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Michael is 10:37 on Wall Street.
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>> 5 I see multiple journalists on the horizon. and founder. >> You're watching TVPN.
4:34
Today's Wednesday, July 8th, 2026, and we are [applause] live from the TBNN Ultradom Template Technology Forces Finance, the capital of capital.
4:44
Let me tell you about ramp. Time is money. Save both.
4:48
Easy to use corporate cards, bill payments, [music] accounting, and a whole lot more all in one place. >> That's right. It's great to be back. >> Yes.
5:00
The Invest Like the Best [music] hype song really it it really has I don't know. It just burned its way. Yeah.
5:08
Puts it in an incredible Yeah. >> mental state. >> Uh 100% 100%.
5:11
You know who else is in a good mental state? Jeff Bezos.
5:14
because he's getting a markup on the 25 billion he's put in.
5:20
>> He's marking himself up.
5:21
>> He's marking himself up >> alongside KOU. >> Yeah.
5:23
The news is that Blue Origin is raising outside capital for the first time.
5:28
He's participating uh fund CO2 who he has also invested in through his family office is also participating.
5:33
Um but there will be an opportunity for some other true outsiders to get their first slice of of Blue Origin.
5:40
Uh Andrew Ross Sorcin had the scoop in the New York Times today.
5:45
You have to wonder if this is gossip coming out of Sun Valley.
5:50
Uh the company is raising 10 billion dollars.
5:52
This is the first outside fund raise.
5:54
Uh it's hilarious to think about this 25year-old company as being previously bootstrapped, but that's technically what it is basically.
6:00
Uh one founders's capital just uh chipping away at a really hard problem for a quarter century. And now we are here.
6:09
Uh Bezos has been funding this basically solo on his uh quest to visit the stars. Uh he's doubling down.
6:19
>> People can't really complain about the valuation because he's a big Yeah.
6:23
>> part of uh setting the price. >> Yeah. Yeah.
6:25
So uh he's doubling down.
6:27
He's putting in $2 billion directly and CO2 is getting twice as much allocation, 4 billion.
6:32
Uh there's another interesting CO2 tidbit I alluded to earlier uh from the New York Times piece.
6:39
Bezos's family office is a major investor in CO2's innovative strategies fund which is focused on emerging technology startups.
6:46
So I'm not sure if the money is coming out of that fund specifically but there is a connection there.
6:51
He's been building a relationship with CO2 for a long time and they are optimistic about Blue Origin's prospects.
6:57
The valuation is expected to be $130 billion uh big for a private company.
7:02
I was uh listening to Gavin Baker and Travis Kalanick talk about how crazy it was when Gavin was at Fidelity and he wanted to value Uber at 14 billion and everyone thought he was crazy.
7:15
The valuation turned into an auction came in at 17 and everyone was like this is unprecedented.
7:19
We've never seen a private company this big.
7:22
And now uh 17 billion even 60 billion in the private markets looks quaint by modern standards in an era where we have uh several trillion dollar private companies uh many up in the hundred billion plus range.
7:35
Uh it's a wild wild time.
7:38
>> Brian wants us to warm up the gong.
7:41
>> We got to warm up the gong.
7:41
Warm up the gong for Bezos.
7:43
Give it a couple warm-up hits just to get it warm. Just to get it warm. Here we go. Yeah. >> Fantastic. >> Nice and warm. >> Yes.
8:00
So, uh, the Elon bulls are saying, "Oh, SpaceX is underpriced now."
8:04
Because you have to imagine, I don't know if there's an exact revenue figure that's leaked for Blue Origin, but based on the size of that business, it has to be small.
8:13
And so, this has to be a very high multiple, but you're not really valuing this company on cash flow or even revenue.
8:19
you're valuing it on the capability which is it's the second company in the world I believe to uh bring a rocket to orbit, land it successfully, you know, prove reusability.
8:32
They got there before China which has been trying to copy SpaceX for years and so lots of really solid progress.
8:38
Of course, there was that setback with the uh launchpad that exploded, but they figured out a solution to that and things are chopping along just uh just fine.
8:46
Uh the company is estimated to burn five billion this year.
8:52
So this looks like a pretty standard 12 to 18month fund raise at 10 billion.
8:57
Um and it's burned something like 27 billion to date, which you know, a billion a year on average over 25 years.
9:04
Not too bad for such an ambitious project. Still a lot of money.
9:06
Uh but a big opportunity.
9:09
And uh and you have to imagine um there are a number of other comps like A Space Mobile as you like to call them [laughter] AS Space Mobile Space Mobile >> AS 272$28 billion >> $30 billion company and I don't believe that they've gotten much to orbit yet they've done some experiments some tests they're still early but it's a huge market and we've seen how fast >> concepts of mass to orbit >> Yeah.
9:35
>> Yeah. and and and we've seen how fast Rocket Lab and various uh it's a big really it's a really really big market and so when you're going after a big opportunity and you've been working at it a long time and you got Jeff Bezos funding it uh lots of reasons to be optimistic uh let me tell you about
9:50
MongoDB what's the only thing faster than the AI market your business on MongoDB don't just build AI own the data platform that powers it um >> another comp uh investors would certainly look at would be Rocket Lab sitting at just under 50 billion and uh [cough] there'll be multiple players in launch. That is for sure. That is for sure.
10:12
>> Well, we have some heartbreaking news. Heartbreaking news.
10:15
Apple has scrapped plans for a cheaper Apple Vision Pro display and is winding down work at Samsung. This is from Mac Rumors.
10:22
Really hits me and the other three Apple Vision Pro fans particularly hard. Uh brutal.
10:27
I did I Who did I talk to?
10:30
I talked to somebody who said that they they actually are a daily user of the Apple Vision Pro.
10:36
I thought I was in the top 1%.
10:38
>> Was it the the founder that's making >> Yes, that's right.
10:41
that he says he watches it he watches he uses it every night or something like that.
10:45
That's a lot of Apple Vision Pro use.
10:46
Obviously, the the the product never really found product market fit.
10:50
Uh although we have one in the studio, we've been having fun with it.
10:54
Uh I still think it's a it's it's an incredible piece of technology, but uh little bit of a chicken and egg problem.
11:00
The developers never showed up and it was very expensive, very heavy, very cumbersome.
11:04
It requires a lot to put that thing on to watch Lawrence of Arabia.
11:08
But when you do, it's worth it. It's worth it.
11:11
What did I watch most recently?
11:13
I watched Dunkirk in it and I watched Godfather Part Two and Master and Commander.
11:18
Master and Commander, that's a great movie, especially in Vision Pro.
11:21
Really, you want to be in the cinematic feel, feel like you're on a on a on a warship.
11:26
Uh so Apple has has reportedly stopped development on a cheaper display for a low lowerc cost vision pro.
11:33
This feels like what the industry needs to move forward.
11:36
The actual display was fantastic.
11:39
It just needed to be cheaper and lighter so more people could get them.
11:42
That at least was my thesis, but Apple disagrees with me. What do I know?
11:46
So the supplier Samsung display expected to formally end the project by September.
11:51
And if you remember, there were rumors of the crazy hoops that Apple had to jump through to get that incredible display because they really leaprogged Meta, who had been working with the acquisition of Oculus and they'd been improving the uh the the display fidelity.
12:07
They got rid of the screen door effect.
12:08
They were increasing the resolution per eye.
12:10
Everything was getting better about that display, but on a very linear trend.
12:14
And allegedly uh what Apple did was they went to Samsung and said, "We know that you are working on next year's display.
12:23
You're also working on displays 2 years out, 3 years out, four years out.
12:27
Now, what's the problem with the one that's four years out?"
12:30
Well, it's amazing, but it's not ready for manufacturing at scale.
12:32
It's not on an automated line.
12:34
It needs a lot of manual work to get it to actually produce, and there's crazy low yield.
12:40
So in in in chips, in displays, yield rules everything.
12:47
If you run the machine a bunch of times, you want to get 99. 9% yield, 90%.
12:53
In the early days, when you're prototyping a new technology, you might be getting just a few percent yield.
13:00
And Apple said, "That's fine.
13:02
We'll just jack up the price and pay a ton for these cutting edge displays.
13:06
Jump to the front of the category with the best display technology.
13:08
We'll charge a fortune for it, but we'll have the best product."
13:11
And that will be our market entry strategy.
13:12
And so I was waiting for that display technology to commoditize because it's been a few years.
13:18
Uh I thought it would just naturally get cheaper.
13:20
It probably has, but it has not solved the problem of virtual reality, augmented reality.
13:24
Uh we haven't seen someone pick up.
13:28
>> Do you think they're just bearish on the near term of people watching movies? >> Maybe. Yeah.
13:34
in in uh in VR because I don't they're they're certainly not stopping uh R&D on their specs and their and their sort of everyday glasses product >> and so it might just be that that they studied you and found that you're built different and you're one of one the only person on earth. >> Yeah. No, no.
13:55
I mean truly like sitting down and watching a full movie is a is a rare experience today. People aren't reading.
14:01
They aren't watching movies.
14:02
they're just scrolling and people seem to be satisfied with their phone.
14:04
And also the the nature of a doom scroll is is somewhat interactive, somewhat multiplayer, although obviously people see it as brain rotting and very isolating.
14:16
isolating. there is a game to uh to be played by uh actively scrolling which is something that doesn't require virtual reality certainly not enhanced by virtual reality but then also sometimes you want to read the comments sometimes you want to send it to a friend sometimes you want to fact check it and
14:33
ask AI about it or spin off and do something else and go to someone's profile so I I think that the number of taps and user interaction experiences in a doomcroll session are obviously much much higher than watching a film which you just put on and hopefully you don't pause it at all because you're engrossed the entire time from start to finish. Uh
14:51
Uh and so if that becomes as scrolling means more and more maybe the the VR experience is less less and less relevant.
14:59
So uh the cheaper display on the Apple Vision Pro or maybe the Apple Vision Slim or Mini or something. I don't know.
15:08
They could have used a different name.
15:09
Pro always always left the door open to just the regular Apple Vision at a more uh approachable price point, but the cheaper display that they were working on uh would have cut the headsets pixel density roughly in half.
15:22
That's not what they need to do at all.
15:24
They need to keep that pixel density because it's that's the best part of the experience.
15:28
Uh the move likely reflects Apple's broader shift towards smart glasses.
15:32
Bloomberg's Mark German previously reported that Apple uh paused work on a lighter, cheaper Vision Air. Yeah, that's the term.
15:39
Uh in October 2025 to fasttrack its Ray-B band style glasses effort.
15:43
Uh this does not mean the Vision Pro itself has been cancelled.
15:48
Apple refreshed the headset in October 2025 with an M5 chip which does very little slightly better tracking.
15:55
I think you can run some applications uh at slightly higher fidelity but it is uh by all accounts essentially an identical device but they are long overdue for a proper refresh if they were taking this seriously and thinking about this as a as a true growth driver.
16:10
I think they they have recognized that this was an experiment that needs to be put on the back burner for at least a little bit.
16:17
Uh and so this report only suggests the cheaper display project is no longer moving forward.
16:22
So, the Vision Pro fans have hope.
16:25
They It's not fully cancelled.
16:27
Maybe there's something else going on.
16:29
Maybe there's more in the works.
16:29
But, uh, anyway, it's uh it's it's interesting.
16:34
I I with all the acceleration in AI, I was hoping that we would get some some uh you know, advancements in this since it is an adjacent technology, but uh we've been few and far between on the updates.
16:44
We got to get an update from the big screen VR team because they have done a great job creating highfidelity VR that's also lightweight but it needs to be tethered to a PC.
16:57
It's a little more proumer a little more dev kit styling.
16:59
VR really attracts these like visionary visionary chats that are willing to go that that seem No, no, I'm I'm actually uh I could make that joke, but I won't.
17:15
But just just people that are willing to just continually look >> silly for a long time to ride through the hype cycles and just like >> keep building.
17:26
I think Big Screen is an is an example of that.
17:28
the founder that we had on that has a very cool glasses uh demo product.
17:32
He's >> I from my understanding probably using >> uh AR and VR more than anyone else on the planet.
17:40
Like so committed to just like winning. Yeah.
17:43
>> Um and so I really appreciate that about the category. >> Yeah.
17:45
Let's see how Apple's doing on the news.
17:48
Are they trading up or trading down? I push the button. Will it come up? We'll see next time.
17:51
Anyway, let me tell you about Figma. Figma agents. agents meet the canvas.
17:57
Your AI agents can now create and modify your Figma files with design system context >> production swearing at the team chat.
18:06
>> Well, uh here is a crazy story.
18:06
I mean, it's such a minor story, but uh it certainly grinds my gears.
18:11
I think we're going to dig into it and see what you think, what I think once we dig into it.
18:17
But uh Getty Images, we know and love them from their trove of Silicon of of Silicon Valley titans photographed at Sun Valley >> at Sun Valley, which is happening now.
18:28
If you don't have a Getty Images subscription, sign up now because you're going to be first to know when the new Josh Kushner uh paparazzi photo drops.
18:37
Um but Getty Images was planning to merge with Shuttertock.
18:40
These are two essentially stock photo sites.
18:46
In theory, they should be absolutely decimated by AI image generation. Meta put out a new one.
18:52
Muse Muse image uh Nano Banana Pro has been fantastic.
18:59
Images 2 from OpenAI has been really good.
19:01
And like they're they're honestly getting to the point where a lot of the example images are just like, okay, that's just a photo.
19:06
I saw Adam Masseri posted some on Instagram and I was like, is this AI or did you just take this photo? Like it's just you.
19:13
And then he did a couple with filters and hair and crazy hair and those were cool and and that breeds creativity.
19:19
So I think there's a lot of value in the technology.
19:22
But in terms of just like I'm trying to illustrate, I'm trying to make a point visually.
19:26
Uh I need a picture of a forest.
19:28
AI image generation is very very competitive with the stock image industry.
19:33
And this should have this should be a business that's sort of affected like the way um you know uh >> yeah a lot of a lot of these business new their net new revenue over the last couple years is just working with >> labs that need >> licensing yeah all sorts of things.
19:51
So um certainly in the face of growing competition consolidation of an industry is very normal that makes a lot of sense.
20:00
This doesn't this doesn't seem like it should raise any regulatory flags and yet it did in the United Kingdom.
20:05
Uh Getty Images has called off the Shuttertock deal after the UK uh created some uh barriers around it. So the $3.
20:14
7 billion deal would have created a visual content company able to offer a more expansive library to users, says the Wall Street Journal.
20:21
So on Tuesday, Getty delivered a written notice to Shuttertock terminating their planned tie up, which was first announced in January of 2025 and res and received clearance from the Justice Department in America in April.
20:34
So pretty quick turnaround in the United States. Uh the $3.
20:38
7 billion deal would have created a visual content company able to deliver a more expansive library to users, helping meet booming demand for licensed images and videos as artificial intelligence disrupts the business of content creation. Getty stock slipped 1.
20:50
7% in pre-market trading.
20:53
Uh shares of Shuttertock ticked up 1%.
20:56
So maybe the shutter shareholders are happy about remaining an independent company.
21:00
The termination came after Getty last week said that its board voted to not proceed with the deal if it meant shut selling Shuttertock's editorial business, a condition required by the UK competition and markets authority.
21:16
So the decision to uh uh by Getty to abandon its merger with Sutter stock was ultimately a commercial choice.
21:23
So the chair of independent inquiry group that led the CMA's in investigation of the deal, the inquiry group found that a loss of competition between the two businesses would reduce choice for UK media outlets and could lead to higher prices.
21:35
And I would I would assume that this would give them some sort of pricing power in the face of, you know, essentially unlimited free editorial images in the form of AI generated images.
21:47
If you want to go with the real thing, you have to pay a little bit more, but that sort of offsets all the pressure of the customers that are leaving and no longer paying because they don't need to pay because they're generating them with generative AI.
22:01
So, this felt like a very logical story.
22:04
Um, and I'm I'm a little bit uh uncertain that this is a good decision for the UK to help these businesses.
22:14
[clears throat] It feels like it's just going to wind up hurting both of them. >> Yeah.
22:17
Are UK media outlets not allowed to use AI content?
22:21
>> I don't think that there's any broad rule against it. No.
22:23
So they you would it would be a deliberate choice and I'm sure there's plenty I I imagine that the Financial Times does not use AI images and that's by choice and they make that very clear and there's probably a disclosure and if they of of course they will use an AI image if they're talking about the AI image industry but in terms of what you see on the front page of the Financial Times it's almost always editorial.
22:48
Yeah, that image >> this is from Reuters and and that is an editorial uh distribution and something that is licensed and uh and occasionally they need a photo [clears throat] for to illustrate something and um they might use AI. >> Okay.
23:02
So I was trying to figure out why >> the the headline number here was 3. 7 billion. >> Yeah.
23:09
>> Because it was based on the January 6, 2025 share prices, not today's prices which are far far lower.
23:14
Yeah, >> shutter stock is sitting at $329 million market cap.
23:20
Getty >> is at $340 million market cap.
23:22
So these businesses have been really really beat up over the over the period since they decided, hey, we should tie up. >> Interesting.
23:33
So is there is there a potential?
23:35
>> So the UK I think regulators are actually [clears throat] trying to just kick these companies while they're down.
23:40
>> Is that what's happening or or is it a situation where Getty Oh, I mean that that is possible.
23:44
I mean it could just be like a just a complete mistake.
23:46
I mean as you go back to Meta and you think about uh the the the uh the UK the US regulators blocked Meta from buying a VR fitness company that they said would create a monopoly in the VR fitness industry.
24:01
And of course like the VR fitness industry like never happened.
24:05
Like it's not a it's not a not an industry worth monopolizing.
24:07
And so if you think about um you know the business model of Quest like would it have been advantageous? Maybe.
24:13
But it's worth letting Meta take a shot at that uh and see if having a VR fitness company in the portfolio will actually get that product to uh you know to scale.
24:26
Tyler, what do you have to say?
24:28
>> Uh another interesting anecdote is um the UK blocked Meta from buying GY in 2022. >> Yes.
24:33
>> So to prevent a monopoly in GIFs, I presume this could be pretty dangerous. Yes. Which is also odd.
24:38
What What does Gy power the uh gifts that you see in iMessage?
24:44
You know what I'm talking about?
24:45
When you go to um you you go to there's Genoji, there's stickers and then there's also hashtag images and you can find images and you can send, you know, different pictures and and gifts.
25:01
I wonder if these are from Gy or if >> it's powered by Bing, not >> powered by Bing. Okay.
25:04
So, there's competition in this market. >> Yeah. I don't know.
25:06
Uh, it's >> Manda says Canva doesn't label AI in their stock images. That's so annoying.
25:13
[clears throat] So, yeah.
25:13
I didn't even know Canva was a player here, >> but uh it would make sense to like >> you're you're in Canva and you want to, you know, have a picture of a forest on your greeting card and you can pick from a library.
25:26
Some of them will be generated, some of them won't.
25:27
And they probably also have a a generative AI tool where you can generate a new image.
25:32
But if you're just go looking for a generic stock image that's already been described, you can probably pull from whatever library is out there.
25:37
Anyway, >> yeah, Canva partners with Getty Images, but then they're also featuring generated images.
25:44
>> Anyway, let me tell you about CrowdStrike. Your business is AI.
25:45
Their business is securing it.
25:48
Crowdstrike secures AI and stops breaches.
25:50
secures AI and stops breaches. Uh there is another interesting article in the Wall Street Journal on the cover the front page of the main uh section the what do they what do they actually call what do they actually call the main
26:06
section there's the business and finance section is this just world news I don't know anyway uh on the cover of the Wall Street Journal it's the world's creepiest office and people won't stay away this is the New York complex vacated by IBM has become a magnet for urban Explorers. We have a video of this
26:22
We have a video of this place.
26:24
And if you're a scrappy startup looking to expand, this might be the key to success.
26:30
The ultimate lock-in factory in sort of rural New York, I think. We'll we'll get into it.
26:37
So, this is in Summers, New York.
26:40
I don't know exactly how far away that is from Manhattan. >> Yeah.
26:43
So, if you were like a Neolab and your name was like ominous intelligence. >> Yeah.
26:48
There we This could be a great sort of HQ potentially, you know, your first uh little micro data center.
26:57
>> Very James Bond villain sort of vibe.
26:57
Uh and yeah, looks looks like you could make it, you know, really really homey.
27:06
>> Uh how far is it from Manhattan? Let's see. Okay, it is 1 hour.
27:08
You can be in the city in an hour.
27:12
That's >> Imagine walking these halls >> late at night after a long day at work. Yes.
27:19
>> It wouldn't be It wouldn't be creepy at all. >> Yes.
27:23
Robert Carlton was getting the mail one day in April when he saw a group of teenage boys sprinting away from nearby woods.
27:30
He cut them off at the road and raised his arms. I just said, "Stop. It's over."
27:35
The 62-year-old retired engineer recalled.
27:37
Soon, he said, "Three pu uh pursuing New York State police troopers emerged from the treeine and arrested seven juveniles.
27:45
The criminal charge, trespassing on the former IBM campus here, disrespecting international business machines. Don't do it, folks.
27:56
The long vacant site has become a magnet for so-called urban explorers who prowl abandoned malls, hospitals, power plants, amusement parks, factories, and any other unused uh disused structure they can breach.
28:09
>> Enough of the graffiti. >> Yeah.
28:11
Do you think put in here?
28:11
We got to figure out how much >> dare they write all over the [clears throat] >> former home of international business. >> Exactly.
28:21
>> Um what was the uh what was the IBM AI Watson?
28:25
Watson the machine in >> was probably still at the frontier.
28:31
>> Still at the frontier.
28:31
It it was super intelligent at uh at Jeopardy.
28:33
Uh the global which is short for urban exploration phenomenon.
28:39
Herbach isn't new, but it's been turbocharged by artsy videos on Instagram and Tik Tok that spur others to create their own posts, luring more curiosity seekers.
28:50
Police in Livingston, New Jersey, recently warned people to stay out of the closed Livingston Mall property, Jacksonville Beach, Florida.
28:58
Police issued a similar caution in April about the shuttered Adventure Landing amusement park going into an abandoned amusement park.
29:04
That is thrillseeking at its best.
29:06
Uh, we are aware of a Tik Tok challenge to explore to explore the property.
29:11
Who's doing these Tik Tok challenges?
29:13
And should they should they be allowed to post those?
29:17
This is this is dangerous for some people.
29:19
I mean, seriously, you go in there, there's a lot of broken glass and and you know, who knows about the structural integrity of a building that hasn't been inhabited in years or decades.
29:27
Could be very >> Is it on the market?
29:29
>> Uh, well, we have some news about that.
29:32
I don't know if it's actually on the market, but I imagine if you make them an offer they can't refuse, this property could be yours.
29:36
Uh, so Sebastian Capital, the Manhattan company that manages the 723 acre site, that's a lot of size, uh, says it has beefed up security and appreciates helps from from police.
29:51
>> So, I'm shocked by the YouTube comments, >> yes, >> that are wholly coming to the defense of this building.
29:57
They're saying, "I hate there's a class of people who see something like this and feel compelled to start breaking things."
30:04
>> Why do people vandalize these kinds of places? >> Interesting.
30:07
>> I can't believe these are all the top comments.
30:08
I can't believe people go in there busting up the place. >> That's crazy.
30:11
I I would have sort of expected people to be on the side of the urban explorers, on the side of the Tik Tok challenge uh challengers.
30:17
Uh Andrew Proto, a defense lawyer, said a 15-second clip isn't worth a criminal record. Don't do it.
30:24
If you've already been arrested, you're not the first call we've taken this month, and you won't be the last.
30:30
Proto says he has represented or advised several minors arrested on the campus.
30:33
The summer's town court uh town court clerk said some def defendants received a six-month adjournment in contemplation of dismissal, meaning charges will be dropped and their arrest will be sealed if they avoid trouble.
30:45
Some explorers who have posted about the IBM site say they follow an observe and preserve ethos and reject vandalism.
30:51
They say they're driven by curiosity, the thrill of roaming forbidden spaces, and a zeal to document discoveries, and that they're careful and know their limits.
31:03
Quote, "It actually gives me hope when I hear that kids are out there getting into trouble."
31:07
Um, said Bradley Garrett, a cultural photographer and author of the book Explore Everything: Placehacking the City about his own urbex adventures.
31:15
He sees urban exploration as a gateway drug in a good way, sometimes into intellectual curiosity about history and culture.
31:21
So you go, you break into this abandoned building and then next thing you know, you're an IBM consultant driving enterprise value for S&P 500 companies traveling a businessman could happen. Who knows? >> Could happen.
31:36
Reg wants to turn it into an Aman. >> Aman would be good.
31:39
Data center seems obvious depending on power.
31:41
What about the first [clears throat] >> Aman with a data center >> with some local AI >> both?
31:49
So, quickly, you asked about the price.
31:50
In 2016, IBM sold the property for $31.
31:54
75 million and it's owned by a LLC that shares a Fifth Avenue address with Sebastian Capital.
32:01
So, everyone suspects Sebastian's in on the deal.
32:03
A plan to convert it to a private school [laughter] foundered during CO and Sebastian said it is considered Yeah, foundering is like failing, but yes, uh foundered.
32:16
So floundered would be, you know, another appropriate term for what happened.
32:21
But uh it did not it was not successfully converted into a private school, obviously.
32:25
Um but uh if you if you want to take a wild swing, go pick it up.
32:32
Make Sebastian Capital an offer. Let's see.
32:34
I wonder what it would trade for today. Lots of work to be done. >> Car and driver. quickly.
32:39
Tyler had something on the IBM complex. >> Yeah. So, okay. You planning to go >> 1. 1 million square feet.
32:44
Um, historically, you'd see like I think something like around 10 watts per square feet. >> Okay.
32:52
>> Um, maybe it's a little bit higher tech, right? This is IBM 80s.
32:53
Um, I an estimate I think is reasonable is around 20 megawatts. >> 20 megawatts. >> Yeah.
33:01
So, you're looking at a small data center.
33:03
>> Is there any natural gas in the ground? Can we frack?
33:07
>> Can we put solar panels on the roof?
33:07
Can we build a nuclear reactor there?
33:08
What are our options if we want to get this thing churning out tokens?
33:12
We want to turn it into a token machine. Um, interesting.
33:17
We should go check it out.
33:19
Anyway, let's move on to the New York Stock Exchange.
33:22
Want to change the world?
33:23
Raise capital at the New York Stock Exchange. [applause] Just do it.
33:27
And Jordy Car and Driver says 2026 Lucid Gravity available with no interest due to no interest. >> What?
33:36
uh several months [laughter] after launching the 2027 Gravity, Lucid still has plenty of 2026 model, so it's offering customers an interestfree loan incentive. >> Okay.
33:47
>> Uh >> I wonder how long there's no interest on the loan.
33:50
Uh that seems like a good deal.
33:52
The Lucid is a very well-reed car.
33:55
Very luxurious interior, very polished product.
33:58
Uh for some of the higher, more performanceoriented trims, incredible 0 to 60 times, incredible range.
34:03
I think Larry David has one.
34:06
Um, they're they're they're well-reed cars, but it's a electric vehicle which has high depreciation and then you're uh signing up to work with a company that a lot of people think might not be around forever.
34:21
So, what does the maintenance and repair and flow of products and new parts look like in a decade?
34:26
And so, that is a risk factor for a lot of people.
34:31
But, uh, the Lucid Air gravity, I think it looks sort of cool.
34:35
It's sort of like a It's a little bit like it wants to be a minivan.
34:39
It's trying to do the job of a minivan, but they didn't just lean into the sliding doors.
34:42
At least the Model X realized that what makes the minivan great is the is the accessibility of the doors, and they made them cool doors by making them go wing or butterfly doors. >> Yeah.
34:56
The problem here is that when I looked up Lucid Gravity for sale, I'm seeing a 2026 with just 3,000 miles that's selling for 125,000 >> a lot of money >> dollars. That's a lot of dollars.
35:07
And regard even if you're paying no interest, it's probably losing, you know, it's depreciating thousands of dollars uh a quarter and so it's still going to be a rough ownership experience. >> Yeah. Yeah.
35:23
um [cough] will be interesting to see [clears throat] where they end up.
35:28
I know they already have some big investors and potentially some corporate partners.
35:32
Uh it could eventually be rolled into another uh organization as sort of the EV strategy of a larger automotive group. Who knows?
35:41
Um did you want to did you did you want to look at end of stay? Did you see this?
35:45
We got to pull up this video because we were talking about exactly this. The 964 Cabriolet Jr.
35:54
is a Porsche 964 that has been shrunk.
35:59
Actually shrunk exactly what you said. Look at this video.
36:05
>> This is what this is what you asked for.
36:07
Uh fully customizable and look at this.
36:10
It looks normal size, but wait until this guy gets in it. >> This is amazing.
36:15
>> So, it is a go-kart that has the bodywork of a Porsche.
36:19
And so, you can get one of these.
36:23
They go like 60 m an hour or something like that.
36:25
Like they're pretty fast. Um. Yes.
36:26
So, I think if you put a a governor on this vehicle, you'd have what you want, which is the the the vehicle for the kid that is fun, engaging, and uh highly stylized and made with precision.
36:40
The group behind this is called End of Stay.
36:43
Stay has uh periods after it.
36:46
So, I imagine it's some sort of acronym.
36:49
But uh what a wild >> they did it. >> Yes, >> they did it. >> They did it. >> Uh I I'm interested.
36:59
>> You can see the YouTube video here, the preview of the 964 Turbo Jr.
37:04
high-performance version.
37:04
It's an absolutely uh crazy crazy video that I uh got organically served to me and I was like, "This is what we've been looking for for sure.
37:13
This is exactly what we were talking about. >> I need one." >> I think you do. Um >> you need one.
37:19
Anyway, uh GPT FI uh GP Live, a new generation of voice models for natural human AI interaction launched today from OpenAI rolling out to Chatt starting today.
37:29
Taking shots at that guy on Instagram who's unsatisfied with legacy voice models. Uh it's a lot smarter.
37:38
>> I have a feeling he's going to find a way to keep using the old models. >> Oh, maybe.
37:42
Or he'll just become uh who's the Ply the Liberator?
37:45
the Ply the Liberator? He's sort of the ply the liberator of voice models in that I know he's taking shots and he's like very unhappy with the quality of the voice models but at the same time he does a great job of actually exposing and finding limitations not necessarily
38:01
jailbreaks but he he by watching those videos you can very clearly understand okay I understand what's going on here it's not it doesn't have tool use so it can't count it can't set a timer it doesn't have you know a long running context window that can stay with you for a long time so it gets It gets lost. They can't talk to each other. There's a
38:18
They can't talk to each other.
38:18
There's a whole bunch of different ways.
38:19
And once you have all of those documented by just a he's basically like a white hack hacker.
38:25
He's he >> found a bunch of benchmarks. >> Oh, wait. What?
38:29
>> He found a bunch of like good >> Yeah. Yeah. Yeah. Basically benchmarks.
38:31
Like if you can satisfy his his videos and run those experiments again in a satisfying way, you probably have a better product at the end of the day. So, I don't know.
38:40
I think it's uh I think it's cool. I'm excited.
38:43
>> Very Yeah, super excited for this one. I I wonder if the Yeah.
38:45
the real time nature unlocks like under unlocks like almost like a new kind of like pod like real time like podcast format where you can just actually have a conversation about a topic. Yeah. >> Right. >> Yeah.
39:01
We should have it sitting right here.
39:02
Uh it has a full duplex architecture which means that it can listen and speak at the same time.
39:07
So it can jump in appropriately >> and it can also route >> like certain questions to smarter models. >> Yes.
39:15
>> To run in the background, you can still have a conversation. Very cool.
39:19
>> Which is great because my default flow like if I'm driving, which I don't think I should be doing, but I will tap the record button, not the voice mode, and I will dictate a really long prompt.
39:30
And then I will click send, and then I will wait for it to cook.
39:35
and then I will have it read that back to me and that's all just like a couple extra clicks, a couple extra steps to get what I really want which is um a conversation.
39:43
I was interested about the idea of uh where this goes like is there is there a world where you are talking to a model and you can have sort of multiple threads of conversations going within one conversation.
40:00
So you can say, "Hey, I need you to go and do a deep research report on uh, you know, IBM Watson."
40:04
And it goes and cooks on that.
40:08
And then while it's doing that, you're still talking to it and you're still having a conversation.
40:13
But then you also might say, "Well, catch me up on the latest news."
40:17
And it has that at the fingertips.
40:18
So it can talk to you about the latest news.
40:20
And then you can go and it can say, "Hey, by the way, I'm done with the report or I'm done with the the code that I wrote, but you're talking to me about other problems in your organization, other decisions, other research projects that you have."
40:32
And it's all done in one continuous conversation like, you know, me interacting with you like, you know, we might we you might uh delegate something and then continue the conversation and then move on.
40:43
Oh, I got to text this person. Okay, I'll text them. They'll do that.
40:46
they'll come back to me in 20 20 minutes with the revision to the the the thing that we're working on.
40:50
But in the meantime, let's talk about whatever else we got going on today.
40:54
So interesting to see where this goes.
40:56
In other OpenAI news, GPT 5.
40:57
6 Soul along with Terra and Luna will will launch publicly this Thursday.
41:04
[music] Preview Access is expanding globally.
41:06
Lots of people are having fun with this.
41:08
Some people got early access.
41:09
Other people were joking about uh clearly not getting early access but wanting early access.
41:13
Um, but a lot of people are having fun.
41:16
Tyler, >> what did what did uh what did [clears throat] John Palmer say? >> What did he say? He's in here >> now.
41:23
He he had uh >> he has one.
41:24
He says, "Uh, it seems I'm allowed to talk about 56 now.
41:27
I wasn't one of the testers, but I heard it's really good.
41:31
Again, I haven't used it yet, but this will probably be my default model from here on when I get access." It's a good one.
41:36
Uh, people are having a lot of fun.
41:39
Uh, Kit Langton says, "Uh, I can finally talk about GPT 5. 6.
41:43
I've been using it for many months, if not decades.
41:45
And what is glaringly obvious to me now as I look back on my life is that you did not have access to it. Oh, it's very fun.
41:53
Uh people are very happy with it. Interesting.
41:55
There's a there's a little bit of a fork around like when how the the vibe around 5.
41:59
6 six is different than Fable 5 when how interactive it is versus uh somebody said like uh Fable is like light speed across the galaxy and uh and Soul is like a Porsche the Nerburgg more engaging. I don't know.
42:17
Uh it seems like we're we're entering uh some some fragmentation in like the right tool for the job. >> Yeah.
42:25
Ethan says my big takeaway is that both Soul Ethan had access.
42:26
So he says both soul and fable represents represent jumps over previous models and have opened a large gap with the next best AIs.
42:35
People will have preferences for one or the other, but if you're doing any work where better intelligence matter, uh these two those two models are your only choices.
42:43
Dean says, I think for me the main takeaway with Soul and Fable is that I can't remember a time when the leading models were a so decidedly ahead of everything else and b so distinct from one another.
42:53
So yeah, um so yeah, a lot of people are talking about how they're using the models uh together.
43:00
>> It's probably a function of uh just tighter tighter distillation protocols.
43:05
like there's less pollution.
43:07
Like also like not everyone's training on the exact same data anymore because uh it used to just be everyone just trains on the entire web corpus and now uh each company has different data sets, different data brokers, different usage patterns that they can train on and then different sort of research tastes. So go give it a try.
43:26
I forgot to mention this GBC 5.
43:28
6 souls worldleading in computer use.
43:31
It made me use it 100x more when we lost access to 56.
43:34
it quickly started to go insane without it.
43:36
So, yeah, people in the early access program obviously lost access for a couple weeks. >> Sure.
43:42
>> Uh due to the DC action.
43:42
Um but yeah, I saw some people saying like, "What are some good uses for computer use?"
43:50
>> And it's like anything on your computer.
43:54
>> What do you use your computer for?
43:55
They're not all going to be great uses, but >> yeah. >> Uh I'm curious.
43:57
I still think it's worth it's worth it's always worth like popularizing those like uh genuinely useful um patterns.
44:05
I mean like deep research was that in many ways just uh a very like it gave you a 20page PDF report on the topic that you were asking for and it did a lot of the work for you.
44:18
And I still think the the uh come up with a good prompt idea, find the right uh reason to use AI is a problem for a ton of people.
44:27
There there there are there are plenty of people that adopt the latest AI tools, immediately find what the model's good at, how to use it, how to use it profitably, effectively, not waste tokens, not waste their time.
44:42
Um but other people need ideas.
44:45
They need to know that there's a new capability.
44:47
You see this with the with the chat app.
44:48
And you see this with the voice mode where people are like uh you know like judging a model based on hallucinations that disappeared a year ago or judging a model based on some oh it has a cut off window and then that hasn't been a thing for a year but it still burned its burned its way into like the the memes of the online culture and thus uh people need to be updated on that.
45:12
And so, uh, I'm I'm in favor of coming up with good computer use, uh, demos.
45:18
The real one is just, can it play Counterstrike effectively?
45:22
That's the real computer use test.
45:24
Can it rank me up to global elite?
45:26
Can it downrank me so I can smurf a little bit?
45:30
This is This is the future. This is what I want.
45:34
Anyway, let me tell you about Railway.
45:35
Railway is the all-in-one intelligent cloud provider.
45:37
Use your favorite agent and to deploy [music] web app, servers, databases, and more.
45:40
Well, railway automatically takes care of scaling, monitoring, and security.
45:44
I'm extremely excited to welcome our next guest to the show.
45:48
We have Vincent Vicer from Prime Intellect.
45:51
He's the co-founder and CEO, and he has some amazing news for [music] us.
45:55
Tell us what happened, then we'll dig into the news, the market, the story, the company.
46:00
But first, give us the news because Jord's already warming up over here. >> Amazing. Yeah.
46:05
So um we've announced that we've raised 130 million um at a billion with prim. >> Wow.
46:11
>> To build um the open super intelligence stack. >> It's fantastic. Congratulations.
46:20
Uh yeah, >> what I what we were talking about before the show is is the the the the ratio between dollars raised to run rate. >> Yeah. >> Absolutely. Uh incredible. Yeah.
46:30
How much have you raised before this round?
46:36
>> Um, just 20 million total.
46:36
So, I think we've actually got to this runway on like less than 20 million in spend. >> That's crazy.
46:44
>> Which is north of which is north of 100.
46:47
>> Yes, >> that's amazing.
46:49
>> Um, yeah, we we doubled it, I think, since we actually closed the fund raise. Yeah. >> Um, to 100.
46:53
So, basically um yeah, on track to um grow much more from here on. >> Okay.
46:59
So uh reset me on the latest and greatest in the actual product offering.
47:04
What customers are coming to you?
47:04
Is it I have used a frontier model to you know figure out that AI can in fact do some agentic workload within my organization.
47:15
I want to cut cost and you're going to RL an open source model for me fine-tune it.
47:19
And then am I paying you for tokens?
47:23
Am I are you getting me GPUs?
47:23
what is the full suite of products that you offer customers these days? >> Yes.
47:29
So basically it is kind of like the full stack to do training, deployment and continue improvement of models.
47:36
>> I think customers basically come um to us for anything ranging from compute to inference to the full RL and post training stack to to train models.
47:45
And I I would say it's like with my customers coming from different buckets and categories, a lot of them are like the AI natives who are basically um starting out and and oftentimes also like being multi-model, right?
47:57
multi-model, right? they they use like the frontier models, they use open models um for different use cases like good examples like RAM for example as one customer um more in this like AI native bucket um and a lot of the big AI native startups but then we've also increasingly um been able to track a lot
48:14
of the new AI labs like a lot of the neolabs so um a lot of those are using our full stack from like large scale clusters to our pre-training and post- training and RL stack um but then also increasingly like traditional enterprise rises and even sovereigns coming to us um who want to have their own end to end um stack that they can run like on prem. So how I see this is to some extent is
48:35
So how I see this is to some extent is like there's just increasingly I think like a demand for having your own like software and AI stack right it's like your own open end to end stack but I think this is almost like complementing
48:47
in many cases like um the other like frontier like models and and stacks >> and you're using sovereign in not just the geopolitical sense but also if you're a Fortune 500 company you want to own your stack from start to finish potentially. >> Exactly. Yeah. I think like there was a >> Exactly. Yeah.
49:02
>> Exactly. Yeah. I think like there was a lot of recent uh talk about this obviously like folks like Satya and Alex car >> we're like also making making those those points and arguments over the last few weeks and I think it's increasingly something I think where like a lot of like enterprises um want to basically build this like compounding data mode
49:21
and flywheel where ultimately I think the future that we are starting to see is a lot of these companies want to build basically self-improving agents and the way to do this I think is generally you you have an RL environment for you use case, you scale on it and then you ultimately deploy that um into production and then continuously improve with the user interacting with that agent. It's almost like the the Tesla
49:40
It's almost like the the Tesla autonomy um like levels but like for knowledge worker agents.
49:46
knowledge worker agents. So I think like the RAM example I think was one that people um um really resonated with for basically them being able to within a week and less than 50k of training spend out compete a frontier model at
50:01
automating spreadsheets and and finance um at a fraction of the cost of of running the cheapest uh models basically like they were able to outperform OPOS at a fraction of the cost of haiku and and like 30% faster like much more tailored to the use case. So I think in
50:15
So I think in many ways like these like specialized agentic use cases are a big unlock and I think in many ways you still need the godlike big mega model to to do the orchestration or planning but then I think often times execution I think happens can happen with these specialized step agents.
50:33
So I think um yeah those have been extremely I think u like fruitful and and useful for a lot of the companies adopting and and training their own agents.
50:42
Um then I think the other big trend is just like an explosion in in new entrance that are like taking model training seriously.
50:52
Obviously hundreds of neolabs really got stood up in the last probably 12 to 24 months.
50:56
Um so we started powering a lot of those like with our full stack including with also large compute clusters.
51:02
clusters. So like Nvidia also joined us as part of the round and we've been like we've since day one basically operated large clusters and and this is in in large part why we need so much money right it's like to basically be uh standing up um more and more GPUs like right now we run like 15,000 GPUs and scaling to like over 30,000 and so so
51:20
this is like a lot a lot of the capital needs even >> and walk me through when you're pressing the huge cluster button is that because there's broad demand for uh specific models that you need to inference at scale and so there's just a lot of inference demand or is it that for the level of training that you're doing you need to be cluster scale to even kick off the training run. >> Yeah. Yeah. So basically it's like for >> Yeah. Yeah.
51:46
>> Yeah. Yeah. So basically it's like for for all the needs like from training to inference um you need obviously compute and >> in in a lot of ways like our customers like are doing a lot of these like large scale training runs with us like leveraging our full stack including our compute right so it's like pre-training for billion parameter models like for
52:03
example what we did with RC um like Q4 last year um or really large um also post training runs and RL runs right so it's like increasingly basically we abstract all of that info away so basically people can just like hit a button um to do a post training run without having to like lock into GPU cluster and and managing um the bare metal GPUs. So we basically abstract a
52:23
So we basically abstract a lot of this like GPU complexity away for but but yeah like for that we basically also ramping up our own um clusters to basically just like serve hundreds and thousands of customers like in parallel um on those. >> Yeah.
52:37
So what you're saying is like there might be a situation where I have a I have a 50k budget like you gave with the ramp example.
52:43
the ramp example. uh I have a 50k budget to do uh some post- training uh and and I need to deploy that 50k into like thousands of GPUs but only for a short amount of time and so the budget's actually going to be relatively small even though if I were to buy all of that it would be it's way more than 50k millions and millions of dollars so you
53:04
sort of absorb some of that cost orchestrate it abstract it away and then you can deliver uh for the customer just a slice of >> yeah so so basically I think this is like also big unlock like also on the inference side right where customers don't need to like frontload hundreds of mans and capex spans for large data center commitments. >> Yep. >> Yep.
53:23
>> Um so we basically also increasingly serve a lot of inference.
53:25
So it really is the full stack and I think a lot of the compute um like we have like quite a clear um like v visibility into the demand just because like people come with us with large uh requests or or um large contracts to basically do larger training runs and deployments.
53:42
So we basically just like need to secure the compute to um yeah to be able to fulfill all of those.
53:48
And I think like right now we would probably be at like many orders of magnitude more um compute uh like compute but also revenue if compute wouldn't be as constrained as it is right now.
53:58
So it's like right now I think like in the in the current environment it's like basically GPUs are pretty sold out for the next few months and for almost like the rest of the year um especially if you want to like stand up data centers in in the US.
54:09
So I think um this is actually like I think the the the main bottleneck um to to scale right now for anyone in AI and this is I think what we've been able to really scale through extremely well because we've basically partnered with almost every data center out there since like over two years.
54:28
>> So basically able to stand up like data centers in different geographies and orchestrate them globally. >> Yeah.
54:33
>> Uh any predictions forecasts for American open source over the next six months?
54:40
Yes, no, really great question.
54:40
We joined also um like Nvidia to help them train Neatron.
54:45
So they're doing the Neotron Alliance and coalition and um so we were one of like I think 10 or so uh partners.
54:51
So it's like so like like I can't can't speak about like all the things there.
54:56
But I think like in general um both on that front and other things we >> we won't tell any we won't tell anyone. [laughter] >> Exactly.
55:04
anything just between us between us just the three of us.
55:07
>> Um [snorts] >> so b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b basically I think like in in some ways like the leading American um efforts actually are Neatron and and actually like RC with the Trinity model.
55:16
So both of those we're like very deeply involved in and so I think those will continue to to like lead like with like American open source.
55:25
Um like we have like some of our own models cooking and and then like we help a ton of customers with theirs.
55:32
So I think there will actually be like a huge resurgence of like frontier open models coming out of the US um also led by players like Nvidia itself um and a lot of our customers and partners.
55:43
So yeah, I think like in general I think the interesting geopolitical question is actually what happens with Chinese open malls, right?
55:49
It's like um like obviously we've seen news that like um China might consider like export restricting them like and and and like there might be policy interventions on on both the Chinese and the US side, right?
56:00
the US side, right? So it's like I think this is I think actually in some ways like the motivation to um build a stack and and to also push American open source forward is to have like less reliance on models that might get banned any day um be it more close right it's
56:16
like I think this is something increasingly like a lot of enterprises are starting to to realize that like there's actually huge dependence right in a sense on um like mainly from the policy side uh so this is something I think where we want to just like enable
56:29
everyone to have like their own end and front open stack um to be able to create their own models and ultimately I think like there will be like there's obviously a lot of like now like um also nail labs and and a lot of them are actually like thinking about things
56:46
quite in quite open way so I think we'll be surprised that that's maybe one of the hot takes is to see more nails release open models like a good example that we also partner with recently was at poolside for example um if people were expecting them to be closed but they actually open their models. So I
57:00
So I think there will be more of those.
57:02
Um especially given there are like hundreds of wellunded nail labs now.
57:05
I think there will be huge resurgence just like of like the age of research in terms of like these these nail labs like pursuing truly novel directions, right?
57:12
It's like uh going where like the big labs almost can't go necessarily.
57:16
Um taking big like bold bets that also might not pay pay off all of them but like if you have 100 shots on goal like some of them will probably pay off and result in interesting outcomes.
57:25
interesting outcomes. So I think this is like really also I think what we um are empowering right is kind of like um helping these new nolabs and and big AI natives and enterprises to move much faster uh and not have to basically um all build the same stack uh each by themselves in house because obviously a
57:44
lot of them are like tiny teams of like tens of people instead of like thousands um so like we're able to like help them move much faster basically but I'm adopting ours >> uh when you hear of a you a major American uh tech company, let's say someone in the Mag 7 that has extra capacity, do you reach out to them? Do you get do
58:06
Do you get do you do you do you ping them?
58:08
Uh are you at the scale yet that uh that a deal would be interesting to them or or are they really searching for these, you know, $10 billion plus opportunities? >> For sure.
58:20
like we already are like sourcing like like pretty large clusters, right?
58:25
It's like sometimes like up to like 5 to 10,000 GB.
58:26
So, it's like um we we basically um like looking at every source and pocket of supply that we can find like we've literally turned every stone to find like the last GPU available on Earth.
58:39
And um like like we we've been quite good at that just like in some like I think we're like that has been like one of the core tenants almost like since the beginning is that like we really wanted to like orchestrate like the global compute supply efficiently.
58:52
So we did a lot of like optimization for tolerance uh and distribute training even in the early days to like um train across like distributed comput.
59:00
So, it's like definitely like I think to this question like like I think it's something that we're definitely um like considering like if there's any uh anyone with some spare GPUs you can always [laughter] [clears throat] back on on China.
59:15
Do you agree with my uh perception that if there is some sort of lockdown on Chinese opensource export controls that would not affect >> Yeah.
59:29
Are they mad that American companies are distilling on or or post-training their open source models by design?
59:37
I thought it was a goal of the project.
59:39
But I what what I'm what I'm interested about is is uh would they try and claw back access to Kimmy or GLM any of those models that are already been deployed?
59:50
Because there's an element of like once the the weights have been downloaded, it's sort of just out there.
59:56
Of course, you could go and try and like sue every company, but that's very hard if you're in an American jurisdiction and you're a Chinese company.
1:00:03
But how would you see that playing out?
1:00:04
Would it just be going forward, no more open source and that's the CCP telling Chinese companies or some other shape of of uh of like restriction?
1:00:17
>> Yeah, I think it's really hard to know.
1:00:19
I think like a good example was like in um to some extent like the most popular Chinese malls already has been closed for example which is coin, right?
1:00:24
like in some ways like they've actually like changed their licensing stopped open sourcing.
1:00:30
sourcing. I think there will be both like companies changing their policies right but then also I think like probably like state intervention right it's like in different shapes of form so I think basically one can't rely um on the steady stream of frontier open like
1:00:45
releases out of China in many ways right it's like from different perspectives and I think similarly um a lot of other sovereigns like obviously including the US also doesn't want to build on on necessarily China so it's like I think a lot of American enterprises obviously
1:00:59
also like sovereign use cases like need American moth but I think similar for for other continents right it's like I think there's been a lot of work obviously um and we're like collaborating with people also across Europe across India across other uh geos so it's like I think we'll we'll see a
1:01:14
much more like multipolar I think uh open like ecosystem of like open front models so I think that's like a healthy like balancing um away from just relying on on Chinese open models even though they've obviously like been a a great acceler of like open source progress. Um
1:01:29
Um I think it's also unhealthy to rely just on an ecosystem and yeah like I think we'll be like there will be I think a bunch of like quite unpredictable changes similar to how like the last few months have been quite a unpredictable I think to everyone involved.
1:01:44
So um I think this will continue to be the case in the sense that it will be like quite a dicey policy uh like AI policy landscape for the next few years. >> Mhm. Last question.
1:01:54
data centers are data center construction, new data center construction deeply unpopular in America domestically.
1:02:01
Uh simultaneously the workloads that are being done in AI data centers uh are basically latency is basically irrelevant.
1:02:12
Uh for training certainly uh for most inference tasks if you're waiting a couple minutes for a result an extra 500 milliseconds to get across the world isn't going to matter.
1:02:23
This feels like a recipe for global competition, for aggressive data center expansion in a country that does see it favorably, that does see an economic boom from it or does have a lot of energy.
1:02:35
Um, what is the state of the non-domemestic non US data center buildout? >> Yes.
1:02:43
So, like we're certainly like building a lot of data centers and like partnering with a lot of them like outside of the US as well, but like I think there's still a lot of demand actually for data centers in the US.
1:02:50
actually for data centers in the US. I think like even from a data perspective like there's a lot of now like the financial industries and and highly regulated industries like also adopting obviously um more and more agents and compute I do think inference still matters like speed in a sense like maybe
1:03:04
not for like longunning agents but like for a lot of use cases people I think still really care about like having extremely snappy like responses but I think um like there's definitely I think like a general uh boom in data center buildouts outside of the US as well I think there's just like a limited set of
1:03:20
countries who are like strong like allies with like ample amounts of like um like geopolitical stability but then also like um like energy and and and and green like like green fields and and enough space um >> yeah US has unique access to natural gas which is if you're trying to bring energy online super quickly >> it's hard to beat
1:03:42
>> yes and I think like we we're seeing this across Europe even where like there's specific regions right like that are like much more active in data center buildouts than others and those are generally the ones that like have their own like money to invest in them and like cheap energy and and a lot of like also local support for it. Um so I think
1:03:56
Um so I think like in general from what we're seeing I think there's like there there is new entrance almost like to to the data center buildouts where it's like even places like Australia, New Zealand like and and like smaller much smaller places right like Armenia, Kalistan and others who like have a huge amount of energy and and huge like and and making huge bets also on data centers but while also being like allies of the US.
1:04:19
So I think those are the countries I think generally which will see the biggest boom in data centers.
1:04:24
boom in data centers. I think at the same time like I think we'll also continue to see a boom in US data centers but yeah there there it's definitely harder to get data centers in the US than outside of the US and and so it's something where I think we'll we'll see both continuously uh expand and then I think there might also be obviously like to your point like a policy uh like
1:04:44
like updating from like with upcoming elections and and midterms things of I think like this this whole almost like populism in the US around like data centers and like a lot of the the kind of I think public um sentiment as as potentially also like sovereign influences and other things like from other nation states who who trying to harm almost like the US data center buildout. Yeah. So I think there's like Yeah.
1:05:06
So I think there's like a lot of things at stake for the US, right?
1:05:10
It's like to to not pull back on on their data center build out, but I think there will also be specific states or like leaning in much more heavily than others, right?
1:05:18
Like I I think this is already what we're seeing where like >> Exactly.
1:05:22
So it's like there's specific states in the US that are just like much more well suited to really ramp up data centers from here.
1:05:28
And um yeah, and I think we'll we'll see them ramp up globally and and hopefully also uh outside of uh like beyond Earth.
1:05:35
And I think um >> yeah, >> like I think this is the only way to really properly scale. >> I love it.
1:05:42
Well, thank you so much for coming on the show. Incredible progress.
1:05:47
>> We love seeing you and the team win. >> Yeah, it's fantastic. >> Fantastic.
1:05:50
Have a great rest of your day.
1:05:52
Say hello to Will for us and we'll talk to you later. >> Cheers. >> Goodbye.
1:05:56
>> Let me tell you about Cisco.
1:05:56
critical infrastructure for the AI era.
1:05:57
Unlock seamless real-time experiences and new value with Cisco.
1:06:02
Our next guest is Ben Thompson, the founder of Stratecery.
1:06:07
He's been on an absolute tear during a slow news cycle.
1:06:09
Does it feel like a slow news cycle to you? >> I don't know.
1:06:15
It it and the summer is always slow.
1:06:17
Um I, you know, I take a couple days or I I slow down a little bit myself.
1:06:21
I feel like you've done a good job of like providing really insightful and interesting pieces during a slow time where I didn't know that I wanted >> I'm doing you a favor. >> Yeah, you are.
1:06:32
Is that what I'm hearing? >> Yeah.
1:06:33
I didn't know I wanted you to adopt the voice of Mark Zuckerberg for 20 minutes [laughter] and go on a ter but it's not like that was driven by like a specific okay there's a Wall Street Journal article where like or Bloomberg has a scoop and like we need to know this.
1:06:46
It's more just like resetting on the meta narrative.
1:06:48
Uh, I want to talk about the meta narrative, but uh, can we start with Xbox? >> Sure.
1:06:55
>> I want to know first, let's go back in time a little bit and I want you to reality check me on the the the story I tell myself about how Microsoft wound up in the situation it wound up in with Xbox.
1:07:09
And I think it stems with DirectX the it's the graphics layer that allowed games to be run on multiple graphics cards.
1:07:19
So that was a Microsoft licensed piece of property.
1:07:22
So you this is why we don't have the Chrome.
1:07:25
>> You want to go you want to go really far far back like because we did we didn't get an Amazon gaming console.
1:07:29
We didn't get a a Google gaming console, right?
1:07:35
Like why >> is interesting.
1:07:36
So you will you go back way back.
1:07:37
I mean, we can go really far back here.
1:07:39
Um, I mean, back in the day, the main technology for doing 3D was coming along was OpenGL.
1:07:46
And OpenGL had uh various pluses or minuses.
1:07:50
Um, it was, you know, we're way back in history, but there like this is the origin of the Nvidia story, making cards to do 3D graphics.
1:07:58
uh you had like the Reva, the 128, then you had the TNT, then you had the GeForce, and like we're talking back in the 90s when I was, you know, your guys' age or whatever it was [laughter] uh in college.
1:08:09
And um you know, making uh the first, you know, Quake comes out, like the real first 3D game, you know, there's actually a really interesting Twitter back and forth with the old ID people talking about Quake and how basically they obliterated the company by burning everyone out by watching it.
1:08:25
But um super fun, super fun back and forth.
1:08:27
But uh Microsoft comes out with Direct 3D as an alternative to OpenGL that was I think and this is a little out of my area of expertise, but I think was a little easier to use, had more nicities, was more tied into the platform, but this is all sort of PC gaming. Yeah.
1:08:43
Uh the Xbox, the way I think about it, and a lot of gamers kind of get annoyed when I write about the gaming stuff cuz I don't really care about the game [laughter] part of it.
1:08:53
I'm more interested like the strategy uh uh in how that fits in the overall company. >> What is your review? >> Yeah.
1:08:59
Can we get a GTA 6 review? >> No.
1:09:02
[laughter] Well, >> I feel I feel compelled.
1:09:03
Number one, I feel uh Rockstar, I think, is charging way too little for this game.
1:09:07
They're charging what, $80? Like, this is a game.
1:09:11
>> This is You're going to get cancelled for this. This is a nuclear take.
1:09:15
>> No, they should be charging like $200 for this. >> I know.
1:09:18
>> GTA 6 is like the last great game.
1:09:18
Like you think about every it was buly all made preai.
1:09:24
Like it is the pinnacle of this AAA >> craftsmanship.
1:09:31
Years and years and years of blood and sweat and tears to the extent where you have like the Twitter analysts like counting cigarette butts outside of the offices to [laughter] see like how much crunch are they in right now.
1:09:44
>> I don't even think he's trading the stock.
1:09:45
I don't even think he's trading the stock.
1:09:47
I think he just wants to know what GTA the love of the game.
1:09:48
Literally the game the the GTA >> gamers are insane.
1:09:51
So I always tread in this water like very very carefully.
1:09:54
But uh no so I feel compelled to buy GTA 6 just in honor of it existing [laughter] >> even if I'm don't know if I'm ever going to play it.
1:10:04
So I'm definitely going to do that and I'd be happy to pay. Yes.
1:10:05
I $200 like $80 is ridiculous. They should charge more.
1:10:09
Anyhow, um >> yeah, we had one the youngest person on our team was commenting on people online complaining about the price and said something like you didn't have you you 10 years you couldn't save up 80 bucks.
1:10:22
[laughter] >> Seriously, whoever whoever you are like but like I know kids that do lemonade stands and they clear like a hundred bucks, you know? >> Oh, absolutely.
1:10:32
I you know the old $20 I'll keep the change.
1:10:34
Nothing will make a kid's day better than that.
1:10:36
Although unfortunately with inflation, I think now it's sort of like expected.
1:10:39
It's unbelievable how expensive things are these days.
1:10:42
But >> um so anyhow, I got [laughter] GTA 6, but we're we're back.
1:10:46
Oh, so the the the console the console era.
1:10:48
So the way I think about Xbox is you go back to Microsoft and Microsoft had this whole thing. This is pre iPhone.
1:10:55
This is idea of their corporate strategy was three screens in the cloud.
1:11:02
>> And the idea that we're going to we already own the desk.
1:11:05
via the PC were going to own the pocket via the phone.
1:11:11
And people always used to say Microsoft missed mobile.
1:11:13
Microsoft did not miss mobile.
1:11:14
They like they came up with like Windows CE in like 1999.
1:11:15
Like they were in mobile.
1:11:18
They just had the totally wrong conceptual model because they were basing it around, you know, as an extension of the PC.
1:11:23
But then the third screen was the living room.
1:11:27
>> How do we get in the living room?
1:11:29
>> Well, people have consoles plugged into their TVs.
1:11:31
If we can get in and own the console, we can own sort of the gateway to the living room.
1:11:34
And we need to earn permission to be in the living room.
1:11:37
We will do that by creating a a g the Xbox, the game console.
1:11:44
>> And what's interesting about this is uh this is a strategy that totally failed.
1:11:50
And [laughter] it failed for a kind of an obvious reason in retrospect, which is first and foremost, people buy consoles to play games, not to have a portal to the internet in their living room.
1:12:02
And so you're selling a multi00 sort of console to people who want to play games, but people who don't want to play games aren't going to randomly start buying consoles.
1:12:11
What actually ended up taking that over was things like the Fire Stick or, you know, Apple TV beta played this.
1:12:17
I still think it's like probably the the best solution, but it's way too expensive.
1:12:22
Now, the Apple TV's poor price got jacked to the moon with this recent memory increase.
1:12:26
Uh, but the Fire Stick is probably a big one.
1:12:28
You had the chcast, you had Roku TV, uh, you had, you know, these, which ended up being, it's not that it's a classic Microsoft thing.
1:12:36
They were actually right.
1:12:36
There was this new front page to online services to be built.
1:12:42
They just took totally the wrong approach with Xbox.
1:12:46
And what's funny is that this approach actually became this uberos of self mutil mutilation because the Xbox didn't succeed in achieving this because it's a games console that's way too expensive to achieve this.
1:12:58
But then also they killed the Xbox where Xbox 360 was pretty competitive and it's that generation is actually the most interesting console generation.
1:13:06
I'm happy to expound on that if you want to.
1:13:09
But they come out after that with the Xbox One, I think, which was super expensive because it had the connect built in that sort of like wave your hands around sort of thing.
1:13:18
And it had all much more like restrictive DRM things.
1:13:22
It was going to be more digital.
1:13:24
It was basically that console was designed around we're going to realize our vision and own the living room. And gamers hated it. So they rejected it.
1:13:30
So their vision which they didn't achieve also killed their console and so and the so my I wrote over a decade ago and the whole Xbox saga is filled with regrets I think first and foremost for Microsoft but also for me because I from the beginning is like they need to kill this program or they need to spin it out or get rid of it.
1:13:57
the stated goals which made sense from a corporate perspective were not achieved and it is continuing to exist because it exists >> and I was actually sympathetic to that.
1:14:12
I worked at Microsoft from from 2011 to 2013 when Microsoft was in the dumps and you know they were still had a great business but their stock had been like $40 for like a decade and uh and the one thing the employees has like well at least we have Xbox all the cool kids
1:14:28
over there like it was such a important thing to corporate culture to have Xbox >> even though this was a totally failed division in terms of achieving corporate goals and also was sort of self- emilating because it was trying to achieve corporate goals that it was not going to achieve. >> Yeah. What do you think the naming >> Yeah.
1:14:43
What do you think the naming scheme says about that project?
1:14:46
I always found it very odd that they went from Xbox to Xbox 360.
1:14:50
That sounds like the third.
1:14:54
It's actually the second.
1:14:54
Then Xbox One is the third, but it's one.
1:14:56
And then now they're on Series X, which feels like the 10th, but it's the fourth.
1:15:03
And then they have a bunch of subnames.
1:15:04
It feels like they just didn't they never leaned into just like Xbox 2, Xbox 3, Xbox One. >> Yeah.
1:15:10
Um, well, you're ask I mean, maybe it shows I worked at Microsoft.
1:15:12
You're asking the wrong guy about naming things, I think.
1:15:15
Um, but, uh, yeah, total mess.
1:15:17
They called it the 360 because it was coming out the same generation as the PlayStation 3 and so they wanted to well, they wanted to be on the same level.
1:15:24
Like, we both have sort of a three in our name. >> Yeah.
1:15:27
>> So, what's interesting about the PlayStation 3 is the PlayStation 3 was Sony's big misstep in terms of the whole PlayStation era.
1:15:35
PlayStation era. what they they had this crazy processor called the cell processor that had all these capabilities and they had uh up to that point consoles were differentiated by hardware and so Sony famously helped one of the reasons they beat Nintendo was they had discs so they could have much
1:15:53
larger like media and things along those lines and whereas Nintendo was sticking with cartridges and there was like other like they were much more favorable to third party developers um just in general they they they had sort of taken over in PlayStation one and two PlayStation three comes along, they produce this. Oh, they wanted to get
1:16:08
Oh, they wanted to get Blu-ray off the ground.
1:16:09
That's another example of consoles getting screwed up by trying to attempt to other corporate priorities. They It worked. >> Didn't they win?
1:16:19
And And didn't Xbox go with HD DVD and they lost.
1:16:22
>> They did, but at the end of the day, what happened was the PlayStation 3 was way too expensive.
1:16:26
Uh I think it ran super hot if I remember.
1:16:29
And all these extra capabilities were not used.
1:16:31
extra capabilities were not used. M >> and the reason they weren't used is that was the first HD generation and you had this shift to 3D games and highde graphics and what happened was it used to be games differentiate themselves by how well they wrote the game like how
1:16:46
did it perform on your Super Nintendo on your Nintendo now we moved to a world of actually all the actual game was offloaded to engines game engines uh like you know it had one unre obviously were Epic got super big with the Unreal Engine and so you no longer did that. What a game company did was actually
1:17:02
What a game company did was actually design the game and then asset creation.
1:17:06
And asset creation at HD was way more difficult, way more expensive than it was for for standard definition TVs.
1:17:12
And so the economic imperative for developers came, we can't just be on PlayStation.
1:17:19
We need to be on everything.
1:17:22
And so that was the ultimate generation.
1:17:24
And almost every game was made to run everywhere.
1:17:26
Run on PS3, run on Xbox 360, and run on the PC.
1:17:28
And that was also the Xbox 360's best best generation.
1:17:36
That was the one they were the most competitive on because they had all the games because all developers are making them sort of run everywhere.
1:17:40
They had a very simple to develop for architecture.
1:17:44
The 360 was very PC- like even more so than the one sort of previously.
1:17:48
And that was their best generation.
1:17:49
And then they come back the the next generation shoving connect down people's throats.
1:17:54
We're going to own the TV.
1:17:55
And meanwhile, Sony learned their lesson.
1:17:58
They're like, "Okay, we can't differentiate on hardware.
1:18:00
We need to create sort of generic hardware that is easy to develop for and the way we will differentiate is through exclusives."
1:18:10
They bought a bunch of small studios in contrast like buying Activision, which we can get to a little bit.
1:18:14
They bought a bunch of small studios and >> pushed all those studios to developing killer games for the upcoming PS4.
1:18:19
And so you got things like like the Spider-Man like uh that was a huge game.
1:18:28
Last of Us, that type of stuff. >> Exactly.
1:18:29
I mean, and so the PS4 was an unbelievable generation and in and a lot of the reason was unbelievable was because it had these exclusive games and they just crushed Microsoft because for all the crossplatform games, the Call of Duties, the Maddens, things like that, those always ran everywhere.
1:18:45
And so what you do is you limit the economic potential of your studios because you're only building for your platform and you make it back by all the licensing fees you get off the EAS of the world and the Activisions of the world because 80% of gamers are on your console, not on the other guy's console.
1:19:03
And so they just wiped out Microsoft in that generation.
1:19:08
Um, and that really just continued to the PS5.
1:19:11
Uh, and this is where we sort of get to the the Game Pass disaster. Okay. Yes.
1:19:16
So, uh, yeah, I want to Yeah, let's just jump forward to that. >> How was it?
1:19:22
>> I didn't want to ramble too long.
1:19:22
I was going to give you a chance. >> We love it.
1:19:25
I have a bunch of other I have a bunch of other questions not related to gaming, but I I like I I love this history.
1:19:32
>> I think the console the console history is fascinating.
1:19:33
It's really interesting how sort of because it tracks technological change to such a large extent and it totally shifted sort of strategy.
1:19:40
So, and I think you can draw I think you can draw a lot of real parallels to even just model releases over the last couple years.
1:19:46
How, you know, >> certain decisions around one model sets you back a certain number.
1:19:51
You know, they're they're iterating a lot faster, >> but I'm I'm seeing parallel. >> Yeah.
1:19:56
The the sort of development of of Yeah, it's interesting.
1:19:57
You could always sort of draw draw lessons.
1:19:59
So, you get to Microsoft at this point again.
1:20:01
I think I wrote at the time, okay, time to give up.
1:20:07
Like [laughter] you I wrote multiple times through the years.
1:20:09
they should give up on Xbox and uh and at this point >> was there ever an option after they bought uh Activision just to make Call of Duty a console exclusive or would that have been an FT FTC problem?
1:20:22
>> Well, we we we'll get to that cuz that's part of the story here.
1:20:24
So, Microsoft decides, okay, uh what we we're going to actually try a new business model. It's true.
1:20:31
Xbox sort of selling a console, >> selling uh you know, licensing it.
1:20:34
We kind of do that, but we're actually moving to being a services company.
1:20:39
The stock's doing much better now.
1:20:41
You know, like we have Azure, all the all these things.
1:20:45
What we need to do, and the way we compete with Sony, is we need to have the exact opposite of the Sony strategy, and we need to lean into services, lean into subscriptions.
1:20:55
We're going to do Xbox Game Pass.
1:20:57
And the idea of Xbox Game Pass is instead of buying every individual game for $60, $70, $80, gaming pricing, by the way far longer than it should have been, particularly for these AAA games, but we already got to that with Rockstar.
1:21:12
So they're they they're like you pay one price per month and you get access to all the games in Game Pass.
1:21:18
Well, of course, no publisher wants to partake in this because they make all their money upfront by selling games to their biggest fans.
1:21:27
You, you know, it's kind of like the movie model.
1:21:29
You make a bunch of money up front and yet in the >> Were they looking at like at at what happened to the music industry as an example of saying like, "Yeah, it's cool to make your product more accessible.
1:21:40
You get, you know, more listeners by bundling." >> That was the bet.
1:21:44
You had to make it up in volume, right?
1:21:45
And so this this why the series S came about.
1:21:48
There's the Series X and the Series S.
1:21:49
The Series S was a more underpowered but much cheaper model.
1:21:55
I think it launched at $300 versus the X was I think $600 or maybe $500.
1:21:59
And that was also a problem because you're kind of neutering the X because developers build to the lowest common denominator, not not sort of the highest one. So that was one problem.
1:22:10
But the idea was we're going to expand the market and they have these package deals where you get an S and you get Game Pass for a year and it's this sort of thing and uh we will make it up and the problem is no no independent developer was going to go for that.
1:22:22
So they had some of their own games but they went out and started buying a bunch of developers.
1:22:28
So they bought Bethesda which included I think it at that point uh and and Zenax I I the uh like they have a bunch of like great ideas.
1:22:41
those uh but those developers just aren't releasing like incredible titles annually except for Activision which does release >> well exactly and so the issue so the issue with buying these companies is their e what you're paying for is you're paying for their existing business plus
1:22:59
the premium and their existing business was selling single copies of games to all platforms and what they were saying is we're going to basically force all these studios to take a bath to lose a ton of money by putting all their games on Game Pass. We'll still sell on
1:23:15
We'll still sell on PlayStation because we have to because that's a lot of money.
1:23:19
It would be massively economically destructive not to.
1:23:22
But what we think is going to happen is gamers are going to realize I could be paying $70 a pop on PlayStation or I could go to Xbox and I could pay $20 a month and I can get all these games and that's it. And what a better deal.
1:23:36
And by the way, we'll get new gamers.
1:23:37
people are going to come in and and realize, "Wow, I can get all these games for $20 a month."
1:23:42
Uh, none of that happened.
1:23:42
All they did was cannibalize their existing business.
1:23:49
They didn't expand the market for console gamers.
1:23:51
All they did was have gamers who would have paid way more to play these games pay way less to pay these games. And Microsoft ate it.
1:23:58
And they I think they, you know, the recent reporting was they expected to have 75 million Game Pass subscribers by this year.
1:24:06
They have like 30 million.
1:24:06
And that number is actually decreasing. It's not going up.
1:24:10
And so it's just been uh and so that's sort of the context of what's happened here.
1:24:16
Uh Phil Spencer got uh retired, which uh if you retire at that level of a company, um you're probably canned. Uh probably too late.
1:24:25
The whole strategy disaster.
1:24:25
They brought in new leadership.
1:24:27
And now there's sort of like a reset going on.
1:24:32
They're they're laying off few thousand people.
1:24:35
They they say all games production are going to continue, but there's a real sort of critical decision here. What do we do?
1:24:42
Because we ended up getting stuck in the middle like and we're just this doesn't work.
1:24:50
>> What uh what did you read into their approach of laying off 1,600 people now and keeping a 1600 person rift?
1:24:56
I mean, it's a terrible idea [laughter] because they know like everyone there for the rest of the year is like like every VC would tell you to like cut hard, cut deep >> and then move forward with the team.
1:25:10
If you're on the ship, we're going to Valhalla together.
1:25:14
I think I I do have some sympathy because uh the reality is I appreciated the note um because they are in big trouble and there's an there's an aspect of just stating it clearly were not sugar coating it and if they laid out how much trouble they were in and then only cut 1600 people then everyone kind of knows they're going to be cutting more people right so I think they're just in a bad spot so of course it's not It's going to destroy morale.
1:25:46
It's going to destroy everything for the next year cuz everyone's waiting to get fired.
1:25:49
But there's a bit of they did, I think, tear the band-aid off to the extent they could.
1:25:53
And now there's just a now they can be very overt.
1:25:55
They can go through and actually talk to employees about what are you working on?
1:26:01
Why should you still be here?
1:26:01
And uh it's a reflection of the employment climate like like people in general are more they're just not going to bail.
1:26:09
Microsoft, you know, they're going to want to keep their job and so they can probably hopefully, fingers crossed, do better cuts by virtue of doing them in the open. Um, but I don't know.
1:26:19
I mean, I don't envy I don't envy Xbox's leadership at all.
1:26:24
It's going to be a very tough thing, but I I I I can totally understand how they are where they are.
1:26:29
>> Probability of a spin out.
1:26:32
>> I mean, I think it I think it needs to happen.
1:26:33
Like I I but you know this is again the regret is this was my take for years and years and years.
1:26:38
I'm like okay fine Xbox Game Pass that kind seems kind of interesting. Let's go for it.
1:26:42
It should have stuck to my guns. So like no stop.
1:26:45
This is going to be a disaster.
1:26:45
Um I think yeah I don't I I I don't get it.
1:26:50
Um I just don't I didn't see it before.
1:26:54
The thing that got me to say okay let's give it a chance didn't work. I don't see it now.
1:26:58
I mean I think it does give me pause.
1:27:01
They hired Matthew Ball who I've had on strategy multiple times >> uh as their chief strategy officer.
1:27:05
I have a lot of respect for you know his takes.
1:27:09
>> So I'm curious what he's thinking about.
1:27:11
>> This gets to the question before >> is there a bit where they just write off these acquisitions >> and say actually all this stuff's going to be exclusive now where like Call of Duty buy an Xbox.
1:27:22
uh like basically giving into the FTC's worst fears which >> uh but they those fears didn't make sense at the time in the context uh because it's >> by writing off what's funny we lost billions and billions of dollars. >> Yeah.
1:27:40
And it would it would test it it would be a good pricing test for the power of a AAA game to say, okay, you can only get Call of Duty on Xbox now.
1:27:50
And you would see like how like how many incremental Xbox sales do you get because that means the real value of the game is actually in the hundreds of dollars if people have a PlayStation and then they'll try something new.
1:28:00
then they'll try something new. Uh switching gears a little bit uh we keep having this experience where there's a company you know an AI company let's say an application layer company that is or lab that is you know hot but then you don't hear very much for a few months and you write them off and then they come out and they've like added hundreds
1:28:20
of millions of dollars of revenue and are doing a crazy up round and it's this weird thing where like even you know historically you know there's power laws everywhere but >> I feel Like in this moment we're seeing more and more examples where like the 10th best company in the category is still having the financial performance that a company that would have been the leading company in their category 5 years ago. What do you make it what do
1:28:44
What do you make it what do you make of that?
1:28:47
>> This is just a thing in tech in general that that is always sort of stuck out at me.
1:28:52
I mean I I think I >> Has it has it been though?
1:28:53
Like like CRM for example like if you go back to like 2020 2015 was like the best CRM company like actually no the the the example I always go back to is um I think it was 2014 or so when Apple bought Beats and they bought Beats for $3 billion and everyone's going the tech press is going crazy.
1:29:14
Everyone's writing thought pieces about it and I'm like you know of course writing about it. I'm like, $3 billion?
1:29:21
Like, Apple is a $500 billion company.
1:29:24
What does $3 billion matter?
1:29:24
And what's funny about that take is number one, it was right.
1:29:28
Who cares about $3 billion?
1:29:29
That's in our couch cushions.
1:29:29
Like, people were spun up about something that didn't really matter.
1:29:31
Number two, Apple was only a $500 billion company.
1:29:34
Like, the the astronomical increase in valuation and numbers around this is absolutely crazy.
1:29:42
So to your point, yeah, a 2019 CRM company, number one, there probably wasn't a number 10 even then.
1:29:46
But yeah, the numbers are not even remotely tied to like any I just sort of let them go and be like I write down the numbers and they don't really mean anything to me.
1:29:55
Um, but it's very hard to keep track of like the inflation in tech numbers specifically.
1:29:59
You know, you think that uh what was I complaining about pricing before?
1:30:03
Oh yeah, lemonade stands are bad.
1:30:05
Uh the Silicon Valley lemonade stand inflation is absolutely the worst in the world.
1:30:09
Um, on mergers and acquisitions, uh, there's this news today about Getty Images calling off Shuttertock deal after UK regulators said that they would have to sell the editorial business for the merger to be approved.
1:30:25
And it seemed very odd to me that a merger would be blocked by a regulator when that industry that is consolidating and is maybe becoming more monopolistic is under such insane attack from generative AI.
1:30:40
I can't imagine a better defensive move than putting Getty Images and Shedter Stock together. >> This happens.
1:30:48
This this is this happens every single time.
1:30:49
like the the natural response to your overall category being threatened by an external force is consolidation.
1:30:56
Like it's the only way to defend yourself to sort of you know you get synergies like like all these companies are pretty established so it's actually fairly easy to price you know exactly what things are.
1:31:07
It's a much like if you have growing companies you want to merge them or acquire them.
1:31:10
It's really unclear cuz how do you sort of price out the future?
1:31:14
These companies are declining.
1:31:16
So, it's very easy like you could do a discounted cash flow and understand exactly how much they're worth.
1:31:21
It's a very straightforward negotiation.
1:31:22
It makes total sense for them to consolidate.
1:31:26
But precisely because they're knowable and understandable, >> it's very easy for regulators to block them.
1:31:32
And you see this happen again and again.
1:31:34
You see like push back on you saw this with TV and like like different networks getting together and the various push backs happen to that or in telecoms like the this happens this is a natural pattern.
1:31:45
The moment that a company uh an industry wants to consolidate needs to consolidate is the moment regulators are most likely to stop them consolidating.
1:31:55
And whereas the actual time when action would matter like when it when it's growing and a company is making the right acquisitions to take over an industry >> regulators don't do anything and also rightly don't do anything because you're dealing with the future and it's unknown.
1:32:13
You don't want to screw it up.
1:32:15
Um it raises the question of what use >> do regulators sort of do anyway in broad broadstrokes.
1:32:20
I used to be I've sort of, you know, I think that they probably do more harm than good as far as a lot of these sort of blocking mergers and things go, but um I don't know.
1:32:29
I'm the one that just said maybe Microsoft to take Call of Duty exclusives. So So who knows?
1:32:35
Uh maybe I'll moment because we were looking it's a $3.
1:32:39
7 billion deal, but I'm like how is this a $3. 7 billion deal?
1:32:42
These are two 300 millionish market cap companies and it was cuz they the deal was like priced back in January of 2025 and so both companies had declined so much [laughter] >> combined market over the last 18 months and >> so maybe they should the deal anyway. I don't know.
1:33:01
>> I mean it could be worse.
1:33:01
You could be Netflix and have the stock market and sort of like make a bid for Warner Brothers that the stock market hates abandon the deal.
1:33:07
But they already decided you did the deal because you're desperate and you're [laughter] you're screwed anyway.
1:33:11
So, um, yeah, they and you don't even get what you bid for.
1:33:13
So, uh, maybe that's what happened here. I don't know. >> Oh, well.
1:33:17
Well, thank you so much for taking the time to come chat with us.
1:33:21
Have a, uh, have a great summer.
1:33:21
Uh, enjoy the break and we'll see you soon. >> Yeah.
1:33:26
Good luck with the lemonade stands. >> Yes. Try to make it. Don't go into debt.
1:33:32
[laughter] >> You're going to run up on a kid that has Clarina. >> Raise some money. Yeah, I know. Exactly. Yeah. Claron lemonade stand. >> Clarimate stand. Five easy. Silken Valley free. Interest free. It might.
1:33:42
Well, thank you so much and have a great rest of you. We'll talk to you soon. >> Talk to you later. >> Have a good one.
1:33:47
>> Let me tell you about Shopify.
1:33:47
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.
1:33:56
And our next guest is Rodrigo Leang from Samban Nova.
1:33:59
The co-founder and CEO is here with us in the TV realm.
1:34:05
Rodrigo, how are you doing? >> I'm doing good. How are you guys?
1:34:07
We're doing fantastically, but it sounds like you're doing better. Give us the news. What happened?
1:34:13
>> Well, you know, we're super excited.
1:34:13
We did a big uh big funding announcement today with a billion dollar uh round that we did a first close on at 10 at an 11 billion valuation.
1:34:23
So, super excited about announcing that. >> Incredible. >> There we go. >> There we go. There we go.
1:34:34
This is reminding me there was somebody posted like a couple weeks ago something to the effect of like every day there's a new billion dollar deal in chips from some company >> you've never heard of and uh >> I guess the trend uh the trend continues >> yeah uh yeah is this an overnight
1:34:53
success when did you start the company how long has this been overdue >> it's it's an overnight nine-year success you know I've been I've been bu I I've been building chips for 30 years a high performance processor and we started this company in 2017. So no but it's
1:35:05
So no but it's been it's it's been a great journey.
1:35:09
It's just you know again it's so noisy so there's so many companies out there doing also all sorts of awesome things but uh look then you know inference inference is now right in front of us.
1:35:18
It's kind of broken everything open.
1:35:20
It's what we do and it's been what we've done for a long time.
1:35:22
And so it's the new training run.
1:35:25
And so people that are kind of been thinking about building just for training, well now it's the time for inference and and this is where we shine and we shine, you know, and and investors are putting all their money behind that and so we're excited about that.
1:35:39
>> How how uh walk me through the the phases of I mean you have some of the biggest uh companies in the world you're working with.
1:35:46
JP Morgan Chase selected you uh for secure on-prem AI inference.
1:35:51
And I'm interested in the thought process that large Fortune 500 companies, Fortune 100 companies are going through right now.
1:35:58
I imagine that there's a lot of explore with f uh with frontier models very expensive. They're token maxing.
1:36:04
Then they shift to uh okay this agentic workflow is working.
1:36:07
Let's use a open- source model for it that is you know we the the either the the open- source uh frontier is caught up and can do this particular task.
1:36:18
Maybe there's a fine tune or some RL on some private data that makes the the the system perform better.
1:36:25
When is the conversation shifting to actually uh actually optimizing the inference stack, the hardware?
1:36:33
What are what what's the conversation like there?
1:36:35
What are the savings that people are focused on?
1:36:39
>> Well, I think what people are starting to realize after they started using uh chat GP and topic the the frontier models is look, there's a bunch of things I can do there and it's great.
1:36:48
you know will use it and it's going to be part of their business for a long long time right and hypers are offering all sorts of different services with different TPUs and GPUs and uh and training chips they're offering different things they're again on the cloud what what's happening now is this next phase of production is people starting to realize okay what happens to the stuff that I'm not comfortable releasing to these models like my
1:37:10
private data my security the stuff that I want your models to learn and then somehow become part of the global knowledge right and so what happens with that right So I don't know if I've have you know you know my my client's banking
1:37:22
information you know my have you know some some very regulated information what do I do with that right and so people are starting to realize okay there is a whole another class of workloads >> whole another class of you know of
1:37:34
applications that you got to go and do private and so uh with someone like JP Morgan which is fantastic you know I mean they are the top of the top when it comes to enterprise and IT right and so and technology and so fantastic partners
1:37:45
so they selected us as the ones that can come in and go into an environment like JP Morgan do full onrem secure private they can bring their open source models they can fine-tune into it they can deploy that privately securely and
1:37:57
control the models and control it forever right so so I think I think we're starting to see the the landscape start to to to steady right there some things you use uh the tropics for there's some things that you're going to use the hypers scale clouds for and
1:38:10
there's some things you're going to say hey let me run on prem and let me let me control the outcome and and especially since I know don't know how the regulatory environment is going to settle. Let me just be secure for that.
1:38:18
Let me just be secure for that.
1:38:21
Let me just be safe and just run those things on my own models in my own environment with my own security around it and then be done.
1:38:27
>> Yeah, you can think, you know, pharma company being like I would love for all the other large pharma companies to share their data with a with a frontier lab. Totally.
1:38:36
>> Uh but uh I'll I'll pass. Mhm.
1:38:36
What does uh what does a partnership with you look like for a large organization?
1:38:42
If I have, you know, [snorts] a large IT footprint already, I probably have data centers, but they might be uh more CPU based workloads.
1:38:53
Maybe I have some GPUs, but I'm not doing, you know, frontier inference.
1:38:58
I'm not fully scaled up, but I have some.
1:39:00
Are are you consulting with them at the level of like where they should be buying land for their next data center?
1:39:08
How they set up a powered shell, who they should partner with, like how deep in the stack will you go with a company that you're working with?
1:39:16
Well, well, look, you know, I mean, if you look at the the the AI ecosystems up to date, you know, you've we've been really focused on hypers scale clouds, you know, the the the neo clouds, the um the frontier models.
1:39:27
We're really focused on building those out, you know, gigawatts here, megawatts there.
1:39:30
I mean, just, you know, just this large scale large scale deployment and then what you're still going thinking about is well, how do I get as many tokens out per you know, megawatt per kil, you know, kilowatt megawatt in Google that I have, right?
1:39:43
So that's kind of we're very focused on that.
1:39:44
Some of we play into that are you really really efficient models.
1:39:48
We run the big models really fast.
1:39:50
That's really what we're known for. Huge models, right?
1:39:51
You know the battleground for power and data center and all that is about huge models.
1:39:56
It's not about the little models.
1:39:57
It's about the trillion multi- trillion parame models.
1:39:58
That's what we focus on and we run that faster than anybody else in the world.
1:40:01
So but then you flip it over to the enterprise and for them it's not as much about how many thousands of racks going to fit into an environment. It's about data privacy. It's about security.
1:40:12
It's about having the capacity when I want it. It's about low latency.
1:40:16
It's about these things that again you go back to traditional computing.
1:40:20
It's what they've always wanted, >> right?
1:40:22
They always wanted low latency. Oh, high performance.
1:40:24
Oh, security and privacy. They always wanted that.
1:40:25
And so, what we know is that because our rack our rack is a 10 kilowatt air cooled rack, >> compared to what traditional GPS are 140 kilowatts per rack, right?
1:40:34
We're 10 kilowatt aircooled rack producing state-of-the-art AI. >> Sure.
1:40:40
Now you can go into your existing data centers.
1:40:42
You don't need to go buy new data.
1:40:44
You you already have data center. Roll out the old gear. Bring in the new gear. Off we go, right?
1:40:47
And you're running the latest and greatest models at at great performance.
1:40:50
So that's kind of what's exciting about it.
1:40:54
And you they're first of first and foremost our customer, you know, they're buying racks and deploying them.
1:40:57
But then broadly, they're really also a co-developer, you know, when it comes to enterprise secure AI for enterprise, right?
1:41:06
right? because they are the most knowledgeable when it comes to deploying these types of applications and they're just so smart about this stuff and so we can partner with them and figure out how to bring the enterprise on board which again you know if we all think about it there are three classes of AI clients
1:41:20
you got the model makers >> right you got the clouds and people forget enterprise is just waking up and historically they have been a massive amount of spend mass right so they're just waking up and you see Jake Morgan so banks and some of the the other retail start to come on board and I think that's going to be a part of the ecosystem. I think it's going to be
1:41:40
I think it's going to be something that's going to be around. >> Yeah. Last question for me.
1:41:42
Jordan, you can take whatever after, but um walk me through the pre-Cat GPT era for your company.
1:41:51
I imagine that since 2022, 2023, it's been on fire and and demand has been through the roof.
1:41:57
But how did the company survive from 2017 to 2022? What were you doing? Who were the customers? uh did you have revenue?
1:42:03
Like what was was it all R&D and venture funding?
1:42:08
Like what was the what was the early history of the company?
1:42:10
Because that felt that feels like a a very potentially rough period, but how did you get through that that that time?
1:42:17
>> Well, look, no, I mean, you know, being chipping design for a long time, go and always know that this is a long-term investment.
1:42:22
And so, I mean, back in 2017, we're still trying to recognize cats and dogs in the web, right?
1:42:25
This is a cat or a dog, right?
1:42:27
Kind of what we're doing, right?
1:42:28
We're trying to figure out, you know, what do we do with this thing, right?
1:42:31
So um and we're building recommended models all of different things for people.
1:42:35
different things for people. But the reality is this the pre what what what what open AI did it just flushed out all of that noise pre-open AI >> y >> and focused all the value around let's start here >> it doesn't mean that images aren't important doesn't mean voice all these other things are important but what it did is focused us as a global market to say let's start here >> let's just start with language and it's
1:43:00
a very good place to start and it allowed us to actually come all of us come come together say hardware software models everybody start focusing in on language as the use case and now you've got so much production traction and now
1:43:12
we can focus on other things like we're doing great in voice and we're doing great in in in video and these are things that are also coming but the ability to sequence these things in production so that you can actually see
1:43:22
value has been incredibly important >> on on that note going forward how are you thinking about you know reacting to customer needs like this partnership with with JPM and some of your other you know new customers feels like reacting
1:43:35
to this like real time need of like okay we understand the potential we're willing to invest a lot here but we have certain kind of criteria around how we want to roll these products out versus skating to where the puck is going and
1:43:47
trying to make predictions around R&D that you do today that will pay dividends you know three four five years out >> yeah well you when you're chip design as you guys know right you it takes you two years to design and you got to go
1:44:00
through TSMC you got to build these wafers and you got to build these systems all I mean there's a three or four year cycle right and so They're always it's a it's a blend between engineering and fortuneelling, right? And so you're kind of mixing those. But
1:44:10
And so you're kind of mixing those.
1:44:10
But but the reality the reality is you're always doing that.
1:44:14
But here's the difference when it comes to enterprise.
1:44:18
And we you not only we have JP Morgan, but last month we announced a huge partnership with Vista Equity, which has 93 portfolio companies building all these applications.
1:44:25
And so what is the biggest thing that we run out with AI is we don't have takes.
1:44:31
>> We don't have a takes.
1:44:31
So now what you're seeing is the JP Morgans of the world, the enterprise of the world, the Vistas of the world, the all these applications all turning SAS companies into AI first companies and you're seeing the demand pull through.
1:44:42
And so what we're excited about this is not only do we have the chips and you got connected with the data center that there, but the next thing is connected with the end user, the end off taker that applies AI into something that's useful to your businesses.
1:44:55
So, so we're super excited about the JP Morgan, the Vista, all of these that picture.
1:44:59
That's our that's our mentality is what are people using it for? Solve that problem.
1:45:06
Everything underneath follows. >> Mhm.
1:45:08
Thank you so much for coming on the show.
1:45:10
Congratulations on the massive round >> 9-year overnight success.
1:45:14
>> Can't wait to talk to you again soon.
1:45:16
Have a great rest of your week.
1:45:18
>> We'll talk to you soon. Goodbye.
1:45:18
Let me tell you about public. com.
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1:45:27
Our next guest is Alana Palmo from Paradigm. >> Hey guys, what's up? >> What's up? Welcome to the show.
1:45:37
>> Our last guest raised 1 billion.
1:45:37
You had to [music] one up them.
1:45:40
You had to two up them with 1. 2.
1:45:41
Tell us about the new fund.
1:45:45
>> Oh man, thanks for having me guys. Really great to be here.
1:45:47
Um, we're super excited about it. We uh we raised 1.
1:45:49
2 2 billion to go after the new opportunity set >> Frontier.
1:45:59
>> Thanks for warming that up for me.
1:46:01
>> It sounds nice and warm. >> Fantastic. So, >> all right. Continue. >> Continue. >> 1.
1:46:06
2 billion for >> investment. >> All right, guys. We're We're going big.
1:46:11
We're We're going after all frontier tech.
1:46:13
We're really excited about it.
1:46:15
Obviously, you guys know we got our our uh start in crypto back in 2018. This is our fourth fund. Yeah.
1:46:22
>> Uh, pretty pretty excited about it.
1:46:24
>> But I feel like I don't know this is being somewhat positioned as like an expansion of the vision or the thesis, but I feel like Paradigm's been investing in broader frontier themes for years now.
1:46:34
Like can you talk about some of the the history of expanding beyond crypto and uh and the key moments in the fund's history that sort of uh woke you up to broadening the thesis? >> Yeah.
1:46:49
Well, I think in 2018, crypto was the most interesting frontier to be investing into and like that really was the heart of how we started building the firm >> and it was the it was the thesis behind being the uh sort of researchers, builders first, how do you get really close to the tech to be able to understand and underwrite these things from first principles.
1:47:10
And then I think over time it's it's become pretty obvious that it's not the only frontier and really hard to ignore what's happening in AI.
1:47:18
But actually like I would say it's more than that.
1:47:20
It's like the world itself has started to blend together and drawing these concrete lines is like no longer applicable.
1:47:26
I think that like even something that called itself a crypto project years ago today like things that are right on the periphery tech is just all touching each other.
1:47:37
And when you think about trying to separate it, it just doesn't work that way.
1:47:40
How are you thinking about the early stage?
1:47:42
There's been some chatter on the timeline about, oh, like every VC just wants to pile more money into the biggest private companies, the trillion dollar private companies.
1:47:50
Uh, why would I waste money or time talking to an early stage founder?
1:47:55
How are you thinking about opportunities at early stage, mid-stage, late stage?
1:47:59
What even is mid-stage now?
1:48:01
Is that 10 a mere $50 billion company early [snorts] stage at this point? Who knows?
1:48:07
Yeah, I think well I think stages is a hard thing to define because like what are we really talking about?
1:48:12
Are we talking about the stage of the company, the valuation?
1:48:14
Like >> um I think it's it's impossible to to not be backing some of the earliest founders and folks who are, you know, coming out >> um with new great ideas.
1:48:26
And so for us, it's like talentled.
1:48:28
I would say like you find great people.
1:48:30
Oftent times they're in their early 20s.
1:48:32
Um, so I don't think you can ignore the early stage, but you also can't ignore the dynamic that you're describing, which is like the power law of what's happening with these larger later stage companies and how much they're able to capture and the compound rate of growth.
1:48:45
>> Uh, so I think it's I think it's like you have to do both.
1:48:49
>> Uh, from an actual product standpoint, are you breaking out the fund?
1:48:52
Is there some amount, you know, se you know, segmented for the early stage, some for growth, some for incubation?
1:48:59
And how should founders be thinking about the new vehicle?
1:49:04
>> It'll be truly stage agnostic.
1:49:04
So, we're going to invest in everything from super early, seed stage, even preed in some cases um all the way into growth markets.
1:49:14
We also um you know are we have a core flagship fund which is an open-ended vehicle and so we invest into public markets too. >> Oh, interesting. >> Very cool.
1:49:22
>> Uh what is the effect of this year's IPOs?
1:49:24
What what have been the internal learnings from the the the the height of the opening of the w of the IPO window?
1:49:32
It feels like it's sort of open but maybe not fully wide open.
1:49:34
Uh we've got a lot of exciting IPOs uh that have done well.
1:49:39
Uh but how is that affecting the fund and your your feeling around the market right now?
1:49:45
>> That's a good question.
1:49:45
Um I think it's a hard thing to answer.
1:49:48
One of the one of the interesting dynamics happening in IPOs is like hyperlquid and some of the uh some of the trading activity we've seen in advance of the IPOs.
1:49:57
It's been pretty fun to see like the 247 365 markets really come alive, which has been a long-term thesis that the crypto markets have had.
1:50:05
And I think Jeff Low at Hyperlid has just done an incredible job pulling it off.
1:50:08
And um and uh Jeff Low at trade.
1:50:11
xyz and Jeff Yan at Hyperlid. Yeah.
1:50:14
Um, and so like the Sarah Bruss IPO, SpaceX IPO, like all of these now, like we had all of this trading activity going into those and so there was a lot more transparency on pricing in advance of the IPO event itself. Um, >> yeah.
1:50:29
How how accurate was the like onchain pricing relative to what these IPOs actually opened at?
1:50:37
And do you feel like >> surprisingly accurate?
1:50:41
>> Yeah, surprisingly like quite accurate actually. Interesting.
1:50:45
>> And have you heard of any institutions like starting to, you know, bigger like firms on Wall Street that you think will, if they're planning to invest in the IPO or or trade it after it opens, actually start their activity onchain?
1:51:00
Is that something that you see happening in the future as we get sort of more evidence that onchain trading tracks, you know, uh, real life after these IPOs actually happen?
1:51:13
>> Yeah, it's a good question.
1:51:13
And I mean, if I were them, I would be doing that.
1:51:16
Um, I don't know what the rules are and and what the playbook is for them today and like what the liquidity and depth of those books looks like.
1:51:22
But I mean, I think that's the thesis for what 24/7 365 markets look like in the future.
1:51:25
Um, is you're going to have a lot more institutional activity.
1:51:29
Um, certainly we're seeing that in per as a derivative product themselves.
1:51:34
Like I think they're just a much more efficient pure play product for big hedge funds to come in.
1:51:39
And um I would even say like the same thing can be true in prediction markets.
1:51:44
Like what we're seeing is you know some people are relating to prediction markets as an institutional product for getting exposure to things and bets that they want to place that is much more precise than we've had in the future or excuse me in the past.
1:51:55
Um and so the future I think holds like still a lot of white space in terms of how these markets are going to evolve but we continue to be really excited about it. >> That's great.
1:52:05
>> What do your internal meetings look like?
1:52:06
Do you have like uh you know a meeting once a month where you guys pitch new frontiers that you're kind of kicking around like at what like what what is what is forming a thesis look like?
1:52:18
Is it is it all partner driven or is it uh more collective?
1:52:20
You guys have kind of a general idea of a category that you're excited about and then you work together. Mhm.
1:52:28
>> Well, I'd say top down like thematically we're investing into areas where that are structurally long AGI first and foremost.
1:52:36
Um, so what are the things that are going to have a natural tailwind to come out of that?
1:52:40
We don't run like necessarily a top down process though down to an investment and say like let's go do a deep dive or a particular theme.
1:52:47
Um I think that oftentimes you try to gain conviction um and do sprints on individual areas in the market um that were maybe like there's a particular founder that we are excited about um but the process yeah I would say it's more organic like each individual partner may have a different thing that they're excited about and um and digging in on.
1:53:11
I do think like you know fundamental to our thesis is like we have to be close to the tech and so we ourselves have to be able to go really deep and like understand the these things down to you know lines of code and a lot of folks on the team are computer scientists or physics >> about down to the metal.
1:53:33
You guys have to you guys have a little data center in the office just huming away.
1:53:38
>> No data center in the office. Um, yeah.
1:53:41
I mean, I like orbital data setters, are they the future? I don't know. What do you guys think? >> I don't know.
1:53:46
I think you guys should should get some uh get on get on the next uh SpaceX rocket and uh run a little experiment.
1:53:54
>> I think it's all just Yeah, I I'm on the Elon timelines, which is take whatever he says and multiply it by three.
1:53:58
And that's probably true, which is still going to happen, but just not next year.
1:54:06
Yeah, I think I think Elon will will things into existence.
1:54:09
I I >> with enough time, you will get there. Yeah, almost always. >> Absolutely. >> Uh but it takes time.
1:54:14
Uh anyway, thank you for taking the time to come chat with us and congratulations on the new fund. >> Yeah.
1:54:20
And excited to meet all the new founders joining the portfolio.
1:54:23
>> Great portfolio already.
1:54:24
>> Yeah, super pumped about it.
1:54:24
We got some great folks on there. I love Zipline. >> Evan Rogers.
1:54:28
Keller is amazing at Zipline. Yeah. >> Fantastic. Super excited.
1:54:32
Have a great rest of your day and we'll talk to you soon.
1:54:35
Great to >> have you on Alana. Cheers. Bye.
1:54:37
>> Let me tell you about Codeex.
1:54:37
Codex is a powerful workspace for getting work done with AI agents.
1:54:41
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1:54:48
Our next >> next up is Byron Boots.
1:54:52
>> We got boots on the ground. >> Boots.
1:54:54
>> Let's bring in Byron Boots from >> here. Overland AI. Welcome to the show. How are you doing? >> Oh, great.
1:55:00
Thanks for having me on, guys.
1:55:02
It's it's really exciting to be here. >> Yes. Great to have you. >> We're very excited.
1:55:05
Uh can you reintroduce the product and then take us through the latest news and the contract that you just signed? >> Yeah, sure.
1:55:12
So, um good news is I'm working here out of our factory in Seattle.
1:55:16
So, you can actually see uh the product um that we have, right?
1:55:19
So, uh we're building autonomous ground vehicles for defense.
1:55:22
Basically, you think about that as like robots for the battlefield. Yeah.
1:55:26
Um so, do you guys want to see it? >> Absolutely.
1:55:30
>> Walk through it a little. >> Give us a tour.
1:55:30
So, so here's here's one of them.
1:55:33
This is our our Ultra product.
1:55:35
Um, you can kind of see the top part of it. Yeah.
1:55:37
>> Uh, it's a large off-road uh ground vehicle.
1:55:40
You've got sensors in the front.
1:55:41
So, there's stereo cameras and LAR.
1:55:43
Um, you've got these big uh big wheels here and and long travel suspension.
1:55:47
Um, down here is a payload deck, so you can think about putting, you know, big payloads on the vehicle. Um, right in here. There's onboard power.
1:55:55
There's compute down below the deck. Um, comms in the back.
1:55:57
So that gives you just a a brief overview of um one of the things that we're building and then you know you asked about the contract and we're super excited.
1:56:06
So uh we're the first ground autonomy provider to get a production contract with the US military um $20 million contract with the US Marine Corp.
1:56:22
>> Oh it's fantastic that I you're thinking about thinking that truck needs a gun.
1:56:27
[laughter] What what does the payload look like on there? It seems very modular.
1:56:30
It seems like you can put a lot of different equipment on that.
1:56:33
Is that something that's delegated to the Marine Corps?
1:56:36
They decide they partner with other primes or or do you have like other relationships where you can bring the configuration to them?
1:56:44
>> So, we've put 30 payloads uh 30 different payloads on these vehicles.
1:56:48
It's designed to be modular.
1:56:48
You can see that there's Elra down here that makes it really easy to attach things.
1:56:52
Um, so this is everything from uh kinetic payloads, uh, like remote weapon stations, drones, EW.
1:56:59
Um, so it depends on what the the customer wants.
1:57:02
We can help them integrate anything on onto this vehicle.
1:57:07
>> Uh, dogs as a form factor.
1:57:07
There's been a bunch of >> sort of creepy dogs, robot dogs >> or actual dogs.
1:57:15
>> Well, we should get into real dogs.
1:57:15
Uh, but, uh, there's been a bunch of videos circulating recently.
1:57:19
There was one maybe a week ago of of of a robotic dog and it seemed like they had solved like some of the recoil challenges.
1:57:26
Do you think that's a like how are you thinking about that form factor?
1:57:32
Obviously you guys are you focus on something else, but I'm sure you understand the trade-offs of both.
1:57:36
I I can imagine like your product is much better for high range uh you know situations where you need a lot of range.
1:57:44
Uh but but how do you think about it? >> Yeah.
1:57:48
So, so one of the reasons why we love this form factor is that it's first of all large enough to put a serious payload on it.
1:57:54
It can handle 1 to 2,000 lbs depending on what the configuration is.
1:57:58
Um it's got wheels so you know it has um really good use of energy.
1:58:01
You can you can drive it uh 100 miles.
1:58:04
Um so robot dogs are really cool too.
1:58:07
So before I started Overland AI as a professor running a um lab where we worked on on machine learning and robotics and we had a bunch of robotic dogs um in in the lab and they're they're fun to work on.
1:58:18
Uh but I think wheeled vehicles are really the place where we can get, you know, the most um the most >> you're saying the wheel is underrated and it doesn't need to be reinvented.
1:58:29
[laughter] >> That's what I'm hearing. >> This is crazy. Yeah.
1:58:30
I mean, so not only do you not need to reinvent a wheel, I mean, if you have squishy tires, you can do things like drive up and down stairs and and do all [laughter] sorts of stuff.
1:58:39
So, >> I never thought about how simple that is.
1:58:41
You [clears throat] can just drive up the stairs if your tires are big enough.
1:58:43
How big are the tires on the right on that truck?
1:58:46
>> I think these are like 38 inch. Um, so pretty big. >> 38. That's fantastic. I love it.
1:58:49
What does the actual manufacturing process look like?
1:58:54
Obviously, you're very wellunded company, $100 million round recently.
1:58:57
At the same time, there's probably a lot of experimentation, a lot of putting different parts of the supply chain together, a lot of modularity.
1:59:03
So, uh, how handbuilt are these?
1:59:06
What does the automation story over the future look like?
1:59:11
>> So, the ultra vehicle like this one is actually based on a Polaris um Razer chassis and and drivetrain.
1:59:16
Um, so we get that from Polaris and then we upgrade the suspension.
1:59:20
You can actually see a great view of that here. Got it.
1:59:24
>> Um, we pull out the the seats.
1:59:24
we just add this flat payload deck um and you know we do all the work to add the compute and the sensors and and wiring power all all of that kind of stuff.
1:59:33
So we pull all that together um in our factory here.
1:59:37
We're also very field forward.
1:59:39
So we we test these out in the field um all the time.
1:59:41
you know, we're in the field every single day um uh working on the you know, the software, the autonomy.
1:59:48
And I think one thing which is really really important about these systems is that this is a completely autonomous robotic system, right?
1:59:55
Like it has sensors that allow it to perceive the environment, um plan through the environment, control it so that a user can just tell it where it wants it to go, what payload to execute.
2:00:07
Um it's not, you know, it doesn't have to be teley operated.
2:00:08
uh you know a single user can control multiple vehicles is one of the things which is really cool about this tech.
2:00:16
>> I imagine there's like very high demand for both teleyop and full autonomous mode though right people want to be able to port in for a particular mission and then also be able to just try and draw way points on a map.
2:00:27
So, so one of the things that I think we see is when people first start to use a a vehicle like this, they're like, "Oh, like I want to tell it and and I'll be able to precisely control where it goes."
2:00:37
But they quickly realize that you can actually just tell it where to go on the map, tell it, you know, what orientation you want it to be in and it will just go there and and do it.
2:00:46
And so, um, it's actually safer, more efficient, and allows you to get like much more force multiplication if the operator just relies on the autonomy to get it there.
2:00:56
And so what we've seen is is war fighters really embracing that and um starting to experiment much more with that.
2:01:03
So uh we think autonomy really is the the future.
2:01:07
>> Any plans to make a dual use version for Malibu?
2:01:09
If you got a bunch of surfboards, you want to get them down to the beach, you load them up and say, "Hey, I'll meet you there in 5 minutes." >> Some natural light. >> Some natural light.
2:01:18
>> I mean, sounds sounds awesome.
2:01:18
We are we are actually um dual use.
2:01:20
We are using this for things like wildland firefighting and other things. So, who knows?
2:01:25
I mean, may maybe pretty soon we'll be able to to, you know, get you guys one.
2:01:30
>> The day party market, >> the Aman >> taking you around the the hotel property.
2:01:35
Uh, well, thank you so much for coming on the show. Uh, fantastic news.
2:01:38
Congratulations, and we'll talk to you soon. >> Incredible.
2:01:41
>> We appreciate what you >> Thank you so much. Really appreciate it. >> Have a great week. We'll talk to you soon. Goodbye.
2:01:47
>> Let me tell you about Console.
2:01:47
Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. Uh, there's a scoop.
2:02:00
There's a scoop on the timeline.
2:02:02
Perplexity is quietly building an AI coding tool that takes on cloud code and cursor and codecs potentially.
2:02:10
Uh, it's meant to build software endtoend.
2:02:11
The tool is being internally used for now under the code name Teammate.
2:02:15
Perplexity has been uh sort of bouncing around from different.
2:02:19
So Steve who here says what happened to the Bloomberg terminal killer?
2:02:23
They were working on that for a while.
2:02:24
Then they launched Bloomberg computer which was sort of a uh computer use agent and and saw incredible growth like you saw the ARR numbers went way up.
2:02:34
It's it feels like one of those examples of a company that uh people were sort of like I think one of the challenges and then all of a sudden there's some new good news.
2:02:43
>> Perplexity has a ton of revenue.
2:02:43
They're taking a ton of shots on gold >> just like every other company to be clear.
2:02:50
But I think the difference is that Perplexity doesn't have a product that's being used heavily by tech insiders.
2:02:57
And so people just see them as like running around with like >> uh they they it feels like they don't have something like that's a hit in enterprise that they can fall back on while they keep taking shots at some of these more >> enterprisey products. Yeah.
2:03:12
>> And so, uh, >> yeah, it's interesting.
2:03:15
I I it feels like >> Fun Prince, remember they they fired up the Perplexity Investment Fund investing in other startups.
2:03:24
>> I don't know what they invested in.
2:03:25
>> I don't know what they invested in, but >> but it but he has he has good access.
2:03:29
>> It's possible everything in that fund is just on fire because the market is doing so well.
2:03:34
So many companies are getting marked up.
2:03:35
That could be a pretty interesting portfolio to dig into at some point.
2:03:39
I think that this is more this teammate makes me think that it's maybe something else.
2:03:45
But I could see them seeing lovables growth and having a lot of overlap audiences and replet and saying like hey we want to make you know we yeah we want to make a more consumer >> leaning product.
2:03:57
I I I think it'll be hard to really get a foothold.
2:04:01
>> They are more adjacent than you think.
2:04:02
You go to Perplexity to look up some information.
2:04:04
You get uh nice you know UI design on the responses.
2:04:08
the Joe Rogan partnership which seems like it's crushing and they and Joe can be like, "Hey, Jamie, build me a build me a new CRM during the [laughter] show."
2:04:18
>> I don't think J Joe Rogan has any interest in a CRM.
2:04:20
I don't think he's in the market.
2:04:22
I think he does everything over text message and you have to be invited.
2:04:25
So, you know, if you're going to be on the show >> before we have our next guest, Grock 45, that's right, >> is out.
2:04:33
>> Is out some reviews, benchmarks.
2:04:35
>> Looking good on the benchmark goes.
2:04:35
Uh, I wonder how does Michael Truel have a SpaceX AI badge yet?
2:04:41
Is the cursor team involved in this heavily because I know they were doing some consulting work while the deal closed.
2:04:48
Of course, the deal was announced, but they're still have to go through post merger integration.
2:04:52
I wonder how deep that team was integrated, but uh excited to >> I think they're still going to be running under the cursor umbrella for a long time.
2:04:59
long time. I think it's much easier to sell cursor through the enterprise than >> and they have composer separate model but u yeah cursor did say that we've partnered with spaci to train gro so I think that there was a lot of >> class I really wonder if there'll be any gap in capabilities like in the spiky intelligence sense of gro will be good at a particular thing writing or what
2:05:20
something that's a little bit more xn native twitter native uh news social media like that's been the advantage there potentially and then cursor will be more data data coded driven and they'll actually be sort of a bifurcation in the models or will we just see a consolidation where both models wind up uh offering like basically the same spiky frontier as every other model. Uh anyway, excited to
2:05:40
Uh anyway, excited to dig into that.
2:05:42
Always love a new model launch.
2:05:44
But we have our next guest in the waiting room.
2:05:47
We have Will Mayer from Cult Holdings. Welcome to the show. How you doing, Will? >> I'm doing well. How are you guys?
2:05:53
>> Thank you so much for taking the time.
2:05:55
>> Great to have you on the show.
2:05:56
>> Great to have you on the show.
2:05:58
>> What What do we got in the background here? Oh yeah. >> Is that real? >> That is real. Yeah.
2:06:01
That's like various artifacts from the past. >> So yeah. >> Very cool. >> Uh Webbby Awards. I I think the spring.
2:06:09
Isn't that a Webby Award?
2:06:10
>> That is a That is Webby Award. >> Congratulations.
2:06:12
Uh give us a little background.
2:06:14
Give us a little bit of the journey.
2:06:16
Introduce yourself for those who are watching who might not be familiar with your work. >> Yeah, of course. I am Will Mayer.
2:06:20
I'm the co-founder and high priest at Cold Holdings.
2:06:24
uh background came from making skateboard films at a young age when I was like 14 for companies like Vans.
2:06:31
>> Became deeply obsessed with brands and what they represented.
2:06:33
Moved from there into advertising, working with brands like Nike and Netflix and then uh started working more and more with startups, incubating companies and fell in love with cults and religions and believe that many of the best brands are some form of a religion.
2:06:47
I remember uh I remember early in Silicon Valley I was working on uh a company and people were saying like oh like you don't want your product to have a cult-like following and I was looking at cult of Mac like the the website that tracks Mac they they they refer to it as a cult.
2:07:05
Uh it's a great way to think about things.
2:07:08
Obviously some >> a case against not wanting a cult.
2:07:11
>> Oh just that like you know cults are bad.
2:07:13
they often lead to like terrible outcomes in the literal sense.
2:07:15
And also, you probably don't want like psychos following you.
2:07:21
You want just like normal customers in reality.
2:07:22
And that's what Apple wound up getting.
2:07:25
They got a huge amount of just normal consumers, but they do have a cult-like fan base.
2:07:29
They need they needed the cult to get them through to the truly hit consumer product. >> Yeah.
2:07:37
>> I I mean, before the like 1970s, the word cult was actually neutral.
2:07:39
It just meant a new fringe group.
2:07:41
There was a period in like the ' 60s and '7s people refer to as the fourth great awakening.
2:07:46
It's like huge boom in spirituality.
2:07:49
Things like Rikio, children of God, but also brands like Blue Ribbon Sports, which became Nike or Apple >> from jobs.
2:07:55
Uh in that period, the word cult went from being a neutral word to a negative and conservatives started to use it to demarcate and delegitimize new movements.
2:08:04
>> So today, sociologists mostly refer to cults as NRMs or new religious movements. >> Okay, got it. Interesting.
2:08:08
But you're you're reclaiming it. you're taking it back.
2:08:12
Uh talk to us about I mean you have a couple different uh a couple different things going on in your world, but I'm interested particularly in in advertising video production.
2:08:20
Like what does it look like to work with you?
2:08:22
How long are you on a particular project?
2:08:26
The Poly Market ad went very viral and I'm wondering like what does that process look like from start to finish?
2:08:33
>> It really depends on the type of folks we work with.
2:08:35
With Poly Market, we've been working with them since January in like a bunch of different capacities.
2:08:40
The team and I have been working on strategy, a bunch of the brand work and out of home stuff.
2:08:43
That campaign came together in an insane timeline and was driven a lot in partnership with their internal team.
2:08:48
I got a call like 3 weeks before the World Cup.
2:08:51
And if you guys know like people now are working on Super Bowl ads, >> it's like a six-month process.
2:08:55
Normally that whole thing from like concept to production to post to being online and routed for TV was like three three and a half weeks. Wow. So, it was insane.
2:09:06
>> Uh, what how did you process all the different reactions?
2:09:08
I I think I saw the Reuben ad like while watching UFC.
2:09:11
I watched it too >> and I was like, "Whoa, Rick Rubin in the prediction market ad." Yeah.
2:09:20
>> Uh the ad was obviously very cool.
2:09:20
A lot of people were surprised by that. I brought up to you.
2:09:23
You were like, >> "Rick Rubin came out of the rap game.
2:09:27
Why is it surprising that he would do like a >> prediction market on UFC?"
2:09:32
>> So So yeah, I feel like it was very very mixed reactions to it, you know, not not on the creative.
2:09:37
I think that was universally like creative was awesome, but how did you process people's reaction to it?
2:09:43
>> I mean, I feel like a lot of the best campaigns are pretty controversial.
2:09:44
I mean, in our time with Equinox, we like banned membership sales on January 1st, and that became like the most heated moment that business has ever had.
2:09:51
Uh, but also the most successful campaign in history for them.
2:09:56
>> So, I think with with someone like Rick, what was great is there's nobody that represents questions better than him for those who either the creative act or anything else.
2:10:03
So, we felt like a great fit. >> Yeah.
2:10:05
Uh, I've been feeling over, you know, we're sort of at like peak marketing content and yet like it feels like advertising has never been in a worse place.
2:10:16
I don't know if you feel the same way.
2:10:19
>> Uh, the the the campaign with Poly Market is like it is a campaign.
2:10:21
It feels like the the the craft of of advertising and that's why I think it broke through as much as like again the actual creative was good.
2:10:29
Do you feel the same way?
2:10:32
Uh, do you have launch video fatigue?
2:10:34
Uh, it used to be like, you know, maybe a company would come out with a video, but they were really just hoping for like a TechCrunch article.
2:10:43
Now it's like, well, we're definitely doing a video.
2:10:44
Uh, and it'll look exactly the same as every other video, and then, yeah, maybe we get a TechCrunch article, but it feels like people are trying to create their own artifacts.
2:10:55
>> I mean, dude, I don't want to I don't want to point it back at you, but you guys created like the OG launch video, I feel [laughter] like for TV.
2:11:00
I remember like that was my first experience at TBPN was like you guys on a helicopter or something.
2:11:05
[laughter] Um >> so I I'd say >> no and and we you you'll appreciate we had 20 other videos planned and then it it just started this sort of snowball where everyone was launching videos and we were like this is no longer a good way to actually break through and get attention. We just switch.
2:11:23
>> We had we we literally had the whole production team here like geared up for like weekly video shoots with ideas and different songs that we were going to play on and then it just got so tired. We were like, "Ah, okay. Let's not do that."
2:11:35
>> We should have We should have made 10.
2:11:36
>> We should launch one day at a time or something like that. But I don't know. Yeah.
2:11:40
What do you think about like the the Yeah.
2:11:42
The oversaturation of things like how fast the internet moves when you want to jump on something when you want to bring back something from the archive that hasn't been touched in years. >> It's tricky, man.
2:11:51
And I mean again, like not to throw it back to the 70s again, but the average American I think then saw like 500 ads a day and now it's more than 5,000 and who knows what it'll be in like a few years from now. >> Wow.
2:12:02
>> I we get hit up like every day for like countless launch videos. >> Sure.
2:12:07
>> I'm not sure how long the trend is going to last.
2:12:09
I think just like it's cliche to say, but like taste and a contrarian point of view will cut through.
2:12:14
The approach I would give to people to try is I think the polymarket work resonated because we took somebody who would >> the whole team like from creatives on in internally there to the photographer >> to the talent normally wouldn't be a part of a prediction market campaign.
2:12:30
When you think of like Equinox, every photographer we ever hired for Equinox had never shot fitness before.
2:12:36
>> They only shot fashion.
2:12:36
All of our design team came from museums that we would poach.
2:12:39
So I think like hiring people out of category, you have enough subject matter experts in the business.
2:12:44
So bring in people who don't know the category and can bring new things to it. >> Yeah.
2:12:48
>> When you have a campaign that hits, where do you do you think the value is primarily coming from a great idea or the execution? >> I think a lot.
2:12:59
It's hard to say >> the equinox the equinox the great the great idea is like let's make it impossible to sign up for a membership on January 1st, right?
2:13:07
Like that's the idea and that's what sticks with people.
2:13:11
I don't even remember like a lot of the visuals, but to me that that's what made it a great campaign.
2:13:18
>> Yeah, I think that we spent less than 1% of what we would normally spend on a January campaign that year for what we launched, which was we don't speak January.
2:13:24
It was just black and white text, which is why you don't remember it.
2:13:26
But like brand actions I think cut through more than anything now.
2:13:30
Especially with like I feel like AI is going to democratize creativity and skill to so many people that there'll be such an abundance of beautiful visuals over the next few years that like the concept and what the company actually does will probably be the most important thing. >> Interesting.
2:13:43
>> What action are you willing to take? >> Yeah. Yeah. Yeah.
2:13:45
Actions speak louder than words and maybe sloth as well.
2:13:47
Uh how how did you how is working with Brian Johnson different?
2:13:52
because it feels like uh poly market it's sort of like a standard playbook.
2:13:57
You have a celebrity, you have a video, it's going in the World Cup.
2:14:01
It's like it's like standard inventory obviously executed very well, but uh with Brian Johnson it's like this massive owned media influencer driven individual. He's huge on Twitter.
2:14:11
It just feels like a different company.
2:14:13
How did you approach that?
2:14:15
What you wind up working with him on? >> It's massive.
2:14:17
him and Kate hit us up like probably late 2024, early 25 because they heard we were focused on like building religions and the brief was basically like build build a religion for don't die. >> That makes sense.
2:14:27
>> Um so we spent a lot of last year we had like to basically collaborate with them on what the doctrine of don't die became a lot of the rituals around it.
2:14:34
There's like a I don't know like five core tenants of like how to build a cult brand and I think Brian's like done all of those completely naturally authentically on his own.
2:14:42
Do you know >> were you were you responsible for getting them on the uh cigarette box? You know about this?
2:14:48
[laughter] >> I was not responsible for that.
2:14:52
>> In in France they have pictures of uh I think cancer patients on the on the boxes of cigarettes and one of them looks exactly like Brian Johnson. >> It's very funny.
2:15:01
Yeah, we can share it with you and you can see um I I'm interested to know the the five key uh tenants of building a cult brand.
2:15:08
First, we'll show you the image of the Brian Johnson on the cigarette box. Can we zoom in there?
2:15:15
It looks just like him to me.
2:15:17
This one, >> this would have been good gorilla marketing.
2:15:21
>> Yeah, >> you should have claimed credit.
2:15:21
Yeah, >> I'm honestly surprised it's not, but yeah, respect. >> But, well, yeah.
2:15:26
Walk us through the five tenants.
2:15:27
How did they apply to Blueprint and beyond?
2:15:30
>> Yeah, I think it it comes down to like five core things.
2:15:32
Uh, the first being doctrine.
2:15:34
So having like identity before features, okay, which is like what is the sacred text that everybody abides by?
2:15:40
Most brands have a tagline, but what can actually be like truly enforced and felt by the community.
2:15:44
Brian's done this incredibly well.
2:15:46
Um, think of things like most uh religions have commandments or tenants.
2:15:50
Brands have like think different or um just do it.
2:15:55
>> You have longer forms of doctrine like the technological republic by Alex Karp or like zero to one.
2:15:59
Brian used to write under the moniker zero all the time. So he's primed for that.
2:16:04
>> Uh the second is ritual which like again Brian through the dinner series for don't die dinners did such a beautiful job at you guys have a ritual here every day 5 days a week.
2:16:13
>> Uh but like what are the initiations into your brand or into your community uh and it's basically be forming like a ritual that becomes a habit that becomes identity over time.
2:16:23
So like you buy a pair of shoes, you join a run club, you are a runner.
2:16:28
Uh the third one is symbols and language.
2:16:30
So like how can you take elements to create in-groups versus outgroups?
2:16:35
What are the key features that signal people who are insiders versus outsiders to your brand?
2:16:41
Crossfit has like it's not a workout, it's the wad.
2:16:43
With Equinox, we never said gyms, we would say clubs.
2:16:47
>> So [snorts] elements like that are super important.
2:16:48
The Catholic Church used stained glass windows to educate an overwhelmingly illiterate population in the 12th century to indoctrinate them into the church.
2:16:57
>> Um that's like another form of symbols for that.
2:16:59
The fourth is a charismatic leader, which again you have in Brian, you have in folks like Palmer Lucky where you almost icon yourself.
2:17:05
So like Palmer, goatee, Hawaiian shirts, flip-flops, things like that are so incredibly important.
2:17:11
Uh and then the fifth one is an enemy.
2:17:13
I think like every brand needs a nemesis.
2:17:15
It a lot of people use like competitors. Apple started as IBM. Yeah.
2:17:19
with the like 1984 campaign, >> but over time it evolved to the concept of conformity because when you get bigger than your competition, that enemy loses power.
2:17:29
But if it's like an overwhelming thought that can never truly be defeated, the enemy always keeps power.
2:17:35
>> If you were doing a brand for the dog breed golden retriever and [laughter] you needed to figure out an enemy for the golden retriever, what what would let's let's workshop some >> the tennis ball.
2:17:46
>> No, it's not the tennis ball because that's your friend.
2:17:48
That's the thing that you want to That's the thing that you want to that you're desperately trying to find and get. >> Hunger. I don't know. What do you think?
2:17:56
>> It could be hunger for for my Australian Shepherd.
2:17:57
It's like every single loud car.
2:17:59
So, I would say like the opposite of peace.
2:18:00
And in defining your enemy, you define yourself.
2:18:02
So, like I'd be interested who who's your enemy?
2:18:04
Who's like the nemesis of TBPN right now?
2:18:09
>> Uh we we've actually >> Yeah, we mapped this all out.
2:18:11
We actually did this experience and I mean it was geopolitical neareer rivals who you can guess.
2:18:16
Uh and then we had a bunch of like more uh satirical ones like uh you know >> like our allies >> people who block data centers we love data centers that whole thing.
2:18:26
>> I mean yeah that that was that was early on but [laughter] we would do things more like who were who are our allies like if someone would mention private equity we would just like you know clap that was like no one ever is like standing up for private >> short sellers we hate short sellers that type of thing you know >> of course.
2:18:42
Yeah, the Yeah, we have a sheet the terms and memes.
2:18:46
>> How do you how do you think about scaling what you're doing?
2:18:47
Uh, you know, in a in a craft business, it's uh it's exceeding it's been done scale's been done in in in the creative field uh with with with agencies, but uh oftent times it's at odds with great work.
2:19:03
But how do you think about it?
2:19:06
I think the the point of view the way we work is different than most I'd say agencies like I I have no desire to scale the agency much larger than it is today.
2:19:14
The way in which we work was like you can either grow an agency really large try to sell for a pretty multiple down the road or what we started doing like 5 years ago was incubating startups.
2:19:23
So only a third of our clients pay us in cash the other two/3s pay us in some form of equity.
2:19:29
We helped create a credit card company that is called Built Rewards.
2:19:32
You might have heard of this guy Ankor Jane.
2:19:34
Um, and I've done a bunch of stuff like that.
2:19:36
So, we're working on a ton of those with firms like Index and other venture firms.
2:19:42
>> I found I found our actual actual list of enemies. >> Did you? >> HVAC repairmen.
2:19:46
I don't know why they're [laughter] on there.
2:19:49
>> DJI drones, Tik Tok, Sean Ping, undermonetized podcasts, podcasts that don't have enough advertising, >> which we solved.
2:19:57
>> Uh, leaf blowers, >> fantasy football.
2:19:59
Why did we put that on there?
2:20:00
What's wrong with fantasy football?
2:20:02
>> This is from the original print out of the TVN.
2:20:04
[clears throat] So we we when we were doing the show early on, we would have these bits >> and if we had a good bit, we would write it down and we would have this sheet that we would update and I would just keep it here and it would just remind me of like the kind of the core tenants as we were establishing >> in in in allies.
2:20:18
We had uh job creators and bubbles. [laughter] Very good. Very good.
2:20:23
Uh yeah, it was a lot it was a lot of fun. Yeah.
2:20:27
Good exercise for any brand.
2:20:27
Uh but of course everyone should call you first because clearly much better than most people.
2:20:33
Uh, but fantastic progress.
2:20:36
Thank you so much for coming on the show, breaking it down for us. Jordy, anything else?
2:20:39
>> Yeah, next time you're next time one of your founders is coming on, >> flag it to us. Excited to meet them.
2:20:45
>> Yeah, we'll talk to you soon. >> Awesome. Sounds good.
2:20:47
>> Have a good one, guys. Cheers. >> Have a good one. We'll talk to you soon. Goodbye.
2:20:51
>> H the old term sheet, the size gong timeline, some personnel news.
2:20:53
We haven't done one of those in a while.
2:20:56
We don't really do the trade deals.
2:20:57
The the trading cards really took the place of the trade deals.
2:21:00
Um, but speaking of advertising, I want to watch this SKH Heinix advertisement that Tyler dug up.
2:21:07
Let's play this because I want your reaction, Jordy, >> to an ad for SKH He Okay, >> don't.
2:21:22
>> So, we're also being extorted by others. >> Exported. Time went by.
2:21:32
He's dressed up as the chip, as the HBM.
2:21:36
He's dressed up as the memory.
2:21:39
>> Can't you just be cool?
2:21:43
>> How have you been doing? >> Why is he frozen? some prop comedy. I like it. >> Wow.
2:22:04
>> No idea what that means, but I love SK Hine.
2:22:07
>> Yeah, we don't know how to make >> I think that ad has like 80 million views. >> Wow.
2:22:10
[laughter] >> Uh for good reason. It's a good ad. Makes me want HBM.
2:22:14
Well, our next guest is live in the TVPN Ultra Dome with us.
2:22:19
We have Tucker Brown from Compound Creative Holdings.
2:22:21
He's the managing partner, friend of Py McCormack, >> and we're very excited to have him here on the show. >> We're back. >> We're back. >> This is quite a set. >> Yes. Welcome.
2:22:31
How was the rest of your trip to France? >> Uh France was hot. Okay.
2:22:37
>> It was um >> difficult.
2:22:39
>> It was productive, though.
2:22:39
I think you know, you guys probably saw the energy that there was in in >> Were you doing deals?
2:22:45
>> I was trying to do deals.
2:22:46
>> I'm always When you do the deal, are you a back of the envelope guy or a napkin math guy?
2:22:50
Um, >> which one are you pulling out?
2:22:53
>> You got to kind of combine, I guess, both.
2:22:55
>> both both like you're doing a DCF and it gets so big, you might have spreading comps on different tabs.
2:23:01
>> I mean, you guys, I'm sure you understand, you know, the category that we're in.
2:23:04
Um, >> you got to be creative with the deals. Yeah. So, anyway. >> Okay. So, uh, take us back.
2:23:11
>> What was your first can?
2:23:13
>> What was my first can? >> Yeah.
2:23:14
When when did you go for the first year? >> It was this year.
2:23:15
I've been to film festival.
2:23:17
>> You waited until it was like actually going to be productive for you. >> Yeah. Exactly.
2:23:20
Make it worth the, you know, the money you got to spend to get there.
2:23:24
>> But, but yeah, take us back early in your career. How'd you get here?
2:23:27
>> So, I've been at CIA for 15 years.
2:23:27
Um, you know, the talent agency that represents biggest entertainers in the world, athletes and all of that.
2:23:33
Uh, I was at Evolution, which is our investment bank, >> uh, working on large scale M&A, capital raising transactions across, you know, different categories.
2:23:41
Um, >> so did that for a long time.
2:23:43
I like the applause on on that.
2:23:47
>> Um, >> for capital raising. [laughter] >> Yes. For Yes.
2:23:49
um worked with pro sports teams, worked with entertainment companies, TV, you know, TV studios, um production companies.
2:23:57
>> When does evolution get get tapped in >> for a transaction?
2:24:00
Like like I can imagine if a if a sports team is going to transact or or an emerging league or an athlete has a business that they want to sell, like am I am I in the right area?
2:24:15
>> Yeah, it sort of it depends, right?
2:24:15
I mean, we're we don't work on tiny deals.
2:24:19
We like to focus on larger scale transactions.
2:24:21
So in sports it's probably going to be something 50 million plus.
2:24:24
>> So if you're putting a check into a team and you got some money to spend and want to buy a piece of a sports team, we'll facilitate that transaction.
2:24:30
Um we'll work on you know team sales too.
2:24:32
So entire teams that trade um one of the earliest deals that we did was the sale of uh the Sacramento Kings Civic runway in 2011.
2:24:42
>> Um >> and how teams traded by the way for $500 million. So good.
2:24:45
Does that organization look like a standard investment bank?
2:24:50
>> A lot like I mean it that's the service that we provide.
2:24:52
I think the difference is we sit within CIA so we have the strategic connectivity the knowledge that might be a little different than other investment banks have >> um >> and and probably less public markets coverage.
2:25:03
No >> we don't have capital markets you know capabilities we don't do public focus on yeah generally um so probably a little bit smaller.
2:25:10
Our team is only about 20 people.
2:25:12
Um, so kind of 50 to 500 million is our sweet spot.
2:25:15
Sports deals can be a lot larger than that, but I'd say for other, you know, deals, it's really in that kind of range. >> Okay.
2:25:22
>> Um, so, you know, was there for a long time and it came to, you know, how I've gotten to compound and what we just launched.
2:25:29
>> I started working around creator deals a couple years ago.
2:25:32
Um, >> kind of just by chance.
2:25:34
You stumble across deals and companies that are interesting, that make sense.
2:25:37
You want to lean in and figure something out.
2:25:38
And that that was the case with uh Dude Perfect, you know, a creator business that >> been scaling really nicely for a long time.
2:25:46
Built on YouTube, >> probably 20 years in the 16 years at the time. >> 16 years of the time. >> Yes.
2:25:51
Um so they were ancient in YouTube, you know, land.
2:25:53
Um >> but but consistent in their performance the whole time like >> I think they were growing at a 50% keer for that entire time.
2:26:00
And and no matter when you d a lot of people dip in and out of dude perfect content.
2:26:04
Of course you go through some binge watching.
2:26:06
You watch a bunch of the archive.
2:26:07
Then you come back years later and you see that okay everything's evolved and all the great pieces are still the same but they've added on a bunch more capability. >> Yeah.
2:26:16
And their audience I mean they they sort of 8 to 16 year old boys I'd say is the core of their audience but they also grew up with them.
2:26:21
So these guys are >> they're 38 now.
2:26:23
They have a big audience that you know >> Oh wow.
2:26:26
>> people in their 30s that grew up watching the content. So >> great.
2:26:29
I I didn't know much about it other than what I'd seen on YouTube.
2:26:33
They built a big live entertainment business. They go on tour.
2:26:34
They sell at NBA, you know, size arenas. >> Yeah.
2:26:38
>> Um, >> so what's unique about that deal?
2:26:40
Because they're they they have multiple revenue streams at this point.
2:26:42
They're doing advertisements, partnerships.
2:26:43
They have a partnership with Nerf and like a bunch of other deals in the works, tours, and then they were also talking about building like a Disneyland basically. >> Do Perfect World. Yes. >> Do Perfect World. Incredible.
2:26:55
>> There was a big mockup of that when I first went to visit their office in Texas.
2:26:58
Yeah, you know, amusement park.
2:27:02
So, >> um, yeah, listen, they wanted to build, and we've heard this a lot from creators, but a, you know, kind of a next generation Disney type business, >> um, for a specific audience around, you know, sports, kids, comedy, family, >> uh, very family-friendly business.
2:27:13
Um, >> and yeah, that's why I I I sort of got to know the guys, saw their business, diversified across a bunch of different categories.
2:27:23
It wasn't just a YouTube business, it was a real media company. Yeah.
2:27:27
>> Um, so we took that to market and executed a pretty large scale private equity transaction. It it wasn't easy.
2:27:33
Um, I was naive in the sense that I thought it would be because the financial profile was so attractive.
2:27:38
>> Why was it not legible to >> it?
2:27:40
It just it's it's a new category I think generally for transacting that it's the opportunity that I see at this point in time.
2:27:46
>> You don't have decades of like case studies and Harvard business.
2:27:49
You know, >> there no there wasn't a single compressed.
2:27:53
I looked at media company comps for it.
2:27:54
I guess >> um and you're you're dealing with talent, you're dealing with keyman risk in a way that's sort of unnerving to some private equity investors.
2:28:03
>> Platform risk, >> platform risk.
2:28:04
I mean, with them, it was a little bit less >> uh contingent on the platform itself, which was an advantage.
2:28:09
You know, their YouTube revenue was a small percentage of the overall business at that point in time.
2:28:14
>> Um but sure, you know, investors get spooked by algorithms, what could happen if it goes up or down or changes and how that impacts the business.
2:28:19
that impacts the business. Um, so it took it took a and by the way you have to find the right partner too and for you know for talent and for their business they built it over 16 years they owned it outright right they cared
2:28:30
about what you know what the future looked like with their partners so finding the right you know not just the right deal but the right people behind the deal to transact with >> I'd say in this category and the creator world is more important than in others. And
2:28:43
And >> so you came out of that feeling like you had a greater sort of understanding of these businesses as well as like an appreciation for their potential and their quirks.
2:28:52
And so you decided to become the buyer.
2:28:55
Is that the right way to think about?
2:28:57
>> I I there were many times during that process and there were a couple others I did after where I was um yeah I I just wish I was the buyer in that situation.
2:29:05
I feel like I was doing the work to structure the deals. That made sense.
2:29:07
I understood, you know, the talent behind the deals in a way that maybe others other buyers couldn't.
2:29:13
And I came from the world of the agency at CIA where we had a whole suite of services and and things we could provide for these creators in a way that, you know, a typical buyer wouldn't be able to do. >> Mh.
2:29:24
>> Um, so we pretty quickly started to think about what we could put together to basically be that unique buyer that we didn't see in the marketplace.
2:29:28
we didn't see in the marketplace. um or we didn't see many of, didn't see really at scale, didn't see sophistication from and started to iterate um you know what what that would look like and how it would come together and do we do it through the agency proper do we set up
2:29:43
something independently which is what we did because I think it's important to be independent um in the way that it's structured >> and raised you know good amount of money and you know looking to do >> um you know a lot of deals in the category and really become the the first of its kind you kind of predominant buyer in in this category. So, um
2:30:00
So, um >> yeah, excited >> for creators or media businesses that wind up with the Disney style business, the flywheel of multiple properties, multiple revenue streams.
2:30:13
Do you find that those businesses are sort of organically grown by garden like a garden or built brick by brick?
2:30:20
Like how often do creators have the idea of where they want to go and they execute one step at a time?
2:30:29
Because I always think of that Disney flywheel and uh it's a beautiful napkin sketch. Yeah.
2:30:34
And it's so cool and you understand how the business works, but when he drew that, it was like two years before he died.
2:30:43
Like it was very much a reflection on a life's work. >> Yeah.
2:30:45
Listen, the best creators really are creative geniuses, but there's not always cohesion with how they think about the future and what they're doing.
2:30:53
So, often times I may see the whiteboard over there in the studio.
2:30:55
You walk into their their offices the same way, you know, I walked into Dude Perfect's office in in Texas and you see a whiteboard scattered with ideas. Yeah.
2:31:04
>> And it's all brilliant.
2:31:04
It's not necessarily put together and structured in a way that um that provides again a lot of cohesion, but there's a lot of opportunity that they see.
2:31:12
And I think first and foremost what they've all done successfully is they focus on um building a pretty rapid audience and and building engagement with that audience.
2:31:22
And then once you have that and you have that captive audience >> um it really expands and opens up the world of opportunity beyond whatever that core product or offering might be. Mhm.
2:31:31
>> So for them it was trick shots on on YouTube and then you know you build an audience there, kids family comedy and you can extend that into live events into products into things they probably, you know, certainly in 2009 when they started didn't think they'd have a line of products in Walmart. Yeah. Necessarily, right?
2:31:46
But then you start to dream bigger once you realize that what you're doing is actually working and resonating with the audience. >> Yeah.
2:31:52
Uh so the fund that you've built, how permanent is the capital?
2:31:56
Are you thinking about a certain fund life cycle?
2:32:00
Is there a world where maybe not today, but in 10 years we are talking about capital markets, public markets, creators going public?
2:32:07
There's been rumors about Mr.
2:32:08
Beast and I could see that happening, but that might be like a exception that proves the rule, but is there a world where in a decade we're looking at like, yeah, like the top 20 YouTubers and podcasts are public?
2:32:20
>> Yeah, certainly possible.
2:32:20
I mean, it's the, you know, it's the fastest growing segment of entertainment.
2:32:23
People want exposure to that.
2:32:25
Um, it's going to start with private capital.
2:32:27
I think it will probably move into the public markets.
2:32:30
>> Um, so yeah, I think we're moving in that direction.
2:32:33
For us, I think permanent capital is an important part of our strategy.
2:32:36
We want to we don't want to be forced into an unnatural life cycle.
2:32:40
We're forced to sell quickly. Creators don't. And you know, feedback. >> Yeah.
2:32:43
They're like, hey, you're doing your life's work, but also we're going to try to just change up who you're partnered with in in a decade.
2:32:49
Whereas like a CPG business or software company >> like the management team might be fully turned over over the fund life cycle. >> Yeah.
2:32:58
We so we tried to again in structuring this we tried to solve for what we heard um was important to creators in the transactions I've been around. >> Yeah.
2:33:06
>> And some permanence of the partnership or permanent capital is part of it.
2:33:08
Um you know uh letting creativity sit and remain with the creators even in a control transaction so there's no interference in the creativity >> of what they built.
2:33:18
That's really important even if you're selling equity control. >> Yeah.
2:33:22
>> Um >> yeah, to me I look at it and I can see over time this just being a more and more and more important part of CIA strategy because the challenge right now is you have creators historically there was maybe I don't I don't you know you you you'll know much more about the history but my feeling is that historically there was like maybe 500 stars that matter. >> Yeah.
2:33:44
And then now in media there's like 50,000 stars that matter across every single vertical.
2:33:49
single vertical. you you it was it was maybe easier to run a business when you had you know you could just focus on like a smaller number of like really really big stars who were running their own >> you know basically they had their own >> individual businesses but when you have 50,000 creators in all these subniches you can't like it seems like there's probably a limit like you can't scale
2:34:11
the CIA team 10 20x and expect to be running >> the same you need too many agents to cover it all as a as a sort of new strategy saying like, "Hey, we're going to try to service as much of that market as we can, but we're also going to try
2:34:27
to find >> the best talent and businesses across all these different categories and then be a long-term partner to those and actually participate in their overall business. >> Yeah, you go deep with the ones you
2:34:38
>> Yeah, you go deep with the ones you believe matter most and are positioned to scale the most." >> Right.
2:34:44
So, we're not, you know, trying to transact with hundreds or thousands of creators.
2:34:48
it really is to pick the businesses we believe in and categories that we think are are exciting and scalable um and go deep with them across the board on the capital side of things.
2:34:57
Then, you know, with the >> a how do you think about stages in a creator's life cycle?
2:35:01
There's people that are going to be incredibly talented from a just pure talent standpoint, right?
2:35:11
There's people out there that are like not even good at making videos, but have incredibly engaging content because they're so good.
2:35:17
And then usually they graduate into having, you know, better and better teams and eventually maybe they get into products.
2:35:23
But like, how do you look at the different stages? What's what's too early?
2:35:27
When are you seeing a an individual who's like showing all the potential but is too early for maybe a transaction?
2:35:37
>> Yeah, we don't like to be hyper prescriptive with with how we look at it.
2:35:40
I mean, there are certain things we do look for to assess whether it's the right stage for us to get involved.
2:35:45
>> Um, if it's an individual without a business, it's tough for us and there's a lot of work to do probably to pull it together and make it transactable.
2:35:50
Um, >> so we look for it to be an actual business that's been built and scaled to some capacity.
2:35:56
Um, right now >> is that like >> multiple revenue lines, not dependent entirely on platform revenue like those kind of >> maybe an operator, >> diversified to some extent, maybe an operator, not essential.
2:36:07
I mean, there was no operator do perfect when we did that deal. Wow. Um, >> wait.
2:36:10
They do everything themselves.
2:36:12
>> I mean, there was, I think, 20 employees.
2:36:13
The oldest outside of them was 24.
2:36:16
>> Yeah, but they didn't have like a business guy who would do like a single business. >> I love that. That's awesome.
2:36:21
>> Um, >> yeah, it's a different business.
2:36:24
>> Yeah, it's 80 employees now.
2:36:26
>> Um, >> so you look for some sense of a business.
2:36:29
business. um achieve diversification in some it doesn't need to be massive but yeah some offplatform monetization is you know was attractive and then >> yeah scale of revenue profitability um we really only like businesses that are profitable and that's that's not >> I don't want to say it's not hard to do but in in this category it is um you're
2:36:47
used to seeing margins that are not common in traditional media right 50% plus margins >> sure >> for creator business is actually relatively >> um it's relatively standard so >> sure >> um yeah look for for profitability growth grow and again categories that we think are positioned to scale >> and where we can be valuable um and add additional value. So yeah,
2:37:05
additional value. So yeah, >> you know, bring >> when you're when you're underwriting a deal, are like how do you think about a like how do you how do you think about a business where you know there's a ceiling like and and I imagine there's certain situations
2:37:20
where you're totally is like there's certain creators I would say that uh we've always said that if you if you asked us to make content for 100 million people, we would just wouldn't enjoy doing it because >> we'd be covering topics that are not interesting, right? To to us at least. To to us at least.
2:37:38
>> Uh and there's I think a lot of creator businesses where they're sort of like some TAM on from a from an audience standpoint in the category.
2:37:46
>> You don't think we can get 100 million views on an SKH Heinix advertisement reaction video. Jordy, have some faith.
2:37:52
[laughter] >> Have some faith.
2:37:52
We're talking about South Korean memory chip company advertising.
2:37:57
>> Um but I can imagine you're talking with a creator and saying like, "Hey, I think that you're you're a $5 million business today.
2:38:03
I think that you can get to 40 and uh and that's going to be enough for it to be a home run for you and us.
2:38:09
Like is that a conversation that you have or is it always like I need to see the path to superstardom and you know nine figures of revenue?
2:38:20
>> I think listen there's a difference between how we might underwrite the deal and think about where there's a ceiling and then how you communicate that to a creator.
2:38:26
M >> um >> if you're trying to justify, you know, value, maybe that's part of the conversation, but really they, you know, the best creators won't really cap their potential. >> Yeah.
2:38:37
>> So, you know, even if it's a $10 million business today, they probably think this is a billion dollar business if we do it right.
2:38:43
We sort of serve the audience in the way that we can. Yeah.
2:38:46
>> Um and so, >> honestly, any of the businesses we look to transact with now probably we ourselves believe could be billion-dollar plus businesses.
2:38:53
And if we don't believe that, >> we're probably not betting in the right categories with the right creators.
2:38:57
Um, >> it's early to maybe make that kind of call, you know, in this space.
2:39:01
But to the earlier comment about public markets, you know, potential, I think we'll see many of these businesses scale to that billion plus dollar mark, potentially go public.
2:39:11
Um, and yeah, it's just there's a lot I think that's left to >> Would it end up is is a more likely or or one of the more likely paths where you end up with effectively an index of a bunch of top creators because to me like creator business is like I don't know that many creators even like look at the most sophisticated operations like a Mr. Beast, right?
2:39:32
you have these like nine figure Amazon deals.
2:39:34
You have these consumer package goods businesses.
2:39:39
You have, you know, royalty streams effectively.
2:39:42
But him running a him running his business being like, I got to make sure that next quarter is good, otherwise we're going to nuke, like that feels challenging.
2:39:50
Whereas, if you took a basket of of, you know, 200 top creators that that uh were we're were we're were trading, you could see that being like stable and growing.
2:39:59
You know, >> you're looking for sort of like a manosphere ETF for you so you can have exposure to >> Vicular Andrew Tate in one ticker. [laughter] >> I do.
2:40:12
Listen, that's that's partially what we're trying to do, right?
2:40:14
I saw the difficulty um from institutional capital partners to transact with single creator business, single assets.
2:40:23
>> Um they're all eager to get into the category.
2:40:25
They want to put money to work.
2:40:26
They talk about it all the time.
2:40:28
You bring them a deal that's attractive and they're like, "Ah, we can't we can't do this. there's too much risk.
2:40:32
>> Um, if you bring a basket though, right, I think it's a lot more attractive.
2:40:36
>> And in some ways, Dude Perfect is a little bit of a basket.
2:40:37
There's a number of on camera talent.
2:40:39
It's not single person, single name.
2:40:41
And same thing with uh with Midas Touch that they have a number of of products in their portfolio and number of hosts and whatnot.
2:40:49
So >> yeah, the more the more layers to diversification you can achieve, more traffic, right?
2:40:54
to the business itself, >> the talent maybe that's involved and for us the portfolio that we build.
2:41:00
>> Um, >> uh, how are you how are you building out your pipeline of opportunities?
2:41:04
Are you going uh I imag you're you're in can you're meeting a bunch of creators, but I imagine you're like you probably like the beauty of creator businesses they're out in the open like an invisible creator business is not one >> whereas like some of the best deals in you know traditional private equity are like >> you would have to like live in the town and know that this you know certain business was was printing.
2:41:30
>> Yeah, they're out in the open.
2:41:30
Um, but some of the flashiest ones don't always have the numbers you might expect that they would.
2:41:37
>> Some that you don't think about as much.
2:41:38
They're a little quieter.
2:41:38
Building actually really significant businesses in a different way.
2:41:41
So, you don't always know everything even if it is quite visible.
2:41:45
Um, >> you know, I've had the benefit of living in the category for a little while, so I've seen a lot and have a good sense of what, >> you know, the immediate attracted targets might be.
2:41:53
Um, you know, we again have the relationship with the agency at CA.
2:41:57
We've got a I think 308 creator clients.
2:41:59
um not all of those would make sense for us, but a lot of them are are growing and are looking to potentially think about capital partners.
2:42:05
So, um there's a built-in pipeline there >> and you know, we're open for business.
2:42:11
I've gotten a lot of great inbound opportunities that have come our way since we announced. >> Great.
2:42:15
>> Um so, yeah, it's there's a lot a lot of activity and a lot I think for us to do.
2:42:21
>> How much time are you going to be spending in New York versus LA? >> LA. Yeah.
2:42:26
I've been back and forth um over the last decade plus quite a bit.
2:42:29
I spend the winter out here usually. >> Smart to do.
2:42:33
February and New York's not always the the most fun.
2:42:34
So um I'm usually here about twice a month.
2:42:37
We'll have a headquarters probably in both, you know, both locations.
2:42:42
>> And then, you know, creators are kind of everywhere, too.
2:42:44
So New York and LA have been the hubs of entertainment.
2:42:45
London a bit internationally.
2:42:48
>> Um but we see that much more dispersed with creators that are all over the place. So >> yeah.
2:42:53
Um, >> how how has the influencer creator industry evolved in China?
2:42:59
>> Is it similar diff how does it how is it similar versus how does it differ from the US?
2:43:05
>> Yeah, >> like they were big and early in like live shopping for example. >> Yeah.
2:43:11
I mean have such a massive um you know massive population.
2:43:14
All the numbers you see with businesses over there are pretty crazy from an audience perspective.
2:43:20
Um it's listen transacting with China. >> Yeah.
2:43:25
I don't I can't imagine you could do deals there.
2:43:27
But I'm saying like is is is when you when you look at that market, is there anything that you see that allows you to feel like you're seeing into the future? >> It's tricky, right?
2:43:37
Because if you do take that as a learning and you try to apply it to a different territory, it probably won't necessarily translate in the same way. Um, >> yeah.
2:43:46
Like live shopping has taken off in the US, but it's a lot of like functionally gambling, not like buying oranges. >> Yeah.
2:43:53
>> Oh, >> like a lot of these like live shopping platforms are like people live breaking o open packs of cards. Unboxings and stuff.
2:44:01
>> Not like they're like shopping for apparel in the same way >> that in China like a lot of these live shopping platforms, they would start with like you could literally go and buy new Kiwis and you could just see the Kiwis and then you're just hitting.
2:44:13
Apparently, China doesn't have a Joe Rogan.
2:44:14
Like, they don't have a really dominant just public commentator who just gives his random opinions about everything.
2:44:22
>> Well, I think somebody like Joe Rogan that's commenting on that many things like >> it's a little risky politically potentially. So, yeah. >> What about Hollywood?
2:44:30
What's been your update on the creator economy's uh interaction with Hollywood post the trifecta of creatorled movies?
2:44:36
So, Obsession, back rooms, uh, iron lung, the three born on YouTube, crossed over.
2:44:46
This was predicted like a decade ago. It's finally here.
2:44:48
Is it It feels like very high status, but maybe not actually moving the needle for some businesses.
2:44:54
Not something reliable like something low status like ads and merch, which might actually drive a business forward. >> Tough to Yeah.
2:45:00
Again, tough tough to rely on that and bet on that as >> a business model in and of itself.
2:45:04
I think it's a component that's pretty interesting.
2:45:07
um for creator businesses.
2:45:10
I mean, it was a big kind of narrative early on in podcasting, using podcast as a cheap sort of IP development mechanism for long form content. >> Yeah.
2:45:18
>> Um you know, same thing with YouTube, right?
2:45:19
A cheaper way to test and see if you got an audience. Yeah.
2:45:22
>> Um and then use that to monetize in long form.
2:45:25
So, >> it's a it's a great trend.
2:45:26
I think that we're seeing more and more of that. It'll continue.
2:45:29
Um, we were talking to Alex Herozi about this yesterday and and it was it was interesting thinking about like he was saying that he just doesn't reach the same audience as a uh as a Dave Ramsey who who just has syndication on so many radio shows.
2:45:46
And if he were able to crack into that, it's not that that deal would make him that much money.
2:45:52
that it would expose his overall portfolio, his overall business to a new trunch of clients and potential uh like customers but also audience members.
2:45:59
And so there's an interesting world where you could underwrite the you know uh high risk maybe this person does the next obsession or you could say this person's on a track where they are going to crack distribution on radio or TV at some point and they're going to be on that channel and that's going to be a halo for the overall business but uh obviously hard to predict. Yeah.
2:46:19
And so that that's why it's hard to underwrite against that, right?
2:46:24
I mean, it's a that that moonshot outcome could drive upside, but probably not going to be a base case underwriting situation. >> That makes sense.
2:46:33
>> What about Substack and potential new >> platforms?
2:46:38
>> Yeah, Substack, you know, you've seen some really nice businesses built and monetized on that platform.
2:46:42
Um, >> so in the same way that YouTube can be a core that you build off of in other areas, you could take YouTube build into Substack.
2:46:50
The same thing I think we're seeing migration from Substack into video and other, you know, other platforms.
2:46:55
So >> um, it's one of the the kind of top platforms that we're actually looking at to evaluate if there are things for us to to invest in there and again migrate that audience into other mediums.
2:47:04
Um, so yeah, there's there's a lot, you know, to do in that category, I Yeah, I was thinking like why is there no Substack for video, you know, like like a platform that was less algorithmic and of course the Substack for video will almost certainly be Substack. >> Yeah. Yeah, probably.
2:47:22
They just got to get the right people on there or something.
2:47:25
It's hard because like as soon as you make a video, you're like, well, this wants to be replicated everywhere on the internet, so let me throw it up on every channel.
2:47:33
>> Timeline to first deal announcement. Any predictions?
2:47:36
>> Are you going to hold me to it? I don't. That's it's always hard.
2:47:38
>> Are we going to I mean but but but we know we we have you know friends with funds that have a unique strategy and sometimes they don't do a deal for 18 months after closing a fund.
2:47:46
So like >> I think we we benefit from a bit of a running start because we've been in conversation with creators.
2:47:53
We've had this, you know, in the works for a little while. >> Sure.
2:47:57
>> We have relationships um that that are warm.
2:47:59
So, >> you know, we're looking to move fast but also want to be thoughtful.
2:48:02
We know those those first couple deals are gonna be really important for setting us up for longer term success. >> Yeah.
2:48:08
>> Um >> love to think we get something done by the end of this calendar year. Oh, >> cool.
2:48:12
>> Um these deals, at least the ones I've been around historically, they do take time.
2:48:15
There's a relationship element to it that >> involves a real-time commitment.
2:48:18
You want to make sure it's again obviously structured the right way.
2:48:22
Um >> so we're ready to go.
2:48:24
Just want to be thoughtful about making sure that we're picking the right partners um and setting up the right deal for ourselves. >> Makes sense. >> Amazing.
2:48:31
Let's hit the gong for the fund itself.
2:48:34
No, I want Tucker to hit it. Look at this guy. He's a gigach. He's a gig.
2:48:39
You can have at it as hard as you want. >> It's warmed up. It's warmed up. It's warmed up. Break it. Break it. >> There we go.
2:48:47
>> Well, thank you for coming on the show.
2:48:49
Thanks for coming on down.
2:48:49
We can wrap the show there.
2:48:52
>> Can't wait to do this with uh your first deal.
2:48:55
>> Yeah, we're excited for that.
2:48:55
Leave us five stars on Apple Podcast and Spotify.
2:48:59
I sign up for a newsletter tbp.
2:48:59
com and we'll see you >> flash >> tomorrow. Goodbye. >> Cheers. Love you.