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5:43
>> Today is Thursday, February 26th, 2026.
5:47
We are live from the TVP Ultra Dome.
5:47
The temple of technology, the fortress of finance, the capital of capital.
5:51
Let me tell you about ramp. com.
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Sometimes money, save both.
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He's used corporate cards, bill pay, accounting, and a whole lot more all in one place.
5:57
We have quite the linear lineup for you today, folks. We got a scoop.
6:03
We got an interview with the robot vacuum guy.
6:07
Linear, of course, is the system for modern software development.
6:11
70% of enterprise workspaces are on linear are using agent.
6:15
>> Sam, the guy who exposed that he could remotely access 7,000 DJI robo vacuums.
6:23
>> Very interesting story.
6:23
enabling live video floor P plans and joystick control.
6:27
>> Uh we're very excited to have him on in just over an hour.
6:29
Then we have Ken Richie, chairman of Flexjet.
6:33
>> Very excited for that one.
6:33
Quickly followed by Howard Marx, >> Oak Tree Capital, >> Oak Tree, and then a lightning round to be remembered forever.
6:43
Lots of lots of deals getting done.
6:45
Lots of gongworthy news >> and we have a surprise guest as well joining us.
6:50
We do the time a little bit.
6:52
First, we will tell you about Nvidia earnings. They crushed.
6:54
Highly anticipated as always.
6:55
Nvidia is permanently holding up the US economy.
7:00
Uh continues to hold up the US economy, the global markets, but it's sold off even though they blew out earnings and it was a very good quarter.
7:07
Uh so earnings dropped yesterday after we got off the phone with Doug Olaflin from semi- analysis.
7:15
Uh some analysis did have some good breakdowns here, but the top line revenue came in at 68.
7:19
1 billion dollar up 73% year-over-year and 20% quarteron quarter.
7:28
And this beat consensus estimates by nearly 3%.
7:30
Uh the stock price popped around 3% immediately but then sold out sold off 5% after at the market open this this morning.
7:39
Uh making it the stock's worst day since last April.
7:44
They're now just a tiny April $4. 5 trillion company. >> April was Deepseek.
7:51
>> Last April, last April was DeepSc. Yeah. Yeah, that makes sense.
7:54
People were saying you you won't need a whole bunch of Nvidia chips because you'll be able to inference cheap commodity hardware and the models.
8:02
>> Deepseek was climbing the app store charts in America totally organically.
8:06
>> Yeah, there was a lot of weird stuff going on.
8:08
>> They weren't using a massive bot farm at all.
8:10
Yeah, I mean I I I guess I sort of steelman the the the the deepseek story.
8:15
There was this interesting takeaway which was that uh even though the numbers were sort of mis reported.
8:22
>> We had it we had it wrong.
8:22
I think it was January >> deep was January.
8:26
>> Liberation day was >> oh Liberation Day tariffs. Yeah. Chip chip sanctions.
8:28
But uh yeah the the deepseek lesson was like you can distill models.
8:34
you can get, you know, a certain level of intelligence at a much lower cost.
8:39
And that is real, but the demand on the frontier is just incredible because people are like, "Oh, I I I I have a strong opinion about 5. 3 versus 4. 6."
8:49
Like, people really care about being on that perfect leading edge for exactly what their use case is.
8:54
You see this with people having favorite models, favorite flavors all over the place.
8:58
Uh, and so the the demand in the Jevans paradox really just powered right through.
9:03
What do you have to say about that?
9:04
>> I was going to say uh like I I think when uh the Deep Seek like moment happened, the narrative was not that they were distilling though.
9:09
It was that they had built like they had trained a brand new model >> with very few resources.
9:13
It there was no like sense that they were just like distilling.
9:18
>> There was rumors about it pretty >> there were rumors but the main narrative was not that like they're being >> distilled.
9:22
>> distilled. I think what I mean what I mean about distilling is that like the uh the the the truth that came out o over the you know news cycle was that distillation does get you somewhere near a particular frontier capability and allows you to reduce cost but there is still another order of magnitude of
9:44
demand for the next generation and the next level of the frontier and we have yet to see uh a plateau emerge for demand for the whatever the next frontier is And >> yeah and overall the story the story the story of the last year is that there's there's very very very very little demand for number three. Yeah. Yeah.
10:03
>> There's some demand for number two and there is an exceptional amount of demand >> for the most >> performant model for a specific specific uh task. >> Yeah.
10:13
So going back to our newsletter today, our earnings recap uh which you can subscribe to at tbpn. com.
10:17
Uh after the earnings call, semi- analysis called the results staggering. I love it.
10:21
Clean bill of health on gross margin revenue and the guide is firmly above buy side bogeies. Incredibly clean really.
10:30
Uh they also pointed out what Nvidia said about supply commitments with 21.
10:35
4 billion of inventory on hand up from 19. 8 billion. Uh they have 90 95.
10:40
2 two billion of supply locked in with chip manufacturers.
10:48
Also stating, "We have strategically secured inventory and capacity to meet demand beyond the next several quarters."
10:55
In other words, we're not running out of chips anytime soon.
10:59
That's good news for Nvidia.
10:59
The the second order effect that I think was interesting that Doug Olaflin flagged for us was that even if TSMC does scale up magically or you know they they figure out how to build another fab they Arizona increases capacity even if Nvidia has sharp elbows and is able to push out other other demand and get all the line time they need to build all the acceleries that they need soak up all the CPU demand etc etc.
11:23
Well, then you could still wind up in a weird scenario where Nvidia has the chips, they're ready to sell them, the hyperscalers want to buy them, the AI labs want to inference them, but there's just not enough energy.
11:36
And so there's this question of like when does the shift when does the chip bottleneck shift to the energy bottleneck?
11:41
That could be part of what is sort of worrying people because you can see in the in the timeline we have this chart, are you not entertained from Nathan uh Benake over at Airstre uh and he's taking a screenshot from the Financial Times and it is just one of the most incredible graphs I've ever seen.
12:04
And so as you see this chart, you you have to wonder if there are any any bottlenecks that they will run into. TSMC capacity. >> Yeah.
12:15
And I asked Doug about this. I asked Doug about this.
12:17
What does Nvidia do if their customers do have an energy bottleneck?
12:22
>> I feel like they'll find a way to still ship the the chips. >> I agree.
12:26
And and truthfully, uh, as big of a as big of a story data centers are, they're still consuming well under 1% of of US electricity.
12:34
And so there are chips to be moved around.
12:36
There are new uh new power plants to be brought online.
12:40
We're actually talking to Doug Bernau from Radiant about nuclear power today.
12:44
And there are so many different ways to solve the energy bottleneck.
12:45
But it is very real world.
12:47
It is very slow and if there's a timing mismatch, you could see a little bit of a flatline that I think people might be worried about.
12:55
So, uh, Jensen himself strongly pushed back against the SAS apocalypse narrative yesterday, which is interesting because he doesn't necessarily have to.
13:03
He could be out there saying like, yes, uh, all those SAS CPU workloads, they're all going to be GPU workloads now.
13:11
And yeah, you should actually sell all your SAS because the future is is inferenced.
13:19
Like all every app that you use, it's not going to be code that's running on a CPU.
13:23
it's going to be inferenced on a GPU on demand.
13:25
And so, you know, demand for Nvidia should be even higher.
13:27
Like, he doesn't really have that many uh bags with the SAS companies necessarily.
13:31
Of course, they'd be, you know, upset if he was talking trash, but he's not.
13:35
He's defending them and >> but he buys a lot of software. >> Sure. Yeah, of course.
13:39
Uh he said, "I think the markets got it wrong on the SAS apocalypse."
13:44
This is Jensen Wong talking to CNBC's Becky Quick pushing back on the fears that AI agents will cannibalize the enterprise software industry.
13:52
Instead, he expects a broad swath of software firms to use Agentic AI to develop their software and boost efficiency in what he described as counterintuitive.
14:02
Wong said that AI agents won't replace these software tools, but will use them instead.
14:06
Why even waste the tokens building a calculator when you can just download the calculator SAS or whatever.
14:12
I don't know, whatever whatever SAS you want to grab off.
14:16
And this is certainly the true certainly what we've seen with databases like certain databases have just skyrocketed in demand because they're the ones that the agents are pulling off the shelf.
14:24
And so yes, the agent could design a new database and install it, but that's a that's a lot of work.
14:28
It's a lot of wasted tokens when databases already exist.
14:31
So let's tell you about Finn.
14:35
ai, the number one AI agent for customer service.
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If you want AI to handle your customer support, go to finn. ai.
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And let me also tell you about vibe.
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co, Co, where DC brands, be startups, and AI companies advertise on streaming TV, pick channels, target audiences, and measure sales just like on Meta.
14:50
And we can move over to the timeline reaction.
14:52
Uh, Nvidia is is such a big deal.
14:56
It's not just on the cover of the business section.
14:57
It's on the cover of the Wall Street Journal.
14:59
Didn't get the picture, though. Didn't get the picture. The picture is Iran.
15:02
Iran talking about nuclear enrichment is on hold, according to experts.
15:07
Um, but Nvidia results help soothe AI fears.
15:10
The surge in profit comes as the AI's AI industry's appetite for chips continues to grow.
15:20
Data center hardware, the chips and networking equipment that Nvidia sells to a AI and cloud computing companies accounted for 91. 4% of the quarter sales.
15:29
Terrible news for gamers.
15:32
Like absolutely the worst numbers you could ever see if you're gamers.
15:36
Maybe that's why they're they're maybe they're launching a short short attack short.
15:40
>> John would be punching a hole.
15:40
I would be um may maybe the gamers have risen up and they are shorting Nvidia to try and get them to go back into gaming.
15:48
Uh computing demand is growing exponentially.
15:51
Chief executive Jensen Wong said the agentic AI inflection point has arrived.
15:56
With each passing quarter, the pressure grows on Nvidia, which at a market value of nearly 5 trillion is the world's largest publicly traded company.
16:06
Is it not just the world's largest company?
16:07
Is there a larger privately traded company? I don't think so.
16:11
It must just be the world's largest company. I don't know.
16:12
Uh I guess you get into crazy definitions of like does does Russia count as a company since it sort of is all one controlled economy.
16:21
Uh it is no longer enough for Nvidia to produce good quarterly results.
16:26
They have to produce perfect quarterly results, said Daniel Newman.
16:31
>> How could they have done how could they have done better?
16:35
>> Instead of net income of $43 billion in the quarter, they could have put up 50 billion or 60 million or [laughter] 100 billion or 10 trillion quadrillion.
16:43
We I want to see a quadrillion quadrillion dollar quarter.
16:49
Please, Jensen, I'm not happy. I'm not satisfied. Uh keep keep growing.
16:54
Keep keep uh keep selling these chips.
16:58
>> Gavin Baker gave some thoughts ahead of Nvidia. >> What did he say? >> Great. Uh Shau pulled some out.
17:02
The same point hit on by Gavin and Citadel Securities. It's a good one.
17:07
Gavin said, "The world is fundamentally short, both watts and wafers, and it may take years to resolve these shortages.
17:13
The shortage of watts and wafers may prevent an overbuild.
17:17
Hyperscalers would overbuild if they could, but they simply cannot.
17:20
My best guess is that we would need roughly a thousandx more compute for the unlikely hypothetical scenario described by Catrini to be remotely possible.
17:26
And the time it takes us to get there will give humans time to adjust and maximize the many potential benefits of AI.
17:34
>> Citadel said displacing white collar work would require orders of magnitude more compute intensity than the current level utilization.
17:40
If automation expands rapidly, demand for compute definitionally rises, pushing up its marginal cost.
17:46
If the marginal cost of compute rises above the marginal cost of human labor for certain tasks, substitution will not occur, creating a natural economic boundary.
17:54
This dynamic contrast sharply with the narratives assuming frictionless replication of intelligence even if algorithms improve recursively.
18:03
Economic deployment remains bounded by physical capital, energy availability, regulatory approvals, and organizational change.
18:10
Recursive capability does not imply recursive adoption.
18:14
And do you know what the title of Citadel's response was? >> No.
18:20
>> The 2026 global intelligence crisis. Calling everyone idiots.
18:24
>> We got to write a intelligence crisis report now.
18:27
>> The [laughter] the is actually the perfect this is the perfect response. Like very very detailed.
18:33
This this is the the same report that I pulled out that uh the the the current labor displacement narrative isn't holding up because job postings for software engineers are rising rapidly.
18:47
>> Yeah, it's pretty remarkable that Citadel was able to get that report out so fast.
18:50
Like it would hit it it dropped I think on Monday right after Catrini went viral on Sunday or maybe it dropped Tuesday or something like that. Like it got really fast.
18:58
>> Yeah, it dropped uh Tuesday.
19:00
>> I mean that's like a quick turnaround for like a pretty detailed analysis.
19:01
Um I thought that they were just recon.
19:05
>> Let's check the M dashes.
19:05
[laughter] >> I mean uh the the the interesting uh question about like you know replacing white color work versus like augmenting in new things is that uh there's the the AI labs are obviously selling into enterprises that's growing a lot and the revenues are very real tens of billions of dollars.
19:25
But um when you look to the other startups that have put up really big ARRs, it it just it I'm trying to square like Sunno just announced that they're selling 300 million in ARR for AI music and that's a huge number.
19:42
It's so big, but it doesn't feel like replacement work yet.
19:49
It feels like it's just an additive new thing.
19:51
Like there were just a lot of people that wanted to pay $10 a month for a cool app. Same thing. Same thing.
19:57
How many how many non-technical people had an idea for an app?
19:58
How many people that weren't musicians had an idea for a song? >> It never could.
20:04
>> That and then just unlocking all this >> and then you see it with like Higsfield 2 and and all the viral loops and then uh what's that other one?
20:10
Um uh not Web Flow, there's >> PVPN simulator. No.
20:15
Uh but the the lovable is one where where huge huge growth and and it feels like yes lovable is like going into enterprises and whatnot but it feels like there's a lot of just like net new software developers website builders that are joining that platform and building stuff and it's it's it feels very incremental.
20:34
it's it feels very incremental. does not feel very substitutional to me and I'm wondering how much of the pseudo story translates to the AI lab coding model story as well and that and that's certainly what Citadel is hinting at
20:48
with uh the >> increase citadel is also showing that new business formation is rapidly expanding this is from the US Census Bureau uh you can see that year overyear it is jumping >> which we love to see >> did Cluso delete this post the great recession session of 9:52 a.m. to 11:16 m. to 11:16 a. m. February. Uh, too bad.
21:10
Uh, let me tell you about Sentry.
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That's why 150,000 organizations use it to keep their apps working.
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And let me tell you about Shopify.
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21:32
Nvidia stock is falling because it needed to clear an options wall of $200 a share.
21:37
So given a lot of folks were long calls into the print and it didn't clear 200 brokers are selling stock to reverse some sold calls. It's that simple. This isn't fundamentals.
21:47
It's market mechanics says Gordon Johnson. Uh very interesting.
21:52
I don't I I I don't fully understand all the dynamics that can happen uh with some of the stuff Jane Street does to to move around the market.
21:59
Uh but you know, we'll we'll we'll see.
22:02
Uh I I would say hold your hold your judgment of Nvidia for the next quarter to see >> Samsung becomes the first Korean company to reach a $1 trillion market cap. >> Pretty remarkable.
22:16
>> Over on companies cap.
22:16
com, >> you can see they are sitting at number 12.
22:21
>> That's your homepage, right? >> Yeah, homepage.
22:23
>> Yeah, >> homepage for sure. Definitely homeage.
22:25
Just under Birkshshire Hathaway. >> Pretty good.
22:28
and Broadcom is above that.
22:31
But Samsung passed Walmart and Eli Liy.
22:35
>> I mean, increasingly important in the AI era, right?
22:38
They've done a lot of uh um fabrication and whatnot.
22:42
Um I don't think it's all the TVs.
22:44
[laughter] There there was some interesting stat about uh of the one trillion dollar companies, isn't Samsung like the the most highest margin, lowest margin or something?
22:56
There there there was some post from yesterday we didn't get to but there there was a lot more context on that. >> Yeah.
23:00
>> Anyway, >> uh Ramp Capital >> is sharing uh says Patriot and somebody says I have open call sending lowball offers on Zillow all day just to make boomers start panicking.
23:12
>> And he says can you give me an update on the Zillow campaign today and the Zillow update.
23:15
Uh listings contacted today 372.
23:20
Average offer 70% below asking. Positive responses zero. Negative responses 270.
23:26
One response was violent, but I've reported it to the Tampa Bay Police Department. No response, 102.
23:29
Would you like me to keep making offers? >> 70% below asking.
23:33
Just you're selling a million dollar property.
23:36
And it's like, how's that? Can you do 300K? >> Yeah.
23:39
Uh let's uh >> let's bring in John Palmer.
23:41
[music] >> Let's bring in John Palmer. Our surprise.
23:44
>> He's live in the TV and Ultra Dome. >> Coming in. >> You You know him. >> Nice hat.
23:50
John, >> you probably know John Palmer is the >> as being one inch shorter than you.
23:56
>> Well, he's the face of leg lengthening surgery right now, [laughter] right?
24:00
>> No, they were saying I'm the Goldilocks technology brother.
24:01
So, they were some people were saying you're a little too tall. >> Okay.
24:05
>> And Jordy tall on his own right, but maybe not quite at this table.
24:09
>> So, they wanted someone right in between.
24:10
So, I was contacted by by your team and >> I love it. I love it.
24:14
Well, actually, introduce yourself since uh for those who've been living under your data center. >> Yeah, sure. My name is John Palmer.
24:18
Um I was a co-founder and CEO of a company called Partardi Dow.
24:23
Um recently >> um announced that we're going to be joining Stripe soon.
24:26
So that was a awesome 5-year journey.
24:28
And um >> also work on a company called Area Technology which does um logo and graphic design for brands like yourself.
24:38
Uh shout out to the new logo and graphics package.
24:40
And um yeah, that that's >> honored.
24:42
Well, we wanted to do we wanted to hang and do some timeline with you as that is a sign of great respect >> in our culture. >> Yeah. What you got, Jordy?
24:51
>> Uh what do we have here?
24:54
Uh >> how do you guys enable pseudo for >> Okay, baby. Baby Keem. >> Yes.
24:59
>> Says yesterday he hits the timeline.
24:59
How do you fix openclaw internal reasoning leaking?
25:03
Peter, >> what does he actually mean?
25:05
Does anyone know what that mean?
25:07
So, I mean, we read your post about uh something small is happening. Hilarious. >> Yep.
25:13
>> Did you How much of that was real?
25:13
Did you ever actually buy a Mac Mini?
25:16
>> So, the the entire post was tongue and cheek, but um I did uh unbeknownst to you all, I did actually buy a Mac Mini that week. I did set it up.
25:22
Um setting it up was the best 48 hours of my life.
25:26
Uh since then, I've used it. Uh not very much.
25:29
So, it's um I I don't know.
25:29
I think the reason I bought it originally was basically to tinker and see like how real is the hype. >> Yep. I set it up.
25:36
I installed various plugins and skills.
25:39
I made sure my setup was super optimized.
25:41
And basically, I realized the only thing I really needed it for was coding remotely in, you know, repos I'm working on or side projects.
25:51
Um, you know, when I'm out and about on my phone.
25:53
And you can already do that with like a million other tools.
25:56
Actually, like even claw, even the cloud app, like you can just connect it to whatever repo, like you can literally just use cloud code in the app. >> Yeah.
26:01
And so there was really very little delta that it provided in terms of value beyond what I was already doing. >> Yeah.
26:09
>> And I did try some other things.
26:09
I've been trying to get it to like, you know, work on Google Sheets and invite people.
26:14
But the big problem is that the browser use specifically is pretty fragile.
26:16
And I I think it's going to get better.
26:18
So I don't have buyer remorse yet.
26:20
I think that Mac Mini purchase will will come in handy.
26:24
But >> so far it's like, "Hey, add I want to add someone to a Google sheet. Can you invite them?"
26:28
And it's like it opens the modal to share.
26:30
It types in their email and it's like I crashed like it can't get past the share modal of a Google sheet.
26:36
I'm sure I could I'm sure I could optimize my setup further which I'm looking [laughter] forward to.
26:40
>> Skill issue skill issue skill.
26:40
mds is >> it probably is a skill issue.
26:44
>> Yeah, you need to get the skill called skill issue and and make sure that's running.
26:48
It it is it is uh I don't know if this is like a brilliant PR move from Baby Keem's team or if this is real, but either way, it's really really uh funny.
26:59
But yeah, it was I how mainstream this went.
27:02
Uh our lawyer uh got a Mac Mini.
27:05
>> Uh he's obviously pretty pretty tapped in, but it's cool to see.
27:10
>> Uh >> well, I was talking with you at the gym this morning that we should I I'm excited about a market for bootleg skills.
27:15
So you don't you don't just like you don't want to be the guy just listening to hits on the radio, right?
27:21
You don't want to just be going on skills.
27:22
sh and getting the what would Elon do skill.
27:24
That's that's pretty that's what everyone did.
27:26
And it turns out that one was like actually it was actually [laughter] malware.
27:29
So what you want >> is within your trusted social circle of people that you spend time with IRL USBs full of markdown files with bootleg skills that you kind of keep internal.
27:39
And there may even be a market for that, you know, on Craigslist, whatever.
27:42
>> And you can say if somebody says, "Hey, can I can I try the USB?
27:44
Can I can I can I borrow it?
27:46
You say, "Well, this this skill is kind of like a personal thing."
27:50
Like, it's not really >> You need to be gatekeeping your skills.
27:53
That's like probably the last moat in tech is gatekeep skills.
27:55
Just proprietary markdown files powering the entire glo.
27:59
>> I do I I I do honestly wonder what the conversion rate from, you know, buying the Mac Mini to like actually using Open Claw regularly was because I think that your post was funny because a lot of people definitely went through that.
28:11
Like I I went and bought a Mac Mini and it did take me like a week even to unbox it because I just had like a busy life and I didn't have time.
28:16
And then when I did it was like okay well I didn't have a monitor at home so I had to plug it in my TV and then like the actual setup does take time.
28:24
Like the 48 hours is not that much of a joke.
28:27
>> And and I think on this point like I do think you need like a solid month at home fixing it.
28:30
So I've been out of town for a week. I'm here in LA. I live in Brooklyn.
28:34
And a lot of the time when you hit a wall, it's like, okay, now you probably need to get on the Mac Mini yourself and like add whatever environment variables or keys that you need, set up a new account for it. Yeah.
28:44
And since I haven't been home, like I can't really >> like, you know, on a more serious note amazing.
28:49
Like isn't like 5 years ago, everyone was posting like I miss like hacker culture. >> Totally.
28:55
I miss I miss I miss the old Silicon Valley and it feels like this this feels like uh it feels like we're back. >> Yeah. Yeah.
29:03
A lot of people definitely like open up the terminal for the first time in years.
29:07
time in years. I mean this is true for vibe code generally like a lot of people would step back from just writing code or committing code to any GitHub repo like the vibe coding boom >> definitely >> it's funny because I do really prefer the quad code like user experience to any of the like slicker desktop tools because >> because of a lot of reasons but it is
29:24
funny you're like in the terminal I think everyone there's definitely a major factor where like you feel really cool using the terminal if you're not an engineer but you're just it's all plain text like you're speaking in plain English and like it's speaking to you in plain English but you know if you're at the airport or in co-working space. You're like, I feel I look pretty
29:38
You're like, I feel I look pretty fantastic. >> Performative.
29:42
Sheree says, "Baby Keem just humbled a model."
29:44
That is actually an exact uh lyric from Baby Keem song uh Stat.
29:51
>> That's exact uh deep cut. Deep cut.
29:53
And uh yeah, he someone else said two phone baby keem.
30:00
That's another lyric, but two Macini Baby Keem.
30:03
>> And Baby Keem liked it.
30:05
>> He's he's very online.
30:05
We're working on getting Baby Keem on the show to break down his full skills. >> Yeah.
30:13
I mean, one of the biggest questions that I feel like is still sort of unanswered is like is like what are people doing with it?
30:18
What, you know, obviously if you're working on a startup and you're building a piece of big software and you're committing to it and you're firing off just managing agents remotely, that feels relevant.
30:26
Although, yes, you mentioned you can just do that already. >> Yeah.
30:30
I mean, I actually whatever like I'm definitely not the top person who's like diving into this, right?
30:34
I I feel a lot more confident even even for coding.
30:39
I actually don't love doing it with open claw because I've I've got my reps in with cloud code. I trust the harness.
30:43
I trust its ability to like utilize the model in the best way.
30:46
So >> e even for coding I'm I'm just using cloud code remotely anyway.
30:50
So still waiting to find the use case.
30:52
I think one interesting thing though is just that like I think prior to this whole open claw wave, the whole idea was like all the AI labs had their like computer use demo and it was running in like the totally you know anonymous um VM somewhere and I do think these things are way less useful without your personal data and your personal contacts and the stuff on your machine.
31:14
No, no one solved like trusting it enough security-wise like you know my Mac Mini uh back home it it has its own Gmail, iCloud, whatever cuz I'm not going to let it touch my data.
31:25
If we do that all the files on your file system and all your accounts and it's not going to make a dumb mistake, >> I do think the ability to like do all of your knowledge work on the go.
31:37
Even if it's just like I do the same stuff I do today with AI, I can just do it on the go would be a major leap in terms of like >> idea guys have been waiting for. >> Yes. Yes.
31:46
It's the moment idea guys have been waiting for though. I think Yeah.
31:50
And we we can riff on that if you want.
31:51
>> Just more phone based work, more like, okay, this is something I need to do regularly, turn it into a crown job.
31:57
Like the agent should be able to do that. >> Yeah. Yeah. I totally think so.
32:01
>> Also, I was just really excited about this like Napster sort of moment.
32:02
Like every idea I was joking with Jordy like every idea that I have for like something to vibe code is like something that doesn't exist not because of code.
32:12
Like if you want a fitness tracker, like yes, you can vibe code one, but you can also just go to the app and get a free app store and get a free one or you can pay.
32:19
Like there's plenty of products in every category, right? Right.
32:21
The things that you want but can't get are like something that jumps every payw wall, something that Yeah.
32:28
You know, so like g gives you videos for free that are behind walls and stuff and like these walls exist for a reason.
32:34
Um and uh and maybe those come down in a world where everyone's like working on open source agents and just sort of showing up as themselves um and synthesizing everything.
32:45
But uh it's uh like it it feels like it's much harder to actually productize that fully because so many of the things that people want are like yes they're possible in open source in the sense that like file sharing was was popular. >> Totally. Yeah.
32:58
And even though I will say like even though I guess so far >> I don't want to say I'm disappointed because it was really learning thing but I I still it's never a good bet to be like really bearish on new form factor with like novel tech.
33:10
So I'm still pretty bullish and excited about like 3 6 months from now what that same Mac Mini could be doing and it doesn't need the Mac Mini.
33:18
It could be it could be on whatever service but I think it's going to get pretty exciting pretty quick. >> Yeah. Yeah. >> Yeah.
33:23
>> What did uh what did Playboy Cardi mean by this?
33:26
Did he was he responding to Baby Keem?
33:28
Is that what was he supposed to read into this?
33:31
>> Is he also doing it back in the Jeremy Irons in margin call? Is that the meme?
33:36
>> This is when he says that the music is going to stop. >> Oh, okay.
33:39
So, so, so Playboy Cardi is calling the top. Have you seen I have. >> You have? >> Whoa. Are you a film guy? >> Uh, I'm not. >> Have you seen Borat?
33:50
>> I would never call myself a film guy, but I've seen all movies. >> Have you seen Borat? I have seen Borat. Okay. Okay.
33:54
You're You're The whole bit is that Jordy hasn't seen enough movies.
33:58
>> Yeah, he hasn't seen any movies, in fact. >> Wow. Interesting. >> RIP the market. We had a good run.
34:00
The three kinds of stock market days so far.
34:06
Donald Trump Donald Trump spins the wheel of tariffs and replaces a 5% tariff on Bellarusian wheat with a 22.
34:10
4% tariff on Pakistani jet engines. All stocks lose 2d6.
34:19
Uh, Substack newsletter publishes a story about Door Dash going badly. Door Dash down 862%.
34:23
global financial system teeters on the brink.
34:26
And three, Nvidia announces earnings of $100 trillion, beating expectations by a,000x.
34:29
Jensen Wong named new king of earth while his stockholders to form the new permanent ruling class Nvidia down 3% on the news.
34:37
This is the president of the market.
34:37
Are you are you a day trader guy? >> No. No. >> Are you an investor? >> I am an investor. Investor.
34:44
>> How do you think about the market? What's your strategy? >> I'm an investor. I'm a businessman. Um I I don't know.
34:50
I think my approach is like pretty smoothrain value investing like uh good fundamentals.
34:53
I'll buy the stock and hold it for a long time.
34:57
Definitely not doing a lot of >> even even intramonth tra it's it's really like long term.
35:01
>> You're not like a oneman Jane Street.
35:03
>> I'm not a not a oneman Jane Street.
35:05
>> What about what about crypto?
35:05
I feel like if you're working in crypto, even adjacent to crypto, there's just so much alpha from seeing essentially like angel investment style opportunities from someone who's building something that's you just know it's going to be hyped and the token's going to moon.
35:22
>> The issue is that it's like wildly distracting because as soon as you have enough money, invest.
35:25
I I I think I I think uh >> I I don't like doing a lot of like individual stock trading because as soon then then my attention is gravitating towards this thing that's not actually productive. >> Yeah.
35:41
>> And so what do you think? >> I think that's true.
35:43
And I think I mean obviously if you're trading like per in crypto like you better stay on top of it because like there's a moment to exit or if you just hold it longterm you'll probably get liquidated at some point.
35:52
So I I just don't touch any of that.
35:54
You're right though that there are uh whatever there are like yeah weird things in crypto where like someone you know or someone's doing a project and they aird drop a token or something like this and you wake up a week later and it's worth like whatever a month's worth of your salary.
36:08
Um, so I think that's >> Let's talk about Jane Street because I've seen maybe >> 10,000 posts kind of blaming them entirely for uh the just crypto price action over the last couple months.
36:25
>> You haven't been able to have you been able to find anything that is like definitive?
36:28
Um uh obviously the lawsuit came out and they were like we were going back and forth on it because it sound they pulled they pulled funds out of this liquidity pool right after >> actually I don't even think they p I don't think they pulled funds.
36:44
I actually think they sold into the pool. >> Okay.
36:48
>> Which is I guess the same thing. I don't know. I don't know.
36:51
>> Uh but they did it five minutes after we were saying maybe yesterday or the day before that okay it's a public blockchain.
36:58
theory that it's not actually a smoking gun necessarily, >> but either way, >> I'm I'm only as informed as you are in terms of the tweets.
37:08
I haven't verified anything, but yeah, my understanding is that um I guess uh Tara Luna had had a lot of money in this pool and they had planned to pull whatever 180 something million out of it. Yeah.
37:23
and that I guess the allegation is that Jane Street heard that this was coming before everyone else.
37:30
That's like the material non-public information and so then also pulled their money or sold it um yeah like just minutes after Tara did it.
37:38
And um you're you're right that it's public.
37:43
So I guess like again not a source of truth here.
37:45
I'm like relaying secondhand with confidence uh information that I read on on on the timeline >> guys built for for podcast.
37:50
[laughter] Yeah, I'm I'm relaying this to you secondhand without confidence, but yeah, I guess you could say, hey, it was it was a anyone could see that and they just reacted quickest, but I think I I guess what that would come down to is what are the internal ops on moving those funds like that.
38:05
I would imagine that a fund like Jane Street with $85 million in this pool isn't just sitting in someone's like hot wallet, MetaMask, right?
38:13
right? Yeah, they probably they could have they could have like some type of protocol or actually software like as some type of protective mechanism given that they >> clearly are are >> I don't know a lot of stuff feels like
38:25
conspiracy theories that uh it feels very similar to uh like uh the Robin Hood um GameStop fiasco where there was like a lot of conspiracy theories about like Citadel purposely tanking markets and the bailing ing out hedge funds at various points. And I I always thought
38:44
And I I always thought that was just like people looking for scapegoats and a whole bunch of market actors just playing hard ball because that's the that's the default structure. I don't know. >> Yeah.
38:57
I mean, I'm not that comfortable like yeah speculating on this either cuz I'm just like all right, I saw you know posting the timeline.
39:03
>> They are interesting though.
39:04
>> DJ CPA says Jane Street got my dad drunk and made him cheat on my mom when I was three.
39:09
People are are hunting for uh for you know says Jane Street killed my dog.
39:17
>> That would not be good.
39:18
>> You're just getting a lot of the cathartic like crypto people who have just been wrecked by these fiascos like now have a viable scapegoat.
39:26
>> He's not a bad trader.
39:26
The market was manipulated by Jane Street. >> Yeah.
39:30
>> Uh Tampa International Airport has come out and said, "We've seen enough. We've had enough.
39:35
It's time to ban pajanas at Tampa International Airport.
39:40
>> Wait, they actually This is great. Read the next line.
39:42
>> I mean, it's really >> After successfully banning Crocs and giving everyone the amazing opportunity to experience the world's first Crocs-free airport, it's time to take on even an even larger crisis. Pajamas at the airport. Is this real? Is this actually Tampa? >> It's hard to say.
40:00
>> What's your What's your airport travel?
40:02
>> I was going to ask you guys because you're traveling together a lot. Um, >> I don't know.
40:06
It's always a dilemma, right?
40:07
Do you wear >> like like I get the pajamas thing because if you wear, you know, your nicest clothes, then to me when I get to my destination, I'm those were on the plane. Yeah.
40:16
Like I'm not unless I have laundry, you know.
40:18
So for me, I'm rocking like uh one of my more like mid fits like I'm something I don't care about, something something lightweight that packs light as well because after that travel like that's not coming out of the bag for the duration.
40:29
Well, there's a there's like a contagion theory here because if I'm in a suit, but I'm sitting down in a seat that someone in pajamas just sat down in, then I'm getting their pajamas all over my suit. >> Yeah.
40:39
>> And so, uh it's it's just a vicious cycle.
40:43
>> Are you guys business cash on the plane with >> I I I've actually traveled in suits many times and and it's underrated. >> Interesting.
40:49
>> I I think uh I mean besides the fact that I've heard that you can get upgraded to first class more more easily if you're dressed up.
40:54
I don't know how apocryphal that is. It happened.
40:56
I feel like that's just people trying to justify.
41:00
>> I think people just they they see the suit and they're like, "Respect here. Please take my seat. I'm in pajamas.
41:03
I have the first class seat, but you deserve this."
41:07
>> I think I'd feel more comfortable with that.
41:08
Um if I if I weren't as tall as I was, and you are because the suit, you know, more powerful aura, definitely less comfortable, especially if you're in a seat where you're kind of constrained.
41:19
It's kind of bunching up.
41:21
It's really not feeling you're aiming for.
41:23
>> What about the TSA ban?
41:23
Have you Have you seen this TSA shutting down? TSA pre-check. >> Pre-check.
41:28
>> This is just like a ploy to up to to increase private jet ownership, right? >> Yeah.
41:33
Clearly the the we're we can ask Ken Richie about this.
41:35
The the lobby is trying to push people into >> it's kicking the commercial aviation enjoyers while they're down. It's really brutal.
41:43
>> What does Joe Wendel say about this?
41:43
He says, "I'm very proconformity, very anti antisocial behavior in public, and yet I can't understand why people care so much about other people's airport attire.
41:54
Just say that you wear pajamas to the airport.
41:56
[laughter] Just say that you wear pajamas to the airport.
41:59
>> Flying is unpleasant enough.
42:01
>> Uh, Burger King is launching an AI chatbot that will assess workers friendliness and will be trained to recognize certain words and phrases like, "Welcome to Burger King. Please, thank you." >> It's huge.
42:12
>> The AI will be programmed into workers headsets according to the Verge.
42:17
>> I think Chick-fil-A got access to that technology like a decade early.
42:20
>> Yeah, >> cuz there's a my pleasure. There's a thank you.
42:22
There's my pleasure every time. >> Yeah.
42:24
Apparently, when McDonald's opened in Russia, there was a quote, "After sever several days of training about customer service at McDonald's, a young Soviet teenager asked a McDonald's trainer a very serious question.
42:34
Why do we have to be so nice to the customers?
42:38
After all, we have the hamburgers and they don't.
42:41
>> They need to be nice to us if they want these hamburgers." >> What was it?
42:44
Did Did MC McDonald's launch something as well?
42:47
>> I thought they launched an AI thing, too.
42:49
It wasn't uh >> it's AI big arch.
42:52
>> Well, the big arch is the big burger.
42:54
>> Um but then um I thought there was I mean at this point every single company has an AI strategy of some of some kind and and so everyone's putting putting uh various stuff. Are you an F1 guy? >> Um a tennis guy.
43:10
>> I'm a tennis guy, but I I watch like the F1, you know, highlights and recaps.
43:12
I I'm rarely like getting up to watch the race live, but um >> play tennis or watch tennis or both.
43:20
>> Um play and watch both a lot. Um >> yeah. >> Um what does it say?
43:24
Best friends should be able to apply to jobs together and get hired as a set.
43:27
New age hired hiring looks like four to six talented people clustering together and building a feature and getting acquired.
43:33
Um that's yeah, this does exist.
43:37
>> I mean a horse did post >> horse is kind of going off.
43:40
horse has been on a on a generational run. Literally a horse.
43:44
Um yeah, underrated to just >> uh Riley Walls, we talked about this yesterday, joined the labs team at OpenAI. >> Very exciting.
43:52
Uh we were talking about this uh kind of offline uh before the show that it seems like there's a lot of opportunity and like hiring for not just ability which which Riley Walls clearly is incredibly talented and has you know an insane probably like the most elite idea guy like actually on the pitch playing right now. >> Yeah.
44:15
>> Uh and that's hard to say as an idea guy as idea guys ourselves.
44:18
Um, but I think like hiring for you you called it like hiring for Mind Share I was a >> Yeah, I was pointing out obviously both Riley and Pete Steinberger like both incredible devs.
44:30
So not not trying to take away from that but it's interesting that like both of those um either like hires or acquisitions >> also come with like a lot of developer mind share >> and I think in a world where like >> if you just run out to the extreme like software production costs go to zero.
44:48
Um, so, so being an engineer, being able to build stuff, that skill becomes more of a commodity than what are you trying to acquire or hire for.
44:56
>> Maybe in this interim period, it's like a blend.
44:58
Okay, like I still want you to be a good engineer, but I also want you to bring me a developer mind share and I think to that point, it's like, you know, with OpenClaw, for example, um, it was definitely the best product in the market, but it was open source.
45:10
No one could have, you know, forked it, copied it, whatever.
45:13
But I think it really would have been hard for someone to catch up given how much mind share it had.
45:18
It's like the fastest growing open source repo of all time.
45:19
So what you're buying it's like even though it remains open source and forkable and in like a foundation and other people could build it.
45:27
The reason you buy PE in addition to him being a great developer, you know, idea guy, whatever.
45:31
is just that like he he's bringing the mind share of all the people who definitely follow him, have notifications on for all his posts.
45:38
They're following all the updates because he's bringing >> in they they probably spent few hund you know 600 bucks or something like that on a Mac mini >> some hardware device to to run the model.
45:49
>> Um uh Noah Smith is sharing the job postings for software engineers have picked up since Vive coding became a thing.
45:59
they had been declining until uh the early part of last year actually.
46:05
>> And again, this is why I mean, we've we've talked about this over and over and over.
46:10
I feel like there's this like uh two different narratives being spread on Instagram.
46:15
It's just like this like labor displacement narrative going super super super hard and then over here >> like it's just an entirely different world. >> Yeah.
46:25
I mean, >> Tyler, how how do you interpret the the software engineering number?
46:28
Have we talked about this yet? >> Yeah.
46:30
I mean, so I think I broadly agree like so when Daria won and Doresh, she had this take where it's like um >> you go from uh AI doing 90% of of like coding to 100% and then it goes from 90% of like all sweet tasks to 100%.
46:42
And so when you're kind of in the interim period like engineers get super super productive, but then there's a point where it's like actually like >> it's like instead of being super high leverage because they're the AI is doing 99%.
46:55
Now the AI is doing 100% and it's actually like it just kind of instantly goes to zero.
47:00
>> So like I I think you should imagine that like yeah you actually see you should see a lot of like hiring because everyone wants like a vibe coder at the company >> but then at some point voding becomes so easy that like you don't need any any like special talent to be able to do it >> and then you just have the random person.
47:15
>> I I I mean even >> Yeah.
47:16
So basically if if if you [clears throat] if one day you're not sitting at your desk, you're like you're kind of the the vibe coder in the coal mine >> canary. Okay. Okay. Yeah. Yeah. Sure.
47:24
Um I I I I do wonder about like because there is there is a world where uh software engineering postings and jobs are substitutive for other roles.
47:37
Like you can have someone whose job is like a business analyst and every day they open Excel and crunch some numbers and then you could hire a software engineer to automate that task 10 years ago, 20 years ago and a lot of companies did.
47:50
And if vibe coding sort of eats into other things, you could see the rest of white.
47:54
It's like the white collar work could go away because the software engineers are doing it.
47:58
The and then the bigger question is like is like you're sort of jumping ahead to like a full unemployment scenario where no one has a job.
48:08
in the world where there are like a few jobs there.
48:10
like a few jobs there. Uh I I keep thinking about this thing that Pavville Asperuhov said where he was like uh yeah like everyone if if the software engineering jobs go away like get ready to compete with software engineers in every category because they're going to learn financial analysis they're going
48:28
to learn to trade they're going to learn to sell they're going to learn all these things and if they're just like smart and hardworking people and they have AI tools both helping them upskill reskill and shift and do whatever they need to in the new role like you'll just th those people will still be employed. They'll just be in a different part of
48:44
They'll just be in a different part of the economy.
48:45
So I don't >> Rachel Carton who's coming on the show soon says by more than a 3 to1 margin young Americans believe AI will take away opportunities.
48:53
There's a lot of uncertainty surrounding AI especially among the youth using it as a joke like Liquid Death Gucci or Equinox have tried is not a wise marketing strategy.
49:00
Uh yeah, the the blowback around Gucci was predictable, but it was also strange that they chose to use an image that looked like it was out of GTA, too.
49:11
Like it was just like not even trying to look like one of the images that we looked at >> looked like >> I thought it would look great >> normal photograph and looked cool.
49:20
And the other one like was like a GTA style characters which really didn't hit >> interesting.
49:27
Um, uh, Jirro Ticket says, "But sir, that's rage bait.
49:32
If you do this, you'll sloppy the timeline and you're posting something that you know has no value.
49:36
We we are selling engagement to willing scrollers at the current fair algorithm parameters."
49:45
Uh AI Schiffman had uh was was uh certainly >> Have you ever talked to an AI just like as a as like a being or like a friend or like just as like any any like nonproductivity like >> earnestly? >> Earnestly. Yeah.
50:01
Just like chatting back and forth with it.
50:03
Not for any specific business purpose.
50:07
>> Have you ever fallen in love? >> No. No. No. I I really haven't. Earnestly.
50:10
I haven't I haven't really given that.
50:11
I I have like to test it out.
50:14
Yeah, >> I wasn't like wholeheartedly engaging.
50:17
>> Yeah, >> I It's weird.
50:17
I don't know if it's like a personality thing or maybe I'm just too busy or something, but I've never been like I will I I will I if I'm in a video game, I'll go talk to a NPC on a on a side quest.
50:30
I'm down like I'm down to explore the story that's there, but for some reason it just hasn't clicked with me. >> I don't know.
50:37
I I I I haven't even done that.
50:40
Like even when I was playing like uh like MMOs back in the day, like I feel like I would always just be like skipping skipping dialogue.
50:45
I'm just like >> I actually do skip a lot. >> I don't know. It's hard.
50:48
It's hard to really buy into it.
50:49
I think maybe a good the synthesis of that would be I would be down to play like a new Elder Scrolls game where there are like really good AI models behind the characters.
50:57
Then I'd be exploring it cuz like >> I've decided to suspend disbelief to play this game.
51:03
So while I'm in this game, let me do it.
51:05
But in my real life, I'm not like having a heartto-he heart with the AI.
51:07
Next time you call me and I don't pick up, go into chatbt and say, "Pretend you're >> pretend you're Jordy. Let's talk about work."
51:18
>> I do think that's like more interest like like again not like maybe not as a heartto-he heart but like >> I mean there's companies that do that like a AI version of an influencer and whatnot like that those things exist.
51:28
>> I mean you guys have like hundreds if not thousands of hours of live show now.
51:32
You could probably get a pretty good Jordy model.
51:33
And if you were like trying to riff on show planning, like it would actually functionally be pretty good.
51:38
But >> no, I just have no desire for it. I don't know. >> Give it a shot, John. >> Maybe. Maybe.
51:42
>> I I do think this is an interesting take on the open claw style stuff where like I think there's a world where again security is like a big asterisk here, but like if I had OpenClaw.
51:51
Okay, so I' I've been riffing on this idea for a while that I'm just a JPT5 client.
51:55
So like chat GPT has GPT5 and I'm John Palmer.
52:01
So I'm John Palmer Transformer.
52:02
I'm JPT5 and I'm just a client for JPT5 which is my brain.
52:06
>> And so like you guys >> kind of like a harness. >> Yeah. I'm I'm [laughter] Yeah.
52:09
Well, this is the clothes are the harness and the the brain is the model and my mouth is the client. I don't [laughter] know.
52:17
>> So, so in in that anyway, I won't go into the whole riff, but I guess like uh so my Mac Mini I named JPT5 and hypothetically if I could train it on like all the writing and speaking I've ever done plus my whole file system and it knew like what I do on my computer.
52:33
>> One version of that is it's single player. It's my open claw. I use it to do my tasks.
52:36
But I'm really interested in like the multiplayer.
52:38
Again, this is the security security is not ready for this yet, but if I had my Mac Mini and either humans like yourselves could really go like, "Hey, I need John for something.
52:48
I know he did that one project and all the files are probably on his computer.
52:52
Could I go microp pay his agent be like, "Yo, I need help researching this crypto thing that you did, whatever."
52:57
And if my agent could actually give you, >> it's like you're not accessing the same one-sizefits-all model that everyone has.
53:03
you're accessing, you know, that model with some custom, you know, context and prompting or whatever and and that would be cool.
53:09
So, like, >> you know, you have access to Jordy anyway, but for someone who doesn't, you know, if that random third party out there wanted to riff with Jordy on a marketing idea, >> it'd be cool if they actually could and you had set up that model.
53:20
It wasn't, you know, Opus 4.
53:23
6 trying to replicate you, but it was like all all your insider info. It's kind of cool.
53:26
And then, you know, the agents could do it to each other.
53:29
Now JPT5 could be talking to JHT5. Yeah.
53:33
>> And they could be like we could be hanging IRL and our models could be hanging back at home like kind of like a kids playd date like my models [laughter] like hanging out with your model.
53:42
They they like hey let's get John involved.
53:44
They go get John Kugan's.
53:44
So it's kind of a fun uh >> I mean there's a take on that where it's like that's dystopian or something.
53:49
But that's not that's not how I feel.
53:51
I just feel like I'm just like bored. I'm bored idea.
53:55
We go brainstorm for an hour on some concept and then we come home and we find out our models cooked up something way better. >> Yeah, I don't know.
54:00
I I was I was looking at the the clawed >> I think I think it's I think it's actually I think it's actually possible >> especially especially if you were like you bring the original idea and then you say like I want I want John Palmer >> GPT to talk with John Kugan GPT >> about this idea and like come back with a bunch of ideas.
54:23
It it's a lot it's it will work a lot better for someone like John who has spoken on the internet for hundreds of hours.
54:33
>> There's so much that I don't say on that's why you actually want to talk.
54:37
>> It'd be cool if the model could like decide to price its own services and negotiate with whoever whatever model is hiring it. I mean >> whatever.
54:44
It's >> uh Avi Schiffman dropped user interview number three.
54:48
We're not going to play the video because it's kind of sad, but Gary Tan said, "This is not the happy demo path.
54:53
Apple or Google would never make this one of their launch videos.
54:57
It's not what you will hear about in a TED talk, but it's real.
54:58
AI doesn't get tired, doesn't ghost.
55:01
A lot to think about with this one."
55:02
Yeah, I I you know, Avi continues to find new ways to uh break through the noise, but in some ways like even though this video has been uh it it feels somewhat dystopian, you know, this is someone who's struggling with mental health, like actually gets in an accident in the video.
55:24
It does feel like the most kind of real raw like like experience of AI companionship in this form factor.
55:38
>> Um yeah reflection on like uh do you remember his interaction with uh Paul Graham very early on?
55:44
He was like I'm building like a hardware device for AI.
55:49
He put out like some very vague posts about his plans and everyone was like this is impossible like Apple will crush you.
55:57
They have the supply chain, they have the distribution, they have brand like you will never win in this category.
56:02
And Paul Graham told him like in order to win you have to do things that Apple would never do and be counterpositioned.
56:09
And so at one point he was thinking about doing something that looked like very organic, you know, no smooth lines, no rounded edges, crazy colors that Apple wouldn't pick, like just really moving outside of their design language.
56:23
So you wouldn't feel like that.
56:25
And then yeah, this this type of messaging is certainly in line with like the anti-Apple.
56:29
Um, and I don't know, it'll be interesting to see where the company goes.
56:34
People were so bearish on that ad campaign.
56:36
We were very surprised by how broad the Billboard campaign was, but >> they got the Heineken response.
56:46
>> Oh, did Heineken like >> So, Heineken also just came out with a new campaign that I want your guys' reaction to.
56:53
>> Uh, it's it's I I don't know where exactly it is, but seems to be global.
56:58
And it's just like a graphic of a voice note, and it says the campaign is don't send a WhatsApp note.
57:04
It could have been a beer in person.
57:06
So, they're like taking like the total like real world approach, which which I think is >> I think it's good.
57:14
Uh, you know, I I think you you had Matt Zaitlin on the show recently and he and I play in a pretty regular like friends poker game. Not big money.
57:22
It's really like a social hang.
57:24
But >> it's funny because like everyone's like multiple people have wives here like why are you going to play poker? That's Dgen. Are you losing money? Whatever.
57:31
But I I had a post a while back that's like in the current like casino economy between like prediction markets, meme coins, like uh crypto trading, whatever, >> like an in-person poker game with your friends is like the most wholesome.
57:44
Like if you're going to gamble and lose like 100 bucks, >> uh go do it with your friends over four hours.
57:51
Like having a drink and hanging out and uh and you're solving the male loneliness crisis.
57:55
>> I've heard the same argument made for cigar nights. >> Yeah.
57:57
Like cigar is obviously bad for you, but getting together with friends and actually maintaining social, you know, ties is probably really good for long-term health.
58:06
It >> It's pretty great, honestly.
58:07
And if you play if you play a regular poker game, even with strangers that you only knew through this game originally, like 6 months out, you've logged like so many hours just like hanging out that it's like a pretty great uh like wholesome wholesome vibe, you know?
58:22
>> We should get into it. Not big.
58:24
>> If you're ever in New York, we can we can have you guys.
58:25
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58:52
Dan Romero says, "I spent five years cloning an existing app with a network effect, building the software is not the hard part."
58:59
And he was building this app for a very specific sub community and was able to get a massive amount of attention.
59:06
So I think this is like a >> good good uh clear rebuttal of at least that one part of the of the Catrini piece. >> Yeah.
59:17
I think um I I had post a while back about how like um again same thing like software costs go to zero.
59:24
Everyone's like oh yes like I'm an idea guy.
59:26
I'm going to be crushing it now because now I can just use cloud code and like build whatever I want.
59:28
But it's like if you if you just make one more logical leap it's like okay everyone has that now.
59:34
So if you're just like building your ideas like if you're building vibecoded apps for consumers you're actually in a way more competitive space than it's ever been.
59:42
So, I actually think it's almost more like uh not to riff on the idea guy thing too long, but like actually being paid like a salary to be an idea guy or like making good income to be an idea guy will actually be like a very privileged position where >> only companies that have like real moes and uh monopolies on distribution will
1:00:01
actually be able to hire like people whose job it is just think on the idea because if you have a good idea and you ship it, you know people will use it because you've already got the distribution versus if you're even if you've got a great idea and you can vibe code it up if you're in this like sea of vibe coders like producing way more apps. >> Well, the the the other thing is is uh I
1:00:17
>> Well, the the the other thing is is uh I there there are certain idea guys throughout history that thrived because they had a unique insight.
1:00:24
They brought it to market.
1:00:26
it to market. executed pretty well but it just was a great idea at the right time and so it got traction attracted great people and things like that >> and in a world where like an idea can be made and and and we've seen this with I think bunch of marketing on ax over the
1:00:42
last year where if somebody has like a good style of launch video it will be immediately replicated within a month >> and then it will become just kind of like flooded and the meta will kind of die quickly >> and so in a world where like ideas are are like cheaper than ever. Is it really
1:00:57
Is it really just about like idea guys getting lapped by people that are great at executing and it's [laughter] like, "Yeah, you had this great idea. You shipped it.
1:01:05
Someone else saw that and it's like, that's a great idea.
1:01:08
I'm going to ship it today and then I'm just going to outexecute you."
1:01:12
Uh, >> someone should launch their startup with a congressional testimony.
1:01:17
That would be a great aura if you just the first time you're ever seeing about this company.
1:01:22
They're just answering questions and getting grilled by Congress people about what their what their plans are.
1:01:27
their plans are. It's always like typically the top of the mountain like Mark Zuckerberg built Facebook for decade then he starts getting called to testify then he starts getting sued but if you just come out the gate day one >> Augustus was kind of Augustus [laughter] was kind of
1:01:44
>> he was like half the time in Alagundo half the time on the road >> he wasn't he wasn't being called to testify he was like you know standing up >> I know but he's kind of doing bit >> yeah it kind of did work like that it's very funny uh anyway let me tell you about Figma Ship the best version, not the first one with Figma. Introducing
1:01:59
Introducing Quad Code to Figma. Explore more options. Push ideas further.
1:02:06
>> Uh, we got new Apple products.
1:02:10
>> What's coming out >> this coming week? >> Oh, yeah.
1:02:12
>> Uh, we don't know exactly.
1:02:12
It's a It's the >> It has the Apple logo on it, though. We know that. >> We do know that. >> Touchscreen Mac.
1:02:19
>> Oh, that's why that's why that's why they're touching it.
1:02:22
>> Are you guys How are you guys thinking about the touchcreen Mac?
1:02:23
Because one of my least favorite things in the workplace is when people put their fingers >> on my screen. It makes my blood boil. >> Yeah.
1:02:32
>> Uh and so, uh >> maybe they have some new like are they I I could see Apple at this point.
1:02:37
They've got the iPhone sock.
1:02:38
They could have like a little attachment [laughter] that has like a clean like a little >> a cleaner, you know, a little spray bottle like an Apple spray bottle.
1:02:46
They could have a magnetized Roomba and you put it on you stick it to your screen while you walk away and [laughter] it and it drives around identifies the >> Yeah, like a Zambon. Like a Zamboni. >> Yeah, like a Zamboni. >> So messy.
1:02:59
>> The Apple Zambon screen. >> I don't know.
1:03:01
>> You want to create the problem and then have the product that solves the problem in the same launch.
1:03:04
So touchcreen Mac with the Roomba. >> Yeah.
1:03:07
>> Yeah. I I that that's such an odd that's such an odd choice because I feel like the whole I feel like the whole we've like humanity has gone down the path of like the touchscreen laptop and it's been available for for years maybe over a decade and I just feel like it's never
1:03:21
really broken through and if it was if we were at least seeing like oh yeah well like obviously like 80% of PC users have a touchcreen and it's clearly a dominant form factor for a lot of >> it's like the the the reason >> the reason for the touchcreen is like I'm I'm away for my computer. I can't
1:03:35
I can't carry around a dedicated keyboard and mouse.
1:03:40
So, I guess I just have to figure out a way to use the screen for everything.
1:03:43
But, it's not superior if I if I have room on my desk for a keyboard.
1:03:48
>> I'm always going to be faster doing the like it's going to you're going to it's going to look very maybe maybe it's better for people that aren't as technative.
1:03:56
Like I can imagine like like an maybe older family member like you know wanting to zoom in on a photo and maybe it's more native to them to >> to kind of like use the the kind of like pinch functionality. >> Yeah.
1:04:10
It feels hard though like if it's in a again I don't even know if this is what they're releasing but if it's on a laptop like I I actually kind of have to like reach past the keyboard.
1:04:17
It seems like a far reach to like like if you're like even keeping your arm held like raised like this for more than like 30 seconds would get I think tiring for most people anyway. >> I don't know.
1:04:27
The first time I saw that I just thought Mac Mini honestly >> because it just looks like >> well they're making the Mac Mini in the USA.
1:04:33
They came out with that announcement. >> Houston, right?
1:04:35
>> And I will be, you know, getting rid of my current Mac Mini and buy the [laughter] USA. Made in the USA. >> Of course. >> Of course. >> Running Kimmy 2.
1:04:43
5 on my made in the USA Mac Mini.
1:04:45
Well, uh, we have some videos to watch, but we don't have IM for you.
1:04:50
So, uh, we should probably let you go get back to the rest of your day.
1:04:52
Thank you so much for coming and hanging out. >> Yeah, absolutely. >> We will see you soon.
1:04:56
Let me tell you about Octa.
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1:05:21
Um, let's flip through some of the videos that we missed because there are some good ones in >> TSMC's plant in Arizona, which is spread over a thousand acres, is expected to cost 165 billion.
1:05:34
I thought they already had a TSMC Arizona up and running.
1:05:37
I guess they're expanding it to the tune of 165 billion.
1:05:43
>> It's still coming online.
1:05:45
>> I wonder when what what day is this actually going to go live?
1:05:48
>> Got to send Tyler over there. >> Oh yeah.
1:05:50
Won't you be in Won't you be in the area soon?
1:05:53
Don't want to dox your weekend. >> To later today.
1:05:57
>> Maybe I should check it out. >> Go check it out.
1:05:58
Get arrested for trespassing.
1:06:01
Uh, we forgot to play this AI video of uh the AI leaders Elon Musk and um and uh Sam Alman as old men.
1:06:10
Did you want to watch this? >> Pull it up.
1:06:14
>> This was a very very bizarre video.
1:06:16
>> Extremely viral over on Instagram. >> Yes. Oh yeah.
1:06:18
Uh it's uh it's in section E here.
1:06:24
Let me tell you about Cisco critical infrastructure for the AI era.
1:06:29
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1:06:31
Um the uh it it features inner gym move the world. >> Here we go.
1:06:41
>> No purpose, >> but they had a lot of time on their hands.
1:06:44
The less [music] people actually did physical work, >> the more they >> you can't restart videos on Instagram [snorts] >> um had lost their jobs.
1:06:53
They had no money, no purpose, [music] but they had >> the visual fidelity is is is just another level up.
1:07:02
I don't know if this is uh >> the latest >> Chinese model, but it's really good.
1:07:09
>> Use the energy of humans to power the machines that took away their jobs.
1:07:14
>> The voices, the voices, >> the voices are a little odd.
1:07:15
Yeah, a little they are still in the uncanny valley, but the actual video is is really strong. solved our need.
1:07:25
>> Deeply wrong to put our technology leaders like this.
1:07:26
Should have made them should have made them look like bodybuilders if you're going to do this. >> Yes.
1:07:31
>> But it is it is a funny it is a funny bit. >> Disturbing.
1:07:35
>> Uh Anthropic is going into consumer now. Is that right?
1:07:37
Adam Feldman joined >> as >> I recently joined Anthropic to lead consumer product and we're growing.
1:07:42
Our goal is to build AI that millions of people will use every day to think better, create more and accomplish what matters to them.
1:07:50
a bit biased here, but this is the most interesting option. >> Yeah.
1:07:54
So, so I I back in Q4, yeah, I was expecting that they would care a lot more about consumer that they were letting on.
1:08:02
I think like when uh if you look at their actions this week, >> you see that when when they were >> lagging, Yeah.
1:08:13
they they were >> like really leading with safety.
1:08:16
And now that now that now that uh now that coding is is a competitive market, >> they're obviously dialing some of that back.
1:08:26
And when they had >> uh actually zero consumer adoption or functionally zero consumer adoption, uh they didn't care about consumer.
1:08:34
But if you look at keep thinking campaign, you look at the Super Bowl campaign, you don't do these things >> unless you >> you care somewhat about consumer.
1:08:45
it all bleeds together anyway.
1:08:48
And so, uh, it it it seems like it's the end of the road for for all the AI companies that they have some sort of consumer footprint.
1:08:56
It's hard to be, uh, that deep and and and you and when you think of like the the the pure plays, I mean, even even Amazon, I mean, they sell a ton of tokens through AWS, but then they also have Rufus because they need to vend the AI into their distribution, into their platforms.
1:09:13
Um, and we've seen Llama be vended into Instagram and WhatsApp and all the different uh consumer interfaces that people use every day and people will use those for business contexts in consumer apps.
1:09:25
Gmail became dominant and in consumer and businesses all over the world because uh there's a huge blend that happens as people uh work both you know professionally in their personal lives and vice versa.
1:09:38
They do work when they're at home and all sorts of different stuff.
1:09:41
>> Reg has some breaking news.
1:09:41
Apple has acquired the rights from Netflix to air Drive to Survive season 8 on Apple TV Plus.
1:09:47
You you you were expecting something like this over a year ago at this point.
1:09:53
>> Uh that if if you're going to be spending all this money on the F1 movie and the F1 streaming rights, you want to be actually be >> the home of uh Formula 1. >> Yeah.
1:10:02
It's sort of like content vertical integration.
1:10:04
Like you want to be able to take the viewer on this journey from novice.
1:10:10
So, you watch the F1 movie which has Brad Pitt in it and it's just super accessible and anyone can throw it on and have a good time.
1:10:17
Even if you're not an F1 fan, you can watch the F1 movie and know and like in the movie they there's a voiceover that explains all the mechanics of how the sport works and so you learn and you come out of that saying, "Okay, I'm kind of interested."
1:10:31
Then you could watch Drive to Survive and then you could actually watch the the >> Trey says Apple should sponsor Cadillac F1.
1:10:36
I get the conflict, but also Pensky owns Indie Car and has a team.
1:10:39
Well, it's funny because >> what would the conflict be?
1:10:43
>> Oh, because they're airing it. >> Yeah.
1:10:45
So, like I don't feel separated enough, but but remember I I had a pretty viral post last year. I forget.
1:10:51
I was I was I think quoting Jen Mochi >> and saying like Apple's like clearly run out of like ideas.
1:10:59
And obviously that's not fully uh not not true.
1:11:05
>> But uh I was saying that they should just have a Formula 1 team >> and be like you wanted the Apple car. This is the Apple car. >> Yeah.
1:11:13
>> It's an F1 car >> cuz like a one car on the pitch that just has no or sorry on the track that has >> grid. >> Grid. Grid. [laughter] Yeah. Three fingers.
1:11:23
Um uh one car out there that's just all white.
1:11:28
>> It'd be very >> It would go extremely hard >> there. Yeah.
1:11:30
No one's really doing white in F1. >> Like no logos. >> Yeah. Oh, no logos at all. Yeah. >> Like not even Apple.
1:11:36
>> Silver like like silver >> just like perfect pearlescent white or something.
1:11:40
That would be very very cool.
1:11:41
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1:11:54
Semi analysis says Micron's hundred billion dollar mega fab in New York is at risk of delay due to just six concerned citizens and their frivolous lawsuit.
1:12:04
>> The project has already taken an on taken an absurd 1200 days between announcement and groundbreaking competitors overseas who began at the same time.
1:12:13
>> Uh now have built and working fabs.
1:12:16
Micron spent 612 days on the environmental impact study including a 45day public input period.
1:12:20
Yet hours before groundbreaking, they were hit with a lawsuit calling the process unnecessarily rushed.
1:12:26
612 days on an environmental study.
1:12:31
>> Um, comments from local borders on nimi parody.
1:12:34
We are not trying to stop any progress, but we don't want this just bulldozed into our area. This is a real quote.
1:12:40
The lawsuit itself didn't come from a grounds uprising.
1:12:42
A California-based workers rights group went doortodoor in New York seeking plaintiffs.
1:12:47
They eventually found just six people willing to sign on, but that's enough to potentially halt the project. That is so insane.
1:12:52
A Syracuse local news outlets excellent reporting on the group behind the lawsuit, Neighbors for a Better Micron, found that before the suit was filed, the group had never held a meeting or a vote.
1:13:05
Some members didn't even know who the others were.
1:13:08
>> One member of the suit, who as a former lawyer you might expect to be smart, says that Syracuse has the highest child poverty rate in the country.
1:13:13
What is Micron doing about that?
1:13:15
Uh, anyone can agree it's a worthy cause, but do we really think an advanced memory semiconductor manufacturer is the right vehicle to solve it?
1:13:23
To be fair, it is legitimate to consider the environmental impacts of a fab.
1:13:27
They're large industrial projects that can be harmful if not built and operated safely.
1:13:30
But these last minute injunctions are renting, not legitimate environmental concern.
1:13:36
We estimate the lawsuits will cost 100 to 500 million to settle despite the fact they should be thrown out as frivolous.
1:13:42
Ultimately, Micron has probably budgeted for it as a small fraction of a hundred billion dollar project.
1:13:47
Still, there is a non-zero chance these six concerned cit citizens delay the entire thing.
1:13:52
If the US wants to compete in strategic technologies like Micron's project, which produces a key ingredient in the AI supply chain, it must reduce frivolous rent seeeking litigation.
1:14:02
AI tools will only empower these people as it trivializes nitpicking on complex rules and 10,000page documents.
1:14:08
That is uh yeah really wild like this feels uh yeah this feels like any state should be generally excited about having a hundred billion dollar project which will undoubtedly generate hundreds of millions of >> and someday billions of of tax revenue.
1:14:33
But uh Patrick says nimbies are being placed replaced with bananas.
1:14:35
Build absolutely nothing anywhere near anyone. >> Oh, okay. [laughter] Bananas.
1:14:43
Uh the uh the the Catrini scenario is now on Kulshi.
1:14:47
There's a 12% chance that the catrini scenario happens, which of course is the S&P falling.
1:14:53
Uh it's uh it's interesting.
1:14:56
12% feels high, but the the rules summary is is is fascinating here on this market.
1:15:01
Uh if at least three of these happen, it resolves to yes.
1:15:05
So unemployment rate exceeds 10%.
1:15:08
S&P declines more than 30%.
1:15:13
Zillow home index value declines more than 10% year-over-year in any of New York City, Los Angeles, San Francisco, Chicago, Houston, or Phoenix.
1:15:21
labor share of gross domestic income uh falls below 50%.
1:15:27
Uh inflation falls below 0% in any monthly release.
1:15:31
And if any of those happen before July of 2028, the market resolves to yes.
1:15:36
So sort of interesting because there's a whole bunch of different scenarios where something could happen that's not AI related that could trigger one of those.
1:15:46
I was reading an article in the Wall Street Journal today about uh expats, the number of uh Americans that are retiring abroad is just increasing.
1:15:52
And it doesn't really have anything to do with AI.
1:15:56
It doesn't really have anything to do with immigration policy.
1:15:58
It's just sort of like Americans are wealthy, the dollar strong, and so they find they, you know, they want to go travel and the internet makes it easier to go live in a different country and hang out and, you know, stay on the beach.
1:16:11
And so that number has been climbing.
1:16:13
And so if that climbs a lot and people leave America but they stay employed and they leave before they're retired, like that could lead to lower unemployment because the labor pool is lower.
1:16:23
There's a whole bunch of different things that could happen um that could adjust these things.
1:16:28
Um but it's still it's still interesting because I mean on the face of it, unless there's some weird alternative scenario, none of these would be particularly good.
1:16:35
And uh fortunately, it's still uh sitting pretty low at just 11.
1:16:39
6% 6% chance but probably worth uh worth following.
1:16:42
Let me tell you about Lambda.
1:16:45
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1:16:52
Um uh some breaking news.
1:16:57
>> What else is breaking news?
1:16:58
>> Uh we this was sent to me by Jay Yarao uh formerly was at uh CNBC for quite a long time.
1:17:06
Fortune is launching a daily business show according to AD week.
1:17:08
the latest in a series of publishers including the Guardian to do so.
1:17:14
>> Mark Mark Stenberg over at AdWeek says this initiative is likely an attempt to imitate the success seen by other daily business programs such as TVPN. >> No way.
1:17:23
>> Uh so if you want to make the fortune version of TVPN, there's a role.
1:17:27
Uh they're hiring a showrunner for a daily show.
1:17:33
>> Do you think they've acquired the tap water required to make that show work?
1:17:37
Yeah, we got to bring we got to bring we got to remind people that >> you want to remind people right now. >> Yeah.
1:17:43
So, I I mean, if you're if you're going to clone TVPN or or do something that's inspired by TVPN, uh we do have a terms of service.
1:17:52
So, if you've ever watched the show, uh, you've actually technically agreed to this and and and buried in the terms of service is is an agreement that if you clone the show or copy a piece of the show or or rip off the show or even are just inspired by the show, it's fine as long as on your first episode you drink a glass of tap water.
1:18:12
Just one glass of tap water.
1:18:12
Uh, otherwise, like I think the gods might curse you and uh >> Yeah, it's really just a nod.
1:18:18
It's a it's a sign of of of And also if you do if you don't do it, you are legally required to pay us 100% of your revenue forever. Yeah.
1:18:28
>> Uh but that's like a minor thing.
1:18:28
The bigger thing is the tap water. Just focus on that.
1:18:31
Anyway, we have our first guest of the show in the reream waiting room.
1:18:35
Let me tell you about MongoDB.
1:18:37
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1:18:39
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1:18:44
And without further ado, we have Sam. Welcome to the show. >> How are you doing? >> Hi everyone.
1:18:50
How are you doing tonight?
1:18:54
>> Thank you so much for joining.
1:18:55
>> Vacuum guy, how's your week been?
1:18:55
Were you expecting to go this viral?
1:19:01
>> Well, not really because it's been like three days I make the I discovered the bridge. >> Yeah.
1:19:07
>> So, it's interesting is pop up now. >> Yeah.
1:19:11
>> Wait, how many you said?
1:19:13
>> Did you say two years? >> No, 20 days. Sorry. >> 20 days. 20 days. Okay. Break down.
1:19:16
Why did you start hacking on on your DJI vacuum?
1:19:22
Give us the full kind of chain of events. >> Okay.
1:19:25
Well, I I I don't even try to hack it.
1:19:29
>> Um it was just um let's say side project.
1:19:33
Uh when I I saw my little guy cleaning uh my living room and me playing uh on my PS5, um my brain just make some association stuff and and and I was like, "Okay, what if I could uh drive my boy with uh my PS5 controller?" >> Yeah.
1:19:53
>> So, what I do what I do what I did um I take the DJI app because DJI have a like official app called DJI Home.
1:20:00
Um and I try to understand what's happen when uh my robovac uh move when it go straight when left and turn right.
1:20:11
change the data between my uh vacuum [clears throat] and DJI cloud and try to replicate it with my PS5 controller and after maybe 1 hour uh I have something uh working uh like I could drive it with uh my PS9 controller but I want to go like uh further like um if my little guy have less than 30 uh% of battery I want to hear him cry. Right.
1:20:42
So >> you [laughter] feel pain.
1:20:48
>> So I need to drive the battery status >> like the percentage of my battery.
1:20:51
So I uh continue my reverse engineering of the DJI home app >> and find out um like uh how to do it, how to ask about the battery status. I do it.
1:21:08
But what I received uh is not like oh your robot is like 80% of battery.
1:21:15
>> I got tons of data like a lot of battery status.
1:21:18
[clears throat] I I I didn't understand.
1:21:19
Um so I take this big chunk of data. It was a lot.
1:21:24
Um I open my uh CL code send the file and just asking him like what's going on explain him what I trying to do.
1:21:39
and and if there's something I did wrong like why I have this data and he answer to me like okay um it's not just for the device there have thousand of others [laughter] so I take a little bit of time to process this well because it's AI of course I double check I try to manual read like my big log file um the data from the vacuum was sent back to me when
1:22:08
I asked it about the the battery status and yeah it was not it it wasn't just my device so for me it was like okay I have a key my own user key let me control my robot >> it look like my key I can open other doors than mine so my software the software I built to control my robot and also drive the u the full stream video and microphone from the vacuum. I have
1:22:38
I have like some uh environment variable like the thing you can change just to make a software working with another device.
1:22:46
So I have two stuff like here and the serial number >> of the device.
1:22:54
So I was just like okay I just need to change the device serial number and put another one and maybe it's going to work.
1:23:02
Um it happened that I have a friend who is uh as stupid as me to buy this uh vacuum [laughter] and I just asked him his uh number. >> Yeah.
1:23:16
>> So he gave it to me perform some test and yes everything work. I saw everything.
1:23:22
I hear him and I can control him control his uh his robot with a really low latency which is great.
1:23:31
And um so we was like a little bit shocked about what we saw.
1:23:34
Um so I start to check um DJ GI program. They have one. >> Yeah.
1:23:44
>> But everything is in Chinese when you go to the website.
1:23:46
I was a little bit confused like it's just for Chinese citizen and even the reward it was it was in the in the local currency of China.
1:23:55
So I I just tweet about it like hey I'm not a Chinese citizen. can I apply for?
1:24:01
I didn't have like any answer.
1:24:01
So, uh I applied but in English to the program and um no one answer to me.
1:24:15
Uh I was >> like you weren't supposed to. That's not a bug.
1:24:17
[laughter] >> Yes, that's a feature. >> It seems like it.
1:24:24
>> So, so they So, I was a little bit frustrated about it.
1:24:27
So I start live tweeting about what I discover.
1:24:30
I didn't uh show how I did.
1:24:34
I just show some data I can have that I can retry from DJI club.
1:24:41
Um they finally answer to me but just because I arrest them on on Twitter by DM um and they say okay thank you uh we're going to check that and and be back to you as soon as possible.
1:24:56
They come back to me probably one day after um uh telling me, "Okay, um we saw the issue and we fix it.
1:25:06
Thank you for everything."
1:25:12
>> But they didn't fix the problem.
1:25:12
Um I >> Wait, so by this by this point you you have full access and control over 7,000 individual devices?
1:25:27
Uh to be more precise, it was 7,000 uh vacuum and 3,000 DJI power.
1:25:31
Um it's like their battery pack or something like that and and connected to internet apparently because I have access to it.
1:25:45
Um but yeah, it was around 10,000 devices.
1:25:48
>> And how did you get the serial numbers for those again?
1:25:50
Like uh I imagine that they've sold more than 7,000.
1:25:52
So what what made the ones that actually were showing up for you different than the ones that you couldn't access?
1:26:05
>> Can you repeat or raise it? Sorry.
1:26:08
>> So uh I understand how you had your serial number and your key which turned out to be the master key and your friend sent you his serial number and then you were able to control his robot vacuum cleaner.
1:26:22
But [clears throat] if I have one of these and you don't know my serial number, how do you get access to it?
1:26:31
>> Unfortunately, DJI gave it to me uh without any keys.
1:26:34
Like if I take my own user key >> Yeah.
1:26:37
>> and plug it to the um um to the MQTT protocol of DJI. Um I see everything.
1:26:41
So I didn't have to guess the certain number of everyone.
1:26:47
I just saw the data like clear. Um >> wow.
1:26:51
>> wow. uh device x6 x6x6x6x6x6x6x6x6x6x6x start cleaning for example >> and like yeah so I didn't have to [clears throat] h encrypt or crack anything everything was clear >> and so oh sorry excuse me >> no no no this is fascinating that uh that all of that data was just because
1:27:12
that's actually two different vulnerabilities like one is the the network topology and the other is the access key and you would expect that both would be locked down or at least one, but the fact that both of them were um were uh were were available to you is uh very disconcerting. >> Yes. And so just after that, >> Yes.
1:27:33
And so just after that, >> yeah, >> after I don't I'm not going to say they they lie about fixing it and not fixing it, but >> they probably just fix some stuff, but not everything.
1:27:43
Uh I was uh talking with the verge uh who who start to contact me when I live tweet him what I discovered.
1:27:54
So we plan to do a demo and uh during the time we planned to do it and the real demo it's like two days happened and uh during this time DJI released another fix which work >> but like not really it's worked to I I can I can retrive anymore the camera uh the stream video >> I can retrive the microphone uh from other users. is like protected now.
1:28:24
And during the demo, I still have access to all of others data.
1:28:31
>> I still have access to the 3D map plan, Magma Pro plan, sorry >> because um this uh this vacuum have tons of sensors and they need like a 3D map of where you live to make sure you know where to go when you need to clean.
1:28:46
where to go when you need to clean. So I got this I still got this data and uh yeah and the full telemetric system of DJI um we do we perform the demo with the with the verge and and one day after uh no more access to others data >> everything was >> what a what a remarkable story thank you
1:29:08
for sharing it with us >> yeah how uh as like do you think that um how much confidence does does this give you that like the DJI drones that they've sold millions of uh could have uh do you think they're more locked down or do you think [laughter] this could be kind of a companywide [snorts] issue? >> I don't know. But that the last thing >> I don't know.
1:29:28
But that the last thing about this story um they still have two major issue.
1:29:34
We decide with the version not disclose it publicly >> because it's kind of bad and I can't talk a lot about it.
1:29:42
>> We try to play a fair game with the company. >> Yeah.
1:29:45
like, okay, we give you a little bit of time.
1:29:47
We know this bridge is not as easy to fix as the first one, but they still have to major issue.
1:29:52
And indirectly, like really indirectly, you can still have um access to stream to stream video from other users. >> That's crazy. >> That's so insane.
1:30:05
Do you know how many any idea how many of these vacuums they've actually sold?
1:30:10
Have they published any of that data? 7,000. >> Oh.
1:30:17
Oh, so they've only sold 7,000. I got access to all.
1:30:21
>> I was assuming that you had you had you had only gotten access to a >> uh kind of like a subsection.
1:30:28
>> Seems like you got them all. >> You got them all.
1:30:30
>> They didn't separate a region.
1:30:30
It was like a whole bucket like a bucket with the whole whole devices.
1:30:36
>> Product and there aren't that many out there.
1:30:38
So, uh absolutely wild stuff. >> It's just insane.
1:30:41
I I hope that they're contacting customers who have them in their homes and letting them know that, hey, by the way, >> might have been spied on by some >> anybody on the entire planet. >> It's a data breach.
1:30:52
It's like it's like they because unless they can prove that you were the first and only person to ever access to this and you didn't go further, uh then they [clears throat] have an unknown uh you know, liability here that they should disclose.
1:31:05
So, uh, we'll be very interesting to see how they respond, but but thank you for, uh, the citizen journalism, the the the activism.
1:31:13
>> Yeah, it sounds like you're handling it in the in the right way and, uh, looking forward to whatever you discover next.
1:31:19
We'll be we'll be following along. It's great to meet you.
1:31:22
>> Have a great rest of your day. >> Cheers.
1:31:24
>> We'll talk to you soon.
1:31:24
Let me tell you about Phantom Cash.
1:31:26
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1:31:30
And let me also tell you about Cognition.
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They're the makers of Devon, the AI software engineer.
1:31:38
Crush your backlog [music] with your AI engineering team.
1:31:39
And without further ado, we have Ken Luji, the chairman of Fleckjet here at [music] the TV panel.
1:31:46
>> Well, what's going on? >> Good to meet you. >> Hey, Don. Hi, Jordy. How are you? >> We're fantastic. >> Fantastic.
1:31:51
We've been looking forward to this.
1:31:52
>> Thanks so much for uh taking the time to come chat with us.
1:31:54
Uh I would love to start with your early career because uh do I have it right that you actually served in the Air Force?
1:32:04
>> Yes, I went into the Air Force through the ROC program in the late '7s. Wow.
1:32:09
>> Uh it was it wasn't that hard to get into the Air Force then.
1:32:11
The Vietnam War was still active in people's rearview mirror and uh I actually probably wouldn't have been able to go to college if it wasn't for the ROC program.
1:32:21
So, it wasn't that I had this strong desire to be an Air Force to be in the Air Force, but I did love to fly and I and and it actually helped me get through college. >> That's amazing. So, uh >> Yeah. Sorry.
1:32:37
[clears throat] >> No, no, I was going to say my my um it was interesting.
1:32:40
I I always wanted to go to the University of Notre Dame and I I was going up for a visit and I heard my parents, we lived in a very small house, thin walls, and I heard my parents talking about they couldn't afford it >> and they said, "Who's going to tell them we can't afford to send them to school?"
1:32:55
So, I got to I went to my visit and I said, "Is there any financial available?"
1:32:58
And they said, "Well, you kind of missed [clears throat] the window for that, but if you were interested in the military, you could go down and enroll in ROC."
1:33:05
So, I went down there on a Saturday that was closed, but I decided for whatever reason I wanted to be a Navy pilot.
1:33:11
I'm standing at the Navy ROTC trying to copy down the number, you know, on the old Rotary phones and somebody taps me on the shoulder and they said, "Can I help you?"
1:33:21
And I said, "Well, I'm an incoming freshman and I'd like to uh fly and I I'm thinking of joining the Navy ROTC."
1:33:28
And he looks at me and he says, "You sure you've been admitted to Notre Dame, son?
1:33:31
Because the Navy has boats and the Air Force has jets."
1:33:34
So, [laughter] I'm Colonel Mhler.
1:33:36
I'm head of the Air Force detachment.
1:33:38
Why don't you become an Air Force pilot?
1:33:39
And that's how I ended up in the Air Force. >> That's amazing.
1:33:42
Wait, so uh you were flying before college.
1:33:44
What was the context with of that? Or you were interested? >> No, no, no, no, no.
1:33:48
I I learned to fly through the what was called the FIP program, which was an instructional program through the Air Force. >> Okay.
1:33:55
And then uh so I don't know how long you were in the Air Force, but it sounded like when you got out, you had the opportunity to buy a company for a very low amount of money.
1:34:03
And I want to know the anatomy of that deal and go a little bit further than you've been uh than you've talked about before because it's it sounds like one of the most fascinating deals that maybe doesn't happen anymore or maybe financial engineering still exists like this.
1:34:16
But I'd love to know uh sort of when did your business career start start?
1:34:20
What happened after you left the Air Force?
1:34:24
Well, you know, I always say that I never really identified myself as a businessman. I I love to fly. I loved aviation.
1:34:31
And, you know, people can people can go into business because they love business.
1:34:34
And those guys could run a candy store.
1:34:36
They could run an insurance company. I'm not that guy.
1:34:38
I'm I'm an inch wide and a mile deep.
1:34:41
And I only I know a lot about like one very narrow section, right?
1:34:46
And so, don't ask me to give you advice on running a candy store, okay?
1:34:50
But in my early years, I was flying for a charter company called Corporate Wings. Yeah.
1:34:57
>> And I got there because after the after the Air Force, I went under reserves.
1:35:02
After the reserve assignment, I flew for Northwest Orient where I was furoughed. >> Okay.
1:35:07
>> And so I started to realize, you know, being a pilot has a lot of insecurities.
1:35:11
You know, at that time, remember that in the early 80s there's only 5,000 corporate jets in existence.
1:35:16
You know, today we have 35,000. >> Wow.
1:35:19
And so the industry was small. It wasn't stable.
1:35:22
And so the charter company I was flying for came up for sale.
1:35:28
>> And um I called my dad at the time and I said, "Dad, I think I want to buy this charter company. It's cost $27,500."
1:35:37
And he, "How are you going to pay for it?"
1:35:39
And he I said, "Well, they have 27,000 in the bank.
1:35:41
So, I'm thinking if I buy the stock, I'll just use the I'll just use the 27,000 and pay pay for the company.
1:35:50
He goes, "Well, but I thought you said 275.
1:35:51
Where are you getting the other 500 bucks?"
1:35:53
And I said, "Well, why do you think I called you?"
1:35:55
[laughter] So, yes, a le you know, leverage finance exists today.
1:36:00
It just has a lot more zeros to it. >> Yeah.
1:36:03
But, so, so when I heard that, it's a fantastic story.
1:36:05
I'm just I'm I'm confused why a why a stock would be for sale so close to cash value.
1:36:10
Were there a lot of liabilities that were coming down the pipe that you then you had to generate the revenue to deliver on?
1:36:17
Like it just sort of defies like basic economic logic. >> All right.
1:36:22
So, we're going to tell a story that's that's known to only a few.
1:36:27
>> And the true story here is that in the early 80s there was investment tax credit of 10%. And it came in cash.
1:36:37
>> So you could buy a plane.
1:36:37
At those times, a citation was a million dollar.
1:36:40
You got a $100,000 tax credit. >> Mhm.
1:36:43
>> And corporate wings at the time was actually called J&J aviation.
1:36:47
>> And they had king errors.
1:36:47
And two citations that were on investment tax credit, but they didn't exist.
1:36:56
>> They they the owner of this company, a guy named Jeff To created a fraud around the existence of these planes.
1:37:03
I was flying the King Airs that was in another I mean I didn't know anything about it but the dispatcher at that company when the fraud became unveiled and everybody headed for the hills the dispatcher of the company I was friends with he said to me I can't run a company
1:37:17
cuz I'm a dispatcher we need somebody that could fly make the customers feel comfortable so so the deal was there because the company was going to the company was done and so that's how that that was why that that situation was unique but it was few people know about the citation fraud. So that's really how
1:37:33
So that's really how it evolved.
1:37:35
We changed the name from J&J to corporate wings and that's how it began.
1:37:39
>> So so a lot of a lot of hair on the deal but some decent customer relationships and probably some decent employees that could actually fly what assets remained after you sort of cleaned up the corporation. Right.
1:37:52
>> So we had four airplanes.
1:37:52
We had uh two Kingairs a Navajo and a Cessna 421. Okay.
1:37:58
>> Shortly thereafter the king got worried and they left. Yeah.
1:38:00
So I So my business was a grand toll of a Navajo and a Cessna 421 for for you oldtime pilots out there.
1:38:07
But by the way, I I thought I died and went to heaven, right?
1:38:10
I mean, I had a [laughter] business.
1:38:12
I had I'd go to the I'd go to the hanger on Saturdays and polish the necessels of that Navajo.
1:38:17
I was so proud of that airplane. >> That's amazing.
1:38:20
So then talk about the scale up because obviously you you're you have a a massive footprint in business now.
1:38:25
Uh but what were the key steps along the way?
1:38:28
What were the key uh turning points for you?
1:38:32
>> Well, I' I'd say the key turning points were in the mid '9s when we, you know, when Fractional was evolving and I had this nice charter company. Yeah.
1:38:40
>> Uh maybe 20 25 airplanes at the time, but saw Fractional starting to steal market share in a big way from Charter because a consistent level of service, the fact that they could run one way.
1:38:49
In those days, charters were always out and back.
1:38:54
You paid round trip for the aircraft.
1:38:56
So I kind of saw the threat of fractional and that's when I came up with the idea to form flight options and flight options idea at that time nobody had done fractional with used aircraft.
1:39:08
They'd only done it with new aircraft.
1:39:10
You had you had citation shares with brand new citations.
1:39:12
NetJets was working with hawker and citation at the time.
1:39:17
>> And how would it work?
1:39:17
How would it work mechanically?
1:39:19
There'd be basically a uh they somebody would say, "Hey, I'm going to buy this jet.
1:39:24
I'm going to cut it up into eight pieces or whatever.
1:39:26
And then what did they effectively crowdfund it?
1:39:31
Like everybody >> had to come together at the same time.
1:39:34
How did that actually work? >> Capital, >> you know.
1:39:35
You know, I'm I'm sorry, Jordy, but there there was no internet at the time, so crowdfunding.
1:39:39
>> No, no, I don't I meant I meant like Yeah. [laughter] >> Yeah.
1:39:43
Throw a jet up on Kickstarter.
1:39:46
>> No, but you you hit on the key issue. Yeah.
1:39:48
>> You had to You couldn't start with one jet. Yeah.
1:39:50
You had to have enough jets that people would buy a share because they could catch on very quickly.
1:39:54
If four of us own a jet, you have to have at least four of them in case we all want to fly at the same time.
1:39:59
So, you had to get to the point where you had a minimum number of aircraft.
1:40:03
And in the in the in 1997, I was out trying to raise capital for just that.
1:40:09
My idea was to start with 12 aircraft.
1:40:12
They were going to be used citation twos and used and used hawkers.
1:40:17
And uh and at the time I wanted to I wanted I needed 12 million of debt.
1:40:23
And I went out to all the debt sources I could get.
1:40:26
I had my great presentation on.
1:40:28
I had my shirt and tie and blue suit and I went to all these places and nobody would give I mean in the end of the day I think we raised like 10 $2 million based upon like you know having that much money in the bank. It was ridiculous.
1:40:42
But this was in in 90 this was in late 97.
1:40:45
Then in 1998, Warren Buffett buys NetJets. >> Yeah.
1:40:52
>> In June of 98, he buys NetJets.
1:40:52
And my proposal was literally on everybody's desk.
1:40:58
>> And from June of 98 till August of 98, we came away with over $200 million of financing.
1:41:05
>> General Electric, Boeing Credit, Commercial Credit Corporation, Bombardier.
1:41:10
>> [snorts] >> And so all of that was that it was actually in some ways Warren Buffett that got me into the business because he doesn't buy netjets.
1:41:17
He christened the industry and allowed my proposal to have meat to it.
1:41:21
So that was really we went live with flight options in November.
1:41:26
>> Needed somebody to legitimize the industry and then people looked at your pitch and they were like, "Hey, this guy's a pilot.
1:41:30
He's got all this operational experience.
1:41:32
He knows how to work with customers.
1:41:34
He's actually a solid bet in the category.
1:41:38
>> He's in the right market." >> Yeah. Yeah.
1:41:39
How much how much was what there was there was massive amount of wealth creation in the late 90s.
1:41:43
Did that was how much of that just just in the in the kind of internet boom.
1:41:49
Did that play into into just like a lot of new demand coming in or or was that not a factor?
1:41:58
>> Oh, unbelievably a factor because because we tended to be with the used aircraft. We had the same model.
1:42:03
It's just the buyin was lower because a brand new citation was 8 million but a used one was 2. 4.
1:42:09
So we had the same model just the buyin was lower and so it became very entrepreneurial.
1:42:14
It became Nuvo Reef were interested in it because they were conserving capital.
1:42:19
I can remember there was a company called Internet Capital Group and they they they were in the late 90s and they had a they had a annual meeting in Philadelphia with and we sold 30 shares at that meeting because everybody was instantly wealthy there and then of course you know what followed that right the dot bomb came and then in 2001 it it it just it it went away. >> Yeah.
1:42:44
>> And so was that crash hard for your business?
1:42:47
How did you get through it?
1:42:47
I mean with leverage it feels like there's always a risk of just actually total capital collapse, total loss.
1:42:54
Uh how did you how do you weather the various storms that you've faced throughout your career?
1:43:02
>> I've been through four and every one has been different. Okay.
1:43:04
But that one that one because the industry was still in its infancy, >> there were a lot of other there were a lot of there were you know at one time there were 55 startups in this area.
1:43:14
If you remember, United Airlines had a startup in the space at one time.
1:43:20
>> So I weathered through it by finding a merger, >> right?
1:43:23
As as people were moving away and the business was shrinking, f find somebody else in deep doodoo and then merge with them, right?
1:43:29
And then and then create a new story. Yeah.
1:43:33
>> So [snorts] that was really and in that case it was Travel Air, which was a division of Rathon >> and that was the merger we did dur to come out of the docom bomb.
1:43:42
>> But yeah, you're right.
1:43:42
I can remember like we came into it combined with 200 aircraft and came out of it with like 120. >> Wow.
1:43:50
>> I mean >> explain the dynamic of the buyout with Rathon.
1:43:55
It was a very interesting dynamic.
1:43:57
I was not familiar with this particular process but uh explain the the economic mechanics, how the bidding worked, the results because I I've never heard of that before and it's fascinating. >> Yeah.
1:44:09
So it's a term called shareholders roulette. >> Yeah. Yeah.
1:44:12
>> And it's used often in a company where you have 50/50 ownership.
1:44:17
>> And what it simply says, because normally if a company has a buyell agreement, and those buyell agreements will say something like fair market value determined by three independent auditors and if you if you're the seller in a pinch, you take a 15% discount.
1:44:29
So it normally defines the process of valuing the company.
1:44:34
But when you have two 50/50 owners, one person just simply goes to the other person and makes them an offer to buy and to sell at the exact same number.
1:44:45
>> And then the other party chooses whether they want to buy or sell at that number.
1:44:49
So it forces you to a fair number.
1:44:52
>> And if you remember, Rathon didn't want to be in that business. They're making missiles.
1:44:57
>> So it never occurred to me that they would ever want to own the business.
1:44:59
But what I did was I got the business underwritten by a private equity firm, Warg Binkus.
1:45:05
We underwrote the business at that time at 360 million and I went to Lexington, Massachusetts with my $180 million buy and sell offer to them thinking, look, they had a business that was going broke, right? I gave out 180 million.
1:45:21
I thought Rathon's going to erect a Ken Ricky statue in in Massachusetts.
1:45:25
I brought him this 180 million, right?
1:45:27
They thought I was cheating them.
1:45:30
They thought it was too little and they bought me out >> and so >> Wait, and the business at that time you said was lo you said it was losing money or you're saying the business >> when we merged. Yeah.
1:45:39
>> When we merged the their business was losing money we were maybe making 6 or 8 million >> and the combined you know the economies of putting them together right sizing the fleet back office we thought we had a projection for about $30 million and just show you how times are changed.
1:45:56
So, it was based on that $30 million projection that the multiple came out and that's how we got to the valuation.
1:46:02
>> That's still 12x ebida forward number.
1:46:05
There's a lot of risk there.
1:46:05
That's crazy that they took the deal.
1:46:08
>> It was you kidding me? Of course it was crazy. I didn't get it. And you know what?
1:46:12
It was the worst day of my life because I didn't I didn't want to be out of the business. >> Yeah.
1:46:16
So, you you have to make this buy sell at 180.
1:46:19
>> You're ready to buy them out >> and you can't then you wind up getting bought out.
1:46:23
>> But there's no there's no like walking it back.
1:46:25
It's like it's over at that point.
1:46:27
They just called your block.
1:46:28
>> You deliver them two letters.
1:46:28
One that says I will sell to you at 180 million.
1:46:32
One says that I will buy from you at 180 million.
1:46:35
And they pick one and sign it. >> That's great.
1:46:37
>> And and I and I was >> You wish you were like I wish we did a duel, like a proper duel.
1:46:40
[laughter] >> It's remarkable.
1:46:42
So So I mean, >> you know what?
1:46:44
In some ways, it absolutely turned out to be a blessing, but you never see that in real time, right?
1:46:49
I can remember those days.
1:46:49
I was like I I felt like I'd lost my child.
1:46:51
I mean it really was but but in reality because I had raised money along the way I only owned 16% of the combined of the entities.
1:47:01
So what you know my buyout I got 16% of the 180 and then we bought that company back from them in 2008. >> No way. >> No way. >> Okay. And we bought it back.
1:47:13
>> So that was like a f five years you were waiting.
1:47:16
>> It was yeah almost six.
1:47:16
But uh but and by the way I bought it in the in the in the middle of the 2008 financial crisis.
1:47:23
Yeah, >> we bought it back for 130 million.
1:47:23
So it [laughter] we bought it back at 30 cents on the dollar. >> What did you do?
1:47:29
What did you do in that in that in that window?
1:47:30
You just twiddling your thumbs.
1:47:34
>> Well, I I don't have I don't have that twiddle your thumb gene.
1:47:36
I um I actually began a disastrous process which which is leads me to much pain these days.
1:47:44
I began to roll up the FBO industry and I started by buying I partnered with a company called Allied Capital and we bought the Mercury Air Centers which were primary in California >> and we started that in ' 04 and we sold that company to McQuary which was Atlantic Aviation.
1:48:02
We sold that to them in 2007 and and so and it's painful because you wish you held on you wish do you wish in hindsight you wish you you didn't sell.
1:48:14
Well, what I was going to say was that uh we bought we were buying them at six times and we were one of the first transaction that traded at 15 times.
1:48:19
Now today FBO industry is trading to private equity well north of 15 multiples. And what are they doing?
1:48:28
They're raising the fuel prices to people like us to fund the acquisitions of what I started.
1:48:32
So So you know it comes back to >> roost.
1:48:36
You mentioned four key crisis moments, four financial crises that you've uh soldured through.
1:48:43
Do obviously one of them.
1:48:47
Housing great recession another. What were the other two?
1:48:52
>> So in in um the great interest rates 84 when I remember doing proposals to buy an airplane at 21% interest rate.
1:48:58
We had that huge interest rate issue in the early 80s.
1:49:04
Did you have any did you have any like adjustable rate loans at that time?
1:49:06
So or or everything prior to that was fixed and you were just having to work off of the the the 20some.
1:49:15
>> Well, it wasn't that I was had any debt really at that time.
1:49:18
We were, you know, Corporate Wings was more of a management company.
1:49:20
I needed people to buy a new plane so that I could run it in charter and become the manager of it.
1:49:25
So I had to make a proposal and they said, "What's my cost of capital?"
1:49:29
And I would say, well, the going interest rates are 21%.
1:49:35
So, but so so, so that was tough on the industry.
1:49:38
And then Gulf War I in the early 90s when we hit Gulf War I the the the sale of new aircraft came to a standstill during that during that crisis.
1:49:47
So, I would tell you high interest rates, Gulf War.
1:49:49
com bomb financial crisis.
1:49:53
>> How is the aviation industry doing today?
1:49:55
I've there were some folks asking about uh EV talls, automation, uh there's there's tariffs and depreciation schedules are changing.
1:50:04
It feels like a time of transformation, but I don't know if that's just what it looks like from the outside.
1:50:11
>> Well, I think our industry, the cool thing about aviation is we're always in transformation.
1:50:14
We we live in an industry that always has something cool coming up. So, that that's fun.
1:50:18
Um, I I'll tell you that um I don't want to be a Debbie Downer on your program, but but we are in a time of abundance.
1:50:28
>> And I think you can if you've only been in our industry for 5 years or 8 years, you can come to think that this is normal >> and we're living through a time where uh it it's easy to see, right?
1:50:38
There's there are two economies.
1:50:40
We can talk about the cost of bread.
1:50:42
We can talk across the cost of gas, but >> fractional owners and private jet owners aren't living.
1:50:49
They don't live in that world.
1:50:50
The wealth transfer that's going on doesn't live in that world.
1:50:53
So, we have this one >> world that's living in really good times because it's very in right now to be, you know, business and wealthy >> and that is creating uh the what I think is an overabundance in our industry.
1:51:08
I think this is extraordinary.
1:51:10
In my 40 years in this industry, this is one of one. >> Yeah.
1:51:15
And I think we have to be careful not to be complacent about this being normal.
1:51:20
>> Uh because I I I say you know this too shall pass.
1:51:23
But right now that this is the world we live in.
1:51:25
We live in this abundant world. >> Yeah. >> In our industry.
1:51:29
>> What about uh specific technologies that might change aviation.
1:51:31
Uh there's been a lot of talk about flying cars, a lot of talk about EV talls, not a lot of production process, not a lot of movement there.
1:51:41
But do you have more insight into uh some of the new technologies that might be coming out in the next decade?
1:51:48
>> I think I think the new technologies I mean I think the number one thing we're going to see is the how windows go away from the airplanes.
1:51:54
>> So today today if you look at the supply chain >> if you go back four 3 four years ago was titanium that that's been solved the problem in the supply chain today is windows.
1:52:04
If you ask Embrier, ask Michael Malfitano, ask them what is why are your delivery slipping, they say it's the windows.
1:52:11
I didn't know this, but 50% of aircraft windows fail on fail when installed. >> Whoa.
1:52:17
>> So, so >> and that's and if you get a failure in the air, like we have a we have a buddy who who had >> a lung collapse >> a lung collapse >> because of a broken window >> because of a broken window >> and uh >> yeah, it's a disaster.
1:52:30
So I think the technology that's coming very fast, I don't know if you saw that Embryer announced the smart window in their Prader 600.
1:52:37
So they've taken out one of the windows in the aft part of the cabin >> and they and instead of that they put a digital screen >> and you can make that screen just look outside because there's cameras outside.
1:52:49
So if you want to see if anybody's stealing your luggage, you could look out the window [laughter] and see it.
1:52:54
But the reality is in flight you could make it day, you could make it night, you could watch a video, you could make it larger, you could make it smaller.
1:53:00
So that is I think the start of what's coming next.
1:53:05
We'll get to the point where we'll eliminate passenger windows and rapid form.
1:53:09
If you're familiar with the auto aircraft, they're that that is in their development process without windows.
1:53:15
And then it won't be long after that that we'll be rid of the cockpit windows because like you just said, high failure, expensive to maintain.
1:53:21
So I think that's a technology that we could pretty much you know is assure is coming quick.
1:53:29
>> How [snorts] do you evaluate uh new technologies?
1:53:32
I'm sure anytime there's any type of new uh private aircraft manufacturer or EV tall company, they're coming to you, they're pitching you, they want like some type of like LOI even though they're not going to deliver for, you know, even five five 10 years.
1:53:48
uh we've seen so many of these companies kind of come and go or have a good render or kind of like demo and then they never end up getting off the ground at all.
1:53:56
So I feel like the tech industry uh maybe it doesn't feel like this from your vantage point but it doesn't even get excited about a lot of these EV tall projects anymore or at least the insiders don't.
1:54:07
Uh but how >> well let me >> I'm sorry let me separate EV tall because I think that's a different class from innovations and aircraft and so on.
1:54:18
Um first of all I think it's my obligation for someone that loves aviation to invest uh a vested side encourage people to come up with new technologies.
1:54:27
So I will say I've invested in four uh clean sheet aircraft.
1:54:32
Uh I'm 0 for three with one with one that I still have development.
1:54:37
So I invested in the supersonic [laughter] >> boom supersonic. No way. >> I did that. I I was at the Arion.
1:54:42
I was an early early supporter of the Arion product, right?
1:54:47
We're an early supporter of the auto aircraft.
1:54:49
So I think part of it is just our obligation is to encourage technology. Okay.
1:54:53
Some of it some of it is is is self- serving because you know you do have a a a you know a duopoly.
1:55:02
You know, we we do have a polyopoly, I guess, in the in in the aircraft business and right now the main manufacturers control so much from the pricing of aircraft, the servicing of aircraft.
1:55:14
So, encouraging people to be entrepreneurial in the phase is something I feel obligated to do.
1:55:18
Now, I said I haven't done very well at it, but we'll continue to try to encourage those technologies different.
1:55:23
I think EVOL is something different.
1:55:26
Evall is is a totally different market.
1:55:29
Um, we we've been a supporter of beta.
1:55:31
I was I did the spa at Eve.
1:55:33
Um these are these are the these are the Wright brothers.
1:55:36
This is this is early aviation and we're generations away >> from those aircraft being suitable for my for our businesses >> that we're not going to have flexjet fractionals.
1:55:48
They're not >> they're not luxurious.
1:55:50
They don't have the weight capabilities.
1:55:52
You know, a lot of them don't even have no pressurization, no heating, no cooling.
1:55:57
People go, "Well, what do you need heating for that?
1:55:58
It's only going to be 6 minutes." Well, okay. That's not luxury.
1:56:02
It's not something we can do, right?
1:56:04
[laughter] >> Yeah, that's funny. >> But I think >> Sure.
1:56:07
But I but I think it's a great technology and it's going to happen. >> Yeah.
1:56:11
Why do you think the Concord failed?
1:56:15
>> Um it's a great question because I love I think it was a wonderful aircraft, but there were only 15 of them.
1:56:21
So lack of adoption would be the number one reason.
1:56:26
you it's hard to what 15 aircrafts there you know you can't keep parts in you know it's just I think it was it's it's obviously was a financial reason now there were other you know environmental concerns at the time most of the environmental concerns aren't a challenge anymore most of the technology
1:56:45
now can deal with that so it's really I think we're just the we're like I think we're on the I think had Arion maybe started a year and a half later they'd have played into this era of abundance that we're in, but they got caught in the before co >> and [snorts] so that that that kind of hurt them a little bit. I think had they
1:57:01
I think had they been a little bit later.
1:57:03
I think the market's right.
1:57:04
I think we're ready for this.
1:57:06
We're ready for supersonic. >> Mhm.
1:57:08
>> What's the most number of hours that you've ever heard of an executive flying annually?
1:57:15
You don't have to name the person, but but just the number of hours.
1:57:21
>> 600 >> 600 hours in the air. >> Whoa. Okay.
1:57:24
That's quite a bit lower than than what uh the Financial Times was reporting on.
1:57:28
>> Oh, what did they say?
1:57:29
>> Well, the Financial Times was reporting on I think al I think Alex Karp I think didn't didn't they have have like expecting him to be up in like the thousand something range.
1:57:39
>> Uh the >> and we were saying like it seems like this guy is doing deals in Europe and Asia and America constantly.
1:57:45
You can imagine he's constantly in the >> headline. One second.
1:57:48
There's only 2,000 hours in a year.
1:57:50
So, like, how are we going to >> Well, so the the the headline was that uh that he spent $17.
1:57:56
2 million on flying, and they worked backwards to estimate that that was $2,457 flight hours.
1:58:06
But a lot of that is based on the plane.
1:58:09
Obviously, if you're in a very expensive plane, $17 million goes a lot less far.
1:58:14
>> Could have been the the BBJ.
1:58:16
>> Could have been the BBJ. >> Yeah.
1:58:17
Anyway, >> now now I I personally fly between around 350 hours a year.
1:58:21
Uh 350 to 400 and and and you know, but I'm doing a long I go long trips.
1:58:28
I'm going I go back and forth to operations in Europe.
1:58:32
So uh and I feel like that's a lot of hours.
1:58:34
But >> how is how is uh Starlink uh how is Starlink uh impacting aviation overall?
1:58:43
There's a lot of excitement from it rolling out on the commercial space.
1:58:47
Most of the jet I'm sure all the jets that are that are uh in the sort of flexjet fleet have had great great uh internet you know connectivity in general for quite a while.
1:58:55
But what is the what is the ongoing impact?
1:59:00
>> Well well not to correct you but that was not a true statement.
1:59:02
Connectivity in corporate aviation has been a challenge for many years.
1:59:05
In fact, I would tell you it was the Achilles heel because here you go buy the $70 million jet and you get on it and you have one of the old technologies, you know, and and it it's a disaster.
1:59:17
You're like, how could I pay this kind of money and I don't have the internet?
1:59:20
Starlink has changed everything.
1:59:22
I mean, Starlink, like even for me now, I used to never for my flights, if I had an 8 hour flight, I'm leaving this weekend.
1:59:28
I I can schedule anything in that flight.
1:59:31
If you want to do this podcast from the air, we can do it because so you can just keep your schedule and remember it works on the ground.
1:59:38
The old technologies only worked in the air. >> Yeah.
1:59:42
>> So now you had taxi takeoff, you couldn't do a phone call, you couldn't watch a movie. >> So disruptive. >> So disruptive. Yeah.
1:59:48
No, it this is it's it's changed a lot.
1:59:50
In fact, uh we we we had for we we did the initial installations on on Musk's airplane and because of that, we got the initial STC's for all of Starlink.
2:00:01
So, our fleets been in Starlink very early on.
2:00:05
Uh their competitors are just starting to convert to it. >> Yeah.
2:00:10
How do how do some of these how do the the contracts work historically?
2:00:12
Did did some of the old connectivity providers lock some fleets into really long-term agreements?
2:00:20
So now they have to make a decision.
2:00:22
Hey, do we continue paying for this plus Starlink?
2:00:24
Because I wonder I we we've just been wondering like the how some how slowly some commercial airlines have reacted seems surprising just considering it's such an easy way to create a meaningful differentiation for passengers.
2:00:41
>> Well, I think you're dead on, right?
2:00:42
Money makes the blind see.
2:00:42
So if you try to find the solution to what you're missing, it is the fact that they have those long-term contracts. Now I don't know.
2:00:51
I don't know enough about all the contracts.
2:00:52
I know our contract, you know, our initial contract with GoGo >> allowed us to because we have so many planes, we could just add and take off planes at at will.
2:01:02
>> And um we have not yet done the Phenom fleet because there's a different antenna needed for the smaller fuselage.
2:01:09
So, we still do have so you know about 80 airplanes that are on the go system, but we'll we'll be converting those. >> That's great. >> Great.
2:01:17
>> Well, thank you so much for the time. This was a lot of fun.
2:01:19
I learned a lot and hope to talk to you soon.
2:01:23
>> Love what you guys are doing. >> Thanks so much.
2:01:24
>> Enjoy what you're doing. Thank you so much.
2:01:27
>> Let me tell you about the New York Stock Exchange.
2:01:29
Want to change the world?
2:01:31
Raise capital at the New York Stock Exchange. >> It's that easy.
2:01:35
>> And we have Howard Marx in the reream waiting room from Oak Tree Capital.
2:01:40
Let's bring him into the TV pan. How are you doing? >> Welcome.
2:01:45
>> Thank you so much for joining.
2:01:45
Um, I would love to kick it off with the high level on your your theory of the market cycle.
2:01:54
Um, and then maybe we can walk into how you're thinking about markets today and over the last few years, but uh the the highle thesis on on the market cycle.
2:02:05
Um, how do you explain your overall thesis? >> Sure.
2:02:10
Well, thanks of all, thanks for having me on today.
2:02:12
uh you know I I've watched what you do and it's terrific and I'm glad to be part of it. >> Thank you.
2:02:19
>> Um you know basically a company or a market or an economy >> uh makes progress along what we call a trend line.
2:02:28
>> And uh so uh the value that it creates should progress along that trend line.
2:02:35
But the point is that while the progress there is pretty steady and gradual, sometimes people get too excited and they overvalue that progress and and the market goes to an unsustainable high >> and then uh something comes along that that makes that correct uh back toward the trend line but given the way human nature works through it to an unsustainable low.
2:03:05
uh and then eventually that's corrected back toward the trend line to a high.
2:03:09
So the point is that that whereas uh the underlying thing progresses gradually >> the price fluctuates wildly around that trend line and the main reason is uh the fluctuation of psychology. >> Yeah.
2:03:28
Is how far back do you go when you think about market cycles?
2:03:32
Does the same theory apply pre-industrial revolution?
2:03:38
>> Well, I'm you know, I'm old, but I'm not that old.
2:03:40
And [laughter] uh >> I didn't mean it like that.
2:03:42
>> You know, I I wasn't there, but uh yes, I think Well, I think you know you know, one [laughter] of the one of the most valuable uh operative quotations is from Mark Twain. Yeah.
2:03:54
>> Who supposedly said that history does not repeat, but it does rhyme. >> Yeah.
2:03:57
>> So, the the things that rhyme >> are the elements of human nature.
2:04:01
M >> that caused these excessive fluctuations around what what what I'll call intrinsic value or reality. >> Sure.
2:04:10
>> So, you know, the desire to get rich quick. >> Yeah.
2:04:13
>> Uh envy >> uh of seeing others get rich quick.
2:04:17
>> Uh the belief that it's possible to get rich quick.
2:04:20
>> Uh the fear of missing out.
2:04:22
>> Um uh the fact that people get more excited the higher the price goes, which should be worrisome.
2:04:29
should be worrisome. So these things I think have always been in place and you read about bubbles that took place uh let's see the tulik bubble I think was 1620 the south sea bubble was 1720 and so >> these these excesses these human failings have always been part of what what goes on >> but this time is different [laughter]
2:04:52
kidding um uh how do do you think uh a lot of the guests on our show have maybe been through the the COVID kind of brief correction and chaos of ZERP >> uh but don't have much else to go off of that can kind of be an advantage because you can just be so optimistic that even if something you know bad you know you do get a big correction maybe you get a a fast rebound. Yeah. Has being through Yeah.
2:05:21
Has being through a number of these cycles ever hurt your performance because you just weren't opti like optimistic enough or you know this this idea that you know uh optimists make money uh and you know pessimists sound smart?
2:05:43
>> Well um you know my firm Oakree Capital Management first of all doesn't invest for the most part in the stock market.
2:05:49
We're mostly investors in what's called credit or debt. Yeah.
2:05:53
>> Uh but I I I think that we are what's called contrarians.
2:05:56
I think we're my partner Bruce Kh and I are essentially uh innately contrarian which is to say that we're most comfortable doing the opposite of what the herd is doing at the extreme because we see its error.
2:06:14
>> And so I think we've always done that naturally.
2:06:16
Um and uh so uh we are I I think we're conservative by nature and I always say by the way in 1978 uh City Bank asked me to go to the bond department and start a high yield bond fund in a convertible bond fund and and and and it worked great because uh being a lender requires conservatism.
2:06:42
If they would have said, I want you to start a venture capital fund and and predict when Amazon is going to be uh created, I would have been a disaster. Uh I'm not a futurist.
2:06:51
I'm not an optimist, etc.
2:06:52
Uh but I when I have seen excessive pessimism and excessive gloom causing crashes and I've seen a few uh I it has been it has come kind of naturally to to go against that excess.
2:07:17
And so I think one of the ironically one of the things we've done best for conservative people is seize the opportunity at the lows again by being contrarian and uh you know I wrote a memo in October of '08 after the global financial after the bankruptcy of Leman uh with the title the limits to negativism >> and there is such a thing as being too negative. Mhm.
2:07:40
Do you think contrarianism like you just described uh is purely innate or can it be learned?
2:07:48
Is it a muscle that you can build over a career?
2:07:50
Is it something that folks in everyday life who maybe aren't professional investors but might benefit from not getting overheated and falling in with the herd can learn? And if so, how?
2:08:03
>> I think you can learn these things.
2:08:03
Uh you know, I wrote a book called Mastering the Market Cycle.
2:08:06
I'm not really trying to plug the book, but it wouldn't hurt.
2:08:09
Um [laughter] >> but but uh you know uh and it all talks about how to how to uh how to deal with the cycle.
2:08:19
>> Um and uh >> what I think is I get all these questions. Can you learn this? Can can you learn that? Can you learn this?
2:08:24
Can you can you learn to be unemotional?
2:08:26
Can you learn to be what I call a second level thinker?
2:08:29
Can you learn to be a contrarian?
2:08:31
>> The answer is I can tell you why it's important.
2:08:34
>> I can explain to you why it's essential.
2:08:38
Is it something you can ingest? I don't know.
2:08:42
>> You know, uh I for some reason or another come by it naturally.
2:08:50
>> Uh it's easy for me relatively.
2:08:50
By the way, I don't want to give the impression that when I make these calls at at the at the highs or the lows that I do it without some trepidation. >> I'm never sure.
2:09:04
>> Anybody who's sure is an idiot.
2:09:04
You know, they say there are two kinds of people who lose a lot of money.
2:09:08
The people who n know nothing and the people who know everything.
2:09:13
So, so I I'm not trying to imply that it's easy. >> Yeah.
2:09:17
>> But it does come fairly naturally to me through the combination of my emotional makeup and and the application of logic. >> Yeah.
2:09:25
>> If somebody else doesn't have my emotional makeup, they could learn the logic.
2:09:29
Maybe they could learn to do it.
2:09:32
>> It might not come so easy. That's all I can say.
2:09:35
H how do you think about uh the concept of black swan events or the integration of black swan events into a market cycle?
2:09:44
Because going into co I was looking at the health the fundamental health of the American consumer the fundamental health of the economy everything looked very strong and I think that's why the economy rebounded as quickly as it did and then sort of overheated.
2:09:58
Um but how do you need to put black swans out of your mind?
2:10:03
Are black swans even a real thing?
2:10:05
Like, how do you think about that concept? >> They're a real thing.
2:10:08
I don't think you can do anything about them. >> Yeah.
2:10:12
>> Uh my term, the term I've always used for what TB calls a black swan >> is uh an improbable disaster. >> Mhm.
2:10:21
>> And by the way, they're not all disasters.
2:10:22
There are improbable bonanzas, too.
2:10:24
to the >> but but but I mean if you just think about the improbable disaster >> it is something where if it happened it would be disastrous >> but it's very improbable.
2:10:37
>> What do you do about it?
2:10:37
And in in my in my opinion you can't do anything about it >> if you say well I'm concerned that there could be you know an eight hurricane uh earthquake.
2:10:51
I'm concerned that there could be four hurricanes in a row.
2:10:52
I'm concerned that there could be nuclear war and I'm concerned that there could be uh uh inflation at 20%.
2:11:01
>> Well, you can protect yourself against that.
2:11:04
You can call that guy who lives in in Omaha.
2:11:05
He'll write you an insurance policy uh to protect you against all of those things.
2:11:11
You just won't like the premium.
2:11:13
And if you take out that insurance policy and you pay that high premium and you're protected in the vast vast majority of years, it's not going to happen.
2:11:25
>> And after a little while, you'll get tired of paying those premiums and it'll stop probably in time for it to happen. >> Yeah.
2:11:30
[laughter] >> So, so, so you you really can't.
2:11:31
And the things that are in the way way distant tales of the probability distribution are just things you have to live with. That's that's real life. >> Mhm.
2:11:46
How do you think about the education that goes into becoming an investor and how that's changing?
2:11:52
It feels like it's easier to learn without mentors because everything's been compacted into AI and open sourced on the internet and you can watch great lectures and podcast interviews.
2:12:04
What's changed and what's the same?
2:12:08
>> Well, my perception is that AI number one, AI has a mentor. Mhm.
2:12:14
>> It reads everything that ever happened. >> Yeah.
2:12:16
>> And ingests it and remembers it and can find it. >> Mhm.
2:12:22
>> And then AI becomes a mentor. >> Mhm.
2:12:25
>> And and and uh it it it tells you uh you know how to think.
2:12:30
It gives you examples of thought processes.
2:12:34
>> So So I I think it just makes it so much easier to learn, you know.
2:12:38
And uh uh I wrote a memo in December.
2:12:41
I write memos to my clients.
2:12:43
October was the 35th anniversary.
2:12:46
And I talked about AI in a memo December 9th.
2:12:50
>> And then uh I have a son named Andrew.
2:12:53
He's in he's in the tech world.
2:12:53
He's a he's a terrific venture capitalist.
2:12:55
He's co-founder of of a of a a group called TQ Ventures. Mhm.
2:13:02
>> And uh and and given the recent events, he pushed me to revisit that memo and update it. >> Mhm.
2:13:11
>> And he had this great idea.
2:13:11
He said, "Why don't you why don't you ask Claude >> to tell you about what's been happening?"
2:13:19
>> And so, uh, he and I developed a a a request which we input inputed to to, uh, to Claude. his help was invaluable.
2:13:29
But of course, he does this all day with all of his brilliant founders and and uh so Claude wrote me a tutorial which enabled me uh to to update the memo >> and I I learned an incredible amount uh you know from uh in a field that is not native to me. Yeah. through doing that.
2:13:51
And so, uh, it was a mentor to me >> and it can be a mentor to others, but as we know, you have to ask it the right questions. >> Yeah.
2:14:01
>> Uh, and Andrew and his his buddies helped me do that. >> Yeah.
2:14:05
How how has technology changed the credit markets or just investing in in credit over your career?
2:14:11
I I can imagine computerization, the internet, there's there's sort of a continuum of advances that just help information flow more freely.
2:14:22
AI feels like just an extension of that, but how has like the actual work changed over your career?
2:14:34
Right now, AI is helping us marshall data >> uh with a with a thoroughess and a speed and a uh and an error-free that we never had before.
2:14:48
>> Uh I don't think it has changed the process because it what you see it all comes down in the end to uh looking at a company and assessing the probability that it'll pay its debts. Mhm.
2:15:02
>> And I don't, you know, I don't I think we're still better at doing that than than AI is.
2:15:09
>> Oh, by the way, I should tell you, uh, that an hour or two ago, we put I put out a new memo updating, uh, the December memo.
2:15:16
You probably haven't seen it.
2:15:18
I may make reference to it, please. >> But, >> Pardon me.
2:15:22
>> No, I was saying we we do have it pulled up, but but for the audience. >> Okay, great.
2:15:27
>> Okay, great. So, um, so, uh, you know, it says in there and and I asked Claude, and Claude said, "Look, the truth of the matter is that the thing that AI is the weakest at is doing analyses uh, on brand new things where there
2:15:47
aren't established patterns, >> and and and so and I think that that's a lot of what we do, >> you know, and uh, So uh you know at the present time I think that I I think AI can uh can marshall the data organize the logic out uh frame the question. Uh
2:16:06
Uh I don't think it's the top of the heap in answering the question yet.
2:16:14
Of course I can always be wrong.
2:16:15
Uh but you know and I say in the memo that I think that what AI does is is predicts based on past patterns.
2:16:24
It predicts what kind of companies will pay their debts and whether a given company will pay its debts and it puts forth a hypothesis u with with regard to an individual situation.
2:16:36
Um and and and it tells you you should or shouldn't invest.
2:16:41
>> I think as I as I understand the status of things today, >> you need people to check the hypothesis. >> Yeah.
2:16:51
you know, I don't think I would make an investment commitment based on the hypothesis alone.
2:16:56
I would want to check it, but I think it gives you a great starting point.
2:17:00
And and uh by the way, so I wrote the memo.
2:17:03
I said to Andrew, "Do you want to look at it?"
2:17:06
He says, "Why why send it to me?
2:17:06
Why don't you send it to Claude?"
2:17:08
[laughter] >> Ask Claude to take a look at the memo. So I did.
2:17:14
And I was I was absolutely And if you read the memo, I was absolutely dumbruck. >> Yeah.
2:17:21
by what what what I got back because it responded to me >> in I said it it it responded to me it felt like a a note from a colleague or friend. >> It was personal. It was warm.
2:17:32
[snorts] >> It drew analogies to my 35 years of memos.
2:17:38
It it talked about some some of my uh some of the people I respect.
2:17:40
It uh it it injected humor.
2:17:46
>> U it was it was complimentary.
2:17:46
it, you know, it said it it it talked about a section it thought was really good.
2:17:53
So I wrote to Andrew I said it is is uh is AI is clawed an assisser because I thought it was maybe unduly complimentary. >> Yeah.
2:18:04
>> He said well well dad ask it ask it to be hyperritical.
2:18:09
>> So I wrote back I make a few corrections.
2:18:12
I I said now would you please be hyperritical?
2:18:13
So it writes me back and it says, "Do you want me to be hyperritical or hypocritical?"
2:18:22
It's making a joke, >> you know, and and so uh you know, I think that it's going to change our world. >> Yeah.
2:18:30
Uh I think I think that you know we we have an activity in our investment world called indexation >> where rather than pick stocks a lot of people who invest in the stock market now instead just invest in a vehicle that emulates the S&P 500 or some other index >> and indexation has put a lot of people out of business >> because a lot of people used to a do an inferior job. >> Mhm.
2:19:01
>> Underperform the S&P and then B charge highly for their services.
2:19:04
There's something wrong with that. >> Yeah.
2:19:07
>> And a lot of those people uh are out of the business now and and the majority of uh equity mutual fund money is managed through indexation or passive. >> Mhm.
2:19:18
>> I think AI will advance that.
2:19:18
It what it does is it it it just raises the bar and weeds out the people who don't add value. Mhm.
2:19:28
>> I don't think I don't think it'll replace the best. >> Mhm.
2:19:33
>> But it'll replace a lot.
2:19:35
>> How how are you uh personally comparing the the AI buildout and the advancements uh in the various models and stuff happening at the application layer all the way down to the hardware layer to the internet buildout.
2:19:49
There's so many different comps from investor psychology to overall consumer psychology.
2:19:55
We were talking earlier this week on the show about the battle of Seattle and the protests around uh the the the internet buildout and the fear that people had around uh jobs getting outsourced uh going overseas as well as just disintermediation.
2:20:13
And it feels like so many of the radical predictions that people made about the internet are still being made about AI.
2:20:21
Some of them came true with the internet, but they they came true over a decade or two.
2:20:25
Uh and in some ways now it feels like AI really is just a continuation of many of the same trends that the internet brought along, but some of the predictions are even wilder this time around.
2:20:43
Well, I think that um first of all, I am in that debate.
2:20:48
I'm on the side of the warriors visav society.
2:20:51
Uh I I by the way, remember I said 10 minutes ago, I'm not that much of an optimist. >> Yeah.
2:21:00
>> Uh so I can imagine the jobs eliminated and I am not imaginative enough to to think of all the jobs that will be that newly created.
2:21:09
So I see a net decline in jobs and um and I and I do worry about that.
2:21:16
Um AI is uh similar to the technological bubbles that I've seen and and the technological bubbles probably go back all all the way to the railroads, you know, 140 years ago.
2:21:31
Um but the power of AI relative to the predecessor technologies I think is vastly higher.
2:21:43
The speed of innovation is vastly faster.
2:21:46
is vastly faster. I think innovation I think if you look at the uh Claude and uh uh all the coding models and the way they've progressed and the way and the way anthropics uh revenues have progressed I think you have to say that this is faster than anything we've ever
2:22:03
seen before and I think >> well and it's because you have the distribution that was laid >> starting over 20 years ago >> but but I think I think the I think the the speed at which AI can innovate is faster faster than the speed at which society can adjust. >> So you might say it'll catch up, but I
2:22:21
>> So you might say it'll catch up, but I think you could I think at minimum you're talking about a a significant period of dislocation.
2:22:31
The other thing the other thing that we haven't touched on but is is is the biggest difference between AI and everything else we've ever seen is the autonomy and all the other technologies starting with the railroad up through the internet were I would call laborsaving devices.
2:22:47
We had a job to do and the new technology did it better, faster, cheaper. AI it's it's different.
2:22:56
It's not just going to do the job we used to do.
2:22:58
It's gonna design new jobs.
2:23:05
>> It's going to assign new jobs.
2:23:05
It's going to take on work we haven't asked it to take on.
2:23:08
Um it's going to take on work we didn't think it could do.
2:23:11
U and it and and it's going to operate at some point in time without instruction.
2:23:17
In the memo, I talk about the fact that Chat GPT brought out a new model earlier this month.
2:23:24
And in the write up for the for the model, they said basically in English AI the model helped us design the model. >> Yeah.
2:23:38
>> There's never been anything analogous to that before.
2:23:40
So uh when I think about the this extreme level of competence, speed, etc.
2:23:49
I I think of dislocation. >> Mhm.
2:23:53
>> Mhm. for people and you know there there are people who say and I referenced in the memo there are people who say oh I have great news uh people aren't going to have to work to me that's terrible news uh you know I
2:24:08
think we get a great deal from our work other than a paycheck >> and and how is are those elements of life going to be replaced >> it's a wild time >> around how How are you feeling about the United States relative to other countries, the rest of the world? There's a lot of uncertainty
2:24:30
There's a lot of uncertainty generally, politically, at the same time, America seems to have a lead in the AI race.
2:24:36
Um, how are you feeling about uh just America broadly?
2:24:42
>> Well, I don't I don't know enough about the technology to know where we stand in the race or or what it's going to take to win the race or anything like that.
2:24:51
Uh but I think you know and and and there was the big news recently was that anthropic is going to uh uh I don't even know the right terminology but u let's say uh be less reticent >> uh in certain areas to to apply technology. >> Yeah.
2:25:15
be because in America and in a lot of developed countries, we have these things called scruples. >> Oh, no.
2:25:22
You know, I'm not going to do that. You know that. Oh, yeah.
2:25:23
Well, yes, you could do that, but I'm not going to do that.
2:25:27
>> Uh, this is an arms race. >> Mhm.
2:25:30
>> And you know, we're America has never had a serious rival before.
2:25:37
>> Never had a serious rival.
2:25:37
We thought Russia was a serious rival. Uh, we were wrong.
2:25:45
uh it it was never really a threat other than militarily or or you know atomically >> but we've never had an economic rival before.
2:25:53
Now we have an economic we have a rival in many dimensions and of course it's China and and I think that AI will be at the core of that uh of that rivalry and you know if if we slow down because of our scruples >> and they carry on pel I think that'll help them win and if they get control of AI if they have highly superior AI.
2:26:23
I think that could be one of the things that makes life tough for us.
2:26:31
>> So, and by the way, I I consider myself as having scruples, >> but I I worry about what this implies.
2:26:38
And by the way, if you want to think about scruples, think about this.
2:26:40
One of the areas in which we we have a problem which is not highly talked about or acknowledged is rare earths.
2:26:50
>> And rare earths are ubiquitous in many areas of technology.
2:26:52
and we're dependent on China for that. >> Mhm.
2:26:56
>> So, here's a question for you two young guys.
2:26:58
Before China developed its primacy in rare earths, >> who had primacy? >> Wasn't it America? I >> think we did.
2:27:08
And we decided it was dirty and and it was worth shipping overseas before. >> Bingo. >> Yeah. >> A hundred.
2:27:15
You get a 100 points for that answer. >> Let's go. Thank you. >> It was us.
2:27:19
And as I understand it, as I understand it, most of the rare earths came out of one mine in California.
2:27:28
>> And my guess is some ecologists >> concluded. >> Yeah.
2:27:34
>> That as you say that it was dirty. >> Yep.
2:27:36
>> And so we maybe we shouldn't do it. Yeah. >> And then guess what? And guess what?
2:27:41
China said >> we'll do it.
2:27:42
>> We'll do it and we'll do it cheaper. >> Oh yeah.
2:27:45
>> And so they got all the business. >> Yeah.
2:27:48
>> And that's how you create a dependency. Yeah.
2:27:50
And there's a big question about how does the dirt over there just come right over here?
2:27:54
Like potentially, you know, I think it's possible it's all one atmosphere, >> but look at what happened with energy in Europe. >> Yeah. Oh, yeah.
2:28:03
>> Germany had a bunch of nuclear reactors. >> Crazy.
2:28:07
>> And then and then they said, well, we don't really want like having nuclear reactors because of its non-ecological.
2:28:13
And Russia said, oh, we'll do it for you.
2:28:15
>> We'll supply your energy. Yeah.
2:28:15
And you dependent you you develop a dependence. Yeah.
2:28:20
>> So the point is what you had in both cases is you had >> decisions made on purely economic terms in areas that probably should have included some strategic decision-m. >> Yeah.
2:28:34
>> Geopolitical strategy.
2:28:36
>> But but it was all seated to the economists and the ecologists. >> Yeah. >> Hard decisions.
2:28:42
These are hard decisions. >> They are.
2:28:44
Uh, can I completely switch gears and ask you sort of a personal finance question?
2:28:49
Um, I've heard this rule of thumb that uh the allocation between stocks and bonds should be uh tied to your age.
2:28:58
If you're 50 years old, you should be 50/50.
2:29:00
If you're 25 years old, you should be 25% in bonds.
2:29:06
But recently, the bond markets and the stock markets have been more correlated than decorrelated.
2:29:11
And I'm wondering how you think the average person should think about the equity markets versus the debt markets.
2:29:20
>> First of all, there are no numbers that hold true for everybody. Yeah.
2:29:22
So any any rules of thumb that have numbers in them, you have to throw out.
2:29:27
>> The only rule of thumb is no rules of thumb.
2:29:29
[laughter] >> Well, like who who was it who somebody once said that every generalization is flawed, including this one. >> Yes. >> Right. That's great.
2:29:37
So, so uh uh the point is that stocks and bonds >> have different qualities. >> Sure.
2:29:49
>> Existential qualities and people should understand what the difference is >> and it's not the difference is not merely that one is called stocks and one is called bonds.
2:29:57
is called bonds. You have to understand the difference >> and then you have to figure out for yourself what the right >> uh I would say risk posture is >> and and each person and each company and each insurance company each sovereign
2:30:10
wealth fund each investor should figure out their normal appropriate risk posture based on age wealth income sufficiency of age of wealth and income aspiration number of dependents uh and uh uh intestinal fortitude >> the ability to live with fluctuations. >> Mhm. >> Mhm.
2:30:34
>> And it's different for everybody.
2:30:34
M >> so you know that rule of thumb generalization hints at a direction which is to say maybe younger people whose lives lie ahead should take on more uncertain paths which have a higher trajectory but more uncertainty and older people who are approaching uh uh retirement should have a less uncertain path and more dependability >> makes per perfect sense the number using something like your age as the answer is silly. >> Yeah.
2:31:06
>> But I think everybody has to think about those things and it and it's not easy to come up with the answers, but you better do it because it's damn important. >> Yeah.
2:31:14
Last question for me and sorry to jump around a little bit, but I'm curious.
2:31:19
Were you ever deeply pessimistic about the internet, about what the internet's impact would be on society in the way that you are around AI and potential labor displacement?
2:31:34
Because certainly >> a great question >> because because you could have pessimism about hey we got a lot of fiber in the ground that's >> not actually being used that we're we're headed uh off a cliff here.
2:31:43
That's kind of like maybe more like economic pessimism but uh societal pessimism. I'm curious.
2:31:53
>> You know uh I think the honest answer is that I never was I never knew enough about the internet >> uh to reach that point of pessimism >> because you didn't have the internet.
2:32:03
You didn't have >> Well, I also didn't >> I didn't have my son kicking me in the butt uh making me uh do the research.
2:32:07
I mean, he has really pushed me.
2:32:11
He said, "Dad, you have to know this stuff." >> Yeah.
2:32:15
>> And he does it all day.
2:32:16
>> Uh and and so I I think I know much more about uh AI than I ever did about the internet.
2:32:24
>> Uh and and so so the answer is I never did uh reach that level of pessimism with regard to the internet.
2:32:33
What's the what's the fundraising cycle like for Oak Tree Capital?
2:32:35
How do you how often do you raise funds? What's the latest fund?
2:32:42
>> Well, that's an interesting question.
2:32:42
I mean, we have a lot of different kinds of funds.
2:32:45
We have some which are very plain vanilla and and produce a uh a steady return fairly dependably >> higher.
2:32:53
We don't do anything in what's called high-grade bonds or investment grade. >> Yeah.
2:32:58
>> Everything we do is is noninvestment grade.
2:33:00
So we don't you know we don't do u uh guilt edge but so nothing we do is 100% dependable but uh but and so we we have some that are mundane and modest return moderate return and then we have some that are highly aspirational and and and often tied to the cycle.
2:33:18
Uh I think it's fair to say we're the world's leading investor in distress debt. >> Mhm.
2:33:28
>> And so sometimes when there's a lot of distress, there's a lot for us to do.
2:33:30
We have the ability to invest a lot of money and historically have high returns when when everything is placid.
2:33:37
There's not much to do in distress land.
2:33:39
So we have to kind of uh go into remission >> and we don't raise much money in those funds and we we raise small funds with which we can do uh very selective things and and make do with a modest supply.
2:33:57
>> Uh so it's a lot of our fundraising is tied to that.
2:34:00
The other thing is we're worriers.
2:34:05
When in good times most people plunge ahead, >> we tend to pull back because we get worried because they're too damn optimistic.
2:34:14
You know, Buffett says Buffett says the the less prudence with which others conduct their affairs, the greater the prudence with which you must conduct your own affairs.
2:34:23
Or he says we we must conduct. >> Yeah.
2:34:26
>> And and and I I believe that.
2:34:26
So when everybody is is unafraid, I get terrified >> because they do nutty things that put us all in jeopardy. Yeah.
2:34:36
>> The scariest thing in the world, the riskiest thing in the world is the belief there's no risk. >> Yeah.
2:34:41
>> And when people believe there's no risk, the world gets crazy.
2:34:43
There's an old saying in the banking business, which is where I started my career, >> that the worst of loans are made in the best of times >> for this reason. Mhm.
2:34:54
>> So that that really defines our cycle when everybody else is having a ball making money hand over fist doesn't see anything to worry about.
2:35:00
You know, we kind of go into a cocoon because that's to us that's scary and it hints at very few opportunities >> when everybody else is terrified and and wouldn't touch risk with a 10-ft pole.
2:35:16
And as a consequence, you get highly paid for taking risk.
2:35:19
That's when we turn aggressive. Mhm.
2:35:22
>> Which uh I don't know how much you you uh if you read or or talked uh with Andrew about Catrini's uh Sunday memo, the 2028 global intelligence crisis, which Citadel responded to by basically saying, "We have an intelligence crisis right now."
2:35:41
with everyone's reaction to this piece, but did you ever have a memo that had >> wild that that created really wild near-term price action or in the way that that the Catrini piece did or or with the way that information moved historically, >> did did that kind of >> No, I I look that he he used a device of I mean he he even said this is not a prediction.
2:36:10
This is an extreme case to illustrate.
2:36:14
>> Uh I've never I've never felt that it was attractive to do that.
2:36:19
>> Uh you know, I try to I try to live in in the in the middle of the probability distribution.
2:36:26
>> And uh and understand what's going on in the middle of the probability distribution rather than again I I think maybe you would say that Catrini's case was a black swan. >> Yeah.
2:36:36
Uh and and uh and and uh I don't uh I don't traffic with black swans.
2:36:45
>> Well, >> yeah, it it's interesting.
2:36:46
It's uh it kind of needed to come from a substack that gives the kind of appearance of being >> if you're just reading it for the first time, it gives these kind of appearance of sophistication. >> Sure.
2:37:02
but doesn't come with having run, you know, tens of billions of dollars of of of assets.
2:37:10
>> Well, thank you so much for taking the time to come chat with us.
2:37:11
Really enjoyable conversation.
2:37:14
>> Well, as I said, I think you guys doing a great job and it's really a pleasure to be part of it.
2:37:20
>> Yes, we've loved having you.
2:37:20
Hopefully, we can do it again soon. Uh, congratulations.
2:37:24
>> Yeah, tell tell Andrew he's welcome. >> Let's plug the book.
2:37:27
[laughter] Go buy the book.
2:37:28
Uh uh and uh it's it's available where all books are sold.
2:37:32
I'm sure that there's a audio version as well. >> Exactly. >> Thank you so much. >> Cheers. >> Bye.
2:37:41
>> Let me tell you about Vanta.
2:37:41
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2:37:44
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2:37:48
And let me tell you about Labelbox, RL environments, voice, robotics, evals, and expert human data.
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Labelbox is the data factory behind the world's leading AI teams.
2:37:56
And without further ado, we will kick off our Lambda Lightning round. I'm getting it, Ben. We got new graphics.
2:38:03
The Lambda Lightning round has been >> We have Demi Gu from Pika.
2:38:07
She's the co-founder and CEO.
2:38:09
Welcome back to the show. How are you doing?
2:38:14
>> Thank you so much for coming back on the show. Uh fired up.
2:38:18
>> Tell us about AI selves.
2:38:18
Tell us about the latest launch.
2:38:20
What did you launch today? >> Yeah, for sure.
2:38:23
Um so we all have the same problem.
2:38:25
you know, there's only one of us.
2:38:28
>> Your mom needs, you know, help with your computer.
2:38:31
Your your partner sometime wants, you know, more time, especially for a founder.
2:38:35
Your friends want to hang out.
2:38:38
You know, you're a founder, you're so busy that maybe you're missing out for like a group, group trip planning, but uh you're in the meetings or on flights or asleep. Mh.
2:38:48
>> So then we raise this question like what if there's a second you >> u we build something you know um new which is called AI self where you can give birth to it you can raise it um and it will grow with you you know you both and it becomes a living extension of you.
2:39:05
>> This is what you and John Bulmer were just talking about two hours earlier in the show.
2:39:08
You're like John and Jordy are going to talk to each other and get stuff done.
2:39:11
Is this purely for entertainment or do you actually see a a business sort of use case where uh someone with a great marketing mind will create an AI self and then uh I would be able to go to them and bounce a a Super Bowl ad campaign off of them.
2:39:24
How do you see the user actually interacting with this? >> Yeah, for sure.
2:39:29
I think there are many ways you can do it.
2:39:31
Uh first, like it definitely uh it's it's you but it's always like you mentioned it's like infinite availability, right?
2:39:37
So >> 247 available always on can be everywhere.
2:39:44
>> Um so you know your family mom people who love you will be able to have more access to you.
2:39:49
So your mom will be able to like talk to AI self to help her to debug it problems.
2:39:54
debug it problems. But like you mentioned it's same for you know people who are have great expertise right so like if you're a really genius marketing person maybe like uh other people can talk to her to gain more import more marketing um knowledge and she can
2:40:11
monetize off it >> um and um and it's because it's AI so it can do all those like it's like it breaks all the human limits right so it can be very capable for example like I mentioned like uh it can your marketing taste, but it also can do everything like 10 times faster. >> How do you how do you get enough data
2:40:30
>> How do you how do you get enough data for an individual to make it an accurate representation of the individual?
2:40:36
We've we've talked about this because we put out three hours a day of content of ourselves talking, hanging out.
2:40:44
Uh but most most people uh don't have >> we're going 247 with this.
2:40:49
Let the AI selves host the rest of the other 21 hours a day. >> Yeah, for sure.
2:40:56
Like yeah, the whole thing sure you guys can use your AI self to directly give >> this is it. This is it.
2:41:03
>> So yeah, but uh to answer a question about how do we get data to have accurate representation of you?
2:41:06
I would say there are like three three angles like first is um it it could import more data of you.
2:41:13
So for example, you can like import all the CBM show in the past.
2:41:18
Um so you can learn from that.
2:41:18
Um but also like when you're using AI self you can there's this constant process like um you're correcting and guiding it right so when you're using using her you know to for him to like generate marketing assets for you uh she he will also learn the marketing taste you have.
2:41:39
Um so when you're using her for like you know short-term productive productive word um you know he will also learn the taste basically.
2:41:46
Uh and the last angle is that the identity also really matters here.
2:41:51
Um because for example like your mom might not care how it's 100% accurate >> about like everything is accurate about you but as long as you're AI she will be interested because otherwise she could not find you right. >> So yeah.
2:42:07
>> Well thank you so much for coming on.
2:42:08
Unfortunately you have some breaking news.
2:42:09
So I need to cut this interview short but we'll love to have you back on the show soon.
2:42:12
So have a great rest of the day and congratulations on the launch. We'll talk to you soon. >> Goodbye.
2:42:18
And the breaking news is that Warner Brothers says Paramount's new offer is superior.
2:42:23
Netflix now has 4 days to respond.
2:42:26
Uh the culy market is uh continuing to diverge.
2:42:30
Uh when we started tracking this, Netflix was up at 50%, Paramount at 40%, now Paramount is starting to run away with it.
2:42:38
They're at 62% and Netflix is down at 33.
2:42:39
Will they sweeten their offer? We don't know.
2:42:43
But Netflix has four days to respond. >> More breaking news. >> More breaking news. What else?
2:42:51
>> Square is cutting from 10,000 to 6,000 employees. A 40% reduction.
2:42:57
>> Uh let's head over to Jack.
2:42:57
He says, "We're making blocks smaller today.
2:43:01
Here's my note to the company.
2:43:01
Today we're making and I wanted to ask Howard about this because it feels like so much of I'm curious to see what Jack says around the reasoning, >> but this I've been shocked that more >> CEOs when their stocks are down and beat up aren't looking at what happened with X and saying we can >> there's a huge expense that we have here. >> Yeah. >> Payroll.
2:43:27
>> And anyway, so he says today we're making one of the hardest decisions in the history of our company.
2:43:30
We're reducing our organization by nearly half from over 10,000 people to just under 6,000.
2:43:36
>> That means 4,000 of you are being asked to leave or entering into consultation.
2:43:41
I'll be straight about what's happening.
2:43:42
First off, if you're one of the people affected, you'll receive your salary for 20 weeks plus one week >> per year of tenure, equity vested through the end of May, 6 months of healthcare, corporate devices, and 5,000 to put toward whatever you need to help in this transition. That uh is uh generous.
2:43:57
Um we're not making this decision because we're in trouble.
2:43:59
Our business is strong, gross profit continues to grow.
2:44:02
Uh we continue to serve more customers and profitability is improving.
2:44:06
But something has changed.
2:44:08
We already seeing that intelligence tools we're creating and using paired with smaller and flatter teams are enabling a new way of working which fundamentally changes what it means to build and run a company and that's accelerating rapidly. I had two options.
2:44:19
Cut gradually over months or years as this shift plays out or be honest about where we are and act on it now. I choose the latter.
2:44:24
repeated rounds of cuts are destructive to morale to focus and to the trust that customers and shareholders place in our ability to lead.
2:44:31
And I won't read the whole thing, but uh this feels a little bit more real >> like like what Satrine was sort of predicting a little bit. >> Yeah. >> Yeah.
2:44:44
And it feels more real than some of these other cuts where they do like a eight 8% rift and then say, "Oh, we're getting >> but going down by nearly half."
2:44:54
>> Also, I mean, Block has been mostly spared the SAS apocalypse.
2:44:56
I mean, the the over the last one month, the stock's down 17%, over the last six months, it's down 30%.
2:45:03
It's not it's not, you know, down 50 60. >> Yeah.
2:45:07
But still, it's trading at like one like like somewhere around >> it's way off peak.
2:45:10
the the peak stock price was $263. Now it's at 54.
2:45:14
And so there's certainly a question about how they build back.
2:45:18
Well, let me tell you about Gusto, the unified platform for payroll benefits and HR built to evolve with modern small and mediumsiz businesses.
2:45:24
And without further ado, let's continue our lightning round and bring in Yash Patel from Applied Compute. How you doing?
2:45:34
>> Well, what's going on? >> Good. How are you?
2:45:35
>> Good to see you again. >> Good to see you.
2:45:36
Since this is the first time on the show, long overdue, uh, please introduce yourself and the company. >> Yeah. Yeah. So, so my name is Yash.
2:45:42
I'm the the CEO of Applied Compute and what we do is we build what we call specific intelligence for enterprise.
2:45:50
>> Um, and what that means is, right, like you know, AI is is sort of um, you know, going at breakneck speeds.
2:45:55
These general models are getting better and better week over week.
2:45:58
Um, but you know, if you're using the general thing, you're kind of never um having your competitive edge.
2:46:04
So what we think is there's a ton of latent knowledge or subject matter expertise that's kind of in an enterprise and what we want to do is help enterprises capture that imbue that into their agentic workforce and you know start to to scale up their their their agentic co-workers.
2:46:21
>> What is an actual onboarding process look like for an enterprise?
2:46:23
Is it just sort of turning loose?
2:46:27
>> Before you answer, I just got to say I love the I love specific intelligence.
2:46:28
I don't I've got enough general intelligence.
2:46:33
I really like some specific >> I think a lot of people are feeling that they're like everything's at 99% but I want 99. 999%. >> Exactly. >> Yeah. Yeah.
2:46:45
I mean like um you know there was that MIT gen state of genai paper that came out a while ago and you know the the thing it highlighted you know the reason 95% of these AI pilots fail is because these things don't really do the last mile.
2:46:58
So they don't adapt to feedback.
2:47:01
adapt to feedback. they don't get better the more you use them kind of like an employee would and um you know that's really what you need in enterprise in order to actually have like a productive employee um you know you can do kind of simple automations we've seen a lot of like workflow building um and that's
2:47:17
great so I I kind of think about this as like RPA plus right you had um >> you know you used to have like sort of like your click and drag RPA now you're introducing models into it but to do sort of like real cognitive work that like knowledge workers are doing, you kind of need to go a step above. A lot
2:47:33
A lot of that is context, but a lot of what we do is is fundamental research on the model level, too, because we think um you know, sort of building this uh this next agentic employee is going to require um sort of touching the entire stack >> and and what does your stack and supply chain look like?
2:47:49
Are you a beneficiary of open source?
2:47:52
Are you partnering with big labs?
2:47:54
you obviously have a lot of experience with Big Labs, but uh what does your what does actually deploying one of your products look like?
2:48:02
>> Yeah, so so so we're a platform.
2:48:02
So we deploy a platform inside of an enterprise.
2:48:06
Um we really want to sell the entire stack.
2:48:08
So that's um you know being able to plug into all of your systems of record and and data because you know we think context is there.
2:48:15
It's just really fragmented right across all these different applications and even people.
2:48:21
A lot of stuff is in people's heads.
2:48:23
this this tacid knowledge.
2:48:23
Um so you know we plug into all of your data.
2:48:27
We have our RL proprietary RL post training stack where we can train these sort of like um reasoning models directly on top of your data.
2:48:34
All the infrastructure around models which makes them agents right so uh there's the model but an agent is really like where's that model running what tools does it have access to all the permissioning and authentication.
2:48:45
Um and then above that is like the application layers.
2:48:49
So how are humans interacting with these agents?
2:48:51
um how are they like sort of guiding it, instructing it on what to do and then the observability around of all all of this um and what we think our value really is is is closing the loop.
2:49:02
So, um I was, you know, everyone's been talking about continual learning.
2:49:06
Um I think that's entirely how this space is going to go, right?
2:49:09
Like we have offline evals today.
2:49:10
Um that's because that's kind of the best thing we have to benchmark.
2:49:14
Really, these models are getting so damn good that um you're going to be evaluating them based off the real work that they're doing um in the enterprise and like while you're actually tasking them with stuff.
2:49:24
So, um, we basically help capture all of that information, um, turn it back into, uh, context and data that we can use to continually train these things.
2:49:35
>> Uh, I don't know how much you can share or how many of how much is this is a secret sauce that, uh, that that maybe you'll talk about on a podcast 3 years from now, uh, when when you've already won, but uh, what how do you how do you get all the context that lives in people's head uh, into your into your system so that it can be used across the organization?
2:49:55
is like I imagine you've tried a bunch of different attempts and and ways. >> Yeah. Yeah.
2:50:00
So, so I think there's like a couple of of um you know standard sort of recipes that you can use to to start these things.
2:50:08
And I actually want to be super clear.
2:50:10
I think RL is is you know sort of one of the best ways to train these models today.
2:50:14
But it's not going to be the only thing.
2:50:16
And it's going to constantly evolve.
2:50:18
It's it's honestly quite uh nent in its stage, right?
2:50:20
You know, I think Karpathy and a lot of these other folks have talked about like how simp overly simplistic it is, but um you know, a good example, Jordy, might be uh embodied work, right?
2:50:31
So, humans go and spend a ton of time going and creating artifacts that they spend a lot of reasoning effort on.
2:50:39
Um and what you can actually do is you can look at these artifacts, these these final outputs, and sort of say, hey, this is what good looks like.
2:50:47
And then optimize models, sort of train models to produce things that look like that.
2:50:50
that look like that. So um you know I think a a recent example of this uh that we actually you know we put out some some uh collaborative research with Meror like 2 days ago um uh sort of hill climbing on this this new agentic
2:51:04
benchmark they call Apex so sort of a professional services benchmark across law investment banking consulting management um and uh yeah we're we're sort of number one on the corporate law subdomain there I think uh got bumped down to yeah and like number four or five overall. So, um yeah, it's crazy how
2:51:21
So, um yeah, it's crazy how much you can do with with these the small amount of data.
2:51:26
[clears throat] >> Where where where is applied compute like where what what sectors are your customers like having their mind blown in the way that software engineers have generally with with codegen uh tools over the last year?
2:51:44
>> Yeah, it's it's a great question.
2:51:44
>> Yeah, it's it's a great question. So, so we're really targeting um you know institutions where there's a lot of sort of builtup knowledge and context uh over over decades right so this is like financial services insurance healthcare bio um places where
2:52:01
data really really matters um I think you know even even the coding domain right it's you know there's so much uh there's such a high ceiling there in terms of the types of of of models you can go and train so you know we we've been doing some some work with with cognition helping train some custom models there. But um yeah, I think like places where
2:52:18
But um yeah, I think like places where there's a lot of sort of like institutional knowledge that's where where this sort of imbuing it into these models shines the most. >> Mhm.
2:52:30
>> Well, thank you so much for coming on the show and >> do we have to I think we got to hit the gong. >> Oh yeah.
2:52:34
Uh yeah, I mean the the fundraising it was it was a little bit ago, but how much did you raise? We want to hit the gong. >> Yeah.
2:52:40
So so we raised uh 80 million last year. Better late than never.
2:52:49
>> Uh great great to finally have you on the show.
2:52:51
Uh you're welcome anytime.
2:52:53
>> Yeah, we'll talk soon.
2:52:54
>> I hope we can hang again soon.
2:52:56
>> Have a great rest of your day. We'll talk to you soon.
2:52:58
>> Let me tell you about Crowd Strike. Your business is AI.
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While Railway [music] automatically takes care of scaling, monitoring, and security >> get Morton.
2:53:22
We're running a little bit behind. We'll check on him.
2:53:24
And in the meantime, we will tell you about Scott is here.
2:53:30
We have Scott Morton from Revel.
2:53:32
He's the founder and CEO. Welcome to the show. >> What's happening? >> Hello. Great to be here. >> How you doing? Massive day.
2:53:38
take us through the fundraising news because I I just hit the gong and I want to hit it again. >> Yeah.
2:53:46
Uh we've raised 150 million for our uh series B uh and led by Index Ventures made innovation from Redcoin as well. >> Amazing.
2:53:56
Uh so uh since it's your first time on the show uh let's break down the product. What are you building? >> Yeah.
2:54:03
So we are solving solving a a basic problem in that the software used to control and test hardware systems [clears throat] >> really has not improved since the 80s and 90s.
2:54:12
So you have these companies building you know the most complex cutting edge systems like hypersonic jets and satellites >> uh and they're using control software that was designed pre Windows 98. Um so yeah it's insane.
2:54:25
Um, and so we provide a state-of-the-art software platform that really makes the control software and test software no longer a bottleneck, but instead uh an accelerant to their development. >> Mhm.
2:54:38
>> Uh, do you have any experience making hardware or did you just think this was a cool idea? >> Yeah, I know.
2:54:43
So, I spent, you know, nine and a half years at SpaceX.
2:54:44
Uh, worked uh yeah, worked on a lot of these systems, wrote a lot of control software for Falcon 9 and the later uh Starship uh Starship vehicle launch site.
2:54:55
Um it's basically really you know it was like a proving ground for you know software for hardware systems and you know and also kind of highest stakes environment. >> Yeah.
2:55:04
So yeah maybe uh go a little bit deeper in terms of software for hardware systems like when I think about a rocket taking off I could think about like a gravity simulation like a full 3D environment something on Unreal Engine.
2:55:19
Then I could also just think about like a whole bunch of you know like business logic basically testing different ratios and and applying the laws of physics at sort of just a mathematical level like what's the shape of the product.
2:55:32
What what what are the most common problems that are solved?
2:55:39
>> Yeah, I mean this is you know this is the software that will control the hardware system directly.
2:55:42
Um, you know, engineers typically, you know, they need to offer the control software and um, you know, overall it's like if you know, if they can only test they're like, let's say they're building a pump or something, >> uh, if you're only able to test that five times in a week. >> Mhm.
2:55:57
>> Um, imagine if you could then test it 50 times in a week and how much of a better pump you're going to then deliver and when you need to ship that product.
2:56:05
>> So, so with a pump, I I you know, I could imagine like uh what is it?
2:56:07
CFD fluid dynamics like are you simulating individual fluid molecules flowing through a system or are you acting on a higher level of abstraction like what's in demand right now in terms of simulation and control software. >> Yeah.
2:56:26
So this is more so like you're designing a pump from the very beginning and you first kind of design the system you then fabricate an initial version of it.
2:56:32
Yeah, >> then you need to set up kind of an environment for how you're going to make sure that what you've built is actually going to work.
2:56:38
It's not going to break, let's say.
2:56:40
And so where we said this is the software that will uh both control the pump, but then also all the systems around it that are going to kind of make that simulated environment. >> Yeah.
2:56:50
>> What do you think of the term digital twin?
2:56:51
Is that overused and too hilarious?
2:56:56
>> Yeah, I know it's used everywhere.
2:56:56
I mean, um, you know, simulation is a big component of all of this.
2:56:59
uh but um we're more so into like rapid iteration and testing these systems.
2:57:05
Um so for instance >> uh you know we're running so deep partnership with uh impulse space if you know them.
2:57:13
>> They have a rocket engine test site out in the Mojave Desert.
2:57:14
Our software will run that whole system. It's a large facility.
2:57:18
Um and we enable the engineers there to write all their control software uh you know uh make their command and control interfaces uh and then also kind of exe execute those together uh as they're trying to figure out you know what what they want to see uh on that that system. >> Yeah.
2:57:35
Uh where are where where are you getting traction?
2:57:38
$150 million series B tells me that you're not just selling into, you know, preede uh companies in Elsagundo.
2:57:47
Uh are you are you getting into some of these larger kind of legacy manufacturers yet or is that part of this round? >> Yeah.
2:57:56
No, we've been we've done really well with kind of scaling startups so far.
2:58:00
uh both doing the test software but also control software working with radiant nuclear providing their command and control system.
2:58:07
Um but yeah, we are engaged with some larger companies.
2:58:09
Doug [laughter] Doug is here.
2:58:11
Doug is here physically in the old to come on the show. >> He's coming on.
2:58:16
He's coming on in 10 minutes. You jump.
2:58:18
>> He's like, I have a bug report. I have a bug report. [laughter] >> Standing. >> It's amazing. >> Yeah.
2:58:25
But yeah, we're so doing very well with the kind of scaling startups, but uh we're now starting to engage with both uh larger companies and aerospace, >> but then also in more of uh heavy industry mining, more of industrial control, oil and gas type applications. >> That's cool.
2:58:40
Uh, is this a is a good place to just kind of vibe code, not even [laughter] look at the code, you just kind of, you know, tell mistakes or or is part part of this is like if you if there's software errors on your side, there can be very physical expensive consequences in the real world. >> Yeah.
2:59:00
No, I mean, it's definitely the latter.
2:59:01
I, you know, I don't think a lot of people are really vibe coding this type of software at this point.
2:59:04
Um, and we do have some plans for that to make that enable you to vibe code potentially for uh for control software.
2:59:11
Uh, we do actually have our own programming language, believe it or not, which sounds maybe sounds pretty wild, but there really isn't a good programming language specifically designed for controlling hardware systems.
2:59:24
>> And part of that is actually designing out a lot of the common mistakes that are made.
2:59:27
Uh, so this language, if it's if it compiles successfully, it actually cannot crash when it is run. That's an example.
2:59:34
You know, Goldman Sachs has their own programming language. >> I did not.
2:59:38
>> I think it's called like slang securities language, right? I think Bloomberg. I've heard of that. Yeah. >> Yeah. Yeah.
2:59:42
There's there's number Jane Street. O camel. It's not there. It's open source.
2:59:46
But, uh, respect programming language respector here. >> That's right.
2:59:50
[laughter] >> Anyway, >> uh, so great to finally have you on, Scott. We We still got to hang.
2:59:53
We still got to hang one of these days.
2:59:55
But >> maybe we needed a custom pro programming language for TBPN. >> Yeah.
2:59:59
Tyler Tyler can learn his first programming language. >> This is what we need.
3:00:02
[laughter] He's more of like a plain text programmer >> these days. >> Sorry, Scott.
3:00:09
We're we're having too much fun.
3:00:11
But uh congratulations to the whole team.
3:00:13
I'm sure you'll be back on.
3:00:15
>> We'll talk very very soon.
3:00:16
>> Have a good rest of your day. >> Goodbye.
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3:00:33
And without further ado, we will bring in Sun from Moon Lake, Sun and Moon.
3:00:36
You see what I did there?
3:00:39
Congratulations on the launch. How are you doing?
3:00:40
Thank you so much for joining joining the show.
3:00:44
>> Um, and uh, please uh, explain exactly what you built and how much AI is going on because it's a crazy demo.
3:00:50
We're hopefully going to be able to pull it up, but we'd love to know about how you're positioning the product, how you're explaining it, and what Moon Lake is. Yeah, of course.
3:01:00
So, actually, let me take a step back, explain.
3:01:04
>> Define role models first because there such a term that is overloaded. Yeah.
3:01:09
Um, >> so I define role models as >> models that can ex a predict a model that can extrapolate the next state of the world in an action, >> right?
3:01:18
And in fact, I'm defining this right now because I'm predicting that you guys are going to ask me about okay, how is our warm up different than other warm? >> Sure. Sure.
3:01:28
So this capability is actually just like my world model capability. >> Yeah. >> Right.
3:01:32
And biggest the biggest problems with foundation models and AI today is that these models don't have these world model capabilities such that it can't predict and act in long horizon tasks. >> Yeah.
3:01:44
No, we've seen with like Genie 3 amazing ability to paint on the wall, come back, paint again, and the paint's still there.
3:01:52
But we're so far away from a real game mechanic of you're 5 hours in and you go back and you get a new quest.
3:01:59
Like we're we're far away from that.
3:02:01
At least it felt like that until this demo. >> No, exactly.
3:02:04
Um like there's there's different schools of thoughts when it comes to role models >> and really it comes down to how are you representing the world for the tasks that you care about simulating, right?
3:02:16
So for example for Genie um it's they have really pretty pixels.
3:02:20
Um the problem with with it is that it you know can't remember the world currently more than a minute. >> Yeah.
3:02:30
>> But it's an absolutely you know incredible technology. Yeah.
3:02:33
>> Um >> the way we're approaching it is to say we're going to use logic >> and symbolic representations such as code. >> Yeah.
3:02:41
>> To encode the interactivity and deterministic part of the world.
3:02:44
And then we're going to use pixel prior to then render the world. >> Sure.
3:02:50
But the pixel part is only responsible for the appearance.
3:02:55
>> But games or real world physics, it's there's a lot of deterministic part that is better represented through code and symbolic represations. >> Yeah.
3:03:03
So I when I when I watched the demo was very impressed.
3:03:07
It felt like uh the first like sort of turning an a coding agent loose on like the Unreal Engine platform.
3:03:16
Uh are you using a game engine under the hood?
3:03:18
Uh, and then how much of a harness did you have to build to actually get this result?
3:03:24
Because the the little interactions around there's music playing and you can bowl and you actually have a game within a game.
3:03:32
You can go up to an arcade game and play Space Invaders that it was all built.
3:03:36
Uh, how much of this is the harness?
3:03:36
How much of this do you get for free by sitting on top of Frontier LLMs?
3:03:41
And then how what are you using in terms of game engine and stuff off the shelf? >> Yeah, great question.
3:03:47
So we are we actually are using game engine but we forced an [clears throat] open source game engine and make a lot of customizations on top of it.
3:03:54
>> Oh probably GDO >> our model exactly yeah um to allow our model to essentially leverage a lot of things that offtheshelf models can't. >> Awesome.
3:04:04
>> So >> and then so you can think of it as like this code generation model that is we we postrained to have >> to be able to use a variety of tools. >> Yeah. >> To build the world. >> Very cool.
3:04:16
So, uh, do you want to become a game developer and use your own tool to generate the next super deep world at way lower cost?
3:04:26
Do you want this >> playing in a game right now? [laughter] >> Yes.
3:04:31
the we'll get into simulation theory at the next interview, but uh uh or or or do you want this to be like a consumer tool similar to what we've seen with Sunno midjourney where there are people that go and sort of generate their own images or music and enjoy those for themselves.
3:04:46
Maybe they share them, but maybe they just enjoy them for themselves.
3:04:48
How do you see this being adopted?
3:04:51
>> Yeah, frankly on the our ambition is beyond gaming.
3:04:53
So, we really want to solve multimodal reasoning. Yeah.
3:04:57
>> Like be able to allow models to really do long horizon planning. Sure.
3:04:59
both the virtual world and the physical world. >> Yeah.
3:05:03
>> But in terms of commercialization, short-term commercialization, we want to empower um empower basically people to be able to monetize with their ideas that is not bounded by their skill. >> Yeah. >> Right.
3:05:17
We want to be the enablement layer to shift leverage from skill or domain knowledge to really taste. >> Yeah.
3:05:24
>> So that anybody with good ideas can then monetize in their ideas. >> Yeah.
3:05:27
So, uh, how much of how much of a network is important here?
3:05:30
Like I'm thinking about the priors of Roblox, building games within the game engine.
3:05:36
Uh, and a lot of that comes from the the network effect, the the multiplayer nature.
3:05:41
Uh, do you think that will be important as a growth engine for you? >> Absolutely.
3:05:46
In fact, in our today, you can say, I want to build an open like multiplayer game. Sure.
3:05:50
And then the modeling agent would automatically configure >> Yeah.
3:05:54
database and multiplayer setups for you such that you can actually one click deploy this experience. >> Yes.
3:06:02
>> But importantly that would not be that sticky of a network effect for you.
3:06:05
And so what I'm thinking is like do I wind up with a moon lake handle at some point that I can take across the different uh games that are created through the platform? >> Yes. Okay.
3:06:19
So you will be able to say you know create create an ID and then create 10 10 of your games just monetize on top of less platform and we help you distribute it to the players and help you monetize. >> That's amazing. This is very very cool.
3:06:33
Uh take us through the funding news.
3:06:33
How much have you raised so far?
3:06:36
>> We've raised 28 million total in >> who's in any good >> I think that was I think this is the same round as as as last time.
3:06:44
But it's it's been it's it's an honor to hit it again.
3:06:51
>> Yes, I'll hit the gong for anything that Jeff Dean's ripping checks into. Congratulations.
3:06:55
It's a great lineup of investors.
3:06:57
Uh and thank you so much for taking the time to come on the show.
3:07:01
>> Yeah, great to get the update.
3:07:01
Really impressive progress. >> Congrats. We'll talk to you soon.
3:07:03
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3:07:05
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3:07:21
And you heard us tease it earlier, but we got some very special guests in the TVPN Ultra Dome. We got Adam Draper. >> How you doing? And Doug Burnau. How you guys doing? Good to see you. Look at this outfit. [laughter] Welcome back. What you got?
3:07:38
A hat for fantastic once.
3:07:43
Wait, I I saw a preview of this.
3:07:43
I I saw the nuclear hat earlier on this show.
3:07:50
>> I also got you guys bright orange.
3:07:52
Is this a safe meat stick hanging out of here?
3:07:55
[laughter] >> This guy's got He's got problems.
3:08:01
>> You know, we're up here for a little while.
3:08:02
Is Is the Is the orange because you're doing construction?
3:08:07
>> Well, you see is orange.
3:08:07
I've been wearing orange pants for about 10 years. >> For about 10 years.
3:08:11
You got to Yeah, you got to have the vest for when you're doing video podcast cuz we didn't see your pants last time.
3:08:18
>> Well, I asked Twitter what I should wear today. >> Yeah.
3:08:22
>> And so I was just walking around LA. >> Yeah.
3:08:24
[laughter] >> And they said the Dumb and Dumber suit. >> There we go.
3:08:28
>> And so I uh went walking for costume shops and I ran into a great guy who tried to sell me everything in the store. >> Fantastic.
3:08:36
>> And I ended up on this. >> Can we open this? What? Can we open this? Yeah.
3:08:39
I want I want you to open this.
3:08:43
>> You got to give him time to >> I'm a collector of things.
3:08:44
I just I I I felt uh inspired here. Open the whole thing. >> Okay.
3:08:50
Do you guys know Funko Pops?
3:08:52
>> I am familiar with Funko Pops. What did we get here? What is this? >> Whoa. Whoa.
3:08:55
It's [laughter] a Look what it says. >> Whoa. Custom. >> Custom Funko Pops. >> Crazy. Crazy.
3:09:04
>> You can just get these made. How does work, >> dude?
3:09:06
You know, I can't believe a gift far enough in advance. >> There you go. This is amazing. >> That's crazy.
3:09:12
I feel like we got to protect those so nobody kind of messes with them.
3:09:16
>> Yeah, we should consult with Dylan Evercott on our team who knows collectibles very well because we might have to get this PSA certified.
3:09:20
I think we should something like that. [laughter] >> Amazing. That's amazing. Thank you.
3:09:27
>> Uh Doug, good to see you again.
3:09:27
Uh how how are things going?
3:09:29
Uh >> they're going really great.
3:09:32
>> I can imagine that demand for energy is in endless supply.
3:09:34
Uh, what's the latest in your world, though? >> Absolutely.
3:09:38
Humans like being humans.
3:09:39
They like lots of energy. >> They do.
3:09:41
>> And you better get ready for the gong. >> Okay. What you got for us?
3:09:44
>> Oh, [laughter] we just we just raised $360 million. >> Gong founder. >> That's a big number. >> We'll kick it off.
3:09:56
>> Congratulations on saying the biggest number. >> 360 million. >> Just in case. >> Fantastic.
3:10:01
>> You want another gone?
3:10:01
Is that [laughter] >> I want you to hit the horse.
3:10:04
Actually, that's on your side.
3:10:06
>> We got to hit the horse.
3:10:06
We should make a horse gone. >> Okay.
3:10:10
So, >> sounds a bit wrong.
3:10:11
So, I I I mean I', you know, I've been to I've been to the radiant facility, nailundo.
3:10:14
Does this unlock a new facility?
3:10:16
Is there going to be a separate manufacturing line?
3:10:18
Just a lot more humans working join the team.
3:10:22
Like, what is the money for?
3:10:25
>> Yeah, it's uh mainly a scale of production at our factory facility in Tennessee, which we signed for in October. >> Congrats.
3:10:31
about 80 acre site right now and already broke ground. Okay.
3:10:33
Digging on site and building's going up. It looks awesome. I saw art yesterday.
3:10:39
>> And so, so now you have when we were last talking, you were talking about still doing design work.
3:10:43
You were working on the the what was this? The helium loop.
3:10:47
I remember you explained some of this to me very nicely, dumbed it down.
3:10:51
Uh but, uh, how far are you along in sort of locking the design?
3:10:57
Because if you're setting up a manufacturing plant, I imagine that you're going to lose some flexibility at some point, right? >> Yeah, absolutely.
3:11:02
So, we're doing a dome uh a test in the dome very soon.
3:11:07
>> U and we actually since we talked last, we've gotten approval from the Department of Energy. >> Cool.
3:11:12
>> Um it's a really boring sounding complex name, but it's it's the approval to fuel and go go to full >> approval.
3:11:17
Like that's more gongworthy.
3:11:19
We should have the [laughter] >> There's a lot of people with money.
3:11:26
There's only one government that can actually put down a stamp, you know.
3:11:30
>> Uh it it is it is incredible progress that doesn't get enough uh doesn't get enough credit. But anyway, so continue. >> Yeah.
3:11:37
So, uh it's called a preliminary design safety approval. It's done.
3:11:39
So, this means the design is locked.
3:11:41
So, that thing we were working on finishing out. That was the big event.
3:11:43
And now it's been months of review back and forth and we're good. We're approved. The only ones. >> So, so no big change.
3:11:48
Oh, we're we're moving away from helium.
3:11:50
We're moving away from >> tric.
3:11:51
Well, this is just I should say that's just for the first unit that goes in the dome and we've got more of a team now working on the production units that we're going to build lots of and build many at a time, right?
3:12:01
Up to 50 per year from that factory site. >> One a week.
3:12:06
>> So 50 that's 50 megawatts.
3:12:06
Are you still thinking about the one megawatt architecture the diesel generator? >> Yeah. >> Okay.
3:12:12
And then in terms of demand uh initially there was a lot of demand from uh you know stranded places where energy is very expensive to get to.
3:12:20
you're off the grid, you're on an oil and gas site or you're in a military context.
3:12:24
Has the has the demand shifted?
3:12:27
Have the AI folks showed up? >> Oh, yeah, absolutely. Okay.
3:12:30
Uh I mean, we have an announced deal with Equinex for 20 units with down payment on them.
3:12:35
And uh you know what what'll end up happening is we're going to make many reactor products, right?
3:12:38
Nuclear reactors can be products.
3:12:41
>> Y >> uh that really has never happened before because usually you dig a big hole in the ground, you build a building, you're really you're making a building. >> Y >> um Right.
3:12:48
And uh it's not a it's not a product.
3:12:50
You have to for a to be a product, it has to be mass producible.
3:12:54
And so that's really what Radiant is all about.
3:12:55
But we're going to be making reactors for space. Yep.
3:12:59
>> Reactors for maybe the bottom of the ocean floor.
3:13:01
Uh reactors that float reactors >> reactors on a truck, reactors on a plane.
3:13:06
Think about them as like they come out of a building.
3:13:09
>> At sound effect, [laughter] >> that's the horse.
3:13:15
>> Walk me some of the economies of scale.
3:13:18
uh if I want in a in a in a long time whenever you're whenever you're it's ready if I want 10 megawws is it more efficient to get 10 one megawatt reactors or just scale up and create one 10 that maybe is bigger maybe has different you know manufacturing and uh and transportation requirements but uh when do you think about actually scaling up the design versus just selling more of the existing product? >> Yeah.
3:13:45
Uh so our mandate is really mass-produce.
3:13:48
And so we don't want to make things that are not that are immobile.
3:13:51
>> Um and so if you operate a reactor that's at a larger power scale, it's going to be more efficient.
3:13:54
There's actually a neat effect where like if you put a little bit more nuclear fuel in a design, that fuel makes the other fuel that you had go a little further.
3:14:02
>> So it's very cool and it's this like exponential scale.
3:14:05
>> Um but you know, we know what we're doing.
3:14:07
We're totally focused around efficiency that we provide is more like deployability, right?
3:14:10
If you go, I want power next week, we can actually do that. Yeah.
3:14:15
>> And if you go too big, you can't do it. You lose that. Yeah.
3:14:18
>> So that's what Kidos the product is about. >> Got it. Makes sense.
3:14:21
>> Um but this round is really exciting.
3:14:21
Uh we actually had uh you know Adam led the rounds and actually has invested in every round.
3:14:28
>> Every round we've ever done.
3:14:30
>> I used to be called the most invested investing.
3:14:32
So he used to say I've invested the most.
3:14:34
But now I get to say >> is this your biggest check ever? >> Yeah.
3:14:38
So boost VC uh preede for uh ma magic and mutants and historic things and that's how we look at it. >> Cool.
3:14:47
>> Uh we generally are investing $500,000. >> Yeah. >> Into all the deals. >> Seems like a shift.
3:14:53
>> Um [laughter] >> but every once in a while you uh you know you encounter a company and a founder who you just enjoy and care about and you want to go all in.
3:15:03
And so >> we we in October after they had announced this uh the Nashville plot. >> Yeah.
3:15:12
>> Uh my partner and I, Brighton, we got together and we were like, >> can we do it?
3:15:18
>> And so we we we decided to just back up the truck. We went for it.
3:15:20
And fortunately, he is incredible investors.
3:15:25
Uh he's an incredible founder and we everyone just re everyone reuped. We got to lead it. It was fantastic. >> Yeah.
3:15:32
Now, >> does that change the overall strategy of boost or is this sort of like a special case where you went to the LPs and said there's a specific a specific opportunity that we're targeting?
3:15:44
>> Yeah, for the So, great question.
3:15:46
>> Um, I do think that there are opportunities like this that emerge when you get to know your founders well.
3:15:51
And so, I've invested in 600 companies over the course of 15 years. >> Uh, here we go. >> I'm I like that. [laughter] Yes. Yes.
3:16:02
And uh and you know, we we we do follow on, we do those things, but uh I just feel, hey, >> if Doug does this, if the team at Radiant is capable of doing this, this makes a historic change in a world I want to live in.
3:16:19
>> Um and so I ended up getting to care about the the founder as well as the mission.
3:16:23
And so by doing that, I get to So my my quick answer, you asked a very specific question. >> Yeah.
3:16:28
uh in the situation where that will continue to be true, it would be really fun to do more of these.
3:16:35
>> However, I wear orange pants. >> Yes.
3:16:40
>> And I love the early stage. >> Yeah.
3:16:43
So, you should still Yeah.
3:16:43
You're still very [laughter] focused on the early stage.
3:16:46
Like, we shouldn't just think, oh, Boost is just a ma major growth equity firm now.
3:16:50
>> Uh I I don't I don't think I could sell Yeah. [laughter] I don't know.
3:16:53
No, I just love the energy.
3:16:55
I love being the gateway to be able to help people pursue their dream of whatever the thing is.
3:17:02
>> Um, and I've been able to see people of across the entire stack for over the last 15 years.
3:17:06
And, you know, I I also now get to, you know, be in the room and watch watch nuclear reactors be built. >> Yeah.
3:17:14
>> Yeah. Are there are are are are LPs and investors that you talk to sort of receptive to this idea that uh nuclear technology is like sort of getting pulled forward by the AI boom but sort of uncorrelated with it because like we still need energy for oil and gas exploration and the military and all these different things like it's not so hyperindexed on like make or break do we get to ASI or not like this technology is useful in all scenarios
3:17:45
>> because ASI the new a it's the goalost we have our goalpost over there >> there's a great book called scythe that calls that the the thunderhead and >> thunderhead >> and so we can call it that now I'm going to call it thunderhead for the rest of
3:18:00
>> okay [laughter] >> uh so the I mean the general answer is I think across all markets energy only gets consumed more and that's like such an easy sell for the and >> so it's it's pure execution risk at this point. >> Yeah. And so we know the demand is >> Yeah.
3:18:18
And so we know the demand is there.
3:18:20
Uh we know that there there's a huge nuclear wave where that the government is behind.
3:18:28
>> Um and so limit limited partners and other investors they want access.
3:18:31
Now when when Doug pitched me seven years ago like none of those things the the energy was still a real problem. >> Overnight success. >> Yeah.
3:18:43
>> [laughter] >> I got a I got a hot hand right now. >> Oh my [laughter] god.
3:18:49
Uh the none of those things like none of the other things were true.
3:18:53
It was uh you know people thought it was a regulatory burden.
3:18:56
People thought like the government would never allow you to do this.
3:18:59
But >> you know we have built nuclear reactors before.
3:19:03
We have nuclear reactors.
3:19:03
And so when he pitched me on a phone call in 20 minutes I said yes.
3:19:08
And we wrote the largest check we had ever written at that point.
3:19:11
that point. also and then we this last October we wrote a way bigger one but >> how much work do you think needs to be done on the on the public perception side because right now data centers are unpopular and I think the number one reason is not slop in your feed it's
3:19:30
energy prices going up and if you build more energy if you build more clean energy it should be a win-win everyone should be happy but I just have this inkling that if if you go When you say we're building a data center, we're going to make it look good. It won't be
3:19:44
It won't be visibly obstructed and we're building the power plant for it.
3:19:48
It's a nuclear power plant.
3:19:50
You're still going to get a few protesters.
3:19:51
Maybe not as many, but they'll still be there.
3:19:53
So, how do you think public what how do you think about positioning nuclear for consumers, for people that might have this in their neighborhood at some point or in their state or in their country even >> or in their podcast studio >> ideally. Ideally, sign me up.
3:20:07
>> ideally. Ideally, sign me up. Uh you guys want but [laughter] uh but and then and then how do you think about actually we actually did look at it we looked at a studio space we were about to put an offer down on it >> and uh we were like what's in that door
3:20:23
and they were like oh don't worry about it that's just the machine and we were like oh I'm actually very curious about it and I'm actually pretty worried about the machine [laughter] that's just the machine >> that in that case they were cleaning the soil from some industrial waste that [laughter] >> happened like 50 years prior. >> Soil remediation,
3:20:41
>> Soil remediation, >> soil remediation 100 years on.
3:20:42
But anyway, uh communication about uh the risks of nuclear, the benefits of nuclear, what do you think are the important uh points to get across and then how do you think those diffuse through the populace?
3:20:54
Yeah, it's really important first off to right to talk to the public and really explain how to think about nuclear and I I wrote a thing called Adams for Prosperity that lays out some of those points, but we will we are making it now into a cooler kind of series.
3:21:09
We can't go through all of the individual points here. >> Yeah.
3:21:13
>> Um but I think you're right about AI, right?
3:21:15
I think that people don't like really a big building going up like a big monstrosity that's going to bring a bunch of attention and people and traffic and like all the the stuff that it brings. >> Yeah.
3:21:25
And you also have the added complexity of the energy markets typically being very regulated, right?
3:21:30
There's a lot of laws around it and they can just get a higher rate.
3:21:32
They have to pay, >> right?
3:21:34
If they get enough votes. >> Yeah. >> Right.
3:21:36
And and so that's probably more more on the growth side of things.
3:21:39
The good news is the thing that we're doing >> is the opposite.
3:21:42
You know, most people doing nuclear are targeting something big.
3:21:46
Um you know, and and there's a lot of excitement around nuclear right now and AI.
3:21:50
A lot of people are saying a saying.
3:21:53
They're building a building.
3:21:55
>> Um, we're not doing that. We're doing the doing. >> Sure.
3:21:59
>> So, uh, and what is that?
3:21:59
It's just reactors that we build. They're on our site.
3:22:03
It's a building far away that you never see as the customer and it just appears when you want it.
3:22:07
It goes away when you want it to.
3:22:09
You call us and go >> pick it up. >> Yeah.
3:22:12
>> It's kind of beautiful.
3:22:12
It's like a totally different from other nuclear.
3:22:16
So, I think that will help quite a lot because it's just such a different thing to be able to go, >> you know, I can have clean power and you and we go, yeah.
3:22:22
And they go, I can have it next week. Yes.
3:22:23
Uh, and they go and it it can get send it away anytime. Yep. Anytime you want. >> And no waste. Yeah.
3:22:28
We take that and we handle that.
3:22:31
>> Talk about the ramp because we were looking at the data center that was recently protested in New Brunswick, New Jersey.
3:22:37
It was tiny by AI comparisons. 25 megawws.
3:22:41
Uh, you could probably supply it in half a year.
3:22:43
But Meta's average campus right now is around 500 megawws.
3:22:48
Take you 10 years to power that.
3:22:51
What does the ramp up look like? >> Your next jack. [laughter] >> Yeah.
3:22:55
What does the ramp up to get from 50 a year to 500 look like for you? >> Uh so I don't know. Right.
3:22:59
It's uh it's not really something we're trying to address. Yeah.
3:23:04
>> What I'm most interested in is being able to put reactors in really crazy places. Yeah.
3:23:08
>> Like put a reactor on the bottom of the ocean floor like right like like I was saying.
3:23:12
>> Why would Why would you actually want one on the bottom of the ocean floor?
3:23:13
Uh it's the same reason you would go like put a research facility in Antarctica, right?
3:23:18
Cuz it's far away and it's weird there and you're going to learn some things and we haven't ever done it before. Interesting.
3:23:23
>> And so it's a frontier and that's kind of all that I'm excited about.
3:23:25
Frontier put on sync some sort of uh you know remote lab that had camera equipment, lights and sensors and you could understand what's happening at the bottom of the ocean. That's fascinating.
3:23:38
>> I don't know what you'll learn.
3:23:39
>> James Cameron should become the spokesperson. >> Anybody can Yeah.
3:23:41
If you want we can make a reactor for that, right?
3:23:42
And the thing is like if you want you can't use a combustion power source and there's definitely no sun.
3:23:48
>> So it's just think about that right >> where the only thing you can do in a lot of places actually not just that one.
3:23:54
It's just a a good example to get people to think like oh shoot okay bottom of the ocean floor >> all the way up to anywhere in space as far from the earth as you want to be >> as far from the sun as you want to be. >> Oh true. >> Think about that. That's weaker on Mars. Right. >> Yeah. Yeah. >> Yeah. Interesting.
3:24:08
>> Although you'd still use it. I like both.
3:24:10
I like solar plus nuclear. >> Yeah.
3:24:13
I think you're on the right path though that education is one of the most expensive issues, right?
3:24:18
And stories like having a nuclear reactor on the ocean floor that's functioning and we're learning >> tell a great story.
3:24:25
And so those stories become easier to tell as more of them exist.
3:24:31
>> Uh the hard part is the in between.
3:24:31
We we saw this when we were in crypto also.
3:24:36
>> Uh everyone was saying like the banks will never let you do this, the governments will never let you do it.
3:24:40
Now obviously like it's on the Congress floor.
3:24:43
It's all the >> ra so many big massive >> Yeah.
3:24:46
And so like transitions take time and they're expensive but like it's important because the end consumer gets a better product. >> Yeah.
3:24:53
In the early stage of I I would call like the hard tech boom, the defense tech boom, the Elsagundo boom, the dollars that were being raised >> about 1980s. >> Yeah.
3:25:04
I'm talking more about like 2022 maybe when people started paying attention in Silicon Valley.
3:25:09
Uh but the dollars were small and so they could be sort of flyer checks from VCs.
3:25:13
Now we're getting into real numbers.
3:25:15
Do you What do you think about the relationship with the SAS apocalypse?
3:25:21
It feels like public markets investors are rotating away from software.
3:25:25
They would love something like industrials energy, something that's clearly going to exist in a hundred years, no matter how good the computers get at at AI.
3:25:34
Uh but then in Silicon Valley, we'll talk to founders all the time where they're raising for a software product.
3:25:39
Basically, it's just AI indexed and so they're soaking up 200 million of capital every other day.
3:25:44
Uh what's happening at the early stage in terms of uh excitement and at that growth stage to fund projects like this?
3:25:53
Well, as we are growth investors. >> Yes. Yes. Officially.
3:25:57
>> Probably not when you guys preed and series D.
3:25:59
>> No, I actually have a shirt.
3:25:59
It says preede and series D.
3:26:00
[laughter] >> You're thinking you're actually thinking on the longest time around.
3:26:05
[laughter] >> I'm going to make a custom >> crazy >> uh gift.
3:26:10
Uh >> technology looks like magic. >> Incredible.
3:26:16
>> My uh well, here I'm sure we both have thoughts on this.
3:26:19
So, we've been investing in hard tech.
3:26:20
Uh we have a way of when everyone really gets excited about something, we like looking the other way.
3:26:28
And over COVID, we saw everyone getting really excited about software because we were all >> locked in our houses and inside and like software was where you saw everything.
3:26:36
>> Anything for remote work is just [clears throat] booming.
3:26:38
>> And so we made a conscious decision to be like, hey, that's not always going to be true.
3:26:41
Let's invest in uh in-person businesses that are that are like physically expensive, okay, that are high capex.
3:26:50
And so we obviously uh invested in Radiant multiple times and a bunch of other Starfish, Venus, just an incredible number of fantastic companies.
3:27:02
>> Um and so like we were able to there there's a I think that there's a sense in the investment world where they want to be a part of something that's important, >> but sometimes they're not considering whether or not it's a good investment.
3:27:16
And I think that balance is at uh scale right now.
3:27:18
That that would be my like and I think we're they're probably overestimating the SAS apocalypse.
3:27:22
I think so many talented people are building so many incredible things.
3:27:28
>> Um I was just at the upfront summit which was just over here walkable. >> So thank you.
3:27:33
This was very efficient for me.
3:27:35
[laughter] Um, and you know who I love to hear speak is Kathy Wood uh from ARC because uh she's just so optimistic about unlocking technology assets to everyone and a lot of other people were sort of in the AI negativity bucket and I was like I >> how can you not be optimistic?
3:27:54
We just saw >> you know everyone who's building awesome stuff on this show, right?
3:27:59
Like incredible AI things. Yeah.
3:28:00
Well, I don't know if you saw, but uh Square just did the largest layoff in S&P 500 history by on a percentage basis. >> That's crazy.
3:28:12
>> And so that's that's that's kind of the the flip side.
3:28:14
And and uh even even Howard >> Hey, get get in touch with Boost VC. >> Okay.
3:28:20
>> Uh and we we're going to invest in some Square alumni.
3:28:25
I think that it's the >> you got 4,000 of them back. Fantastic.
3:28:29
So get the Brink trucks, right?
3:28:29
There are talented people there.
3:28:31
We would love to invest in them.
3:28:33
And I think what AI is really causing is this eruption of amazing uh individual entrepreneurs. It's like the next wave. Yeah. >> So, it's exciting. >> Very interesting.
3:28:45
>> On that note, you know, of optimism, we there's a very cool video we released just yesterday that I thought you might want to see. >> Yeah.
3:28:52
>> And I think you're I think you guys have so we can do it.
3:28:55
>> We can have a have a look see >> and just shows shows what we're building. Right.
3:28:59
So we talked about the approval the >> the regulatory approval. >> Yeah.
3:29:08
>> I remember seeing >> the core plate.
3:29:09
This is >> I think you showed me like the raw material for this.
3:29:13
>> That's hard in the loop.
3:29:13
That's doing orbital welds tubing.
3:29:16
>> That's this the mounts for the pressure vessel.
3:29:17
That's the forged pressure vessel piece. >> That's crazy.
3:29:21
>> And that's what we're doing. >> Yeah. Amazing. >> July 4th. I love it. >> So cool. >> How awesome LA is.
3:29:27
It's just like huge physical things like we're we're back to building huge physical things.
3:29:34
>> So you'll bring that design to the dome. >> That's right.
3:29:37
All that is the actual nuclear reactor hardware that we're showing.
3:29:39
And this is really like the most that we can possibly show to the public.
3:29:44
>> Uh and we now have two buildings.
3:29:44
One is just all manufacturing.
3:29:46
It's like you go in, it's all machine shops, these big fancy glove boxes where we're doing welding with controlled gas conditions.
3:29:53
And it's it's so much different from the last >> Yeah. Yeah.
3:29:55
When I was at the when I was at the uh the the the office, um >> were you sending out for like CNC parts? Were you? >> Oh, yeah. A lot of stuff.
3:30:05
We had to send out a ton of stuff.
3:30:08
>> I noticed a lot of equipment, but there wasn't that much actual machining material to like make stuff that you would put on. Interesting.
3:30:14
So, that must have the machines in the actual building must speed up iteration as well, right? >> Absolutely.
3:30:19
a and a lot of the incoming capital allows us to make those moves and do those things and even invest a little bit in R&D for things that are really far out that aren't even a product yet that are just like >> we realize the limitation and we're like we're going to go push on that thing and if it moves we'll have something no one else has. >> Yeah.
3:30:35
Uh last time I was there I think you had around 40 people.
3:30:38
How big is the >> Oh my god. 150. >> Wow.
3:30:41
Uh talk to me about that road.
3:30:41
Uh I I I mean you were at SpaceX for a long time.
3:30:48
Did you ever manage that many people?
3:30:50
Is this a new challenge for you? >> No.
3:30:52
Uh I I I did a very weird job when I was at SpaceX. I was there 12 years.
3:30:54
Uh and the first couple years I >> success.
3:30:57
[laughter] >> I I loved it.
3:30:59
It's why I stayed 12 years, right?
3:31:01
It was the coolest mission like make life multilanetary. I love that.
3:31:04
And and I I left to make a reactor company to make power for that mission still like I I still want our reactors to go that route. Totally.
3:31:10
uh of course a different type, but uh >> I was doing stuff like uh you know I made the first Falcon 9 ground system and then I made the the first two rockets.
3:31:19
I traveled around the country testing the first two Falcon 9 uh that flew >> and then I did the first ever rocket with legs and that was like report directly to Elon with like three other people like go to his desk. Yeah.
3:31:28
And go here's what we're doing.
3:31:31
He would be like and we got so lucky that like every time we came to him we're pretty much like and the qual tank passed and it worked and the schedule's good and he so he loved it right. It was like great.
3:31:38
he loved it right. It was like great. Um but from there it was like then I was doing Boring Company and I was doing Hyperloop is every Elon like side project which is exciting around special projects so not really full scale up constantly but now it's higher higher
3:31:52
higher >> but I would just go and talk to whoever I needed and cross every line possible and there I didn't use the right channels of communication I just pulled all the assets and I'm building a thing I'm building a thing and I'm ignoring everything else and I that's basically still how I operate. >> Yeah, that's great. Hidden candy shop. >> Yeah, that's great. Hidden candy shop. >> Powerful.
3:32:07
>> Anyway, Jordy, anything else?
3:32:08
>> No guys, congratulations.
3:32:08
Thank you so much for coming.
3:32:10
>> Thank you for coming here. And this is great. This is a great one. >> Uh so excited.
3:32:13
I I I genuinely cannot wait to get my own.
3:32:17
So I don't know what I'm going to use it for yet, but it's going to power your >> How many are you going to need in total?
3:32:24
>> How many minis can you talking about the ocean? >> 35 2035.
3:32:26
I'm going to need some for a boat.
3:32:30
I just love an electric nuclear boat.
3:32:34
>> I mean offrid for the preppers.
3:32:34
for the rich preppers, the AI billionaires, they might want it. >> Yeah. Yeah.
3:32:39
Well, and if you have some real estate on the moon, it's not very high value without power.
3:32:41
We want to get some power for that. I like that.
3:32:45
>> Guys, >> thank you so much. >> Hang out.
3:32:48
Hopefully, we can see you and uh >> and wrap up the show.
3:32:52
>> That concludes our guests for today.
3:32:55
Thank you for watching TBPN.
3:32:58
>> Let's get more into the block news. >> Okay.
3:33:01
Yeah, you can pull some up that.
3:33:02
The other the other big news is that Nano Banana 2 launched today uh combining pro capabilities with lightning fast speed.
3:33:07
We of course did uh this is uh the latest image generation model from Google and uh Tyler gave me a little review.
3:33:17
He ran a couple benchmarks.
3:33:19
Uh some pretty impressive uh results.
3:33:21
Uh it you said it's slower and is that because it's it's reasoning more, you think? >> Uh so it's unclear.
3:33:27
I I saw people saying online that it was actually much faster.
3:33:30
So I I'm I'm curious if it was just like while they were just deploying it for sure and it was on Google. It was on the studio.
3:33:37
It wasn't on the the Gemini website when I was trying it. Yeah.
3:33:39
So So that could be I I'm not actually sure if it's >> Yeah.
3:33:42
I mean the headline is intelligence and visual quality at flash speed.
3:33:46
So they were going for something faster.
3:33:49
But yeah, I mean these these models take >> I think I was using it right when it was being deployed.
3:33:52
>> Um but there's >> upgrade over Nano Banana Pro. >> Yeah.
3:33:56
uh a lay flat infographic depicting the water cycle, some cartoons.
3:34:01
Yeah, it really it really is always been great at nailing like these m these complex graphics that typically you would absolutely have to do piece by piece and then maybe add the text afterwards because you would get slight hallucinations or misspellings and uh it seems to be oneshotting these things at this point.
3:34:18
Uh so we of course ran Waldo bench where we try and use a generative image model to create a photorealistic uh where's Waldo graphic and uh you'll you'll you can be the judge.
3:34:31
This took you a couple prompts but we did in fact get a where's Waldo that fits the right perspective.
3:34:38
I feel like the the scale of all the characters is correct and most importantly there's only one Waldo and he's somewhat hard to find. It's not the hardest. Where's Waldo?
3:34:48
So, I'd give it sort of an eight or nine out of 10 on on Waldo quantity and placement.
3:34:53
Um, but as you zoom in, one of the key features of where's Waldo is that there are little story lines playing out throughout the image to distract you from finding Waldo.
3:35:05
And so, that is in fact happening here.
3:35:08
You can see some folks building a some kids building a sand castle, some people in line for uh what looks like ice cream. There's a mariachi band. Uh there are sunbathers.
3:35:18
There's a there's a large sand castle that's gathered a lot of folks.
3:35:20
The the level of of quality once you actually zoom in very very closely on the individual people that are being depicted at a very small scale.
3:35:30
This is totally nitpicking.
3:35:32
Um but uh there are some hallucinations still.
3:35:35
It's not quite at the level of visual fidelity of a handcrafted where's Waldo, but it's getting close.
3:35:42
And so congratulations to everyone over on the Nano Banana 2 team who made this possible.
3:35:47
Uh it's certainly uh a major step forward.
3:35:51
Although I'm moving the goalposts again because I want I want my full Where's Waldo just as intriguing as a typical Where's Waldo?
3:35:58
Jordy, what else do you have for us on the block news?
3:36:00
How is the internet reacting to the news that Block laid off?
3:36:04
I was so >> I mean it's 4,000 people which is a huge number.
3:36:09
And then I was trying I ran a ran a deep research report to try to find because it's certainly not uh not the largest layoff ever >> but it is the largest layoff as a percentage of the overall workforce in S&P 500 history.
3:36:26
>> Wait, how is that possible?
3:36:29
So the second largest layoff in S&P 500 history was Phillips >> at 22 and a. 5%, Chevron at 17 1. 5%.
3:36:40
Verizon >> nearly half >> uh 15 Intel did 15% in uh 2024. GM did 15%. Yes.
3:36:46
In 2018, Meta >> So I guess I guess TW the Twitter the Twitter restructuring doesn't count because it was delisted before that happened. Yeah.
3:36:55
So, Twitter went from 7,500 to uh 1,500.
3:36:59
And yes, I I I I I think you're right.
3:37:03
It might not have been in the S&P 500 at the time. >> Yeah, it wasn't. >> Uh interesting.
3:37:06
Well, there's some reactions.
3:37:07
Will Slaughter Bama Bond says in three years from December 2019 to December 2022, Block more than tripled its headcount from 3,900 to 12,500, unwinding less than half.
3:37:19
an insane COVID overhiring binge has much more to do with Jack Dorsey's managerial incompetence than whether AI is going to take your job.
3:37:29
And so people are immediately jumping to is this AI, is this not?
3:37:34
The stock's up 25% on the news.
3:37:36
Um, so the investors certainly think it's the right move to make, the right hard thing to do.
3:37:40
Um, the other interesting thing is that Block, if I'm correct, did a fairly large merger with Afterpay.
3:37:48
And I don't know how much overlap in the employee base there was, but it's not uncommon when a merger of those two sizes, 10 billion dollars to I think a afterpay merger was in the tens of billions.
3:38:02
um after afterpay uh block acquisition. Let's see. It was 13. 9 billion.
3:38:10
Um it was an all stock deal.
3:38:14
It was originally announced at 29 billion and I'm not sure how many uh uh total employees.
3:38:19
Let's see if they we can pull up this.
3:38:21
Afterpay had um around 1,500 employees.
3:38:27
And so there's a few different things this go.
3:38:29
Dan Primac says it's stunning in its cander.
3:38:31
And if you're one of those spared, how could you not be wondering how long until AI comes for your job, too?
3:38:39
If CEOs get comfortable that this is okay, let alone if they believe shareholders will be rewarded for it could set off a stunning layoff wave.
3:38:49
Very interested in the AI will create. >> Yeah.
3:38:52
So, the the obvious push back to uh over at Salana is making it.
3:38:55
and he said, "Didn't Jack have 10,000 people running this website when only 75 were needed even before AI?"
3:39:00
So, yeah, the >> uh again, it doesn't really it doesn't really matter whether or not a company is actually getting tremendous efficiency from AI.
3:39:15
>> Every CEO is going to do this.
3:39:15
And we've said over and over and over, I'm surprised more CEOs haven't done the Elon thing.
3:39:22
Salesforce has 76,000 people at the company, right?
3:39:26
It's basically a city and >> yeah, it's really really sad.
3:39:34
Jared Sleeper, who has a fantastic episode on um >> uh uh OddLots about the SAS apocalypse, he says, "First of many sad days, as painful as it is, Jax did focus service by being decisive."
3:39:50
of course really sad day.
3:39:53
These employees will be able to quickly go and hit the job market.
3:39:55
Uh which probably gives them somewhat of an advantage over future layoffs like this.
3:40:06
>> If you're not a software engineer, there should be a wakeup call to what has happened in the past few months with AI engineering tools. Everything has changed.
3:40:12
Now we get to watch as companies learn how to either use these tools in earnest or slowly fall behind, says Dustin Curtis.
3:40:17
I would I I'm very interested to learn the shape of the layoffs.
3:40:22
Um did they lean more software focused or less software focused?
3:40:26
Um this is certainly just one company, one example, but uh uh interesting to see how this matches with the Citadel rebuttal of the Catrini piece.
3:40:37
You a lot of people are seeing this as like vindication of the Catrini piece.
3:40:43
Anyway, uh we will cover it more.
3:40:43
Hey, Kim says, "Every media person, please read this before writing your narratives tomorrow.
3:40:49
Jack Dorsey is Jack Dorsey. Do not extrapolate. Do not pass go."
3:40:54
>> Um, responding to Will Will Will Slaughter's >> post that I just >> post. >> Yeah. >> Uh, yeah.
3:41:01
Square for context did around 24 billion in total revenue in 2025. Mhm.
3:41:10
>> They've been trading at around 30 even though the business is profitable and growing and so had certainly been beat up.
3:41:17
Uh but uh very very sad day.
3:41:21
Gavin Baker had a post that Kyle Harrison highlighted.
3:41:26
He said the fact that Twitter is running well with headcount down significantly really matters whether they admit it or not.
3:41:34
Everyone in SV admires Elon.
3:41:34
A lot of venture funded CEOs are sending emails like this inspired by Elon and taking drastic actions. Margins are going up.
3:41:45
>> Um, Bology says, "This is the first AI cut and it will send shock waves.
3:41:50
Remember, Jack is one of the greatest founders of all time.
3:41:52
He created this platform that we're all on has been early to many technological shifts and Block is doing very well as a business.
3:42:01
So for him to cut 40% headcount in this way is a signal to everyone in tech. Get good now. Become indispensable.
3:42:05
Work nights and weekends.
3:42:07
Learn the AI tools and raise your game.
3:42:09
Or you might not make the cut as an employee or as a company.
3:42:13
Uh I know that sucks, but capitalism is natural selection.
3:42:15
The market is unforgiving because you are the market.
3:42:18
After all, it's not like you're buying some random gallon of milk from the store.
3:42:22
You're always buying the best product at the best price.
3:42:23
So to for apps, your customers are are always installing the best piece of code they can get.
3:42:28
And because AI is going to create new winners, if you aren't the best in your market, someone may become better with AI.
3:42:33
To be clear, block severance is generous by any measure.
3:42:35
20 weeks of pay, six month of health insurance in invested equity.
3:42:39
All of that goes far beyond any typical package.
3:42:43
Jack did his level best to cushion the disruption.
3:42:46
The laid-off are a temporary unfortunate class as opposed to a permanent underclass.
3:42:51
But had he not leaned into the AI transition, he might have had to lay off more people slowly and over time as faster competitors went after his market share. How would they do that?
3:43:00
Sure, AI is not a panacea by any means, but the closer you are to software engineering, the more aggressively you need to embrace agentic workflows.
3:43:07
The AI companies are already doing that and places like Stripe, Shopify, Coinbase, and now Block are pushing hard on this area.
3:43:12
There will be overcorrection, but the fundamental technical innovation is real and you need to either disrupt yourself or get disrupted.
3:43:20
I think that's generally >> generally good advice. >> Mhm.
3:43:28
Anything else in the timeline you want to review?
3:43:33
>> Um >> I'm sure we will be covering >> ACE 16Z says every tech company can fire at least half their people, but most can probably do 80%. >> Black pill. Thanks. >> Yeah.
3:43:43
And to round it off, we'll leave you with a white pill. >> Okay.
3:43:48
or something like a white monster which is that Joe Weisenthal is sharing the chart for the Monster Beverage Corporation which seemingly is entirely AI proof.
3:44:00
>> Yeah, Monster's been ripping.
3:44:02
Fascinating company history founded by a very >> How much do you think uh how much do you think Catrini paid paid Square to do this live? [laughter] >> Yes.
3:44:15
to to validate >> how deep does it go in the victory lab after being mocked for the last four days. >> Yeah.
3:44:24
>> Um Fed speak says on one hand Jack is a notoriously bad business operator and on the other hand it's over. Yeah.
3:44:32
The the the the push back on um on Bology saying Jack Jack is one of the greatest founders ever is simply that yes he is one of the greatest founders ever.
3:44:42
And I don't think anyone would say that he is the best operator >> of >> of of um and and that's okay, right?
3:44:48
But sometimes being the best founder means making the super hard decision and having the foresight to >> uh >> get ahead.
3:45:00
>> It would be a very weird situation if only Jack Dorsey founded companies with stand 80% >> same dude bought Jay-Z's title.
3:45:05
Not the greatest operator.
3:45:09
>> Yeah, take him's white pelling.
3:45:09
He's always white peelling. enjoy him.
3:45:14
Anyway, thank you for watching the show today.
3:45:16
Leave us five stars at Apple Podcast and Spotify.
3:45:20
Sign up for our newsletter at tdpn. com.
3:45:22
We will be live tomorrow at 11:00 a. m. No, we won't. We're off tomorrow. >> We are off tomorrow.
3:45:26
We are heading to Montana.
3:45:30
>> And so, uh, we have some affairs to attend to, and we will not be live tomorrow, but we will return on Monday. And I can't wait. >> Mark your calendars. 11 a. m. Pacific on Monday. It will be >> goodbye. >> Goodbye. Terrorists win. >> Nice work, brothers.
3:45:49
I'll see you on the next one.