saturation right it's not people aren't excited about it just because like it's not ingrained in their identity whereas you go to you know you go to europe and they are have more of a motorsport culture or at least f1 let's just say f1 where that culture is understood so So tracks are very interesting.

1:57:34They want more street circuits. There are more street circuits coming. Madrid is being added this year. So that'll be interesting to see how that build goes. We actually talked to the - Why do they want more street circuits? I feel like an American Nurburgring would be incredible. I would love an American Nurburgring, maybe in like Idaho or something, going through the forest. I don't disagree with you. The reason they want more is because it is actually more appealing and more sexy to say, hey, come to our city, come to Madrid, and we can sell Madrid. So being able to pay. And I mean, Vegas, everyone goes to the nightclubs.

1:58:09There's like a huge economic impact, the hotels. Whereas if you're out in the sticks, yeah, you might be in some cheap hotel, but you're not going to go spend a ton of money. Spa in Belgium is arguably, every driver we've talked to, any motorsport enthusiast says spa is the best track to drive, to race at. It's awesome. But you know where a spa is? in the middle of the Ardennes Forest. Yeah, it's awesome. It's not, right, it's cool if you're really into motorsport, but if you're trying to sell F1 or you're trying to sell the brand as this is appealing to sponsors and it's sexy, well, I would rather do it in, I don't know, Brussels or something like that.

1:58:47Yeah, of course. Because you're basically holding a conference for your company. A lot of the sponsors will invite key clients and partners to come with them. And if you're out in the forest, it's a little different. and the playbook has been written so like it's it's become a festival it's you know it is a festival yeah and that's what they want the new like if you're going to pay 70 million dollars to host a race you you need to recoup that you can't recoup that by just having a race in the middle of nowhere and that's why you're seeing a lot of these things happen with the smaller tracks in europe they can't afford it they just don't have it that's funny uh next question i next time you come on, I want to talk about the possibility of an AI driver at some point.

1:59:28I think imagine if Google bought a team and they had no human driver. This is my new AGI test is I want a humanoid robot in a manual gearbox shifting with three pedals around the Nürburgring in under seven minutes. Now, did you guys see the Abu Dhabi Autonomous Racing League? I saw it like briefly but tell me. It's Autonomous Racing and it's teams of of engineers basically with no drivers in the car yeah it's clunky it's clunky it's like you know oh because the cars i mean they are driving by themselves but they still have to process so like yeah you have a car cut in front of you like yeah what do you do about that imagine well imagine a waymo and something jumps in front of it's gonna stop right so it's kind of like the same thing happens with this race um so it's kind of if you had a chance to look it up the autonomous Racing League in Abu Dhabi.

2:00:19They're trying to make it a thing. It's not there yet. I would love to see the track times, how they compare, and also all the blooper reel, I'm sure, is really funny. There's a lot of blooper reels. I'm sure. For sure. Anyway, we'd love to have you back. So great to hang. Let's make it a regular thing. I appreciate you giving us the full overview of everything. Thanks for having me, guys. We'll talk to you soon. Goodbye. Let me tell you about Vanta. Vanta, automate compliance and security. Vanta is the leading AI trust management platform. You can go check them out. And our next guest, Nigel Vaz, is already in the Restream waiting room.

2:00:58Let's bring him into the TVP in Ultradome. Nigel, good to meet you. How are you doing? How's your new year going? Off to a good start? Thanks for having me. Great to be on. Yeah, it's great. Thanks so much. Well, we'd love to kick this off since this is the first time on the show with a little bit of an introduction on yourself and how you introduce yourself to everyone who's watching. Yeah, I run Sapient, which is an enterprise AI software and technology business. Sapient was founded about 30 years ago in the early days of the internet, building some of the world's first online banks, the first time you could trade equities, the first time you could pick a seat on an airplane.

2:01:34So we've had about 30 years of building digital systems to really build intelligent enterprises in the first wave of digital and now leveraging AI, we're all about how we can actually unlock real transformation beyond pilots for some of the largest enterprises in the world. So what we really do is bring together deep industry expertise across sectors from financial services, retail, healthcare, and then combine it with our digital DNA alongside a few AI products that stem from agentic orchestration through to accelerated software development, and then finally managing IT systems using AI. How did you process that data point that kind of shook the internet a little bit for a couple days last year where it suggested that a lot of the AI demos at the enterprise level, the experimentation, those experimental budgets, that they weren't getting renewed, that they weren't seeing the level of adoption.

2:02:37It wasn't that they weren't getting renewed. It's just that they They weren't converting and they weren't working. It was some crazy high number, like 93 % of enterprise AI tests. Yeah, yeah. So how do you process that at the time? It was an MIT study. Yeah, that's right. Yeah, it was an MIT study that came out. And actually what we did is we had a bunch of professors evaluate from MIT our work almost as a counterpoint to that data. Because what we were seeing is, of course, there was a ton of experimentation in the organizations around AI. But trying something out and then scaling it across the enterprise was one of the biggest stumbling blocks, largely because building a proof of concept in a small organization and scaling it is a lot easier than when you are one of the largest automotive manufacturers in the world or when you're one of the largest banks in the world.

2:03:21Because you have to actually think about the tool chaining of the organization and how these systems deploy in the context of that. Most of these organizations, I mean, Davos is coming up in a couple of weeks. And every time I go over the last couple of years, AI has been the dominant conversation. But more and more clients are now saying, hey, we understand the concepts around AI. We understand all of the conversation is around compute and all of the conversation is around models. But how am I, as an enterprise leader, getting value from this in the context of what I do day to day? And that is exactly why that stat is so critical, because I think essentially the bridge from you experiment with a little bit of AI to you can actually start to see meaningful gains outside of the obvious use cases of you're deploying AI in a call center to route some calls more efficiently, or you're deploying AI in the context of enabling your sales teams to be more efficient, right?

2:04:22We're talking about large-scale agentic mesh deployments that are allowing businesses to re-imagine a car build that used to take 18 months in 18 weeks. Yeah. Or allowing an insurance company to monitor worldwide events and on a dynamic basis allow you to react to the fact that I heard one of you guys talking about your house getting burned down in California. And this is an actual piece of work we did for a client where they were monitoring the air quality post fires and alerting people who have significant issues with asthma to actually, you know, make sure they had inhalers or maybe even perhaps moved out of those zones proactively, saving themselves hundreds of millions of dollars in health care and better outcomes for these folks who otherwise might have gone through a traumatic health crisis.

2:05:17event, right? There's a Whitefield, right. That's the Whitefield right there. They require completely different orchestration than, I think, a pilot or two. Could you share some more, as much as you can, like who your actual clients are? Because I think that'd be helpful to ground the conversation because it's some of the biggest companies in the world. Yeah, it is. It's some of the biggest banks in the world going all the way from retail banks to investment banks like the likes of a Goldman Sachs, for example, in the investment space. In the retail space, we work across the retail space across essentially grocery retail and then fashion retail as well as general product retail.

2:06:05So we work with the likes of a Carrefour in France or a Walmart in the US, Tesco in the UK. So a number of big businesses there in the context of the automotive space, the likes of a number of the big German automotive companies, a number of the big U.S. automotive companies, Asian automotive companies. So we serve multiple sectors across countries around the world. And in many cases, that's one of the complexities there, right, because these are global organizations. There's different data governance rules. There's different legacy enterprise journeys that they've gone through. almost every one of these enterprises is sitting on you know a few hundred million dollars of tech debt which you have to kind of work your way through before you can actually deploy any one of these ai uh you know ideas how are how are some of these like uh management teams that you work with uh approaching messaging uh ai internally because i feel like the broad fear in the economy right now is related to job loss.

2:07:10And so one of the reasons you'd bring in an external partner is so that they can take just kind of a pragmatic view at the business and really understand where you can get leverage out of AI. Whereas if you're running a thousand person organization in a company, there's maybe some more tension around implementing AI. You know, you'll probably lose your job as an executive if you don't implement AI well, but depending on how you implement it, there's going to be some job loss and people are looking out for their team and maybe they like having a bigger headcount, et cetera. So how is that even being messaged at the moment?

2:07:47Look, I think the conversation is definitely across organizations, right? I mean, people in most enterprises are very tuned to the fact that this is a moment much like the internet was. And we saw this in the early days of the internet. I mentioned some of the things we did back then, a moment of reimagination of business in a very fundamental way. This is not one of those incremental, progressive overload type moments. This is a significant transformation. So I don't think anybody in a organization sitting there basically saying, hey, I think nothing in my world is going to change. I think people expect to change.

2:08:23I think what most folks aren't clear about is what is the journey from here where we have existing systems, existing processes, existing ways of working that the business is running on and, you know, making sure that you can fundamentally rebuild this plane while you still have targets and commitments and shareholders. And you recognize that if you don't do it soon enough to the point you're making, you're going to start to give up margin or you're going to start to give up speed or you're going to start to give up market share. Almost every conversation we're in is about how can I actually drive more growth?

2:08:58How can I actually create a better experience for my customers? And this isn't coming just from leaders in the organization. This is coming from people across the organization. What we are seeing, though, is that at the level of enabling these people to do work in this new context, organizations are very much separated by execution. So, you know, so many clients will talk about, you know, an AI strategy, right? But do you have a data strategy? Are all your data Or actually, are you doing AI pilots on sales data on this ERP system over here and doing, you know, you know, marketing pilots on that ERP system over there, which will eventually evolve to agents on this ERP system for sales, not talking to agents to that ERP system on marketing.

2:09:46And those agents not talking to each other across sales and marketing resembles a traditional baton passing organization of today. Right. So you're making a lot of what you do. Larger enterprises, how it felt like last year was the year of was all about just like coding. Right. Every single founder that came on our show would talk about the leverage that they're they're getting. We're getting that leverage internally. We've built a bunch of software to run the show. that we never would have built historically because it just would have been too time intensive. But now we can have one great engineer, Tyler, on our team who can build an entire product end to end.

2:10:27Please don't try to poach him because I said that. But yeah, how have coding agents and products been adopted in some of these companies? Is there any type of restrictions? Part of the reason that it got adopted so quickly is it was somewhat permissionless. Engineers could just sign up for a product. and go bottoms up. But I don't even know how adoption would work at someone like a McDonald's or someone like a Mercedes or someone at a bigger bank where I don't know that an engineer can necessarily just say, like, I'm going to start using this product. No, and you can't, right? You can't because the fact of the matter is it's not just Tyler or one engineer.

2:11:08It's one engineer with another engineer, with a third engineer, with a fourth engineer, where a lot of them share context around a bigger application. Whereas if you start using one tool chain and the next person starts using the next tool chain, which is, by the way, what happened in the early days, right? Which is why you got those pilots up and running really fast and people were starting to see real leverage. But then very quickly that started to devolve to basically, but we're not seeing the net output actually move the needle across big things. So I'll give you an example of a, you know, we, um, we did a piece of work for a large healthcare company, which was on a 10 year modernization journey, migrating millions.

2:11:50Wow. Thinking in decades, thinking in decades, people say you should think in decades. These people are actually doing it. I love it. Yeah. Yeah. And it's crazy, right? It's like millions of lines of Cobalt code written in the sixties and seventies by dudes that are not not only in the company, they're not probably on the planet. Right. And you have individual developers going line by line by line, trying to interpret what the intent behind the code was. But more importantly, because this is HIPAA compliant data and has serious health care outcomes tied to it, you have to be really thoughtful about what of this code you need to retain, what logic it holds, and how much of this you can actually do away with.

2:12:31That journey, going from like 10 years to a few years, two years or three years, requires you to be able to have all of the current business context of the organization. It requires you to have a future state that you understand really well. And you need to have a group of people working on a very similar tool chain so that the code that you are ingesting then gets created into a spec that a bunch of humans can look at and say, is this the spec that we actually want? And then that spec can actually get migrated into new code. So we built this platform called Slingshot, which is our software modernization platform.

2:13:08And how it differs from a lot of the consumer-grade platforms that have got crazy valuations right now is they were all built for individual users writing apps like Tyler for small organizations or for themselves. But the minute you start to deploy them into large enterprises, what you find is that enterprise context graph that is missing or permissions. Like what part of the app are you allowed to see versus me? Or what is my relationship to you on a dev team, right? How do you actually start to manage authentication, permissions? This is the kind of stuff that really makes those pilots go awry in the context of these big scale changes.

2:13:48What can we expect in AI and advertising this year specifically? I feel like we went from large companies making an ad and saying we're going to serve this to a million people or 10 million people or 100 million people. Right. A Super Bowl ad is an example of that. And then as you have platforms like Meta, really, really, really specific targeting, you can basically make an ad and serve it to like a tiny group of people. Very, very specific. You can imagine a world in the future where an advertiser, even as big as McDonald's, would effectively make an advertisement that's meant for like one individual person.

2:14:24just because you could generate it on the fly. Jordy, you're going to love this. This big mic was made for you. Yeah, effectively. So what are you expecting on that front? Because the models have gotten a lot better, and it does feel like companies should generate maybe at least 50 times as much ad creative this year than last year. I think the output's going up. The question is whether the quality and the targeting are going up simultaneously, right? Because Meta sees incredible stuff in their wall garden. Google sees incredible stuff in their wall garden. But how are companies leveraging their first-party data to understand that you're Jordi, this is your context, this is the car you drive, or this is the burger you eat, or this is the hotel room you like to stay in?

2:15:06I tell them everything about myself. I want them to target me as specifically as they possibly can. You'll be so surprised, though, right? I'm sure you do that all the time. But how often do people actually use what you give them about yourself to actually give you something back that's relevant? The hard part is not getting consumers to give data. There's been a lot of conversation about data privacy. And of course, I think consumers are all about like, if you give me value back, I'm going to give you my data because I get something back in return. So if I'm watching Netflix and you know what I like to watch, you're going to show me something back that I care about.

2:15:41Great. I'll give you my data. But most companies can't do that. They can't actually serve up what you want. I mean, we work with a very large hotel brand, Marriott, globally. And we were basically working with them to basically say, how do we capture intent in the context of what people are searching for? So when you actually go to their villas platform, you know, historically, what you might say is, hey, or a hotel platform, you might say, these are the dates I've got free. This is the city that I'm searching for. And this is the kind of product that I'm looking for. Right. And now you flip that around to say, how can you ingest all of the intent and context that they're willing to give you?

2:16:19So give them a white box. And all of a sudden you say, hey, I've got young kids. I've got a pet. One of my children is autistic and really sensitive to noise. So it needs to be in a quiet part of the hotel, blah, blah, blah. Next thing you know, the relevance that you can respond with goes up dramatically. So what I think you're going to see from an advertising perspective is people who have the ability to leverage first party data, combine it with second and third party data from a targeting perspective, and then building production tool chains that allow them to use that to really personalize content is really powerful.

2:16:54Like to give you an example, large pharmaceutical company doing a vaccine launch in 115 countries. How this works normally is the marketeers would have to come up with a bunch of concepts, then talk to the lawyers to basically say, what are the regs in each of these 115 countries about vaccines? And you'll find crazy stuff like in New Zealand, you're not allowed to smile in the ad because a smile implies an outcome. So they want like straight faced people because you don't actually know if the vaccine is actually going to work. So hard to advertise if people can't smile. Yeah. If you take this, you're going to have a bad time.

2:17:33So you've got this crazy process that goes for like 12 months where the marketeers and the lawyers are having a conversation about what can and can't be done content wise. And then the content gets tweaked and produced. And what we built using both the Argentic platform, we ingest all of the regs into our platform. We then basically look at the creative concepts that were originally created by the team and we'll test them against the regs almost on a real-time basis and then regenerate, to your point, using whatever models are more efficient for the kind of content, regenerate versions of that content appropriate to every one of these countries.

2:18:14and then allow that work to be deployed at significant scale. More importantly, if we discover an issue once it's actually live in the context of that, our monitoring agents are monitoring the content to ensure the reactions to them and then can actually start to do A-B testing about what's actually working better. But all of this is in one synchronous orchestration in the same way that these orchestrations might connect supply chain data to store inventory to advertising. So we're basically, you know, Black Friday, this product's already gone off the shelf. The ad isn't still hitting the same product because those people in the store are only going to get more frustrated.

2:18:53And you start to close the loop. Awesome. Well, thank you so much for taking the time. Thank you for coming on and breaking it down. What an exciting time to be in this particular business. To be modernized. To be advertising. I mean, progress over a decade will happen in years. I love it. Nobody likes advertising or modernizing more than us. It may be you. So it's great to hang. Have a great rest of your day. We'll talk to you soon. Take care. Great to hang out. Before we bring in our next guest, let me tell you about Restream. One live stream, 30 plus destinations. If you want to multi-stream, go to Restream.com.

2:19:24And up next. It's steward time. It's steward time. We're stewarding. We are joined by Sequoia Capitals, Pat Grady and Ravi Gupta. What's going on, guys? How are you guys doing? Great to see you. Good to see you guys. Happy New Year. We might need you guys to scoot back a little bit. Is that possible? We don't want half of you, Rob. There we go. Massive start to the new year. Take us through the news today. Very exciting. But we'll hear from you. The news today is about XAI is raising money. Is that the news that we're done? Yes. That was yesterday, actually. Oh, okay. We've moved on. We already covered that.

2:20:05We're here to talk about it. You guys are looking fantastic today. Just letting you guys know. Particularly good, I think. Dude, so what happened today was, as you recall from my last TVPN appearance, I want my children to be AI researchers so they can support the family. And it wasn't obvious they were going to get hired anywhere else. So we're like, fuck it. I'm going to start my own company. Deputism. Right? Deputism for the good people. Those are the links that I will go to to make my children happy. No, what happened was today I announced that I am going to be starting a new company. I'm super pumped.

2:20:40And then also getting to do it while still being part of Sequoia is pretty special. And I think my brother Pat here was cool about letting that happen. And we're excited. Yeah. How did you two first meet?

2:20:57Was it Abramson? Yeah, of course. We had a partner named Michael Abramson who was involved with Instacart back in the day. And I think Michael was the original connection. and then Ravi we got to know Ravi over a period of years and I mentioned in a tweet today that we always have this shadow list which is not long it's like literally half a dozen people but you know the shadow list of the people we would hire if we ever got a chance Ravi was on that list for a few years and finally we're lucky enough to get him back in 2019. Whenever someone asked me about my Sequoia interview process John and Jordy I said it was either five years or five minutes I don't know but it was one of those seemed to happen quick at the end but you know I guess it took a long time.

2:21:38Being gang-stocked by the Sequoia Partnership. I would love to see that list, but it's certainly key intellectual property. That list is, yeah, key IP. Stewarded. One of the things that you stewarded. That's a steward's greatest responsibility. How are you settling into the new role? It's been great. You know, we – first off, Alfred and I have been working together for 15 years, and he's been – Overnight success. How did you two meet?

2:22:06You guys are big on this question, huh? I thought it was like Laura. I didn't think we were going to answer it the first time. I thought they were best. We could do news, but I also like Laura. Well, I think most people know Alfred before Sequoia was the president and COO of Zappos, which was a Sequoia investment. And so we got to know each other a little bit through that, but I wasn't playing on the investment. So it was just kind of seeing each other at Sequoia events or whatever. And then he joined, I want to say 2010, he joined Sequoia, somewhere around that time. And at that point, I was mostly focused on growth investing.

2:22:37He was mostly focused on early investing. By 2015 or so, he was co-captaining the early business. I was co-captaining the growth business. And we just had a great partnership for a very long time. Yeah. How are you thinking about the divide of responsibilities now? Is there more nuance to it than just early and growth? Are there other – is there someone who likes to do more personnel management, more recruiting, or more marketing, or whatever, more fundraising? Is there any division there? Once upon a time, Fred Luddy, who is the founder of ServiceNow, handed over the reins to Frank Slootman. And I remember shortly thereafter, Frank Slootman had the line, I'm the workhorse, he's the show pony.

2:23:17So Alfred and I have this wonderful relationship where the plan that we've agreed to, certainly agreed to, is I get to go on TVPN. He gets to manage finance to go on compliance. Alfred's welcome anytime too. It's fantastic. No, no, I'm kidding. The honest answer is our team, we have so many awesome people at Tukleya, not just on the investment team, but on all the operating teams. There isn't a lot of management that needs to happen. And so over the last couple of months, I think one of the things we realized is it's a very small amount of incremental load to do the steward job. It's mostly just serving as a thought partner for other people in the organization who kind of already know what the right answer is.

2:24:09And so there hasn't actually been that much incremental work, which has been a nice surprise. What is unique about Sequoia's surface area of work to be done? I mean, I know there's the RIA transition. Is there a public markets desk? Are there traders now? How big is the organization outside of what people think of from a classic VC partnership? What else is going on at Sequoia? why you need that one yeah i mean you know what's funny guys i think people would be surprised at how small sequoia is you know like the i mean we i think we barely have double digit general partners in the business right the entire firm is pretty small and so i would tell you this and i mean this sincerely like i think people tend to overestimate like surface area right of what we have in terms of like management scope and realistically the most important thing is that the stewards are awesome investors and people that great people want to work with you know and so the thing i didn't say that's what you guys were i said that's like an important thing for you guys that's the idea that's like that's the standard now we'll talk about it yeah that's what they're supposed to be no but obviously like so truly like i would tell you the thing that's most important for these guys is to be great investors yeah it is to sponsor investments in the best companies and to continue that because like sequoia's entire thing needs to be that we back the best companies in the world.

2:25:29If we keep doing that, everything else follows. If we don't, you're going to be the best manager ever. It's like a GP or a steward that's not investing as a CEO with bad product sense. Can they really be a truly incredible CEO if they don't understand the product? You lose your moral authority. We're too small of an organization. There's no management job available at Sequoia. It's just too small of an organization. Yeah. Ravi, how are you thinking about the specific advantages of starting a company from your experience at Sequoia? There's obviously going to be endless industry plant allegations that you'll have to beat, but I'm sure you'll take those on head first.

2:26:10Well, I guess one question would be like - How much of the company do you build beforehand? How do you actually think about how you want to build this company? What are the axioms that you're following? Yeah, yeah, yeah. Go ahead. Jordy, were you going to say something? Well, yeah, and I was going to say, what qualifies as an opportunity that is worthy of leaving an institution? Because a lot of the ideas that you think are good, somebody will come to you and be like, I'm going to do it. And you're like, that's great. I just write you the check, and then you go do the hard work. But this is different.

2:26:38Well, the pressure is immense. You basically have to put on an absolute master class here. There's no excuses. You have to achieve greatness. You don't think I can just yell at myself to grow faster and burn less? that's not how this is going to work one of my favorite portfolio reviews is Ravi was unfurling this beautiful monologue about what was going on in some company, it was probably a five minute speech it sounded great, and then when you boil it all down he basically said grow faster, burn less just five minutes of next words this thing happens at the ear okay so the real answer I guess the first thing is Jordy you know this, I'm not leaving, I'm changing my role I'm going to go from a general partner to partner on the boards, all that.

2:27:23But look, it is a high standard. This job is amazing. I love this job. I love our team. And I love the founders I get to work with. I think the real thing that pulls it towards is not the specific idea. It's the specific moment we're in. I do think that AI is changing everything. I think that like, I wrote this thing maybe like a year ago, AI or die, which was just sort of like, can you see the progress that's happening? And I really believe the world belongs to the fast moving, reactive, responsive company right now that can get the best people in the world. And it doesn't matter if they're an incumbent or they're a startup.

2:27:54But I think that you like being able to move quickly and respond to that is the biggest advantage that you can have. And I found myself thinking about that all the time. And after writing that, I was like telling all these companies I work with and even companies I don't work with, like, look, this is what I think it's about. This is what I think we got to be doing. And then I was like, man, I like really do feel passionate about this. I want to do that myself. And so the real thing that happened was, I just wanted to be on the field. Again, I wanted to build a team, I wanted to go after this.

2:28:22And I think the thing that I found was that the fact that I could then do it while still maintaining my relationships with my partners, the fact that I can stay on some boards, that made it so much more like something more I wanted to do. And then the other thing is, and I haven't shared this yet. And I'll share with you guys when the time is right. But like, I have a co-founder who's out of this world, truly out of this world, like way better than me. Someone that will make you guys bang the gong when you guys hear who it is. Are you going to be the show pony or the workhorse? I mean, I think it's pretty obvious.

2:28:56I think it's pretty obvious that I'm the good looks of the operation. I mean, I'm surprised that you'd ask. But put it this way, like when I told the kids, like maybe, what do you think of dad starting a company? They were somewhat like, well, I don't know. What do you think the implications are do we have to move if this doesn't work do they call you unk dude uh basically okay and i was like how would you feel if this person was the co-founder and then my kids were like well we actually have 750 of accumulated birthday money maybe we could lead you lead your get him on the sequoia list for future they did not call me unk but uh andrew's tweet was an all timer today all time so good how how are you thinking about uh timelines with the new company it feels like you can build products so much faster today than maybe you could two years ago that there's maybe more of a value in in staying uh really really quiet actually staying in stealth and and making some more uh progress before you come out the gates and then invite a bunch of people to try to come compete with you yeah i think listen we're going to talk when we have something to say right we got to go and build this thing i do think to your point you know the sierra guys are very good about this and they have this language of like in ai world a year is a month right or you know whatever whichever way you make it faster but basically like a month is a year you know uh you know a week is a month and a day is a week and the idea is just like you got to go fast you need to be super responsive you guys know i'm big basketball guy coach k has this great quote you know i'm not a world-class predictor but i am a world-class reactor like that's what we got to be in, you got to be fast and truth seeking.

2:30:34And I think the other thing that's nice about being, you know, with Sequoia is like, we get to see the best companies in the world, you know, and we get to learn from them and see the pace that the best ones go. And, you know, Pat, you can talk about that, but I think that's simply something that is helpful. Yeah. How do you think about the particular AI opportunity right now? I feel like there's, there's a little bit of a meme that the best time to start a AI company is probably 10 years ago as a lab and wait around and then have this breakout moment. And the second best time was probably like the day ChatGPT launched and everyone sort of realized that this was real.

2:31:10But we're now two years into this. A lot of, you know, the default categories, the market maps exist. How do you think about just finding opportunity? Is it unlocked by just last year's advances? Or do you you think there's new categories that were not on the table two years ago that are now on the table? And I mean, this is your thinking, but also for anyone that's watching who might want to start a company in 2026. I kind of think that the premise that those other people have is flawed, right? And I'll tell you for real, like the biggest thing that makes a difference in whether a company succeeds or not is the people that are building it, right?

2:31:48And I believe that we have the most fierce competition ever, you know, right now. And it's only going to get more fierce. Right. And I think that you're gonna be fighting every day. And there's no like, actually, Sarah, whoa, that's wife wrote this awesome post yesterday about like, relevance decay, right? And how much more quickly it's happening. And basically, like, you have to fight for your relevance every day in the venture world. That is even more true at the company, like, it doesn't matter what you did yesterday. Think about recently the goodness that's happened from Google, right? The best thing that happened to them is the competition that they have from OpenAI because all of a sudden it lit them up and then they had to go and re-win all this stuff and re-get that mojo back.

2:32:31So even like the deepest moats in the world, you got to go fight for them every day. So the real answer, you know, John, is all we want to do is be in a space that we are willing to fight for every day and apply the latest technology every day and have AI native people working on it every day so that every day we fight again and earn our spot. And in my heart, I believe that more than anything, which is that there's nothing to protect right now. Even at Sequoia, there's nothing to protect. The only thing is what we go do tomorrow, and that'll be true at the company too. So I think that, honestly, I think when people are like, oh, the best time was before, I think that's like low agency thinking.

2:33:08And I'm like, I don't have any time for that. Like, you got to go out and get it. I can make a specific case for why now's the time too. Please. So I think if you want to start a foundation model lab, yeah, you're probably better off to have already done that. You know, we've kind of already seen that play out. One of our core hypotheses in the world of AI is that the value is at the application layer. I think even for the foundation model labs, we're starting to see that that's true. I would argue that now might actually be the single best time to start an application layer company, not because everything is white space, but because it feels like the playbook is finally starting to emerge.

2:33:41and specifically if you think about like the three major inflection points that we've seen in the world of ai i think the first was november 2022 when chat gpt came out and the world was exposed to pre-training i think the second was fall of 2024 when 01 came out and the world was exposed to reasoning i think the next one was actually the last couple of weeks where you see quad code with opus 45 and all of a sudden we see what long horizon agents can do yeah and it's hard venture capitalists. We're not in a position to try to define AGI. But from a functional standpoint, if you have a piece of technology that can just keep going and overcome obstacles and use resources and eventually think its way to the outcome that you wanted, I don't know, man.

2:34:27That seems pretty close to AGI for me. We have goalposts, physical goalposts here that will continuously move. Yeah, exactly. And so and so anyway, I think now that that playbook has like not quite been written, but you can kind of see it. You know, I think the ability for these application layer companies to go from a chat bot that in best case scenario, people use four or five times a day to an agent that is always on running six instances in parallel, 24 seven, doing the work of six human beings. there's just a dramatically different impact that application layer companies can have today using the most recent playbook versus what they could have done two or three years ago.

2:35:09I think for that reason, it's a great time to start a company. Can I have one more stat real quick? Is that all right? Dude, I think that I so agree with that. I think also, if you just kind of think about this, I could give like a 10x engineer that has become so popular in Silicon Valley. I think Steve Jobs talked about it, whatever. I think that the leverage available to great people is it's never been higher and it's only going to get higher. Right. All these things you guys see about the value of agency. And it's like all about like, how much do you want to get your idea into the world? I think that I don't know how to do the math perfectly of like, is it a hundred times person or a thousand times person?

2:35:46But I think that the leverage available to the best people is insane. That's a huge aspect of the new thing that I want to build too. And I want to build with our co founder because this idea that I believe in of like people are power laws, right? People follow power laws. I think that's true and it's only going to get more defined. And so what Pat's saying about like, you know, the leverage you can give to somebody with today's technology has never, ever, ever been higher. Do you guys have any type of internal philosophy around, it feels harder than ever to predict like two years out. Like I think in 2020, you had a good sense of like what the world and what software was going to look like in 2022.

2:36:26And it feels much harder to do that today. Do you guys have any internal philosophy, you know, similar to Bezos thinking around people are going to want things like cheaper and faster. And I'm just going to focus on that. The world's going to change, but people will still want things that are cheaper and faster. Do you guys apply any thinking like that around when you're looking at investments, Pat, maybe at the, at the late stage or Ravi with, with, with your new company around like, okay, A lot of things are going to change. Potentially, we can imagine a century of progress in 20 years or 10 years or eventually.

2:37:00Two hours. Who knows? So how do you build something that's going to be durable and, again, relevant as you get an increased rate of change? What's your thing on inevitable? Yeah, yeah. I think there's a few things. So, yes, I think and I think Pat and I agree on a bunch of this, too. But I think, one, you want things that are early and inevitable. right? Like, I think that there are things that when you see them, they're like, well, that definitely is going to happen. And just to like go back in time, I think, you know, when I joined Instacart in 2015, this idea of like, are people really going to shop for their groceries in a hundred years, the way they shopped for them 80 years ago?

2:37:35Like, it certainly doesn't seem like we will do that. You know, this is inevitable that it will go and it'd be different. I think that to your point, it is harder to figure out what things are inevitable right now, because the world is changing super fast. So I think one, you got to be like more limited in that. Right. Of, you know, what are the what are the industries that will be durable? I think the there are two things I would tell you to answer your question, though. One, I think network effects are still potentially even more powerful than they've ever been, which is I think if you get a company with a network effect and you execute with excellence and speed, I think you can keep going and build it even up more.

2:38:11And I never want to predict what the AIs are not going to be able to do. But I think it would be hard to say, press this button, cloud code, and create a network effect of highly fragmented buyers and sellers. And so I do think network effects can endure. And then I think the biggest thing is the people, which is you need the people that you will trust to go and face these realities. And it's the same way, honestly, like I know I got called unk on Twitter today, but I'm going to go with this. it's the same way with your kids which is you want to prep them for every possible situation that's ever going to happen in their life but the reality is you can't and all you can do is make sure that they're actually good at reacting to tough things as a general matter and that's the same thing i think that in a value system yeah what's the changes we're going to see what you want is to trust that the people you have are good at responding to those things with truth seeking with agency with aggression uh and i know on that dimension i know pat and i agree there's also Also, there's a Jamie Dimon line, which is it's easier for me to predict the next 10 years than it is for me to predict the next quarter.

2:39:13And part of what goes into that is the forces that shape the next 10 years are kind of so big and so obvious that you can actually make in some ways higher fidelity predictions over a longer period of time. and I think similarly with our business if you look at um like for example can you imagine a version of the future in which doctors aren't using all of the world's medical knowledge on an application in their pocket to make better decisions at the point of care of course not like of course that's going to be a thing and you know like there happens to be a company open evidence that is doing that today for a decent think of the doctors in the country but like obviously that's going to be a thing or by 2050 are people going to drive cars in 2050 I have a hard time believing they will.

2:39:56It's going to be the way people ride horses today. You might do it as a novelty, but it's not going to be the way you get to and from point A and point B. And so there are some things where you just know that it's inevitable. And it's a question of, okay, well, what's the path from here to there? And who is it that blazes that path? And that's where it can be tricky. And I think that's where Ravi's commentary on the people really come in. Because one trap that it's easy to fall into is theorizing on market structure and different technical approaches. and the reality is if you can figure out the best people, they're going to figure all that stuff out.

2:40:28They'll figure out the right technical approach and the right business model and all that stuff. If you just figure out the right people, they'll probably find the path. I think one challenge right now for founders that are trying to navigate the world is 10 years ago, if you were looking and trying to understand the dialogue and different narratives and conversations happening in tech, it would be 99 % market analysis, product analysis. one percent science fiction fan fiction and now the the narrative and the conversation is like 50 50 it's like some like kind of like tangible analysis of what's actually happening and how markets are evolving and then 50 like sci-fi fan fiction of people writing like it's possible that in two months a galaxy like you'll be able to buy a galaxy what does this mean and so like you kind of need to you you kind of need to like drown that out and like pay attention like that goes back like just talk to customers what do they what do they need today for sure react to the the game on the field do you guys think that uh we were debating earlier it feels like ai is is doesn't have its steve jobs from a messaging standpoint like i would love an hour an earnest you know conversation of an hour from a from steve jobs or a steve jobs like figure talking about because i feel like society broadly underrates ai they see the slop videos and they see the idea that they're electrical bill might be going up and they're like, I hate this.

2:41:52Or they see the slop and they hear they might lose their job in a couple of years or they can't find a job. And they're like, I hate this. And it feels like we don't have anybody right now that can go on, that can go like when, when, you know, as, as great as the Elons and the Sams and the Darius and people like this are as operators and builders and visionaries, when they go on podcasts and those videos go out, the comment section are all like, please, no, stop, turn it off, you know? And so it feels like we're missing. Or maybe it'd be impossible. I don't know. What do you think? Oh, I agree with you.

2:42:27I think we are missing that person. I think Pat and I were both in a meeting yesterday, though, that this kind of reminds me of. And I will share it on his behalf. But like Alfred shared a story the other day, yesterday, about his dad. Okay. And I think it is pretty instructive in terms of this thing. So Alfred's dad, I don't think this is going to surprise you, was a pretty brilliant guy. But what his job was, was to be a human human calculator. OK, like literally sit in a row, like do math, like, you know, be a cell in Excel. Right. And just be a human calculator. And at some point, what technology allowed was for him to not have that job anymore.

2:43:10Right. And someone with this giant brain and this ability to produce and help society could all of a sudden not do math and put numbers into one cell anymore. And he could have way more impact and build an accounting system for the company that he worked with. And all of a sudden, all those other people who have huge brains, right, could go do that because of technology. And he made this point, which is like, look, technology is neither good nor bad. It's what we do with it. Right. The same technology that powers a nuclear bomb can power a nuclear power plant. Right. And so the idea is like, what do we do with it?

2:43:42What do we do with it? What do we do with it? I do think that a lot of what people are doing when they go and talk about the technology is they talk about all the things that might happen. I would rather us talk about the fact of it's going to get more and more and more powerful and it's more and more incumbent on all of us to make sure we use it for something that's great. And I actually genuinely believe that. Like I've written about this before, but like, you know, if I could give my kids one thing, it wouldn't be kindness. It wouldn't be curiosity. It'd be agency. And this is that same point, which is like, listen, the technology is going to be what all of us make of it.

2:44:13You know? And I think Alfred's point sat with me, which is like, he talks about his dad being able to do more with his life so that his son could do more with his life. And a lot of that's due to technology. Like, there's nothing better than that. Yeah. Well, that's a great place to wrap it up. Thank you so much for taking the time to come chat with us. And congratulations on the move and everything. We're very excited to hear. For the new company and the evolution of the role. Buried the lead, but we got to have you back on as soon as we know more about what you're building. And we would love to do it here live.

2:44:43But congratulations to you both on all the progress. Hope 2026 is a fantastic year. And happy new year to the whole team. Happy new year to the whole team. Thank you, guys. Cheers. He mentioned Jamie Dimon. There's some breaking news about Jamie Dimon. JP Morgan is taking over the Apple Card program from Goldman Sachs. That's very exciting. Also, let me tell you about Turbo Puffer. serverless vector and full text search built from first principles on object storage fast 10x cheaper and extremely scalable and you know who we got next we have Ben Smith from Semaphore on the best day of 2026 how you doing man look at this setup good to see you again look at this setup thank you for having me upgraded setup new round new setup new round new setup wait the dollars are already at work I see this you can spend 30 million dollars on a podcast Look at us.

2:45:36We have a gong. We have a horse. We have all sorts of stuff. We need to ring the gong. Give us the details. What was announced today? Media is back. Yeah, media is a hard business. I've spent my whole career mostly at media startups. And it's exciting to be at one that's working as a business. We were profitable last year. Wow, one person clapping.

2:46:03I mean, honestly, that is how I feel. Like I'm a journalist. It took me a large part of my career to realize that you're trying to bring in more money than you spend. Because I'm mostly, you know, obviously trying to hire more journalists. But, you know, it's a tough business. And having been through a bunch of ups and downs, it's just very exciting to feel like we've kind of figured out a sustainable model to do really quality journalism. That's great. Talk about why true journalism, not a newswire account that's sharing fake news, is more important than ever. Because it feels like actually getting information from a journalist that did original fact-finding on a story is actually more important than ever.

2:46:45I used to trust stuff. I feel like you actually could trust a headline on social media a lot more five years ago than you can today. And I think it's only going to get more insane as you can't even trust, like you will get to the point where you can only trust in some situations, somebody that actually did the fact finding because somebody else could make a video of some news or an interview that just never even happened. Yeah, I mean, I think that, you know, and particularly for our audience who in these different verticals that we're in from, you know, from tech to finance to DC are often the most informed, the most plugged in people, the people who ought to have access to the best information.

2:47:27They probably like you and me feel like on one hand, you're totally overwhelmed by the volume of incoming. and then on the other hand don't know what to trust. And so we've just focused very, very intensely on delivering kind of careful, straight up the middle trusted information from journalists who like good beat reporters are real experts. And often in the kind of traditional journalism, you're supposed to kind of hide your point of view or find some way to smuggle it in through expert quotes or adjectives. And I think like our view is, you know, the audience, particularly sophisticated audiences caught on to that.

2:47:59You'd rather just hear directly from journalists who knows what they're talking about, hear what they think with some room for disagreement. But really, the place we found value as a business, too, is both in these email briefings and in these big convenings, in this big one we do in Washington, that people are just very hungry for trusted, really smart, dense information from the source. Yeah. What are the underrated strategies that you use? I feel like Semifor is interesting because it's a place that has the patina of legacy media almost. And I mean that in the best way possible, in the fact that you land on a semaphore page and you trust it with the authority of other larger, older institutions.

2:48:37And that's not true for every new blog or sub stack that pops up because anyone can spin those up. Anyone can spin up a website, but you've built a credibility very quickly. Do you know, as you reflect on that, how did that come together? I mean, I think it is partly that you sort of have to realize that we're living in this very kind of talent-driven moment. And we definitely kind of built it to provide a platform for great reporters and great beat reporters who mostly, with some exceptions, but mostly aren't going to go out and do a substack. Because, you know, particularly if you're a beat reporter, you might be telling this side what they want to hear today.

2:49:12But tomorrow you might be telling them what they don't want to hear. And that's not always the best sort of creator model. And so in any case, we provide a sort of platform. Not to mention some of the stories. There's certain stories that take six months to do properly. And you can't do that if your audience is like, I pay you monthly for this thing and you're not delivering. Yeah, and you might need legal support. You might need a team, some editing. I mean, we've broken a lot of news because we have a guy in Riyadh and somebody in Silicon Valley. And a lot of the chip stories are really Gulf, Washington, Silicon Valley stories.

2:49:46Sure, sure. And you need legal support. But no, but I think it's funny. Almost what you say about our design is true. Like that's definitely we are trying to, you know, take the best of the values of legacy media in terms of fairness and reliability, but then also give a real kind of condensed intelligence. I actually think the thing that people that helps people trust you now is if you can pull in points of view from people who disagree. A lot of what we do is try to read across the whole Internet and say, here's what the Chinese media is saying. Here's what the Japanese media is saying. Here's what the right is saying.

2:50:16Here's what the left is saying and not try to shove our own perspective through. Yeah. What about the events business? I'm very interested in understanding how you're splitting your time, how Semaphore is thinking about these two. There are obviously a lot of synergies, but they are two different projects. I imagine there's different folks staffed on each side of the business. Walk me through the thesis there. Yeah, I mean, this is actually sort of a nerdy journalism industry point. But a lot of the events business in newsrooms, the newsrooms I've come up in, it's like you have a journalism business that's often based on scaled web advertising.

2:50:49that starts collapsing and you panic and look for other businesses that work better and staple on an events business. That's what a lot of news organizations have done for, you know, to better and worse degrees. We definitely started with the premise that we're talking to an audience and it's the same audience. We're reaching them in emails, but these are decision makers. These are people, the tops of government and businesses, reaching them in emails and conveying them in person. And they want to hear from the same journalists. And so our journalists who are writing the briefings are the ones doing the interviews, are the ones figuring out how to structure an event so that it's interesting.

2:51:21But of course, as you say, also, in some sense, as an old blogger, it's incredibly easy to sit in your pajamas and type things and then incredibly hard to put on an event where the security is perfect and the food is perfect and the music is great and the staging is great. So we do have an unbelievably capable team of people who do that. Is there something, just understanding like the journalism that happens at an event, I experienced this for the first time last year where every interview that happened on stage, the key quote or the key fact that was discovered was turned into an article. Is that sort of a virtuous cycle where the events businesses and the actual publications can work together synergistically when it's done right?

2:52:06Is there something that there may be less disparate when they're done well? yeah for sure and I would actually put it more on the other end which is like you definitely go to events that are not journalistic and that are fundamentally kind of promotional and the interview is often like the chief marketing officer of company A is interviewing the chief marketing officer of company B and the thing is like journalism and tough interviews bring a kind of tension and drama and interest and you lean forward Dealbook this year was amazing it may as well have been a pay-per-view boxing fight in some of them and it was amazing content It was great content.

2:52:39It was so good. Yeah, and people want to watch, you know, like a well-informed interviewer. And again, like whether they're a journalist or not, actually, like professionally, like ask the hard questions. So the thing is like smart CEOs would also rather be asked hard questions than sit on stage for an hour and like recite monologues that they memorized. Yeah, I want to watch a serious journalist ask a public official a hard question and have that public official turn around and call a pop historian. That's what I want to see in effect. Exactly. Yeah, we were off air. We were doing – we got invited to like moderate a panel last year and the PR person gave us some questions.

2:53:18He was like, here's some – we'd love if you asked some of these questions. And the first question was like, you have changed the world in so many ways. How could you possibly do this? And we're like, yeah, I don't think we're going to ask that one. Right, because you're thinking about the audience, right? Yeah, having an interesting conversation. Right. But what was the real catalyst to raise your profitable? And that gives you the luxury of saying, like, we're going to be here for a long time. But I imagine there's a lot that you want to do with the money besides your new podcast setup. Yeah, well, once, you know, with what's remaining from this lavish room.

2:53:57Yeah, you know, I mean, I think really two things. One, we're going to hire some more journalists. Like, we're, you know, we're a very light team. I think we're about 50 journalists in their places, particularly the Trump story in D.C. and the global business story where we just have some hires we want to make. I don't think the newsroom of the future has 1 ,000 journalists the way the old ones did. It's kind of like in a post-industrial world, it is fewer people, I think. But between the technology that helps you and the audience wanting to connect with individuals, but still, we are very eager to hire some more great journalists.

2:54:28And then, as you would imagine, the convening business. It's like an expensive business. We're renting out the Conrad Hilton for a week in Washington in April. And that's like, it's amazing. That's great. That's great. I want to ask you about the anatomy of hard questions. I was listening to Joe Weisenthal talk about this. And he said that oftentimes audiences want people to ask hard questions. And they imagine a situation where interviewers send down someone and they say, are you a fraud? and the interviewee just says, oh, you got me, I am a fraud, instead of just them shutting down and just delivering a talking point.

2:55:06So what makes for a great hard question where something's actually learned? And when's the right time to move on from a hard question? Because we have a chat, right? So if we're talking to somebody, people will be like, ask them about this specific thing that happened in 2019. And we're like, does that need to be rehashed? I mean, there's like 50 other interviews that got into that. It was not great. but let's focus on what matters now. Yeah, it's funny. I think I may have been Laura Loomer's first victim many years ago when I was at BuzzFeed and she came up to me and she was still kind of young, nervous, Laura Loomer, and her hand was shaking on the camera and she just asked me if I was fake news, which is like one of those questions.

2:55:48Like, what are you going to say? You got me. Ben, fake news, Smith. I think actually it's sort of about creating an environment of mutual respect almost in a certain way where they feel committed to the conversation and you're asking serious questions and you're hopefully asking things they haven't necessarily been asked before but that are really top of mind. And whatever is the core question, like why did you make this decision? Like when I look at this decision, it looks kind of reckless. Like why would you do that? and just sort of sometimes kind of verbalize the criticism in a respectful way and really push them to actually respond.

2:56:27Like bullfighting, you know? The journalist has the thing and the bull is running. Sometimes the bull runs straight into the journalist, right? But, you know, it's a dance. It's a great metaphor. Nailed it. And sometimes you want to just run right into them, though. I do think, like, if you feel weird and bad asking the question, sometimes that's a really good question. Like, if you feel like, ah, this is a little awkward. Yeah, yeah, that's wild. We got to hit the gong. Yeah, give us the details of the fundraise. Yeah, who came into the round? Because it was really a who's who of Henry Kravis.

2:57:02Yeah, it was really, I mean, it was honestly like a great vote of confidence. A number of our existing investors came back in, including Henry Kravis, David Rubenstein, George Palo LeMond, the Gallup organization, and then some new investors, including a couple of great European media investors. Again, I'm Thomas Leeson and Penny Pritzker, the former Commerce Secretary. That's right. Well, we're excited to see you put it to work. We're very excited for the event this year and the rest of the year. Yeah, I hope we can get you there. Do you travel? Do you go east? We do. Can we drag you to this event?

2:57:37That would be a lot of fun, yeah. I mean, let's check the schedule and stuff. We're working on figuring out how to bring the show on the road and still do our show while we're at other things. It's a lot of... The show must go on. That's our non-negotiable. The show must go on. I would love to find a way to get you on the road. It's April 13th to 18th in D.C. Cool. Yeah, we'll talk. Prepare for your Trump interview. Fantastic. I don't know if we'll ever... Purely business and technology focused. We should conspire on it. We can talk to him about Truth Social or World Liberty or any of his many businesses.

2:58:09We can get Saks. I bet Saks would talk to you. I don't know if he'd talk to me. Yeah, yeah, yeah. We have fun with Saks. Let's work on this. I introduced him at Miami Tech Week three years ago or something. I was the emcee. You got to ask him hard questions. Yeah, that'd be fun. Well, thank you so much for coming on the show. Congrats on all the progress. Yeah, congrats to the whole team. It's awesome. Like you said, vote of confidence. And I'm excited for you guys. Sometimes you're like a company raising money, and it's like, okay, they have more money. But I'm genuinely excited for you guys to have more money.

2:58:38Yeah. Be able to do more. Thank you, guys. Thank you. and thanks for having me on. Awesome. We'll talk to you soon. Cheers, man. Have a good rest of your day. Goodbye. Our next guest is Jacob Ritamaki. He's written a fantastic piece about humanoid robots. Before we bring him in, let me tell you about Console. Console builds AI agents that automate 70 % of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. Let's bring in Jacob to the TBP on Ultradump. Jacob, how are you doing? Hello. How are you guys doing? We're doing fantastically. Great to have you here.

2:59:13Is your 2026 off to a good start? I think it is, yeah. Since, to be honest, just some backstory for why I'm here. About a month ago, a friend of mine was like, oh, you have some interesting thoughts about robotics, about kind of the data center market. You should write something up. But it's kind of like a small piece. And then it took a month. Instead of letting go, a couple days, it spiraled. We had a whole section. Dwarf Kesh released a piece, so we have a section on that. We have a section about kind of the future. We have short stories. We have a whole financial model we've built out. It really spiraled.

2:59:51And, no, I'm having a great January because it's no longer raining in San Francisco. It's actually sunny today. I think this is a good omen. Yes. I believe we're in omens. In 2026, omens are in. Omens are in. Omens are in. Omens are in. That's a great call. Omens are in to be an omen maxing, yeah. I think Tyler, he speaks a lot about this. Yes, yes. I need to be on the, you need to be open to omens to find them when they're sitting. I think so. I think that you do have to be open to. strange things happening uh since i think that's kind of like you know the talk my book for a little bit uh But like, that's kind of the point of this essay is that not only is this going to happen a lot faster than I think people realize, it's going to be a lot stranger.

3:00:34Like one thing I've heard people bring up is this idea that as you could call it like the bifurcation theory, this idea that as we get, whether it's on AI or whether on robotics, we're going to get this like robot produced quantities of goods. Maybe it's images, it's media, maybe it's clothing, maybe it's food, maybe it's these other sorts of opportunities. You have people like Ari Emanuel kind of betting on the idea that there's going to be this split. There's going to be the live world and that you're going to have like the human rare quality stuff and then like the infinite robot slot. But I think that's you can add a little more nuance to it.

3:01:13Like, for example, I think that the idea that human only fashion is probably it's going to be very niche. And the reason why is simple. If we look at something like Shine and we say, okay, we can cut the costs another 10 times and the quality is something you would wear at the Met Gala, most people, frankly, aren't going to be able to tell the difference in their tailor. Maybe we could get the menswear guy on. Maybe he could tell. But I feel like most people, they're not going to be able to tell the difference. They're just going to click the buy button and go. But there is something where I think that like in healthcare within an industry, you can split it up into sub portions, like the logistics of actually bringing medicine to people in like an urban hospital or someone like an NYU.

3:01:55That's probably going to be done by robots. But the actual care for people, like people want if your child is sick and about to die, unless if, you know, this doctor is about to do an operation, you don't want to see a robot looking over your child. You want to have somebody to be able to kind of absorb that fear, to absorb these emotions. And if you take that and you say, okay, wow, that was like maybe slightly different than what I would have expected and apply that to literally every part of our society in the next decade. Yeah, it's going to be a lot. It's going to take you a month. It's going to be hard.

3:02:28And I'm glad that people starting to see this. That's kind of why I wrote it. Where are we in terms of humanoid robots? Or would you even use that term? Is it more just useful to think about physical instantiation of artificial intelligence, just robotics broadly? Because maybe they won't look like humanoids, but it's still going to be transformational. Are we like, you know, you see these stats where I think Amazon employs a million robots already. Do you see it more as like a continuous process? Will there be an iPhone moment, a chat GPT moment? Like, what are you waiting for? Okay, so I think there's a couple of ways we can look at this.

3:03:07One of them is a really interesting split. It's between manipulation and navigation. So navigation has been a much easier problem. And the reason it's an easier problem is that we've been able to use classical methods. We don't need to collect a lot of data for, you know, a warehouse robot that kind of like moves the boxes around, even self-driving. Like it's not, self-driving wasn't the hard problem. Getting it reliable enough so it doesn't kill people was the hard problem. But manipulation is difficult. How do you encode this? Like an idea that Andres Karpathy kind of spoke about in Software 2.0.

3:03:43You can't really – you can write a program to say, oh, I want a robot to go forward, and it's going to go to left. It's going to go to right. How do you encode this idea of I want it to pick up this goldfish? I'm not sponsored by them. Maybe someday. and uh like i think that uh you know that's kind of a weird thing about the robot future is that um i've written about robot holidays i think there's gonna be probably some weird relations there's gonna be all sorts of cults it's gonna be you know there's uh um i also wrote i what is what is what is getting one-shotted or or having l psychosis like like humanoid robot psychosis that feels i mean i think that like isaac asimov he wrote about this back in the 60s you have robo psychologists like they literally wrote about like this robot going insane because the positronic brain it got modified the three laws you kind of you know i think if you kind of remove the rule of like wow maybe we shouldn't kill people that would be bad yeah uh what about uh there we we were talking uh reading a post earlier about uh tesla with optimus like doing a bunch of supplier selection, seems like they're gearing up to actually make a lot of these things.

3:04:56And I think some people are somewhat surprised by that because everything we've seen so far from humanoids has been like, kind of like cool, cool demo, but not like, oh, I need this in my home today, or I need this at my warehouse today. Yeah. I mean, I think there's a couple of things. One is that on the home versus enterprise, enterprise is going to be a lot more valuable. Not only because home is distributed, you have safety stuff, the costs. There's also this weird tax thing in the one big beautiful bill. It's called the 100 % bonus appreciation clause. CFOs, you should listen to this. You can depreciate whatever asset you want.

3:05:32It's uncapped in a year instead of five to seven under this, as long as it's kind of in the US. So you can do it for data centers, robotics. Like, I think there's just a lot of things that are going to push for enterprise adoption first. But then within enterprise, I think the supply chain, why people are going to get side, you're just going to get blindsided by this, is that a couple of things. One, if you're focusing on how bad America is at manufacturing, you're focusing, it's important, but you're focusing on the wrong thing. You need to focus on how good Asia is at making stuff. In particular, Pyeongyang in Malaysia, Bakni in Vietnam, Taiwan underrated, South Korea, Japan, obviously China, Shenzhen, um wongdong lots of places so asia is going to be really important you can also repurpose other industries i talked about this with rare earths processing since rare earths rare earths aren't rare you know as trump said uh but like the actual uh processing of rare earths in the same way like standard oil became a monopoly off of processing china has like a processing monopoly there you can just repurpose the oil and gas industry for uh processing rare earths which i haven't spoken about people have spoken about it you know for finding the rare earths but not reprocessing and in the same way you can repurpose the automotive industry uh for like humanoid robots like you already have honda you have toyota these are already people that are integrating it you have the same actuators you have the same battery management systems you have everything else it's something where the auto oems were in a secular slump right now so if you're not if you believe that's kind of it's like the satrini thesis in some sense of that you know auto is in this sort of like secular slump.

3:07:12And then as we kind of like, in order to break this slump, we're also going to have robots. So it's going to be this double whammy of people are expecting, oh, you know, this sort of dying industry, it's stagnating, you know, profits are being competed away. Tesla is kind of, it has to sell the energy story, the AI story, the robot story, the cars aren't, you know, doing it as well. BYD, like, I think this is a Dan Wang point about China, it's weirdly more capitalist than us. Like the Tillion idea of capitalism is bad in some sense because you're competing, you're constantly, you're trying to compete everything away.

3:07:45So in some sense, China's more capitalist than us. Everyone's competing. That means that the auto industry is in a slump and it's looking for something to save it. I think robots are probably going to be it. And even China right now, like Unitree, there's kind of, it's whispers of that, oh, are they going to delay the IPO this year or stuff? Because the hardware is getting ahead of the software. So it's something where I'm like, I don't see the hardware. And you can just rely on if you have like, you know, expensive precision reducers or some of these other things. Like you don't need rare earths to make a motor.

3:08:15You don't need expensive precision reducers to make an actuator. You can rely on cheap stuff. The thing that's going to like do my like, you know, surgery or stuff is not the thing that's going to stock shelves. and we just have like UMI or like how people are collecting data now with the gloves. You can 3D print stuff. That's like a pretty good embodiment match. Like I'm just incredibly bullish. Like a few years ago, you could ask me, I said no. But now it's like, no, it's a sign that this is going to be big. It's going to happen fast. You had mentioned before, John, about, you know, humanoid versus other form factors.

3:08:49The key word to think about is payback times to borrow something from finance in that the faster your payback time, the more that creditors are going to want to lend to your business. It's not just going to be venture capital. It's going to be the entire private credit industry. It's going to be private equity. It's going to be RAS. It's going to be all of these other things. So you've got to think, okay, how do I drive my payback time down? CapEx is one component. You get rid of the legs. You have a wheelbase. Or you just even get rid of the mobile stuff. You just have arms on an assembly line assembling AI servers or GPUs, and you just crank the infinite money printer.

3:09:21but even more so it's not even the capex i feel like a lot of investors and a lot of people they focus on the bomb they focus on the capex they should be focusing kind of on the opex on oee on all of these metrics of saying wow if this thing is going to run like industrially rated robot arms already exist it's fine this thing is going to run for 30 000 hours and i built a calculator on the website so you can play around with it yourself this thing is running 30 000 hours and every day it's like 22 hours with some maintenance and it's like pretty close to a human or stuff that is going to be the dominant term for like whether I'm going to get a good return on investment what my I like my blended levered IOR is going to be all of these other sorts of things like there's just a lot that goes into it and um I that's why like I want people to read this like I don't want this to kind of be like oh I like this and then we had like a discussion once It's like, no, I really tried to talk to as many people as I could.

3:10:18Sit your butt down and study. Yeah, basically. It's like, it's going to be big. It's going to be a big deal. And I tried to write it to be fun. I don't want it to be homework. I feel like the idea of, I tried to write it in a way that's fun and not, because you could just go down and read some textbook or some schizophrenic supply chain reading or whatever. It's like, that's just not fun. but I tried to make this fun what's your thesis on land? I've had this idea that I was trying to find it but basically I've had this idea that if you can build things 10, 100 times faster let's say you could build a factory or multi-family apartment building you can potentially start getting a return much faster and it's cheaper to you know make infrastructure things like that that but yet physics the laws of physics will presumably still apply which means that it might be more convenient to have a factory like next to a city versus some somewhere random so i've had this idea that like it's possible there's like a situational and awareness style like real estate fund that could start thinking about how the value of land will change as you have advanced robotics that can kind of accelerate progress and just build things quite a bit faster.

3:11:43But how are you thinking about land in the context of advanced robotics? Yeah. So I'm going to back up a second. I think that the four factors of production classically are land, labor, capital, entrepreneurship. And all of those are covered in this, but we're going to focus on the land for a second. You can split it up into what is it going to look like from a consumer and then an enterprise perspective, because consumers and enterprises, they're going to be looking at this differently. From a consumer side, I think that the originals will appreciate in the sense that long Europe, long historical sites, long existing cities.

3:12:19It's going to be very hard. The idea of, oh, we're going to get cheap housing because construction is now done by robots. I think for Austin, for the South, we're going to have a lot of that. But I don't think that's going to solve San Francisco or New York's political woes. And then from the enterprise side, I think you're correct. I think that in some sense, the final offshoring may be the greatest reshoring we'll ever have in America of that. You go from being constrained by not having this like tacit knowledge of manufacturing or enough people or it's all expensive to now you have the energy resources, you have natural gas, you have IP.

3:12:56That's going to be very important. And yeah, maybe we don't have to put it right next to San Francisco. but you know you go out west go down south you could just kind of let things start to rip i know that texas in particular seems very primed from a regulatory perspective i would also say i think that like for the idea of land taxes or land appreciation or stuff that feels somewhat deep into the curve like i think this is why like georgia's um has always been like this great idea in theory but not in practice and this is kind of what dorkesh and philip talked about in their essay is that there's so much of the gains initially are just going to come from capital who owns the factories who owns the energy the data centers that by the time you get to the point where oh i am just going to be leopold i'm going to raise a trillion dollars i'm going to buy iowa um like at that point like you should have just been buying like stargate 2 you should have been going to new taipei you should have been with jensen you should have been in all these other things an interesting thing of land though is that uh i'm totally a big believer in the whole orbital data center stuff.

3:14:00Not just because of, you know, being friends with a lot of teams kind of at the SpaceX, XAI, some of these other places, but also like, I think that the thing about orbital data centers, I want to keep this short since you could go on a whole rant is that it trades off one problem, which is cooling. It makes cooling a lot harder in space because you can only do radiative for all of these other problems. You don't have permitting, You don't have land. You don't have a lot of this other stuff. Maybe you'll need to do some radiation hard and things. But I do think that the idea of space data centers like is not going to be crazy in some sense.

3:14:39Like I also think because I spent a lot of time saying if you're a robotics company, really be focused on the AI like infrastructure build out as a market. It's really good. like every robotics company that wants to be big you know is secretly a dyson sphere company they just don't know it yet like if you think about in the end of what can we do with robots like everyone's thinking so short term of like if i had 100 million laborers a billion 100 billion a trillion like what would they do at a certain point you can only make so many like mocha lattes or stuff it's like you got to start you know building the dyson sphere we got to start cranking um dyson sphere before macho 2100 or after 2100 yeah and if you enjoyed this conversation so far this is like basically 80 pages of this awesome except worse what's your what's your prediction for dyson sphere timeline 2100 before or after i mean like what do you count as a dyson sphere because i feel like if i'm sorry to be like a vantic like asshole about this but like what What do you count?

3:15:40What do you count as that? Is it like, oh. It doesn't need to capture 100%. Let's call it. But like a meaningful percentage. A meaningful. Let's call it over 10%. And definitely like a structure that is like gravitationally locked to the sun, not the earth. So it's not just like a bunch of random starlings scattered about in the stars. It's truly like around the sun. Before 2100. But then. There we go. I think that it, you know, we can hit the gong on that one. We're going to pull this up when it happens. We're going to pull this clip up. I don't know. But I think, though, for, like, the whole Dyson Stair stuff, it feels very much, I don't know if you've ever heard of, like, the parable of the back half of the chessboard that, you know, this king one day asked, he had kind of a checkers board, one grain of rice on the first one, two on the second, four on the third.

3:16:36By the time you get the 32, by the time you get the 64, it just swallows the earth. I think it's something very similar here. This idea of robots building robots, which is, again, in the essay. People should read it. That's the point of this. Read the essay. But FANUC has been doing, they're like this robot arm company. They've been having robots building robots for 25 years now. That's older than me, which is astonishing. But it's something where, granted, it's in a very limited, narrow capacity. of that you have to scope everything for safety and whatnot but it's the idea of like oh robots building robots that's some like sci-fi bullshit like some of us don't have to live in berkeley or whatever but you know i do think that it is going to be more plausible than not particularly because you know talking about the ai data center build out our stuff the odms that are making all the ai servers all the gpus everything all the chillers everything that's going into the data centers, or even from it as a prefab perspective, are also the people that could do consumer electronics.

3:17:38They're the people that could actually build the robots. So if you're servicing these customers or stuff, you're servicing these industries, it's like, wow, you know, they're going to want to start building it themselves because it lowers their costs. It increases their margins. It's going to be something where the market forces are going to be very powerful here. And that's also why, like, we spend a lot of time on the social sections of this of thinking about taxes about i think sovereign wealth fund initially like between besant and ludnik um there's a lot of really interesting ideas that you can start off with so you don't drive away the business community but i do think that there's a lot of factors pointing to like it's going to go from 2025 people maybe they saw a physical intelligence video or something to 2027 it's like holy shit this is actually happening like guys I know that you wanted a robot horse, John, or something.

3:18:31Yeah, we have the dog. I need the horse. I feel like the robot dog's a little played out. The robot horse, that's it for 2026. Nobody has that yet. That's a very... You would think they could just scale it up. Just scale the dog up. Make a bigger dog. They kind of have. I mean, the MIT Cheetah stuff. They kind of did scale it up, but it was like... But that's not the same. It looks lame. It has to look cool. Yeah, but I also have to look cool. I feel like that's also part of this essay was like, like between clog code and other stuff, like I got a lot of compliments on what it looked like or so on.

3:19:07I think that the Marshall cost of making a good website is going to zero. Same like physical labor, Marshall cost of physical labor is going to zero. And my website as well, like might as well. Like you got to make a good website now. I'm probably being clapped out. So I'm going to leave. No, no, no, you did. I was clapping for your website. It looks fantastic. Oh, thank you. Making a beautiful website for an essay is the new meta. Maybe the AI 2027 people, maybe they get some credit for it. But you also need a PDF. Is this available as a PDF? Yes, it is. It's available as a PDF. And also, if you want a secret, here's how you make a good PDF.

3:19:47So if we start with the thesis that Claude Code is God and does everything, um then of course well obviously i mean have you seen the new anthropic price 350 i mean uh sounds like the market capitalization not the share price but yeah i mean i think it's still grossly undervalued like add another zero or something at this point like um sorry sorry morgan stanley sorry michael frenchman that had that one but uh i think that like uh he yeah well i mean i think he's busy with xai and all that stuff but uh they also had their recent round um but i i do think that if you treat like what in my life can is secretly a code generation problem i think that making really beautiful pdfs is that because latex which is mostly used by like math nerds um to render um math research papers is a programmable way of creating documents and PDFs.

3:20:47Like if you wonder how Leopold, I never, I didn't do the footnotes here because my side notes and footnotes were completely crazy and it just like cluttered up the side and looked unesthetic. It looked awful. Um, and the website was the better medium for this anyways. But I do think that the idea of saying, Oh, I have this really great piece of writing. I'm going to put it in the clog code. It's going to render it in late tech. You can get an Overleaf account. It's free overleaf.com. Um, and then sign up. You can just like make these documents and you can have it be very expressive or so on. And then you can make like a really nice website to go along with it since it's not just about the raw content.

3:21:25It's also how you say it and then how it's presented in the same way of that. Oh, you know, I see John and Jordy, um, they're going down the tartine, which I thought was an SF thing. I was told by Michael it's now like it would start in LA, which is a bunch of bullshit like it really like that's some i it's like it's like people go to this is not like you guys ordering the um we invented tarts i'm not gonna say that open yeah we exported it to you folks exported it to san francisco wow first time that's happened um i think that uh but the thing though is that you know if you add like john and jory if you both had like oh we're gonna you know write about technology and business which i mean i i'm a daily active reader of john's newsletter so i think that you know we can pump that um maybe i should turn into a 90 page pdf every day just call it well i think you can render it as a website or you can you can spice it up i feel like it's 2026 you gotta not seem the same old you gotta you gotta you gotta wasn't it the whole lulu stuff is that you gotta be real you gotta be you can't be like all these other people i mean yeah there's opportunity well we've talked about doing a daily print newsletter somewhat like a newspaper yeah oh i think that like um the only problem though is that it's kind of like well i mean like colossus does it better so it's like yeah but that's evergreen that's ever that's evergreen this is more just you you literally throw it out at the end you're not yeah yeah yeah you're not like you're not keeping our most people are not keeping the four day old.

3:22:57It would be a beneficiary of robotics because it needs to be printed and delivered within like two hours of the news breaking. So it's like uncannily fast and that's a unique product. But who knows? Maybe it's too sci-fi. Maybe. I feel like that's a little too sci-fi. A newspaper, they write this thing, it gets delivered every day, make it make sense. It doesn't feel like... Can we interest you in some New York Times games and stuff? Can we interest you? we go we can do actually making the money an app yeah you should add some games to this yeah what's your game strategy vibe code is something schulte's building an rts what are you doing for an asshole thing like he wanted some games or other stuff fun i was like oh you know i'm going to skip economics and this i mean it's a slider that's not fun no we'll add games in the second version of this we need to build an entire stellar stolaris or hearts of iron for spinoff game dwarf fortress this was like schulte was doing over breaker he was honestly also i have to say like shout out to him he was a very i already knew he was going to be a very thoughtful editor he was like even more thoughtful and i think that his quote tweet in addition to others are starting to bring attention from people that you know i'm not going to be like the class or say who's reading or who's like following now or stuff it's like oh wow a lot of people look up to him like i'm over him like he's he's the goat he is the goat he is the goat let's give it up for shalto well thank you so much for coming on the show for fun always good to hang out anytime you want great to see you great to see you oh thank you and uh i'm glad your 2026 is going well dropping and just try to you know use the tools try to get one of these out every day please this one took you whatever a couple months try to get one out it took me a month but i feel like Yeah, we got to get down an hour.

3:24:47Every minute you got a new essay. That's new. Fast and I can read. A thoughtful essay every minute forever. Thank you so much for coming on the show. Hope you have a great rest of your day. And we will talk to you soon. Later. Well, is there any breaking news that we have yet to cover? Or is that where we should conclude today's story, today's show? Reggie, James, Bilt, The Situation Monitor. This is amazing. Global Activity Monitor has a TBPN integration and Intel feed, tech, finance, politics, news feed, stocks, crypto. So funny. Prediction markets, tech, layoffs, tracker, AI race news. Layoff tracker?

3:25:27Oh, wait, it keeps going. Wow. It's just a bunch of everything. Is the Fed printer on? This is amazing. This is great. Turn this into like a Chrome. Wait, it has today's episode live streaming on it. This is amazing. You can refresh everything. This is very cool. I like a situation. Yeah, we need this on the projector. all day long. This is great, yeah. This is cool. It has a map. You can click around and see new stories. This is really cool. I love a project like this. This is awesome. And in other news, the team got to the bottom of the large 3D holographic volumetric display. It apparently exists.

3:26:03It's a 3D display with no glasses required. Much bigger, almost the size of the table. Not quite. Looks a little bit bigger, but pretty cool. We'll have to get a demo of that soon, but that looks fun. Anyway, thank you so much for tuning in today. We will see you tomorrow at 11. We'll be back tomorrow. Big surprise, I know, but we'll be back tomorrow. We're coming back. We've got a bunch of great guests for you, folks, and we will see you tomorrow. Leave us five stars on Apple Podcasts, Spotify. Subscribe to the newsletter, tbp.com. We will see you tomorrow. Goodbye. Cheers, folks. We love you.

3:26:36Bye.