0:06
[Music] [Music] [Music] Heat. Heat.
Search this video
0:38
[Music] [Music] [Music] [Music] [Music] [Music] [Music] Heat. Heat. N.
1:52
[Music] [Music] We came to this [Music] world to reach the stars.
2:27
We came to this world to shape our future.
2:38
We came to this world to reach the [Music] stars to shape our future.
2:52
[Music] We came to feel a new feeling.
3:18
[Music] [Music] [Applause] music.
3:38
You let me [Music] You're watching TVPN.
4:02
It's Monday, March 31st, 2025, and we are live from the Temple of Technology, the fortress of finance, the capital of capital. This show starts now.
4:13
We got a great show for you, folks.
4:15
Uh Jordy, how was your weekend? Uh, it was fantastic.
4:19
I was having an intense podcasting withdrawals. It's rough, right?
4:25
Pretty much until last night when I could kind of see uh, you know, sort of the end of the downtime on the horizon.
4:33
And, uh, we also got extremely pulled on the show because Elon clearly knows that we're live from 11 to 2 Pacific. soon.
4:41
As soon as we logged off, he announces that X and XAI are merging.
4:48
Uh, very rude of him, but we'll talk about it.
4:52
We were both in the car heading to meetings. Yes.
4:54
And the urge to just turn around. Yep.
4:58
Uh, you know, sort of donut U-turn, turn around, go back to the studio was strong. Yeah, it was rough. But, uh, we're back. Yeah.
5:08
We need to figure out what our like breaking breaking news product is.
5:09
A lot of people were saying, "Hey, we should hop on a a spaces."
5:13
Uh, which I've actually never really done.
5:16
Kind of hearkens back to the clubhouse era.
5:17
Uh, I think it would be cool.
5:19
I actually had like backtoback, not just meetings, but also phone calls and I was like touring studios while on phone calls.
5:24
It was like I couldn't break away from it.
5:26
Um, but you know, we were able to take the full weekend to digest the news and bring you a breakdown of uh this very interesting deal between X and XAI.
5:36
And there's a bunch of precedent around this that I don't think people have really been talking about enough uh which is that this isn't the first time Elon's done something like this.
5:47
He of course uh bought Solar City while at Tesla and so I want to take us through uh first the Wall Street Journal reaction to or just like the facts of the deal.
5:56
X and XAI X and XAI are now one company.
5:58
So I want to break down that.
6:02
Then I want to talk about some of the reaction what people are saying on X.
6:05
people are saying on X. um what how people think this will create value or whether it's a good or bad idea and then I want to go through some of the XAI uh the the history here and we're going to have the takes former early Facebook
6:21
employee Sam Lesson showed this to break down the merger I'm sure he's going to have a good time he's gonna have he's going to have more takes than we can fit into 15 minutes but it's going to be a great time and we have a bunch of other great guests on the show but that's in 90 minutes. Yeah. The other guests, we Yeah.
6:36
The other guests, we got David, uh, who is the co-founder of Poseidon.
6:42
I'm so glad he can come on.
6:44
They launched a new plane today. Yeah, that's great. Uh, who else we got?
6:46
We got, uh, Aaron Levy, uh, from Box, uh, who I'm very interested.
6:53
We got to ask We got to ask the story of how he amassed two and a half million followers.
6:59
It's probably just like being like early and right about a platform. Oh, yeah. Uh, but still fantastic.
7:03
We got uh Crystalall, co-founder and CEO of Runway coming on. Yeah, they launched.
7:10
Then we have Alexis O'Hanian uh and a new port co-founder of his, RJ, who's um creating a new sort of like Twitch for watching sports live in in a very entertaining way.
7:24
And then I think there's one more.
7:26
Uh it's actually getting Nope, that's it. That's it. So that's it for today.
7:30
Um, very excited and uh, yeah, should we get into it? Yeah.
7:36
So, from the Wall Street Journal, Musk merges his AI company with X, claiming a combined value of 113 billion.
7:44
That's 80 billion for XAI and and and 33 billion for X.
7:47
Uh, X, of course, was bought for something like 46 billion, but had about 10 billion in debt.
7:55
Um, artificial intelligence startup XAI has acquired X, the social media platform he owns, an all-star transaction that fuses two of the billionaire's biggest technology bets and assigns the new enterprise a lofty valuation.
8:08
Um, the deal combines the two Musk controlled companies racing to create powerful new tools that could transform the economy with social media platform that holds a fire hose of chatter from around the globe.
8:19
X can serve as a powerful distribution for XAI's products, including its AI chatbot, Grock, and provide a valuable feed of real-time data to power the startup's models.
8:30
Executives of the companies which share personnel believe, and it's funny because they've already had a deal in place.
8:36
Clearly, Grock is very deeply integrated in AX and it says that they're already sharing personnel.
8:42
And so, there's very clearly like blurry lines from day one.
8:44
And I think that putting the companies together actually makes a lot of sense, but I'm interested to hear your take.
8:49
Uh, I generally had a mixed reaction to this.
8:54
I think it makes sense for Elon.
8:56
He's sort of got a lot of balls in the air. He's juggling.
8:58
The teams were already sort of overlapping pretty substantially. Yep.
9:03
Uh my concern is just around focus.
9:07
It's like, okay, the combined entity both of them are still very much startups in some way, right?
9:15
like uh X has been in this sort of like they put it back in founder mode. Back in founder Yeah.
9:18
Not even founder mode, but just startup mode like running lean on budgets, right?
9:22
Uh you know, really focusing on, you know, just growing revenue and and and all these things that just historically weren't super important at Twitter for for one reason or another.
9:32
So now seeing them together, I'm just I have some uh I understand how it makes sense from a team standpoint, from a fundraising standpoint.
9:42
Um, but ultimately it's just sort of unclear to me that uh like I understand that that X can be a powerful distribution tool. Yep. I don't know.
9:51
I don't know what it's it's unclear.
9:55
It's unclear to me that that it's working as a distribution tool other than people use Grock. Yeah. Within X. Sure.
10:04
But that doesn't necessarily need to be Grock. It's almost Yeah.
10:10
I mean, it is a powerful distribution tool, but when you think about it as like if you want to get a 100 million people to use your LLM and you have a 43 or 33 billion budget. Yeah.
10:23
To do that, like could you acquire a hundred million people a different way? Yep.
10:27
And that's like buying the entire inventory of every Super Bowl ad for the next decade, right? Exactly.
10:34
Like like we're talking tens of billions of dollars. It's a lot of money.
10:35
You could put up billboards in every single in every single metro with Adqu.
10:38
You could like you could do a lot, right? Um Yeah.
10:43
So So my point of view is if any other entrepreneur in the world was doing this, I would just be like blanket bearish. Yep.
10:50
But it's Elon, so we're going to give him the benefit of the doubt. Yeah.
10:53
Uh I'm actually taking the other side of this.
10:56
I'm like super bullish on this.
10:57
I think it makes a ton of sense.
10:59
I don't know about the exact valuations.
11:02
Um but in terms of just putting the two together, I think it makes sense for both.
11:06
Uh, first you look at how quickly Zuck was able to catch up on LLM distribution with Llama by stuffing it in Instagram and WhatsApp and how natural that distribution point makes sense.
11:20
Uh, CatchBT was able to break through because the first and now the app's installed. It's on my home row.
11:26
But Anthropic has not been able to get to like the normie average person.
11:29
I just think it's it's one of those things. What is the prize?
11:33
things. What is the prize? is the prize being a an answer engine a sort of alternative to Google search where people go there yes to uh you know multiple times a day for information if that's the prize then the merger I'm not
11:49
really sure that it works because to date I've continued to use chat GBT for a lot of stuff I think more and more people are moving over and they'll use the one that's just one finger tip away as opposed to swiping up and picking a different app and So I wouldn't be surprised. I mean the interesting
12:06
I mean the interesting question is like how much traffic to Grock is driven by inx app usage versus just people going to grock.
12:16
com aside from like the market entry of you know obviously Grock is going to get a lot of attention just because it's an Elon project and it's going to like essentially go viral.
12:25
Uh any product can go viral.
12:27
You know anthropic claude 3.
12:27
5 went viral on Axe even though it's not an Elon project.
12:30
Um the question is is how much enduring value.
12:33
I just want to see I want to see a deeper analysis from somebody internally at XAI. Yeah.
12:38
That the distribution edge and the data edge are legitimately real and working and making people more likely to want to use Grock. Yep.
12:51
Uh and actually helping Grock go mainstream, which is the final prize, right? I don't Yeah.
12:58
I mean I think I think on the distribution side it we learned this lesson from Facebook when Facebook was trying to launch new apps to challenge upandcomers.
13:10
So when Instagram launched at one point Facebook launched a a separate app called in Facebook camera I think it was called and it was an Instagram clone just a complete clone. Yeah.
13:22
And they were like, well, we have, you know, 500 million DIUs.
13:24
Like, we'll just send a push notification for all of them, and of course, they'll move over.
13:30
And that didn't happen at all.
13:30
And so, they added feature like camera functionality and photo functionality to the Facebook app.
13:36
Then, they bought Instagram.
13:37
And then what happened with Snapchat?
13:39
Well, they actually launched another clone at a certain point.
13:42
They and I think Reels was even like a separate app for a while.
13:46
And again, they've learned this.
13:48
They've learned that people go to a single app and they do stuff within that app and you can kind of push them around that app, but it's very very hard to durably move someone to a new app. Yeah.
13:57
And so yeah, I feel like I'm not using I'm not using Grock as a search engine within X. Yes.
14:07
And I'm not yet using it as a search engine outside or an answer engine outside of X. Yes.
14:12
So this I and I don't see what they can do to to change that other than sort of marketing Grock more as a consumer product and and sort of I somewhat disagree with that.
14:26
I mean to be clear I'm not you like Grock has not become my number one LLM. It's still catchy.
14:33
But um but I do think that there's something about seeing a post from someone who's on the edge of your understanding, someone talking about, you know, like if I see a Joe Weisenthal post and he's going really deep on like jobs and labor and and interest rates and all these different economic things that I'm not really fully tapped in on.
14:52
Being able to just click a button and just get great definitions.
14:54
Being able to say, "Hey, go give me the historical context here. Chart it out for me.
14:58
Pull all the data right there.
15:01
I'm going to do that and I'm already doing that in some ways.
15:04
I forget exactly the last croc query I went but I I I posted but it was something like that where someone was making a reference to something and I didn't fully understand the the historical context that they were referencing and so clicked the button and got a pretty good answer.
15:17
And I think that could grow as because so many times when I kick off a Google search it's like oh uh you know uh Saquon Barkley won the uh the Super Bowl and I'm like ah like who won the Super Bowl the last 10 years and I always just go over to Google but if I can just click Grock right there and just say okay I just saw that on my timeline there's you know an update about the Philadelphia Eagles Super Bowl championship run. I want more context.
15:45
I can just click that button.
15:47
I think that that could be a a durable source of of like LLM entry points and it just feels like we're we all agree that that the that the foundation model layer is commoditizing. Yeah.
16:00
And that the application layer is where the value will occur.
16:02
And so either you have to break through in such a massive way like Chachi PT that you you get an app that's installed on everyone's phone and then you iterate on that app so fast that you keep creating like viral moments like Studio Giblly stuff and then you build out you know all these different functionalities like the deep research tool and you and you make it an app that people want to keep opening.
16:23
Um and Chad GPD has been able to do that.
16:26
So they kind of catapulted their way to all of a sudden becoming not just a foundation lab but a a consumer tech company and it's been very hard but they've gotten there.
16:34
Uh and then all of their competitors are typically partnering with a social network.
16:41
I feel like and so I I don't know that makes a ton of sense to me.
16:45
There is the other side to be honest.
16:48
When you look at uh when you look at XAI and X as a sort of combined uh 113ish billion dollar entity. Yep.
16:58
It is a I'm not sort of like bearish on the overall investment at that price because you're basically getting one of the few social networks that matters in the world that also has a professional network. Yep.
17:14
That I think has massive growth potential by itself as a platform and you're getting a call option on sort of like Elon's AI bet and like I think that if X continues to operate like it has been for the next 5 10 years.
17:27
it by itself is at least a hundred billion dollar company every time and and and all you have to do is just sort of like um you know do a you know you don't have to do a technical analysis or or like full deep dive on on meta.
17:43
It's just sort of like if there's only a handful of social networks that matter. Yep.
17:46
uh and X can get to billions of users, which I which I believe it can, it should have this sort of um intrinsic value at at close to where it's marked at right now.
17:59
That being said, it just feels like it's like it's it's a very like complicated strategy and complicated. Yeah.
18:08
And he he's run these before.
18:08
So again, I'm I No, I agree with you.
18:11
I'm I'm I understand why it's happening. Yep.
18:17
I'm long-term bullish on the combined assets.
18:19
Yeah, I just don't think it makes as much sense as it makes sense from again the sort of financial standpoint, the team standpoint, all these kind of things.
18:30
One talent org, you know, trying to just sort of become this sort of like vortex for a type of person that thinks a certain way and wants to work on, you know, Elon's AI plus social bet. Yep.
18:44
But I don't think it it like my take away from it is everybody that's like, "Oh, slam dunk."
18:48
Like this makes so much sense now.
18:50
Now it's going to be easy.
18:55
Like there are some people on the timeline that are resting on their laurels that are Well, yeah.
18:58
There's some people that are fairly wellresected in the industry. Yeah.
19:01
That are coming out and just saying like, "Yeah, this is a no-brainer, etc. , etc."
19:07
And I don't necessarily think it's a no-brainer.
19:09
I think Elon will make it work, but uh not a slam dunk.
19:14
I think this I mean it all goes back to Zerp and like if Elon had bought Twitter after the Zerp crash, I mean Twitter would have been trading at like 8 billion.
19:24
Like if it had brought gotten brought back down to earth after, you know, every stock was inflated and they all went down 80%.
19:32
I mean, Meta fantastic business drew down like 50 plus%.
19:37
And it's like he could have bought it half off and then at that point we I think I think your point might be a little bit uh less less real.
19:47
Uh these numbers do feel high but of course it's Elon makes sense.
19:49
Um the other interesting thing about this deal I think is um does what is the value of the data?
19:58
So X has become very very good at uh creating this walled garden, right?
20:05
Like you can no longer just view tweets or embed tweets. The API is locked down.
20:11
You can't really just view them in an incognito browser.
20:13
Like if you're not logged in, you'll see people's top tweets, but it's harder and harder to scrape this stuff out.
20:18
And more and more people are bringing things onto the timeline from everywhere.
20:24
So, and a lot of times that takes the form of somebody screenshots a book, somebody screenshots a Wall Street Journal article, somebody screenshots something that happens on Instagram, but they bring it back to X. Yeah.
20:37
And I think that's hard right now to categorize.
20:42
Like the search function right now is not amazing because so many people are posting images and the text in the images isn't indexed.
20:49
But obviously image models are getting way better as we saw with the Studio Gibli thing.
20:53
And I think that there's a world where every image as it gets uploaded to X gets and every video gets really well tagged with with information even if it's in some sort of uh like latent space that isn't human interpretable.
21:07
But at the very least like transcribe all of the uh subtitles and transcribe even if the captions are baked in let's transcribe those and put those in a database that can be searched and then let's bake that into the next LLM training run.
21:18
I think that's really I think that could be valuable information.
21:22
I think the more valuable information is probably just the real- time nature of this of these things.
21:27
Like news still breaks on Twitter immediately and X really is still a place where information goes out the same minute as everywhere else.
21:36
And even if you look at a feed, if there's really really huge news, it's possible that one of the mainstream media publications is the first one to report on it, but it'll hit X within two minutes and then the other the other like, you know, the Financial Times will have to write about it, but it'll take them a day or it'll take them a couple hours to get something out.
21:57
So, if you want your LLM to be up up to date, which I think people do, and we saw that with the first version of ChatPT where they had the knowledge cut off. Do you remember this?
22:06
and and it was like, oh, like I can't get it to answer anything for the last 3 months.
22:11
Like that's unacceptable as an answer engine, right?
22:14
So, and and to be honest, I do believe that news breaks almost as quickly on Reddit.
22:20
Like, for example, Reddit has a very active MMA community. Yep.
22:23
The split second that somebody wins a fight, it's live and it's, you know, all the information is there.
22:30
So, and doesn't want Open AI. Yeah.
22:33
So if OpenAI wants that sort of like breaking userenerated sort of like news, Yep.
22:39
they can go to Reddit and say, "We're going to give you totally $100 million a year for just like, you know, direct access." Yep.
22:46
And so again, I think that this data is like more accessible than 33 billion. Yeah. Got it.
22:55
But but it's still important.
22:57
And I and I think I think one thing we actually should be tracking is like what how does it feels like the application layer is a problem that you need to solve if you're a foundation model company.
23:06
Um unless you're SSI and you're just going straight to super intelligence and you have no desire to play in the application space at all.
23:14
But if you're anthropic I feel like you need to figure out how are you going to solve the consumer angle at some point and they're partnered with a number of big tech companies. Yeah.
23:21
Could there be a partnership with Snapchat or Pinterest or something at those at are there any other assets out there that they could buddy up with?
23:29
Because um how important X AI broadly and Grock will approach enterprise going forward just because of how tumultuous X's relationship with large corporates has been. Yep.
23:41
just now it's like, okay, now we're all combined and you should plug our LLM into your Well, it seems like Grock has not been super aggressive on the enterprise side.
23:53
Anthropic has been much more aggressive on that.
23:55
Yeah, that's what I'm saying.
23:55
But are they going to sort of say we don't care about enterprise, we are a consumer, application company. Yep.
23:59
And Anthropic seems to be more focused on the coding and driving like the cursors and the man.
24:08
Main thing is I'm I'm very disappointed I didn't get the deck on this one of the combined entity.
24:13
Maybe there wasn't a deck ever.
24:15
It's very possible that Elon was just like this is happening now.
24:19
Um but it but it it makes sense to me if if it's, you know, XAI is going to be the everything app. It's going to be social. It's going to be video. It's going to be search.
24:29
Like if Elon is making, you know, is simultaneously thinking, I want to make I want to actually compete with with Google, right?
24:39
He's like, it could be identity, it could be email. There's just so much.
24:43
And so if he's 100% oriented around the sort of everything app angle, then that's great obviously.
24:52
But it should I almost think you drop the like X AI and just have it be X, right? It is odd.
24:57
all shares of X and XAI will be exchanged for shares in a new holding company named XAI Holdings Corp.
25:04
And so he's he's he's it feels like he's waiting this as like this is more of an AI effort and we bolted on a social network as opposed to this is a social network on a long enough time horizon.
25:17
This just becomes uh you're in X and it's there's no humans.
25:21
It's just bots in all of your comments.
25:23
Every post it's terrible.
25:26
Uh we're about 20% of the way there. Not a fan of that. We'll see though.
25:31
Uh Musk has combined two of his companies before.
25:34
He used Tesla stock in 2016 to buy his solar energy company, Solar City.
25:38
Musk's other closely held businesses include SpaceX, a rocket startup, which I don't think he's ever bought anything for.
25:44
Maybe some small I think he did some vertical integration stuff.
25:47
Neuralink, the brain implant chip firm.
25:50
I could see that rolling into an AI company at some point.
25:52
and Boring company, the tunnel maker, which Boring and SpaceX were much more closely linked because if you remember when the uh Hyperloop uh when the Hyperloop pitch dropped, Elon dropped a blog post saying we should have these tunnels where they vacuum out all the air and then there's no wind resistance and you could travel in a train on a train very very fast.
26:12
Um he actually posted it both on SpaceX and Tesla's website, both of them.
26:19
and and it was like okay which company is doing this and he was kind of like I don't know like we'll figure it out and then there was another company called Hyperloop that just was unaffiliated with Elon that started that company.
26:34
I don't think that one went very well.
26:38
Then he started Boring Company and that one's just been grinding along for a while. No pun intended.
26:42
Um but um uh it it you I mean you could see Boring Company.
26:49
It's like, well, they make the roads that the Tesla drives on, so maybe merge those together.
26:52
Or, hey, it's like this super hard tech, like these mega machines.
26:57
Maybe the SpaceX team should be involved in that.
27:00
And so, bring that in, but we'll see where it goes.
27:01
Uh, his role as an adviser to President Trump has added to his influence and appeal for some investors.
27:07
At the time, Musk has seen the polarizing effects of his politics hit Tesla's value.
27:11
Earlier this month, X raised roughly $900 million from new and existing value uh investors at a valuation just above its 44 billion takeover price in 2022.
27:21
And um we covered this a little bit how X became profitable um and on an IBA basis, but there were a bunch of adbacks, so it was kind of unclear.
27:32
It seems like the business has has been hit on the ad side, but then um of course is making money from the XAI deal because XAI is paying for data, which is fair, but it's like a related party transaction.
27:42
So, it's hard to kind of exactly price and handicap that value.
27:46
But at the same time, if Elon can consistently get money for XAI and grow that, then that pool of capital kind of continues and now they're all one.
27:56
So, it doesn't even really matter.
27:58
I think he just needed to to justify like, hey, this is like this makes sense together and everyone's kind of in the same ballpark on this and all the shareholders are cool.
28:07
I mean, it is a private company after all, so it doesn't really matter as much. Yeah.
28:10
At the end of the day, much easier to raise for this like collective, you know, just sort of, hey, you want to invest in Elon's AI bet?
28:21
You know, there's basically you should kind of pay any price. Yep.
28:25
Uh, and we'll we'll slap on X. Yeah. As as almost a freebie. Yeah.
28:32
It is interesting how much this has all moved away from AI safety discussions and into just look LLMs are valuable the the the it's more he talks more about like the truth engine and yeah and in control of information and free speech.
28:50
I think what this could lead to is more you can imagine Elon doing keynotes for the combined entity that and and getting into actually sort of more illustrating what what is what is this vehicle what is the long-term purpose of this vehicle because I think he got to an interesting point with Grock being like the sort of truth seeeking AI and that made sense.
29:12
Uh but now what does that mean?
29:12
Are we back to just sort of the collective uh everything app? Uh AI is everything.
29:18
You know, it's sort of unclear.
29:22
Um but I'm excited to see it play out.
29:25
Imagine he buys PayPal, rolls that back in.
29:27
I mean, anything is possible with this guy.
29:30
He's just like I think he wants to kill PayPal probably.
29:34
Uh it is it is funny to think about like if the PayPal mafia never sold and like kept running that business because it's PayPal is a big company.
29:43
It's a multi- trillion dollar business if if they stuck with it because they'd probably have done Stripe internally, they'd done Plaid internally, they done Square internally, right?
29:53
Like all the all the different companies that they created externally could have just been all part of that.
29:58
Um so there I mean the reason that this deal is happening so quickly I think is because uh X and XAI share many of the same investors.
30:04
Sequoia Capital, Vy Capital, Valor Equity Partners.
30:07
X already owned a roughly 10% stake in XAI before the acquisition.
30:12
Prior to the acquisition, they also shared some resources and in XAI's early days.
30:15
Its employees worked out of X's San Francisco office.
30:20
XAI has also leased GPUs from X and so everything's kind of flowing back and forth.
30:25
Morgan Stanley advised on the deal.
30:27
I think that's Michael Grimes.
30:28
Uh went to my high school.
30:31
Uh shout out Michael Grimes.
30:31
Uh advised on the deal along with lawyers at Sullivan and Cromwell.
30:35
According to people familiar with the matter, um the social media site is expected to see ad revenue growth for the first time since the takeover this year.
30:43
And uh um uh Morgan Stanley has close ties to Musk, having advised on his $ 44 billion acquisition of Twitter.
30:52
And that was a very controversial deal to to to work on because of course there's a whole bunch of debt that I think Morgan Stanley wound up holding on their balance sheet.
31:02
And there was a question about like is this just a disaster because yeah obviously the the market tanked and then the advertisers pulled out but Elon is relentless and uh doesn't seem to like down rounds and or let them happen ever in his entire career.
31:16
I think he's never done down.
31:18
Um he's always gotten creative and figured out a way to just look towards what the future is like and then build towards that long enough and then he makes it happen. So it's cool. Yeah.
31:27
So Tom Howard had a a solid analysis. He says, "Hold up."
31:31
Uh he's quoting uh the original post from Elon announcing the deal.
31:36
He says, "Buy distribution channel with crap monetization and nonoptimal financing."
31:42
So again, Elon uh had to really lever up to buy Twitter.
31:45
He bought it at at what many people would say was was well beyond what it what it should have been priced at.
31:52
uh separately launches XAI which is basically a research project at least initially. Yep.
31:58
Um now using X to sort of distribute uh this sort of uh LLM Yep.
32:05
to a large user base and um that in turn can sort of help uh you know increase the valuation of XAI.
32:16
And anyways, I I think it makes sense.
32:20
Again, they were already sharing employees, resources, etc.
32:21
They're basically one company. Uh yeah.
32:24
Do you want to go to the to the counter point from Compound 2? So, Compound 2448.
32:32
Uh it's hard to know what to make of XAI buying X.
32:35
My gut is at smacks of desperation.
32:37
On the surface, the deal values acts flat to Twitter's 2022 takeout takeover value despite massive underperformance on financial metrics.
32:45
I would argue, I mean, wasn't Twitter Twitter wasn't profitable at the time of Yes. So, so it's complicated.
32:52
Like Twitter in its history had only had one profitable quarter ever. Yeah.
32:57
And so it was this weird company where where they still were trading at a relatively high multiple.
33:05
They were never really they never really got the business working.
33:09
They were trading on cultural relevancy over Yeah.
33:11
And there seems to be this like zombie land for these public tech companies sometimes where the ones that really get it working and are cash flowing and are get huge like Zuck and Meta.
33:23
Um but Twitter was never really like a cash machine.
33:26
They had a couple good quarters where there were these like weird anomalies in their financials where some some like, you know, they get some like tax credit and they'd be like, "Oh yeah, we generated like 600 million in Evida or something that quarter, but it was like kind of iffy."
33:41
The the question I think you're getting to is like, "Hasn't the financial performance improved because Elon famously laid off like 75% of the staff? They cut so many costs.
33:53
Like the cost basis has to be way lower." And I think that's true.
33:56
Uh the the the problem is is that we as the public don't have audited public financials because it's not a public company.
34:04
And so we've heard rumors and we've seen that you know the business might be doing better.
34:09
It might be producing a billion dollars in Ebida and and and you know applying like a 40x profit PE multiple to this thing given all the opportunity.
34:18
Like it's not that crazy but we don't actually know how real is that profit or what's the shape of it or how how new is it? How durable?
34:26
It's rare to have uh transactions of this size that are trading based on narrative and and almost pure play sort of like founder bets. Totally.
34:37
And that's what that's what that's what's kind of eye popping about this. Totally.
34:43
Um so compound u it's an all stock deal. It's a stock deal.
34:47
Exon owners will now own 29% of the combined entity shifting from a near pure play social media bet in a highly strategic asset to an AI bet that's very much uh on the come up plus you get a diluted ownership in X.
35:01
Yes, XAI is a powerful model but not unusually so.
35:06
XAI has dimminimous res revenue is hemorrhaging cash.
35:09
We don't necessarily I got to stop here because he's saying like shifting from a near pure play social media bet in a highly strategic asset.
35:17
Like I think we've played the highly strategic asset game for Twitter out a decade and we've seen that Disney doesn't want to buy it, Microsoft doesn't want to buy it.
35:28
Microsoft doesn't want to buy it. like this idea that there was going to be some like white knight dark course bidder that oh yes it makes so much sense for Oracle to have this so they'll come in and pay some high price it's a strategic asset for Elon yeah I yeah I I
35:43
guess but like like the reason that the the reason that the valuation was always high with Twitter back in the day was like it was like if you want to compete with Meta and Facebook and Instagram like buying Twitter would be a way to get in the in the game in serious way. Yeah. Um and I think we played that out Yeah.
36:00
Um and I think we played that out and I I I don't know how strategic it is if if that's the sense of what you're saying, but I I agree with you.
36:06
I agree with your your interpretation of like what strategic asset means.
36:09
Anyway, uh we can go on to the XAI has dimminimous re revenue is hemorrhaging cash and its perspective business opportunity seems very difficult given the relevant competition.
36:20
A has a head start, B is murderer row and C has existing business and GTM strategies to build on. Yep.
36:24
So obviously, you know, primarily referencing OpenAI chat GBT here.
36:28
Um, and uh, the big thing, and this is part of the reason why this transaction at a high level makes sense, is like, hey, we're going to have to lever XAI up a bunch anyway.
36:41
X by itself is is super levered.
36:44
Um, $12 billion of very high cost debt.
36:48
I don't actually know uh what what they're paying on that, but I would guess it's like got to be close to like like 10%. 10%.
36:56
Which is over a billion dollars a year just carrying cost on on the debt without actually paying it down. Yep.
37:05
Um and so that's very painful.
37:07
And so anyways, uh it will be in perpetual cash raising mode until that changes, which leaves its risk to the whims of the fundraising environment and the temperature of macro animal spirits, except Elon seems to be fine with fundraising.
37:22
So I don't know how big of a deal that is.
37:25
Um and then I think he goes on to say, I wouldn't bet against Elon.
37:28
A few bonus thoughts prompted by questions. One, creditors.
37:31
Uh this is clearly a better structure for creditors.
37:33
they retain their claim on Twitter and pick up optionality on XAI, which you mentioned earlier, uh to clean up.
37:39
I suspect this deal is actually clean up for XAI to raise a new a huge new equity round.
37:44
And so, yeah, it's interesting.
37:46
I I think the I think it makes a ton of sense to put the two together.
37:51
Yeah, I think it's interesting to see as we play this out, how does when this when this machine really gets humming, how big can this get?
38:02
because I'm feeling like number one chat GPT is as we saw last week still able to be stay on the frontier for for nine months out of the year and then they get beat towards the end of the year basically and then they come out with something new and then they're still the number one and so as long as they
38:22
continually drop the frontier and get all these people to install they can kind of ride it out because I bet you in in you know six months people would say oh well There's actually like better giblies if you really care about giblification in this app, but only the hardcore folks move over. And that's the
38:38
And that's the same thing with like claude.
38:40
Like sonnet was like better, but people didn't really care enough to switch for if you're like a normie.
38:45
The interesting thing is I do believe if if this combined entity were to go public right now, it would trade well beyond the sort of private mark.
38:54
It probably would pop to like a trillion.
38:57
to like a trillion. I wouldn't I wouldn't but the given how much sort of political pressure is on the company right now like it would be very chaotic and maybe it wasn't the right move but if the play is to basically take it out
39:11
and Bill Gurley would be watching this one like he'd be like do not leave but you could easily see this getting priced you know you could see this getting priced at a like even sort of stabilizing at a couple hundred billion dollars just just pure The Elon thing is so crazy. It's hard to price, but uh I
39:29
It's hard to price, but uh I mean we actually saw evidence of like the market wants something that's pure play index to AI that's not Nvidia.
39:37
Nvidia had already like run up so much there was not much left on that Apple or whatever.
39:41
Uh and we saw Coree go out and what happened?
39:44
Coreweave priced right at 40. Bill Gurley very happy. It didn't pop.
39:49
But the but I think the the counterpoint to the to the coreweave thing is that it showed that there was not this insatiable demand for like oh we need we need a AI pure play company uh we we we we want it so badly like we'll pay any price it's going to pop huge like that didn't happen.
40:05
Coreweave was not able to to become like this like meme at least not yet.
40:09
Um yeah, but obviously XXAI is like way crazier because like Elon like has so many fans and like huge allies all over Wall Street and stuff.
40:18
So yeah, coreweave also being a data center business that's not coming out and saying we're going to achieve AGI.
40:25
It's more like you guys do a lot of revenue. Yep.
40:27
You have a lot of leverage. Yep.
40:29
And you have sort of mediumterm contracts, right, that that could um go up in smoke. Uh but uh but who knows? Yeah.
40:39
Um either way, who knows? Wild times.
40:42
Um the most entertaining outcome is the most likely.
40:47
Let's go through the the the Tesla Solar City merger.
40:49
I just have some some key bullet points that are kind of interesting to go down uh memory lane.
40:56
Uh Solar City, founded in 2006 by Elon Musk's cousins, became number one in US residential solar uh installation by 2013.
41:05
So, he kind of delivered on the initial pitch and I heard this crazy story that like he thought about it at B he thought of the idea at Burning Man or something like that. Have you heard this one?
41:13
It's like a crazy like like he was hanging out with a bunch of people and was like maybe we should do solar panels on people's houses and then they just like went for it.
41:21
It's so funny because my entire life as long as I've been truly conscious, solar panels on homes are just so normal. Yeah, totally.
41:29
that it's funny to think it was maybe one or handful of companies that actually normalized it, but that's usually how things work.
41:38
Uh, so at the time Elon was like famous, but really he was only known um uh by for PayPal and SpaceX and 2006 like these weren't like PayPal was a big deal.
41:50
SpaceX was still very early.
41:52
Uh Elon provided the initial $10 million in the startup and uh Lynden and Peter Reev uh c his cousins ran the company.
42:01
Uh he also served as Solar City's chairman and was the largest individual shareholder leveraging his vision of a sustainable energy future across his ventures.
42:08
Solar City's business model focused on solar panel uh solar panel leasing and what are called PPAs which are power purchase agreements.
42:15
The customer pays no upfront cost for rooftop solar installation, but then signs a long-term agreement to buy the power produced.
42:24
So, it's basically like a no money down solar leasing model.
42:26
And it was wildly pro popular.
42:29
And so, there was a little bit of like hard tech here, but most of the panels I I don't think that they were manufacturing them at, you know, gigafactory scale.
42:37
I think it was mostly, hey, let's buy a commoditized product and then innovate on the financial side. Yeah.
42:42
And so this fuels rapid growth.
42:45
fuels rapid growth. Um, but it was very capital intensive and debtfueled, of course, because you're giving someone a, you know, I I don't know I don't exactly know how much these cost, but let let's say like you're giving someone 10,000
42:58
bucks or $100,000 in value, like the solar panels and then the installation cost, and then you're you're paying that and you're advertising it over 20 years, but you're not getting th those payments from the customers for 10 20 years. It It takes a long time.
43:11
And so every time you install new solar panels, you're accumulating debt on your balance sheet. Yeah.
43:18
And you're also accumulating like a revenue stream, which is great, but but you have a major major financing uh mismatch there.
43:24
And so by 2015, warning signs emerged.
43:27
Solar City's stock price uh which had peaked around $88 a share in 2014 began began a steep decline.
43:32
In October of 2025, the company lost a quarter of its market value in one day, falling below the coveted unicorn one billion dollar valuation.
43:43
The drop followed uh CEO Lynden Riv's announcement that Solar City would slow its expansion and cut costs as years of 80 to 90% growth had led to huge investments that were not yielding cash flow yet. We talked about that.
43:56
Um internally, executives knew the company faced a looming liquidity crisis by late 2015.
44:03
Solar City's aggressive growth had left it with large operating losses and over $3 billion in debt by 2016.
44:06
In fact, Solar City was nearly insolvent prior to the Tesla merger.
44:11
Court found filings later revealed that weeks after the acquisition, auditors warned that Solar City lacked sufficient cash to meet its obligations on a standalone basis.
44:21
And so there's always this question about like, you know, he kind of got a bailout.
44:24
Should he just let the company go bankrupt, buy it out of bankruptcy, do a proper bidding process?
44:29
Like this was always like a hot button debated issue.
44:31
that um so to sustain grow growth, Solar City diversified within the solar value chain.
44:36
In 2014, it acquired Salvo, a solar panel manufacturing startup and embarked on a on construction of a massive 1 gawatt solar panel factory in Buffalo, New York, with substantial subsidies from the state.
44:51
The Buffalo Gigafactory 2 was part of a plan to produce advanced solar modules domestically and reduce costs.
44:58
And we talked to Casey Hammer about this a little bit where, you know, he thinks that the the the Chinese manufacturers of solar panels are subsidizing them really really heavily.
45:07
And his his argument was like, hey, when somebody's subsidizing something below their cost, you shouldn't tariff it.
45:13
You should buy as much as possible to hurt them, which is kind of funny, kind of hot take.
45:17
Um, but there has been incredible international pressure with these monetized products.
45:22
We could have maybe pushed him a bit more on that and and said, "Well, do you want to, you know, usually if somebody's selling something for less than what it actually costs, they have sort of sometime some sort of long-term Yep.
45:38
strategy that that maybe isn't in your best interest."
45:40
And it's the learning curve pricing issue.
45:42
So yes, they are losing money on each solar panel right now, but if we if we all of a sudden provide to them 10x demand, they might be able to justify investments in 10x larger gigafactories and they might actually be able to lower the price to the point where they are profitable at a price that we can never compete with because we just are not scaled up enough.
46:05
And that's certainly what's happened with TSMC where TSMC has seen so much demand from Google and Nvidia and Apple and everyone else that that they're getting to a place where no one else can compete.
46:18
Uh and they really have like essentially a monopoly on on the 3nmter node and they're running this with uh cars right now.
46:24
Yeah, cars and phones and a lot of different stuff.
46:27
Uh it's it's it's all happening.
46:29
Uh so the cash squeeze got really severe.
46:31
The company was holding emergency weekly cash management meetings and its executives privately informed Musk that it needed an infusion of$180 to $300 million to avoid default.
46:41
I feel like Elon nowadays could like raise that with one phone call for like literally anything.
46:48
He could text Mark Andre and say, "Yeah, Ellison, hey, I need 300 mil. Don't ask what it's for.
46:53
It's just for something cool."
46:55
And he'd be like, "Yeah, of course, dude. I got you."
46:59
um uh attempts to raise equity or find outside investors during in early 2016 fell through which is unfathomable forcing desperate measures.
47:06
Uh the other Musk's other company SpaceX loaned Solar City money to prevent its cash balance from triggering a bond default.
47:13
Uh Solar City had covenants requiring cash above 169 million.
47:18
Hilarious number that even his debt covenants include the number 69. Classic Elon.
47:22
Like even in the debt world, he's like memeing. I don't know.
47:28
It's probably just a coincidence, but you never know.
47:30
Uh, in February 2016, uh, as Solar City's board grappled with how to avert bankruptcy, Musk met with Linton Lynden Rebe to Reeve to explore a bold situation. Tesla Inc.
47:40
would acquire Solar City, uniting Musk's electric vehicle and solar energy ventures.
47:45
And I want to go through a couple bullet points on how the deal came together.
47:51
So, uh, so by 2016, Solar City was in trouble.
47:55
They had they were nearly insolvent and they had $3. 25 billion in debt.
48:00
And again, like this is a company that was trading in the billions and then the market cap goes down to less than 1 billion.
48:06
So the equity value to debt to equity ratio is like really really out of out of whack.
48:13
Uh and so in June of 2016, Elon proposes that Tesla acquire Solar City to form a vertically integrated clean energy company.
48:20
And it makes a ton of sense that a Tesla owner, again, it's like it's crazy because it's one of these Elon deals where it's like him one hand washing the other, him talking to himself and like he's on the board and he owns all this and stuff, but at the same time, if you think about it, it's like Tesla customers love clean energy.
48:37
They have the Tesla battery pack on the wall.
48:39
They Tesla charger and of course they want solar panels.
48:41
So, you imagine that it makes a ton of sense for to just sell all of this to one person.
48:44
there's tons of like sales channel stuff and then also in just in terms of manufacturing like the the the the gigafactory that produces the batteries and the cars can also produce the solar panels.
48:56
Like it's not that crazy to me.
48:57
Um but the deal is kind of crazy and so there's an all stock deal that happens.
49:01
Solar City is valued at 2.
49:01
6 billion and they ass and Tesla assumes three billion in debt. Shareholders got.
49:06
11 Tesla shares per Solar City share.
49:09
And then Tesla went on like a generational run and every Solar City shareholder if they held is very happy about this. Yeah.
49:16
Um, of course there was this conflict of interest because Elon was the chairman of Solar City and the CEO of Tesla and he owned 22% of both.
49:23
Um, and his brother brother and cousins were board members and executives.
49:28
Uh, despite the controversy, 85% of unaffiliated shareholders approved the merger in in November 2016. And that makes sense.
49:37
Like if I'm if I'm an unaffiliated shareholder and I just hear about this and I've never even met Elon, I'm going to be like, "Yeah, of course."
49:41
Like this deal makes sense even though it's a little wonky, like put these companies together.
49:47
I'm happy to be a a shareholder in the combined entity.
49:49
And so, of course, there's a legal battle still because 85% approved, but some of them are upset.
49:56
And so, there's a shareholder uh lawsuit.
49:58
Uh they sued Tesla's board of board of directors for breach of fiduciary duty, which is what you sue for whenever you're unhappy about something.
50:07
All directors except Musk settled for 60 million in 2020 via insurance.
50:12
And so they had some key man insurance there or some uh yeah, I forget what it's called.
50:16
It's the executive uh director DNO, directors and officers insurance.
50:20
Uh Musk uh alone went to trial in 2021 accused of pushing the deal to bail out his failing investment and family.
50:28
plaintiffs sought sought 13 billion in damages, which is crazy because that's like way more than the debt and more than the equity.
50:34
It's like more than everything combined. But Musk won.
50:38
So in April 2022, a Delaware judge ruled in Musk's favor, stating that Tesla paid paid a fair price. Of course, they did.
50:46
If anything, they overpaid.
50:48
And so, as a Solar City shareholder, you've you've gotten a bunch of Tesla shares that basically like 10xed.
50:53
You got a really high price at the time of the deal.
50:56
like you have nothing to complain about.
50:57
Why are you It was it was a full zero like literally 3 weeks later. Exactly.
51:01
They were running out of cash.
51:03
Uh and so uh the Delaware judge uh you know Elon's been very rough on the Delaware judges, but in this case they say you know we got Musk's back. He's right.
51:11
Uh and the deal this deal ultimately be benefited shareholders which I think we agree with.
51:18
Um and then uh there was a post merger decline too.
51:21
So even even as they combined and they had all the resources and they took care of the cash management problem, uh Tesla's solar installs fell 60% from 870 megawatts to 326 megawatts uh in just three years from 2015 to 2018 and Tesla lost its number one solar market position to Sunun which is another solar installer crushing it.
51:43
they've been crushing it.
51:44
And so today, um Tesla has actually has actually shifted for away from highly commoditized solar panel installation to uh to battery storage.
51:55
So they sell those power walls.
51:57
We looked at one, it was $192 million installation, right?
52:02
Wasn't that that you just go you could just go on their configurator and say, "Yeah, I actually need like a gigawatt of power. Can you send me it?"
52:06
And they'll be like, "Sure."
52:07
Um but but listen to this.
52:09
In 2024, Tesla Energy hit 10 billion in annual revenue powered by power walls and mega packs.
52:16
And so, yeah, like I think of the Power Wall as like, oh, it's like this cute like little side project.
52:21
It's like the AirPods of the Tesla world.
52:23
Like that's a lot of money, 10 billion in revenue.
52:27
And so, uh, even though like the solar angle didn't really pan out, like Musk was right over the very long term that like vertically integrated clean tech energy would be a good strategy, good company.
52:39
And so, uh, just an interesting thing that like, you know, to think about with the X X and X AI thing, like it's hard to predict where this goes in the next 5 10 years.
52:48
Is it a good deal right now? Will there be a lawsuit?
52:51
Like all of that kind of steps to the side of really trying to concretely visualize what does the social networking and AILLM consumer productization of AI look like in five years, 10 years?
53:06
And can he figure out something that is good in that space in that time? Yeah. And I don't know.
53:15
He has a lot of money and a lot of time and a lot of effort.
53:16
Time for Ben Thompson to be on vacation. I know.
53:20
He did one he did one uh one um unscripted podcast about it and he was pretty bullish on it.
53:26
He said it he said he thinks it makes a lot of sense, but we'll have to wait to get Ben's full take.
53:31
Anyway, such a funny s such a funny deal.
53:35
Uh never a dull moment in tech.
53:37
Uh my number one advice for Elon is you're combining these two companies.
53:41
It's more important to uh control costs more than ever. So go to ramp. com. Elon time is money. Say both. Save both.
53:47
Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place.
53:51
I would love to see X and XAI both on ramp. Uh really understand.
53:54
I mean a big thing of ramp is like you're paying for two subscriptions and it identifies that automatically, right?
54:02
It's like you're merging these two companies. SAS savings, you know.
54:03
Well, actually, I imagine a lot of their contracts are primarily seatbased and maybe aren't saving much money at all. Maybe.
54:14
Uh, but uh you can always save money.
54:17
I know that man hates losing money.
54:19
If anyone in our audience signs up for RAMP and doesn't find a way to save at least $100 a month, I was going to say like a thousand. I don't know.
54:29
And then somebody would depends on your scale.
54:32
Yeah, it depends at your scale.
54:32
But you sign up for RAMP, you're gonna save you're gonna save some money.
54:35
And you're gonna save some time, baby.
54:37
And you're gonna save some time.
54:38
Well, let's stay with Musk and go on to this exclusive in the Wall Street Journal. That's right.
54:44
Apple and Musk are clashing over satellite expansion plans.
54:46
We talked about this a little bit.
54:48
Uh the iPhone is getting uh Starlink direct to cell.
54:54
So, you'll be able to communicate with the Starlink satellites from your phone. Very cool.
54:58
It's already live in some places.
55:01
you can send like a single text message on a satellite network.
55:03
Um but uh obviously this is a really really tough deal and a very um and a very big uh there's a lot at stake obviously because yeah once you don't need the cell phone towers you can use the the satellite communication everywhere that's going to be a big differentiator for any cell provider.
55:20
So Apple here's the key points Apple and SpaceX are competing for spectrum rights to expand their satellitebased communication services.
55:27
Apple's outer space ambitions have drawn the eyeire of SpaceX CEO Elon Musk, who has pushed regulators to stall expansion efforts from Apple partners.
55:36
Despite their despite their rivalry, Apple and SpaceX need each other to achieve their respective goals in the satellite market.
55:41
And so, uh, Apple has been investing heavily in satellite-based communications that keep users connected in places where traditional wireless signals aren't available.
55:51
Musk's SpaceX meanwhile has launched more than 550 satellites that provide cell phone connectivity via its Starlink service.
55:57
To build capacity, the companies are competing for valuable spectrum rights, airways that carry the signals which are in limited supply.
56:05
It's very interesting like the the wireless spectrum when it goes when when there's a block up for sale, there's this whole auction.
56:10
It's governed by the FCC.
56:12
Brendan Carr, the new FCC commissioner, is the guy who kind of oversees that now.
56:16
Um, but I don't know if you remember this, but back in 2011, 2012, TV stopped being over the air.
56:26
Like, do you remember rabbit ears?
56:26
Do you remember those little antenna that you put on a TV? That just stopped.
56:29
We had the digital transition TV.
56:31
You could still get TV, but it wouldn't be over the air.
56:35
And so, that block of of spectrum was then reauctioned off for other things.
56:41
And that's where like the 5G spectrum kind of comes in.
56:43
Um, and so Apple's outer space investments have drawn Musk's eye.
56:47
SpaceX pushed federal regulators to stall an Apple funded satellite expansion effort.
56:52
The conflict intensified in recent months after SpaceX and its partner T-Mobile sought Apple's cooperation to offer Star Starlink on iPhones.
56:59
The company's engaged intense discussions intense discussions uh and eventually reached an agreement that allows SpaceX and T-Mobile satellite cell phone service which will debut this summer.
57:10
It appears to it appear uh to appear seamlessly on newer iPhones.
57:14
So even though SpaceX has a deal with T-Mobile, they need Apple to opt in and say, "Yes, we're going to allow this.
57:22
We're going to build this.
57:23
This is going to be a function."
57:23
It's not enough to just say, "Oh, SpaceX and T-Mobile agree.
57:26
You got to get it in the Has ever shared about what its long-term ambitions are?"
57:32
ambitions are?" because I imagine long term you'd want to just cut the carriers out completely and just own uh you know basically have another $100 a month sort of yeah it's kind of a it's kind of a match made in heaven with if if Musk and
57:50
Apple can partner up and just cut out the middleman entirely it'd be amazing but again I think the satellite internet just does not work in buildings it just does not penetrate and so uh you like like we're we're not anywhere near there. So, it's very much like a nice to
58:04
So, it's very much like a nice to have add-on.
58:06
Nothing penetrates my home because I use lead paint to a Faraday gauge.
58:11
Yeah, I've developed using lead paint to create a Faraday cage in my home.
58:16
I mean, a lot of people are doing that.
58:18
They're worried about microplastics.
58:19
So, they're switching to leaded gasoline.
58:20
They're calling it nowaday coming back in in a big way.
58:24
Yeah, you don't want the microplastics.
58:26
Let's just use the lead for sure. Go full lead.
58:28
uh offering greater connectivity in hard-to-reach areas could spur more iPhone sales or greater connectivity.
58:34
Connectivity, what do you call connectivity?
58:36
Connectivity uh greater adoption of Star SpaceX SpaceX Starlink.
58:42
In some ways, the companies need one another to pursue their respective strategies.
58:45
So, Apple's currently partnered with Global Star, which I think is one of those satellite internet companies that just puts up like a huge washing machine guy.
58:52
It's like a massive not in LEO.
58:54
It's not a constellation like Star Starlink.
58:56
And Global Star is very high latency. Global Star is a $2. 6 billion company.
59:01
So, um, so there's a few of these companies.
59:06
Astronis is one of them that puts up like a much larger satellite.
59:08
It's locked in geocynchronous orbit.
59:10
Y, there's fewer satellites, but they're higher bandwidth.
59:15
And then Elon, because SpaceX has all this residual capability, they can just throw up Starlink satellites whenever they don't have a full ship.
59:23
Basically, throw it up there, create a whole constellation. It's a lot lower.
59:27
they'll burn up a lot faster, but the benefit is that it's a lot it's a lot lower latency.
59:32
And so, you know, famously like you can game on a plane, you can take a, you know, FaceTime call on uh on on your private plane if you have Starlink.
59:41
Whereas with Global Star, if you've used Apple's satellite service, like you could definitely not have a conversation on it.
59:48
It takes forever to upload even a small text message.
59:52
But it's still very cool.
59:52
using Apple service during LA fires because I was trying to help it was this, you know, it was a crazy time, but I was trying to get my buddy's solar panel turned on cuz he wasn't around to help his mother like and I was using the sort of very it's a very dinky service.
1:00:09
You got to be around outside. Yep. Yeah. Pointing it around. Um, this is interesting.
1:00:16
Uh, you said Global Star is worth what? Two billion. Yeah. Not a lot.
1:00:21
So last year Apple invested more than one billion in Global Star. Yeah.
1:00:26
And so so they must be the biggest outside shareholder unless they invested at a really high valuation just got wiped right now.
1:00:33
But uh you know 20% this okay they own 20 not bad uh Apple service part of that $1 billion I think was like basically services revenue. Sure. Sure. Sure.
1:00:44
Uh so invested in the deal broadly.
1:00:47
Uh, and of course the service allows you to send text messages, call emergency assistance, uh, seek roadside help, etc.
1:00:53
The new spending is intended to help Global Star develop a new global satellite fleet to improve space-based iPhone usage.
1:00:59
This technology has already helped save lives.
1:01:04
Apple said these satellite features are designed to complement carrier offerings, giving users even more ways to stay connected.
1:01:09
SpaceX recently asked the FCC to dismiss a Global Star application seeking permission to use certain spectrum uh for the new network of Apple finance satellites document show.
1:01:20
It's called the airwaves it uses.
1:01:22
It called the airwaves it uses to carry Apple's users emergency signals an underused resource.
1:01:28
SpaceX didn't respond to comment.
1:01:32
Um so uh SpaceX and T-Mobile revealed their plan to offer always on texting in remote areas during a rollout event in Texas.
1:01:41
Inside Apple, some staff believed SpaceX's announcement of the T-Mobile agreement was designed to frontr run Apple's news, disclosed soon after that it would provide emergency texting through satellites on some iPhones.
1:01:51
Uh Musk's Tesla and Apple long ago competed over talent for developer for developing driverless cars.
1:01:57
The two sides also had spats related to X.
1:01:59
There was that famous like Apple might be pulling out of advertising on X.
1:02:03
Uh Elon goes and meets with Tim Cook and then they kind of like figure it out.
1:02:07
It was also the question of like was there a way for Apple for for Elon to make X a premium service that was based on subscription revenue without causing without paying the 30% uh to Apple which would be obviously very very cumbersome for him.
1:02:23
Uh the social media company relies on Apple for distribution on its app store and advertising dollars.
1:02:26
And there was also the question of like if if Musk goes too far with the free speech, will Apple kick him out of the app store? That didn't happen.
1:02:33
But um Musk at times has considered building a smartphone himself over frustration with how Apple controls distribution of thirdparty apps.
1:02:41
Um but nothing's really really happening there.
1:02:44
Uh and then he said Elon said the idea of making a phone makes me want to die, but if I have to make a phone, I will. I love it.
1:02:53
Cracking a market dominated by Apple and Samsung whose devices account for around 40% of the global smartphone market would be tough according to analysts.
1:02:58
Uh in orbit, SpaceX through its Starlink operation has far more satellites than Apple and industry leaders believe Global Star alone won't be able to satisfy the iPhone makers needs.
1:03:09
Apple has held talks with other satellite providers over the years to secure more spectrum.
1:03:15
people familiar with those discussions said it explored investments in the Colorado based satellite operator Echoar to provide more satellites and spectrum to support iPhone connectivity.
1:03:27
The people said uh Apple previously worked on a satellite plan with Boeing and everyone is trying to do deals with everyone in the great space phone race of 2025.
1:03:37
It's fascinating because Global Star has contracted SpaceX to launch satellites. Of course. Yeah.
1:03:43
There's no vertically integrated satellite internet or yeah satellite internet provider.
1:03:50
They're all la they're all using either SpaceX's launch capacity or separately and we'll talk about this today.
1:03:54
Uh they're f pure play on launch capacity.
1:03:59
So yeah SpaceX is definitely unique in the fact that they make the satellites and then also launch them.
1:04:02
Uh and so that's obviously much better for margins and all the different stuff. No.
1:04:07
Again, part of the there's a world in the future where X is not only the everything app, it's your personal AI, it's your cell phone, it has sort of 247 connectivity via satellites and you're hopelessly dependent on it in the way that you are the iPhone.
1:04:25
And I'm sure, but can you imagine if your phone only worked on Starling?
1:04:30
So, it's like, yeah, you got to go outside.
1:04:31
You got to touch grass if you want to scroll the be. That'd be bullish.
1:04:35
I think it would be great. It'd be like Pokémon Go.
1:04:36
Everyone I I saw a bunch of people playing Pokémon Go at some meetup in Pasadena and they were all on their phones out.
1:04:41
It was very dystopian actually.
1:04:43
But it was cool to see them all walking around a golf course like at least they were getting outside just in the middle of a driving range.
1:04:49
Oh yeah, they shut down the whole golf course to exclusive Pokémon Go effect.
1:04:54
Can you imagine being the golfer that's just showing up on a Saturday just like h finally get a little time off?
1:05:00
It is funny because they only they only shut down half the golf course like like one of the one set of the 18 holes was shut down for the event.
1:05:06
Um so you could actually play and then you'd see like you know a thousand Pokémon Go players like heads down like oh I caught a Charizard. Very excited. It's great.
1:05:17
Anyway, if you're traveling a lot and you have a Starlink and you want to hang out, why don't you find your happy place at wander. com? Find your happy place. Find your happy place.
1:05:28
Book a wanderer with inspiring views. Hotel grade amenities. Dreamy beds.
1:05:32
Top tier cleaning and 24/7 concier services.
1:05:34
It's a vacation home but better folks. I got TVPN.
1:05:36
Go follow Kyle Tibbitz historical run at Kyle. K Y L E T I BB I TTS.
1:05:46
He posts some of the best wanders every single day.
1:05:49
He's their chief marketing officer. Yeah, he's their CMO. He's a friend of ours.
1:05:52
And he just posted one a bit earlier called Malibu Ridge that just looks 10 out of 10. Iconic.
1:05:59
We got to get over there.
1:06:02
Sure it's uh close to my house.
1:06:02
And um yeah, we got some we got some shoots coming up.
1:06:09
We got some shoots in the pipeline.
1:06:11
We're going to be leveraging some wanders. Love it. Very excited about that.
1:06:14
Um well, should we move on to uh Isomorphic Labs?
1:06:16
$600 million for AI drug development.
1:06:21
They were backed by Google.
1:06:24
Thank you for the size, Gong.
1:06:26
Demis Hassabis uh the CEO of Isomorphic Labs of course has been at Google for years.
1:06:32
He founded DeepMind and uh famously beat Lisa Dah in Go with his Alph Go uh product and team.
1:06:39
Fascinating documentary if you haven't seen it all about Alph Go.
1:06:45
Move 37 really shook Lisa doll to his core.
1:06:48
One of the greatest moments in in AI history basically.
1:06:50
Uh but we'll take you through it. It's very interesting. It's very early.
1:06:55
Everyone kind of expects that AI will help in drug design, drug development, uh could help us live forever, like really really amazing applications, but we haven't seen AI really move the needle or move the biotech markets yet.
1:07:08
So, uh still early, but Thrive Capitals getting in early as you should if you believe that this is the future.
1:07:15
Uh so they raised $600 million in the first external funding round to boost artificial intelligence drug design pipeline across multiple therapeutic areas.
1:07:23
And so they're taking an ensemble approach.
1:07:27
They're really looking at not just one drug which is the kind of the normal biotech strategy.
1:07:32
Even a company like Maderna before they got into mRNA vaccines, they were focused on you know one one specific biotech technology and a lot of companies will go public as biotech company saying like we're an Alzheimer's company.
1:07:46
We're we have a drug that's targeting Alzheimer's. Not isomorphic labs.
1:07:49
Isomorphic wants to work across mult uh multiple therapeutic areas.
1:07:53
And so this is actually a subsidiary of Alphabet.
1:07:55
Uh started uh four years ago.
1:07:59
Uh Thrive Capital led the funding round with participation from Google Ventures, but they're potentially spinning it out.
1:08:05
And we've seen this with Whimo, too, where Whimo is starting to take external funding and potentially spinning out as well.
1:08:09
potentially spinning out as well. uh this company's based in London and they'll receive follow on capital from the existing al uh so fascinating that that uh Google allows for this sort of massive external investment in companies that are you know they're
1:08:27
effectively acting as some type of like venture studio but you'd think with how much cash they produce they would just want to own all of these but sometimes having an external you know board members can can help yeah I mean I I think that there's something about maybe
1:08:44
this is a kind of an ad like an admission by Google that says like hey like these companies these ideas are great but they can't really thrive when they're 100% owned by Google like we just need the the external pressure totally external pressure yeah it's like um who were we talking to about this
1:09:05
where um I think maybe Delian was was talking about this where it can be very tricky when you have uh when you're a company and you have like a billionaire patron who's just kind of paying payroll off their own balance sheet and they can kind of bail you out forever, but there's no pressure. And the venture
1:09:21
And the venture model of like, hey, you raised enough money to get to the next milestone.
1:09:26
You have 12 to 18 months.
1:09:28
Maybe you stretch that to 24.
1:09:30
Maybe it goes somewhere else, but like you have to deliver some sort of milestone and get on you're off the research track.
1:09:37
This is not goend and figure out if you can create a grand unified theory of the universe.
1:09:44
This is can you commercialize, can you make really really solid traction to justify the next round and that treadmill has worked in technology development for decades.
1:09:54
And so I think Google's maybe just admitting that.
1:09:59
There's also the question of just if how do you incentivize someone who's at a subsidiary financially?
1:10:04
Like if you go into I wonder what these cap tables look like, right?
1:10:08
Because it you have to imagine Google 100% Google.
1:10:10
It's at the start, right? Yeah.
1:10:12
But but post investment you've got, you know, the found you know uh founders got to have some direct exposure.
1:10:20
I would imagine the team is now working on it would want exposure. You know, who knows? Yeah.
1:10:25
I mean, I would imagine that Google outside of GV and Google Ventures probably owns 50% of the company still or something like that.
1:10:34
They probably gave a lot to employees and founders, but uh they, you know, it was definitely incubated there and built there and so they they deserve a a large chunk of the equity, but that will probably get diluted down over time as the company does more more investment rounds.
1:10:46
Um so the company will use the investment to advance its AI research and development and expand its team.
1:10:53
Uh Demis said this funding will help further turbocharge the development of our next generation AI drug design engine.
1:11:01
And of course uh while at DeepMind uh Deis worked on the team that's created alpha fold solved the folding the protein folding problem.
1:11:13
That was an interesting development because everyone thought that protein folding was extremely resistant to computational efforts that it was not going to be solved.
1:11:22
They solved it very quickly.
1:11:24
But also when they did solve it it didn't really move the biotech markets in an interesting way.
1:11:28
markets in an interesting way. like you would expect it's like hey like the thing that's really hard just got solved it's now trivial like you would expect all of the companies to kind of get a little bump but nothing happened in the market because it turns out that protein folding while it is important in drug
1:11:43
development it is not a major cost center uh yes you need to use this I think it's like an X-ray crystalallography machine or something you need to use some like really expensive equipment uh but at the end of the day you kind of just pay a PhD to do it and they're kind of a starving student and it's not that big of a of barrier to drug development. Even though
1:11:59
Even though it is from a from like a philosophical and mathematical perspective like a very very difficult problem and is very impressive that they solved it, it didn't really unlock.
1:12:09
It wasn't like oh yeah protein folding alpha fold came out and then we got a new cancer drug the next day.
1:12:15
Like that's that we were not that limited on it.
1:12:17
Um and so uh this is the interesting quote.
1:12:22
Demis says his mission is one day solving all disease with help of AI. Yeah. He's coming for it all. Yeah. Not just one area.
1:12:30
And uh while OpenAI's GPUs burn due to the Giblly usage, Google's TPU is burning is on fire trying to trying to uh further Brian Johnson's goals of living forever.
1:12:50
uh they already have partnerships with uh Eli Lily and Novartis for drug design and development through AI and uh they put out a press release.
1:12:57
They talked a little bit more about this.
1:12:59
They're bringing together top tier investor groups with deep AI and life sciences expertise.
1:13:04
They want to transform the industry through an interdisciplinary uh approach.
1:13:09
It feels like this um press releases maybe written by Gemini 2. 5. Who knows?
1:13:15
press releases just sound like boring all the time.
1:13:17
I wish he'd just done a thread.
1:13:20
He did he did post about it, but it was kind of like, okay, yeah, we get it. You're bullish.
1:13:24
Um, there was an interesting post I saw by Zachary Spiro here.
1:13:28
He says, this means Isomorphic has raised somewhere between 12 to 40x the average UK funding round for companies at this stage. Even at that stage? Yeah.
1:13:39
Well, how is he describing stage?
1:13:41
probably growth equity or like series B or something like that. I don't know.
1:13:46
Because if this is the first ex is this the first external round?
1:13:49
It is the first external round.
1:13:51
But 40 times the average. Yeah.
1:13:51
He's clearly saying it's more of a This is the interesting uh this is the interesting uh benchmark.
1:13:57
It's so large it's equivalent to more than a quarter of all UK life science VC investment in 2014 2024.
1:14:05
So last year, yeah, all UK life science VC companies, VC back companies raised just four times what they just raised, like two billion.
1:14:16
Thrive goes to to London for one trip and they're like, we are venture capital in the UK now, basically. But it makes sense.
1:14:24
It's like like Demis has had, you know, an incredible impact on the industry.
1:14:28
He's built Deep Mind, which became Google's like fantastic AI research organization.
1:14:33
Google at one point had Google Brain and then also DeepMind and they wound up merging them because it was too much and they had two research orgs that were kind of going back and forth.
1:14:41
Um, but he's a legend in the industry and he's and he really has again and again and again just created absolute dog. He's an absolute dog. He's an absolute dog.
1:14:52
He really is like I mean solved go uh m another legendary uh AI system.
1:15:00
Same thing with um I mean yeah it's like Google's been doing an incredible amount of work on the research side.
1:15:09
Uh just I think that the productization has been a little bit slow because a lot of these organizations within Google they feel like modern interpretations of the academic lab.
1:15:21
They're very much just, hey, you have unlimited money, unlimited time.
1:15:27
Go work on science and research and don't even think about how this will actually make money.
1:15:31
And that's produced some incredible results, but at the same time, it's not it hasn't really produced incredible products or businesses or durable value.
1:15:40
And so, uh, I I I I'm in support of them spinning it out. Yep.
1:15:46
Um but uh yeah, we don't want these moonshot projects just living within Google without any sort of urgency to actually deliver commercial results. Yeah, I agree.
1:15:58
So um but until Demis solves all disease, I think the best thing that you can do for your health is just get some good sleep. Go to eight.
1:16:07
com nights fuel your best days and turn any bed into the sleeping experience.
1:16:14
uh called out on X that you can use your true med funds. Oh yeah, that's right. Buy your eight sleep. Yeah.
1:16:21
Shout out basically buy a sleep pre-tax. Yep.
1:16:25
So if you have a FSA HSA account, you got some money burning a hole in your pocket, head over toleep.
1:16:31
com and check out with Trummed.
1:16:34
Can't recommend it enough. Just do it.
1:16:36
And a lot of these companies, they have FSA HSA programs.
1:16:37
You can just start acrewing it. Pay it down. There you go. It's all good. How'd you do last night?
1:16:44
Um, I I imagine I did well. Let's check.
1:16:51
I to be honest, fantastic numbers.
1:16:51
How do you was watching White Lotus 98 and I don't recommend Night Lotus is Night Lotus. Night Lotus. Night Lotus. Night Lotus. Never Night Lotus. Day Lotus only.
1:17:04
Uh, White Lotus before bed. Not a not a great combo.
1:17:07
I only got 6 hours and 42 minutes of sleep last night. I got 7:24.
1:17:11
So much as sleep is just getting, you know, really getting the time in, you know. Yeah.
1:17:16
You got to put in the time.
1:17:18
And once you're getting the time in, sleep on your pod. Yeah. Not in the pod.
1:17:25
You need a good morning routine.
1:17:26
You got to need a good nighttime routine. You got to go to bed.
1:17:29
You got to start your bedtime routine at 5:30 p. m.
1:17:31
I need a keg of Saratoga water to just do a quick keg stand. There you go.
1:17:37
Keg stand in the evening. Saratoga water. Yeah, you're good. Sparkling.
1:17:39
You could do it with the Aurora. The Aurora is a keg.
1:17:43
You should flip that bad boy over.
1:17:45
We should You're a huge Keg stand guy. I'm a huge keg stand.
1:17:47
You're bringing Keg stands back. Yeah. Yeah.
1:17:49
We need to take back Tech Bro. Take back Meatthead.
1:17:54
That was a great post earlier. It was fun.
1:17:56
Or maybe it was last night.
1:17:57
I think it was last night.
1:17:58
For those that missed it, John said, uh, "If you're trying to avoid microplastics, don't drink beer out of those red plastic solo cups. Stick to keg stands. Stick to keg stands.
1:18:08
And that only got about 25% of the likes of your other post which was the heat death of the universe is unacceptable.
1:18:16
We need to address entropy in a meaningful way within the next 10 to 100 years at Gary Tan.
1:18:22
So hopefully is that one doing well? It's uh it's over 400.
1:18:25
Okay, we're we're going with that one.
1:18:27
Yeah, the Gary Tan one went viral.
1:18:28
Any any problems that you have right now?
1:18:31
Yeah, just taggary tag tag GT.
1:18:33
This, of course, comes from like a pretty serious post, Deep Prasad, who I've actually met years ago. Nice guy.
1:18:40
Uh, he said last night around 3:30 to 4 a. m.
1:18:43
, okay, that's your first mistake, Deep.
1:18:45
You should have been sleeping. Uh, but this is crazy.
1:18:49
He said he was shot at twice near his hotel in San Francisco. Very scary.
1:18:53
He said they chased me to my hotel and shot the second time when I ran inside and got one of the staff to come out.
1:19:00
We both heard a Glock and he saw the gun while I saw the bullet impacts. I'm still shaking. Very sorry to hear that. I hope you're okay. That is very rough.
1:19:08
And it was no laughing matter until we found out that you were safe.
1:19:13
And then at the end of your post, you just added Gary Tan like, "Hey, help me."
1:19:17
And uh so people had a lot of fun with this. It turned into a meme. Glad that you're safe.
1:19:21
Um but we're going to meme. Okay. And he's safe. New meme format.
1:19:26
Says, "I'm sorry that happened, but what is Gary going to do?"
1:19:28
And there is a little bit of like Gary Tan has just become like Batman of San Francisco.
1:19:34
You just like put up the bad signal anytime anything bad happens.
1:19:36
Uh and so we had a lot of fun with this.
1:19:39
Uh uh Jordy put up a a similar post in the format talking about uh the difference between East Coast and West Coast time and how the East Coast has a three-hour advantage on us and Gary Tan should fix it for us. It's absolutely brutal. It's absolutely brutal.
1:19:57
perpetual three-hour head start on the day forever.
1:19:59
It should We should flip it.
1:20:02
We should flip it every six months. It should flip.
1:20:05
Yeah, that wouldn't cause chaos at all.
1:20:07
In uh in sports, you know, you don't let one, you know, team just sort of like pick their side. China, one time zone. Yeah.
1:20:18
Bas Russia 13 time zones. 13. Yeah. So long.
1:20:22
And and it's funny because it's like they're both like pretty big countries, but it's clear that like Russia was just like let's have as many times as possible and China was like let's have as few as possible.
1:20:31
Um and so yeah, I think if you're on like the I think if you're in the western side of China like the sun sets like really early. Yeah.
1:20:39
Something something odd happens.
1:20:41
But you got to deal with it because they're not putting up any east west rivalry. It's one team.
1:20:44
Well, I got a I got some breaking news. Okay, hit me. We have a new partner. Oh yeah.
1:20:49
Uh if you look in the ticker right now, you'll see a lovely logo for Numemeral.
1:20:58
Uh so shout out to Nate, Sam, and Matt over at Numeral. So uh break down. You're about to know.
1:21:04
Numeral puts sales tax on autopilot for leading e-commerce and SAS businesses.
1:21:08
It is the platform for sales tax compliance.
1:21:11
John, you already know that.
1:21:14
Uh they already work with a thousand plus different e-commerce and SAS businesses.
1:21:18
They power uh Ridge Wallet, our friends Sean and Connor.
1:21:22
They also power Graza, which is a company uh that is absolutely crushing.
1:21:28
Uh it's the Haze portfolio.
1:21:30
It's in the Hayes family portfolio.
1:21:30
I think it's like a clean, but they got their own ticker on here.
1:21:34
Uh they got their own ticker, too.
1:21:36
So, they're they're ticked up. They're ticked up. We love to see it.
1:21:40
You got to scroll down so that fantastic.
1:21:41
Our ticker doesn't block their ticker.
1:21:44
Let's look at their benchmark series. They got great teams. Uh very cool.
1:21:48
Uh and uh I mean two things like like sales tax is such a hassle uh because it's there's just so many sales tax jurisdictions.
1:21:57
It's like the perfect thing for automation and software.
1:22:01
Um I I was like deathly afraid because I just yelled out benchmark series A and I was like, "Oh wait, did did that not get announced yet?" It did get announced. It got leaking.
1:22:10
It got uh it got announced uh last month.
1:22:13
Um so we love a benchmark series. Fantastic.
1:22:16
Um uh I'm very excited to be uh Sam the CEO splits is is spends time in LA.
1:22:23
So yeah as soon as he back on do you remember the golden age of e-commerce when you just didn't have to pay sales tax and Amazon was just like yeah if you're not in Seattle like we're a Seattle company like we don't have nexus in California. Yeah.
1:22:38
And they just wouldn't and it was this crazy arbitrage because you just you could buy things and you just wouldn't pay tax if you bought it online.
1:22:44
And then eventually uh Amazon was like, "Okay, yeah, we actually have Nexus everywhere and we got to pay tax everywhere."
1:22:50
Uh and it got a lot less fun.
1:22:52
But now that it is a lot less fun, the fund's coming back because of sales tax automation.
1:22:57
So what's the call to action? Uh go to numeralhq. com. numeralhq. com.
1:23:03
And yeah, we're pumped to have him on the show. Great.
1:23:05
Uh we are eventually going to sell some merch and we will be running on numeral. That's great.
1:23:12
Uh GMO, friend of the show, former guest of the show, has a post here.
1:23:16
There's no better investment in the world than America.
1:23:18
It's people, its culture, its land, its companies, its freedom, leaders in AI. There's no second place.
1:23:25
I'd buy every stock in every square foot.
1:23:27
It's only been in a blink of an eye since 1776.
1:23:29
And the best is yet to come.
1:23:31
Let's hear it for America.
1:23:35
Let's hear it for America, folks. Thank you, John.
1:23:37
What happened to the American flag that we used to have on the set?
1:23:41
Did you take it for your bedroom? I don't know.
1:23:43
I was thinking we need a massive American flag somewhere on the set.
1:23:47
Uh well, we're working on a new studio, folks.
1:23:49
I'm sure we'll Maybe we should just paint the whole wall American flag.
1:23:52
Uh I'm also seriously looking at a Cybert truck that's wrapped with the American flag and throwing a sticker on there.
1:23:58
I bought this before Elon went crazy and see if people fall for it.
1:24:03
Just the most aggressive screaming eagle and be like, "Yeah, yeah, I bought it before Elon went crazy."
1:24:09
Yeah, like uh or or maybe you throw the I bought this after Elon went crazy.
1:24:15
Um I kind of want to do a copy pasta of this GMO post that says there's no better investment in the world than Versel.
1:24:23
It's people culture, it's land, it's companies, it's freedom, leaders in AI.
1:24:27
There's no second place I'd buy every stock in every square foot.
1:24:29
It's only been a blink of an eye since 2012 14 when they incorporated when GMO launched Nex. js. Yeah.
1:24:38
Isn't that the one he he launched? Uh, very funny.
1:24:41
Uh, anyway, um, if you're looking to get in on America, on the action in America, buying every stock in America, go to public.
1:24:47
com to invest in America.
1:24:50
Investing for those who take it seriously, multiasset investing, industryleading yields, and they're trusted by millions, folks.
1:24:54
Uh, anyway, let's move on to Tom Bloomfield over at Y Combinator.
1:24:59
He says, "Software engineers are highly paid farmers tending their crops by hand.
1:25:03
We just just invented the combine harvester.
1:25:05
The invented the combine harvester.
1:25:05
The world is going to have a lot more food world is going to have a lot more food and a lot fewer farmers in very short and a lot fewer farmers in very short order.
1:25:11
I think this is true of doctors order.
1:25:11
I think this is true of doctors and lawyers, too.
1:25:13
But maybe a year or and lawyers, too.
1:25:13
But maybe a year or two later, we're going to have abundance two later, we're going to have abundance of an abundance of incredibly high of an abundance of incredibly high quality knowledge work at very low quality knowledge work at very low prices.
1:25:20
Instead of living off grl, prices.
1:25:20
Instead of living off grl, everyone is going to have bananas and everyone is going to have bananas and kiwi fruit for pennies.
1:25:24
The farmer, but kiwi fruit for pennies.
1:25:24
The farmer, but the farmers will need something to find the farmers will need something to find something else to do with their time.
1:25:29
We something else to do with their time.
1:25:31
It's actually so wild that you can take a you can you can take any type of media whether it's text, screenshot, PDF, image, etc.
1:25:45
Put it into any of these models and get and say pretend to be this and give me an an analysis of this content.
1:25:55
And then it just spits out a a really robust analysis from the lens and you're effectively getting to hire a lawyer, an intelligence operative, uh a doctor, etc.
1:26:07
to do this sort of pretty in-depth analysis for effectively zero dollars.
1:26:13
This is a big and that is still just dramatically underhyped.
1:26:15
This is a very potentially a very stupid take, but I haven't seen it and I wonder if there's something good here.
1:26:21
Like we talked about Jevans paradox where deepseek drops the cost of inference and paradoxically the overall demand goes up. Right? That's Jeban's paradox.
1:26:30
Now I've always wondered like is Jevans paradox just price elasticity?
1:26:34
Because if a product is very price elastic like a price inelastic good is is cigarettes.
1:26:43
Like the price goes up people buy the same amount.
1:26:45
But with a price inelastic more inspire myself to grind harder of course.
1:26:50
Um but uh yeah well well that's a Vlin good and recently I I said we should put 100% tariffs on goods because Vlinin goods are goods that the demand increases when the price goes up.
1:27:01
So that's something like a PC Philippe is a Vlin good because you you're like oh it's a 200 I want to buy it more.
1:27:08
I was joking about the auto tariffs being actually good for the economy because okay if if you know whatever if a Daytona SP3 cost 25% more I'm simply going to grind harder and you're joking but that's actually the economic analysis of what a Vlin good is.
1:27:30
That's exactly how an economist would describe how a velling good works which is why I think that post is funny.
1:27:36
post is funny. Um but what's interesting is like if you have if you have price inelast if you have price inelasticity for uh AI inference as the price goes down if it's truly very price inelastic or price elastic what will happen is
1:27:53
your your demand increases disproportionately to the price and so you're actually selling more at the lower price um and so your overall revenue goes up and that's what Jevans paradox predicts about GPUs and new technologies But is there a Jevans paradox for software? And I think that's
1:28:07
And I think that's what we're hearing from a lot of folks in the industry who say, "Hey, yeah, it's going to be much easier to write code, but there's a lot more code to write."
1:28:17
And so what's interesting is like it's possible that the software engineering industry actually grows even though the price of software engineering declines and you have a sort of Jevans paradox, but we'll have to figure it out.
1:28:32
We certainly see that with with Studio Giblies.
1:28:34
Like someone was uh chirping at uh Mike Tyson for posting a Studio Gibli photo of him with a with a pigeon.
1:28:42
And somebody was like, "You're you're a millionaire.
1:28:44
Like why aren't you paying an artist to do this?"
1:28:46
And I saw this and and and the and the thing was like look like he was never going to pay an artist to do that because like he doesn't have time to hire.
1:28:54
He's not thinking about that.
1:28:55
That's not something he was doing.
1:28:56
Somebody quoted that and said something to the effect of, "Hey, I'm looking for an artist to make me a picture of Mike Tyson, you know, with a pigeon and my budget is zero dollars." Exactly.
1:29:08
Let me know if anybody wants Let me know if anyone's interested. Exactly.
1:29:12
And so and so you have this weird this weird paradox where where it's possible that like demand for for art and demand for engineering it all increases.
1:29:22
And it's kind of unclear what that does to jobs.
1:29:25
like you would imagine there's fewer software engineers like what Tom Bloomfield here is saying but uh we could see a lot more code a lot more doctoring and lawyering and we certainly can imagine that with with legal where all of a sudden like everyone's suing each other constantly because it's all AI powered and it's going to get very weird.
1:29:46
Um but yeah but uh yeah it's one of those things I think I do think more legal work will happen when you have these sort of chat GPT like I mean people are already using chat GPT to generate legal docs I think it's or dump in legal docs and usually those types of people were never going to hire a traditional lawyer. Yeah.
1:30:06
But then there's some intersection of people that would have hired a lawyer but now will just pay Yeah.
1:30:14
you know, or or they're like, I pay 200 bucks a month for Hey, uh, draft a restraining order for a podcaster who stole my idea.
1:30:25
Uh, let's get using that 50 times a day.
1:30:29
Aaron, the CEO of Box, is coming on the show in just a few minutes.
1:30:31
I want to read his post because Nope, he's actually coming on at 12:45.
1:30:37
We got Yeah, I said 15 in 15 minutes. Sorry.
1:30:41
Um, but I want to give some context about what I'm excited to talk to him about because he has been very rigorous in his uh evals and uh uh I'm sure um uh Avi Schiffman from uh from friend.
1:30:53
com is just kicking himself reading this post because uh Aaron's saying that Gemini 2.
1:31:03
5 Pro is a big step towards AI being useful in the enterprise.
1:31:07
So, Box has an AI enterprise evaluation and Gemini 2.
1:31:11
5 Pro scored three points better overall than Gemini 2.
1:31:16
0 Pro for accurate singleshot data extraction from enterprise docs.
1:31:19
This entails asking the model to pull out many fields at once from the doc and the jump is actually bigger specifically in areas where it must work through a complicate through complicated logic in a doc.
1:31:30
Obviously, this is extremely helpful for box.
1:31:32
you have a ton of documents in your enterprise uh kind of, you know, document storage warehouse and all of a sudden you can just query across everything.
1:31:41
Note, doesn't matter if it's a PDF or Excel sheet, it's going to pull it all out, which is awesome.
1:31:46
Um, it performs much better when tasks require more time thinking and not just jumping to the first answer it assumes is right, such as deducing dates in a contract when you have to reason through multiple sections in the content to come up with the correct answer.
1:31:57
Accuracy and data extraction is obviously insanely critical for enterprise AI use cases.
1:32:03
You can't get data wrong when working with enterprise information for a missionritical use case.
1:32:07
This is the difference between being able to deploy AI or not in financial services, healthcare, life sciences, and many other places.
1:32:15
It's amazing to see the continued performance and capability breakthroughs happening in AI, but it only seems to be accelerating.
1:32:21
And so, what I'm interested in is like Gemini 25 Pro, like it's a Google product. Google has Google Drive.
1:32:27
Uh Box obviously competes with Google Drive.
1:32:29
uh he's going to be probably offering this as a product.
1:32:34
How does that deal get done?
1:32:36
What are the risks to partnering versus building your own foundation model?
1:32:39
Is is AI and data extraction a sustaining innovation or a disruptive innovation?
1:32:48
Box is unique in that they're still a founder mode company. Erin's still the CEO. He founded the company.
1:32:51
And so you would imagine that he'd be able to move faster on product and that could be a pretty big differentiator in the short term.
1:32:58
So, I'm excited to hear what he has to say about all that.
1:33:00
Um, and you know, if he gets it really working, he should run some more ads on adqu out of home advertising. Maybe even measurable.
1:33:10
Say goodbye to the headaches of out of home advertising.
1:33:12
Only AdQuick combines technology out of home expertise and data to enable efficient, seamless ad buying across the globe.
1:33:16
Um, we have someone who is on the cap table of adquisian. Let's go.
1:33:23
the man himself and he's coming right now from uh see if he's here. Let's go.
1:33:36
And this is maybe our second time having two guests.
1:33:39
We're still figuring it out. We might do a four up.
1:33:41
We might just see one person little scroll back and forth depending on who's talking.
1:33:45
But we always love having Alexis on the show.
1:33:49
Uh he's got so much to talk about, so much history.
1:33:51
Um, and he's always cooking. He's always cooking. He's a chef.
1:33:56
And hey, how you doing, RJ?
1:33:56
Hey guys, I wasn't sure if you could see me or not.
1:34:01
Not going to lie, it was always easy. How you doing, guys? I'm good, guys. How are you? We're good.
1:34:06
Uh, can you start with just like a little bit intro yourself, your company, what you're working on? Yeah. Yeah.
1:34:10
Really quickly, uh, I'm R. J.
1:34:12
I'm the CEO and and co-founder of Playback.
1:34:14
Um, I can go more detail on my background, but just really high level.
1:34:19
I actually have a little bit of a non-traditional background for a startup founder.
1:34:21
I was a hedge fund analyst at an activist hedge fund based here in San Francisco called Value Act Capital.
1:34:27
Um so kind of investing in large pack cap public companies.
1:34:33
Um in terms of playback, look, the idea is pretty simple.
1:34:36
We're trying to create a better way to watch sports by integrating creators and communities directly into the content itself.
1:34:43
Uh, in practice, what that looks like is it looks like a little bit of a combination of like a traditional NBA or MLB broadcast with a Twitch creator stream overlaid on top of it.
1:34:51
So creators can basically add their own voice, own commentary, and most importantly, they can actually interact with an audience while they watch these games.
1:35:00
And what we found is that that's just like a way better way to watch sports.
1:35:04
Um, and then I'm sure we can get into more detail on this stuff, but we had a couple big announcements last week in terms of obviously adding Alexis and 776 uh to the team and and uh a new partnership with MLB.
1:35:14
But yeah, that's the high level.
1:35:15
Dude, I loved it uh right away for a few reasons.
1:35:18
One, uh we basically are doing for technology and business news what you're doing for sports in a way where we don't do any journalism.
1:35:26
We're basically sort of providing sort of this like commentary and reactions, reactions to the news.
1:35:33
And I think what you tapped into is basically, you know, just an existing behavior which is so many people are sort of consuming sports content in this sort of bifurcated way where they're getting their commentary from YouTube or Twitch and then they're getting their the broadcasts, you know, through these sort of legacy providers.
1:35:51
sort of legacy providers. and like sort of putting that in the same place just makes a lot of sense because I I don't I don't watch I don't watch a a ton of I don't watch a ton of sports but if I want to like get a recap on F1 I'm going to YouTube I'm not turning on the sort of like post race and a lot of those
1:36:08
yeah I watch a lot of those like F1 reactions and they can barely even use photos they have to go to Getty Images license them they can never use the real footage and I'm just like as a viewer I want I want everyone to be able to use the footage in the right ways and it just requires figuring out all the licensing and stuff. I remember seeing
1:36:25
I remember seeing on Twitch someone was watching a boxing match that was clearly pay-per-view.
1:36:30
You've probably seen this.
1:36:30
And they're holding the controller and they're like, "I'm Don't worry, it's just a photoreal video game I'm playing.
1:36:36
I'm just playing the photoreal video game dive into as if they're Yeah. Yeah. Exactly.
1:36:41
They're like getting really into it."
1:36:42
And it's like clearly they're just they're just like pirating the pay-per-view stream for their viewers and the viewers are just like ignoring that guy and just watching the the pay-per-view stream.
1:36:49
um talk about how talk about how the the licensing and the rights work for all this stuff.
1:36:58
So just just first off totally agree with everything you guys are saying like it's one of those things where to me like one of the internal maxims we use is like you know can the next Stephen A.
1:37:07
Smith just be an independent creator on playback.
1:37:09
Like they don't need to go work for ESPN.
1:37:10
They don't need to go work for Fox or one of the big traditional media companies.
1:37:13
And I think the only thing that's held back like independent uh sports creators is the lack of content and lack of rights.
1:37:18
like it's just been too hard to do it.
1:37:20
So, one of our goals was to kind of mesh those two things together.
1:37:23
The way we've done it is actually pretty interesting.
1:37:27
So, essentially both this is true and I think you guys know this, but we have partnerships now with NBA and NBA League Pass and MLB and MLB TV.
1:37:32
And the way those partnerships actually work is MLB TV and NBA League Pass are just apps on playback.
1:37:38
So we kind of created this like bifurcated system where there's like an app layer where these like you know content companies and streaming services can put their content still deliver it the exact same way in a lot of ways still get all that user data still have the same subscriber relationship but then we can overlay on top of it this creator experience because sort of everyone agrees that this is a good idea.
1:37:58
It's just really hard to actually fit it into the existing rights ecosystem.
1:38:02
And the way we've been able to do this with this app layer just makes it a lot easier.
1:38:05
It was still a lot of work uh to get the partnerships over the line.
1:38:09
Like you know, our MLB partnership went live on Thursday.
1:38:12
We first agreed to that partnership in July of 2024.
1:38:14
Uh and then actually been negotiating it and talking about it for like nine months prior to that.
1:38:21
So it's still a long process, but I think the like sort of structure we've set up here is pretty scalable and it can hopefully work with anyone basically. That's awesome. Amazing.
1:38:30
Well, natural fit to partner with Alexis given that he not only is a sports fan, but he's creating new leagues.
1:38:38
Obviously, I wanted to give you an opportunity to talk about Athlos, but maybe before we get into that, uh, I'd love I'd love to kind of get your take on it, Alexis, and and what kind of got you over the line to partner up in a big way.
1:38:49
Dude, I had a tweet from six years ago ranting about it only being a matter of time for someone to build the product because there is a lot of product that gets done.
1:39:00
So, the syncing and everything works well and the partnerships and took a minute, but thankfully R. J. and the team did it.
1:39:06
And and the only reason this one was an easy one to spot even 6 years ago is is I think for anyone who spent time in gaming, we watched the ascent of Twitch, you know, shout out to Justin and EMTT who who found that one of the most popular things people would want to watch people watch was video games, esports, whether it was competitive or not.
1:39:28
And what are games other than, you know, whether it's sporting events or League of Legends?
1:39:33
It's it's abstracted away.
1:39:35
It's the same damn thing.
1:39:35
But what gets you in the way is the rights deal.
1:39:38
And that was obviously not going to be solved easily.
1:39:39
But I first got into sports.
1:39:42
It was actually one of my first investments after leaving Reddit in 2020 and splitting initialized up was uh launching Angel City FC now the most valuable women's soccer team in the world or sorry women's professional team in the world.
1:39:55
Um, but what I found getting into sports was here was this world, especially in the emerging side, where folks didn't really have any of the media dollars at stake.
1:40:03
So, they could move a lot faster with innovation because, you know, you weren't looking at billion-dollar rights deals.
1:40:09
Uh, you could just assess from first principles.
1:40:12
And I think that's why we've had the success we've had in emerging sports.
1:40:16
And then what it was going to take was really seeing the uptick of this new generation of sports fan.
1:40:21
That's the reason Angel City has been so successful.
1:40:24
We're talking to a very different sports fan than the traditional one.
1:40:26
It's a fan that lives here, right?
1:40:27
That watches on their terms. It's a younger fan.
1:40:29
And so now, thanks to the success of emerging leagues, the big four can look and say, "Okay, like maybe we need to reach out to fans here and technology is the way to do it."
1:40:40
And it just took time, but the market's ready now. And R. J. delivered. Yeah.
1:40:43
and talk about kind of uh with with playback, you have an opportunity to truly sort of productize sports culture in a way that I feel like Twitch early on was just very much like video game culture.
1:40:58
Like the entire thing was built around that.
1:41:00
How how are you approaching um kind of like bringing sports culture into the kind of the product layer?
1:41:06
Yeah, it's a good it's a good question.
1:41:09
Honestly, the easiest way we've kind of done this is I think a hallmark of sports culture is that people like to get their takes off.
1:41:15
Like they're very interactive and active in their fandom.
1:41:19
And it's honestly like the biggest dividing line between what a 24-year-old fan looks like versus a 48-year-old fan is like, you know, 48-year-old fan leans back, turns on the TV, and just like relaxes and probably still yells at the TV, but a 24-year-old fan actually wants to yell and be heard while they're yelling.
1:41:34
And so one of the first tweaks we made to the product is we actually built it originally in sort of the the Twitch style of like a one to many mini like it's just a creator basically talking.
1:41:43
And what we did is we we switched that from a like a one to mini to actually a stage concept.
1:41:47
So creators can actually bring people from the audience up on stage to chat with them, debate with them, do whatever.
1:41:53
And like our best users are like very frequent stage requesters or even joiners.
1:42:00
Like they're always trying to kind of get their takes off.
1:42:02
And I think that's kind of a microcosm for how we think about why we're focused on sports is like if we can continue to tailor it to this user and this use case like we're going to have a much better chance of like carving out our niche and kind of winning the use case.
1:42:14
Uh but yeah, there's lots of other little things, but hopefully that gives you a good at least early signal. Yeah.
1:42:19
Do you see it, you know, maybe it's happening today already, but do you see former pro athletes sort of like retiring in the same way they do now, saying, "I'm going to start a podcast, you know, once once they're out of the league, you know, I'm going to get on playback and I'm going to just start being basically a super fan providing that commentary."
1:42:37
Uh, is that is that part of the vision?
1:42:39
Our our biggest creator is Gilbert Arenas.
1:42:41
So, very classic example of that.
1:42:43
And also been very successful as like an independent content creator.
1:42:47
He has a show called Gills Arena.
1:42:49
It's very similar honestly to what you guys are doing live on YouTube four times a week.
1:42:54
U been super successful in that venue.
1:42:56
Uh and has transitioned into a playback creator too.
1:42:59
He's live, you know, four times a week with us at night and will be basically seven times a week for the playoffs on.
1:43:04
And he's been super successful because I think he has like the right blend of like he has a content creator mindset like he can actually think uh like what's going to go viral, what's interesting to people, what do people want to talk about, like what's just basically fun.
1:43:16
Um, but he's also an ex player, so people sort of naturally want to hear what he has to say.
1:43:20
Uh, but yeah, he's been super successful.
1:43:21
I can even I can send you guys a clip.
1:43:23
He had a really fun clip that went very very viral this uh past week when uh when Giddy hit the game winner basically for for Lakers versus Bulls. That was really fun.
1:43:33
Yeah, I can follow up with that.
1:43:35
Can you talk a little bit about monetization on your end?
1:43:36
Obviously, I'm paying the MLB through their app.
1:43:39
You're sitting on top of that.
1:43:42
It makes a lot of sense that if I'm uh following a creator and I'm tipping them, that money just flows through. You take a cut of that.
1:43:49
But on Twitch, they're actually running ads as well.
1:43:52
I imagine that the MLB would be pretty upset if you just start running ads on top of their ads and kind of distance your media there.
1:44:01
Is there some sort of partnership?
1:44:01
Like you obviously as a digital platform have even more information, you could target better.
1:44:05
There's a lot of different things.
1:44:06
How are you thinking about monetization over the long term? Yeah.
1:44:09
So short term it's just focused on the creator monetization that you referenced.
1:44:12
Like I think we have a long runway and we have great investors to kind of build to the long term.
1:44:15
But yeah, near-term it's all about basically these independent sports creators.
1:44:19
Can we actually help them build a business?
1:44:22
So obviously tipping is one category, but even just room subscriptions is what we call them.
1:44:25
Like the ability to offer an actual subscription to their audience for either like limited interact interactivity or even like premium streams.
1:44:33
That's the primary focus right now.
1:44:36
Long term though, I think there's sort of two options.
1:44:38
One is like there is already a proven model around like advertising sponsorships in partnership with the leagues, right?
1:44:43
So the leagues do have these partnerships with Amazon and YouTube and other like obviously fully scaled platforms to deliver ads for them and then a healthy cut goes to the partner basically. So that's one category.
1:44:55
The other category is like I kind of think once we're big enough there's going to be a really big opportunity for what we call like platform revenue which is basically like some percent of our of the subscribers we drive obviously to these partners.
1:45:06
We should earn a percent of that but also there's going to be new services that we can kind of offer.
1:45:12
So the two obvious ones that come to mind are e-commerce and and sports betting, right?
1:45:15
Like being able to bet from within this experience, being able to buy a ticket from within this experience.
1:45:20
Like all of these are going to be sort of like high quality opportunities and we expect to both enable that and make money from that if that makes sense. Yeah.
1:45:28
For me, it's kind of silly right now that you have a creator who's providing reactions and commentary to sports on one platform and saying, "Use my code and go to prize picks or go to, you know, underdog or uh Joey and and Jake's, you know, platform like better uh like it's very silly that these are just happening in one place where a sports fan wants to like post up.
1:45:56
they're just like fully immersed in the game, the commentary, and whatever sort of activity they're doing on top of that.
1:46:02
So, I mean, maybe merge in a social network and an LLM, foundation model company as well. Yeah. Just merge it all. Yeah. Yeah. LBO, a big trillion.
1:46:11
I I see a quarter trillion dollar here. Yeah.
1:46:14
Let's throw it all together.
1:46:14
Um, you got uh we got a minute left.
1:46:16
Alexis, tell us I I wanted the the update on Alo uh since like there was some stuff going on over the weekend.
1:46:24
Yeah, the greatest show in track.
1:46:26
Uh we started this women's track league last year.
1:46:28
Three million people tuned in for it.
1:46:31
Was the biggest purse in the history of the sport.
1:46:34
Fastest ladies in the world. And it was a blast.
1:46:35
Uh we're doing it again October 10th in New York.
1:46:37
And of course, we're going to be streaming it on playback.
1:46:41
Yeah, I was going to say, are you going to have a are you going to be providing commentary?
1:46:44
I you don't want to hear my commentary.
1:46:46
But there is to your point though, right?
1:46:48
your point though, right? This is why I love the idea of building in a new in this case building a brand new league but even in emerging sports is is you can rewrite everything from first principles right we can say because we don't have a billion dollar streaming
1:47:01
deal media deal yet we can say okay what's the best thing for fans and what's wild is there is a long long long tale of creators who love this sport or even just mildly curious about this sport who are going to be able to bring their audience to watch it and I really believe if you haven't watched John boy. Like, I'm not an MLB guy. I'm not a
1:47:20
Like, I'm not an MLB guy.
1:47:20
I'm not a baseball guy, but I fell in love with this sport through this random creator.
1:47:26
Happens to be a Nick, not a Knicks fan, a Yankees fan.
1:47:28
Nobody's perfect, but he's a big Yankees fan and does these voiceovers of baseball that delight even a non-fan.
1:47:35
Like, it's just so engaging.
1:47:37
And to me, that that is the future of sports.
1:47:39
And it just seems kind of silly that we've had all this talent emerge from streamers talking about video games, but we've never seen the new John Madden or the next Pat McAfee.
1:47:47
And it's it's going to happen here imminently in these next years. Love it, guys.
1:47:50
Thank you for jumping on. Uh very excited.
1:47:53
I'm going to hit the size gong for you and uh we look forward to tuning in to some playbacks in the near future and uh hope you guys crush the rest of your Monday. Yeah. Good luck. Talk cheers. Very cool.
1:48:08
It's crazy that that do people bet on running a lot yet? Horse betting is huge.
1:48:16
Why is betting on, you know, people like these personalities, these track stars?
1:48:20
Why is this not You should be able to do a whole track day.
1:48:23
Just you head to the track, get some get some.
1:48:25
I mean, it's way I mean, I respect horses. We love horses.
1:48:29
I went to the Kentucky Derby.
1:48:31
Uh, why can't I just go to, you know, the human derby? The the derb. The derby. The derb. Uh, how we doing?
1:48:36
Do we have our next guest? Not yet.
1:48:40
Hopefully coming in soon.
1:48:42
Um, I think that's very cool. It's interesting.
1:48:46
I mean, you have to wonder if Twitch is thinking about that. They're so big.
1:48:48
Amazon has the rights to a bunch of stuff.
1:48:50
It seems so logical, but man, I mean, it's been a decade and they haven't done it.
1:48:54
So, I mean, part of it is it's great for it's great for business if your competitor is owned by am uh Amazon. Yeah, exactly.
1:49:07
And not that they can't innovate at all, but I mean for a long time Emma Sheir was the CEO of Twitch and was running essentially an independent organization from Amazon, but of course he stepped down and now Twitch has been much more absorbed in the Amazon ecosystem.
1:49:20
Uh it is a fascinating model.
1:49:22
Have you have you seen on Twitch how uh the Twitch Prime model, how if you have Amazon Prime, you get one free subscription to a creator.
1:49:29
And so most people who use Twitch, they really have one favorite person that they tune into every time.
1:49:36
It's not really like YouTube where you're bouncing around watching 25 different creators.
1:49:39
And so you you go in and you get a free one.
1:49:42
And so they would give $5 a month and then the Twitch Prime I think delivered maybe $2.
1:49:49
Only like the margin went through, right?
1:49:52
But still you would have these uh these creators with like huge organizations.
1:49:57
Uh what are you looking for? Water.
1:49:59
I was looking for a year. I thought you had two.
1:50:01
We got Aaron in the chat here. Bring him in. There we go. How you doing? Boom.
1:50:06
Hey guys, how's it going?
1:50:09
We're doing great to finally have you.
1:50:10
You should have been on like, you know, we've had like 50 plus guests at this point.
1:50:14
You should have been on the first one.
1:50:15
Why wasn't I a launch partner for this thing? Seriously.
1:50:17
Oh, well, we're making up for today. Okay, great. Another podcast. Awesome. Good work. Yeah. Yeah. Yeah.
1:50:23
I mean, that was the genesis, right?
1:50:24
The world didn't need another.
1:50:26
You said technology needed a podcast.
1:50:28
That was the idea for sure.
1:50:28
Um, I want to talk about uh the enterprise AI eval and how uh the different LLMs are interacting at Box.
1:50:37
Is this a sustaining innovation?
1:50:40
Is this a disruptive innovation? Is Google a rival? You're gassing them up. What's going on?
1:50:46
Uh there were like nine questions in there.
1:50:48
Where do you want me to uh where do you want me to start? Wherever you want.
1:50:51
Uh yeah, I mean we're we're pretty pumped about AI as as you can imagine.
1:50:55
So we we've been building this platform to help enterprises store their their their data for you know a couple decades now and uh we have hundreds of billions of files within box and what the you know the one challenge with with content you know financial documents and resumes and marketing assets and contracts is you create it you share it and then you kind of never look at it again.
1:51:15
Y um and so what happens is you see this this sort of you know uh curve of you know people you know content remains hot for a day or two and then and then it kind of goes into an archive state. Yep.
1:51:25
And AI is the first thing that lets you actually tap into all of the value of all of your data you know no matter how old it is and when it was created and who it was shared with and where it is.
1:51:34
So for us it's this massive breakthrough which is you can turn all of this unstructured data into you know effectively usable knowledge for an organization.
1:51:43
Um, and so we we we're kind of betting the whole company on this idea of in the future when you work with your content, you're going to have AI agents that go out and and read your documents for you, you know, create analysis, you know, go through all your contracts, find exactly the data you're looking for, automate workflows across any business process.
1:52:03
So that that's effectively why we're all in and um and so we're, you know, trying to think through what are the implications in the future of enterprise software. Yeah.
1:52:09
Um, you know, I I'm very much on the side right now that it's a TAM expansion of software as a as opposed to kind of a TAM compression.
1:52:17
Um, uh, I think this lets enterprise software, you know, startups or incumbents go after much bigger markets because you're now tapping into, you know, just a completely different budget pool in in an organization.
1:52:27
Um, but uh, but yeah, lot lots happening at the moment.
1:52:31
What about uh training a foundation model? Did you consider it?
1:52:35
It seems like can you talk a little bit about value acrruel versus uh foundation model layer versus application layer?
1:52:40
We thought about it for like six and a half minutes and um that's a long time in 2025. Exactly.
1:52:47
So in uh in back in you know the moment we saw chatgbt like there was like one brainstorm of like oh do we need to like fine-tune our own models and or even train our own models on on you know certain data sets and um and we basically quickly concluded like no that doesn't make any sense.
1:53:01
Um, and the math is really clear.
1:53:04
It's like if you have Google and XAI, we didn't, you know, didn't have XAI at that point, but but you had, you know, OpenAI, Anthropic, Google, Meta, at a minimum, you just don't want to be, you don't want to be fighting that war, uh, from a capital standpoint or even just a deep research talent, uh, standpoint.
1:53:18
So, um, uh, you know, you always want to be as a, you know, a startup or any size company, you kind of want to be on the side of the tailwinds of of the market.
1:53:28
Um, and the tailwinds in this case are that there's like now five or six atscale companies that are deploying hundreds of billions of dollars, you know, on computers and and and training data and talent.
1:53:38
So, you want to be riding that wave as much as possible.
1:53:41
And so, we've built an architecture that lets us tap into any of the AI models, you know, whoever makes them. Great. story.
1:53:47
Uh, you had quoted somebody, I think it was a couple days ago, that that basically delivered a pretty good prompt about a paragraph of text describing a website that they wanted and it just sort of pops out this beautiful uh, you know, landing page and the designer said, "We are so cooked."
1:54:04
That was a reaction for a lot of people last week.
1:54:06
Maybe that was a reaction if you're Studio Gibli. I'm kidding.
1:54:08
Uh, but but you said, "Here's how this plays out.
1:54:12
AI makes producing amazing designs more affordable and faster.
1:54:14
Designers get to offload the longtail work, iterate faster, and serve more clients or projects.
1:54:19
Customers get better results faster or cheaper, inducing more demand for great design.
1:54:23
It's basically calling Jevans parad paradox on design.
1:54:28
Uh you is there any like context that that you feel like is worth adding there?
1:54:31
Because I I think they're they're generally you see these sort of big you know exciting releases or updates to models and there's like a lot of sort of doom.
1:54:40
But if I was if I was in high school and I like enjoyed design, I would be calling up every single SMB and I wouldn't even what I wouldn't do is say, "Hey, will you pay for this website?"
1:54:53
I was I would say, "I designed this website for you already and you can have it for whatever bucks and you could just be printing in like seconds, right?"
1:55:02
So, I had a positive takeaway.
1:55:05
I think you did too, but I was curious if you had anything else.
1:55:06
I mean that that that that took took it way way further than the initial thought on on you know how you how you kind of growth hack that uh which is which is I think a great idea.
1:55:15
great idea. I think we we you know everybody got really excited about Jevans paradox because of of you know the the efficiency of AI models the theory that as they get more efficient consumption goes up but there's an equal amount of of Jevans paradox of all of
1:55:30
the applied use cases of AI and and so that's that gets you closer to to then the the human labor side which is which is if you just think about like most markets on the planet um I would argue uh are are sort smaller than they should be. If the cost of delivering the
1:55:47
If the cost of delivering the service was was cheaper, you would have Jevans paradox for almost every domain in the world.
1:55:53
Like, and let's take a very easy one.
1:55:55
If health care was cheaper, we'd probably consume it more.
1:56:00
Um, like my biggest hurdle to seeing a doctor is is just it's a nightmare to to just like even get, you know, you know, a date on the calendar to to see anybody.
1:56:08
anybody. And so so just just think about all of the things if you could increase the productivity of that particular category um which is an which is an inverse or a correlary to lowering the cost of delivering that thing or making it more available or making it more accessible would the consumption of that
1:56:24
category go up and I think there's not a lot of markets that are kind of at this perfect saturation level of of what the potential demand is um and we saw this in the very you know I think in modern tech we saw this let's say in Uber as an example um there was this really funny article that that some economist wrote
1:56:41
like 15 years ago about Uber that was like the best case scenario is this takes like half the taxi revenue and it's like a $5 billion business or something and and like what the guy like obviously totally missed the forest from the trees is if you if you just make Uber you know and liquidity of of of a
1:56:57
taxi service 100 times more efficient you know the market actually goes up by let's say you know 100x and and he couldn't kind of quite process that but we we're doing the same thing over and over again in AI where we're sort of thinking like, oh wow, you know, we made this thing way more efficient. That
1:57:10
That means it's going to compress the size of that market.
1:57:13
When actually what what it will mean is is that is to your exact point, all of the people on the planet that have really bad design right now, they'll have some some entrepreneurial some, you know, high ingenuity person going and saying, "Okay, now I can actually do better design for the first time ever because it's affordable to do great design for this small bakery that that would never have hired a designer.
1:57:35
they never would have, you know, thought even to make their their website look good, but now it's actually affordable to do so.
1:57:40
And so I think that's actually going to play out, you know, many many times over uh in AI.
1:57:44
There'll be some categories where where this where we we are at sort of equilibrium of of of sort of supply and demand, but I'd argue most categories are are this is not the case.
1:57:54
you know even as an example taking like another knowledge worksp space let's say you know there's a lot of AI startups doing legal legal work um you know AI for lawyers and you know one theory is okay wow is it a really bad time to be a lawyer um on the other hand if you make it much more accessible to now ask a a question that's a legal question I'm still going to follow up and say okay can you paper this now as a contract or
1:58:18
or can you just give me a little bit extra advice but the we've lowered the barrier to now getting access to even thinking about what is the legal implication for a particular thing that then grows the demand of that space and and um you know even in the category of let's say internal legal work at a company if I could make it so we could review contracts faster with customers that we're going back and forth on. I'm not
1:58:39
I'm not going to have fewer lawyers in the company.
1:58:43
We're going to actually just have higher throughput of our deal review process.
1:58:45
So there's a lot of these areas where where where you know you're just going to actually see an increase in demand of the overall category as AI comes and drives productivity in these uh these spaces.
1:58:57
Talk about just hiring and and headcount expansion generally.
1:59:00
You've have thousands of employees already at Box.
1:59:06
When when you're talking with the team about doing headcount planning, are you pushing people to say, "Do we actually need this person?"
1:59:13
or if you just figured out how to use sort of these tools better, could we get away with without sort of adding that that incremental person?
1:59:20
Because there's been a lot of, you know, the CLA CEO came out and was basically like we're not we're never hiring anyone again and like obviously that's really good marketing, but like what what's the reality and and how are you approaching it? Yeah.
1:59:31
So, so we we are uh we're 100% committed to being uh an AI first company just across the entire business.
1:59:39
So we want every employee using AI to be as productive as possible, you know, with all the right asterisks of of, you know, if you're doing production code, you're still responsible for what the AI produces. It's not the AI agent.
1:59:49
So So all all the all the normal, you know, kind of T's and C's on that.
1:59:54
Um but for the most part we look at it through the lens of if we can cause efficiency in in a particular area of the business.
2:00:01
We want to reinvest those gains back into a another area in the business might be even the same category or same function but we want to use those dollars that we're freeing up to actually reinvest into the areas that were previously constrained.
2:00:15
And this is sort of, you know, even in the case of things like customer success where you're getting kind of like the first line of defense, you know, hey, I need to reset a password, those types of things that that we can now begin to automate with AI.
2:00:27
The dollars, at least in our case, that we that we save on on that kind of of um uh you know, you know, kind of human labor that that will actually go back into the same exact organization, but now for more proactive customer success managers that were always constrained by.
2:00:43
We can't we can't hire enough people to go out and do a proactive outreach to our customers and help them strategically because we have to have people that that are responding to to tickets.
2:00:52
And what's interesting in this case and it's I think it's an optimistic you know sort of story about AI in most cases it will be the same person that that sort of moves from one type of work to the other.
2:01:02
You know our our classic kind of customer success manager type roles oftentimes started in support at either our company or some other one.
2:01:11
So, so what really what it lets you do is is recalibrate your talent to increasingly more strategic ways of of using it.
2:01:17
You know, the the sort of, you know, go and and um translate this marketing asset into 10 languages is a much less strategic use of time than help go work on the next marketing campaign that we want to go deliver.
2:01:32
So, it's it really just lets you readjust into more and more strategic things.
2:01:36
that I think is a is an analog for what we can expect for most AI impact in in an enterprise context.
2:01:42
Can you talk about going public?
2:01:43
Is it as bad as people say?
2:01:43
You went public young, you're a young guy, your hair's gray.
2:01:48
Is it responsible of the is it because of the SEC?
2:01:50
Uh it's it's actually not because of the SEC, it's because of the hedge funds. Um Okay.
2:01:56
So the that I I my my you know there's always this conversation of you know if we if we magically change the listing requirements or something of a company, you know, would that be better?
2:02:05
I I actually don't think I think that's a red herring.
2:02:07
Um uh I I think that the the scrutiny that the SEC requires, the governance that you have to have, I actually think is all net positive on companies.
2:02:16
I think that that like just lets you run a more stable, mature, you know, thoughtful business.
2:02:21
Um uh and and you know, any reduction in that probably if anything just causes adverse selection for the kind of companies that eventually go public.
2:02:29
Um, uh, I think I think the the the and this, you know, Brad Gersonner kind of kicked this conversation off a couple days ago or yesterday online of of like I, you know, about the supply of IPOs.
2:02:40
I think this is firmly actually in Brad's hands.
2:02:42
is firmly actually in Brad's hands. Uh this is a private this is a private capital market dynamic which is as long as you have you know him and the cottos and the you know sequoas and everybody else doing very large late stage deals uh it's a you know as long as you have capital in the private market to stay
2:03:00
private longer uh that is the the real thing that will reduce IPOs and I don't necessarily know that there's any any kind of grand economic loss for that but this is this is now this SEC has nothing to do with this this is firmly you know in the private private sector we could we could decide do we want more IPOs or not. Uh last uh question did h how did
2:03:18
Uh last uh question did h how did you react to the XAIX merger?
2:03:22
You have more followers on this platform than probably anyone I follow but Elon himself.
2:03:30
Uh yeah, I'm curious what your take is.
2:03:33
You've been you've been here since day one.
2:03:34
I I I you know was was early on the uh the the Twitter wave.
2:03:38
Um uh I no I mean I mean I I the the uh Elon clearly likes to keep buying X.
2:03:44
Um so it's uh he will find another way. I mean the twice now. Yeah.
2:03:49
I have uh I I don't have a particularly strong opinion other than um you know I want I do wonder if like Tesla is the ultimate acquirer of XAI.
2:03:57
But but I you know I don't know how how he's going to kind of um uh you know make make all these worlds come together but um you know we'll be interesting to see and um and but no no impact on my life. Yeah. Yeah. As long as we can post.
2:04:10
As long as we can post, we're good.
2:04:12
Just don't turn off the posting.
2:04:14
Don't turn off the posting.
2:04:16
And and and what I don't want is I don't really want like a write this tweet button.
2:04:19
I I hope that's the one thing they won't do.
2:04:21
I think I think that like a lot of these platforms like LinkedIn has this, you know, like help AI write your post and like I just think you get slop.
2:04:30
Like it would be nice if if this could be like a slop free environment or slop on X. What are you? No way. Unfathomable.
2:04:41
No, we want handcrafted, artal, organic, farmtotable posts. Yes, exactly. We need artisal content. We need artisal content. I agree with that. Well, thanks for you.
2:04:51
We'd love to have you back when you have Fox News. We'll talk to you soon. Bye.
2:04:56
Uh, who you got coming in? We got Sam Lesson. Oh.
2:04:58
Oh, we can keep it on on X and XAI. Let's bring him in. Get a hot take. Get him out of here. the takes himself. I want to hear it. I want to hear it.
2:05:09
You know it's going to be good. Is that a yes or a no? He's here. He's here. There he is. Welcome to TBPN.
2:05:12
You going to get me in here and get me out of here? Want some hot takes? Spice it up. Yeah.
2:05:18
I mean, you know what we're talking about. XAI. What's the take? Sustaining.
2:05:22
We got So, we technically have like 12 minutes, so we should probably just let you just go on a giga rant. Just rant.
2:05:29
But first, I want to say you're the only person I know that's been getting more tan throughout winter.
2:05:34
I think it's And I think it's because of all the tennis.
2:05:37
But you also were you were you skiing recently?
2:05:40
It's because of the skiing and I'm not done. I'm not done. He's not done.
2:05:45
He's putting up 60 days on the Epic Pass or whatever. Epic. What What do you think? I am a basic Where? There's no passes.
2:05:54
There's an app that you track your days in.
2:05:57
I forget what it's called, but people track it. Garmin. Maybe it's a Garmin one. Okay. Garmin. Garmin.
2:06:03
Uh there is no epic where I go. Okay. Yeah. There's no chair lifts.
2:06:08
It's all helicopters and cats, right? No, it is.
2:06:09
Listen, I'm just trying to live the VC dream, you know. You're doing it. You're doing it. Keep it up. Yeah.
2:06:15
Uh speak dreaming on something. Yeah.
2:06:18
You were probably, you know, uh midway down some peak when the news broke. Uh but talk to us. What was your reaction?
2:06:25
We we had sort of a a you know sort of I remain sort of long-term bullish Elon having a sort of an AI bet and how could he not? Yeah. Yeah. Yeah.
2:06:36
And and on you know this platform that we've built uh our you know our show on but uh to me it's like you know it's generally like complicated.
2:06:45
There's a lot of ways to kind of like you know maybe poke some some holes in it.
2:06:48
But I was curious to get your initial reaction as somebody who's been, you know, bearish uh bearish on just a lot of stuff in AI on everything except because the reaction was like like people people were really big tech. Yeah.
2:07:02
People were just like immediately like yeah this makes total sense you know etc.
2:07:06
But, you know, there's So, look, I I actually think to Elon's credit, it makes total sense of very Elon, right?
2:07:13
Like Elon is the king of cheap money, right?
2:07:15
If no one played Zerp in history better than Elon, right?
2:07:20
You basically come up with a long-term vision that can require infinite capital.
2:07:24
You're the world's greatest marketer. You sell the out of it.
2:07:28
You raise infinite free money and you build stuff, right? He did that great.
2:07:31
Now, it turns out the Zer free money is over.
2:07:33
But you know where there's free money? AI narratives, right?
2:07:36
AI narratives is where the free money is.
2:07:38
So obviously Elon's got to have an AI narrative because he's the king of free money.
2:07:41
And so I think when you look at the Twitter X thing, I mean it seemed I mean he literally named them there like how could they not end up combining?
2:07:50
Like literally one was distributing the other.
2:07:51
They're layered on top of each other.
2:07:53
They basically have the same name.
2:07:54
And to Elon's credit in terms of pulling this off, I mean what is this really? This is AOL Time Warner.
2:08:01
If Time Warner had like a ton of debt, right?
2:08:04
like and so and so you use an inflated you use the zerocost capital inflated valuation thing which is the AI thing to buy the thing you also happen to own that's an actual asset Twitter's great I love Twitter right but it also has a what tens of billions of dollar debt noose around it right it's 12 it's not tens it's 12 exactly oh twelves sorry a 12 of debt around it and like what's not to like about it, right?
2:08:35
If you're Elon, it's a great deal all around.
2:08:38
Um, is what I would say, but what does it actually add up to?
2:08:40
I mean, like look, the entire question is what are these I call the mid-market AI players actually worth, right?
2:08:46
And that's the I mean, I again, as you know, I've been very consistent on this for years.
2:08:52
If you're the biggest in the world and your cost of capital is zero, um, sure, like build out a huge AI infrastructure.
2:08:59
Ideally, one where it's non-cannibalistic like Meta.
2:09:01
Ideally, one where you know how to make money off of it, like Meta. Mhm.
2:09:05
If you're a tiny baby player, take all the leverage, fire your customer service team, like be more efficient. Hooray.
2:09:13
But I think these mid-market players, I don't understand the numbers.
2:09:16
I mean, you said it makes sense for Elon, but I feel like when we were looking through the deal, it's like the Solar City Tesla acquisition.
2:09:23
And it looks and it and it looks good for the Tesla shareholders, too, because they they effectively get out at the same price they got in at.
2:09:32
They're in this new thing.
2:09:33
If you're a Tesla shareholder, are you happy or not?
2:09:35
Well, wait, which one's Tesla now?
2:09:37
Are we saying that that XAI is Tesla? No. No.
2:09:41
So, so if you went in on the Twitter deal and you're sitting at X and it and the valuation probably went down and then it goes back up and it get and you get out at like 44, it's about where you got in, but now you're in this combined entity.
2:09:54
Uh well, let's let's put it this way.
2:09:55
I think the question the question is there's probably and I don't know this, you guys probably do.
2:09:58
There's got to be some market for XAI shares floating around on and and markets, you know, things that are worth what people are willing to pay for them.
2:10:06
So, if you bought into Twitter at 44 and it's not worth 44 despite the fact I love it, despite the fact you guys love it, it's just not, right?
2:10:13
And all of a sudden there's a market for Xi plus Twitter at whatever the number is and you can get out and you want out, like who cares, right?
2:10:21
Um so this seems like a win-win.
2:10:24
It's not just Elon like the the original Twitter shareholders are also happy.
2:10:26
But I guess but if you're I don't know if you're an X. AI shareholder.
2:10:30
It's just kind of I mean this kind of fits in the world of you know we we live in a world of spheres of influence right now.
2:10:36
This is not my line by the way.
2:10:38
It's a smarter hedge fund friends of mine line which is we've gone from kind of a legalistic globally open market to a world of multipolar worlds of fears spheres of influence.
2:10:47
You know if you bought into X.
2:10:49
ai you bought into Elon sphere.
2:10:52
If you bought into Twitter, you bought into Elon's sphere.
2:10:53
What are things actually worth?
2:10:56
You know, like who knows?
2:10:56
But like you're kind of just betting on Elon holistically.
2:11:01
And this is the nice consolidation which by the way gets him out of a very large debt bill, right?
2:11:06
That he was personally liable for in some way, shape, or form.
2:11:08
But I mean, it it just feels like Tesla Solar City all over again.
2:11:11
But if you Tesla Solar City, that deal worked out for everyone.
2:11:18
Well, it's not clear it actually worked out for Tesla shareholder.
2:11:20
It's fine cuz it's a rounding error, right?
2:11:22
They're making 10 billion now.
2:11:23
They're making Tesla energy on batteries and stuff.
2:11:27
Yeah, they pivoted away from that.
2:11:27
Do they need Solar City for that? Maybe not.
2:11:31
Like, if you think about the Solar City story when was pretty weak when it was acquired.
2:11:35
It was we're going to stick solar panels on the roofs of Teslas and that's why we should buy this thing.
2:11:39
Like it it didn't really make any sense, right?
2:11:41
In the house of the Tesla owner, right?
2:11:44
Eh, I mean, so you're already there to install the install the battery pack, install the charger, install We all I get it.
2:11:49
I'm saying we all know you look back on the history of that deal.
2:11:53
That was a this thing is about to die, bail out.
2:11:55
I'll come up with a one-page letter that makes that justifies it cuz we're going to put some solar panels on the roofs or some right?
2:12:02
It was like completely made up.
2:12:04
Now, when number go up, all sins are forgiven, right?
2:12:06
And so what I'd say is number go up so everyone's fine and no one who's the master of number go up.
2:12:12
He's the master of number go up, right?
2:12:14
So, everyone should be happy.
2:12:14
So, is that's kind of that's the kind of story in general.
2:12:18
I think there's a real Elon narrative which is master of zerocost money in master of narrative number go up, right?
2:12:26
And the reality is it's kind of like very Roman is like as long as everyone's getting paid, everyone's on your side. Even Doge, right?
2:12:32
Like the whole thing with the Dogecoin is brilliant.
2:12:35
Like the best way to build more followers is to get them paid, right?
2:12:40
And Elon has been the king of that.
2:12:41
Now, the question is it works in both directions and we'll see how that plays out.
2:12:44
Now, um but you know, I think what I'm what I'm interested in is like I want to hear Elon speak for an hour about the combined entity and what that really means versus data and distribution, right?
2:12:58
Like the two narratives have been like, you know, X AI gets distribution, X uh and and sort of data.
2:13:05
of data. So, so it makes sense, but for me it was it was more easy to visualize how X was worth $44 billion when it's sort of an Elon pure play sort of social media bet in a you know strategic uh influential asset and if he is able to continue to grow earnings and grow the
2:13:26
importance of the platform it's easy to see how that's like you know maybe it's a hundred billion dollar company someday now you have XAI and it's you know you're sort of looking at this collective entity being like it's a founder it's a pure play like founder bet at this price. I mean, look, I in
2:13:41
I mean, look, I in the end of the day, the problem with alts AI stuff is it's either worth infinity or zero.
2:13:47
And no rational person can do a discounted cash flow on an infinity or zero, right?
2:13:52
And and I think that's kind of where everyone's stuck, which is why it's so narrative dominated.
2:13:56
Personally, I have to say I actually quite like Grock.
2:13:58
I use it like I have on my home screen Grock and OpenAI and all of them next to each other and when my finger goes, which button do I press? I press Grock. You know why?
2:14:08
Because it's kind of marginally faster and fun, whatever.
2:14:09
I don't know what that's worth, right?
2:14:11
Um, but we'll see, right?
2:14:14
And the and the and the the bullcase for that behavior is that Grock could replace Google for Exactly.
2:14:23
I say Google's a multi- trillion dollar company.
2:14:25
You slice it up and all of a sudden you're getting a couple hundred billion dollar bet. This is the mistake.
2:14:34
This is a mistake that people make, I think, consistently when thinking about AI, which is the story of will you use LLMs to look things up? Yeah, of course.
2:14:42
Yeah, you're definitely going to use them.
2:14:44
Like, you know, but the idea, it's kind of like the same story as when people say, hey, I pay accountant $120,000 a year.
2:14:50
AI accountant $10 a year, therefore AI accountant worth 120 times. That's not how it works. It's just it's worth 10.
2:14:59
just it's worth 10. and like the mar it's all about the marginal advantage and so it's not clear to me I mean the it is very clear to me that a lot of search volume that currently goes through Google and gets resolved by you know shitty web pages people have set up
2:15:14
to farm those searches goes that behavior goes away um where commerce go where the ads dollars actually go and whether just searches like it's just not the same market configuration anymore and who gets that money that that's all like really TBD is my Um, and it's really unclear. I mean, again, it's a
2:15:31
I mean, again, it's a very binary game.
2:15:34
So, that's the one that So, I think it's very hard to value um, right now.
2:15:38
But I think the big picture is like so long as private investors are willing to put the hail Marys, the binary outcomes and believe that, you know, again, Elon is the king of cheap money.
2:15:49
How do you feel about uh, market concentration?
2:15:52
Google has like 99% of the search market.
2:15:54
Meta has 99% of the social networking market.
2:15:57
Uh it feels like LLMs could be a little bit more oligopolistic on the consumer side, but if history is any guide, like these monopolies kind of run away with it at some point. What are you feeling? You know what?
2:16:11
Actually, I think the question is if you think really what I'd say with Google and Meta are is they're not technologies, they're economies, right?
2:16:18
And this is the really I think the mistake people make is if you think that Google's a technology company and Google search is technology purely then and you're like wow technology tends to compound and run away then you're like yeah like this would end up that way.
2:16:31
Same thing with social networking.
2:16:32
There's no actual techn I mean yes there was like some stuff Facebook invented on the way to scale but like it's not fundamentally a technology company.
2:16:38
It's an economy and I think that the problem with LLMs is people are equating them to an economy but they're not.
2:16:45
They're just a technical level.
2:16:46
Now, if someone actually nailed the everyone's pouring every single thought they have into it and all the knowledge of the world into the LLM and then that single LM side is like the smartest thing in the world, but that's what they're doing with this deal.
2:17:00
You go on X and you get paid a creator payout for bringing information to X and then that gets siphoned into XAI and GR gets better answers. Agree.
2:17:09
answers. Agree. But here's the thing that you have to understand and this is really important is one of the big economic failures of the internet is that the economy of the internet both social and search is actually driven around entertainment right and engagement not around information or truth right and so the reality is what
2:17:27
you're basically at best that's what the economies work that's why we're so screwed on so many things is because there's actually no economy of truth there's an economy of of entertainment and I think that's getting going to get quashed in a bunch of ways because again if nothing else and LLMs do generate infinite free personalized entertainment, right? And like that's
2:17:44
And like that's going to like crush that economy. It's not clear to me.
2:17:47
I mean, I can tell you the vision where yes, for some reason X becomes this machine that pumps all of the world's knowledge and then somehow Grock has some fundamental advantage on know.
2:17:56
I can tell you the story, but I don't see any indication of that actually being what's played out.
2:17:59
And I would argue that again that was the same story Google had didn't play out that way.
2:18:05
It ended up being a commerce engine, you know, and a bunch of like, you know, dead internet theory stuff.
2:18:10
Unfortunately, it's not the way that social played out either because social is just like a dopamine feed.
2:18:15
Unfortunately, it's not an information machine.
2:18:16
And so, that's really the question of how you get there. Um, and I I we'll see.
2:18:20
I I I am very skeptical that the mid-market players who are saying LLMs are a compounding e economy actually have anything right now.
2:18:29
I think they have technology that's pretty fun and it's all pretty undifferiated. Um, but we'll see.
2:18:34
Where do you think XAI would trade if it were to IPO uh tomorrow?
2:18:40
Well, so this is a really interesting question, right?
2:18:41
Because basically you have two dynamics at play.
2:18:46
Either it's traded as a memecoin, right?
2:18:48
If it's traded as a memecoin, it might be huge, right?
2:18:49
Um, it's the same thing with like, you know, Mr.
2:18:51
Beast wants to go public.
2:18:53
We talked about him, you know, the last time we I was on. It's like if Mr.
2:18:56
Beast's you know public company trades like a memecoin.
2:18:59
It trades like GME then it might be a very very large number.
2:19:03
If it trades on a discounted cash flow basis or as like a traditional accepted business the way like not very well right and so I think that's really just the question you know as the retail versus um you know enterprise versus like effectively real serious business world compete.
2:19:18
How these things trade is all about the marginal buyer right and what that marginal buyer's belief system is as much as anything else. Yeah. Got it.
2:19:27
Well, we got to move on to the next interview.
2:19:28
Bye for talk to you soon. He said bye, friends. Great to have you, Sam. Thanks for coming on.
2:19:34
Um, we got a uh is it Chris? Oh, wait. No. Oh, we got David.
2:19:38
Is he in the waiting room? Coming in. That's right. From Poseidon. Let's do it.
2:19:47
I'm gonna let you take the Poseidon himself.
2:19:48
Can you grab me a Yuma mate? Of course. Thank you.
2:19:51
Uh, David, what's going on?
2:19:53
big day for you and a big flag. Thank you. Yeah.
2:19:55
No, it's a it's been a great day here.
2:19:58
We finally launched in public.
2:20:00
We've been in cell for a bit over a year now.
2:20:02
So, it's really exciting to show the world what we've been working on. Uh, it's amazing.
2:20:07
And, uh, if I remember correctly, some of the very first posts we featured on the show at the beginning of last year, weren't they yours?
2:20:14
I feel like you came from I think there was one. Yeah. Way back.
2:20:18
So, thank you for uh contributing to us uh getting this off the ground.
2:20:23
uh talk about talk about the Poseidon Seagull, kind of the the genesis of the company.
2:20:28
Would love to hear kind of like, you know, your backstory and then and then the first uh you know, is it been a year and a half of the business?
2:20:36
How long have you even been in market?
2:20:38
Yeah, so we I can go way back to the beginning.
2:20:40
We started uh right around like December 23, January of 24.
2:20:41
um raised our initial preede and the way that the company got together was um it's me and two of my co-founders uh Isaac Zeke um and Parker and so we were I think ideating about like logistics uh and aerospace and I think like logistics especially has been a market that's been largely unchanged for the past 100 years.
2:21:06
years. the types of planes that we're flying are like largely the same uh same 737 same like Cessnes um and on the the ship cargo side it's been pretty much like containerized cargo uh with very much like spoken hub model and so we were going through a bunch of ideas of like what we could build to disrupt this
2:21:24
thought about airship for a while um and those are very interesting but have their own set of problems uh a couple other things um but then I think one night at a random party in San Francisco girl walked up to Isaac and was like, "Hey, you should look at into like a chronoplants." And we're like, "Oh, like
2:21:38
And we're like, "Oh, like what are chronopants?"
2:21:40
So, we spent the next night just like binging YouTube videos and like documentary series.
2:21:44
So, chronoplons were these like types of vehicles that were built in the Soviet Union in the '60s and '7s.
2:21:48
And at the time, they were like the highest cargo capacity uh like planes ever built like they're like flying ships essentially.
2:21:57
And so they're constrained to fly in ground effect, which is a regime when you're flying extremely close to the surface of the ground or in this case water because water is extremely flat.
2:22:06
um where you have an aerodynamic boost. It does two things.
2:22:08
Um it a largely reduces your drag and it increases your lift so you can carry a lot more and spend a lot less fuel.
2:22:15
So it's like increase of your lift drag ratio by 30 to 50%. Which is a huge deal.
2:22:19
Um and so we started looking at those and the really crazy thing about ground effect vehicles um this modern age is like a lot of the problems that the Soviets had uh are solved for the most part.
2:22:30
So, it's it's really done a controls issue and a material science problem.
2:22:34
Um, and composits are incredible material science. So, like carbon fiber.
2:22:38
Um, and controls is like much like I think we we've solved those problems pretty well now.
2:22:46
Um, and so, but the the really cool thing is like the ground vehicles are not regulated by the FA.
2:22:51
Uh, they're regulated by the Coast Guard. Yep.
2:22:52
And so, um, Coast Guard certification is significantly easier than FA.
2:22:58
So you have like really great companies that have built cool like EV tool stuff and like they've IPOed or spacked or whatever um for billions of dollars, but they've never actually had a commercial flight because the FA regulatory process is so long.
2:23:10
Uh so it's like a decade plus to get certified.
2:23:13
Um but if you're going through the Coast Guard and so it's if you're flying sub 150 meters and it's the same thing internationally Europe under the IMO, you get certified as like what is technically a boat.
2:23:23
Uh and so what we're building are flying boats.
2:23:26
Yeah, we talked to Billy Thalmer at Regent.
2:23:29
He's doing personnel carriers, but uh that that regulatory arbitrage is just like amazing.
2:23:34
Uh even off air after we had Billy on, you were just like, I'm so excited about this. I I love that. Regar just gets regar.
2:23:41
It's previously the domain of crypto stuff, but now in hard tech, we're taking advantage of So, we have the video.
2:23:49
I want to pull up the video and I want you to just kind of like talk over it.
2:23:52
Uh, Ben, can you pull it up quickly?
2:23:54
And, uh, while we're waiting for that, I'd love to know a little bit more. Oh, here we go. You can mute it, Ben. I don't see it. Okay. Okay. Uh, maybe try watch.
2:24:04
I mean, oh, we'll just uh seagull. Okay. Pretty cool.
2:24:18
So, this is put Starlink on it. Take my art. Um, so this is it. taking off.
2:24:23
Um, yeah, like flying at about 8 to 10 feet is peak.
2:24:26
And so the How fast is this? Uh, it cruises 65 mph.
2:24:34
We hit 115 miles an hour and 115. Let's go. Yeah. Some prop changes.
2:24:38
I think we'll hit 160 on our next set of tests.
2:24:42
You got to get it in sports car numbers. I want to see 200.
2:24:43
Bugatti Veyron goes what, 250?
2:24:46
Yeah, we got to race one. You got to go. Yeah. Yeah. Do the Nurburg thing.
2:24:52
I love I mean the the design looks fantastic.
2:24:54
So when you say ground effect, does it have to fly over water or or I mean this looks just like a plane.
2:25:01
Can you just fly it over land too? Yeah.
2:25:03
So So like if you're flying in ground effect, do you generally want to fly over water because water is like extremely flat and so like you'll have waves and even in waves you'll fly slightly higher and it'll average out.
2:25:15
Um but you can find ground effect in like the like I don't know like the the salt flats or something.
2:25:19
But um ours is what's considered to be like a class B class C ground effect vehicle.
2:25:24
And so we're not restricted to ground effect.
2:25:27
We've just optimized uh aerodynamically to take advantage of ground effect. Got it.
2:25:31
But we could fly out of it um up to 150 meters.
2:25:34
Can you talk about where were you? Yeah.
2:25:36
Can you talk a little bit more about the tech tree that enables this?
2:25:39
It sounded like there's some material science stuff like carbon fiber is cheaper.
2:25:43
Then there's also like the miniaturization of electronics like you have Starlink on that thing.
2:25:47
That's not possible a couple years ago.
2:25:48
The question is really just like why now?
2:25:52
But I want like more of a breakdown of like of like all the different things from the regulatory to the tech tree that's enabled this to happen now and not earlier because at the same time like this feels like something that could have happened decades ago but why are we just why why are we just breaking through with this now? Yeah.
2:26:08
So I think like starting on like the the material science side I think is really interesting like composits have really come into their own in the past like 10 15 years.
2:26:16
Um, and so in terms of like being having like actually like very like good manu like there's very good manufacturing here.
2:26:22
So like ATV composits is where we get all of ours and that's in labor more. It's like an hour drive. It's kind of awesome.
2:26:27
And that's both like the science of those composits but also the cost or is it just the cost that's come down?
2:26:34
Both and like the amount to which they're being used.
2:26:36
And so like you're having your like large planes like your Airbuses are being built with like composite wings.
2:26:41
And so like aerospace as a whole has like really moved into composits as opposed to just like aluminum.
2:26:47
Um and so then like on the electronics side um I think like there's in the same way that like GPUs for like gamers like enabled machine learning.
2:26:58
Um there's just like the the hobbyist grade uh RC stuff has gotten extremely good.
2:27:02
And so um just like really move forward like the quality of motors available, the quality um of like electronic systems, sensors, um the types of sensors that are available right now have gone small enough that we can fit them on here. Yep.
2:27:16
Um and really the the seagull has started as like a quarter scale prototype of our full scale vehicle uh which is going to be a 50 foot two-tonon capacity vehicle.
2:27:25
Um yeah, that's what I was going to ask.
2:27:27
I was going to talk about, you know, sort of long-term capacity scale and then like the applications of this cuz at that size to me it looks like something you would use for like potentially defense applications is a big one.
2:27:39
But I thought you were going to say pleasure craft and like going out and going out with your boys with your boys on the ground effect vehicle with your boys having a glass of champagne.
2:27:49
That' be a really good time.
2:27:51
But yeah, so is is your guys's first focus like logistics and and sort of like long sort of longer term longer distance transport that kind of thing? Yeah.
2:28:02
So um I think like as I was saying this like started as just like scale like prototype demonstrator, figure out the aerobody design, validate a bunch of stuff.
2:28:09
Uh but as we were building it, um it became aware that like it was like pretty capable vehicle in and of itself and like we designed it for manufacturing.
2:28:17
Uh so we reached out to uh the DoD specifically like the naval surface warfare center people and SOCOM uh and they all had their own specific like mission profiles that they were interested in with uh the seagull.
2:28:28
And so it's like pretty large payload capacity relative to size.
2:28:32
Uh and being able to operate in like marine uh domains.
2:28:37
And so doing stuff like anti-ubmarine warfare like UV detection um very like urgent and like high priority logistics and goods is on the on the defense side for the seagull.
2:28:47
And then we're starting operations commercially with it uh for doing like very like mo mostly like medical deliveries to remote islands.
2:28:54
Um and then at the the full scale carrying two tons, the idea is to be able to compete um with air freight for coastal and island uh logistics and cargo.
2:29:05
Um and through a bunch of things, we are going to be able to get to roughly a quarter or a third the price per kilogram per mile.
2:29:13
It seems like Zipline's done pretty well with the medical deliveries stuff.
2:29:17
I was I was surprised to see how how long that company has been around and how much they've grown.
2:29:21
Um, so clearly there's like these niche markets that are really important in logistics and trans in transportation.
2:29:27
Um, yeah, Jordy, you got another question or No, I mean that was it.
2:29:32
I just wanted to bring you on to say uh thank you for the early I was saying you you missed it earlier, but uh I just remember I don't I don't remember much of what you posted, but I do remember covering covering your fantastic.
2:29:43
In terms of military applications, it sounds like uh logistics first, then maybe ISR, but is there gonna you're going to put a bomb on this thing at some point?
2:29:54
I'm responsible for what they stick in it, but there are discussions about a wide range of different payload options, but I I mean just just like stepping away from like the business applications like is that something even like we even need?
2:30:05
Like we hear about the hypersonic missiles being able to kind of bob and weave and they don't fly on a traditional like parabolic ICBM trajectory, so they're harder to shoot down.
2:30:14
This thing seems obviously maneuverable.
2:30:16
Uh, is there military value on a weapons platform for this thing or is it just like too slow and too small to to really like matter?
2:30:26
Yeah, the it's definitely faster than like torpedo per se, but the unique advantage of it is when you're flying at such a low elevation, you're flying below radar.
2:30:32
Uh, so it's a like very stealthy platform like a ship.
2:30:36
Um, so you can get pretty close to the enemy lines without being spotted. That's cool.
2:30:40
Uh, back on the tech tree.
2:30:43
Um, are you are you doing any AI on board even like open CV to do collision detection like you'd get on like a DJI drone or is everything kind of remote controlled right now operated?
2:30:58
How are you thinking about the evolution of that uh tech? Yes.
2:31:00
of that uh tech? Yes. So the the way that we built it out is it starts with being till operated because you need to like train the systems and so running it's like the on a hardware level it's like pixock with art pilot that we've like modified it and art pilot's like an open source platform cool I know guys at Android use it as well and so uh there's
2:31:17
a few sensors that we have on board uh we have a sonar we have a radar just like a visual camera sensor so yeah um taking stuff in terms of like collision detection like elevation detection maintaining stable flight and so yeah we're building our own models so when you're flying flying it, are you doing FPV or is it just at a computer screen? Like what what does that actually look
2:31:35
Like what what does that actually look like for the pilot?
2:31:37
Yeah, for for the pilot when you're like flying it just like remotely, um we have the the computer screen with all the um different like signals on it.
2:31:46
Um you get all your stats flight simulator. Yeah, basically.
2:31:52
And then then you have the camera on board so you could actually see where you're going. That makes sense. Cool. Super cool. That's amazing. Well, good luck.
2:31:58
Congrats on impressive what you've built.
2:32:00
uh in so little time with in a very efficient way. So, congrats again.
2:32:04
Congrats to the whole team and looking forward to the next update.
2:32:07
Yeah, we'll talk to you soon. Thank you guys. Cheers. Bye.
2:32:12
And we're going deeper on AI image generation.
2:32:15
We got the CEO of Runway ML coming in the Temple of Technology, Chrisal Valenuela from Runway.
2:32:20
I'm a huge fan of Runway. I used it years ago.
2:32:26
They had a fantastic feature that would allow you to basically create a green screen even if you didn't have even if you didn't record the footage on a green screen.
2:32:34
And so you could do all these funny things.
2:32:36
Remember Zuck uh using the flag when he was uh like surfing like on Lake Tahoe?
2:32:42
I was able to use runway to uh select just the flag and then I could put a different flag there.
2:32:48
And it would have been so hard to do in After Effects, which is a software I I I kind of know pretty well, but uh takes a ton of time to do rotoscoping.
2:32:58
And uh that was the moment when I was like, "Oh, this company is doing really cool stuff."
2:33:03
Now they've gotten into image generation, video generation, and a whole lot more.
2:33:07
And today, they launched a new Gen 4 uh video model, and I want to hear all about it.
2:33:14
So, welcome to the stream, Chris.
2:33:15
Hey, yeah, thank you for having me here.
2:33:17
Thanks so much for joining.
2:33:19
I I have a million questions, but let's just start with can you introduce yourself, the company, and uh what you launched today?
2:33:24
Yeah, I mean, you did kind of a pretty great job.
2:33:26
OG, you've been using Runway since since a couple of years. Yeah, that's great.
2:33:30
Uh yeah, so we just introduced Runway just a couple hours ago.
2:33:34
Uh sorry, Gen 4 just a couple of hours ago.
2:33:36
Um it's our latest like video model.
2:33:39
It's basically a new frontier, I would say, of not only video generation, but of storytelling.
2:33:44
It's uh it solves one of the most pressing things of uh AI video these days, which is consistency.
2:33:47
So you can create really consistent worlds.
2:33:49
And the way we wanted to like emphasize this idea of consistency is that uh besides just releasing a model and I think it's kind of the model part is like the first stage.
2:33:58
Uh we put together a collection of like different shorts and films that if you watch them, if you guys haven't watched them, like definitely try watching them.
2:34:05
It's just like a few minutes. They're short films. It's crazy.
2:34:08
It's such a trip because you're looking at it and you know it's AI and it's does not We're passing the uncanny valley for sure.
2:34:17
and faster than the VFX stuff did.
2:34:19
I mean, we that that took 20 years and it feels like AI video generation, it's been like a few years.
2:34:25
There was an uncanny valley for a while, but we're getting the other side really fast. Yeah.
2:34:28
I mean, we weren't going to run for almost seven years.
2:34:30
So, it's it's definitely been like more than like a couple like two or three years, but uh but yeah, I would say the last two or three years have been like really fast.
2:34:38
And uh I don't think we're even close to like the final stage of her media will come.
2:34:42
Yeah, I think there's still a long way to go.
2:34:44
But but the point is really to point that at uh once you start like seeing how good the stuff that you can do runway is and you layer in a really good creative mind.
2:34:51
You can make stuff that you just like forget how that you're watching something that's completely generated.
2:34:55
Yeah, we need a new eval.
2:34:56
We had uh the Will Smith eating spaghetti. We blew past that. That's photoreal.
2:35:02
The next one I think should be uh born identity style shaky cam.
2:35:07
You know that because I think AI could not do that today.
2:35:10
I think the next evil should be just like how good the movie is, how good the shirt is, like you know, like how many awards, how many people are watching it. That's the that's evil.
2:35:20
Like I think that's the that's our internal goal is basically to make sure that you judge by the quality of the story more than anything else.
2:35:25
Uh I'm sure last Wednesday whenever the Giblly meme started ripping, I'm sure some of your investors, big and small, reached out, hey, did you see this?
2:35:35
You know, I'm curious what uh if you had to answer that question, like, you know, what what was your immediate reaction to it?
2:35:43
Uh it's amazing that you guys so quickly followed it up with something that is, you know, uh Yeah.
2:35:46
So, you come on the show, we ask you the stupid questions and then you don't have to answer the stupid questions from your investors. Yeah. Yeah.
2:35:54
You just one time, you share the clip.
2:35:56
So, so I I have to be honest.
2:35:58
Uh no one reached out to be honest.
2:36:00
Like I don't think like Yeah.
2:36:02
It wasn't like a like a thing.
2:36:02
I think it was it I think there's a separation between like memes and like more of the casual like fun stuff that I think it's great.
2:36:10
You can just kind of like have fun.
2:36:11
It's like a trend, but I think if you're making like good professional content, if you make a living out of making content, like making a meme or like one image, it's not going to get you far.
2:36:20
It's like you need a suit of different tools. Yeah.
2:36:21
Um and so I don't think we've I I saw the trend and I saw the images and I think they're great, but I don't think they're No one really thought about us to to be honest. Yeah.
2:36:31
Uh the thing that the thing that I think was what what part of what made that so viral is that it didn't require sophisticated prompt engineering.
2:36:40
You image oneline studio Giblly.
2:36:43
You can spell like a text uh replacement on my iPhone a shortcut.
2:36:48
Now I just upload a photo SJ SGS and it automatically expands to Studio Giblly style and then it just does it. Yeah.
2:36:55
But but so so more importantly as it as it comes to using runway and and video uh how important do you think prompt engineering is in the context of runway long term?
2:37:07
Is I'm assuming it's just not going to be a thing.
2:37:09
You just sort of describe exactly what you're kind of feeling off the cuff and it creates something beautiful. Yeah. Exactly.
2:37:14
You know, I I so prompting is a way of like sampling something out of a model, like basically getting what you need.
2:37:19
But there's many other ways of getting what you need with much more control because language doesn't really like have all the nuances of like describing a composition or the style, the mood or the feel of something.
2:37:30
So the idea, for example, with Gen 4 is that I saw like the demo, but you can combine images of real things.
2:37:37
You can take a photo of something you've actually like have.
2:37:39
You can take a color grade and a kind of like a moody scene and you can take a location and you can there's no prompting just like put them in and like create like the composition that you like.
2:37:50
Um and and you you can get a much more like specific detail thing rather than just like trying to use the words correctly to like get to where you need to go.
2:37:59
So it really depends on like what you need.
2:38:02
But I think prompting I think prompting is overrated.
2:38:03
Like just language as a unique interface uh will not get you too far because like storytelling and films particular in video is just so hard to just describe in words, you know. Yeah.
2:38:13
How how uh how many years away do you think we are from being able to oneshot a a movie that could, you know, win uh you know an award-winning movie, right?
2:38:27
It feels like so many movies in Hollywoods are sort of derivative.
2:38:31
hero's journey, its set of sort of characters, but it's somewhat predictable.
2:38:35
You could imagine that like from a storytelling standpoint, a lot of models could already deliver something that's like pretty good from a story standpoint.
2:38:43
And so to catch up, you need uh the the I mean, from what we're hearing, like the GPU cost alone would be like hundreds of thousands of dollars right now. Sure. Sure.
2:38:53
But but you know, if you're a movie theater today, I mean, we we're so we're here in LA.
2:38:58
We've been actually touring studio spaces and almost every single studio space is completely empty because like it's just too expensive to film in LA.
2:39:08
So I I I can see a world in the future where a big studio is just like run does these expensive, you know, sort of prompts that then they get maybe they remix it or whatever.
2:39:21
But, you know, I'm curious what your take is.
2:39:23
Yeah, I mean, if you look at the the lonely little flame, the short I was just mentioning before, that's production value before Gen 4, we're talking about hundreds of thousands of dollars.
2:39:32
That's a very expensive thing to make.
2:39:33
It took us like two to three days to make uh like the first rough sketch of that and then like another few days to just like get the final comp.
2:39:40
So, you can and by version of one, the whole thing was done by one person. Wow.
2:39:44
And so, um I think you you are there.
2:39:48
you can technically just take that same process and it's something we're doing already and do it like for longer future films.
2:39:52
It's more of like you're going to sustain the attention of your viewer not by how fancy or how expensive the thing is like by just how good the story is and just iterating on the shots takes you a lot of time.
2:40:02
And so I think the issue with the way we've been traditionally making like very high-end production things is that um the budgets have like skyrocket to the point it's unsustainable.
2:40:12
point it's unsustainable. Like I mean to your to your point like you're spending hundreds of millions of dollars trying to make something and then if you need to make something you're going to bet for the thing that the safest the safest
2:40:21
which is like superheroes and and and franchises that you know will return which I think from a from an like uh film making perspective has kind of like prevented like new independent stories from actually like being made because it's more much more risky actually. Um,
2:40:35
Um, and I think part of uh part of this new wave of models is that it will kind of like flip that a little bit and allow this like independent set of people actually don't don't use those studios just like use runway and like make the films to yourself.
2:40:48
There's no excuses like you just do it yourself, you know. Yeah.
2:40:52
Do you think uh the big Hollywood studios are reacting quickly enough to the advancements of runway and other you know are they do you feel like they're sort of properly planning around the sort of the biggest change to film making in our lifetimes?
2:41:07
Yeah, I mean I I think so many are I mean Bob said it was the most uh important technology of her company uh just a couple days ago.
2:41:14
I think many more that we work with are pretty much on that same vein.
2:41:18
I think some are more advanced than others.
2:41:19
some are more advanced than others. I think for a long time it wasn't clear to many what this meant and and to be clear I think that's fair because if you look at like video generation four years ago no one took it seriously like no one cared it was so I mean maybe you were
2:41:34
like using runway for like rotoscoping and green screen but like that was a small amount of people right and I think now I can show you a film that makes you feel something and it was done like in two to three days all generated and that's when you wake up and I think some have woken up before but some are still like dormant. Uh but I think yeah
2:41:51
Uh but I think yeah everyone's really paying attention to it.
2:41:54
Can you talk a little bit about uh just like style transfer animatics and the importance of like generating the first image in something like images and chatg.
2:42:05
Uh, I could imagine a world where it's a lot easier and maybe even more efficient to block out a story in Minecraft or in Roblox and really direct it and be very very solid on I kind of program the camera move. I know the shots.
2:42:22
I know the layout, but then I just want to take it to photore and that style transfer is what you guys are great at versus I'm going to be purely prompting and really hands off.
2:42:33
Uh, how do these things evolve? What's most important?
2:42:38
Is there an important like step function where we work through one to get to the next?
2:42:42
No, I think you're right.
2:42:44
There there's many people who've been using runway to do exactly what you're saying.
2:42:47
You block the scenes by using either like 3D software or just like props.
2:42:51
Uh, we have a a way of rendering content using existing video.
2:42:56
So, I don't know if you guys have seen it, but you you use a performance of yourself.
2:42:59
It's like advanced motion tracking and then that drives a performance of the generation that you're creating.
2:43:04
Um, and that's great because it allows you basically to like you become your storyboard.
2:43:07
You are defining the shots in the way you want it.
2:43:11
And I think the the essence also is that um once you create like a mood there there's a few for example another mood another short film that we released called the herd.
2:43:18
It's like the story of like two guys like hiding from each other in like this dark moody scene.
2:43:21
uh we start with one image and then you can use Gen 4 to kind of position the camera in different parts of the scene and you kind of like it's interesting because the the the model becomes like a cinematographer.
2:43:32
It's kind of helping you understand or provoking provoking you with ideas of how you want to do it which is different from how you do film making traditionally because you can't afford to do that in traditional film making.
2:43:44
You have a kind of like a set list of shots that you need to make and it's very expensive to like not do those.
2:43:49
here you can just like wander around and kind of like find your angle.
2:43:52
And I think that's also interesting.
2:43:53
This changes the nature of how you make things in the first place.
2:43:55
It's a much more experimental like you're kind of finding ways and you're getting to stories that you never thought you could.
2:44:01
That that to me is the most exciting thing because historically if you're a director and you're like I'm going to bring you know these you know superstars out to this like desert and we have one day to get this shot and then we got to go this other location and do this other shot. storyboarding.
2:44:18
You're basically like you could have a better idea midway through the shoot and not actually be able to do it necessarily without increing the producer and being like, "Hey, I need another 20 million bucks because we miss the same.
2:44:30
It's like one person sort of deciding in the moment.
2:44:35
set and if you think about how different startups have been historically where startups are this sort of like daily iteration and you can adapt the strategy and you can adapt the product versus film making which is like well you write the script and yeah you can change it along the way and you can change it in post but then every decision is just so much more expensive. Exactly. Yeah.
2:44:52
I mean I've been thinking about it as um like you're pay you're you're playing in a in a jazz band and you're improvising and so you're you get a shot you see something and then you can go anywhere you want.
2:45:02
It's like whatever you want to fill and then like take it there. Um it's very fun.
2:45:05
It's it's something I haven't filled for in totally in really a while.
2:45:09
H how do you think about the the the kind of shift in or the ratio or breakdown of creative video content as it relates to fiction versus non-fiction?
2:45:22
Like YouTube and the iPhone has exploded the amount of creativity.
2:45:27
Uh and we've gotten hours and hours of like non-fiction content. Everything from like Mr.
2:45:31
beast videos to video essays, histories, podcasts, all this stuff that's non-fiction.
2:45:36
Fiction stuff hasn't really taken off on YouTube in the same way.
2:45:40
That's still kind of the domain of Hollywood.
2:45:42
Of course, Tangerine won uh Academy Awards.
2:45:44
It was shot on an iPhone.
2:45:47
It took a number of years to get there from, you know, the iPhone being introduced, but it but it did eventually democratize film making to the point where an iPhone filmmaker could win awards.
2:45:57
Um, do you think runway is more of a of a benefit to people that want to tell fiction stories or do you think we'll see kind of the same breakdown where there'll just be a ton of non-fiction content that goes through Runway and you're seeing like illustrated video essays or I can just pull up history of, you know, Yura Mate and all of a sudden I just get this beautiful story that's visually intriguing but it's still non-fiction.
2:46:24
I think Renui is made for stories.
2:46:26
That's what the ethos of the company is.
2:46:28
And I think fictional or not fictional like stories are just stories.
2:46:30
And I think we're humans are like obsessed uh with stories and will consume anything that tells a story.
2:46:37
And so I think I think you're right.
2:46:39
YouTube hasn't been like yet good at perhaps like AAA content or like professional like uh fictional content and it's better to do like more informal like blog type of things because it's just cheaper. Mhm.
2:46:51
But I think this is particularly interesting because like what gen models like Gen 4 do is break that barrier.
2:46:55
Now you anyone basically anyone out there who has a YouTube channel right now can create a type of content that looks like someone made it in a studio with $50 million.
2:47:08
Um and I think that's the that's like the last unlock I would say media wise.
2:47:12
The first one was like everyone can do like this.
2:47:14
Everyone can just like tell like create their own like channels and tell their own stories.
2:47:18
But then professional grade content has been for the for the last couple of years, the last kind of like stage and it's only been accessible to this very sort of companies and now it should be everyone.
2:47:29
It should be basically anyone who has great stories.
2:47:32
It's like creative metor whoever has the best stories will win.
2:47:34
What happens to movie stars, right?
2:47:37
You can imagine uh early on with some of these AI generated films, somebody's planning to generate a film using entirely AI.
2:47:46
They don't plan to have any onsite shoots or anything like that, but they want to go they go to Brad Pitt and they say, "We're going to give you 10 million bucks to star in this film because Brad Pitt, if they just completely use his likeness and his voice and whatever."
2:48:00
Uh, but then over time, people start realizing like, hey, it's actually much more valuable if I kind of create my own potentially like IP or own superstars from the ground up because I can instead of paying Brad 10 million for one movie, I could invest a lot of money in this sort of Yeah.
2:48:15
I can make my own gig of Chad. Yeah.
2:48:17
And uh I don't have to pay any of the fees and maybe there's some R&Dish to sort of generate that character.
2:48:23
But what happens to our our our stars? Yeah.
2:48:25
Uh well, I don't think that changes that much to be honest.
2:48:28
I think we we had that capacity of doing that for a long time.
2:48:32
I mean, animation and like CGI and anything that's non like live action has uh we've been able to do that for quite a long time.
2:48:38
It's more the cost of it is really expensive.
2:48:41
I think you can still have a space in a world where you can have both.
2:48:43
You're going to have characters and actors performing the way they do.
2:48:46
And you're going to have this new medium. It's a new format.
2:48:49
It's like a video game that allows you to create infinite worlds.
2:48:52
Maybe the two might overlap.
2:48:52
You may bring some elements of the real world into this.
2:48:56
You may create some elements generated into and it will swap.
2:48:57
I I I don't see them as a replacement.
2:49:00
I don't see them as like, oh, we're going to suddenly like stop hiring actors.
2:49:05
Actually, for most of our shots, you actually require actors to do like act one or performances that you can transpose into the way you want.
2:49:11
And so, um, I think it's more of like a change more than like, oh, we're going to suddenly like stop doing everything we're doing and and and do this thing now. That makes sense.
2:49:20
Uh, do you have any type of sort of like long-term cost target for a 90inute movie in 4K?
2:49:27
Is it something that in in a decade it's a dollar?
2:49:33
Uh, or is, you know, how how long just comput wise or like people time? Yeah. Yeah.
2:49:39
Ignore ignore the sort of like uh the prompting. Yeah.
2:49:47
OPEX of like like you used to have to pay by the foot for film and it was very expensive to get it developed.
2:49:51
Now anyone with a phone can record 200 hours of footage for you know a couple hundred used phone.
2:49:59
So so I think maybe the way they need to think about cost is to think also to the point so to understand how like the models and the optimization of these models is like progressing.
2:50:09
you're going to get really soon to a point where you can run these models in real time.
2:50:11
And so by the time you run them in real time, you're streaming the pixels as you're watching them, interacting with them.
2:50:16
And so if you do so, then like the story first of all never ends.
2:50:19
There's no 60, 90 minutes.
2:50:21
It can be days that you can just like start generating.
2:50:23
And it's a cost of inference.
2:50:25
It could just be as cheap as however uh Nvidia wants to optimize their like GPUs to make their faster for everyone and cheaper for everyone.
2:50:31
So, um I think it's just a couple dollars if you want to make uh it's like a L file that you just like import and boom you got it and you're just like sort of wandering around. It's amazing.
2:50:40
Well, I mean what does the business of runway look like at that point?
2:50:44
And how how are you thinking about the importance of like value acrruel in the application layer?
2:50:51
Uh are you thinking you go more B2B and try and get big contracts?
2:50:53
Do you want to go uh B to C and just get every consumer uh on you know some you know $10 $100 a month plan?
2:51:01
Uh how are you thinking about pricing and customer base?
2:51:05
So far for now our focus is being professionals mostly making sure that like those who make a living out of telling stories can use Runway to accelerate like their work.
2:51:13
Um I think there's still a lot of like creators and individuals that will like start becoming professionals because of this.
2:51:20
But I mean I've I've I now could do things that will require like an army of BFX artists.
2:51:25
Um and there are many other people who can feel the same right now.
2:51:29
Um our plan is mostly to make sure that those who want to tell something can actually like tell a story.
2:51:33
Um and that's a wide spectrum of folks.
2:51:35
So we work with like Lionsgate, major production studios to like independent studios, indie studios, like filmmakers themselves, just groups of like two, three people making amazing stuff.
2:51:44
And then we have an iPhone app so consumers can also make stuff.
2:51:47
Um I think like the mission of a company is like look this is the most important technology for like art like I I've started working on this because I had the idea that neural networks applied to art would like eventually become a new form of art and I want to be part of that and I think the consequences of that go beyond just B2B and B2C.
2:52:05
It's like everyone out there should be making great stuff.
2:52:07
Are you optimistic about any of the hardware developments kind of speeding up runway rendering or generation?
2:52:15
Uh obviously there's like new Nvidia chips coming, but then there's also startups that are focused on transformer models baked into silicon like etched, there's Cabbrus, there's there's Gro, not the AI XAI thing, but the the the the chip company.
2:52:33
Uh and then there's like the deepseek approach, which was like it seemed like they mostly just worked on algorithmic improvements to speed up inference.
2:52:38
Um, where are you most optimistic about getting the next 10x improvement in your models and your systems?
2:52:46
I think those are all like interesting developments.
2:52:51
We've been watching some of them really closely.
2:52:52
closely. I think right now um cost is mostly for us at the scale of what the business is and the like the research that we do the main factor and so if you give me like X performance but it's unproven or like I will need to spend like six months trying to like debug
2:53:07
into like much performance and whatever or I already know um that makes it really hard to switch um and so I think it's it's it's cost mostly what cost in the sense of like how cheap can I get just like my computer and for how long can you like guarantee me that that price and maybe a price better after. Um, and then performance improvements if
2:53:25
Um, and then performance improvements if they're like significant will matter a lot, but I don't think we've seen something so significantly yet that will make us like either switch or move to other like hardware.
2:53:34
I do think it's important like I do feel like all of the chips that are being made to to compete with Nvidia are relevant, but for us it's still like very hard to to see where we can switch to be honest. Makes sense.
2:53:47
Last question or This has been great. This has been awesome.
2:53:48
We'd love to have you back.
2:53:49
This is really informative. Thanks. so much.
2:53:50
I' I've I've I've been a fan for so long. I wanted to talk to you.
2:53:54
I'm really glad I got time for you.
2:53:55
Seen we make we make some pretty cinematic videos at some point.
2:54:01
We're And I want I I I really want to do the style transfer thing on some of our older content.
2:54:05
You can now you can now you can just now it's animated.
2:54:08
So yeah, we'll definitely be uh racking up those runway bills when we get to hitting render it all.
2:54:14
I want every piece of B-roll we've ever filmed in studio Giblly style.
2:54:18
I don't care what it costs. I want a full of it all. It's worth it. Yeah, it's it's awesome.
2:54:24
It's it's such a fun time and there's so much that you can do with this stuff.
2:54:27
So, uh thanks for powering it and thanks for stopping by the show.
2:54:29
Yeah, congratulations to Congratulations on the new model. Perfectly timed. Dr. All right.
2:54:37
Uh we can do some timeline and then OpenAI drops some news about a new openweight model with reasoning in the coming months and uh I'm going to use the rest. Okay.
2:54:46
Well, uh, while Jordy is doing that, I want to take a look at this video from Isar Aerospace, which is a company I hadn't heard of before, but they had the most cinematic rocket crash I've ever seen.
2:54:59
Uh, from NASA Spaceflight.
2:55:02
com, uh, drone and pad footage from ISAR Spar aerospace spectrum launch.
2:55:08
You can see it avoided the pad when it came down.
2:55:10
Uh, Andrew McCall, friend of the show, says, "Insane footage quality.
2:55:14
Sorry about the loss, but serious credit to your media team. Top tier work. I couldn't agree more.
2:55:20
It we'll have to pull it up because it's it's the most cinematic just footage ever from this drone.
2:55:25
It looks like they color graded it. It looks amazing.
2:55:28
And uh and Ashley Vance uh also chimed in and said uh and said, "This site, this launch site slaps because it was great.
2:55:38
Uh and it's just a beautiful, beautiful uh website."
2:55:41
But speaking of beautiful things, go to bezel do getbbezzle. com.
2:55:44
Shop over 23,500 luxury watches.
2:55:47
Fully authenticated in-house by Bezel's team of experts.
2:55:50
Uh, get a luxury watch, folks.
2:55:52
Um, anyway, how are we doing on the footage of Isar Aerospace Spectrum launch?
2:55:58
I'd love to have the founder on the show.
2:56:00
We're we're we did defense week or defense day.
2:56:02
Uh, we're thinking about splitting that up because we kind of did manufacturing in there and then also weapons systems.
2:56:09
I think we need to break it up further.
2:56:11
do space launch day specifically.
2:56:14
Maybe we'll do space satellite day specifically.
2:56:15
Um, but aerospace would be would be a fantastic company to include in the uh space day if we do it because I want to talk to these folks and I want to see what cameras are they using to film this stuff because it looks great.
2:56:29
And we have the video here. So check it out folks. Isar space.
2:56:34
I think you got to pan down more, Ben.
2:56:40
Oh, here we Oh, we're good now. So, look at this. This is so beautiful.
2:56:42
I can't get enough of this. Look at this. The rocket takes off.
2:56:46
Very sad that it didn't make it to orbit, but very cool video. And look at this.
2:56:50
The drone just going higher and higher.
2:56:53
This is why you got to watch the video, folks.
2:56:55
Sorry for everyone on the RSS feed.
2:56:56
Um, but uh the rocket's going up up up and then starts flipping over and winds up crashing.
2:57:02
I actually don't know where this was.
2:57:05
It looks like it's in Antarctica or something, but I think it might be in Europe. I'm not sure.
2:57:10
Um, but beautiful glaciers.
2:57:12
They got to get Harry Stebings over to the launch site.
2:57:14
Have him figure out what's going on.
2:57:16
But, uh, this this post uh came. Look at that. Wow.
2:57:18
Big like like look look at the teal and orange.
2:57:23
It's just the classic Hollywood color grade.
2:57:25
Looks like a Transformer movie. Uh, fantastic.
2:57:26
And so if you're doing something cool, like the the takeaway is just like spend the money on the nice camera because you're going to get a lot of attention and attention is all you need. Uh rad backwards.
2:57:38
This one it it was unrelated but it felt related.
2:57:44
He says uh caring is cool.
2:57:44
You should care a lot and work really hard.
2:57:46
That's the coolest stuff ever.
2:57:48
And I saw those folks blowing up that rocket and I was like you know what it didn't go well but they care.
2:57:55
They care and I love that. Try again.
2:57:58
And uh should we go to Gokul Roger?
2:58:02
He says AI shrinks the skill premium.
2:58:04
A year ago, a portfolio co would ask me every week on tips to hire senior engineers.
2:58:09
They found it really hard to attract season builders.
2:58:10
For the past couple months, they have stayed conspicuously silent on this topic. Today, I asked them why.
2:58:15
Had they finally found their dream senior engineer hire.
2:58:18
They said, "We don't need senior engineers.
2:58:20
Our junior and mid-level engineers are able to use AI to solve every logic and system design problem."
2:58:25
This is what we were talking to uh Patty about.
2:58:27
Um chat GPT is his colonel and uh cursor is his army or something like that. I like that model.
2:58:35
But really, it's like, yeah, uh, you know, you have these tools and systems that plug in that help speed up the autocomplete and the implementation of your ideas, but how do you how do you reality check and and, uh, it's the rubber duck test.
2:58:47
Can you explain what you're building, what your architecture is, and the these reasoning models are fantastic at that.
2:58:55
So, goes on and says, "This will be one of the pervasive effect uh pervasive effects of AI.
2:59:00
AI will massively erode the premium charged by senior professionals in any white collar role.
2:59:06
You might still need the 0.
2:59:10
01% of talent to build worldscale systems, but the top 1 to 10% are going to see massive competition from the middle 50% as AI uplevels the latter skill group.
2:59:20
I don't know if you had to take Jordy, but I thought it was interesting.
2:59:22
Yeah, I mean uh it's interesting.
2:59:26
Last night I had a question that I wanted to ask a friend of mine who is a a uh very much an expert in the subject and I felt like and and I I reached out to him.
2:59:39
I said, "Hey, can you chat about this thing?"
2:59:40
But I also asked the same question to a language model. Yeah.
2:59:45
And like hours before my buddy responded, I got a like satisfactory or potentially even better answer than my friend would have given me. Yep.
2:59:54
And I think that that scenario is basically similar to what what goal is is describing here. Yeah. Um which is good.
3:00:02
It's sort of I mean again it's sort of leveling the playing field in many ways.
3:00:07
Uh the internet as a technology leveled the playing field globally where like you didn't have to be in the United States to compete with US workers for jobs.
3:00:15
You could be a web developer in UK or India or whatever competing for work in the US.
3:00:21
So yeah, I want to go to this post by Dylan Patel.
3:00:27
Uh he says, "Data Center capex is going to zero.
3:00:29
Grock struggling deploying anthropic extremely low limits for paid plus cursor. Google not offering 2. 5 on API.
3:00:38
Open AI not serving 03 struggling to serve 40 image.
3:00:41
Azure still not serving many models including 01 03 deep research 4. 5."
3:00:46
Uh and this is so funny because he's the most respected analyst in uh in semiconductors.
3:00:52
Uh Dylan Patel obviously the the founder of semi analysis.
3:00:56
Um but the first line is a joke and if you don't have a good irony detector uh you would just read this completely wrong.
3:01:04
And uh and fortunately Brad Gerson chimes in and says, "Bizarre how the GPU doomers all somehow understand true demand better than the companies who all have massive computing down their GPUs and scrambling to find supply."
3:01:18
And so I mean, yeah, if you look at the uh how long it takes to inference some of these models, it's all very slow.
3:01:25
It does seem like demand is very high.
3:01:26
Just anecdotally, I think we saw that everyone is using all of these models all the time and they are intense from a GPU demand perspective and you can just Gary Gary Basin actually has a good point here saying they're looking at two different time scales.
3:01:41
The short-term squeeze is priced in but like that capacity for the short-term squeeze is in many ways being coming online or being built out. Yeah.
3:01:51
There's also this this interesting dynamic where some of the founder mode companies do have an incentive to overstate the the the level to which they are overstrained.
3:02:00
You know, it's like the classic steed stage founders like I can't sleep.
3:02:04
I my phone's ringing constantly.
3:02:07
I'm the most popular startup. We're growing too fast.
3:02:11
Like you kind of know that if you signal that to the market, you're going to get more term sheets and stuff.
3:02:14
Um, but I don't believe Google is in that mindset with like, oh yeah, like if we don't offer 2.
3:02:21
5 on API, like the market's going to see that and price us higher.
3:02:26
It would be very odd if all of these dynamics were uh fake.
3:02:28
It would be it would be reasonable if it like just one was, oh, that person's kind of overstating or they're a challenger and so they're saying, oh, we're so popular.
3:02:38
Um but when they're all struggling clearly there's there would be an economic incentive for one of them to break rank and say actually we have we have plenty of GPUs so come over to us we would love to have your business when they're all struggling it's definitely a sign that data center capex is not going to zero in fact uh and speaking of uh 40
3:02:58
uh images and chatgbt uh there was an interesting post uh by technium saying 40 image generation can do calculations during its image generation somehow This was community noted because uh the first LLM prompt so it it's a picture of a calculator and the prompt is uh make an image of a calculator app for the calculation 53* 88 and the result of that calculation is 4,664. Uh and this would be shocking if
3:03:25
Uh and this would be shocking if the LLM had just been able to or the the the the image model had just been able to do this at image generation time.
3:03:32
But in fact it appears that in the prompt reasoning step before the image is generated the uh there is an internal uh prompt interpol interpretation that runs that that basically hydrates the prompt and adds extra context.
3:03:53
And so um someone else shared that and said that when you if you give the exact same prompt in the screenshot, you can see that they pre-process the prompt and that that prompt actually uh does the math which is still impressive that it can get it right.
3:04:11
Uh let's not be wrong about that.
3:04:13
Um but it is it is interesting and this is a this is obviously just like a huge unlock and and obviously pairing LLMs with image generation.
3:04:22
generation. This is the future and this is I think why um this new image generation the studio giblificication of chatpt it didn't happen in dolli 3 or dolly 4 like a separate app it just happened in chatbt and it takes advantage of all the other chatbt
3:04:41
features and eventually you're going to see consolidation so you can upload a PDF have it search the internet do some deep research generate an image with images in chatp it's all going to happen in the same app and same window, which is great. Um, but but interesting like
3:04:54
Um, but but interesting like kind of technical deep dive here.
3:04:56
Um, is there anything else you want to run through on the timeline because we are past 2 p. m.
3:05:02
We've been streaming for three hours.
3:05:04
I wanted to take an opportunity to talk about another new partner which some people have called out in the ticker which is Poly Market. That's right.
3:05:11
And uh we're very uh excited to be partnering with Shane and Matt overarket.
3:05:17
We've been very happy to have them as a partner. Thank you.
3:05:19
Um, and the reason that we were so excited to partner with them is that the Poly Market platform is news, right?
3:05:28
Like it is a way to understand the world and understand news.
3:05:34
And um, so it's a natural fit to integrate into the ticker.
3:05:39
It's like everything that's happening in tech, like here's how to get an understanding of it.
3:05:43
Uh we're going to be sort of updating the ticker, making it um yeah, we're going to be improving it basically like improving it uh day by day like we do.
3:05:52
Uh and we're also going to be creating some of our own models. Yep.
3:05:56
Um and they already just have like uh one of my favorites that's going right now is AI wins IMO gold medal in 2025 at 61%. That's really high. Uh which is really high.
3:06:07
And what that would mean is that everybody basically gets the average ramp employee. Yep.
3:06:12
or a average cognition employee on their team.
3:06:15
Um, and so yeah, there there's a bunch of other stuff.
3:06:20
Some of this stuff feels like um I probably can't say this, so this is not an ad, but it's just commentary.
3:06:24
Some of the stuff feels like uh free money uh just because it's like, you know, you look at the probabilities on some of this stuff.
3:06:32
Um but um and I think it'll be cool because Poly Market's been known for political prediction markets, but we never talk about politics.
3:06:40
And genuinely, this is not a political show.
3:06:44
Uh, and so I'm just excited to build markets around tech predictions.
3:06:46
I love, you know, will the next Starship make orbit?
3:06:50
How many Starship launches will there be in 2025?
3:06:52
Like, these are the markets that I've always cared more about and I'm excited to highlight on this show and kind of there are plenty of other shows that are partnered with uh Poly Market that can highlight the important political markets.
3:07:03
Uh, I want to drive the tech markets forward for sure.
3:07:09
So that's what I'm excited about.
3:07:11
Yeah, there's so much other stuff.
3:07:11
I mean, which company has the best AI model by end of April?
3:07:13
Uh, Google's sitting at 51%, which again is not what I think the average person on X would even tell you. Dangerous.
3:07:25
It's forbidden knowledge.
3:07:26
It's forbidden knowledge. But look at this.
3:07:29
I mean, Sundar Pachai posts 2.
3:07:31
5 Pro ship today to everyone.
3:07:33
Find it in the drop down here. Gemini. google. com.
3:07:35
Still he puts up 5k likes, a million views. built different. Built different. He does it. He's so confident.
3:07:41
He throws the link in there.
3:07:43
He's got the hilarious uh image. I'm I'm grow.
3:07:46
Sundar's growing on me, man.
3:07:46
I I like the I like that he's going direct. I own links. Yeah, I am the internet. I'll post this. Whatever.
3:07:53
It's also hilarious that it's in this drop down on a subdomain.
3:07:57
Like, you're taking it seriously, Sundar, but like how seriously are you taking it?
3:08:01
Uh should this just be baked into the Google search box? Yeah. Right.
3:08:06
Um but hopefully soon and I'm excited.
3:08:09
I mean it seems like they're they are hearing the message we need better productization.
3:08:15
Google legendary team in terms of AI algorithm development.
3:08:18
Uh attention is all you need. That's a Google paper.
3:08:22
They created the transformer. Time to capitalize guys. You got the TPUs. You got the team.
3:08:26
You got the Poly market has a poly market for Google's whiz acquisition being blocked before July sitting at a very six uh only six% chance.
3:08:35
But and that's an interesting one because you normally if when a big acquisition is going on you can actually determine you can extract that market from the stock price movement.
3:08:47
So like you can see how Activision is trading and understand okay the market expects that Activision will be acquired.
3:08:55
This is what happened with the Twitter acquisition.
3:08:56
Like it went right to 46 billion or 44 billion or whatever Elon was going to pay and then it would it would drop by a little bit based on the probability that it would not go through.
3:09:06
But Whiz is a private company so you don't have that you don't have that real time data on how the share price is trading which you can use to address whether or not the deal is going to go through.
3:09:17
Poly market comes in there. Very cool. We got it.
3:09:20
We're also sitting at a 25% chance that X relaunches Vine before July.
3:09:23
Do you think they need to do that?
3:09:26
I feel like they have the video feed.
3:09:27
They have their they have their secondary apps are rough, you know, to stuff it all in one app.
3:09:33
And they're they're very good at getting you to open up one video, it autoplays, then it scrolls you to the next one.
3:09:38
Pretty soon it's just all slop, but you're watching it anyway.
3:09:42
Those unreged user seconds are dropping to zero. Uh but uh we'll see.
3:09:48
I mean, I I' I'd love a Vine comeback.
3:09:51
uh the Vine team, one of the just legendary crew of uh entrepreneurs. Yeah.
3:09:57
The other thing that we're going to be paying attention to as April starts is just what's happening with Tik Tok. Oh yeah.
3:10:02
Poly market says today there's a 30% chance that the Tik Tok acquisition is announced before May. Wow. That's pretty high. Yeah.
3:10:11
I mean it's high, but that's also what everybody's been orienting around this early April sort of deadline to get a deal done. So we'll see. Um and there we go. Oracle Walmart.
3:10:21
Ben Thompson says says Walmart should buy them.
3:10:25
People think there's only a 1% chance that Mr.
3:10:27
Beast is the winning bidder.
3:10:29
So, no faith in the beast man. No faith in Jimmy. Oh well.
3:10:32
Uh well, that's a great show for you guys today, folks. Thanks for watching. Leave us five stars. Apple podcast, Spotify. Stay tuned. Repost all of our clips.
3:10:41
Like and fave everything. Do it. Do everything. Uh thanks a lot. Uh last shout out.
3:10:50
Yeah, Chris Amdon, we saw you got an aid sleep.
3:10:53
We're competing with you now. Yep.
3:10:55
I want to see you put out those numbers.
3:10:57
I want to see those scores, Chris. Let's see it. That's it. Thank you, folks.
3:11:00
We will see you tomorrow.