Yapping in Neuralese, GoPro v2, Jimmy Iovine in the Ultradome | Nikesh Arora & Andrei Serban, Kurt Tenenbaum, Philip Johnston

27:46Like, of all the charitable giving you could do, you know, curing cancer and helping solve hunger, marijuana legalization is pretty low on the list, but, you know, he has his choices. Company watches are in the news. First, let me tell you about Cisco. Critical infrastructure for the AI era unlocks seamless real-time experiences. A new value with Cisco. Good work is joking about them. Said the best rare company watches a thread. Of course, like this goes back to those old Rolexes. The Rolex Air King Domino's edition is a popular one. They also made a Rolex Halliburton, which is a more controversial one.

28:30But the Halliburton logo actually looks not as jarring as the Domino's logo, which is sort of crazy. There's a bunch of various levels of taste. GoodWorks joking around with an FTX watch. There isn't much time. The Teamsters Union, clock in, clock out. These must be fake. Cabot cheese. These are fake. Yeah, yeah, these are fake. But there are a bunch. Is this X one actually real? This one not. Nate's just joking around. But Google's done them. OpenAI's done them. There's been a few other companies that have done these throughout the year. You used to be able to go to Rolex and ask them if you were a large company, like do us a run for 30-year anniversaries of our most tenured employees.

29:14That has slowed down among Rolex, I believe. But I think Tudor is still in the business. I know that they did a run with OpenAI and maybe with Google as well, the Black Bay, and there's a few others. What is Jensen wearing, though? Shout out to Jensen Wong, CEO of NVIDIA, wearing the super rare richard mill rm 2705 rafael nadal calling it a gpu on the wrist this is a blackwell on the wrist yeah three million dollar price i don't see any i don't see any issue with this that's good i wonder what the occasion was i wonder i wonder uh if uh if he got this from someone specific or if he just picked it up for himself pretty pretty interesting i like it uh Let me tell you about the New York Stock Exchange.

30:03Want to change the world? Raise capital at the New York Stock Exchange. A little back and forth here between TJ Parker and Lloyd Armbrust. Lloyd built an entire pharmaceutical factory so we could sell drugs on the Internet. Should we watch the video? Let's watch the video. Okay. I'm Lloyd, founder of RoninRx. We manufacture and personalize GLP-1s for$78. Yeah,$78 a month for drugs like Ozempic. Do you know the reference point for this? Are our drugs even legit? No. Our drugs are super f***ing legit. Every prescription comes from a real doctor. It's a shot for shot remake. We collect your health data and use AI to help your doctor personalize it.

30:52And other companies have taken this video and remade it before. But it's kind of out of, it's gone out of style. a little bit. Well, yeah. Maybe it's coming back. Yeah, exactly. It's been so long. Yeah, it does deliver a lot of information very succinctly. But yeah, the Dollar Shade Club video, I believe, was produced by the Harmon Brothers, who went on to create a whole series of these sort of like designed-to-go-viral advertisements for startups, and a lot of them did very well. Anyways, TJ says, farm to table more like yc to jail really uh quite quite aggressive kind of thing you post as uh as a you know unicorn exited founder uh lloyd responds brother you sold drugs on the internet for one billion and then taught amazon how to do it if this is yc to jail you built the highway which is which is what are you saying that tj built the highway that you're on the highway to jail anyways tj responds and says you put a smarmy med spa business on the internet and are masquerading around as a pharmacist in a white coat as an english major tj actually is as bona fides as a real pharmacist so finding out i met a major in english he's they're saying uh lloyd might be the the dejan love of uh the pharmacy business yeah i don't know The putting on the lab coat, little bit of a LARP.

32:30I was always joking with one of my co-founders who does have a PhD in biophysics that he should wear a lab coat. And he was like, no, I'm not wearing a lab coat. I'm like, you're technically a doctor. Like, you should go by doctor. Or God says, bro, just wants to sell drugs online in peace. Yeah, the thing is, is like the rules of the road for pharmaceuticals, for drugs, the FDA, like these have been written. This is not the Internet where it's the Wild West and people don't exactly know what's a social media site. Oh, you know, what can you post section? What is it? It's not 83B. You know the one I'm talking about.

33:12Section 260 or something like 230. Section 230 is sort of something that comes up later. So there's this move fast and break things approach in the early dot-com era. Okay, are there regulations around ordering groceries online? Let's just test it out. But that's not the environment in the pharmaceutical industry. And so TJ knows the rules, and he's willing to enforce them on the timeline every once in a while. He'll let it happen. Should we watch this video of this boat? Yes. this was a crazy crazy video so a boat was going 213 miles an hour at the lake of the ozarks shootout which sounds like a great event uh flew in the air after crossing the finish line flipped and crap every time i see a video of boats racing like this it flips so i just have this i just have this understanding of like if you go that fast in a boat you're gonna flip yeah but i think they do it all the time yes i think this is probably a one in a thousand occurrence or one in ten hundred Hopefully not one in a thousand.

34:16Otherwise, it'd be every time. But I agree. To me, it's like one in five boat videos looks like this. So let's play it.

34:27Oh, the slow motion, too, was really dramatic. Everyone survived, which is insane. They actually stuck the landing pretty cleanly. Pretty cleanly? No, wait for it. Wait for it. I was smashing it. No, they land how they should. There's another angle that shows they landed perfectly, John. I think they were doing this on purpose. I don't like it. This is very, very risky. I do wonder. Jay Boutard says, what it feels like to long semis which go up and down 10 % every week and end up flat. Yeah, because he landed perfectly. I guess, yeah. I mean, one person broke a leg, one person walked away clean.

35:09Both survived. Very good news. A lot of commentary on the new pay packages over at Apple. Chase said, get a degree, get an office job, climb the corporate ladder, retire at 65. Congratulations, Tim. You did exactly what the system told you to do instead of starting your own business. He is 65. Well, his new pay package as executive chairman feels a lot better to me than his CEO pay package. A lot more flexibility. 47 million a year. Yeah. Hopefully less work. He deserves a little time away from the action. But Ternus making less. Ternus making less. I found there's 35 professional athletes that, like roughly, that are going to be making more than John Ternus next year.

35:58And anyways, I feel like it's a fair place for him to start. I hope he can 10X it and then maybe 10X it again, personally. a couple more orders of magnitude would be great but he's got to prove himself yeah for sure for sure uh what else is going on elon is making power turbine components in the wall street journal skeptical they say it won't be easy uh every everything has he ever done anything easy he chews glass daily that's his whole shtick is just doing things that seem impossible uh stocks Stocks of blade and vein manufacturers fell in response, but the threat to them is still remote. So let's see what the Wall Street Journal had to say.

36:43First, I'll tell you about public.com. Investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service. If you want to get into blade and vein manufacturing stocks, head over to public. Only a few companies make the crucial components for power turbines that AI data centers are so desperate to get. Elon Musk wants to go ahead and make his own. That has unnerved investors in this prized oligopoly. Okay, we're going to learn about the power turbine market for a minute. Over the weekend, Musk confirmed on X that SpaceX will start making blades and veins that go into natural gas-powered power turbines.

37:23I think Big Turbine wrote this article. Yeah, you think it's a little coordinated counter messaging? Yeah, they were enjoying their oligopoly. Yeah, maybe. By doing in-house casting at SpaceX, we can accelerate natural gas turbines coming online by up to 18 months, which is a profound game changer, he wrote in his post responding to a report from the information. Interesting. Wasn't Sarah Guo mentioning on the Investing the Best podcast that a lot of the, or she was talking to a hyperscaler CEO or someone who was in a place to know that was saying, like the bottleneck is real, it's very real, and there's nothing in the short term that's going to come online that will alleviate power generation.

38:08So that is where the real bottleneck is, at least in the short term. So in mid-August, Morgan Stanley published a report saying that SpaceX was planning such a foundry in Bastrop, Texas, based on the company's job postings. Shares of HowMet Aerospace fell more than 7 % Monday before partially rebounding on Tuesday. Helmet and Berkshire Hathaway's precision cast parts are the two biggest players in the market for these parts, which also include blades and veins for the aerospace and defense sectors. Smaller players, DPC's shares were also hit. It is premature to count SpaceX as a threat, the Wall Street Journal says.

38:44The shares of Helmet, Aerospace, and DPC might have been due for a breather. They are among the priciest artificial intelligence picks and shovels plays at 42 times and 45 times forward earnings, respectively. Turbine makers, GE Vernova and Caterpillar fetched 33 times and 26 times earnings for perspective. And there's a nice chart there to show you the price-to-forward earnings ratios for some of the AI bottleneck plays. And the blade-and-vein manufacturers are up in the upper echelon. DPC is the most vulnerable to disruption in this space. It is small, and about 40 % of the revenue comes from natural gas-fired turbines.

39:30While Haumat holds about half the global market share of components used in natural gas turbines, It is diversified across aerospace and defense with only 11 % coming from gas turbines. SpaceX will face barriers to entry. One reason there are so few companies in this sector is that it's technically challenging to make the blades, which must withstand extreme temperatures and rapid rotations. That feels like SpaceX's bread and butter, though. The casting process involves making a new wax mold from scratch each time. Making these parts requires the blade to be grown in a vacuum furnace as a single crystal of nickel super alloy, according to Nigel Chong, an analyst at Semi Analysis.

40:13Oh, Semi Analysis getting a shout out in the Wall Street Journal. Even a stray grain or hairline defect means the part has to be scrapped, he added. A new manufacturing line could scrap over half of its production for a long period, so yield will be difficult to get up. It is also a highly secretive process. Once the parts are produced, the ceramic cores and wax used to make them are destroyed, Helmet's chief executive, John Plant, said at an investor meeting earlier this year. He says, we're not getting distilled. Don't worry about it. We're good. We destroy every evidence that would lead someone to be able to copy us.

40:48That prevents competitors from reverse engineering them. So Helmet Aerospace's annual revenue from industrial gas turbines is up and to the right with incredible forecasts. And you can see the chart taking off. They're going exponential right now. A high scrap rate might matter less if SpaceX is making parts for its own use. Morgan Stanley's report noted that we would not expect SpaceX to be a material supplier of blades and veins for supply outside of SpaceX use. So they're going to use everything internally. Speaking of industrials, we've got to talk about rotor sales. So there was news in the Financial Times that Maersk is going to put a wind sail on their container ship.

41:39And there's a very interesting design because I see the image for the ship. And I'm like, where's the sail? Yeah, it looks like a smokestack. And I'm like, okay, does the sail come out of that big round thing? And no, it doesn't. That is what's called a rotor sail, which actually produces wind force and accelerates the vehicle without any traditional sails. What do you think? So there's an explainer video from Norse Power who makes these that we should watch a little bit of. We can kick this off. It's a one-minute video, but we can watch a little bit of this YouTube video on Norse Power rotor sails because it's a fascinating world I didn't know existed.

42:21And you need to know this. This is crucial. This is crucial. How do Norse Power rotor sails work? You might be familiar with curveballs in sports. Oh yeah. But what exactly causes the ball's path to curve? A spinning ball compresses air on one side and thins it on the other. The pressure difference causes a powerful thrust that curves the path. If you work at Norse Power, this drops. The Norse Power rotor sail is a large cylindrical sail. A common misconception is that wind spins it. Instead, it is rotated actively by an electric motor. The spinning sail compresses air on the backside and fins it on the front.

43:03I'm from the founding town in Denmark. Don't believe in the sail, though. Taking shots. Thrust is created in the same way for the football and the ship.

43:18In good conditions, Norse power rotor sails can actually produce more thrust than the main engine. Norse power, saving fuel, and the planet. And lastly, there's a photo of a rotor resale on a small catamaran that we think is a steal. I don't know how much this thing would sell for. Yeah, Tyler was looking at picking this up because he's been exploring the marinas in the area. Yeah. He wants to potentially live on a boat. Yeah. Well, I have the perfect ad read before our next guest joins. Let me tell you about console.com. Console builds AI agents that automate 70 % of IT, HR, and finance support, giving employees instant resolution for access requests and password resets.

44:01Our next guest is Nikesh Arora, chairman and CEO of Palo Alto Networks. He's here after fantastic earnings. How are you doing, Nikesh? Welcome back. Great. How are you guys? We're doing fantastically. I appreciate the little console plug right before this. We've been very happy to sponsor with that. It's hard not to be plugged in console. They're right on the laptop sticker. Is it a good company? It's a fantastic company. You've heard of it, right? That's a bit late to ask, but yeah, I should have asked you before. I think it's great. It is a fantastic company. We love the team over there. Had them on the show multiple times, and of course, talk about them every single show.

44:35Yeah, super excited for you guys to be partnering up. But we can get to console later. Let's talk about Palo Alto Networks. What's the newest development this quarter? What is the story that drove this quarter? You know, I've been trying for eight years to get the attention of customers to surface and cybersecurity. It's been hard work. But I really want to give a shout out to my friend Sam and Dario. They did a fantastic job getting the living Jesus out of everyone. They're pretty good. BDR, they're like your best. Yeah. Your best BDR. They're writing letters, protect us on cybersecurity. They talk about Mythos, they talk about Astra.

45:09It's amazing. Every CEO, CIO wants to talk about cybersecurity and how do you secure me. I love it. It's amazing. That's what drove a lot of the interest in cybersecurity. People have realized that Mythos was interesting because it can find a lot of vulnerabilities and there's a lot of interest. People want to talk about it. They want to talk about the capabilities of OpenAI. But very soon after the first five, 10 minutes becomes about, okay, wait, this is just the beginning. What happens after? When the next bigger, faster model shows up, what do I do? Then, like, okay, I get it. You guys can help me test it.

45:40What happens? How do I fight it if I get attacked? The answer is, well, you can only fight that with some sort of a consolidated platform that sits in the back that looks for this stuff at machine speed and is able to respond at machine speed time, which means you have to fight AI with AI, and that's where Palo Alto comes in because we've spent our life building systems that can respond in near real time or at machine speed to protect them. So that's kind of been the inflection point or pivot that's driven a lot of the interest in cybersecurity over the last six months. I think that trend continues to sort of accelerate both from a customer interest level as well as, you know, my friends are continuing to build better, faster models which can be weaponized.

46:24Yeah. What was the last three to six months like? Because you have these moments where the AI labs are causing a lot of discussion around security and overhanging all of that. I think people were mostly worried about when the open source frontier catches up and the attackers get those level of capabilities. and there's this narrow window that is sort of a window that continues to move continuously, but there's a window where Palo Alto Networks and other folks in the security space have to really get the posture correct. What actually changed? What was the conversation like? And how did that process go?

47:09How much of a boogeyman was open source? Because it was discussed early, but there were a bunch of different takes. Look, I think what has happened is even in the last six months, you've seen the capabilities of these models continue to rise. I read something that two days ago, Sam said that Astra, their new model, is so powerful that they're going to have to clip its wings and trim it down. So that gives you a precursor of things to come. I'm sure those capabilities will be caught up with, whether it's with other frontier LLMs or the open source community, the open source models, or Chinese models for that matter.

47:40So I think the capability is going to come out as hard and fast. Now, honestly, just cybersecurity is simple. I never grew up in cybersecurity. I have a very simplistic mental model. If it's bad and you know it's bad, stop it at the perimeter. That's called perimeter security. That's where 80 % of our business lives. That's where when you find a vulnerability, you found it in the perimeter, stop it, protect yourself. And that's what patching and fixing your vulnerabilities is all about. But unfortunately, stuff still gets through. That's why breaches happen. It happens because you have a vulnerability that you didn't understand because a credential got hijacked or something got misconfigured.

48:19Then the question is, you've got to find it quickly and you've got to get rid of it before it creates impact in your organization. This find and fix it part is where all this superhuman effort needs to be put in, in transforming cybersecurity postures, cybersecurity architectures, ripping out old stuff that can no longer work in machine speed. And I don't think that's going to take two months or three months. That's a three to five year journey. And that's three to five years if everybody sets their mind to it. And, you know, I look at life to a cybersecurity lens. So I would like everybody to do that.

48:52Unfortunately, my CIO friends are busy. Their boss wants them to do coding quickly. They want them to transform the company with AI. They have existential threats because the world is using AI. Why are we not using AI? So the poor CIO has got a lot on their agenda, cybersecurity being one of those things. So they're trying to balance all these priorities at the same time. But I will say there is more awareness, heightened attention, and more importantly, whatever they had on their cybersecurity docket, the priorities have shifted in that docket to make sure that they can protect themselves against the impending sort of weaponization of AI models and bad actors getting better and better at this stuff.

49:27So the trend is our friend. There is positive momentum. The trajectory has changed for the better. But don't expect a sudden inflection point that people are suddenly going to come out and say, the first thing you want to buy is cybersecurity. Sure, sure. When a CIO wants to buy cybersecurity, is the economic calculus changing because AI uses tokens? Do they need to shift their thinking from this line item grows along a different axis than what we previously understood the cost and benefits would evolve over time as we scale our network? That's a very insightful question, my friend. So that's a good question because I don't think if we slapdash frontier AI models in the protection scenario, that is a good economic outcome.

50:21Yeah, you just cannot do a 5.6 pro fable 5.1 for every transaction that happens across your network. You're going to go. That's right. So think about it. Every day we inspect 180 terabytes of data. Every day. Yeah. you stick anything against it, which has got a token-based economics against it, it doesn't matter what the price of tokens is. That's going to add up a lot of compute. That is why what we do today is we write machine learning code where the marginal cost of inspection is zero. It's hard to beat zero. The marginal cost of inspection is zero. We've got to figure out what's the right balance where I want to use AI in the most intelligent way possible, but I don't want to do it in a way that the marginal cost goes up.

51:05So the way it's going to work is already we're training small language models, which are going to work on a very small footprint, which will do a specific task. Okay, my job is to stop people going on bad websites. Well, we get 150 ,000 new websites every day in the world. How do we find them, classify them, stop them? Well, let's train a model to identify these bad websites. Let's have it work on the endpoint or your laptop. So it's doing that and that's all it does. And you can do that by taking all the collective intelligence that we've built over the last 17 years, train a small language model, deploy it to the customer where the marginal cost is zero, and my cost of training is$5 ,000,$10 ,000,$15 ,000,$20 ,000.

51:41So you just find many of these use cases will be deployed over time where we won't need a frontier AI LLM, where we will need Fable 5-like capability or mid-sauce-like capability is in what, let me call it the defender model. The defender model has to be as smart as the attacker model. Now there, there's going to be a debate about token economics. But remember, you're only using the defender model in situations where you find that there's a problem. Those are fewer and far between compared to having to inspect all peacetime traffic using tokens. So I think that's where the balance is going to end up from an economics perspective.

52:15I'm hoping that AI costs don't become a factor in cybersecurity. Talk about social engineering. We heard yesterday that employees are actually clicking through phishing links at a higher rate than they were historically, simply because a lot of the grammar being used in these social engineering attacks is just better. It's harder to immediately clock it. Do people and teams not have their guards up enough? What is the solution there? You would think that everyone is reading about the potential risks of LLM-based attacks all over the news media. You would think that when they're in their inbox, they're maybe thinking, oh, I won't click this link from, you know, asking.

53:05It's a$20 gift card. I'm going to tell you a funny story that we do phishing attack simulation at Palo Alto all the time. There's only one time I was tempted to click on it. Thank God I didn't. And I'll tell you why it wasn't, right? So there's this email that came saying, it's National Pet Day. Take a picture. Take a picture of your pet. And anyone who puts the cutest picture of their pet is going to donate$5 ,000 to charity. What the hell are you doing? I got a witness. That like put a little tear in my eye. Thank God I'm not into pets because if I was into pets, I'd be clicking a picture and uploading it and clicking on it.

53:44So this is where social engineering kicks in, right? Yeah, very creative. People will find ways to try and entice the end user to click on this. The only way to fix it in the medium term, long term, is start running AI classifiers against the emails to understand whether it's a real email or a phishing attack. And it's much better if you can build that into your scanning systems than if you expect every individual to be smart enough to discern whether it's a phishing link or not. Now, it was hard to do in the past because you couldn't really read email or get context. But today, I'm pretty sure it's a trivial task to train a small model which says, look, this email address looks weird.

54:18It doesn't look like it comes from our company. The domain has never been seen in our entire infrastructure. This is talking about something which this domain should never be talking about. All those are simple checks which you can do using a small language model from a scanning perspective. So that's going to be the antidote to these much better social engineering attacks that are going on over there. Speaking of dogs, Ilya posted yesterday and said that NeoClouds, Ilya only follows three accounts, SSI, OpenAI, and Dachshund fan account. Apparently a big dog guy. Even after you guys got bought out by OpenAI, he doesn't follow DBPN?

54:55We got to get him. I don't know. We got to get him on the show. I dressed up as him on Halloween. Oh, he's an honor. Running these days. No, but he was posting that NeoClouds need a lot better security. Oh, yeah. He feels like it's an important issue. Is that an area that you're focusing or that you will be more focused on? Are they too busy? I actually posted back, send them to us, and I'm happy to help. But I am not aware of what he was particularly referring to. Everybody needs a lot more security, yes, of course. But I actually don't know what he was talking about. I think he was specifically worried about, in the context of the Hugging Face incident, like an agent swarm, an agent state, like wanting to get more resources and just going into a NeoCloud to get more inference in themselves.

55:38And that would be a high value. There's a way of hijacking capacity. Exactly. The good news is there doesn't seem to be much excess capacity out there, so it's hard to hijack capacity. But let's hope that. Yeah, yeah, yeah. A lot of alarm bells are going to go off and you'll be like, wait. Yeah, I think so far, it's my understanding, most of the NeoClouds are re-selling their capacity back to the front-tier LLMs and the front-air elements will basically build very strong tunnel pipes that basically sort of make it almost like captive capacity. So I'm less fearful that that's going to be a problem.

56:08But yes, at an infrastructure level, everybody needs to put in basic infrastructure security. And I think some of them are. I think some of them are not putting it. We're still in the stages of building their clouds yet. I think the ones who are built, to be fair to them, are deploying firewalls and technology to make sure that there is no unauthorized access. But maybe Ilya knows more because he's smarter. Yeah. What's the state of AI research at Palo Alto Networks? You mentioned training small models. Is it so exciting that you have current employees that want to jump onto that project and re-skill and learn the art of training these small models?

56:48Are you hiring new AI researchers? Is there a specific skill set within AI research that is hyper-relevant to that team? What is your strategy for sort of remaining on the frontier of small models that are great at cybersecurity? Well, I think there are two or three sets of people we want, right? One set of people we want are who are AI savvy, who know how to use AI to get their jobs done better, who know how to use coding agents for AI. That should be a lot easier than hiring AI researchers. there, we have pivoted. I think 50 % of our new hires in the last six months are early in career. These are people who are learning and they're typically having to run through hackathons to get to Palo Alto.

57:29You don't look at where you went to school. We care about where you can use coding agents, you can use AI. So that's good because we're pivoting our workforce and if we keep following that trend, it's reasonably likely that we will overwhelm the un-AI savvy people with more AI savvy people. That's kind of like ground zero. You've got to get that done. The second part is there are people who are really good at cybersecurity and know AI and they'd like to get involved. If you want to work in cybersecurity, there's no better place to work than Palo Alto Networks. We're the largest cybersecurity company in the world.

57:59You want to have an impact. You want lots of proprietary training data. You've got it. We are lucky, given our position, that we can attract some of the people who work at the intersection of cyber and AI. The third part is raw, pure AI researchers who can do wonders with small language models and large language models. There, we have people who are AI literate. We have some PhDs in AI who work here who have a cybersecurity ban, but they can go back to their roots in AI. There, we supplement that capability with third-party training companies because they've been doing it around now for multiple customers.

58:32We want to make sure we can do it once. Let's not get it wrong. Let's have somebody who's done it 500 times and bring them maybe 500 is too many, but 20, 30 times. Let's bring them as part of the team so we can make sure we're getting it. So that's how we're tackling it. Thankfully, we don't have to compete with the frontier models for hardcore AI researchers to build our own big models with multiple parameters. No, totally. Well, we have Andre from Console here with us on the show. Let's bring him in. And I want to hear about the partnership, how this came together, and what the plan is. Look how we bring him in.

59:05Oh, perfect. Oh, he's right here. There he is. I thought he was... Sorry about that. Okay, so... Introduce the thesis here. How did you guys start talking? What does the future look like for console at Palo Alto Networks? Well, look, we spent a lot of time talking to a lot of startups across the ecosystem, cybersecurity and non-cybersecurity. And as we continued our conversations, we ran to Andre and his team. We run a very strong capability, obviously, in security operations and agentifying that. We have a lot of data, as I said, 180 terabytes just upon all the networks. We have an observability company which looks at it from the outside in to see how customers' infrastructure is running.

59:52We run observability for one of the largest frontier LLMs in the world from that vantage point. As we were talking, Andre shared what he was working on. When you look at what he's doing, he's taken a very AI-native agent-first approach to building a product. That is what future of software needs to look like. He's actually hit the nail on the head in terms of how we need to build software for the future. That is something which is rare skill, things that we don't do internally. Then he coupled that capability by looking at the operations of a company, both on the IT side and non-IT side, and trying to say, well, how can I take that agentic capability, build product that sits on top of the underlying systems that work in a company?

1:00:33When we saw that, we thought, wait, if we could bring the large data lake, the backends we have in security and IT operations, and we can bring his capability, could we build something that's amazing for our customers? And that's sort of what started the conversation. He was a hard nut to crack. He and his partner weren't doing it alone, but I had to use every bit of charm and persuasive skills to convince him and Neil to be part of a auto. And I couldn't be more delighted that he's part of the family now. Yeah, I'm so excited for this. We were looking at the console website, and in such a short time, you got every single logo on that website.

1:01:08Fantastic execution. What excites you most about the console journey thus far, and what are you most excited for in the next chapter? Thank you. Yes, I mean, first of all, the DBPN sponsorship got us a lot of those customers. I'm so excited for that. That's amazing. A little plug there. I think, look, we started this journey about three years ago, and it's been kind of better than we could have expected. We started in IT, and then we've kind of like expanded. Most of our customers actually use this for more than just IT. It's, you know, HR and legal, security, finance, and so on. And I think what we realized was if we were going to go broader, you know, go beyond IT, we, I think, partnering with a larger customer, a larger company that has, you know, works with the largest companies in the world felt like a natural path.

1:02:01And so I'm excited, I think, for the future where we, you know, can just, we have more resources. We can go after the vision at a much, much broader kind of like product roadmap. Amazing. Well, I want to hit the jump. We're going to work on the data to get him more excited. Well, how about this for the first one? How about this? How about this?

1:02:23Is that exciting enough? I'm so happy for both you guys. Like, Andre, if there was a CEO to work for in my book, especially in your category of being Nikesh, you know, he's like a very fatherly figure. you know you're start working on your golf game buddy start working on your golf game because we're going to need a lot of birdies he's going to work bro he's going to work he works you golf that's the plan well thank you guys so much for coming on thrilled for you both excited to see the progress you make we'll talk to you soon let me tell you about Codex Codex is a powerful workspace for getting work done with AI agents whether you're writing code, analyzing data creating content, automating business workflows.

1:03:10Codex helps you move projects forward from start to finish. Our next guest is from Blue Owl Capital. We have Senior Managing Director, Kurt Tenenbaum. Sorry to keep you waiting, Kurt. Thank you so much for joining the show. How are you? No worries. Well, you had to finish with Nikesh there and give him a hard time about all the birdies he's been getting. So I appreciate that. He's a fantastic golfer. Since it's the first time on the show, I would love to know a little bit about your focus within the organization. And then I want to go into the latest deal with Iron, but also a little bit of the lineage of this business that Blue Owl's built up.

1:03:48We've seen, we've covered the company so much on the show, but I think you're the first person from the organization to join. So very excited to talk to you. Yeah. And excited to talk to you, Jordy and John, big, big fan of the show. And thanks for, having me on. At Blue Owl, I focus on our AI compute infrastructure business. What that means is we have a big, robust data center investing practice. We own over 100 data centers across the world. About 10 gigawatts worth of compute. Wow.

1:04:22However, that business is really focused on building the underlying data centers. My team is everything that goes in. And so as you guys know well, you spend$25 on a data center, you have to spend$75 on the chips that go inside every five years. And so that's what we're really excited about, figuring out ways to partner, figuring out ways to finance that piece of the build out. What's interesting for us, because Blue Owl is a diversified asset manager across a bunch of different strategies, is we really get to bring the excellence attached to our data center investing business, our direct lending business, where we really got our start, as well as our leasing business, and bring the combination of all three of those together to be able to provide solutions like IRON, which we're excited to talk to you about, to market that we think are differentiated versus many of our other peers.

1:05:16Every time I see private credit and data Center build out in the news, it's always this discussion about GPU depreciation. Is that an overwrought discussion? Do you feel like you have a stronger feel on that now? Obviously, we've seen a lot of incredibly positive news around depreciation with even A100s getting really high utilization rates long into their life. That was the primary takeaway from CoreWeave's last earnings call, just that they have these old GPUs that are going to be generating revenue well into the... But I'm curious, is GPU depreciation actually top of mind for you? Or is it something that you feel like is pretty well understood, pretty solved?

1:06:04Yeah, it's a good question. And it wasn't that the CoreWeave data point is quite notable and something we and the rest of the market obviously took note of. But at Blue Owl, we don't pretend to have a crystal ball on depreciation or forward rates for GPU levels. Obviously, we're very bullish on them in general. But the way we've invested here is really focused on keeping the duration of the investment we're making relatively short. It matches the underlying contracts that we have with some of the AI natives that we are financing. And we're excited about talking about that piece of it as well. And then underwriting IRIN as an investor and getting comfortable there.

1:06:44And so we are not just hanging our investment on forward depreciation rates for GPUs, although it's something we're obviously very focused on and spending time around. What does the current landscape for these types of deals look like? Because we see Hyperscaler, sometimes NVIDIA, directly doing something that looks a little bit like equipment financing. And I'm wondering if the shape is like, are you competing with people outside of the private credit world at this point? How big is the pool of capital that the data center constructors and operators are actually going after? Yeah, I think this is a moment in time where everyone is going to have to be invested across the landscape to get to the type of capital needs that we need.

1:07:28I actually think at some point capital may become the limiter or at least one of the limiters attached to it. We're seeing the investment grade market finance chip compute actually quite efficiently, but there's a lot of demand for that. And that demand will continue and will continue to escalate. And so the part of the market we're really focused on is the non-investment grade piece, where we think it's a lot harder to get that type of financing. We're able, in the case of IREN, to finance the AI natives, which is a particular pain point and pinch point in the market. And that's where our focus has really been.

1:08:01Yeah, got it. What are you seeing on the actual data center operator side? what are the smart players doing to overcome sort of local regulatory hurdles? You know, we've heard there's a bunch of ideas being thrown around right now. How do you get a local community really bought in? There's a tax revenue component. Some individuals are going to be excited about that. Others may be more excited about direct payments. But what are you seeing across the landscape of what's working to actually get projects from the sort of concept stage to powered shell GPUs, you know, actually running. Yeah, listen, that's been a huge focus of the market and of the media recently.

1:08:46I'm not sure I have the exact answer to that as we sit here today, but it's something we as an organization are spending a tremendous amount of time around. And listen, we really need to engage all the constituents around the table to get to a solution that, you know, works for AI infrastructure as well as works for the investors and the operators who are involved as part of that. And most of the time for, I imagine, for equipment financing deals, the powered shell is already up and running. And so a lot of those concessions, if they need to be made, have already been made. Is that roughly right?

1:09:20Yeah, that's exactly right. One of the things we like about it is when we fund into these transactions, the compute is basically on the come within a couple of weeks. And so that portion of the business is already up and running and we get to finance very close to where the revenues are actually happening. Yeah. And it might also be the case that there is an existing PowerShell or data center and they're just upgrading to Blackwell or something like that. And that's where you come in. Is that post-retrofit? That's exactly right. Yeah. Post-retrofit. Yeah. That makes sense. Well, congratulations on the IREN deal.

1:09:52Thank you so much for coming on the show. Yeah. Come back on as you have more. Yeah. We'd love to talk to you again soon. Thanks for having me, guys. Take care. Great rest of your day. Cheers. Goodbye. Let me tell you about 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. We're going to space next. That's right. We've got Phillip Johnson from Star Cloud. Space man. How are you doing? Welcome back to the show. Hey, thanks so much for having me. Third time. Third time.

1:10:20Three Pete. I mean, it's a fascinating business. Attracts a ton of attention. also attracting a bunch of capital. What's the latest news for you? Yeah, so we just raised Series A extension$250 million at a$2.3 billion.

1:10:38With NVIDIA investing$25 million and Cisco coming in and a bunch of other folks. Fantastic. What is the use of funds right now? I imagine that there's still a lot of R &D to do. I'm obviously very optimistic, But, you know, when we talk about space data centers generally, we're usually in 2030, maybe 2028. So is there a use for capital right now or is this sort of more of an opportunistic raise, build a fortress balance sheet and then be able to hire and really build all the key precursor pieces to the actual ongoing business? Yeah. So I think there's a few reasons to do the raise now. One is to secure launch.

1:11:17So booking launch for 2028, 2029, and that's obviously quite expensive. Another is when we work with, I mean, we're doing some pilots with some of the large data center companies. We'll announce that soon. But they want to see a few hundred million dollars on the balance sheet before they'll commit their resources to the project. So that's another one. And then the last one is actually moving into much larger manufacturing facilities and starting to ramp up the team, things like that. Yeah, that makes sense. What is the state of the experiments? I mean, I know that you – I believe you put a GPU in space, but there's other sort of test runs that you're doing.

1:11:56Walk me through the thesis there, what you hope to get out of those tests, what you expect to learn. And then also I imagine that it's also just sort of marketing for the company, like awareness during a time when you're not putting up tons and tons of compute just yet. Yeah, yeah. So, yeah, as you mentioned, we launched the StarCloud One satellite in November last year. So that had the first NVIDIA H100 on board. It's still going strong. We're doing a whole bunch of tests on that. Really? We managed to, yeah, we're doing, the more useful workloads we're doing now are high-powered inference on other satellite imagery, particularly SAR data for various military and government applications.

1:12:30Sure. But, yeah, we've got three launches booked for next year. So we'll have two going up in Q1 next year, one towards the end of next year. And we're actually just booking on every launch provider possible now. So, yeah, we should have some. I'm not sure if we've announced that yet, but we'll announce a few other launches that we've booked soon. Yeah, is that, you know, from a, you know, I guess forward-looking standpoint, is that going to be important to be diversified from a launch partner standpoint? Because I can imagine when you need to raise the billion dollars, people are going to be sitting there being like, hey, like you're dependent on SpaceX and they're also in this business, and maybe that's a concern over time.

1:13:12I'm sure right now Elon is just happy for there to be more compute in space and have other parties proving out this thesis, but is that important? Yeah, yeah. So to start on your second point, I mean, right now we do have a great relationship with SpaceX. We've signed a contract for the next 25 of our satellites to have their laser terminals on, So we'll also be using them for connectivity and we've got a whole bunch of launches booked. But yeah, I mean, I think it's good for the industry in general for there to be lots of optionality in the launch market. And so, yeah, we're keen to encourage it to be a diverse launch ecosystem.

1:13:53What does it actually take to lock in a launch in 28 and 29? Are you having to put up a non-refundable deposit? What percentage of the total cost are you having to actually put up? Yeah. For most launch providers, it's sort of 10 % to 20 % down payment. Refundable if the launch doesn't happen. Although with the more experimental rockets, if the launch doesn't happen, they probably have larger balance sheet problems than we paying us. It's a bit of a gamble on some of them. I mean, it's the kind of thing we're keen to spur on. So we're happy to put those deposits up. Very cool. Well, congratulations on the new funding.

1:14:37Great progress. Congratulations on the progress. And we'll talk to you soon. Have a good one. Let me tell you about Figma. Agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. Up next, we have Jimmy Iveen in person. Nice to see you. He is the co-founder of Interscope Records. How are you doing, man? We're doing fantastically. How are you? Good, good. Thank you so much for coming on down. Hey, it wasn't easy. You're far from my house, but it's cool. Coming in from Malibu. There we go. I do that drive every day, too. Are you in Malibu? Yeah, exactly.

1:15:10Wow. Senra, me, Huberman, you know. We got a little podcast dynasty out there. Oh, great, great. I'll give you my number. We're out there. Me and my family, yeah, yeah, yeah. And Ben, too. Ben Taft. Really? Yeah, yeah. Fantastic. That's great. We're all out there. That's great. How are things going at USC? Well, you know, we started this, we started the school, you know, it's called IYA. And it's really a school of innovation. What happened was in 2014, we sold Beats headphones and Beats music to Apple. And at Beats, we had a similar experience where we couldn't find people that could collaborate the way Dre and I wanted them to collaborate.

1:16:01So we kind of got into that. It was very, very difficult. Either you're an engineer, design, business. They couldn't speak the same language. They didn't understand the why of the other person. So when we went to Apple, it was that on steroids for us. You know, they're a great company, the best company, you know. But we found that at every company we went to, that everything was very siloed. And communication, understanding was siloed. Not just people, but understanding. And so one day I woke up and I just called Dre. I said, Dre, you know, the problems that we're having. you know, Dray and I really didn't go to school much, you know, and I said, but I got a feeling that this is a problem in education.

1:16:53People are learning in a siloed way. You see, 19 to 25 and 26, I don't know about you guys, but that puts a big imprint on your life. Yeah. You know, it's like you learn a lot in the formative years. Those are really important. They were very important for me. Yeah. And I guess that's kind of why the age of college. And getting varied experiences, I feel, is so important. When I think about my era from 19 to 26, I studied economics. I learned a program. I started a business. I filmed videos, did marketing. It helps to blend all these things together. How old are you? I'm 37. Yeah, so you're young enough to grow up in a really multidisciplinary environment.

1:17:38But importantly, a lot of that was on my own. I just had to go learn. That's my point. Yeah, I had to do it myself. That's my point. So now when you come out of high school, they silo you. Yeah, totally. Okay, you're going to go work with 60 engineers every day. You're going to go to Wharton, but you're going to be with 45 accountants every day. Yeah. And there's something wrong with that. Yeah. So, you know, we stepped in, went to USC. How do you map that to or match that with this idea of putting on the blinders? Why does a race horse wear blinders, right? Well, because we live in a world now that's worse than ever with social media.

1:18:18Everyone cares so much about what somebody else thinks. Oh, that's interesting. I mean, we have people just all day, what do they think of my post? What do they think of my orange juice? Who cares? You know what I mean? Would you go to a grocery store and ask everybody what they think? So anyway, I'm an older guy, so it doesn't make any sense to me. But that's the blinders. The blinders are very simple. Run your own race. But enter that race with the understanding and the empathy of other disciplines. We all have that problem in any company you have. The extreme tech side and the extreme design side have trouble communicating.

1:19:07Maybe not everyone at every company, but most people at most companies. And then when you – remember, we brought 300 people from the creative business into Apple, basically. And Apple is an incredible company. But it's – and it's the best of them, by the way. By the way. But it's all somewhat siloed. Of course. Do you think entrepreneurial people know that they're entrepreneurial for the most part? And I ask that because do you find with the school there's people that maybe that aren't applying to be a part of the program but you actually want to go and find those people? Or generally are these people like self-selecting and they just know they want to be a part of it?

1:19:53They know that there aren't many schools that fit who they are. Right? and we get a lot of applicants, and that's because we fit, we speak in their language, you know, and think about this. We started this in 2012. Now a lot of schools are saying, okay, we offer multidisciplinary. They say, okay, you're in an engineering school, but you can go take one course across the hall and sit, you know, that's not the joke. What it is is what companies want. Actually, we did research at USC to find what type of students they want. Number one came back collaborative innovation. And that's the foundation.

1:20:41Our school is really Ivan Young Academy for Innovation. We put, in the beginning, tech, design, and entrepreneurship because we wanted to explain it. We wanted to make it literal, like rock to the forehead kind of messaging. But now it's fundamentally the Ivy Young Academy of Innovation. And because people can't – you need to collaborate to innovate. And look, I'll give you an example. People say, how do you know there are problems at these companies like this? Well, I've been to a lot of them, but I have proof. Here's my proof. Why is it that so few, I'm going to be generous, so few software companies have built successful commercial hardware, consumer electronics?

1:21:36Why is that? No founders in the seats? Run by committee? Because, no, they can't collaborate. They can't collaborate. You know, now, you know, I mean, Meta's gotten this piece of hardware out there right now, but they went to, I mean, it looks like they went to Ray-Ban, you know, I mean, and it's cool. It'll do okay. You know, it'll do fine, whatever. They're a great company. But none of these companies can make hardware, and they all have hardware envy. Yeah. All of them. Yeah, that's true. You know, and so there's a reason for that. And my thesis and mine and Dre's thesis is that this is why.

1:22:18Because what was so great about, what is so great about Apple, because it's still in their DNA, is they had Steve Jobs. He was the ultimate cross-disciplinary human being. That was in his DNA where tech meets liberal arts. and when I went, the first time I went up there in 2003, I got it in 30 seconds because I had gone to five other companies before that. I talked to them about piracy and all that stuff. I was on a kick about that, you know? And the minute I had a hello, I met him in ADQ, I said, okay, this is where the party is, you know? And I just went back. I told the people at Doug Morris at Universal, who was in charge of the place, I said, license this guy because they know a lot more about this than anybody in our business, and they have feel.

1:23:15Okay? So this school is truly designed behind that meeting. I know it sounds simple, but look, we had an idea. I woke up one day, and I called Dredge. What about starting a school like this? Hell, yeah. By the way, he really talks like that. So we wrote a check for$70 million in a month. We're just on one line knowing nothing about education. And we built what I consider a fabulous school. Do you think that there is a trap to be avoided with the school around students becoming tracked? Like they've done the interdisciplinary work and they see this as the best way to get a job at Apple or the best way to get a job at a startup.

1:24:03And in fact, they should be sort of laying back and watching opportunity come to them during this period. Well, first of all, they're 22 years old. They can go get a job at Apple and still go change the world. That's true. You know, Steve Jobs had a job for Apple, right? So, you know, nothing wrong with getting experience. I think it's actually good. Yeah. But it's more important. I mean, look, even the engineering degree you could see is trying to expand. They get it. You know what I mean? You can't just – it's really not a good environment to work where people just don't understand each other fundamentally.

1:24:42It's empathy. Do you think that as technology grows and technology progresses, that is creating a natural widening force? because it used to be that the instrument was technology, but it was understandable by an artist. And now the technology might be seven layers deep in some AI thing that's so abstract and so obscure that that creates. Look, in 2012, I couldn't spell AI, you know, so I had no idea. But we built a school that's perfect for it, you know, and because it's what it makes. So much common sense inside these companies if you understand the why of the other discipline. Otherwise, you're walking.

1:25:31It's a crash. And that's why Apple can still make great software and great hardware. That DNA is in those people. It's in Tim Cook. It's in Eddie Q. And now I don't know this fellow, John, but I'm sure he was brought up in the same school. Yeah. No, he's been there a long time. But that's a question that should be asked and will probably never be answered. But why do software companies fail when they go to make hardware? Yeah, it's tricky. A lot of them have tried. A lot of them have tried. Are you kidding? Yeah. Yes. Basically all of them. But there has to be a reason, right? Yeah. So my reason is better than anybody else.

1:26:11Maybe somebody else would come up with a better idea. But my reason is very convenient for my school. Yeah. That's good. Do you think more entrepreneurs should go back to the university that they graduated from and teach a course? Like something that's – there are so many lessons that I didn't learn in school and I won't claim to be an expert on many things. But if I even had to put together like 90 minutes, I feel like I could save my younger self a lot of time. And it's maybe – Of course they should. Everyone should give back. I mean I think a lot of people do. I see you at UC all the time. I mean, they have alumni giving hundreds of millions of dollars to these schools, you know.

1:26:54And I'm sure they go back and talk at them and everything. I spend a lot of time at the school. I try to be very involved, you know. I do. Do you think you would have dropped out of your own school? Like the younger version of yourself? You know, here's the thing. If there was, I have to go for a lot of therapy on dealing with dyslexia first. Sure. You know, I had a lot of trouble reading and paying attention. So I don't know what they call that as a couple of names for them, you know, but I don't know. Maybe if there was a lot of Prozac back then, maybe I could have focused. But no, I got into I I I just what I got into is I got into I love music.

1:27:37Right. So I got into music and engineering, which is sort of technology side. Right. So I started as a recording engineer. So you have to understand the basic principles of technology in order to run a console and fix microphones and do whatever you have to do. So I got lucky. I didn't know I was doing that then. But I don't know. Not everybody can do that. So school is a great thing. but only if you're in an environment that's going to enhance your creativity and who you are and not take one part of it and put it in a box. Yeah, the funny thing for me is it took me until I was an adult to realize that I was creative because I remember my pretty formative experience was in early, early school when I'd be in an art class and I'd be told, draw this or do that or whatever.

1:28:33I just was not good at drawing. I never was good at drawing. And in my head, like creativity and art was all about drawing. Sure. Right. Because that was my first time like doing anything creative in a school setting. So then I went like almost probably 15 years thinking I'm not creative. Right. And so it took me to being an adult to realize that creativity can have all these other forms. Right. It's not just like, can you draw a pretty picture? Right. Well, you could also you could learn. You could learn creativity. You could learn taste. You can learn all those things. It's somewhere in you where you can learn it.

1:29:05Absolutely. I had no taste when I walked into the record plant in John Lennon's studio in 1973. I had zero taste. I went from three albums with him, two albums with Springsteen, and one album with Patti Smith, and I left with taste. But I often find that a lot of people have great taste, but they don't have the ability to create things that meet their taste level. like taste can taste can be inherent in some people you know what you do then is you have an eye for people that do have the gift and you surround yourself with them you know i learned that at 19 years old i came i was living in my mother's house in brooklyn in red hook brooklyn my father was a lawn shorman and i met john lennon and bruce springsteen i did those records and I got an apartment.

1:29:59I said, okay, I meet people like this. My life is going to be okay. I just got to make sure that I don't get thrown out of the room. So when you're running a company, leave your ego out of it and realize somebody does something better than you. And don't defend anything. Don't defend your ignorance. Just go for it and just say, okay, this person is great. I'm going to be of service to this person. even if they work for you, to get them loyal to your company and loyal to you. And, you know, that's what I always do. I got a pretty good eye for seeing who's gifted, and I try to make their life as great as possible.

1:30:47Yeah, that resonates on a smaller scale where I knew I would care. I'm not great at design. I'm not great at drawing out a logo, for example, but I can find people that can make great logos, and I realized I could at least work with them. Headphones. Yeah. Yeah, we come out of music, me and Dre, so people used to go, well, of course, you guys are in the recording studio. Of course you knew how to make headphones. Where would you start? If you gave Bruce Springsteen two pieces of wood, he's not coming out with a guitar. No way. Okay, or Keith Richard. So we had to go and learn. And what we did was we found people that really were good at this and bring them in.

1:31:27And we just added the idea of what was wrong. What was wrong is that everyone was listening to music, an entire generation, including yours and yours, on those little free earbuds that Apple would give out. That's right. So Dre said to me, man, I spend all day in the studio and my kids are listening on these ridiculous things. So we said, okay. So then we decided we're going to make a headphone. Then everyone tells us you can't, to get a great headphone, they'd be like$300 at retail. They said, well, that's not going to work because Apple gives them away for free and so does Samsung. We said, okay, our job is to get them on people's head.

1:32:13Once they hear it, they're not going back. And that's what we did. So we brought culture and we got them on people's head to try them. And then once young people started trying them, they wanted it for Christmas. Was that expensive? I remember the story of you paying to advertise G-Thing, right? That was a song. That was a song. That was a song. But it was a contrarian move because I feel like pulling the trigger on a big ad spend before an artist has really broken through is risky. But how did that change your… I don't know how to spell risk either. You know what I mean? I just, I do, I wake up in the morning and I do what I feel.

1:32:57Yeah. And I do what makes sense. I talk to the people that are around me and I don't care about the risk. I really don't. I never did. I just do what's right for the project. And sometimes, you know, you cut a lot of flack because, you know, when you're at a big company or something, the budgets and things like that. But I just get myself in situations where I leave them if I can't just do what I want to do. You know, I try to make a life of just doing what I want to do. Yeah. Over the years, how how did you think about bringing in new business partners? You have some early success working with some set of people.

1:33:35You start meeting other great people in your mind. And how are you deciding whether to spend time and partner with new people versus sticking with the band? I'm a very positive person. So I always give people the benefit of the doubt and try it. And you can tell pretty quick if something's going to work or it's not. And if it's not, say sorry. And if it does, go in further. I try a lot of things. You know, I'm not precious about anything. Once I figure out what I'm doing, I'm precious about that. But as far as the education and learning how to get, look, we would have never done this school. I mean, if we were nervous about things, I mean, we knew nothing about what we were doing.

1:34:21And I think we have one of the best, if not the best, school in this area in the country. So that's a good thing. There's obviously a big technological transition in music with AI. Going back maybe before streaming, what was the first technological shift you remember in the music industry? I mean, Napster, you mean? Yeah, before Napster even. Well, before Napster, I mean, I go back a long time, you know. Stereo. Okay. You know, multi-track recording, you know, where do you want to start? Yeah, but what was that like? Like, was there a discussion about it or was it something that just, you know, was adopted behind the scenes and the consumer of music?

1:35:11It's always the stuff like that. It was expensive. It was always the professionals, you know, like you could hear the first time a phaser. One of the first times a phaser was used on a record and Jimi Hendrix, you know, you could hear when the Beatles got stereo. They walked in the studio one day because I knew those guys. And there was two speakers instead of one. And, you know, Paul will tell you, he has told people, they said, okay, they thought at the beginning, oh, twice as loud. There's more to it. There's more to it. So, you know, it's gone all the way. There's drum machines. The drum machine was big.

1:35:44Yeah. You know, I was fortunate because Roger Lynn used to be a guitar player, and he was playing on one of my sessions when he was creating this thing. He had the computer in there with him. He was creating a drum machine. Yeah. So I got to see that really early on, but then Prince exploded it. Yeah. You know, so AI is, you know, it's a little different. Do you think people thought it was a risk? I mean, I know risk is not in your vocabulary, but four prints to adopt the drum machine. It was bold. Bold. It was very bold because remember, this guy is a great, great musician that had the greatest musicians playing around him.

1:36:24Yeah. So he said, I'm going to simplify. I'm going to go to a drum machine. Yeah. That's bold and brilliant. And he was one of the guys that exploded it, you know, that really took it, went all the way. Yeah. The boldness, that feels like that's, like, when you're thinking about stereo or the drum machine or synthesizers, there's an opportunity for boldness on the side of the musician. Yeah. Did that same opportunity for boldness exist in the streaming transition, in the social media era, in the AI era? Well, streaming, okay. Let's go to streaming, right? Streaming, you have to go to iTunes first.

1:37:00Yeah. That was very bold because the record industry didn't want to license it. You know, musicians didn't want to sell their songs at a dollar a time. But out the back door, they were being given away on MP3, you know, all day, right? So what Steve and Eddie had was a really good idea, an elegant way to match their iPod. You know, they had a piece of software that was really elegant. and it worked. And these guys understood the culture. Steve, my first five conversations with Steve Jobs was about John Lennon and Bob Dylan. He really cared and understood. Hey, he went out with Joan Baez, right?

1:37:46So he understood the culture. And he understood, he had a feel for it, you know? So that was a big step. And then streaming was another big step. Daniel Ek was a brilliant guy. We came to the market. We had Beats Music at Interscope, and we sold to Apple. And then we worked with the guys up there and made Apple Music. How do you think streaming changed music production or the decisions that musicians make? I mean, I've heard at least anecdotal evidence that albums got longer or there's more songs because that gives you more shots to go viral in the algorithm. I think what caused all that was social media.

1:38:36OK. Social media, unfortunately, like a thing like TikTok, it's in a lot of ways. It's great because it gave artists power and a platform to market themselves, which is what artists want and need and should have. But it also made a lot of artists and record company people chase that. Whatever the latest TikTok thing is, and that can be pretty ridiculous at times, right? So I think that affected music more sonically and creatively than streaming did, personally. Maybe more songs or whatever, yeah, great. But even that more songs thing came out of SoundCloud and TikTok and Instagram, just putting stuff out.

1:39:26I was talking to a buddy of mine in Malibu, and he's produced 20, 30 Billboard number ones, like really, really impressive career. and he's for decades now received people will send him demos and he always says he likes to listen because he wants to be working with you know up-and-coming talent and he said over the last year it's become harder to judge who's who's got potential and who doesn't because because of ai because anybody can make a song that sounds at least decent and maybe there's a thread of a good idea in there and so he said it's just become impossible to understand um and to me that signals that it's going to become even harder to break into the music business because and suddenly anyone can make a song right like suno shockingly quickly in about takes my experience about 10 seconds to make something uh and there's patterns you can if you well where do you want to start with this yeah yeah just a lot of ground okay yeah yeah but but i guess my main question is like does it become these previous technology trends in music the professionals the existing professionals got access to them first they were expensive to adopt things like that now with ai anybody in the entire world can get access to it and i'm wondering does that mean you're going to have a lot more people breaking into the music industry or or less just because competition is Well, do you want to talk about the licensing of AI, the actual use of AI or the production of it?

1:41:05Where do you want to start, right? You know, where? Well, specifically, what do you think it means for emerging talent? Well, let's use the word talent. If you really have talent, it'll help you. It'll help you create as a tool. You know what I mean? It's like you asked the right question. Stereo. It made Sgt. Pepper better. The Drum Machine made Prince's first album. Fantastic. Or second album, whatever that was. So I think as a tool, it's going to be fabulous. A lot of these companies that are creating AI music right now are doing so on unlicensed music en masse, like 60 million tracks or something like that.

1:41:53Well, those, in my opinion, those are going to be like the kazah of this moment. It's got to get under control to a certain extent. There should be, I mean, in this particular case, there's going to be some kind of government regulations or there should be something, right? For proper licensing. If you use these three influences in the creation of this AI song, those three artists get compensated. That's right. The prompts should get paid. Yes. Right? Yeah. So, but there's a lot of cowboys and they're going to run around doing this stuff, you know, but that's not, I don't think that's where it's going to shine.

1:42:32You know, like can people make songs, you know, easier? Can somebody who was Instagram influencer go out and make a song because they know how to dance and jump around and get people's attention? Possibly. But there's crap now. There'll be crap then. There'll be crap now. Maybe the crap will get more interesting. Who knows? But as far as the great artists, you know, Kendrick Lamar, Alicia, Olivia Dean, you know, some great people that are CMAT, some of these young artists that are just, you know, St. Harrison, some of these great, great, that kid's St. Harrison. There ain't no way I can sing like that kid, you know.

1:43:11So something like that, they're going to be there. What AI can't do is grow up in a terrible home. AI can't have a broken heart. So AI is not going to be Dolly Parton. Art has always been about stories. You look at a modern art museum and there's the constant refrain, My kid could have drawn that, but you didn't, and there's not provenance, and there's not a journey and a story behind it. I'm not afraid of AI, and I met a lot of people that are working on it, and none of them truly scare me. Or should scare anyone, for that matter. So I think it's a tool. I think Dre said last week on some interview that it's a tool, and that's what it is.

1:44:01But the licensing, the artist that it's learning off of, the way this product is. Look, when the Beatles came out, they were influenced by Little Richard and Buddy Holly, right? Yeah. They didn't get paid. But now if you're influenced by the Beatles and Dr. Dre, they will get paid. And I got to tell you, everyone's always tough on the labels. But I think I'm watching the labels closely and I talk to the guys that are running it. quite a bit because I've known them all for years. I think they're handling this problem right in the beginning because they have to, the things that are out there just randomly licensing, not licensing, ignoring it, and thinking that they're going to, I don't think that works.

1:44:50It most certainly doesn't. I grew up, I grew up for the first 18 years of my life relying on musical artists. They changed my life and a lot of people's around me's life. So that music deserves to be paid. You don't just come in and think, I don't believe that. But I'm an older guy. I've been around a long time, so some things are good about that. Some things get a little stale. But I believe that how the labels are handling those particular cases is the right way. Yeah. I mean, the technology should be able to help here. Of course, there needs to be legal precedent. But, I mean, if you look at the way YouTube's handled it, if I upload a video with a Dr.

1:45:33Dre song on it, any money that I earn from that is going to rout it automatically. But in the beginning, it wasn't. Yes, yes, it wasn't. But pretty quickly, and why they sold to Google was they had to pay out a bunch of money. Well, because that's going to happen here too. Exactly. You know, but – The money will flow though. But the chain reaction that this causes, unfortunately, is the people that are giving out licenses shrink. Meaning they shrink what they're going to do. They lessen what they're going to do. And it's going to cause a lot of this product everybody's excited about to really be dumbed down.

1:46:08Oh, yeah. Yeah, that makes sense. All right? So, you know, a couple of companies have gotten licensed. I guarantee you. I don't know, but I guarantee you, in my opinion, that that product would be dumbed down. Yeah. You know, so where the thing will shine is when you get producers that learn how to do this. Yeah. You know, when Stereo first came out in Extreme, there were records, a Beatle record, where the drums were on the right and the vocal was on the left. All right? But then people learn how to… Blend things together. So a lot of producers are using AI right now, and it's really helping them.

1:46:47Sure. I mean, what they do is they even copy the AI, you know, the idea. It breaks a logjam in your head. Is that the best way that you see artists using AI as essentially pre-visualization, like what would happen? That's what I see. The guys that I know, you know, the producers that I know, I talk to them, you know. And I keep in touch with a lot of producers because I was a producer and I relate in the record business. I really relate to record producers that had journey and stuff, you know. So when I was at Interscope, it was driven by record producers, you know, Swizz Beatz, Pharrell, Dre, Timbaland, you know, Will.i.am, Polo to Don.

1:47:31All these guys were at Interscope at one time or another. I hope I didn't leave anybody out. I'm sure I did. I'm sorry. but you know they they are learning how to use this it will come from them and yeah they'll be look there are there are artists out now that can barely sing happy birthday okay okay so so what's the difference if you can barely sing happy birthday if you can't sing happy birthday at all right so that they will always be boring silly you know So records like that, right? But the great artists and the great producers will maybe create real masterpieces. Because of this, it'll spark something.

1:48:18So I'm very pro-AI. I just think that in the beginning, there's always the Wild West in anything like this. You've seen it enough. You just go, okay. But the guys that are running the labels are really trying to do the right thing here. And I think in this particular case, the artist and the labels are aligned. Yeah, that's a good point. Yeah, what do you think? So knowing some of these entrepreneurs that are building in the space, they would push back and say within streaming, if somebody was illegally streaming or pirating a song, they are taking a product that an artist and a label produced and they're just consuming that product without paying.

1:49:02That is objectively wrong. And in this situation, they are training on a bunch of music to create something entirely new off of that. And they would argue that that's fair use in the way that, like you said, the Beatles had their own inspiration. I know, but that's the argument, right? Is it fair use or isn't it fair use? The artists and the labels think it's not fair use. And somebody who's making a lot of money on a new company thinks it is fair use. Yeah, of course. Those are very convenient arguments. Yeah, yeah. And these companies are making money providing a tool. And I'm actually not taking it aside one way or another, but they make money from selling a tool that lets you create music.

1:49:54But what's also happening is people are creating that music, and then they're going back to the labels, and they're going back to artists, and they're making new music that then gets listened to and monetized the normal way. So I would argue in some ways that the music industry and artists are, yes, their music is being used to train models that then create other music, but they are also beneficiaries of that. Yeah, but there are some people that are dead. Sure. Yeah. So, you know, Wilson Pickett is not going to go out and make a new record. So if you're learning on Wilson Pickett, I believe that his estate should make money.

1:50:33I believe that if you're learning on, you know, somebody who's around today, George Harrison, not George Harrison, you know, like any of the artists that are around today where you're learning from their music, they should get the prompts should get paid. It's going to be hard to monitor, hard to police and all that stuff. But they'll figure that out. So I just don't think that – I don't think it's fair use. I don't think it's free. I just don't. That's where I'm coming from. We just saw this with the social media addiction trials. Like big settlements can come decades down the road and be basically benchmarked to revenue and the money can flow.

1:51:12But it takes a long time to go through the court system. That's just the way I think about America. So what? But it has to be done right and it's a wonderful technology for music. It's fantastic. But, you know, this has to be deals made. Yeah, of course. Always. What do you think about the future of live performances in the age of AI? It feels like it could be a really important proof of humanity, proof of talent. I went to the show. Sure, maybe there was some autotune in the loop, but I watched them perform. And if they can perform to a certain level, that gives me more confidence in the rest of their library.

1:51:52I happen to be fortunate. I have a really good friend in that business named Michael Rapinoe. He's the CEO of Live Nation. I learned a lot about the live business from him. Plus, I grew up with my friends playing live all the time. So I think live is live. Do you want to see somebody performing live, spilling their guts on the stage, or do you want to see a hologram or something? I don't know. I'd rather see the person live because it's just more exciting. So I don't know. I don't think there's any problem with that. I don't think there's – I don't think it crosses. I just don't see it. I don't see it.

1:52:29I don't know the future. I have no idea. I'm not going to be here anyway. So – but it's – I don't know. I have no idea. I would just expect it to grow. I don't know. It feels like the Aeros tour was such a moment and there's these certain moments that happen in American culture where shelling points. Everyone comes together around a certain thing. To me, it's simple. You've got a new technology. It's going to be great. It is great, and it's going to be even better. People are going to use it, but there's going to be licenses, and people get paid for it. And then the great talent and the great artists are going to show the world how to use it.

1:53:09It's that simple to me. It happens every time. So it all comes down to what we talked about first, which is, what's great about this is it's teaching young people. That's where multidisciplinary behavior comes in. This is technology and you're creative, right? So when you really understand technology and you really understand the creative, you're going to really do well. So you shouldn't be siloed in school. You shouldn't go to a school where all you do is play the guitar all day. You know what I mean? To me, that doesn't work. I mean, Juilliard is a nice place, and I'm glad it exists, or Berkeley, whatever.

1:53:55But it's not where I see the world going, and not if anybody cares. But me personally, since I'm on this show, at least you two guys care. Do you think AI can help bridge that original gap that we were talking about? When I think about what it takes for a creative person to build a hardware product, for example, There's a lot of technical hurdles that can now be broken down. Before there were things to break it down. Let's put it this way. Dre and I had a record company. We're creative people. We're both record producers. We built the biggest headphone company in the world. That's hardware. And the reason why it's hardware is because it's goddamn hard.

1:54:37That's why not everybody does it. So we did it. We're creative guys that built a piece of hardware. That's why we started the school. It all needs to be working together. And we built the number one. Beats was the number one headphone in 50 countries when we sold to Apple. So we did it. And because we live in a multidisciplinary world, we were both recording engineers, me and Dre. And so we come from the non-wall background, you know? And so that's why we built a school. That's it. And, you know, when you go look at these, most companies right now.

1:55:30Technology, engineering, design.

1:55:35There's a lack of communication and a lack of understanding. Again, I asked the question again in case somebody just tuned in. Why can software companies not build really successful consumer products? There has to be an answer. I don't have the answer, but you guys are really smart. You talk to everybody in the world. I don't know why. Yeah, it's tough. But there has to be something at the core of what's going on that challenges that. No one can say, no, he's wrong. No, I'm right. No, you are. Yeah, well, one of the things you brought up Meta. No, no, but they started this. I think one of the reasons that's been successful is they didn't try to reinvent too many things.

1:56:18They just made a good-looking pair of glasses that also had a camera in it, and that was enough. Well, they sold 2 million. They didn't sell 20 million. We sold two million headphones in Brooklyn. It's not a massively successful. And also acquired Oculus to get that whole project started. And by the way, in fairness, I have a pair and I enjoy using it. It's fun. But that does not a story make yet. Now, I know who they hired. They're the head of the hardware division, and he's really good. So, but are there people at that company that can really communicate and empower him and that type of stuff?

1:56:59I don't know. I don't know. Meta is a great company. Mark Zuckerberg is brilliant. But do I know about that? I don't know. They've done a good job at getting that product out. Yeah. Yeah.

1:57:15I feel like one of the big lessons that people in the school should hopefully be imprinted on their minds is that you can be wildly successful in business without creating anything that's exactly new, right? You guys didn't create – you created desire and you created an amazing product, but you didn't create the headphone. And I think that when a lot of people think about entrepreneurship and creativity and business, they think I need to come up with some totally novel idea, right? Well, it starts out by I don't think I'm Steve Jobs, OK? But even Steve didn't – he didn't create the phone. No, but he had a much bolder attitude towards life than I did.

1:57:59and he's much smarter than I am, right? Somebody asked me, what's the difference between you and Steve Jobs? They're very simply smarter than me when we were hanging out together, right? So, but no, you don't have to invent something new. I mean, headphones weren't new, but the attitude of headphones was new. Bose was out there saying, buy my headphone for$300 and we're going to help you sleep. We were like, this is taking candy from a baby, right? We are not going to help you sleep. we are going to rock your head. The ads were silence, not music. It's the opposite of music. Exactly. So we had a real edge there.

1:58:35And they all looked like medical equipment. So your job as an entrepreneur is to find that hole in the market, right? Where's there a hole? We knew there was a hole there because Dre, first of all, most computers had their speakers facing the table. So that was like, okay, great. Let's face them up. We're geniuses. Let's get a good show. Right? No, there's so many times when you're looking at different categories, specifically with, I find it with consumer products where you're like, is there like a law that says that it has to be done this way? And oftentimes you do a little bit of research and you realize.

1:59:14We're going back to understanding each other. Right? Yeah. Computers, like I went to a couple of computer companies, not Apple, right? And I witnessed this firsthand to where engineering, audio, the audio budget in a computer at the time was 50 cents. Wow. Okay? Wow. It's nothing. Right. It's nothing. So you want to know why. And music was being played through it. Yeah. Yeah. Guess what? That's not enough. Yeah. You know? So, but that's where the breakdown is. Yeah. Because design and engineering clash. Yeah. And that's where I keep saying it over and over again, but it's true. That's where our school comes in to help training people that are going to become the new engineers and the new designers and the new entrepreneurs to understand the why of each other's discipline.

2:00:10You know, it sounds like kumbaya, but it's not. You know, it's real. Yeah. Was there anything else you looked at in terms of product ideas, business ideas before settling on headphones? Or was it straight? Well, it came out of a real frustration of the record business because the record business, again, the record business at a time was really cool and music was the right thing to do and all that. But when I met Steve and those guys, cool had moved the technology and I felt it. I felt the shift and I said, okay. The first guy that was really cool with technology was Morita from Sony. The original founder of Sony.

2:00:53He had the Walkman. You know, he really got it. Oga, who replaced him, really got it. He bought Columbia Pictures and Columbia Records. That's right. Right? And then they kind of screwed it up because they got it. And that gave Apple the opening to go take that idea, which Steve has said many times publicly. And so when I saw that, I said, we have to learn a new trick. We have to move. I believe companies need to move laterally. I do. I felt record companies especially needed to move laterally. That's why we created Beats and Beats music inside of Interscope. We did it at the company. So we built a company in Beats that was bigger than Interscope in six years.

2:01:44Right. So obviously, tech and design and creativity all belongs in the same box. It's all just moving your company. Like we have a company called Complex right now. And what we're trying to do there, we brought back Mark Echo. We have Aaron Levant. My son, Jamie's there. And we're trying. We have a lot of really good people. And we're trying to mix disciplines in it and we are creating an AI product alongside of it that will blend all these things together and not all of them, but the things that we have together because we're firm believers in that. You know, the record industry needs to move laterally.

2:02:27They need to own the enterprise of AI, not just license to everyone. That's, you know. Oh, yeah. Interesting. They should own the enterprise. Why not? You know, there's no reason why not. Instead of licensing to everyone, only enterprise yourself. Yeah. Right? We own beats. Yeah. Why is there so much historical sort of disaggregation in the music industry? Like the actual relationship between the artists and the end consumer, it's always been intermediated. And it feels like that's been a problem. It's insane and it's ridiculous. Okay? All artists want is to be able to communicate with their audience.

2:03:06Yeah. And ask me why Spotify and Apple Music don't have social. I know why Apple Music doesn't, and I don't know why Spotify doesn't. But that's why I said on an interview once recently that streaming is minutes away from being obsolete. What I meant by that is unless they adapt to what artists really want, the artists are very resourceful. Right now they got to go to Instagram, TikTok. You know, it's like a silly game. And that has to be fixed. That has to be fixed quickly because, and the labels who have all this historic music need to be in the loop. Whether they like it or not, they are a tech company.

2:04:00And they have to adjust to that. And if they don't, I believe it's not going to be great for them. Yeah. Yeah. The Spotify story is interesting. I mean, Sean Parker obviously involved in both Facebook and Spotify. And so I think they had this like delicate truce because if you remember in the early days of Spotify, everything you'd listen to would be shared on Facebook. And that was a huge growth driver. But that's not why Spotify is not social. No. I don't believe that. Apple is not social. Apple Music is. Because they don't, look, when we were there, we wanted to buy Musical.ly. Oh, yeah. Whoa.

2:04:38That's crazy. We brought those guys up there twice, but Apple doesn't do social, and they shouldn't do social. I get why they shouldn't. I was on the tail. I was on the tail wagging the dog. You know what I mean? Yeah. I was on the tail. So, you know, I understood why they didn't do it. But we, Trent Reznor and I, instinctively knew, especially Trent, that we needed social. And it's going to be limited without that. So, you know, look, Apple, so far out of all the companies I found, they're still the most interesting, you know, because they still have that DNA in them. They just said, we're not going to, we don't do social.

2:05:24Fine. They don't. So that was not a good fit. But that's cool. But it doesn't mean that music doesn't need it. Right now, you're not giving the artists what they want. And the pay structure in streaming is all screwed up. So I see you're married. You got a ring on your fingers. Or maybe you have kids. If you have two or three kids, you have the family plan. Oh, yeah. If you listen to, what's your favorite music? Don't take so long. My favorite artist is Yeet. Yeet. Yeah. Oh, great. Okay. So you listen to that and your kids listen to? Elmo. Or their babies. Okay. Well, let's say they listen to Taylor Swift and Kendrick Lamar and you listen to Fleetwood Mac and Madonna.

2:06:13I'm paying, but the kids are listening disproportionately. Yes. They lean on the button all day. Yeah. So guess who gets paid? You pay the bill. Taylor Swift gets paid. Crazy. But Fleetwood Mac doesn't get anything. Elmo's raking it in. Yeah, exactly. No, seriously. Exactly. But that's – so the structure. So streaming is flawed and not complete. But Daniel's brilliant. Alex is really talented. Those guys at Spotify. So they're going to figure a lot out. They may be sticking to a whole other paradigm that I don't even understand, right? But someone who helped bring streaming service to light, I can tell you that they're all missing social.

2:06:55Yeah. Period. And that's why I have a crew of guys and girls that I work with. We're looking at something right now that's really interesting. We're doing it with one of the main companies. and we have an idea that we believe is unique and good and great for the artist and great for the labels and uh that's what we're gonna do yeah we have uh we've had some guys from spotify on and i think that one of the interactions i was most excited about that they've been working on and working towards is making sure that the people that are listening to artists the most get access to the concert tickets right because an artist doesn't necessarily benefit if they yeah but That's self-serving.

2:07:40I mean, I get it. But the artists should be doing that. Sure. Yeah. Again, you don't need third parties to do a lot of this stuff. Why do the labels need third parties to deliver their music? I'll tell you why. They don't. Right? But they do. Right? So that all should evolve with the artists in the front of the paradigm, you know, making the money and doing great and communicating. So I'm not very differently in Hollywood with Disney Plus and Hulu. Well, hang on. No. Yes and no. And I'll tell you why. Because when Netflix came to town, they came to town with a big checkbook. And unfortunately, all these companies are public.

2:08:30Now, I'm going to make this official. This is my opinion, okay? But they all licensed them their music. At least most of them did. Why? Because they got big checks and helped make their numbers. Well, guess what? They created a monster, right? And now they're trying to catch up, right? So music business is the same thing. They licensed their music to Spotify, Apple Music, and Amazon. Well, Spotify is worth more than all the labels together. Yeah. Guess how much IP they own? Zero. Somebody's podcast maybe or something. Go Rogan. I don't know. I don't even think they got IP on that. But that's the point.

2:09:13So the movie business didn't get it. They got it late. At least they got it. And I think that's going to happen in music. I think the music companies are going to be more involved. And AI is the opening to do it. AI is the road to, that doesn't mean Spotify is not, but Spotify is going to have the morph as well. Okay? And again, just no ride goes forever. When I was a kid, not a kid, I'm sorry. I wasn't a kid. I was 2002. I was nowhere near a kid. Just a spring chicken. I was nowhere near a kid in 2002. But when I saw Piracy, I went and met with three tech companies. and one of the tech companies, very high up guy at Intel, said to me, Jimmy, this is a great, I started talking about the recording studio and the people that are suffering and you know, it's not the big stars, it's the kids in the studios and he said, what a fabulous story.

2:10:08He said, Jimmy, but not every industry was made to last forever. It was powerful. Right? I said, he's right. Sorry, this music thing had a good run, but it's over. But it's not music, It's the business of music and what that looks like, right? So I carried that with me. And then when I met Steve and Eddie after that, I said, holy shit, these guys, they're the next step, right? So there is a next step now, and Spotify may grab it. You know, they have all the tools available and the money, the capital, and everything. So they could recreate their business all the time. And you got a guy like Alex running it who's really, really talented.

2:10:50The people at Apple are really talented. You got Oliver and that team over there. They're all really good. So maybe they'll morph the company into something that it needs to be. Or maybe the labels will figure it out. And they'll do more of what this new model needs to be. But to be just a licensor of music, to me, first of all, is boring. Second of all, it has nothing to do with any other discipline in the world. It doesn't. Yeah. And you need to have a proper company today. You have to have a blend of disciplines inside your company proven by two great, great people, Marita from Sony and Steve Jobs at Apple.

2:11:39Yeah. Period. Yeah. They got it top to bottom and they set the tone. Who out there doesn't want to be Steve Jobs, right? They, you know, everybody. He's the new Steve Jobs. He's the old Steve Jobs. You know, he's not Steve Jobs. He is Steve Jobs. Yeah, and it's saying something I've never, everyone wants to be, and yet I've never seen someone and thought, damn, they're the new Steve Jobs. Well, of course, they're missing what Steve was. Steve was the ultimate. He knew it. He knew the goal was where technology and the liberal arts meet. And there's nothing more evident than that than in AI. Yeah.

2:12:18You know? Do you think he would have liked AI? I don't know. I never tried. I was a friend of mine. He has an incredible wife, Lorene Powell Jobs, who's an incredible human being. And Johnny Ives, incredible people. I can't speak for them. For Steve, he was his own guy. But, you know. Yeah. Yeah. A friend of the show was trying to compare AI messaging to the launch of GarageBand and democratization of creative tools. And I thought there were some good points there. Although he didn't like streaming. Yeah. He was very public about that. Yeah. But who knows what – maybe he was right. You mentioned the tail wagging the dog at Apple.

2:13:04If you're a tail, should you try and wag the dog? Is that advice that you would give to someone who works in a large organization? and if they're interdisciplinary. Well, what I was saying is that, look, there's no hiding it. Big companies, music, outside of music companies, nobody wants a tail wagging a dog. But is it a fool's errand to try?

2:13:30I don't know. I don't know. Depends on the situation. I don't know. But I always use Apple as an example because I think it's run really well. Yeah. And they blend it as well as you could blend it. You know, Steve was a big music guy and so is Eddie. So they do it really well. But, you know, I think the record company should do it. I really do. I don't get it. I think that they should do it. They should take it on themselves. And Spotify is a music company. They can do it. Live Nation. Isn't there some interesting positioning that the record companies, at least if they banded together, could work with the artists to say, hey, if you subscribe to Apple Music or Spotify, Spotify and Apple Music are taking a big cut.

2:14:20If you work with us, a lot more revenue is actually going to the artists. Is that how you position it? I don't know. I don't know if that's right. Because it's a hard bell to unring. I'm not looking at streaming. That happened already. I don't think the labels are going to start streaming services, you know, not in any time short in the next few years anyway. But I do think there could be a new AI business. Yeah. And that's where the opportunity lies. And you have Spotify, you have the labels, you have the artists. So there's something in there that needs to evolve out of this that makes more sense, you know.

2:15:02And I see it all together. But I always have. That's why we started the school we started. It just all goes back to that. It's just the way people think. That's how we think. Yeah. I mean, obviously, the answer is probably both. But I would be interested to see if you're more optimistic about the entrepreneurship that comes out of your school or the transformation within industry. The school was built to transform inside the industry. Okay. Yeah, it was built for jobs. It turned into an entrepreneurial place. Of course. I guess we caught that wave, everybody wanting to be like one of these guys or Zuckerberg or something.

2:15:41But it was made to help communication inside Apple, Google, all these giant companies that are taking over the entertainment business, literally. So it's not going to happen in my lifetime, but we wanted to build as many people as possible to infiltrate and help make that all one thing rather than have to be a tail wagging a dog. You know, I mean, look, Intel's buying Paramount and Warner, right? I mean, fundamentally, I mean, and David Elson is terrific. You know, he's a really smart and understands where these two things cross. So hopefully there'll be some great stuff there. Yeah, it's going to be exciting.

2:16:22Well, thank you so much for coming on the show. Hey, you were fantastic. An honor and pleasure. It was fun. Let's do it again as we make more of these plays. Oh, I don't know. You're very far from my house. Maybe if you come to my house, we can do it. Yeah, we'll do it over there. That's fine. But anyway, thanks. There's a big world behind me. I see that. Nice set. Yeah, thank you. The lighting. We reinvented television. Well, we will see you tomorrow at 11 a.m. Thanks for tuning in, folks. Sharp. Have a great rest of your day. And goodbye. Cheers. Thank you. Don't fade us out.