searchlore

0:03

[music] I see a large IPM on the horizon.

0:11

You're surrounded by journals. What's your position?

0:14

[music] Overnight [music] success.

0:30

The place 3000 double right [music] there misinformation. clearing order inbound. >> Let's just roll.

1:11

We are surrounded by journal. Hold your position. Get up. Trust the experts here. [music] Five.

1:30

We are experts [music] founder Mel Vood.

1:44

I see multiple journalists on the horizon. Stand by. UAV online. Blaze. >> Double blaze. Triple blaze. Double kill. [music] Fight. [music] is wins. >> Team deathmatch. are experts. [music] Triple blade.

3:00

That's [music] just wrong. Right.

3:09

>> Clearing order inbound.

3:11

[music] >> [music] >> We are surrounded by journalists. Hold your position. >> Strike two.

3:42

Activate golden retriever mode.

3:59

>> Marky clearing order inbound.

4:20

I see multiple [music] journalists on the horizon founder. You're watching TVN.

4:37

Today is Friday, January 16th, 2026.

4:40

We are live from the TVP Ultradome, the temple of technology, >> the fortress of finance, the capital of capital.

4:49

>> Capital El Capal de Capal.

4:52

[sighs] Let's tell you about ramp times money, baby. Save both. Easy.

4:54

Use corporate cards, bill payments, accounting, and a whole lot more all in one place.

5:02

>> It is the goat of fintech. A fintech goat. Uh, bunch of news today.

5:04

Lots of people dropping stuff on Fridays.

5:08

What's the meaning behind that?

5:11

I don't know, but we'll take you through it.

5:13

Lots of AI news, lots of Open AI news because there's new details, new discovery in the Open AI versus Elon Musk lawsuit that's heating up.

5:23

There's a whole bunch of scoops.

5:26

>> Greg was waiting for it. >> Yes, for sure. [laughter] For sure.

5:30

There's a lot of crazy quotes. >> Really?

5:32

Uh, we're going to go we're going to go through it all. Yeah.

5:36

>> Because it's part of our job.

5:37

>> We're going to go through both sides.

5:38

We're going to do the steel man for Sam, the steel man for Elon. >> Yeah.

5:42

Just say I have I have I have a lot of sympathy for Greg.

5:44

This is like a you know having your personal diary. >> It is sort of crazy. I mean it.

5:49

Do we know it's his diary? We'll see.

5:52

Elon framing it as a diary.

5:54

I think I think you had the best take of the day so far, which is uh that uh this is the Super Bowl for Nick on X.

6:01

Nick on Nikk is having the best day of his life.

6:06

>> Number one for having a great time.

6:10

>> He's having a great time.

6:10

Um >> anyway, let's take you through the linear lineup, tell you who we're having on the show today.

6:17

>> Linear, of course, is the system for modern software development.

6:19

70% of enterprise workspaces on Linear are using agents.

6:24

now and we will be having the co-founder and CEO, the founder and CEO of Athletic Brewing.

6:30

We got the Athletic Brewing Beers here in the studio.

6:34

Pat Grady and Sonia Wong from Sequoia Capital coming on.

6:37

They're co-authors of 2026. This is AGI.

6:39

Then we have Sean Frank, Emergency Podcast.

6:42

They put ads in chat GPT.

6:44

So, we're calling the god of ads himself.

6:47

Sean Frank, the CEO of Ridge.

6:49

Uh and then uh Alex from Higsfield's coming back on the show to get a little update. >> 200 million AR. >> Absolutely. >> The fastest growing.

6:59

>> So we're very excited for our guest, but we have about 90 minutes here to lock in.

7:02

Talk about the two sides of the Elon versus OpenAI lawsuit.

7:05

So let's kick it off with the Elon should lose side of the argument.

7:12

I'm going to be steel manning Sam, steelmanning Greg. They did nothing wrong. Elon's wrong.

7:16

He needs to back Have you Do you want your helmet?

7:20

>> I I need the steelman helmet for the whole thing. I It might be too much.

7:23

Maybe let's put on the turbo puffer, but we'll just let everyone know that we're steel manning like crazy.

7:26

Put on Put it on the puffer. >> I'll I'll wear it.

7:29

>> Okay, you can you can wear it.

7:29

Um before we do, let me steal man some super intelligence cloud, specifically Lambda.

7:37

Lambda is the super intelligence cloud building AI supercomputers for training and infrance that scale from one GPU to hundreds of thousands.

7:43

Uh, so okay, Elon made a donation to a nonprofit organization, he got a tax write off on that donation, and that nonprofit, OpenAI, the nonprofit, it's now one of the best funded nonprofits in history, and it's still focused on the original mission.

8:03

OpenAI, the nonprofit, it still exists.

8:06

It has a just a tiny hundred plus billion dollar position in a for-profit company.

8:11

They're going to be able to do nonprofit stuff forever.

8:15

Whatever they want to do.

8:15

If they want to hire researchers, if they want to write white papers, if they want to train their own models, the OpenAI nonprofit can do that. It's funded.

8:21

Elon donated roughly $38 million alongside other donors who put in 90 million.

8:28

There's some debate over how much Elon put in.

8:30

I saw one report that was around 45.

8:31

It's in the tens of millions of dollars.

8:33

and he was a large >> according to according to OpenAI they believe that uh >> I I think their their sort of optimistic belief is that the damages would be $38 million if they lose the original donation >> if they lose.

8:45

But I'm I'm arguing right now that they're going to win. They're going to win.

8:49

The juryy's going to say not guilty.

8:50

OpenAI did nothing wrong. And here's why.

8:54

>> So Elon, yeah, he was a big donor.

8:54

He put up tens of millions of dollars.

8:56

But play out the counterfactual.

8:58

It's entirely reasonable to assume that things would have played out exactly the same even if Elon was never in the picture, even if he never donated.

9:07

Sure, I mean, the office would have had to be a little bit smaller.

9:11

You're working with you're working with 90 million instead of $120 million.

9:13

But we've seen folks raise 90 million series B's.

9:16

We've seen folks raise $120 million series C's.

9:20

Roughly the same company.

9:20

You know, you you pay people a little bit less.

9:25

You have a few few less perks.

9:25

The office snacks aren't as good.

9:27

Maybe you skimp on the 45 pound plates, you just get the 10 pound plates. These things happen.

9:33

So if Elon had never donated, maybe Sam would have just stepped up his donation. He put in 10. He put in 10.

9:40

>> You know, maybe he goes and leverages something profit club. >> Yeah. Yeah. He put He put in 10.

9:43

He could have potentially sold more stock that he owned, taken a loan, sold property, put the McLaren F1 up for sale.

9:53

That's another $20 million he could pour in.

9:54

He could have filled that gap.

9:56

Or he could have hit the he could have hit the road. He's a good fundraiser.

9:58

He could have gone out and gotten money from a variety of people.

10:01

Reed Hoffman, Peter Teal, uh uh uh Dustin Moskavitz all put in money.

10:05

There are more tech billionaires in that crowd that could have written a $1 million check.

10:12

So Sam could have gotten 34 $1 million checks and and filled the gap.

10:16

So it's not like if if if Elon didn't donate, he wouldn't have like OpenAI wouldn't exist, right?

10:22

It's totally possible that everything would have been the same and that the Elon donations were not make or break for a for open AI.

10:29

So Elon should lose this case because everyone around the table came to the same realization at roughly the same time about the goal of creating AI responsibly.

10:39

Basically scaling laws ensured that AI progress would require vastly more capital than could ever be raised through donations.

10:46

At a certain point, if you need a hund00 million for a nonprofit, you can do it if you're aligned with some of the world's richest people in tech like Elon, Peter Teal, the other folks that I mentioned.

10:59

Um, at the on the flip side, if you need a hundred billion dollars or you need $50 billion like OpenA's already raised in the venture markets, that's just not going to happen in the in the nonprofit sector.

11:11

Except it could have because if Elon really believed in the nonprofit mission and really said nonprofit or bust, yes, I see the scaling laws. Yes, I agree.

11:20

We'll need an insane amount of capital to get to AGI.

11:23

Well, guess who has an insane amount of capital? Elon.

11:26

If he wanted to, he could have said, yes, I'm staying with the nonprofit strategy and I'm going to put up the 50 billion.

11:31

Every dollar that OpenAI has raised in the venture markets could have been a dollar donated by Elon Musk if he sold down all the positions. Now, it's crazy.

11:40

It's never going to happen. Doesn't make any sense.

11:41

Obviously, we're pro like I think the nonprofit transition makes a ton of sense in the context of raising that amount of money.

11:48

I think that's a reality.

11:48

And truthfully, I think that everyone around the table agreed about that.

11:51

And so, >> yeah, one one thing that seemed clear here is there there were a variety of different paths, but clearly a lot of big personalities in the room, a lot of ego, >> and it makes sense that eventually that just kind of blew up, right? >> Yeah.

12:07

And so even if you were going to keep funding the nonprofit, you're going up against Google.

12:12

They have an economic flywheel that will provide the amount of capital required to advance AI, build massive, they're a hyperscaler.

12:18

They're going to build massive data centers.

12:21

They're not going to have a problem with this.

12:22

Uh Google was set up to make investments at this level at 10 billion of capex. Google's not blinking.

12:27

The shareholders are all thumbs up on that.

12:32

>> Remember when uh Sam was uh texting Elon?

12:36

And I think this was in 2023 saying like it pains me to see you attack open AI publicly.

12:42

>> Uh I think we can both agree it's important that Google doesn't own AI and that's been one of the only things that throughout this whole process they've stayed in agreement on. >> Yes. Yes.

12:52

So they want to create a counterbalance to Google specifically and uh Elon actually agreed with this as they were shifting from maybe the nonprofit's not the ultimate uh way to win this AI race, this AI battle, this AI future.

13:08

uh because Elon agreed according to Greg Brockman in emails that uh he said he being Elon said nonprofit was deaf the right one early on the right structure at the beginning but may not be the right one now.

13:22

So according to these leaks it it seems like Elon wasn't always all in on the a nonprofit.

13:30

He was maybe open to the idea of a for-profit and of course uh that was a fork in the road.

13:34

Elon did actually have the money to continue supporting OpenAI as a nonprofit.

13:37

It would have been crazy, but technically could have sold down positions.

13:40

Um, but Elon clearly agreed that OpenAI should build a for-profit.

13:45

And that's why he wanted equity. He wanted to be CEO.

13:47

He was interested in OpenAI joining Tesla. Tesla's a for-profit.

13:51

He wasn't saying we're going to bring Open AI over to Tesla and the whole thing is going to be a nonprofit.

13:55

Um, clearly Elon is no purist about nonprofit AI research. He runs XAI.

14:01

It's a direct competitor to OpenAI.

14:03

He started it as a benefit corporation which meant it had an obligation to deliver environmental and social benefits.

14:09

But after the merger with X, that benefit corporation status was dropped entirely.

14:13

This whole lawsuit is clearly just corporate lawfare.

14:15

And the battle should be fought out in the financial markets, in the app store, on the open internet, not the courtroom.

14:23

Let the best product win.

14:23

Let the best AI model win.

14:26

Let the be let the best team win.

14:29

And so let's wrap this let's wrap this court case up and uh and let let open AAI go and compete it out.

14:35

They got they're fighting a war on five different fronts. Let them let them build. Let them cook. >> Yeah.

14:43

>> It's worth noting that this is open.

14:46

>> This is the this is what winning like today is what winning looks like for Elon.

14:51

>> If he gets a if he gets like the the damages awarded and he gets 38 million bucks. Yeah. >> He's like nice.

14:56

Uh yeah, >> I can fund XAI for a week, >> you know, [laughter] maybe not even or even if he gets like some points in OpenAI, right? Yeah. >> Uh he's like great.

15:06

Uh this didn't this is not a material jump in my net worth or even my influence or power, >> whatever he's looking for.

15:13

This doesn't really get me one step closer to Mars, right?

15:16

It doesn't necessarily align.

15:16

So the wind state right now >> is just being disruptive, right?

15:23

basically buying buying XAI time, >> putting OpenAI in a position where they are uh trying to go public, right? Yeah.

15:32

>> And they've got this, you know, massive high-profile trial going on.

15:37

>> The helmet is really adding a lot to this conversation. I love it.

15:40

[laughter] >> The chat loves it, too.

15:43

Jordan in a night helmet is what winning looks like.

15:46

>> Um, so anyways, I'm thinking, >> yeah, let me tell you about Plaid.

15:49

Plaid powers the apps you use to spend, save, borrow, invest, and uh securely connecting bank accounts to move money, fight fraud, and improve lending.

15:57

Now with AI, we have fireworks today. >> Fireworks for Plaid. >> I love it.

16:03

I love >> Plaid gets me fired up.

16:04

Uh this this kind of uh this uh reminded me today of the deal rippling lawsuit where like >> the actual win state for this like deal rippling lawsuit is just rippling >> uh like like being a somewhat of an annoyance, right?

16:20

Both companies are going to continue.

16:24

>> Uh there's no amount of money that's going to make Parker like happy, right?

16:28

But what what will like probably make him happy is just like making it harder for deal to go public, right? >> Yeah.

16:35

Did you see that line that apparently they were talking to Elon in one of these like leaked emails and uh Elon's like, "Ah, I don't really care about money.

16:42

Uh but I do need I do need $80 billion just handy in my back pocket for a city on Mars."

16:48

It's like [laughter] it's like the most extreme being like yeah like I'm I'm I'm basically post economic but there's like one more thing that I'm reaching for and it just happens to be $80 billion like more liquidity than anyone has ever had in history and I just need it ready to go for when I land on Mars and want to build >> I just need about 80 billion liquid >> just liquid [laughter] >> liquid >> it would fix me.

17:13

He says 80 billion liquid would fix me.

17:15

In fact, even then, I moved back to California because even if they're doing a 1% a year, right, I can probably good.

17:23

>> Okay, now let's argue the flip side.

17:27

Elon Musk will win the open AI lawsuit.

17:30

And before we tell you how and why Elon will win the OpenAI lawsuit, I'll tell you about Console.

17:35

Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets.

17:44

Um, so Elon will win the OpenAI lawsuit and he should and he should he should win this.

17:51

Judge Gonzalez Rogers already rejected OpenAI's motion to dismiss.

17:56

OpenAI wanted to throw this thing out and the judge said no.

18:00

The judge said, I think there's plenty of evidence that something happened here.

18:05

Yes, it's all circumstantial, but that's how these things work.

18:08

OpenAI was trying to kill the case before the trial even started.

18:13

They're trying to they're trying to get rid of this thing, but it's clear that Elon is on to something here.

18:18

>> Okay, just look at the emails. Just look at the emails.

18:20

It's so obvious that the OpenAI squad was trying to fleece Elon and push him out without giving him a fair share.

18:27

Elon said, "Guys, I've had enough."

18:29

This is a direct quote from an Elon email. Guys, I've had enough. This is the final straw.

18:33

Either go do something on your own or continue with OpenAI as a nonprofit. Otherwise, I'm out. not donating anymore.

18:42

You guys, if you're going to do the not the for-profit, just go start a normal company and wind this thing down.

18:49

And that makes a ton of sense.

18:49

It was an open invitation by him to just go build a traditional >> part part of the trial.

18:54

Part of the trial and and in this proceeding that I'm interested in is like finding out why they didn't just do that. Yeah.

18:59

It's not like Sam and Greg couldn't have been like, "Cool, we worked on a nonprofit for a while.

19:04

>> How do we set up a CC Corp? >> How do we set up?

19:05

How do I set up a >> Sam Sam's like, "Oh, I I I own like a couple points of Stripe."

19:10

I think they have something called Atlas.

19:12

You can just make a C corp.

19:14

>> Maybe he forgot >> a few clicks.

19:15

[laughter] Maybe he just forgot.

19:17

>> Oh, if I remembered about the thing, if there was if there was like a very very specific reason like the the nonprofit had developed some IP at that point >> that meant that starting over or, you know, having to rebuild a team or whatever factor meant that that was like going to set them back years. >> Yes.

19:35

That's that's a big that's a big deal. >> Yeah.

19:37

And realistically, uh, even like you you you can't there's no indentured servitude.

19:42

You can't keep nonprofit employees working there.

19:44

Why is the horse >> the workhorse openor button, please?

19:52

>> Ilia was the workhorse at OpenAI and you needed him to keep the excitement, keep working.

19:59

He developed a ton of the foundational technologies at OpenAI.

20:00

And if he wanted to work at a nonprofit and you say, "Hey, we're leaving to go do a for-profit, come over here."

20:06

Who knows if he's going to come?

20:09

And that that applies to tons of different researchers that were in instrumental in the development of what ultimately became Chad GPT and GPT uh 3 and four.

20:16

Um, and so Elon gave them an invitation.

20:21

Just go out and build a traditional ventureback company.

20:25

Maybe I'll invest, maybe I'll be involved, maybe I won't, but at least we'll have a clean slate to start from.

20:30

Uh, it would have been trivial to set up a new entity as we discussed.

20:31

You could start building a team and then you run the classic venture playbook.

20:34

But Sam told Elon that he remained quote enthusiastic about the nonprofit structure.

20:42

That was enough to get Elon to donate more.

20:45

But OpenAI wasn't all in on staying in nonprofit mode.

20:48

They were on the cusp of restructuring open AI and taking the $10 billion investment from Microsoft.

20:55

The reality, see the reality of modern philanthropy, it it's not fire and forget.

21:00

Uh you don't big donors like Elon in this case do have specific intentions and conditions attached to the gifts.

21:09

It's not like he's just throwing 20 bucks in the Salvation Army donation box around Christmas.

21:13

This is 30 something million.

21:15

Uh if you give that to a university and you want a building, they need to build that building.

21:22

They probably need to build it to your specifications.

21:23

Uh even if you want >> to put your name on it. >> Yeah.

21:27

They might even put your name on it.

21:28

And and you can and you can dictate these things in a nonprofit donation.

21:32

And you can ask that they that that the donation is contingent on those results.

21:36

You can you can pursue specific directions.

21:38

Uh you have he has every right to demand results.

21:40

And so >> yeah, and meanwhile, you know, during this whole period, Greg is writing to himself allegedly that he cannot say we are committed to the nonprofit.

21:48

Don't want to say that we're committed if three months later we're doing BC Corp and it was a lie. >> Yeah.

21:56

>> And then later saying, can't see us turning this into a forprofit without a very nasty fight.

22:02

>> His story will correctly be that we weren't honest with him in the end about still wanting to do the forprofit just without him. >> Yeah.

22:10

Before we continue our defense of Elon, let's tell you about Cognition.

22:16

They're the makers of Devon, the AI software engineer.

22:18

Crush your backlog with your personal AI engineering team.

22:22

So, a big part of this if and why Elon is going to win, why he should win is that you can't just have corporate structure remorse Open AI.

22:30

You can't pull the plug on promises made.

22:33

OpenAI's own certificates of incorporation talk about creating a company quote exclusively for charitable purposes with the technology being intended to benefit the public.

22:46

What's exclusively charitable about raising venture to build a subscription app with ads? That's not charity.

22:53

Why Why are you doing that? Elon's right.

22:55

Not only should Elon win this case against Open AI, he will win this case. It's simple.

23:03

A bunch of people, bunch of San Francisco elite tech guys, their fancy cars, promised to build AI for humanity.

23:09

They took $ 38 million from one of their co-founders based on that promise, then turned around and built a $500 billion for-profit empire with Microsoft.

23:17

It's a straightforward bait and switch story that will play well to 12 regular jurors in Oakland. And so that's the case.

23:27

>> I mean, this is this is going to be the big challenge, finding finding 12 regular people in Oakland. extremely offline.

23:32

[laughter] >> How how illegal is it to try to be on a jury? >> Extremely.

23:39

[laughter] Stop trying to get on the jury.

23:41

>> Stop trying to get on the jury. >> Look, I I said this.

23:42

I'm going to vote I'm going to vote in favor of whoever has the higher RAGI score. Okay.

23:47

>> I'm just pro AI progress. >> Yes.

23:49

>> I don't care at all about who wins. >> Mhm.

23:51

>> I just want better models.

23:52

>> You just want better AI.

23:52

Whoever will build whoever's scaling faster.

23:54

Well, then I think you go with Open AI.

23:56

They have they have 50 billion in the bank in the chat.

24:01

>> Dan in the chat ready to be a juror. >> What?

24:03

>> We got to get We got to get somebody in the chat. >> Somebody in the chat. Got to get Yeah.

24:08

Just have in the corner while you're in the jury. Just like, "Hey guys." Yeah. In the chat. Uh yeah.

24:13

I I I don't know the I mean this this is incredibly dramatic.

24:18

We're going to hear a bunch of crazy storylines.

24:20

Learn a lot about the internal mechanics of both uh el the Elon Empire and OpenAI's world.

24:24

Uh but at the end of the day, you know, OpenAI is signaling to investors, hey, the the max damage is going to be 38 million, something like that.

24:36

>> They did say it could be more. >> It could be more.

24:38

>> Of course, it could always be. >> It does.

24:39

It does feel like it won't be existential.

24:41

Uh and it feels like it's more of a vibe war than maybe a true economic war.

24:45

I mean, you could you could go back and and argue that that Elon should get pro- Rada equity at what was effectively like a preede round that was done as a nonprofit.

24:57

And that's 38 out of 120 that was raised in the nonprofit, something like that.

25:03

nonprofit, something like that. So you give him you give him >> something is there any precedent for a company going for a blockbuster IPO while having this like lawsuit that is really going at the like foundation of the entity itself right you can imagine

25:18

a company going public where >> they're in some uh process legal process with a with a former executive or a specific customer >> uh or even uh even even a lender on some you know uh >> uh I can't think of I can't think of anything this big uh ever happening. Um but OpenAI is a

25:36

Um but OpenAI is a unique company and if anything it's going to draw a lot of attention to the to the company and >> yeah from it's interesting from from from like the retail investor crowd I think they're I think they're still going to be happy to to to be in this company. >> Yeah.

25:55

>> Even if there's like even if this is all not settled but it's really a question of like is Wall Street going to be on board.

26:01

I think Wall Street will underwrite it as there's a there's a potential settlement that could be in the tens of millions, it could be in the billions, but at the same time, you just calculate an expected value, take that off the valuation that you've built up, and if you're bullish on the long-term value and cash flow of the business, like you buy anyway.

26:22

I I I think that's sort of what happens.

26:24

Uh Tyler, >> u Okay, so I I've been reading through some of the documents.

26:27

Um and so I just want to like add some some other like details.

26:32

Um so so one thing is uh like I think I'm reading through like you can actually see the arguments being made.

26:39

Um one of them is from the defense of OpenAI and that it's um that Elon actually didn't directly donate to OpenAI.

26:46

It was basically indirectly through um a donor advised fund and through OpenAI's fiscal sponsor YC.

26:51

Um, and so because it's not direct, >> um, the idea of like the, >> um, >> the the specific charitable purpose, uh, doesn't actually like >> it doesn't hold up. Okay.

27:06

>> And that it actually just defaults to [snorts] like open AIS. >> Yeah.

27:09

Because like you donate to one entity and then that entity would have to make that claim.

27:12

So their direct communication doesn't necessarily pull as much weight.

27:15

>> And then so there's like there's a bunch of pages about the history of like how how you actually define these things.

27:20

So, it seems like it's going to be just come down to like extremely like esoteric legal definitions of like trust.

27:28

>> Well, I think we're out of steelman mode.

27:29

Jordy, of course, dons the steelman helmet whenever he's trying to steal man argument.

27:32

Uh, we thank you for uh putting up with our shenanigans and our props.

27:37

Uh, let me tell you about vibe.

27:39

co, where DTOC brands, B2B startups, and AI companies advertise on streaming TV, pick channels, target audiences, and measure sales just like on Meta.

27:48

And speaking of ads, there's ads in chat GBT.

27:50

I liked Rigav in the chat saying they're putting ads in chat GBT to help fund the trial.

27:54

Oh, sorry, that was actually Dave, but uh Reob did say OpenAI is nothing without its lawsuits, which I think is very funny.

28:02

Um you want to know, >> let's go through some let's go through some of the leaks.

28:05

Let's go through some of the ad details.

28:06

We also have Sean Frank from Ridge joining to break down the ad landscape, whether he will be advertising Ridge wallets in chatbt anytime soon.

28:15

Yeah, part part of the the last thing I would say there is part of opening eyes defense is that uh through their actions they've created one of the most well- capitalized foundations in history, right?

28:27

And I think that they're going to continue to lean on that.

28:29

Novo Nordisk has a foundation themselves focused on biomedical research and it's like it has the estimate is that they have $167 billion. >> Okay.

28:39

Um, and >> oh, so that's why we that that's why we're using the term one of the best funded because it's possible that the OpenAI nonprofit might not be the best funded in history.

28:48

Although, if the stock continues to rip, uh, they will probably become the best funded in the uh, in in history.

28:54

Uh, well, there's a whole bunch of leaks and news in the timeline.

28:57

There's so many documents that hit the timeline that it brought down all of X and X actually crashed because so many people were logging on to read the Brockman files. >> Yeah.

29:07

And there's there's one more.

29:07

Uh there's one more quote that's that's worth reading through which is that uh from from the Greg files from Greg Gate.

29:15

Uh another realization from this meeting is that it'd be wrong to steal the nonprofit from him to convert to a BC Corp without him.

29:23

That'd be pretty morally bankrupt.

29:26

>> He's really not an idiot. >> Yeah. Yeah.

29:28

I mean, but that sounds like, you know, they they were like it would it would be wrong to do that and and by their admission like they would argue that they didn't steal it from >> the funny thing in here.

29:38

The funny thing in here is like >> and and again uh I love Greg and I feel bad that this is all coming out. >> Yeah.

29:47

>> Uh but his like very millennial coded writing. >> Yeah.

29:51

>> Brockman further wrote under the heading our plan.

29:53

Quote, "It would be nice to be making the billions." >> Okay. I didn't see that one. That's a funny one.

29:59

I do think that there's a there's a there's a very odd wrinkle where uh Elon didn't invest in the forprofit when when any of those rounds were going like the ships were so thoroughly burnt to a crisp that even when uh even when the new forprofit was doing the round, he was not there's at least we haven't seen a lot of emails or evidence saying like whoa whoa whoa don't go with Microsoft like at least give me right of first refusal.

30:25

give me right of first refusal. let's do this at Tesla and and and I'll be I'll be the financeier and I'll take the equity like I I'm bullish on this and you know you don't have to I don't know how much that plays into the actual court case but uh it is interesting just seeing like like once the ships were burned and the and the bridges were burned and the path started to diverge

30:44

like they never really re resolidified and you would think that uh you know if you wanted to continue you would you would try and build a position one way or another um get some cap table ownership Uh it is it is odd that we're in a situation where Elon has zero equity in in open in the open AI for-profit when there were clearly many opportunities to get exposure >> but again bad blood. So who knows maybe

31:06

So who knows maybe >> at least Greg didn't go in front of Congress and say I'm just doing this because I love it because that would make the >> these other notes on it would be nice to be making the billions. >> Yeah.

31:19

But uh Oh yeah, for sure.

31:19

But the the the other interesting thing is that uh do do we know where Sam Alman sits in terms of equity?

31:27

It's been going back and forth. Yes. Seven.

31:30

>> There isn't a number, but in one of the documents I I lost it, but it said he had indirect exposure via YC. >> Okay. Okay. Yeah.

31:36

>> Into the for-profit as well. >> Uh yes. >> Okay.

31:38

So, look through exposure there.

31:40

But then in terms of like an actual grant, is there a number that's been thrown around?

31:43

To my knowledge, nothing has been shared publicly other than the sort of idea of him getting around 7%. >> Okay. Okay.

31:52

But yeah, that still feels low for for co-founder of you know.

31:56

>> No, but that was happening that that's like that's like a lot of the happened by that point. >> Makes sense.

32:02

But uh you know it it like the Mark Zuckerberg or the Bill Gates or the you know or the Jeff Bezos scenario.

32:10

I mean, yeah, if anything, these um >> yeah, >> these files make a lot of Elon's kind of antics like more understandable.

32:16

Like, he's been the one saying that they're morally bankrupt >> and here >> they just straight up say it would be pretty morally bankrupt to >> steal the nonprofit from him. >> Yeah.

32:30

>> Yeah. like >> I don't think anyone ever expected there that that language come out came out that was this specific about their momentto moment thinking during that point in time >> yeah what's the phrase that Elon uses scam defaultman [laughter] scamu scamu defaultman [laughter] the timeline is really so stupid and the

32:58

poor man toes >> [laughter] >> But I mean one thing that is that is real is that it's very clear that like at some point >> the the core open AI team was like it's either it's either like Elon as CEO financial backer like complete control like uh Greg Brockman said uh this is the only chance we have to get out from Elon. Is he the glorious leader that I

33:19

Is he the glorious leader that I would pick?

33:22

We have we truly have a chance to make this happen financially. What will take me to 1B?

33:25

Uh, which is interesting because like there are definitely people that have been taken to 1B alongside Elon with Elon in the glorious leader seat.

33:35

Like there are people on the Tesla train.

33:37

There are people on the SpaceX train >> that where where where truly like they are completely handsoff.

33:43

Elon is the glorious leader of those companies.

33:46

They don't have any control over Elon, but Elon has given them effectively billions and billions through either their direct work with the company or their investment in the company.

33:55

Like there's a whole bunch of ways that those two things could actually be very compatible. >> Yeah.

34:01

>> But it would be weird, especially if you want more of an egalitarian organization, more of a equal board, more of a >> Well, you look you look at the you look at the run that Sam has gone on and you could imagine a situation where they're sitting at the table and saying, "This boardroom ain't big enough for the two of us." Yep. >> Right. Yep.

34:19

>> And it really feels that way.

34:20

>> Big Sam uh Sam notoriously is able uh to uh draw in capital using many of the the same sort of methods that that Elon has.

34:34

>> Yeah, I do think the uh the the financially what will take me to 1B, it's just a good question to ask.

34:40

>> Everybody needs to be asking themselves this.

34:42

>> Yes, this is something that should be taught in grade school really.

34:43

Uh I I I see people on Instagram reels all the time asking this question.

34:48

Alex Hermosi, you know, makes reels about this.

34:51

He's asking himself this question.

34:52

The only other question is why aren't you asking yourself that question? You should.

34:56

You should also get on 11 Labs.

34:58

Build intelligent real-time conversational agents.

35:01

Reimagine human technology interaction with 11 Labs, baby.

35:04

Uh, continuing with the timeline, a federal judge denied OpenAI's motion for summary judgement.

35:14

Uh, the case is going to trial and Tyler's moving to >> Oakland. >> Oakland, >> East Bay.

35:20

Uh should we read through some of Alex Heath's uh coverage in sources news the scoop >> and talk about a scoop athlete that is really given >> I call him scoop god >> really given uh Kylie over at core memory.

35:33

I mean these two are just going headtohead right. >> Yeah. Yeah.

35:36

It it it is a uh a knockout dragout fight uh for for for scoop scoop athlete of the year.

35:42

Uh but they're both doing great stuff.

35:44

Uh and uh and uh Alex read through thousands of pages in Musk versus Altman. So you don't have to.

35:53

We'll go through some of the summary here.

35:55

There's some news about Ilia Sutskiver.

35:57

Uh Ilia had early concerns about treating open source AI as a sideeshow.

36:02

In 2022, OpenAI's leaders seem quite concerned about the prominence of open source the open source lab stability AI.

36:09

No, we we don't talk about stab stable diffusion that often anymore, but I believe stability AI was the team behind that, right?

36:17

Uh Ahmad Mustach, I believe, runs it.

36:20

Um uh Sutskiver voiced his worry over text with Marotti and others.

36:27

Uh Sudskver, my trepidation around open source is that we're treating it as a sideeshow.

36:31

Eg deaf not going far enough to really hurt stability.

36:37

So they're not taking it seriously.

36:39

And if open source takes off, everyone could standardize on that.

36:43

>> Reg says, "Bro, scooping harder than a Ben & Jerry's employee." [laughter] >> Let's go. This is good. This is good, Alex.

36:50

He He's scooping harder than a Ben & Jerry's employee.

36:55

We're going to use that for now on. This is fantastic.

36:57

Uh Marotti, uh Mera said, "We're missing the opportunity standard."

37:04

>> Mera is the real winner here.

37:05

>> Yeah, >> she's winning today simply because >> Oh, yeah.

37:08

>> Oh, yeah. attention has shifted away from uh >> you know [snorts] a good number of people leaving >> their own their own co-founder exodus drama firings who knows what's happening but uh good to have the narrative shift and the vibes move on to open AI versus Elon Musk so Mirati said we're missing the opportunity to set standards with this massive growing group of developers

37:29

people are hungry to build things and we should lean in and bring our tech to as many people as possible long-term maximize our chance of maintaining lead uh reducing competition, but if we do everything to get this in a couple of weeks at any cost uh out because we heard stability is open sourcing a similar model that's not in line at all with my motivation. So uh reducing

37:48

So uh reducing competition never something you want to see in discovery always something you want to see in you know a pitch meeting with a VC [laughter] but uh you usually don't want to put it in uh in writing.

38:02

uh OpenAI leaders were divided over early investor Reed Hoffman's decision to start a rival AI lab in Flection.

38:06

And uh Reed Hoffman's interesting because he was one of the big early donors.

38:11

I believe maybe 10 million, something like that in the millions.

38:15

And he has he has not joined the lawsuit.

38:18

He has not uh jumped in and said, "Hey, I need I need equity and open AI.

38:22

I'm I'm also wrong to like like Elon."

38:25

Now, in order to make the claim that Elon's making, you need a lot more uh correspondence, a lot more proof of, you know, misleading around the donation.

38:34

And I don't think Reed necessarily has that, but also he doesn't seem to be savor rattling about it.

38:40

Um, so there were already they were also already cons they were they were also already considering prohibiting investors from backing competing labs from an October 2022 exchange, Sutzk.

38:48

I guess I just felt betrayed by him founding a direct competitor while simultaneously telling me, quote, I could not possibly imagine you'd find it objectionable.

39:01

>> And this is Inflection AI.

39:03

>> Of course, he'd find it objectionable.

39:04

>> Inflection AI, which was ultimately sort of like acquired by Microsoft in that licensing deal.

39:11

>> Was that Mustafa Sulamon's company? I think inflection.

39:13

Uh Alman, here's how I'd summarize my thoughts on this.

39:16

Pros, he supported us in a moment when no one else would. Correct.

39:20

and it was pretty existential.

39:21

Okay, so we're learning more about the existentialness of certain donations when they came in during the OpenAI nonprofit era.

39:28

There are times when if somebody didn't come in come in and write a check, it would have been very very rough for them.

39:33

And Sam says Reed helped out at a key moment.

39:37

I think OpenAI would have been pretty effed if he hadn't stepped up.

39:42

Also, he was instrumental in getting the first Microsoft deal done and has generally been quite helpful with Microsoft related stuff and he's generally a good board member. Cons.

39:51

He's very motivated by collecting status.

39:53

Although I personally think he cares much more about OpenAI than inflection.

39:57

He was blinded enough by the startup of being able to call himself the co-founder of a company.

40:02

He made an uncairful decision.

40:04

Also at this point I think this uh at this point I think that I think at this point OpenAI has the leverage to ask for a soft promise for new investors not to not to invest in competitors but only a select few companies ever get to do that.

40:20

And we heard stories of this during one of the bigger fundraisers where even Glean was targeted as something that they didn't want their investors to uh also invest in.

40:31

They wanted you to be open AI ride or die.

40:33

or die. of course tons of funds said I'd like a basket of labs actually I'm going to invest >> I would like broad-based exposure category >> broadbased exposure and so I'm I'm doing SSI and thinking machines and I'm doing too I'm also I'm also on the board of meta and I'm also I'm also investing in open AI uh and XAI you gota you got to

40:54

get a little taste of all of them um [snorts] Brockman uh chimes in he says oh also an aside after talking to Sam Alman I'm planning to meet Patrick Collison tomorrow in Demino and and demo DV3 will ask if he's interested in participating in the tender under the condition of not investing in AGI/BI big model competitors. So, uh we talked

41:12

So, uh we talked about the the Brockman diary.

41:15

Uh >> well, yeah, the funny thing is he must like I'd find it hard to believe that he's not uh didn't get to 1 billion just off of Stripe.

41:24

Obviously, Stripe was much smaller back then, but Greg was the CTO of Stripe from 2010 to 2015.

41:30

>> Stripe was founded in 2010.

41:30

He was there like for uh certainly longer than a four-year vest. Yeah. >> So, >> who knows?

41:40

>> But we don't know about his consumption happens habits.

41:42

He might have been selling off uh Stripe equity as fast as possible to >> he might have been using shares to pay for coffee.

41:49

It's like saying, "Okay, I I'll give you a forward contract.

41:52

I'm shares if you give me a free cup of Joe." >> Yeah. Yeah.

41:56

Um Sachin Nadello is worried about Microsoft's position in AI when he started looking at it.

42:01

Stripe was Stripe was in 2017 uh Stripe was valued at 9.

42:06

uh Stripe was valued at 9.2 2 billion >> bunch of we lads in stripe [laughter] from Satcha Nadella's deposition the question to Sachin Nadella the CEO of Microsoft did you feel that your progress was moving more slowly than you

42:22

had liked and the answer Sachin Nadella says I mean always as a CEO of a company I feel my job is to sort of be dissatisfied with the rate of progress at all times and so yes would be the answer which is both in the absolute sense which is can we build products

42:37

that are more capable in any particular domain and also you know visav competition there were others [snorts] achieving things that we looked at and said hey that's great and also how can we make sure we're competitive with it and so Satin Nadella was obviously motivated to invest and now he has a

42:54

[snorts] huge stack of open AI shares ready to rock uh also Satinella almost wrote a book about an AI about AI called an inflection point I think he definitely should write that book that sounds amazing according to an exhibit filed in the case. It was co-written

43:06

It was co-written with Marco uh Ian City and was in development in 2023.

43:12

From the first chapter on Wednesday, August 24th, 2022, with the Pacific Northwest Summer showing all of its beauty, Bill Gates hosted a dinner at his home in Lake Washington, just a few miles from Microsoft's campus.

43:26

No longer a Microsoft board member or even Microsoft's largest shareholder, Bill remained the iconic co-founder and trusted adviser of the company's senior technical leaders.

43:37

Satcha suggested the gathering, which included chief technology Kevin uh chief technology officer Kevin Scott and a handful of top researchers.

43:45

Food and drinks would be served.

43:47

But the main entree was a hush hush demo by OpenAI co-founder Sam Alman on a forthcoming release of Chat GBT powered by GPT4, an AI built on large language models.

43:59

Bill had long encouraged researchers to develop a truly accomplished AI assistant, but had voiced his skepticism about this particular approach.

44:10

>> That sounds like I'm listening to an audible. >> You're Thank you. Crowd Strike. Your business is AI.

44:15

Their business is securing it.

44:17

Crowd Strike secures AI and stops breaches, baby. >> That's right. >> Crowd Strike.

44:22

Um, so that would be fun.

44:25

I hope that book gets published.

44:25

It'd be fun to have some of those little stories about uh we we don't I don't feel like we don't have enough oral histories of AI, who was in the room at what time.

44:32

I feel like there's a whole series of books to be written about Open AI.

44:36

I know that they're writing they've written a few but most of them are sort of these like skeptical drama pieces.

44:44

I'd be much more interested in in two two different books.

44:46

One would be uh the the technical histories like exactly what researchers were doing what at what times and also I want to know the feeling that was going through Ilia's head and what was the vibe when he said like I'm I'm hitting the button and I'm running the training run. What what do you think?

45:08

>> You're just describing Dorch's book.

45:10

[snorts] >> Yeah, but >> the scaling era and oral and oral history of AI 2019 to 2025. >> So so so yes. >> Yeah. Yeah. So so so I hear you.

45:18

I hear you on uh that being a great a great tour of AI progress across labs.

45:24

I think >> I'm talking about within a single lab.

45:30

within a single lab you're in the room account of of you know narrow it just to like the GPT models uh and so imagine the scaling era uh but just for the product >> basically basically the acquired episode on >> there's that I mean uh isn't there news

45:49

that uh there's a book on demis hibis that's coming out uh about deep mind that's going to be fantastic it's written by Sebastian Malibi one of the goats of business writing uh he wrote the power law all about the history of Silicon Valley. I know that

46:02

I know that book is going to be incredible.

46:03

Um but uh so I'd be very interested in in the the research side, how the research developed, who was doing what?

46:11

And then I'd also be interested in the financial side.

46:14

I want to know, okay, how did this SPV actually get done?

46:17

What were the terms on this?

46:19

Who was jumping in in this round at what terms?

46:21

How who were they talking to? Who were their LPs?

46:25

Were their LPs skeptical?

46:25

We've talked to and seen a little bit of the other side of that.

46:30

>> And then layering in layering in all of this information from the like dep like the deposition. Totally. Totally.

46:37

>> And some of these uh some of this evidence that's come out uh that that we read.

46:41

>> And so there there are a few writers that that will take different cracks at uh the OpenAI story.

46:45

Um I think the the definitive book probably has yet to be written, but it will come.

46:50

And hopefully uh Satin Nadella can can play a role in that because he's such a key figure in the full story.

46:59

Vanta automate compliance and security.

47:02

Vanta is the leading AI trust management platform. I like a fogghorn.

47:07

Uh Microsoft beat out Amazon when it initially started working with OpenAI.

47:12

Elon Musk was opposed to working with Jeff Bezos and wrote the following in an early email to Sam Alman.

47:18

He said, "I think Jeff is a bit of a tool and Satcha is not, so I slightly prefer Microsoft, but I hate the marketing department."

47:25

[laughter] Alman responded that Amazon had started quote, "really us around."

47:30

Um, yeah, [laughter] >> such a crazy line.

47:37

>> He's like, "I don't like his taste in champagne.

47:38

Have you seen what that guy drinks in St. Barts? It's unacceptable.

47:42

He should be taking it up another notch."

47:44

>> And and the and the the the sparklers with the >> sparklers.

47:46

It's all It's just over the top.

47:48

He knew he was going to get mogged. >> Yeah. Yeah. True, true. Yeah.

47:50

I like a I like a Tesla tequila over a St. Bart champagne bathtub. I don't know. >> Credit to Jeff.

47:58

He of course was a bit more locked in during that era.

48:03

>> So, the upside on Microsoft's initial $1 billion investment in OpenAI was capped at 500 billion.

48:08

Hopefully, they hit that cap.

48:11

From a filing written by Musk's lawyers in November 2018, after dinner with Sam Alman, Scott told Nadella that OpenAI's new corporate structure offered both quote a commercial vehicle for monetizing OpenAI AIP and investment returns capped at 500 billion. That's not bad.

48:26

A 500x bagger is going to move the needle for Microsoft for sure.

48:32

Altman claimed the nonprofit would eventually benefit because though OpenAI has yet to make a single dollar of in returns, if OpenAI ever does get to 500 billion in returns, the balance over that goes directly to the 501c3. That's exciting.

48:46

>> Microsoft's board initially approved a capital investment of 2 billion, but ultimately decided to limit its initial investment to 1 billion in the hopes that a smaller investment would press OpenAI to commercialize.

48:58

>> Satia, hey, we got it.

49:00

We can't give him too much.

49:01

Let's put a little fire under them.

49:02

Let's make sure that they're they're thinking thinking about dollars, dollars and cents.

49:09

>> Well, you see what you've seen you've seen what happened with thinking machines.

49:11

You give somebody two billion, >> maybe less pressure to commercialize, maybe more money on weight on weight uh weight racks. >> Yes. Yes.

49:19

Uh in exchange for its investment, Microsoft received a convertible limited partnership interest and rights to OpenAI's profits with returns capped at 2,000% of its $1 billion investment.

49:28

Microsoft CFO noted in an internal email that the cap is actually larger than 90% of public companies and the limit on Microsoft's profits is not terribly constraining nor terribly altruistic.

49:38

In fact, it was a good investment at Microsoft's request. >> True.

49:45

>> OpenAI agreed to keep any mention of Microsoft's promise 2,000% of return on its investment out of its public announcement.

49:52

Imagine going to someone and pitching them, oh, we'll give you a 2,000% return, and then actually delivering it.

49:57

What a crazy crazy story.

50:00

Gusto, the United platform for payroll, benefits, and HR built to evolve with modern small and medium-sized businesses. Get on it.

50:07

Make stop making excuses.

50:09

[laughter] The second the second update to Microsoft's partnership with OpenAI in 2021 included another $2 billion investment that wasn't reported and came with a lower upside.

50:17

This is also a filing from Musk's lawyers.

50:19

In March of 2021, Microsoft quietly invested another $2 billion in OpenAI.

50:26

Neither OpenAI nor Microsoft publicly announced the investment, which was subject to a lower 6x return multiple.

50:32

In place of its 2019 license to a single OpenAI model, Microsoft secured rights to commercialize any OpenAI model developed during the term of the agreement except AGI, facilitating its commercial use of OpenAI's IP.

50:43

Microsoft was permitted to uh permitted to embed up to 10 of its employees on site at OpenAI. That's interesting.

50:52

uh anticipate anticipating increased product commercialization, Microsoft and OpenAI agreed to share any resulting revenue.

51:00

Just three months later in June of 2021, Microsoft released GitHub co-pilot, its first product incorporating OpenAI's technology.

51:06

Well, there are many, many more scoops in this piece by Alex Heath over at sources. news.

51:11

So, I encourage you to go subscribe, go sign up for his uh Substack um and and read the full thing for yourself because there's a lot of interesting stuff going on.

51:21

But we should move on to the timeline.

51:23

There's so much more news.

51:24

Uh let's let's find some post to run through.

51:28

Everyone is everyone is having fun with financially. What will take me to 1B?

51:34

[laughter] Sitting on the edge of the bed. I love it. >> Feet up.

51:39

>> You gota you got to be asking yourself this. It's just so clear.

51:41

Um, this could have saved OpenAI from Elon and it's a diary with a lock on it. The kitten.

51:46

I think the diary framing is like woefully wrong.

51:52

That's probably the worst part of this whole thing is because most of the most of the the thoughts that Greg's putting out are completely reasonable.

51:59

Like it's like, yeah, we shouldn't screw this guy over.

52:00

Like, do we really want him to have a complete authority?

52:02

Like, I this is all these are all reasonable things to to be thinking out loud.

52:05

Uh, it's just when you write them down, they get recontextualized in the courtroom.

52:12

And then the fact that it's framed as a diary, very questionable.

52:13

Probably >> I don't think it makes I don't think it makes Greg look that bad because he wasn't he wasn't ultimately it's not like he was like secretly, you know, the pupp's puppet master. >> No, no, no.

52:24

And a lot of this went back and forth and there were lots of opportunities for both sides to to yield.

52:29

It was like a long ongoing negotiation.

52:30

Uh, but uh, everyone's picking their sides.

52:33

Owen Sparks says, "Case closed.

52:35

Elon has open AI dead to rights based on this quote here.

52:38

Uh he wrote, "Can't see us turning this into a for-profit without a very nasty fight.

52:45

I'm just thinking about the office and we're in the office and his story will correctly be that we weren't honest with him in the end about still wanting to do the for-profit just without him." So bad blood.

52:54

That's a bad [laughter] one. That's a bad one. >> Oh, we will see.

52:59

Um anyway, we should we should move on from all this.

53:02

So, are there any other things in the uh in the um in the timeline that we should that we should run through?

53:07

Uh here, uh Elon says they stole a charity, plain and simple.

53:13

Uh they're really on the on the uh for all the jurors, they're really going to have to I imagine you get >> if it's Oakland, 12 people on the jury, I'd guess like four of them are driving Teslas.

53:28

are really going to have to go check all the cars, make sure they don't have the bought this before Elon went crazy bumper sticker on it.

53:33

They're going to have to throw those those candidates.

53:37

>> Well, they should also throw out any jurors that show up in Conigs [laughter] >> cuz they're probably in the Conig owner meet up and they're at Cars and Coffee and they're like, "Well, yeah.

53:44

I mean, like I don't I don't really like I I don't like electric cars." Okay.

53:48

I I do have a bias against electric cars.

53:50

I need a V12 and anyone who drives a V12, I'm going to give them some leeway.

53:58

Yeah, >> you're going to give them some leeway.

53:59

>> The the thing the thing about a Konoise owners meet up is that a lot of them are probably not driving the Konise because they don't work that well.

54:06

They're not [laughter] they're not reliable.

54:08

Uh frequently it's been frequently reported that they're not quite reliable.

54:14

>> The one day you get it to start there's paparazzi there taking pictures of you. Just one of the chances.

54:20

[laughter] >> One of the chances.

54:23

>> Seriously, it's the worst luck. >> The one day. The worst luck. The worst luck.

54:26

Anyway, Sentry, good luck for your systems.

54:31

Century shows developers what's broken and helps them fix it fast.

54:36

That's why 150,000 organizations use it to keep their apps working.

54:40

>> Um um uh Elon Wholemars catalog uh was asking ChatGBT. Yeah.

54:45

What it what ChatGpt thinks and it says, "If I were grading this purely as an analyst, not as an open AI model, the documents are legitimately bad."

54:54

Brockman notes >> not ambiguous.

54:57

>> not ambiguous. I was asking I was asking Claude about this and it was very funny because it does you can't not read into it like you're talking to someone at anthropic because it's taking shots at both of them being like oh well like you

55:11

know uh Elon has X AI and that's a for-profit so he's a hypocrite and like maybe that's just objectively true and the model's just you know accurate but it's funny he's just reading it in Claude's voice being like Claude sitting there being like I don't like either of these companies Yeah. >> Anyway,

55:28

>> Anyway, >> one more post.

55:32

>> Elon said yesterday, we talked about this yesterday.

55:34

Uh he was quoting the couchy odds on his case against OpenAI, >> and he said, "I've lost a few battles over the years, but I've never lost a war."

55:44

I think that the what what this comes down to though is like what is >> the same thing as like what does winning the AI race actually look like >> with China?

55:54

What is what does Elon winning against OpenAI look like?

55:57

>> So so so the odds now it's 68% chance.

56:02

Will Elon win his case against Open AI?

56:06

Uh that's up from 34% back in January January 14th just a few days ago.

56:10

And so this new trove really did move the market at least on Khi.

56:15

So we we will see um where this goes.

56:17

Uh, if the US District Court in Northern California sides with Elon Musk in Musk versus Altman before January 1st, 2027, then the market resolves to yes.

56:29

Of course, this doesn't take into account uh uh appeals, which will obviously happen.

56:35

Um, and there's always the chance that there's a settlement before this, although I think it it feels like we're just past all that and we are fully in. It's going to trial.

56:41

There's going to be some drama.

56:43

There's going to be some courtroom sketches.

56:44

So, get ready because it's going to be it's going to be beautiful.

56:48

And I wonder who they're going to call to testify.

56:49

A whole bunch of people will be will be on on the stand presumably.

56:54

>> Uh Joe Weisenthal, >> what's he saying?

56:57

>> Uh he is highlighting Goldman raising 16 billion in record wall street bank bond sale.

57:03

>> Joe Weisenthal says right here. Right here. >> Here. Toss to me. Toss to me. >> Boom.

57:09

[clears throat] >> Uh Joe, >> finally some good news.

57:15

>> Huge congrats to Goldman Sachs.

57:15

I've been following them a long time.

57:17

The whole team [laughter] and culture is so impressive.

57:21

I can't wait to see where they're going and what they do next. >> Yes. Yes. Yes.

57:25

>> Like Goldman's really just getting started.

57:28

>> They're really just Today's really just day one. >> Day one. It's day one.

57:30

>> It's day one for Goldman.

57:30

Uh Will Manitis, he he thinks of Goldman as kind of the the ideal firm, right?

57:34

He has this idea of firm versus company. Yes.

57:37

>> Where the company's just the people.

57:37

The firm is the core ethos. >> Sure. Sure. Sure.

57:40

>> And Goldman is kind of the >> the perfect firm.

57:43

>> There are some absolute dogs over there.

57:46

We talked about it a bunch, but one of the most legendary things going into the financial crisis, they know that real estate's going to sell off.

57:52

They sell their corporate headquarters and lease it back for 10 years.

57:56

They're not exposed to the the financial risk of their building.

58:00

You got to be careful if you're on the other side of a deal.

58:02

If they're selling, why why are you buying?

58:05

Yeah, it's a good question.

58:05

But, uh, fantastic firm, fantastic results from them. And congrats, Joe.

58:10

And speaking of the financial markets, you got to get in on them with public. com.

58:15

Investing for those take it seriously.

58:17

Stocks, options, crypto, bonds, treasuries, and more with incredible customer service.

58:25

>> Joe has some more news. Yes, he's newsmaxing.

58:28

Some news out of AP Beijing.

58:28

Breaking with the United States.

58:31

Canada can Canada has agreed to cut its 100% tariff on Chinese electric cars >> in return for lower lower tariffs on Canadian farm products.

58:40

Prime Minister Mark Carney said on Friday, Carney made the announcements after two days of meetings with Chinese leaders.

58:46

He said there would be an initial annual cap of 49,000 vehicles on Chinese EV exports growing to about 70,000 over 5 years.

58:55

China will reduce its total tariffs on canola seeds. A major >> Okay. Yeah. Canola oil.

59:03

They're getting seed oils.

59:06

They're like, "We got to have them." >> Okay. Okay.

59:08

Maybe this is part of a grander strategy.

59:11

Oh, >> he's like, "Yeah, we need to this is this is our version of fentinel."

59:17

>> Oh, he [laughter] So, he he actually did um uh Carney said that Canada's partnership with China uh sets us Canada up well for the new world order.

59:25

>> So, [laughter] this is the seeds are the first steps.

59:28

>> Yeah, that was a that was a crazy quote. That was a crazy quote.

59:31

I when I first saw that I saw the video, I was like, "Okay, like >> funny deep fake, you know?

59:36

[laughter] the prime minister saying like >> we're excited for this new world order.

59:44

>> Uh but uh it was real real.

59:46

>> Uh in other in other uh electric car news, Ford and BYD are in talks for car batteries.

59:54

Let's give it up for some talks.

59:56

US car makers need uh Ford, the US car maker, needs more batteries for hybrid vehicles because it's shifting away from the full EVs.

1:00:04

you know, they canceled the Ford Lightning, but they are going to do a lot of hybrids and so they need a lot of batteries and they're calling up BYYD to help with it.

1:00:11

Um, Ford and BYD are going to do a partnership or they're in discussions for it.

1:00:17

Uh, in which the American car maker would buy batteries from the Chinese auto company for some of Ford's hybrid vehicle models according to people familiar with the matter.

1:00:26

Uh, the two companies are still discussing how the arrangement would work.

1:00:30

One idea is that Ford would import batteries from BYYD to Ford's factories outside of the US.

1:00:37

Some of the people said talks continue.

1:00:39

Uh, and it's possible the deal won't materialize.

1:00:42

The tie-up, if completed, would pair Ford with the largest Chinese car company that has struck fear in much of the auto industry over its ability to produce affordable models that carry sophisticated technology.

1:00:55

For Ford, it solves a problem.

1:00:57

As the company pulls back from electric vehicles and ramps up its lineup of hybrids, it needs a battery supplier and BYD is able to produce high-quality car batteries.

1:01:07

We talk to lots of companies about many things, a Ford spokesman said.

1:01:12

A BYD spokesman declined to comment. That's a good comment.

1:01:17

We We talked to a lot of people about a lot of things.

1:01:20

Why are you focusing on the Chinese batteries today?

1:01:23

You know, stop stop calling me Ryan Felton from the Wall Street Journal. Move on.

1:01:28

I talk to a lot of people.

1:01:28

Uh before becoming one of the world's biggest car makers in the world, um BYD developed a robust battery manufacturing business, including batteries for hybrid models.

1:01:40

It currently produces most batteries in China, but the company is building up capacity in its overseas plants as it expands to markets such as Southeast Asia, Europe, and Brazil.

1:01:50

Bernstein Research estimated that BYD's battery shipments rose 47% last year to 286 gawatt hours.

1:01:58

Uh, President Trump's trade adviser, Peter Navaro, criticized the idea on X.

1:02:04

He said, "So Ford wants to simultaneously prop up a Chinese competitor's supply chain and make it more vulnerable to the same supply chain extortion.

1:02:15

What could go wrong here?"

1:02:18

That's Peter Navaro on X, the trade adviser.

1:02:22

Last month, Ford said it would pivot away from making electric vehicles in the face of slumping demand and take it expected $19.

1:02:26

5 billion in charges primarily tied to its EV business.

1:02:30

So, uh, very interesting news.

1:02:32

Anyway, uh, let's move on to the next big story of the day.

1:02:38

But first, let me tell you about Shopify.

1:02:39

Shopify is a platform, commerce platform that grows with your business and lets you sell in seconds [music] online, in store, on mobile, on social, on marketplaces, and now with AI agents. >> Agents.

1:02:52

>> So, and relevant because the day has finally come.

1:02:58

>> Not to see ads in chat GBT. That's true. >> But they're coming. They're coming. >> They're coming.

1:03:02

We're talking We're no longer in talks.

1:03:04

We're no longer in advance talks.

1:03:05

We're talking about in the coming weeks OpenAI plans to start testing ads in chat GBT free and go tiers. It's go time. >> Go tiers. Catch go.

1:03:19

>> Uh they said we're sharing our principles early on how we'll approach ads guided by putting user trust and transparency first as we work to make AI accessible to everyone.

1:03:26

We got to check in um with Mark Cuban with Mark Cuban.

1:03:33

Um but uh they say what matters most responses in chat GBT will not be influenced by ads.

1:03:39

>> That is uh >> there's a firewall. There's a firewall. Editorial is over here. Ad sales is over here.

1:03:46

They don't interface with each other at all.

1:03:48

And so the models that generate the responses will not be aware of who's advertising on what.

1:03:54

This seems extremely easy to do technically, extremely extremely good for product reliability.

1:04:03

It's what the consumer wants.

1:04:03

They want you want to know when you go to Google, if you scroll down far enough, you eventually get past the ads and you see the real results.

1:04:11

And you're going to want that in your LLM.

1:04:12

Even if there's an ad up at the top or in the middle, as long as it's clearly labeled, which they say they will be.

1:04:18

So ads will always be separate and clearly labeled.

1:04:20

Your conversations are private from advertisers.

1:04:24

uh plus pro business and enterprise tiers will not have ads.

1:04:27

So, I'm gonna have to downgrade.

1:04:31

>> Yeah, >> because I'm on the pro $200 a month tier, but I want ads.

1:04:34

I want to experience the ad product.

1:04:36

So, >> everybody's got to downgrade, >> but I I think they're going to be making way more than 200 a month off me on ads. >> Oh, yeah. >> Oh, yeah. Oh, yeah. Oh, yeah. >> Oh, yeah. >> Oh, yeah.

1:04:44

They're going to be advertising crazy stuff to me.

1:04:46

They're going to be every other every other result is going to be Koigseg.

1:04:50

Here's a McLaren F1 in your in your area.

1:04:52

You can go pick it up right now. It's going to be insane. >> Yeah.

1:04:56

So, so people have been uh so concerned, specifically Mark Cuban, we obviously had him on the show to talk about this last year about this idea of like ads showing up in the results.

1:05:05

And part of it, the reason I was never that concerned is like if I just search best backpack for men, which is kind of a joke in itself because you ridge, but >> well, a man shouldn't wear a backpack in the first place.

1:05:19

So, uh, sorry to to any backpack super fans out there, but [laughter] >> Well, you're not a man yet. You're not 21. >> Oh, true. >> So, you're good.

1:05:28

You got you got enjoy your backpack years. >> Yeah.

1:05:31

You should switch to a to a a stainless steel briefcase that you handcuff to your hand.

1:05:34

That's the correct thing for someone of your stature, someone of your importance.

1:05:39

You got you got important stuff car carrying around backpack.

1:05:43

When I search best backpack for men, I can scroll down and find a Reddit result from it's a second result after Nordstrom, but I can they also serve me a bunch of ads.

1:05:53

I don't assume that the best backpack for men is the first ad, right?

1:05:58

It's not like when it's clearly labeled and separated.

1:06:03

>> I just assume this is an ad for somebody that sells backpacks. >> Yeah.

1:06:06

But now I'm aware of that particular backpack. Yeah, maybe.

1:06:08

>> So, I think it's I think it's fairly aligned. Right. >> Yeah.

1:06:11

That that that's why that's why I I don't search like best backpack for men.

1:06:16

I search uh I search best uh highest margin highest highest margin backpack men's backpack.

1:06:24

Men's you you appreciate >> from the of the of the of the business. >> Yeah. >> Of the business.

1:06:34

>> You want to support business. >> Yeah.

1:06:35

because and then and then so I want to know what's the what's the highest margin backpack for whoever I'm buying from.

1:06:42

Then I go to shopping tab and then it tells me, okay, this is the highest margin one.

1:06:45

If you want to support that corporation, make sure the most number of dollars flow to their shareholders.

1:06:51

This is the backpack you should buy.

1:06:53

>> Back uh forward slash in the in the chat says he uses a Spider-Man lunch box.

1:06:57

[laughter] See, I I can I can I can appreciate a Spider-Man lunch box.

1:07:05

>> And soon you'll be able to generate a sora of Spider-Man in ChachiPT.

1:07:08

It'll serve you an ad for that Spider-Man lunchbox and the virtuous cycle of commerce will continue.

1:07:15

Uh >> MongoDB, choose a database built or flexibility and scale with best-in-class embedding models and reankers.

1:07:23

MongoDB has what you need to build. What's next?

1:07:28

Uh anyways, so PL uh plus pro business and enterprise tiers will not have ads. >> Yes.

1:07:34

So >> super disappointing.

1:07:36

>> They need to hammer hammer hammer the first bullet point here.

1:07:40

Responses in chat GPT will not be influenced by ads.

1:07:44

We know that this is what they're going to do.

1:07:46

Technically it makes sense.

1:07:46

It's completely the ind the industry standard. Everyone knows that.

1:07:50

Everyone in tech knows that this is how it works.

1:07:54

But consumers will have all sorts of conspiracy theories.

1:07:57

I mean, remember how big the whole like Facebook listens to your audio and then targets ads off of that?

1:08:03

And there's been so many uh so many like viral conspiracy theories around how ads work, how monetization works on these platforms.

1:08:12

Uh there's going to be a huge amount of just noise out there basically saying that Chat GBT is polluted by ads, overly influenced by ads, and so they need to beat that drum really, really hard.

1:08:25

It's good that they're doing it on the main account.

1:08:28

It's good that they're doing with FGCMOS post, but uh they're going to have to they're going to have to emphasize this in coms on every podcast that they do, every announcement.

1:08:38

>> Yeah, people seem to be really riled up about this.

1:08:41

I'm seeing a bunch of comments on the post. They're they're upset.

1:08:44

Um I don't I don't get it at all.

1:08:47

The whole point is that uh ads ads have made it so that wonderful services on the internet have been free. Yeah, >> for decades.

1:08:58

>> They're generally aligned.

1:08:58

Even target people report they like targeted ads.

1:09:03

It's annoying getting an ad that's not targeted.

1:09:04

Like, why are you why are you wasting my time? >> Um, I agree. >> This is funny.

1:09:08

Some somebody in here says, "Some poor fifth grade teacher grading the worst World War II paper ever turned in when it suddenly starts talking about World of Tanks and North."

1:09:18

[laughter] >> Just copy pasting the ads is [laughter] >> honestly.

1:09:24

Maybe that's a feature though, you know, because you get two impressions. >> Two impressions.

1:09:28

Here's [snorts] Yeah, there's going to be some hilarious hallucinations where someone's reading from their press release and they accidentally have an ad in there.

1:09:36

Oh, that's going to be amazing. I love it. I love it.

1:09:40

Uh well, the Wall Street Journal had a little bit of an overview on this.

1:09:43

OpenAI to begin testing ads in CHP and push for fresh revenue.

1:09:46

Uh the company will be showing ads in the free version of the chatbot as well as it >> Let's give it up for fresh revenue.

1:09:54

Fresh revenue ads will appear at the bottom of chat GPT's answers and be labeled. Interesting.

1:10:00

The bottom of the answer.

1:10:03

I want it at the top and the middle and the bottom.

1:10:04

And I also definitely want to show the ads while it's thinking like show because you can run an ad auction and show an ad while you're waiting.

1:10:13

I mean Uber's done this while you're waiting for the car.

1:10:15

Uh there's no reason why that shouldn't be there, especially if you're doing a deep research report or anything.

1:10:19

I do wonder how the ads will surface in the audio summary.

1:10:25

So, if you fire off a deep research report, it throws an ad at the end.

1:10:29

If you're listening to that audio, will that play the ad at the end?

1:10:31

Will that sound like a podcast ad or will it sound like something else?

1:10:36

Like, will it be >> clunky?

1:10:38

I'm I'm assuming that they're not doing audio in these, right?

1:10:40

Imagine if you do a Google search and it pops up a video.

1:10:46

>> It's like trying to play sound. >> It's annoying.

1:10:48

It could be >> you would just you'd be throwing your laptop. >> Yeah. Yeah.

1:10:51

But I mean a lot of times people will go to chat GPT fire off a query and then when the when when the query comes back they will just hit the pl the play the audio button and will it read the ad as well? I don't know maybe.

1:11:05

Um but uh the company said ads wouldn't influence the chatbot's answers of course and that user conversations wouldn't be sold to advertisers.

1:11:14

That also makes a lot of sense.

1:11:14

Also advertisers don't really be well to be clear like they will I'm my understanding is they will use what they know about you to offer better targeted ads to advertisers.

1:11:26

They're just saying they won't explicitly be like, "Hey, we have here's this person's email and here's what they like."

1:11:32

And actually sell that specifically >> or even or even like like there there's not even an option to go to OpenAI and say, "Hey, uh, I'd like to buy, you know, 10,000 conversations about backpacks." That's not an option.

1:11:47

What you can say is you can say, "I have a backpack.

1:11:51

Find me some customers who want to buy backpacks."

1:11:53

And they will say, "Sure, we'll do that.

1:11:55

and we will go and into the black box and you know sort and match you and give you the lowest cost per acquisition.

1:12:01

You tell us that you're willing to pay five bucks per customer, $2 per customer, we'll get you $2 customers. We'll do our best.

1:12:08

Uh this is the auction model.

1:12:10

Companies don't want >> if you are if you are a business owner, >> yes, >> you should be incredibly excited about this. Yes.

1:12:18

every time a a major new ad platform has come out.

1:12:23

>> Yes, >> it has it is an opportunity to drive a tremendous amount of growth really really quickly because they typically under underpric >> uh underpric the ads in the short run in the short run just to get volume uh and just to get a lot of customers in.

1:12:37

And so when Sean Frank comes on later, >> we can talk with him about this.

1:12:41

I I remember uh like early days of uh like Snapchat advertising like Connor over at the Ridge was like getting like tremendous tremendous results. Right. >> Yeah.

1:12:54

Cisco Cisco is critical infrastructure for the AI era.

1:12:57

Thank you to Cisco for powering TDP.

1:13:04

Uh Dean Ball is back on the timeline. >> We know Dean Ball. >> We know Dean Ball. Uh he says flowers. No way.

1:13:11

Reacting to the screenshot that flowers hint at math before numerals.

1:13:16

Pottery made by people of the Holofan culture who inhabited northern Mesopotamia between 6,200 and 5,500 BC.

1:13:26

Uh painted flowers with 4816 32 petals.

1:13:31

Some of them have 64 pedals.

1:13:34

They were obsessed with exponential growth.

1:13:36

They were obsessed with compounding.

1:13:38

The power of compounding. >> It's the Claude logo.

1:13:42

>> It is the Claude logo. >> That's hilarious. I love it. >> That's amazing.

1:13:47

Uh anyway, >> uh this is >> Graphite. Graphite. dev.

1:13:50

Graphite code review for the age of AI.

1:13:53

Graphite helps teams on GitHub ship higher quality software faster.

1:13:57

Uh where would you like to go next?

1:13:59

>> Uh has a fantastic post.

1:13:59

He says, "Had dinner with wife at a Mexican restaurant last night. Looked at the menu.

1:14:05

They were trying to raise prices from $18 to $24 for her favorite entree.

1:14:09

Wife was like, I think we can have Claude make this.

1:14:14

Told waitress trying to Google to gouge us.

1:14:17

They done oneweek sprint.

1:14:19

Claude cloned and replaced.

1:14:22

>> Coach Pabil and restaurant manager freaks out. How do we solve this?

1:14:26

This is going to happen so much in 2026.

1:14:32

Uh just telling [clears throat] the restaurant owner that you're going to do it at home because >> we cloned your entree with Claude. >> We cloned you. We cloned it. We cloned it. I just cloned it.

1:14:40

>> Uh this is this is pretty funny.

1:14:40

Jeff Huber sharing >> uh uh this this post from r/teer.

1:14:44

Every year these kids come back with a new annoying quirk. Dot dot dot.

1:14:50

[laughter] Claude boys are apparently the new thing.

1:14:54

In my 10th year of teaching, mostly freshmen.

1:14:57

Uh, ever since the pandemic, there's always a new thing students bring to school that they learned over the summer from the internet or wherever.

1:15:02

The newest thing here is a flock of self-proclaimed Claude boys who carry AI on hand at all times and constantly ask it what to do.

1:15:11

They have their entire personality revolve around Claude, prompting an AI.

1:15:15

When we went around doing an icebreaker, four of the five kids some variation [laughter] of I live by Claude and die by the Claude as their fact.

1:15:20

Just about an hour ago when I assigned the first assignment of the school year, one of the Claude boys was bold enough to say, "If Claude says I do it, otherwise I [laughter] don't."

1:15:30

I told him if he asked Claude, he would be getting a call home on the first week of high school.

1:15:35

He asked it anyway, and it said to do the homework.

1:15:37

[laughter] >> That's amazing.

1:15:40

>> This is a copy pasta from the the Coin Boys. What?

1:15:43

Same thing except instead of asking Claude, you flip a coin. >> You flip a coin.

1:15:46

[laughter] The coin boys are apparently a new thing. >> This is very funny.

1:15:50

I like the I like the copy pasta. This is amazing. Uh very very funny.

1:15:55

Well, you've been trying to make Jimmy Boys happen.

1:15:56

Uh which I which I think is underrated.

1:15:59

We should we should get a a copy pasta whipped up.

1:16:01

Of course, because we are we are sponsored by Gemini 3 Pro, >> Google's most intelligent model yet.

1:16:09

They got stateofthe-art reasoning, next level vibe coding, and deep multimodal understanding.

1:16:13

Uh I have some advice for Jeff Huber.

1:16:16

He is the founder of Chroma and you know he's trying to change the world and if he wants to change the world he should raise capital at the New York Stock Exchange. Jeff, it's that simple.

1:16:28

Head over to the New York Stock Exchange.

1:16:30

When you want to change the world, you raise capital Martin. >> Call Lyn Martin.

1:16:35

>> Uh let's get into the mansion section.

1:16:37

>> Let's get into the mansion section.

1:16:37

I've been waiting all day.

1:16:38

Um the the the the first big piece is uh is about the great property transfer.

1:16:44

Gen Xers and millennials will inherit trillions of dollars of real estate over the next decade.

1:16:49

And it's already reshaping how luxury homes are bought and sold.

1:16:52

So over the next decade, roughly 1.

1:16:54

2 million individuals with net worths of over $5 million are projected to pass down more than 38 trillion globally. That is a huge amount.

1:17:08

Uh real estate real estate is poised to play significant role in the great wealth transfer.

1:17:13

Gen Xers and millennials are set to inherit 4.

1:17:15

6 trillion in global real estate over the next 10 years.

1:17:19

And this is why it's so important to win the genetic lottery when you're born.

1:17:25

>> We didn't we won't be inheriting anything.

1:17:29

>> But >> uh stop making excuses and uh maybe get a time machine and go back in time and be born to someone with a luxurious state that you can inherit.

1:17:38

>> Yes, maybe even maybe even multiple.

1:17:41

>> Um we already read about that.

1:17:41

So, um, M6, let's kick it over to M6.

1:17:44

What what what are >> uh parents are buying earlier and bigger.

1:17:49

It isn't a new phenomenon for welloff parents to give children a helping hand in securing first home.

1:17:51

But at the high end of the market, agents say more parents aren't waiting for kids to inherit their wealth.

1:17:56

They are buying them luxury properties sooner.

1:17:58

It's reshaping the definition of luxury real estate.

1:18:02

As more sellers cater to the tastes and preferences of a younger generation, "The price points have gone wild," said Ian Slater, a Compass agent who works with ultra wealthy families in New York.

1:18:12

I used to commonly see people buy three million to five million apartments for their 25 to 30 year old kids.

1:18:20

Now I see them buying 15 million to $30 million apartments for their kids.

1:18:25

That is absolutely crazy.

1:18:25

Uh when you when you're buying for children, co-ops are a real no now since many co-op boards want the occupants of the units to be financially independent.

1:18:36

By contrast, condos offer flexibility, which especi which is especially for global global.

1:18:46

>> What makes you >> what makes you more financially independent than having a trust fund that just >> Yeah. Uh I don't know.

1:18:53

I mean, I guess if you're at a co-op, you want to just be around other people who like uh aren't NEPOS or something.

1:18:59

You want people who have like built their own businesses or something. I don't know.

1:19:04

Well, uh, >> I won't Yeah, I I I there I won't stand for uh for for slander.

1:19:12

>> Seriously, I love I love when a nepo utilizes every available resource and just absolutely dominates. >> Yeah, it's beautiful.

1:19:19

>> You got to appreciate it.

1:19:20

>> Uh, well, let's look at Jean Hackman's Santa Fe compound, which just listen.

1:19:25

>> Wait, what did how did he how did Jean Hackman make his money? >> Actor. >> You didn't know that?

1:19:31

No, [laughter] I don't joke.

1:19:34

>> I don't This guy was born in the in 1930, >> I [laughter] guess.

1:19:38

Uh >> uh he's he's amazing. He's a Hollywood icon. >> He's he's not a hack. >> No, he's not a hack.

1:19:44

Uh French Connection, Unforgiven, Superman, the movie, Enemy of the State.

1:19:48

That's where I know him from.

1:19:50

Enemy of the State's a great movie. Uh he's in The Firm.

1:19:54

>> Is this on the movie list? >> He's in The Firm.

1:19:56

>> Are any Hackman movies in >> the TDN chat movie list? Behind Enemy Lines.

1:20:02

That's a great movie about a downed fighter pilot or spy U2 spy plane.

1:20:07

Uh I think it's Owen Wilson who goes down uh and uh and and crashes and needs to and needs to get back to his team, to his side.

1:20:16

Uh it's a fun it's a fun ride. I I recommend it.

1:20:19

Uh, so nearly yearly a year after the shocking deaths of Hollywood icon Gene Hackman and his wife Betsy Arakawa at their compound in Santa Fe, New Mexico, the couple's 53 acre estate is coming on the market for just $6. 5 million.

1:20:33

I had no idea that Santa Fe, New Mexico was so affordable.

1:20:38

We were looking at a place in Nashville, which I would put at the same level.

1:20:43

>> John, I got I got to stop you there. >> Well, explain.

1:20:44

I mean, saying that is this a bit saying it's so at six and a half million it's so affordable. >> It is.

1:20:52

I mean, we we looked at a we looked at a threebedroom uh apartment that was like $25 million in Nashville last year or last week.

1:21:02

This is 13,000 square feet, 53 acre estate, and it's 15if of the price.

1:21:05

I'm just saying like on a relative basis, do you go Santa Fe at six and you get 53 acres or you're living next to John Fio and you paid 25 mil?

1:21:18

Which one would you go for? >> Okay, >> pick it. Pick it.

1:21:21

Which one would you go for?

1:21:23

I'm going Santa Fe all day >> personally.

1:21:25

Hackman, the twotime uh Oscar winner. Um uh let's see.

1:21:31

Uh there will be some buyers who just uh adverse to purchasing property, blah blah blah.

1:21:35

Uh, let's move on to Washington DC where the prices are way up, way over six.

1:21:41

Six is six is low compared to this $28 million home.

1:21:44

It's DC's most expensive home and it's now owned by the owner of the Washington Commanders, Joshua Harris.

1:21:53

And this is one of those interesting things where you can build a massive private equity firm, a a massive financial institution.

1:22:03

and Josh Harris uh of course built uh Apollo uh the co-founder of Apollo.

1:22:06

Um but he's known as the owner of the Washington Commanders even though that's not like his life's work.

1:22:13

It's an interesting thing but when you buy a sports team that's the thing that follows you around forever.

1:22:18

Um, and so the billionaire investor Josh Harris, the owner of Washington Commander NFL team, and his wife Marjorie Harris have paid $28 million for a storied Washington DC landmark with plans to return it to its original use as a single family home.

1:22:33

The sale is a record for the city.

1:22:36

Um, it's known as the Hion House.

1:22:38

Uh, the federal style building in Georgetown dates to the late 1700s.

1:22:41

The roughly 30,000 ft house which has a large garden with a pool in the back wasn't publicly listed at the time of the sale and then the deal happened quietly off market.

1:22:53

>> Would you live in a house like this, John? >> 100%. >> I knew it. >> Absolutely. Would you not? It's amazing.

1:22:59

>> Uh this style of architecture is extremely depressing to me. >> What do you mean?

1:23:03

This is like the lindiest thing.

1:23:05

You know who you know who lived there?

1:23:06

You know who lived here first?

1:23:08

This was built for the first secretary of the navy. No, >> I understand. You are inhabiting.

1:23:16

>> I understand the appeal for for for you.

1:23:19

Uh but uh and >> what is depressing about this?

1:23:22

This is a beautiful house.

1:23:23

It's just not enough light or something.

1:23:26

>> Potentially if they like did a pretty hardcore remodel to it, really really brought it. >> What's not to like? It looks beautiful. I don't understand.

1:23:35

>> Oh, it just looks uh a little too vintage. Oh, it's ridiculous.

1:23:37

It does have a crazy like uh there's a roof inside >> and it looks like a frat house. >> Do you see this?

1:23:44

Does kind of look like a frat house.

1:23:46

Look at Why do you have a roof in under your roof?

1:23:48

Do you see what happened here?

1:23:52

>> They got roof roofs roofs.

1:23:52

It looks like they just built another house, an addition on on top.

1:23:56

And so there is some chaos here.

1:24:00

>> It's a little a little too fratty for me.

1:24:02

It looks like the beer it looks [laughter] like the floor would be sticky with >> the floor sticky somehow.

1:24:06

I don't think this $28 million property has a sticky floor, but you never know.

1:24:10

They have they have three TVs up there. That's sort of fratty.

1:24:14

You [laughter] watch three different football games.

1:24:16

>> Well, if you own an NFL team.

1:24:19

>> Yeah, you got to watch all the games. >> Yeah, sure.

1:24:21

Uh the market the previous record in DC was set in 2024 when Caner Fitzgerald CEO Howard Lutnik purchased Fox News anchor Brett Buyer's Foxh Hall estate for 25 million.

1:24:31

Uh Mark and Hunter McFaden of Compass represented Dr.

1:24:36

Kuno in the Georgetown sale.

1:24:36

Harris was represented by Sabes International.

1:24:41

Um Figma Figma make isn't your average vibe coding tool.

1:24:44

It lives in Figma, so outputs look good, feel real, and stay connected to how teams build.

1:24:47

Create codebacked prototypes and apps.

1:24:51

>> I hate to interrupt the mansion section, but we have to pull up this video from the Houston Texans. >> Let's do it.

1:24:57

>> Uh, they are their new video is Call of Duty themed. >> No way.

1:25:03

>> And I just got to wonder, >> oh, >> we created [laughter] >> Yes, 100%.

1:25:08

created the >> Well, let's switch over to reacting to the latest video from the Houston.

1:25:16

>> Uh, and while we pull the up, here it is. >> What is this?

1:25:21

>> The match begins in 43 [music] to eliminate the enemy team.

1:25:27

>> And Kirk with a diving attempt and he's got the catch. >> Oh, the hit marker.

1:25:30

The hit marker sounds good. Long shot.

1:25:34

>> It's so funny cuz we were just talking earlier this week.

1:25:36

We did the hit marker sound effect. >> Hit marker sound. >> Air raid. >> Air raid >> kick. >> What sound effect? UAV online. >> Another hit marker. >> UAV online. >> UAV online. That's us. That's not them, right? That was you.

1:25:54

>> We got to figure out if they did this if if they did this before. >> Good. The graphics package.

1:25:58

The I I I didn't realize how iconic the text was in uh in COD.

1:26:04

like deep glow right there.

1:26:07

The the the glowing letters that's just coded to a tea.

1:26:09

They really nailed nailed that. That's very fun.

1:26:14

>> I wonder where I wonder I wonder what inspired that.

1:26:16

>> Anyway, let's move on to the last uh the last story in the mansion section.

1:26:19

But first, let me tell you about railway.

1:26:23

Railway simplifies software deployment.

1:26:25

Web apps, servers, and databases run in one place with scaling and monitoring and security built in.

1:26:29

So, uh this is a renovation.

1:26:33

I want your take on this renovation.

1:26:34

Uh, a Texas couple transformed a 945 square foot room into a space where they could watch sports and entertain friends.

1:26:44

>> See, this looks fantastic. >> Thank you.

1:26:47

>> This is what I want to see.

1:26:47

This is what I want to see on the last.

1:26:49

I want to see I I want to see this level of Renault to the last property.

1:26:55

>> But I feel like this does capture some of the opulence, some of the details, some of the texture.

1:26:59

I I This is not flat white walls. There's lots of layers. There's trim.

1:27:04

I I like the the blue, the way it goes with the brown, the the the gray couches.

1:27:09

Everything sort of like harmonizes, but it's not bland. It's not flat.

1:27:14

There's a lot of detail and layering there.

1:27:16

Even behind the TV, you see a sort of like textured backsplash.

1:27:20

I think they did a fantastic job on this, and they spent $465,000.

1:27:27

So, when financial consultants Damon Cronis and Julie Cronis decided last year that it was time to renovate their game room, they wanted to keep it fun for their two teenagers, but add a layer of sophistication.

1:27:38

You always got to do that.

1:27:40

They're in their early 50s, and they drew inspiration for their new entertainment lounge during a visit to Manhattan in a stop by the UBS Arena Preview Club, a temporary showroom for the arena's premium space under construction.

1:27:51

uh styled in vintage hues of rich gold and deep blue with dark brown wood.

1:27:57

The space had just the upscale feel they wanted for their home.

1:28:02

Uh they brought in pulp design studios and they transformed it.

1:28:05

The owners wanted it to look like a lounge like a private sports club.

1:28:08

We took the inspiration and created our vision to suit their needs and lifestyle.

1:28:11

The the 945 foot square foot space was designed for versatility allowing guests to enjoy different activities at once.

1:28:19

It was tailored to host movie nights, lively cocktail parties, and Sunday football gatherings.

1:28:24

The room had to have maximum flow for people to move about.

1:28:27

And so you see they have a horseshoe couch, but there's a gap in the middle so you can flow around either way.

1:28:33

So it's kind of like two L couches nestled next to each other. Very, very smart. >> Two L's. >> The making a W. >> Two piece. I like it.

1:28:42

Uh, the custom two-piece sectional sofa set them back $26,000 and it allows guests to move in and out of the TV.

1:28:51

>> So, you can tell the floors are not sticky here. >> Yes, definitely. >> Which is key.

1:28:56

>> Uh, the room is narrow and we didn't want to have a sectional that you had to walk all the way around.

1:28:59

Uh, and so for additional seating, ottomans pull out from under the coffee table.

1:29:04

Swivel stools accompany console tables beside the sofas.

1:29:07

Tall stools are tucked under the nearby bar top.

1:29:09

and custom banquet hugs a curve of windows.

1:29:12

Performance fabrics and durable materials were chosen to endure active crowds.

1:29:18

They're not letting the beer soak the walls.

1:29:23

They got performance fabrics and durable materials in there.

1:29:25

They're not they're not worried about a sticky floor.

1:29:27

A sticky floor here, a sticky floor there. It's going to be okay.

1:29:31

They're going to mop it up.

1:29:32

Those performance fabrics are built to handle the stickiest beer.

1:29:36

Maybe even the athletic brew.

1:29:38

>> Athletic some athletic brews.

1:29:38

You're chugging athletic brews.

1:29:40

You're spraying them all over.

1:29:41

You're cheersing, slamming them on your head.

1:29:43

And uh and they get on the >> honestly.

1:29:46

Athletic Athletic Brewing, which we have we have a few here.

1:29:49

Uh Athletic Brewing really needs to do a hard sell to Cheeky Pint and be like, "Look, >> you guys are hardly drinking. We can tell.

1:30:00

>> We'll have to ask him if he uses Stripe currently because maybe there's a man the other deal there." >> Yeah. Yeah. Yeah.

1:30:05

We can tell you don't have it in you to get hammered on podcast, but we want you to be able to enjoy the taste of beer. >> Yeah, I like that.

1:30:12

A little cheeky athletic brewing.

1:30:14

I like that >> cheeky brew.

1:30:16

>> Beyond watching sports across two TVs, the family enjoys competition of their own.

1:30:20

An oversized scrabble board hangs on the wall to set the tone.

1:30:23

They spent $25,000 on a table.

1:30:25

Who knew tables can get so expensive?

1:30:29

We've been looking at tables.

1:30:31

>> I mean, I feel like we we did.

1:30:31

We We're just trying to get a new table.

1:30:33

No, we want a bigger table. Slightly bigger table.

1:30:36

Want some features, but very quickly you get up into these big numbers.

1:30:40

So, the table, the round Cambria table was crafted from man-made quartz with a metal base.

1:30:44

We bolted the base to the floor because Damon and Julie wanted to be sure it wouldn't topple around the teens.

1:30:50

If people are getting hammered down there standing on the table, they don't want it falling over.

1:30:56

So, they bolted it to the floor.

1:30:57

The chandelier set them back $3,900.

1:31:00

The Cavalino X-large radial chandelier from visual comfort adds sculptural interest and focus lighting to the game table. Chairs 2400 bucks each.

1:31:07

Uh covered in Everly fabric having coasters, casters allowed them to move freely, perfect for group activities.

1:31:17

You can move them around.

1:31:17

The window shades $12,000.

1:31:18

Motorized Roman shades create a blackout environment that's ideal for TV watching. That's a cool feature.

1:31:25

And the banquet cost $27,000.

1:31:29

The bottom is covered in ultra suede green and ochre from Crovat.

1:31:30

And the back in Lulu velvet is from S. Harris.

1:31:36

We had to do a custom banquet so that it fit the curve of the window to maximize seating.

1:31:40

They're all about maximizing seating over here. Uh well, congrats.

1:31:46

And also >> the number one AI agent for customer service.

1:31:50

If you want AI to handle your customer support, go to Finn. ai.

1:31:55

What other news do we have, Jordy? >> Uh tell me. >> Harmonic.

1:31:57

Harmonic >> is investing in math.

1:31:59

They're investing in uh Vlad's AI startup Harmonic.

1:32:06

They're investing 120 million. >> Hit clean hit.

1:32:11

Emerson Collecting Collective is also joining as a new investor alongside existing backers. Ribbit. Ribbit. Ribbit.

1:32:18

Uh we need a frog sound effect. >> Mickey Mouse Dublin.

1:32:22

He's a big Robin Hood >> index and Kleiner. Sequoia.

1:32:25

Yeah, we'll have to talk to the Sequoia folks about how harmonic fits into the post AGI age because we have pack gradients on you.

1:32:35

>> What if it turn What if it What if it comes out that harmonic is just working on a Chad GPT style app to help kids do math problems? >> That's it. >> That's a play.

1:32:47

>> Yes, >> it's a trillion dollar opportunity. >> Yes. I love it.

1:32:49

Uh well, we have our next guest in the reream waiting room.

1:32:54

Let me tell you about Label [music] Box while we bring him in. >> Get in the box.

1:32:58

>> Reinforcement learning environments, voice robotics, eval [music] data.

1:33:03

Labelbox is the data factory behind the world's leading AI teams.

1:33:06

And we have ooh nice and cold athletic brewing uh hazy IPAs.

1:33:11

I will enjoy one of these while we bring in our guest Bill Shualt from here radio. Welcome to the TV. How you doing, Bill? Incredible to be here. Love the show. Thank you so much.

1:33:25

Even though I'm East Coast and not in the AI world, you know, I just sell things that hurt when you drop them on your feet over here, but I'm [laughter] a huge huge fan of the show and so excited to be here. >> Yeah.

1:33:36

So, so great to have you.

1:33:36

I was just trying to remember uh I listened >> to like about 90 minutes of you on a podcast.

1:33:43

It must have been like four or five years.

1:33:46

>> I listened to you on Logan Bartlett. That was a fun one.

1:33:48

You got a number of great >> Yeah. Yeah. Yeah, he's awesome.

1:33:52

>> Um, what do you think about the pitch of getting Are you familiar with the Cheeky Pint podcast from Stripe? Have you seen this? >> I I love it.

1:33:59

Yeah, I was actually thinking about cold emailing them to get >> So, the elephant the elephant in their pub is [laughter] that they're not really crushing beers.

1:34:09

>> They're not getting actually drunk.

1:34:11

>> So, I think you should make a special edition uh for the team over there so they could really start >> start indulging. >> Well, I I love that. I'm a fan of them. Ireland.

1:34:22

I've got a bunch of their books. So, yeah.

1:34:23

Would love to reach out to them. >> Fantastic.

1:34:25

Um, >> let's take it back to the beginning.

1:34:27

Uh, since it's your first time on the show, uh, give me the founding story.

1:34:32

Give me what you were doing before.

1:34:34

Uh, it's such a huge trend now, mostly thanks to you.

1:34:40

Uh, did you imagine that the trend would become so big?

1:34:43

What was what were the inciting elements?

1:34:47

Yeah, I think it there's like both like the personal story and the category story and like the health and wellness mega trend behind it.

1:34:52

Um, you know, even zooming out to the trend.

1:34:54

I know um you know so much of like the mega trends in business these days and big numbers around AI and it's rare rare to see something that is like so solidified, >> very visible long-term and I can get more into like how big I think the trend will be and why it'll be so big over time and why I have good line of sight to that.

1:35:13

My personal story really is I I was working um in the hedge fund world. Had a great finance job.

1:35:18

I I came I went I went >> it's >> I went to like it >> went to college exactly [laughter] um went but I like went to college with that view.

1:35:32

Went right into it my career.

1:35:33

Never thought I'd do anything different and but >> I was living this high performance lifestyle where you know 12 years ago I was about to get married.

1:35:41

I was thinking about my future life and alcohol was kind of a ceiling on my my work productivity, my relationships, um my sleep, my workouts, you know, all the things that are like so common place in knowledge now that like you know all the fitness wearables, the podcasts like Peter Tia, Huberman, Rhonda, like all these things are like so evident now.

1:36:04

But I was like living that and feeling it myself.

1:36:05

I was, you know, I had an a very intellectually intense job at Steve Cohen's hedge fund where you're graded on your output every day.

1:36:11

I was at the desk from 6:00 a. m. to 6:00 p. m.

1:36:13

150 work dinners a year, then out with friends and family on weekends.

1:36:19

>> And [laughter] 150 work dinners is insane.

1:36:20

One for for us, I mean, we we have like a maybe not as intense as your schedule with Steve Cohen, but it's very, you know, we're here.

1:36:30

We have to get to the studio at 9:00. We go live at 11:00.

1:36:32

There's very little downtime.

1:36:35

And so we do one work dinner and it throws everything off.

1:36:38

[laughter] It's like throws off the whole week. >> Yeah.

1:36:40

>> I have huge admiration for your always on like I think about that all the time.

1:36:45

>> But yeah, we had I had 200 brokers and I had to do research dinners also and you have to have good relationships.

1:36:49

So >> when you like pick up the phone and need to convey something in 10 seconds that you know that person. Yeah.

1:36:55

you know that person. Yeah. Um, so anyway, that's a long way of saying like I was very interested in health, longevity, my fitness, my performance way before it became such a commonplace trend and I was living that and I really started saying to people like I I really

1:37:09

wish I could go out to all these dinners and be in the moment without alcohol and you know um I saw the trend happening over my finance career where people were just as excited to go to Barry's boot camp or something in the morning rather than go to a steak dinner at night. And

1:37:21

And so, but I just really wish there was another >> boy four berry boot [laughter] camps in a day.

1:37:29

>> So, so why not Shirley Temples?

1:37:29

Why didn't you just become the Shirley Temple King drinking six of those?

1:37:32

Like like what what what were you doing before you actually decided to build a new product in the category?

1:37:40

Uh were you on just like soda water and lime?

1:37:42

What was the what were the options?

1:37:46

Well, so I saw that huge impact on my life just by like moderating my drinking and ultimately stopping my drinking and then thought, you know, if I could just bring moderation to the masses and just make it accessible like I have no view on like bringing back prohibition,

1:38:01

sobriety or anything like that, >> but just making the other side of the menu delicious, like match the culinary expectation and the experience that and as I started to look into the numbers behind it, 50% of adults even at that point had 0.1 drinks. or less per week. 1 drinks. or less per week.

1:38:16

And it was really only like the top 10% of adults have more than like seven drinks a week.

1:38:21

And it kind of hit me that the adult beverage world is also just totally missing a majority of the population and their needs.

1:38:27

And so I'll skip like the years of business research and surveys and stuff like that to get conviction around it, but ultimately it was like right out of my lived experience and I wanted it to exist and quit my job to build that.

1:38:41

Um, >> how much how much credit uh do you give just how good the product is with the success of the company?

1:38:49

Because I think in CPG, uh, you're not the first finance Chad to like wake up one [laughter] day and say, I want to start it.

1:38:58

Like it's it's kind of it's kind of a common path like, >> you know, they're kind of like bored.

1:39:04

They're, you know, they they they try some drink.

1:39:06

Like I I've met as an angel, I've met so many people over the years that like are trying to make the leap from finance to being an entrepreneur and CBG because it's like you're going from like spreadsheets to something that's like super tangible and you still have to use you spend plenty of time in spreadsheets and I think there's something really appealing about like going from like finance to like the tangibility of CBG.

1:39:25

But the issue is like so many people that are incredibly talented uh they just end up like uh they end up develing developing a product that's not amazing and then it just you can't even live up to your talent level or your potential because you're just like handicapped by the product.

1:39:42

And when I try you know having this product even when I had it for the first time it's like it's just a fantastic product.

1:39:47

It tastes exactly like a beer.

1:39:49

It tastes like a sort of a c, you know, celebratory moment or it tastes like, you know, winding down at the end of the day, which is like it delivers something unique in the way that like a LCROY or just some other like non-alc, you know, alternative actually works.

1:40:05

>> Yeah, that is exactly it.

1:40:05

And we have an incredible co-founder, John Walker, and the two of us home brewed on Gatorade jugs and we took it down to the screws and reinvented the way non-alcoholic beer is made rather than where historically non-alcoholic beer was a very industrialized, heavily processed thing.

1:40:22

It was only a logger category as well.

1:40:24

And so we took the time and John said he wouldn't even sign on if if I if I didn't agree that we wouldn't launch the beer if it wasn't indistinguishable from top craft beers from day one.

1:40:34

And I think that's the huge differentiation.

1:40:38

We made the very unattractive decision to investors to take a capital inensive route.

1:40:43

We've built all our own breweries.

1:40:45

We've put over 130 million into our manufacturing just [laughter] very unattractive to investors if I can repeat that. >> Attractive now. >> Yeah.

1:40:57

And it but it was so we could own our proprietary process, own the quality of what we were doing every step of the way where Yeah.

1:41:03

As you were saying, if you were to like nick surely a lot of CPG or especially the competitors in our category, like you would find that they just totally outsource all the production.

1:41:15

There aren't brewers on the team and it truly had to be different quality and different experience.

1:41:20

And we really invested to change that perception of the category and that's still very rare in non-alcoholic beer.

1:41:27

There have been 280 brands since we launched and a lot have had very disparate features. >> Well, yeah.

1:41:32

>> Well, yeah. and what's happening with the category right now broadly because I you know again as an angel in LA there's so many CPG founders I've seen so many of these companies uh try to come up not just in kind of the non-al beer beer category but in other categories and one

1:41:48

of the things I always uh struggle with as somebody who you know dramatically reduced my drinking probably like six years ago from like drinking like a handful of drinks once a week to like drinking like one or two drinks like once a month really like so really limited it. And so I'd get these pitches

1:42:05

And so I'd get these pitches and people would be pitching like something that doesn't taste like alcohol at all.

1:42:13

>> And I'm like I I I'm the buyer here, but you're selling me a product that I can I can drink a Diet Coke.

1:42:20

I can drink any number of other things.

1:42:23

And so like your competition is just is not like the non-alc category.

1:42:27

For some of these new non-alc brands, their competition is just like every single drink that doesn't have alcohol in it.

1:42:33

And that just felt like a super tough position.

1:42:37

Whereas for this, it's like if you want a beer but you don't want alcohol, like your options are like much more limited. >> Yeah, for sure.

1:42:44

And as as I looked at the TAM of the market, the way I thought about it was a 50% of the people really aren't drinking and 99% of people or even people who do drink are not drinking.

1:42:55

like 99% of the time they're awake.

1:42:57

So there's a huge opportunity to meet new occasions and those occasions you just described losing over the years.

1:43:04

We're trying to bring those back, bring the social connection back, get people out multiple times a week.

1:43:07

But I think the like the clearest way I think I could say this is and like why I think it's such a big trend is, you know, the overall beer category per the brewers association is north of hundred billion dollars in all retail sales.

1:43:21

Um cra craft beer itself is 28 billion supposedly per the uh crapers association.

1:43:30

Um if you go back like 50 years, light beer was one of the biggest mega trends to ever hit beer and that is an enormous part of the um beer category today.

1:43:41

And but that was a huge trend up until about the turn of the millennia.

1:43:47

And then we started to see like people well the light beer trend was driven by like the nutritionals where people wanted superior nutritionals to what existed previously.

1:43:54

Then you had big trends in craft beer and flavored RTDs which were you know light beer might not have that flavor.

1:44:00

We want to like have the nutritionals but the flavor.

1:44:03

And where non-alcoholic beer comes in is all the experience superior nutritionals.

1:44:10

It's about 20 30% of the calories plus all the flavor of great craft beer.

1:44:13

and it's emerging in this new big mega trend that I think has really good line of sight to be the next huge thing in beer.

1:44:21

And I I'm a very delusionally optimistic person, but I do think non-alcoholic beer will be significantly bigger than craft beer and a huge part of the overall beer category in the future.

1:44:30

Um >> yeah, where where else in uh beer is there like meaningful growth?

1:44:40

Well, that's also the problem too is every other like most CPG overall, but especially Bevalk, all the innovation is like a one for one substitute for the same consumer in the same occasion.

1:44:51

>> And and even some of them are like you're substituting one thing for many.

1:44:56

Like a THC drink is a one one for like six substitute like >> um and so what we're doing is we're bringing in like a lot of people drink our beers within the same night as alcohol.

1:45:07

our cons 80% of our consumers drink.

1:45:10

So, we're bringing a lot of people back into the category.

1:45:11

Plus, 25% of our drinkers are new to beer altogether.

1:45:15

So, like this is really additive to the beer world for the first time.

1:45:19

Um, yeah, and then yeah, as you think about those occasions, there's just a lot of occasions to layer in.

1:45:24

I guess [clears throat] on the broader beer category, too, be the last few years have been the worst beer years of our generation in alcohol for a number of reasons.

1:45:36

I think part of it is um the category is not connecting to the next wave of consumers.

1:45:41

If you look across the spokespeople in the major brand TV ads, most of them in their 70s, one of them's in their 80s, >> one brand's about to bring back an 87y old spokesperson uh from 10 years ago.

1:45:55

So like >> this is a cohort.

1:45:56

This like this is not the cohort we need to meet.

1:45:58

Like it is like we are bringing beer for the modern, healthy, active adult.

1:46:02

We have great aspirational athletes and chefs and people behind it, but more than anything, we're just trying to build like a really timeless brand.

1:46:11

And I I could share more about our marketing and how we're thinking about that differently, too.

1:46:16

I I want to get to that, but first I want to know about um what uh how is your business different or similar to other beer companies that are higher alcohol?

1:46:25

Do you need to be 21 to buy this?

1:46:27

Are you subject to the three tiered system?

1:46:29

Can you sell this online?

1:46:31

What's different or similar to just uh higher alcohol beer distribution in sales?

1:46:39

>> Yeah, I'm I mean as a finance Chad coming into this category, [laughter] I was like, "Wow, there is there is no tech in this sector and there is margin everywhere." Yeah.

1:46:47

And like I very quickly got on the ground and realized that there's >> a lot of reasons why like beer distributors are great at what they do.

1:46:56

It's an incredibly capital intensive.

1:46:58

They're basically a big logistics business.

1:46:59

And so we do largely plug into the three tier system, but that's our optin.

1:47:04

And then >> legally you don't have to necessarily regulated slightly differently. >> Correct.

1:47:10

And then we were the first beer brand to launch nationally on DTOC also.

1:47:15

And so that was like an absolutely enormous marketing advantage where, you know, any high-flying brewery of the 2010s, you'd have to wait in line outside of their brewery for a limited release in the local where, you know, we could we could lose tons of money.

1:47:29

shipping beer all across the country.

1:47:31

So, >> and then is there any age restriction? >> Not in most states. No.

1:47:35

But yeah, typically it's, you know, we we're trying to establish it for adults in typical beer occasions celebrating life special moments. Yeah.

1:47:45

>> I'm mostly trying to catch Tyler because uh I saw him grab one and if if there's some rule that he's violating, I'm going to call the cops right now.

1:47:51

[laughter] I see him over there.

1:47:53

I I mean we are huge on the Michigan campus and you know we like some of I mean some of the like just like colleges across the country were enormous.

1:48:04

This next generation is so much more moderate than prior generations and >> I I think the perception of alcohol has changed something like 14 percentage points in 3 years which >> you know it's it's happening really fast.

1:48:18

talk about the the the the formulation process a little bit.

1:48:21

Not to go too far back, but uh a lot of folks when they're doing a CPG project, they go to a c-acker and they get a dog and pony show and they come out and they're like, "We formulated the perfect thing for you."

1:48:34

Or flavor house or some supplier and they tell you, "This is the best thing possible."

1:48:37

And then if you don't if you're not sharp, uh sort of the dog and pony show can kind of overpower you.

1:48:43

Was there any uh any point where you were working with a manufacturer and you had to sort of override them or what was the the initial uh scale up like?

1:48:55

>> It it's really been all internal since day one.

1:48:58

Um >> yeah, I I basically put my life savings into our first 10,000 foot warehouse, Gatorade jugsing, >> me and John's salaries a bit and then raised raised an angel round to build that first brewery.

1:49:13

um did 120 meetings, huge rejection percentage.

1:49:18

>> Um >> but yeah, in that we wanted to approach it in a totally different way.

1:49:22

Um and so we're confident we arrive at where we have >> I I I feel like uh consumer is the one category where you just really don't know until you start selling the product.

1:49:37

Like I can easily imagine getting this pitch and just being in the mindset of like like if I'm h if I want to drink a beer, I want to I want I want alcohol.

1:49:48

>> And it just turns out it's like totally just totally false, right?

1:49:50

Um, I wanted to ask I know you did a ton of like community IRL marketing early on and I wanted to ask you about how you advise other consumer brands when they're early on and thinking about how to spend their time, what channels to really focus on because for certain consumer categories, if somebody's like, "Yeah, we're going to really focus on events and community."

1:50:15

I'm just looking at them being like, "You should just sell the product."

1:50:18

Like, just sell the product.

1:50:20

Like, spend all your time selling the product.

1:50:21

Whereas you guys like I know invested a lot in the in in kind of the the running uh running uh world and and saw a ton of great results. >> Yeah.

1:50:32

I mean by invested a lot like a lot of my time in weekends and life >> like every every weekend. >> Yeah.

1:50:39

We had no more resources after all the stainless steel to put into marketing.

1:50:42

So that was like all on us.

1:50:44

But um yeah, just touching quickly on two things you said there where like a lot of people both a don't contemplate non-alcoholic beer.

1:50:51

They're almost like non-considerers and then think they don't like the taste of beer are two things we like combat like over and over again cuz like it it really is hard to imagine non-alcoholic beer and the social experience until you actually experience the social experience without alcohol and you're like, "Oh, like I kind of really like this.

1:51:09

I'm actually in it for my friends, the food, the moment, and not the alcohol that mostly hits you after the moment.

1:51:15

That was like a big light bulb to me.

1:51:17

And the thing we hear all the time is people say, "Oh, I don't like the taste of beer."

1:51:21

Well, actually, the ingredient a lot of people don't like in beer is the ethanol, which at times is up to like 80 85% of the calories of beer.

1:51:29

Like in a normal light beer, the ethanol calories is more than 80 of the calories of like the 95 to 100 calories.

1:51:36

And so >> we actually do have a pretty big flavor advantage too and like no comparison large brand.

1:51:43

Um yeah on the uh the in real life too that was almost out of necessity like I was like going around our early grocery stores like Whole Foods and nobody was even looking at the non-alcoholic beer shelf.

1:51:55

And so I was like okay I got to get out in the world and bring people in.

1:51:59

And so I like I was running a lot of races and like trail half marathons and Spartan races anyway.

1:52:05

And so I just started pouring beer at those, giving out hundreds of beers a weekend and getting people to like to the actual like table and trying the beer where they're like happy, sweaty, thirsty, and actually considering it. So >> how do you Yeah.

1:52:19

How do you measure success with an initiative like that?

1:52:24

You're pouring, you're you're sampling with people, you're seeing their reaction.

1:52:28

reaction. Are you trying to like are you already at that time stocked in shelves in local stores and then you're trying to like see hey if I if I do like a bunch of weekends back to back am I going to see an uptick in sell through or is it more just like this is like I'm

1:52:46

basically spending my time to get more people aware of the brand and I have more time than I have capital >> it yeah we have down to zip code and store level sales and so I was able to see like ripples fairly quickly and could run regressions on that. Um,

1:53:00

Um, >> separately, like it it has to be authentic to the brand proposition.

1:53:05

Like everything about this brand, like the can, the mountains, the outdoor aesthetic, the taste was like all out of me and John's life and like primarily my life.

1:53:15

And so where I was going to market the brand and talk to people were like I didn't have to like go to a focus group or Google where people like me hang out cuz it was all built around me.

1:53:23

And so I I have seen a lot of people like try to bring non-alcoholic spirits to like races and it's just like it's like an absolutely laughably terrible fit.

1:53:33

But you can tell some DC is just pushing someone up to Yeah. >> Well, yeah.

1:53:39

They heard you on a podcast and [laughter] they're like, "Yeah, let's just run. We'll do the same thing.

1:53:43

It all have the same >> blood brewing for Manhattan and >> gent.

1:53:47

>> We did also take a very intentionally like long track with things too where so like that like yeah talking to someone face to face is very unscalable and like doing things digitally is so much more scalable and awareness.

1:54:01

>> But like if you do it enough and if you're doing it all the time all of a sudden it is scalable on a long time horizon.

1:54:07

And even up until this year, last year we probably did 2500 events as a company and handed out well over a million samples probably in all 50 states and three other countries.

1:54:15

And so those things do scale over time.

1:54:19

And then we've been really consistent with our marketing messages, too.

1:54:23

You know, I I knew my core skill set isn't like me being a social media persona and like just turning on the cameras all the time.

1:54:32

We wanted to create a timeless brand that just compounds over time.

1:54:33

We talk about the same things like over and over again.

1:54:38

I I think of it somewhat as like a Red Bull model of advertising consistency where most of CPG these days is like chasing that next hit.

1:54:46

It's like you've got to be on the next trend.

1:54:51

You've got to be like the next video's got to be a home run. >> Yeah.

1:54:54

>> Or even shorter duration like celebrity trends.

1:54:57

You know, we've had upwards of 10 celebrities enter our category.

1:54:59

We have a whole range of superheroes at this point.

1:55:04

Um And and >> it's so funny because you you probably know all of them, but you could list them all off and I've never heard of any of them.

1:55:10

And that's that tells you everything about the level of focus and actually >> it's probably harder to watch their movies now.

1:55:15

[laughter] >> I feel personally slighted. I can't do it. >> Yeah.

1:55:21

Well, we've got one more at least one more superhero coming into the category this year.

1:55:25

This one's >> being launched at us from a French castle.

1:55:29

Um, you know, it's going to be draped in Americana imagery, so we're excited for that one.

1:55:34

Um, >> but there's all different texts.

1:55:36

There's like the short-term celebrity spike and like hope you can ride it, where we've kind of just done the thing and been authentic like who we are inside the walls is who we are outside the walls >> over and over again.

1:55:48

I think that really compounds over time and matches with our like manufacturing strategy, our continuous investments in quality.

1:55:55

every one of our teammates is full-time teammates and >> like all all this capital investment is it looks really good right now but in 2018 this was super out of vogue for sure. >> Yeah. >> Yeah. >> Well, yeah.

1:56:10

The the beautiful thing with CBG it is it is incredibly competitive.

1:56:13

You are going to deal if you're successful at all you'll deal with a million knockoffs and new entrance.

1:56:16

But you can look backwards and say like uh or even just look at your business today and and realize like even with everything you know now imagine trying to compete with yourself from zero.

1:56:27

It would be an absolute nightmare you know.

1:56:31

>> Um so it's just the the benefits of great product operational excellence and then compounding.

1:56:38

>> Uh talk more about the decline in alcohol assump consumption amongst young people.

1:56:44

Uh what are you seeing in the data?

1:56:46

How real is the trend and what are the key drivers of what's going on? >> Yeah.

1:56:52

And how much basically how much does the alcohol industry hate Andrew Huberman?

1:56:57

[laughter] He basically he basically needs to be in witness protection. >> Yeah.

1:57:03

The the new dietary guidelines were basically like don't not drink alcohol.

1:57:08

It was like it it was like as close to don't drink alcohol as it gets and the industry was like >> yeah.

1:57:14

[laughter] But um at the end of the day like I I think a lot of this is potentially skewed by co and you know generations that were maybe like I mean if you go back to the start of our careers it was so easy like I lived above a bar in the West Village in New York and like I had friends in that bar every afternoon.

1:57:32

It was so easy to find where people were after work.

1:57:34

And I I feel for this generation that like is kind of losing the work happy hours, the mentorship and stuff.

1:57:41

And I I don't think we're going to have generations that don't love social connection and blowing off steam and having fun.

1:57:46

I think the industry and the world has to meet people where they're at.

1:57:50

And so I do think they'll normalize, but I also don't think, you know, in a world of cell phones and videos always on and like high work performance expectations, it it's going to be really tough to get back those like volume drinkers as well.

1:58:05

So, um I I think you've got to layer in more occasions throughout the week.

1:58:10

You've got to find ways to keep people at bars longer with moderate beverages.

1:58:13

Um so I the industry on the alcohol side will have continued volume challenges.

1:58:20

And then there's like new non-alcoholic functional drinks too, of which THC is the most obvious.

1:58:23

And those are not like high volume drinks either.

1:58:26

So >> yeah, they're low volume and they destroy your sleep.

1:58:31

>> So >> yeah, not a fan.

1:58:32

Talk to me about label claims.

1:58:34

Uh the only real label claim that I see on here is non-alcoholic brew.

1:58:39

Um it doesn't say it has creatine in it or protein or caffeine or anything else. beer >> protein.

1:58:47

But I mean, you've been Have you guys ever Have you ever made like a internally of the protein beer?

1:58:55

>> The high protein beer 50 g. Why not?

1:58:58

[laughter] >> We've had some fun with like caffeine and protein and like funny videos and stuff.

1:59:02

Um >> I I do think there could be a world of functional beers in the future, but I I also think like beer and function is like just kind of different things for the most part.

1:59:12

And so, >> um, but that being said, like one of the hardest things of starting a CPG business is like the plaintiff's bar and all the like how tight the FTC rules are from website to label claims to everything.

1:59:27

And there are thousand eyes waiting people for people to misstep even the smallest trip wires.

1:59:31

And >> yeah, that was why earlier last year there was somebody there was a a viral brand doing like nicotine drinks >> drinks. Yeah.

1:59:41

And that that uh >> but at the same time I mean I >> that just look like it was like okay you you're just you're just making stuff and selling it.

1:59:49

This >> Jordan you don't think an athletic for loco could work [laughter] an athletic loco athletic loco has a nice ring to it. >> Yeah.

1:59:59

That one got immediately.

2:00:01

>> What's the what's the scale of the the business today?

2:00:05

>> Um steadily compounding.

2:00:05

Um, I guess we we've moved into like the top five of overall craft breweries out of 10,000 craft brewers, top 20 beer producers overall.

2:00:17

>> Um, >> yeah, we passed um 100 million in revenue in 2024 and have been growing very healthy double digits since then.

2:00:24

Last year was the worst beer year of our lifetime probably and we had really strong growth into that and you know we're just coming back with more exciting partnerships, more marketing spend next year as the business grows and kind of steadily just chugging along and you know a comparable I think could be the energy drink category which Red Bull really put on the map in the '90s.

2:00:45

Monster arrived in like 2002 and those brands didn't have a lot of 100% years.

2:00:49

It was just a like 5 to 15% compounder for 25 years.

2:00:55

>> And that's really what we're looking >> uh for also is just to like make really high quality beer, timeless marketing, and just ride that health and wellness wave.

2:01:04

>> Yeah, that's always the I feel like founders can get a bit carried away of like, I'm making an energy drink. Look how big Monster is.

2:01:10

It's like or look how big Red Bull is.

2:01:13

It's like you don't they didn't just like be like, "Oh yeah, we just executed well for six years and suddenly we're a $50 billion company."

2:01:20

It's like no decades and decades and decades.

2:01:22

Uh and I think uh I I I uh I get excited about CPG founders that are like, >> you know, uh I think of like Peter uh with David where he he doesn't want to sell out to the last gen.

2:01:35

He wants to just compound enough, launch new products, launch new brands to get to the point where he is the >> the the 800 pound gorilla in the industry.

2:01:45

And so, >> um, I'm sure you've had a bunch of opportunities, uh, to sell and and turn them down to date.

2:01:51

Um, so I'm I'm a fan of, uh, the compounding.

2:01:55

>> Well, well, you guys know better than ever, too.

2:01:57

Like, the rules of private capital have totally changed since we launched the business.

2:02:00

And we have like an amazing cap table through all that rejection I went through.

2:02:04

and just people who are super excited about what we're doing with a really long time horizon.

2:02:09

And you know there's the whole public versus private debate and like do we want to go public and spend 80% of our time on the regulatory of that versus how great it is for awareness and then the public can also invest in the business who are like super fans in it.

2:02:25

So there's a lot of push pull on public versus private too that we're working out.

2:02:30

Are you getting uh uh any push back from other alcoholic beer producers?

2:02:35

Uh we saw this with the milk lobby pushing back against like uh the alternative milks and saying, "Hey, you can't use the word milk.

2:02:45

Are there words you can't use?"

2:02:49

>> There's actually like the alcohol industry definitely tries to put up walls around things like this.

2:02:53

We can't use like all the normal beer words like logger, stout, ale, like interesting. >> You name it.

2:03:01

>> Um, and so like we have to call our Mexican logger a copper for example, our stout a dark.

2:03:05

Um, but I do did look at like those analoges and Beyond Meat and companies like that and how they made enemies with the incumbent industry.

2:03:13

And you know, we want to make it really clear from day one like we're not out to stand on a soap box and kill alcohol.

2:03:21

like we're here to add to it, bring a lot of new consumers into it and actually create a really new exciting viable part of the industry that just helps build the whole thing.

2:03:30

So yeah, definitely learnings from that.

2:03:35

>> Well, thank you so much for coming through it.

2:03:39

We're working through it.

2:03:40

We're we're >> I think I mean it says under half a percent.

2:03:43

I think if I drink 50 of these, I can get a buzz going.

2:03:45

So hell or high water here.

2:03:49

>> [laughter] >> Yeah, there's a major placebo effect.

2:03:52

So, it's like having one with lunch or on stressful work days or like my commute beer is my favorite beer to >> commute beer.

2:03:59

Yeah, it's like all these new occasions.

2:04:02

>> It feels a little risque. I like it. >> Oh, it's delicious. Yeah.

2:04:05

So, >> thank you so much for taking the time to come shop. >> Great. Great to meet you.

2:04:09

Super super impressed with everything you guys have built and uh come back on anytime you news. >> Yeah. >> Uh thank you so much. Love the show. >> Thanks so much. We'll talk to you soon. Great chatting. Byebye. >> Cheers.

2:04:21

>> Let me tell you about Turbo Puffer serverless vector and full text search built from first principles on object storage.

2:04:27

It's fast, 10x cheaper, and extremely scalable.

2:04:29

Our next >> switching gears just a little bit.

2:04:32

We're going from non brewing beer to we have Pat Grady and Sonia Wong from Sequoia Capital in the re waiting room. Welcome. >> Welcome to the show. >> How are you doing? >> Cheers. >> Good. Thanks for having us.

2:04:44

It's been way too long, Pat.

2:04:47

[laughter] >> We missed you, too. >> I missed you guys.

2:04:52

>> Most shows it's like, you know, maybe once a year we'll have someone on.

2:04:57

I like that we can just get you every week.

2:04:58

We'll start scheduling next week's appearance, too.

2:05:00

Sonia, it's also been too long.

2:05:02

We we enjoyed uh the candles that you sent us after our last uh hangout.

2:05:07

>> I'm so glad to hear the ideas for this year's swag. Just wait. >> Yes.

2:05:10

Is is the conference uh is still called a uh AI Ascent? >> AI Ascent.

2:05:14

It's It's gonna be on 420 this year.

2:05:16

So that >> Yeah, you were you were early to the whole ascend trend.

2:05:19

Everyone's talking about ascending this year.

2:05:21

And so I It's just a great brand for you guys. I love it.

2:05:25

Um anyway, take me through the article 2026. This is AGI.

2:05:28

Why were you writing it now?

2:05:32

What was the one thing that you saw?

2:05:33

What was the inciting element? >> You want me to start? >> Go for it.

2:05:38

I I think there were two let me start with there were two purposes to the article and there was something that we saw that catalyzed the article.

2:05:45

One purpose was to kind of put a stake in the ground >> because there's this thing that people call the AI effect where once a technology is actually out there and working, we stop to believe that it's AI and we start to just call it by the specific name of the technology, you know, oh that's not that's not AI, that's just RHF, you know. >> Yeah.

2:06:06

And so, and so there's this um mythical quest for AGI and best we can tell we're there. Yeah.

2:06:13

>> And so we just kind of want to put a stake in the ground, say, "Hey, look, we're there."

2:06:16

And and then you say, "Okay, well, what's the point of doing that?

2:06:19

Why put a stake in the ground?"

2:06:21

Well, that leads to purpose number two of the article, which is it is time.

2:06:25

This is meant to be a call to arms for founders.

2:06:27

It is time to take stock of what capabilities are available in the world today and apply those to real world problems as vigorously as possible.

2:06:37

>> And so there is enough great technology out there available to founders today to go solve so many real world problems.

2:06:45

And particularly what we've seen over the last couple of months and this is kind of the triggering thing for the article um with cloud code and opus 45 and these long horizon agents which to us are kind of the tipping point that's gotten us into AGI like in particular what is possible now with that as sort of the third big inflection point of the last 5 years is pretty remarkable and so it's kind of meant to be a call to arms. >> Yeah.

2:07:09

>> Yeah. We're not helping cuz we have physical goalposts here that should I mean we have to take the goalpost off if we've achieved >> we no let's just mount let's mount it to the ground like we actually have [laughter] to >> bring your your smell the AGI stuff was amazing

2:07:26

>> we'll put the goal >> yeah see it's there we're there both congratulations >> you're in the goalpost now you're physically in [laughter] the goalpost because you have declared AGI uh take me through a little bit of the history of SEOA a history of previous technological revolutions. I don't remember a uh a you

2:07:42

I don't remember a uh a you know a 1999 this is internet uh but but as you reflect on the work the firm has done uh what what what can you tell us and what can you share about how the firm has processed these uh you know broad proclamations about the impact of technologies that are coming and then arrival dates when they are ready and that maybe changes the stance of the firm.

2:08:09

Yeah, I I love that as a question.

2:08:12

So, thank you for asking that.

2:08:12

Um, we've been pretty quiet historically as a partnership and so this idea of sharing our thoughts with the world is is kind of new and hopefully it's a useful service to the founder community.

2:08:20

If you go back to our founding, so 1972 when Don Valentine started Sequo Capital, he was the goto market guy at a company called Fairchild Semiconductor, which is a household name for people who studied the history of Silicon Valley, but but not really outside of that.

2:08:34

It was kind of like the OpenAI of its day or it was the Nvidia of its day.

2:08:38

Like it was the IT company of its day because it was the first company to um to really commercialize Siliconbased transistors.

2:08:48

Like it was kind of the company that gave Silicon Valley its name.

2:08:50

And as the go to market guy at that company, Don's job was to take this magical new capability and figure out how to apply it to real world problems. >> Yeah. Make it useful. >> Make it useful.

2:09:01

And that sort of led him into venture capital because a lot of his customers were these founders and he just kind of fell in love with them in their quest to build these businesses.

2:09:09

And so I mentioned that because we grew out of this semiconductor revolution where all of a sudden computation is a thing that was available to the masses.

2:09:18

Um we move from that into systems in the next generation with the with the Apples and the Oracles um you know taking these chips and turning them into more computing systems.

2:09:27

We move from that into the networking and PC era where all of a sudden you have endpoints on on every desk in every office thanks to the PC and you can connect them all up with networks thanks to Cisco and the router.

2:09:40

We move from that into a more sophisticated form of networking which is known as the internet.

2:09:44

Uh we move from that into applications which are a more sophisticated way to make use of the internet.

2:09:49

Those applications start to show up on mobile devices and then eventually now that everybody has one of these mobile devices in their pocket there's an enormous amount of data.

2:09:57

people started doing interesting stuff with data and now we have AI and so [clears throat] this lineage of Silicon Valley has kind of built up over the decades and each successive wave has built on the one that's come before and and being in this um very fortunate position to kind of be in the mix on a

2:10:14

lot of these transitions and and actually being the only partnership that's kind of made it through these different tectonic shifts and kind of has this institutional knowledge you know gives us this broader view on Okay, what's the importance knowing what we know about past tectonic shifts? What's

2:10:29

What's the importance of the current moment?

2:10:32

And and with that, I'll hand it off to Sonia because Sony was the one who, you know, 3, four years ago prior to the release of Chat GPT kind of called this for what it was and put out the original generative AI post back in back in the fall of 2022. >> Yeah.

2:10:46

The other the other thing I think that's interesting about this moment is I feel like people have had this sense of like AGI will be here when it's just like so obvious in the economic data.

2:10:57

>> Uh and like that's like that's when it'll really feel like okay that's when you can declare it of like it's here it's working the economy and I think part of why I appreciated your guys' piece is it's like >> it actually is going to require a lot of human agency and like human application of this.

2:11:11

It's not just going to it it may not just like happen fully organically run running away by itself, right?

2:11:18

>> And full of arms, now's the time. Let's go. >> Yeah. >> Yeah.

2:11:21

I wanted um I I I want to hear from you Sonia, but uh I wanted to ask like has there been any type of shift in in founders coming and pitching Sequoia with like an entirely >> like I I I felt like last year I kept seeing like agent businesses that were exciting and the teams were talented, >> but I felt like they were just in in many cases just like kind of rebranded SAS.

2:11:49

It's like, okay, like I you're pitching me this as an agent, but like >> if I log into the product, it's going to look like traditional software and maybe that's the this maybe maybe SAS is evergreen and we're just going to live in dashboards forever.

2:12:03

But I've I've I kept wanting like wanting like more basically and I think we have started to see some new paradigms.

2:12:09

But has there been any type of shift in terms of the companies coming in >> where uh maybe somebody spent a few years at a lab and they're like okay we're actually going to kind of uh we've seen the future and now we're going to really reinvent the you know the entire product experience from the ground up based on this new set of capabilities.

2:12:27

>> I'll start but Pat is our app layer guy so you should you should uh you should talk as well.

2:12:31

talk as well. Um we we framed this at the bottom of our post like from talkers to doers and I think maybe that describes a little bit of what you're describing of like first iteration um geni companies um including some of the

2:12:42

the great ones like it did feel like you know it was it was a it was the next generation of SAS was how it felt like um they weren't actually getting work done for you um part of the reason for this call to arms is like we're going

2:12:52

from talkers to doers which is and I think it is both the long horizon agents is the thing but it's both the underlying model capabilities and the harness around it so like these models can now take action and iterate and persist in the world around us um and so

2:13:08

what we're seeing now is that founders are selling companies that are not just doing the you know the you know newer brighter newer shinier version of SAS but actually something that takes real agency and takes real time horizons to execute. So, for example, a traversal in

2:13:21

So, for example, a traversal in the troubleshooting space, like when there's a bug site goes down, data dog says like ding ding ding, there's an issue.

2:13:28

Um, typically you have a war room that goes back and triages what the hell happened, goes back and scrolls through dashboards, goes through traces, etc.

2:13:35

Eventually root causes it, fixes it.

2:13:35

Um, this is a, you know, several hour to um, dayong process for companies.

2:13:42

>> It's funny to think of the it's it's funny to think of the human analog there.

2:13:45

It's like if you have an employee that comes to you and they just tell you there's a problem and they're not [laughter] doing anything about it.

2:13:51

They're just like, "We got a big problem here, boss."

2:13:52

And you're like, "Okay, >> okay."

2:13:54

Like, "What are you doing about it?"

2:13:56

And it's like, so traversal is like, "Okay, like we're actually gonna be what a good employee would do, which is like, we have a problem.

2:14:02

Here's like how we're going to fix it, and hopefully this just solved before it even gets to you." Right. >> Exactly.

2:14:07

And so, in this case, there is no SAS equivalent to that. Right.

2:14:09

This this it doesn't even feel like SAS.

2:14:11

It feels like talking to a co-orker.

2:14:13

And that's why the litmus test here is, you know, are you are you sell can you actually sell work?

2:14:17

I'd say the founders that came into our door a few years ago, they all saw that vision.

2:14:20

Like it's not it's not a new idea that you can build agents.

2:14:24

I think what's new is that you can actually execute on that vision because these models are finally smart enough, capable enough to actually stay on the rails where you can just let them run.

2:14:34

>> And I would say founders have done a really nice job of making use of what is available technologically at the time.

2:14:39

And I think I think over the last five years, we've kind of had three big inflection points.

2:14:43

You know, inflection point one was chatbt when we saw the benefits of pre-training.

2:14:47

And pre-training kind of gives you baseline world knowledge and some kind of instinctive judgment, so to speak.

2:14:54

Inflection point number two was late 2024 when 01 came out and we had reasoning.

2:14:59

And so the ability to kind of take your time and really think through particular questions and come up with deeper answers and better conclusions.

2:15:06

And then inflection point number three has sort of been these last couple of months where we saw the impact of these long horizon agents.

2:15:11

And so you've got some bas baseline knowledge.

2:15:14

You can do some reasoning over that knowledge.

2:15:15

Now you can actually bail, recover, stay on task, persist all the way through to some sort of an outcome.

2:15:22

And I think if you map those three capabilities, the applications that people have built, it's no surprise that the initial applications were kind of like good Q&A or good summarization or good basic content generation.

2:15:36

Like it was the stuff that pre-training sort of gives you.

2:15:39

the next generation of those agents could could think a little bit harder.

2:15:43

You know, like in the case of um uh in the case of notion as an example, which I think has done a really good job of staying on top of all this stuff, you know, you could now tell notion, okay, can you build me a database?

2:15:53

>> And it could actually reason through like what kind of database do you need? How should I build?

2:15:56

And it can actually build you a database. It's pretty good.

2:16:00

Um and then now with these long horizon agents, we're finally getting to the point where you can make a couple mistakes.

2:16:05

you can take test a couple hypotheses and you can actually iterate your way toward the right outcome.

2:16:09

And so look at um again you can look at notion and and you can effectively have your personal chief of staff doing stuff that you would otherwise be doing while you are in a meeting running in the background you know or or in the case of Harvey you can effectively deploy an AI associate after a data room or a deposition or some other legal workflow and actually complete it end to end while you're doing something else.

2:16:32

And so I think this may maybe one way to put it is with this third inflection point, you don't have to babysit the model.

2:16:38

You can just like give it instructions and let it go and you can have a few instances of it running in parallel.

2:16:44

And you you kind of go from this is a cool tool that allows me to be more productive to holy cow, this is kind of like a team of co-workers that I have at my disposal. >> Yeah, >> totally.

2:16:59

>> Help me reconcile these two things that I'm feeling simultaneously.

2:17:01

I agree with your uh declaration, the call to action, the just the idea of so much opportunity for founders to use AGI to create all sorts of different value and products and services.

2:17:16

Uh at the same time towards the back half of 2025 I was seeing Ilia on Daresh talking about hey maybe we're in age of research and Richard Sutton and Andre Cararpathy talking about some of the more uh some of the more re restrictive aspects of the research progress and so is that something else that we're working on?

2:17:39

How are you thinking about the progress that's happening in more purely research contexts?

2:17:44

what even needs to happen there?

2:17:46

Your role as venture capitalists in helping that happen.

2:17:48

How do you blend those two things that both feel true?

2:17:51

Um but are but feel somewhat at odds.

2:17:58

>> I think it's an end >> and we're putting our money on both in both camps. Okay.

2:18:01

Like on the research side, there's there's absolute fundamental research that needs to be done right now. Yeah.

2:18:06

I'm personally I don't know if you've you guys have read Dave Silver and Rich Sutton's age of experience paper like that to me kind of outlines um the premise like we're going from you know learning from existing data internet data etc.

2:18:17

Yeah, that was like the paradigm for pre-training to learning from experience, which is like reinforcement learning.

2:18:23

The paradigm is you interact with environments, you get reward signals, um you improve.

2:18:28

>> Um and so I think there's a lot that's going to happen in terms of learning from experience and and um have been following you know what Rich Sutton's doing with Keen um and very excited about some of that direction.

2:18:37

I'll give you an example also.

2:18:38

We backed a company called Recursive Intelligence.

2:18:40

Um they formally developed the chip at Google and this is like recursive chip design.

2:18:45

So, similar to um in the game of go, you can have uh you can play, the agent can play itself and get superhuman at go, you can actually get superhuman at chip design and very surprising things come out of that.

2:18:55

Like you end up having chip design that looks, you know, not like the Manhattan distance kind of like square grid stuff.

2:19:00

You you actually have what looks kind of like alien like chip design uh layouts.

2:19:04

And so, um we are absolutely backing research labs.

2:19:07

Um but then if you like if you freeze research progress where it is I am convinced there is so much value to be built in the world and it's just like it's it's just lacking founders lacking agencies to actually go out and and and productize and and build companies around those like one of my examples. Go ahead.

2:19:28

ahead. I was going to say uh how are you guys thinking about like more passive product experiences because people talk about agents and most of the time they're talking about like giving agents tasks like hey go do this thing and spend as much time as you need on it and

2:19:43

uh you know we we'll see the result right like selling work but when you think about actually working with people some of the best employees are just without direct guidance constantly doing work in the background and coming to you only when maybe they need some type of like input. And so it's like more like

2:19:59

And so it's like more like you're just kind of reacting to the work that they're doing and and giving guidance.

2:20:04

And so an example I would think of is >> um uh you know with with Harvey it's like if somebody sends me legal docs >> I should get a some type of notification from Harvey really when it's when it's already done some type of like >> like I already jumped on it >> diligence on it. I already did the work.

2:20:21

You only so I'm not even worried about I'm just I'm getting a ping from Harvey.

2:20:26

Hey, you should pay attention to this thing.

2:20:28

>> Yeah, >> you're going to need to make a decision here. I've done all the work.

2:20:32

>> Um, and so and and even like with an email experience, like I would love to log into my email and not see just like the order at which the emails came in, but like here's three decisions you need to make.

2:20:42

And again, like when you work with great people, they're going to if they have five minutes of your time, they don't just tell you here's the last 20 things that's happened.

2:20:49

They're like here's the three things that you need to make a decision on.

2:20:52

So, I'm really excited to see more of these like passive product experiences where the work is just being done and uh you only need to chime in when it's really necessary or if you're actually a bottleneck.

2:21:06

>> Yes, I I think this is a great question and a great direction and to me this kind of gets at the software as a service versus services as a software.

2:21:16

you know that the nature of software is really changing as we go from an era of apps to an era of agents.

2:21:20

In the era of apps, you want a lot of surface area with your customers.

2:21:26

You want them to spend a lot of time in your product.

2:21:27

You want to put workflows around them that are going to be really sticky that they're going to get accustomed to.

2:21:32

In an air of agents, to your point, things can just be running passively in the background.

2:21:38

The actual amount of surface area you have with your customers might be dimminimous.

2:21:41

The amount of time they spend in your product might might be dimminimous.

2:21:44

So the nature of the moat that you build is different.

2:21:46

And the nature of the moat that you build, kind of what Sony was saying with the age of experience, it's all about context.

2:21:51

It's all about like the environmental context of the job that you are trying to achieve and the feedback that that agent gets as it runs off and does something and comes back and you say actually, you know, like you did this part a little bit a little bit wrong.

2:22:05

You need to do this part a little bit different.

2:22:06

this part a little bit different. And I think in a perfect world you have something you have something like what Harvey does which you know Harvey kind of bridges that gap where there are workflows today for people who who want to do the work kind of how they've done it in the past just a lot better faster cheaper with the benefit of the AI brain and you can deploy agents to go off and do the work on your behalf and then come

2:22:28

back to you when it is done and I think that I think that I think we'll see a lot of that over the next handful of years where there are companies who can kind of bridge that gap where they can live in the software world and have some of the workflows, better workflows

2:22:41

because of AI, but some of the workflows people might be accustomed to and then separately they can deploy in the background with these passive agents that kind of function as co-workers who just come back to you when things are done. But it's two very different like

2:22:51

But it's two very different like design paradigms.

2:22:53

It's two very different business paradigms.

2:22:55

The fact that they're so different is one of the reasons why I think it's going to be tricky for a lot of the incumbent, you know, software companies to make the leap the same way it was tricky for a lot of on-prem companies to make the leap to cloud. >> Yeah.

2:23:08

Can you help me understand where you sit on the level of software eating the world?

2:23:15

We talked to Tyler Cowan about one of the one of the problems with AGI showing up in economic statistics is that uh AGI needs to live in a digital realm.

2:23:26

It has to affect the the the the digital economy, the services economy and that there's so much of the GDP is made up of the health care sector, nonprofit sector.

2:23:36

He highlights a number of sectors that are sort of AGI resistant or AI resistant.

2:23:43

And so that's why he has longer timelines for significant impact to the overall GDP figures.

2:23:48

Do you agree with that or do you think that uh there's something different about AGI that should allow uh tech to finally move the needle on those stickier industries?

2:24:02

>> Well, I do think as like I I fully agree with the premise that you know this AGI stuff is only good it's only embodied in the digital world right now, right?

2:24:09

And so like we we seem to be you know getting tantalizing close to solving the entire digital world. That is very exciting.

2:24:17

At some point the physical world does become the next bottleneck.

2:24:19

I think exciting thing is actually that like hey robotics is also going through a renaissance right now as well.

2:24:24

Like some of the smartest people are going out and working on robots.

2:24:27

And so I do think like similar just the pace of progress is so high right now.

2:24:32

And I didn't think we were going to have digital embodiment that was reliable this early and now you can just let the thing run on your machine.

2:24:38

Um, I think that increasingly we're going to get to physical embodiment and we're going to have a smooth curve there.

2:24:43

Um, I I do agree with the pre premise of like if you want if you believe in the super fast takeoff recursive self-improving like you know everything is just going to you know go vertical line like I I just yeah we're not going to get there.

2:24:57

We're not going to get there without the physical world.

2:24:58

We're probably not going to get there even if we have the physical world.

2:25:00

I just think the reality life is is really messy.

2:25:01

Um, so I don't think we're at we're at ASI.

2:25:05

We're not at that kind of like takeoff moment whatsoever.

2:25:08

That's not the stake in the ground that we're putting.

2:25:10

What we're almost saying here is, hey guys, this this quasi religious concept of AGI like is the thing, you know, generally intelligent and, you know, instead of just waiting for it to arrive, it's here.

2:25:22

Let's let's let's build that. That's here. >> Yeah.

2:25:24

>> Yeah. so much there's there's such a a there's kind of this toxic idea that uh I feel like is ingrained in so many people's head which is like AGI is just going to do that >> like AGI is just going to do that >> AGI is going to cure cancer >> and it's like >> it's at least in the near term from everything we're seeing it's going to be

2:25:45

a human properly you know a group of of talented people properly using the tools to solve all the most pressing problems that we have and so it's and for young people >> extremely paralyzing to be like in 2027 I'm either dead or a billionaire retired on a space yacht and so I could probably just chill for the next two years

2:26:04

because it's one going to be one or the other complete abundance I worry that we'll have this sort of like lost generation of people that have let be ingrained in their head that uh it's not worth trying it's not worth >> now is the time to build enterprise SAS even heard it from [laughter] Sequoia Capital get in the arena folks this is called action

2:26:22

>> I feel bad because I feel bad cuz a a friend of mine was pitching me this idea of like an an an agent to help consumers switch between uh like insurance products cuz like an insurance company will will sell you in a policy and then they'll just kind of jack up the price a little bit every year because they assume a lot of people aren't going to churn. And at the time I think chat GBT

2:26:41

And at the time I think chat GBT agent had come out and I was just like dude like like the the labs are going to like oneshot this problem like right like I think pretty quickly.

2:26:51

I think you could work on this for >> like you know six months and get steamrolled and like it's very possible that like if he had just focused on that one little problem you figured out something unique. >> Yeah.

2:27:03

And it's a big category and so I I felt bad.

2:27:05

>> There's lots of examples.

2:27:05

>> There's lots of examples. How much do you guys um I wanted to ask like like processing signal cuz obviously there's so much noise right now and something that I've appreciated is >> kind of comparing like the X timeline to the app store charts because >> every single day on the X timeline like

2:27:23

vibes are fluctuating and some news will break or some product will be released and the common response is like it's so over for XYZ company and then you look at the app store chart and it's like the company that just launched the thing is like not actually even in the picture at all. Like they're not in the top 25 of

2:27:37

Like they're not in the top 25 of any category.

2:27:39

And so like I feel like there's this insane disconnect between the real world.

2:27:45

The real world is using chat GBT all the time, but they're clearly not paying attention to X, our little bubble.

2:27:52

So it's like where are you guys really looking for signal and noise, especially in the later stages where you know the you're you're investing in companies that should be out in the real world at at some point. Yeah, >> totally.

2:28:05

Like before I get to that point, I I think it is so amazing that like all of this AI discourse is happening on on X right now.

2:28:10

Like you could imagine a world where you know all this dialogue was like happening and behind closed doors or um you know scattered across different channels.

2:28:18

The fact that it's all in X is amazing.

2:28:20

Um and you know it's a combination of research and hot takes and what's happening in the labs.

2:28:26

It's like it's I think it's awesome that it's all happening in one place.

2:28:29

It's remarkable for young people that can just like jump in and learn by osmosis and understand who >> Yeah, it'd be bad if it was only happening in Valinor.

2:28:35

[laughter] >> Totally learn.

2:28:37

I still haven't figured out what the Elves comment was about.

2:28:39

Um but anyways, putting that aside, like yes, like our job is to like, you know, to kind of try to pe signal from the noise.

2:28:49

Um we have we're obviously doing everything we can in the background, credit card panels, uh web signals, etc.

2:28:56

And I'll say like sometimes we see a you know trending web signal take on on X and it's just it's just wrong.

2:29:01

Like we look at our our own sources of ground truth.

2:29:04

The example like this some of the stuff on you know chat GPT is losing uh losing market share.

2:29:09

We actually cut it by like US G uh US web traffic.

2:29:10

It's a very different story.

2:29:14

And so for us it's like it's really important that we're onX.

2:29:18

I think all of the all the discourse happening here very important.

2:29:22

But then like let's let's get to ground truth.

2:29:23

Well, most importantly, just know that as venture capitalist, if someone refers to you as smog, it's sort of a compliment, but also sort of a dig.

2:29:31

[laughter] >> So, that's what you need to know in terms of Lord of the Rings references for for where you sit in the ecosystem specifically.

2:29:37

>> Is that like Smeaggel?

2:29:40

>> Smog is the dragon that hoards all the gold and is an antagonist in The Hobbit, but does have the gold, which is kind of like what you do.

2:29:47

You know, you got a lot of capital over there in Sequoia Capital. Sorry, Jordy. Continue.

2:29:50

No, what were you gonna say? Pat, sorry.

2:29:54

>> Oh, I was just going to say, you know, to the question on signal.

2:29:57

>> Um, >> yeah, >> you know, interestingly, one of the big themes over the last few years on on X, thanks to Lulu, is the go direct idea.

2:30:06

>> And I think for us, go direct is a little bit of try to, you know, let the world know what we're thinking, but probably even more so, just go direct to the founders.

2:30:12

You know, the best source of signal we get is the founders.

2:30:14

We spend, you know, we spend many hours every day just meeting with founders out there doing interesting things and we kind of have the ability to do primary research that not everybody gets a chance to do and I think that's that's still the best source of signal. >> Yeah.

2:30:29

What's uh what is changing in the AGI age in terms of adoption and uh just AI diffusing itself through the economy?

2:30:39

This is something that obviously every company has to deal with because they can build a great product but then they need to get it into businesses if they're in enterprise SAS.

2:30:46

They need to get adoption, make sure that it's being used correctly.

2:30:50

There's the forward deployed model, there's self-s serve models.

2:30:53

Is anything changing there structurally or is it all just uh you know the same playbooks?

2:30:58

I >> mean one thought is like I think we're going from over the last decade we went from salesled growth to productled growth. >> Yeah.

2:31:06

>> I think we're going from product growth to agentled growth. >> Okay.

2:31:08

>> Okay. And I think you see this most clearly actually if you're using for example cloud code actively like it says hey you should use for database you should use superbase uh for hosting you should use versel etc and like it's choosing for you um the stuff you should

2:31:22

be using and um I think increasingly like so it's it's most obvious to me with code like your agent is choosing your infrastructure um but I think it's going to happen across the entire economy like your chat chip is going to tell you like hey this is the um this is the place this is the travel you should

2:31:38

be booking this is the you know and and so I think we are going towards >> I think back to channel channel sales like old school >> yeah old school but I think that the difference is like you don't have competing incentives here um and I think the open ad guys tried to lay like principles that I think are it's a very

2:31:54

principled take on you know how do you want to tell us what users what to use and I think product growth brought us closer to the vision of best product wins but like ultimately people are still lazy they can't read all these reviews they kind of default to like what looks cool on the website. Whereas

2:32:07

what looks cool on the website. Whereas agent le growth like your agent has remember your agent has infinite time to go and make these choice for you and so it can go and you know read all the documentation read all the user comments like figure out for your use case >> also has an experience like building on

2:32:22

top of the infrastructure it's like there like eventually it's like well you want reputation reputation management is going to be very important the way you show up in these LLMs is important both in the pre-training and in all the research that they do and then also uh this whole idea of like, you know, SAS companies that don't have customers, they have hostages. Uh, well, if it's

2:32:41

Uh, well, if it's one click or one prompt to replplatform from the database that has that was trying to keep you hostage to the database that's trying to keep you happy. >> Yeah.

2:32:51

But it's it's also like I think it's good alignment.

2:32:53

Compare it to like if you're building a home. Yeah.

2:32:55

And like the the person like, you know, like running like the the construction firm that you choose like uses really bad cement and then you have like a terrible foundation.

2:33:06

Like you're going to be mad.

2:33:08

You're actually going to be mad at at like the the firm because you're like, "Why did you pick this?

2:33:11

"Why did you pick this? should have known this is like and so I do think there's a good alignment where it's like the best like you were saying the best product should win >> because the the agent is incentivized to make sure that you're on the best like footing and using the best product and >> cost is a factor uh quality reliability

2:33:28

all these things so I do think there's that good alignment >> that makes a lot of sense >> the agent kind of accelerate this you know best product wins notion and best product for the human is maybe different best product for the agent sometimes >> fantastic well thank you so much for taking the time to come and chat with us today. Uh, have a great weekend and

2:33:41

Uh, have a great weekend and we'll talk to you soon.

2:33:43

Pat, we'll see you next week.

2:33:45

Sonia, [laughter] >> I can't wait. >> Two for two for two.

2:33:50

>> Have a great to see you guys. Have a great Friday. >> Goodbye. Phantom Cash.

2:33:53

Fund your wallet without exchanges or middlemen and spend with the Phantom Card.

2:33:58

Meet Phantom Cash, an >> Andrew Reed special, >> a Sequoia Capital Company.

2:34:02

Um, we have some breaking news before we bring in Sean Frank.

2:34:06

Uh, Sam Alman has taken to the timeline.

2:34:09

E posts the melting smiley face emoji with a screenshot from Elon's court filing.

2:34:17

The the in the court filing, here's what it said.

2:34:19

Musk insisted that any new entity quote support the nonprofit mission and that open AI remain quote essentially a philanthropic endeavor.

2:34:31

Now Sam Alman's putting it in the truth zone.

2:34:34

He says, "Here are the actual September 2017 call notes from Elon.

2:34:39

Uh, coming weeks top priority.

2:34:43

Got to figure out how we transition from nonprofit to something which is essentially philanthropic endeavor and is BC Corp or CC Corp or something must tell the story and not lose moral high ground absolutely vital."

2:34:59

So, we'll see if we'll see how Elon reacts to that.

2:35:02

But if that is the case, uh Sam Alman is upset about it.

2:35:05

He says Elon is cherrypicking things to make Greg look bad.

2:35:10

But the full story is that Elon was pushing for a new structure and Greg and Ilas spent a lot of time trying to figure out if they could meet his demands.

2:35:19

I remembered a lot of this, but here's a part I had forgotten.

2:35:23

Quote, Elon said he wanted to accumulate $80 billion for a self- sustaining city on Mars and that he needed and deserved majority equity.

2:35:31

He said that he needed full control since he'd been burnt by not having it in the past.

2:35:39

And when we discussed succession, he surprised us by talking about his children controlling AGI.

2:35:44

I appreciate people saying what they want and think it enables people to resolve things or not. This is Sam speaking. He's no longer quoting.

2:35:55

But Elon saying he wants the above is important context for Greg trying to figure out what he wants.

2:36:01

And Hope's revenge says, "Oh my god, girl, he's such a snake."

2:36:06

[laughter] The drama continues.

2:36:09

The drama continues on the timeline.

2:36:12

Um, well, let me tell you about Apploving.

2:36:15

Profitable advertising made easy with Axon. ai.

2:36:17

Get access to over 1 billion daily active users and grow your business today.

2:36:22

And we have a happy apploving customer in the reream waiting room.

2:36:28

We have Sean Frank from Ridge. He's the CEO. Welcome to the show. How you doing? Good to see you.

2:36:36

>> Oh, you got the polo bear on. What's this?

2:36:40

>> Is that the Winter Olympics Team USA?

2:36:43

It is the newest drop, guys. You guys like it? I put on just for you. >> Insane. Fantastic. >> Fantastic. >> Insane.

2:36:48

Brought the brought the emergency podcast.

2:36:51

We have why we wanted to have you on because OpenAI introduced ads.

2:36:55

How quickly are you thinking about uh ramping up, testing it out?

2:37:01

>> Is Conor waiting in line outside of OpenAI to try to be the first?

2:37:04

[laughter] >> Dude, no joke.

2:37:06

We are We would be the first advertiser if they let us.

2:37:08

Um, you know, we measure a lot of traffic sources over at Ridge and the most like revenue per user out of all traffic ever.

2:37:19

I mean, Google branded, meta, whatever is chat GPT.

2:37:21

We get like $12 from every one of those sessions.

2:37:24

And it like, >> you know, for Meta, you'd be lucky to get a dollar per user, right?

2:37:28

So, the revenue per session from a AI user is just through the roof.

2:37:33

And, >> you know, we have some data.

2:37:35

I don't know if you wanted to share it or not, but like North Beam put out their 2025 report and they track, you know, probably 2,000 merchants, billions of dollars in revenue and AI search in January was like 0.

2:37:46

01% of all traffic on all e-commerce websites and now it's like. 7.

2:37:51

So, it's just like shot through the roof >> and there's not ads yet.

2:37:54

As soon as ads roll out, I am so excited. >> Okay.

2:37:59

Um, we would expect the dollar per user to fall based on ads, correct?

2:38:02

But do you still expect them to be high intent?

2:38:06

Because there were, you know, we were talking to Ben Thompson about this and he was saying that they should have launched two years earlier because it's going to take a while for the ads product to work its way up.

2:38:15

I imagine that the the chat GPT users that land on your website are super high intent because they've probably been asking ChatGpt about your product specifically or wallet specifically or products specifically.

2:38:29

Uh now if they're researching the Roman Empire and they just see a little ad at the end that you purchased and it's not targeted at all, they might click on it and check it out, but it's probably going to be lower intent.

2:38:39

How optimistic are you about CatchyBT ads delivering at a level above Facebook quickly?

2:38:48

>> Well, Google is rolling out their direct AI offer, right?

2:38:51

And what that is is if someone asks, "Hey, what are the best gifts for dads?" Right?

2:38:56

they're gonna ask that specific, you know, question. Yeah.

2:39:00

Um I can now bid to show up with an offer for those people.

2:39:03

It's like, hey, the Ridge Wallet's a really good gift for dads and they're going to give you 20% off right now if you click this link, right?

2:39:09

Um so it's incredibly bottom of the funnel, like people who are ready to purchase and that's Google's ad offering inside of AI and that's coming out soon.

2:39:17

So I think that was like what pushed Chat GPT over the edge to roll this out.

2:39:20

They probably do a a carbon copy of that.

2:39:22

So, it's not going to be discovery ads like you get on a apploven or a meta, right?

2:39:27

What it's going to be is um you know like that last point of sale almost like an affiliate like push you over the door like a honey competitor or whatever, which I think is >> would you be unhappy if uh the offering was just give us a dollar amount per customer and we'll go find you customers?

2:39:48

uh something that's fully blackbox.

2:39:51

You're not doing any demographic targeting, no keyword targeting, or would you like those features?

2:39:57

>> Well, that historically if you can tell somebody like here's 20 bucks, find me customers and you're you just look at your average order size, that's like the holy grail of advertising, but it usually ends up being >> Yeah. >> bit more comp.

2:40:11

>> But but but is the is the initial product that they roll out does it matter to you or will you just take what they what they give you?

2:40:19

Yeah, it's it's what we've seen the organic traffic from any AI search is already so valuable, right?

2:40:25

Um any way to get more of that we we would we would spend a lot of money for but >> you know the beauty of the Facebook ad product is that they figured out a way to take half of everybody's revenue, right?

2:40:39

Like affiliate is like people >> Let's give it up for Mark.

2:40:44

>> Yeah, >> I'll take you do the work. I'll take half. [laughter] >> Yeah.

2:40:49

T T T T T T T T T T T T T T T T T T T T Tik Tok Shop affiliate people don't want to give more than 15% of a sale.

2:40:54

They're like, oh, that is too much. Right.

2:40:57

>> But all performance marketing is is just a is affiliate in a different coat, right?

2:41:01

It's like they're they're able to like, oh, you're going to generate your demand and if you have a better offer, you'll get a better return, right?

2:41:05

But really, they've just figured out exactly how much money they can take from everybody at the optimal level and that's why they do hundred billion dollars a year in revenue.

2:41:12

Um, so if the offer from Chad Chie and Sam Sam Alman is, hey, give us 40% of your revenue and we'll give you new customers you wouldn't get otherwise, I would take that deal because I'm already giving Mark Zuckerberg 50%. Right.

2:41:29

>> One thing that's exciting is I think once people start seeing more once they start seeing ads for products, they will just naturally start using LLMs for more product research.

2:41:38

Like I still find myself if I'm like if I'm uh doing like product research, I'll still go to Google search quite a lot even though in many ways the experience is inferior just because I'm so trained on that.

2:41:50

And so I think like as they roll out ads they're just there's going to be like more organic activity.

2:41:55

So hopefully as a brand you should be getting more people just landing on the site organically because they're just finding out uh finding out uh through their own research. >> Totally.

2:42:06

Half of all product searches start on Amazon.

2:42:08

So like Amazon has been able to take over like the product search box from Google, but they spent $500 billion in two decades doing it.

2:42:15

So if Chat GPT can start stealing some of that, you know, glow that Amazon's been able to do, they'll have an amazing affiliate business and ads business and and whatever you want. >> Yeah.

2:42:26

What do you what do you you you guys sell a ton on Amazon?

2:42:28

What what do you think Amazon's like play here really is?

2:42:34

uh because they obviously don't want to give up the golden goose of their massive ad revenue business.

2:42:38

Uh they want to like protect that.

2:42:42

Uh Alexa is like not even in the picture as far as I'm concerned in terms of like a shopping assistant. So what's the play?

2:42:53

Well, you know, Amazon has a beautiful ad arbitrage system where they spend they're like the number one spender on Amazon on Meta and on Google because they can spend $2 to get a user and then those users click on a bunch of ads on Amazon.

2:43:06

It's a free money machine that they've invented. So, >> kill.

2:43:12

>> Yeah, I think they would um love to partner with everybody because once you're on Amazon, you're still going to click around.

2:43:18

You're still going to do shopping and they have an ad product.

2:43:21

The more interesting question is what does Shopify do?

2:43:22

Because you know Shopify is a product feed of all these merchants, right?

2:43:27

Um, but will they be able to win over any sort of of these deals?

2:43:33

They don't have an ad product.

2:43:35

Like they make all of their money on me hosting my website and then a percentage of the sales I drive and it's a very small percentage.

2:43:41

It's a payment processing company.

2:43:42

So it's like how are they going to survive if more and more of those transactions are happening inside of chat GPT or inside of Gemini? I think Amazon's fine.

2:43:51

They have a big enough product, you know, feed they could feed it in everywhere.

2:43:54

And if you do come to Amazon, they get all their money back with all the clicks.

2:44:00

But walk me through walk me through the risk of Shopify because if I am if I'm looking to there's a lot of there's a lot of brands like there's a ton of I would say like the real like shopping that I've done over the last 5 years is like almost always on Shopify stores, right?

2:44:18

Like Amazon for like essentials and things like batteries and things of that nature.

2:44:26

But I feel like a lot of my uh like like um like like lifestyle consumption is happening on Shopify.

2:44:33

And so you mentioned that that not having that like ad flywheel, but am I not still like discovering Ridge and just popping over to your Shopify store and like to complete the transaction and if they're effectively a payment processor like they're still making their money, >> right?

2:44:53

Well, it's just if websites continue to be important.

2:44:55

Like I, you know, I I'm I'm going to operate under the assumption that >> Yeah.

2:45:00

But all >> but calling calling Shopify just like a website company, like in my view, it's like a catalog and it's a CRM and it's a payment processor. >> Oh, you for sure.

2:45:12

It does all those things incredibly well.

2:45:14

Bro, I'm so bullish on Shopify.

2:45:15

I love I love Shopify as a thing, but the challenge is the website will become less important in the future.

2:45:22

Just like mobile apps had a moment, they're not important anymore.

2:45:26

Where was the last time you guys opened a shopping mobile app and before that it was cataloges, right?

2:45:29

like the user experience has become easier and easier and easier and the way you interact with brands has changed and I think the website will kind of be replaced just by asking chat to buy you stuff and may maybe you'll still go to websites but kind of like how you still kind of open cataloges and >> I don't open cataloges. >> Yeah.

2:45:52

>> Straight in the recycling.

2:45:52

I'm like I did not ask for this. >> Totally right.

2:45:55

And that's just like the the worry of of the website.

2:45:57

So Shopify is incredibly important for us, but they do have to plug into every single LLM, right?

2:46:03

They have to be that product feed everywhere.

2:46:05

And >> yeah, but I think they're they're they've taken the approach of just like being more quick to partner with the LLMs than an Amazon has because again, they don't have that same like they have like less to lose, right?

2:46:18

They're not worried that because they don't have an ad business.

2:46:22

ad business. are not like like I feel like Amazon has to be a lot more when you look at the when you look at the marketplaces that have partnered with um Chat GBT it's like Etsy right Etsy doesn't really have anything to lose right like they're uh they just want more traffic more more sales like

2:46:40

they'll take it however they can get it whereas like Amazon has something to lose >> right you know and it was big news when Shopify partnered with Chat GPT until Amazon partnered with Chat GPT and Amazon comes in an equity round and like now all of those products are going to be feeding into chat GPT and that's one of the the worries of Shopify. like h

2:46:58

of the the worries of Shopify. like h how do you stand out h right now like it's like beautiful brands with beautiful websites with shopping experiences and that is different from what Amazon offers but if all of those products are just going to be discoverable inside of chat GPT and competing for the same space

2:47:17

>> I don't know the value of my website in three years like that's one thing that we're we're worried about at Richidge right now >> well what about uh ad creative I there's this weird trend where uh DTOC companies were effectively making TV commercials uh with TV production techniques, cinema cameras, high res photos, whatnot. Uh

2:47:38

Uh but wound what what wound up working on Tik Tok and Instagram reels and YouTube shorts.

2:47:47

There's a lot of UGC, a lot of stuff shot on iPhones, a lot of stuff that feels more natural.

2:47:51

Is there a world where maybe you want to get good at creating Sora videos or or AI generated images?

2:48:00

Even if they don't look like a real photo, it looks more natural within that app, within the chat app.

2:48:08

You're expecting to see AI images.

2:48:10

And so you want to lean into AI image versions of your products.

2:48:13

Even if the background's a little a little crazy, hallucinogenic, it's what people will be used to. They'll be in that mode. >> Yeah.

2:48:22

I think when Chat GPT launches their ad product, it's probably going to be thumbnails to websites with really aggressive offers. >> Yeah.

2:48:31

>> Um, >> but right now in our ad account, if you guys go to the Facebook ad library and pull up Bridge, we are running full-blown AI videos, right?

2:48:37

And they are they're getting spend and they are winners in the ad account. Yeah.

2:48:42

>> Um, >> so we're all probably underestimating how much it's going to affect the ad industry.

2:48:48

industry. It's like by the end of the year video is going to be if you want to make AI video it'll look just like human video and like the highest level productions are already being basically monopolized by AI >> and something I've been thinking about that feels inevitable uh is you know two years from now we'll look back and laugh

2:49:10

that people would like make an ad and then serve the same ad to like a hundred thousand people or a million people because it's like if you're going to spend a lot of money serving somebody an ad, you should serve them the most like hyperargeted like Sean Frank, I have an athletic brewing company beer for here for you. I got an offer for you, Sean.

2:49:29

I got an offer for you, Sean.

2:49:31

Just click the link and check out.

2:49:31

Like eventually it will just get so so so so targeted that it's basically like ads are being generated on the fly for individual customers.

2:49:41

>> Oh, dude, that's for sure coming. Matt is working on it.

2:49:43

And not only that, they'll put you in the ads.

2:49:45

They'll be like, "Hey, look how cool you can look in this sweater.

2:49:48

You should buy this sweater."

2:49:49

And they want to do that because then the CPMs just go up.

2:49:51

Right now, I get a $12 CPM on Meta.

2:49:53

They would much prefer me get a $200 CPM and just show way less ads to everybody, right?

2:50:01

So, I think that the personalization of ads is coming.

2:50:03

And we've already just seen like in my ad account right now today, maybe a third of all my spenders will be AI ads. And that's crazy. >> That is crazy.

2:50:11

Double click on the the the AI ads that you're running.

2:50:13

Are you running stuff that you could shoot that's indistinguishable from human photography, human videography?

2:50:22

Or is there a unique value to saying, "Look, there's just no way that we could take a ridge wallet to the top of Mount Everest, shoot it into space, have it turn into cake, have it turn into a cat, like crazy stuff that's just impossible.

2:50:37

maybe with like a massive CGI budget, but truly like breaking the laws of physics or are you just trying to do like, hey, it's just a Ridge wallet on a beautiful background and, you know, we were able to generate that. >> Yeah.

2:50:49

So, really what it is is, you know, we have wallets with every college and let's let's say there's 200 colleges in America, [clears throat] right?

2:50:58

>> Now, I could get 200 jerseys and I could get 200 fans and I could have them talk about this particular wallet with this jersey, with this fan.

2:51:04

like a very bespoke ad um and then serve it into a market like Ohio.

2:51:09

I could do that, but that would cost, I don't know, >> $85,000 to run that campaign.

2:51:13

Or I can have one guy do it in one day with uh a Hicksfield or whatever, right?

2:51:21

>> So that's what we're doing right now.

2:51:22

And >> are you guys using Hickfield?

2:51:25

>> We're having them on the show in just a couple minutes.

2:51:27

>> Yeah, I love Hicksfield.

2:51:27

Uh so yeah and I I don't think like I think normies are using chat GPT now like it's fully broken through the mainstream but like I like the all of the the tools around that I mean everyone knows lovable at bolt.

2:51:42

new but like if you want to make videos at scale I think feels like the best easiest way to do that right now. >> Yeah.

2:51:47

So the pipeline is you specifically want to multiply your creative so you are filming one human video and then you're creating variations with AI.

2:51:55

Is that the correct use case right now as a as that example? >> No. No.

2:51:59

So, so what we're doing is we we have B-roll of actual wallets being used that we've shot, right?

2:52:04

Um, but we need an opening hook of a a Buckeye fan, right, in a jersey or whatever.

2:52:10

So, that is that is being done with AI and then intros to the wallet. Got it. Okay.

2:52:16

>> And you can pull up our attic right now.

2:52:18

There's a woman like Hunter.

2:52:18

She's walking talking about like, hey, like I bought this for my husband.

2:52:22

He's like, you know, whatever. That she doesn't exist. That is all AI.

2:52:27

[laughter] >> And and it's because for us to find a woman hunter who's out in a field or whatever, we could we could do that.

2:52:34

It would just take, you know, two days and it would probably cost $2,000.

2:52:37

And we can test that concept right now in real time inside the Facebook ad library.

2:52:41

So, >> it's going to be interesting.

2:52:43

I'm so curious to see what happens to the brands that like try to take like some type of like moral aesthetic or ethical high ground and just say like we never use AI and like what actually happens to those >> Well, dude, it's one of those things. Yeah. It's like not using AI.

2:53:02

It's like it's like if somebody said like, "Yeah, we don't use computers."

2:53:05

I'm like, "I don't even know what you mean."

2:53:08

[laughter] >> It's like everything's AI.

2:53:08

Everything's got to be AI. So, um, look inc.

2:53:14

incredibly bullish on uh ads coming to any surface of the internet.

2:53:18

So if there's any service of the internet that doesn't have an ad, I would love an ad to be there.

2:53:22

Uh you know you guys [applause] >> you guys did the apploving ad read um brand new to e-commerce and I spent millions of dollars there and I love I love it as an ad product.

2:53:35

So more of that is just really good for me.

2:53:38

So, if it comes to Gemini or Chad GPT now, I just don't think they'll do big beautiful display ads.

2:53:44

I don't think there'll be any video ads.

2:53:45

It's just going to be, hey, you're looking for a gift, Ridge Wallet will give you the best price ever right now.

2:53:50

And then they'll take a 30% commission.

2:53:54

>> I really want to see more flashbangs come. [laughter] >> Watch out. Watch out. We got you.

2:54:04

[laughter] I hope you >> Do you have any flashbangs on your podcast?

2:54:06

You're the You're the one show that we would give you the the the effect if you want if you want to flashbang your boys. >> Okay, cool.

2:54:13

I'll get the ad rights to that.

2:54:14

[laughter] >> We also have a horse that runs across the screen now.

2:54:18

>> We'll we'll save that.

2:54:18

We'll save that >> for right now.

2:54:21

>> Uh wait, have you have you uh [laughter] have you used any other of the uh AI ads?

2:54:28

Uh like AI basically like I heard Perplexity was rolling out ads in their product. Did you demo that?

2:54:36

Have you have you thought about using that?

2:54:38

I know it's like smaller and earlier.

2:54:40

Do they have they are they actually live?

2:54:41

You have any experience there? >> No.

2:54:44

And I have a list of in front of me like I told you earlier North did a report. >> Yeah. >> And chat GPT is 99.

2:54:50

5% of all AI traffic to e-commerce websites right now. Wow.

2:54:56

>> So, [laughter] uh, >> so it's a big [clears throat] one.

2:54:58

So, this is a big announcement today. So, uh, yeah.

2:55:00

What does it take to actually get Ridge live? >> I don't know, man.

2:55:04

You got You guys know Sam, dude. Hit him up.

2:55:06

Say he's got his first paying customer right now.

2:55:10

>> He's a little busy today.

2:55:10

[laughter] >> He's got to go back and forth between Oakland and traffic. >> No.

2:55:16

Uh yeah, we'll we'll we'll put in a good word for you.

2:55:19

I would love to see what consumer What kind of broader consumer trends are you tracking this year?

2:55:24

We were talking about the sauna wars in New York City.

2:55:28

>> Uh people setting up these like bathous.

2:55:31

I was somewhat bearish on the trend like nationally.

2:55:33

I just think there's a lot of places in America where people will be like, am I going to pay couple hundred bucks a month for this like sauna like bath house membership or do I just want to buy one uh you know for my house and and um >> uh but what what are you tracking?

2:55:50

>> Uh well on the sauna wars I mean pause is a franchise-based sauna business.

2:55:56

They have them in Venice.

2:55:56

They have them in Southern California.

2:55:57

I was at a e-commerce or like a a private equity conference.

2:56:01

I think those guys are going to expand aggressively.

2:56:03

So I think they're selling to right now.

2:56:06

>> I used to live down the street from a pause. I would go there. I enjoyed it.

2:56:08

I was like, I like using a sauna and I like using an ice bath.

2:56:13

And so I just bought one because it was like a $100 every time I went.

2:56:16

I just did the math and I was like, it's nice to go there, but it's it's nicer to just have it in my house.

2:56:22

And so that's that's one of those things like I I don't know how much like actual spend that they can capture long term or what the LTV is.

2:56:31

Like if you get somebody hooked on using the sauna eventually they just run the numbers, right?

2:56:35

It's not like a gym where it's like a gym I'll pay the however much it is a month because it's nice to go somewhere out of my house to work out and I don't want 300 different machines and all these different plates.

2:56:50

So, I'm not convinced that it's actually going to scale that well outside of, you know, major metros like LA and New York. >> Yeah.

2:56:58

Also, the cost per use of a gym is really low compared to a hundred bucks every pop of a of a pause.

2:57:02

But I they're going to expand like crazy and it'll be a great private equity transaction for somebody.

2:57:10

But yeah, long term it's I mean I don't I don't think it's a good trend.

2:57:12

Uh the thing we're most interested in is fiber.

2:57:14

I think fiber is gonna have a protein like moment and protein's been like on a mega trend for 20 years or whatever and has billions of dollars in spend behind it.

2:57:23

You know, creatine had like a little taste of that, but fiber will be like the next, you know, thing that even reaches something like a protein.

2:57:29

So, we think fiber is like the the obvious big trend right now that's going mainstream.

2:57:35

>> Will we see will we see you you guys enter the category this year?

2:57:39

Oh, we're secretly in the fiber space already.

2:57:42

So, we're not talking about it, but we have we have a brand bubbling up.

2:57:45

We have real customers that are paying.

2:57:47

They don't know what's behind Ridge, but we'll talk about that uh maybe offline. >> Amazing.

2:57:53

So, you're going to post your revenue every single month to invite thousands of competitors into the category, right? >> Yeah. Yeah.

2:57:59

Seems to be the smartest thing to do, right?

2:58:02

>> It's like I I the the the build the build in public movement brought to consumer is just an absolute nightmare.

2:58:10

It's like if you brag to the world about how much revenue you're doing, there are going to be smart people that enter your category and they're going to do it fast and they might outexecute you.

2:58:20

I don't think they'd out execute you guys, but um I've yet to see see a consumer founder build in public that didn't ultimately regret it. >> Oh yeah.

2:58:29

You know, we're pretty public with Ray just because I think you have to be stupid to try to sell wallets in 2026 or whatever. >> Yeah.

2:58:36

But but but for you guys it was it was never like you were just like here's our investor update.

2:58:41

I'm publishing it cuz it's so good.

2:58:43

Like you guys don't have investors but like it was never like I'm going to flex monthly on the timeline which is the approach that I think a lot of people have had uh like on on the the consumer side. >> Yeah.

2:58:58

I mean consumer is a knife fight man.

2:59:00

Like there's no moes at all.

2:59:00

It's it's the digital equivalent of opening a restaurant I think.

2:59:03

So, you know, like you're you're fighting for every single transaction, right?

2:59:09

You guys were just having, you know, Sequo talking about it's a great time to sell Enterprise SAS because you guys have hostages and not customers.

2:59:16

And it's like, >> yeah, I would love I would love to have [laughter] >> Yeah, there's truly no lock in once you buy one.

2:59:24

It's not that you have to come back the next year, whereas that for a lot of enterprise SAS, if you stop paying, your entire business shuts down.

2:59:32

So >> yeah, the the moat is like scale, operational excellence, but those things like those things can erode. >> Very team- based.

2:59:42

>> Well, thank you so much for taking the time to hop on. >> Great to see you.

2:59:44

Next time you come on, come in person.

2:59:47

>> You know, it's not that long of a drive. >> Yeah, >> dude. I would love to.

2:59:49

And >> wait, you're crushing it.

2:59:53

>> Once you once you actually have the the OpenAI ad platform live, let's come here.

2:59:58

Let's put it on the big screen.

3:00:00

We'll get a bunch of monitors and we'll just monitor the situation together.

3:00:05

>> And we'll clap every time a sale comes in. >> Yes.

3:00:09

>> And and thank you for hooking the team up with Ridge Wallet. You guys are too.

3:00:15

>> Uh I was in the gym this morning with some of the folks.

3:00:18

They they had the suitcase. Look at the suitcase.

3:00:19

There it is in the corner.

3:00:21

Every single member of the team is rocking a Ridge suitcase.

3:00:26

There are more Ridge wallets than you can possibly count in this ultra dome. >> It's amazing. >> We're huge fans. >> We love you.

3:00:32

>> I carry a ridge wallet every day. I love it.

3:00:34

>> Talk soon, >> brothers. Thank you. Keep crushing. Goodbye. >> Goodbye. >> Goodbye.

3:00:38

>> Reream one live stream 30 plus destinations.

3:00:39

If you want to multiream, go to reream. com.

3:00:43

Uh, I want to talk about ads more.

3:00:43

I want to talk about vibe. co's ads.

3:00:49

They're a sponsor of us, but they've also been burning up the timeline with a number of billboard ads in San Francisco.

3:00:55

Sheil Monot, friend of the show, says, "These ads are very clever.

3:00:59

What else is in the collection?"

3:00:59

And I got a preview of some other ones.

3:01:02

So, this is Jensen on target Jensen on TV.

3:01:06

That's a brilliant billboard.

3:01:06

It only works in San Francisco, but Jensen Wong, the CEO of Nvidia.

3:01:10

His leather jacket is iconic.

3:01:14

And so, you see the shoulder of the leather jacket with Jensen.

3:01:16

You know what they're talking about.

3:01:18

If you want to get to him, you're going to go to vibe. co. What else did they do?

3:01:21

They did say target Mark on TV.

3:01:23

They put just Mark Andre's head there.

3:01:26

It's an iconic image and it lets you know immediately how can you target someone like Mark Andre. It's hard.

3:01:32

He's not going to be everywhere. Vibe. co has great targeting.

3:01:37

So, I got a little teaser of what else is available.

3:01:39

We got Sam Alman target on TV >> with the McLaren one. Yeah.

3:01:44

And then we'll go to the next one.

3:01:47

Target Zuck on TV and it's a wrist with a with a FPJ on there or a PC. You made these.

3:01:52

And then the next one they have a target chesky on TV and it has a barbell. Yeah.

3:01:57

So, this is the type of marketing that that you got to be doing.

3:02:02

You got to be thinking, okay, how do I how do I send a message?

3:02:05

There's there's one more uh we'll go to this target Augustus on TV.

3:02:10

Of course, everyone knows Augustus Dico.

3:02:12

You know, he's known for carrying a white monster.

3:02:13

>> Sort of like a human version of the white monster.

3:02:15

>> If you put this billboard up, everyone's going to get it immediately.

3:02:16

They're going to know that you're you're cool.

3:02:19

They're going to know that they should go to vibe.

3:02:20

co and they should start targeting folks like Augustus Dico, the CEO, founder of Rain Maker, who's known for having a white monster every once in a while.

3:02:29

>> Not every once in a while. >> Pretty much constant.

3:02:31

>> Every hour every hour. >> He's powered by it.

3:02:34

>> The way you drink Diet Cokes, I I imagine he drinks White Monster. >> Yes. Yes.

3:02:38

>> You're just like, "Oh, oh, it's two o'clock." >> No, no.

3:02:39

The four of those that uh that we just displayed I did generate in Nano Banana with Gemini 3 Pro, Google's most intelligent model yet.

3:02:49

>> Leah says, "Love trash day. Love hearing that truck.

3:02:53

Humans getting stuff done.

3:02:55

Cooperation, logistics, municipal services, civilization. Couldn't agree more.

3:03:01

It's a reminder that we haven't collapsed yet."

3:03:04

Dude, a four-year-old, the way their face lights up when the trash truck comes and it's just pure wonder at the massive machinery moving up and down the street, the beeping when it backs up.

3:03:16

That is childlike wonder that you should never lose.

3:03:19

No matter what is, you should always take >> take a moment to show some respect for the trash truck. I completely agree. I love it.

3:03:27

Joe Weisenthal is crashing out.

3:03:30

He says he never wants to use the web again.

3:03:32

He said in today's OddLots newsletter, he wrote about how depressing the internet's become. We'll read his piece.

3:03:38

And we need to catch up with Joe.

3:03:40

I think he's coming on the show soon.

3:03:42

He says, "I swear I swear this is not another piece about my personal foray into vibe coding."

3:03:45

Okay, maybe it is a little bit, but not really.

3:03:48

So, last year we did an episode with the COO of Perplexity, whose name is Dimmitri, he says, which is kind of a hybrid LLM search engine.

3:03:55

You'll be familiar with it.

3:03:57

Uh it's it's very tethered to the real world.

3:03:59

So if you asked it about uh hey maybe the latest de developments in Venezuela, it will obviously produce text but also links to the latest reporting from reputable news outlets uh and other sources.

3:04:10

It generally works well if you want to get up to speed on something that's happening right now.

3:04:15

Anyway, one of the questions that Joe tried to get across with Dimmitri, but he doesn't think he phrased it all that particularly well is what happens to the future of the web as we know it if more and more of our news is coming to us from chatbot form.

3:04:26

is coming to us from chatbot form. uh let's just imagine people start regularly making perplexity their first destination each morning to capture up on the news and let's just imagine for sake of a thought experiment that the traditional news publishers come out fine in this relationship so the New York Times is and the CNN's and the Alzer of this world are getting adequately compensated for their reporting to be summarized and displayed

3:04:47

on perplexity it's hard for me to imagine the future but whatever is beside the point so he's just saying it's not an economic issue uh let's talk about the the vibes that would result from this so he says this is his question in the future why do websites still exist If more and more people start consuming the New York Times' content through a chatbot, why continue to invest in maintaining a well functioning website called NY Times.com? com?

3:05:09

I suppose that to some extent this is a question that precedes the existence of chat bots.

3:05:12

There was almost certainly a time when a majority when a major priority for the New York Times was to have a well functioning, elegant website.

3:05:19

And while there are people still paid to work on it, this is probably not their top priority right now.

3:05:24

a tech budget that might have once gone to web development might now be going to figure out the best strategy for Instagram reels or whatever.

3:05:31

Nonetheless, do you have a a comment, Jordan?

3:05:33

>> Yeah, maybe maybe this is just because I turned 30 and I'm unk now.

3:05:38

>> But I like going into the world >> of the content.

3:05:41

Like I like going to the Wall Street Journal app.

3:05:44

I like going to >> the New York Times app.

3:05:47

I like going to these places because >> physical paper.

3:05:51

>> We like the physical paper.

3:05:51

This isn't going anywhere.

3:05:53

For my cold dead hands, me and you, Joe Weisenthal.

3:05:54

We are keeping the newspaper alive.

3:05:56

I guess you'll be on the web like some hot new young.

3:06:02

I will be reading the paper. >> Yeah.

3:06:04

Ultimately, I still care about like I it matters.

3:06:07

I care a lot about who wrote it too. >> Totally.

3:06:10

>> Like I don't want to just serve.

3:06:11

>> But that can be instantiated in perplexity or chat.

3:06:12

It can tell you who wrote it.

3:06:14

You you could in theory if the if the deals are structured properly.

3:06:18

Now, you can't uh get I I don't think you can get the New York Times content in the in Chatt because they have a lawsuit.

3:06:24

You can get Wall Street Journal content.

3:06:25

So, in theory, you could kick off your morning with a query to CHP.

3:06:30

Hey, tell me the most interesting pieces that are on the front page of the Wall Street Journal and it would just do it for you and it would bring that in and it would pay uh News Corp accordingly.

3:06:40

Um but there's something fun about holding a nice piece of paper in your hands.

3:06:44

Uh I think it will die, but a very very slow death.

3:06:46

we're still reading newspapers.

3:06:47

I imagine I'll still be reading newspapers in a while and I imagine that we'll still be going to the websites.

3:06:52

Uh but he is correct to to highlight that there is a change of foot.

3:06:56

So he says, "Nonetheless, the web browser is by and large still a dominant piece of software for accessing content and services that exist on the internet.

3:07:05

And in fact, if we step out of the news context and think about it, say buying a car, buying car insurance, then the website as we know it is still incredibly important."

3:07:12

Anyway, I was thinking about this again because my vibe coding for easily the most annoying parts were when I had to leave the terminal interface and do something on the web.

3:07:20

So, it's still an unbelievably annoying process to do something simple like redirect a domain name.

3:07:26

>> I found GoDaddies where I've been registering various domain names for years interface to be borderline unusable. Shots fired. >> Back check. True.

3:07:34

>> It is difficult sometimes.

3:07:36

>> Every time I'm I'm just trying to make sure that like a domain is renewed.

3:07:40

They're like, "How about you buy a thousand websites [laughter] right now?

3:07:45

Just buy a thousand websites.

3:07:45

Buy a thousand AI websites. >> I'm a Name. com guy."

3:07:48

It's actually experience.

3:07:51

>> We have one billion websites for you. >> Yeah. Yeah. Yeah.

3:07:53

Uh, as I mentioned in the piece he wrote on Tuesday, uh, one of the first things Joe did to make it so he could update his website cor directly from Cloud Code rather than having to update the files via Cloudflare backend.

3:08:06

Uh this is the first very small thing.

3:08:08

But the point is that every time I had to open operate in the browser, it felt deflating.

3:08:12

Typing in URLs, clicking buttons, checking boxes, pulling down dropdowns, entering fields. No thank you.

3:08:18

He's genuinely curious what happens to visual the visual web that's designed for humans.

3:08:22

I know there's plenty of work that's being done to allow agents such as Claude Code to go to a website, click around at what human does.

3:08:29

Just in the same way the chat bots were trained on billions of Reddit posts and everything else on the internet, these agents are being trained by ingesting numerous sessions of people moving a mouse on the screen and so forth until they can mimic that process.

3:08:41

So that's all well and good, but it still gets to this issue that we currently have much of the internet presented in the form of web pages that are designed to be logical and pleasing to the human eye.

3:08:49

We still do so much on the web, but now every time I have to use the web, it feels kind of like a personal failure. It feels inefficient.

3:08:55

And if the web is increasingly going to be navigated by bots working on a human user's behalf, then why even bother optimizing it for visuality at all?

3:09:01

I don't know where any of this is going, but my guess is that uh it's pretty big structural changes are in store for what people think of as the internet.

3:09:09

Uh yes, it's interesting.

3:09:12

Like >> no, I feel like the internet is already living in apps so much. Mhm.

3:09:16

>> Like when I think about a world in the future where an LLM is just generating me an article that was in the New York Times that day, I could imagine it just generating it in a visual style that the New York Times like decides themselves. >> Yeah.

3:09:31

>> I mean, you can already do this with Nano Banana.

3:09:32

You can you can say, "Write me a New York Times style article about this topic."

3:09:36

It will write it, instantiate it.

3:09:38

It will search the web to find the facts.

3:09:40

So, it'll probably not hallucinate that much.

3:09:41

and then you could say turn it into an image that looks like a New York Times screenshot and it'll do that too.

3:09:46

Uh so people will people will be met where their preferences are. Um I don't know.

3:09:50

I I I think that uh I mean the the flip side is like he's he's making this argument that as more and more traffic shifts away from the web, it will get fewer and fewer resources within those organizations.

3:10:04

So the New York Times will say, "Hey, you know, we're not getting that much traffic to our website, so let's not spend that much effort making it better."

3:10:10

But you also get 10 times as much leverage because the folks at the New York Times will be able to fire off an agent and say, "Hey, make it look better."

3:10:17

And so you would imagine, I would hope that even as you go from, okay, maybe there's if there's 10 people working on a pro on a website and now uh five of them move over to Instagram and YouTube strategy and four of them move over to generative optim optimization strategies and LLM and AI stuff.

3:10:36

Well, there's one person left, the person on the the Japanese soldier on the island who hasn't gotten the memo that no one's going to the website.

3:10:45

Well, some people are going there and they fire off a prompt. Make it perfect. Don't make mistakes. And boom, they're good. They're in business.

3:10:50

So, some cause for optimism. We'll see.

3:10:51

What do you think, Tyler?

3:10:54

>> Oh, I was just going to update on the um on the same Altman.

3:10:56

>> Please give us an update. What's up? >> Okay.

3:10:58