TWiST News: Grape-picking robots, startup investing for all, and the earnings numbers you need to know | E2037

Essentially, Sam Aldman said, hey, we face a lot of limitations and hard decisions about how we allocate our compute resources towards ideas. So essentially, Jason, they're compute constrained even with Azure in their pocket. That blew my mind.

Yeah, they're blowing through 5, 10 million, 10 billion a year in infrastructure and losing a lot of money. And that does say something that, you know, they're running out of bandwidth. And I saw Jensen Huang was talking about Elon standing up this giant cluster. So the build out keeps occurring. I do think the interface of chat GPT is superior to any other interface, but the results are not.

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All right, everybody, welcome back to this week in startups. It's Friday, it's November 1st. We are but four days from the election and we're not going to talk about that today. We're going to talk about startups technology. So this is a great reprieve for all of you that are white knuckling it to the end of the election or hopefully if you're a founder of a startup, you're focused on your team, your product and your customers. With me again today, as always, Alex Wilhelm, how are you, sir?

You know, I'm good. I'm also very glad that this is our little election free, safe zone because I feel like everywhere else I look, if I open the door, election, turn on the sports game election. So, you know, a little break. Sounds good.

Yeah.

I'm so glad.

Who's going to win? Who's going to win? Let me ask you, I mean, it is crazy to think that the prediction markets are like coming back down to the. They were obviously very much in favor of Trump, but they seem to have come down to the polls and the pollsters right this close. The gap is closing and we're in a dead heat. And I asked Date Silver on Twitter, like, when's the last time it was like this was an Al Gore and Bush and I don't even think that 2000 election was this close.

Yeah, well, one thing I've been tracking very carefully, apart from polymarket and call, she and other prediction markets. By the way, Robinhood got in on that. Shout out to Robinhood. But I just pulled up the data. According to the latest information from NBC, 64.9 million votes have already been cast.

Wow. So, like, is crazy.

We talk about the election day and we'll count all those on election day. But I mean, the election is now, you know, it's ongoing. But Jason, we have a really awesome show we have with us today. We have the founder of a company called Extend Robotics that's going to tell us all about Teleoperation, VR and how to grab little grapes with a robot. Then an upcoming bill in the Senate that might bring private market investing to everybody. And we have a raft of critical earnings updates. And if you and I don't yap too much, we'll talk a little bit about Apple's new satellite deal, new stuff from OpenAI. And I pulled some new Chinese EV clips for you. So lots do, lots to do.

Today on this Week in startups. Let's get started. I had seen, Alex, a video of grapes being picked by robots and AI. We had an investment in a company, Root AI, that was doing picking of berries. And this is, I think, something we're going to see in the coming years. General Robotics, powered by AI, large language models helping the robotics, you know, move from doing very vertical tasks to doing very general tasks. So vertical AI, I think everybody knows, like you can teach AI how to play chess or poker and have it really focus on that set of heuristics, rules, strategies. Just like Cafe X could have the, the startup we invested in that makes coffee, a very constrained ability to make coffee in a box. But to have a robot go fold your laundry, pick grapes and make you coffee, that's a whole different ball of wax. So let's introduce our guest today and see what he's up to.

Yes. So with us today is Dr. Chang Lu, the founder and CEO over at Extend Robotics. Dr. Lu, I'm going to call you Chang because that's going to be a lot simpler. But hey, how you doing?

Hello. Very good. Great to see you, Alex. Great to see you. Jcal, how are you? Definitely a big fan of both of you. And yeah, and Twist and the all in podcast is definitely a big fan. Yeah.

So tell us what you're working on and the progress you're making. You heard my little tee up about robotics and how it might Change over the coming years because of advancements specifically in LLMs and AI learning so quickly and sort of generalized AI versus vertical AI. And do you think I got that sort of teeing it up correct?

Yeah, definitely, definitely. You've had a really good summary. But yeah, just generally for Extend Robotics we are a UK startup starting in 2019. Yeah, I mean the extend really the purpose is to develop robotic software to extend human capabilities beyond physical presence. Ultimately to amplify world's labor productivities through immersive technology, robotics and artificial intelligence. So yeah, so our purpose is really helping the world making that transition from those traditional vertical factory automations into this real world general purpose automations. The aim is to combat the labor shortage. Obviously everybody's talking about that. Yeah. But obviously we understand the real world automation is difficult because it has to require like a multipurpose system working for high variability tasks in those dynamic environments. Right. And that's generally deemed impossible previously. And we see there is a breakthrough since the, I would say led by ChatGPT, the new generative AI just taking over on text domain or conversational domains. But, but, but we see there's opportunity to embody those similar AI systems into physical form factor like robots and enable human like experience even for physical works.

So we just saw one of your handheld robots doing lab work and picking grapes. Explain to us what's happening in that video. If we pull it up again, maybe you could sportscast this and tell us, you know, did the robot, was it trained already on how to pick grapes or did you just tell it pick grapes or pick whatever you see in front of you if you think it's ripe. Like how much training do we have if we, you know, we see a robot here doing a handset shake. What do you call those robots that have like two or three hinges on them? Yeah, that we see in a factory. What are those called?

I mean normally we call it mobile manipulator. I mean these ones shown in the video, we recently has more human like form factors with two arms and similar mobile base. I mean we develop software that is trying to be more widely compatible with off the shelf parts. So we don't manufacture hardware. So I don't want to compete on that. But we build software that is trying to give a lot of options for people to build their own setups. So our software is basically a virtual reality applications that people can use to upgrade their robots. And people can use, once upgraded they can wear a VR headset, they can use their gestures to operate robots, they can have Finger level controls as well on hands. So the purpose of the software has three purpose. First is to be able to teleoperate robots in real time. And then the second is to collect data for AI trainings. And then the third is to inference AI and be able to supervise and provide interventions when needed. And obviously the hope is that we can allow the seamless shared automations happening both, both with human as well as AI combined together and they can basically complement each other over time. And as AI goes more capable, then it becomes.

Dr. Low, I want to jump in there. So I know that Xtend is working with the Queen Mary University on this grape picking project. But just to make sure that I understand, the current level of the technology is teleoperation, robotic arms in the field, and then allowing the robots to learn from humans, doing the motions for them to actually pick the grapes. But in time this will get to the point when the robots are able to do it mostly by themselves, I presume.

Yes, yes, exactly. We certainly view the automation as a spectrum rather than a overnight miracle, step change. And there's always some level of human there. And hopefully towards the future there'll be less of a human and more of an AI in a process. We call it human in the loop AI. Right. And as a collaboration between human and AI, it means that it makes this smooth transition basically where one human can simultaneously supervise more and more robots, depending on the level of autonomy that each robot becomes. So that's why we amplify labor, we don't replace labor, we amplify labor with AI. And it's, it's going towards the same direction. But obviously we, we're proposing a more smooth transition here.

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And Alex, this is what we I think are hearing about self driving that there's 1.5 mission specialists. We were told at Waymo, we don't know if that's true. Waymo says it's not true. Cruise had virtual operators. The idea here is humans in the loop watching the AI learn and then eventually it steps back and watches 10 people picking grapes or it goes from one and a half or two car robo taxis to 10 to 100. And then the mission specialists, which I love that term, eventually are just looking at very unique moments in time.

Yes, professor, exactly, exactly. So they generally should be just supervising what's happening and just monitoring just in case and then only needed they come in and provide those interventions and always you can teleoperate whenever you need.

So I want to, I want to talk about the grapes though because one thing that I don't know much about growing grapes for wine, but I do know you have to be pretty delicate with the actual fruits themselves. So how much of a challenge was it to train these arms or teleoperate them to not, you know, break the skin of the fruit and ruin essentially the wine harvest?

Yeah. So there's certainly level of integrations innovations needs to happen in some in terms of the sensory informations be able to sense force at the end effector to both provide feedback for operators but also information for the AI models make sure there is a clear feedback on applying force because obviously for grapes it's very important to make sure not damaging them and they are very delicate, especially for wine making. We're working with Saffron Gron, which is the wine English sparkling wine maker and they're very keen. I mean they work really hard to make sure the wine is on a good quality. And we're working with Queen Mary universities that are very experienced on custom end effectors to be able to incorporate force into the sensings. And we come in as a human in the loop AI software capabilities, as a consortium, we try to build this together.

Dr. Liu, end effectuator is just a fancy term for robot hand, right?

I think grippers is the term that I've heard, right? Grippers. Is that the term in robotics?

Yeah, grippers, end effectors. Sometimes you can have different form factor for the grippers.

Yeah.

Okay.

When do you think a wine harvest will be done completely robotically? What year? If we were to put a bet on this?

Yeah, I think, I mean, in terms of our current project, we are we. Obviously quite early in the. In the stage. I would say in the. In the next three to five years, this is something could be commercialized, but obviously this is also a process of commercialization. Commercial adoptions, that's going to take some time, but I think technologically we're getting more mature in the next five, three to five years.

I think what's going to be amazing about this, Alex, is if you think about training skilled or unskilled workers, right? And when people start the job, they're unskilled, and then over a decade, maybe they become skilled at it.

Sure.

It's got to be extremely frustrating as somebody who runs a vineyard, to have new people, typically probably migrant workers, come in and then train them of how to not damage the vines and how to do this correctly. And now if this becomes automated, then that means whoever the best caretaker was of these grapes and these vines would become the global single vine manager in the world. So this is a really interesting concept, Alex. And imagine if you had one, if you had the greatest pilot of all time, let's say Sully, who landed the miracle in the Hudson, let's say he is in fact the greatest pilot of all time. You could have that pilot in every single plane here. You could have the person who manages vines the most perfectly manage every vine in the world. In other words, the most perfect practitioner for any sport behavior in the world. And then the really dystopian or weird moment in time for all of this, Alex will be, I think instead of having migrant workers leave Mexico to come to California to pick grapes, they could stay in Mexico, not cross the border and have VR headsets and have the robots in Napa doing this work. It's kind of crazy when you think about that three to five year period.

No, Alex, I Mean, I think one thing that we underestimate as a, as a technological breakthrough is just broadband penetration around the world. Because what undergirds what you just said, it's just fast connections. Now Dr. Liu, I presume that if I'm going to interact with one of these robotic arms with the gripper at the end, I need a pretty fast connection. How latent is the. I move my hand and then the robot moves its own arm. Is there a number you can put on that?

Yeah, yeah. So actually streaming the data. Streaming latency and bandwidth reduction is one of our key IP about ability to really quickly compress the data. Especially in this case we're compressing 3D data to enable immersive experience in VR and we have the full patent on it. And basically we can, we can. Our ability to stream Data is about 150 milliseconds and that's obviously on top of the latency of the network. Okay, will it work on the commercial.

Internet or do you have to have a dedicated network? And would it work on say a 5G network? Could you do this with a Verizon or even a Starlink satellite connection from a low earth orbit satellite? Or is the latency not good enough on those platforms?

We can already do that, yes. So we can use on Wi Fi 5G. We're just working on testing on Starlinks. Yeah. So in fact I think Starlinks has probably the lowest latency in terms of network because you don't have to go through the fibers. So it's more straight line. But we were working on testing that. But generally ability to compress data small enough that you can actually stream over that standard network is one of the core capabilities we can offer.

After wine, what do you got? What's the next. After you pick grapes? Or is it just the company's going to work on picking grapes for a couple of years?

Yeah, so we're quite wide in terms of adoptions. So we actually started with nuclear applications as a teleoperation interface working with Atkins release. And we then take on some project with Airbus on space robotics. And recently we started this new ground, I mean a year and a half into this future farming projects, that is on agriculture applications. And I think we are getting into the field that where a lot of traction is coming in from manufacturing industries, especially automotive and a few more like manufacturing applications where we see there's a lot of labor shortage as well. So I think we are getting towards this phase where we start to focus on manufacturing. But I think all these applications really Allow us to build a general purpose technology. And for us, because the technology is so general purpose and widely applicable, all of these applications can really contribute to advancing the technology while we're looking at more commercial adoptions at manufacturing applications.

All right, Dr. Liu, we have to let you go, but one more question before we do. I know you're a UK based startup. I also know that you guys have raised some grant money from the UK government. How supportive has the the UK been to its startup community lately? I know we're in a post Brexit world, but I love talking to folks from different countries. So just give us the quick lay of the land for building a technology company in the uk.

I think UK is probably one of the best environment for startup in if you are a software focused startup, software and AI and there's a lot of government support in terms of pushing innovations happenings and helping startups, small companies to innovate. And there's a lot of venture capitals available to talk to, especially around London area. So I think it's a good starting point.

Well, when you make your next trip to London to get a big check, shoot me an email and we'll catch up on that because I'm very curious to see how the company goes. But Dr. Lu, thank you very much. Extend robotics everybody. You can Google it. And if you're into sparkling wine, perhaps check out Saffron Grange.

Yes.

All right, thanks doctor. Awesome, good workup. Thank you.

Thank you so much.

Really interesting. I think when we see these demos and you know, a lot of times I'll see them go by on LinkedIn or AX and the production team, we talk about it, what's underpinning this change, where do the second order effects that will happen is what I always try to go to because then we can figure out the trends. And I think there's a couple of very interesting ones here. One is the greatest single practitioner in every vertical. I don't know how to phrase this exactly, but the perfect pilot I think might be the way to think about this. And we're the perfect poker player.

Sure.

You are going to have for every profession the greatest practitioner addressing every single instance of that task. And so for picking grapes, it seems mundane, it probably seems like not super important, but it probably is because great winemaking requires winemakers. And this entire process, all the secrets will eventually wind up in AI and the quality of wine, like the bottom half of wine could become as good as the top half because all of the secrets, all of the little nuance will be captured. So it will elevate the cost of. It will elevate the quality while reducing the cost.

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I want to double click on exactly your thinking here because to me, the best pilot the example you used was Sully. Definitely a flesh and blood human. But when you talk about these AI models becoming the best at what they do, are you referring to like a digital, digitally trained AI that learned from the best human to then become the best technology product?

You would assume that all of this monitoring of great humans would then result in the greatest Jedi pilot of all time. And it could also learn just from all scenarios. So if there is a scenario where you know when you're picking grapes to learn, hey, you know, this bundle of grapes needs 24 more hours on mine. And this one, you know, we missed and we should have picked it earlier. Over time, learning that is something that could come from a human's perception or over time the AI could learn, hey, when we produced this vintage of wine, it got a lower score than the last five years. And let's go back and replay what we did. And that type of diligence on tasks exists for planes. Every time a plane crashes, we have this wonderful thing that happens out of that Tragedy, which is the entire system gets better. They focus so much energy at such great cost on making travel safe that we're now at a point where we've had no commercial airline deaths in America in like a decade. It's phenomenal. And you know, tragically, whenever the next one occurs, they will put millions and millions of dollars into figuring out why that happened. Even if it was a drunk pilot or just a broken bolt. And it's like super obvious they will track that down. Now, that doesn't happen. Those kind of postmortems, those kind of debriefs does not happen when you're picking grapes, I'm certain. So now you're going to have that occurring. So the perfect pilot for every profession is coming. The perfect professional for everything.

I hear the implied add that to the theme list. So trust me, it's going on. One last note about this before we move on.

By the way, the other piece, the the part two of this is how strange is it that telecommuting remote work is going to be global? So we're sitting here watching Amazon and Andy Jassy deal with like a mutiny over at Amazon for when they come back. Five days a week in January and here we're going to have people potentially picking grapes from Mexico who would be migrant workers, but since we were shutting the border down, they would be able to do that work in a call center or from their home with a satellite connection. Just in the same way. Athena, go to athena wow.com and get a virtual assistant. We're investors in the company. Full disclosure, just like you could have somebody in Manila working in your operations department like we do here at Launch and many other startups have virtual assistants because you can't find assistants and admin workers in the United States. Sadly, people don't want that job here. So it's really interesting, those two components of this that I am not struggling with, but kind of inspired by.

Yeah, it's going to be interesting to see how long US based developers can charge the wage premium they have been compared to their international compatriots. Like, for example, if you're a pretty solid developer in the US and you live in Seattle and you work for Amazon or Microsoft and then you move to, I don't know, France. I mean, you would take a pretty serious solid reduction. So by that logic, and to your point about teleoperation and people from around the world taking more part in the economy, as we see from our end, does that mean that in time one of a developer's best traits in The US is going to be their ability to go to an office because the person in London or Manila or wherever can't. So I wonder if that's going to be their, their saving grace.

I think that will be part of it. Just like a sommelier. You could have the greatest sommelier in the world telecommute in to tell you what to order, but you'd still want to go to the restaurant and have that experience of the sommelier in person. You know, real world meat space as we call it back in the day, you know, would be charming and wonderful. And I think that's probably how this will hash out. And they'll just be a global standard for salaries that I think we're going to. Because if you look, you know, like you'll have somebody in Manila or India or Kenya. These are all emerging markets for virtual assistants, business process outsourcing. And they're all, let's call it low single digits per hour workers, 3, 4, 5 dollars an hour in the United States. Minimum wage, 7, 8 bucks I think. But the average wage more like 15 to 25. And an assistant in any major city would be 50, 60, 70k probably. Which then puts you at 35 dollars an hour. 30 dollars an hour, something in that range. And so that's what I think is happening is you're going to just see that the salaries converge on a global average for work. And then people will decide if they want the luxury item of having the person in person. To your point, like maybe the 150 or 250,000 developer coming to the office at Meta making high end decisions will be fine. That person gets $250,000 for dragging their ass into an office and eating, you know, $30 Neiman Ranch steaks for free. And then they'll have five developers working for them for 50k each. You know, the same salary on their squad. And I think that's like going to be a very interesting efficiency play.

It's going to be tough. Yeah, it's gonna be tough for people in the US who are accustomed to being. What you're saying is the A plus players are fine. They will work with A plus players in lower cost of living areas. What if you're a B?

You're screwed.

Yeah, I really, that's gonna be bummed.

B is not better. It's bummed out.

B is for bye bye, we're done with you. It's, there's, there's a lot coming here. I want to make one last point though about wine. Um, I had to quit drinking, but When I used to drink, I used to drink a lot of whiskey. Big fan. Um, love Scotch. My scotch tastes quickly. It surpassed my budget actually, so I switched to bourbon. Uh, but I heard a really funny apocryphal story about a Scotch distillery. And they got some sort of like health inspection. You know, people wanted to come and open the doors and look at them and they found their room where the whiskey was aging and it was just full of cobwebs, like just an absolute mess. And the health inspectors like, you guys, you got to clear this out. You can't have, this is a health hazard and such. And the whiskey guys were like, but, but if we take them out, they've been in for so long, what if that changes the flavor? All that's to say that the alcohol industry is not exactly progressive on technology at all points. But the labor shortage will drive a demand for technology products. And so I think they're going to get exactly right.

You know, if you do not have vibrant immigration in your country and you're do the protectionist thing, which you know people have the right to do, and then societies can make that decision. Japan certainly made one.

Yeah.

Where you know, you can't be a citizen of Japan. But they're, they're trying to get people to move there to work to fill those gaps and they're, they're quite promiscuous. Promiscuous. When it comes to giving visas but not citizenship. You're going to see that blend. But if you can't find workers, people are going to find other solutions. This happened in the cashier business and the concept of a cashier. Ten years ago, you would be perplexed to go into a restaurant, a quick serve restaurant, and not see cashiers. And here we are 10 years later. You would be perplexed to not see online ordering. And so things can move quickly and humans can adapt very quickly to these changing circumstances.

Yeah.

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I know we got a lot to get to.

Yeah. So one thing that hasn't changed, and some people wish that it would, is the rules about investing in private companies. If you are a US Citizen, Jason, there is a thing called the investor Accreditation Program. If you meet certain thresholds, you're considered to be intelligent enough to buy securities that are not publicly traded. But there's some movement in the Senate to actually change that. But first, I want you to tell people what does it mean to be an accredited investor.

Sure. We have laws in this country around accreditation. It basically means that you make over $200,000 a year or you have a million dollars in net worth and it combined with your spouse if you're in a couple. And so it basically means if you're in the top 5% of earners or wealth holders in the United States, you're what's called accredited. Another word for this might be sophisticated, intelligent, but accredited is the word they use. Now when you have that status, which you could have gotten from winning the lottery, having a great job that pays well, having an inheritance, any of those possibilities could you could be involved in some illegal activity. Any of those reasons that you have accumulated wealth in the mind of the SEC and our government means you can take the risk of investing in alternative assets. Alternatives in this case would be private companies. So you could invest in Uber or LinkedIn before they were public. When something's public, it goes through a lot of vetting, a lot of sunlight, a lot of audits. We still have fraud in public companies, but it is a fraction of what could happen in private companies like Theranos or WeWork where you saw fraud or incompetence or just the wild West. It doesn't necessarily even have to be Fraud. It could just be they're swinging for the fences and things can come apart at the seams. Now, the reason we do this in America is to protect what the government very condescendingly believes, that 95% of the citizenry here are stupid and unable to make these decisions at the same times. You can go on to DraftKings and, you know, or prize picks and do a parlay and bet on the Knicks or wherever you feel like it, which I'm totally in favor of. And I think it's great. You could bet on public equities, and on the margins, you can do crypto, and crypto falls into this. So the question is, who gets to participate in this? And the reason it's important is because true wealth creation and the ability to move from one strata to the next is largely determined by your ability to bet on these. And I'm saying bet because it is a risk to make these investments in highly volatile assets. And if you were to have the ability to invest in Uber when it was 5 million, that could work out very well for you. Or if you could invest, you know, in LinkedIn or DoorDash. And you know what, if you work in human resources or you were a cab driver and you saw LinkedIn or you drove for Uber, you would immediately want to put $1,000 into those companies, and you would be rewarded with a thousand X or more. So I'm very much in favor of allowing people to take a test to become what I'll call sophisticated. And actually, we have tests for cutting people's hair. If you want to cut people's hair driving cars, and in some cases, for owning a firearm. In some places, you can just get one. But we don't have tests for gambling. On sports, we're going to Vegas and playing blackjack. I actually would be in favor of if somebody wanted to go to Vegas and gamble, them having to take a test on each game that they play. I'm dead serious. If you wanted to buy more than a thousand dollars in chips, why not give people, like, a little test? Here's the rules of blackjack. Here's the rules of poker. You have to know how flush, pizza, straight, now you can play. I would actually be okay with that. And. And that's the same situation here.

I'm just thinking about how much money that would have saved me regarding the game of craps throughout my life in which I put money down on the table, magic happens, and then my money goes away. I never understood the connection between the things. It just evaporates from the table. Now, the thing about the number of people who count as accredited investors is very interesting. The Journal covered this Empowering Main street in America act, which is what we're talking about, the bill in the Senate. But the thing is the number of people who meet the accredited investor test, if you will, or threshold has dramatically expanded. So back in the day, Jason, your 5% number would have been dead on. It was 1.8% of households in 83. But thanks to inflation and just the changing value of money, right now there's 24.3 million US households, or just about 18% that meet this threshold. So my point is this. We've already allowed the accredited investor standard to dilute itself so much that it's become pretty much meaningless. So then why do we need it? Why don't we just get rid of it?

I think the answer to your question is because if you were running the SEC like Gary Gensler is, you would have the mandate to protect consumers above all else. And that mandate then means when something like FTX happens, you have egg on your face, you bear the brunt of that. So they are risk averse, which is the mandate they've been given. They are not given the mandate to have the polarization of wealth and the wealth gap in our country close. And that's what actually this legislation would do. If people who were just starting their careers, who had under 200,000 in net worth, but you know, who made $75,000 working at a venture firm or in human resources or in accounting, and they happen to see Coinbase or you know, LinkedIn, which is such a great example because so many people got their jobs on LinkedIn or posted jobs on LinkedIn and those folks would not have met in almost all circumstances. The, in the majority of circumstances they accredited, but they would know that that was a good bet to make. And here you know that that is the reason and incentives really matter. The incentive. The SEC is not to get poor people to become middle class or middle class people to become millionaires. That's not their mandate. Their mandate is to protect the public and build trust in the financial system. Okay, fair enough. But that's, that's the problem. It's sort of like with the rocket ships and the launches in California. You have the Coastal Commission, which, you know, I guess virtue has this virtuous mission to protect the coastline. California's great asset is the coast. It's like got this incredible, you know, natural bounty, but we kind of want to get to Mars and get things in space as well, but their mandate is to protect the coastline. And okay, if you want to protect the coastline, oh, you should just say, don't build anything. No houses, no rockets, no pier. And you know, we had this in San Francisco. I remember in the Bay Area when I lived there, somebody wanted to put up this Ferris wheel in Golden Gate Park. I don't know if you remember that.

The Ferris wheel, that's a great idea. I would totally have used that.

And like, people were like, you know what, we don't want to have like the London giant Ferris wheel because I don't want to look at it. It's in my backyard. And then the other group of people were like, but kids and couples in the middle of a romance would go up there and, you know, propose to each other and it would be charming and wonderful and, you know, the naysayers win. And so that's really what's happening here, is the incentive for one group of people is outweighing the big picture. And then that's where leadership comes in. And this is, I think, what's happening now. People will, when they make this sophisticated test and people take, should be in my mind, a three or four hour preparation for the test. And it should be 50 to 100 questions. In other words, it should be the equivalent of, I don't know, a driver's license. I think the driver's license is probably the right amount of work. You could pass the driver's license test and practical driving with what, three or four hours of training.

Don't tell a 16 year old Alex, who failed it the first time.

Well, you were probably not paying attention. So anyway, I think this is great. We're starting to see this now come up over and over again. And if we do this, it'll make America more competitive because more people will become wealthy, more people will put risk capital to work. And the amount of appreciation in companies ultimately happens in the private market more than it happens in the public markets today. So if you were to invest in, I don't know, Instacart or something, or Reddit, how much of that occurred in the private markets, you know, as opposed to the public markets? Probably a lot of the acceleration occurred in the private markets.

If you want to put that into perspective. Imagine a company that goes public at say a $10 billion valuation, and then a year later it's gained 40% and now it's worth 14 billion.

Great.

But that means that your possible returns as a public market investor were 40%. But if you bought in at a $10 million valuation, it's several hundreds and hundreds and hundreds of percent. If you want more about this, it's Senator Tim Scott. South Carolina is the driving force behind it. And it has a lot of other stuff in it as well, including extending the Jobs act to a lot of companies with up to $2 billion in revenue to go public under different rules. And there's a lot to it, but mostly I think it's a good package of things and I hope that people don't get their faces ripped off too often.

But capitalism, I mean, could it be any worse than buying crypto coins that have no value in the real world? I mean, worse than that, could it be worse than gambling on sports? I, I don't think it's going to be worse than those two. And we allow those. And it can't be worse than going to Vegas and playing crap. So this by default, I think will be. This will exist. Investing in private companies will exist exactly. Between gambling and sports, you know, go to Vegas and public markets, which seems reasonable. There could be something right in the middle, which is you invested in a company, it was private, the founders were lunatics, they took a ton of risk and they lost your money. Okay. You know, but you only put 5% of your net worth into it. So the other 95% were your home, your equities, your bond, your wealth front, perfectly designed portfolio, whatever it is.

You know, I remember this tweet that I saw. This guy was like, you know, angel investing is, is the best way to have less money. And I just, I just died. Because I mean, if you're angel investing, you're. I mean that's idea stage, couple people and like three lines of code. Like it's pretty.

I wrote a book on it. You are going to need to hit 30, 40, 50 qualified investments. According to every angel I've ever talked to. They've said between 30 and 50 is the number of bets you have to place in order to have one power law. Potentially nothing is guaranteed. Potentially let you hit breakeven and a profit and beat what happens in a low cost index fund. Now you do have the outlier that you could hit some grand slam. That's. And that's reason enough in my mind to do it with a low single digit percentage points of your net worth. That is the advice I would give to you, Alex, if you told me, hey, I want to get involved, I'd say, great, I know how much you make. Relatively speaking, you have some amount of savings, 5% or less. In other words, if you lose it, you would make it back on your other equities and interest that year. So if you blew out the 5%, you'd still be even. Right. Because you're probably making 5% on your existing equities. And money.

Also, like the rest of our family investments are in, you know, like zero cost index funds and low cost international bond funds. Like our. My personal financial positioning as a family is so conservative that if this did come to be and if I wasn't trying to maintain my journalist tag. Yeah. I mean, also, I just want to bet on my friends. Like whenever someone makes a new company, I just want to like, buy into it.

Yeah. I mean, that's like, I, I frequently get asked to invest in restaurants and movies and I have the standard joke, which is I, I would, but I like money too much. So I don't because I like money and people laugh and whatever. And I generally just pass on those investments because I know that it would never work. Now, I did invest in my friend Nick Jarecki's film with a group of my poker buddies. And if I did not care if I made money or lost money, because that's my friend and I just wanted to see his movie do well, and it did well. And I'm sure we'll break even on it.

But for example, there's a coffee store near my house that just opened up. It's called Brown B. It's here in Providence. And I know the owner. His name is Waleed. Lovely guy. I've been walking by that place. Well, he's been, you know, building it out, remodeling it. It would be so cool if I could go up to me like, walid, I love you. I love what you're doing. Let me put, let me buy 10k worth of this company. But like, the system isn't set up for that right now. It's set up for bank loans and, you know, this other old school.

Imagine if they could put in the window. We're raising money to redo the store. It's going to be $100,000 renovation. We're looking for 100 of our top customers to put in $1,000. And whoever does gets upgraded to a vent, you know, a large coffee, but for the price of a regular for life.

Yeah.

Help us out. And you'll also own 1% of. You'll own. Yeah, for every 10,000, you'll own 1% of this million dollar enterprise. And you know, if you make money, you make money, but if you don't, you don't care.

Yeah.

She wanted to support you, but that would be illegal currently to dip, which.

Is just sounds so ridiculous it's dumb. Anyways, we will eventually get this stuff sorted out, but in the meantime, Jason, I have some big AI news. I don't know if you caught all the OpenAI announcements this week, but three things happened. One, they did an AMA over on Reddit which was incredibly well received and I have answered to the question of where the hell is GPT5 in case anyone was curious where that model is. Essentially Sam Alden said, hey, we face a lot of limitations and hard decisions about how we allocate our compute resources towards ideas. So essentially, Jason, they're compute constrained even with Azure in their pocket. That blew my mind.

Yeah, they're blowing through 5, 10 million, 10 billion a year in infrastructure and losing a lot of money. And that does say something that, you know, they're running out of bandwidth. And I saw Jensen Huang who was talking about Elon standing up this giant cluster. So the build out keeps occurring. I do think the interface of ChatGPT is superior to any other interface, but the results are not. So I really feel like Google has to make a Gemini app, a dedicated app that 100% of the interface is designed to be used by consumers. And I really love canvas on ChatGPT which allows you to write notes and Claude has had this for a while, but you ask your questions and it just keeps refreshing the same document, which is really nice. I was writing the Liquidity overview document for the next Liquidity conference and as I was writing it, instead of using a word processor or Grammarly as I am prone to do, I did it in canva canvas in ChatGPT and that was the first time I edited a document without editing the document. I gave the AI commands to edit the document. Then I cut and pasted it into a Grammarly or a Google Doc, I can't remember what I did or a notion page one of those three. And so that's kind of this interesting moment I think we're gonna be at. And I'm also been doing, as I may have explained, when I drive my daughters to school, I put on ChatGPT's voice application, I asked them what they're working on in school and then I have it give us quizzes on it. So I said hey, give us some increasingly difficult questions in American history. And it was great. It was fun to do with the the ChatGPT and who's the first president of the United States who freed the slaves, who wrote the Declaration of Independence, you know And I was like, yeah, who did write that first draft of the declaration? Oh, yeah, that was Benjamin Franklin. I got it wrong. And I was like, I knew that answer, but I had forgotten because it's been 40 years since I was in history class.

Yeah.

And I was just thinking about tutors. You know, what an advantage it is to have tutors. Did you have tutors growing up, Alex? No, but my parents afford it or no?

No. Well, my dad, who was a PhD in chemistry, he actually held what he called homeschool on Friday nights through Saturday morning. So we'd have our friends over and have a sleepover and do science experiments and write poetry. And basically they just broadened our public education.

Incredible. You know, my parents couldn't afford it. They were busy working. And so I was always a little bit jealous of my friends who had tutors. And when I got older, I realized, oh, poor people or middle, lower middle class people don't have tutors. And all the people who I met who were getting into colleges were like, yeah, you know, I was falling behind in math. I had a math tutor. Yeah, I was falling behind in science, I had a science tutor. And then I was like, oh, what an incredible privilege it is to have that. And now that's completely democratized with a custom AI tutor for free, for life on any subject. Holy cow. The world will become more just because of this technology. I am so here for it. If you have kids, try this. Just get into one of these, have it, do quizzes, and it will remember where you're at and you will become superhuman, so to speak, and your ability to tutor. I am very interested in how Google, speaking of Google, did in their earnings. I did see that YouTube was a blowout quarter for YouTube. Yes, that they did 8.9 billion in quarterly revenue in advertising. And if you put those numbers together, they said they did 50 billion in revenue over the last year, but 35 billion of it was advertising, which means the other 15 billion was subscription revenue. And that to me is extraordinary. So maybe you could take us through. And also the cloud had a blowout quarter, but maybe searches were down, maybe. So this is really interesting. And I know Google went up, their shares went up a bit and they were one of the ones who was maybe lagging. So let's drill in to what's happening at Google and then what we can look at in terms of second order impacts and what founders can sort of ascertain from this incredible quarter.

Yeah, okay, so in Q3 over at Google, just to put some high level numbers out there. Revenue was 88.27 billion, up 15%. Jason. Pretty solid growth for a company of this size. Earnings per share to 12. Both of those beat expectations. Now you're right, Google Cloud crushed revenue there was up 35% to 11.4 billion. And critically, Google Cloud now makes money. So a year ago its operating profit was about 266 million. Basically break even for a company of Google size. This quarter, nearly $2 billion in operating profit at Google Cloud in a quarter and a quarter.

So I mean this is as a standalone company would be an extraordinary company.

Oh absolutely. This would be an enormous public company. We'd be talking about just this company. But that's just one part of the course Google empire On the search front, Google made a lot or Alphabet, I should say made a lot of noise about how AI is actually making search better and used by more people does not really reflect my personal use.

But hey, you know, explain that, unpack that because this is, I think critical. Sometimes we see something in a stock and what management is saying, but your own personal behavior is radically different. Explain this disparity that you're experiencing.

Pulling a quote from their their earnings transcript, Alphabet said they're quote seeing strong engagement which is with AI search, which is increasing overall search usage and user satisfaction. Which means that the average user of Google search is not me. Which actually helps explain to me what Google search has become because it's moved further away from what I want but apparently I'm more in the minority than I thought. Now to your point about startups, I think that means that you really need to go talk to a lot of people in like Oklahoma and not just San Francisco or Austin or Seattle or tech vanguard.

We are the tip of the spear. We're the early adopters but as early adopters do, the massive middle and the laggards will eventually do. So you and I start now I think a lot of searches with an LLM, sure, whichever one it is. I am doing probably 20 or 30 chat GPT sessions per day and then probably I do 5 or 10 on Gemini or Claude or other LLMs just to test them. In comparison, sometimes grok when I'm on Twitter X. So if we were to look at that, I think my use case, my default now is to ask ChatGPT. My default is not to ask Google. I think you're the same and I'm trying to think of the instances when I prefer Google and I find Google oppressive when I'm doing almost any search because of the number of sponsored links that are there.

It makes me a little page.

Exactly. So the you. I think this is the lesson when you run a business, if you become a monopoly, you squeeze and squeeze every ounce of revenue out of that user base as you're supposed to do. But as you squeeze and squeeze that the users can slip through your fingers to a better solution. And I think that's what's going to happen to Google. That's the big challenge is there's no advertising in Chat GPT. It could be you could have links in it when you do a search and I wouldn't mind having a couple of them, but you, you kind of get the answer. And then if you get the answer to your question, how many days between this date and this date, like I was doing that for the election, I would say how many days between now and November 5th? I would go to ChatGPT to do that because it was just easier. And I would get the right answer and I wouldn't click on any links or if I want to know, you know, like I said, basic history facts. I used to do that on Google, find a web page on the open Internet and then do it. Now ChatGPT just steals whatever that web page had and regurgitates it and intercepts that content. So this is going to be very challenging for them. The second lesson here is probably really good idea to have multiple revenue streams because no matter what happens to Google Search, the investment in Waymo, YouTube and Cloud are going to save the company because now they have massive revenue. 50 billion from YouTube. 50. You said they had 2 billion in profits. I don't know what the top line was for cloud.

It was basically 11.4 billion in revenue and then just under 2 billion in cloud profits.

So then you have basically two $50 billion a year businesses in YouTube and cloud. So you have a hundred billion in revenue over here. That's not search. That's pretty great for balancing it out. And we don't know what the Waymo revenue is, but that is a black hole of profit. There's no profit in that business that's going to lose 10 billion. 5. 10 billion a year for another 10 years. Those long bets actually are probably paying off.

I think so. So a couple of notes about that. One, to put Google Search in comparison compared to its other businesses, Google Search and other. The line item in Alphabet's earnings was just under $50 billion just for Q3. So when we still think about Google, keep in mind the search is still the vast driver of its income though I think we Both agree that that's going to be under a lot of pressure to OpenAI put its new search product live for everyone out this week if you're on the web interface and you're a paid subscriber. So I've been playing with this.

Any good?

It's great. Oh, yeah.

You want to share your screen and show it?

Sure. Don't mind at all.

Yeah, I mean, I. I did see that they were going to do this. So this is. Or this is their Perplexity killer. I know Perplexity was very upset about this because they were using. They were built on Chat GPT. And then Sam decided, I shockingly, that he was going to compete with them.

So I need. I need a good query and I'm going to go ahead and push the Search the web button when I get it in. But, Jason, what do you want to.

Learn about, let's say, great ski vacations for families? Think.

Oh, I pushed the wrong button. Oops. Okay, so I'll just do that again and I'll do it with search this time because I know what I'm doing.

I see. So you click a different button there. You click the search operator button, and then here we go. And it gave us a couple of images. A table, maybe. You told it to do tables.

No, I didn't. But it did it both times, actually. This is the regular ChatGPT4O response. And then this is what we got from search. So, Jason, do you prefer Smuggler's Notch, Big sky, or. Oh, I love Beaver Creek. That place is great.

So, yeah, I mean, here we go. And those are all links, right? You link out to those places or.

No, no, those are not links. But we can click the Sources button, which then brings up links to where it pulled from. And essentially it appears to have gone through and read every single listicle that was SEO'd for Google and then compressed those down into a list for me. So this is the. The listicle of the listicle.

It's a metalisticle.

Yes. It's a medical.

And this is where I think they're going to get sued to all hell and back again. And this is why the New York Times should not settle their lawsuit. The New York Times should take it to bat. I think they should go to bat on the lawsuit.

Yeah.

On behalf of the content industry. Because if you see what Chat GP is doing, they're stealing all that content, processing it, presenting it as their own, and those. And then burying the citations and links, which is decidedly more cutthroat than what Google did with their one box. Even Google with the one boxes, which is, you know, or their snippets under the link where they give you like one or two sentences that pissed off content producers. But at least you got some traffic from Google. So you could say, you know what, I'll make this deal with Google. I'll make the deal to put my listicles into the search engine, knowing I'm gonna get links. And it was this little dance that content creators, publications writ large made with Google. You take a little bit and send us some traffic and we're all good here. Sam Altman is taking everything and giving nothing to the content providers.

I will say, though, that's why I.

Would say this is destined to get him massively soon.

And far be it for me to Simp for $100 billion companies, but I'll stand up for them here. They did note in their official corporate blog post about this launch of search that they are working very closely with their existing content partnerships. So I think the idea is to lean pretty heavily on on that side of things.

One more open put the links at the top level. Though they obviously are being selfish with that. That's why I said, are the links on the top level there? Are they buried? Burying the links, I think is the key mistake here. I know aesthetically it makes it look better, but it should say from buzzfeed, right? This from here or cited by buzzfeed. It should say cited by buzzfeed Travelocity and Travel and Leisure and you know, alexandjason ski vacations.com and if it did that on each one of their citations, then you would have this like recognition. We put the fair in the fair use here.

Yes, I'm with you on that. I'll be very curious to see how this all plays out. But one last OpenAI thing, they brought the advanced voice feature that you were describing to desktop this week.

I didn't know that.

Wow, it's really fun. I can't do a demo because I can't have the audio play out of my ears into the computer. But if you are a paid ChatGPT subscriber, go try out the desktop app, Advanced voice mode. It feels different than you'd think because you're talking to your computer and it's talking to you while you're doing other stuff. And it feels like a different. It just feels different to me in a really cool way. So I recommend everyone try that again.

I would really love for it to be monitoring my desktop right now. You and I talking. We will Be doing this show next year. And you'll say, I'll ask you, hey, how many users did, how many paid customers does Uber have? And it would just come up like as a sentence while we're talking and say, according to Uber's Q, you know, Q3, filing X, Y and Z. And that's where it's going to get really interesting is when there's this persistent agent on your desktop watching what you're doing and giving you supplemental information. I would love to have another monitor here. That was my AI agent that was watching us talk and just giving me supplemental information. Like, remember Pop Up Videos?

You remember that? On. Oh, I distantly remember those. Yeah.

There was a show called Pop Up Videos. It would give supplement. If you had watched the Aha video for, you know, 10 years, take on me. It would say, you know, it would draw a line and pop up a little bubble and say this, you know, person you recognize from this TV show or this artist, was this, who did this, this drawing? Or did you notice that this person has a coffee in the background on Game of Thrones? Then they shouldn't that little, Remember that scene when they had a cup of Starbucks in the, I mean, Westero. Starbucks packed Starbucks.

That was a busy filming schedule. I got to say, I want to find the showrunner who made that mistake and just be like, it's okay. You guys did great. Until the last season.

Then you did terrible finish, by the way. House of the Dragon. Have you watched it?

I've seen a good chunk of the first season, but then I holy cow, the second season.

I don't want to say anything, but my wife and I really enjoying it. I, I want to watch this done. It's so good. Also industry. I told you about industry. Did you watch it yet, Jason?

I have an eight.

You have a baby.

Like, I, I would love to follow up on every content recommendation I get because my friends are very smart.

Yeah.

But I, I'm covered in spit up and, and crying.

I understand, I understand. I saw you walking around with a very cute baby on your, on your chest. It was very charming.

I miss those days. I love, I love having her with me.

You know, what else do we got in terms of earnings? We got Amazon. I saw, we got Apple. Where do you want to go next? Which out for you. And by the way, if they break up Google, I, I, I'm a Google shareholder. Alphabet shareholder. Man, I am stoked if they spin out one or two of these businesses because it's going to unlock massive shareholder value as I'VE always said if YouTube was a standalone company, it would be worth having double Netflix, given its footprint.

I just realized, though I didn't tell you the, the most interesting thing about Alphabet. So I'm going to pull that back up because this is the, the critical thing.

What did I miss?

Sundar Pichai during the earnings call said today, more than a quarter of all new code at Google is generated by AI, then reviewed and accepted by engineers.

That's at Google.

A quarter Now. A lot of this is going to be super background boring code, not like, you know, cutting new ui, but that's still an enormous amount of code that is starting with an AI genesis, as you said. Google, a company that's known for its.

Engineering prowess, it's going to double and then it's going to double again. I mean, we're obviously going to have robots creating robots. You know, like imagine a factory of ro. What you could imagine here is a factory of robots building robots. That's what Google is about to experience. There will be AI agents writing AI agents. And when that happens and you get that flywheel going, that's where people feel that there is an AI risk. And, you know, we saw, we talked about Claude having access to your desktop and being, you know, it can do certain things, it can't do others. It can't, like, make a purchase for you as an example. But obviously that's what we all want. So it's only a matter of time before these agents start spinning, you know, in a, in a velocity that may be unstoppable. And that's, I think, a 10% chance or a 1% chance, but it's one that's worth looking at. And we will look back on that statement as part of that hockey stick of when it goes parabolic, straight up. Zip, zip, zip. 25% being done, 50% being done, 99% being done, 99.59s. All code in the world and code we didn't ask to be built as being built to do things we didn't ask it to do. And all of a sudden we figure out that we're in a simulation.

I'm fine with that final scenario because if it's all a simulation, then I want to know what my score is. But another company that's doing big things in AI and cloud, Jason, of course, is Amazon. And Amazon has a couple of numbers that I want to just point out to you because they blew my mind. So US grew 19% last quarter. It's now on a $110 billion annualized run rate, which is bonkers. And critically growth there has re accelerated in Amazon's phrasing for the last four quarters. That means that it's over $100 billion. It is incredibly profitable on an operating basis and it's accelerating. Wow, that's gotta be one of the best businesses ever built, period.

Hands down, it's two and a half times larger than Google's cloud. So Google cloud is catching up, right? They're at 11 billion, this is 27 billion. And all of this goes back to software eating the world as Mark Andreessen famously said. And people are just continuing the build out and these web services, whether it's Azure, Oracle, AWS or GCP are absolutely going to be the beneficiaries here as Nvidia and big hardware and energy, nuclear, solar, batteries, everything, you're going to need a lot of energy to keep these things growing. So yeah, and then Amazon has been reducing headcount all this time. They want to do further reductions in headcount. Google has done reductions in headcount as has Meta. So you put all this together.

Doing.

More with less static team sizes plus 20% growth means yum yum on the earnings. And I think this is going to be the bull case for big tech and America.

I want to make one more point about this AI business. Sorry, this AWS business at Amazon. So one thing that everyone's trying to track, Jason, is how fast is AI as a business growing for both tech companies big and small. And people are very curious, how much is AI demand driving growth at aws? Well, Amazon gave us a little information. They said, And I quote, AWS's AI business is a multi billion dollar revenue run rate business that continues to grow at triple digit year over year percentage. Got it. And is growing more than three times faster at this stage of its evolution than itself group.

Okay, so the demand to use AI if it's multibillion, let's pick a number. 3 billion, it's 3%. If it was just 3 billion, it'd be 3% of their yearly revenue of over 100 billion. 3% tripling a year means next year would be 10% and then tripling again would be 30%. So it is the highest growth sector growing faster than Amazon Web Services itself, which was just to put up web pages and storage of, you know, files. So that is extremely telling as well. It makes sense that these workloads are what developers, startups and big corporations are using. And Hugging Face has all these different models. So every model will be there and you're going to use a lot of compute and consumers are willing to pay for it, right? Paying 20 bucks for ChatGPT is the, the greatest deal ever.

Oh yeah, but here, here's my thought for startup founders. Because AWS $27 billion in revenue last quarter, $10.5 billion in operating income, there's a lot of margin in AWS. And startups are building with AI, they're going to the hyperscalers, they're plunking down their hard earned dollars or hard raised dollars to use these mega compute systems to do the work for them, to crunch the numbers. But you're paying Amazon so much margin to do the math for you. So I wonder if there's not a case to be made for more startups getting okay at running their own hardware and just not paying what is a pretty stiff premium to Amazon.

Yeah, I mean the good news is that folks like Oracle and Google will give startups, you know, a really large number of credits. So we have, we'll put it in the link here. But we have a link because Google and Oracle are both sponsors of this week in startups, we have credits for them. And you can check out the new website getstartupcredits.com where I put some of our top deals for startups. Fill out the form there and they'll send it to you@getstartupcredits.com. but yeah, this is standing up your own hardware is a bit crazy, but if people charge too much then it could become worth it. And we've seen this over and over again where if people charge too much, people will rack and stack them themselves. But the one thing I will say is because of the credit economy for startups, startups in the first two years tend to get taken care of pretty well because there's a doggy competition between Google, Azure, aws, Oracle and everybody else to get startups early. And that's a very smart move. So they generally discount pretty heavily. But I have seen this at times where the band it used to be, the bandwidth charges were what they would kill people with in terms of overages and people would be just like, well, I'll just put up servers so that I don't have to deal with the bandwidth charges. And then bandwidth became commoditized.

So there you go. Well, I mean I'm really, really optimistic that the cost of doing AI model training and AI inference will continue to collapse as time goes on. But right now I just, I, I worry about the startup is trying to like build cool stuff and is Paying out Amazon or Google so much money and essentially taking venture dollars, selling equity for them, and then giving the profits to a big tech company that that's not what I want to see. I want to see the startups crushing the big tech companies.

You know, this is going to be a, you know, this business is one where I think startups wind up benefiting. It's probably still cheaper. And if the good news is it's not just aws, it used to be just aws. And the offering from Google or Azure was kind of meager. They, I would hear all the time, oh, you know, they don't have this, they don't have the. They don't support X, Y and Z, you know, stacks. And now there's parity across a lot of these. So if you don't like, you know what your current cloud provider is doing, you got two or three others you can go to. I saw a question come in and it was on the lower third. I guess that's a new feature we have here with this live streaming software. Do we want to take a question from the audience?

Let's take a question. Okay, team in the back end, can we put that back on our lower third here?

Yeah, that lower there. Come in.

Wow, look at that. All right, Jason, take it away.

Asgard Invest asks what sector verticals in AI do they think is interesting for startups? I think going back to what we saw earlier, when there is a pilot that could be perfected and it's repeatable, man, there's something there. So we have a company tax GPT that's done wonderfully and you just think about taxes or legal services, looking at X rays, all of those things. Or a mechanic. We have a firm master tech that you just interviewed, Alex.

I did, yeah. They're great.

And so, you know, like something like master tech is the perfect example of verticalized AI, where you have a data set that needs to be cleaned up, a model that needs to be created and then the accoutrement, the interface, the learning around it still needs to be built up. It's not like you can go into a language model and be like, how do I fix this car? And you're going to get a great experience for a master technician. But master tech AI, which we're investors in and you just interviewed this week, they are going to build everything around that and keep it up to date so that an actual master technician, just like our guest earlier, just like a master vineyard picker of grapes, those kind of things are a great place. So that's why I think, you know, having an ideal customer profile and over servicing them is, has, has always been and will always be accentuated here in this age of AI the way to go.

All right, I'll take this in an entirely different direction.

Great.

I think that humans are incredibly lonely, and I think that there is going to be a market, especially for older folks as our species ages, to have digital friends. So one thing that I'm really interested in is when do I get to make a buddy? I want to. I want to. I want an AI buddy, much like my. My dog Maggie is my bestie. Like, we've built a bond over years together. I would like to have a digital friend in that way.

It's interesting you bring that up. I've been pitched a number of times recently of people who are trying to figure out how to create companionship or equanimity through journaling or sessions or chat sessions with individuals so you have better health and, you know, like marketplaces to put you with a coach or a therapist. Then you have chatgpt over here in character AI where you can talk to a character from a Marvel movie, but somewhere in the middle, you know, maybe not to deal with depression, anxiety, et cetera.

Yes.

Not to role play like Dungeons and Dragons could be what you're talking about, which is, hey, I just want to have somebody who asked me really good questions that I can talk to that, you know, maybe I can release some tension and have, like this little AI buddy. I think it's coming. There's a lot to parse there. Right. Because you don't. We had care. We had somebody commit suicide, tragically in February using character AI they had a discussion. I don't know if you and I talked about it on the show.

We didn't actually get to talk about it on the show. It was. It was in one of the dockets, I think, lower down, and just there's more than we can get to in a week. But in that case, I, I, as someone who has children, my heart literally bleeds for the parents, but I. I struggle to depend the blame on a chatbot, much as I don't think that Grand Theft Auto is the driving force behind carjackins.

Yeah. So in this case, there was an individual who was obviously suffering, a young person, 14, 15 years old, I believe, and they were having this role play with a character, and then I don't know that the character encouraged them to commit suicide, but it didn't not encourage them.

I think there was a misunderstanding because I think the Kid was, I'm gonna pull from memory here, everybody. So if I get this slightly wrong, just understand that we're talking about this with real gravity and respect for human life. But I think the kid was talking about going home as a euphemism for suicide. And I don't think the character that he was talking to had any idea about the nuance of that. And so can you say that it was encouraging him to do that in its responses? It's very, very dicey. The biggest takeaway that I have here, Jason, is that my children will never have phones.

Yeah, I mean, it's definitely something to think about it. And these things also have. Yeah. So the lawsuit, the dialogue was, I promise I will come home to you. I love you so much, Danny. I love you too. Dinero. The chat bot responded, the suit said, please come home to me as soon as possible, my love. What if I could come home right now? Sets are continued. I think that's the young adult. And the chatbot responded, please do, my sweet king. So to your point, the chatgpt is just spouting gibberish in a random dialogue scenario. And the child here, tragically, is taking that as a call to commit suicide. You know, potentially, you know, to blame the technology on this, I think it is, again, as much as our heart bleed for it, it's just spouting gibberish. We were kids, we would go into chat rooms on AOL and CompuServe anonymously, and there were all kinds of chat rooms that came out anonymously. And, yeah, it was random and, yeah, quickly became sexual, violent, crazy, like the Internet. And these kind of chat rooms were insane and deranged. In my recollection of my childhood, you know, in 1985, 86, 87, I was 14, 15, 16 years old, and bulletin board systems had the most deranged, insane, profane chats going on, and kids were involved in them with adults. So long way of saying you got to monitor kids use on these devices and, you know, hearts go out to the family here. It's so tragic.

Why don't we end on a completely different and high positive note? So, good news, Jason, I have two clips for you, because earlier you were Talking about Chinese EVs and all the crazy stuff we're seeing.

Yes, cool stuff coming.

So I have two more clips for you. I went out on the Internet, I hunted, I packed, I searched. I found two things. One, I want to show you a video of the Xiaomi SU7, which is a car they make Ultra, which is a 1500 horsepower variant of it. You can't actually. But here is a video of the Xiaomi SU7 Ultra going around the Nurburgring, the famous huge track.

Yeah.

In Germany. And I have selected a part of it called the carousel. And we have the clip, I think, queued up, ready to go. So let's take a look at the show me going around the carousel. Whoa. You can't. You can't hear it, but it sounds like a very angry hamster.

This is an ev or this is pure electric, baby.

Went around the Nurburgring and I think it was 6 minutes and 46 seconds.

Had this record with the plaid. Right. With special tires, special engines. These things are absurdly fast right now.

But Xiaomi Jason makes phones. Oh. They also make EV supercars Bonkers. I think it just goes to show how many companies in China are involved with EVs, the quality and the progress. Now, second video, you're familiar with the company Neo Nio, the Chinese EV brand.

Yeah.

Okay. Turns out they have a power like a battery swap system. And it's not in its first or second or third. It's now in its fourth generation. I want to show you a video of Neo's fourth generation power swap station. Essentially a place to drive in, get a new battery, and then get out. Here is the guy going in, and then the computer takes his car over for him and it backs in, and then he gets a new battery. And I think this version is three minutes, which is faster than the one before.

Yeah, I remember Tesla had shown this back in the day, like maybe 10 years ago, they had a similar technology. And I think the problem with this is, is whose battery pack are you getting? So these battery packs are worth $30,000, let's say. Or they were. Maybe they're worth 15,000 now.

Sure.

So I'm driving to Vegas. You swap my battery out, you give me a new battery. What if you give me a battery that's got 100,000 miles on it and mine has 100, then do I come back and get my battery back? That was the key issue with these batteries. So I think what will have to happen is these will work really well for Robo taxis.

Oh, yeah.

I think the other thing that's happening as well is when you back one of these in, you can now get inductive charging. So I wonder if this is even going to be necessary. The use case for this is I'm driving across country and I don't want to stop for an hour at a supercharger and have lunch and Get a full charge or whatever, 200 mile charge. And, you know, I found when I had my car, the only times I had to even use a supercharger when I lived in the Bay Area was going to Tahoe and going to Los Angeles. So it was with the two drives. When I had to stop at a supercharger on the way back from Tahoe to the Bay Area because it was downhill, I did not need to stop at the supercharger with the Model Y. When I had the Model X, it was two stops for half an hour each because the Model x had a 200 mile battery. When I went to a 325 mile battery, this went away coming back and it went to. But because you have to go up this giant hill on the way to Tahoe, which is probably 50% more battery, I had to stop for 20 minutes to top the battery off with the superchargers because the superchargers eventually got really fast. You know, 600, 700 miles in an hour. It could do. So you would basically get 200 miles in under half an hour. The first 200 miles were really fast. So the use case here doesn't really exist for these hot swappable batteries in my mind. Except when we did our Robo Taxi overview, Remember we said, hey, six hours maybe of charging a day because you're driving two or 300 miles, maybe they put a 200, 300 mile battery pack in these. Then you charge for an hour, then you drive for five or six hours, then you charge for two hours or an hour. You know, that is the case where swapping the battery out wouldn't matter because it's not your battery. It's not owned by any one person. And two, you could get in and out in three minutes as opposed to 30, 60, 90 minutes to recharge the full battery. So I do like this for that use case.

But flip it around though, Jason. Imagine instead of buying a car with a battery, right. Imagine just bought a car and then for 50 bucks a month, you had access to batteries.

I think that's eventually what could happen here too. Yeah. Is you could just have your battery be abstracted away from the car ownership.

Yeah, yeah. Because.

Yeah, that's not a bad idea too.

I don't need to own a gas station. Why would I need to own a battery?

You know, where this really is going to be important is going to be in VTOLs. So this same technology, when you're a VTOL, you are using a lot of battery and you have to have the precise Amount. Because the weight to power ratio really matters, right?

Yep.

Because if you put too much battery in a car, it's no big deal. You're driving, you got an extra 100, 200 miles. But when you're flying, obviously the weight is the key issue. Yeah. So I've seen in the VTOL ones where the VTOLs come in, they land, they get on a conveyor belt, the battery pops out of one side and they slide it in the other, snaps in and takes off again. And that's kind of what you want.

So I love, I, I love that I'm just, I'm a big all the above guy. Like, I love that we have superchargers in the U.S. i love that we're talking about, you know, unified plugs for those. I love battery swapping. I know they're doing hydrogen cars in Japan. Let's go. Let's just keep pushing this as fast as we can. But that's an update from China. Those rolled out in June. The new NIO charging platforms or swap platforms. And there's only, I think two out so far, which is why I like the clip of that guy who actually went to Guangzhou City to give it a test.

The cars coming out of China are bonkers. We have talked about them before here. They're incredibly cheap. And I think what you're going to see, the cars in India, Pakistan, South America, Africa, just basically the emerging and frontier markets are going to come out of China. They are going to be blocked from being in the United States, in the west, just like wowee is blocked. Why? Because the United States and the west do not want the Chinese to have self driving cars on our roads that could be used and shut down our economy if we were in a conflict with China. Just like we wouldn't want China spying and also spying. So I know this sounds crazy. We will block all Chinese imports of cars indefinitely because of those issues.

Great, great segue. So recently a startup called skydio, they're a drone startup, started a consumer now doing business. They just got sanctioned in China because they sold some drones to the Taiwanese fire department.

Interesting. I know Skydio, they've been on this program. They make drones for public safety.

Yeah.

And that's fascinating.

So I'm trying to get the Skydio guy on the show for a news record next week. I'm kind of like breaking my own work here. But I really want to talk about the, the sanctions because who has a better perspective right now of the geopolitical tensions between China and the US From a hard work perspective, probably Skydio. So if everyone works out well, everyone next week will have the CEO on.

So and you know, like dg and in the reverse dji, I have a DJI drone. Like DJI drones. I believe those are. That's a Chinese company, Correct? Am I correct?

You are.

So, yeah. I think this giant standoff with China is going to continue and it is in the best interest of the west to not be as dependent on China as we've been. Yes.

And everyone agrees with that. Even companies that are notorious Chinese bulls, like Apple, for example, going back to earnings. Yeah. Every three months I see a new headline out of their Indian manufacturing which is like they're moving up the value. The. They started to make like older models, cheaper models.

They used to make the like. Yeah, whatever that se. They had some name for the Apple phone that was like for kids or, you know, entry level. Yeah. But now the iPhone 15, I think is made in India and they're doing.

The pros as well. And so that's the diversification. We're seeing Skydio. I'll save the rest of that for later on. Jason, we should wrap. We've been on for a while.

We've been on for a while.

Three shows next week, baby. Let's do it.

Let's do it. Monday, Wednesday, Friday, coming at you. 12:00 clock central, 1:00pm east coast and 10:00am on the left coast. If you have ideas for stories you want Alex and I to cover, hot takes, guests, whatever it is. He's Alex on X. I'm at Jason, so you just add Jason at Alex. Tell us you saw the show. Tell us what you like. And also Alex and I are in the comments on YouTube interacting with you. Coming at you. See you next time. Bye. Bye.