Brothers the most profitable podcast in the world uh let's kick it off with a quote from David senra he is quoting Sage advice from leelou Charlie munger's favorite investor and he says you can compound knowledge faster than money if you truly love this game I would suggest
that you don't take shortcuts it might take longer but it's more rewarding that's what we're trying to do today compounding knowledge let's go uh more importantly than leelu David CER is not feeling super well right now he's got a little bit of a cold send nice comment send him a DM or a comment and say heard
the technology Brothers told me you were sick I hope you feel better hope you feel better and uh let's get him back in action the the RSS feed needs him at the top of his of his game desperately even though David on a sick day is is better than your favorite you know your next favorite podcaster on their you know
best day yep uh we still need him back in business speaking of next favorite podcasters uh we got David saaks here from the all-in podcast he still has the all-in badge he's monthly now but he's still putting up huge numbers he's got a great post here he says new report by Leading semiconductor analyst Dylan
Patel you know we love Dylan Patel here on the show shows that deep seek spent over1 billion dollar on its compute cluster the widely reported $6 Million number is highly misleading as it excludes capex and R&D and at best describes excludes hey we're going to just ignore capex and R&D and in
every normally this is the most American thing you could do we we pioneered this they even stole the idea of Faking your financials from us Sam Sam Alman is actually pissed that they figured this out before him this is just adjusted iida it all comes back to Masa and Adam Newman he pioneered the community
adjusted IAH deep seek puts up a fantastic Community adjusted IAH ripping out capex ripping out A&D and just ripping the American markets I mean that like you know you do take capex and R&D out of out of psychological warfare the point right yeah um and uh and at best describes the cost of the final training
run only and so today we have the semi analysis post here deep- seek debates Chinese leadership on costs true training costs close model margins impacts h100 prices soaring subsidized inference pricing export controls MLA and so if you're not already subscribed to semi analysis you got to do it folks
you got to do it it's one of the most embarrassing things that can happen to you in Silicon Valley getting caught looking at a at a uh at a semi analysis pay wall that's the way to get just kicked off a board these days it's disastrous what you saying yeah if you see a VC out in public walk up to them
say pull up semi analysis right now and if they hit the pay wall it's just very very negative signal say oh oh so you're not raising the next land like you're you're retiring yeah cool enjoy Aspen yeah yeah enoy hope you picked out some good stuff so uh Dylan Patel writes the Deep seek narrative takes the World by
storm for the last week deep seek has been the only topic that anyone in the world wants to talk about basically true uh deep See's daily traffic is now much higher than Claude perplexity and even Google's Gemini which is crazy but it makes sense but is that the Chinese market no no no no I think in America
because the the the the the traffic stats are always uh aggregated by American like tracking pixels um but Gemini is super embarrassing because it's a Google product they should be stuffing it everywhere but it's so hard to get to as we talked about before um but close Watchers of the space this is
not exactly new news we have been talking about deep seek for months uh the company is not new but the obsessive hype is semi analysis has long maintained that deep seek is extremely talented and the broader public in the United States has not cared when the world finally paid attention it did so
in an obsessive hype cycle that doesn't reflect reality classic Americans we get pumped we go to the Moon we crash and sometimes we forget how to go to the moon for few decades yeah sometimes you're the world we run it back yeah we run it back M of stuff yeah sometimes you're the world versus man and then you
lose 99% of your money it happens we'll get to that later very American uh we want to highlight the narrative has flipped the last month when scaling laws were broken we dispelled this myth now Al algorithmic Improvement is too fast and this to is somehow bad for NVIDIA and gpus the narrative now is that deep
seek is so efficient that we don't need more compute jeevan's Paradox is closer to reality the models have already induced Demand with tangible effects to h100 and h200 pricing so you can just go look at the at the spot Market market for renting these uh these gpus and you can see jeans Paradox in action today
and so it's a it's a really strong Market signal yeah and RAM saw this with um oh yeah that's right their data right as a cost per token drop the the the actual demand for them increase spending on them increased substantially yep and so high flyer is the name no they're a Chinese hedge fund and they started
using AI in trading and they invested in 10,000 a100 gpus in 2021 this is before the chip band they didn't do anything everything was above board but they got a big cluster it was wonder how many Singapore they've taken since then yeah well that's the thing is that they might not have needed to because they they
they just they just built up so such a huge cluster but it goes on to say they spent over half a billion dollar on gpus with estimates pointing to 50,000 Hopper gpus across variations so there's the H2 H20 the h800 which is the nerfed one with that memory bandwidth which they
got around by the way and then the h100 which they can still get through the Singapore loophole and a bunch of other places you can buy I think a thousand or 2,000 at a time and so they uh there is an interesting angle here which is that they truly do have goated Engineers on the team yeah Omega cracked I think was
the the the term uh Dylan Patel used um they have a really crazy Talent strategy they aggressively recruit top Chinese University students offering salaries over $1.3 million and I assume that's per year oh per month yeah I think it's per year but in in America some people are making that per month y got to get
your money up uh with flexible roles and unfetter GPU access staff count is 150 and rapidly growing and so they have uh there's an interesting kind of like uh counternarrative to the whole like 996 grind it out work really hard they are much more like a research lab where it's just kind of people hanging out trying
stuff there's really like you know open-minded try whatever you want don't worry about cost just run it it's and it's produced remarkable results it's more of an been some push back because uh from from folks on the Dei side just because there was no non-chinese employees they seem to have made that
work yeah yeah uh it's uh we'll see we'll see what happens maybe there'll be some push back I expect the New York Times to come after them pretty hard but yeah I would imagine Taylor Rens is writing something right now um so in terms of server capex it's estimated at 1.6 billion plus almost a billion in
oper operational costs uh there's some estimates here 10,000 H 800s 10,000 h100s with large orders of h20s and progress uh h800 has the same compute as the H h100 but less Network bandwidth uh the misleading six million figure was widely circulated as the cost of V3 but that doesn't include R&D Hardware
depreciation uh repeated experiments actual total spend is far higher but at the same time just to break it down R&D is the entire is the cost that they they're spending on their team which is undoubtedly one of you know in the like I would imagine in the billions of dollars a year based around I mean they
had $944 million in operational costs so yeah that's that the Opex is probably the mostly R&D in salaries they have 150 people making a million dollars a year and so right there that's $150 million that we know of they also yeah have been aggressively lying and now and now the
truth is coming out a little bit but we still don't know the full truth right I I think this is probably correct I I'm I'm this feels correct and believable yeah and so it's easy to lean into this and be like uh you know Dylan Patel is saying it's not it's not five million or six million it's actually closer to 500
million or a billion and it's easy to be like no it's even higher it's 50 billion and it's like probably not that high but um but it is it is interesting and so in terms of model performance deep seek V3 is the base model while R1 is the reasoning model we've been through this and they have a couple genuine
Innovations here so these are the things that you need to see these are the buzzword that going to be going out in the AI you know influencer space so this weekend start sprinkling them into conversations at home yep they may they probably won't land but you'll sound smart and then come Monday you'll be
able to just sprinkle them in in the workplace and really start you know working them into the yeah you got to let people know that you you use these words so frequently you got to use the abbreviation so multi- token prediction MTP to toes toes toes multi- toes prediction multi toes mixture of experts just call
these PS specialized sub networks quote unquote experts managed by Advanced gating networks you could say oh yeah my my perts are gated perks are gated I mean the funny thing is that and real ones will know exactly what you mean yeah and so it's a good way to filter out who's laring and who's who's really
you know at the at the Forefront of of these broader TR yeah I mean like the like mixture of experts was was described in detail by George Hots when GPT 4 dropped uh and he was saying that there were some Hardware limitations to how large you could scale the models and so they were effectively
training six or 20 sub models and then wiring them all together with this mixture of experts thing and so I've heard that term before like outside of this so that's not entirely but but it does seem like combining all of these are allowed them to to to create a great model uh and then multi-head latent attention MLA
you're going to be hearing a lot about that drastically reduces KB Cas memory 93.3% less slashing inference costs and that's obviously very important and so at this point uh V3 is uh reportedly passes GPT 40 from May 2024 although a AI evolves fast and many new models have also improve improved drastically since
and there's this reasoning shift going on where posttraining synthetic data like RL is getting cheaper than giant pre-training runs letting R1 quickly match others like 01 uh open weights Advantage deep seek is now considered the single best open weights lab beating out metas llama and mol although Zuck
had a few things to say about that he claims that Lama for is going to blow him out of the water and that he's still investing in capex and Zuck loves to deliver yep he's done it many many times so that feels believable as well and so he kind of has to too to save face yeah
he's got to drop drop something like truly competitive not not just oh great you have distribution you'll get users for it but it's not Best in Class with the amount that he's spending which is something like 60 billion y a year he's got to show results as well as the meta Executives that are all sitting there
making 5 million plus a year yeah and uh facing that pressure internally to perform yeah I mean people I you got to go back in the timeline when meta dropped the first llama model because I remember the exact same hype cycle happening where people were really rooting against Sam for a variety of
reasons and people were rooting for Zuck for a variety of reasons because he was like on this gigachad Arc and there was this whole this whole Narrative of like oh Zuck it would be a shame if I destroyed your entire company like open AI going to zero now because llama's out there and it's free and you can just
inference it and then I remember there was a rune tweet at the time saying like have you talked to that thing like it's not that good like he was kind of playing like def defense uh obviously it got better and at this point it's it's pretty good but it had the same narrative as like as like oh if there's
an open source model it's game over for the closed Source models and that didn't really play out because there was obviously the app layer and then all the is clearly not just a model company they're shipping products against against the underlying and they do seem to be able to stay six months ahead or
so so you know V3 surpasses G GPT 40 but GPT 40 is almost a year old now may 2024 and it's crazy already despite the the Mind share dominance among outside of teapot yep is insane with chat gpts totally like I talked to a Founder yesterday and she's like it's acting as a co-founder for me and I'm
like thinking out loud talking to it all day long about what I'm building yep and yeah she could go and use you know llama or any of these alternative products and it's just for some reason it's not getting Traction in that same way yeah and so let's let's break down the direct comparison between R1 and o1 uh deep
seeks model versus Chachi BT again I think a lot of The Narrative of of deep seek just killed open AI was driven by the fact that it was free it was free yeah exactly and so a lot of people hadn't upgraded to the $200 model o01 Pro and so they were just like well I'm not going to spend $200 that's too much
cost of the training run that everybody saw is really bearish because us companies are spending and there's the chons of dollars and then there's the then there was the concern around you know a lot of people just trading against the news not really trading against jeans's Paradox right and uh and then there's the cost
of like okay if you introduce a free product that's on that's better than the free product of your competitor what happens yep but uh consumer behavior is not always entirely rational Y and especially in the context I just don't see um it's still hard for me to see deep seek um you know becoming truly
scky sticky and dominant right um totally because chat gbt among consumers is a very loved product and you can't underestimate consumer love because so many people have had magic experiences if you go hey you can use deep seek and it's better but they're like well I already love I already love chat GPT
exactly it does exactly what I want and it's learned a bit about me some of my data is in there already oh and I also there's a little share button so when I generate something with chat GPT I can share the link that onboards and the value the value for us it's like okay for $200 a month yep we would happily
for the same service pay two grand a month yep so by telling us that we can get something something that's comparable for free the value tradeoff is like not that significant I only want the best most Cutting Edge model that has the most features at at any given time um but a lot of people aren't
aren't in that boat a lot of people do just want whatever's free so uh is r1's performance up to par with 01 I want to read this pretty much this whole paragraph here uh on the other hand R1 is a is is able to achieve results comparable to 01 and 01 was only announced in September how has deep seek
been able to catch up so fast the the answer is that reasoning is a new paradigm with faster iteration speeds and lower hanging fruit with meaningful gains for smaller amounts of compute than the previous Paradigm as outlined in our scaling laws report the previous Paradigm depended on pre-training and
that is becoming both more expensive and difficult to achieve robust gains with the new paradigm focused on reasoning capabilities through synthetic generation and RL and posttraining on an existing model allows for quicker gains with a lower price the lower barrier to entry combined with easy optimization
meant the Deep was able to replicate 01 methods quicker than usual as players figure out how to scale more in this new paradigm we expect the time gap between matching capabilities to increase note that the R1 paper makes no mention of the compute used this is not an accident a significant amount of
compute is not is needed to generate synthetic data for posttraining R1 not to mention RL R1 is a very good model we are not disputing this and catching up to the reasoning Edge this quickly is objectively impressive the fact that deep seek is Chinese and caught up with less resources makes it doubly
impressive but some of the benchmarks R1 mentions are also misleading comparing R1 to 01 is tricky because R1 specifically doesn't mention benchmarks that they are not leading in and while R1 matches in reasoning performance it is not a clear winner in every metric and in many cases it's worse than 01 this was your actual user experience
where you were trying it and you're and seeing okay this output is not on par with what I get from tot GP and my prompt was not something that's baked into some math eval or physics test it was just can you summarize this book in 5,000 words did you give me 5,000 words and was it was it factually
accurate or not and O 01 Pro gave me exactly 5,000 words a little bit more was great and deep SE gave me a thousand words and it's like what how how am I fail test it failed it failed my prompt for what functional yeah functional test exactly and then and then add this this is again from a consumer standpoint
you're not going to notice these small intricacies in terms of you know having the model you know run at 50 physics problems because you wouldn't necessarily wouldn't have been able to get any of them yourself right so it's almost irrelevant what matters is actually the output which is what people
want what they're paying for yep um around specific problems that they need the model for yeah and so and this doesn't even include 03 the latest model from open AI that hasn't been fully released yet 03 has significantly higher capabilities than both both R1 and or 01 in fact open AI recently shared o03 03s
results and The Benchmark scaling is vertical deep learning has hit a wall but a different kind and so then there's also the question of Google's great great line yeah from Dylan uh Google's reasoning wall looks like a wall by the way yeah it's it's it's completely up and to the right it's fantastic um but
it's on AR AI s bench and Frontier math advanced mathematics like things that most concern consumers might not even care about the benchmarks on but are potentially good proxies because a model that can do insanely advanced mathematics might be better at you know generating a recipe um and so Google
jumped into the game to very little Fanfare they did not really break through other really struggling on the marketing front totally and so uh while there is a frenzy of hype for R1 a$ 2.5 trillion doll us company released a reasoning model a month before for cheaper Google's Gemini flash 2.0
thinking what a fantastic name guys I don't know why it didn't take off um you got 12 different words that no one knows what they mean it's possible that clippy is like no longer able to be trademarked so Google should just take clippy for it next model uh so the model is available it's consider considerably cheaper than
R1 even with much larger context length for the model through the API uh and again I'm signed up for Gemini Advanced Pro Plus plan I pay for it I have no idea if I have access to flash thinking 2.0 and I have no idea how I even go and find it if I if I Google it I'm going to get the paper I'm going to get some
tweet like it's it's it's so hard to access Google's models it's so embarrassing for them uh get it together guys uh on reported benchmarks flash 2.0 thinking beats R1 uh I I remember Peter had a fantastic Peter T had a fantastic uh like uh distillation of what's going on in AI where basically uh all the
different AI labs are you can think about them as like lemonade stands and they're all obsessed with perfecting the formula for lemonade and none of them are thinking about where to actually place the lemonade stand when you're running a lemonade stand all that matters is that you're on the busiest
Corner location location location yeah yeah yeah and and that speaks to distribution not even the corner what neighborhood you're in exactly exactly and and so you can you can imagine that at Google they're like Gemini flash thinking 2.0 we beat this Benchmark it's amazing everyone's going to love it it's
like that's not how products work guys like just not like no one is like I'm going to go figure it out at some point but it's going to take me 30 minutes to find this product and figure out that I'm using yeah again you don't you have access to open AI reasoning model so you can just use that easier to access your
data is already there yeah and then now in every single Google product there's some sort of popup saying like hey do you want to use Gemini for this do you want Gemini to work on summarize your emails and I'm like well which Gemini you guys have 17 different products and like how is it going to integrate I know
I'm we're dealing with this email like related bug right now yeah for TV uh related to a new domain and I keep I I everything is set up properly but it's not working yeah and I they just keep sending me the popups of Gemini and I'm like you know you can't get the basic like like level one maybe I should
actually try with Gemini hey fix can you fix this fix this yeah um and so on reported benchmarks flash thinking 2.0 R1 though benchmarks do not tell the whole story Google only released three benchmarks so it's still an incomplete picture we think Google's model is robust standing up to R1 in many ways
but receiving none of the hype this could be because of Google's lackluster go to market strategy and poor user experience but also R1 is a Chinese surprise which is nobody huge advantage to be clear none of this distracts from uh none of this distracts from Deep seeks remarkable achievements deep seek
structure as a fast moving well-funded smart and focused startup is why it's beating met Giant like meta in reasoning in releasing a reasoning model and they did beat meta like Lama for still in training they haven't released a reasoning model and it certainly would be cool if this had just baked itself
into at least Zuck is breathing a sigh of relief knowing that they actually spent the money however many billions getting this model out oh yeah it's like okay we're not totally crazy we're spending and I think that's why the stock popped and earnings I mean earnings were crazy but I think I think
everyone was very excited about like his his positioning on the AI infrastructure investment um and so deep seek has cracked the code and unlocked Innovation that leading Labs have not been able to yet achieve we expect that any published deep seek Improvement will be copied by Western Labs almost immediately what are
these improvements uh we we covered a little bit of these uh these training pre- and post V3 utilizes multi token prediction at a scale not seen before these are added attention modules which predict the next few tokens as opposed to a singular token and so you can imagine you know the old version of
autocomplete on the iPhone it would say you know uh would you like to go to and it would have like breakfast or lunch pop up but now you but you know you see some of these models where it's predicting three or four words it's kind of like that but baked into the model at a very very low level so it's just more
efficient because it it says oh yeah after this sentence usually there's just this you know three words that go together um and and all of those go together the add there are added cons considerations like doing fp8 accur accuracy in training we talked about this leading Labs have been doing FBA
training for some time so that's a little bit overhyped there's a lot of things where where people just went through the Deep seek paper and everything that they were doing they assumed was novel and they were like oh my God they're they're they're they're using data to train it like no one
thought of that and it's like no everyone's using data everyone's scraping the web everyone's you know like running it on GP the synthetic data side as well yeah and so uh and did I don't know if this is going to come up later in the show but some Lab at Cal yeah uh was able to generate a reasoning
model with 450 bucks yeah I love that so anybody working on models out there we're good for our 450 yeah we're good for our 450 uh so rather than decreasing overall investment mixture of experts which is uh uh which is where one large model is comprised of many smaller models that specialize in different
things uh and this is an emergent behavior um historically models have faced uh struggle um about how to determine which token goes to which submodel or expert deep seek implemented a gating Network that routed tokens to the right expert in a balanced way that did not detract from model performance so basically you're
getting like instead of activating the entire model which is very expensive requires a lot of energy you're just AC activating like one little section of the brain um but uh despite concerns thate efficiency gains might reduce investment Dario uh over at anthropic points out that the economic benefits of
more AI models are so substantial that any cost savings are quickly reinvested into building even larger models this is Jeff's Paradox um rather than decreasing overall investment's improved efficiency will accelerate AI scaling efforts the companies are laser focused on scaling models to more compute and making them
more efficient algorithmically uh in terms of R1 it benefited immensely from having a robust base model V3 this is partially because of reinforcement learning there were two focuses here formatting ensuring that it provides a coherent output and helpfulness and harmfulness to ensure the model is
useful as mentioned in the scaling laws article this is what happened with 01 note that the R1 paper no compute is mentioned this is because mentioning how much compute was used would show that they have four more far more J gpus than their narrative nid wouldn't have had
billions and hundreds of billions wiped out of its market cap yep and Dylan also says that uh additionally a portion of the data deep seek used seems to be data from open AI models which of course makes it easier because you're just cloning the outputs and so you're you're you're you're optimizing against like a
very set Benchmark if you want a gp4 model and you're training on all gp4 data or a lot of gp4 data you're going to get a lot closer to gp4 pretty quickly which again is interesting because they would have had to spend a ton of money with open AI right which we've talked about before the same thing
that Tik Tok did to scale they just spent billions on user acquisition on Snapchat and Instagram and it's this weird dilemma that the other platforms get in where they're like well we'll take the billions now and even though we're going to lose out on you know potentially billions later yep and so uh he he concludes with
a with a couple different takeaways deep seeks Cut Rate pricing may be zero or negative negative margin partially to gain market share and investor attention uh and then he highlights jeevan's Paradox again um talking about uh the AI race uh is similar to semiconductor fabric Cutting Edge nodes command
premium margins everything older quickly commoditized um and that's like the story of tsmc versus Intel uh the dynamic this Dynamic Spurs an endless cycle of scaling up new models and Hardware investment benefiting chip providers like Nvidia uh there are exports restrictions h100s are fully
banned they've been replaced by H 800s um h800 I think were banned and then the H20 was introduced more stringent us bands may come depends where like we haven't seen exactly how the government will react to this it's a really funny Dynamic that the the our government doesn't want Nvidia selling them great chips yep so
why is it okay with them selling them any chips at all Y and what you know assuming that they can I mean the Steelman here is that if you're Nvidia and you're Jensen Wong and you've been building this company that you control and own for 30 years and for 29 of those years the government has been telling
you go Global we want you to be as big as possible get those tax revenues up hire people it's cool these are our allies uh the internet's going to make China democracy and they're part of the World Trade Organization so absolutely go manufacture over there do business with them we love this we you know we'll
put you in touch with the the the ambass and all rull you like that's kind of harsh and so unwinding that relationship and it would and and if Nvidia had a blanket ban on selling to China or any any countries in close enough proximity to China that they can act as as a proxy y it would destroy I
mean it would it would wipe potentially trillions out of the out of the out of the market see I might actually disagree with that because I I I think you're right that they wouldn't be as high of a stock but there's an interesting Dynamic where the best time to deleverage from China was when there's insane demand in
America and that's what happened during the AI boom in 2023 2024 where there was ever time to say hey we're going to pull back in China it's when it's when Elon Musk and and Oracle and everyone sit down like we will buy every single GPU you can make yeah yeah so so uh the Altman needs
two uh he needs 2 million gpus just an Abal right yeah exactly that's that's buy them all Nvidia is going to produce 6 million total this year y right so just one guy is could could potentially be a third of Nvidia and he's not buying those all this year it's going to be spread out over time I need a I need a
steel hat to put on when I'm steel Manning um because again the the steel man here of why would Jensen not want to do that obviously people have been like very critical of him not putting America first but the flip side is uh if you if you do say okay I'm only going to sell to these crazy American AI companies and
then there's a bubble and it pops you are more fragile than if you have a not in a it's not like the United States and China have declared war on each other it's just this great power conflict that kind of moves along slowly and everybody allies not enemies we're also dependent
on so much I mean totally and so uh uh this is an interesting stat I didn't I had heard about this but the Bank of China announced a one trillion Yan 140 billion US doll AI subsidy let's ring the size gong for China One te hey SI is size size is size size gong does is isn't nationalistic for everyone yeah um
and if anything we hope the the the ringing sound inspires one of our listeners to invest a trillion in something exactly and so 140 billion subsidy AI subsidy after meeting deep seeks founder so the guy literally goes and pitches the government seems you should put up 140 billion and he's like
conveniently timed right starg you have yeah you have uh Sam Alman gets Trump to do his press tour for him less and a week later China meets with the Deep seek founder and announces something very similar yep but interestingly this is the Bank of China putting up a subsidy of 140 billion Trump hasn't put up anything for other
than just his name and and a couple minutes in the in the Sam Ora farmed him he Ora farmed him uh whereas the deepsea founder gold farmed him basically uh so uh the CH China has a goal of self-reliance in advanced technology Oles obviously and this aligns with that and so despite large
GPU stocks scaling to serve millions of new users is tough future export controls May starve them of advanced chips and there's a big question about was this an aberration will they be able to keep up a lot of that's predicated on can they uh can they either get around the export controls reliably at a at an
order magnitude larger scale or can they get smick and SME their version of tsmc and asml uh can they get those uh chips up and running and start making competitive gpus internally because if they can do that it's game over like they could they could make a billion chips and with something like $40
billion of like is world class at copying totally and that's all they have literally and and I don't even say that in a way to slight them but that is historically what they've done over and over and over and over and they have asml machines they have TSS T tsmc machines this is what Entre entrepreneurs you develop some Hardware
product or consumer product you go to China you see your factory if you walk to the factory next door they'd probably be producing your exact item totally almost one for one within a year if you're actually really selling well so it's just ruthless they're good at it I'm sure they're going to have their own
Nvidia tsmc yeah we'll see so let's close with some of these conclusions uh efficiency does not mean reduced investment this is jeevan's paradox cost savings from new architectures like mixture of experts spur more scaling not less fast follower deep seek lags top Labs but closes gaps swiftly with new
paradigm reasoning their open source stance accelerates industrywide progress sick uh Frontier capability commands premiums but deep seeks low pricing disrupts incumbents potentially forcing big Labs like open AI to innovate even faster and we're seeing that you know there's going to be more
pressure hey release 03 get it on the free tier get an ad product in there do something to bring this to the masses so you can cut stem the bleeding of people installing the Deep seek app uh long-term Outlook Hardware demand isn't going away quote more advanced AI more GPU spending more scaling export
controls will likely tighten but we're going to need to see where this shakes out I think uh Jacob hellberg might be on the team that's working on export controls and TCH uh deals globally we actually need a rack of gpus on the set y I think we should get some h100s to just replace that cash with some a
couple gpus with a couple gpus yeah yeah great uh and so we think the East versus W West debate in AI models will continue and the new paradigm is good for NVIDIA very interesting so fantastic analysis from Dylan Patel highly recommend subscribing to semi analysis if you haven't already it is a great resource
and we love to see deep Dives on the timeline great poster too follow yeah follow him DM him the technology brother sent me exactly exactly uh comment on on his post um so uh let's go to drone Horizons a great piece in Pirate wires another another outlet that you should
definitely be subscribed to this one by GB Rango fantastic name uh great name pirate wires says uh drone Horizons are deep dive on how drones will change the future not just in war but in everything from construction infrastructure and interplanetary space the widespread adoption of UAV technology piggybacked
on the inexurable AI surge could significantly retool both international power relations and the daily lives of regular people in a manner that few understand today in Pirate wires GB rang Rango systematically outlines the trajectory of inevitable drone developments that are going to permeate every Poe of
society from agriculture to medicine to policing and National Security and firefighting which is particularly relevant to the last month we had here in LA and so let's kick it off with GB Rango lead which is uh a a little anecdote here the stadium is a Roar with 880,000 rockus attendees and cast a
short shadow in the midday sun in the distance peppered specks rise from nests unseen before gathering over the high Horizon like iron filings in a magnetic field small payload drones hundreds of them race bafully forward the orchestra the orchestrated swarm twists and folds in hive-like unison as it approaches its
Target in response nearer to the stadium another group of drones Ascend ascends in concert and rushes to meet its hostile counterpart the confrontation is Swift and casually anticlimactic with only a few City goers caring to notice the warror of propellers or the hissing and buzzing of the interceptors
high-powered microwave pulses the sky is clear once again and the game goes on uninterrupted the emergence and fasile neutralization of drone threats is common place here in a potential future this cross-section of a shocking and Inter terminant future and those to follow are meant to demonstrate and warn
of the transformational nature of an IND of an imminent drone age shift d pretty crazy but I think this is one of those things where you see one side of the technology development and you don't realize that there is the flip side that's countering it just as aggressively like in 2000 or the or the
you know the 2000s the 2010s if every day you were reading articles about email spam yeah and you had no knowledge about spam filtering and the fact that that was possible you would be like wow why would I ever sign up for email like it's just going to get worse and worse and worse but of course it's an arms
race and there's anti- drone technology which I think we'll talk about as well and so I'm not quite as blackpilled as some people on this front I also find it hard to imagine this future um if you put in the context of how dissimilar would it be if somebody launches a Hypersonic at a stadium of people and we
launch yeah you know some type of countermeasure and stop it that would be national news y so I would hope we don't experience this future because um and and and in this illustration the stadium doesn't even notice right uh but just very dark but um this is like the threat so it's worth you know really
paying attention to and there are um so he breaks it into six or seven different sections we'll give you a little tour of the article and you can go read the full post on pirate wires says an infrastructure and agriculture infrastructure development will undergo drastic changes with the Advent uh and
ubiquitous drone of advanced in ubiquitous drone technology construction s sites strangely devoid of human laborers instead populated by powerful heavy lift drones Nimble inspector craft and bipedal robots will be more productive efficient and safer than ever before gargantuan cranes with arms outstretched fresh metal glinting
through measured pivots rotate powerfully over the Earth he's such a good writer this is why I I love this style of writing it just takes you on like this this tour instead of visualize fact fact it's like it's really like pleasurable to read yeah it's already can you imagine the drones you know
working this construction site they run into an issue they need some type of human intervention and you're the human that's on call and you get a call from this nice sounding robot voice and they're like hey bud you mind stopping by the site for a few we could really use a hand here it's like a human voice
and then uh you know hopefully after you finish as a human that the drones are nice enough to say hey thanks bud yeah uh probably won't need you anymore today but uh you know appreciate you stopping by yeah and um this is the flip right now we tell you know we tell the models what to do yep eventually they'll
they'll tell us what to do we are the apis but uh I mean there is obviously there like there's the job displacement question but the the flip side is like I think every almost every single time a major skyscraper is built there is a single digit death toll from workers just because it's so dangerous and you
put 10,000 people on a construction site for 5 years or something and like things are going to go wrong and so there is a pretty significant opportunity in oil and gas right on these Frack fracking every every now and then a video will go you know super viral and it's it's an active you know
fracking site and just that kind of action that's going on where there's heavy machinery whipping around super dangerous yeah it's just super dangerous so that's what he says in the agriculture world in the coming age Farms will not sleep when the Sun goes down drones will work around the clock
to protect crop yields and monitor livestock rustic family barns sitting bare on flat planes will look like nocturnal beehives with luminous agents approaching for payloads before dutifully buzzing back into the dark these small flying machines will fit will flit non-stop through thousands of
crop Road Acres addressing issues like pest treatment disease and water sortage on the individual plant level very cool and so we got to get him to describe us preparing what a great writ seriously John threw on his Jack back it yeah and yeah and this next this next segment on uh Emergency Medical Services was
actually highlighted on pirate wires uh drone delivered organs should be standard protocol for transplants and he says over 46,000 organ transplants were conducted in the United States in 2023 quicker transport times are associated with better patient outcomes in and in the sort of major delay described above
is is not unheard of in 2023 a praza ceasefire protest on the San Francisco Oakland Bay Bridge blocked all westbound traffic for 4 hours three UCSF organ transplant deliveries were significantly delayed one of which had to be rerouted over the Golden Gate Bridge but uh one transplant surgeon at U UCSF noted that
two other large transplant centers in the Bay Area Stanford and CPMC were probably suffering from the same issues as well but now while no known complications have been directly attributed to the protest the proliferation of drone technology will completely eliminate the transport delay
risk opposed mean a lot of this stuff a lot stuff happens via helicopter now and there's even there's companies like blade that actually have a really I think at one point Blade's organ transplant business was bigger than their consumer business during I think it was Co might have that off but um yeah this is actually a very big
business already but it's kind of funny to think about you know needing to fly in Oregon from one side of a city or county to another and you just put it in a helicopter like it's not the most efficient if you're just basically needing to transport the equivalent of like an ice chest right yep uh he goes
on to explain search and rescue Maritime efforts larger boats serving as bases of operation for small drone swarms that can expand radially outward and Aid in the geographic process of elimination larger unmanned aircraft systems with multi-day endurance will work in concert with these teams to survey vast area
areas of Open Sea for survivors and identify points of interest that's just seems like new capability now you have a bunch of Pilots that gr up in their planes and they take turns just taking you know basically running yep there's some sort of like grid search that they have to do
but it's a funny path it's not you have to be high up enough to get enough coverage but in a world where you can send a thousand drones almost instantly scan huge huge surface area so this would have been useful during hurricanes Helen and Milton both of which struck in the fall of 2024 and uh drones were
pivotal in the preparation for and response to these disasters uh he goes on to explain that drones will have an impact on firefighting which I think we discussed previously um and in America fire department use of drones is almost exclusively limited to the Realms of surveillance and intelligence gathering
in the wake of the recent Los Angeles fires which have reportedly resulted in the deaths of at least 24 people and rre over $250 billion of economic damage this lack of progress what two weeks ago was at 150 billion so it's still climbing climbing yeah uh uh compounding this International Delta is the fact
that across all US public safety agencies 90% of drones in use are designed and manufactured by DJI a company that was recently added to the Department of Defense list of Chinese military companies while that number is from a 2020 survey and steps are being taken to limit Chinese drone usage the
status quo remains largely unchanged so he goes into to talk about foreign dominance and how they can uh how drones will be effective in the military talks about regulation of drones and drone deliveries as well as policing and the State and finally National Security and War National Security of course is a
Paramount re is of Paramount re relevance in the discussion of drones the nature of war is changing faster than it has at any point since the post World War II nuclear proliferation and drones are one of the major cruxes of this change it is essential that America not rely on China for any segment of the
defense supply chain let alone uas design and Manufacturing yeah and this goes back I posted a while back and it resonated we needed a sarg for domestic drone production Y and the reason for this is that if we were in a conflict with China they could produce presumably millions of drones a month and we can
probably right now produce I don't know if we like needed to turn it on and produce locally y but however it would be a fraction of what China could produce and the capability would not be there yep which is just a terrible place to be in um like a huge part of the reason that we we were successful in
World War II was because we were able to turn on this massive you know manufacturing capacity and just out out uh produce um our uh out produce the competition yeah this is interesting he go he ends with uh space and visions of the future um below the arcing of stars and spirited space adventuring of
generations to come the skies are clear save the birds and an occasional transport drone passing silently overhead towering biohybrid buildings draped with verdant Ivory attended to by swaths of assiduous Airborne Robo gardeners looks as if they might have emerged in search of sunlight from the
Earth itself a period of Peace less fraught with tension than its Doctor Strange Love type predecessor has settled upon the world this is not for want of Bad Bad actors but for their inability to find secrecy and he closes with now with all of this having come to pass there seems to be an almost
palpable optimism a sense that things can change and that we have a significant say in how they change a weird Coalition between humans and their hive-minded autonomous aircraft once an unnerving Prospect now Powers the world forward in ways that not even the most Visionary among us could have seen in a
crystal ball ball this or something else entirely lies ahead of us with courageous optimism we step into drone filled Horizons so clearly GB Rango should write some science fiction yeah because we'll read it so good uh one thing that's interesting too there's already technology that's been developed
to make drones silent so it's some element of the propeller design yeah the propeller design and so right now it's actually nice that you can tell when a drone is I've had situations where a drone flies over my backyard yeah I go out there and I I look up at it I'm like get out of here get out of here scram
scram scram get off my not much you can do um but uh imagine when they're completely silent you're just you know somebody could fly it over your backyard uh on a on a on a Battlefield it's pretty terrifying to think about you know this kind of uh assassin that can move at 100 plus miles an hour instantly
take you out without you even hearing about it so very dark but uh good time to get so so one thing I would say uh kind of a call to action for the audience it see there are a lot of new American companies taking on this issue developing drones for all these different use cases if you look at Augustus and rain maker they're
developing drones for cloud seating and agriculture we like we could probably have 10 10 to you know 50x more drone companies attacking all these different areas everything from like the production down to the parts level all the way up through these sort of like app layer product layer companies uh for organ
transplants you know sorry not transplants transports transports things transplants yeah that's right yeah um cool we'll go give it a read on pirate wires uh we love pirate wires and highly recommend that you subscribe it would be just crushingly embarrassing to get caught looking at a pirate wies pay wall
in front of someone in Tech brutal you don't want that to happen to you yeah uh and if you ever run into salana he has the ability to just search your email in the database and he'll know yeah so you can't fake it guys can't fake it you got to be real real subscriber uh so let's
go to straty uh breaking down more Tech earnings from Big Tech the hyperscalers Microsoft and meta earnings went live and Ben Thompson broke it all down I don't know what day it was we already covered met a lot of that as earnings so we can kind of rip through Microsoft and just give you a quick update from The
Wall Street Journal Microsoft's Flagship cloud computing business exp experienced a slow down in growth last quarter as constraints on data center Supply once again weighed Down results revenue for tech for the tech Giants Azure cloud computing division which is closely watched by investors grew 31% at the low
end of companies of the company's projections Chief Financial Officer Amy Hood said Azure growth would again be 31 to 32 % this quarter a projection that disappointed investors Microsoft stock was down 45% in after hours trading fortunately on public you can get in on the after hours action now yeah uh they
are allowing after hours trading uh so first off Ben says Microsoft said the AI growth was capacity limited but would be rectified by mid year it's nice to not have to be on the hook for that new open AI data center but the bigger Miss in Azure was somewhat obscure but interesting in its own right
um basically summarizing the Wall Street Journal Ben says Microsoft pivoted their scale motion think small and mediumsized businesses and second tier geographies to be very focused on AI instead of boring old Cloud migrations and they didn't get many takers so they're going to second tier geographies outside the
United States and they're going to small and medium businesses and instead of saying hey you have this data on this old server let's get it on the cloud they are now shifting to a model of saying hey can we get AI installed in your teams integration can we get AI installed in uh looking at all your data
running streaming analytics looking at your Enterprise and that's a harder sell for a lot of businesses that are just hey like I kind of have I I'm running on Vibes like I'm the AI I know if revenue is down I kind of know why I don't necessarily need L love to CI have a power lunch exactly it's a harder sell
apparently that's what we're seeing could turn around we never know uh so now they will go back to just selling actual cloud service isn't expect to see a revenue rebound count one for my thesis that Bottoms Up AI adoption will be a hard sell uh and this is also why there's those private Equity rollups VC
backed rollups that are that are buying companies and then forcing them to use AI because it seems to be a hard sell from an outsider and so you could always ask hey why is Long Lake uh rolling up HOAs and then dropping AI on top of it why don't they just build AI for HOAs and then sell into the existing HOAs
well maybe the sales motion is very difficult maybe they want a new model and so if they own the company yeah they get to my HOA management company still runs on paper sent in the mail that has to be sent back to them and then processed yeah it's like the easiest software integration to just
allow online surveys they haven't rolled that out so imagine how many HOA software companies have pitch them look you could be way more efficient you could save money here all the stuff don't care yeah and they're say oh you're trying to pitch me some e signing software how many employees you got
50,000 I'm not interested going be too expensive get those numbers up yeah yeah uh so on the flip side satch nadela claimed good progress with co-pilot adoption we are seeing accelerated customer adoption across all deal sizes as we win new Microsoft 365 co-pilot customers once again however Ben says
there was no actual real number shared I'd love to see them beyond that I do want to Express gratitude for to Microsoft for introducing a new term new terms of art database funis they're not getting pressed harder on that considering it's such a major element of their AI strategy wouldn't the analysts
kind of push no you can totally push back until the SEC says you got to break out the revenues you don't want to share anything this is the classic Google YouTube AWS Amazon thing like Amazon did not want to break out AWS data because even though like you could hire someone from AWS and they could tell you like
yeah that thing was really profitable that doesn't ring as true as every day seeing the stock price and every quarter seeing AWS just print profit and that gets Google and Microsoft off the couch and they say well I know for a fact that that that AWS is massively profitable we got to build a competitor instead of
just oh I've heard Whispers that they're making lots of money yeah right very different because Bezos that whole time was reinvesting all the profit so it wasn't showing up it was hiding It's just tough because I mean on the on the co-pilot side they're selling into existing customers right so it's an
upsell yep which is different than okay if you want to go compete with them really on co-pilot in many ways is you have to own the underlying companywide yep people infrastructure to some degree right like you need to own teams so that you can upsell totally you know the co-pilot for teams integration
yeah so sat continues to get hammered with questions about open Ai and the relationship there and he says and they posted so so Altman and Nella uh Altman and Nadella posted a selfie together yeah trying to you know clear up hey we're buddies we're buddies we're smiling happy it's not it doesn't
count unless there's the the the the bar mogged Altman on TV he said the bar for like the the CEO to CEO selfie has gotten so high it's like I want to see you doing Jiu-Jitsu together I want to see a jersey swap I want to see that Lea jacket on you I want to see I want to see siata in the passenger seat of the
regera in the we need to see Pap shots of them hitting 200 miles hour in that thing and Sacha scared out of his mind then I'll be like okay yeah these are boys they're boys they went to the track they did a track day together and Sacha trusted Sam to put up five GS in the corner SAA let Sam ride his favorite
thorough bread exactly exactly uh yeah it's not you can't just take a picture in a boardroom boring it's boring Step It Up Guys um so siata answering about open AI he says but to your overall point I the thing I would say is that we are building a pretty fungible Fleet right like don't worry we can move our
Fleet anywhere uh we're making sure that all the right that there's the right balance between training and inference it's geod distributed we are working super hard on all the software oppositions right I mean it's not just the software optimizations that come because of what deep seek has done but
all the work we have done too for example reduce the price of GPT models over the years in partnership with open AI which is true they've done a lot of optimization to serve GPT we know exactly how much Microsoft owns of open AI because there was that one weird investment where they basically bought
seemingly I I forget the exact structure it was like 10 on 20 the way I think of it is like is like there's kind of three important parties around the table with the open AI for profit it's like the like the founders employees like the shareholders the Microsoft and then the nonprofit and then the actual investors
are like pretty small in that but you can think about like those four things and they're like roughly balanced there isn't one person or one organization that has like outsized control I think the whole meme of like it's it's entirely controlled by the nonprofit or it's entirely controlled by Sam or it's
entirely controlled by SAA is maybe a little bit oversold and it's a little bit more of a balance because when the nonprofit conversion happened there was like a big debate and you get four people around the table often times if everyone has like roughly equal leverage to kind of veto you kind of wind up with
roughly equal positions um but I don't really know um anyway in fact we did a lot more work in inference optimizations on it and that's been key to driving right uh one of the key things to note in AI is you don't just launch the Frontier Model but if it's too expensive to serve it's no good right it won't
generate any demand so you've got to have that optimization so that inference costs are coming some specific communication strategy keep saying right yeah yeah uh and it it makes you inclined to agree with him right yeah right yeah 100% I was watching some video of someone uh who was it someone
on uh it was the ramaswami on Mad Money on Mad Money uh with Jim Kramer and he's breaking down this biotech deal and every sentence he starts with actually he includes the word actually like 25 times in this interview and so Kramer will be like oh like why are you taking this uh drug through uh through phase
three trials like it already failed phase two and he's like well actually when we looked at the data like it actually outperformed and so he's like really enforcing that this is like true what he's saying is a fact it's actually true and he's just throwing that in and I just picked up on it like a rhetorical
technique got to watch out for these things folks it's important we would never do something like this to you we would never use rhetoric against you never to get you to uh buy one of our sign up for ramp to sign up for ramp actually actually which is actually uh the greatest financial institution of
all time all time um also the fleet physics that we are managing and also remember uh you don't want to buy too much of anything at one time because Moore's Law every year is going to give you 2x your optimization is going to give you 10 you want to continuously upgrade the fleet modernize the fleet
age of the fleet and at the end of the day you have the right ratio of monetization and demand driven monetization to what you think of as the right training expense I like the use of Fleet because it it does you can imagine that same language being used at Amazon where they're like all right Jeff you
have you know tens of thousands of these delivery vehicles like the depreciation is insane you're putting hundreds of thousands of miles on them every few years like they're clearly depreciate massively and so by positioning it as a fleet standpoint it makes it slightly less painful that a lot of these gpus
will be worthless in 3 years yeah not worthless people like yeah I I got a fleet of sports cars at home I'm used to this I've dealt with depreciation before you buy the right cars I got an sf90 appr I got a bunch of tons yeah in my fleet I'm I'm sitting on losses I the only thing that depreciates faster than
gpus is tyon Ty uh some some people call them the gpus of the car market yep uh and so Ben summarizes this by saying this is the exact opposite way in which Microsoft was talking about their data center investments in October 2023 where nadela emphasized that Microsoft would have a
durable cost Advantage because they could build infrastructure for a specific model so they were not talking about Fleet fungibility at that point they were talking about going all in on open AI Ben doesn't forget he's putting he's putting Sacha in the truth Zone truth Zone in the truth Zone and you
know SAA is reading this being like Oh I got got me yeah I was trying to be a little sneaky like a dead sneak Pastor dech oh no uh ultimately though that's not a criticism models seem to be well on their way to commoditization and Microsoft has changed its tune appropriately and so yeah and they're
hosting R1 for free and so uh you know Microsoft Microsoft is hosting R1 everyone's hosting R1 no one is as much of a Django as you no one no one is that America First like like the whole like the abstract concept of like it's bad to host the open source model just like that didn't take hold at all as a mean yeah just I
you know imagine imagine Sam you're you're posting The Smiling picture with SAA meanwhile he's but they host everything they host llama they did a whole press release I understand I understand it's just if you're an Azure customer you're like I want all of them like give me all the flexibility all the
time on cost and stuff like they're hosting it on Azure on Azure I thought I thought it was an integration in teams or like co-pilot product Lally if I go to a I can get my sequel I can get postgress I can get other databas I thought they were like yeah loaded into co- let's go sorry Sam Sam's got the you
know the smiling face on he's just crying crying no no no it's not that aggressive yet but um uh and one more point of note uh Hood the CFO said we talked a little bit about what the main drivers uh what which was one of the com Azure commitments that open AI has made uh and I do want to say that obviously
this is a big commit you'll continue to see open AI make commitment uh so I want to separate the concept that this is one time versus an ongoing relationship that will grow as they grow which it absolutely will that right of and Ben says that right of first refusal to open ai ai buildout figures to be a pretty
handy tool for Microsoft they can build capacity for their customers and if they overbuild well guess they'll grab a bit more of open AI capacity to fill in the gaps and so Sacha you know getting a little a little an words but an absolute dog he's he's nice with it he's nice with it he's nice with
it you know he was the first hyperscaler big Tech CEO to mention the metaverse before Zu he got to it before Zuck he was like yeah we're really into this metaverse concept like it's going to be a big deal we're gonna it's called teams it's called teams yeah it was like you're going to be if you're like an
industrial company you'll be able to create a uh what do they call it like a clone of your Industrial Systems so you'll be able to like walk around in virtual reality and see okay this machine is green this machine's red what let's diagnose it and called we're running out of Lucy digital twin fire up
the packaging machine print more labels uh all all digital and I think they have some products for it I don't think the adoptions been great but uh it is just funny that he was early to the trend he was reading Matt ball y another absolute dog okay let's move on what is Matt ball up to these days oh he just put out a
fantastic report on the state of video games which we should dig into uh it's like a massive slide deck and he just did an interview with other than Ben Thompson the absolute absolute absolute dog on dog action it's a dog fight those two guys get in the rain you know hot takes flying yep it's great okay let's move on
to Masa Yoshi son hey crack I uh I specifically ordered these uh this morning this is my favorite little Japanese soda it's called the kimono okay sparkling Yuzu soda It's Made in Japan actually still has uh all the uh it has some uh westernized labeling in order to sell here but they left the
Japanese characters on the side too so if you can read Japanese you can dive in there but these things are delightful I thought it was a great way to kind of sort of kick off this um overview of Masa son's Masa Yoshi son's uh absolutely incredible career and that we are blessed is still raging ing on the
ultimate size Lord the Gambling Man the Gambling Man the gambling man there's there so there's uh John had uh covered Masa on on his YouTube channel in the past but uh in in diving into this uh so we we looked at some of his research from that and then I went back and uh started listening to the audio book uh
Gambling Man uh which is an incredible overview of Mosa's life and gets you really into um really into who this guy is everything like deep family history going back to his dad his dad's family his grandpa their entire um trajectory going from Korea to Japan back to Korea back to Japan uh you know going through
a very tumultuous oh yeah series of decades leading up to MSA being born well let's start with some context of why he's in the news and then we'll kick it off with like the proper intro uh so Jeff Lewis has a great post here that we'll put up on the screen he says you only have to be really right once
Masa has been really right twice third time tends to be a charm and so Jeff's going long Masa and uh hero onoda Capital says 25 at 340 post this is the rumored open AI round and it's a quote he says there are one business guys Bill Gates just started Microsoft and Mark Zuckerberg just just started Facebook I
am involved in in a hundred businesses and I control the entire Tech ecosystem Masa continued these are not my peers the right comparison for me is Napoleon or genas Khan or Emperor chin builder of the Great Wall of China I am not a CEO I am building an empire and that's the
type of energy we love to see on the timeline and so we got some photos of Masa but let's kick it off with why you should care about this guy he's back he's in on Stargate he's ripping huge checks he lost a ton of money it was embarrassed by wework but he made a ton back on on on arm he's Rich he's
powerful and he's firmly back in the game and so why don't you kick it off with his humble beginnings in early life humble beginning is an early life so he was born uh on the 11th of August in 1957 in tou which is the Southeastern part of Japan's koshu Island he is a third generation Korean zichi Korean
zichi Korean which which are ethnic Koreans that were at some point or another granted permanent residency or C citizenship in Japan so before going into that uh he actually so going back to his his grandpa uh I'll pull up some notes here um his uh his grandpa and his I guess his great grandpa were a part of
this sort of agricultural class in Korea and so they were not seen as businessmen but they were seen as people that sort of they were sort of aristocratic uh Aristocrat adjacent their responsibility was sort of overseeing agriculture in Korea and what's interesting about this is that his grandpa really internalized
this and so even though that aristocratic sort of uh agricultural class was disbanded in Korea and they eventually moved to Japan he always saw himself as above business like had a very negative view of business he had a negative view of entrepreneurs which is fascinating because Moss's death D his
Grandpa's son the Grandpa's son uh was very much an entrepreneur and he went on to very much influence um Masa uh in you know in a big way Catal can just do things real you can just do things guys rules build whatever he can so yeah so going going back uh Moss's Dad was born in 1936 uh their their um Masa uh wow he
was just 21 when he had Masa has a kid very young Masa is one of seven going so his his his yeah very very much um and so uh M's dad is living through uh World War uh you know the sort of the end of World War II right sort of this Japanese Reconstruction Era y the Japanese were deeply embarrassed by
World War II right they went from this sort of dominant Empire that stretched all over Asia to being forced back onto the four islands and um they went through this reconstruction period And so as the Japanese uh were in a bad spot they badly badly mistreated Koreans even during the war the Koreans were um uh
the men were forced to work in like coal mines and do these sort of tasks that that were basically slave labor and the women were uh like concubine sort of sexual slaves so very very dark uh history and so this is this is what masa's grandpa is like going through as as like an adult basically so he has his
son uh he seven kids um and ms's dad even has um memories of American b29 bombers who flying and bombing the uh nearby cities that they were in and Mosa's dad has this memory of walking up and touching the glass of a b29 bomber that crashed but M's dad at the time is a kid he decided that America was
awesome Oh my he he says like there's a quote he says um they uh he's like at that point from that point on I I thought America rocked that was like the summary you know not not word for word that's hilarious um and so uh after after the war Koreans are being treated terribly there was there
was a lot of push back many of them were asked to leave if you didn't leave you were forced into these sort of shanty uh you know ghettos slums Japan's always been kind of a like light ethn State like they've never been big on immigration they're kind go live there but you very like the population's collapsing so
things might change but it's been rough even even being Korean not even being like an American who would really stick out yeah and so um they lived in this illegally built Shack on the railroad you saw is this wild and so at one point they go so masa's Dad uh goes back to Korea they realize it's even worse there
there's like there's no economy yep then they decide they're going to come back to Japan they get on a boat they're it's like it's a multi-day Crossing typically it's like a couple days they the boat sinks and they spend two days at Sea just like drifting around and eventually
get picked up taken back to Korea and then they finally make it back to Japan wow and so uh jumping forward a little bit um Japan at this point is still like a completely shattered economy right they're rebuilding they've lost so much uh ground um uh Moss's dad uh leaves school at 14 and is selling alcohol to
basically support his family right he's one of seven he's trying to put some food on the table's an IL so Masa yeah Masa basically masa's Dad starts a moonshine business and at this point his dad is a drunk is beating him like frequently very dark y uh and has at one point badly beats him because he was
bragging M's dad was bragging to his friends about his business success right he's like I'm making moonshine I'm making bucks his dad over hears it uh ends up beating him for it um so masa's born um 10 years after the family gets back to Japan um they're completely at the bottom of society so it's it's very
much like Masa by the time he's a teenager his dad is kind of on top not not on top of the world but they have a very flashy lifestyle yeah but he's born while his dad is living with their family in the salams and uh they are pig farmers and they chose pigs for a few specific reasons that I thought were
interesting so they um one his dad had free labor because they have a big family and everybody's participating um they have free land because they're just living in this sort of like railroad ghetto and the pigs just kind of roam around chilling yeah the msa's uh Grandma who is a big part
of raising him because his mom was very absent takes uh Masa around in a wheelbarrow picking up scraps of food to feed the pigs so this is just like it's it's hard to even illustrate how rough of a situ ation they're in um but anyways they pick he his dad picks pigs because they reproduce super quickly
yeah the pigs are just very hustle mindset but very limited opportunities and like low low class yeah um and So eventually through this sort of raising pigs selling them off to be you know butchered for food um Moss's Dad starts saving up some money at one point he has the equivalent of 100,000 USD a lot of
money back then um and Masa this this really gets into kind of understanding who he is his dad starts to get into this thing called Pachinko which is this new form of gambling which is effectively via slot machines but is still is very much around um in Japan so his dad just starts getting getting into
the game a little bit he's gone from Pig farming to gambling yep an absolute dog but he's on the casino side but he's on the casino side he's on the house he's not gambling the money away this is important but he still has to take some pretty big gambles so um anyway these are picture like casinos and not that
dissimilar to what Vegas looks like today where it's just rows and rows of these machines and people just sit there um and over time uh he's sort of Levering up he's launching different you know parlors here and there at one point he takes a huge bet and spends 4 million dollar on a new uh on a new club they
called it and it's called lions and so this was like the vast majority of the capital that he had available so huge bet and for the BET to pay off he needed to get five to 10 ,000 people per day G gaming in this in this facility which is an order of magnitude more than his like best performing Club so it's it's
literally the most like gigachad long move that a lot of people are like you were absolutely crazy and his dad is on record saying I don't care if I go bust and he even had contingency plans he's like if I go he's like if I go bankrupt like we'll hit we'll go on the Run he's like I'll run it all back wow and so
this is this is the environment that MOS is growing up in as like sub 10 years old old which is just crazy crazy environment um and so he launches his Club yep first two weeks absolutely flops and he's like obviously freaking out but wants to you know wants to really make a play so he takes like a
$350,000 loss in the first month he's like I got to turn this around he decides to he works with his Engineers to make it so that the machines like pay out a lot more and people start winning a lot and he starts attracting this flood of people so the next month he changes it and he makes 350k of profit
and then he the next month you know they're they're kind of messing with the machines he loses it back again so he's no the the the suns are just like not afraid to like make it all lose it all make it all lose it all um and uh and eventually he sort of slowly dials it dials it in um and so by the time M's uh
I believe it's 14 the family's now living this sort of dual lifestyle where some they have 20 uh members of the family that are that are working on the family business but then there's also the sort of older generation and so it's this weird dichotomy where the people that are working in the business are
like driving like flashy cars and like really like living it up right they have all these sort of casinos um and then the grandparents are like kind of still um around but like very much still living in the past in some way um and so we can get more into masa's you know life and career but I think that's very
important context because the sort of gamblers mindset and and entrepreneur like high highrisk entrepreneurship is 100% in his D DNA it's all he knows yeah so when people are were like oh how could Masa put1 billion do into you know we work and lose it all it's like well he's lost more money than any other man
in history in the entire history of the world and in our sort of modern economy he lost 70 billion during the dot crash yeah the highest number ever he was also the rich so he went from being the richest man in the world to like in history yeah I'm crazy so yeah and I think through through the through the
gambling business and through kind of their family growing he meets this guy Den fueta who is an entrepreneur who brought uh McDonald's to Japan and this guy is a psycho he has this quote he says if if the Japanese eat McDonald's for a thousand years they'll grow taller have white skin and blonde hair
like it's like they'll basically turn into Donald Trump I think it's so funny that the dude's just like oh yeah like this is like Trump code this is Trump maxing basically Trump maxing and so uh fueta acts as like a mentor to Masa and tells him go study English learn about the computer industry and you got to go
to America and so Masa has this Outsider complex he's like you know yes I'm like the lowest rung of society yeah my family is from this like destitute you know Shack and we're still looked down on as kind of like gamblers and like you know lower class but I'm keeping the name I'm not changing my name and I'm
gonna prove that I can do it no and the cool thing so Mosa's dad had a you know I don't know the exact dynamic but very rough relationship with an abusive father who's an alcoholic masa's dad is awesome though and like from a young age is training MSA and saying you were the
best you are number one anything you want you can achieve like it's it's honestly like I went from being I I was you know listening to this being like very emotional because it was so dark and then it flips and M's dad is is you can just do things anything you can see in your mind you can achieve and Masa
really carries that into the rest of his career oh yeah totally so he goes to California at age 16 joins this college before entering high school and he and he advances from sophomore to Junior to senior in two weeks by just testing out of everything and he spent two full years at the college then transferred to
UC Berkeley to study economics while also taking some Computer Sciences CL some computer science classes and he has this idea where he needs to generate business ideas and so he generates one new business idea every single day he would have loved my first million oh yeah my first million or just like you
know your your path of just like building a deck spinning up an idea tweeting something out and then being like actually this is business yeah that idea sucks or but he was just throwing stuff at the wall I remember in my first startup uh we were like destitute and we had a a wall of sticky Nots just like
all the different business ideas and some days we would just pull one out and be like can we build an MVP for this and like eventually it started working which is great so he sells a patent for a translation device to Sharp Electronics so it seems like he does have some sort of technical background even though
later on he becomes deeply Vibe based investor he's just not an engineer and he never identified as an engineer he he he he is the in the grand scheme he's the the Japanese Warren Buffett so you should look at him as like a dealmaker y that's seeing opportunities putting people capital and ideas
together and doing it on a on a global scale and so sharp pays him .7 million for that patent which is crazy considering how young he is at the time it's a huge windfall back for this was uh before 1980 so this is in the 70s he gets two million bucks basically and so he immediately invested all in importing
Space Invaders arcade machines modifying the software and installing them on campus and that makes him another million dollars and then he founds a game software company and he sells that for $2 million so he has a bunch of like back-to-back hits really really quickly Y and and so then he returns to Japan uh
in the early 80s and he starts doing extensive research so he's just kind of Monk mode he's made his money in America enough to like you know buy some time and he's just spending 18 months doing extensive research all of his relatives are like this guy's doing nothing um but secretly he was building a massive
knowledge base so he developed 20 metric tricks to measure potential business ideas and the highest scoring idea for him was personal software distribution and this goes into his deal making philosophy he's not building the software that's complicated that's risky he's just taking software that automatic
that already works and just buying it for cheap and selling it to somewhere else yeah distribution businesses have existed for years they're great businesses you usually don't have to take on you don't have to take on too much inventory risk you get this sort of um toll booth style yeah not R&D heavy
very boot strappable I know some people that own food and Bev distribution companies and like they just print money and they don't and they never raised any money it's like this amazing family on business and so um this uh uh and and this also like just it super aligns with his skill set at this point like he
understands what good software is obviously because he's built a game company ran the Space Invaders thing but if you think about you know you get a call from somebody who's like in their early 20s they've already sold like three companies like they're they have money they're really like this crazy
Hustler with this interesting back like you're going to take that meeting even though they're young and so that's the ultimate Alpha is just he's like such a hustler has enough of a track record to get the meeting and then it's like oh yeah you're providing me a service like I I need software to distribute through
my stores anyway so why not I why don't I go with you yeah and that's why when you know because today the younger generation of entrepreneurs really know masa for going Giga long on we work and and but that's not the story so years earlier he had his 20 metrics to measure business ideas and so he takes massive
risk and oftentimes there is a sort of Vibes based analysis which which some of his his employees talk about right um but in general he's one of the most well-studied well researched most experienced dealmakers in history totally totally and so and there's not like he does get some really lucky
breaks but it's not necessarily luck right he's taking so many crazy shots onal yeah and so he chooses the name soft Bank think about it is like a bank of software it's not it's not actually a final institution but it kind of turns into one or a huge fund at a certain point and so he he hires two part-time
people in a small office he's not afraid to hustle uh and then famously he would get an Apple box because he's short and stand on them and and declare in five years we'll have $75 million in sales supplying a thousand outlets and we be number one in piece software distribution and the two employees were
like this guy's crazy we quit immediately imagine giving a speech to your only two employees imagine we're like Ben this is going to be the most profitable podcast we are going to crush it we're gonna be number one this year and Ben just is like I'm good I'm I'm out I'm out on that note I'm out yeah I
mean if he saw a stand on an alha box maybe that would be the the trigger for that but hilarious and so but he doesn't mind he he grinds through it and so he he books a giant Booth the size of Tony Sony Toshiba AT a Tokyo trade show even though he's like this small company he's just sending it it's so smart he's
standing out this is this is the friend.com Alvi thing like he's he's doing the thing where everyone's like no one would take that amount of risk and then it got gets him a bunch of attention and so he invited ad vendors to exhibit for free and so he's like I got this booth I'll let you do it for
free I'm G to advertise you for free and he's just creating pulling forward value basically and so it feels like a flop there's no immediate leads but Weeks Later joean denki from Osaka contacted him and originally this is hilarious because he made millions of dollars at this point and and they're like hey why
we're we're this software firm why don't you come and Pitch us and we'll see if we can do a deal and he's like I don't have enough money to afford a train ticket like I I literally can't go um yeah so we I I would love to know how he's he probably did the most degenerate things with all that cat probably going
long like of course Russian corn Futures just like uses it all yeah I mean he's just investing it I I think he literally spent a ton of it on that trade show booth and just spending it on like you know all these all these crazy long shots imagine in an era when when Tokyo's biggest software trade show to
actually get a booth the size of might have had to spend a million bucks or something yeah a ton and so um the the president of Joe and Deni uh calls him and says we need a dedicated software supplier we want you to be the one to do it and he says is an interesting time right because this is
at a time where companies were R&D product companies but they wouldn't do their own distribution so to sell they would just find a yeah distributor that would be the primary sales channel for them right I mean this was up until the internet like all the not this we're we're in 1981 or something and uh all
the way up to 2000 you would have to go to uh what was it Comp USA or Best Buy or Fries electronics and I remember buying video games on discs in like boxes and you take that home why GameStop was a great business it's because the manufacturers or the the game makers didn't actually have and if
you just think about it like there's I mean there's obviously some sort of power law where Best Buy is probably the biggest one GameStop's big like you mentioned um but there are hundreds or thousands of individual small software box retail stores and then there's also thousands of game companies and software
companies and somebody making spreadsheets you forget that before Microsoft can like condensed all of office like PowerPoint was its own company I'm pretty sure Excel was its own company and they like put all these together yeah almost all of that was through m&a and and so at a certain
point if you're the guys who are like we're making presentation software we're going to call it PowerPoint or whatever you're like okay we have some cracked Engineers we built it it works it's good but like now we got to sell it into a thousand different retail stores like we have to have a massive Salesforce it
makes per perfect sense to disaggregate that and work with the distributor so that's what they do and but uh Masa gets this phone call and they're saying we need a dedicated software supplier for joean Deni and Masa says I have no product no money and little experience but I have the greatest desire to
succeed and I will pour my entire Spirit into PCS let's go let's go full s so so one thing you'll know about Masa that that's important to know is from a very young age he intensely practice manifestation and visualization so he would have loved La in the 2000s because this guy uh I'm sure he's a big fun you
know you know Enthusiast as well but he he would if in his view from from early in his career if he could visualize it he could make it real yep and so that has kind of bit him in uh a little bit throughout you know the last few years well he'll just announce a huge deal before it's done and in his mind he's
like I can see it in my mind it's done we're going to do it right and that bit him a little bit with weor because I'm sure when was investing at weor at a $44 billion valuation he just imagined a world where Wei workor had Office Buildings hotels Apartments you know all these you know campuses right and so
he's like of course this he was not analyzing it based on their evida at the time it was entirely based on what he visualized and he believed in Adam Newman in many ways Adam Newman was an amazing CEO from a storytelling narrative brand building standpoint yeah yeah and so in his mind we work was
already a hundred billion doll company seem like he's buying it for cheap right he's like you're the idiots right yeah he could see it in his mind even even we work like it's not like we work people uh people like to put wew work in the same bucket as like Theos but it's just not true at all like this was a
benchmark company like this was like they were very much like a serious contender in Silicon Valley whereas Theos this weird zombie the thing the other thing with wework is the fundamental consumer product was amazing do you remember walking into early weks I I remember being you know you know in
col probably going to my first rework and I'm like the coffee is free and good like that's amazing it was like a fun vibe everyone was friendly um maybe it's not the highest productivity space in the world it was on it was on a mega trend of like more remote work more distributed teams more small teams more
start it felt like the the pricing part of why the product was so good is because they were not selling it for what it cost to deliver totally but it still was like okay at 400 bucks a month it'd be stupid not to get this because I'm getting so much value totally totally and so Masa the dealmaker comes
out in full force with the joeing Deni deal he says first off you got to break off other vendor relationships you got to go exclusive if you want to be with me but I will work extra hard for you and then he also really pitches them on this idea that the software is key to them winning in Hardware so the idea is
like if if JH and Deni wants to sell a lot of Hardware they're going to need the best software in their stores and people will come for the software and then they'll buy a new computer and that and and that virtuous cycle will drive value for Jo Deni he's not he's not wrong there like that is a good pitch
and so he secures the deal and he also importantly gets Jo and Deni to pay for product inventory covering Mosa's shortfall so all of a sudden he doesn't have a working capital problem and so even though he's very small and doesn't have a lot of uh a lot of funding raised or anything he can basically boot Joan
deserves uh hopefully MSA went back after all this and was just like got some warrant here's a boat's a boat or something you know something to pay him back because it seems like Jo just made it a really risky bet I mean look at this growth he's a for he was always a force always a force and so MSA takes uh
Masa takes SoftBank from $10,000 in monthly Revenue to 2.3 million in monthly revenue and remember there's no inventory cost here so it's all like it's all like effectively software margins like he doesn't have the work the working capital like the debt issue that nor comes up he's Printing and so
he IPOs in 1994 at a valuation of 3 billion and by the early 1990s soft Banks was SoftBank was Japan's largest distributor of PC software he manifested this and he was extremely wealthy but far from done should we move on to the do com boom and bus yeah this is this is like we're just getting started we're just getting
started Buckle in folks we got another hour at least on this baby so he moves to Silicon Valley in 1995 he sets up offices in Mountain View seeing the internets enormous potential and 1995 this is still early on the do com boom it's not like he yoed in at the top in 2000 like did he did that also he did
that but he also got in early and that was very uh that was very valuable and so the doom boom was in full swing companies were rushing to harness the web's explosive growth but this was still pre-ipo craze oh raay you know go public with just a slide deck and a domain name um and so in 1996 he meets
the Yahoo co-founders Jerry Yang and David foel he offers them $100 million for 30% of Yahoo it's a big stake typic VC funds at the time rarely wrote $100 million checks because that could alone Be 40% of a fund yeah this is so normalized now but the biggest funds back in the day were like classic solo
GP F yeah yeah exactly yeah uh and it just yeah it just like you would just raise from VCS for a seed round or series a series B and then IPO Google IPO very early obviously it was a different thing because they were cash flow positive but uh even even the money losers would IPO and the capital markets
in the public Capital markets raise money nowadays when companies IPO they're often times it's not even about the money it's about the liquidity for the shareholders it's like well I raised a couple million dollars just from Angels then there were a bunch of there were a bunch of huge Venture Capital
firms that could rate a $20 million series a check no problem then there were growth funds then there were crossover hedge funds then I started just going to the direct LPS and being like can I raise a couple billion from a sovereign wealth fund just directly in the private Market uh all before IPO and
that's why you see companies iping at 60 or 100 so listen to this quote Masa gave the after he made this offer he gave the Yahoo founders an ultimatum he says if you don't take my money I'll invest in excite or Leos which were competitors and kill you the funniest thing making death threats the funniest thing about
this quote is that he didn't even know who their competitors were in the meeting he asks who do you think your biggest competitors are and they say probably excite or Leos he's like okay well then if you don't take the moneyy I'm investing in them thanks for doing my DD for me ultimate dealmaker didn't
do any research still wins the deal and so it's this it's just interesting because he breaks all the all the trends of he's exactly the opposite of of Warren Buffett to totally right Warren Buffett is is heavily researched sort of slow uh moving builds these positions you know over time make takes a position
then starts marketing it things like that he's the opposite where where he's coming in and he's clearly brilliant and gifted and a in a brilliant entrepreneur but from an investment standpoint he breaks all the rules right he's not even doing market research before offering to do aund million
investment to not know the competitors and just be like yeah I like you guys but also I will kill you if you don't let me invest and so uh Yahoo accepts the $100 million offer the IPO in 1996 like very shortly after this deal goes through and the share price soared on day one Masa made $150 million
immediately and which again at this point in time doesn't really make a dent in his net worth right like he he had taken soft Bank public at a three billion doll market cap sure 150 extra bones is not a bad thing I mean Yahoo continued to rip post IPO all the way I but I'm just saying I think you'll
realize through looking at mosa uh the reason that later in his life he starts to make these crazy side size Lord Giga Chad mega long bets is cuz he's had inst is like later when he invests in Alibaba and prints tens and tens of billions of dollars you know that he wished he just massively sized up that position totally
right totally and so that that leads to the sort of 10 you know understand concentration you right now there's too many VCS who are like yeah I'm in this amazing company I got a quarter percent you know because I got I got diluted down and I and I got crammed down on this one round I couldn't get to the
ownership percentage and and the founders only wanted to do a 10% round and I only took % of it all this stuff but I mean Yahoo like the wealth creation at Yahoo was is really underrated in the Silicon Valley story like when I got to Silicon Valley you'd meet a lot of gen xers and a lot of them
were like oh yeah I was early at Yahoo and then you're like okay this person's like cool and like kind of smart but not like generational Talent you go to their house like a $40 million mansion in like me park because there was just so much wealth created from that IPO and a lot of liquidity yeah and so it it was a
huge huge thing that led to you know a rarified air around anyone associated with Yahoo and then also just a kind of Yahoo Mafia that spawned and and built a bunch of companies um and it was kind of like the Facebook of the day but it didn't didn't have staying power whatsoever and so it eventually Unwound
um but uh so once he gets liquidity from that he's he's hooked on Deal making and so from 1996 to 2000 he invests in 250 internet startups deal a week and he emphasized you know there were some weeks where you know some weeks he probably did five and other weeks he was
back in his Tokyo pad he's making calls okay yeah what is it oh who are your competitors okay I'll invest in them okay yeah one thing that's interesting a lot of his career you know he he had his time in the valley but a lot of his career he spent working and living in in in Tokyo and just sporadically traveling
to places like Davos you know or California things like that and so he's basically just making a uh he's not trying to pick winners he's just trying to ride the internet wave so he's not not doing a lot of doe diligence enormous volume and it's a good bet time he created the tiger glob tiger model
was the same thing tiger just timed it terribly buttig Tiger Tiger actually did way more due diligence because they would hire like Bane Consulting it was still pretty quick still like they were doing market research totally totally MOS is just Vibes based ripping checks and I mean we should do the tiger story
at some point but they were very active in in Asia around this time shortly after this made made a ton of money there m is not just scaling the Investments he's scaling The Firm so he launches basically teams in South Korea Japan Hong Kong Australia India Mexico Brazil AR so all all you know over the
last you know decade you've had VCS being like Oh yeah we're doing a lot in ladam we're doing you know we're doing stuff in India we got bets in Pakistan and and meanwhile Moss has already been in all those places just spamming checks spaming checks it's like you on the you know with the you know spam him and so
he makes 15 billion doar in just a few years and he starts to double down once he meets Jack ma of Alibaba and so alibaba's scaling they need additional Capital Goldman Sachs who was old alibaba's previous investor was reluctant to keep funding it uh didn't really see the massive potential there
and was looking at more on a spreadsheet basis and so Masa meets Chinese first mistake yeah ignore spreadsheets for sure and so he meets Chinese Tech entrepreneurs he sees a glint in Ma's eyes and one one thing about moss is like you need to understand this run as he is a degenerate Gambler because like
he grew up in casinos like you know these Pachinko clubs and he had so many wins and his dad was fully comfortable with making you know going up one month and losing it all the next month just keeping it rolling yeah beta beta yeah Beta And so uh they Shake on a deal 20 million on a $100 million valuation but
he winds up getting 34% of Alibaba uh through as the deal progresses and so uh the critical Advantage here is that Ma Masa sat on Cisco's board and saw router sales to China exploding indicating massive internet expansion so he got some Insider Intel understood the market was growing and went in found targeted
bet and ripped a check what's probably missing from this story is that he probably wrote a hundred other $20 million checks and and none of them went went anywhere but it doesn't matter because he got he got the elephant bag the elephant and so the crash was rough for him wait let's talk about the
Alibaba investment real quickly so he turned $20 million into a72 billion position which I think is I think is actually the greatest I think it might be the greatest Venture B of all time yep it's hard to measure because I think uh it sold off a ton during the dotom crash but at the current valuation um
and I and I think he still owns a huge chunk of Alibaba right um because that was one of the one of the positions that they were thinking about unwinding uh to do the Stargate deal yeah um so interest rates rise in uh 2000 the stock market plummets and many.com with shaky business models went bankrupt softbank's
market cap plunged 99% classic yeah and so so to be clear so this was in March of 2000 in January uh there he was giving a talk in Tokyo at this like very kind of cool underground uh sort of uh disco type Club to all these and and the Japanese culture at the time was very much salary
men you know you worked a good income and it was sort of seen as boring and so Masa got all these guys in a room and and it's been described as being almost like a getri quck scheme because he was pointing around the room being like you're going to be worth $50 million you're going to be worth $100 million
you're going to be worth $100 million and just like going around the room like that and it really seemed like that and he genuinely believed it totally and um I'm sure many of those people went on to start you know important companies but uh he was he I do believe that at every Market top y he still believes totally
which is why he gets smokes right he's not the guy he doesn't really I don't early he never sells early yep which is which is a drawback for a lot of big investors who have the ability to find fantastic entrepreneurs see Trends but then they get pessimistic at the last second and say ah this must be capping
out I've made so much money I mean the whole Benchmark Uber story people are like you know maybe that was like they were like looking at well you know we're each going to take home a billion dollars individually like this is retirement money maybe we got to get out something like that and there's a little
bit of internal you know devil on the shoulder telling you hey uh this is this this is too good to pass up uh but even though he's losing so much money uh he personally lost $70 billion which is a record at the time um Alibaba is surviving did we hit the size I think we take a moment of silence silence but
it's almost like losing 70 million 70 billion means you made that much which should forgotten let's hit the size G just a little bit boom there we go for the run up and the run down and so uh he he makes it through with the Alibaba stake and then he starts launching more companies uh Yahoo Broadband Japan
Telecom vone Japan rebranded as SoftBank mobile and this was smart cuz he found the area of tech that had durable revenues people pay for an internet connection they would pay for cell service you know things like and and uh disaggregated from the application layer yeah so it doesn't matter if Yahoo wins
or Google wins or excite wins if you own the Broadband Broadband demand's going to increase today he still has a huge position in T-Mobile so there's certain positions that hege you know kept kept writing but so the the chaos of the post 2000 um you know the the the actual like
do crash was because there were all these businesses that Masa was hugely invested in that were like dogs.com and it' be like basically a service where you could buy Dogs online and it turned out that people were still just buying dogs from like you know exact regular kennels and stuff like that and so you
can think about the early 2000s as kind of like back to the basics rebuilding with like the less frothy companies riding the Alibaba stock rebuilding uh soft Bank back up and then in 2010 he releases this 30-year Vision presentation and this thing is a bombshell in June of 2010 it's a 133 slide Deck with outsize predictions like
advancements in artificial intelligence will surpass the human brain life expectancy in Japan will reach 200 years and a new era of hyperconnected communication will be upon us and so he his Central philosophy is in the information revolution will bring happiness for everyone so I love that
even today he does similar things well he his he's a master marketer and salesman right he's a deal maker so he's got to sell these deals and he would even despite his limited English he would know the simple words to say information revolution to bring happiness for everyone right it's very sort of simple very intelligible it's
not it's not techy mumbo jumbo about scaling curves and h100s and all this other stuff it's like yeah and even even his more recent decks have these very simplified graphic people they're they're so simple people make fun of them people make fun of them but then they end up being correct yep they do um
in many ways and so the vision fund is born on 20 in 2017 he conceptualizes it in 2016 during a flight to the Middle East he wrote down a target of $30 billion then crossed it out in favor of a 100 billion what he say he said Life's too short to think small yeah and so just tripling the size of your rays just
yeah let's go biger one of the one of the greatest probably the greatest fundraiser of all time Sam alman's very good at fundraising yet he still has to go to Masa to really get the job done yeah elon's great too but it's a very different style of pitch more driven by the science and and the
technology so he has his famous uh 45 minute pitch where he's uh meeting with the Crown Prince uh of Saudi Arabia Muhammad Ben Salman m in Moss's words he says I want to give you a trillion dollar gift if you invest a 100 billion alternative into 1 trillion so MBS uh ultimately invested $45 billion on the
spot catapulting the vision fund into existence they also add a bunch of other investors Apple's in the vision fund Qualcomm foxc uh UA uae's mubadala uh you know sort of sovereign wealth fund soft Bank puts in 28 billion the funny thing about this is that he goes to NBS and is like you got to invest 100
billion to I'll turn it into a trillion and MBs is like that's crazy but I'm still going to give you 45 yeah it's like a total shoot I'm good for my 45 and it's funny because his original Target was 30 he sized it up and still exceeded that with the first check yeah and and there's been this uh idea in
Tech that Middle Eastern money is is easy to get and that perception is only because there's a lot of capital out there these relationships take a lot of time I know I know a ton of of allocators that have had to go visit the Middle East 10 plus times before getting anything done and so it's not like this
was easy you know Masa made it look easy because he just rolled over there he was thinking about doing 30 cross it out he liked the the 100 to a trillion um but this was again a very credible feat by itself and then SoftBank commits $28 billion of the fund what Masa has done
historically I don't know exactly but he also makes Venture invest using leverage which is kind of a tricky situation to get in because one Venture Investments can go down all the way to zero y right and yet he still owes that money to someone the cash flow so he would use he would use uh soft bank's you know actual
earnings to to help uh back that up but then also would lever up other positions so he would raise debt against you know some of his specific positions and so all throughout this even from you know from the early 1990s to now he's gone almost bust in like smaller ways that don't even make it into the story
because he's just Levering up just going long like he doesn't you know I don't think this man has ever been short uh you know he doesn't have any middle of the road outcomes yeah it's all 10 Baggers or zeros which is great well in the case of Alibaba you know 10,000 bagger yeah uh so he focuses on AI
Robotics iot and consumer Tech he makes bets on Uber Wei workor bite dance DD door Dash grab and then quirkier startups like Zoom for robot pizza and wag for dog walking and it's funny because three of those are companies that have been like oh this is such a silly idea it never was going to work he
was so stupid for doing it and then uh Uber bite dance DD door Dash grab all Banger companies yeah all very very good yeah one thing you'll notice here he does not uh he has no issues investing cross Bard so he has big presence in the US he has a big presence in China and so he's one of the few that's actually
threading I mean of course some American Venture Capital firms have have gone and raised Chinese money or invest in China but he's getting into the best Chinese companies you know bite dance um DD the the Uber of uh China she's uh and so really he's a he's a um truly Global dealmaker like he can go into any room
and make stuff happen and he's really good at being the capital that Bridges these huge deals like I'm pretty sure the the Uber and DD deal like having having SoftBank Bridge those two companies and put money into both in like this interesting way is like what kind of facilitated that um and and
that's just like a wild card it's kind of the same thing that's happening with Stargate where he comes in and all of a sudden Like Larry Ellison is with Sam Alman and it's like more of this like Avenger style team coming together because there's so much capital on the table everyone's like okay yeah I'm I'm
I'm marching to the same beat of this drum because often times has the conviction to make stuff happen that otherwise would have never been a part of History totally um I I recently invested in a Founder uh uh who will go unnamed that took a couple hundred million dollars from from Vision fund during 2021 and
the pressure that he faced immediate you know immediately after investment to deploy it because in hindsight he's like how did I spend that much money in such a short period of time company ended up uh you know selling it wasn't wasn't a good good outcome but he just said the
Relentless pressure of like we gave you this money yeah 100x your business this year there's also this interesting Dynamic with SoftBank I've heard from uh some folks that have had SoftBank on their board that even though MSA might come in there's this example with wework he gave Adam Newman uh the founder of
wework $3 billion on the first meeting and told them to be crazier so the CEO and Masa they they get together they have a short meeting and it's like the deal's done but then SoftBank actually comes in and puts in like crazy infrastructure in the board and so if you sit on a board with a SoftBank board
member there will be audit committees compensation committees like they run it like a like a public company basically and so a lot of investors like hate that because they're like I'm used to having like a one-hour strategy meeting with my boys and now I'm like doing like paperwork which I'm not down with I just
want to let the CEO cook and just do whatever many ways but it's interesting in many ways uh early on I think investors would say this is amazing Vision fund you know very early just gave a company that I invested in at a $8 million Val valuation they just gave them $100 million right it's some crazy
valuations the markups great companies super capitalize but then over time uh it ends up being seen as more of a kiss of death because a lot of these companies unless you were this generational outcome like uber uh or door Dash ready to deploy that money yeah and you're legitimately a phenomenal business that's that's
already has some maturity versus something like you know Zoom like the robot Pizza Company where there's tons of competition there's clearly no real Network effects it's called the suicide round I like that I like that terminology great and there's been a few of them uh they lost money on we work
obviously which we've talked about they lost money on wire card the German payments processor which collapsed after accounting fraud green Sil Capital melted down and many Vision funds start about green profitability was greenell was it was it a fund they invested in green cill I don't remember I thought it
was like housing or energy or something like that and uh it was a big blow up uh and so there's been a lot of those but he's still in the game yeah and it's tough like the reason you know the reason why these rounds ended up being the kiss of death is if you're not profitable and you rais $300 million and
you spend it all yeah then you're sitting on this massive preference stack nobody else wants to back the company because y it's going to be tough to get any money out unless like everything goes perfectly and and the number so big you think like oh wow he gave Adam Newman $3 billion and like it basically
went to zero like that's so embarrassing and then you realize that in 2021 SoftBank posted an annual net profit of $46 billion yeah it's like enough to cover what 10 of those Investments 15 of those Investments without blinking and so you look at the GP commit on the S on the on the vision fund they put in what
26 or something 28 billion on 100 uh yeah they could do that all day they could do that all day and it's just like he's just the numbers are so big you can't get you can't analyze them like it's a traditional fund because it's backed by this organization that's just printing cash printing cash from
all of their holding yeah but now I think their their actual net income is in the single digit billions so that was a specific moment in time where they had a lot of things go right which was just due to covid and interest rates and but he doesn't quit you only need one you only need a couple to make it all back
yeah that's basically what he does every single time and so uh in 2022 2023 this this history going back again to his childhood he was conscious when his dad was willing to bankrupt the family to go when they were already super successful right so a lot of people look at this
and it's like Masa you you made all these amazing Investments you built one of the biggest companies in Japan you've been the world's richest man why are you still taking on all this risk yep and the answer is he's playing the greatest biggest game that he can play right which is and so uh I mean you were right
that uh a year later in 2022 they announced a $27 billion loss uh and so they lose money on Clara there's a Chinese Tech Crackdown and so Alibaba and DD get hammered by PRC regulations very hard to make money as a private investor in China especially if you're uh Japanese instead of Chinese uh and
then it emerges in 2022 to 2023 that he personally owes SoftBank five billion dollar due to side deals gone aai he's just ripping so he's got his main deals side deals and I'm like oh yeah I'm good for it like I'll write I'll put this on the ramp card yeah yeah yeah uh yeah just just uh just hit up soft Bank
they'll take care of this billion dollar loss yeah uh and so Masa says yeah and this is this is evident of the way that he operates which is he is such a force that he's traveling all over the world doing deals committing to things announcing things that haven't been actually finalized yet Y and then
telling his team all right just make it happen um so it's not shouldn't be that surprising to anyone that after the chaos of 2020 to 2023 he just happened to like owe his own company5 billion dollar because of like some other stuff that probably didn't even make it into
the news you know it's remarkable and so he shook it off he says when it rains you open an umbrella and he's repeatedly insisted that he's embarrassed by the fund's performance but remains an unshakable optimist and we saw that come back and we didn't even get to arm you know he he He Turned uh something like
20 billion into an 80 billion gain he's back in the game and he is making AI deals now ripping checks into open AI working on Stargate he's just not going anywhere he's so he's he's the dealmaker tech Mogul that has the he clearly has a very powerful uh very well known in our Center you know corner of
the internet y but if you actually go ask people that maybe even are in Tech but don't really follow the game closely they won't know him yep and the story is just truly incredible grows up in not just poor but like abject poverty living with pigs yeah like he has he he said he has a consistent nightmare around waking
up you know having these nightmares that he smelling the the pig sort of fumes right and he wakes up like y you know in in um in shock right and so to go from that abject poverty to the richest man in the world made his was born in poverty made his first million in America before he turned 20 yeah runs it down to zero
again runs it back up back down to 99% down runs it back up I mean this man uh doesn't quit he can't be broke no he's like the he should launch a course yeah you know like at this point like if he if he ever got down bad enough he just could launch a course yeah it's so funny cuz this week that Hacker News comment
went viral that's like uh entrepreneurship is like uh throwing darts at the dartboard at a carnival uh if you're middle class you get one throw if the rich kids get as unlimited throws and the poor kids are working the carnival and this guy has gotten so many throws and he came from nothing just
complete invalides own throws yeah he just figures it out and uh it's funny because that always goes viral and people like oh this is so true like this hits so hard I looked up the dude who posted it he's never launched a startup he's never even tried yeah and so it's it's clearly just cope just being like
you know oh yeah like I can't do it because like I'm too poor or something and like clearly there's a million ways to start the flywheel and then once you're on the flywheel you get extra shots because it's like oh well like you're last company didn't do well but yeah you probably learned a lot and you were
CEO in that when he was in that uh nightclub talking to all the Japanese at that time it was not normal you know Venture Capital didn't really exist in Japan in the same way it does in America and he gave the story he's like in America an entrepreneur can start four companies they all fail and on the fifth
one they become a billionaire yep there's so many stories like that and so the thing that's the the criticisms of the the risky governments and the and the just crazy risk tolerance are real we're not uh you know this show is obviously for entertainment purposes only but the thing that I think
everybody should take away from masa's that extreme radical optimism yep and uh he the ability to be a dealmaker yeah it's really just a story of of deal making in my opinion it's it's it's so underrated Tech Mogul without seemingly ever written writing a line of code maybe in the very early days yeah like
when he was but very quickly moved to just how do I assemble Capital effectively how do I put the puzzle together this is Sam Alman too this is probably why El Elon hired Gwen Shotwell to run SpaceX like it's a fantastic it doesn't take away it actually adds to their like their abilities it's leverage
leverage for the team for the mind it's fantastic well that wraps up our Deep dive on masay Yoshi son and soft Bank let's go to a promoted post from your Budd Steve oh yeah small note yeah uh he's got two daughters don't know their relationship status but Brothers why don't you if you send it send Ms DM on
LinkedIn and say Hello uh I you know if if you would review my profile and you find me compelling I would love an warm intro to your daughter there you go um he's still he's married to his wife that he actually met at Berkeley still so wow that's fantastic Mas always gets the last laugh he does he does let's go to
promoted post from Steve I got a promoted post from my buddy Steve uh Simon so yesterday you sent me this which was a Chinese drone light show and can you actually play no you can't play that we can't play the video working on we're working on Tech here at technology Brothers we want to get to the point
where we can play videos but I will just share so Ben uh Benjamin crer cracker who knows who knows the cracker says uh how do you defend against this not a rhetorical question and it's a video of these drone crazy drone light shows Steve says you don't you have a robot do it for you and so what ACS is developing
i' I'd love one of these to put on top of my my G wagon uh but uh he's developing this sort of autonomous uh counter drone uh gun that can uh I've seen you know a bunch of demos at this point but it can take out some people have just described it as ACS gun on truck gun on truck yeah yeah they should
really buy gun on truck.com gun on a truck gun on a truck but anyways go check out at Steve Simon and uh check out their their turret it's pretty awesome the bullfrog fantastic we have another promoted post from uh Ryan Macintosh promoting our show and promoting an ad in aren this is also
promoted post for arena magazine and there's an ad for ramp in the ad for technology in the ad for arena magazine posted by Ryan there's levels to this and so uh we whipped up a an advertisement full page full bleed beautiful full color printed in the latest Arena magazine if sign why why
don't you read it the whole top to bottom sure so I said uh technology needed a podcast last year we noticed a problem while we were listening to the all-in podcast on vinyl we realized something shocking it doesn't have ads no ads for watches no ads for private jets not even a plug for ramp it's
hurting the Tech Community but the madness ends today what if instead of focusing on audience size a podcast focused purely on profit What If instead of big political questions it answered the ones entrepreneurs really care about should I get a Ferrari F40 or a Lamborghini mura should I upgrade from a
gulf stream to a BBJ what's the best Aman property technology Brothers is that podcast focused profitable capitalist visit techbros pod.com today and add it to your uh RSS feed uh we before we dive into the rest of the timeline we got some questions questions Tyler ronon with a phenomenal suggestion he says get a
medieval night helmet for Steelman arguments oh that's fantastic so much better than that's so good so much better than steel yeah than just a steel hat I mean we have our tinfoil hat but the this the the medieval night helmet is a good uh opposite yeah we need both of these clearly and uh anyways just J
the letter J says which one is the technology Brothers favorite YOLO seed round or guac a round uh I I think it's mango or the suicide a round suicide no it's more suicide B suicide B is typically what happens take the 300 million and just die just spend it all on people I love I love a YOLO I love a YOLO I actually
like when the first round is just 20 yeah you know kind of like that incorporation round 20 on those always work out great sure um next question Venturi says I think he's responding to Masa on steal making I I don't know exactly he says sales is massively more valuable than engineering so venturi's
clearly mogging uh the engineers listening so feel free to Duke it out in the comments but in Moss's case he probably had way more impact on the World by being a dealmaker if he might have been a top 10% engineer he's in top .01% yeah I I think he it's clear he did the 8020 on the computer science thing
took the classes got really pilled on technology and understood how exponential curves will affect the future of the world and humanity and he can still think like a technologist while not actually needing to lead a tech company be a CTO be a programmer do any of that but he understands the
science at a deep enough level which is important but yeah he's still not using that knowledge for diligence purely VI and I mean we have compan we have friends that buy small companies where people say oh did you do like technical due diligence look at all the code and they're like no I looked at the stripe
account because if the if the customers are paying that's evidence that the code is working yeah or just use the product yourself is it a good product is a good prodct I know there's this has been happening with with really smart sort of AI ml trained Engineers that are now building products at the app layer often
times they know so much about the actual technology but can't translate it into products people love oh cool like you're train and inference cost is so low that's amazing but like what's your product sense like are people actually using it did you get Market entry exactly exactly um as our says should
companies stop paying dividends to reinvest their dollars into custom letterheads yes obviously uh you need to have custom letterheads we're working on it here we're actually you know behind we need our own we need like our own actual stacks of paper even though we're sort of evolving I got the business
cards we need TB business cards I got some personal stationary I need some TB stationary for sure and Patel says I'm planning to do my masters at Berkeley in civil engineering should I should I do it he's an international student he says he wants to go become a founder or break into Founders fund both
good options uh hopefully uh you get B well you definitely have the first option Founders fund um it's tough tough to get in but um we have at least 50% of this podcast uh works for Founders fund so if you're listening to it that's a good start um I you know if you want to be a Founder doing a masters in civil
engineering might be awesome it could be a huge distraction it could be a huge distraction so if you want to you know go into that field and I'm sure there's a bunch of really crazy cool opportunities to apply like modern technology within that so I don't think it's a bad idea especially if you're you
know not a US citizen and you want to spend time in Berkeley I mean so many Berkeley is doing a bunch of cool stuff in AI I don't know if it's in the timeline but they I mentioned it earlier they were able to create a reasoning model for like 450 bucks so just being in the bay I was born in Berkeley um
it's a funny funky town but you're right there next to San Francisco going to the Bay um I guess the question is will this pull forward finding a really really valuable idea and sometimes being in a master's program can be a conduit to Industry where you might identify a big problem and identify customers sometimes
you can bootstrap that without that you know on on the resume you could just work straight at a company and realize oh this stuff's way broken I got to spin this out and build something um so there's a bunch yeah you're probably going to have to go from your civil engineering Masters to work at a company
to truly just figure out so the question is can you just go straight to the company and get those learnings but starting companies is not a race there's just so many examples at this point of people that started their first company at 40 years old and they needed all that experience to get to the point where
they had the knowledge uh one two questions do the technology Brothers have a favorite pen or pencil brand from AAR again I actually don't my handwriting is terrible I'm using it promoted on the show before I'm using a bowy hotel pen here um but but also hire a calligrapher yeah for me it's just got
to go higher um full time Sergio says do you guys publish anything in the paper form or do you have a website yeah we have uh tech.com and a new website that is already in the works with a new domain that we're excited to share soon um and then we don't do anything in paper yet we're experimenting auction
these off valuable kids books we've talked about random TW we talked about making a book that's just uh why you shouldn't use leverage and then it's just 100 empty pages love that um but uh but yeah we we stick with uh Arena right now that's our magazine of choice and uh and Colossus Colossus of course so thank
you guys for the questions fantastic well let's go to Grant he says sub instituting 3 hours of daily scrolling through x.com with 3 hours of playing factorio while listening to the tech Bros pod gets me up to date on the news I care about plus teapot bangers of the day while destroying bit biter nests and
juicing mining productivity I have a similar hack for work instead of writing code for eight hours like a pleb I spend five minutes writing GitHub issues for Menat alt Tab and spend 10 minutes expanding my green circuit board then flip back to GitHub and review PRS Menat is the fastest most capable AI agent for
coding that plugs directly into your GitHub workflow login at m.ai for $30 worth of credits free and redirect your engineering talents toward expanding your base brilliant brilliant post talks about the show yep talks about the content yep puts an ad in it I love it I love it this is Peak
technology you can have a ton of different content and a post including ads so love to see it well we got another we got another promoted post by none other than Lulu miserie we got a fantastic opportunity she says wanted a founding engineer to join rostra to work with me on a novel tool for Founders
like AO you will be fully self-driving like the medius portrayal of AO you will go through walls if it's the shortest path you will choose your own tools for the job but experience with llms with tool use will help greatly especially if it involves building long chains of structured and unstructured outputs you
are creative and tasteful with a strong sense of style and Vibes you have a finely tuned cringe detector and ability to read the room if you believe you are the person to do it apply at the link below fantastic job opportunity uh if you're looking for your next thing hit up l i mean that's actually the craziest
opportunity that I've seen in a while yep it and and uh truly if you are uh Omega cracked go apply for that or DM us and and we'll let you know if if we think you know you'd be a good fit Lulu is phenomenal and the kind of companies you'd be building products for are legitimately some of the best founder
mode companies in the entire world so totally crazy opportunity well we got some Personnel news we got some breaking news here Scott bsky after seven years at Adobe post acquisition of behance he's shifting gears over the coming months and jumping into the fast evolving world of film making and
storytelling a longtime passion he's joining a24 an independent Studio he has long admired as a partner and he will be kicking off a few special projects within fortunately he'll remain EX in the extended family of adobe and look forward to working with them as a future Tech partner you want to break it down
what else you got for me this is absolutely massive I can't you know if if it's nonobvious he's going to work on AI within a24 y he doesn't necessarily say that explicitly but a24 is one of the you know greatest uh film you know production media companies in the world Josh Kushner also made a big investment
in a24 siis Lord that we've talked about on the show before and uh I'm just so excited to see what comes out of this this is fantastic this is exactly you know for so long it feel you know we live here in La for so long it feels like Hollywood has just been so behind the times in terms of actually
innovating they obviously there's you know a massive sort of CGI industry here uh a cottage industry around La but um the opportunities of applying gener generative AI to filmm are so obvious yet we still need the best talent in the world to actually Implement that and make that happen so Scott going over to
a24 he I imagine he's going to build out a massive you know team of really bright technologists that are going to allow generative AI to actually um compete with traditional film making Y which is going to be incredible for consumers yep period an absolute dog an absolute dog bsky on the Move stay tuned for what's
next and uh yeah this is massive what a pick up by a 24 you love to see it well we have another massive announcement breaking here on the show you definitely haven't seen the Tweet before uh 11 Labs has raised $180 million series C to give every AI agent a voice let's go oh with
authority with authority you'll love to see it the past year has been about building the foundations of AI audio now they are focused on making speech the standard for how we interact with technology yep and so if you haven't checked out 11 labs they have some fantastic abilities to turn text into
audio that sounds perfectly human here's a homework assignment download a transcript to this show all three hours put it into 11 Labs generate it in some exotic sounding voices give us Irish accents Irish accents likey Scottish make me sound like Pat old Patty Collison yeah I want to sound like and
uh it's interesting some of these models Sean con put me in Sean connory voice please please uh some of these uh you know voice generation tools have some limitations they let you do Irish Scottish voices they don't always let you do Japanese Japanese which is unfortunate we were trying to generate
some but maybe 11 Labs can do a Masa you know adjacent voice that we could leverage because we have a lot of uses for that and we would we would happily pay few million bucks a year to get access to that voice fantastic but congrats to the 11 Labs congrats to the 11 Labs team and everyone involved in that deal Hopey there were some cheeky
secondary in there hopefully uh let's go to an evolving story this is heartbreaking yesterday if you were watching the show we gave Mass brother of the week for his amazing work putting up a swing in a public park in San Francisco he says they took the swing down apparently fun is illegal
that's insane isn't this crazy and the picture is of someone like with the government saying no swings it's like hey we know somebody's actively breaking into your car right now just like 10 ft over there we're going to take swing down this prority this is the priority how it it's just so bad it's so bad it
is the perfect symbol of everything that is wrong with the government prioritization here it's it's really just so ridiculous just uh the mass brought Joy to the World uh went viral and was immediately shut down by the long arm of the law and so uh Mass Please Don't Go full Ross Alber mode
keep things legal maybe there's a way to get through this we'll get the swing back up maybe a petition maybe we'll go viral maybe we will upend the entire San Francisco government but we'll do it entirely legally and we won't need to uh create a massive uh illegal drug Network to do it great uh let's go to Jason
yanowitz he says tether 13 billion net profits last year every financial institution will read this and ask why don't we have our own stable coin so I don't know that much about tether I know there's been like rumors swirling but the tether organization seems to be on a tear yeah so they've had a lot of uh
people that sort of question their business right it's sort of this they they control tens of billions of dollars of assets I don't know the market cap of USD usdt but whatever it is if they have aund billion doll in market cap that is a hundred billion do basically cash that
they have on their balance sheet and so they they invest that in treasuries so they earn some interest rates they some of they that's generally the business model it's a good business model y um the flow of money it's easy to just take a little and so tether's been also pretty aggressive on the m&a front um
making you know if you're doing anything sort of adjacent to them and getting traction they'll probably make an offer and they they make uh typically control offers so they'll say we want to buy your business but we want 51% y um and uh so they've been on a tear very under the radar they don't have as much hype
because nobody's printing you know THX returns off of tether yep they did have some uh crisis points where if you remember after after all the FTX stuff there was a lot of questions that usct was trading at less than a dollar which a lot of people were like this is free money not not chaotically it wasn't down
at 10 cents it was down at like 99 Cents or 97 cents or something I think it got even more than that at one point but um it's rough but but yeah still they were you know people were but for those people it was free but the interesting thing is because it it's an international organization there's not as much um
there's not necessarily you know the fud around tether has been are they just sort of taking a dollar and printing $2 dollar on chain or something like that but they've weathered every storm to date and and we'll see what happens um and uh absolutely meteor numbers you love to see it should we hit the size
gong for that little one little one 13 billion in net profits pretty good uh let's go to varam Ganesh he says if you're not subscribed to Pirate wires already you really should missing out on bangers like these uh from Riley norc he says in the wake of Trump's recent executive order renaming the Gulf of
Mexico after its namesake Superior Northern neighbor I said what I said um Google Maps announced it would indeed Rec Christen the ocean Basin as the Gulf of America but don't pop bottles on your boat just yet right after the change was announced Google reclassified the US is a sensitive country label reserve for
nations with strict governments and Border disputes like China Russia and Iraq in other words they're virtue signaling Google wants to pretend they're here for Tex Vibe shift but behind closed doors they're rebranding Trump's America as an authoritarian dictatorship bold strategy for a company
with an ongoing Anti-Trust suit a laundry list of foreign governments that want to Rob them blind and a president their only real hope against those governments who famously to borrow your phrase sensitive to public ridicule good luck and the reason uh I just like this ad copy sharing this is because there's
some fantastic ad copy which we love to highlight sponsors we love to pass through ads when we're reading content if it has ads sponsor acknowledgement says warp fixes this if I run the FBI we're shutting down headquarters on day one and reopening it as the Museum of the deep State cash Patel's words not ours
here's the thing your business has a deep State too it's called the HR department you know the bureaucratic overlords who bury you in paperwork in pointless meetings warp shuts them down cash Style by automating payroll navigating state tax compliance and making in international contractor
payments effortless so Founders can focus on building not busy work one of my portfolio companies got kicked off of Rippling with with zero notice and warp got them live again the same day it's great you love to see it love to see it let's go to bology he's talking about our favorite topic technology
Brotherhood he says we need the tech bro Massachusetts equals Tech Virginia equals bro the synthesis is greatness lift weights yes but weights too and I agree he goes on to expand on the analogy doing a little bit of cougan law here coinages bology fantastic coiner he loves coining things big coiner big
coiner bitcoiner and B coin coinbase coinages all the above to explain Virginia's time ended long ago and today it's just another US state but it was originally the home of the masculine Noble and brave Cavaliers Massachusetts time is now ending too but for almost 400 years it was a center of Higher
Learning that's why Harvard and MIT are there the these were two of the most important American colonies in a sense they compete and cooperate every hundred years in the mid 1600s they fought back in in England itself first the Cavaliers V for Virginia then the round heads migrated to Massachusetts B where does
he learn this sty I never heard those terms before uh roughly speaking the Cavaliers were right and The Roundheads were left and the English Civil War was over the same themes of hierarchy versus equality in the 1700s they worked together to beat Britain and found the United States in the 1800s their
descendants fought in the Civil American war and in the 1900s they worked again together to win World War II and found the American Empire now in the 2000s they are fighting once again over the same themes of hierarchy red versus equality blue even if the geographic center of red has been displaced
somewhat to the South and the geographic center of the blue has been dispersed across the Northeast others have written about this as well see the fourth turning turchin yarvin Walter Russell me Al seed in Scott Alexander's review my view is that red and blue will unfortunately smash each other to Pieces
over the next several years and then the gray will have to pick up the pieces gray is Tech in its modern incarnation of the tech bro Tech is the intellectual successor to Massachusetts as the migration of to the internet of Harvard's best proves Bill Gates Zuck and Paul Graham all moved away from Harvard in the literal sense and of
course Larry Page Steve Jobs vitalic and many other college dropouts moved away from Harvard in the metomic sense um but in its more recent Tech bro Incarnation Tech is also becoming the viral successor to Virginia Elon Zuck and Palmer lucky are examples of tech Bros respectively becoming leaders of men
packing on muscle and getting serious about the military amazingly this synthesis the tech bro did not exist years ago but it was Meed into reality by Blue attacks and the and has the balance that blue and red both lack train weights yes but also lift weights I think this synthesis the tech bro will
be crucial to what follows after all the tech bro founded America let's see what they found next what do you think I don't want to say anything at all because I feel like it would take away from that dramatic powerful Pros I think he nailed it yeah if uh if I had to fight in the culture War yeah I would
want bology to be my Napoleon yeah my Napoleon I love it uh it's great I I think uh I mean we literally worked out today we it was leg day I'm super sore and then we do dove into semi analysis and talked about training weights and and AI semiconductors for an hour uh and that is the Fantastic dichotomy of the tech
bro that is so enjoyable and wonderful and I think value creative as well and it's interesting because uh during the the the mid 2010s when Tech bro was a slur um we could have just said no it's actually fine it's fine to be a programmer and and lift weights and program there just wasn't enough like
mtic or social like power to actually have a post like this that everyone says yes I'm on board it took coinbase it took and now you have people like word grammar who did one of the best analyses of uh the Deep seek research paper yeah he's an amateur powerlifter oh he's jacked and I would actually push him to
say you know keep being a professional programmer yep but become also become a professional powerlifter like don't limit yourself he's diced he's he's diced he's diced he Jack that's fantastic we' love to see it follow word grammar well let's go to this post by Andre uh funny meme I like this meme
format it's Sydney Sweeney and Ana de armos recently had a spontaneous exchange about which characteristics would constitute a sixth generation fighter aircraft Sydney no standing vertical tail surfaces the ability to operate AI drone enabled drone wingman Anna uh but those will be first fielded
in F35 so drones alone would not constitute a sixth generation fighter Sydney well fifth gen Sixth Gen these are marketing terms not technical classifications northr Grumman is calling the B21 Raider on I says a heavy payload strategic bomber Sydney says a heavy strategic payload bomber uh the
world's first six gen aircraft also China doesn't recognize the same designations at all they recognize the j20 and the F35 only as fourth generation Fighters hna says okay so what else adaptive cycle turbo fan engines open system soft software architectures subo rle flight Sydney says LMAO I wouldn't hold my breath on
that one and uh just a great way to deliver a little bit of information I definitely learned a little bit about uh fourth fifth and sixth generation fighters from this hadn't heard the terms uh vertical tail surfaces before adaptive cycle turbofan engines but now I know to go look them up so thank you
for turning into a meme ready for yeah I love when any new video just like emerges on the internet of a potential six fighter and then everybody just like breaks it down in a million different ways and you just get one thread and learn a lot about fighter jets in about 20 comments it's just it's
so fun it's so fun to learn about this stuff so we got a post from Kyle Sani uh huge investor in salana he says polym Market parlays who's building this and the reason I wanted to highlight this was because six months ago in October 23rd I said does poly Market allow parlays because I want Lando Norris in
Mexico City four rate Cuts Trump Rogan over two and US confirming aliens exist I would have lost this parlay but I could have made a lot of money if they had that product I did talk to the poly Market team about parlay it's very hard from like the crypto perspective on the back
end to actually implement it um but it would be very fun uh and I and I on the on the pirate rers podcast I talked about the the cougan parlay which was uh you bet whoever does what whatever presidential candidate does the longer episode of Joe Rogan will win the uh the popular vote and the and the national
election because basically I was saying that like I I was predicting that this would be the podcast election and that and that now that three-hour podcasts were on the table it was really going to be a battle for attention and whoever could be in the ears of more Americans for longer would and authenticity
totally which you cannot hide your true self beliefs Etc across three hours an hour you can hit talking points have your notes but by hour we know this by hour three just real that's when the real Jordy comes out that's when the real J comes out the real dog yeah you got to put the your dogs are yeah your
dogs are barking yeah and uh and so yeah there was a lot of debate over oh Trump's too old he couldn't last two hours three hours on Rogan there was a whole poly market for it and then obviously Biden people were saying he couldn't do Rogan but then Kamala they were like well she's GNA go and call her
Daddy That'll be really big but her call her daddy experience was I think like uh her appearance was like maybe an hour maybe slightly over and it just wasn't as viral because it wasn't as long it was as deep and I think that really hurt I really I I do think that really changed the election um let's uh skip
this next one uh did you see this uh the Derek die workware the watch guy getting in a fight this is pretty fun I think I shared this uh Alex Alex broke it down so basically uh Derek uh Derek guy at die workware posted a handful of watches that he was uh thought were were interesting as as well as a bell
um somebody quote quote uh quote tweeted it and said if you ever need a reminder that this Society deserves to be destroyed it should come from the fact that absolutely anyone cares in the slightest about any of this nonetheless are willing to pay manye salaries for some something you can get for five
bucks so this guy's basically saying Society should be destroyed because people like nice things uh they go back and forth a little bit um Derek immediately responds with a bunch of evidence that the guy that quote posted in who actually has a lot of followers is a uh pedophile convicted sex offender and uh this
astronomical 25,000 likes to just zero likes yeah so this guy actually has the audacity to respond and tell Derek one of us will be remembered for trying to save millions of innocent lives this is the same guy who said Society should be destroyed yeah and the other will be remembered for embodying why this
Society doesn't well your only God is luxury you're emblematic of absolutely everything wrong with the society and says and Derek says I like watches you're on a watch list such a good RA again you know we talked he's a fantastic poster he's a fantastic poster anyways the guy he's
going back and forth with uh should delete his account generated generated a bunch of regretted user seconds but at least D workware managed to turn it into entertainment for the rest of us but it fantastic um anyways absolutely br br Alex Cohen we appreciate you let's go to Andrew mccallop friend of the show he's
been on before he says how embarrassing must it have been for all these car manufacturer dynasties such as Ferrari to get completely dominated by a caffeine rapper company in F1 talking about is just a rapper on caffeine and they've and they've crushed it Max rest stappen is an absolute Beast the car
obviously it's not Red Bull manufacturing the engine but it's a lot of the energy and the brand of Red Bull definitely comes through team um and uh budget and stuff yeah did you see Louis Hamilton just crashed in the Ferrari for the first time I mean he's fine but it was a practice Run Okay crashed we might
have to start we might have to start live streaming F1 I think that's the real failure mode for this show you know people always criticize oh all they know they used to talk about tech now they just talk about politics I think if this show goes down the drain it's going to be because it just becomes an F1 show
and we're just talking about sports all time Just Sports all the time and everyone's like didn't they used to be talking about tech like why are they covering the NBA Finals somebody somebody a friend a friend's company told us uh very recently that they were uh it'll all go on on name but they're
like we're working on this you know partnership with this athlete turns out to be a very famous athlete neither of us knew who they were yeah you're like I was like is that like an actor or something this is part of golden retriever maxing I'm getting into sports because the politics stuff is too much
it just rots my brain and I want to be able to just chill out and just care about the game yeah rip parlays exactly never ripped a parlay the first one's going to be electric when it hits what if you hit it on the first try you're going to be addicted for Life M mode yeah let's do it mode uh speaking
of ripping parlays we got Rossi to update from our Deep dive most recently uh he lost $12 million on pump. fun hilarious that he has $12 million to lose no back here the back story you can read I don't know the full story but that's never stopped us from talking about anything on the show uh so it says
Ross or someone with access to his wallets just accidentally nuked the price of a pump fund coin sent to him while trying to provide liquidity to said coin and so what happened is somebody basically made a coin like a free Ross coin or some type of coin that that ripped because obviously the vast
majority of of ross' biggest fans are are heavily involved in crypto and uh so anyways they then sent him a lot of the token because they're like hey this is your token uh and then they he made a sort of technical error in terms of trying to actually he was from what I can tell he was trying to um support the
the the project basically by adding liquidity to it which presumably would have made the the price go up but uh he ended up blowing um more yeah 12 million $12 million um which was which was effectively uh I don't know exactly how it worked works but some type of Bot that's entire job is to find find no
like just find Trad like whales yeah if you're if you're a super talented software engineer you can write code that just sort of it's the same similar to high frequency tra trading right and so anyways basically wealth transfer of $12 million from um from him or the wallet that that he controls to um uh
this bot so the bot did well everybody else got smoked good day to be a bot good day to be a bot yeah maybe consider going digital um but it's but somebody I I saw people in the comments saying he's a little rusty but but but even in the era even when he even during the height of the Silk Road he there was coins he this is
part of the course he would lose 10,000 Bitcoin in a day and just shrug it off he'd be annoyed be like I'm going to fix the code I'm going to kill the person that did it a little bit or try GNA order to hit you're not necessarily gonna or try to try to do it uh let's go to Luke Metro he says AWS govcloud is
safe y'all because breaking news in a major reversal Amazon is ramping up ad spending on X after pulling much of its advertising uh spend more than a year ago and this is I want to cover this because this is a major narrative violation like after Elon bought X all the all the advertisers pulled out he
told them to f off it was very dramatic and there was this question about like okay are they going to be able to get the premium side running like is the business model going to change completely but advertisers are coming back we're set I'm setting up uh an advertising program with them uh for
Lucy and they've and they brought a ton more advertisers on they just did a deal with visa and just in general the vibe shift is is perfectly timed because people realize that yeah there's a lot of valuable people on a and it's worth re reaching do you remember after the whole ad crisis all the advertisers were
things like buy these Donald Trump socks you know it became like the bottom of the bottom of just like people that will like pay for any type of but then quickly I upgraded to X Premium Plus Pro Plan or whatever and I never see any ads now and it's actually a lovely it's totally worth it I don't know I kind of
miss kind of miss the ads seeing an ad here there well if you see a good ad screenshot it send it to us and we'll read it on the show yeah as long as it's in a festar review yeah so uh Peak journalism uh this is this is just hilarious uh everything I say leaks Zuckerberg says in leaked meeting audio
you love to see it absolute Banger get on the Banger archive uh very funny it is it is interesting like there's there's some sort of shift happens as companies scale and get more media attention and it obviously matters a lot more if it's consumer and it gets clicks sure this is the case that all the Elon
companies no matter how small they are um a reporter will be dedicated to like the the Elon Musk beat or the SpaceX beat or you know the The Meta beat and they'll be like yeah I was at the Wall Street Journal for four years I was covering meta and so I cover their earnings but I also cover editing press
release and I'd be talking to employees all the time just trying to get information on what's going on oh telling a story trying to get clicks also just doing good journalism sometimes occasionally it happens um and and uh and it's funny that this leaked it's almost like he baited this out yeah
like he knew it was going to leak and so he just said that CU it's hilarious but it really it really must be so weird to be Zuck and that's something i' never seen an interview hit on is like what is your life like you're this like they made a movie about you when you were in your 20s like yeah very few people get a
biopic by Andrew Ross Andrew sorin yeah no Andrew Ross sorin is the aarin sorin aarin Ross sorin is the is the journalist um y so just just a bizarre life uh but he's living it to the max getting jacked wakeboarding and doing UFC you'll love to see it he's he's grinding on and to end on some really
positive awesome news we got a post from Adam singer I thought this was amazing when people talk about the Roaring 20s I feel like it's so often about the markets and just looking at charts but this is the Roaring 20s folks you can go on a Carnival that's a mini Disneyland on the water got going we're catching Rockets with
chopsticks and it's all out there in the open we should celebrate it uh we're also working on some very cool stuff with Adam which we'll announce soon in the ad Qui team um but look we have uh seven minutes until the Market's closed okay let's do it we just got the notification from public so cool that's
our time to uh call it for today and I cannot wait for Monday yeah so thanks for watching go leave us a fivestar review on Apple podcast and Spotify please do both leave an ad in your review leave us five stars ad and stay tuned for the next one we'll see you Monday thank you folks bye