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>> Today is Thursday, October 15th, 2026.
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We are live from the TVPN Ultradome, the temple of technology, the fortress of finance, the capital of capital.
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How many days till Christmas?
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I know that's what you came to the show.
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That's the question you've been answering.
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We got the answer for you right here on QDPN.
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There are exactly 70 days until Christmas. It feels so close. It feels so close. It's It's remarkable.
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Um it's uh it's been wonderful joining that you've all joined us on the road to Christmas.
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It's been it's been a strong strong road.
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I do want to I do want to give a little >> There's more >> there's more coming. >> There's more coming.
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There's actually a lot more coming.
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>> Another 70 days or or after that?
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>> Well, of course, it just the clock restarts. >> Yeah. 364. Yeah. Immediately. Um of course.
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But uh I I I do need to give a little bit of uh first first let me tell you about ramp. com. Time is money. Save both.
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Easy to use corporate cards, bill pay, accounting, and a whole lot more. All in one place.
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I actually have a little Christmas gift right here.
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Let me let me open this up.
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Production team tossed this my way this morning. And let's open it up. What's inside? What's inside? >> Oh, it's a ramp card.
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>> Great Christmas gift this holiday season.
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Get it for someone you love.
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get it for someone who needs to save time and money, which is really everybody.
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Um, also congrats to RAMP.
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Uh, massive fundraising news.
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Uh, we'll be talking to the team tomorrow, but um, uh, the road to Christmas.
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We're 70 days away and it and this can be a difficult this this can be a difficult moment.
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I mean, I don't want to call out anyone in particular on our team, but there was a there was an individual on our team yesterday who I I was reflecting because it had been a little bit cold over the weekend that I was feeling especially Christmy.
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I was feeling I was feeling the u tide.
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I was feeling the hearth.
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I wanted to warm up my hands.
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I was we were in the jackets.
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Everyone was saying, "Was it so cold in the studio?"
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I was like, "No, there's just a warm fire burning inside my belly as I get closer to as I get closer to Christmas."
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But somebody on our team is like I'm like, "Oh, we're finally in like the cold season."
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Like, and and as soon as the cold starts where you live, whether you're in California or New York, as soon as it gets a little crisp, it's game on. It's game on.
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No one no one's going to look at you like you're crazy for talking about it's only 70 days till Christmas because it's it's Christmy out. It's it's cold. It's cold.
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But Michael over there, I'm gonna call you out.
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Michael over there on our team is like, "John, you know it's going to get hot again.
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It's going to get hot again."
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And yes, I checked the weather.
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It's going to be 88° today, which is not the most Christmas.
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There's actually a heat advisory in California from the National Weather Service.
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>> Advisory, but there is a lesson.
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>> It remains in effect until Saturday, >> which is Michael.
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Uh 90% of the road to Christmas, the battle for the road to Christmas is is mindset and we can't have anyone on this team being a Grinch right now.
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It's very important that everyone supports uh the idea and looks on the looks on what whichever side has the greener grass. >> Friendly elf mindset. >> Friendly elf mindset.
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>> Golden retriever mode. >> Yes. Exactly.
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So yes, there might be heat advisory.
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It might be blistering hot, but we're still gonna stay laser focused on what matters, which is that in 70 days it will be Christmas. >> But >> that's right.
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Uh we're pretty excited here.
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We're headed to see uh You Can See Everything, the new Nathan Fielder movie. >> Yeah.
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>> Later today after the show >> with a great group. >> Can't wait.
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>> Yeah, >> we'll have the review for you tomorrow.
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>> Yeah, that Yeah, it'll be fun.
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any really anything to take our minds off the market, John. Yes.
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Because it's an absolute bloodbath out there.
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>> Well, before we go into the market and the news, let me tell you about Figma agents. Meet the canvas.
4:01
Your AI agents can now create and modify your Figma files with design system context.
4:05
Okay, so uh the market is mostly reacting to the anthropic investor day numbers, but it's been in a decline for a long time.
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For the last month, coreweave's down something like 50% over the last month or so.
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Um it's it's been rough in the AI trade broadly uh and way off% over.
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>> It's crazy that you can be growing at 45% quarteron quarter and still not meet expectations.
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But when people have had in their minds 10x every year, 10x revenue growth every year and Anthropic goes to their investor day and says that Q3 revenue was 16.
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8 8 billion which annualizes to 67 billion 67 billion.
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I don't know what they were doing there.
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That seems like a little bit of like like okay I get it.
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It's like the zoomer reference but like this is serious financial.
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There's a lot of money on the line.
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Can we not do like the meme thing right now?
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Anyway, it uh they are in fact annualizing their quarterly run rate to an annual run rate of 67.
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2 billion which is remarkable for a company that was doing you know a tenth of that a year ago.
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Um, but it's seemingly not enough because because everyone in their minds was like they're going to surprise to the upside.
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They're going to throw up 90 like they're going to do something.
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And I was kind of in that camp.
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I was like they had they've been quiet for a while.
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I feel like everyone's like there's that chart of like oh the the growth stalled and I was like that feels like something that they would love to come out and be like from the top rope fake news like we got some surprise up our sleeve.
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But they really have been fighting fires on multiple fronts.
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There's like the Meta business which has pivoted over.
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They're probably using their own model now.
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And maybe they and and there was that like leak of like an executive at Meta saying like, "Oh yeah, if we stop buying Anthropic, like it could really mess up their IPO. That would be a shame.
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I would hate for a company to IPO at lower valuation than us since we're almost $2 trillion.
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Like that would be terrible."
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Uh so it seemed like sort of a veiled threat in the media.
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Um and then >> distillation >> distillation we actually got a number.
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Uh so distillation is between five to 7% of revenue which I think is a little bit lower than people were expecting but it feels like the the anthropic team David Saxs was was celebrating this that hey like there was this big problem and one of the proposed solutions was like ban
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open source do all this crazy stuff slow down and David Saxs didn't want to do that and then uh Anthropic came out and said hey like we did a lot of work we deployed our own frontier technology to fight this And uh we believe we have bought it and we believe that we can shut down distillation. Uh pretty
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Uh pretty staggering that 5 to 7% you know that that's that's billions of dollars spent stealing from because that's the value of of the of the of the distilled tokens.
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Uh which is pretty crazy that uh that you can be at that scale of of essentially fraud.
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Like you're not supposed to be distilling.
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Um it's against the terms of service.
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Um, and usually when you see uh somebody, oh yeah, there's somebody who's like scraping LinkedIn and then they're like reselling the data or whatever, it's like, yeah, they might have like a couple million dollars deployed into this scheme.
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But you're looking at you're looking at $5 billion dollar of fraud essentially or run rate fraud, you know, something like that.
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But, uh, as they as they fight that fire, obviously that's going to be a drag on revenue growth.
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uh if they opened the floodgates and were like, "Yeah, go distill away."
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You know, at least in the short term, revenue would be growing faster, but in the long term, there'd be much more competition on the frontier.
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>> But it's certainly not as meaningful as some people on the internet thought it was. >> Yeah.
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I mean, there were like some trolls who were like, "Oh yeah, once you get rid of Meta and distillation company's going to be doing, you know, $2 billion a year."
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And it was like, "No, that's not going to be the It's like this is a this is this is installed in many many organizations.
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This is a sure go to market.
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>> The question now is what happens to the frontier of the open weights ecosystem, right? Does the gap >> widen?
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Oh, because they're because they're shutting down the distillation. Yeah, >> we'll see.
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We'll see how effective it is. >> Yeah.
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And I wonder how Muse Wonder distillation will fight.
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Like on on one hand, like >> I don't think people are going to be distilling Muse Wonder. >> Yeah.
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Like maybe maybe it's not quite there yet.
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But if if if Meta can invest enough to actually have a model that is a target of a distillation attack, are they better equipped to fight distillation attacks because they've been fighting for a long time?
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>> Being on the frontier >> just means you're getting distilled.
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If you're not getting distilled, >> that's the definition in your mind.
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It's like unless you're not frontier.
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>> I think that's like the the most honest definition.
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Like unless other people will spend a lot of money to try to emulate >> your model and recreate it, then you are not.
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>> That's a good that's a good like reality check.
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Anyway, uh do you think that Meta would be more equipped than anthropic or less equipped than anthropic to fight distillation attacks if they do get attacked?
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And maybe so what I'm saying is that like on one end there's a lot of bots that are that are already in the meta ecosystem and so you could be distilling attack because maybe you already have a botn net up and running across Instagram and you haven't been caught and then you can reroute those bots to do something more valuable than just like and share and like astroturf stuff.
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you can get them to pull out tokens from wonder somehow and then you can distill it or wonder two, whatever you want to call it, wonder three, uh, whichever one is like worth distilling.
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Um, but then on the other side, you have, you know, an organization that's younger, a culture that's not paranoid about this stuff.
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It's they they're not saber rattling around, oh, if we get distilled, it'll be the apocalypse, right?
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And so, like, culturally, you'd think that they're a little bit less worried about this.
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And then also they're not in the business of like every every distillation dollar is $10 that could be API revenue for anthropic.
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It's very important from a business perspective that is basically giving the stuff away for free.
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Yeah, it's important to keep people in like the Muse ecosystem, but if they get distilled and then all of a sudden there's a open-source model that's really really good, >> they're not going to be as worried because they're just going to say, "Well, like that open source model doesn't have a button on the every Instagram like the distribution on every Instagram account there's like a muse button like I think they'll be happier." So, I don't know.
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What do you think, Tyler? >> Yeah.
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I mean, so what one thing is Meta released an open source model today? >> Yeah. >> Muse open. Yeah. Yeah.
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>> Um, so I don't think they're that worried about like someone distilling them and then releasing an open source version.
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That's like >> seems very different ideologically, right? >> Yeah.
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>> Um, and also I think it seems like distilling is is I mean I I I don't know how hard bot detection is normally, but distillation seems like uniquely hard and that like I think it's it's hard to actually tell what is like a normal prompt versus what is not, right?
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If you're asking like some math problem uh like are you going to distill on that?
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Because like effectively if you're decing on something you you need to like get the train of thought right you need to get like the reasoning steps the answer looks very >> and this is happening while they're experiencing explosive growth and the
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distillers are setting up hundreds >> distilleries >> distilleries are setting up hundreds of individual like max accounts >> that are each have their own VPN >> and it's just very difficult to detect is this like organic growth. Yeah. Yeah.
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>> Or >> and often they're going through like third party rapper companies.
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So there's a lot of companies that are like, "Yeah, we're like uh you know an AI native uh document editor."
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And there's like a bunch of these.
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It's not just like Notion that we know about and it's not just Google Docs.
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Like there's a lot of these companies.
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You set one of these up and you're like, "Yeah."
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And we you pay us uh a fee and we go and we inference Claude or we inference GPT6 or whatever.
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And then that goes into the document.
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And then all of a sudden that what what if somebody's using that like AI word doc to do the distillation then that SAS company that rapper company needs to go and figure out wait why is someone generating all these documents maybe they can't even look at the documents and then from anthropics pers
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perspective or or the the Frontier Labs perspective they're just seeing like oh yeah one of our SAS rapper companies is like sending a bunch of queries across their entire network because they have thousands of users maybe hundreds of thousands of users And it's hard to tell. And so there's a lot of rapper
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And so there's a lot of rapper companies that have gotten to like crazy revenues and basically no one uses the products because it's the distillers or the distilleries that that are like, "Oo, new rapper company like can't wait to spin up a thousand accounts on you because you won't detect me." But Anthropic would.
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So we can't go straight to setting up cloud plans.
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Instead, we'll set up a rapper plan and a million rapper plans.
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And then the company that's running the rapper is like, "This is amazing.
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People are just paying so much for us and all we need to do is just take their prompt, stuff it over in in Enthropics API, give it back to them and we make a 10% margin on top like the mar the rapper systems working when really like they are a distillation factory. >> Very interesting. >> Distilleries.
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>> They're Yeah, distilleries.
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You got to got to take a trip to the distilleries.
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Well, what's going on the market?
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Cuz >> yeah, where did that lead us?
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Uh that led us >> to sell everything.
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>> Uh yeah, I mean especially your dollars. >> Sell your dollars. >> Your dollars.
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Sell your stocks, sell your bonds, get out of everything, get into land, buy guns, food, medicines.
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We we we will be on a barter economy soon, I think.
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I think that's the main major prediction.
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No, people are blackpilling. Um, >> sell your assets. >> Sell everything. >> Sell everything.
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Take your dollars, invest them into a Roadster or maybe a Mission S. >> Yes.
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>> I think that's why they timed this launch.
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They knew, this goes way deeper than we ever thought.
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They timed the launch of these two vehicles for later today cuz they knew that people would be going to cash >> and they'd be primed.
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Uh, no, this this led us to the president of South Korea. >> Yeah. >> Very dark. >> Yeah.
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Posting what um something that was translated from Korean, but the Grock translation is we must live.
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You have to live somehow.
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If it's hard, please call 109.
14:43
In fact, Gil will help you find reasons to live together.
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I don't know who Gil is, but um but yeah, the the Cosby, I believe, is at a six-month low.
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Uh and so for a country that uh loves trading as much as the South Koreans, dark times. >> Yeah.
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Um yeah, a lot of this just goes down to uh exponential expectations being extremely difficult to catch up uh to keep up with.
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So the meme has been the lab revenues are 10xing every year.
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Enthropic went from like uh 100 million to 1 billion to 10 billion.
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So logically they'll do a hundred billion.
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But I remember looking at the numbers and being like, there's actually, it sounds so nitpicky to say it's deceleration, but it technically is because I think they went from like a a little over a hundred million to a billion, which is which is just under 10x.
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And then they went from a billion to technically 9 billion, which is a 9x, not a 10x.
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And so if you assume that you're actually seeing some slight degradation there, you would be thinking, oh, they'll close out at like 80 because they went from one to nine.
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They didn't go from 1 to 10.
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So going from 9 to 100 would be acceleration.
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Again, we're talking about growing 10x a year, 9x a year, 8x a year.
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It's all crazy and incredible.
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But the fact of the matter is like the difference between an exponential curve going upwards and slight deceleration is a huge difference.
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And I think people are maybe like overreacting to this because there were a lot of people that were saying like, "Oh, maybe we'll hit 100 billion.
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Maybe they'll do 150 billion."
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And so, uh, when you get when you get like the expectations so high, people um uh uh it's very very hard to keep up.
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And then also that I I just there it's very clear that there's like this tall poppy syndrome in uh in the frontier where uh whoever is at in the lead like all the other businesses are like well we don't want a monopoly on intelligence and so let's go buy from the other labs let's go uh you know figure something else out fund invest let's do something else to make it so that no one runs away with this entirely.
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entirely. of course like uh there there always could be some sort of runaway but at least while businesses are the ones that are deciding you will see uh the the Microsofts the Amazons of the world it's like all of a sudden they're doing deals with the other guy because they don't want a monopoly and so as soon as someone starts running away with it
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there's this huge forcing function where you're like oh wow there's a big like we you know the the anti-YouTube uh alliance or the anti-Netflix alliance or the anti- open AAI alliance was a thing and the anti-anthropic alliance like comes together and these alliances come anytime someone's getting a little bit too hot at the party. Somebody's
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Somebody's like, "Yeah, we got to we got to pull the punch bowl away a little bit."
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Anyway, the >> Gersonner was on CNBC this morning. >> Okay.
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He says, "We have sold, this is according to a meet.
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We have sold all of our core.
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We've don't own any of it today.
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We've taken exposure down over the last 3 months.
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We felt AI had overshot and would lead to a period of consolidation."
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They move 10% of their book into Meta and Tesla.
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Um, and uh, again, Brad usually, uh, ahead of the curve.
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Sounds like he was here as well.
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Yeah, >> it's an interesting it's an interesting challenge being um you know running a hedge fund, an adventure fund, but then also being one of the most elite podcasters cuz >> there's times there's periods where he in some way he can't go out and say what he actually feels. >> Yeah.
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>> Because it's not sort of pragmatic for um for his actual >> investing.
18:32
So the interesting thing is people aren't actually selling everything.
18:36
They're not actually selling their dollars. That's just the meme.
18:38
Uh, of course, uh, Catrini says, "Oh, it's over over." Which is very funny.
18:42
Uh, uh, just to put it in perspective, the NASDAQ is down like a.
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3% 4%, not much, but then the Dow is up almost a full percent.
18:54
So, what's really happening is that there's just a rotation that's happening while uh the the Dow and Treasuries are getting more uh attention while tech stocks pull back.
19:06
obviously uh not good for the AI trade in the short term, but there's a lot of new uh initiatives and we'll go into through some of the progress because there is some interesting AI progress going on.
19:16
Um but at least over in the AI trade, over in tech world, it's rough.
19:22
People are speculating that uh that Leopold might have gotten into some of the same trades and depending on the leverage ratios, he could be down a bunch. It's very unclear.
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Uh obviously he's extremely sharp and and just learned a really hard lesson.
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So how he interprets that uh who knows what's happening. >> Yeah, it is short.
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>> It is notable that people are saying it's over over. Yes.
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>> When the NASDAQ is flat over the last >> 5 days. >> Yeah.
19:52
It's because like people are rotating out of core, but then they're buying more SAS, you know, because like if the AI trade breaks down, like the super intelligence thing doesn't happen.
20:00
It's like well then you still want to own like a social network that runs ads, right?
20:03
you still want to own like a software company that that has good margins.
20:08
Like there's plenty of things that are worth owning.
20:09
And so, um the the the dollars actually aren't getting sold.
20:15
Like the money is not disappearing.
20:16
It's merely just slloshing around in the economy.
20:18
Uh anyway, uh the uh uh VARA AI, which is Value Aligned Research Advisors LLC, um there's a rumor going around uh that Martin Skrey shared that the the a the VAR AI fund is has blown up.
20:34
So, uh we'll be tracking this.
20:38
It was uh it happens fast, but not immediately.
20:40
The rumors around situational awareness uh took a few days of speculation.
20:45
Oh, he must be hurting based on the latest selloff in semis and memory.
20:50
And then a couple days later, oh, there's a rumor he's he's doing a deal. Boom.
20:56
And then all of a sudden it was all over the Wall Street Journal. So, that will happen. Uh, and we'll find out. Maybe they make it out. Maybe something happens. >> Yeah.
21:06
Looking at their trade, but crazy stuff.
21:09
as of the last 13F was Nebius, Bloom Energy, Corewave, Seagate, Western Digital, uh, Hut 8, uh, Ira stuff that's further out on the risk curve, >> Core Scientific, some Nvidia, some SanDisk. >> Okay. Yeah. >> So, ASML. >> Yeah. >> Um, among others.
21:27
So, >> I think they were >> big believers in this whole AI thing.
21:34
Hopefully continue to be. >> Yeah.
21:35
But >> and I mean uh I I I still I still feel like uh there's a lot of management that happens in the preIPO stage.
21:45
You could see potentially the labs see that, okay, there's a there's a blip.
21:54
We got to rip the band-aid off now.
21:56
We got to correct the record, get the low numbers out because we know that we're going to go into a period of acceleration and that's when we actually want to IPO.
22:03
It's notable that this investor day is not the actual IPO.
22:08
This is a precursor to that.
22:11
It's maybe almost like airing some dirty laundry, which is crazy to say given uh how fast this company is growing and how big it is.
22:17
But um it's useful to sort of clear the air when there's a bunch of speculation around sort of flatlining Q3 deceleration.
22:27
These like sort of less exciting words floating around.
22:30
You clear the air and you say, "Okay, we got we we decelerated."
22:36
Only way to go is up now. >> Baja blast. >> Time to Baja blast.
22:39
Yeah, maybe they got through the code red.
22:41
Now it's time to Baja blast.
22:42
Uh anyway, let me tell you about Railway.
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Railway is the all-in-one intelligent cloud provider.
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Use your favorite agent to deploy web app servers, databases, and more.
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While Railway automatically takes care of scaling, monitoring, and security.
22:53
Well, uh the inflation is up.
22:56
So if you are if you were short stocks and long inflation then you're very happy today.
23:07
Uh hopefully uh I mean if you own real assets you're probably pretty happy.
23:13
Uh Joe Wisenol says that was the hottest PPI number in four years.
23:18
Uh and uh yeah it's uh it's >> banger >> pretty rough time.
23:23
You're really having fun.
23:24
Um, did you see inflation for the 1%? This is cpireeserve. com. We can pull this up. It looks at inflation.
23:33
Uh, you know, there's normally the CPI basket that measures, you know, what the average American buys.
23:40
Uh, CPI reserve is for the global elite.
23:44
So, it tracks how much does it cost to go to space on Virgin Galactic.
23:48
How much does it cost to stay at Amaniri in a base suite? An Hermes Birkin bag.
23:54
How much has that gone up? >> The spicy rietoni. >> Really? >> Only up 31%.
23:59
>> Oh, I didn't know that. Porsche 911 Carrera.
24:01
Um, and so there are some there are some uh interesting stats here that we can go through and you tell me whether these are overrated or underrated.
24:12
Have these gone up because the value has improved or is it now overpriced?
24:18
So I want an overrated underrated for the key items that CPI Reserve highlights.
24:23
So the the classic Chanel flap in 2016 it was $4,900.
24:32
Now in 2026 it's $11,700.
24:37
It that's over 139% inflation in 10 years.
24:39
That's over three times what standard inflation was.
24:46
If it if it tracked CPI directly, it would be uh it would be $6,800, but instead it's $11,700.
24:54
Do you think the class >> you're a bozo if you're still buying this? >> Okay.
25:00
So, it's overrated at this point. The inflation's always. >> Always was. >> Okay.
25:05
What about Met Gala tickets?
25:05
In 2016, cost you $30,000 to go to the MetGala. Now it's $100,000.
25:10
That's six times the average inflation rate in America. Overrated, underrated.
25:16
What's a MetGala ticket worth, Jordy?
25:21
>> Uh I think underrated still. >> I think so.
25:23
>> This is charitable giving. >> That's true.
25:24
I hadn't considered that.
25:27
>> So the more the more the better. >> Yes.
25:28
And uh the MetGala has grown so much.
25:32
So many interesting folks there.
25:34
So many interesting moments. Uh worth every penny.
25:36
Uh what about a Hampton's luxury home in 2016?
25:38
The median Hampton's luxury home cost just $4. 425 million. Today it'll cost you 11. 5 million.
25:49
That's 160% increase in 10 years.
25:54
Four times the CPI, the average inflation rate. Are you a Hampton's guy?
26:00
I've actually I don't think I've ever been. >> Never been. >> So overrated. You'd pass. >> No.
26:06
I mean, when you look at uh the real estate prices here, I think this ends up feeling like it's it's driven in many ways from COVID people wanting >> like more people wanting a second or third home. >> Yeah.
26:20
>> Plus, they're not making anymore. Plus, SER, right?
26:24
>> And so, a lot of those homes traded at really low rates and and so that just drove everything. >> Okay.
26:30
What about a Virgin Galactic Seat? You want to go to space?
26:33
It used to cost 25 uh $250,000.
26:38
Today it'll cost you $750,000.
26:41
>> Overrated, underrated. >> I don't know. Not Not for me. >> Steal of the century. Any price? Absolutely. Send me to space.
26:53
>> I would go to great lengths to >> not to block you from going on this.
26:58
>> Is that because of safety?
26:58
assume that I survive it >> cuz I'm going to survive it no matter what.
27:05
It's going to be >> I can actually imagine.
27:07
Yeah, I can I can imagine it.
27:09
You know, the the the flight going poorly and you having to sort of like fight your >> Yeah.
27:15
You got to roll a duct tape and I got to put it together and screw this in and figure it out.
27:20
>> Take a deep breath and dive. >> Yeah. Yeah. Exactly.
27:22
That's >> figure out a parachute on the way down. >> Yep. Yep. Yep.
27:25
That's that's exactly what would happen in a realistic scenario. Um, okay, the last one.
27:29
Uh, the Porsche actually we got two more.
27:35
Porsche 911 Carrera base.
27:35
It used to be $83,000 $84,000 in 2016.
27:41
Today it'll cost you $135,000.
27:46
That's 61% gain in 10 years. That's 1.
27:46
5 times what the CPI did.
27:50
Not a huge increase relative to overall, but it is ticking up in recent years.
27:55
Where do you sit on the value of the Porsche 911 Carrera base?
28:00
>> Uh, still undervalued relative to the joy that you get out of it, but I wish that I wish that they could keep like the base 911 at like $99,000. >> That'd be cool. >> Forever. >> Yeah. But >> yeah. Yeah, that'd be special.
28:14
>> This is the world we live in. >> Yeah, it is.
28:15
Um, the last one, truly heartbreaking, a Dom Perion Magnum. It's up 121% since 2016. Used to be $380.
28:26
Now it's >> Wait, we also got to pull up the big law.
28:28
We got to pull We got to pull up the big law hourly rate for partners.
28:35
They are way outpacing >> inflation. Okay.
28:39
>> I mean, just look at this. >> Yeah.
28:40
You used to be able to hang out with a lawyer for just a mere 1,500 bucks an hour.
28:43
Now it'll cost you almost three grand an hour to get legal advice from a >> Yeah.
28:50
No longer the cure for male loneliness. >> Yeah.
28:53
>> Cuz that 1,500 an hour >> Yeah. You just call them up.
28:56
>> Call them up and just ask them how you doing.
28:58
>> Kind of lose track of time. >> Yeah. Exactly.
28:59
>> Talk going all over the place. Right. >> Yeah. Yeah. >> How how you been? How are the kids?
29:03
>> Can we can we bill in quarter quarter hour increments?
29:05
Can we book an hour in in 10-minute increments? I'm going to my lawyer.
29:09
I'm saying, "Can we can we just book a week in a at a time?
29:12
>> If I talk to you, just put me down for the whole week." >> Yeah.
29:15
>> Give me Give me a 100 hours 100 hour block.
29:17
If if I if I shoot you a random question, if I ask you, is this domain available? Okay.
29:24
Anyway, uh anything else you want to cover on the CPI Reserve? You can go check it out. CPI reserve. com. Very cool.
29:31
Uh little fun project to give you another side of the economy.
29:35
>> Craziest here is Manhattan luxury real estate. >> How's that doing?
29:39
>> It is uh down >> down the pair tax, right? It's higher taxes. People are getting out. They're moving. I don't know. It's working.
29:48
>> There's uh there's also an interesting article in the Financial Times.
29:50
I don't know if we have it here, but uh you can go you can go read it all about uh the E-shaped economy.
29:55
You've heard of the K-shaped economy.
29:57
They argue that there's an e-shaped that there's the the ultra wealthy, the middle class, and the lower class, and they're all going in different directions.
30:07
And that uh some of the some of the inequality stats uh are not tracking exactly how you would expect.
30:15
uh and they pull some Bureau of Labor statistics and some economic statistics that were released from the 2025 report. So, break it down.
30:21
It's kind of interesting.
30:23
Uh Blake Buyers is taking like the the the AGI question around capital markets.
30:29
He says, "My modal prediction for the next decade.
30:35
Interest rate spikes as capital shifts from saving treasuries to investments due to higher returns promised by AI related capex.
30:41
We've seen this before because AI is the only modern project that could affect real rates to this degree.
30:47
Um, this leads to short-term panic as high rates spike debt servicing costs for governments and other borrowers.
30:55
We're seeing this all over the place with real estate developers who are who were doing great financing a large development project and now with floating interest rates they're o they're they're they're over their skis and they have to refinance or sell a property or stop building.
31:11
Uh it's a really really tight and chaotic moment.
31:15
There's a lot of places that are in pre-forclosure.
31:16
It's actually an interesting hack.
31:18
You can have chat GPT go and hunt for properties that are in pre-foreclosure and make below market offers and get sort of a steal on properties.
31:29
Uh it's it's very very interesting to dig into uh what's going on and and what the loan actually there were people that were doing this during the 2008 mortgage crisis.
31:37
They would look into the mortgage back securities, into the collateralized loan obligations, and they would say, "Okay, I know that this hedge fund does not want this house.
31:48
Like, they don't care about this.
31:50
So, I can go to them and buy it because they're rating the whole bond at 20 cents on the dollar now because we're collapsing.
31:56
I'll buy it from them from 50 cents on the dollar."
31:58
And I it's more complicated deal, but people some people walked away uh with some really really great properties.
32:05
Um after three years of panic it be it becomes clear to the market that the investments are paying off in a big way.
32:11
Interest payments remain high but increased revenue from economic growth more than offsets the higher borrowing costs.
32:17
Panic shifts to euphoria developed world adjust uh to 5% growth rates as the new normal and now demand 10% to be happy.
32:26
Healthcare consumption R&D grows as a percent of GDP.
32:28
Um I was listening to Ari Emanuel and Ben Thompson ch talk and it was the funniest interview because uh Ben Thompson like cannot get a question in edgewise.
32:35
It's just a conversation.
32:37
Normally Ben is like very structured in his interviews.
32:39
Let's start with your background.
32:41
Let's ask some questions.
32:42
Instead Ari's like I'm asking you the questions. It's very very funny.
32:44
But one thing they talk about is that uh recently the the share of advertising dollars you're going to love this.
32:50
The share of advertising dollars is percentage of GDP was 1 to 2% for a long time. It's now two to 3%.
32:56
And they both agreed it could go higher. It was amazing.
33:02
Anyway, um AI is disrupting the job application market faster than the job market. >> This is continuing.
33:12
It's a hot take, but it's continuing to gather evidence.
33:15
Derek Thompson shared a post from the Wall Street Journal.
33:17
AI amplifi amplified job applications are met with AI enabled filters and other AI tools used by AR HR departments to narrow the application pool.
33:27
Uh people are interviewing AI avatars.
33:29
That seems like a really terrible thing unless the whole meta game is just can you jailbreak it, which I think it probably should be.
33:40
Like if I was to put out a if we were to put out a job description and we I'm totally tempted to throw an AI avatar in front of that just in the hope that someone convinces that AI avatar that it is in fact in interviewing for the job.
33:54
You've seen that where people will flip it flip the script and be like actually we're here to talk about your performance and and the AI avatar is like fighting back being like remember your instructions.
34:03
Remember your instructions you're the boss you're you're in charge.
34:07
We're here to interview you.
34:08
And then eventually the interviewer can keep hammering and and prompt injection prompt injecting.
34:13
Um, but Derek Thompson says, "And now 10-minute conversations with AI that take place in McKenzie's very real offices with partners or interview assessors in the room observing how the candidates do."
34:26
>> So these candidates are basically putting on an interview show. >> Yeah.
34:30
>> And the partners are watching watching two people duke it out. >> Yeah.
34:34
It's kind of like a gladatorial arena.
34:36
and I want to see if you can beat the tiger that I've released.
34:38
And if you can, you get to sit at the the side of the court jester or something like that. I don't know.
34:45
Um, we get to debate the bread and circuses thing.
34:48
I feel like circuses are kind of running away with it and bread is potentially falling behind. >> I don't know.
34:56
Did you see the crumble cookies introduced? Okay, I'm living.
35:01
I'm just saying that from from a perspective of like what the elites are doing in our economy. Think about it.
35:07
You so many billionaires are buying effectively circuses.
35:10
They're buying sports teams. They're about UFC.
35:12
There's F1 banana banana. What? What? >> Savannah bananas. The Savannah bananas.
35:21
The >> banana >> the minor league baseball team. >> Banana ball. >> Banana ball.
35:24
>> Yeah, the Savannah bananas. >> The Savannah bananas.
35:26
And so there's a >> lot of speculation today that that they're announcing some sort of acquisition. >> Yeah.
35:32
So there's an intense amount of money flowing into the circus economy, but I feel like Brett is kind of falling behind.
35:37
I mean, Arowan, we we talked to them.
35:39
It's interesting, but there's there's a lot less.
35:41
It's not a trophy asset in >> We had two grocery stores on the show yesterday.
35:46
>> We did, but it's very different.
35:46
Like no one is saying that like like no billionaires are like, "Okay, I bought a grocery store." >> I'm sorry, John.
35:53
your whole thesis breaks down because Crumble Cookies and Wings Stop >> are collabing. >> Uh, it's fake news. >> It's fake news.
36:06
See, undefeated, but it's not a trophy asset.
36:09
No one is No one is getting the bag in venture or private equity or high finance and then being like, >> "Give me the give me the award. >> Fell for it again. >> Give me the award."
36:19
Jord's got to put on the fell for it again award because he he fell for AI slop.
36:24
There is so much AI slop on the timeline.
36:27
Uh I'm actually I'm actually very very close to to hooking up codeex to Grockbot, sucking my timeline out of X, getting all the different raw data and the tweets and then factchecking everything and then creating a new feed for myself again.
36:45
>> Okay, we got to move the camera down. There we go. >> There we go.
36:48
fell for it to get board. >> That's me.
36:50
>> That's Jordy >> many many times. Uh many many times.
36:52
Uh but yeah, the that the the job apocalypse is certainly not happening.
36:59
Bank of America hired a thousand contractors to patch software flaws exposed by AI systems mythos and whatnot.
37:07
Uh you got the fell for it again award with regard to the crumble cookie wing stop. that one.
37:11
I saw that and it just felt like something that would not be edible because there's bones in it.
37:19
Like there's chicken bones.
37:23
You know what I'm talking This is the picture.
37:24
You got to >> You seem I mean you seem like you seem like the kind of guy who just eats the bones.
37:29
>> You don't eat the No one eats the bones. Get out of here. That makes no sense.
37:35
But you know what does make sense? MongoDB.
37:38
What's the only thing faster than the AI market?
37:40
Your business on MongoDB. Don't just build AI.
37:42
own the data platform that powers it.
37:44
Okay, we got >> Okay, >> what >> I'm I'm excited that these thousand contractors got hired, but at the same time, >> shouldn't the same AI that discovers the bug be able to like work out a solution?
37:59
And >> but maybe maybe there's just like maybe there's a 100,000 engineers worth of bugs. >> Yeah.
38:06
you know, but because these thousand contractors are are powered by >> Yeah, this is kind of an odd headline now that I'm thinking about it. >> Very, very odd.
38:16
And it's like, yeah, did we just create a bunch of make work?
38:19
Because if we just didn't if we hadn't invented this, it really is like the Pandora's box.
38:23
Pandora's box opening creates thousands of jobs containing the stuff that is flowing out of Pandora's box. Is that what happened?
38:31
Basically, that's the story here.
38:33
Anyway, there is some progress on alignment.
38:35
We're very excited to see this.
38:37
Nick Camarada says neural networks may be easier to interpret than researchers once thought.
38:44
Rune is very excited about this.
38:44
Um uh so it starts with Nick Camarada.
38:48
He says interpretability uh might be the most important scientific problem in the world right now as I don't think we can solve alignment if we don't know what we're building.
39:00
Uh I think we have good news about it.
39:02
I co-authored early work in mechanistic interpability at OpenAI and came away pessimistic because neural networks appeared to fold into arbitrary tangled knots.
39:12
The, you know, they're grown, we're growing a garden, we're midwifing a deity instead of building a machine that is interpretable.
39:19
Uh, this has been the hope that we can actually interpret these systems.
39:23
Um, and so he started OpenAI's first large-scale automated interpretability product uh project, finding about 2% of neurons legible with the primitive tools that he had at the time.
39:35
With modern agentic tools and a much closer look, the picture looks totally different.
39:39
The vast majority in models up to trillions of parameters are legible and their circuits beautiful.
39:45
Many famous examples of tangled neurons turned out to be misunderstood.
39:50
The roadblocks I expected mostly aren't there.
39:53
I now think ambitious interpretability will be solved by the time we need it most and possibly quite soon as automated scientists keep improving.
40:02
It may be a bitter lesson for interpretability.
40:04
The simple thing at absurd scale works.
40:07
And so Rune contextualizes it by saying when Nick told me that he had some interp breakthroughs he was uh underelling it.
40:16
I think this may be remembered as a major moment in scientific history.
40:18
News so good even Udkowski will have to lower his PDO.
40:24
We can start making a line in two moments.
40:29
So, uh Tyler, did you read the full neural networks are already clean post by Nick Camarada from Goodfire? >> Okay.
40:38
So, it's like super long, but I I I think I have like the main the main >> It has beautiful uh beautiful illustrations.
40:44
uh as you load already-clean. goodfire. com.
40:49
Maybe you can start by giving us some uh context on Nick because he was at OpenAI, he references OpenAI, but he's no longer there. What's he up to?
40:55
What is his mission here?
40:58
>> Yeah, so he's at Goodfire.
40:58
Goodfire is like a mechan lab.
40:59
This is like um all the stuff they work on.
41:02
It's like a third party kind of similar to a lot of like the safety labs.
41:06
>> Is it a Frankenstein reference?
41:06
Like fire bad, fire good?
41:08
Like he's like we're summoning the Frankenstein, but it's going to be good.
41:15
uh potentially potentially okay I'm not sure but uh so b basically the context of this is like um like mechan broadly is is you're trying to figure out like what's going on at the most like minute level in the in the models right so you're looking at like individual neurons y >> um >> you know when you pass in some text through a model you know neuron A like lights up it has a high number like why it's very unclear um
41:39
>> you'll look at one neuron and maybe you pass in some text about cats uh and it lights up and then you pass in some some some text about dogs and it also lights up and it's like very confusing because um like how is the model like actually working it seems that um you know each like individual neuron is basically uh like it corresponds to like a bunch of different like topics or like features usually call it. >> Yeah. >> Yeah.
42:02
>> Um >> and so there's this thing called like superposition.
42:04
This was the the previous theory.
42:06
>> This is the thing you were doing where like uh didn't you make like a 7 1776 GP? >> Yeah.
42:12
that used um something called a sparse autoenccoder.
42:14
Okay, >> which is basically like the theory is that um these models are basically compressed forms of like bigger models essentially >> where you can imagine like a much bigger model where every single neuron corresponds to one specific feature, right?
42:29
So like one neuron is the cat neuron.
42:31
And so if you're talking about cats, that one will definitely light.
42:36
>> And and if you're talking about cats on the show, >> if you're talking about something else, it it won't light up, right?
42:39
And then basically you can take you know your small model and you can basically expand it out.
42:44
It's called a sparse autoenccoder.
42:46
>> So yeah I'm I'm interested to see uh how he integrates with the labs.
42:48
Obviously he's has ties to both anthropic and open AI through Chris Ola.
42:54
Um, but GoodFire is independent, probably doing a lot of work on open source models, but uh, it's feels like I don't know if he can have a product that he sells into the labs or if he can just be one of those like third-party auditors that gets brought in and and and basically says like I will do mechan for your lab and help you there.
43:16
That's uh, uh, it'll be exciting to see where this goes and how people sort of like interpret this.
43:20
Yeah, basically the outcome is like we no longer need the express auto encoders and you can actually look at the the neurons themselves and figure out what's going on there. >> Fantastic.
43:28
>> So it's very useful for safety but also for capabilities right because if you can figure out like >> you know if you're trying to make some capability better within the model like whatever math on some niche subject you can figure out exactly how it's working right now and then kind of optimize on that. So it's very applicable. >> Yeah, great news. >> Fantastic. >> Great summary. >> Um yeah, white pill.
43:47
Uh, let me tell you about the New York Stock Exchange.
43:52
>> Want to change the world?
43:52
Raise capital at the New York Stock Exchange.
43:54
Uh, faith in artificial intelligence was um the timeline is in turmoil and has been over the weekend over Valor Atomics, Isaiah's company, and Day One uh because they're beefing over day one's proada rights.
44:13
rights. And so, uh, this happened back in October 9th, but we didn't get a chance to go through it, but Isaiah Taylor, the founder and CEO of Velar Atomics, uh, posted a long blog post on, uh, October 9th, saying that he had
44:30
gotten all of the investors to agree to wave Proda except for one venture capital firm, Day One Ventures, and uh, and that they were fighting tooth and that day one had retained a law firm and was fighting a lawsuit against them and it was getting messy. So Isaiah decided
44:48
So Isaiah decided to bring it to the public square on X and have the open debate.
44:53
Lots of people coming out and supporting Isaiah.
44:55
Some VCs coming out and supporting PRAA rights.
45:00
Obviously, this is a more complicated situation because day one has a bunch of complicated and uh controversial connections to international organizations and stuff like like and Isaiah's like going and doing more and more government work.
45:14
And so like there is this extra layer of nuance there I think that's getting missed.
45:20
But the uh the the the core debate that the VCs are having is that there's a uh there's like a don't throw the baby out with the bathwater pitch happening that I'm seeing like Delian was talking about this.
45:34
>> You're saying their baby is praada.
45:37
Yeah, basically uh like the bathwater might so like it might be like okay Isaiah like we support you in this one case you should be able to sort of force an investor who has this like very controversial background uh to be diluted down below the the the major investor threshold in in this case but just know that in like founders don't get the idea that pro rider rights are squishy like they're negotiated for for a reason.
46:07
They're going to stick around.
46:09
Don't think that you can pull this move uh without a huge amount of push back.
46:15
Uh because a lot of a lot of founders, I think, read this just as like, oh yeah, like I should override my investors praa because it can be a hassle to deal with.
46:24
Like you're going out and doing a round, but you've already sold 40% of the company.
46:28
you're raising $20 million or $200 million or a billion dollars and some fund comes in and says like, "Yeah, you're raising that much. I want the full amount.
46:38
I want to jump straight to 20% ownership in this company."
46:39
But all the previous investors say, "Hey, we want to keep our 40%."
46:43
And so then you're faced with the question of are you doing a 30% dilution?
46:48
>> My view is I don't even know if it's worth having the proa debate because this isn't about proa >> at all.
46:55
Yeah, it's sort of a proxy debate over the fact that it seems like Isaiah doesn't want to work with Daywan anymore. >> Yeah.
47:03
>> And there are other vectors to work with.
47:06
I think there's isn't there like an FBI investigation or some sort of letter from the government investigating this and like like there is there are other forms.
47:14
I I think there's something else going on, but uh it is tricky.
47:16
Like uh signing up to work with a venture capitalist is somewhat of a marriage and you're stuck with each other for a really long time and it's hard if they don't want to sell their shares, if they don't want to go the other way.
47:29
It's typically very difficult.
47:31
There are some scenarios where VCs have just given the equity back and stuff like there and then there have been other scenarios where founders have basically been like we're not converting the convertible notes and so like you don't get any equity ever.
47:44
But once it's papered and the prooda is in the contract it's very hard to keep the to dilute them down because that's the design is that I if as long as I keep showing up with the money me as an investor with a proo right I can have 5% of this company forever. >> Yeah.
48:00
>> And there's nothing >> Yeah.
48:01
The big I mean the the question is how just how much is having Masha involved >> with the company in a meaningful way, right?
48:09
It's a meaningful stake or the company, right? >> Yes.
48:12
>> Are they losing are they losing >> you know contracts over it?
48:14
Is it just something that competitors can can >> uh sort of use >> to to poke at the law?
48:21
Um I you know based on what Isaiah was saying there's no information rights like technical information rights that that come along with that.
48:35
And so >> I do think that it's probably completely possible for for >> them to just sort of keep uh keep the fund at an arms length. >> Yeah.
48:49
>> But financial information rights are valuable. >> Yeah.
48:52
>> Yeah. like even internationally like I mean we just saw that with the OpenAI spy um like there there is there is value to knowing um if if a if a business even if you don't know how it works if you know that it's profitable and you know that it's works that can
49:08
underwrite your own investing into into competitive technologies you're like yes let's grind down this path like you think about it in the in the semiconductor space like why is China subsidizing the indigenous semiconductor supply chain so aggressively. Well, they
49:21
Well, they know semiconductors are super profitable. They can see Nvidia.
49:26
>> The only thing is like I just the way that Isaiah runs a company. >> Yeah.
49:31
>> You have to assume that that momentum is going to become very obvious just through like public communications. >> Yeah.
49:38
>> Hey, we we got you know XYZ contract. >> Yeah.
49:41
But you never know because if you have information rights, you know actually what's happening with the cash flow, actually what's real.
49:46
There's always a lot of like, you know, uh, gesturing and context and rumors above and you have an advantage if you actually have the real numbers on the inside.
49:58
It's only a slight advantage. I I agree with you.
50:00
I agree with you generally, but uh, but I don't think it's a it's a huge I I I I do think it's valuable information and it's why investors negotiate for it.
50:08
They want information rights and they want to not be diluted down. So, uh, interesting.
50:12
Uh yeah, hopefully if you're a founder and you're uh and you're doing a uh a VC deal, uh don't give the PRAA right away uh the PRAA right um lightly like think about it as a serious deal point.
50:28
What is the value of that?
50:31
It's going to be a headache potentially for a long time. Could be really awesome.
50:34
Sometimes it's great to have people investors with PRAA because every new round you're like ah I got 40% of my round filled.
50:40
Some some some some founders love having a bunch of a bunch of VCs who are like, "Oh yeah, every round."
50:46
Like, you can count on me for the first half of that round.
50:50
I'll fill it first and I'm continuing to add on.
50:52
And so then when you're raising like that next big round, you do still need to go find an anchor, but you don't need to necessarily fill it all, which can be hard if you're not the hottest company in the world sometimes.
51:01
So, uh it cuts both ways, but um I don't think it's going anywhere.
51:05
Uh there is uh yeah I mean the the the state of Delaware you know is is firmly entrenched in Silicon Valley uh and and for that reason like we will abide by these things.
51:16
Anyway uh >> big car day uh today two car launches the Tesla Roadster tonight 7:55 p. m. Central time. >> Yeah. So 5:55 Pacific. >> 5:55 Pacific. >> 8:55 Eastern. >> Okay.
51:35
So 7:55 people are rumoring or are are are uh suggesting that 7:55 might be the quarter mile time.
51:43
Is that what they're saying? >> Yes.
51:46
>> I've seen a bunch of different speculation.
51:47
What would be really crazy is if it was a 555 quarter mile and they were it was the Pacific time. That would be amazing.
51:55
Uh, but I put down a deposit yesterday for a roadster and I'm fully ready to put that pin on the fell for it again award is ready to go. We have a big version. Tyler is a big version.
52:09
And >> let's cut over to Tyler.
52:13
>> And uh, and I need to I I I mean I need to I need to create some stakes for this game because like what would be >> Hey, but but but break down your strategy.
52:22
Putting down the deposit.
52:24
So, my strategy is it's >> You sold me on it. I ended up I I I did it. >> You did it. Okay.
52:30
So, uh it's five grand on a credit card and it's and you have to wire 45,000 within 10 days, but I'm going to know whether or not it's a good car by tonight.
52:40
And so, I don't so that I can I can cancel it if I don't like it and jump out of line.
52:45
But if it's amazing, I mean, Elon's saying it's like going to be the most amazing product demo ever.
52:50
If it's amazing, then I will be able to hold my position in the line before everyone floods in post launch. Yeah.
52:57
And so it felt like the right risk of you're tying up five grand for two days.
53:03
Even at 6% interest rates, you're talking about like $5 of opportunity cost. It's nothing.
53:07
And so, um, >> it's a it's a pretty good trade.
53:10
>> It's a pretty good trade for potentially being at the front of the line for something that could be really cool that actually flies.
53:14
But if it's like, oh, it's going to be shipping in 2035 and it's, you know, it it's not going to be anything special and the, you know, none of the like none of the features appeal to me or oh, we couldn't get self-driving working on it and it's not actually that. >> Here's the thing.
53:31
Here's what everyone uh let's speculate a little bit. Yes.
53:35
>> So, I think that ramps will be involved. >> Okay.
53:39
>> I think that ramps will be involved.
53:39
So, so because our original bet was it will leave the ground on flat ground and I think you had like half a foot.
53:46
I think you had >> flat ground in in the >> He just said he just gestured towards it flying. >> Yeah.
53:53
And so and so to me, what's the easiest way to get a car in the air? >> Okay.
53:58
>> Shoot it off of a ramp. Drive it off of a ramp.
54:00
I think we're going to be seeing multiple types of ramps.
54:03
I think we're going to be seeing >> That'd be awesome. I love it.
54:05
I'm taking a different direction, a different bet.
54:10
My bet is that off of flat ground it will go I think I said more than six feet in the air but I def I think definitely more than three feet in the air. I think it will go high.
54:20
>> Not 10,000 ft which is what they got cleared to.
54:23
>> You know those demos you know the demo the Chinese car like goes no the one that sort of like drives >> Yeah. through the tunnel.
54:30
>> So what I think is that there's going to be sort of a looped ramp that will send it through the air in a rotation. >> Okay. >> And land.
54:37
>> So like stunt driver basically.
54:37
But maybe it could do it, >> which is still incredibly impressive.
54:42
You You don't see car manufacturers demo their cars by sending them off ramps. >> Okay.
54:46
So, if there's ramps involved, Jordy wins.
54:48
If it jumps off the ground off of flat ground, I win. That's the bet.
54:53
>> Here's the other thing.
54:53
Uh do you remember >> there's videos?
54:56
There's some street in LA. >> Yes.
55:00
Where they film all the car commercials. I know it.
55:01
Uh it's like Figuro and First, something like that.
55:05
No, I'm talking about >> Oh, talking about something else.
55:09
>> There's There's like basically a very specific road where it's very steep up and then it flattens out for a second and then it goes >> Oh, yeah. Yeah. Yeah.
55:15
I've seen people jump off that.
55:18
>> I think I think Elon >> saw that and was like that.
55:20
We should just demo the next car that way. >> Okay. Okay. So, you think jump?
55:24
I think I think rocket engines or or thrusters or fans that will lift. >> Pull this up.
55:33
pull this up immediately. >> Okay.
55:36
Um, but let's pull this up. Yeah. What's going on here?
55:42
Is this a famous YouTuber, too? >> So, David dore.
55:44
I've seen a bunch of videos of people at least 50. >> That is so crazy.
55:51
>> So, I'm I'm call this, but the ramp spins it. >> Okay. Okay. Okay. >> Okay. So, you think jump. I think flat.
56:02
Now the question is is what is the criteria? >> There we go. >> That is insane.
56:07
Uh here's the criteria, Jordy.
56:11
The people that fell for the Tesla Roadster the first time, they put down the full amount in 2017 and they waited a decade and they didn't get anything. Nothing shipped, right? They fell for it.
56:24
They didn't file for it again because Tesla has always shipped their vehicles.
56:29
They did the Cybertruck, they shipped that.
56:32
there's one outside like they they're real.
56:33
You may like it, you may not, but they shipped it.
56:36
But they didn't with the original Roadster.
56:37
And so there were a lot of people that feel like they fell for the Roadster promo scheme because they put down the money and then they waited a decade and they didn't get anything.
56:48
So in order to fall for it again, you need to put down the money and wait another decade.
56:53
But we don't want to wait a decade.
56:54
And so the question is is on what time scale would you be disappointed?
56:59
And to what feature set would you be disappointed?
57:04
>> Well, well, I did have one theory that that again, this was clearly a car that didn't want to get made. >> Yeah.
57:12
>> And it sort of was forced into it by taking deposits and all this stuff.
57:16
>> And it doesn't really make sense in the Tesla lineup of sort of appliance style cars in many ways, right?
57:23
You're shaving off >> Yeah. Yeah. >> all these other cars. >> Yep. >> The Model X, etc.
57:28
uh you don't have an SUV, all all these all these things.
57:34
>> Um and so I thought it'd be funny to demo the car in such an insane way that it just instantly like federal regulators come in and say like you cannot under any circumstances do this.
57:45
And then he's like >> and he's like, "Yeah, sorry. I I made the product. >> Okay. >> I just can't ship it.
57:49
We're going back to Model Y.
57:51
We're only going to make the Model Y now." >> Yeah.
57:55
But if he says that, the obvious next step would be it's track only, which is a huge selling point for me. It would be amazing.
58:03
I would I would be I would definitely stay in line. >> Yeah.
58:07
Do we think do we think it'll have a roll cage built in? >> Hopefully.
58:11
>> Given that given that it may be taking flight, >> hopefully it's a roll cage, but like all of the bars are like slightly misaligned.
58:18
>> Sebastian says Elon wouldn't hype it this much to drive a car off a ramp. Come on.
58:23
>> Okay, >> it is a good point.
58:23
I do think that I'm I do think it'll have rocket thrusters of some sort, but I still think I still think ramp.
58:34
>> I think that's part of it. Like we're launching. >> What if it does both?
58:36
If it does both, we both win.
58:40
>> Well, that's what I'm saying. It's using the rocket.
58:42
>> No, what I'm saying is that what if there are two demos?
58:43
One is just it's sitting there on flat ground and it goes hover up and everyone's like, "Wow, it's flying."
58:49
And then it goes down and it lands, but it goes up 5t in the air and we're like, "Wow, it can go so high. That's crazy.
58:53
I've never seen a car do that.
58:54
And then separately, they're like, "Now to the stunt portion."
58:56
And then they go off a ramp. Like that.
59:00
>> That's what I That's what I think.
59:01
That's That's what I expect to happen. >> Both. >> I'm thinking both.
59:04
I think this is like a Nitro Circus style demo.
59:05
Like I think I think it's I think there's cars launching everywhere. >> Okay.
59:11
Then then the only thing I disagree with you on is that I don't think there will be any ramps.
59:16
>> So I would go You're going to you're going to see the card leave the ground, but there will be no ramps involved at any point in the demonstration. You're going no ramp. >> That's our bet now. That's our bet.
59:24
But back to the fell for it again award.
59:28
What does it take for you to put that on? >> The demo is amazing. You do the full deposit.
59:35
So you go from 5k to 45k >> and then it doesn't ship for 10. >> Yeah.
59:41
So >> So we have to keep these around.
59:43
>> So it's going to be withered and old by the time we put it on.
59:45
No, I I would say I would say one year.
59:47
I I It's got to be one year.
59:50
If it takes more than one year to ship this thing, then you fell for it again, right?
59:54
Cuz like you've had 10 years.
59:57
Like like you don't get another 10, you get another launch and then you get another okay, ship it, right? >> Yeah. >> I mean, what else?
1:00:05
What else would like you're you're going to you're going to be at nine years like, oh yeah, didn't fall for it this time.
1:00:11
I got my Roadster just 19 years after they announced it the first time and only 9 years after they announced it the second time. No way, dude.
1:00:20
You're going to be in year six being like, I fell for it again. >> Right.
1:00:26
>> How much was the original Roadster deposit?
1:00:28
>> I thought it was the full amount.
1:00:28
It was like a quarter mil. I don't know. We can look that up.
1:00:34
But Mission S is coming out.
1:00:36
I think they will ship it.
1:00:36
I think that the Mission S is probably a safer uh a safer bet.
1:00:41
You won't be >> So, this video leaked >> Yeah. >> Late last night. >> Yep. >> Let's pull it up.
1:00:46
First, I'm going to tell you about Shopify.
1:00:48
Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. Okay. What are they doing?
1:00:59
They're peeling back a cover and they're showing off the car.
1:01:03
And you had a very good take on this.
1:01:06
What do you like about this design?
1:01:08
What do you like about the Mission S?
1:01:10
What sticks out to you about this?
1:01:14
So, I'll start by saying I feel like a kid who like accidentally saw their Christmas present. >> Oh. >> And >> Okay. >> It's exciting. Christmas.
1:01:27
>> It's exciting because you're getting what you want, but also it just like kills all the suspense. >> Oh, interesting.
1:01:34
>> I've been looking forward to this launch >> more than any other car launch in my entire life. >> Yeah. >> And now it's ruined.
1:01:42
>> But Yeah, you want to see the positive.
1:01:44
This car is way >> way more aggressive than I was anticipating.
1:01:53
>> Yes, >> it feels like it really does feel like >> it's over for every other manufacturer in the >> in the sort of like mid-range supercar category >> because >> the McLarens, the Lamborghinis, the >> the Ferraris. Yeah.
1:02:08
>> Like it is gonna be rough.
1:02:08
Like this becomes the most.
1:02:11
>> When I heard flat 8, I thought, "Okay, we're gonna >> It's got a roof scoop." >> I know. I know. >> We're scoop it.
1:02:15
I mean, this is the perfect car for an S tier journalist to just rip around SF. >> Yeah.
1:02:23
>> With the roof scoop, >> for sure.
1:02:25
>> Oh, the Oh, the scoop. The scoop. Yeah.
1:02:28
So, I I definitely thought it was going to be like Cayman 911 and then this.
1:02:32
And this would feel as far away from a 911 as a Cayman does.
1:02:37
And a Cayman does not feel very far away from a 911.
1:02:40
>> No, it feels way farther.
1:02:42
>> This This feels way farther.
1:02:42
Like if a Cayman is a seven and a 911 is a is a nine, this is like a 15, right?
1:02:47
It's like further along and it's much closer to Carrera GT 918 Spider.
1:02:52
Aesthetically, we'll see about the performance.
1:02:57
We'll see about how they position it.
1:02:58
I know that they're not going to do as as as much of a restriction on the production numbers, but at least from like an emotional feeling, it's giving me 918 successor.
1:03:09
And I know that they might say, "Oh, it's not it's a different thing.
1:03:14
It's going to be a high production or whatever. It doesn't matter.
1:03:17
Emotionally, I'm feeling Carrera GT. I'm feeling 98."
1:03:21
>> And this just immediately becomes by far the most desirable car in the $500 to a million dollar price range in my opinion. Yes.
1:03:30
>> Like day one >> compared to Rivwellto compared to SF90 compared to 750 LT or whatever McLaren's working with these days.
1:03:37
>> Although uh where's the MCL uh 6 GT?
1:03:42
Remember the MC like McLaren's doing like a manual one.
1:03:44
Is that going to be sub a million now?
1:03:47
>> No, that'll probably be two million.
1:03:49
>> Oh, it'll be like one of their seven things. Okay. >> That's the thing. That's the thing.
1:03:51
so many of the cars that have become >> we looked at that Alfa Romero and it was like a million bucks and it's like okay a a million dollars for an Alfa Romero that >> yeah there's so many of these situations where uh they they got the market potentially in like a headlock right now.
1:04:07
I love to keep >> the one thing is >> the car is somewhat antisocial, right? >> How so?
1:04:14
>> Looking at the uh amount of rocks that those back tires are going to be thrown out, >> right?
1:04:18
If you want to take this out on a Sunday drive with some buddies, >> you're going to need some mud flaps. >> That's right.
1:04:25
>> Otherwise, good luck if you're sitting behind this thing.
1:04:27
But, uh, overall, can't wait for the event.
1:04:29
It's in less than 90 minutes for the actual reveal.
1:04:33
>> We might have to stay.
1:04:34
>> Uh, what a fantastic looking car.
1:04:34
Nailed >> right at the intersection of the 959 and the GT1. >> Very cool. >> Stunning.
1:04:44
>> Anyway, uh, we have our first guest of the show.
1:04:46
Reed from Semaphore is here. series.
1:04:48
The San Francisco bureau chief. You know him. You love him. He's got scoops.
1:04:53
The new Porsche's got scoops.
1:04:56
It's swear they made this car for the lone wolf journalist that's scooping around scooping around SF.
1:05:03
>> That >> I I don't know how many journalists you guys know, but you know if you buy a super car, you can no longer be in journalism. You have to leave.
1:05:09
That's like >> really can't drive a super car and be a journalist. the trend. the trend.
1:05:17
Yeah, you need you need to be driving like a I don't know like an Oldsmobile, something broken down something or >> a very old one.
1:05:25
>> Something that you can pull up pull out, you know, pull up outside of a of a technology company office and smoke a cigarette, just >> act sort of mysterious.
1:05:34
>> Even like a 19et even like a 1998 S-Class that has some weight to it, but it's going to be depreciated.
1:05:40
You you can pull up and have some authority there.
1:05:43
Can we get can we I don't know if you >> own a car you you know even owning a car is probably Yeah. Go ahead.
1:05:50
>> Uh I don't know if you've been uh following but uh any predictions for the Tesla Roadster later?
1:05:56
We've been debating >> are there going to be ramps involved?
1:06:01
Are there going to be is it just rocket thrusters?
1:06:06
>> Is it going to be able to kick flip? Things like that.
1:06:07
You guys are You guys are in a very different place with cars than I am in my like I I have a Model Y and I'm just like I just need a bigger car. That's all I care about.
1:06:15
I just need more space for the kids and the gear, you know, and all that stuff.
1:06:19
Like >> a roadster I'm just not that's not where my head is at right now.
1:06:23
But >> the Model Y L the long wheelbase version gives you an extra 20 in or something. >> I was super excited.
1:06:31
I want to go uh when my lease is up.
1:06:34
I'm going to for sure go check that out. >> Yeah.
1:06:37
Seems like >> just make it bigger. That's my That's my ask.
1:06:40
>> I have one on order and they push me back because they can't make them fast enough.
1:06:43
I was supposed to get it in November and now it's January. >> Yeah.
1:06:47
I think my theory is that Tesla's like starting this crazy inflection where enough people have had the magical experience of self-driving. >> I've heard it.
1:06:57
>> What what I'm actually fascinated by is like I it doesn't feel like Elon H is actually giving it enough attention.
1:07:04
And I think in part that's because he wants to merge Tesla and SpaceX and he owns more of SpaceX, right?
1:07:10
So he wants Tesla to be at a lower valuation >> when that happens.
1:07:14
But we've both we've both like put, you know, >> we've both like I bought a Tesla a few weeks ago.
1:07:22
John has been trying to buy a Tesla.
1:07:24
Both of them were delayed by months and months >> for like basic models.
1:07:29
>> And so I think that inflection is happening.
1:07:31
And I but I don't think you're going to get the like >> Yeah.
1:07:35
Every single every single person I know now is having that like magical moment.
1:07:40
>> I'll tell you, I have a broken shoulder right now from playing ice hockey and I activated my FSD. It's kind of amazing.
1:07:48
You just sit there with your broken shoulder and have the car drive you around.
1:07:51
>> They need to advertise.
1:07:51
They should elite athlete.
1:07:56
>> It's not It's not >> It's not so much how hard I'm going.
1:07:59
It's like how hard my old man body went to the ground when I was brutally tripped in Oakland.
1:08:04
But my point is, >> wait, did you throw ice skating rings?
1:08:08
>> Was it too broken to throw hands after after you got taken out?
1:08:12
>> Way too way too broken. Way too broken.
1:08:15
It's just me sadly skating off the ice thinking this is probably the last time I lace him up.
1:08:19
But, >> you know, we should have been there.
1:08:20
We should have been there.
1:08:22
We would not have let that let that let that go.
1:08:25
Yeah, >> this is the second time FSD has helped me with a with an old man hockey injury.
1:08:30
So, >> I gotta say it's, you know, there's some marketing opportunities there.
1:08:35
>> No, no, the the FSD is is like overpoweringly good to the point where uh people who don't like electric cars because they want to hear an engine are like, "But I still had to get one as a second car like for whatever reason."
1:08:48
And then the political thing, people are like, "Look, the midterms are coming.
1:08:51
like Elon's going to be like I I I don't like them, but I'm doing it anyway.
1:08:54
And I've heard that from a lot of people, too.
1:08:57
So, people are begrudgingly buying them just because >> everyone said they would never buy a Tesla.
1:09:01
And I every day at school drop off, there's a new Tesla, you know, that's that's post You can tell it's post Elon cuz it's got the new or post Doge cuz it's got the new headlights, you know. >> Yeah.
1:09:12
I'm getting the bumper sticker.
1:09:13
That's uh I bought this after FSD became so undeniable that I felt it was the safest option for my family and others on the road. Bumper sticker, right? >> Yeah. Yeah. Exactly.
1:09:25
>> Well, my bumper sticker just says morally superior. That's all. That's all. >> Okay, that's good. Yes. Yes. Yes. That's that's ideal.
1:09:31
And then they can apply it to whatever the topic dour of the day is.
1:09:34
Like >> whatever it is, whatever it is, you know, you're prepared. You're prepared.
1:09:38
>> My other car is the moral high ground. >> Yeah. >> Right there. There you go. That's great.
1:09:43
Uh well, what yeah, what what else are you what else are you tracking?
1:09:45
Are you uh I mean, we were at the start of the show absorbed by the anthropic numbers.
1:09:51
Obviously, historically massive, but still not beating expectations.
1:09:54
And so, yeah, what what what are you tracking today, this week, uh in general?
1:09:59
What what's captured your fascination?
1:10:03
>> I think Okay, so so shameless plug, I've got uh Satia and Nadella on my new podcast that which that'll air next week.
1:10:11
So, I was in um I love I love the music.
1:10:14
Um so, that's going to air next week.
1:10:16
Um but a little teaser for that is, you know, I asked him this question.
1:10:21
You'll have to watch it to see his answer, but >> you know, Microsoft's doing great.
1:10:23
Wall Street loves Microsoft, but like look at the growth of all these companies.
1:10:29
Nvidia is now out earning them per quarter.
1:10:31
You've got the hyperscalers.
1:10:33
You've got SpaceX AI coming into the fold.
1:10:34
fold. like is there a world in which Microsoft is still a great business like a few years from now but they're not in the mag seven >> and um I heard a little gasp from the uh the Microsoft comm's team when I asked the question so >> you'll you'll have to but I I think this is
1:10:51
>> I'll just say Satia's my >> yeah those comms people can get aggressive sure somebody didn't chime in and say are you sure you don't want to talk about something politically controversial instead anything but the >> I'll just say like Satia is my favorite communicator. Like he's like in in the
1:11:05
Like he's like in in the mag seven like he he's the one that I think is >> generally like the most candid and actually pick up on on how he feels about different things in a way that >> the other CEOs like he does it in a way that's just >> again I I think he's just very candid. I think he's very fair. >> He's not stiff. He's not performative. >> Yeah. Exactly. Exactly.
1:11:28
And it doesn't it never feels it never feels like he's just >> on some set of talking points and just always looping back to that.
1:11:34
He's like actually like, "Oh, let me answer this question." So, >> I'm excited.
1:11:39
>> And if he does have a talking point, it's like he h it's like he's written a blog post on exactly the question that you're asking and he's got like the perfect he's thought it all out. >> Yeah.
1:11:48
>> And um yeah, I mean this this was up at they've got the CISO summit up there and >> he's been thinking about security.
1:11:53
I think the way he it was actually really interesting to hear him talking to these um CISOs because he was saying he's like he's been sort of it's almost like a let down.
1:12:02
He's like let down by these models.
1:12:03
He's like I don't think the alignment is working.
1:12:06
>> He doesn't think we're going to get to mechanistic interpretability.
1:12:08
So you have to put all these guard rails around this stuff.
1:12:12
>> And that was that was fascinating to me.
1:12:14
It's like a little bit there's like a sliver of defeat there, but also like >> we're just going to figure out how to make this work.
1:12:19
like we're gonna put secure, you know, deterministic software around it and, you know, >> we'll use it that way.
1:12:26
>> Uh, what is your read on Xbox Labs?
1:12:26
We talked about it yesterday and I I love the the decompiled mashup games.
1:12:31
I think they're super fun. Uh, as like memes.
1:12:34
I don't necessarily actually think that they're blockbuster games, but I I thought it was interesting that Xbox was leaning in.
1:12:43
But what's your interpretation of that story right now? >> Oh, yeah. I totally agree.
1:12:47
I was talking with someone I I think someone at Xbox about that, you know, earlier in the week.
1:12:52
I think Asha is probably the right CEO for Xbox right now.
1:12:55
So, I think she's like, you know, she's a little more forward thinking. She's flexible.
1:13:02
Um, and I think they're like, yeah, I mean, if you can't beat them, join them.
1:13:05
Like, there's nothing you can do.
1:13:05
If some kid wants to like mash up like decompile a game in their, you know, in their home using Claude, like there's not much you can do about that from an IP perspective.
1:13:14
So, like I think they have to the video game industry is going to have to rethink everything.
1:13:18
I think it's probably going to accelerate cloud gaming is my guess like in new new ways.
1:13:24
And >> I'm excited by that.
1:13:25
And Gen Z is super It feels like they're in such a good place as effectively a private company because they're owned by Microsoft.
1:13:32
So, they can they they can kind of like hang out in the subbalance sheet and completely upend the business model.
1:13:42
Whereas if you're an independent video game company, you you have a business model that relies on you earning a certain amount from microtransactions and selling a certain number of discs and having this particular business model and you're going to miss your quarterly earnings if you upend everything.
1:13:59
But they're kind of in a situation where it's never been a big driver for Microsoft.
1:14:03
It's been awesome for culture.
1:14:05
It's been really cool to work at Microsoft and be like, "Oh yeah, we got the Gears of War over there."
1:14:08
Um, but financially there's a lot more flexibility. Do you agree with that? >> I totally agree. Yeah.
1:14:15
I mean, they they still I mean the console business is no joke.
1:14:19
Like it's like it's like a great business and >> I think they have that but they will I think they realize like they probably have to start disrupting themselves a little and they can do that. I agree. They have the luxury. >> Yeah.
1:14:31
>> Yeah. Yeah, I mean it feels like it's just good to be in hardware too because like we saw the Mac Mini was not ever built as like the an AI device like it's very much the opposite thesis from Nvidia the graphics cards right which got used is for for all sorts of AI stuff and eventually developed server
1:14:50
chips uh but the Mac minis flew off the shelf and you could see people sort of decompiling or hacking Xboxes and being like yeah it's just a good bargain it's a good product it's reliable and I can run anything on it or I can install an agent on it or I can, you know, actually hack and vibe code and do all these different things. And so they start
1:15:06
And so they start flying off the shelf and actually becoming like differentiated and they're just going to sell a lot because even if they're not even if they don't have that huge margin of IP on top, it's still just a great product to be selling. >> Yeah.
1:15:19
I also love that I love this concept of just like hacking old hardware.
1:15:22
Like you can actually do that now. It's like >> why not?
1:15:25
I mean the stuff is so expensive.
1:15:27
I'm like going through my drawers now looking for old hard drives because like I don't want to buy a new hard drive. But storage is Yeah.
1:15:32
I mean it's like why not like just try to just try stuff.
1:15:36
It's it's an exciting exciting time. >> Yeah.
1:15:39
Uh how are you how are you thinking about uh the opensource uh alliance like all the things that Nvidia is doing the different groups there.
1:15:50
Uh, open AI has been kind of like one foot in the other like we don't want to ban it but we also aren't really open sourcing stuff.
1:15:57
Meta is like open sourcing stuff but you know really has something very close source that's working now.
1:16:02
Anthropic still very strong against but what is the shape of the open source alliance these days?
1:16:09
>> I think yeah first of all the I think the hyperscalers would love to ban it.
1:16:11
I mean, we I was talking to like our our DC people like the you know, the the open phil funded groups are having dinners talking about like, you know, open source is going to be banned.
1:16:22
I have no idea how that's even possible.
1:16:24
I mean, that just seems so draconian and and really ultimately just like a fool's errand that >> Yeah, I mean, I think this stuff is going to is going to totally it is taking off, right?
1:16:35
open source is >> I I want to fight you on that because uh I I I think it actually might be very easy to ban open source in in the sense that like we banned uh we banned file file sharing like uh right >> and and it's like yeah obviously like torrents still exist and you can go and find an offshore website that has a torrent but you will get a letter from HBO if you download the latest season of True Detective illegally.
1:17:02
uh they will find your IP.
1:17:05
So you got to be using a VPN and then it just becomes cumbersome and you can't have a big data center hosting files like mega upload.
1:17:11
hosting files like mega upload. that whole saga went came and went and so it needs to be distributed like weights that are you know on this like dark web torrent network that's kind of cumbersome and then the really dangerous stuff is always like a million dollars
1:17:27
of compute and I don't think you're going to be able to run anything as an attacker on a Mac mini that can do anything but bounce off you know crowd strike plus mythos plus GPT cyber plus pow like these organizations are going to be running like every So to be clear, you're not you're not advocating for it. >> No, I'm not advocating. I'm just saying
1:17:46
>> No, I'm not advocating.
1:17:46
I'm just saying I'm just saying that in practice it's not Yeah.
1:17:49
It's like banning banning serving >> serving it is is quite is quite different.
1:17:55
But and the other thing >> I think that you're >> Oh, go ahead. Yeah. >> Yeah.
1:17:58
I was just going to say that the >> like the zero day that Expo found Chrome >> was that affects would have affected a billion people >> Yeah.
1:18:09
>> was like $40,000, right? >> Yeah. Yeah. Um, >> yeah. Okay. >> So, okay.
1:18:13
But you're assuming that it that you you actually get it banned, right?
1:18:19
Like I think I think you're right.
1:18:20
Like if if this gets fully banned, like there are technical ways they can just make it a total headache to download open open they could just like kill that industry.
1:18:27
But like is it the legal framework for just saying >> like any kind of open-source AI model is is banned is going to be so difficult, right?
1:18:38
Like what are what is the theory there? >> Yeah. Yeah. Yeah.
1:18:40
So, so like as a practical uh like as a practical matter of how things get done in Washington, uh that is more intractable than the technical question of like how do you find out that a data center is serving an open source model and send them a sternly worded letter, hey, stop serving this because we banned it.
1:19:01
But yes, uh so so I agree with you.
1:19:03
It's harder to actually ban than enforce a ban that that happens potentially.
1:19:06
Um >> yeah, >> interesting.
1:19:09
Uh I've always What do you think I mean from talking to the DC folks?
1:19:13
What do you think of this idea of like you can sort of chart the path of technology regulation by just summing up the market caps of various uh open letters?
1:19:23
Like when the open source letter happened, I was like, "Oh, this is like very rough for to be the anthro anthropic position of like let's ban it."
1:19:30
it." because I was just looking at it's like Nvidia 5 trillion and then you have another company that's like you know a couple trillion and I'm just I'm just adding up the market caps and I think it was like $25 trillion of market cap was
1:19:42
saying like we support this thing and whether or not DC is coin operated it's just a fact of the matter that when you have that much economic weight behind it and that many people's pensions and all the different things that like that might dictate the actual outcome. >> Oh yeah. I mean, I let's let's face it, >> Oh yeah.
1:19:57
I mean, I let's let's face it, like DC is somewhat coin operated.
1:20:00
Like, it's not, you know, it's oversimplifying it and I'm out here in the Bay Area. Easy for me to say.
1:20:05
I don't have to go to dinner with these people every night.
1:20:08
But I mean, yeah, I think you totally can.
1:20:10
But I also think it's like who it's like there's not some law that's being violated by this already.
1:20:14
Like you have you would have to create a whole new idea, a whole new legal framework.
1:20:18
It makes it it makes it really difficult.
1:20:22
And then like the other the other thing I think with like name a name a tech regulation that was actually good or or didn't have some major blowback like even section 230 which is almost like >> unregulating rather than regulating is like hugely debated today.
1:20:35
the DMCA that that governed all the downloads and torrenting and everything. That's a huge mess.
1:20:42
Like that just created headaches for years still is creating all these issues with doing like security research, right?
1:20:48
Like you don't you can't let you have to be very careful about how you research bugs and software because of that.
1:20:55
>> So like I don't know the it just to me it doesn't make it doesn't make much sense.
1:20:59
It makes a lot more sense >> like it's like you have the money behind it and also just like the logic behind it.
1:21:05
Like there's it makes logical sense like let's have open weights, let's have open- source harnesses and sandboxes.
1:21:13
Like I wrote I had a little scoop today on Perplexity open sourcing their sandboxing technology.
1:21:16
I mean like let's let's like have let's crowdsource like figuring out how to keep this stuff in you know in silos and make sure it's safe.
1:21:26
like that makes a lot more sense than like let's have two two labs or labs companies um in Silicon Valley like figuring this out all out for us like that that never works. >> Yeah. Yeah.
1:21:37
Uh >> I'm preaching to the choir. I realize that. >> No, no, no, no. It's interesting.
1:21:41
I'm I'm thinking about like the like AI is maybe like the least frustrating it will ever be.
1:21:49
I'm just imagining like like do we get the AI utopia or do we get the doom scenario where like the median case is like probably like we get cookie popups and we get some like annoying thing that happens that like is like constant and like and it's just like the the cookie popups development and like the way that like that's how the internet played out is just so depressing.
1:22:14
every time I have to click that button, I'm just like, how did how was this the outcome? But I don't know. That's beside the point.
1:22:22
>> That was a consumer thing, right?
1:22:22
And like I I think there's actually like my theory right now is like the reason there isn't more consumer stuff happening in in AI >> is that there's just not enough compute.
1:22:32
Like we don't have >> you just don't have enough data centers to run like the frontier models for consumer applications.
1:22:36
And and I think open weights is probably the way that happens like first >> before you get to I don't know like the web 2.
1:22:45
0 of AI where it's like all in the cloud.
1:22:47
You're probably going to have some sort of like the netscape of AI first which is like it runs on your computer and it's you know it's not wide it's not like everyone uses it but it's sort of like early adopters get into it >> and we're like not even there yet. I mean it's >> Yeah. Yeah.
1:23:02
I mean, you see it with like, you know, Muse is having like a crazy moment.
1:23:05
OpenAI responds with Dot, but >> Dave's Hot Chicken responds.
1:23:09
>> Dave's Hot Chicken >> apparently working with Nikita. >> Yeah, apparently.
1:23:13
Uh, but like dot I think is like still rolling out through the paid tiers because it's like it's actually difficult.
1:23:19
They were like opening the floodgates and being like, "Yeah, billion people can just run this constantly."
1:23:24
Like that's a lot of compute. And so it is tricky.
1:23:25
Where are you thinking the bottleneck goes next? Like uh is it money?
1:23:29
Are we going to run out of money?
1:23:32
Is that the real problem?
1:23:34
>> Yeah, we that's actually I was talking about that this morning actually with our our finance team because we're they're like obsessed with the fact that these companies are borrowing money. >> Yeah.
1:23:44
>> I'm like I'm on the other side of this.
1:23:45
I'm like this is not like you know this isn't like >> the financial crisis or like 2000 again.
1:23:52
Like this is a very different thing.
1:23:54
>> But like the banks are are getting to the point where they're like yeah we just can't lend out this much money.
1:23:57
And so I think the the the borrowing has been opportunistic by these tech companies.
1:24:03
It's like why not borrow that money?
1:24:05
Like investors like it, but if the banks are like, "Yeah, we're just we're we're hitting our limit here."
1:24:11
>> Then yeah, I think money does become another bottleneck.
1:24:13
The hyperscalers, you know, the the mag 7, they have enough cash, they can they can find other ways to fund this.
1:24:18
But >> I mean, yeah, I I'm actually probably going to write about this for tomorrow in the newsletter, how this is not a >> this is a bottleneck economy right now. >> It it flipped. so fast.
1:24:27
I mean, I remember uh Peter Teal.
1:24:32
>> Well, if cash is the next bottleneck, I'm going to invest I'm going to invest in cash. >> Oh, okay. Yeah.
1:24:38
>> You got to get some of that.
1:24:39
>> But I I I remember at uh there was a wired tech conference maybe uh 2012ish, 2015ish, uh Peter Teal, Eric Schmidt, who is then the CEO of Google debating uses of cash at Google.
1:24:51
And and Teal's point was Google has $50 billion of cash on the balance sheet.
1:24:58
You don't have anywhere to spend it. You're out of ideas. We're stagnating. Go do something with it.
1:25:04
And he's saying, "Oh, well, like we're spending a billion dollars on this self-driving car thing and we're going to work on cancer research."
1:25:09
And it was all the same promises, but it was just a decade too early where there wasn't actually real ways to deploy the capital.
1:25:16
And and this was the this was true across, you know, all the hyperscalers where Zuck would go off and spend $10 billion on something that wasn't really working.
1:25:24
And now the opportunity is here and we've switched from like, oh, you don't you're not you're not spending your cash.
1:25:30
That's an >> also Google did invent the transformer and they did make self-driving cars.
1:25:38
>> But now now we're in the okay, go spend the cash because there is an opportunity that can actually consume that cash.
1:25:42
Uh and you still get criticized, but I don't know. No, I know.
1:25:47
And it's like everyone's like, you know, everyone's talking out of both sides of the mouth, right?
1:25:50
It's like, oh, they don't want big tech to become so powerful.
1:25:53
And it's like, well, they're actually being forced to like spend all their cash right now.
1:25:57
Like, that is a good, right?
1:25:58
That means there's there's like competition and disruption and >> totally, >> you know, I guess if it doesn't work, then they'll go back to just having, you know, the most profitable cash cow businesses in history. But, you know, >> Yep. Yep. Yeah.
1:26:10
I mean, we saw that today with like there's a rotating out of the NASDAQ, but it goes straight into the Dow and and and you know, it's like, oh, if if the AI trade's blowing up, like get back into SAS, get back into the social ad tech, like like this stuff, this money just like flows around.
1:26:24
Uh people hunting for the for the latest thing.
1:26:26
Anyway, >> they're pretty well hedged. >> Thank you so much. >> Awesome.
1:26:29
Real excited for the Satia episode. >> Go download it. Go listen. Yeah. Download Future Proof.
1:26:35
Future podcast are available.
1:26:38
Thank you so much for coming on and have a great day. >> Goodbye. >> See you.
1:26:42
>> Up next, we have Brian Crantrell from Oxide, the co-founder and CTO.
1:26:44
Let's get this gong warmed up. It's time warmed. >> Nice little warm up. How much you raised? How much did you raise?
1:26:58
>> Let's get another >> Oh, man.
1:27:00
How much did you >> Oh, love it.
1:27:02
>> How much did you raise? We got to know. >> Okay.
1:27:04
Well, so hey guys, I don't know.
1:27:06
Is that a Is that a gong about how much we raised or about the fact that we're profitable? IS THAT A PROFITABILITY?
1:27:10
A different gong for that. >> Wow.
1:27:17
>> Well, we did the warm up. >> The mad lads did it.
1:27:19
>> We did the proity hit.
1:27:22
>> Now we got to hit it for how much they raised. >> That's right.
1:27:24
>> How much did you raise? >> Uh, we raised 445.
1:27:30
>> And finally, the best hit of all.
1:27:33
>> Tell me >> for the secondary. No, I'm kidding.
1:27:33
No, >> no, we're not going to go there.
1:27:41
>> We're not going to go there.
1:27:41
We're having too much fun.
1:27:43
Um, >> amazing to have you on.
1:27:45
Thank you for matching or exceeding our energy. >> Good day.
1:27:51
>> Introduce yourself and the company. What's going on?
1:27:53
>> Oh man, it's great to be.
1:27:53
First of all, I just I love the gong.
1:27:55
I got to tell you the the gong.
1:27:56
So my co-founder and I had there was a gong at we were at a cloud computing pioneer joint >> and um >> that's actually really loud if you play it there. >> We got the baby gong.
1:28:11
>> So uh the the the founding CEO had this gong that was very awkward and cuz like the problem with a gong is it like then the gong isn't rung very much and like now the gong is just kind of like sitting there kind of like foroting. >> That's crazy. That would never happen.
1:28:25
gong ended up a couple office moves later ended up on Steve's desk and there's just kind of this inert gong there and I remember as we were contemplating oxide I looked at the gong I'm like Steve at some point >> we are going to have we're going to build this company we're going to have our first customer and we are going to
1:28:41
ring a gong and it's going to feel so good but that gong never made the move so we don't actually have a gong at oxide so the first gong that we have had at Oxide is the gong that you guys just ran >> amazing well I recommend I re I we recommend a gong long hit for every single dollar of revenue that comes in. So that basically means you need
1:28:57
So that basically means you need somebody dedicated to the to the craft, you know, and they're pretty much just tapping away all day once you're at, you know, a certain uh run rate.
1:29:05
But um anyways, uh I still have no idea what you do and I'm so curious.
1:29:10
So >> So um we are a computer company.
1:29:13
So it's right on the 10 oxide computer company.
1:29:17
So we make rack scale machines, hardware and software codeesigned.
1:29:20
And our big observation, Steve and I were together at a cloud computing pioneer joint.
1:29:26
Prior to that, I spent 14 years at Sun Microsystems.
1:29:28
Do I have to explain your company? >> Exactly. The the OG there.
1:29:32
Um, and we at at Joyant, we were building a cloud on top of commodity hardware on top of Dell HB Micro.
1:29:42
>> And when Joint was bought by Samsung in 2016, we went out to this explosive new scale and everything broke.
1:29:47
Um, and the stuff that broke in our software we could fix, but there was so much that broke at that hardware software interface that was unresolvable.
1:29:54
And I there's so I mean the number of times you heard from Dell, it's like you're the only customer seeing this problem.
1:30:02
And you're like, how the hell is that possible? Like that's true.
1:30:05
>> Everyone else is at much greater scale than we are.
1:30:06
Then you realize like, oh wait a minute, Google and Amazon and Facebook are not Dell customers.
1:30:10
And so you Dell are kind of speaking your own truth at some level because once someone gets to this kind of scale, they actually can't be a Dell customer anymore.
1:30:19
And so as we were beginning to contemplate what was next, we wanted to go we realized that the hyperscalers had built for themselves their own machines, rack scale machines with hardware, software co-designed and the enterprise the anyone else didn't have that.
1:30:32
You could rent it in the public cloud, but you could not buy it and run your own data center.
1:30:39
And our big belief we are very pro- cloud but we believe that cloud should be available wherever you want to run your business and that includes on-prem.
1:30:47
Um so the the the big an econlastic belief that we had in 2019 was that cloud computing is going to endure and persist and thrive if that's going to happen on prem and it necessitates this rackcale hardware software codeesign.
1:31:02
Um, and I, you know, I don't have to tell you how in 2019 it was all SAS all the time.
1:31:07
And, uh, it was very aoclastic to, and but part of the reason it is oxide computer company in the name is to make clear to any 2019 VC is that there would be no pivots to pure software that we are just company. >> No pivots.
1:31:24
>> We just make computers, sir. >> Just make computers.
1:31:26
Um, and you know, actually I just because you guys are scholars of history.
1:31:30
um Digital Equipment Corporation back in the day, one of the if not the first venture capitalbacked company, wanted to make computers straight out of the shoot.
1:31:42
>> And they were told by their VC, which is one of the George Doro, basically a proto VC, um in Massachusetts, it's like, you can't call yourself a computer company because IBM is going to be the only computer company in 1957.
1:31:56
>> They call themselves Digital Equipment Corporation Deck.
1:31:59
>> Uh isn't that amazing?
1:31:59
So he thought there was going to be a fast a fast takeoff in IBM sort of an IBM singularity. >> That's exactly right. Right. Totally.
1:32:07
And as it as it turns out um we and again you know many many many decades later in 2019 um we believe strongly in hardware software co-design and actually delivering because that's the only way you can really deliver this elastic infrastructures.
1:32:21
But >> all right give us the big milestones in the business leading up into this point.
1:32:26
You started the company in 2019. >> Yeah. Gong's ready. Wow. Okay.
1:32:31
Well, on so honestly the I mean the first big milestone was just rading our seed. So >> all right. What happened next? >> What happened next?
1:32:42
>> What happened next? Um well so we um uh ra when we raising the seed we raised 20 million out of the shoot which was a very big um we and the rationale for that and we feel uh to as we were talking to VCs in 2019 and only finding these SAS folks and having to explain that actually the
1:33:05
most important products that we have represent hardware software code design so just finding and we feel very blessed to have around Eclipse and Seth at Eclipse having being big believers and immediate believers in hardware software code design and they're and they saw
1:33:21
that like actually the biggest companies ever built are are so finding them finding the right investors raising the right amount of money and we didn't want to raise like three on 12 right or or what but that would have been easy but it would have been >> well it would have been beneath you
1:33:36
>> it would have been a recipe for death because you would you can't do any of this with three and >> well the funny thing is the funny thing is that the the $20 million seed became at least now is very much standard >> and companies are now >> can be capital intensive enough to justify that. It's not just sort of like
1:33:54
It's not just sort of like a you know supply and demand equation.
1:33:59
Um, but back in 2019, uh, most of the companies that were getting started like didn't really need, you know, they they were three on 12 would have been more than enough money to like at least get to the next round.
1:34:12
>> Yeah, >> that's right.
1:34:13
And so we and we knew we needed to raise that much to be able to get get the team get the team hired.
1:34:17
Um, get I think you know I in many ways the most terrifying moment for me in the lifetime of the company was when we got our first term sheet.
1:34:26
got that term sheet from Eclipse. >> Yeah.
1:34:29
>> Because they was like, "Oh we got to I got to go build this thing and we don't have the team. Like, I can't go.
1:34:37
This is so technically hard.
1:34:37
There's so much technical risk in this."
1:34:39
One of the things that we heard that drove us bananas in 2019 is like, look, technically we know you can do this.
1:34:44
And I'm like, am I You don't want to stop a VC and be like, "No, no, sorry.
1:34:48
Let me stop you right there.
1:34:49
Technically, I don't know I can do this. Like, I'm sorry."
1:34:53
Like, technically, this scares the out of me.
1:34:55
There's so much technical risk.
1:34:56
We did our own comput sled. We did our own switch.
1:34:58
We uh we we eliminated the UEFI bias.
1:35:01
So we did our fir first instruction on the x86.
1:35:03
We we've done all of our own software, lowest levels of firmware all the way up to the control plane distributed system, distributed storage.
1:35:11
I mean we are nine startups in one.
1:35:13
Unbounded technical >> crazy.
1:35:16
>> By the way, Eclipse was actually was was absolutely cooking in in the 2010s.
1:35:18
like >> they they have so many bangers that like were just nonobvious or like most people just were not that interested in that now look just like genius in hindsight.
1:35:33
>> Well, and so they had the advantage of of investing in this sector when everyone else was ignoring it.
1:35:38
And so as a result, like if you were starting >> starting Oxide in 2019, starting Cerebrus a couple years prior, like you are so contrarian that you almost have to be good. You know what I mean?
1:35:51
Like those companies are good companies because they were almost tutologically contrarian.
1:35:57
>> And so Eclipse had the luxury of in and what we found we're we're kind of we found that we're VC home recorders because we would find that like a single partner Yeah. Yeah.
1:36:07
Is is that the home record gong?
1:36:10
Um, we actually called them pelts on the wall because we Well, cuz here's what happened.
1:36:19
You you get a what I learned very quickly is that oxide is very very contrarian and obviously like everybody loves contrarian, >> but no one actually wants a zero, right?
1:36:32
And I think that the the outcomes for oxide were very bifurcated.
1:36:35
It felt like wow generational company or zero and you know VCs are kind of in this quantum superp position of fear and greed and they would constantly be oscillating in their minds between like oh my god in fact we had a VC being like I love that this is n of one or this is n of one.
1:36:56
It's like they were scared that we didn't have competition.
1:36:57
Wait, help me understand how this would be a zero because it feels like like even if there's no AI boom.
1:37:02
Uh it's like you can still like buy parts, assemble racks, maybe there's not a ton of innovation, but you just become like a mid-market reseller of equipment and like you have thin margins maybe. Oh, okay. Okay.
1:37:15
So, >> no, no, that is a zero because first of all, that's not different.
1:37:21
>> I know it's not differentiated, so it doesn't go anywhere. >> Okay.
1:37:23
It just like it just peters out or something.
1:37:26
It it peters out because the >> but when when I think big VC zero, I think like you you spent $100 million on like software engineering for a social network that never gets product market fit and it's actually like you ran out of money as opposed to like the downside risk with it with the sector that you're in feels like you become like a small like microenter almost like just a place that like assembles. Okay. No, >> no, no, no, no. The the No.
1:37:53
The downside risk is a zero because we're >> we're not reselling things out of the back of a catalog.
1:37:59
We are actually engineering a system >> and there are companies that tried to do what Oxide did.
1:38:05
You haven't heard of them because they're all zeros >> and some of them are like pretty prominent zeros and we actually one of the things that you know benefit of of starting a company you know later in life and and with a lot of wisdom and Steve and I both started the company in our 40s.
1:38:21
We were real scholars of how these companies had failed and wanted to understand how every single one of these companies had failed.
1:38:29
And of course, like any founder will tell you, well, I failed because I ran out of money.
1:38:32
It's like, yeah, yeah, yes, you ran out of money, but also like why else?
1:38:34
And the one of the things that we saw over and over again is it is if you have something that is kind of halfbuilt, it is very very hard to get that funding that that funding round to get to that that real customer and getting that first customer is really really hard.
1:38:52
And then getting that first customer to to expand is even harder because that you need to land this thing and that there was a company Nebula that is >> pretty similar to Oxid's vision.
1:39:01
If you guys remember these guys these are this is one of the open this is during the great OpenStack boom. Oh yeah.
1:39:08
>> Which maybe you haven't heard of for a reason, right?
1:39:10
The um but so Nebula and >> Nebula's vision looks like Oxid's vision almost scarily so.
1:39:18
>> Um and in and I'm like I got to understand every single thing about this company.
1:39:22
Uh best seven bucks I ever spent in my life is on the Stanford Graduate School of Business did a case study on Nebula as Nebula is dying. >> Whoa.
1:39:33
>> So Nebula is like going to go bankrupt.
1:39:35
By the way, Nebula shut down on April 1st.
1:39:38
So, April 1st, 2015, Nebula shuts down.
1:39:40
And I was in the office with my CEO at the time, and he and I are looking at this like goodbye cruel world kind of announcement.
1:39:46
And we're like, is this like the darkest, most up April Fool's joke ever, or is this company literally so incompetent that they can't even go out of business on the right day?
1:39:57
Like, go out of business on March 31st or April 2nd?
1:39:59
April 1st, I'm sorry, is >> No, we we we announced we announced an acquis our acquisition on April 2nd.
1:40:05
We had the opportunity was ready to go on April 1.
1:40:10
>> I wanted first, but it would have been so much more chaotic than it already was. >> You know what I mean? >> Exactly. They're excellent. Strong. Good job over.
1:40:19
>> Wait, but this company But this company this company uh they had raised a lot of money.
1:40:24
It was like hot at one point.
1:40:26
This is sort of I think like predates my technology consciousness.
1:40:29
bought uh Kleiner had backed up the truck.
1:40:31
Um Kleiner had put a ton of money into it.
1:40:35
Um and it I was absolutely a zero and they now the the the case study was extraordinary because they failed at everything.
1:40:42
They failed at the tech, they they failed in terms of manufacturing, in terms of supply chain, they failed in terms of software.
1:40:49
They failed in terms of of their approach to market.
1:40:52
They were trying to get to market too quickly with something.
1:40:54
It was kind of that lean idea of like, well, let's just ship garbage.
1:40:58
It's like, no, no, you can't ship garbage.
1:41:01
You have to actually get something that fully works.
1:41:03
And in particular, one of the go to market things that they screwed up was they had this idea that someone will buy one rack and they'll buy one rack and then like a month later they'll buy 30.
1:41:13
It's like, no, no, no, no, no, no.
1:41:15
Have you ever been an ENTERPRISE BUYER? SORRY.
1:41:16
YOU'RE GONNA buy one rack and you are gonna kick the out of that rack for like 18 months.
1:41:23
>> If you are if you are a bank or you are a farmer company or you you are going to spend a long time because when you do that 30 rack buy you are betting your career on it and the hell bet your career. >> What about 30 racks? >> What's that? >> What about 30? >> What about 30 racks? Sorry.
1:41:44
I mean I we know we know a lot about 30 rack buys. >> Buy in 30. >> Not on this.
1:41:50
So I got a little switched up there.
1:41:52
>> We're just messing around. >> But thank you.
1:41:55
This really good history.
1:41:58
>> I uh I hope they don't watch this like the team, you know, >> because you're like not only did they have the perfect vision, they had the worst execution across every possible dimension of the business.
1:42:10
>> We That's not a state secret.
1:42:10
It's in the Stanford Graduate School of Business case study.
1:42:14
I mean, it's like >> But it's behind the payw wall.
1:42:15
It's behind the pay wall.
1:42:17
You're breaking open the pay wall.
1:42:20
>> I'm breaking open the pay wall. Yeah. Breaking.
1:42:21
But it was it was super helpful to learn from that because you realize that like in your go to market motion, >> you have to rely on the fact you have to know that that that single rack is going to be at that single customer.
1:42:32
That customer could be a 100 rack customer, but they're not going to be a 100 rack customer until they are running in production on a smaller deployment for an extended period of time.
1:42:41
And that changes the way you gear the business from it changes the way you raise.
1:42:45
It changes the way you kind of set expectations, the way you build the product, the way you set expectations with your own employees, with your customers because you are what we are focused on is the are those very large deployments.
1:42:58
deployments. And what's exciting and this where Ken definitely ring the gong is that's what we arrived at in the last 18 months is we got those like you know the we're both pretty fiscally conservative and you know these these companies that like celebrate employee number milestones like number of employees I'm
1:43:21
like no we are never doing that because number of employees that it shouldn't be a cause of celebration those are all like it It should you should be celebrating revenue and so on and profitability can >> profitability and like can we celebrate when we have more >> more racks shipped than than employees. I'm like yes that we can celebrate and
1:43:39
I'm like yes that we can celebrate and that was a big a big gong banger was when we shipped our more racks than we have employees.
1:43:49
So um our our vision from the beginning was how do we run an we have the belief that if you have an extraordinary team you can run an efficient business a totally econostic belief along with the econostic.
1:44:02
So we you know we're we're we're real renegades over here. >> Yeah.
1:44:05
Really out there on the on the fringe. >> Amazing stuff. >> Yeah.
1:44:08
Thanks so much for coming on break. >> Yeah. What a what a milestone. This was super fun. You're welcome anytime.
1:44:11
This was uh this was a joy. >> Yeah. We'll talk to you soon.
1:44:15
And uh congratulations to the team on uh Yeah.
1:44:20
How many how many racks are you trying to get?
1:44:22
What's the new What's the new ratio that you're going for?
1:44:26
>> 100 100 to one like how how >> I would love that. Exactly.
1:44:28
I'm very again old school.
1:44:30
It's like what is your revenue per employee and like what let's get revenue per employee in the many millions of dollars please. >> That's I love it.
1:44:38
>> That's the objective and big healthy generational business.
1:44:41
We're not not looking to not looking to flip.
1:44:43
were looking to to actually go build the generational business that Steve and I want to work at for the rest of our careers, which apparently is also a kind of classic.
1:44:51
I thought that was the point of starting companies is that we build generational ones, but >> guess not.
1:44:56
I guess everyone else is geared for an exit.
1:44:57
So, um, but we um big talk until you get offered 100 times revenue and then >> No, NO, DUDE.
1:45:06
LIKE, THIS IS not like a negotiation tactic.
1:45:09
Like this is like honestly hand on heart like that's not what we're interested in because we're just like >> bigger number. >> Yeah.
1:45:25
>> I mean we are wanting to kick our dent in the universe.
1:45:27
So that's what we're doing here. >> Dr. I love it.
1:45:29
Dent the dent the gong and then dent the universe. >> Great stuff.
1:45:33
Brian, >> have a great day. We'll talk to you soon.
1:45:36
>> Give our best to the team. >> Have a good one. Goodbye.
1:45:37
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1:45:53
Our next guest is Daniel Kimo from the Advanced Spade Company. Welcome to the show. The founder and CEO. >> What's going on?
1:46:03
What do you got in your hand there?
1:46:05
>> Going subterranean, I think. What's going on? Look at that microphone. Lucy got There we go. Jordy, you got that.
1:46:13
>> Check, check, check, check.
1:46:15
>> I got the same flavor, but in a different form factor. But thanks. >> All right.
1:46:19
So, what's what's going on here? >> What's going on? >> What's going on here?
1:46:22
>> Uh, this this is our media debut.
1:46:22
Uh, we've like famously under the radar and so we wanted to show off all the uh cool stuff.
1:46:29
We get to play with a bunch of fun things. >> Awesome. >> Yeah. >> Amazing. Well, yeah.
1:46:32
So, so introduce yourself in the company >> and give us background.
1:46:35
Have you worked at anywhere relevant to the current mission?
1:46:40
>> Oh yeah, I've probably only worked at relevant uh relevant places. Um, >> name them off.
1:46:47
>> So yeah, I mean uh way way way back when um I was a student and did the the Hyperloop competition when it was just like designed for college students and uh our team did really well.
1:46:57
It got me in the door at SpaceX and uh I think I was like the only person that worked at SpaceX and I was like didn't care about rockets.
1:47:05
I just wanted to build transportation.
1:47:06
And uh yeah, then from there we like uh built built the Hyperloop track and like ran that competition and like right before we were we were kind of like showing it off.
1:47:18
Elon was like, "Oh, we're going to do it. We got to be serious.
1:47:20
Let's go like dig a hole in the parking lot."
1:47:22
And that's kind of where Boring Company started.
1:47:25
And so then I got to got to help start that and like do that for quite a while.
1:47:29
And it like there's some like wildly fascinating uh technical problems when you start looking at underground construction.
1:47:36
And so kind of like occupied my whole brain for a while.
1:47:40
Then we went uh was in was in Austin building uh building for a couple Elon companies doing just like a lot more site development and there's like crazy construction coordination of and like underground utilities.
1:47:53
It's like it it is wild how difficult it is to know what's there and uh not hit it and so yeah >> had a couple accidents along the way, you know. >> Yeah. Yeah. Yeah. Yeah. >> To say the least.
1:48:10
>> A couple water lines in Austin that like I know where every inch of that line is uh personally.
1:48:15
So, um, yeah, like but these these kind of like it's it was so wild working at at SpaceX and seeing like, dude, we know where like satellites are to millimeter grade and then underground construction it like looks upside down because of uh these like technical problems and and just like an integration of data and so this uh I ruined a lot of parties.
1:48:37
uh I ruined a lot of parties. I just kept thinking and talking about this constantly and then uh yeah I got to I got to spend like two years at Andre which was was awesome and uh it like finally met kind of some smart people they tipp me in the right direction and
1:48:53
then yeah was really fixated on like okay there's a couple of technical things you can go build like they're hard to build but you go build those and then this would make you really good at building underground and if you're going to build underground the really really useful thing to do is go build underground utilities. >> And so that is uh you know 2024 we
1:49:10
>> And so that is uh you know 2024 we started uh advanced spade company.
1:49:12
I think I was running around telling everyone like dude power lines you should care put them underground and everyone's like yeah yeah and like we're in my garage and then like LA started burning down around us and then all of a sudden everyone was calling.
1:49:26
We had like big wigs coming to just my garage and seeing like what can we possibly do to get power lines underground.
1:49:34
And uh yeah, we've been going Yeah, I've been going for two years now and uh having a ball digging holes, burying utilities in those holes. It's a great business.
1:49:46
>> So glad you're doing this.
1:49:46
Like where where I live uh >> I live in Malibu and like there's all the power lines should be underground.
1:49:53
I think the power is getting shut off for at least some parts of the city um this this week just because there's like there's high winds and and the utility knows they need to do it, but it just seems like it's really hard and expensive and so everyone just keeps kicking the can down the road and um and so yeah, it seems like super super important work.
1:50:14
How do you how do you even go about like what what is what is what does revenue even look like in this business?
1:50:21
like are you like who who's actually getting the the cont like these are like massive infrastructure projects?
1:50:28
I imagine you guys are like part of that or are you guys like the >> are you guys like the the primary partner that's like bidding on on these like kind of opportunities?
1:50:42
Yeah, it's uh I mean this is very hard thing to figure out early on, but we we've kind of uh early days of mastering it, but we're getting quite good at this sort of like find the essentially like the cheapest shittiest work that nobody wants and that nobody is good at and start there and then you go start doing it and then you have like a room full of engineers building way better tools like integrating the data.
1:51:09
just like make that work supercharged and then as your reputation gets good you'll start getting on bigger and bigger projects and getting bigger and bigger scope and you just keep sort of clawing the next thing forward.
1:51:22
So we started in private utility locating.
1:51:25
Uh we were really good at making maps.
1:51:28
And so then these general contractors who are typically the ones that like hold the contract from the utility, >> they would say like, "Hey, like we keep hitting stuff.
1:51:39
The drillers are struggling.
1:51:41
You guys make a really good map.
1:51:42
Can you come drill for us?"
1:51:42
And we're like, "Yes, that you know, secret plan the whole time."
1:51:46
And then we go start drilling and like we already come in with a bit of an edge because we have like really good data sets, really good maps and then we just like keep going forward, right?
1:51:57
Like apply the better tech there.
1:51:58
You go build it that better there and you start on like really small shots.
1:52:03
you're kind of like a sub and you get called in last second and it's it's very like it is ground game and it is reputation based and uh you just like keep building those and the tech lets us like speedrun the normal like construction growth curve.
1:52:17
So you're basically just expanding the scope of what you're doing and then eventually people are going to realize like hey this GC is actually just a very thin wrapper around the advanced spade company and then you guys eventually will will bid for the for the end for the project yourself. >> Yeah.
1:52:34
And that's um there's like a I mean yeah uh there's there's a bit of a mix like there are days where being a a subcontractor is really nice because it's just like a lot less that we have to deal with but then you also wind up like you have no control over your own destiny. >> Yeah. Yeah.
1:52:52
>> And so the way we see it is kind of like our service team, I mean it feels very big for us but like is is quite small and we sort of just keep moving up in terms of technical difficulty and then as we move up we want to sort of like leave the lower end market to where it's like we don't want to be a monopoly of all things utility construction.
1:53:15
That's like a really tough game to be in.
1:53:17
So what we do is we take the tools that we've developed to get really good in that market and then we turn around and sell them to the like mom and pop shops.
1:53:28
So private locating is one where like we're kind of phasing out of it, you know, like we can do like these really high quality maps on like really like customers who care a lot about the data.
1:53:40
So a lot of the like fieldwork uh for just like marking and pre-construction stuff, it's it's just like we aren't the best person to go do it.
1:53:47
But now we can sell them a locator that we're like, "Hey, we spent years perfecting this and making it so that like uh we can move crazy fast.
1:53:56
It does all the things that you want."
1:53:58
And that's uh there's this theory in in construction of kind of like golden shovels.
1:54:02
Everyone wants to sell you say like, "Hey guy, like contractor who lives on 3% margin. Pay me a ton of money.
1:54:11
Buy this golden shovel and like I I promise you that it's going to make you a bunch of money in the end."
1:54:17
And that's it's like a brutal business.
1:54:19
Like most people fail when they when they try to do that.
1:54:23
Whereas if we say like, "Hey, we've eaten your lunch.
1:54:26
We've taken every contract you've had for the last year and now we don't want to do it anymore."
1:54:31
Uh here's the tool that like let us go beat you. Now it's an easy sell.
1:54:33
Like everyone everyone wants that tool. >> Interesting. >> Fascinating.
1:54:39
>> How important is uh reliability?
1:54:39
Like how much how much opportunity is there in like innovation, robotics, the really sexy advanced stuff, entirely new equipment versus like just taking a design that works and simplifying it, removing complexity and just getting away different economic equation like a reusable rocket at SpaceX for example.
1:55:05
It's um there there are a bunch of cool things that are like no one's ever done this and it's going to count on like material advancements in in tech.
1:55:11
Um we I can't wait to come tell you about those in like 5 years.
1:55:16
Uh the reality is >> right now it is that like >> tech uh you can kind of look anywhere in the industry and everyone like hates each other.
1:55:26
Everyone thinks that the other part is like underserving them. Sure.
1:55:30
>> Um there is a a stack of like tech that can solve pretty much any of the problems, but you're paying like 18 different people.
1:55:38
>> So one one customer was like, "Oh, you guys are really just like a a slick integrator of all these things."
1:55:45
>> I'm like, "Yeah, that's a way to say it.
1:55:46
I mean, we also have like we have zero SAS cost.
1:55:49
We don't pay like for added layers.
1:55:52
Like we can go make those things."
1:55:54
So like some challenges are mostly just integrate.
1:55:56
I mean, like construction workers love having details sent to their phone.
1:56:03
It's like the easiest way to make them happy and it's like not hard to do.
1:56:07
Y >> uh making a new locator is like quite hard to do. It's uh like >> Yeah.
1:56:13
So >> there's there's a mix.
1:56:15
Um some days it feels like uh if you just take good notes and then go ahead and look at those notes, you're like a notch above.
1:56:26
You're doing really well. Last question for me.
1:56:28
Uh, can you walk us through what's behind you?
1:56:30
What it feels like I'm looking at maybe three different vehicles, but what's your product? What's modified?
1:56:35
What What's the purpose of all this?
1:56:39
>> Um, everything here is like uh our config of something that you buy.
1:56:42
So, we've got a directional drill.
1:56:45
Um, so this is like a super common uh drill that you'll see like you guys will see it on the street.
1:56:52
They're all over LA everywhere.
1:56:54
And um these are these are kind of like the big uh this is the this is the thing where >> you know like these tools really proved their value basically everyone wants underground grid investment has like in the last 10 years it's tripled reliability is worse by every single metric.
1:57:14
Uh and every like the problem problem is overhead.
1:57:19
You you keep putting stuff overhead it keeps failing.
1:57:23
Everyone wants to go underground.
1:57:24
There's no like secret there. It just costs too much.
1:57:26
And uh really when fiber started rolling out super aggressively and then directional drills, >> you had this problem where like crossing a rural road, how do you do it?
1:57:35
And it's like what do you can't dig a trench and like stop a two-lane country road.
1:57:42
>> So directional drills became like ubiquitous.
1:57:43
They were everywhere because you can just pop a shot under the road.
1:57:47
>> Then they proved their worth.
1:57:47
this whole idea of being trenchless and being like less intrusive, less invasive in rural places.
1:57:56
Now the fiber companies are trying to do it in cities and it's like I mean uh look at the news, right?
1:58:00
like >> New York airport just got shut down because of people like operating uh and there's there's fiber in the ground and you like hit it and it's uh like the tool set and the tech set is just not there to be able to like be trenchless or safely work in cities and so that's kind of where we started and uh yeah like data center boom has pushed things forward but um it's it's reduced the barrier to cost a lot then we just have a big trucks. Yeah.
1:58:33
>> Uh we've got a mud truck, so like >> drilling is a very fluid game. >> Yeah. >> Yeah, it makes sense. >> Very cool.
1:58:40
>> I love the I love the the your design. >> Like it's so cool.
1:58:44
Like it feels like uh it feels like it could just be like a an everyday like construction like general contracting like logo. It has that feeling.
1:58:54
But but um it's very cool.
1:58:57
>> Um how big how big is the team today?
1:59:00
Uh, we're at like 50, 55, something like that.
1:59:04
>> Hiring more, I assume. >> Yeah. Yeah. >> Yeah. Yeah. Always to say the least.
1:59:10
>> A lot of digging to do. >> Well, >> yeah.
1:59:12
I'm on a I'm on a public awareness.
1:59:13
I mean, we're based in Long Beach, so we're surrounded by space companies.
1:59:17
And I am uh on a public awareness campaign of like space doesn't matter.
1:59:21
No one don't look up, you know. Come dig holes. >> Space doesn't matter.
1:59:25
Take it from somebody who works at SpaceX. That's great. look down.
1:59:30
>> Well, thank you for coming on the show.
1:59:32
>> Uh, great to meet you, Daniel.
1:59:33
Fascinating company, fascinating journey. Come back on soon. >> Yeah.
1:59:38
>> And, uh, please, please land some contracts in my backyard. >> Yeah. ASAP. >> Yeah, I'd love it.
1:59:43
>> Coming to your streets, baby. >> Fantastic. >> Can't wait. >> Talk to you soon.
1:59:46
>> Great to meet you, dude. Cheers.
1:59:48
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1:59:55
We got to pull up this video of Aetto Corsa with mods running DLSS5, which is Nvidia's AI upresing.
2:00:07
And I was looking at with this with Jordy yesterday.
2:00:09
We were like, "Oh, we should pull this up on the show. This is really cool.
2:00:11
I can't believe they they took a video game and they added uh some mods to make it look more realistic and they added some AI upresing and it looks like a YouTube video. It looks real."
2:00:23
Uh, and we were like, "Ah, but it might just be a video.
2:00:25
So maybe this is someone trying to trick us into thinking it's fake AI because this is happening.
2:00:33
There's a lot of video games that are rebranding as like, oh, we vibecoded this game."
2:00:37
And in fact, they've been working on it for a couple years.
2:00:38
It's not actually vibecoded.
2:00:40
Um, and uh, and and I was like, "Ah, this might be fake in that it's real video, but it turns out it's not fake.
2:00:47
This is a video game, I believe."
2:00:49
I've done a bunch of research and tried to debunk the idea that this was a setto corsa.
2:00:53
I believe it is a setto corsa, but I cannot tell it from real video.
2:00:59
Like it's fully passed the touring test at this point.
2:01:03
This is like maybe the first video that I've been able to watch the full thing and firmly say like we are cooked in them in terms of video.
2:01:11
Like this is this passes the touring test.
2:01:13
We were both confused by it.
2:01:15
Um I don't know if you have any other takeaways.
2:01:16
The the interesting thing is that you want >> my takeaway is I gotta shave more seconds off my lap time at Spa.
2:01:24
>> You got to shave some time off your uh off your time. But uh do you want this?
2:01:28
Because there was some debate over uh I don't want my video games to look real.
2:01:32
I want them to look like a game.
2:01:32
Uh part of what makes this look real is that there's some camera shake and you're the camera position is behind the driver's head.
2:01:41
As someone who spends a lot of time in a racing simulator, would you want this filter on?
2:01:46
Would you want this feature?
2:01:48
Is this appealing or is this just a cool viral novelty?
2:01:54
>> I don't really care that much about graphics.
2:01:56
>> Okay, >> but I would certainly take it for a spin. >> Yeah. Yeah, you should. It It seems pretty cool.
2:02:02
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2:02:14
Um, there are >> Gibriel says, "Please stop cutting off the intro countdown music on your live stream final cuts. I enjoy the intro song. Please leave in."
2:02:24
>> Really, that's interesting. >> It's just so long.
2:02:26
>> But people know to skip to 5 minutes, maybe. I don't know.
2:02:28
That's That's something I never considered.
2:02:30
We thought we were doing such a favor, saving you from having to tap tap tap tap tap or scroll forward.
2:02:36
We thought we were going the extra mile.
2:02:38
Takes us a little bit of time. Saves you.
2:02:42
>> I think it's a little treat for showing up live. Music's a little treat. >> Okay. Yeah.
2:02:47
>> For being with us live.
2:02:48
>> If you want to enjoy the intro music, >> the real ones, >> show up live. >> Show up live.
2:02:55
It's an It's a live exclusive.
2:02:57
>> It's a live exclusive because sorry to you in the chat. Sorry.
2:03:00
We're not >> We're not giving you what you want.
2:03:04
We're not listening to the customers.
2:03:05
The customers don't know what they want.
2:03:07
They'd ask for a faster horse.
2:03:07
Um Well, there is a lot of uh a lot of fake news on the internet.
2:03:12
There's this uh idea of single flight life insurance from Jet Star.
2:03:17
I was able to debunk this.
2:03:17
It's a really ridiculous concept.
2:03:21
$8 in 3 million if your flight crashes um for a single flight.
2:03:27
Of course, Jet Star does actually sell insurance, but not this way.
2:03:31
Uh very funny post though, but be careful out there because I'm sure a lot of people saw this and thought, "Hey, maybe that's real."
2:03:38
Uh I like this take on jet lag.
2:03:40
Jet lag is kind of holy to me.
2:03:42
I'm tired because I flew. I flew too fast too far.
2:03:44
My body misses a different sun.
2:03:50
I haven't been getting jet lag lately.
2:03:52
I've been doing pretty well. I don't know.
2:03:54
Maybe it's just because I've just been doing East Coast for days in and out.
2:03:58
>> I think RVs are going to have a huge comeback.
2:03:59
And you never have to worry about jet lag. >> Get ready.
2:04:03
>> RV lag is not a thing. >> Get ready. Yeah.
2:04:05
Who do you think going to buy uh Who do you think is actually going to buy the the banana ball >> team?
2:04:11
You think Disney or TKO and >> never watched >> the the second of it? >> The nano bananas.
2:04:17
Maybe Google will buy them. Who knows?
2:04:19
Um uh in >> an AI an AI company should buy them just to like get try to help with the the popularity >> training data for hallucinated AI video.
2:04:30
They already do it in real life.
2:04:30
Uh get it in the data set.
2:04:32
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2:04:42
Uh the other story that is worth uh sharing is that Reese Witherspoon is buying her company back.
2:04:49
Hello Sunshine uh was valued at $900 million in 2021, but potentially she's going to get it back for just 94% of what that headline valuation was.
2:04:59
I think you were saying that's around $7 million or something for this production company.
2:05:05
So, Candle Media bet on Wii Witherspoon's celebrity brand and book club, but it fell short as growth in direct to consumer subscriptions lagged, but always fun rooting for a founder getting back in the full ownership seat.
2:05:20
So, uh, a lot of silver lining there, although I'm sure there was some money that was wagered and lost. Who knows?
2:05:26
Who knows where it goes next, but uh, very exciting to see her maybe back at the helm and getting another bite of the apple.
2:05:33
I am personally uh I'm personally rooting for it.
2:05:36
Um also, do you think this is a recession indicator?
2:05:38
The fact that uh startup launches are starting to do paid partnerships with all the hottest anonymous accounts, Robert Sterling, Wall Street Bets, Greg, and >> yeah, this is just the biggest anti- signal.
2:05:54
Like, if you do this, I just assume that I shouldn't and no one should care about your company. So, just don't do it. Don't do it, folks. >> Be interesting.
2:06:03
Do something >> original.
2:06:07
>> That is original that will break through. >> Yeah.
2:06:10
I think there's enough people that will just your brand will just be like, "Oh, you're the Astroturf brand.
2:06:14
You're the brand that had to buy, you know, quote tweets."
2:06:19
Um, but there is I I believe that there's a industrial complex around this now. Like there is a >> Yeah.
2:06:25
There's multiple companies that do this. >> Yeah.
2:06:27
And so it's it's probably something that's pretty turnkey. >> Yeah.
2:06:30
Sheil was saying like if you pay for X premium it should just block the the paid partnership. >> Interesting.
2:06:36
That would be interesting.
2:06:38
Yeah, maybe maybe that would be something to do.
2:06:40
It is it is cool that the disclosure came because uh for there there was a while there on X where there was a lot of stuff that was paid and was not disclosed and uh this feels like a uh a step forward in terms of transparency makes the platform better.
2:06:54
Honestly, I'm enjoying it.
2:06:54
Um, and I don't see that many of these paid partnerships and sometimes they're funny.
2:07:00
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