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4:56
Today is Friday, December 12th, 2025.
5:01
Just 13 days till Christmas.
5:05
We're live from the TVPN Ultra Dome, the temple of technology.
5:07
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5:08
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5:13
Easy as corporate cards, bill payments, accounting, and a whole lot more, all in one place. That's right.
5:17
Uh Death Star post, now it makes sense. It all makes sense.
5:23
It wasn't a vague post, it was it was uh It was just early.
5:28
>> A preview, a a deal that would take shape 4 months later, right?
5:31
That's what was happening.
5:33
Uh Sam Altman, of course, what was this on GPT-5 day?
5:36
August 6th, he posted a picture of the Death Star rising on the horizon.
5:41
Uh very confusing post at the time. Now we understand. >> get it.
5:49
>> He was saying, "Hey, one day we're going to have rights to Star Wars properties through this deal with this ours." Of course. Darth Sama.
5:56
Uh how do you >> did not like this post at the time.
5:58
Uh people were in there saying, "You should delete this.
6:02
It's time to delete this."
6:04
And the timing the timing was really funny.
6:05
It implied that they were about to release uh something, you know, so all powerful.
6:14
>> Yeah, it was easy to read it that way.
6:16
You could also read it as like maybe they're going on the offensive against the the Death Star, the Empire, which is Google.
6:21
They're going to attack Google.
6:23
Uh there were a number of different ways to to to read into it, but it was It felt confusing.
6:28
It was confusing and then and then it and then it was I feel like people were somewhat let down. Yeah. Right? By by GPT-5.
6:36
>> Yeah, people were expecting something you know, remarkably qualitatively different.
6:39
That's not what people got, and so the end result was uh you know, people just remaining confused.
6:44
We had a bunch of different takes on it.
6:46
We think it makes sense now, but now, you know, it's even more clear with the Disney deal.
6:51
But you wrote about the Disney deal, you dug into the deal, and you uh kind of crystallized your take. So, take me through it.
6:57
Yeah, so I some of the stuff I talked about yesterday, but I wrote about it for the newsletter today, tvpn. com. Uh I wrote 127 days.
7:04
That's the gap between Sam's the Star Wars Death Star vague post and yesterday's announcement that Disney is investing $1 billion into OpenAI and giving them a 3-year license that allows users to generate AI photos and videos of the most popular 200 Disney characters.
7:19
Uh most notably, OpenAI is a guaranteed a 1-year exclusive on the IP, and while the post and the deal are probably not connected, I think it's funny to imagine that they are.
7:29
Right before the deal was announced, Disney sent Google a cease and desist letter claiming Google had been violating Disney's intellectual property by allowing users to generate a variety of Disney characters.
7:37
Many people outside tech seemed shocked that Disney would license their IP in the first place given their history of ruthlessly protecting it.
7:45
There's a number of examples of Disney coming after kids' birthday parties, or at least that's how they positioned it.
7:51
Of course, these are businesses that are using effectively using Disney characters to >> Yeah, yeah, I I I read >> monetize I read your draft, and I was like Wait, they sued a child for having a Disney-themed birthday party?
8:03
>> there's two notable examples.
8:03
One One is coming after basically a birthday party service. >> Company.
8:09
Like a business that sells And >> do your birthday party, and then they were selling and it'll be princess themed, and people were >> they it would it wouldn't they wouldn't directly call the characters that you could like rent the the same names. It wasn't like Elsa. Okay.
8:24
But it was clearly >> In the reviews, what Disney noted in the reviews, people would call the characters by the Disney name, and so that And then there was also a story of of a father who like wanted to do a Spider-Man uh tombstone for his like very young son that passed, and and the I think it was the um uh it effectively got blocked.
8:45
It wasn't necessarily directly by Disney, but anyways, Disney has long-standing policy of of not letting other people >> nightmare.
8:53
If your legal team comes to you and says like we want to sue a dead person, like tell them they backed down. >> an a lawsuit.
9:01
>> it was a tombstone company.
9:01
They were just saying like no, you can't make a Spider-Man tombstone.
9:05
>> Um anyways, uh many people outside of tech seemed shocked >> Yeah.
9:09
that Disney would license their IP, but Bob Iger knows that AI-generated Disney will happen with or without the company's blessing.
9:14
So, partnering with OpenAI today, while setting up negotiations with Google and other players, makes a lot of sense.
9:19
Again, uh I I just expect this like cease and desist is the start of a negotiation process in order to get the same type of IP and capability ultimately into Gemini.
9:31
>> But in 2027, not in 2025.
9:33
>> and and maybe not, right?
9:33
Like one question I have is they have a 1-year exclusive.
9:37
After that period, does Disney say, "Okay, you can keep having the exclusive, but you need to pay us like a billion dollars a year?"
9:43
>> And at least Google's at the table negotiating. Is that what you mean? Exactly.
9:46
So, the strategic significance of this deal for OpenAI has been broadly underappreciated, mainly because for a company that frequently talks in the trillions, Disney's investment, a paltry 1 billion, just isn't enough to turn heads, but the advantage this deal gives Open AI from a product and distribution standpoint is extremely significant.
10:01
Per the most recent reports, Open AI has 20 to 30 million paid users out of a total of 900 million globally.
10:07
Disney, on the other hand, had 140 million people visit Disney parks in the last year and 128 million paid subscribers to Disney Plus.
10:16
If you're an adult spending thousands of dollars to take your kids to Disneyland or Disney Plus subscriber, surely you'll pay an incremental amount to Open AI to extend and personalize your Disney experience.
10:26
As a parent, some of the most magical moments with AI that I've had are simply generate I've talked about this before.
10:32
I take a real photo of me and my son and I turn it Into dinosaur mode. generic dinosaurs. Dinosaur mode. Dino mode.
10:38
Uh it really brings us both a lot of joy.
10:40
It's like Everyone sees these photos.
10:42
It's his reaction to the picture that I'm getting joy from cuz he just like absolutely loves it.
10:48
I I had a similar experience where I would uh I would like take a picture of like a you know we would create a scene of toys and then we'd say like make these Lego versions of this or something, but the models got so good at a certain point that I was just like okay like I just I I made his toys look like toys and it just looks exactly like what I made.
11:06
I was like I just I need to take a photo.
11:08
I need like more creativity to come up with something remarkable. Yeah.
11:11
So anyways, I think people my household is not into the Disney world yet.
11:17
I think my kids are just young. Yeah.
11:19
But I can imagine how excited if you're a Frozen super fan and Avengers super fan, being able to put yourself, your kids into their world, I think it's going to be pretty exciting.
11:29
So, having a license to generate high-quality images and videos of 200 of these characters creates a temporary, but very real differentiation for tons of current and future chat GPT users.
11:39
Creates a real catalyst to pay, right?
11:41
Like my kids want more outputs.
11:41
I'm assuming you'll get a handful for free and then you'll have to upgrade and it creates and it's just going to be super viral, right?
11:50
These videos are going to be going into family group chats.
11:53
They're going to be shared online.
11:53
Uh I think it would I think it's hard to imagine another Studio Ghibli moment in the way that that happened, but you could imagine that this will be getting a lot of attention.
12:05
Knowing Sam and Josh, they've likely negotiated get Sora chat GPT broad exposure across Disney properties both online and offline and we already know that select Sora videos will be featured in Disney Plus.
12:16
I think they're going to be taking really making sure they're hand-selecting those because I wonder what that means.
12:23
I wonder if that means the Apple TV app or the Disney Plus app on the phone because on an iPad, on a phone, it feels a little bit more natural, but I mean just in terms of the Star Wars property, like there's there are the original Star Wars films and then there's Young Jedi Adventures, which is Star Wars for kids the you know there's even less violence.
12:44
It's more G-rated than a PG-13 rated.
12:48
Even with Bluey, very popular children's show on on Disney on Disney Plus, there are full episodes that are like a full episode might be I want to say like 8 minutes long, but then there's mini-sodes that are even shorter.
13:02
So like the short-formification is happening within the Disney app already, but I think a lot of parents would have a sort of negative reaction to just >> a feed. a feed.
13:14
Yeah, an endless scrolling feed of short-form Sora content.
13:18
That's going to be really tricky.
13:22
It needs to be something it needs it needs a twist. It needs curation.
13:24
They said that there's already going to be curation, but I wonder how that's going to roll out.
13:29
Curation, but it could still very well be infinite.
13:32
Yeah, well it doesn't need to be infinite.
13:35
>> Well, I just imagine it could be a every week.
13:37
>> Like you could have like like you could truly have like a monthly contest.
13:41
Everyone prompts to create the most in the most incredible Sora videos with Disney IP the most creative kids.
13:50
>> on Yeah, they definitely have to gamble on it for sure.
13:52
That's that's done gambling.
13:56
But but you could you could essentially have like a like a film festival that's running and kids submit their generations and then those get >> film festival of 7-second videos.
14:03
I'm sure Hollywood would love that.
14:06
Back in the back in the Vine days like the the the the creative skill ceiling was incredible.
14:13
Like people were doing remarkable remarkable things with that with that with that technology that short-form video that would loop and do all sorts of stuff.
14:21
I I still believe that there's some really interesting things that you can do with generative systems with generative AI and I and I imagine that we will see some cool stuff come out of the Disney partnership, but I don't know that I'd want a kid sitting there watching endless slop. Like that seems rough. Yeah.
14:38
But I mean at the same time a lot of a lot of parents are like yeah >> comes from That's great cuz there are parents out there who are like no I'm actually just in the market for something that will keep their attention. today.
14:48
Right now I want them to stop crying now.
14:51
>> need 5 minutes to do this thing.
14:54
>> yeah or just Anyways, I'll finish it up by saying my long-held assumption is that over time everyday consumers won't pay for LLMs.
15:01
There will be great ad and commerce supported LLMs that provide the monetization to serve great models, but Open AI's challenge is that even with future Hall of Famers like Fujishima and Denise Dresser on board, Denise is of course the former CEO of Slack who's now CRO at Open AI, they can't massively scale monetization of the free product overnight.
15:18
They can't just say hey chat GPT agent Yeah.
15:21
create a massive ad platform. Don't make mistakes.
15:25
Uh I said I don't expect those business lines to really begin ramping till the second half of next year and they need to show continued revenue growth now.
15:33
Hard to think of a better time for this deal to get done than 11 days into Open AI's code red and right as Sora was about to fall out of the app store's top 25.
15:40
I looked earlier this week they were sitting at around 24.
15:45
And again, as this as this new IP actually like rolls out to users, I expect it to go right up back to number one.
15:53
Uh I said will the functionality be immediately abused? Yes.
15:55
Will it create uncomfortable moments for Disney's leadership? Yes.
15:59
Is it a smart move for Disney? Yes.
16:01
Will Open AI have to shell out billions to maintain exclusive access over the long run? Yes. Will it be worth it?
16:08
Wait, so First, I want to tell you about Julius AI, the AI data analyst that works for you.
16:13
Join millions who use Julius to connect their data, ask questions, and get insights in seconds.
16:20
Second, I want to debate you on this idea that it will be abused immediately.
16:24
I think it's actually really really hard to abuse these systems.
16:26
Like there was the whole the first Gemini model where people would say make a you know a soldier from the 1940s and it and it would be a Nazi, but it would be a black Nazi and so that people were very upset about that because it was like just made no sense.
16:43
But I think that the models and the more importantly like the reasoning chains that happen.
16:47
the reasoning chains that happen. Like it's very clear that when you go to Nano Banana Pro and you say, you know, take this image and make it Christmasy, it's unpacking that using Gemini as a LLM first and it's and it's hydrating it into something that's it's actually reasoning about what you asked even if you just say Christmas mode, Studio Ghibli mode, you know, like you give it
17:09
two words and it actually is clearly hydrating it to a much to a much broader degree and I think that that reasoning step happens before and I also think it happens after so that even if it accidentally generates Mickey Mouse or you know someone doing something that they shouldn't be, Mickey Mouse holding a gun or something, then it will detect that and and actually turn that off. Like it's been
17:29
Like it's been very hard.
17:31
The whole like oh oh jailbreak it.
17:32
I got it to say something crazy.
17:34
Like that's like it's just like seems like a thing of the past.
17:36
What do I just I just trust that the internet immediately will figure out if you have hundreds hundreds of millions of people trying to jailbreak it, they will pull it off.
17:45
The other thing that will happen is people using different models that are like already don't have the same guardrails.
17:55
And making it look like they're Sora outputs even though they're insane, right?
17:58
>> Oh totally totally Again, I'm just saying like open-source model that's completely unrestricted.
18:04
You do something crazy and then you throw the Sora watermark on it just to take a shot at Sam and and will Yeah, I was I was going to agree with Shorty.
18:14
Like I think Hey, what's this? What's this?
18:16
Oh yeah, I've just been you know I got a double jaw surgery.
18:21
>> Double jaw And a little bone smashing. A bit, yeah.
18:23
Just trying to get my lips You're looking fantastic. This is remarkable.
18:27
I really I really can't hats off to the production team.
18:29
This is this is a fantastic new feature to to allow Tyler to look like the absolute gigachad. I love it. Yo.
18:42
Okay, but I I was going to say like yeah day one there's going to be people on X that like easily jailbreak it. Just look at us.
18:51
And then and then they're just going to post it and then it's going to go super viral and then you'll have parents Chat now it says chat now chat podcast. I love it.
19:02
Vanta, automate compliance and security AI that powers everything from evidence collection and continuous monitoring to security reviews and vendor risk. Okay.
19:13
Tell me your actual take. Okay, yeah.
19:15
So so I think like day one Oh, he's back.
19:18
>> Oh, what what what happened?
19:21
[Music] Day one >> There we go.
19:27
Okay, day one you have people who jailbreak it even if it's like one person then it goes super viral on X and then it's like oh Mickey Mouse like shooting a gun and then it goes viral.
19:34
Parents see it and they're like okay my kids aren't going to be on this because Even even if it's like mostly like you're going to have a ton of backlash where >> It could be bad backlash.
19:41
go super viral on CBS News or whatever. Nah, I don't buy that.
19:44
I think I think I think it I think it will be very magical and I think that they'll immediately be getting shared in family group chats and and you know between friends and that I think we're maybe underestimate the adult Disney audience. Well.
20:02
Of course it go two ways adult Disney. Okay, easy John.
20:07
It is yeah it is notable adult mode and the functionality are rolling out around the same time.
20:11
With the Pikachu getting barbecued, is that a violation?
20:13
Is that something that they'd want to stop?
20:16
If you're Bob Iger and and someone shows you that Pikachu getting barbecued video, would you say no no no, I don't want any videos out there of Mickey Mouse getting barbecued. What do you think?
20:33
Do you think that crosses the line?
20:36
I think Disney execs if they saw that in a pre-IPO world would send a cease and desist. >> do you mean pre-IPO?
20:43
Sorry sorry pre-AI world pre-deal world. >> Okay.
20:46
Like I think that I would imagine that anybody that's been creating content like that, they come after them in the same way that Ferrari if if Ferrari sees you like paint your like Ferrari some crazy color and do donuts, they'll just send you a cease and desist even though that even though you own the car. Yeah. Right? They care a lot.
21:07
>> like like internally, how where do you think the line is?
21:09
So you think that they would you think that that you know, whenever this rolls out, maybe it's already out I mean it might be out soon, but let's just assume it rolls out January, you go to Sora, you can generate you know, Luke Skywalker fighting with Spider-Man because those are two Disney properties.
21:28
Um can you have Luke Skywalker cut Spider-Man's arm off?
21:32
Because Luke Skywalker does cut off people's arms in the PG-13 rated Star Wars, Spider-Man does not ever get cut he never gets his arm cut off because he's more of a PG character. Right?
21:48
So how do you blend those two together?
21:51
And I'm and I'm just wondering like where is the line for the Disney execs?
21:55
Like where would they draw the line?
21:55
How do they even think about a framework for holding upholding the brand?
21:59
I think we'll know it when we see it. You think so?
22:03
I think it'd be a funny scenario where they only allow violence on Warner Brothers characters.
22:09
But they don't have the the rights, but it's just like oh yeah like you can well they do that in Hollywood.
22:13
There's some there's some actors who have it in their contracts that they never will lose a fist fight basically.
22:19
They'll say like you know, you you can cast me in this movie, but if we're if I'm fighting up at somebody, I don't lose, we can tie basically.
22:25
So you know how you watch a lot of like Jason Statham and The Rock and like Fast and Furious and they're like bashing each other through walls for like 5 minutes like this crazy action scene and then at the end you're like oh and like neither of them won.
22:37
It's like that's because it's in the contract.
22:38
They don't want to be they don't want to be depicted as like losers >> want to be horror-farmed.
22:42
>> want to be horror-farmed exactly.
22:42
They want to use graphite. dev instead.
22:44
Code review for the age of AI.
22:47
Graphite helps teams on GitHub ship higher quality software faster.
22:54
Um Justine Moore is taking a victory lap.
22:56
She's been on this case for a long time.
22:59
Uh she said I got roasted by the anti-AI crowd for suggesting that IP holders might want their characters in Sora.
23:07
They insisted that real entertainment companies would never willingly allow their characters to be used in AI slop.
23:14
Two months later, how the times have changed.
23:16
Fantastic prediction Justine. Uh great work.
23:18
I I completely agree with this take.
23:22
I think um it is interesting how there are there there is just the reality that if you hold IP, you need to exist in the world, you need to exist a lot you can't just stay on the shelf.
23:36
You can't be the Humphrey Bogart and yesterday when when Dylan from Puck was here, I he was mentioning a bunch of old Hollywood references and I was laughing to myself because I know you have not seen Casablanca and you have no idea what he means by get on the plane or Rosebud or any of these references.
23:56
You're just like yeah totally dude. Yeah yeah.
23:59
>> Give me another give me another movie to watch this weekend.
24:01
Uh Because you you told you you tried to get me to you got me to watch The Fugitive. And it was good, right? I delivered.
24:08
>> Okay, movies might be underrated.
24:09
>> Movies are movies are underrated. You heard it here first. Movies underrated.
24:13
At least in my household.
24:15
Scroll down here cuz I wanted to show another post uh from Olivia Moore who said has anyone else noticed VO3 has no IP constraints prompt Mickey Mouse welcoming you to Disney. Look at this John. Sorry. Yes.
24:32
I'm pulling up my movies my movies list which I will read to you in fall.
24:35
Anyway, so this was going back this was going on back June 16th.
24:39
>> What's crazy is that this somehow looks this this looked so good at the time and I was like oh it's over. It's so over.
24:45
Like like they can fully do it.
24:45
And yet this now looking back this looks washed out.
24:51
It doesn't have it's like overly saturated or something.
24:55
>> It looks like a green screen really.
24:58
>> actually look that good to me anymore and it's because the the goalposts have moved as they always do.
25:04
Um anyway, uh let me tell you about our daily newsletter.
25:06
Tech analysis and news daily.
25:11
Get our daily op-ed, top headlines and best posts from the timeline every >> every something every day.
25:20
And your newsletter it's still Casablanca we're working on I'm just messing with the team here. Anyway, uh numeral. com compliance handled.
25:29
Numeral worries about sales tax and VAT compliance so you can focus on growth. Numeral.
25:33
Bill Peebles is fired up.
25:36
>> Do you want to hear Do you want to hear my full movie catalog?
25:37
This is the full list you can pick and uh and Tyler you can play along too.
25:41
Um First up, The Godfather. Have you seen it? No. Wow. Okay. Taxi Driver. Never heard of it. Star Wars. You've seen Star Wars.
25:56
>> Seen at least a couple. Uh Raging Bull. No. Scarface. Yes.
26:01
You've actually seen Scarface? >> Yes. Okay. Uh Full Metal Jacket. But I didn't study it.
26:05
Watched it but I didn't I didn't take notes. Full Metal Jacket. No. Die Hard.
26:12
Maybe like when like 10 years ago.
26:16
>> You got to see Die Hard. Uh Goodfellas. No.
26:19
You got to watch Goodfellas. This is so good. Uh Reservoir Dogs. Mm maybe. Falling Down. Never heard of it.
26:29
>> Falling Down's a good one. Uh Pulp Fiction. Seen it. Okay. Heat.
26:36
Heard of it, haven't seen it. Casino. Never heard of it. Braveheart.
26:43
Uh heard of it, haven't seen it.
26:44
>> You've never seen Braveheart? Wow. Okay. Uh Hackers. No. Apollo 13. No. Contact. No. The Fifth Element. No. Saving Private Ryan. No.
26:58
You haven't seen Saving Private Ryan? Wow. Uh Fight Club. Seen it.
27:03
You've seen Fight Club, thank goodness. Uh The Matrix. Seen it. American Psycho. Seen it. Gladiator. No.
27:12
See now we're in the 2000s so we're we're we're more likely but the fact that you haven't seen Gladiator, I mean that's a fantastic film.
27:16
You got to watch Gladiator. Uh Lord of the Rings. At least one.
27:21
What do you mean at least one? You mean at least once.
27:23
You've watched the full trilogy at least once.
27:27
No, I'm saying I don't think I've watched the full trilogy.
27:29
>> a random movie in the trilogy? Probably the first one. The first one? It's a it's act one.
27:33
You didn't finish the Lord of the Rings.
27:35
It's the three act structure.
27:37
You can't just watch one and call it a call it >> I I guess I can. >> Minority Report. No. 300. No. You didn't see 300? That's crazy. Troy. The Departed. The Prestige.
27:56
You're just you're just I'm not making these up. No Country for Old Men.
28:01
I think I think I've seen that one. The Dark Knight. Seen it. Iron Man.
28:06
See now this is this is now we're getting into we we we we've passed you know we passed the joke that I've only seen three now.
28:13
I think I've I've seen a handful. But uh a few handfuls. Sicario. Have you seen Sicario?
28:17
No, but I Okay, that's a good one.
28:19
I like the You got to watch Sicario.
28:22
I like the I know the the memes from it. Yeah.
28:26
We got to we got to run through the rest of >> is the chat's getting angry.
28:29
>> There's so many good ones here.
28:29
Iron Man, Gran Torino, Inception, The Social Network, Tron: Legacy, The Town, Drive, Enemy, Wolf of Wall Street, American Sniper, Edge of Tomorrow, John Wick, Interstellar, Nightcrawler, Mad Max: Fury Road, Ex Machina, The Martian, Sicario, The Revenant, Dunkirk, Blade Runner 2049.
28:48
I was uh Ad Astra, Joker, Tenet, Dune.
28:51
I I have seen I have seen John I have seen John Wick. I have seen John Wick.
28:55
Funny story, I was on a flight back from London Yeah.
28:59
and it was like effectively 3:00 a. m.
29:04
The whole plane's dark and Keanu Reeves just walks by my seat.
29:10
>> Wait, in the back of the plane? Yes. That's wild.
29:13
Just walks by and it was like Wait, and you were watching John Wick on the plane? >> No, I wasn't. Oh okay okay. >> Yeah.
29:17
But it felt like >> walks by and imagine seeing like Keanu like you're just you're on a overnight flight. That's great.
29:24
It's dark in the plane and he just like walks by I think he was using the restroom.
29:28
And I did I ended up watching it after that to be to be fully immersed. Anyways.
29:33
>> I think Sicario would be the pick.
29:33
If you if you have one movie to watch >> Tonight.
29:36
tonight, I would say Sicario. Okay. It's a great one.
29:38
I I know I know that you're going to like it in the same way that you liked The Fugitive with Harrison Ford. Great.
29:44
Uh Bill Think bigger Bill faster.
29:47
helps design development teams build great products together.
29:50
Uh, Bill Peoples Sora meets Disney is going to be pure magic.
29:54
Dream come true to be working with them.
29:56
Let's give it up for Bill. Bill Peoples.
29:58
Yeah, seriously, what a what a great partnership for him. Um Um, Euro.
30:03
>> especially because, you know, there's there's a lot of people that have been uh like pointing to like Sora falling out of the App Store charts.
30:10
Like Sora is not doing that well.
30:10
And it's like that might be true, but Sora is still the number one generative AI video app, right?
30:18
It's kind of like winning by default.
30:21
So, the it's not like you should cut your losses.
30:25
It's not like you've been beaten.
30:26
Like it's clearly still a category that you want to go after.
30:27
And so, why not go get a big partnership?
30:32
Why not keep iterating to get to breakout success, to get to product market fit?
30:35
Keep The model's going to get better.
30:37
You know the research team's working on that.
30:38
And now you have more IP.
30:40
And then the actual the actual implementation of the app is going to get better.
30:46
So, uh congrats to Bill Peoples on the partnership. Job's not finished.
30:50
>> Yeah, it's already I mean, it's back up to 15 already, probably just based on the news.
30:55
Even though I don't know that uh all this functionality is actually available yet.
31:01
Um more importantly, Hero 1000 presents says 5. 2. How about 5.
31:04
2 cold ones with the boys?
31:07
It's a beautiful Thursday night, folks. It's hilarious.
31:12
Uh This latest model is state-of-the-art on beer bench, which is if I crack it open, it makes a fizzy sound and I go, "Hell yeah." Very good.
31:20
Uh Tyler Cowen says chat uh GPT 5.
31:24
2 also knows exactly which are the best Paul McCartney songs, and it can write a poem in Spanish as good as the median Pablo Neruda poem. >> Hm.
31:36
Tyler Cowen loves loves the GPT models. He's obsessed.
31:40
Um Have you Have you >> He He's He's the most obsessed and I yet I've never seen somebody make the claim that he was one shot. That's true. That's true.
31:48
It's pretty He's He's He's using responsibly. He's using responsibly.
31:54
>> Uh Yeah, there I I haven't I haven't really had a chance to play too much with the new model.
32:01
Is it already Is it already rolling out? Yeah, I am on 5. 2 already. 5. 2 Pro.
32:05
Um I uh I was working through I I hit 5.
32:09
2 Pro with a question because I wanted to know.
32:14
So, uh it it does feel like OpenAI is a little bit of the the coming out of the trough of disillusionment potentially.
32:22
You know, the the vibes have been really bad with the 1.
32:24
4 trillion, but the global economy has not collapsed.
32:27
And the market is rallying and they were in fact not an Enron scenario.
32:32
None of the big tech companies blew up. Like we we moved on.
32:38
Now, maybe it happens, but in general, it seems like, you know, expectations have sort of reset.
32:42
And now we're going into 2026, it's kind of a new game.
32:46
Uh but, you know, OpenAI still has a really dominant consumer business.
32:52
And it what looks like it's shaping up to be an oligopoly in the enterprise side or the B2B side.
32:57
And so, um nothing is a five-alarm fire.
33:01
They're in the code red, but it feels like they will emerge stronger from it.
33:04
Um the big question is, you know, how will Sam Altman be perceived?
33:12
Will he be one of the greatest founders of all time, founder CEOs?
33:17
And I was and I was trying to benchmark him, you know, let's say that let's say that he he, you know, lands the plane, gets out of the code red, Baja blasts his way into the public markets.
33:29
Uh and and he winds up, you know, being the founder CEO of a multi-trillion-dollar uh consumer tech company. He's in the mag seven.
33:36
It's be It's the mag eight.
33:38
Uh how will he be remembered?
33:40
And I was and I was and I was thinking about uh how unique his own ownership structure would be because for most CEO founder CEOs, if they get the company out into the public markets at a trillion dollars something like that, um they typically own a ton.
33:55
Um Steve Jobs is notably at various times uh not a major shareholder.
34:04
Uh at one point he owned 5 and 1/2 million shares out of almost a billion shares.
34:10
So, he had half a percent or 0. 6% in 2011.
34:12
That's uh that's reported here.
34:16
Um Bill Gates, on the other hand, absolute An absolute dog. Uh 13.
34:20
7% ownership of Microsoft.
34:24
So, you know, at a trillion dollars, that's 137 billion.
34:30
That's a lot of ownership.
34:30
Uh Alphabet, Google, uh obviously both of them became some of the richest people in the world today.
34:37
The economic ownership is only around 3%, but still significant.
34:39
Uh Jeff Bezos is at 14% with Amazon. Jensen is at 3. 7%. 3. 77% of Nvidia.
34:46
Uh of course, it's been a 30-year uh trip.
34:50
Uh Elon Musk, almost 20% at Tesla, 19. 7%.
34:57
Uh Meta Well, it's interesting to think given given how much dilution OpenAI has had to take and all the shareholders.
35:07
>> starting as a nonprofit.
35:08
>> There's well, that, but there's a world where if the company had just been formed as a C corp back in the day in 2015, and they had just raised a bunch of rounds >> rounds back-to-back-to-back and there was a bunch of co-founders initially, would Sam actually have It's rumored what he's going to get something like 7% was the proposal. >> Sure.
35:25
Would he have would he have less than that in that scenario?
35:27
Uh obviously he could get topped up, but I don't think I don't think in the fullness it's going to end up working out that badly for Sam. Yeah.
35:35
Yeah, it is interesting because uh just like like being being founder CEO of a of a trillion-dollar consumer tech company that usually is good enough to get you 50 billion, 100 billion dollars.
35:48
Um but we'll see where it lands. Yeah.
35:51
I'm not I'm I'm not quite sure what will happen.
35:54
But >> Did you want to run through this post from Greg? I'd love to.
35:56
But first, I'm going to tell you about Profound.
35:58
Get your brand mentioned in ChatGPT.
35:59
Reach millions of consumers who use AI to discover new products and brands.
36:06
Uh Greg uh Kamradt, who of course is the president of Arc Prize and the creator of some fantastic TVPN trading cards that he's been printing out. He's been printing out.
36:17
Uh we were shocked by this.
36:18
Thank you, Greg, for the for the tireless work on that project.
36:20
It's very fun, very cool.
36:22
Um and you have such an important day day job.
36:25
I'm I'm shocked We were shocked when we found out that you were uh making something cool on the on the side.
36:31
Um but he says the jump to reasoning models will be studied for years.
36:34
They are still widely wildly underrated.
36:36
Arc AGI-1 has been out for 6 years. GPT 5.
36:39
2 is a five order of magnitude scale-up.
36:42
And yet it still lands at 12%.
36:45
Add a bit of reasoning and performance immediately jumps.
36:52
Um And so, you can see the Arc AGI-1 leaderboard. GPT 5.
36:56
2 is only at 12%, but when you get to low, medium, high, extra high over in the reasoning models or you switch to the pro models, uh you're getting up to 90% on Arc AGI.
37:09
Of course, the the the tests of that that any human can do and yet AI has struggled with for a long time. Not for long.
37:18
AI is starting to uh make head room or make headway on the Arc AGI leaderboard.
37:24
Um very impressive results. Opus 4.
37:27
5 didn't do too poorly either.
37:30
Grok-4, of course, is also doing well.
37:33
Um Who else is And has Gemini not benched on this yet or are they not been Have they not been focusing on this? I'm not exactly sure.
37:41
Um but I'm excited to uh to see what happens with Arc AGI V3.
37:45
It feels like we're not even showing those scores yet because I think that none of the models are scoring at all yet.
37:52
They're not even finishing.
37:55
Um and I think it's uh it's it's an optimization problem to get the least number of moves.
37:59
Um but it is interesting because the the model card that Sam shared had a caveat around the OpenAI models.
38:08
I sent this to Tyler last night asking him uh about this because So, so Sam Altman's uh shows OpenAI GPT 5. 2 thinking versus GPT 5. 1 thinking.
38:21
And there's huge step-ups across SweBench, GPQA, Diamond, uh Frontier Math, AIME, Arc AGI-1, Arc AGI-2, GDP Eval.
38:32
Like there's there's jumps of various sizes all over.
38:35
Uh and then there's also Anthropic and Google.
38:41
Gemini 3 Pro and Claude Opus 4.
38:41
5 are also benchmarked there.
38:44
And of course, when you read into it, uh OpenAI's GPT 5.
38:47
2 thinking wins on almost all these benchmarks except for the advanced mathematics tier one through three and tier four, where Gemini 3 Pro wins, actually.
38:56
But, um down at the bottom, there's a little caveat and it says, "OpenAI models were run with maximum available reasoning effort."
39:02
So, these models now have the ability to to reason for longer.
39:08
You can just throw more time at them.
39:09
Um but uh but I was asking Tyler, it's it's weird because like like this makes it look like OpenAI is cheating and and and Anthropic and Google are doing more of a, you know, by-the-book uh approach to their benchmarking or whatever.
39:22
Uh but Tyler was sharing that actually uh all the labs now run their models at maximum reasoning effort because they all want to maximize the benchmarks, Well, yeah.
39:32
I mean, you're going to run out on on your best model with the highest number.
39:35
>> just weird to put that caveat for you and not your enemies, you know? Is that weird? Yeah, I I I don't know.
39:42
just like standard practice.
39:42
Like they're not going to benchmark on the on their worst model.
39:46
No, no, no, no, they're not.
39:46
But but it but if anything you would want to say >> just put it out for all the different All the labs all the labs are running on maximum available reasoning effort.
39:56
We we we're just like that. I don't know.
40:00
Yeah, we should build a model that reasons for a hundred years. What happened?
40:03
Oh, he's back in chat mode. He's missing it. This is insane.
40:06
You didn't even you didn't notice the difference. No, I didn't.
40:09
Cuz I I cuz when when I'm talking to Tyler I look at him as I look at his face.
40:12
I don't look at the screen.
40:14
Uh I'm going to jump in here. So uh Jay >> Yeah.
40:18
uh Jay Boltard over on X says, "Oracle is a train wreck.
40:23
How did they not disclose these delays on the call two days ago?"
40:25
And Bloomberg is reporting that Oracle delayed some data center projects for OpenAI to 2028.
40:31
Oracle has pushed back the completion dates for some of the data centers it's developing for OpenAI to 2028 from 2027.
40:37
The de- delays are largely due to labor and material shortages, said the people asking not to be identified.
40:44
Uh Oracle has been working to deliver over on a $300 billion contract to supply the computing power necessary to train and run OpenAI's models since it was inked this summer.
40:54
Even with the delays, the timelines for the project in the US remain ambitious for sites that are set to become some of the largest in the world.
41:01
I remember when this news broke, uh we talked about how Oracle was basically saying like we're going to build AWS in two years.
41:09
And that just felt like um uh uh you know, I applaud the the sort of ambition, but I think some of these delays, labor shortages, et cetera are were predictable. Mhm.
41:20
Um Bloomberg says, "Our take on uh on Oracle's massive bet on AI, uh Oracle's AI bet has fast become a bubble barometer." Mhm. Little bub talk.
41:31
Oracle spokesperson said in a statement that the company remained confident in its ability to meet its obligations and future expansion plans.
41:39
There have been no delays to any sites required to meet our contractual commitments and all milestones remain on track.
41:48
Uh site selection and delivery timelines were established in close coordination with OpenAI.
41:53
Uh and they said, uh "We have ambitious, achievable goals for capacity delivery. Yada yada yada."
42:00
The whole market's down today.
42:02
I wanted to wear a white suit, but it is not the day for that. Did you see Broadcom? We celebrated yesterday.
42:08
It seemed like the earnings, but And they revealed their mystery $10 billion customer. >> And drop it.
42:14
What didn't people think it was OpenAI?
42:17
I think I I think at the time everyone thought it was OpenAI.
42:18
Um but uh Broadcom is selling off significantly down 10% um really really bad really really bad news.
42:28
>> Yeah, so Broadcom revealed during a September earnings call that it had signed a customer that had placed a $10 billion order for custom chips. Mhm.
42:36
Tan said yesterday that Anthropic had placed an additional $11 billion order with Broadcom in the company's latest quarter.
42:43
So uh at the time originally in September uh Broadcom didn't say who it was, but yesterday uh Hock Tan revealed um So anyway >> So it's selling off because of questions about Broadcom's sales forecasts, uh contracts backlog, and anticipated future margins despite reporting a record $18 billion in sales and strong profit growth.
43:08
That with that's what we latched on to from that hilarious post of the crying bear.
43:12
Well, the bear's not crying now.
43:15
The bear is rich cuz the bear was short.
43:17
The bear is pissed on me. The bear is excited.
43:19
Uh margins appear to be one area of concern.
43:23
Chief Executive Hock Tan said Broadcom's fast-growing AI business has lower gross margins than other areas.
43:27
Uh it's forecast for non-AI revenue in the first quarter was flat.
43:34
So the revenue mix is changing, the margin mix is changing, and so some analyst cast the stock move as an overreaction and noted it came after a 75% run-up this year so far.
43:46
We can expect it to recover, wrote a team from Citi Research that reiterated its buy rating on the stock saying that upside from the AI business will continue to push up earnings estimates.
43:56
I wonder why the AI business is so much lower margin.
43:59
Like we've seen like over the past few years Nvidia has actually expanded margins and grown their their gross margins significantly um during the AI boom.
44:09
Broadcom doesn't seem to have the same leverage as Nvidia, and so they've been struggling, unfortunately.
44:17
Um Meanwhile, Apollo, according to Compound 248, casually predicting zero returns for the S&P 500 over the coming decade.
44:24
They put this out yesterday.
44:27
A note on expected returns in public equities over the coming years.
44:29
The historical relationship between the S&P 500 forward PE ratio and the subsequent subsequent 10-year annualized return show that investors should expect to get zero return in the S&P 500 over the coming decade.
44:42
Uh they have a chart below.
44:46
Um They're like, "Hey, can we interest you in some private credit opportunities?"
44:50
Where Yeah, or you know the other option.
44:54
What's the other thing you want to invest in when the stock market isn't looking so good? Puts. Land. Land. >> Land.
45:00
And we have Mike Swan on the show. We do land maxing.
45:02
The the the this the owner of Swan Land Company.
45:05
We saw him advertising some land in the Wall Street Journal.
45:09
We said we got to get him on the show, and we did.
45:10
So we're very excited to talk to him in 15 minutes all about land and his business.
45:14
I'm I've talked about this.
45:16
Land I think is the most criminally underrated asset by new generation of investors.
45:22
Nobody wants to nobody wants to make steady returns land maxing.
45:29
They want to they want to hit the thousand X >> Exactly. >> meme coin.
45:32
They want to hit the the 1% uh Polymarket, whatever it is.
45:38
Well, let me tell you about Addio. Uh the AI-native CRM.
45:40
Addio builds, scales, and grows your company to the next level.
45:46
Uh there is uh the timeline has been in turmoil over Kline um and uh some posts are getting deleted, so I don't even know if we're going to be able to pull these up, but Here's what happened. >> Yeah, bring it down.
45:57
Somebody at Kline commented on a picture from a hackathon and said "Imagine the smell." >> Yes.
46:06
>> People thought he was making a they thought it was like a racist comment. >> Yes.
46:10
People started piling on. >> Yes.
46:12
The CEO initially defended him and said, "I'm like I know I I can vouch for this guy. He's he's he's fine." People kept piling on.
46:22
The CEO ended up turning around and said, "Actually, we've let this guy go." >> Yeah.
46:27
And then now the CEO is getting even more more hate on uh from letting the guy go.
46:34
And then now he's deleting the post, and so and so maybe the guy maybe he ends up re- rehiring.
46:38
He feels like damage is pretty done at this point.
46:41
Um I'd imagine, you know, I'd imagine this this engineer that was formerly at Kline finds a new I it'd be hard to imagine him saying like going back and saying like I'm actually going to rejoin >> Yeah.
46:56
the team that just I have a I have a brief uh screenshot saved a little bit.
47:00
I think I can I think I can read it some of it.
47:02
Uh this is the CEO of Kline says, "A few days ago a tweet from our head of AI offended a lot of people.
47:07
And it definitely offended a lot of people.
47:11
There was an article in the Hindustan Times in India.
47:13
Like this is like news-worthy in India.
47:15
Um while I don't believe his original tweet was attended intended to be offensive, his response refusing to apologize does not reflect my position or Kline's.
47:24
We recognize this caused real pain, and that deserves blah blah blah."
47:30
And so the rest is cut off.
47:31
Uh Lulu says this stinks.
47:33
Uh she's not a fan of it.
47:35
Yeah, she says "Re-com's mistakes. Everyone makes them.
47:39
Sometimes things fall flat.
47:39
It's happened to me, and it also happens to people much smarter.
47:42
But betraying people or principles is in a different category.
47:46
It's more preventable and less excusable.
47:48
Cowardice doesn't happen by accident.
47:50
In the case of smell gate, it could be argued that Posh made the first kind of mistake overlooking how the joke could be interpreted, but then the CEO inarguably made the second kind of mistake, and that one to me is much worse."
48:02
Nat Eliason uh posted uh friend of the show.
48:07
I'm not sure if he's in the chat today said, "Considering the unanimous reaction to the CEO's post saying that he will fight that he that they let go of the engineer."
48:16
Nat says, "Will he fire himself now? Only seems fair." So I don't know.
48:22
Uh I don't know if it'll get that far, but certainly The entire company gets fired. >> Fire-ception. Does everyone get fired? No.
48:30
Uh the funny thing is that the only reason I know about this joke is from a bunch of Indian friends who who seem to have like been making it uh on anonymous accounts years ago in some sort of funny attempt to like reclaim the the formerly racist joke, but uh Lulu says, "When you cave to the mob instead of standing by your employee, and now people are more mad at you than before."
48:53
And uh she quotes, "Your worst sin is that you have destroyed and betrayed yourself for nothing."
48:59
>> really it's really odd because it feels like although it was going viral, like this just feels like something that would have blown over.
49:05
At least like take a breather, take a week or two, just like, you know, take some time off to think about the action.
49:12
It feels very reactive to do it like within a 24-hour news cycle, which like can just amp up so quickly and then fall out.
49:19
Um Okay, I guess I I guess the Hindustan Times is not very serious.
49:24
It's the Gawker of India, apparently.
49:26
Uh so so don't So don't worry about that.
49:28
I guess I'm wrong on that.
49:30
Thanks for fact-checking me, Suraj.
49:33
Frank says uh is responding uh "Trump in an interview yesterday said that he would consider eliminating taxes on gambling winnings.
49:44
Frank says prediction markets be like, "Never mind, it is gambling." It is gambling.
49:48
Cuz they always use trade.
49:50
They always use like it's not it's not bet. You you trade. >> on future events.
49:54
>> Trade trade on sports, trading on this. Like wait, actually.
49:59
And yeah, it is interesting to think about, you know, creating tax incentives for gambling. Taxes on tips?
50:04
I remember that was like a thing during the during the election or did that ever go through?
50:10
Cuz I remember we were joking we're like, "Oh, we're going to tip everyone here."
50:13
I think everyone made that joke at some point.
50:15
Um Apparently it is a glorified tabloid.
50:18
Um so, you know, don't don't if you're an American CEO and the Hindustan Times is putting you in the truth zone, let it be known that maybe take it with a grain of salt.
50:31
Um Anyway, I I this this just feels like a whole series of of people.
50:36
It's like it's like Trump likes being edgy and funny, making jokes, and he says I'd consider it, and then Watcher Guru takes it and turns it into a viral thing, and then somebody dunks on it and they get viral points, and it it all feels deeply unserious and and not really uh like it's going to reshape the market anytime soon.
50:57
But it certainly is a funny headline.
50:59
Yeah, I think I think a lot of people would hope that it'd be like, "No, we're not going to create tax incentivize gambling in this country." But >> Yep. he didn't.
51:09
>> Stranger things have happened.
51:09
Stranger things have happened.
51:10
Um What does this classical Theus says, "Increasing the incentive to gamble as an answer to the affordability crisis is nothing short of diabolical."
51:22
That is yeah, very very rough. Um I don't know. Yeah.
51:28
Seems like the thing you should tax extremely highly.
51:31
Seems like the best thing to potentially tax.
51:34
Uh Arthur Pigou in shambles, the Pigouvian tax creator.
51:37
Are you familiar with Pigouvian taxes? >> No.
51:41
It's basically this idea that like you can use taxes to shape uh you know, behaviors incentives.
51:46
So like if you don't want people to drive gas guzzling cars, you just increase the tax on gasoline.
51:53
Uh instead of instead of trying to make something illegal or or promote something or incentivize something, you just you you just shift the tax to be tax on tobacco, people will smoke less in theory.
52:03
Of course cigarettes, they're addictive.
52:06
>> California's done done this so aggressively with gasoline in the state.
52:10
>> And arguably it's worked.
52:10
I mean, there's a ton of electric cars in California.
52:13
Like there really are less gas guzzling cars.
52:15
So if that was the goal, mission accomplished, right? It kind of worked. Yeah.
52:19
But what do you think about Pigouvian taxes?
52:20
I was going to say isn't that like the idea behind the land value tax? Yes, a little bit.
52:27
Uh it's not it's not quite the same.
52:29
Land value tax is more Cuz you're incentivizing people to develop the land. Yes.
52:33
Yes, but uh I I think a Pigouvian tax is more is like the opposite, like the negative.
52:38
Like it it it's a way to it's a way to disincentivize negative externalities, like negative behavior.
52:43
Uh but I but I suppose it it works both ways. Um anyway.
52:49
Um this yeah, this was interesting.
52:49
The scoop from Alex Kantrowitz. Did you see this?
52:52
So, Alex Kantrowitz from uh Big Technology, what a great name. Uh he's a scoop.
52:57
Open AI CEO Sam Altman gathered news leaders for lunch in New York City on Monday.
53:02
He told them enterprise AI will be a massive priority for Open AI in 2026.
53:09
And Greg Brockman says, "Yeah, enterprise AI is going to be a huge theme for 2026."
53:14
Um what's And this tracks with hiring Slack CEO as CRO, right? Totally. Yeah.
53:21
Yeah, the the question is what what what does this actually look like, right?
53:26
Uh I think a lot of people are using ChatGPT at work.
53:28
They're using a variety of LLMs.
53:30
Does it mean they're going after Harvey? That's the big question.
53:35
Harvey seems to be doing really well, and I think of law firms as enterprises, and I think of law firms as potential targets for an Open AI enterprise plan. Am I crazy?
53:48
Yeah, I don't I don't think you're crazy. Okay.
53:49
Uh there was a funny post here from Peter uh Kurnis.
53:52
This uh not a not a super serious post, but I think it's worth reading.
53:57
He says, "Last quarter, I rolled out Microsoft Copilot to 4,000 employees.
54:01
$30 per seat per month, 1. 4 million annually.
54:04
I call it digital transformation.
54:07
The board loved that phrase.
54:09
They approved it in 11 minutes.
54:11
No one asked what it would actually do, including me.
54:12
I told everyone it would 10x productivity.
54:16
That's not a real number, but it sounds like one.
54:18
HR asked how we'd measure the 10x.
54:20
I'd said we'd leverage analytics dashboards. They stopped asking.
54:22
3 months later, I checked the usage reports. 47 people had opened it.
54:26
12 had used it more than once. One of them was me.
54:31
I used it to summarize an email I could have read in 30 seconds.
54:33
It took 45 seconds, plus the time it took to fix the hallucinations.
54:37
But I called it a pilot success.
54:39
Success means a pilot didn't visibly fail.
54:41
The CFO asked about our ROI. I showed him a graph.
54:44
The graph went up and to the right. Measured AI enablement. I made that metric up. He nodded approvingly. We're AI enabled now.
54:53
I don't know what that means, but it's in our investor deck.
54:55
A senior developer asked why we didn't use Claude or ChatGPT.
54:58
I said we needed enterprise grade security.
55:00
He asked what that meant. I said compliance.
55:02
He asked which compliance. I said, "All of them." He looked skeptical.
55:06
I scheduled him for a career development conversation.
55:08
He stopped asking questions.
55:13
Microsoft sent a case study team.
55:13
They wanted us to feature a they wanted to feature us as a success story.
55:16
I told them we saved 40,000 hours.
55:18
I calculated that number by multiplying employees by a number I made up. They didn't verify it. They never do.
55:25
Now we're on Microsoft's website.
55:26
Global enterprise achieves 40,000 hours of productivity gains with Copilot.
55:31
The CEO shared it on LinkedIn. He got 3,000 likes. He's never used Copilot.
55:36
None of the executives have. We have an exemption.
55:37
Strategic focus requires minimal digital distraction. I wrote that policy.
55:44
The licenses renew next month.
55:44
I'm requesting an expansion, 5,000 more seats.
55:48
We haven't used the first 4,000, but this time we'll drive adoption.
55:52
Adoption means mandatory training.
55:54
Training means a 45-minute webinar no one watches, but completion must be tracked. Completion is a metric.
55:58
Metrics go in dashboards.
56:01
Dashboards go in board presentations.
56:03
Board presentations get me promoted. I'll be SVP by Q3.
56:05
I still don't know what Copilot does, but I know what it's for.
56:09
It's for showing we're investing in AI.
56:11
Investment means spending.
56:13
Spending means commitment.
56:15
Commitment means we're serious about the future.
56:17
The future is whatever I say it is, as long as the graph goes up and to the right."
56:23
134,000 likes on that one.
56:25
What a long post you got. That's fantastic.
56:27
Um I was thinking about the fact that we now have a data point for Agent Force revenue.
56:38
And we also have a data point >> have to take that with a grain You have to take that with a grain of salt because Salesforce is are they are the greatest to ever do enterprise sales, and we do know that they're selling Agent Force as like an add-on. >> Cool. Yeah.
56:53
That's where I'm going with this, baby. >> Okay.
56:56
But first I'm going to tell you about Restream.
56:57
One live stream, 30-plus destinations.
56:59
If you want to multistream, go to restream. com, baby.
57:05
Okay, so my point was you could actually get to a dollar per token.
57:12
Because we've we've also seen that leak of how many tokens they're generating, remember?
57:15
And everyone was like, "Oh, Benioff's like not generating that many tokens."
57:18
And so you can see that he's probably making the most dollar per token of anyone in the industry.
57:23
Because you can look at other companies and see how many tokens they're generating, their rough revenues, and we can work through all the math.
57:30
Tyler, have we done this with with Anthropic or Open AI?
57:34
Cuz we were looking at at at like rough revenue token, how much they've done it Yeah, I I think I I tried doing this at some point.
57:44
It's just so hard because they they don't like break it up in a nice way.
57:47
Like I think at some point Demis said they're doing like over a quadrillion a month. >> Sure.
57:53
But then what is the revenue? We don't know.
57:55
>> Yeah, we don't know for Yeah, and then for Open AI like we I think we knew their API token count, and then the the revenue was leaked, but it was overall revenue. It wasn't broken up.
58:05
So you can maybe estimate it based off subscription percentage, but >> still.
58:09
I I feel like we got to we we we got to put together the Agent Force numbers to figure out >> Force must be cuz I mean, I think the leaked number was like 3 trillion or something.
58:18
It was like a very low amount.
58:20
And they're making like half a billion dollars.
58:23
So they're they're printing.
58:23
And that must be like 99. 999% margin, too, right?
58:28
Like how much does it cost to generate a trillion tokens?
58:32
Like 10 bucks or something? I don't know. Well, yeah.
58:34
I think we also calculated this, too, cuz we wanted to get in the Open AI token club.
58:37
So if you do the batch tokens and like the 4.
58:39
0 model, it's like 20 bucks.
58:43
>> Can you imagine Benioff's sitting there like, "Yeah, it costs 10 10 dollars. I made half a billion." No, I don't know.
58:49
Uh yeah yeah, tokens are the new page views, the new eyeballs.
58:51
Um but we should we we we should actually get both of those numbers in a spreadsheet and see if there's any other numbers we can pull through because I would love to see them.
59:00
In the meantime, let me tell you about Gemini 3 Pro, Google's most intelligent model yet, state-of-the-art reasoning, next-level vibe coding, and deep multimodal understanding.
59:10
What are you laughing at?
59:10
Uh a post went very viral a couple days ago.
59:12
Someone saying, "Come on now."
59:15
Cuz uh Tubi has a movie out called The Grinch That Stole uh B I T C H E S, and uh Tubi responded >> Tubi responded? 'Tis the season.
59:30
Incredible incredible response uh from the Tubi team. Yeah. And. >> see this sorry.
59:36
Did you see this chart crime from right this is from Riley.
59:39
Riley says put this on a shirt.
59:43
So open AI launched a merch store called supply. open ai. com.
59:46
Very fun bunch of shirts in there. You can get basketball.
59:50
You can get a bunch of cool stuff.
59:52
But then Riley Riley sort of dunking and saying like put this on a shirt.
59:55
It's like how crazy the financials are over at open AI.
1:00:00
And I and I get it like merch store probably not the biggest priority while you're in code red on your core product. Like that's a legit.
1:00:08
Concern but but the Financial Times like like what what are we doing with this chart?
1:00:12
This is a crazy crazy chart.
1:00:13
So first off this says open AI's estimated balance sheet but then it has revenue on here and like revenue doesn't go on the balance sheet.
1:00:23
So like what what are we doing? And like. It's like.
1:00:25
I'm just so confused by this.
1:00:28
And so total cost of cloud compute that's the that's the purple bar down there.
1:00:34
Cogs also don't go on the balance sheet.
1:00:37
So like both of those don't belong there.
1:00:40
Then the red dots are new equity fundings that they're planning to do and that should go on the balance sheet because that's assets that come in.
1:00:47
But then free cash flow that comes from the cash flow statement.
1:00:51
So it's just like this is such a chart crime from anyone who has respect for the three statements. This is the financial.
1:00:57
This is the Financial Times.
1:00:59
I have a lot of respect for the Financial I was just very shocked.
1:01:03
I mean it's more like open AI estimated financials. I don't know.
1:01:07
It's it's sort of an interesting chart.
1:01:08
It's also it's also just very weird how there's like bars and dots and it's like what does the bar mean? What does the dot mean? Like uh.
1:01:17
It's like the dot feels like it's more of like it's a very confusing chart.
1:01:18
It does tell an interesting story though which is that they're projecting revenue increasing while costs also increase.
1:01:29
And they're going to have to raise more money and eventually they're going to you know they're going to lose a lot of money.
1:01:34
There's going to be negative free cash flow for a number of years that eventually they will turn positive. Um. I don't know.
1:01:39
It seems like it's a bold five-year plan. We've heard about this.
1:01:43
It's funny to see it all laid out like that but ultimately they they're you know.
1:01:50
Like whether or not they deliver a sort of immaterial to their to their merch efforts. Anyway. Uh. What? Cognition.
1:01:59
AI is not going to like uh.
1:02:02
The post I read after you talk to me about cognition.
1:02:05
>> Cognition the team behind the AI software engineer Devin.
1:02:06
Crush your backlog with your personal AI engineering team.
1:02:10
What what post are you pulling up?
1:02:13
>> Jacob Elordi says he has no tolerance for AI and finds the whole conversation around it so effing boring.
1:02:21
He would not like this show.
1:02:23
He says I would much rather kiss on the beach and read a novel and be sunburned.
1:02:29
Most most pick me moment of. It's a crazy line. >> year. It's a crazy line.
1:02:36
This is But it resonated. 91,000 people agree. This is hilarious.
1:02:39
Yassine Madjid who makes technical deep learning tutorials says "Yo Jacob come on my live tomorrow.
1:02:48
We're going to be review this paper.
1:02:50
It's almost as good as the stuff you mentioned. See you tomorrow buddy." And it's.
1:02:56
It's the surprising effective of negative reinforcement in LLM reasoning.
1:03:00
That's a very very funny post.
1:03:01
>> Okay one more post before we we start land maxing.
1:03:05
Socks says God blessed us again shocker a thousand year American Empire.
1:03:08
An open source intel's reporting a major deposit of rare earth and critical minerals has been uncovered in Utah which the Wall Street Journal calls the most significant critical mineral reserve in the US. We did it again. We did it again?
1:03:22
>> If you're a nation without you know a lot of critical minerals.
1:03:24
It's probably a skill issue.
1:03:27
This is actually a good transition to our next guest Mike Swan.
1:03:31
Before we bring him in let me tell you about Privy.
1:03:33
Privy makes it easier build on crypto rails securely spin up white label wallets sign transactions integrate on chain on chain infrastructure all through one simple API.
1:03:43
We will bring in Mike Swan the managing owner of Swan Land Company.
1:03:45
Mike Swan how are you doing? Welcome to the show. Doing well gentlemen. How are you? Merry Christmas.
1:03:52
Thank you so much for taking the time to come talk to to I don't know probably random people.
1:03:58
>> the what was the timeline here?
1:03:58
We saw the ad was it Monday?
1:04:01
>> Yeah it was in the it was in the weekend edition of the Wall Street Journal in the special mansion section.
1:04:05
We saw the Swan Land Company advertisement and we were like we've wanted to invest in land.
1:04:12
We think that there's a lot of people in our audience.
1:04:14
>> I've talked on the I've talked on the show before that I think the the new generation of investors they want to buy crypto coins.
1:04:21
They want to you know be trading options.
1:04:24
They want to you know do NFTs all this stuff.
1:04:26
They want to they want to buy land and I feel like land is just kind of overlooked but certainly not by you.
1:04:35
So we were excited to have you on the show to give us kind of an update on.
1:04:39
Uh your business and how how investors are approaching the asset class lately.
1:04:49
No thank you for having me on gentlemen.
1:04:51
It's really really been looking forward to joining you and and sharing a little bit of what we see in our in our arena out here in the west as far as ranch properties investment properties in the Rocky Mountain West which we primarily serve. Um.
1:05:07
Basically right now what we're seeing is is as we always have that you know land in the western part of the United States isn't going out of style anytime soon especially Montana.
1:05:15
We saw an explosion with with the rise of the Yellowstone phenomenon and and how that that really hit us out here and it's certainly driven by the show.
1:05:26
The show really caused people to it amplified what we were already seeing out here in our in our market but it certainly didn't it didn't slow down the process of the interest in.
1:05:37
In Rocky Mountain ranch properties.
1:05:40
So of course you you receive the phone calls that you know talking about the train station and and and all of the entertaining aspects of what Rip Rip and that show went through but but that's a that's obviously Hollywood doing its best to to portray to portray our part of the world in a very unique and and unrealistic light. But.
1:06:03
You know we're we're seeing we continue to see investments in in our part of the world.
1:06:09
You know what our market's very cyclical as we see many of the markets and we study those and keep very close tabs on what the markets are doing but.
1:06:18
You know currently right now with with the stock market where it is and and the cash and the financial sector being as strong as it is right now the capital flow has really been out of real estate.
1:06:29
It's it's gone into the market.
1:06:29
It's going to stay in the market until we see and until we see some corrections there and then and then typically we see that pendulum swing back. So really so.
1:06:40
So that that's somewhat counterintuitive I would imagine.
1:06:44
Some folks maybe some smarter investors when they feel like markets are maybe a little bit overheated or overvalued might say hey this is a good time to rotate into.
1:06:51
Uh a less liquid asset like land or ranches and have some stability.
1:07:00
What you're saying is it's maybe the opposite.
1:07:01
A lot of people just wait for a correction and then and then get maybe a little bit scared at that point and then seek more stability.
1:07:09
No I think we're going to start seeing that in Q1 Q2 next year.
1:07:13
I think we're going to start seeing that movement back into the back into our arena.
1:07:18
But we've certainly seen a slow down you know early 25 all the way through 25.
1:07:21
It was a relatively slow year outside of some several large transactions that we've seen in the in the marketplace but.
1:07:28
We feel as far as looking at the markets and the economic indicators as well as the financial people that we work with that we're going to start seeing that come back into the market early in early in 2026 and really see it ramp up in our in our neck of the woods. So.
1:07:46
You know our focus right now is is getting quality listings getting them priced well getting them priced in the market.
1:07:53
We continually see anywhere between a 10 and 20% rate of appreciation in these western Montana ranch properties.
1:08:01
That's year is that year over year?
1:08:04
I'd say that's over a five to seven year period is what we typically see especially in the Rocky Mountains.
1:08:08
Now there's a lot of factors that play into that.
1:08:11
We see properties where you have a a quality water component fishing component hunting component.
1:08:16
There's timber on the property different amenities like that obviously have a higher rate of appreciation than straight agricultural land where you're grazing cattle.
1:08:27
But but there's getting to be real appetite in the investment world for these quality A properties just like there are with with with quality stocks or quality business investments whatever it may be.
1:08:40
We see the same thing in the in the Rocky Mountain portion of you know in our real estate world as well.
1:08:46
>> Yeah how many how many people out of the buyer pool really care about having like a high quality water source on the property? I think uh.
1:08:56
[Music] Our our audience primarily works in and around tech.
1:09:01
Every every once in a while a headline will pop up of.
1:09:04
Some tech founder you know buying a doomsday ranch.
1:09:07
I think a lot of people like the idea of having a place with a dedicated water source that you know if stuff hits the fan they can escape there but what percentage of the buyer pool really actually cares about making sure there's you know a lake or a river or or some type of natural spring.
1:09:25
I'm assuming a lot of these properties you can just drill down and and access well water, but how does that all work?
1:09:33
>> a lot of it Jordy deals with the fishing aspect of it.
1:09:35
The blue ribbon trout fishing in western Montana is some of the best in the world.
1:09:41
So so primarily it's more of a recreational driven component of these properties and it is necessarily of end of times or a doomsday aspect to the property.
1:09:49
doomsday aspect to the property. So the fishing we always refer to to quality fishing water on these properties is really the golden thread on on ranch real estate and and recreational real estate in the Rocky
1:10:02
Mountains in that A we we typically see these properties appreciated at a much higher rate and B they never go out of style and there's there's only there's a there's a finite amount of those A properties that are on legitimate fishing water available in the Rocky Mountains. So when they do come
1:10:19
So when they do come available they're they're typically in very high demand.
1:10:22
And the premium over the pre is what's the what's the what would you say the premium is over a property that doesn't have a running water or lake or any of those things? Is it 50%? Is it 100%? 200%? It's it's hard to say.
1:10:38
Each each one of these is so unique Jordy.
1:10:40
That's what's hard about it, but it's it's significantly higher.
1:10:45
Then you know then you go to you know the timbered properties, the the properties that are in the mountains with the mountain setting and that everybody sees in the magazines that that you real obviously recognized in in the magazine ads that we put out.
1:10:57
But the timber, the elk, the big game are are always an attractor as well as to those investment grade buyers.
1:11:05
You know, back to what you were talking about from the tech standpoint, it's remarkable how Bozeman's exploded as as really an emerging an emerging market in that tech industry.
1:11:17
We're seeing a lot of tech people high net worth tech individuals relocating in Montana.
1:11:26
Relocating in in the Rocky Mountains in general as well as buying large properties.
1:11:30
You know, we've we're we're tied by a lot of NDA documents and NDA contracts, but but there are a number of of high net worth individuals that that are relocating out here for a number of reasons.
1:11:44
One is from a safety standpoint.
1:11:46
They see Montana as very safe.
1:11:48
They see the Rocky Mountain West is very safe.
1:11:50
As as you see the crime rates in some of these urban areas that that that you know regardless of your political affiliation, there's there's concern about it and I think as there continues to be concern about about that we're going to continue to have people that are driven to this market seeing it as a safe secure place to to raise their family, to have their kids, to have their family, you know, a family compound where they can gather at. Yeah.
1:12:16
What what kind of opportunities are there to actually monetize and and generate yield on a on a ranch property?
1:12:24
Obviously if you can just buy a a piece of land and and let it appreciate over time, are there opportunities to actually utilize some of these properties even if you're not, you know, there to generate some type of incremental yield? Absolutely.
1:12:43
You know, the the ROI's on these is is is much lower than what a standard investor would would would demand out of their portfolio.
1:12:50
So a lot of it when we're working with buyers is is changing that mindset that we're looking at long-term appreciation.
1:12:58
Obviously the depreciation schedule and the depreciable assets that that are contained within these properties is of significance to a lot of these buyers that they can use directly on their on their tax returns.
1:13:12
But typically the ROI on on a cattle ranch if you can get a two even a 3% return on some of these, it's quite good.
1:13:21
The the land prices have gotten to the point where it really agriculture is making it is it's hard for agriculture to really sustain and to and to pay for any of these.
1:13:33
Um I had a a good friend of mine a ag family tell me that you know, really the ability for agriculture to pay for these ranch properties, farming is a little different, but on a on a strictly cattle standpoint, finding a way to get cattle to pay for these properties really that that that wagon came unhitched back in the 70s.
1:13:55
in the 70s. So today it's more of looking at how you can get the agricultural operation to pay for your operation, to pay for your expenses, hopefully get a decent paycheck out of it, but where you see the return is obviously when you go to sell that real
1:14:11
estate or you look to 1031 out of an existing operation and upgrade into something a little larger in a in a possibly not so desirable area that isn't commanding these record prices from a recreational standpoint if that makes sense. Does it feel like
1:14:26
Does it feel like essentially most of the land that you're seeing come across your desk has been properly surveyed such that people aren't seeing it as a gamble.
1:14:39
They're they're they're not buying and saying oh well like maybe there's a chance there's gold there or oil because we just saw so there was a new rare earth element deposit that was found in Utah and and the the Wall Street Journal called it the most significant critical minerals reserve in the United States a whole bunch of rare earth elements and that seems like how were we not looking for that already?
1:15:04
But I but I imagine that most of your clients are not thinking about their land purchases as lottery tickets, right?
1:15:11
So how do you think about these like wild card events that seem to be happening and yet what is your what is your client base actually experiencing?
1:15:20
You know, we really don't see that in our client base.
1:15:21
It it typically what our clients are looking for is preservation.
1:15:26
We have buyers that are typically very conservation minded that look at the at the land is how they can improve it, how they can possibly reduce man's footprint on that landscape, enhance the wildlife, enhance the the agricultural components, enhance the the land so when they leave it it's it's a little better off.
1:15:46
A lot of what our role is is actually educating these buyers to you know, there's there's a great there's a great shot right there in a ranch that we have listed in northern Montana.
1:15:56
But um a lot of these new buyers that are in our arena today are looking at ways to that they can help preserve the west which is very refreshing in a lot of ways.
1:16:08
They want to find ways that they can preserve the agricultural way of life, that ranching way of life.
1:16:12
Often times we'll see buyers that will come in, acquire an asset and then go back to that owner and say okay, we understand that the the margins in agriculture are very tight.
1:16:25
Let's let's re-look at this asset and say okay, if we if we have an influx of capital and we have the ability to to put some capital into this property, what can we do to enhance it both from a production standpoint, but also from a recreational and a conservation standpoint as well.
1:16:39
Looking at it through a little different set of glasses and possibly what that operator has been looking at it in the past and in finding ways that they can better preserve the ground, preserve that landscape, preserve that Montana that western way of life and not just come in and look at mining it, developing it, carving it up, putting small ranchettes on it or whatnot.
1:17:01
We've really seen a shift away from that development aspect into more of a conservation minded buyer.
1:17:10
What's the process if you acquire a piece of land, actually build on it?
1:17:14
We're based here in California and and the process is absolutely insane. I live in Malibu.
1:17:19
If there's a there's a property that you might look at it might be reasonably priced, but you're looking at maybe six years to actually develop plans, get them approved and actually start, you know, getting getting to the point where you could really occupy the space.
1:17:35
What's it like in Montana from from everything from a permitting process through even just like labor costs, all that stuff?
1:17:42
I I don't know if I want to answer that question necessarily.
1:17:43
I don't want to see a big big rush all of a sudden into our into our market, but it it I I think you'd be pleasantly surprised Jordy.
1:17:52
It's significantly smoother.
1:17:54
We don't have the bureaucracy in Montana that you'd see in a lot of other states.
1:17:58
Obviously there are processes, there are permitting processes as far as building permits, electrical electrical permits and whatnot, but but nothing remotely close to what you deal with in California.
1:18:12
You're it's much more personal.
1:18:12
It's it's much more hands-on.
1:18:14
It's much more streamlined and and not always is it you know, the with that being said, we have a a development here in Montana called the Yellowstone Club which you may or may not be aware of which is turned into quite a a billionaires resort area.
1:18:32
Very very high end very high end.
1:18:32
It's the who's who in in the financial sector that that are residing in that area and and what we're seeing is really the high high end construction taking place in that kind of in that sector of our state.
1:18:47
It you know, we'll see some building in the more remote areas, but but not the extravagant building like like we see up in the Yellowstone Club.
1:18:55
Yellowstone you'll have a like a two bedroom condo for 20 million.
1:19:02
Is that pretty commonplace? Yeah.
1:19:06
How much does it how much does it cost in general to to work with you in general?
1:19:14
Do you you know, is there like a like a floor price or how do you people start uh get into ranches, farms, land.
1:19:21
Like, what are all the different financial products or or or or actual uh opportunities uh that you see people come to you with?
1:19:32
You know, a lot of it, John, is just sitting down with a client and interviewing them.
1:19:34
We spend a lot of time up front.
1:19:38
Uh our time is money just as a lot of our our our clients, their time is money as well.
1:19:42
So, we like to spend a lot of time up front interviewing them, understanding what their goals and objectives are, looking not only short-term goals and objectives but long-term goals and objectives, not just of them specifically but also of their buyer, where they at with their family, you know, what are their what are their in you know, what time of year do they plan on using the property, what do they want to get out of the property.
1:20:01
What are they looking at long-term?
1:20:05
Um you know, talking a lot from the construction standpoint, what those times look like, what are those time frames, getting them hooked up with the right people so they're they get good quality information.
1:20:16
So, what we do is is a lot of times is is spend that up front time.
1:20:21
So, so when we have a buyer that comes out and says, Mike, we've we've sat down, we've spent several hours with you on Zoom calls or or personal meetings, a lot of times we'll fly to the client.
1:20:32
We'll sit down with them at their house in California, Texas, East Coast, wherever it may be, sit down and have that face-to-face meeting.
1:20:41
What we do extremely well is personalize a process that so many clients feel is very impersonal.
1:20:46
And that's really been our niche that we do extremely extremely well. We're very high touch.
1:20:51
We This is a These are big decisions with big dollars tied to them.
1:20:56
And so, we want to make sure that A, there's no surprises.
1:21:01
Uh we want to make sure that we're totally up front, where we have everything on the table.
1:21:06
We we we inform and educate our buyers as best as we possibly can so there's no surprises. Yeah.
1:21:11
That's the last thing any of us want is dealing with surprises when we get into a multi-million dollar or or hundred-million dollar transaction is surprises.
1:21:19
So, a lot of that is done up front and we sit down and talk them through that right up front.
1:21:24
We we explain the good, the bad, and the ugly about these processes, timing, uh costs, um and and trying to make sure that those goals and objectives that they have are realistic.
1:21:36
And so, once we get on track with that, we're we're very strategic.
1:21:41
Uh we like to say we shoot you know, we we like to aim like a laser versus a shotgun.
1:21:45
So, we're very we're very direct in in how we approach these processes.
1:21:50
So, when we put a property in front of a prospective buyer, it's something that they need to look at and we've we've vetted it, we've gone through it, we've we've visited the property, we've gone through and already done a lot of the due diligence already up front before they ever even set foot on the property.
1:22:05
So again, being efficient in the process, that's one of the things that we stress within our office is being efficient with our time.
1:22:14
There's no wasted motion in what we do and we can and we convey that to our buyer and we convey that even to our sellers that everything we do has a purpose.
1:22:23
We have very strict, very very systematic protocols in everything we do.
1:22:28
And and you know, I got to be honest with you, gentlemen, what we do, we're not building rocket ships here.
1:22:34
Um real estate is is is personal and it's being able to execute at a very high level.
1:22:39
And that's one of the things that we do and we feel we do exceptionally well.
1:22:43
We've transacted more hundred-million dollar plus ranch properties >> What's the what's the the total volume that that you guys have done if you're able to share?
1:22:54
Oh boy, I I couldn't even tell you, Jordy, right now.
1:22:57
>> But it's in the it's in the bill it's in the in the billions? Absolutely. Yeah, absolutely.
1:23:02
>> hit the hit the gong for Mike. We got a gong here.
1:23:11
I think that's a good thing.
1:23:12
>> Oh yeah, I got I got I got two more questions for you.
1:23:14
>> We got to do the question.
1:23:15
>> Yeah, yeah, yeah, but I got one more before that. >> Okay.
1:23:17
Uh any restrictions on building an airstrip on a on a large enough ranch?
1:23:22
If I want to if I want to create a ranch and fly a PC-12, land that or a PC-24, is is that all fair game?
1:23:28
>> sell ranches with airstrips on their properties, private airstrips. Mhm.
1:23:32
Okay, let's hit the gong again. Again.
1:23:36
And then we have a question we like we like to ask all of our guests but it's particularly relevant for you.
1:23:40
What's What's the biggest fish you've ever caught? Oh.
1:23:47
You know, as crazy as this sounds, I don't fish a lot. Oh. >> don't.
1:23:53
You know, we You're too busy land maxing.
1:23:55
I We're we're busy, you know, and and when I'm not when I'm not at the office, we have a a small farm uh that my family and I have that that's kind of my therapy.
1:24:04
I I get my hands in the dirt and it's where I work.
1:24:06
Um we're avid avid sports fans so we travel around watching our local college teams and and my son is a college athlete so so my wife and I we spend a lot of time on the road uh following him.
1:24:17
And so, uh I I think one of these days I'll probably take up fishing.
1:24:22
I do I do like to go to Canada with some with some good friends and we go up in in fish walleye and pike in in up in the in northern Canada.
1:24:31
But uh around here, I I just I just don't have time to get on the rivers too much.
1:24:36
And it is crazy as it sounds, we get on we get on some of the most spectacular fishing water that you could ever imagine that very few people in the world ever get to see.
1:24:46
And you know, I I now with that being said, some of my colleagues here in the office are exceptional and and and very accomplished fishermen.
1:24:54
So, that's probably a better question for for them.
1:24:57
I'm I I I like to work too much. Oh, I'm with you. I'm with you. I'm with you. Uh great stuff.
1:25:04
Well, thank you for coming on breaking it down.
1:25:07
And uh I'm sure there'll be another land story in the news sometime soon and and we will reach out.
1:25:13
I appreciate you having me on, gentlemen.
1:25:15
Thank you very much and have a very Merry Christmas to both of you. >> Christmas. Have a great day. We'll talk to you soon.
1:25:21
We'll tell you about Fall, the generative media platform for developers.
1:25:24
Develop and fine-tune models with servers, GPUs, and on-demand clusters.
1:25:29
Up next, we have Matt Levine in 5 minutes.
1:25:31
But let's go back to the timeline and clarify something with Augustus Dorico.
1:25:36
He says, am I tripping or did TBPN used to stand for Technology Business Podcasting Network?
1:25:41
He says, Technology Business Podcasting Network.
1:25:48
Did we get gentrified, bros? What happened?
1:25:49
You already break it down for Augustus.
1:25:51
>> I mean, I think real one I think real ones will always know what the TB in TBPN stands for.
1:25:56
Uh we actually never refer to TBPN as like four words.
1:26:03
It's just always always the initials.
1:26:06
>> Always the initials, yeah.
1:26:07
>> We leave it up to the audience to interpret.
1:26:09
>> Yes, it's becoming a thing.
1:26:09
But it is it is actually on our website.
1:26:11
There is it is spelled out on our website.
1:26:14
It says Technology Business Programming Network. I still get that wrong.
1:26:18
Often I say Production Network.
1:26:20
It's not Production, it's Programming Network.
1:26:23
Of course, it's a nod to ESPN.
1:26:25
Of course, technology and business is what we talk about and so that made sense.
1:26:31
>> And Technology Brothers uh TB >> Brothers or always remains. Yes. In our hearts. >> Eternal, eternal.
1:26:37
For our epsilon of What's up with uh what has Rivian been up to this week?
1:26:41
We should play this clip.
1:26:44
Uh we should >> RJ's been on a tear.
1:26:45
He's he's he's making a a a serious run at self-driving. He's chipped up. He's chipped up. Uh let's play this. With sound, please.
1:26:54
And now, for the first time on R2, we're adding a third sensor, the lidar. Oh, they're doing lidar? >> That's crazy move. That's bold, right? I don't know. That's pretty crazy.
1:27:10
>> Well, yeah, clearly no one clapped when he when Yeah, go back go back.
1:27:11
That was a really awkward pause. Dramatic. And now, >> Pause.
1:27:18
>> first time on R2, we're adding a third sensor, the lidar. The lidar. Woo!
1:27:27
[Applause] No, wait, iPhone camera's going to get fried. That was a weird thing.
1:27:33
Apparently, lidar on certain cars, not all of them, can be so strong that if you point your camera at it with your phone, it can permanently damage the sensor.
1:27:43
And so, What about your eyes? some recalls.
1:27:46
I think it I think it actually only hurts the phone.
1:27:47
Doesn't hurt Don't worry. You're good.
1:27:50
>> You're Okay, totally good.
1:27:50
Uh Nick, could could you bring over that that bag right there?
1:27:54
I got to see We got to see this. Look, Okay.
1:27:57
>> we signed up for Picnic, uh TK's new service. Let's see this. Let's see this. What did you get? Try Picnic. trypicnic. com. >> Look at this.
1:28:06
We're supporting Travis Kalanick and cloud kitchen's team with Picnic. >> What did you get?
1:28:14
You got a You got a You got a slop bowl? >> One slop bowl. >> One slop bowl.
1:28:20
Anyways, looks fantastic.
1:28:22
We're excited to check this out.
1:28:24
One of one of one of our interns signed signed up for the service.
1:28:27
>> orange bag stands out with the green background.
1:28:29
This feels like a Yeah, yeah, this this is iconic.
1:28:33
This is going to be seen all over all over the place. I >> He's cooking. They're cooking.
1:28:37
>> He's literally cooking.
1:28:39
Well, let me tell you about public.
1:28:39
com, investing for those who take it seriously.
1:28:41
They got multi-asset investing, industry leading.
1:28:43
They're trusted by millions, folks.
1:28:47
Uh Tyler posted yesterday, you're telling me to brainwash this cult?
1:28:51
Didn't get uh didn't get into the three-figure like club, but Kristen Forti says uh top 20 tweets of the year. So, you made her top 20. >> top 20, that's good. Yeah.
1:29:02
Uh I only need four more likes. I'm at 96.
1:29:05
Yeah, everyone go give it a like. Go give it a like. There's a chance.
1:29:10
Uh I I I tried to artificially give it a boost by quote tweeting that one and not the other ones.
1:29:15
But it did out it did perform the best, right? Correct.
1:29:18
>> cuz we ran the experiment, we posted all four of Tyler's jokes, and per my prediction, the did a brain walk >> All right, you can turn the gigachad filter off now, Tyler. You can turn it off.
1:29:30
The bit it's kind of an old bit at this point. >> Ridiculous. Ridiculous.
1:29:32
Well, >> Um we have Matt Levine from Bloomberg and Money Stuff joining the show.
1:29:36
He's in the restream waiting for him.
1:29:38
Let's bring him into the TVP and Ultra Dome. Merry Christmas, Matt. How are you doing? >> Christmas. How are you doing?
1:29:44
Thank you so much for taking the time to come on the show on a Friday. >> having me.
1:29:49
Uh great to good to meet you.
1:29:52
Um >> And thank you for creating wonderful content that at at times we have uh >> Remarkable.
1:29:57
Yeah, I many times included included in our show. >> Triple glaze. Yeah.
1:30:00
You know, we love we love the work. It's been fantastic. >> Thank you. Thanks.
1:30:04
Uh I I I did want to start with a little bit of background.
1:30:08
I I wanted to know about the day that you decided to become a journalist.
1:30:12
What was the transition like?
1:30:13
Uh what was like the first inciting element in that sort of >> know we were headed towards a hyper financialized world where we would be able to gamble on this very conversation? Uh I don't know, man.
1:30:25
I I was working at Goldman when I decided to become a journalist.
1:30:29
That was that was already pretty hyper financialized.
1:30:30
But now, I mean But I was uh I uh the day I decided I I went to my boss and I was like, "I'm quitting to go to Dealbreaker", which is like a financial gossip blog, and he was like, "That's fine.
1:30:43
You can stay for another 2 weeks and finish up your work."
1:30:45
Then he was like, "Wait, did you say Dealbook?"
1:30:46
And I said, "No, Dealbreaker."
1:30:47
He said, "Okay, now you have to leave the building." That's remarkable.
1:30:55
Um well, I wanted to I wanted to take your temperature on a bunch of different topics.
1:30:58
Um the the the first might be uh prediction markets.
1:31:03
I mean, Jordy was joking about it being able to gamble on this uh this very conversation.
1:31:06
Yeah, we've had some uncomfortable moments throughout the year where people flood into our chat and they're, you know, betting on what Sam Altman is going to say or Mark Zuckerberg is going to say on one of our conversations, and it becomes very distracting because everyone's just saying, "Say this. Say that."
1:31:23
Obviously trying to uh >> influence the >> manipulate manipulate the conversation.
1:31:29
Um but uh but yeah, it's been I I get a lot of those people. I get a lot of um Yeah.
1:31:35
>> The overlap between prediction market people and and my readers is pretty high, so there's a lot of people emailing me this stuff.
1:31:40
>> So so so what what I mean, one of my main questions is like is like how do you actually get to some sort of ground truth for what's going on with prediction markets?
1:31:48
Because there's there's a world where it was like, you know, this incredible crystal ball for understanding the election, then it turned into, "Okay, this is going to give you information about all sorts of different things in the world."
1:31:59
And then you peel back the onion and you think maybe there's just a lot of sports betting going on.
1:32:04
Like, how do you actually think about the the shape of the business today and where it's going?
1:32:13
Um you know, I think think that like this stuff about like what people will say, like you look at the volumes on these things, they're like, you know, thousands of dollars.
1:32:20
Like it's not Like there's a lot of stuff that is fun to write about because it's it's weird and silly and susceptible to manipulation, but it's just not that big, right?
1:32:29
Um when people talk about these companies raising at huge valuations and becoming huge companies, like it's 80% sports gambling.
1:32:37
That's like a number I made up.
1:32:40
Like it's it's, you know, it it may be less than that as a volume matter, but it's it's like the next leg up is sports gambling, right?
1:32:48
I mean, that's what that's why their business is.
1:32:50
I think if you talk to them, like their view is sports gambling is this huge opportunity for them to, you know, get people there, right?
1:32:59
To get customers who really like gambling and to get uh professionals who can make money gambling against the the sort of like, you know, dumb money customers.
1:33:06
And then, once you have that, it's easy enough to expand into, you know, markets that make us more informed about the future of the world.
1:33:16
Uh I don't know if that's true.
1:33:18
And like if they end up just being um weirdly regulated casinos, then like that's possibly still a really good business.
1:33:28
Um The question is how does the market actually evolve?
1:33:30
Because you have every traditional sports book adding prediction markets. And so, Yeah.
1:33:37
if you have new businesses that can be in 50 states on day one, maybe that grows the market a little bit, but overall, you know, what what is what is the sort of like total enterprise value that all the popular online trading and or betting platforms can really sit at is kind of unclear, right? Maybe >> Yeah.
1:33:58
I mean, like like clearly the big opportunity is like cannibalizing sports betting.
1:34:01
The other thing is like it's not clear what they are cuz they're exchanges, right?
1:34:06
So, they're not making money by trading against customers, right?
1:34:09
And so, like one possible evolution of the market is you end up with people who are either literally sports books or who are like kind of like hedge funds that are replacing sports books being market makers on these platforms and sort of, you know, making their money by trading against retail flow, but like, you know, they're a separate business from the the actual, you know, Kalshi and Polymarket platforms.
1:34:29
Yeah, do you have an idea of how sophisticated like Wall Street is around sports betting?
1:34:34
Because you have to imagine that like at some point Jane Street or Citadel said like, "Well, what if we just went and put someone in Las Vegas and started trading?
1:34:46
Um could we make an edge there permanently?"
1:34:47
Uh I I I it feels like there might be a wave coming where Wall Street starts having like serious desks dedicated to sports betting.
1:34:57
But or is that already happening or do you think that won't happen?
1:35:02
>> it's already happening, right?
1:35:02
I mean, like Susquehanna is the big one who like, you know, famously have a sports desk.
1:35:08
And like other big kind of like hyper concentrated market making firms are dipping their toes into it.
1:35:11
Um I think it's harder for them to get into like traditional sports book, you know, trading, but it's very >> Yeah, cuz if you're too if you're too good, you get regulated exchange.
1:35:22
If you're too good, you just get booted.
1:35:26
Traditionally, you get limited and it's like it's just like a different interface.
1:35:28
Where And And And a different regulatory interface, too, right?
1:35:30
Like if you're trading on a commodities exchange, you're trading on a commodities exchange. They can do that.
1:35:34
Um uh So, I think they're very much getting into it.
1:35:39
And if, you know, legal sports books regulated as commodity exchanges are here to stay, then it's also just like uh whether or not it's a good business opportunity and there's a huge personality overlap.
1:35:50
Like you go to these hyper concentrated firms, like it's the same type of analysis.
1:35:52
It's the same type of adrenaline.
1:35:55
So, like they they're very happy to get into sports books.
1:35:58
How are you thinking about insider trading on prediction markets?
1:36:02
It feels like we've I mean, this this week it seems like multiple people have been making the the steel man argument that it's good.
1:36:07
Uh >> Well, yeah, the the problem is is in some ways it feels like if you don't have insider trading, then it's just a bunch of people guessing.
1:36:15
And if you do have insider trading, then you potentially get greater accuracy of of uh and and like more value out of the markets.
1:36:26
And so, it just feels like a very tough uh tough I mean, it's very tough for the prediction market platforms themselves to actually talk about. >> Mhm. Right.
1:36:38
Like my impression is that everyone who started a prediction market is a true believer in the idea that like the job is to make markets as informed as possible.
1:36:47
And like they all secretly love insider trading, but they're also trying to get approved by the CFTC.
1:36:50
And so, they have to say, "We do not allow insider trading."
1:36:54
I think the rules are weird, right?
1:36:56
I mean, the rules of insider trading in commodity markets are less strict than they are in securities markets because traditionally they're for like, you know, grain producers hedging their grain production.
1:37:04
So, like you're supposed to insider trade.
1:37:05
Um and I think like maybe a little bit of that philosophy will be imported into the prediction markets, but I mean, if you look around at like the Justice Department is going after, you know, baseball players for rigging gambling in baseball, like no one There's no appetite for legal insider trading in most of the markets that that, you know, that are will be big money in prediction markets.
1:37:31
So, I think that the regulatory situation is kind of going to shake out that insider trading is kind of a prohibited, but maybe a like a little harder to monitor than it is in the stock market.
1:37:41
But definitely philosophically, people on this market don't want that.
1:37:50
Is it Do you Do you think we just need a like a big like like like bombshell case or story to sort of like catalyze uh some action around that?
1:38:00
Because it feels like >> The The The sports books exist in that. Yeah, yeah.
1:38:05
I mean, I guess the sports books have existed for a long time.
1:38:06
So, I'm interested in understanding like what would actually change because because for what like I don't know, 50 years it's been you know, the the longer.
1:38:16
It's been for decades it's been illegal or, you know, against the rules for a baseball player to go and put a big, you know, bet against them and then throw the game.
1:38:24
And so, that should just that yeah, I would imagine that that framework just carries over to prediction markets.
1:38:31
But maybe if it's lagging, then it we won't actually get codified until there's a big headline case.
1:38:38
Yeah, I think they'll be more codified in prediction markets. Right?
1:38:39
I think the prediction markets have rules saying you can't use material non-public information.
1:38:43
Whereas, like the sports books The sports books have that rule, too, right?
1:38:45
But they um uh I think that I I think that it's going to be pretty codified like that.
1:38:51
But, you know, you're going to have a lot of Like the sports stuff the sports leagues have a real interest in policing.
1:39:00
And, you know, the Justice Department has a real interest in, you know, that's a that's a sexy case to bring if you're like, you know, arresting baseball players.
1:39:08
Uh you know, people betting on uh like, you know, Google search results maybe is a little bit less interesting and a little bit more lucrative. Yeah. Yeah, that makes sense.
1:39:17
And like also we like live in a world where like fraud enforcement is just kind of less of a priority.
1:39:23
So like people will definitely get away with stuff in the next few months. Yeah.
1:39:27
Uh how did you process Trump saying he would quote would consider eliminating taxes on uh gambling winnings?
1:39:32
Was it just him joking around or something?
1:39:37
>> Yeah, it was kind of offhand, but then the the the nature of the internet today is you have like a hundred accounts on X that are like pseudo news wire accounts and they'll take one line out of context and then blast it out and they'll get a
1:39:51
bunch of engagement and then you realize, you know, you you you look to like an actual credible news source and you realize that, you know, again fully fully taken out of context, but uh do you think we should be incentivizing uh gambling in the country? Uh Uh so a couple things. One, no.
1:40:06
Two, uh you know, like like like being the friend to crypto has paid big political dividends to him and like if you're sort of looking around for what other like aggressive young male demographics you can can appeal to, you can maybe like, "Oh, I'll I'll I'll give the gamblers what they want."
1:40:25
And then the other thing is there is this weird situation where the tax bill maybe somewhat accidentally limited to deductions of gambling losses.
1:40:33
So you can only deduct 90% of your gambling losses, which if you are a professional gambler is like quite devastating.
1:40:40
And one theory is that that has been very good for the prediction markets because there's an argument that if you you know, are are trading on prediction markets and you you win some and lose some and you win 51% of your bets, you can deduct all of your losses, whereas if you're doing that on a sports book, you can deduct 90% of your losses and so it's the difference between being profitable and unprofitable. Yeah.
1:40:59
Uh as far as I know, that was sort of an accidental consequence of all of this, but like you could imagine a, you know, Trump like you know, Trump administration liking the prediction markets and wanting to send business their way. Yeah.
1:41:11
Uh I want to talk about the potential SpaceX IPO.
1:41:16
A lot of people have been processing it in different ways.
1:41:19
Some people were surprised this would was happening just given that uh SpaceX has thrived in the private markets and has plenty of access to capital and and Elon has had a number of bad experiences in the public markets.
1:41:33
I have a kind of working the thesis that this is could be a spike IPO.
1:41:38
I think we're going to see a lot of IPOs next year and if you're raising a billion dollars, let's say, if you're going to float it like a 50 bill, you know, if you're a 50 billion dollar company and you only need to raise a billion dollars, you're not really threatened by IPO, but if you're a foundation model lab such as OpenAI that wants or Anthropic that wants to raise tens of billions of dollars, it's very possible that a 1.
1:41:59
5 trillion dollar SpaceX IPO could kind of like suck the oxygen out of the room.
1:42:05
Uh is is uh you know, I want you to kind of give us your take broadly on it and and uh I'm curious if my uh tin foil hat schizo theory has has any merit.
1:42:19
Yeah, I don't really know Okay, so first of all like I, you know, I read companies might go public next year all the time, so I don't I don't know.
1:42:24
I mean, I assume it's true, but like I'm not totally sure.
1:42:28
Um two, like one thing I've read is that the use of proceeds for this hypothetical 30 billion dollar IPO is to put data centers in orbit.
1:42:40
put data centers in orbit. And like you know, this gets to your spike theory like in a world where there's, you know, 10 trillion dollars of broadly speaking AI capex needs, like there's going to be competition for that and there's going to be like
1:42:58
like like SpaceX can kind of SpaceX has been able to raise as much money as it wants in the private market and like, you know, achieve a, you know, 800 billion dollar valuation and like send rockets into space and be like a fairly capital intensive of company while staying private. But like if the next leg is, you know,
1:43:12
But like if the next leg is, you know, they need tens of billions of dollars of AI-ish spending, then uh you might reach the limit in the private markets.
1:43:21
And yeah, you might reach the limit in the IPO market, too, right?
1:43:24
Like you might like there might just not be enough money to go around for all of these uh AI companies.
1:43:28
uh AI companies. And then I don't know why SpaceX is in the AI company category other than this data center >> so here's here's the other here's the other >> complex, but Yeah, but but the other theory is like there's a world where XAI could get rolled into SpaceX and taken
1:43:42
public around the space data center narrative and I think that there's a lot of people that would be excited about that narrative even if uh other people in the space economy are saying, "Hey, space data centers will happen, but it's probably more like a a 10-year timeline versus a three to four-year timeline." Yeah, also like I mean
1:44:01
Yeah, also like I mean I I've read that they're like looking at a 1.
1:44:05
5 trillion dollar valuation on like 22 billion dollars of revenue.
1:44:07
Like it's all pretty It's on a pretty deferred timeline. It's in orbit. It's in orbit. Yeah.
1:44:16
You're not paying for it like that year's earnings, right?
1:44:18
So you you you need a you need some sort of 10-year story to tell. Yeah.
1:44:22
But I mean to be fair, it would be easier for I mean at least I believe it'd be easier for SpaceX to acquire XAI than Tesla to acquire XAI because of acquisition laws around a public company buying something big versus a private company buying something big.
1:44:41
Does that sound roughly correct?
1:44:43
Like would you handicap Oh yeah, it sounds roughly correct.
1:44:45
Although I mean, Tesla has form of buying you know, other Elon companies and Yeah, getting it through.
1:44:53
has moved to Texas in order to make it easier, right?
1:44:55
Like I don't think Tesla would have that much trouble buying, but they would get sued, you know, if you do it in SpaceX, it's like Well, well, I think I think part of the challenge is that Tesla shareholders might say like, "Hey, we already have a really good AI team.
1:45:08
We've been working on self-driving. Like we don't need XAI.
1:45:11
We don't necessarily want to dilute ourselves, you know, whatever XAI's current valuation is or whatever price it would come in at.
1:45:23
So I I just think >> I just feel like the sort of standard Tesla shareholder approach is like we're going to trust Elon's intuitions on these things.
1:45:30
And like I mean they bought like, you know, SolarCity. >> solar company, right?
1:45:33
Like they >> were there still was pushback and that was like a much I'm assuming that'd be 1% of the that'd be 1% like SolarCity was like 1.
1:45:41
something billion, wasn't it?
1:45:43
It wasn't like a it wasn't like a hundred bill like I'm assuming XAI has a lot of debt.
1:45:47
They've raised a lot of equity.
1:45:49
It would be somewhat >> It has the Twitter debt as well. No, yeah.
1:45:53
It has a lot of debt rolled in.
1:45:56
Uh well, speaking of that, I mean Netflix had to issue some debt for this Warner Brothers deal.
1:46:00
I I'm interested to know um your your your thinking on round how the Warner Brothers uh process will go.
1:46:07
Are we going to wind up in a quiet period for the rest of the the year as we go into the holidays?
1:46:15
Or you think it'll be uh you know, just as as uh just as many headlines as there have been?
1:46:19
Where do you think it actually lands?
1:46:21
What's the nature of the story?
1:46:25
I don't know, it's been surprisingly quiet to me.
1:46:26
I think it's weird that um that Paramount first of all launched the tender at the price that was rejected, right?
1:46:36
Rather than saying we're going to raise a few bucks and go to the shareholders, they launched it at the price that the board said no to.
1:46:42
And that they've said publicly that it's not their best and final offer. I know.
1:46:47
Can you What what what is the logic there?
1:46:49
Is there any Is there any logic where that makes sense?
1:46:50
Okay, so I think that where that makes sense is that um is that there it's not a real tender offer, right?
1:46:57
Like they can't close a tender offer for reasons including antitrust.
1:47:00
They clearly want to do a friendly deal with the board, right?
1:47:03
And so I think that saying very clearly we could give you an extra two bucks if you sign a friendly deal with us is a is a good way to get, you know, to the board and to try to strike a deal with the board.
1:47:17
Um so I think that's the logic there, but uh I I don't I don't know what the board is doing, right?
1:47:23
I mean, I think the board likes the Netflix deal.
1:47:27
I think that I also think that like um Paramount has two things going for it.
1:47:34
One is that they think they've offered more money or certainly they can't offer more money.
1:47:39
And the other is they really think the Netflix deal is dead on sort of antitrust {slash} Trumpy reasons. Yeah.
1:47:46
And I don't know how that plays out, right?
1:47:47
Cuz that's a that's a potentially year-long process and presumably nobody wants to wait that long, but I think like there's some ability to wait a few weeks and see if like Trump says nastier things about Netflix to try to, you know, pressure the board to come to a deal. Mhm. I I don't know.
1:48:02
I'm I'm surprised that there's been so little news, right?
1:48:06
I mean, like since Monday like no one like would have expected them to raise their offer by now. It's a good point. Yeah. Mhm.
1:48:13
Uh what was your Have you formulated a take on the uh OpenAI Netflix deal?
1:48:18
We kind of landed on >> Disney deal.
1:48:23
>> Or sorry, yeah, OpenAI Disney deal.
1:48:23
Uh we sort of landed on it being like sort of an interesting way to create less commoditization in uh you know, the AI application layer that consumer chat experience.
1:48:38
They all are starting to feel very similar.
1:48:41
I don't know if you felt this way, but feels like all the models are, you know, sort of at the same level.
1:48:46
The benchmarks are pretty similar.
1:48:48
Well, if you can get Spider-Man in one and not in the other, maybe that's a differentiator.
1:48:52
Have you Have you processed that deal similarly or do you have a different frame of mind around it?
1:48:59
>> I haven't thought about that much about it, but that seems right to me.
1:49:01
And it is like, you know, it it's like, you know, you you think about like the Netflix uh Warner situation, right?
1:49:10
Like you have like you have like content distribution services and then they have like content libraries, right?
1:49:15
And there's some combination of acquiring the content and making, you know, commercial deals with the content providers, right?
1:49:20
Like like here one possibility is that the AI chats are ultimately the next, you know, dumb entertainment channel, right?
1:49:31
And so if you have the good properties in your dumb entertainment channel, then like when people are like, "Oh, I want an AI to create a movie about me."
1:49:39
I'll go to the one that has like the Disney characters.
1:49:43
Like that, I don't know, it kind of makes sense, right?
1:49:44
And it's like a um Like the thing that is striking to me is that uh the AI companies like talk about like this sort of fundamental reshaping of society and, you know, discovering superintelligence and then like they're a little bit consumer entertainment products, but like if you're a consumer entertainment product, like you want the Disney characters.
1:50:06
Also adult adult entertainment. >> Yeah. >> Yes, right. Right.
1:50:09
It's like Disney character porn. Do they Well.
1:50:14
It really has been interesting to think of adult mode and Disney or will be rolling out in the same effectively 30-day period. So.
1:50:21
Yeah, I don't I don't I don't know enough about the deal to know if they like have um I hope they have I hope they have a carve out.
1:50:29
>> They do have a carve out. They do.
1:50:29
This was confirmed today.
1:50:31
They did say that there are lots of restrictions on what you can and can't do with a Disney character in OpenAI properties.
1:50:37
I'm sure that was that was key. Uh It's wild.
1:50:45
Um We're going to We're going to see the jailbreaks. That's going to be good.
1:50:48
There will be some jailbreaks.
1:50:49
I think there won't be that many jailbreaks.
1:50:51
I think in the last 2 years they've gotten pretty good at locking it down.
1:50:54
So that was that was kind of my my prediction.
1:50:55
Uh I'm sure but I'm but there will always be chaotic stuff.
1:50:58
It's it's it's inevitable with AI and the internet.
1:51:02
Um what uh uh uh how should tech people be thinking about the growth of private credit?
1:51:08
I feel like there was a uh an era where folks in tech were, you know, understanding that the foundation model companies, Anthropic, OpenAI were operating at a truly unprecedented scale.
1:51:22
The capital war was bigger than Uber left.
1:51:25
It was bigger than anything uh folks in tech had seen.
1:51:29
It was certainly more capital consumption consumptive than Google was when before it IPO'd.
1:51:35
And so all of a sudden by a lot.
1:51:37
So all of a sudden you have tech people that are grappling with um the prospect of a $10 billion debt financing for something that is, you know, feels like a startup.
1:51:46
It feels like a startup project.
1:51:48
Uh and so it was easy to point these to sound the alarm bells like debt is coming. Debt is scary.
1:51:54
Debt blew up the economy in 2008.
1:51:57
It's going to happen again.
1:52:00
Uh but you talk to a lot of people in private credit and they say, "No, there's plenty of areas where, you know, people pay their pay their debt obligations on time."
1:52:07
How how have you processed like the is Nvidia holding up the global economy?
1:52:16
Is OpenAI going to blow up the entire global economy?
1:52:18
Those types of like Cassandra-esque narratives that have kind of spiraled and maybe are coming back down to earth now. Uh Yeah, I don't know.
1:52:29
I mean I it's fascinating that, you know, like insurance companies investing in investment grade debt are like ultimately underwriting like a stream of payments from startups, right?
1:52:41
I mean like kind of what is happening here.
1:52:45
Deeply unpro Deeply unprofitable.
1:52:45
Deeply unprofitable startups.
1:52:50
Yeah, but like also a lot of it is like people underwriting a stream of payments from Facebook, which like, you know, um uh Which is very profitable. Yeah.
1:52:57
Yeah, like the Blue Owl data center for for Meta superintelligence, 1 gigawatt, the Hyperion thing.
1:53:05
Like It's like Meta's going to pay that bill. At least I think so. Right.
1:53:09
And if you had made like an equity bet on like if you if there'd been a way to make an equity bet on like Meta's pivot to the metaverse, like you would have lost all your money, but like Yeah.
1:53:17
presumably they paid their supplier bills for that, right?
1:53:18
Like they I totally >> Like there's a there's like a difference there, right?
1:53:22
If you're like underwriting these like hyperscalers, like mostly um you know, these are very investment grade very cash flowy companies that, you know, could could turn off the capex if they needed to.
1:53:35
But right, I mean you're underwriting a lot of, you know, fixed payments on capex and uh it's it's um uh it seems a little aggressive for a credit investor, but um they're all like Like one thing you know about private credit is like uh it's not going to blow up the economy.
1:53:55
Like it's, you know, it's like insurance companies making these bets, so like it's a little bit longer term capital. Yeah.
1:54:01
But I mean Is there anything in the economy right now that gives you the same sort of jitters that you had during your famous interview with Sam Bankman-Fried where it felt like at the time you were clocking like this just doesn't make sense. The math doesn't math.
1:54:17
Like it feels like we're frothy.
1:54:19
We're everyone kind of goes around saying like, "Yeah, we're in a bubble."
1:54:24
But it at the same time it doesn't it feels like it's a bubble that's built on some real stuff.
1:54:27
Like even even the prediction market stuff.
1:54:30
It's like I can at least trace the cash flows.
1:54:31
I might think that sports betting isn't the greatest thing, but like at least I know that the businesses are going to make money. Right.
1:54:39
Like, you know, AI sort of replaced crypto as the sort of darling of a lot of investors, but it's just you can you can the the consumer product is very tangible, right?
1:54:48
Like the crypto stuff is all like, "Oh, we'll make tokens that other people can trade for more tokens."
1:54:53
And and and like it didn't feel like it was >> sounds like AI, too.
1:54:59
Because I make I make Anthropic tokens. I sell them to you. You make Cursor tokens.
1:55:02
I And you take that Like that like the circularity is is, you know, if you want to be troubled by the circularity, it's like a little weird, but it's um the difference between that and like crypto where no one Like like the thing about Sam Bankman-Fried that was obvious at the time was that he didn't care about crypto.
1:55:22
Like he wasn't like, like, "Oh, yeah, this is a world-changing product."
1:55:24
It was like, "Oh, yeah, this is a casino where people will give me money."
1:55:27
Um And like AI is there's a lot of people who are true believers.
1:55:31
And then again they've like rolled out consumer products that have Disney's going to license its its characters, right?
1:55:36
I mean like there's a real um uh sort of there are many real obvious use cases.
1:55:41
And so like there's a lot of value being created.
1:55:43
And then the question is like is it commensurate with the, you know, $10 trillion of debt that's being incurred?
1:55:48
And that's uh it's not obvious, but it's like, you know, there's there's something there.
1:55:54
How much how much would I have to how much would I have to pay you for you to agree to not use any AI for the next year?
1:56:02
Um I'm kind of a lot of like I mean I use AI, but uh uh I'm assuming it's like for re like research here and there of like better kind of search.
1:56:11
Well, give us the prompt for your column. Give us the prompts.
1:56:14
Well, the people pretty regularly email me.
1:56:17
They're like, "I asked ChatGPT to write about this in the style of Matt Levine." And it did pretty good.
1:56:24
And they send it to me and I'm like, "Okay, I'm safe for like another 3 months."
1:56:28
It's like never It's never close.
1:56:30
No, it just doesn't get that flavor or something. I don't know.
1:56:34
I mean your question is less on you than that guy. Good for Yeah. Yeah.
1:56:36
How have you been processing Oracle over the last 6 months or so?
1:56:43
They've they're getting zero credit for their backlog, their five half a trillion dollar backlog.
1:56:52
Uh I think they're are they trading at less than less than the backlog currently?
1:56:58
Uh they you know, people have brought up uh the dot-com bubble and obviously they're drawing comparisons between the two moments, but what's your view?
1:57:11
Uh about Oracle being like not the darling of the AI bubble.
1:57:14
I don't I don't I don't really know. Yeah.
1:57:18
Uh uh they're just not I don't I don't I don't know enough about like Oracle's backlog, but I I think they're not just, you know, they're not the name that that people go to as the as the AI AI darling. Um >> I don't know.
1:57:32
The dot-com bubble is like, you know, it seemed like a reasonable comp in that uh I could it just feels like obviously even if there's a huge shakeout, there will be huge value, you know, there'll be an Amazon of this bubble, right?
1:57:49
Like there'll be big important survivors of it, which, you know, again like I can't say it wasn't true of crypto, but like there's nothing inevitable about that in crypto, right?
1:58:00
Like that was, you know, like the There's there's there's a possibility of nothing happening there, whereas here it's like like the changes to the economy and to society are kind of already tangible.
1:58:11
The thing that's somewhat of a narrative violation is the like the median crypto fund has actually done pretty well over the last few years.
1:58:19
And it's possible that the median venture for AI-focused venture fund >> much like the dot-com boom.
1:58:25
It's like you got to be in Google or Amazon or you're probably in a lot of trouble.
1:58:29
And and uh and and with crypto they were a lot because it's so liquid.
1:58:34
There are so many funds that were like trading in and out.
1:58:37
Even if something went way down, it's like, "Well, they already distributed. They got out early."
1:58:40
Like, you know, there's tons of ways to make money. Yeah. I don't know. One one uh Yeah.
1:58:48
One kind of random question on your workflow.
1:58:52
I'm assuming people email you kind of like tips tips all the time that are really trying to like feed you information on on their enemies, things like that.
1:59:01
How do you kind of uh uh I'm up an investigative reporter and so like I don't I'm not that useful for that.
1:59:10
But yeah, people are like You should write about this.
1:59:13
But how do you Yeah, what's your process? What's your process?
1:59:18
Uh what's your What's your process for trying to figure out what of that is like actually real?
1:59:21
Cuz I mean we we we get that where people are trying to like convince us of certain narratives and and we're trying to process you know, maybe off air and kind of process how real something actually is.
1:59:34
Um you know, again, I don't like do a lot of investigative stuff.
1:59:37
So if people are like, "Oh, look into this secret thing." I'm like, "Yeah, no."
1:59:41
Um so like they Yeah, like if I'm if they're sending me information about their enemies, it's like here's their 8K filings and I can read them myself.
1:59:49
Um and I do try not to I used to like find it flattering when like you know, big finance people are like, "Let me tell you about this."
1:59:56
And then I was like they're just shopping me their version. So I try not to Yeah. Sure.
2:00:00
Try not to either have those conversations or if like I have conversations with a hedge fund manager about how their position is so good, I just don't write about it because I don't I I it's like too easy to be to be um flattered and persuaded into thinking that what they say is right.
2:00:20
And so like I just try not to expose myself to that very much. That's good. Yeah.
2:00:23
Like I just try to, you know, like like peop- People are like, "Oh, this is an interesting thing."
2:00:29
Like, "Okay, send me the public documents and I'll read them and I'll make my own thoughts about it."
2:00:34
I mean, there's a balance there, you know. >> related question.
2:00:37
>> You have to get some information from people, but like I try not to be hearing their opinions.
2:00:40
Somewhat related question, what is your theory on why Bloomberg is able to retain top journalistic talent?
2:00:46
They've seen very little churn over the last couple years relative to other legacy outlets. What's going on? What's the secret sauce?
2:00:55
Um I mean, there's a lot of things.
2:00:56
Like we have a great audience.
2:00:58
Like the audience is so good like it's so, you know, there's like the feedback that I get from readers is like they're so smart.
2:01:04
Like it's it's so concentrated in the financial industry, so like the audience is so good.
2:01:08
Um it's the best business model in media.
2:01:13
Like we're good, stable, profitable company in a world where that is not true of a lot of legacy media.
2:01:19
Um and uh I mean and you know, and there's a flywheel where like your colleagues are great.
2:01:26
Like I really like Like I wouldn't leave Bloomberg just cuz my friends are all here. Yeah.
2:01:29
And then the other thing is like it is a huge organization that nonetheless gives people a lot of freedom to do weird stuff.
2:01:38
Like what I do uh Like I've been doing this for like 10 years and, you know, if I tried to do it at like another media organization, they would have various statistical objections.
2:01:52
They'd say, "Hey, are you sure you can do it this way?"
2:01:55
Like I feel like I proved out the model and so Bloomberg just lets me do it, but like Bloomberg does that a lot, right?
2:01:58
I mean, like Odd Lots just had its 10th anniversary party this weekend.
2:02:02
Like Odd Lots is a weird >> overnight success.
2:02:07
Yeah, it's like a program that just, you know, like a lot of people in media would have been like, "Oh, that won't work."
2:02:11
And Bloomberg just let them do it, right?
2:02:13
So there's a lot of stuff like that where it's a huge organization that also is is like quite >> experimental. agile.
2:02:16
Like yeah, and like gives people a lot of freedom. That's really cool. Yeah, that's great. That's a great take.
2:02:22
Well, thank you so much for taking the time to come >> Yeah, really Thanks for having us.
2:02:24
This is Really enjoyed uh Yeah, this is very educational.
2:02:28
>> Letting uh letting us bounce bounce our theories off you. Yeah. Well, thanks.
2:02:32
Well, have a great rest of the year.
2:02:34
Have a great rest of the day and we will talk to you soon. Thank you so much. >> Cheers, Matt. Goodbye. fin.
2:02:40
ai, it's the number one AI agent for customer service.
2:02:43
Automate the most complex customer queries on every channel with fin. ai.
2:02:51
Our next guest is Mike Gallagher. >> from Palantir.
2:02:55
He's the head >> Gallaghernator.
2:02:59
I don't know if that one's going to stick, but hopefully he's here. Welcome to the stream. Merry Christmas. How are you doing?
2:03:05
Do you have some Christmas music for Mike Gallagher? Thank you. How are you doing? I'm good. How are you guys? What's the nickname? The Gallaghernator? That didn't stick.
2:03:17
>> No, that one's not sticking.
2:03:17
Have you had any nicknames throughout your career? Throughout your life?
2:03:20
>> Um mostly just Gallagher, G Money for a while. G Money.
2:03:24
Uh yeah, I think that's it. Mixmaster Mike G. Was that on the hill? What's that? >> Was that on the hill?
2:03:34
G Money, no, that was like high school, college. Uh yeah. Yeah, yeah.
2:03:39
That sounds like a high school name, not necessarily one in in Congress.
2:03:41
But anyway, it's great to catch up with you.
2:03:45
I hope you've been having a wonderful year.
2:03:47
It seems like Palantir's been on a tear.
2:03:48
I'd love for you to take us through the news today and and kind of get us up to speed on what's happening in shipbuilding specifically and then I'm sure we can zoom out and talk about shipbuilding more broadly and geocom- geo- just geopolitics and competition.
2:04:07
Well, I wonder if we couldn't reverse it.
2:04:08
I I think it's important to make the geopolitical case first.
2:04:10
First of all, you guys seem to be crushing it as well. I see you everywhere.
2:04:15
I have like merch in my office now.
2:04:18
All my friends are constantly on your show, so congratulations on all your success and taking over the world.
2:04:24
It's very cool to see and I'm excited to be back. >> It was huge.
2:04:28
Hey, listen, some call it the Gallagher bump, you know, that you've now you're now a beneficiary of. Gallaghernator bump. The Gallagher bump. The G Money bump.
2:04:37
[Laughter] Um but really, you know, my Yeah, that's right.
2:04:42
My my my entire like eight years in Congress was devoted to this question of how do we enhance deterrence with respect to China?
2:04:50
And if you look at it like there are things we need to do in the short term, you know, killer robots, a lot of the stuff Anduril's building, you know, long-range precision fires.
2:04:59
But over the long term, if you just look at a map of the Pacific, we need a bigger navy, right?
2:05:02
We had a force structure assessment that called for a 355-ship navy when I was a freshman member of Congress in 2017.
2:05:08
We made it the official policy of the United States to get to a 355-ship navy as quickly as possible, as quickly as practically possible was the language.
2:05:16
And then the size of our fleet continued to shrink.
2:05:22
It's on track to bottom out at 279 ships in 2027, which happens to be the year that Xi Jinping has set for having his military ready to invade Taiwan should he make the decision to move.
2:05:32
So if for no other reason than if you look at geopolitics in the most fundamental sense, the collision of geography and politics, we need a larger navy to preserve the peace.
2:05:45
We need to start cranking out ships.
2:05:47
We need the high-low mix of ships.
2:05:50
Now, the reason we haven't been able to do that, I think is a combination of factors, right?
2:05:53
We have had an inconsistent demand signal from previous administrations.
2:06:00
And that's usually what the shipyards say.
2:06:01
It's like, "We don't know the right mix of ships that the navy wants to build.
2:06:05
You have inconsistent budgeting from Congress, right?"
2:06:06
I mean, we go from omnibus bills to big beautiful bills to continuing resolutions.
2:06:15
Continuing resolutions are particularly destructive for the navy.
2:06:16
A former secretary of the navy said because of continuing resolutions, the navy put about $5 billion in a trash can and lit it on fire.
2:06:23
All of this is to say as we were trying to figure out >> Why is What are the dynamics that that causes that waste?
2:06:30
Yeah, the big the biggest issue is under a continuing resolution, you basically agree to fund a previous year's levels.
2:06:37
You can't have new starts, right?
2:06:39
You can't fund new things, whether it's a new ship class or a new innovative AI program or a new, you know, robot that, you know, scares the hell out of Xi Jinping, right?
2:06:51
And then there's just also a lot of uncertainty hanging over a CR.
2:06:54
They're usually short-term, hard to do long-term planning.
2:06:58
There's other phenomena where the military actually, because of how messed up congressional budgeting is, the Pentagon fails to spend about $15 billion a year. So think about that.
2:07:07
For the last 10-ish years, we've lost about $125 billion in defense appropriations, money that was appropriated for defense that went unspent.
2:07:18
It goes back to the Treasury.
2:07:20
It sits in a balance for five years and then it evaporates.
2:07:22
Like that's For $125 billion, like I I could build you a regional military that could definitively prevent World War III.
2:07:30
If I was unrestricted in how I could use that money and how quickly I could move.
2:07:36
>> Certainly you could have Certainly you could have prevented the decline in in the navy's uh you know, number of ships like you mentioned just a bit earlier. Exactly.
2:07:44
I think there's another thing, right?
2:07:46
Like we obviously went to war in the Middle East after 9/11.
2:07:49
I was part of these wars.
2:07:51
I deployed twice to Iraq.
2:07:54
The navy was largely the bill payer for these for these wars.
2:07:56
We had a large infusion of money into ground forces um and overseas contingency operations.
2:08:04
What we didn't spend money on was investing long-term in the future naval fleet and growing the size of that fleet as well as the mix of capabilities on various ship platforms.
2:08:14
And then we had cost overruns in key programs, whether it's the Ford class carrier, Columbia class submarine, uh you know, the the Constellation class, forget the Littoral Combat Ship prior to that.
2:08:25
So all that is to say for the first time in a long time now in the Trump administration under the leadership of Secretary Fanning, the navy is taking advantage of some money that was appropriated by Congress for non-traditional bets on leveraging AI and autonomy and applying to shipbuilding and bringing in Palantir in this specific case to turbocharge production in key shipyards, both public and private yards, and 100 key suppliers.
2:08:53
So this is $448 million over 2 years.
2:08:57
It's based on pilot work that we've already done at various shipyards and suppliers, the results of which have been incredibly promising.
2:09:05
At one shipyard, we saved over 100 or 200 planning days.
2:09:10
20 planning days a week, you may ask yourself, there's only 7 days in a week, but that's because there's four people whose full-time job it is.
2:09:15
They spend 160 hours working on manual processes.
2:09:21
Now, with our software, it takes 10 minutes.
2:09:22
At another supplier, a process that used to take 200 hours for manufacturing bill of materials is now down to 12 seconds.
2:09:29
So, just by modernizing the underlying software, leveraging AI, it's our belief that we can maximize production at the shipyards and then link the suppliers to the shipyards and all of that, what's called the maritime industrial base, to the Navy itself.
2:09:43
So, key Navy officials and general and the Secretary of the Navy in particular can look at the maritime industrial base and understand what's going on in real time and make critical allocation decisions.
2:09:54
Because a lot of what's happening at the yards, particularly the public yards, is just simple decisions about what do I buy now, what do I not buy now, and there's really no like there's no there's no source of truth to to make it a sophisticated judgment on that, and that's what causes us to waste money and time.
2:10:11
So, this is all about maximizing production, getting more ships in the water, and ultimately fulfilling that geopolitical need for a bigger and more lethal Navy.
2:10:19
Are there sailors that don't have boats right now, or are we going to recruit a bunch more sailors as we build out the physical boats in the Navy?
2:10:27
I mean, I'm just wondering cuz I imagine if you if you are, you know, an American citizen, you join the Navy, your dream is to be on a boat, and then they're like, "Oh, we're all out of them.
2:10:39
You got to stay on land."
2:10:39
That's got to be depressing.
2:10:40
But but do you think there'll be a recruiting push for more Navy sailors as we build out our fleets, or are these going to be autonomous boats?
2:10:49
Like are these support ships?
2:10:51
Like how do we think about the human side of the future of the American Navy?
2:10:56
Sure, it's a great question.
2:10:56
I mean, one thing we've seen in recent years was a full-on recruiting crisis that had little to do with the decline or the growth of the fleet and more to do with a lot of at the time it was, in my opinion, a misguided push for diversity, equity, and inclusion initiatives that were based on specious political science that really turned off a lot of people.
2:11:18
We had a a retention crisis as well.
2:11:18
The interesting thing is, at least in most services, that's starting to turn around.
2:11:25
I was just at the Reagan National Defense Forum.
2:11:27
They release a survey every year, and one thing that the survey results reveal is that the the so-called Hegseth reset is extremely popular among current service members, which is important because that's the big recruiting pipeline.
2:11:39
It's usually someone who is serving or recently served to tell someone else, "Yes, you should join the military." And among veterans.
2:11:47
So, when it comes to things like gender-neutral combat standards, you know, and so and so and so other changes, this is wildly popular.
2:11:55
So, the recruiting crisis has gotten better.
2:11:57
I actually think over time it's not going to be a problem if we stay on that trend because, and this is the second part of your question, yes, more of our ships are going to be autonomous.
2:12:07
There's still going to be destroyers that are complex man ships.
2:12:11
There's still going to be carriers.
2:12:13
There's still going to be submarines.
2:12:15
Submarines are our biggest asymmetric naval advantage right now, but increasingly, I think you're going to start to see a lot more autonomous vessels in the fleet, both autonomous surface vessels and undersea robots.
2:12:26
And that's where you have, I think, what as we talked about before, I believe what's most exciting about the current moment is you have so many people in your world, right, in the investing world, that are that are that are that are willing to put capital into non-traditional defense tech startups that are building really cool capabilities for the Navy.
2:12:43
And I think this is a really exciting moment for the non-traditionals.
2:12:46
So, I think the defense industrial base is going to look a lot healthier 4 years from now, where, you know, Palantir shouldn't be the last company to enter the S&P 500 as a defense technology company.
2:12:58
We we need five more companies like that.
2:13:00
So, I I actually think the companies that are building autonomous vessels, that are building killer robots, that are building long-range precision fires, you know, hypersonic missiles like the stallion in California, I think it's a great moment for all those companies.
2:13:13
Yeah, I have you I mean, it's hard to like pick a favorite branch of the military, but it feels like >> The Marine Corps.
2:13:19
Obviously, it's the Marine Corps. I mean, it's not hard. It's not hard? I'm a Marine, so yeah. Hit the gong.
2:13:24
Hit the gong for the Marines. Let's go.
2:13:33
We're not picking favorites, but we certainly will But but but I I am I am super fascinated by this this Palmer Lucky line that he's been delivering a few times about he he wants America to be the world's not the world's police, but the world's arms dealer.
2:13:48
And so, the idea that that maybe, you know, if if he's if he's building something that can shoot down a drone, that goes in the hands of the Ukrainian service members, and maybe America doesn't put boots on the ground in Ukraine, but we do put you know, equipment that can neutralize an attack for a Ukrainian soldier.
2:14:11
And so, I'm wondering how that, you know, interfaces with the naval strategy in your mind.
2:14:17
Are there are there do you think that are there already boats that we're going to be supplying to other allied navies?
2:14:23
We want to build up our own Navy, but is there also an incentive to build up allied navies as well?
2:14:28
And and and what role do you think the US will ultimately play in that dynamic? 100%.
2:14:37
Well, first of all, Palmer is at the leading edge of a lot of this stuff.
2:14:40
And one thing that gives me hope as we look at this new Cold War with communist China is like I think our, you know, our private sector leaders, and Palmer's a great example of this. Yeah. Oh, did we lose you? Oh, no. A nation-state, again. What a coincidence. Wow.
2:14:56
He started his mouth and odd about near-peer competition and get immediately taken down. Well, Good question.
2:15:05
We're we're we're under cyberattack, very clearly.
2:15:08
We thank you for bearing with us while we have The moment I I mentioned the Chinese It's crazy.
2:15:15
Okay, anyway, kick us back off.
2:15:19
Well, let's I'll I'll I'll make it simpler.
2:15:20
I I think it goes both ways, right?
2:15:22
Like we are seeing foreign shipbuilders, world-class foreign shipbuilders like HD Hyundai, with Palantir has had a long-standing partnership with.
2:15:30
They represent, I think, 17% of the global tonnage that's built, and a lot of the work that we're now applying to American yards is built on some of the lessons we've learned in applying AI to Korean shipbuilding. Hanwha, etc.
2:15:42
, are trying to invest in America.
2:15:45
Hanwha bought the Philly shipyard, and that's great. We need more shipyards. We need that investment.
2:15:51
That's sort of and they're going to have, you know, American subsidiaries that are doing important work. So, that's one thing.
2:15:57
And then on the other hand, and I think maybe the AUKUS agreement, this was the arrangement we had to provide nuclear submarine technology to the Aussies and these is an example where we can take what we're best at, i. e.
2:16:07
, building nuclear submarines, and share it with our closest allies and get more interoperable vessels west of international dateline to enhance our collective combat power.
2:16:18
I think this gets you a broader issue, really the promise of AUKUS and a promise of a lot of our alliances in the Indo-Pacific is that we can start to build out something resembling a free world technological industrial base where humans with appropriate clearances, technology can flow seamlessly among between the borders of countries that we truly trust.
2:16:40
And then if you layer on geography and you look at, okay, Taiwan, the first island chain, the second island chain, we need countries, including treaty allies like Japan, to invest more in their military.
2:16:51
There we have a really positive story in terms of Japan, what's happening in terms of their investment in asymmetric capability is probably one of the best developments for deterrence in the last 20 years in the region.
2:17:03
So, the answer is yes, all of the above.
2:17:05
We need to be we need to have a more coherent foreign military sale process where we can provide our best technology and our companies can sell around the world.
2:17:14
We make it easy for them.
2:17:16
But we also want to leverage areas where allies might have key capabilities either to invest here in America, or we can fight as a team.
2:17:23
And that's where different sector what Palantir does with our Maven smart system, you know, we are the solution for joint all-domain command and control.
2:17:30
This is how you see the battlefield, how you see the enemy, how you see yourself.
2:17:33
We obviously want us to have a similar, if not identical, picture when we're thinking about how do we fight China with the Aussies, with the Japanese, and with other key allies.
2:17:43
We have to fight as a team in order to enhance deterrence on a timeline that's actually relevant. Yeah, that makes sense. Jordy, anything else?
2:17:52
Uh not sure how much you can comment or riff, but what should what should people be paying attention to in regards to Venezuela as a casual geopolitical spectator?
2:18:04
I saw that video floating out that that very clear clearly at the top it said unclassified or declassified.
2:18:09
It felt I didn't want to read too much into why it was immediately, you know, look like SEALs taking over, but what should people be kind of paying attention to on on that front?
2:18:25
Well, you know, it's it's almost similar in my mind to some of the recent naval operations we saw relative to the Houthi rebels in in CENTCOM.
2:18:33
Um You know, I started this conversation off laying out the challenges we've had with shipbuilding.
2:18:40
That being said, what our recent operations in the Middle East and what our current operations in SOUTHCOM in Western Hemisphere demonstrate is that we are still the world's best military far and away.
2:18:50
And we have capabilities that nobody else has.
2:18:52
Now, that should not be a cause for complacency.
2:18:55
Like we need to build off that.
2:18:57
We need to keep investing more in the military, but like our sailors, our soldiers, our airmen, and Marines, like when you give them a mission and a difficult job to do, like they will get it done.
2:19:07
And if you are an enemy of the United States, like you should be on notice.
2:19:12
When we have presidential leadership combined with military professionalism, there's almost no limits to what we can achieve.
2:19:18
And so I welcome a renewed focus on our own hemisphere when it particularly particularly where it intersects with Chinese and Russian influence on our hemisphere.
2:19:30
That being said, what I'm most concerned about over the next 5 years and beyond is what is the conventional balance of power in the Indo-Pacific region.
2:19:37
Cuz what I've been saying now for a decade is that Xi Jinping is serious when he talks about taking Taiwan by force.
2:19:44
And all these operations, whether in the Middle East or whether they're in, you know, off the shores of Venezuela or in the Caribbean, will look like child's play compared with a major naval war with China over Taiwan.
2:19:56
The scale is almost hard for us to imagine because we just haven't fought a war on that scale since World War II.
2:20:04
Really since the Battle of Leyte Gulf in World War II, we haven't seen something of that scale.
2:20:08
And I think one of the disadvantages, I almost hate to call it that that we have is that in a in a republic like ours, in a democracy like ours, we're very sensitive to casualties, rightly so.
2:20:17
We have an all-volunteer military.
2:20:19
We don't want to spend lives uselessly, right?
2:20:21
I mean, the American people won't stand up for that.
2:20:25
In a in a dictatorship, in a Marxist-Leninist system like that in China, I don't think Xi Jinping cares if he loses 10,000, 20,000, 50,000 PLA soldiers to achieve his lifelong ambition.
2:20:37
This is actually a lesson that endures from the last time we fought the communists on the battlefields of Korea, on the Korean peninsula.
2:20:43
They were just far less sensitive to casualties.
2:20:45
So I only bring that up to say there are certainly lessons that are relevant across the world, but there are certain things peculiar to the nature of the adversary we face in China that I don't think it it is we that I think makes it a much harder problem to deal with than Venezuela, if that makes sense. Yeah. Completely. Wild times. >> with the gong?
2:21:11
Can I ask about the gong?
2:21:12
Is that I, you know, The gong is a Of course. Of course. A gala gong. There we go. Gong.
2:21:21
The gong is usually The the gong is usually a celebration of funding rounds, big numbers, milestones.
2:21:27
Uh uh yeah, and there's This is a This is obviously a a massive deal, and so uh totally gong-worthy.
2:21:32
Uh and the Packers beat the Bears, so we have a lot to celebrate, you know, there's a lot going on, a lot of numbers.
2:21:38
And we should ring the gong every day that Xi Jinping doesn't invade Taiwan, cuz that sounds terrible, and I don't want that to happen.
2:21:45
And you just delivered a very chilling uh you know, potential sci-fi future where that doesn't happen and it's miserable.
2:21:53
Uh but thank you for everything you're doing to stop that from happening because I very much want peace in the world and in the Indo-Pacom region.
2:21:59
Uh and of course, you and the rest of the team over are working very hard on that.
2:22:05
So thank you so much for taking the time to come and chat with us. Thank you guys. Merry Christmas.
2:22:08
Peace peace peace on Earth. Peace on Earth. See you.
2:22:14
Uh Up next, Turbo popper, Serverless Vector and Full Text Search built from First Principles and Object Storage, fast, 10x cheaper, and extremely scalable.
2:22:21
We have Sagar Enjeti, the co-host of Breaking Points with Krystal and Saagar, obviously the Realignment podcast, the second time on the show. He's also a girl dad. Welcome to the show. >> How are you doing? >> Looking sharp.
2:22:37
>> Great to see you, gents. Great to see you. Uh how's the family? Merry Christmas.
2:22:41
How's how's the holidays? Thank you.
2:22:42
Merry Christmas to you all. Family's doing well.
2:22:44
We've She she's old enough that we've got her pigtails going. This is true girl dad.
2:22:48
Yeah, it's the as good as it gets.
2:22:50
Yeah, yeah, that's amazing.
2:22:52
Uh well, I'm glad that that's going well, cuz it seems like everything else on your timeline is not going well.
2:22:58
What is if you had to pick one uh to snap your fingers and eliminate, would it be you know, rising energy prices from AI data centers or or sports betting at the at the touch of everyone's finger all over the world?
2:23:14
>> Impossible impossible question.
2:23:14
Very tough, cuz one is going to be the future >> before said, is it okay if I bet on this?
2:23:22
[Laughter] I'm sure somebody already out there.
2:23:26
There's There's going to be a market that that's going to exist in terms of which one that I would pick. I don't know.
2:23:32
Both are going to be very financially draining to the American household.
2:23:36
Sports betting in the immediate term would probably be the one that I would ban immediately.
2:23:40
But power use in the future Well, what was that reason There's a recent There's a I saw a study floating around that in states that sports gambling was legalized, like the average credit score drops like 10 points or somewhere in that range.
2:23:56
So it has like effect effectively like a direct impact on >> think that sports betting is something that will come for us all?
2:24:02
Because I The odd thing is that I have you know, obviously I don't have the >> some weird genetic like immunity cuz we went to Vegas for F1 and didn't gamble at all, had no I don't have zero interest in gambling.
2:24:18
>> I don't have the bug or something.
2:24:18
It just doesn't do anything for me.
2:24:19
If I sit down and actually stress about Yes.
2:24:22
I'll tell you why it comes for us all, okay?
2:24:24
Even when if if you casually watch sports, casually watch the NFL. I don't sports bet.
2:24:28
I think sports betting is bad.
2:24:30
I still know the line on every game.
2:24:31
Oh, because that's how you know Because that's how No, I'm like, oh, well, so-and-so's the favorite or the over/under on how many yards somebody is going to throw. I shouldn't know that.
2:24:42
People shouldn't know, but I do.
2:24:44
Even just casually, you know, the last time I was on here, I talked about how I think that there's a media bubble in sports because I think sports gambling is just pumping all these money into people with microphones who talk about sports, but that's part of the issue is in all mainstream sports coverage from ESPN, Pardon My Take, everywhere you go, a daily segment is I like the over, I like the under.
2:25:04
Here you're going to take the first half.
2:25:06
And so even if you don't bet, you can't help but think about the sport without thinking in sports betting terms.
2:25:12
And that's what I would say is like frame domination, you know, where even for people who don't bet, they have to think in betting terms.
2:25:19
So that's a winning that's winning in their part.
2:25:22
Yeah, maybe I have a weird like a weird perception of it because I I also don't watch sports.
2:25:26
Like I I really I really I watch like movies a little bit, and but but I there's no there's no sports that I follow like regularly, and so I'm I'm like I'm not even getting into the top of the funnel for this stuff, and so it's really really hard to ladder me down, and so I'm a little bit more immune.
2:25:41
So of course you were excited to hear that Trump would consider eliminating taxes on gambling.
2:25:46
This must have been big for you.
2:25:48
Well, okay, let's talk about this though, guys, cuz he said gambling winnings, gambling winnings.
2:25:53
And what I was crashing out about was there are no winning gamblers. It doesn't exist.
2:25:58
There's a longitudinal study of sports bettors.
2:26:00
Only 4% of people over 5 years ever took profit. 4%. Be in the 4%! I'll take those odds.
2:26:12
There's a 4% chance that I could be one of the greatest gamblers ever. I love those odds. I'll take them all day. It does exist.
2:26:19
So you can technically I got the technical on a generational gambler.
2:26:23
I will tell you if if I had to bet, I would bet on both of you.
2:26:26
But but statistically, it would be a bad bet.
2:26:30
And so the reason I was crashing out is because that is going to give advertising to casinos and sports betting apps who are like, all your winnings are tax-free. There are no winnings. The winnings are fake. 96% of you are losers.
2:26:42
And all it will do is it will increase that funnel of people who may not previously have sports be like, I tax-free winning.
2:26:49
I mean, I can't lose, right?
2:26:52
Except I'm going to lose.
2:26:54
So I think it's it's really disgusting basically just giving away Well, we don't know what's going to happen yet.
2:26:59
It was a offhand comment, and hopefully hopefully it doesn't go anywhere.
2:27:04
Well, since you're the resident Puritan on this show, do you do you I mean, do you believe that you can response that you can drink responsibly?
2:27:12
You can have a glass of wine every once in a while.
2:27:13
Obviously, you don't want to become an alcoholic.
2:27:16
Can you ever responsibly sports bet?
2:27:16
Can you responsibly sports bet? Super Bowl squares.
2:27:21
That was that was that was the only thing that I ever did in college was I was in an office setting, and they said, "Hey, there's squares. You put down $10.
2:27:27
Whoever gets the right square will get $100 or something."
2:27:30
I I have never said people can't responsibly sports bet, but what I want to highlight is that responsible sports betting would put all these companies out of business.
2:27:38
They literally cannot operate without addicts.
2:27:40
Like what I'm trying to highlight for everybody is responsible sports betting would end the industry as we know it.
2:27:45
The vast majority of the profit comes from a very small percentage of the customers.
2:27:49
Which is why Look, this is the casino model, right?
2:27:53
The The whales are the ones who fuel everything, and they lose the most.
2:27:57
So that's why they shower these people with gifts, and they call them every day, and they invite them to games, and then send them to concerts, and all this stuff is specifically to milk them for as much money as humanly possible.
2:28:08
Basically a sales SDR that calls you with like a custom parlay for your specific Oh, I know you like this player, and I know you love betting on the coin flip, so we're going to give you coin flip >> What did you what did you think about the the policy the like an MBS policy in Saudi on like you got to be in your bag to to be getting cracking open a cold one So I mean, in principle, I'm I'm smiling a little bit, but no.
2:28:35
I mean, because I lived in the Gulf, guys, I can explain this to you.
2:28:38
That's just a way to target the Indian laborers, so I oppose it.
2:28:40
So the way that it works over there is that they create this entire social structure so that all the Indian, Pakistani, and all these other laborers, like the day laborers, are basically excised from all polite society, and they don't want them drinking, so they're just going to set an income cap to make sure that the foreign laborers don't get to have a drink as well as their own people.
2:29:00
And it would just apply to like the wealthy white expats.
2:29:04
So, because I know that it's just basically going to further immiserate their like slave labor population, I do oppose it. >> Mhm.
2:29:13
Uh but you know, just broadly, you know, I just want to get to the fact, you know, from the gambling thing, like there is no such thing as a gambling company that can operate profitably without with responsible gambling.
2:29:23
Like if it it would literally would cease to exist.
2:29:27
And remember, cuz people always forget this, these sports betting apps, if you're actually good, they ban you.
2:29:34
They literally do not allow you to place any large wager. >> limit they limit you.
2:29:37
They say, "We want you to be responsible here." Mhm. No, no, no.
2:29:41
They don't limit you because you're responsible.
2:29:42
They limit you for being too responsible.
2:29:44
Yeah, I think Nate Silver is banned from sports betting. >> He is. Yeah.
2:29:47
He's he's he's limited on all the major apps.
2:29:50
My major question when somebody tells me they're like, "Oh, I'm pretty good." I'm like, "Oh, really?"
2:29:54
I'm like, "Have you ever been limited?" And they're like, "No."
2:29:56
I'm like, "Yeah, you're a loser then."
2:29:57
I'm like, "If you're any good, you'd just be limited."
2:29:59
That means you're a statistical loser. Yeah.
2:30:02
Well, you need like a complicated network of, you know, people that can make bets for you. >> Shadow accounts. It's a whole thing.
2:30:07
And I mean, we were just talking to Madeline about this.
2:30:09
Like Susquehanna has a desk, like an actual trading arm of their firm. Like it's very serious.
2:30:14
Like the guys some guys trade oil and gas.
2:30:16
Now there's people that are trading trading the I can't name a sports team. The sports lines. >> The Yankees. Uh anyway. Well, that's the thing.
2:30:24
The real bettors, they don't care about the sport at all.
2:30:27
They're just looking for value.
2:30:29
They're like constant They're They're always betting on like golf and tennis where Yeah, cricket.
2:30:32
Yeah, this one is at 2:00 a. m.
2:30:35
halfway around the world, but it works for you, so you're going to play it. >> Right.
2:30:40
But but I mean, in terms of like the actual politics of this, how does this how does this wind up becoming like where does this go over the next 4 years?
2:30:48
It seems like Trump's sort of like leaning in, but is this actually going to is there a constituency here of people that want to say like, "Hey, maybe we need to rethink this at the national level."
2:30:58
Well, I already the tide is turning, guys.
2:30:59
More recent Gallup polling showed that all age groups, including young people, the most increase is against sports betting.
2:31:05
The governor of Ohio, Mike DeWine, he actually said that if he could go back in time, he would never legalize sports betting knowing what he knows right now.
2:31:13
I think people can feel it, man.
2:31:14
It's the most expensive advertising real estate in the world is all being bought by these gambling companies.
2:31:19
You can intuitively feel that this is off.
2:31:21
You know, nobody's getting rich if they're able to afford all of the stuff they're able to put in front of you.
2:31:28
So, I think America's beginning to turn.
2:31:29
The Trump administration very recently, you know, you didn't let me crash out on what I'm crashing out the most on, which is weed.
2:31:34
But you know, the Trump administration is making their vice play right now.
2:31:39
You know, they're doing very badly with young voters.
2:31:40
So, they want to try and reschedule weed.
2:31:45
And yeah, let's do some gambling winnings and the TikTok thing.
2:31:46
It's like this libertarian kind of giveaway.
2:31:48
But I I I think that really misunderstands why all of these younger people are even turning on the administration for economic reasons in the first place.
2:31:57
The reason they resort to all of these horrible vice activities is because they cannot afford, or at least feel they cannot afford, the very basics of life like health insurance, being able to buy a house, crushing interest rates for a mortgage.
2:32:11
So, I would spend more of my time on that rather than a cheap trick like weed.
2:32:14
But you know, that that would require actually doing something.
2:32:16
Maybe you get busted for weed, the arresting officer flips a coin, 50% chance you go to jail, 50% chance you get free.
2:32:23
Uh let's let's talk about another thing I'm sure you're thrilled about, the Disney Open AI deal. Yeah.
2:32:28
Uh I think it's I think it's incredibly bullish for Open AI. It's really good.
2:32:38
So, I just I want to get I want you to agree with me first that it's bullish for Open AI at least over the next year. For for a profit? Yes, yes, yes.
2:32:47
Literally because yes, literally because like like if you're a dad and your kid comes to you and says like, "I want to be in Frozen, or I want to be in Star Wars."
2:32:56
Well, there's only one app that can deliver that, and even if Nano Banana's a little bit better for today, it's like you'll go to Sora because it's there.
2:33:03
Yeah, I I I I You Sure, it's bullish for users.
2:33:08
Or for for creating more users.
2:33:08
I think it's one of the worst things that I've ever seen.
2:33:12
I mean, last time I was on here on the show, I was like Sam Altman is like, "Yeah, we're going to do AI porn."
2:33:18
And I was like, "Oh, well, I thought you were going to cure cancer, but okay."
2:33:20
And so now we're going to have Disney princesses to addict children, like you just said, so that daughters and you know, others will come to their dads and say, "Can you create a video of Elsa doing saying my name and doing this this and this so that we're continuing to breed the phone addiction.
2:33:37
And as you guys all know, we're also going to see the most disgusting pornography known to man as a result of the Yes, I know that they have controls on all that easy. They're No, they're not. No, they're not.
2:33:50
Have you guys been on Sora?
2:33:50
Have you been on Sora or Grok or any of these?
2:33:53
They're not that good at it, okay?
2:33:55
You People people have been playing around with trying to create some pretty disgusting junk.
2:34:00
>> John is a is a is a little too confident that the the the I'm pretty I'm pretty confident.
2:34:04
No, yeah, I just think I I don't the internet will always figure out a way to jailbreak anything. >> Exactly.
2:34:11
They will always find a way.
2:34:12
>> Earlier in the show, I went to Sora and I said, "Put me in a Sora video fighting Spider-Man and Darth Vader." Okay.
2:34:20
>> said, "This content may violate our guardrails considering concerning similarity to third-party content."
2:34:25
So, whatever deal they announced, they haven't implemented it yet because I got completely blocked. But I don't know.
2:34:32
As I've scrolled, I I don't scroll Sora that often, but as I've scrolled, I have not seen shocking stuff.
2:34:39
I was reflecting with Jordy about some of the crazy crazy stuff that was on the internet when when I grew up.
2:34:43
I mean, the stuff that people would send you a link to, you'd open it up, it would be like jump scare level.
2:34:49
I feel like I have not gotten that from ChatGPT randomly.
2:34:51
I have not gotten that >> it I think if you want to make the the argument that you know, this is Mhm.
2:35:00
so bad because it's going to get kids more addicted to devices and their phones, like you just got to go even further and say like, well, we should ban all electronic devices for children or by man.
2:35:09
And maybe maybe maybe maybe maybe you're right.
2:35:14
Speaking my language, brother. Yeah, yeah.
2:35:19
How do you How do you feel about some of the How do you feel about that new law in Australia that's that's banning social media? >> Yeah, I love it.
2:35:27
>> think it's going to create a bunch You don't Why Why not put it on the parent?
2:35:30
Why I mean, it's like there is plenty of evidence out there.
2:35:32
There are plenty of access controls. You can set a passcode.
2:35:37
You can I mean, yes, like the really inventive 13-year-old can go out and make the money to buy the iPad and hide it under their bed every night.
2:35:43
But like in general, parents do have the ability to, you know, effectively be the own authoritarian of their home.
2:35:50
Why do you need the government?
2:35:52
Why do we need a nanny state?
2:35:53
Yeah, my concern with these laws >> understand, yeah, go ahead.
2:35:56
Yeah, my my my main concern is if you tell a group of young people like, "Hey, you can't use these apps." Mhm.
2:36:03
There will be new apps created.
2:36:06
It's not hard to make a social media app.
2:36:07
And there'll be new like kind of homegrown wild west social media apps where there's no like the the the the properties aren't doing any content moderation.
2:36:17
They don't have any groups that are trying to make sure that that that, you know, pedophiles are not able to get on, etc. etc.
2:36:23
So, I think it'll just create a bunch of like dark corners of the internet that could very well be worse for kids. >> Mhm.
2:36:31
It's certainly possible, but to just answer like the spirit of the question, which is basically like why should parents not be the sole responsible ones for this?
2:36:39
In the same way that social media only works when everybody's on it, not being on social media works best when nobody's on it.
2:36:47
And so, if you talk to Jonathan Haidt or others, what the most the best and most successful experiments for schools, for example, which are phone free, or people who are opting out of social media, is being able to be in a social network where everybody else is also not on social media because one of the things that's often raised is like, "Oh, they're missing out on I don't know, school drama or communication for this this and this."
2:37:09
And they feel as if they're explicitly removed by the parent from like the social way that their high school or their social network operates.
2:37:18
Whereas by explicitly making it a top-down way of saying, "No, nobody's engaged in it."
2:37:23
It's going to facilitate a lot more actual like prosocial real social behavior and make it easier in order to Basically, look, at the end of the day, what we're trying to talk about and this is what I always talk argue with libertarians.
2:37:34
Like, no, this idea of like a totally free society is ridiculous.
2:37:38
Like there so many different ways in like you could act quote freely which would impinge upon my freedom.
2:37:44
That's why we have, you know, we have basically government and enforcement mechanisms.
2:37:48
Ultimately, what we're trying to do on this is to decide what is the optimal way and for our outcomes to facilitate happiness in the family unit and for our children.
2:37:57
And there's just too much evidence here on social media and on phones.
2:38:01
So, that's why I get with the Sora thing, especially in the totally unfettered like wild west that we live in here in the US.
2:38:08
I just know this way that this is all going to go.
2:38:11
In a perfect world where everybody is very informed, but you know, right now, in a lot of ways, there's a huge class divide on phones.
2:38:18
Like from the very very richest people you know are probably the least likely to actually give phones to their children.
2:38:24
But the anxious generation might be the best-selling book in the United States, but let's all be honest, like it's a class signifier, right?
2:38:31
It's something that the top 25, 30% have read, are implementing, have the time to be able to.
2:38:38
And then the iPad kid thing is still definitely not yet fully known, you know, for a lot of other people.
2:38:43
And so, I I think everyone should try to live under a more uniform standard.
2:38:47
And yeah, that's why I broadly I take your concern dude about Australia and they're like backwater ways to get around it.
2:38:55
But the government's sending a signal and we have enough data on gambling on other all other vices that when you send these signals, especially with a real information campaign, the behavior will reduce.
2:39:09
And there's a lot of different ways we can deal with the backdoor ways of getting around it.
2:39:12
You never make anything zero.
2:39:14
How do we try to facilitate the best outcomes for everybody, for all of our citizens?
2:39:19
That's the way I would look at the Australia policy.
2:39:20
Have you ever thought of setting up a you know, breaking points, you know, one of these neo cities, you know, you go down to South America and set up your pure city? >> down to Honduras. Yeah. Down to Honduras.
2:39:32
Uh no, I don't have enough money for that, right?
2:39:34
I don't have nearly enough to buy off the president and then get him pardoned whenever he deals drugs. That's not my bag.
2:39:39
I'll leave that to a few of the other guests on your show.
2:39:44
But no, look, I mean, at the end of the day like we have our country. We can just do it here. We don't need to leave.
2:39:50
I think that the people probably feel that there's a problem. >> Yeah.
2:39:54
No, no, that makes sense. Let's talk about H200s.
2:40:00
Nvidia is now able to export them to China.
2:40:04
The previous rhetoric was we're not going to give China the best.
2:40:06
We're not going to give them the second best.
2:40:09
We're not even going to give them the third best.
2:40:10
We're going to give them this nerfed H20 chip that's two generations behind, blah blah blah.
2:40:15
Now, we're giving them the second best effectively.
2:40:20
Uh the argument in favor seems to be keep the government out of the boardroom and Jensen is a is a founder of an American company. Let him sell everything.
2:40:27
Again, to your point about the AI, it doesn't seem like you're doomed pilled. Is this nuclear weapons? It's no, it's AI slop.
2:40:36
Let them let them have it.
2:40:36
If the AI if slop is so bad, don't you want >> Don't Yeah.
2:40:39
Don't you want our enemies They're much smarter than us and they're not going to allow any of that.
2:40:43
They don't have any problems over there about Sora or about the image generation >> they do they really though?
2:40:48
Do they they they have like incredibly high rates of youth unemployment?
2:40:52
Are they not using the phone to kind of medicate >> What are those 20% doing all day?
2:40:56
Yeah, I mean, that's a great question.
2:40:58
You know, is it phone related, social media? I'm not entirely sure.
2:41:02
They don't seem to have the same issues at least in our way.
2:41:07
Obviously, they're going to have their own unique set of circumstances.
2:41:10
But on H200, Imagine imagine being one of these unemployed Chinese youth and having no job, but also no slop, no sports betting, no weed.
2:41:19
What are you doing all day?
2:41:22
You're getting shamed by your elders for not having a job. That's what we need.
2:41:27
All right, that's what we need. That's a good thing.
2:41:30
>> Yeah, no, that's that's that's great.
2:41:32
That's that's what a good society does.
2:41:35
You're studying the blade.
2:41:37
Hopefully, you're studying the blade. Studying the blade. Anyway, sorry.
2:41:41
The H200s, it seems like a lot of people >> H200, you know, it it to say what your your kind of articulation of the H200 policy, it's more complicated.
2:41:49
And I've spent the last couple days interfacing with some of the guys who are pro exporting H200.
2:41:56
I'll give their their argument.
2:41:56
Their argument is to keep China on the US and Nvidia technology tree as long as possible.
2:42:04
So, what would happen according to them is if we cut off H200, what it would mean is that Huawei would have the impetus and the incentive to not only compete, but to have all of the developers in China and everybody there explicitly build the software, everything on top of that, right?
2:42:20
And so, the argument that was posed to me was that it was a bad idea and a mistake to not have Android be very not have Android and other operating systems that are explicitly US based be dominant in China.
2:42:35
And that the domination of HarmonyOS is actually bad for the United States.
2:42:40
for the United States. And here was my counter and I'm really curious for what you guys think is that in a world, as we see with Apple, where we see a huge portion of US business which is based in China, there has never been, at least in my opinion,
2:42:54
over the last 25, 30 years since the PNTR with China, the reopening of trade relations, we have never had a situation where we have a huge business penetration in in China and that company ever really stands more for American interests. Usually, what happens is that
2:43:07
Usually, what happens is that the Chinese use US market penetration, like US companies market penetration, to make that company a lot more malleable to Chinese interests and to basically make them this multinational actor which, because of their ability, policy, and scale, they can shape for their own interests and strategic, let's say, direction.
2:43:28
So, the point that I really I'm trying to make here is that I understand the technology tree argument entirely, but the longer that Jensen, Nvidia, and others see China as this gold mine, which he obviously does, you know, he's over there once a quarter kissing their ass on camera, you know, out in the open.
2:43:46
>> a they have a they have a dedicated like R&D center in Shanghai. >> Yes.
2:43:51
Right, but not it's not just that.
2:43:51
He goes there and explicitly is like I want to continue to do in business in Beijing as long as possible.
2:43:57
He's been lobbying for against a lot of these export controls.
2:44:00
It's obvious that a lot of his stuff is getting transshipped via Singapore or whatever.
2:44:04
Even the Blackwell chip, I'm sure you guys saw that very recently with the deep seek research that came out.
2:44:09
But the point the point remains, he knows it's good for his business.
2:44:13
The more that this remains kind of an opening, it's going to have somebody have to straddle both sides and it's going to be a lot more beneficial, I think, for the ability of the Chinese to shape him as opposed for us to be able to have our companies working in our national interest.
2:44:28
And look, I mean, more libertarians are listening to the show would say our companies shouldn't even work towards our national interest.
2:44:34
Their sole job is to make profit.
2:44:36
I think that's a ridiculous argument, you know, sitting here in Washington.
2:44:39
And especially just over the last 30 years, I just don't think that there is a good example from Hollywood to tech or anywhere else where they've made a lot of money in China and they become, you know, very reliant on that business line where they have not shaped themselves as lobbyists against, you know, any more hawkish Chinese action.
2:45:00
>> I I I I think the my read on it generally is that selling into China will make it more expensive for them to reduce their reliance on >> Right. the US AI stack.
2:45:11
They still will do everything in that they can to reduce that reliance, but >> Which they are. Uh Yeah.
2:45:17
but but yeah, it's going to be more expensive because there's clearly the Chinese companies in AI have a lot of demand for chips and, you know, dollars that they spend with Nvidia and other other players are dollars that aren't going back into local, you know, kind of national champion.
2:45:36
>> think of a counter example and all I can come up with is the Hermes Birkin bag.
2:45:40
As we've exported the Hermes Birkin bag to China, >> Well, that's French.
2:45:43
That's a French company, not a US company. Yeah, but it's Western.
2:45:48
But they have become dependent on it.
2:45:50
And the more Birkins that they buy, the harder it is to rip out the authentic Birkin bag, much like the Nvidia GPU where the CUDA stack and the open source CUDA ecosystem has been built up around.
2:46:02
No, I I'm still somewhat sympathetic to the to the you know, hooked on the AI stack. I get it.
2:46:10
I just want to say I don't think it's fully I don't think it's wrong.
2:46:11
I think it misses the forest for the trees.
2:46:15
They're looking at it purely from a technology question.
2:46:16
I'm trying to point out the dangers of extending this relationship.
2:46:21
And also, look, let's look at the Chinese side.
2:46:23
The Chinese were like, yeah, we may not even allow H200 in the country because they want Huawei to compete.
2:46:29
They want to create the Huawei >> they said that I think they said that because of Latinex comments that they were very offended by, which she was like, we're trying to get them addicted.
2:46:37
We're not going to give them our first, second, third, fourth.
2:46:38
We're going to give them our fifth best.
2:46:40
And they were like, actually, we don't want any.
2:46:41
And also, like the country's not a monolith.
2:46:44
Like it's very clear that like even if the CCP says like absolutely not, they're banned, like there's still a world where like a Chinese company smuggles them in and uses them against the CCP's will because and like that could have a dynamic where that boosts the CUDA ecosystem further.
2:46:58
Although, I don't know why you'd be open sourcing CUDA software if you're stealing Nvidia or smuggling Nvidia in.
2:47:05
That's probably a good way to draw the ire of the CCP.
2:47:10
Uh but but who knows, of course.
2:47:10
You know, we'll we'll we'll see how this plays out.
2:47:15
I I I still think a lot of the reason why this H200 news is not so much of a firestorm is because this year has been somewhat of the end of the AI doomer narrative.
2:47:28
And just we've been backing off this idea that these are nuclear weapons.
2:47:33
More and more people have been using the models for I mean, ChatGPT's 3 years old now.
2:47:37
Open AI's 10 years old now.
2:47:40
>> and after 3 years of everyone saying or all the, you know, the wild crazy people in Silicon Valley saying it's going to kill you next year, it's like, okay, boy who cried wolf once, the sky is falling the second year.
2:47:51
>> Yeah, or it's going to kill you kill you more slowly because everyone falls in love with the >> Yeah, yeah, it's become it's become more abstract.
2:47:56
And so, I think this this idea that like, oh, just like one more training run and then it's the super intelligence and it's runaway and it's going to completely dominate and like it's it's either the United States or or China.
2:48:07
That narrative has kind of fallen by the wayside a little bit.
2:48:09
And so, I think people are are maybe more more accepting of, you know, export controls loosening.
2:48:17
My my my question is just like like do you agree with me that it was a phenomenal L by the tech community to come out so early with this like AI is going to kill everyone narrative?
2:48:28
That just feels like AI is the first technology that we've had since, you know, the phone, social media, software in the cloud, the internet, all of those were products that I feel like they were technologies that were enjoyed by people for years and then we had the conversation about what are the phones doing to us.
2:48:47
Like but we got 10 years of like phones are cool, right?
2:48:49
And then we got okay, maybe we should, you know, understand they're addictive.
2:48:52
With AI it's like out of the gate we hate it.
2:48:56
That's why I'm I'm not yet ready to say like oh, they stopped saying that.
2:48:58
I'm like no, they still say it guys.
2:48:59
Like Elon was on Rogan the other day being like hey, you know, you're never even going to have to work again.
2:49:04
Like don't worry about it.
2:49:05
And Jensen, what did he say it recently on Rogan?
2:49:07
He's like all knowledge in the world will be AI and that's fine.
2:49:11
I was like uh is it even I was watching so I was watching Sam Altman on on Fallon and and and Fallon comes to him with the with the premise of like give me the pros for chat GPT.
2:49:26
Give me some examples of how people can use it for good things.
2:49:31
And then he's like and I got to ask you about the cons.
2:49:32
Like what are the cons of this technology?
2:49:36
And I was like no no no if Tom Cruise was sitting there doing the interview and he's like give me give me the reason give me some reasons why, you know, movie goers might like the new Top Gun.
2:49:47
And then he's like now give me some reasons why people might hate the new Top Gun.
2:49:50
Tom Cruise would be like what are you doing?
2:49:52
Like no, I'm not talking to you about the negatives of my movie. Get out of here.
2:49:55
I'm here to promote my movie.
2:49:57
And and same thing with you know, any technologists that goes through the normal late night circuit.
2:50:03
Normally it's like oh, wow, you you invented this new trinket.
2:50:05
Like and you can buy it at the local Walmart this Christmas. Like amazing. You you made a gadget.
2:50:11
And with AI we just it's always about the like the negative has just been so drilled. >> it's new.
2:50:17
People don't people don't Well yeah, it's like you could write a story every day about violence that happens in grocery stores, right?
2:50:26
But it would not grocery stores have been around so long. It's Yeah.
2:50:35
It's like you know, it's a little different.
2:50:36
And look, I mean again to their point like Sam and them don't do themselves no favors.
2:50:40
Like when he's like I can't imagine raising a baby without chat GPT.
2:50:44
Look, maybe just me I'm like a whoa man. I I don't know.
2:50:48
Again, it's just one of those where look, they sold domination of our lives, our tech our our not only in terms of our digital lives, but saying that they were going to take away our physical ability to work, education.
2:50:59
They said we're going to take away all knowledge and we're going to feed it back to you.
2:51:05
So I'm still not ready You're extrapolating you're extrapolating a little bit. You're extrapolating.
2:51:09
He said he said all knowledge will be AI and that's fine.
2:51:13
You're sort of piecing together like three different statements, which is fine.
2:51:15
Cuz that's cuz that's how people perceive the tech industry.
2:51:18
All Reddit all Reddit will be AI.
2:51:21
There'll be one human on Reddit.
2:51:21
Just running around talking to But that's the that they say guys.
2:51:24
They're like you don't need to work anymore. What's his name? Dario?
2:51:28
I mean you guys are acting like this is 3 years ago.
2:51:30
I'm talking about like 3 months ago.
2:51:32
You know, all the comments I just made I think are literally all within the last month.
2:51:37
So the they're continuing to feed the narrative.
2:51:42
And I think people believe them.
2:51:42
And and I think that's the danger.
2:51:43
Fear really sells to the capital markets.
2:51:46
Like if you if you're if you're somebody that has capital and somebody tells you that like all jobs are going to go away or huge half of all knowledge work.
2:51:55
What do you want to do with your money?
2:51:57
You want to give it to the guy who's going to take away the jobs, right?
2:51:59
And so I think that is the challenge is these people are having to go around and give the optimistic vision one hour and then the next hour do the fear based version of the story and then the next hour do the optimistic and but then the content just gets shared everywhere, right?
2:52:14
So it's like then everybody sees it and they're like wait, I don't really know what to believe at this point.
2:52:18
Yeah, my my I mean last time I was on the show John, I have stolen your line completely. Credit card.
2:52:23
I thought it was the best comp that I've heard is you you were like I think this will be like the credit card.
2:52:29
We just made transactions more frictionless. It created more wealth.
2:52:33
People built on top of it and in in general people's lives were like mostly better and it didn't you know, like horribly change anything, but it definitely was very valuable.
2:52:42
I I love that comparison.
2:52:45
That's kind of the modal one that I'm working with right now.
2:52:48
>> leaks into all the different cracks and I mean there was there was data yesterday from our our sponsor Ramp that 55% of businesses are they don't pay for AI.
2:52:59
And that's like and it's slowing down.
2:53:00
It's like flatlining too.
2:53:00
So it's sort of like a bombshell like okay, like there's a lot of businesses out there that are just like I'm good.
2:53:04
And it's like they are good because they're using other products that probably have enough AI in them.
2:53:11
And so if they're on So they're indirectly they're indirectly buying AI cuz they hired a creative agency to make a logo and the creative agency uses it AI or whatever.
2:53:19
Or there's you know, their back end finance and all that stuff.
2:53:23
I totally agree with you guys, but that also doesn't justify the valuations and that also doesn't justify the It might actually it it might it might justify the valuations.
2:53:32
I think it doesn't it doesn't it doesn't justify the the panic and the fear and the it's going to kill everyone.
2:53:39
It's like it's like if we're talking about the credit card, it is like much more incremental.
2:53:44
But of course there are other sides because we we have the social media angle of the I agree that that's where it'll end up.
2:53:48
I'm mostly with you, but I can't help but take them all a little bit seriously.
2:53:52
I mean these are the wealthiest most powerful people in the world.
2:53:56
So like when the wealthiest guy in the world says I don't need to work anymore and especially if you're walking out there and you feel it very out of control of your own life and you hear that, you hear about the data center stuff that I've talked about here.
2:54:07
You have a lot of fear about your own children and their addiction.
2:54:09
You're watching their behavior.
2:54:10
I mean do you guys ever see your kids as you know, like my daughter is 7 months old, man.
2:54:16
She's crawling for the phone.
2:54:16
Like it's it's it starts so early.
2:54:18
Like already I'm like oh my god, I can't even use this thing in front of her. That makes me concerned.
2:54:24
Does it make me a doomer?
2:54:26
No, but it does make me a feel like it makes me immediately calculate some of the downsides of the use of technology in my life.
2:54:33
>> her go for that phone might be what gets her into the 4% of gamblers that wind up making money.
2:54:38
You got to start her young.
2:54:41
You got to start her young.
2:54:44
Uh you know, is there is there an optimistic story being told by the cannabis industry about weed anymore?
2:54:49
I feel like that one is just like people are just like yeah, okay, it's it's Well, they're still faking medical benefits, which is complete But yeah, I mean they're they're still talking about supposed medical benefits.
2:55:04
There's a huge huge study that just came out in JAMA.
2:55:05
Almost all of the so-called medical benefits total BS. It's all fake.
2:55:10
People just want to get high. It is what it is.
2:55:13
Oh, you know, oh somebody you know, they always talking about people with cancer, seizures, epilepsy.
2:55:17
The anxiety one is the fakest one of all of them.
2:55:20
But yeah, I mean they're always you know, oh it helps me sleep and it's like well, it knocks you out.
2:55:26
That doesn't mean it helps you sleep, but it's like does alcohol help you sleep?
2:55:29
No, it actually makes your sleep you know, 10 times worse.
2:55:32
You may not be you know, awake, but that doesn't mean that you're asleep.
2:55:36
You'll be happy to know we were looking we were looking at a new studio space here in LA and it checked every single box.
2:55:41
It was a great space and that it and but right across from it you could see out the window like a pot store and I was like no way.
2:55:48
I would there's no no I just don't want to look at the the flashing lights and the the There was another there was another studio that we looked at where it was like the royal flush of like of like gambling sin companies.
2:55:59
It was like but the previous three companies had been like an adult content a weed company and then also a gambling company and we were like that is just a cursed building.
2:56:10
>> It was like an amazing amazing building.
2:56:13
We told our broker like sorry.
2:56:13
It's just like it has bad vibes.
2:56:14
Like we can't possibly be there. It's just bad.
2:56:18
>> Oh John, we should do debanking on the whole thing.
2:56:22
This is so interesting guys.
2:56:22
So you guys know about the whole debanking, you know, Andreessen, Zuckerberg.
2:56:25
Everybody goes to the point 2. 0.
2:56:28
Nick Carter has been on the show.
2:56:30
So the Treasury the Treasury Department takes this seriously and they conducted a study and they just put out the report 2 days ago from the office of the comptroller and I was reading it this morning and it's like oh, they've unfairly targeted gun companies.
2:56:44
I was like okay, you know, that's bad.
2:56:45
They've untargeted unfairly targeted oil and gas. I'm like oh, that's ESG. We hate that.
2:56:49
They're like the banks have untargeted unfairly targeted the adult industry and I was like whoa whoa.
2:56:54
I was like hold on a second. Wait, what? What was that?
2:56:56
So they are actually pressuring the Trump administration right now is pressuring via this report banks to do business with porn companies.
2:57:06
Now why do the banks not want to do business with porn companies?
2:57:10
It's not just vice clauses.
2:57:12
It's because they're afraid of the internal standards that all these companies have been doing now for decades where they're often in violation of the law whenever it comes to children exploitation, all of this and they don't want anything to do with that.
2:57:24
That's why OnlyFans, you know, had that problem at one point.
2:57:27
So our great the debanking conversation is now basically being weaponized, you know, by the government to potentially a force the largest financial institutions to do business with major porn companies.
2:57:41
So this brings me back to the I'm sorry. Come on.
2:57:49
The idea he doesn't want to do business with porn companies cuz he has a heart.
2:57:52
Like get out of here, okay?
2:57:54
Like they're desperate to take their money.
2:57:55
They just don't want the risk. Come on. What was it? 2.
2:58:01
2 billion from consumers in the US just last year? It's not nothing though. 2. 2 billion?
2:58:09
That's only We had a guy on the show earlier who brokers big land deals, ranches.
2:58:17
What do you think the odds are that Breaking Points a decade from now is just based on like a big ranch property in Montana and you're just yelling into the microphone.
2:58:28
Hey, it might it's it's possible, man.
2:58:30
You know, regen- regenerative farming, uh just fully off the grid, uh except for Starlink, right?
2:58:38
I'll need Starlink to be able to zoom in to be able to do >> you'll need to be set up for that.
2:58:43
I put it I put it at 55%.
2:58:47
You want to make a market?
2:58:47
Do you want to make a market on Kalshi? Yeah.
2:58:48
I'm making a market on What What was Tarik's exact quote?
2:58:53
By the way, Tarik, if you're listening, I've been trying to get in touch with you, man. Please come on my show.
2:58:56
Uh but Tarik, what did What exactly did he say?
2:58:59
He's like, "Our goal is to be able to create a market."
2:59:04
>> Points is like Sam going on Tucker.
2:59:04
That is what Yeah, hey, that was good for Sam, wasn't it?
2:59:08
Because it showed that he was open to difficult conversations.
2:59:13
So, I would say if if he truly believes >> in Silicon Valley believes that, but but I I I I actually do agree with you. I do think it was good.
2:59:20
No, I mean, look, if if if you're going to live in a world where you're going to, you know, make all of these claims and you're going to have a high level of distrust already from the Democratic populace, then you're going to have to go out there and defend your business.
2:59:33
I mean, all of the big tech companies have been doing that or had done that for a decade prior.
2:59:37
I know that they all now think that that was bad. I totally disagree.
2:59:40
I think going on podcasts where you're just fluffing your product all the time makes you look even more disingenuous and you should come face hard questions.
2:59:47
But yeah, I mean, he said "We're going to make a market between every difference of opinion." And yeah, so look, Mr.
2:59:55
Tarik, I would love to speak with you about why you think that's a good idea and vision for our future and some of the protections that you may have in place.
3:00:03
John, did you read the prediction thing I sent you about the Russian map? I love this story. This just came out.
3:00:10
So, I actually used to be an intern there.
3:00:13
It's called ISW, the Institute for the Study of War here in Washington.
3:00:15
What they do is they create battle maps Yeah, yeah.
3:00:20
And so, there was a Polymarket market for like 1. 3 million. >> map.
3:00:25
That was trading on this map and there was like a 33,000% payout if Russia seized a particular town in Ukraine on this date.
3:00:34
And the story that's now come out is that the guy who worked at the think tank altered the map specifically for that date so that the market would resolve in that 33,000% payout for that specific date of bet.
3:00:51
And now, the the think tank has actually come out and said that they fired that person and that he violated their internal principles by going in and editing this map beforehand.
3:01:01
And it was a sizable enough market.
3:01:03
We're not talking about one of these $5,000 ones. We're talking about 1. 3 million.
3:01:07
So, I just want to highlight that, you know, just in terms of how these prediction markets and all that should work.
3:01:13
I've been reliably told no realistically large market even trades on anything degenerate.
3:01:18
I can't think of anything more degenerate than betting on the fate of individual Ukrainian towns in a war.
3:01:29
>> Oh, the really the really dark the really dark What What if you just load What if you just load a billion dollars into a world peace contract and everyone has an incentive to bring world peace around?
3:01:40
You're going to need a hell of a lot more than 1 billion.
3:01:42
If you're If you're going to shame me about 2.
3:01:45
2 billion, you're going to need a shitload more than 1 billion >> Yeah, maybe maybe a trillion dollars.
3:01:49
I I but I do believe in the next call it 1 to 2 years, we'll see even darker markets specifically around individual people like Yep.
3:02:01
John was John was joking offline yesterday.
3:02:07
He's like, "Jordi, I'm going to load a market that Jordi's going to have a I'm going to put a million dollars into a market that Jordi's going to have an amazing year next year."
3:02:14
He's just Cuz I'm betting on you.
3:02:16
>> He's going to He's going to bet on me because he's my friend. He wants to bet on me.
3:02:19
And then what what happens?
3:02:20
Somebody says, "Well, if I can make Jordi have a bad year, I can make a lot of money." So, There you go.
3:02:26
Guys, the one I'm worried about the most is elections because you know, now we have state not not just the national level.
3:02:32
I I don't think the national level will be as corruptible, but what I worry about the most is individual counties.
3:02:37
And these markets already exist. So, I mean, come on.
3:02:39
Like if you guys know anything about our election system, an individual clerk in an individual county, the ability to swing, let's say, a mayor's race, and people on Polymarket already do these like parlay-esque style debate, you know, bets where they'll be like, "All X counties in the state will go for Trump or something just because they have a little bit better odds."
3:03:01
These are massively open to manipulation.
3:03:05
County-level races, mayoral, at the state representative level, there is just way too much ability Like the one I just gave you all is the classic example of somebody being able to manipulate just because it was based on a think tank map.
3:03:17
And they couldn't They never thought, "Oh, some guy making probably 25 grand a year who makes the map isn't susceptible to a $1. 3 million market."
3:03:26
I mean, in a lot of cases, our election infrastructure, it relies on volunteers, you know?
3:03:34
It's not even people who are paid.
3:03:36
So, I'm very worried about stuff like that or individual primaries where there's not as much scrutiny.
3:03:41
They Yeah, I mean, already we've seen the There was the Google Insider.
3:03:46
Did you guys see that one?
3:03:48
The Google >> get to the bottom of that because what was weird was that that was that that was published by one of the one of the one of the Yeah, I was like, "Why are they Why are they admitting to this?"
3:03:59
And then it's like, "No, they're not. They're bragging."
3:04:01
They're bragging." And so and so I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I
3:04:09
I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Right. Anyway, thank you so much for coming on
3:04:18
Anyway, thank you so much for coming on the show. Jordi, anything else?
3:04:19
We could do this all day, but we'll have to have you back in a couple weeks.
3:04:21
What are you What are you doing anything that fun this weekend? Oh, not this week.
3:04:27
Oh, we're just We're going shopping. Final final Christmas. That That's all it is. Merry Christmas.
3:04:31
Let's play some Christmas music.
3:04:35
Thank you so much for coming on the show. >> for having me. Love you guys. >> having you. I love you guys. Love you, dude. >> Love you, man. I'll see you. See you. >> Bye.
3:04:43
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3:05:13
Fall asleep faster, sleep deeper, wake up energized.
3:05:18
>> Eight Sleep last night, I got a 90. I got a 90.
3:05:22
You're >> Play that sound effect.
3:05:24
>> You're cooking the books.
3:05:24
You're cooking the books. >> the books.
3:05:26
You're cooking the books.
3:05:28
You're putting a bunch of weights Putting a bunch of weights in the bed when you leave in the morning?
3:05:32
>> No, no, no, no, no, no, no, no, no.
3:05:32
No, Tyler loaded $10 into "No, John will have a good sleep."
3:05:37
And so, I had to do it to win the $10.
3:05:39
And hope hope everyone enjoyed the the conversation with Saagar.
3:05:43
I think it's it's critically important that TVPN not just be an echo chamber of capitalism, libertarianism, and you know, I think uh it's important >> Tyler, what do you think about echo chambers?
3:05:58
It's important to have an open dialogue. >> echo chambers? I love echo chambers. >> echo chambers.
3:06:03
I was born in that echo chamber.
3:06:05
I feel like I disagree with every single one of his points. >> Okay. Yeah.
3:06:07
Uh elections, like that's like there's so much value in the information of like who people think is going to win.
3:06:12
If you're a local business owner, there's a local election.
3:06:16
Like there's an an maybe one one of the candidates says, "Oh, we're going to do this this tax that we're going to start um you know, change the the regulation around building certain types of building services."
3:06:26
There's so much value in knowing that, right?
3:06:28
>> yes, yes, yes, seeing that 6 months in advance, even even 1 month in advance, that is valuable.
3:06:31
If he If If he's If he's saying that someone has the incentive to like actually mess with the election, I mean, that's like a felony.
3:06:40
So, like after one person, like does he think that more people at the ISW are going to mess with the map? Yeah, I don't know. Yeah.
3:06:46
It's like one Yeah, okay.
3:06:48
Yeah, the first time it happens, it's bad, but >> It's like yeah, if there's if there's if there's economic incentives to to meddle in local elections, like Yeah, like like at the at the end of the day, there are laws. I don't know.
3:07:02
I think I Yeah, I I would be much more worried about a normalized situation of the opposite where where the insider trading, not not not not changing the the underlying outcome of reality based on a big market, but the opposite.
3:07:16
Like you know how the market will resolve, so you size up the market as much as possible.
3:07:23
Um but we're clearly going to be grappling with both of these issues going forward.
3:07:27
>> Sean in the chat says, "Lock me in the echo chamber. Never let me out." That's amazing.
3:07:33
Well, speaking of Sean, we got a post from Sean Frank here.
3:07:37
He said, "We are in the shop ads beta and it has been great."
3:07:39
Eric Seufert has a story here.
3:07:41
He says, "Shopify is expanding shop campaigns with a new ad format that allows merchants to recommend products on other merchants' websites.
3:07:51
So, you're already in the checkout flow.
3:07:53
You're buying a Ridge wallet and you see, 'Would you like some Tacovas to go with that Ridge wallet?'"
3:08:00
That That's basically what's happening. Very cool.
3:08:01
David Stickland says, "Tell me why you would you would want to encourage someone to quit click away from Ridge to another website after you paid to get them there."
3:08:10
And uh and I and I think the answer is that it's basically like an after sale post purchase.
3:08:17
You have someone and and you can and you can cross-sell.
3:08:19
So, you're not necessarily surfacing an ad that will take someone away from your checkout at the most valuable point.
3:08:26
Yeah, the Shop app The way I use the shop app is for like tracking an order, right?
3:08:30
And so if I'm in there and I bought something and then I get served something else that says like, "Hey, you bought this, you might like that."
3:08:36
It's a it's a pretty it's it's just a valuable ad placement.
3:08:39
I think it's pretty additive.
3:08:41
Well, Um speaking of advertising, John, >> wander. com. Here's an ad for wander. com.
3:08:48
Book a wander with inspiring reviews, hotel and amenities, dreamy beds, top-tier cleaning, and 24/7 concierge services.
3:08:52
Uh Quinn had a post here.
3:08:55
I've been seeing this lately.
3:08:56
Meta has a special ad unit that they reserve for themselves.
3:09:00
It's like a personal ad Yes.
3:09:01
for the Meta Ray-Ban glasses.
3:09:06
Um I've gotten this actually multiple times this week.
3:09:10
Uh it's a fantastic placement and it what's notable is you actually have to hit the X to like close it out.
3:09:15
So if you just Oh, we just see it and scroll past it and you close the app and join again, it'll just be back there.
3:09:21
So really one of the greatest ad units of all time.
3:09:25
It's a fantastic Well, well done to the Meta team.
3:09:27
And yeah, sometimes you got to save the best for the family.
3:09:30
I mean, I would advise this to anyone who's starting a sunglass business.
3:09:34
Just >> get a few billion DAUs.
3:09:36
billion DAUs on a major social app so that you have so effectively unlimited ad inventory. >> Take it public. >> Yeah.
3:09:44
Use >> Have a bunch of cash flow from that and then invest that into the sunglasses. Yep.
3:09:49
I mean, these with this ad unit like these the glasses better move.
3:09:55
I better be I better see some big numbers. Yeah.
3:09:57
Because it everyone should be aware of these at this point, but uh you know, it is it is hard to use >> good It is a good It is a good gift, right?
3:10:06
It's It's the kind of thing a lot of people wouldn't necessarily buy for themselves, but they'll you know, get some enjoyment out of it if if it's under if it's in a stocking.
3:10:17
Uh Flow over at Lindy is highlighting Max Myers post.
3:10:23
Uh asked about by the Wall Street Journal whether spending 500 million renovating the Fifth Ave Tiffany flagship, Bernard Arnault replied, "You cannot dream when you talk numbers.
3:10:31
When you create desires, profits are a consequence."
3:10:36
We need to be creating desire.
3:10:40
That is one of the hardest lines. >> Yeah. Flow said of all time.
3:10:43
most profound business insight I've read this year.
3:10:46
Makes sense that it would come from the biggest luxury company in an industry that only exists because of its ability to create desire.
3:10:51
Arguably the clearest distillation of the function of marketing.
3:10:57
I I have no idea if that can be applied to tech at all.
3:10:59
I agree with Flow that it is a profound business insight, but I think it should probably be used sparingly because I can imagine so many scenarios where an enterprise software CEO would go off and spend $500 million uh renovating an office and realize that it did not really move the needle for their business because what what they are selling is not uh a Birkin bag. Yep.
3:11:26
Uh in other news, Lululemon stock #LULU surges over 12% after the company's CEO says he's resigning.
3:11:33
This is not what you This is not as a manager, as an executive of a public company, you never want the stock to rip when you resign.
3:11:43
Uh I'm wondering if we get Chip back in the driver's seat.
3:11:46
He's been kind of an activist kind of a proxy fight.
3:11:51
Uh I would be interested to see what he would be able to pull off back in uh Speaking of other stock pops, this is insane.
3:12:00
Google >> Speaking of stock pops.
3:12:02
>> Google is about to turn a $900 million investment in SpaceX into $111 billion if the $1.
3:12:10
5 trillion valuation materializes.
3:12:14
There are some crazy big tech like circular deals.
3:12:16
I'm pretty sure Didn't Jeff Bezos invest in Google?
3:12:20
If he held, then he gets SpaceX stock as well and it all goes back to Bezos. He's the boss. The final boss. >> boss. The final boss. The non-determinism.
3:12:34
Zeke in the chats is going Tyler Potter in the echo chamber of secrets. I like that.
3:12:41
We should actually build an an echo chamber around your desk. >> Yeah.
3:12:46
A small echo chamber just so that your own ideas and thoughts are just constantly reflecting back on you.
3:12:50
It's very comforting to see these AI input names sell-off, says Bucco Capital bloke. Very unbubbly.
3:12:57
Confirms we are very much in a more rational, discerning next phase of the AI build-out and adoption. I agree with that.
3:13:03
It does feel like um we There was a world where going into the end of the year we were talking about valuation as a function of tokens or, you know, IPOing any company that could just throw a dot AI or or, you know, throw a throw an AI name on their company and we we've we've backed backwards from that abyss, fortunately, I think so. I've been happy.
3:13:27
Well, yeah, you didn't have to have a dot AI domain.
3:13:31
You just had to say, "We're going to do something with AI at some point." >> Yeah.
3:13:34
You got a pretty big premium.
3:13:36
>> Well, Chipotle rang the bell at the New York Stock Exchange, but they didn't hit the gong on TBPN yet. 4,000 4,000 restaurants. >> 4,000 restaurants.
3:13:49
4,000 restaurants and we'll see.
3:13:52
They're under intense pressure from Sweetgreen.
3:13:54
Sweetgreen's putting 400 g of protein in every bowl now, something like that.
3:14:01
Uh Can Chipotle turn it around?
3:14:01
Win Jordy Hayes back as a daily customer?
3:14:05
I would love to see that. >> 2026 is the year. We'd love to see it.
3:14:12
I'm still a fan of Chipotle. I still eat Chipotle.
3:14:14
>> still love that in tech you have people that are like, "Well, like I can predict out pretty well the next 1 to 2 years, but after 10 years, the way that we're accelerating, it's very hard to predict."
3:14:22
Chipotle's like, "In 10 years, we will add 300 new Chipotle locations in these key metros and we will Yeah, it is Things are more certain when you've been running business for a long time, I suppose.
3:14:34
Uh well, in other in other financial news, Wealthfront raises $485 million and IPOs valuing it at 2. 6 billion. Let's go. Let's go.
3:14:46
Oh my god, if the SpaceX IPO ticker is SEX, that will be crazy. Probably will be.
3:14:55
SPACs would be better though. I'm rooting for SPACs. There's no way.
3:14:58
SPACs has terrible no aura.
3:15:02
I'm not saying I advocate for SEX?
3:15:02
SEX, but I think that Elon will do that.
3:15:07
>> Can't he just get dollar sign X? He likes X. Let's just do that. How about that?
3:15:12
Anyway, uh What else is is is is in the news?
3:15:15
Is there anything else we should we should cover?
3:15:18
There's some there's some news around um uh Substack.
3:15:21
I guess Substack changed their their their how you how much you can read without installing the Substack app.
3:15:29
They're really pushing the Substack app app.
3:15:32
Gergely Orszag's is Orszag's is upset about this.
3:15:37
He says, "My paid subscribers cannot even read my email without installing the Substack app."
3:15:43
Eric Newcomer says, "WTF?"
3:15:43
Uh bullish for Substack if they get everyone to install their app, obviously.
3:15:47
Uh D like like Yeah, yeah.
3:15:50
And Max Chafkin there saying, "I was wondering if this was a growth hack."
3:15:54
And Eric Newcomer says, "For Substack?"
3:15:56
Yeah, it's for their for their app.
3:15:58
Um would be very interesting.
3:16:00
I don't know if this is a Substack hack. >> is so >> to tbpm. com.
3:16:03
You should drop your email.
3:16:05
You get a free newsletter.
3:16:05
We don't have a paid version.
3:16:06
I don't know if this affects us.
3:16:08
We'll have to figure it out.
3:16:10
We'll have to talk to Brian.
3:16:11
>> I'm sure it affects us.
3:16:11
The newsletter's pretty long.
3:16:14
And and again, >> And so it's not sending the full thing in the in the email. Yeah, you can Yeah.
3:16:19
continue your reading in the app, which is just it's it's it is this this kind of decision.
3:16:23
I like Substack as a business, but this decision is good for Substack and it's not good for the reader and it's not good for the the person sending, right?
3:16:31
I don't They could argue that it'll have a long-term benefit because people might be more engaged in the app.
3:16:36
They might be more likely, but again, when when you look at the data, at least for us, like 95% of readers are reading it in their email.
3:16:49
They're not reading it in the Substack app yet.
3:16:50
Substack wants to change that, but I can see why people would be frustrated here and this is why the the traditional email platforms have pushed back on Substack and said like, "Look, they want to become a social network.
3:17:02
They want to They want to build a garden.
3:17:05
They're building a garden, then they're going to put some walls up."
3:17:08
Right now it looks like this beautiful garden.
3:17:10
You can just come in and I mean, if they get the app cooking, they're going to put ads in that thing and they're going to print.
3:17:13
It's going to be a great business.
3:17:14
Um on the flip side, we are we are big fans of being in the big social media feeds.
3:17:23
Like we we we have not like we you know, love X, love Instagram, love YouTube.
3:17:29
These are algorithmic platforms.
3:17:29
If there were to if Substack were to become an algorithmic uh you know, long post app, basically like Twitter with more words, I think we would be the long trough. Yeah, the long trough.
3:17:45
We would be okay with that.
3:17:45
I mean, we would certainly be the first ones because we have no paid subscribers.
3:17:52
>> the whole premise of Substack and you know, you look back at every all the marketing materials is like own your audience, have a direct relationship with your reader, don't be disintermediated by the platforms and so to come out and make some make a product decision like this and you see where this goes, it feels at odds with everything that the company is built on. Hm. Yeah. Yeah.
3:18:12
I mean, at the end of the day, for me, it's about like can our business model flourish in the long-form written text and whether it's delivered like there are certain amount of people that read our newsletter in their email.
3:18:24
If we can get them all to read in the in the app, like it's it's kind of six of one and half a dozen of another to me.
3:18:32
Like it is it is sort of neutral.
3:18:32
And the and the bull case is that by going into the app, we our stuff can go more viral, and we wind up getting more views on average per post.
3:18:44
But you live and die by the content, just like we do on YouTube, just like we do on Instagram, just like we do on X, just like we do anywhere else.
3:18:50
It would be a unique thing, and every time that a feed switches from, you know, subscriber enforced to algo, creators always hate it.
3:19:00
This is what happened to YouTube.
3:19:01
YouTube, the default home page used to just be your subscriptions.
3:19:05
And then people realized that uh you could just bomb the subscriptions feed with a million videos, and you'd get tons of impressions, and eventually they went algo feed, and they show you a single video from Mr.
3:19:14
Beast or whoever you're subscribed to.
3:19:17
Maybe you're subscribed, maybe you're not, maybe they just know that you'll like it.
3:19:19
And you could see that same thing happening with newsletters.
3:19:22
You open up the Substack app, and it says, "Hey look, today DVP put out a fantastic newsletter. Here you go."
3:19:29
Other days, it wasn't good, so we're not showing it to you.
3:19:33
And that's weird, because that's not the Substack model, that's not the email model.
3:19:36
I think people would revolt, but there is a world where where being in that in that feed be be being able to go viral within the Substack app is actually a net positive.
3:19:46
It is it is a it is a it's sort of a it's like a Darwinian survival scenario.
3:19:53
Like you really have to you have to thrive.
3:19:54
You have to fight it out.
3:19:56
You have to you have to earn every view, earn every impression. But we'll see.
3:20:01
We'll we'll we'll we will assess.
3:20:03
>> Yeah, it's I mean it is notable.
3:20:03
I don't I don't think uh Chris or Hamish have responded to any of the criticism.
3:20:12
Maybe they're responding on Substack. Maybe. >> there. Maybe.
3:20:17
Maybe we should have gone the Substack debated it more. I don't know. Uh it's interesting.
3:20:21
Anyway, that concludes our show for the day. Have a great weekend. Merry Christmas. Thank you for listening.
3:20:28
Leave us five stars on Apple Podcast and Spotify, and we will see you on Monday.
3:20:32
And next week is Christmas week.
3:20:37
You thought this week was Christmas week.
3:20:38
We're just getting started.
3:20:40
We're just getting started.
3:20:42
We're just getting started.
3:20:42
You're not going to be able to see us.
3:20:43
There's going to be presents.
3:20:46
We're going Christmas We we might be dressed up.
3:20:50
We might be interviewing public company CEOs while dressed up.
3:20:55
You'll have to wait and see.
3:20:55
We hope you have an incredible weekend.
3:20:57
Thank you for being with us this week. We'll see you soon. Goodbye. [Music]