KPop Demon Hunters breaks records, Grok speeds up, and an AI-powered browser deep dive | E2171

What's interesting about this is we're now starting to see a couple of different cohorts. You got the non mag 7, I'll call native models, OpenAI xai anthropic. Then you got the mag 7 in some cases pursuing models. I understand Amazon has a model now. Apple was doing something in vision and images. This is Microsoft, obviously. We know Gemini doing very well at Alphabet. And then Meta has Llama.

Llama. Yeah.

And then you got the Chinese companies coming in with Deepseek and Moonshot, Baidu. And I guess the question is we're now in a game of chicken with these companies who can keep building data centers, keep raising money and then race towards the cliff, hoping that the cliff turns into a bridge, with the bridge being revenue and customers willing to take out their wallets and give 20 to $200 a month, you know, $250 a year to $2,000 a year to use these platforms.

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All right, everybody, welcome to this Week in Startups. I'm your host, Jason Calacanis. We do this show Monday, Wednesday, Friday. And with me again, my co host, Alex Wilhelm. How are you doing, brother?

I'm doing fantastic.

Great, great. Happy Friday, Ed, the editorial director at my investment firm Launch and my media company this Week in Startups, Juan Harris. Hey.

Hey.

We got a big docket here, big docket energy. And I know we've been working on twist bets and we now have all the wagers starting to come up. You can pull that page up and we'll see where these things wind up. But we have the unemployment rate bet that's going to come due to at some point and. Oh, wow. We have to make sure we have this bet clear below 5%, 5.5% in six and 12 months. So we made two bets. Ah, got it. Yeah.

I was going back to the transcript and it turns out when you and I banter about a bet, sometimes it's slightly hard to figure out exactly what we were wagering on. So I'm trying to make sure I'm as fair as possible to everyone involved with these discrete wagers confirming the bet.

Because I've been involved in a lot of these side bets and like my poker groups and et cetera and degenerates. What they do is they restate the bet on text in front of everybody else and then confirm the bet. And so now everybody has it, you screenshot it and you put it in your calendar and then you settle up.

We're going to have that up with its own URL, hopefully by next month. Well, actually Tuesday, Jason, because we're not going to be here on Monday. It's going to be a holiday here in the States.

Oh my goodness. We're taking a holiday now. What is happening? We were so good about just working hard and now everybody's taking an actual day off.

Labor Day. The bane, the bane of your existence. Labor Day. The worst one.

Labor Day. It's like it's Labor Day. We should all work a 12 hour day. What are we talking about here? It's in the name, folks. All right, where to begin? Lon, I see that you are on the program, which means there's something going on in pop culture land.

Yeah. So I think we need to talk about Netflix's K Pop Demon Hunters. I have watched the film. I'm not sure if you two. Jason, you have daughters. I'd imagine you might have seen this.

They're so into this show. Yes, they're watching it. They're trying to rope me into it. I don't know what it is.

It is now the number one most streamed Netflix original film of all time. It just took out Red notice this week. 236 million views. It was also the number one theatrical movie at the box office last week. Netflix had in about 1700 theaters across the US Saturday and Sunday only they had sing along versions of the movie and it came in number one. $18 million at the box office at Bested Weapons Freaky or Friday Fantastic Four. All these late summer hits and another record, four songs from the film are on the Billboard Hot 100 this week. That is an all time record for any movie soundtrack in history.

Wow.

All that's interesting that a Netflix original is blowing up to this insane degree. But I think what makes this even more interesting, this movie was actually produced by Sony Pictures Animation during the Pandemic. They had a pandemic era deal with Netflix. Netflix and Sony produce these movies together. Netflix gives Sony back the full production budget plus $20 million per film and then they release the movies directly on Netflix. Now that seemed like a good deal for Sony during the pandemic, but now Sony has lost this IP that could have been like a huge franchise. Now they have to share this huge IP with Netflix when it could have been. I mean this could have been a billion dollar grossing theater.

This could have been their Marvel, you know, their next Spider Man. Sony has a couple of things right. They own the. They. When Marvel was but a comic book company, they sold the different comic books.

Right.

They kind of share Spider man with Marvel now. But this has been a big pain point specifically for Sony. Just last year, CFO Hiroki Totoki said in an interview, whether it's for games or films or anime, we just don't have that much IP that we fostered from the beginning. We're lacking that early phase of IP and that's an issue for us. Well, here's an example. They actually hit a grand slam home run, but they sold it to Netflix before they even had a look at the movie. And so they didn't get the huge benefit out of it. So I mean that's what's going on. They're working currently Netflix and Sony collaborating on a sequel. But this could have been billions of dollars for Sony that they.

So they still own half of it or they own some portion of it or unknown.

Yeah, they own an unknown chunk of it right now. But despite, no matter how big it gets for Netflix, they only get their $20 million payment, which they already got. They won't earn any additional. Maybe they'll make a new deal for the sequel, who knows. But yeah, they kind of gave away what could have been a billion dollar property, it seems like for $20 million, not a great deal. And you know, I think throughout the streaming era, Sony's kind of seemed like the smart one. Like NBC Universal, Paramount, Disney, they spent billions of dollars on these streaming platforms and they're still lagging behind Netflix. Sony seemed like the smart one there. They don't have a streaming platform of their own. They just license all their content to the highest bidder. But here's a situation where, you know, they licensed the wrong thing and they made a kind of a bad deal.

Self inflicted wound.

Yeah, they kind of lost out on this one.

This would be, this could wind up being the equivalent of Watlawn. If this goes seven movies and 10 seasons, 20 seasons, give me the equivalent. If it goes 20 seasons and seven movies, what would we compare this to in animation? Land.

I mean, what you're talking about going that huge would be something like a Transformers level franchise. Something. I mean, even approaching a Star wars level franchise. I. I don't know if it would go that big, but yeah, I mean, certainly you could get several films, several shows out of this.

Like, you know, something anime.

It's animated. Right. So, I mean, something on the level of like a spongebob kind of franchise. And we know how crucial stuff like that has been for Paramount, where it's a TV show, it's a series of films. And the merch. I mean, that's. The other thing is the merchandising, the shirts, the soundtrack albums. You know, they could put this thing on tour.

Yes. And that's actually very interesting, Lon, because you said they were hosting sing alongs in the theater. So I thought, okay, people have to know the music. How much are they listening to it? I pulled up Spotify data and then I ran an analysis. They have seen thus far from the soundtrack of this film, 2.25 billion streams.

Yeah.

Yeah. On Spotify alone.

Also, those sing along screenings they have, it's subtitled. So, like, that's how they do sing along screenings. They put the lyrics on so you can. It's like karaoke, so you can sing along live with people.

And this was done in English. This isn't a Korean. South Korean product.

This is an American.

This is dubbed. This is American from the beginning. It just happens to have K Pop in the name.

Right. Because K Pop is so huge. And there are. The singing voices of all the characters are provided by real K Pop stars. But no, it is an American film with a lot of American. You'd recognize a lot of.

It's going to wind up being like Harry Potter or Lord of the Rings. Because what's going to happen is they're going to do a live version of this and they're gonna do a play not to.

They'd be fools.

Can you imagine the play? A play on Broadway or traveling. Because they did a Harry Potter play at some point. I think it was quite successful.

The Cursed Child, it's called.

I read that. Yeah, it was. Okay.

Look at you nerds. Look at you two nerd balls. You admit it. You read the book.

I didn't. I have not read the book.

Children. Alex, what are you doing?

I'm familiar.

I'm concerned.

So, I mean, in child, Alex back in the day, used to go with his friends to the Barnes Noble or one of those bookstores at Borders to get the new Harry Potter book. Borders.

Oh, my God. Did you have any pictures of that? Do you have a picture of yourself with hair? Online, please find that.

That makes me feel old.

Producer Claude, make me that image, please. I need to see Alex in line with a big mullet. Alex with a mullet. Go. Producer Claude.

I feel like Jason's just discovering how big of an enormous dweeb I am, and I'm terrified it's going to let him down.

We all understand the importance of a crisp, memorable, easy to spell domain name. One of those names you can say over the phone and people know how to type it in without asking you the spelling. But let's get real. The good ones are either taken or there's some poacher who's holding it and waiting for some huge payday and they don't reply to you. Even if you want to pay for a premium domain, you don't want to use up all your Runway on a domain name. That's just the truth For a startup. You want to put that valuable cash back into your startup's operations. So you should consider this a tech domain. You can get a clean, crisp, super memorable name for your website and company and signal out loud to your customers and investors, we're a tech company. That's instant branding for you. That's why over 500,000 founders have collectively raised over 5 billion in investment building their companies on tech. So skip the hassle, head to www.get.tech/twist, or go to your favorite registrar and grab your tech domain today.

That makes me feel so old. I was already working at a bookstore. Like I was selling kids Harry Potter books at that.

So you may have sold it to Alex. I may have come in with his Alex mullet. I remember we have a mullet. We got to have a mullet day here, all three of us. We just put on a mullet wig and we just do the show. We don't mention the mullets. It's just a mullet show.

I could go natural for guys. I'm not that far away, Matt. I could do a natural show.

Yeah. I don't know about the mullet you got. More like the Stravos.

Yeah. Stavros. Yeah. The bald up front party in the back. Yeah.

I just realized I didn't know Cumtown all that much as a podcast. I know about the dirtbag left. Cause I'm a big Red Scare fan and I know the Red Scare and the Chapel. Chapo.

Chapo Trap House was a big part of it.

It's all part of the Dime Square Movement. But it turns out there were three co hosts on the show. You and producer Nick from All In. Formerly a producer from here. There's three principals from there. Adam Friedland, right?

Yes.

Is it Friedland or Friedland?

Friedland. Adam Friedland, Nick Mullen, and then Stavros.

So Stavros went on to do the bear comedy, and he's a huge, huge hit.

Yeah, he's hilarious. He also. He did a movie this year called let's Start a Cult. That's really funny. It's on Hulu right now. You can watch.

And he was just at Cannes, I think, with a film. And so he's at this film with Jesse Plemons. Is that the character?

Oh, is he in Begonia? Yeah, he's in the new yard.

So I saw him trending on. So this guy's career has blown up. He's an indie star, he's a TV star.

Huge podcaster, big comedian. Yeah, he's doing a lot of stuff.

I like this guy. He's Greek. I need to meet my Greek brother at some point. I want to meet Travos and hear his story. Let's book him for the show at some point.

I'll try to get Stavros on. I'd love to have some.

I would like to get Stavros on. Then there's Adam Friedland. He's got the Adam Friedland show, which is like a surreal. Like he's a comedian, he's sardonic, and he's got an old style set where he just interviews people. And it's a little bit meant to be weird and awkward. Like Between Two Ferns. Yes.

I mean, I wouldn't. Between Two Ferns is like a full on parody. And I don't think it's not scripted like that, but it is like a, you know, it's like that new style where it's supposed to be very kind of loose and it's. It looks like a talk show, but it doesn't really follow most of the talk show rules.

So I like this guy, Adam Friedland because I watch his clips. I see them come up on TikTok, Instagram, et cetera. He's witty.

He's going very viral right now because of this Richie Torres interview that he did.

That's why I pulled it up the other day.

Explain what that is, what happened. I watched a clip of this and he was very emotional. And the guy, Richie Torres was a little. What's the word?

I mean, I've got some choice words for it, but he comes off very cold. They're discussing Gaza. Representative Richie Torres, he is a Democratic congressman from New York. He actually represents the Bronx. Yankee Stadium is in his district, which they discuss on the Friedland show. So he's notable as one of the fiercest, staunchest pro Israeli members of Congress, where he is just. The United States has to back up our Israeli allies 100%. And Friedland is a progressive American Jew who lived in Israel for a while and is very opposed to Israel's war in Gaza and the treatment of the Palestinians. And so they're having this kind of debate, but it has gone viral because Friedland is really making this very emotional appeal. Like, how do you look at this footage of what's being done to these Palestinians and now feel for them? And Torres is very much falling back on cable news style talking points and the same arguments you've heard a hundred thousand times. And it does, I think it comes off very mechanical.

And that's what I noticed. He was very like, mechanical, not heartfelt, not sincere, I guess would be the word.

Exactly.

And then Adam is breaking down, he says, listen, I grew up Jewish. They taught us about the Holocaust, obviously. And then I believe that we're perpetrating a genocide or if anybody's perpetrating a genocide, I'm paraphrasing his words. Like, I can't stand by after you. I don't want to say indoctrinated, but after you educated me on the Holocaust would probably be a better word maybe.

Right.

And felt very deeply connected to that horrific thing that happened to our culture, to my great grandparents. And then I see this and it's causing massive dissonance in him. And then he's being responded to by a guy who is, like you said, doing.

He's just, yeah, Jeff is like, oh, like, but that, but that's Hamas. And Hamas started it. And all this stuff that. And I'm about, like, we don't have to get into the arguments themselves, but just all of the things you'd expect to hear on, you know, cable news to people like.

But it goes to show how popular Adam show is that we've all seen these clips bouncing on our social media. Very effective broadcaster.

Yeah, well.

And incredible broadcaster. Yeah.

And I think it also shows why Democrats are struggling so much with the podcast revolution. And like, they're just, they're just kind of unable to. Whereas a lot of Republicans have the ability to go on these shows like JD Vance on Theo Vaughn. And look, I'm not a JD Vance fan, but he feels very natural on that in that show. He can just take off the politician hat and chat with Theo Vaughn, like two guys chatting. And repeatedly, when we see Democrats get on these kinds of shows in these same kinds of environments, they don't seem to have that ability to do that. And Friedland is practically begging Torres to just like take off, show some humanity.

Just like stop talking like a politician and let's talk like humans.

Yeah.

I think the problem is that these positions get codified on sides, to paraphrase what you just said, Lon. And so people end up just wanting to represent a particular, as we say, party line. Now, Richard Torres is not someone that I'm hyper familiar with because I'm not from the east coast originally. I know that the California reps a lot better. But I do think that especially on issues like Israel and Gaza, people have formed opinions so strong that there's not a lot of debate to be had. In some ways, like when I read a lot of tweets from people on the progressive left, the Jewish progressive left, the right, the Jewish right, and there doesn't seem to be any actual discourse whatsoever. I don't see anyone ever going, that's an interesting perspective. I'll think about that. It's just shouting.

And you're not allowed to change your position or say I don't know or I'm unsure. Let me tell you my position. I'm unsure what's going on over there. I feel like I can't get precise news, but I can tell you that hundreds of thousands of people starving and being not in their homes is a tragedy.

Exactly.

I don't have to pick sides. If it was either side, we're starving. Starving equals bad. Now if I say that, does that mean I'm anti Israeli and people are trying to make me choose a side in a multi thousand year conflict in which it's filled with suffering. Am I supposed to make. How do you pick a side on what happened in October 7th and what we see in the last 30 days in Gaza? I can't pick a side on either one of those. They're both horrible.

Yeah. And I think a lot of the reaction to this has been like, well what is Torres supposed to do, switch sides? Cuz he's on this podcast and like, no, I don't think that. I don't think he would have needed to switch sides in order to turn this appearance around. I think what people were looking for is exactly what you just said. It's regardless of where you come down on what should be done, what are the next steps we have to take a moment and acknowledge that these images we're seeing from Gaza are horrific and that the treatment of those people and leaving these people to die in refugee camps and blowing up their refugee camps and killing journalists and like, we all can agree just, just that that is not something that should be done. That is bad. That's horrible. We don't want to see that. What can we do to make that stop? Beyond that, whatever you think your proposal is for, how should America engage? I don't even think the conversation ever got to that level because they couldn't agree. Torres was unwilling to even acknowledge, like, what we're seeing from Gaza is horrific and no one should be subjected to treatment like that.

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Yeah.

That is the death knell of this in an age of unfiltered honest discourse.

Right. Charlemagne, the guy, the Breakfast Club host this week, he labeled Hakeem Jeffries, another Democratic rep who's very pro Israel, Apac Shakur. And I think that's what. That's what this all is highlighting is like, these guys have these lobbying groups and these special interest groups that are dictating policy, telling them exactly what to say.

And.

And when you get on, you know, when you go on and do an MSNBC hit, that might work out fine. But when you go on Adam Friedland's podcast, he's going to call you out.

Had he not watched. What's the theory here? He didn't watch it. I think sometimes people don't watch the podcast they're going on.

Yeah, if you watch the clip, people don't prep. If you watch the clip all the way to the end. One of the last things Friedland says to Torres at the end of the interview is, I know your people told you not to come on the show, and like me, maybe they were right. So clearly Torres was not as familiar with that show as he should have been. And he had people who in his.

Corner room come back and take a second shot at it as like a human, not a robot. Alex, your thoughts. You were trying to interject.

Oh, it was Just, it just. My favorite Theo Vaughn clip is when he was talking to, I believe, President Trump and he said, cocaine will turn you into a damn lighthouse, homie. And that is a statement that is so hilarious by itself in the context of speaking to the president. And now contrast that with how we approach presidential debates. Now, I'm not saying Theo Vaughn should moderate the next presidential debate, but think about the difference in tenor of questions and what you might be able to learn from somebody by having them in a more relaxed conversation versus essentially trying to recreate the White House press room in every single interview.

I want to just go back and circle back around to the K Pop Demon Hunters. I know that's a little bit.

Let's do it. Let's talk K Pop Demon Hunters.

I've always felt I would have been a great studio head and I feel like that's still a possibility for Milan because, yeah, I feel like studio heads is such a mercurial, insane, deranged position in the world that you get to greenlight stuff and you have like an undue amount of influence over that and then you have these hits and bombs. I just love it. I read the Barry Diller biography, the kid stays in the picture. I love that job. And I think there's a huge opportunity here around ip. And I've talked to you about it, Lon, over the years based on like Toho Studios and our mutual love of Kurosawa and how they did things. I would really like to fund a startup. I would incubate it of trying to create the next K Pop Demon Hunters, the next squid game, but use the new mediums to do it. There's a new short form lawn. I don't know what it's called, but it's very popular in China where you watch like a 90 second or a 3 minute vertical video.

Microdrama.

Microdrama. Thank you. Oh, right.

I've heard about this.

I love these micro dramas. And I talked to Brian Alvey who had a comic book company for a little bit after we sold Weblogs Inc. About this and it's hard, but I think you could create a little mini studio that doesn't try to make money in the short term. They just try to build characters and ip.

Well, do you know about Naver? N A V E R. Of course.

Naver is like basically the Yahoo of Korea. I've met with the founder 15 years ago ago when I started Mahalo.

So they have a, like, they call them webtoons. They're basically online comics. What we would think of as online comics that are a huge source of IP for Korea and Japan. Like they're constantly making animes or TV adaptations or movie adaptations of stories that got popular on Naver as a webtoon and then got turned into this next thing. Like a lot of the Netflix anime originals or new anime shows you'll see out of Japan started life. Or like even Korean TV shows, a lot of them started life as these, you know, basically manga or comics, but they were not published on paper ever. Just exclusively from the Internet.

Before we jump back into this, Jason, there's a company doing this, it's called Microco, and this is an article from earlier this month. They want to take the micro drama phrase, infuse it with AI and avoid somehow the Quibi comparison, which is the obvious thing. If you don't recall, folks, Quibi was a short lived, short form video project, right?

Quibi, not Quibi.

It was a terrible name, but it was Katzenberg. Katzenberg comes up as a young assistant in the Barry Diller. He was, I think, Barry Diller's assistant for a little bit or one of the heads of Paramount Pictures or Gulf Western. And he's a friend of mine. I play cards with him sometimes and we, we chat once in a while. Katzenberg's like one of my favorite people. And he had a really good idea there. I think the problem was too much money going too big. Remember, they had a $2 billion valuation before they started. Yes, you can't have a $2 billion valuation. You got to have a $50 million valuation. You have to raise 10 million. You have to go slow, you have to learn and you have to make mistakes. And the thing that I got out of the Barry Diller biography was that he just liked to fail fast and learn by doing. And that's how he did his entire career. Barry Diller created the Movie of the Week. Lon, you can explain to people what this kind of cultural significance was. But he, when he took over cbs, decided to do the Movie of the Week.

It was abc, wasn't it? I think it was abc. It was abc. Yeah. The ABC Movie of the Week. I think so. Right.

I think it was in third place.

Because that was like doing these Duel is the most. Steven Spielberg got his start doing these duel. That first Spielberg film was an ABC Movie of the Week, famously.

And it turned out that the Movies of the Week they had had all the different movie studios pitch them. And he said, you know what? We're just going to do it ourselves. We're not going to Give the creatives the ability to, like, just go off for two years and make something. We're going to actually have a process here where they pitch, we iterate, we read the scripts and they have like, like tighter controls on it. And they made so many amazing films. Some of them had like six or seven sequels to them and it was the number one show.

The other interesting thing I was gonna say IP wise was they would do. They would make a lot of pilots as movies of the week and then the popular ones would get TV shows. So, like Starsky and Hutch, $6 million man, kung fu. Those all started as ABC movies of the week that then took on a life of their own as shows.

Yeah, this was like a crazy idea. So there's always. Even though the media space feels like it is the toughest business in the world, and it is in some ways, there are opportunities here to take the new mediums, whether it's AI, generative AI, specifically TikTok, you know, shorts, vertical video, or panels on Instagram. And you could figure this out. So if somebody out there is like, got a lot of energy for this, I would love to hear some pitches on it. Jasonalicanus.com for Pitch Life. All right, thank you. Editorial, hair, director. I think that's the proper way to say it. Our director.

Yeah, sure.

Yeah, sure. Director. Okay, thank you.

Yeah, yeah.

All right, we'll drop him off and continue going through the docket because I'm sure there's a lot of tech news that we haven't talked about since Wednesday.

Yes, Very, very much so. Although it's not going to be as fun everybody as K Pop Demon Hunters, we're now going to go eat our vegetables. But, Jason, there's quite a lot going on.

There's your dad joke, folks. Dad joke number two. Doom. I need my stinger. Dang it. I'm trying to love it. Keep doing them. I want to have like a stinger that, like, everybody groans and then there's a layer of crickets. Somebody in the audience make like a great stinger for us. Dad jokes from Alex. I'll pay you like 500 bucks to make me. Whoever makes the best stinger for this will pay you 500 bucks. I'll pay ballot to you in person. If you want to run a successful company or maintain a profitable portfolio like I'm trying to do, you need reliable data, and without the most accurate and up to date information, you're flying blind. That's why you and your company need a partner like AlphaSense. They're the world's number one most trusted AI platform for market intelligence. That means they can help you and your team track the latest economic trends before for your competitors even know they exist. Hey, listen, here at Twist, we eat our own dog food. We only pick advertisers and partners here on the show that we love their products. AlphaSense has a massive searchable database of public companies and that lets us quickly dig up the most relevant facts and context. And their equity funding screener includes private companies, not just the public ones. They save us time and they make us superhuman. So start your AI search and market intelligence journey today and get deeper insights to power your business. We're even going to start you off with a free trial. How great is that, alphase? Sense.com twist, to get started, make sure you use that URL so they know we sent you and you can get this great deal. But let's get started here. I know XAI has a coding model and that people are kind of losing their mind over it.

Yeah, yeah, it's fantastic. So everyone knows Xai is Elon Musk's foundation AI model company, competing with Anthropic and OpenAI. And we talked about them on the show when they launched the Grok 4 family of models, which, as we said at the time, were quite good. They ranked very high. People quite like them. Now they're out with something new. It's called GROK Code Fast one with dashes in between. This was, quote, built from scratch, starting with a brand new model architecture and they built it alongside some partners, Jason. So as they were building it, they were talking to cursor and GitHub, copilot and windsurf and others to get feedback to make it better. Now what's really interesting here because we have other models in the market that are pretty good at coding from Anthropic in particular. This one is fast and cheap for use. It's only $0.20 per million input tokens and only $1.50 per million output tokens. And for reference, Jason, that's cheaper than GPT5 mini and it has a really, really quick token throughput. So it's just quite impressive.

And here you go. Here's the model performance on the XAI site. As you can see here you have the output price per 1 million tokens and tokens per second. Tokens are, you can think of them as words or chunks of knowledge. And GROK code Fast one is the cheapest and the highest tokens per second. And then if you go look at, you know, Grok 4 and Gemini GPT 5 clock, sonnet, sonic, very expensive. One of the great things about what we're seeing in a competition like this is how. What's the economic term? Deflationary, I guess. This technology can be. If you want to win, you can change the world by making something that was previously extremely expensive, extremely affordable. And you see this in everything from tickets for airplanes, right? That's like an attack vector. We're going to make flights cheaper. You can see it with food cloud, kitchens, delivery of stuff. You can see it in hotels with Airbnb and hospitality. Right. And so here we're seeing it as the, I guess, way for xai to catch up when you're behind, when you have a couple of players ahead of you. What are strategies for startups? One of them is to make something free or to make it dirt cheap. That gets people's attention. And then there's a certain group of people, usually the vanguard, the early adopters, who will notice something like that. So you can make it better. That's always good. Another attack vector is to make it cheaper, and another attack vector is faster. So if you want to beat people, better, faster, cheaper are the three things you're looking at. And if you were to look at elon's success at SpaceX, cheaper and better. Right. And then you look at his electric cars, they were faster, but more expensive and better. Actually, it wasn't even better, they were just faster. When the roadster came out.

Yeah.

Then when the model S came out, it was faster and better. And then when the Model 3 came out, it was faster, better, cheaper.

All three?

All three. And then you look at BYD being, you know, what is it? Your dreams. Be your dreams. Build dreams.

Build your dreams.

Build your dreams. I think it's build your dreams. Yeah. And so you look at byd, they're cheaper, they're not faster, they're certainly not better, but they're going after cheaper. And the Chinese government is subsidizing them and they are ripping through some markets, you know, and it's quite unfair when the government price dumps like that. But, hey, that's the game on the field right now, so.

It is the game on the field right now. Jason, I want to illustrate exactly what you're saying in the form of a chart. One thing that I track a lot is how AI models rank and then how much they get used. And one place that we look at that usage Data is on OpenRouter. It's a service that lets people kind of pick and choose models for their Inference needs and I don't bring it up too much because it is a partial data set and we try to avoid those. But sometimes something moves so quickly that I think it is worth our time to look at.

Yeah, it could be directionally correct. It might not be the perfect data, but it could be directionally correct. Yeah, hit us with it.

Especially when the direction is this clear. So what I'm showing on the screen for folks listening to the audio is the combined tokens process on OpenRouter, which is a venture backed startup for all of Xai's models. And Jason, as you can see here, the teal bars are when Grok 4 came out and their usage did go up by maybe 30, 40%. Then they started letting people use Grok code fast1 and it tripled to up to 80 billion tokens. I think that's a day. So it's been a dramatic increase in XAI's, I would say in market share. And I think that's critical because they've been building good models, but I don't think they've been commercializing them or getting revenue out of them as effectively as I might have expected. But here they have a demonstrable straight up hit.

Amazing. And Microsoft, which has a very deep relationship with OpenAI, but let's call it perhaps tenuous at times conflicted because they own 49% of the company until it hits some amount of revenue. This whole convoluted deal structure that is a headwind for OpenAI, all this convoluted nonprofit to for profit. The Microsoft relationship, the nuance of that relationship, which has them making back a certain amount of money and then it becomes public domain. It's just all very weird, but it's a real testament to how great their product is and how the utilization of it and their product cadence, how often they release new stuff that despite all of the hair on those deals in the corporate structure, they're able to keep this thing growing and the revenue growing. If you have revenue growing, it can make up for a lot of mistakes. But you shouldn't make these kind of organizational mistakes. You should avoid those. That's why you got to have good attorneys, good board of directors, et cetera, which they did not. Maybe they had good attorneys, but they didn't certainly have a good corporate governance. But Microsoft, I'm guessing, has seen enough to know that that relationship is not reliable. And they're doing what exactly?

ALEX so Microsoft's AI division, named Microsoft AI, or mai, if you will, has put out two homegrown AI models this week. Now, Microsoft has released some models in the past, but these are more flagship, these are larger, more general users. And so the one that we need to talk about is called MA1 Preview. It's a mixture of experts model trained on 15,000 H1 hundreds. So they put a lot of GPU power behind this and it is a model built for kind of a purpose inside of the Microsoft domain. So it's for following instructions and providing helpful responses to everyday queries. Think about things like Office Copilot Jason is my guess. What's interesting to me is that they immediately charted with this one. So I was over on LM arena, which runs a lot of side by side tests to track out which models are best across which metrics. And this one shot up to the 13th best model in the world, which I think for a preview from Microsoft's AI division for their first model of this sort is quite good. But it's still very, very far behind what OpenAI has cooked up. Because right now if you look at the top of the charts, it's anthropic and it's Google and it's OpenAI and then Microsoft's far down below. But this de risks them, Jason, because if they have their own model, they don't have to pay anyone else's margins. So in time I can see Microsoft moving away from OpenAI's models for stuff inside of the Microsoft world and still offering them of course, on Azure and so forth. But this strikes me as Microsoft saying we don't only have OpenAI in our pocket, we do have our own smart nerds who are cooking up their own models.

Yeah, this is an important hedge. And they had hired. Was it Ilya that they hired?

No, it's Mustafa, I believe.

Oh, Mustafa, right, sorry. Mustafa got hired by Microsoft to become the CEO of Microsoft AI. So I'm going to assume that this is under his management. What's interesting about this is we're now starting to see a couple of different cohorts. You got the non mag 7, I'll call native models OpenAI xai anthropic. Then you got the max 7 in some cases pursuing models. I understand Amazon has a model now. Apple was doing something in vision and images. This is Microsoft, obviously we know Gemini doing very well at Alphabet. And then Meta has Llama.

Llama.

Yeah, and then you got the Chinese companies coming in with Deep Seek and Moonshot, Baidu and I guess Mistral in Europe would be. I would put them in that first group. So you kind of have these three groups, the Mag 7, the non Mag 7, and then the Chinese ones. I think it's starting to come down to who has the wherewithal and the deepest pockets to stay in this game. This is not an. This is not a cheap game. This is like being in like the F1 or in like the. What were those sailing races that Oracle would always win?

America's Cup.

America's Cup. Like it's expensive to field the team, I guess. And also like professional soccer too, right? Like it's not cheap to have Arsenal or Newcastle, whatever the teams are there.

I'm glad you started with the best team to Premier League Arsenal.

Okay.

Just to put it in perspective though, Jason, so the F1 racing world is famously expensive. They did put a cost cap in, so now it's about 140, 150 million a year. That would get you what, seven GPUs and a cooling rack.

I mean, yeah, it's a different how.

Much more expensive this stuff is.

Yeah. And then I guess the question is we're now in a game of chicken with these companies who can keep building data centers, keep raising money and then race towards the cliff, hoping that the cliff turns into a bridge. With the bridge being revenue and customers willing to take out their wallets and give 20 to $200 a month, $250 a year to $2,000 a year to use these platforms. And there probably don't need to be 20 of them. It's probably going to whittle down. It would be great if there were a dozen available, but it will eventually be six. So we're going to see. Six seems like a good number.

Yeah, I think six. Three from the us, two from China, maybe one from Mena, Europe area, something like that. I can see that.

Okay. Wow. I guess maybe we should talk. I know you love revenue and I saw my friend Brad Gerstner talking about Nvidia, and there is a. Pursuant to what we just discussed in this game of chicken, who's willing to build the most data centers and fill them with Nvidia gear? My lord, six customers are now 85% of Nvidia's revenue in the last quarter. Break it down for us. Yeah.

All right. Nvidia is a company that if you are a gamer, you have known for a long time because they make graphics cards for computers. Turns out those little computers are great in mass scale to handle parallel calculations. And so as the AI boom has expanded, Jason, people that run AI compute are buying mountains of GPUs now. There's only so Many companies out there that are building what we call hyperscale compute, which is your Microsoft Azures, your Google Clouds, your Amazon aws, et cetera. What this means is the number of companies that are really buying enormous sums of GPUs from Nvidia, which is the leading GPU company in the world, isn't that many. There's only like as you said, you know, maybe six future AI companies. There's only probably five or six hyperscalers in the world today. So unsurprisingly they buy a lot of stuff from Nvidia and unsurprisingly, that yields a really funny customer revenue count in startups. Jason, if you saw a company come in that had one customer that was 80% of the revenue, big red flag. You don't want that level of customer concentration. So people are a little worried in Nvidia's case. So how big Is their number one customer? 23% of revenue in their last quarter.

And that's Probably Xai or OpenAI I think have the biggest because Colossus was the biggest. So it's got to be Xai is number one, I mean it's got to be top three, it's got to be one and two are OpenAI and Xai, you got to think.

And then after that, Meta, which is spending tens of billions as well and doesn't have its own in house chip division the same way that Alphabet does for example, with their GPUs or the training chips over at Amazon's AWS group. So basically there's one customer 23%, another one 16%.

Maybe it's Microsoft because they have Azure and Azure Powers OpenAI. Actually that's probably what's going on here is that OpenAI is buying them, but they also have a deal where they get compute from Microsoft that was part of that original Harry deal we were just talking about. So maybe it's Microsoft because they represent two of the language models or two of the big players.

Yeah, absolutely. But 23, 16, 14, 11, 11, 10, that's a, that's, you know, most of Nvidia's revenue from just a handful of companies. And this is why people are so worried about Nvidia's earnings. Jason. Like if you think about, you know, when they dropped, everyone was really holding on tight because if they miss it implied that the hyperscalers weren't spending. It implied that AI demand was slowing, it implied that et cetera, et cetera. So it was kind of a linchpin earnings report.

This could be a stop and Start kind of a situation where it takes time to digest the models, it takes time to finish the products and get them to market and then the software and the developers become more efficient at utilizing the infrastructure. So there's a confluence of factors here that are going to trend towards growth for Nvidia. But what if somebody like Alphabet says hey, we're going to be, we have our own silicon. Amazon's working on their own silicon. I think we have enough H1 hundreds and whatever and we're going to just try to build on our own. And the long tail of demand here is also significant. There are startups who are using Azure, Google Cloud, et cetera for their GPUs. So those are long term going to keep buying, you would think.

Absolutely. Also OpenAI's Sarah Fryer, I think we mentioned this on the show a week or two ago. She did an interview with cfo. The cfo. Thank you Jason. And she said that they're still constantly under compute. And so at least for today, there remains a shortage of free GPUs to use at scale. But we are seeing some other changes as well. So a story that we're not going to focus on today, but I'll just mention it. Alibaba is mentioning over in China that they're working on their own chips. That's going to help out with the intra China GPU shortage. So everyone wants Nvidia's market cap. They are the number one most valuable company in the world. You're not worth 4 trillion plus without having everybody taking shots at you. But to quote the wire, if you come at the king, you best not miss. And thus far no one's really managed to slow down Jensen and his team.

Yeah, and we have to get our hands on this Claude browser. We had a great experience with the Comet browser.

The browser though, Jason, is a way to let Claude run Chrome for you versus a distinct whole cloth browser. Just so people are sure.

Yeah, everybody basically uses Chromium I believe is the name of the open source project or Mozilla, which is the Firefox project. Both of those are open source projects. You would never write a modern browser from scratch. You would use those basic architectures and then have those, you would wrap them basically. And I use the Brave browser and Comet now Brave I use because of the protections and getting rid of ads and privacy. And it's fast. I think it's also fast because it's not letting people cookie you and all that cruft slows you down in terms of web speed.

But tell me more about Comet. I'm curious. You've been using it now for a couple weeks, I think a month.

Yeah, definitely a month, yeah.

An AI, the browser of the future, Jason, has it changed your productivity, your workflows, how you approach the Internet?

Yeah, it has. You know, Perplexity's got a pretty good search product and the Google one is kind of two different products. They haven't moved to the AI native search on Google. You can use it. But Perplexity does a nice job with like a comprehensive search which was pioneered by Mahalo, my company, when humans were doing it and Naver and down in Korea, both of those Korean companies. And so they do a good job at that comprehensive search, not for everything, but pretty solid. And they're taking a Yahoo like approach now where they have shopping and finance, I think. And so Yahoo Finance for me isn't as good as Perplexity's finance product. So when I'm checking stocks, I find myself using Perplexity Stock Checker instead of Yahoo Finance and Google now because it does an interesting thing. It goes and searches and summarizes the news with AI as opposed to just natively listing the stories. And so they're kind of intercepting my clicks from going to MarketWatch or to Fortune or whoever's covering what's going on at Robinhood or Uber or Korean Defense or whatever I'm in at the moment. So I do find that.

What's that so bad for Yahoo?

Yeah, I mean Jim Lanzon's got to decide if they are going to super invest in AI to summarize their partners stories. But I think they have a prisoner's dilemma there because I think they make money by sending traffic to their partners. I think their partners pay for placement or because you see some of them say sponsored on them and their news stories.

Yeah.

So if you were to summarize them, well then you don't get the advertising there. All these AI companies don't have advertising products. So their products are kind of like Uber or Lyft in the early days where they're being subsidized by venture capital. And if you could get a summary of all the stories without any advertising or cruft in it. And then Yahoo needs to have the cruft in the advertising. Man, that's a huge advantage for making a better product than Google's which is filled with ads as well. But I do like using it for multi step processes. So I will pull up the assistant on a page and I'll say, hey, summarize the Themes here in this story or please go find these individuals LinkedIn's for me and go follow them on LinkedIn. And it doesn't quite work perfectly yet. And it's all based on Claude by the way. I use Claude as my, I use Comet as the browser, but I use Claude as the language model. So very interesting that the browser you can kind of like you can pick a search engine, DuckDuckGo or Google or Yahoo, whatever, you can actually pick what language model you use. And I don't think I can use a non AI browser ever again.

Ah, see that, that's interesting. So it has changed your behavior patterns for life which means that we actually have turned a new page in browser technology.

Okay, I think so, yeah. When you have the assistant there at the side, when you have the one click summary of the page, when you can fire off like a, I'll call it a light agent to do something, sure it works relatively well. Not good enough yet. But if I want to like when I was having my Mexico City trip I took, I was like go to these websites, figure out the consensus of all the best restaurants, you know, near this hotel in this neighborhood, which was Roma where I stayed, and then put it in a table and then give me the Yelp link, the Instagram link, you know, and the TripAdvisor link or whatever and the Google local link. And it's kind of did a decent job at that. Almost 60% of what my Athena assistant would do. So I had my Athena assistants do it. I did it. Now I've trained my Athena assistants to use Comet to do this. So I'm using a combination of Athena assistance and the emerging technology. And that's seems to be a winning combination for me for getting more done faster. And if you want to know what it's like to have an Athena assistant, I have two of them. They work seven days a week, they have a split schedule, some days they overlap by half an hour and I have them in a imessage group, I have them in a slack and I was like, give me the restaurants, rank them by Michelin stars, rank them by the reviews or whatever they do, all that, a little bit of AI, a little bit of their manual stuff. And then I gave them my open Table account and I said get me two restaurants per night based on this list. One reservation at 5:30, one reservation at 7:30. Then I said okay, I will tell you which reservation I'm going to use around 4 o' clock so the restaurant can give it up. They don't mind you doing that. And the ones that are hoity toity sometimes will give you like a ten dollar per person cancellation fee.

Yeah.

Which is if that happens to me, I'm happy to give a restaurateur because my dad was one and I know it's a hard business. I'm happy to give him the 20 bucks if I don't cancel within an hour or two, whatever their policy is. And man, that makes your life real simple. You have options and it really works well.

Also, you're making me incredibly hungry, so I'm a huge fan of Mexican food. But this brings up a really important polymarket. Jason, People are trying to figure out what's going to happen with OpenAI launching its own browser. We've seen reporting that this is going to come. Now this is a relatively small market and I wouldn't normally bring up a smaller one, but there's something very interesting that happens if you click a button. Watch this. If you change the timeframe here on this polymarket, this one is OpenAI browser by September 30th, not that high of a chance. About a third. If you click on Change the date to October 31st, suddenly people think there's a two thirds chance. So it does appear that some people are really wagering that this OpenAI browser is going to come either in the first month of Q4 or around there. So here's hoping they're right because if Comet is good then I would love to see more browsers do the same thing. Competing.

Yeah, shout out to our friends at polymarket because one of the great things here, and I don't know what the rules are on this but if you have inside information. Ah. Are you like if you worked at OpenAI or you were, let's say you're a recruiter and I'm a recruiter and OpenAI had me recruit 10 people to work on a browser six months ago and then they said we don't need any more, there's no more open recs for that I might be able to discern. Okay. They're getting ready to launch it and if those people are still working there and I check their socials now is that proprietary? Is that inside information? It's not like I wonder how that works for. I mean I know how it works in sports leagues. Like you're not allowed to like miss your free throws to, you know, get the under. Okay, but how would that work on a poly market or any prediction market?

I'm curious. Insider trading laws apply to securities and I, as far as I Understand it. We're trying to narrowly define securities to leave crypto alone. So I'm going to presume that Polymarket doesn't land there. There are some states that have insider betting laws, but that's not as broad across the nation. And when we're talking about what Polymarket does, it's. Is it technically betting, is it wagering, or is it investing?

Hedging? Investing. Investing in an outcome is a way to say it.

Here's a funny thing. Some experts argue that allowing insiders to trade may increase market accuracy. Yes, this conflicts with fairness. Yes, it does and yes, it would.

So they don't. Yeah, I think that's a feature here. I want the insiders doing this because it means the data will be more accurate. So like when I was saying Biden is going to be swat hot swapped and I made that incredible call as no strikanis on all in. And here, you know, it turned out I had heard from people like, you know, yeah, and I wouldn't say call them insiders, but in and around the political arena, that they felt that was going to happen. And I felt it certainly was going to happen because I thought it gave them a free second chance at winning the election. Right. If you knew you're going to lose and you got this free second chance, why wouldn't you take it?

Exactly right.

And as I explained, like, why would you do a June debate with Biden if the debates normally start in September? That when I heard that they had done that like in, I guess in May, they announced it or April, I was like, wait a second. And I'm not an insider, but I had an insight which is, oh, the Democratic Party is setting up and stress testing Biden's ability to win this race so they have enough time to hot swap. And that's actually how I made my decision.

Good news producer Claude just got back to us. And traditional insider trading laws don't apply to prediction markets because they fall under the CTFC's jurisdiction. And the Commodities Futures Trading Commission, I don't think deals as much with insider regulation versus just keeping tabs on the commodity market. So should be okay. Actually, let me rephrase that. It may be okay. This show is not legal advice and.

It'S not in trouble.

You are not allowed to call us.

Yes.

We're just fans of wagering and predictions and figuring out what's gonna happen next. That's all we are.

I do think if you are the principal in this, like if you were Sam Altman and you get to pick when you launch, you're not allowed to participate based on the terms of service at Polygon.

That would be fair. Also, by the way, producer Claude is brought to us by our dear friends over at Anthropic and we talk about them all the time on the show, but we talk about them most of the time in a non sponsored format.

They're a partner on the program, as is polymarket. Yeah. So we are so lucky to have the top brands partnering to bring this amazing episode. It's not cheap to have. Oh, someone like Alex here. It's not. It's not like we don't. This is an expensive talent you have on this program.

Ruinously costly. But if you do want to dig out more about Claude, you can go check it out at Claude. AI slash twist. And now I'm going to get five internal points.

All right, listen. Another amazing episode of this week in startups is in the can. As my dear friend Leo Laporte would say, another twit is in the can. Shout out to my guy. Shout out to all the people who made podcasting happen. My friend Dave Weiner created rss. Big part of my career. I sent him a little note just thanking him for the impact his technology had on my career. So thank you to my friend Adam Curry, who created podcasting along with Dave Weiner. He's got a great show, no agenda. He's doing this like podcasting 2.0 thing. Oliver, I want to book him for the show, please. Adam Curry would love to have Dave Weiner on and hear what he's up to. He's working on some content management systems using WordPress. I understand. And Leo Laporte for being a pioneer in the space and teaching a lot of us how to be broadcasters. So thanks to all those legends. They don't get any credit. Like, the OVAN doesn't know who Dave Weiner is. The Ovaugh, you know, Joe Rogan knows who Adam Curry is because he has him on his podcast. If you want to see Adam Curry on a podcast, he does Joe Rogan once in a while. Adam Curry had convinced Steve Jobs to in itunes. Itunes was where music used to exist on your laptop and would put the music on your ipod. Before there was. When he was that young. Yeah, before there was. Yes, before there was an iPhone, there was an ipod and he convinced them to have in the menu, add RSS feed.

Oh, wow.

And you would cut and paste the RSS feed from somebody's blog or podcast and put it into itunes and then it would sync it to your ipod. If that hadn't happened and Adam Curry and Dave Weiner didn't do it, there would be no Joe Rogan. There would be no all in. There would be no.

Ah, so they're responsible for the second Trump administration. I see. Oh, God, it's Dave Weiner.

Dave, you want to know who's responsible for the second Trump administration? It's pretty simple. The Democrats did not field a qualified team.

Joke, joke, joke. We don't even need to.

It's a dad joke. No, I just. I hate the fact that people think that, like this, like, podcasters create this. You have to feel the team. Yeah, this is my message to the Democrats. Like, feel the team. You can't put rec players. You can't put a retired player against Kobe Bryant. You got to have, like, a sharp player. If you're going to be up against, like, a media savant, like Trump Descartes. I mean, a Democratic Party is just so frustrating. Bring me the America Party. That's what I want. We'll see you all next time. Have a great weekend. Enjoy the long weekend.

Enjoy the long weekend. We'll see you guys on Tuesday.