TWiST News: Nvidia's AI Edge, Google Might Have to Sell Chrome, and Founder Fridays Updates | E2049

0:00so jp do you think that the doj has gone far enough in its proposed remedies i was reading luther Lowe, who heads policy of a Y Combinator, and he was saying that some of Google's complaints are them actually just pretending to be upset and that the DOJ could have gone further. So was Brave hoping for an even more punitive set of remedies? So everything we need is in there, and then some. It's all about monetization, right? And there's two ways you can monetize, and there's two ways that Google can remedy the situation. One is if you have a browser like Brave, and you send a lot of queries to Google because, you know, half of our users, let's say, are still using Google as a search engine.

0:39So we send them a couple billion queries a month for which they don't pay us, right? Oh yeah, yeah. We're talking about big numbers and one billion queries a month are coming to our browser, but we get no money on this, on this traffic we send to Google for free for a year. You're talking about hundreds of millions of dollars that we've given them. This Week in Startups is brought to you by Ramp, the corporate card and spend management software designed to help you save time and money. Get$250 when you join Ramp today at ramp.com slash twist. DevSquad. Most dev agencies only offer developers. Why?

1:15Because product management is hard. Get an entire product team for the cost of one US developer, plus 10 % off at devsquad.com slash twist. And DigitalOcean. Whether you're just getting started with AI or seeing your project take off, digital ocean is the cloud platform that lets you focus on what matters building killer apps right now get up to a hundred thousand dollars in free credits at do.co slash twist terms and conditions apply all right everybody welcome back to this week in startups i'm jason calacanis x.com slash jason instagram.com slash jason linkedin jason calacanis add me on all the platforms i interact with people dms are open and uh with me of course alex will help the famous tech crunch editor and writer has joined this week in startups to chop it up with me three days a week and we've got more guests coming in we're going to be doing some triplets and quartets coming up if you have people who you love uh and you want to see on regular rotation here on this week in startups let us know because we're doing news three days a week with interviews we put it together uh alex how you doing on a thursday yeah yeah no i'm doing good i'm just kind of amazed at how much is going on in technology right now, given that it's this time of year, you know, I've been a reporter for a long time.

2:31Usually back in the day, things would slow down a bit, but it feels, I don't know if this is just post-election jockeying and so forth, Jason, but it feels like the news velocity is about as high as it's been at any point this year. So I'm feeling good. Lots to talk about. You are right. The velocity of news is tremendous. I just saw Matt Gaetz is not going to be attorney general. He took himself out of the running. It's just nonstop. non-stop and with trump you have to understand he's an entertainer and he does a lot of entertaining things and the press loves loves trump because trump equals ratings so there's going to be a lot of politics and policy on the show over the next four years we're going to try to keep it out of the lunacy and the matt gates craziness we're going to try to keep it policy based but of course here we are we're about to talk about google on the docket and the google breakup remedies yes and i think that matt gates would have played a major part in that but now we have to take that out so it's going to be crazy and one of the great things is having people who are first principled non-partisans to talk about it and that's what we're hoping to do here on the show let's get right to it you know i know you were very excited about nvidia last night and they crushed it yes just give us the overview here i mean this is extraordinary it was incredibly impressive.

3:53As we said, if they just met expectations, probably not enough. We expected them to actually beat them by a little bit, Jason. And here's the number. So revenue expected, 33.2 billion. Revenue actual, 35.1. And then earnings per share expected, 74 cents. Actual, 81 cents. And then, yeah, I know, right? And then critically, their guidance for the last quarter of the year, their Q4 of their fiscal 25 did have guidance that met investor expectations. So everyone's pretty happy. Shares haven't moved too much, Jason, but it does seem to be that this indicates that the hype train in AI can keep going for at least another quarter or two.

4:32All right. I just want to pause here and say they beat the top line by$2 billion,$1.9 billion. That's extraordinary. I mean, that is just bonkers on already high expectations, they beat the eps by seven cents a share which is about 10 that's exactly what i was about to say about 10 yeah that is extraordinary um and they're saying revenue in the next quarter will be 37.5 billion or something to that effect which is another two and a half billion another almost you know whatever 10 i mean it's just bonk and that's quarter of a quarter to go up eight percent or something yeah but the stock didn't move i think that means that it's all priced in everything's always priced in so be careful out there folks it's this thing is a juggernaut it's not going anywhere and the question i had for you yesterday was is anybody going to compete for these dollars is there a competitor for these dollars and it does not seem like that has emerged i know amazon has a big project to make their own chips etc and competing products is there any on the horizon headwind or lanaius headwinds headwinds would be things that are not direct competitors they would be things like the economy etc i guess there's two things that people are wondering one will there be a competitor for this category of servers essentially in data centers for ai and then number two this hitting a wall concept that people have been debating you know is there going to be some plateauing of AI and therefore the need for these.

6:17So any insights on those two? Yeah. So the thing, the way that I would answer the question about AI chips, AI focused chips and competition is that as it stands right now, they have already secured sufficient leadership in the next generation of chips that any material competitor from a startup, or I would say a big tech company as well, will be in the next generation. So the investing call after NVIDIA's earnings focused a lot on Blackwell, Jason, which is the successor to the Hopper architecture that we all know, the H100s that are out there. And just quoting from their earnings call, demanded greatly exceed supply.

6:56We are on track to exceed our previous Blackwell revenue estimates. Customers are gearing up to deploy Blackwell at scale, etc, etc, etc. So it seems that NVIDIA able to retain the crown for the foreseeable future that said there are a lot of startups out there that are pursuing this because the company makes so much money and jason i think any business that has 35 billion in revenue and net income of 20 billion in one quarter is going to attract i mean a sea of competitors over time because there's just too much profit there to not go after i guess the amazon in-house ai chip tranium 2 yep that's the one that's designed to reduce essentially amazon's reliance but amazon is one of the biggest customers because they have aws so even if amazon does make a great in-house chip for lower cost jobs to reduce people's aws cloud computing bills and you would assume other people will do the same people still might want to rent h100s so it's not blackwell chips or the new blackwells yeah so therefore it's not even in amazon's choice they're providing to the startup community and other folks their cloud as is azure as is google cloud as is oracle's cloud so they're just going to buy what their customers want so we're going to see uh cerebrus is the other company i guess that's making ai chips cerebrus um etched and then also there's a company called d matrix and um they're actually microsoft backed and there was a new story that came out this week which we just pulled up that they've actually kind of put together their first actual chip so there's movement here i i think one reason, Jason, we haven't seen as many competitors out in the market as you might expect is that building chips is much harder than building software in terms of time to product and market.

8:36So I would not be shocked if next year was a very exciting year for chip startups. But you also asked about the AI wall. And this was what I was most curious about in the earnings once we saw that the numbers themselves were good, kind of what we expected. So the first analyst question that I saw was someone going, hey, Jensen, CEO of NVIDIA, what's up with this AI wall? Are you worried? And Jensen gave, I would say, a very good answer. And I'm going to try to just down Jason to a couple sentences here. Tell me if this works. Essentially, the old model of training AI models, pre-training scaling is intact, he says, and it's still continuing.

9:13But that does not address, I would say, the rate of progress, which people say has slowed down. But Jensen says there's two other ways that they are improving AI models in the market today. One is post training scaling. And then essentially what we saw with 01 from OpenAI, which was test time scaling. So there's two other approaches now creating a three prong approach to improving AI models, which Jensen thinks is going to keep going and improving what we have in the market for a long time to come. So some slowdowns in one approach, but there's several approaches. We're fine. Hey, everybody. I want to tell you about an awesome corporate card and spend management software that's designed to help you save money.

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11:04It's elegant, it's dead simple, and it's going to save you money. disclaimer cards issued by sutton bank members fdic terms and conditions apply so let's talk about google the doj um obviously has a case against google and now we're going to the remedy google lost the case maybe tee this up for us and then let's talk about the remedy and i have been giving a lot of thought um as to how this might go down and i have a lot of practical questions about what would happen if Google Alphabet was forced to spin out the Google Chrome browser. Yeah. Okay. So just to back everyone into this, recall that back in August of this year, Google was declared by court to be a monopolist and one that acted as one to maintain its monopoly.

11:51This was, for you nerds out there, a violation of Section 2 of the Sherman Act. Jason, this sent shockwaves through technology. This was a big moment. The question then became, though, okay, hey, Google's a monopoly, what are you going to do about it? So we've been waiting to hear from the Department of Justice what they were going to put out in their initial proposed final judgment, or PFJ. So if you see that acronym out there in the news, it's essentially the DOJ's pitch to, hey, they're a monopoly, here's how we're going to fix it. And Jason, the headline story out there that everyone's talking about is that the DOJ wants Google to divest Chrome, but there's quite a lot else in there, including the possible divestiture of android and a lot of other business rules about what google can and cannot do including investing into other ai companies or other search companies so it feels pretty broad and google is uh peeing its pants is maybe how i'd put it frankly that's a technical term that's a technical term yeah i mean i don't know that they need to i think what they need to do and this is really the hard thing to do when you've got something as core to the business as you have two core pieces chrome which is kind of built into everything it's very integrated into search because you have the default search engine it is very tied to your google account whether you have a gmail account or a google domains account like the google docs account because it syncs all your information into the chrome browser you know that when you log into a chrome browser so they have really integrated this tightly and then of course the reason they did chrome was to control the user behavior of going into the url bar and instead of typing in google.com typing in your cert and firefox was printing money for a long time as was the opera browser mozilla just a bunch of folks and so all of this added up to a way for them to kind of intercept searches before anybody else could intercept them that's why it was so critical for them to give tens of billions of dollars a year to apple to secure those high-end customers apple customers are the highest end customers because they can afford a 1200 phone so the default search there is worth more because remember google search monetizes through advertising whoever owns the apple user base gets the mercedes the tesla ad searches whoever owns the android users well yeah they get a lot of global users, but they're going to get the Toyota, no offense to Toyota, you know, the Toyota Prius searches and the used Prius searches.

14:28So just keep that in mind of how critical some of these deals are to them. And also, Jason, the data that comes from those searches is more monetizable to your point, which is very critical, but also it provides a lot of signal to Google about how to tune its search engine. And one of the points that DOJ made was that Google bought access to essentially search audiences, use that information to make itself better, and then no one else could compete with that virtuous cycle. So one of the remedies is that Google will have to quote, disclose data sufficient to level the scale-based playing field that has illegally slanted, including at least licensing syndicated search results that provide competitors a chance to offer greater innovation.

15:06That's a lot. Yeah. So I had talked to you a little bit about maybe be putting in context uh how much revenue google has from advertising versus other ad networks and stuff like that because one way to look at this is product base another way to look at it is revenue based on a product basis you can't debate that google doesn't have 90 percent of queries searches right now although you and i know people are doing searches on uh claude and chat gpt pretty frequently i would say the majority of my usage of cirque has gone to open ai with a trickle to grok and a trickle over to claude right now yep uh and actually some to gemini so i would say i might be you know the um the early adopter in this metaphor the vanguard of technology adoption so i feel like that part of it is going to be solved by the market which is the great paradox of this by the time they got to 20 years later to google search monopoly it has viable competitors which is really weird it's almost like somebody got to the top of the hill and they started running down the hill and you just push them in the back and they're going to go tumbling down the hill and then it's a very weird for it as well like look what i did yeah it's like tripping somebody who's already fallen you know they're already you know at peak search market share but But if you look at this through online advertising, they are also a smaller percentage of online advertising than people realize because they're competing with Amazon, Uber, Instacart, DoorDash, and of course, Meta, who have large advertising businesses.

16:47So, and then if you look at advertising overall, which would include television advertising, I think Netflix, Amazon, Prime, other people have advertising, right? Oh, yeah. And then you have advertising in newspapers, magazines, and then you have outdoor advertising. So you have other places to put your advertising dollars. Do you have any idea percentage-wise what percentage of revenue? We all know that Google has the majority of searches, but what about ad dollars? I want to make a point before I answer that, Jason, just so everyone knows that when we talk about the Google search monopoly, just to be clear, the DOJ reports that Google has unlawfully maintained its monopolies in general search services and search text advertising so it is a very um it's a constrained point still a large market but certainly not trying to say that they own all the advertising market or all of search whole cloth so there are some distinctions there in terms of their total share of the u.s advertising market i don't have the number off top of my head but it's 27 i was gonna say less than a third so there you go yeah and if you look at the duopoly of google and meta together they hold 57 here in the u.s so that means like of all advertising in the world they own maybe single digits that's the you know like the question i have um how much do they own of all so we'll bring that to you in another episode as we double click on it let's talk about what are some possible scenarios here and then we have a special guest which i'm very excited about because my favorite browser is brave and we have somebody from brave here a competitor who is directly impacted by all of this so if google is forced to spin out google chrome i have a series of questions okay who would buy it they have to spin it out yeah so that means somebody has to buy it or it has to be a standalone business yes so let's start with the first question who would possibly buy this because and then what would you value it in yeah then what you would value it at would be based upon its ability to do a deal for search so here we are if you are the doj you're probably going to say it can't be owned by the mag 7 right because that makes no sense you're breaking up one of the mag 7 you're not going to let apple buy it right you're not going to let amazon or meta buy it because then you're it's just like making somebody else you know one of the seven you know giant bullies or whatever you want to call them if you view them as bullies like the doj does you're just letting one bully get the weapon of another bully so that's it's got to be somebody below that group somebody under a 500 billion dollar market cap let's say okay then would you allow if a smaller company bought it let's say just going to pick a random company here salesforce isn't in or hubspot aren't in the mag 7 right they're under a trillion dollar market cap companies i believe so if you let a sas company atlasin i don't know some 50 to 250 billion dollar 500 billion dollar company buy it yep would they not be allowed to do an ad deal with google would that be not allowed because if salesforce buys it i don't know why they would but let's just say they did yep then they're going to be banned from having google buy it and google monetizes at the highest level which means they've got to let somebody else buy it then how do you value it because if you can't do a google deal well then it's i don't want to say worthless but it's gonna be hard to monetize this thing that means you have to sell the advertising to bing or brave or duck duck go or somebody who has a competing search engine or would you sell it to yahoo the private equity owned you know maybe five or ten billion dollar company that owns a collection of assets maybe that makes sense but you would essentially be sunsetting this browser.

20:41Now, on top of all that is an open source company. So I'm going to stop there because this is one of the most complicated things I've ever heard. Strategically cutting out Chrome. Okay, no big deal. It's a pain in the neck for Google. But how does it become a viable standalone business if it can't have a search deal? All right, take a second and picture the ultimate all star team for your startup. Okay, you got that mental image, maybe the Avengers, maybe even X-Men, Wolverine, Cyclops, pick your favorite superhero team. And let's be realistic, until you've raised your Series A or your Series B, you might need some help building that dream team and finding top tier talent, managing all the timelines you've got and maintaining quality.

21:25It's a big lift for all founders. I mean, scouting for that elusive 10X developer, that's going to eat all your time. And that's where Dev Squad comes in. Think of them as like Professor X, you know, they know where to find those exceptional mutant developers who are 10x devs. And DevSquad offers a complete product team from Latin America. You're going to get two to six full stack developers, a technical product manager, and specialists in case you need them, like product strategy or UI and UX design, DevOps, and of course, quality assurance, all for 75 % less than a US-based team. all for 75 % less than a US-based team while being on your same time zone, which is really important.

22:09There's no long-term commitment. It's just seamless collaboration. So if you want a GSD, if you want to get stuff done and you're ready to squad up, head to devsquad.com slash twist for 10 % off your first engagement. That's devsquad.com slash twist and transform your startup with the all-star team it deserves. I honestly do not know. And Jason, it's great that you point this out. We were on Hacker News earlier today looking for the most interesting commentary from the market. And quite literally, this is the thing people are chewing on. What is the value of Chrome not inside of a search company and when it's unable to monetize via a major search deal, a la what we've seen with iOS and Google?

22:50I honestly have no idea. and so normally when we talk about taking a large company and breaking it up into smaller pieces we think in terms of unlocking value that if you took something and made it smaller and more discreet people would value it differently and that the aggregate would be worth more than the whole in this case it feels like if you break off chrome it crumbles into your hands like sand and so i don't see it happening and so here's my pitch to you is this the doj doing the door slamming negotiation technique make a lot of noise threaten this and then when they actually retreat to the position they expected it feels like a concession and then mountain view gets to say hey you know we got to keep chrome i mean who knows i do think they're probably trying to give google an off-ramp here to make a sacrifice you're exactly correct taking some things out of a conglomerate would unlock value taking youtube out would unlock extraordinary value and i think the greatest move for google shareholders would be to just offer that offer youtube that would offer youtube that's 50 billion in revenue a year plus the subscription base it would be a netflix competitor immediately google would be bummed but it wouldn't be the end of the world for them i agree with that and just to put it into into context everybody in q3 of this year youtube ads were at 8.92 billion dollar business jason okay up from 7.9 in the preceding year so not the fastest growing company but certainly one that has ample scale to be public and still maintain advertiser share and so forth so and they have subscription revenue too for sure but how does but the the issue i have with this is not a product complaint but more of a how would divesting youtube answer the core issues the doj has with google's kind of search ads business and does it actually go at the heart of that particular issue as a sacrificial lamb i get it i'm just curious if it'll you know appease the right thought the search a lot of youtube is a lot of searches so if you look at the percentage of searches it would go down and i don't think they would be able to monetize the search deals with apple etc if they didn't at the level they're able to if they didn't have youtube i think it's that key of a piece they think they're making 50 billion a year off of youtube because the ad revenue is like 33 34 billion and then there's another 15 billion i guess in subscription revenue with youtube premium so yeah i don't think it's a perfect match to the concerns they have but it would be significant i think it would actually be more significant than chrome in terms of hurting google in some ways in terms of the size of the business because i think you'll lock 500 billion off the market interesting we trade at 10 times uh chrome yeah i'm not sure but let's bring our guest on and let's see what their opinion is here uh and so that will you know really help us contextualize this everyone we have uh jean paul brashmets or jp if you want to call him that if you're here in the u.s head of brave search head of ads over at brave and also worked according to his linkedin at abe books way back in the day which if you're a used book yeah if you're a used book nerd you know that company jp thanks for coming on the show man appreciate it what's your take here jp when you see them spinning out chrome you work on the brave browser it's a private company i love it it's my favorite browser the reason it's my favorite browser is you don't track anything and you have shields up and when you have your shields up on the margin some websites don't like it but i would say 95 out of 100 it just works so much faster and it works really well on mobile and you have your own search engine which i do not change my default search engine i like to use brave i like to have a little privacy i like to go faster and i don't like to be tracked of course i use google sometimes i go back for google flights i go back for next scores but i have gotten quite used to brave's search engine so when you you run a browser company you're a standalone browser company so do you make money through a deal with google at all or is your money all coming directly from your own ad network i guess it comes directly because one of the uh well one of the points that the doj is making is that google only gives you money if you agree not to compete with them and that is the crux of the matter so if you have a browser and you decide to make a search engine you're not going to get money from google you only get money from google if you agree not to compete which in the case you had the example of apple doing some deals with bing for siri and then google telling them we don't really like that so much or firefox was actually invested in clicks which is the company that created what became brave search and when they renegotiated their deal with google in 2017 google told them that they didn't like that thing in europe that they were doing so the the payments uh of google two browsers were always conditional or non-compete and this is the crux of the case and this is in the remedy if you read them carefully this is basically what is now forbidden so these strong arm tactics we'll call them what they are if you want this incredibly robust the largest search ad network in the world and you want to monetize it on your search engine let's say braves or duck duck go is a competitor you are the two i think largest independent search engines outside of google in the united states in the english spiking language you can't use their network their network has scale and then if anybody tries to compete on the margins they swing a stick essentially and say yeah we don't like what you're doing there it would be terrible if something happened to that really nice car you have parked outside and uh you know in brooklyn you know when they told you like it would be terrible if something happened to the car you're parking in front of my house you would move your car because you would know what would happen you're you might have a broken window or you know your tires might be gone when you come back now that's really one of the main monetization so one of the main anti-competitive move that google was doing was basically here's a pot of money but you agree do not compete and if you compete we basically make your life nearly impossible because you have to do you have to finance a browser which is since the day of explorer has become a non-profit right netscape did not monetize the b2c business they gave the browser away tried to sell the server when explorer came out there was part of windows so it was for free when firefox came out it was open source and sort of an outcast of netscape and they couldn't make money it was a non-profit it right and then chrome was offered as a way for google to reduce their payments to third parties so the browser business has always been a loss leader right tell me how you built your search index and how hard it is to compete against google's global search index because this is seems like a non-trivial non-trivial task it seems like it would cost a lot of money and a lot of time but correct me if i'm wrong or if i'm right yeah i mean we so first of all we are at brave search the one of three independent indexes.

30:15I think there's Google, Bing, and us. They used to be Yandex and Baidu, but I think both of them have pretty much given up on trying to index the American and European world. Companies like DuckDuckGo, Perplexity, or everyone else that you could call a search engine typically just worry about the user interface. They basically use a search API in the back. There's three search APIs in the world, Bing Search API, Brave Search API, and Google Search API, which is actually underused because it's not a high quality and it's not exactly... Is it not high quality on purpose, by the way? Yeah, of course.

30:52So this is one of the other remedies that the DOJ is asking Google to make a basically cheap and high quality version of its search index. If your startup is all in on AI, well, DigitalOcean is the cloud platform that's going to help you scale faster without headaches. With DigitalOcean, you can quickly spin up GPU-powered virtual machines and start training models, building your AI agents, and crunching massive data sets in seconds. And when you're done, you can turn those virtual machines off as quickly as you spun them up. Dio, DigitalOcean, is going to help you scale computing power based on your precise needs without making upfront hardware investments.

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32:12I'm ambivalent about that one because we built a large business in the Search API at Brave, and we would not like Google to have to sell it for zero bucks, right? That would not be so great for us. So that's one of the stuff that we criticize. But there's only three independent search engines. And to come back to your question, yes, it is hard. That's why I started this thing in 2008, and it took a great team of people many, many years to get to a level where we could get to 100%, which was only achieved by Joseph and his team. so Joseph Pujol runs the search engine, it was only achieved after Bing raised its price factor 17-fold after they had to deal with OpenAI, and we could not afford the 10 % that we were still using Bing on, and we decided to go to 100%.

32:57So it took us 13 years to go to independence in indexing. So JP, do you think that the DOJ has gone far enough in its proposed remedies? I was reading luther low who heads policy of a white combinator and he was saying that some of google's complaints are them actually just pretending to be upset and that the doj could have gone further so was brave hoping for an even more punitive set of um remedies so everything we need is in there and then some uh and so i do agree with what you guys were discussing earlier that that there's a good settlement that can be made there. It could very well be that they don't have to diverse Chrome in the end.

33:41The main reason people don't compete in search is it's not about data so much because there's a lot of kids that went to Stanford. We know how to build it. The problem why we're not building it is because no one is going to give us money to build it because they don't think it's going to be remonetized. No VCs in the last 15 years, Jason knows this, but it was a little but it was more like 20 years ago jason and i were fooling around with search engines like no one will give you money to build a search index right so you got to find it somewhere and they don't give you money because they don't believe that you will be able to distribute it number one because they know distribution costs money distribution would be possible if you had tons of money so it's all about monetization right and there's two ways you can monetize and there's two ways that google can remedy the situation one is if you have a browser like brave and you send a lot of queries to google because you know half of our users let's say are still using google as a search engine so we send them a couple billion queries a month for which they don't pay us right oh yeah yeah we're talking about big numbers and one billion queries a month are coming to our browser but we get no money on this on this traffic we send to google for free for a year you're talking about hundreds of millions of dollars that we've given them on the other hand if you have a search engine they have a product called adsense for search which actually is made to finance search engine, except you cannot use it if you have a browser because they don't allow you to monetize queries that start from a toolbar, they call it.

35:08I mean, this is ridiculous, right? And both of these points are in the DOJ document, meaning that there is somewhere in there, well, it's a bit lawyerly, right? Because they turn it into negative. They say that Google is not supposed to pay or to give special value to people for exclusivity, etc. Now, let's play this for a minute. Does that mean that Google cannot pay Apple for the traffic? Well, that would be interesting because then the market cap of Google would go up by 500 billion, right? Because 23 billion times multiple and Apple's market cap would go down. So the perpetrator gets up. That doesn't make sense.

35:44So they will continue to pay Apple, I believe, roughly the same amount of money, but they will also have to pay Brave the same amount of money, but they cannot request exclusivity, which means that Apple will have to display a choice screen and say, do you want to use Brave? Do you want to use Google? right there's a lot of choice queens in this remedy situation because jp just to make sure that i'm tracking this because exclusivity won't be allowed your company will therefore be able to monetize the search queries you already send to google from folks who use brave but don't use brave search so we believe so and and second uh you know whenever i had the chance to talk to the doj i always said look look if it doesn't help brave i don't know if it's a remedy that works Got it.

36:26Now, if you spin out Rome, does it immediately help Brave? Well, it depends, because if they have a gigantic deal with Google, you just create another monopoly or near monopoly, not a monopoly, but near monopoly, and they're the richest company in the world, right? And they can start, I don't know, I mean, it's a different world, but I don't think you really make a huge difference by just doing that. Now, to be fair to the DOJ, that's three lines in a 35-page document, right? And obviously for the press, you have the impression that it's 35 pages out of 35 pages. That is, I think it's very easy for the press to conceptualize spinning out a product.

37:04What they don't understand is the deal structure. And that's where the nuance is. And I think JP, you explained that perfectly, which is if you run a search engine, you can't use their ad network. If you compete with them on a browser or a search engine, you can't use their ad network. and just saying to them listen if you're going to let people monetize it's got to be good for everybody you can't pick and choose and you can't strong arm people into not competing with you because that is the definition of antitrust being able to say and they could keep taking this further and further and further now they can't bully apple but they could have said to apple at some point and there was a lot of rift here between apple and google over the iphone because android came first and steve jobs felt very betrayed by the iphone i mean imagine if they said to apple like you can't make an iphone or else you know we're not going to allow max to have search can't use google search on a mac right like it's really crazy to think of telling other people what businesses they can be in in order to have a business relationship with you but that's what they did with samsung that's what they do with uh with firefox right they which are less powerful they basically told samsung you you can have your own browser but it has to have google search in it but you cannot have i i run a browser in asia and i tried to be on the phones and they would tell me no we cannot do it because we have a deal with google and even browser that we would pre-install on the second screen have to have google search as a as a default if not we don't get the app store yeah so that's one of the remedy as well that google cannot in the future condition the availability of the app store which you know you don't have the app store your android phone is a brick right yeah yeah yeah and it's like having a supermarket and you don't have anything on the shelves it's kind of like it's just a shell yeah so so that was the it's another remedy you know you have like i don't know there's like 10 sections and and each section has like five remedies and one of them is google cannot condition the availability of a another product based on the uh supply of search as a default yeah is google upset at brave for protecting people's privacy so deftly and removing ads and giving that control to users?

39:19Or is that part of their animosity towards Brave? They just don't pay us. But I think the fact that they don't pay us is more connected to, they don't like competition. And Brandon is a person that has built two major search engines, two major browsers in his life. So who's to say he cannot do it a third time? And I remember that there was a company before Brave that was sold to Brave. I used to tell a prospective employee who would always ask the question, why does the world need another browser, another search engine? And I would tell them, look, there has been five browsers in the history of the web.

39:56It's only 25, 30 years. Who tells you there cannot be a sex one, right? Like, why does history stop at Chrome? And why do you only need a search engine in a world where, I don't know, I mean, it's difficult to build. So yes, there are less countries in the world that make search engines than countries that make atomic bombs. So yeah, it's difficult. But having another search engine, I mean, that certainly is a nice thing to have. What do you think of what Sam Holtman's doing over at OpenAI with their search experiment? Is it good? Yeah. I mean, first of all, they realized a number of things. One is that an LLM that's not connected to the web is a bit, well, it's less good than it could be, right?

40:45Yeah. And if it's connected to the web, then it is most likely going to use a search engine to go to the web because, you know. And so without, you know, I cannot talk too much about other things, but I mean, they have to connect to some search engine, you know. Maybe. Like an API with a company that we may have mentioned in the last five minutes, perhaps? Maybe. But the thing is that now the question becomes much more interesting is where does AI live in the future? Because you can answer that question by saying, oh, it will live everywhere. But that's not an answer. The real answer is there is a place where people ask every question they can think of.

41:25And that's the navigation bar of a browser, right? Yes. And so does AI, like in Brave, I mean, you use Brave Search, right? So you know that we have the summarizer, which, by the way, we launched way before Google did that and way before everyone else. And it basically reads all the results of the web for you and summarizes them on top, which I think is a super useful feature for that kind of queries. And so exactly, I mean, people are going to use GPT, of course, in a B2B API type business thing, and it will have to be connected to the web as well. some people are going to use gpt on a web page but i think you know a lot of people will use gpt in a browser-like yes product and that will have access to if i want to go to a restaurant tonight and i want to know who are the five best restaurant and you know you got to get some ai somewhere and and that is uh going to be in something of a browser so yes at open ai there's a guy who was one of the first creators of firefox and one of the guys who created chrome so they work at open ai so yeah they're probably doing a browser right yeah uh and at some point they will launch a browser you're right yeah one thing is that i i uh over the years building search engine i realized that some people talk think differently about things so many years ago i was trying to convince uh facebook uh dan rose and and circleberg like you guys need you should launch a browser like you're such a threat to google if you if you if you launch a browser you're going to be master of the world.

42:56And they were like, no, we already have one. And I said, okay, well, my app is a browser, people open link, and my social discovery search. So they had a different view of the world, which turned out not to be correct, because social is not a good search engine, and the Facebook app is not a good browser. But they didn't feel the need. So it could very well be that OpenAI goes in the same direction, and they say it's very AI-centric, and we don't care about navigational queries. We don't care about this. We don't care about that. But what Google discovered in the past is that you need to have 100 % of the queries if you want to make money on the 18%.

43:31And so, sure, you remember the queries you've done with perplexity and OpenAI, but these are the 24 % that are not monetizable, right? So if you explore the number of queries and you say, there's a company that does the smart stuff, there's a company that does the navigational stuff, there's a company that does the porn stuff, and then there's a company that does the commercial stuff, that doesn't work so well because you have three bankrupt companies and you have one that makes all the money and that would be Amazon, right? And so I think the magic of search is having this box where people just ask everything and AI is going to have to live there.

44:08We talked about how there might be monetization opportunities in a post-Google settlement world for brave and brave search. I'm curious though what your expectations are for driving increased search volume because if you monetize your existing volume better great but do you think that the remedies as discussed by the doj will actually help smaller search engines get more net new users yes so we already have kind of in europe we have a preview of this because the dma which is a new legislation in europe actually forces apple to give users a browser choice and the dma forces google chrome to give users a search choice so if you start chrome in europe the first time they ask you, do you want to use Brave Search or Google Search, etc.

44:50So we do know that this works. And what's the impact on that? Like how much acceleration did that drive in your ability to get new regular users? Oh, it's very significant. Like our growth in Europe is twice as big as it is in the US at the moment, just because of that. I don't think that... Yeah, I think the word of mouth growth is probably the same across all countries because people have like social structure and stuff. But Europe, we can see double the growth at the moment, and it has to be coming from there. Okay. Thanks. I really appreciate it. JP, thanks for getting us into what actually matters here.

45:26It was really great to catch up, and I appreciate you educating us on the nuances here. It really is about these deals and the deal-making. And the browser is just, like you said, a couple sentences in this 35 pages. Really, truly appreciate you coming on the show. Thank you, Jason. Thanks, Alex. I'll talk to you soon. Okay. Well, that was great, Alex, because this is like a breaking news story. And I think when you get somebody who's on the inside, who's got decades of experience on it, you actually get to what is really happening here. And he seemed very excited about not Chrome being spun out, but just the dealmaking being leveled.