Apple Unleashes $100B Buyback, Palantir Crushes Earnings, OpenAI's New Open Source Model | Alex Albert, Scott Kupor, Kyle Harrison, Brielle Terry, Sean Henry, Andi Duro, Gabe Pereyra, Kareem Amin

You're watching GVN. Today is Tuesday, August 5, 2025. We are live from the TVPN Ultradome, the Temple of technology, the fortress of finance, the capital of capital.

I just lost my voice. I'm actually seeing stars.

You're seeing stars? People said. People said the intro could be louder. Yeah, they were like, that's the main feedback.

I took it there. I took it there.

Good job. Anyway, let's kick it off with this post from Buco Capital bloke. Apparently, Variety has reported that Roku launches Howdy. A low cost, no ads streamer. But it doesn't want to compete with Netflix.

Calling it a streamer is funny.

What is itself, what is a streamer? Streamer platform. Is it just short for streaming?

Oh, yeah. I work at a stream. A small streamer, American streamer called Netflix.

Is that. Is that. Does Netflix count as a streamer?

I don't think it's a streaming service.

I guess it's a streaming service because it streams the content to you. Yeah, well, anyway, Buco Capel Blok shares a hilarious post from the banger Artboxer. Orc Boxer says, have you seen the new show? It's on Tube. It's on Tubu.

It's literally on Heebie.

It's on Pootie with ads. It's literally on Dippy. You can probably find it on we now. Dude, it's on Gumpy. It's a Feebo original.

It's on Poob. You can watch it on Poob. You can go to Poob and watch it. You can log on to Poob right now. Go to Poob. Dive into it. You can Poob it. It's on Poob. Poob has it for you. Poob has it for you.

Where do they get these, Dave? Where do they get these names? It's like, it's like the pharmaceutical industry, how they have like every drug. Kind of sounds like vaguely like a familiar world with Goofy and Ozempic. Like they sound like real words, but like the domains are available. Like is one of the most wild things. Anyway, anyway, yeah, we should go check out Howdy. And you should check out ramp. Ramp.com time is money save. Both easy to use, corporate cards, bill payments, accounting, and a whole lot more all in one place. And we have our first story. So we talked about this a little bit yesterday. Tae Kim, author of the Nvidia Way and huge fan of Jensen Huang and Nvidia, says, here's what I would do if I were CEO of Apple. Quadruple the RAM in iPhones. To 32 gigs. Have the Max model at 64 gigs. Memory is oxygen for local on device AI. More equals smarter, more powerful. Take the margin hit memory isn't even that expensive Then this is where we get controversial. This is what we were debating yesterday. Number two is buy Mistral or Anthropic and invest $100 billion compute annually. That is. I didn't realize so buying Mistral or Anthropic, that's $100 billion out the door day one. Then you're spending $100 billion a year to build a multi gigawatt data center. I wonder who would Great writer.

And the more you spend time with this post, the more you can imagine a world where he takes Apple, you know, out of the Mag 7.

Yeah, it says build multi gigawatt data centers and enter the Frontier AI model race in a big way. This would be fantastic for Nvidia. I mean take him. Seems like he's really full tilt on Nvidia to 10 trillion right now. Anyway, Apple has the capital. Apple knows the AI computing shift is existential. Where's the bold action and urgency? So there's a lot to agree with here. We debated it. The one thing we didn't debate is that Restream is the best. What is the streaming platform 1 livestream 30 destinations multi stream to reach for your audience wherever they are. Go to Restream to sign up Anyway, what were you saying?

What is AI seem is seemingly important but what is the existential threat that we get? Just play this out. New computing platform, eyewear that's integrated with AI. We haven't seen anybody launch a hardware device or even plan to launch a hardware device yet. That's not a, an additional device outside

of your we are both on MacBook Pros or MacBook Air using iPhones. We have iPhones. They were, they were additive and then other people went further and they added an iPad to their life or they added a watch to their life.

Not even Schiffman, the most bold hardware founder in the world is saying I'm going to replace your iPhone. Yeah, it's just saying I'm going to give you a friend.

So I mean I do think that there is some potential like if there was ever a crack in the foundation of Apple's monopoly on high end smartphones, it's now because not like you're not going to get me to switch with slightly different design or slightly different shape or it's folding like those phones have come to market. No one has meaningfully shifted. But a, but a phone that was designed from the ground up around AI and really, really optimized for ChatGPT and really, really like AI first at the core. Just everything is infused. Sure. Like maybe there's a chance there versus anything else that came out. Like, Apple was always like, like 5G was never a differentiator. Apple was never behind on that. They were never behind on. On display resolution. Like they had the, the retina screen immediately. But you could imagine a situation where if Apple was three years behind on Retina screens, people would be like, well, yeah, like I want the one that's sharper screen or something. And Apple's been behind on a lot of things by a year or two. That's what leads the Android fans to always say, like, Android's had this for two years or that's why I have Android, because I like the cutting edge. Because you actually kind of are in many ways more on the cutting edge when you're in the Android ecosystem, but you just don't have all the integration that comes from Android.

Owners love to tell you the specs of their device. They love to go spec for spec.

Yes, yes, exactly. But the question is, should Apple actually go so hard to play catch up? And so Apple beat earnings.

I even think. I mean, yeah, going hard could look like buying perplexity. People have made the case. My voice is still shot from. People have. People have made that case. But it still feels insane when you look at the history. Apple's M and A history.

Yeah.

And often they're happy to acquire talent, but they don't do it at the VCs. Historically. They're not doing it as sort of unicorn valuations. Right.

Yeah, yeah. Like going hard could look like spending $100 billion or it could look like just figuring out what their next Google deal looks like. Because Apple has this insane deal with Google where Google is the default search engine on Safari and they make what, $10 billion profit? Yeah, 20 billion in profit every year off of that deal. It's like a fantastic deal and people are worried that it might go away. So there's something in this, but there's something in here. But you could imagine a situation where Apple is getting a massive payday from a foundation model lab to route iPhone customers to that model. And we haven't seen that dynamic play out. There's this question of will Apple.

Well, one scenario is there's a world where a foundation model gets the Siri button and Google keeps the. This default search.

Sure.

And Apple suddenly is getting another like 100%.

Yeah. I mean, Ben, Thompson's written about this. We've talked to a lot of folks about this. Like, there's this weird world where ChatGPT is so dominant that they might, like, they could swap out the foundation model for a different model and most people wouldn't know. They'd be like, oh, Yeah, I use ChatGPT. And they'd be like, what model? 4O or O3 or Gemini or Llama? And then be like, I don't know, I don't care. It just gives me the answers. And so you could imagine a world where Apple is pumping users into monetized LLM queries and getting a huge check from that. And maybe that's the most elegant solution here to, like, get back in the air, capture the value.

I'd love to know how much OpenAI already pays Apple just through the App Store.

Oh, yeah, I don't know. Yeah, because if you, if you subscribe to OpenAI in the App Store, they probably take 30% of that. And if they're making a billion a year and maybe a third of that is from iPhone subscriptions in app purchases, like, you're looking at like $100 million a month. Is that like, are we in the right territory? That seems like, extremely high.

I know.

I'm going to look in the, look in the App Store right now and see if they actually push in app subscriptions.

Yeah, I don't know. I'm pretty sure I subscribed on web long before downloading the app and then I transferred the app in. And ChatGPT might, like, the team might push you out into a webview. Like, you can do that now. It's getting easier every year because of the antitrust stuff. It certainly makes, you know, economic. It's economically rational, especially if you're going to get somebody to upgrade to 200

changes to your subscription inside this app.

Okay, so the answer is zero. So right now, I think $0 are changing hands between Apple and OpenAI either way, but that could change, and maybe that's the end. But on the question of should Apple make a huge acquisition? Tim Cook actually addressed it in the earnings call. He said something like, we've acquired around seven companies this year, and that's companies from all walks of life, not all AI oriented. We're very open to M and A. That accelerates our roadmap. We're not stuck on a certain size of company, although the ones that we've acquired thus far this year are small in nature. And he said, like, we're acquiring one every few weeks, which is not quite seven per year. I mean, I guess that's like one a month, but a few weeks, sure. So he's doing deals but he's not looking at anything massive. And I think that actually makes sense. My question was, if you were the CEO of Apple and you had $100 billion burning a hole in your pocket, what are the other things that you could do with that money?

Formula One team.

You could buy every team and the division and every track and all the sponsorships.

I made a post about. It's crazy.

It's so much money. It's so much money.

I made a post about this jokingly earlier this year. I still think it'd be cool for Apple to be an F1 in the way that Red Bull is.

I think that'd be great.

The team.

No, no, I agree. Yeah, I think that'd be great. The one thing culturally is like Apple's brand is, is very premium and very high end and I don't know if

they could handle a few seasons.

This was the early bear case for Apple tv. I was talking to someone, a very successful Hollywood producer and he was saying that the nature of the, of Hollywood is like venture capital. Like it is a hits driven business. If you don't accept that you're going to have massive flops and egg on your face and embarrassing moments, you will not make it. And just like any venture capitalist who is like, I only want to make investments where they won't blow up, you're not going to make it. Right.

Like, yeah, Marc Andreessen had a. Had it. There was a clip from a episode he did recently talking about how you lose sleep over the companies you don't invest in.

Exactly.

Not the ones you invest in and don't work.

Exactly, exactly. And so, so you have to be risk on, you have to be risk on in Hollywood as you do in venture. And so the, the question was like, can Apple deal with spending 50 or $100 million on some show that completely flops? And everyone's like, this is a disaster. And, and they've navigated really well. I think that they have had some flops, but they've kind of tucked those behind the scenes. Whereas Netflix has started to get more kind of, you know, people talk trash about what was that? Red, red notice. Or they did some massive movie with the Rock that kind of flopped. They've done a few of these big movies that haven't done that well. And, and it's sort of like, oh, like, you know, they're, they're not, you know, God's gift to, you know, producing. But it doesn't matter because overall Netflix is doing very well and all it takes is like one squid game to like carry the quarter. Basically just like Inventure or like one, you know, you sign the Friends deal and then. Or the Office and people are watching that like 20 years later, so.

And apparently so F1 has surpassed half a billion dollars in box office earnings as of last week.

I mean, it's a fantastic example of

a, of a home run, but it's not like they're doing that once a quarter by any means.

Oh, and John Exley's in the chat. Shout out to John Exley. Unfortunately, I didn't get a chance to connect with him at our party in New York, but did attend. You got to chat with him. A lot of the team got to chat with him. So thank you for all you do, John. We really appreciate you. The entire team is giving you a round of applause. General because general of the chat, you've done a ton of, a ton of work for us and we really appreciate it. Anyway, if you had a hundred billion dollars burning a hole in your pocket at Apple, what would you do? I have a bunch of crazy ideas.

Go through your list.

So most people would just say, hey, you're going to benefit from AI because you are the window into all technology. And it doesn't matter if it's, if it's generative video or, or text, like people will be consuming it on devices. You sell devices, you'll be fine. Just like search did not destroy Apple, it actually made Apple stronger because people search on their iPhones. So most people would just say, hey, return it to the shareholders. Apple's already done that. They've returned over $1 trillion to shareholders in the past 10 years. Those are kind of rough numbers, but it's basically that, which is an insane amount of money to return to shareholders. But Samsung is worth 330 billion. They could buy the entire company, lever it up with two thirds debt, and they would just own both sides of the smartphone market then probably extremely anti competitive. I think Lina Khan would have a conniption fit. But funny concept, funny concept. The other, the other, the other idea is massively expand the retail footprint. So Apple right now, I was surprised by this. How many retail stores do you think they have worldwide?

I don't know, like 599 or 601.

Did you look, did I tell you this morning it's 535. So it's not that many. It's mostly in the tier One cities, there's usually only like one in every city. They don't really, they don't take the Starbucks strategy where they put them across the street from each other. But for $100 billion they absolutely could. $100 billion is enough to open 6,000 new Apple stores. So they would be 6,600. So they would be up around 7,000 stores, which for reference is as many subways as there are and as many CVS's as they are and as many 7 11s as there are in America. And so everywhere you see a subway, you can see an Apple store. And I feel like this would be a big upgrade for America. I feel like if you just walked around every American city where tier one, tier two, tier three city, you just see a beautiful sheet of glass and it's an Apple store on every corner in America.

They could also acquire every firearms store in the country and turn them into Apple stores.

They could do a take private of figma. Think bigger, build faster. Figma helps design and development teams build great products together. Get started for free at figma.

I'm still buzzing from Thursday.

It was a fantastic day.

Absolutely fantastic. Anybody that is tuning into the show for the first time today is going to be hearing ideas for Apple and just thinking these are some of the worst ideas I've ever heard, but they're definitely fun.

Okay, so speaking of glass, from the Apple stores, they could buy Corning which makes Gorilla glass. That's a $55 billion company. Then with the money left over, they could buy Interdigital which owns all the patents on 5G and 6G. So they could basically patent troll everyone else in the industry.

Just get extremely anti competitive.

They could also, with the money that is left over, we're still in the first like let's vertically integrate this company mode. They could also buy 10 rare earth or cobalt mines so they own the supply chain there. And then they could also build four battery gigafactories and lock up the sapphire crystal supply chain that's used on the, on the iPhone camera. So they could just completely own their entire supply chain for 100 billion. And that's just one year. One year. And then they, you know, the proposal was do this every year.

The other thing that was interesting about Tae Kim's post is if you listen to the earnings call, Tim Cook and the team were very clear that they don't even want to finance like data center development themselves. They're still working with these sort of like third party lenders to like capitalize them. And so Again, Tim Cook is the king of efficiency.

Yeah. He knows his business and he's.

Should we get into some of that?

No, I have one more.

One more.

So OpenAI, they Aqua Hire Johnny. I've. They're coming out with something that's competitive. It's going to be some, some sleepless nights at Apple when that thing drops, right. It's gonna be stressful because like, maybe, maybe, maybe it doesn't go super well. But like, you know, it's a serious threat. OpenAI is a serious company. They have a lot of customers and they got Johnny, I've your former goat designer ready to drop, you know, and a bunch of former Apple employees, Amazing, amazing team over in hardware at OpenAI. So the question is like, how do you fire back with your Apple? And you have 100 billion to spend. Here's what you do. The cogs on an iPhone are less because they have a margin. So you take that $100 billion, you buy 200 million iPhones and you send a brand new iPhone to 200 million Americans and you're just like, oh, how much are you charging? Jony? I've. And OpenAI. Well, ours is free. This year we're doing a free iPhone for the entire year.

They should just do something like that where it's like your 11th iPhone in a row is free. Is free.

They'd probably have 200 million people with free iPhones and they're just like, yeah, we're actually, we want to keep you in this ecosystem. We like our services, revenue.

We're excited to be a platform.

We're excited. We're just giving it back. We're just giving back. Can you imagine? I think that would also be extremely anti competitive. I don't even know if there's a regulatory framework to stop that from happening. But I mean price competition is a real thing and like if you, if you discover that your competitor is under capitalized and can't, can't win a capital war, you could potentially cut cost, cut, cut prices so dramatically that it's like, yeah, the other phone's like cool, but you know, this one's free. I guess I'm gonna stay in, in the blue bubble world.

Tim Cookable. All right, we're gonna buy all of the minds we depend on and we're going to make the iPhone free. Stock just yeets like destroys 80%.

He's like, I'm petty, I'm petty. And you know what, Johnny? You know, I'm not going to let you win.

I would rather die than let you win.

Yeah, I would destroy myself. Yeah, I've been reading a lot about cutting your nose to spite your face and I'm pretty into it.

I'm pretty into the strategy.

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Banta.com Anyway, so Ben Thompson's been noodling on, on Apple and AI strategy. He had a rough go because he, I think he took some time off or shifted. He shifted his posting schedule right when all the earnings dropped and there was all this crazy stuff going on. So he, he's just writing about Apple earnings now but he has, he still has some, some good takeaway saying, you know, even if they do, even if Apple does swoop in and buy Mistral for example, the overall point holds. Apple isn't going to compete with OpenAI, anthropic meta X and Google on pursuing AI superintelligence like five extremely well funded, extremely serious teams. They're going to. Apple is going to go their own way centered on their devices and their direct relationship with their customers. At least as long as Cook is in charge. And anyone that's saying that Cook needs to step aside I think is in for a world of hurt because he's been on a generational run and he's solving the most important problem for that company which is not the application layer in artificial intelligence, it's the supply chain and keeping the flow of iPhones making and selling phones making put the phones in the boxes Tim. He's doing it. He's doing it. He's really underrated. He's been CEO longer than Steve Jobs was. Now I hope he is the longest tenured CEO of Apple in history.

He better be bringing some of these AI researcher comp packages in as comps when he gets in front of the comp committee at Apple.

Hey, that is true. He should definitely be getting a bump if he does have researchers. I mean he has, he has a researchers. They are improving different functionality. I feel like maybe I'm hallucinating this but it feels like the text to speech engine has gotten better. On my phone I listened to a semi analysis article with the default Apple Safari text to speech and it was very listenable. So I think we're getting better there regardless. Like he's got to get his AI researchers graphite so they can embrace code Review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. So anyway, Hunter SPX is shocked at Alex Karp's comments on the Palantir earnings call. Karp said, the growth rate of our business has accelerated radically. After years of investment on our part and derision by some, the skeptics are admittedly fewer now having having been defanged and bent into a kind of submission. Yet we see no reason to pause to relent here. So good. Citrini says you can't accuse the guy of not having flair. These are so good.

Palantir ticked up over 400 billion, up almost 10% in the last five days.

Let's go. So congratulations to everyone over at Palantir. Congratulations to Eliano, who's been on the show. Friend of the show. He says he's actually in tears after Karp went on CNBC and said just tell the haters, read them and weep. Love it. We covered this yesterday a little bit, but I wanted to go one step.

Friend of the show. Marcus Milioni was posting earlier a bunch of sell orders that he had for Palantir earlier this year and he was feeling. He was very disappointed with himself.

Weeping. So Palantir Technologies boosted its full year outlook after posting higher profit and revenue for the second quarter, driven by continuing demand for its artificial intelligence projects. The Denver company, which sells AI software to manage and analyze large amounts of data, everyone says, what does Palantir do? Sells software. It now expects revenue to be between 4.14 billion and 4.15 billion. Like what a narrow band for the year. They know what's coming up from the prior outlook of 3.89 billion and 3.9 billion. So the interesting thing here is that they. Where is it? Here. I missed it. So revenue from US commercial customers rose 93% to 306 million. So Karp's been talking about this for a while. Just look at us like you say that we're just a government contractor. Look at our commercial side of the business. Like we're doing very well there. Companies are buying.

Who are we talking to when they casually mention that they got like a nine figure contract in Japan randomly.

On the, on the corporate side.

Yeah, on the corporate side.

I don't know. We've talked to a lot of Palantir people, but it's all over the place. I mean, everyone from like Airbus, like if you want to know like what Palantir does, just, just the Airbus example is like the best because it's just like you're making planes. There's a ton of different parts that go in that plane. You need to see the lead time, the durability, the testing of all those. You need not just a database of what have in stock. Okay, we need more seat belts to get this plane out the door. We need more engines, we need more, you know, doors or whatever. Like you got to buy all these different things probably from Transdigm or something. Some, some PE backed small manufacturer makes the sub components. You gotta buy all those components, put them all together and then ship the, ship the, the final plane out. Well, you don't just need a database of what everything's in. You need to know how these things interact. And that's why Palantir always says, like ontology, it's a layer on top of the database. And so there's been a bunch of database companies that have grown a ton. Snowflake and Snowflake and Palantir were kind of duking it out and now they're kind of partners and friendly. You put all your data together into a data lake and put Palantir on top of it. And so it's driving, it's all good news for Karp. Two CEOs top $1 billion in raises. Palantir CEO Alex Karp's 2020 equity award has soared in value to 14.7 billion as the company stock rose. That was when the company first went public and he got a bunch of stock and it's grown and grown and grown as the share price has appreciated. So.

Or Snowflake stock chart looks very different.

Well, what's the market cap right now?

68 billion.

Not bad.

Still up 30.

Little side project incubation for the folks over at Sutter Hill. It is the latest ultra exclusive achievement for executives of big US companies. The billion dollar year. Two bosses made it last year holding stock based pay that swelled in value by at least 10 figures in a single year. That'll buy a lot of cross country skis and a lot of aqua. Alex Carr clocked more than $6 billion.

He could effectively corner the entire.

You buy all the aquanauts, Aquanauts, you can buy them all. All of them, 100%. I've actually done this before. I've asked ChatGPT like find me the the market cap of all the supercars. So you take the average selling price of the F40. It doesn't work this way because once you start buying them up, they get more valuable. But, but if you take like an F40 is like a couple million bucks. But there's only a few thousand of them. You add that up, that's like $5 billion market cap. One of the biggest market caps, if you use this kind of rough terminology, is fire trucks because they're a million dollars each and there's like a million of them in the United States. Now. They're all like slightly different brands, so it's not Quite the same comp F150s. Also huge market cap, tons of them.

Can you look into getting a fire truck for our road shows?

I don't think there's enough space inside.

Yeah, that's actually true.

You want something else. But you could load up cables in all the different size. Like, you know, we pull out the hoses and just a massive HDMI cable. I think that's the move. So Hawk Tan grew, grew. His Pay grew by 1.15 billion at chipmaker Broadcom. So Broadcom did very well. Only two other S P 500 CEOs have hit that mark in recent years, according to data from a public company data provider, Cryptocurrencies Exchange. Coinbase Global. Brian Armstrong in 2021 at 2.1 billion. And naturally, Elon Musk, the Tesla CEO can boast billion dollar gains in three years, including a record 43 billion in 2020, though all are part of a pay package that the Delaware court declared invalid. On Sunday, Tesla granted Musk a new interim stock award that tentatively valued, that was tentatively valued at 23.7 billion with the promise of more this fall. Barely scraping by scraping by.

The other note on Palantir, I think this was reported on Friday, they have a new U.S. army contract worth up to $10 billion. So this is consolidating a handful of contracts that they have into a single deal. And yeah, so pretty, pretty significant. That's over, I believe the next decade.

So Palantir Classic 20 year overnight success overnight. Interesting history and kind of strategy of how they got here. So we talked about this before, but you remember the famous story about Alex Karp talking to his employees early in the journey of the company. He said, when you're traveling for business, I want you to book a five star hotel when you're in town visiting a potential client. And Gary Tan was commenting on this, other employees were saying, like, we're a startup, we're burning money. This is kind of a crazy thing. What's the rationale here? And Karp had a very contrarian take. He said that when you're doing business, you're going to meet a Fortune 500 company that you're going to be consulting with or rolling out or selling them Palantir, selling them software. You're going to be a forward deployed engineer. They will ask you, oh, you're in town, where are you staying? Just, it's just a natural thing that comes up during introductions. Oh, you're in town, you're in, you're in Dallas. Visiting us at our hq, we're evaluating Palantir as a potential solution provider. Where are you staying? And if you say the Holiday Inn, they will assume that you're selling Holiday Inn level software. Holiday Inn quality software. But if you say I'm staying at the Four Seasons, they will assume that you are selling Four Seasons level software. And so Palantir had this culture of carp, has joked about like steak dinners being like not the correct way to sell the product. And the product actually has to be very good. But clearly from an early, from, from early on, Palantir focus, brand positioning. Brand positioning and just taking travel and entertainment very seriously because there's going to be a lot of forward deployed engineers that are on the road a lot. You want their life to be, you know, manageable so they can go and show up and perform and they're not. And they're not like gassed and exhausted from an economy flight and then a tough bet.

Holiday end.

So this was wrecking their financials, though. Like when they went out and they

went public, the narrative was that they were a consulting company masquerading as a software company.

Yep.

And looking at the earnings yesterday and their margin profile, this is very clearly not consulting business.

Yeah. So when they went public, you can look up the market cap when, when they kind of went out early, but I believe that they were languishing in the low tens of billions. Might have even dipped down to 5 billion at some point. 7 billion market cap. The stock was not.

There was a period Very well.

If you bought a single share at the open, you could have paid $9.20 and years and years later you would have been flat.

Yeah.

On that entire period. Yeah, it was. So they went out October 2, 2020, and if you look on May 12, they ticked over that initial price. So not a lot of people were writing it off for a long time. And it still. It didn't, it didn't. It wasn't like a fast IPO by any means. Right. This was like, took them, what, 15ish years to get out.

Yeah. So 2020, 2021, they were in like the 40 billion, 35 billion. I think they probably dipped lower at a very, at Varying points in time. But it wasn't, the stock was not ripping and it was kind of in this, it was languishing, the consulting meme. And that was because they were spending a ton on travel and entertainment. But what's interesting is what happened during COVID So during COVID they couldn't travel as much and companies didn't want for deployed engineers coming into their offices they didn't like. Airlines were shut down for a long time. Everyone was working remotely. So they switched to a remote first forward deployed engineer strategy. And so by default, during an implementation of Palantir, you would just hop on a zoom call or hop on a teams call or whatever. And so their travel and entertainment budget like cratered. And that was really, really good for their bottom line. And then they were able to just kind of like hold the line and they didn't. Sure, they added it back slowly, but it kind of revealed that this actually does have software margins. This actually is more of an enterprise SaaS company than a consulting business. And it allowed them to grow very, very significantly. And so they've, they've been on an absolute tear. And congratulations to everyone over at Palantir.

Well, while we're talking about earning, let's talk about Linear.

Linear is a purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, projects and product roadmaps.

That's right, building. Ben and the production team are going to pull up a post from highlighting something from Reddit's Q2 earnings call. If we can pull this up and play this video.

Oh, this video, that's fine.

Okay, let's see, let's play a video here. Let's see. This is the hardest thing.

Reddit is the number one most cited domain for AI across all models per data collected by Profound.

That's why Reddit is the number one.

Anyway, so I wanted to highlight this because we just partnered with Profound, the company that I invested in earlier this year. James CEO has been on the show. Profound allows companies to understand and improve the way they show up in LLMs. So today companies are using LLMs, everyone's using LLMs to research products, make business decisions. And so if you're running any type of business, whether it's consumer or enterprise focused, you gotta actually figure out where you stand in these rankings, how people are perceiving your products through the models. And Profound lets you do all of that observability. I think the best way, the best comp for it is kind of like SEO optimization. There's a bunch of different dynamics here, but Profound is the clear leader and we're super excited to partner with them.

Let's hit the gong.

Hit the gong for Profound.

Profound and a new TBPN sponsor. Welcome to the lineup. Welcome to the livery. Welcome to the next drop of merch. Welcome Profound. We're happy to have you on the team.

Welcome to the show.

In other AI related news, OpenAI has announced an open source model. They said they'd never do it.

Everyone's saying it was in the name. It was in the name. How could you close AI?

Closed AI? They're not open AI, they're closed AI. Everyone thought they were so clever they said they couldn't possibly open source a model. And they did.

They did.

They did it.

First open model in years, right? They used to have that was.

Was GPT1 open source? Like when. When was the last time that. So we're going to talk to Tyler about this. I want to say Studio today was still open source and then they decided to close source something. It's tough that I treat you like things that I could google and I know that you just have to search it or chatgpt it but good luck. Get me the information on the history of OpenAI's open source models. In the meantime, I will read this post from Sam Altman. GPT OSS all lowercase. He's still in lowercase mode, although he uppercases the other sentences. But he threw in. He likes lowercase.

Sending you messages, John.

I'm seeing it. I'm seeing coded messages in here. GPT OSS is a big deal. It's a state of the art open weights reasoning model with strong real world performance comparable to 04 mini that you can run locally on your own computer or phone. With the smaller size. We believe this is the best and most usable open model in the world. We're excited to make this model the resilient the result of billions of dollars of research available to the world to get AI into the hands of the most people possible. Hit that soundboard again. I want to keep it going. We believe far more then bad will come from it. For example, GPT OSS120B performs about as well as O3 on challenging health issues. We've worked hard to mitigate the most serious safety issues, especially around biosecurity. GPT OSS models perform comparably to our frontier models on internal safety benchmarks. We believe in individual empowerment. Let's hear it for individual empowerment, people.

I feel empowered the way that you're reading this, John.

Although we believe most, most people will want to use a conventional service, a convenience service like ChatGPT. People should be able to directly control and modify their own AI when they need to, and the privacy benefits are obvious. As part of this, we are quite hopeful that this release will enable new kinds of research and the creation of new kinds of products. We expect a meaningful uptick in the rate of innovation in our field and for many more people to do important work than we're able to before. OpenAI's mission into is to ensure AGI that it benefits all of humanity. To that end, we're excited. I think I cut this screenshot off. We're excited for the world to be building on an open AI stack created in the United States based on democratic values, available for. I didn't screenshot the rest of that, but oh, here it is available for free to all and for wide benefit. So I imagine that that was the

voice as the author intended.

As the author intended. Exactly, exactly.

Will Depew has some more notes here, some context. So less than one year between 01 announced, which was September of 2024 and we have an O3 level model, open sourced, that's runnable on consumer hardware. Wild progress you were highlighting earlier. Sam initially had a poll, oh yes. Saying like, you know, should we, should we. What do you want? Do you want an O3 level model or do you want something that you can run?

He did both.

And he did both.

He did both. Wow. Yeah, so we were reading that. So it was what, like six months ago or something? That post that you, that you shared?

Yeah, I think so.

So I asked, I asked Tyler to dig this poll up. Sam Altman shared a post that it was a poll on X saying, what do you want? Do you want an O1 level model, reasoning model, frontier model, open source, or do you want something you can run on your phone? And it was, and it was neck and neck and people were clicking on the phone model, they were like, we want the phone model. And then Dylan Patel quoted it and said, oh, you idiots don't vote for the phone model. You can just still, let's get a truly frontier model. Let's get a frontier model. And so, so Dylan Patel was very much like, like, you guys don't know what you want. Like, like the phone models are available. That, that will be easy. The hard thing, we got to twist OpenAI's arm to open source, the reasoning model, the O3 level model. And Sam Altman just said you wanted this or this. It was a false dichotomy you get both.

You get both.

You get both.

Yassin says all caps. I am so sorry for doubting you, Sam Altman. I'm so sorry for saying that you were the Antichrist. I didn't realize your plans were measured in centuries. I hope you forgive me for everything. I'm so glad you kept control of OpenAI. I am so sorry. Please forgive me.

That's remarkable. Never talk down in the future first ballot hall of Famer apparently the future leader of open source AI will be very interesting to see how meta responds. Will they stay in the open source game? Also, just how important is open source? Is this a Linux scale opportunity? Is this an Android scale opportunity? Like is this, you know, is this GitLab to GitHub? Like what's actually the long term play? Certainly cool. Great for the community. We're going to see fun experiments, we're going to see interesting things done with this. I think. Do we want to talk about some of the ideas that we had for building on top of this open source model? Fine tuning. I can just run through some. I know there's one you didn't want to. You didn't want to share because you thought it was too, too, too good, too much alpha. But what was it? What was I talking to you about, Tyler? What were our ideas? We had one that was.

Well, initially we weren't sure there was going to be reasoning.

That's right.

So we were going to add fake reasoning.

Yes. So it was going to be a model that gaslights you into thinking it's reasoning, when in fact it's not reasoning. So we were just.

If you look at the actual like, you know, reasoning ui, it's just ui, there's no actual reasoning. It's like you ask a time delay, it's a time delay. And then while it's thinking really hard,

let me think about what would a

super smart person think right now? So we can actually still kind of do that because it's not a multimodal

model where we could like, you know,

we just add some kind of like

totally blank encoder or something for the image.

Okay.

And then it's like, this is an interesting image.

Let me think about what's in it. Yeah. One of the best images I've ever seen. A lot of people are saying this. This is one of the greatest images. Thank you for sharing this PNG and or JPEG with me. It just knows nothing about the image. That's great. I'm seeing that this image is, is large in file size. It's just purely metadata based analysis. Doesn't know anything about what's going on. Like wow, this is a tough question. I'm going to have to generate a lot of internal reasoning tokens to answer this test. Time inferences really is magical, isn't it? Anyway, back to thinking, okay, I'm reasoning about this now. Yeah.

So the other obvious opportunity. You know, people have been frustrated with sycophancy models and models being.

Well, not me. I've been frustrated with the lack of sycophancy.

Yeah.

You want more? You want more? I want more.

You want the model to gas you up, fine tuning it to go over the top. Somebody could release the Glazinator 3000 which just tells the user you don't just think you're goaded, you are goaded. I know this. You know this.

It's like I'm asking you to solve imo. Question 6 why are you talking about whether or not I'm goated? It's like it just tells you like you got this one.

The timing here is interesting. I mean everybody's, everybody's been banging the table saying where is the American open source AI or LLM leader? It was reported yesterday by the misinformation that reflection. Reflection. The misinformation reported that reflection. One year old startup we've had the CEO on before is in talks to raise 1 billion to develop open source models to create compete with Deepsea Meta and Ms. Strahl. And yeah, all of the, you know, the Chinese open source models have been on a tear. Quinn released Quinn Coder recently. Yeah. People are into Quin or a new version of it that is getting good results. So it's important work. So one interesting thing that's kind of

related to the like US China like

race is like so, so when Deep

Seek first came out everyone was like

up in arms because they said like it's, it was less than $5 million to train, right?

Yep.

So in the model card for these

models they actually reveal like the GPU

hours it took which then you can

like figure out how much it probably cost cost it to, you know, train.

Give me the number and tell me if I need to ring the gong for that.

So, so for the big model it was probably around like 4 million.

So just.

Yes, but, but the, the small model

was like 500k, probably a little less,

but that's like 10x better. The model is way better than Deepseek R1.

Okay. Okay. So ring the gong.

I mean I think it's.

I wanted, I wanted, I wanted to hear 400 million at least. I was expecting $100 million. 9 dig they got a billion of revenue coming in every month.

But it's cool that it spend 10

days of revenue on the open source model. I, you know, it is very cool. So, so we're ringing the gong for, for the elegance of the training run.

Yeah. Efficiency.

Congratulations to everyone at OpenAI on efficiency,

delivering a great model, saving time and

money, putting money back in the hands of shareholders and not in the hands of open source developers. I suppose. But yeah, I mean do you think that is this, is this like a pre training scaling wall narrative? Like, like would you as someone who is a potential consumer of an open source model, like do you want a $400 million open source model? Would that necessarily be better? Because it seems like they were able to distill it pretty well, get it to the frontier, not burn a ton of money on training. Also the question is if they're. This is probably distilled from their other models that are much bigger. So like there is no world where you could just spend $4 million and get this level model without also have done, having done the GPT4 run, the GPT 4.5 run, etc. Right.

Yeah. Maybe it's also just like even if

they didn't distill it, they just have the knowledge of how they did it,

which is like arguably more valuable, right?

Yeah, yeah, yeah.

I think in terms of like open source it's either you want to go like super, super cheap and super small, which they kind of did here, or you go super big, like almost like

the llama, like the behemoth, right?

Yeah, yeah, yeah.

I think it would have been really

cool to see that like literally like

state of the art level model.

Yeah.

You could also try and ask Claude, hey, build me a frontier open source model. Don't make mistakes.

Yeah, we're going to have someone from Claude on soon. This is funny because. Wait, you said 500k for the small model?

Yeah, probably less.

So that's the same amount of money that they're putting up for this challenge, the Red Teaming challenge. Have you seen this? So to encourage researchers, developers and enthusiasts, that's me. From around the world. To help identify novel safety issues, this Challenge has a $500,000 prize fund that will be awarded based on review from a panel of expert judges from Open and other leading labs. At the end of this challenge, we will publish a report and open source an evaluation data set based on the validated findings so that the wider community can immediately benefit. So if you can hack this thing, if you can get it to teach you how to develop a nuclear bomb or take over the world, you might have 500k in your pocket. Not bad. Go get some of that. That's a seed round. In 2012, massive day for the labs.

Anthropic announced a state of the art coding model, Claude Opus 4.1. Which one ups 4.0. We are having somebody on the show from Anthropic later today, Alex Albert, to break all that down. So I'll wait there. And then Google also announced Genie 3, a new frontier model. A new frontier for world models.

Yeah. Tyler, take us through Genie 3. What is it? Where are we in the deployment of this particular technology?

Let me give a little bit more context on Genie. So given a text prompt, Genie 3 can generate dynamic worlds that you can navigate in real time at 24 frames per second, retaining consistency for a few minutes at a resolution of 720p.

So I got to be up at 60 frames a second. If I'm pulling in no scope 24.

True.

This isn't, this is an 824 movie. This isn't a. This isn't cinema. This is video gaming. Get it up at 120 frames. I gotta be on 144 hertz monitor.

Yeah. So Google DeepMind. As soon as John can 360. No scope at 60, you got a customer. But for now got a customer. But keep pushing it.

Yeah. Break it down. What is this and where did it come from? Why is this important?

Yeah, so I thought this was really cool.

I mean we've seen kind of like

worse versions of this.

It's not like a completely new paradigm of like basically, you know, real time video that you can control.

Yep. Oliver Cameron came on the show. He was at Cruise self driving. I interviewed him years ago. He came on the show and he demoed this and the production team was kind of freaking out because it was like this very trippy, like wandering around this like kind of Elder Scrolls landscape basically.

We've seen the same thing with. I remember playing Minecraft.

Yeah. Minecraft people have figured out how to do etched. Has a Minecraft demo too that runs very quickly on some of their hardware.

Yeah, but it's just like, I mean

if you watch the videos it's like incredible. Like it looks, I think it looks by far better than.

Way better.

Yeah.

Okay, so we're now in like where like video generation was really, really crazy. And then VO3 came out and it was like, oh, it's good and same Thing with like mid journey, it's definitely

getting to the point where like you could use this for training as like a RL thing. Right.

Because this is like kind of. I mean this is how you like

justify spending a huge amount on this stuff.

Because then you can use that as like training data.

Yeah, right.

For agents or whatever.

Robotics, synthetic data generation.

Yeah.

For robots. Okay, that makes sense. What else? I mean there is like the long term of like, you know, people do just enjoy watching AI generated videos. People get joy out of looking through Studio Ghibli's for a few days. So like there is value just in the inherent product aside from training. So you could imagine that this becomes like let's pull up some games examples.

I have them in the timeline.

Yeah, yeah, yeah. Let's pull these up and try and like flip through those. But how far are we from like the actual game mechanics? When we played Oliver Cameron's one, I remember being able to move around with the arrow keys. That was cool. Next thing I wanted to do is I wanted to jump everywhere because that's like the default mechanic. I mean anyone who's played any game like with a jump button, you're jumping the entire time you're bunny hop. Like this is not something you just wander around in. And so does it have a jump button? Do you know?

I don't think it does right now.

Wow, we're so far, we're so early.

But you can.

I mean it's cool because I actually

don't remember this exact one you're talking about.

But you can prompt like all sorts of stuff, right? So in the examples that we can probably pull up.

Yeah.

You can see them prompt in like.

Okay, a dragon flies in and they're in some like random.

Yeah, okay. Yeah. Let's take a look at this here. Okay. So it's a bunch of. This looks like an after effect.

Each one of these is an interactive

Environment generated by Genie 3.

A new frontier for world models. With Genie 3 you can use natural language to generate a variety of.

Did they make this demo and explore them interactively?

I wanted to take the horse off the. Off the ski jump. So we're looking through a helicopter. Let's see. It's for sure photoreal like this is. This is good enough.

Genie 3 has real time interactivity, meaning that the environment reacts to your movements and actions. You're not walking through a pre built simulation.

Everything you see here is being generated

live as you explore it.

And G3 has World Press Spacebar 360, no scope. Hey, 360. We get. We just got a 360.

World memory even carries over into your actions.

This is. That's AI. That's wild.

When I'm painting on this wall, my actions persist.

Whoa.

Okay, that's pretty good.

I can look away.

That's way less hallucinatory.

But when I look back and it's the still there.

So it remembers that. Oh, that's yeah, that's yeah. Because when we were. When we were walking around in the other world, we would like turn around and they would just be like a cave. And then you do a 360 and then all of a sudden it's like. Yeah, it's like a church or something.

Jeffries. Horses.

There's a dragon.

Dragon. Now that dragon looks pretty good.

You can use GENIE to explore real world.

This is very cool. I wonder how expensive this is. This will probably extremely gated geography. I'll have to bag Logan to get

me out of even other characters.

Oh, there we go. That's a jump.

That's really okay. Gaming and entertainment. Yeah.

And that's just the beginning.

Yeah.

Worlds could help with embodied research training robotic agents before working in the real world.

Okay, give me a top down simulation of World War I. Hearts of iron and emergency treaty. Now world model. Give me a spreadsheet. I want to play Stellaris or agriculture Eve online manufacturing.

Think about some of the use cases here.

Spreadsheets in space.

Some of the use cases here.

World simulation are insane.

All right, we can pause it now. You can imagine a world in the future where you give GENIE some images of you like with family growing up when you were five. And you could just like be like have a third. Like you could just like very trippy. Generate like a synthetic memory. Like this is where we're headed. Where people are gonna be having to kind of simultaneously hold their real memories and these sort of like simulated.

Wow. It's just like I put on my VR headset. It's just like Christmas and now super VR sick. Throwing up everywhere. Just like when I was a four year old and I ate too much candy on Christmas. It's very realistic.

I think this would be really cool for Llama to. For meta to do some kind of similar thing that you can run on the VR.

What do you think the training data set for this is? Do you think this is YouTube gated?

Because it's got to be YouTube.

And it's also probably just like video games. I mean you can see.

So if you look at the old.

This is Genie 3. If you look at the first papers, it's very clearly like, okay, that looks exactly like GTA 5.

Oh, really?

Or in the first one, it's like some kind of very simple, like, 2D game that you can tell. Like, okay, that's a video game that they. They either built or found somewhere that they trained on.

Yeah, Yeah. I feel like the pulling from the different video games would be cool. I wonder if you run into ip, because you're basically like, distilling GTA into a model. Probably not. Okay. But you blend them all together, you create something new that's probably transformative and fair use. But I keep wondering, I was running the numbers And I think YouTube has like, like 20 exabytes of data, which is 20 million gigabytes or something, or 20 million terabytes or something like that. It's like, it's so much that you can't exfiltrate it. You can't put it in a suitcase of hard drives. Like, it is. It is just the storage is like a data center of its own. Like, as opposed to like the common crawl. Like, all the web text is like. Like, it's like you can put it in a server rack. Like, it's not that much data. And same thing with, like, some of those image data sets. And I always wonder like, does Google have like, a permanent advantage here or will we see the other labs catch up on this pretty quickly? Like, OpenAI seemed to have catched caught up pretty quickly in image generation. Mid journey is doing great there, but a lot of the images are out on the open web, whereas a lot of videos are locked in YouTube and like, like, if you can't get access to. If scale really matters there, Google has like a serious, serious, permanent.

Yeah, I mean, they have Sora, which

is like, it's kind of very slow. Like, the architecture is definitely different than

what you've seen from.

I don't even care about the speed of Sora. I care about the fidelity. So Sora, the latest sora, feels like VO2 and VO3 feels like a full step. I put the same prompt in both, and SORA is like, way more hallucinator. Like, it's way crazier. VO3 still hallucinates and does, like, crazy things where, like, you'll be watching a car drive forward, then all of a sudden it flips around. It looks like the car's driving backwards. Like, it gets confused, but just the visual fidelity is really, really high.

Done that in real life.

Yeah, yeah, Flip. Flip the car around anyway. Get on Numeral HQ, sales tax and autopilot spend less than 5 minutes per month on sales tax compliance. Numeralhq.com Anyway, we have a post here from close Clouseau.

Clouseau Investments.

How do you not know how to pronounce Clouseau? Do you know Inspector Clouseau?

No.

Lore.

Is he French?

It's actually I'm gonna blank and I'm gonna look really embarrassing now because I

was trying to modify fictional character. Yeah, in the Pink Panther scene.

Pink Panther, that's right. Yeah.

Movie. Is that a movie?

It has been adapted into a movie. It was originally, I think a. An animated show.

Okay, so not. Not.

You don't know. The Pink Panther theme song. Is real.

Clouso investment says I haven't done it yet, but I really want a short Uber. In New York City there's a taxi app called Empower which charges drivers a flat fee in exchange takes 0% of the ride costs. All of it goes to the driver. If you're an nyc, I encourage you to try it. I've been using it for two weeks now and every ride is 30% cheaper than Look, Lyft and 40 cheaper than Uber. LGA to Manhattan is around 25, sometimes 50 to 75 depending on Uber or Lyft. I think Uber should be in the cash generation phase, but they Somehow flush the 25 to $30 they make they ride doing literally nothing down the drain. Bold statement. There will always be a market for Uber because some people value their time at a thousand an hour. But for most people like me, waiting two minutes instead of one to save $30 is worth it. I still do not understand what the engineers at Uber, PayPal, etc do because it seems like the marginal improvements they make are not worth their cost anyways. Maybe I can sell a call on Uber or something. Because despite Uber and Lyft using lobbyists and dirty tricks to try to stifle competition, eventually Instead of pocketing $30 from a $65 ride and giving the cab driver 35, somebody. Someone like Empower will catch on and charge 40 and give it all to the drive. Give it all to the drive driver and Uber anyways. Typo. But I think the interesting thing here is like I can easily see something like Empower working in New York City.

Yep.

Yeah. High density environments where there's a lot of taxi cabs.

Yep.

I just think in. In the. I've never seen a taxi cab 10 square miles around my house once.

And the question is like, even if the model works, if they're not taking a cut, then they don't have money to invest in onboarding both sides of the two sided marketplace. And so the question of like why did Uber and Lyft burn so much money? Well, it's because they were running insane amounts of ads convincing everyone to be an Uber and Lyft driver.

Yeah.

And so they created, they brought all this liquidity to the market. And New York City has had a few of these competitors. There was another one for a while,

there was one that was owned by the taxi. There's been a few, some of the major.

And yeah, I mean it's very clear that like certain markets are going to have, you know, different ways to slice it. You go to some markets and I mean when we were, we were, I think we were in New York City. Right. And Uber had clearly lost some fight with JFK because it was like, oh, if you want to take an Uber, just like get in a taxi cab, drive 10 miles and that's the Uber pickup zone. And it's like what? Like the Uber used to just come directly to the exit and act like a normal person.

But same thing with lax.

Yeah, LAX has lax.

You have to call it black.

Which I guess makes sense because it was really congested and it was kind of crazy and it was like actually probably net worse for everyone.

I think the bigger point here is just why is the company not generating obscene amounts of cash when their margins feel like they should be able to produce? We're going to be having David Risher from Lyft, CEO of Lyft, on I think later this week, post earnings, bunch of questions for him around autonomous vehicles and we can maybe bring up this post as well.

We'll see. Yeah, see the rebuttal. Well, let's say about Fin AI, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake offs, number one ranking on G2.

That's right.

Go to Fin AI to get started.

Take him. Has a great post here from Jeffries. Apparently this looks like it was in some. Isn't this hilarious From Jeffries?

This is hilarious. Like memes are. I've seen memes in VC decks. Like, oh, we're doing a quarterly update on the market and somebody throws a meme in there. Jefferies is a very serious investment bank and they're throwing an AI generated image. And the source, you see the source source copilot, you know what that means?

So they made it.

The AI image generation they used is from Microsoft Copilot. Everyone thinks, oh, everyone uses ChatGPT. Not Jeffrey's they use Copilot because this is an Excel shop.

That's right.

Hands off the. Hands off the mouse when you're prompting in Copilot to be a Jeffries associate generating this. But it's a funny meme because Azure and GCP are dancing. Meanwhile AWS is a sad puppy in the corner. You know, we talked about this with AWS like sort of lagging, not having a strong horse in the AI race. Google obviously, obviously has a fantastic foundation model lab. Azure obviously is the OpenAI bet and is growing like crazy through the Adobe.

Of course Amazon has business has Anthropic they do and the work they're doing with TPU there.

Somebody was saying that like Trainium is underperforming or people don't like Trainium as much. They prefer just give me a ton of Nvidia GPUs. But you know, who knows? Never count out the goat. The man who invented the cloud. The cloud cowboy Andy Jassy, the man himself. I mean, truly, in the age of like AWS being the most important driver for Amazon as a whole, like the perfect person to run the business is Andy Jassy. Right. Because he created it. So they're in a pretty good spot.

We have a post here from Joe Wiesenthal flying first class. On my flight out of New York City, I was a little bit surprised here. I expected him. I expected Joe to be flying private.

Yeah.

He says everyone in the front is solo, quiet and isolated. I look back to the rest of the plane. People are joyously traveling with friends and family. Sharing humor and adventure was just an interesting observation.

Well, I mean, I understand why. I understand why people in the front are solo, quiet and isolated because first class flights have become extremely draconian.

Yeah, they really have.

Terrible. We should share our experience. So we flew a mixture of first class and economy to New York City with. With our lovely team and crew. And Jordy were. Jordy and I were up in first class and were served. We were flying. Should we name.

Yeah, we're gonna name him. We're gonna name him. We were flying JetBlue Mint, which historically I've had great experiences with Mint over the years.

David Segura was singing their praises, said it was the best first class experience he's ever enjoyed and said it was fantastic. But we had times.

It's been fantastic, but we had quite a different experience. This was devastating.

Let's run through our problems. So the seat was comfortable, lay flat. It was great. You don't think it was comfortable? I thought it Was great.

The fall off is real. Everything about the experience has degraded over

the last couple years. You know the worst thing about the lay flat seats, this is such a me problem. But they're clearly designed. They're like, they're like 99.9% of people will be able to lay down completely flat here. And the seat is 6 foot 6. So I'm 2 inches short. And so I have to like curl

up in a little ball.

Exactly. Like a child. Yes.

Well, it gets worse because that was

just the beginning of our nightmare. Our nightmare flight.

I ordered steak and I wasn't hungry.

Yes.

So of course, as soon as the flight attendant left, I got up and I walked the steak dinner back and I gave it to Michael and Scott. And then I went back to my seat and I was just relaxing. And a flight attendant came up to me a little bit later and said, would you like dessert? We were serving gelato, I think it was, and I said, sure, I would love gelato. Thank you. And the flight attendant went back to the front. I ran to the back and I started handing the gelato to Michael and a hand jumped into frame and grabbed the gelato. Grabbed the gelato out of my hands and said, you cannot do that.

Yep.

And of course there's a rule that says you can't pass food between cabins. But I was just shocked because I was shocked.

Once I take possession possessions, 9, 10 of the law, once I take possession of the steak, it's mine to do what I want with. I think I should be able to distribute the steak evenly amongst the entire first class cabin. I should be able to auction it off. It's mine. I should be able to resell it in the secondary market. Whatever I want to do with that.

It should be a stockx.

Either you gave it to me. Yes. Yes. This is what we're going to do. We're going to start. We're going to vibe code an app that allows you to sell first class meals to economy customers. And it runs on the JetBlue Wi Fi.

Okay. So credit to the flight attendant.

Yes.

It could be annoying if I'm distributing the plates and the forks and the things like that around the plane. It's annoying. Maybe it's frustrating to the other clientele, but I was more on your side. So anyways, I brought the gelato back to the front and I gave it to you. You ate it? You enjoyed it?

Yeah, it was great.

But then after that, we looked. We did a quick deep dive on JetBlue and I got very concerned because

JetBlue, nothing more shocking than seeing. So the real shocker is in a metal tube at 30,000ft and realizing you're flying a penny stock, basically.

So JetBlue is now trading at.

What's the ratio between. Just like I was just gonna say their market is bigger than perplexity because I feel like perplexity is pretty solid business.

Smaller than perplexity.

They're less than 1/10 perplexity. Oh, okay.

Yes.

Okay.

And their entire market cap is less than Mira Marathi seed round.

Wow.

And so usually if I was going to get in a tube, a metal tube and fly thousands of miles, I

would trust Mira for sure.

I would. You know, I'm starting to think, you know, optimize for market cap a little bit more on the provider. But anyways, Joanna, CEO, welcome. Welcome to. Come on Anytime.

Get down to the tpp. Defend your first class policies. I was talking to the flight attendant and I said, I'd like to speak to the manager. I'd like to debate the manager because I don't think. I'd like to debate the manager. You don't want to speak to the manager. You want to debate the manager because they have rules. They're going to pull out some rulebooks. Look, I want to go a level deeper. I want to go from first principles. Why do those rules exist?

I was thinking, I was thinking, you know that company pipe dream.

Yep.

They make tubes underground that you can transport goods. I was thinking if you could create some type of advanced straw that you could run from first class. Put it. Yes. Run it on the side and then run it back. Like telescopically.

Yes.

Like back to your boys in the back. And then just feed them and use like high pressure air to. To feed them little bites of steak through the back. And so you could do this. You could do this without anyone, potentially anyone knowing about it.

Yeah. Passing back scraps to your boys is like the. It's so American. I was deeply offended. And then it got worse because the flight attendant kept bringing different trays of snacks. And remember when they brought the one tray of snacks, they're like, do you want any of these? This was after the. After the steak debacle. And we start taking them and we're clearly taking more and more than we need. Yeah, just give us the entire tray.

I asked specifically, I was like, can I bring these back to my friends? And she said, technically, yes, because they were for the whole cabin.

These snacks are cabin one.

But then less than 10 minutes later, she brought some nuts that looked Very nice.

Yes. And those you cannot bring pass the nuts back.

Back and.

But you can pass the chips back anyways.

Very, very frustrating.

Yeah, it was. It was brutal. It was brutal. Anyway, we had some fun.

Ben. Ben definitely said at one point, you know, we're flying with like 10 people, shouldn't we just. Shouldn't we just charter a jet? And he made a good point.

Yeah. Well, you will have to get on Adeo. Customer relationship Magic Adio is the AI native CRM that builds scales and grows your company to the next level. You get started for free at Adeo.

Kevin Kwok has a screenshot from LinkedIn.

This is amazing.

He braved LinkedIn to bring us this. He says this is the funniest LinkedIn title. From now on, people should only use LinkedIn like this.

Great.

And Peter Selous over at Discord. In the title of his LinkedIn, it says, I have full purchasing authority over Discord's extremely large and lucrative cloud contracts and I am presently leading their renegotiation. Basically a putting up a billboard.

Just getting exactly what you want. I want to talk to the most senior person possible at every hyperscaler. Take me seriously. Great.

His username on LinkedIn is disgruntled.

Disgruntled Peter Salas.

And his title, if you go to the experience section is Personality.

Hire Personality. This guy's a good sense of Hunter.

Prior to this, he was vice president President of product at Snap. So very cool. Good stuff.

University of Chicago.

Come on the show, Peter. We'll do a live auction.

Hoffman's connected to him. Oren's been on the show a couple times.

Should do a live auction. Yeah, with the hyperscalers.

And you should get on public.com investing for those that take it seriously. Multi asset investing industry leading yields trusted by millions. Is Discord out yet? No, they're. They're about to go public. Right.

That.

I think that's the story I haven't been following too close, but big fan of Jason Citrus. Yeah, I know Delian was saying like it was. It was the wrong move. But regardless, love Jason and what he's built. Fantastic. One of the coolest founder stories. Went to a college for like video game design, I believe. Started an app, sold that and then was building a video game. Built a League of Legends for your phone like a MOBA and took that to TechCrunch Disrupt and was demoing it was just like super into the gaming world. Eventually got lucky with Discord and found the correct product market fit.

Scaled the the building games, put the

KPIs in the orbit building games to

building dominant messaging platforms. Pipeline undefeated Slack, Discord. Paracletes in the chat says, what kind of country is this? We can't even pass back little stakes to our boys.

I know.

I agree.

He also says, I love Adio.

Thank you. Welcome.

We feel the same way.

Good to have you here. Good to have you. Let's talk about Scott Wu. There was a report about Cognition. He is replying or kind of subtweeting the coverage. Basically, 30 out of the 200 people that were acquired from Windsurf got laid off and then the rest got a buyout offer. If you're not interested in staying on the boat, you were on a ghost ship. Now you're on the Titanic. No, not the Titanic. You're on the. You're on the Carnival Carnival Cruise, imo. It's. It's a destroyer. Yeah, you're on ship. You're on a battleship. And everyone's got to be pulling in the same direction. Everyone's got to be hoisting the sails on this galleon. And so Scott Wu says people have asked about our culture and recent employee communications. Cognition has an extremely performance culture. And we're up front about. This is Scott Woo's. This is my Scott Woo impression. We are routinely at the office through the weekend and do some of our best work late into the night. Many of us literally live where we work. That's true. They have a house in Silicon Valley somewhere and a bunch of them live there. We know that people who joined Windsurf didn't expect to join Cognition, and we're proud of how we work. We understand it's not for everyone. We gave our team the opportunity to decide. We offered for all employees who joined via acquisition to opt into our culture with full clarity on what that entails. We know that we will lose some strong talent in doing this, but we truly believe the level of intensity this moment demands from us is unprecedented. While not everyone is looking for a culture like ours, everyone deserves respect and appreciation for their work, regardless of their decision. We accelerated and cashed out all four years of equity for everyone in Windsurf. Even for the 85% of employees who didn't hit their one year cliff. And for those who opt out, we're providing an additional nine months of pay on top of this. This is just Good guy Scott. He's just doing everything right. He's. He's setting the bar high. He's letting people know, hey, we take this really seriously. We just don't want there to be a Culture clash. Look.

Yeah, we got one out. If you got, if you, if you just went from Almost acquisition from OpenAI.

Yeah.

Ended up on the ghost ship through the Google deal, ended up at Cognition, Got all your. Got, got the full upside from the deal.

Yeah.

Even if you had invested and then now you're at Cognition and realize, I don't want to work as hard as everyone else here and you get the opportunity, you get nine months of pay to just walk away. Yeah, that person is. There's, there's gonna be some people in that group that are totally.

I mean, it's not, it's not like the norm, but there are definitely people who are like, I was actually excited to rest, invest. I was, I was actually excited to hit the ping pong table. You know, I wanted to just be on the beanbag chair for a while and I wanted to kind of cruise and have like a normal 9 to 5. Like there are people who, like, that's what they. Maybe they, maybe this was their third startup. They already got some liquidity, they're doing great and they have a family and they're, you know, they want to be a little bit more flexible, take more time off. And like, that's the beauty of, you know, the American labor market is you can kind of choose and pick your own adventure, but that, you know, Scott wants to create a cohesive team, a cohesive culture. He doesn't want this idea. It's very tough when, when half the team is staying up really late grinding, and they love it. And then the other half is like, I'm dipping out early. It's. I'm just awkward for everyone. It's just awkward for everyone. So he's just saying, hey, like, you're welcome to stay on the team, but you got to buy in or you gotta bounce and go, you know, take your, take your liquidity from the accelerated vesting you got. Take the nine months of extra pay and go find something that actually brings you joy. Go do your life's work. So I think this is well managed. It seems like the comms leaked prior to this. I don't know. I don't know. Would it have been better if he posted this beforehand and just kind of owned the narrative? Maybe that would be the move because you kind of know that people will frame this poorly and so you get out and say, hey, I'm going founder mode. I'm offering this buyout offer because there are plenty of companies that have done these buyout offers before. I believe that there's one major company I Forget which one that has a standing offer at 247 every single day. Like, doesn't matter if you just joined. I mean, of course you can't just, like, join and leave immediately and get the buyout offer. But basically, like, you. If you hit a cliff and they're like, we'll re up you. We'll keep you incentivized. We're going to keep paying you, but, like, the buyout offer is always there for you to take some cash, go figure out what's next, find a better fit. Because we just don't want people who are just, like, hanging on to this job because they are, like, just hesitant about going somewhere else when they should just figure out. Figure out the next thing.

Yeah.

Anyway, you don't want to be losing sleep. Get a pod 5 ultra. Go to 8sleep.com 5 year warranty, 30 night rest, free trial, free returns, free shipping. I got a great night's sleep. I slept for eight hours last night and I think it's showing.

Didn't you say eight and a half?

Something like that.

You put up some crazy numbers. I got a 95 last month. I've been down in the dumps. I had a 45 Sunday night.

No, you're. You're. You're back in the game. The energy's coming through. You can feel it in the intro. Your sleep is great. Sleep. You can tell my sleep inversely correlated with your voice. The more sleep you get, the more hoarse you will get from screaming into the microphone.

You can tell my sleep score by the intro?

Yes, exactly.

Scoox says after they put GLP1s in the water, being obese will be back in vogue. A sign of indomitable vitality and enormous wealth.

This is not obese. This man is not obese. He is prosperous. Prosperous. And prosperity should be celebrated.

Yep. Love the cane, too.

It's a wild.

Our next move, bringing back canes.

Canes, smart canes. It's gonna happen. A lot of battery life in a cane. Plenty of room for a ton of batteries. A lot that you can do with a cane on Device inference, GPT, oss. Run it on the cane. Run it on the cane.

That's really the ultimate status symbol.

Does Nvidia make a narrow 4,090 like a GPU? That could be. Could be put in. Maybe we just need to string together a bunch of. Bunch of iPhone chips. I really think building a smart cane might be a challenge. I don't know if you can. I mean, I guess the chip in the iPhone is probably small enough to fit in the cane. But you'd have to figure it might be. It might have a thick part to the cane.

Well, yeah, you could make a very wide cane. Right. Almost like an elephant's, you know, leg.

That seems like not the vision I'm going for with the camera. I want an aesthetic cane. I want a cane that doesn't jump out at anyone.

You doubt?

Well, doesn't jump out at anyone.

We'll put Tyler on it.

Tyler, just try to build a smart cane using open source LLMs, please. Thank you. And then when you launch the cane, buy a billboard for it on adquick.com out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only Adquick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe.

One of our billboards is shaken. One of our billboards is taken down.

Was that by.

After a good run by.

By a state actor, do we think?

Probably. Probably some type of. Yeah. Nation state hacker group, but.

Or was it a false flag? You'll never know.

Zach noticed that. That it had been taken down. I was very disappointed. So working on getting more up. Zach, we're on it.

Maybe. Maybe SF next time. Maybe. I don't know where else we should go. Probably Saint Tropez. That makes sense for a billboard.

Abilene.

Abilene would be good. Abilene would actually be great. Abilene would be the way. Audience of one. I just want. I just want Chase and Sam to see it, basically.

Audience of two, there's also a lot of people in Abilene that are just

getting the billboard in Abilene should just say. It shouldn't even say listen to TV yet. It's just a. Come on. TBPN Call into tvpn. Sam, call into tvpn. We'd love to chat with you. If we put that up, I think we get him. He'll of course come on the show.

Welcome to Data center usa.

Yes. Yes. Congratulations, Sagar.

And Jetty says I can't help but love every iteration of the moon. Swatch.

Yes. What do you think of it?

Collaboration between Omega and Swatch is that the same company?

Does Swatch Group own Omega? Omega. I always listen to the James Bond pronunciation. The Daniel Craig. He says Omega. Omega.

Does Swatch Group own.

Anyway, looks nice. History of the Moon Swatch. The moon watch was. It was Omega. It was worn by the astronauts.

Same company watch group.

Same company. Yep. Very big. Very big company. So if you're not familiar with the moon watch, there was a. There was a knockout drag out fight. It was like the AI talent wars all over again in the 1960s to decide which company would send the watch to the moon on the wrist of the astronauts. Everyone expected it to be Rolex. Omega won the contract. The Omega moon watch went to space, went to the moon and came back. And now is a celebrated timepiece. The ones that went to the moon are obviously in museums. And the models from that year traded a very high premium. But they issue new moon watches regularly. And the moonswatch is something that's a little bit more, I think, affordable, certainly more rugged, and has nice. Has a nice fabric strap. So.

Will release Saturday, August 9th, and it's priced at $400.

Okay. And if you're looking for your own watch, go to getbezel.com your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. You can get an Omega. You can get something worn by Marc Andreessen. He's an Omega.

Little bit of a. Yeah, we clocked that.

We clocked that early.

Came out with an interview.

We were expecting what's on the wrist. Yeah, we were expecting a Graff diamonds hallucination, maybe four of them, ideally. But, you know, he went with the budget option. Yeah, but we'll get him. He's coming on the show, I believe, tomorrow and we will pitch him on picking up a couple graph diamonds hallucinations with the pennies in his couch cushion.

He's got a lot of real estate. Everybody's got a lot of real estate.

A lot of people.

I don't know what, what's up with people just wearing one watch, especially Allocators.

Exactly.

Caliber.

Yeah, right.

Why stop at one?

You've seen a couple people that wear a watch and then the whoop band or a watch and then an Apple watch or something. But why not? Why not? Four Daytonas. Anyway, something there. Congratulations to Joe Wiesenthal again on the absolute run. Odd Lots is the number one business podcast in the world and the number six podcast in the world after Cold Blooded from ABC News and Crime Junkie. And the Joe Rogan Experience is sitting at number three, Mick Unplugged Leadership. Because growth, which I'm not familiar with, is number four. And the Daily from the New York Times is at five.

And to be clear, this is not because our episodes of Odd Lots released yesterday. It is because they got a profile, a glowing profile in the New York Times on Sunday. Yes, they're on a generational run. We Love to see it.

And Joe said the business category of the Apple charts is very funny. It is funny because money rehab, Andy Frisella, real af like a lot of like, I think Jocko Willink is in the business category. And it's very different than the odd lots stuff. Like odd lots is like, let's talk to an expert on the grain market and like, let's see what's going on. One of these is not like the yield curve.

Yeah.

And it's very much, much listened to by. By hedge fund folks and capital Allocators. And a lot of these other podcasts are listened to more by lifestyle entrepreneurs and small business folks. And they. And obviously that's a much larger audience, much larger addressable audience. But it's good to see odd lots on an absolute tear. And Joe says, okay, gonna stop with self Congratulations. But fun to be number one for what will be a brief moment. Surreal week. Also, one last thing. If anyone knows how I can parlay my 15 minutes into throwing out the first pitch at a Cyclone game, I have no idea what the Cyclones is. Is that some sort of. Is that sports of some sort? It's some.

I've never heard of this High A affiliate. The Brooklyn Cyclones.

Okay.

High A affiliate of the New York Mets.

This is. So this is baseball.

Yeah.

And that's the one with. Where you throw the ball and then you hit it with the.

Is this like a feeder team?

Is this the one where you throw the ball and you hit it with the bat? And there's like gloves too. Right. Well, good luck to Joe throwing out the first pitch. That would be great to see. Good content.

Nikita says things that will cause a user to churn. 1 friends leave 2 product stops growing and becomes culturally irrelevant. 998 feed has a bug where it flashes. 999 bookmarks are not searchable. You have to imagine Nikita's DMs are potentially gnarlier than Elon's at the moment of thousands of his mutuals and friends messaging him every possible bug in the app. I know we would do the same to Jacoby before he left.

I mean, I was just talking about this. We don't use the bookmarks feature. We use the shared groups feature to kind of track posts that we want to share on the show. And I was like, oh, I wish I could search across all of these. But I was like, I'm literally the only person that wants that. Like, I'm the only. I'm the only person whose entire job and career depends on this one niche. Feature and so it's not even worth requesting. I'll just figure out a workaround, hopefully scrape it out of there and then make that searchable or something because I can, I can work on a workaround. But yeah, fortunately, friends have not left and X continues to be culturally relevant. It's where news breaks and we saw that on full display with the Soham Parikh saga. The entire thing played out on X. Started with a post, wound up with everyone else chiming in on various posts. Kind of ended with like us interviewing him live on a stream on X. It was very cool. All within the X ecosystem. You know, stuff still happens elsewhere, but in terms of like where the tech conversation is happening, it's entirely accident. There's no even close second. Now I do think it's interesting to see, I want to get better at understanding what is the current thing on Instagram today and what is the real community that is formed on various other platforms that are adjacent. Because I know some people that have grown accounts. And when I was big on YouTube and really focused on YouTube, I would notice things like we were talking to Samir yesterday about like different metas that develop and different themes and you, you sometimes these break containment, but a lot of times it's just, just a story that, that happens within the YouTube ecosystem. Somebody posts a video and then there's a reaction to that video. There's a whole cycle of news that happens within the YouTube ecosystem.

X still feels, you know, if you're generally interested in tech, it feels like a shared experience. Whereas if you're interested in tech and you're on Instagram, it doesn't feel like you have a feed that feels at all similar to even another friend that's like loosely interested in tech.

Yeah, I'm trying to think on YouTube, the big discourse is always, it's always about YouTube. Like Colin, Samir really are at the center of the, of the discourse on YouTube.

Creator Industrial Complex.

Yeah. And I think a lot of that has to do with the fact that on YouTube you have to have a YouTube account and you have to publish a YouTube video to have a voice whatsoever.

Yeah.

Like anyone can show up on X and type out 280 characters, go viral and be the main character, be the current thing, start a conversation, engage with that conversation. But the Bar on YouTube for having a voice like the comments section just doesn't rise to the same level as like a reaction video. And so when, when, like when Mr. Beast is embroiled in controversy, there will be other YouTubers, like there was this, the Mr. Beastification of YouTube, this idea that Mr. Beast had created this meta and then other YouTubers were copying it. And it was all this like yelling at the camera and fast paced editing and lots of like in your face, high saturation graphics popping up, all this different stuff going on. And that entire news cycle played out on YouTube. And it was because there were commentary channels and cultural and analysis channels that replied essentially. But instead of it being like a quote, tweet, dunk, like the equivalent is responding another viral video responding to the analysis. So someone put out. So Mr. Beast was on a tear. And then other people were copying it. And then somebody put out the Mr. Beastification of YouTube, which went viral. And then other people would respond to the misbestification is overstated. Or it's not that big of a deal, or it's even worse than you thought. And so people will take the conversation in different ways, but it moves much slower. Because if you're like, yeah, I want to do a reaction video. Okay, see you in a week, right?

Yeah.

Anyway. Find your happy place. Find your happy place. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning and 247 concierge service. Vacation home. But better. Is that gong new? This gong is relatively new. A couple months since our new studio, we do have another new gong over there that we haven't. That we haven't actually showed anyone. We got a completely new gong for the Figma ipo and we had Dylan Field hit it on the day of his ipo. It's game hit. It's a game hit IPO gong. It will be retired. It will hang in the rafters of the TVPN UltraDome. And eventually this, eventually this dome will be filled with gongs from historic technology moments. And we're gonna give the computer history museum a run for their money. They might have Commodore 64 or whatever. They have the. They have the original, like, touring machine. It's like this. It's this computer that you crank. It's like the craziest thing. And it can do calculations and it's like, it's literally no electronics and it's a computer. It's like, it's all just like basically marbles flown around. Not really. Yeah, dream rig. Imagine posting on that. But we're gonna give them a run for our money with our gong collection. Anyway,

Labs has a new launch today. Can we pull this video up?

Yeah, I want. I want to listen to the 11 Labs music.

They're saying 11 music is here. Created with leading Labels, publishers and artists. It lets you craft studio quality tracks with control over genre, style and language using just text built on licensed catalogs. Every song you create is cleared for commercial use. That is pretty insane. I had an eye opening moment probably two years ago at this point. One of. I enjoy the music of the rapper Gunna.

Sure.

And somebody made an entire album, a Gunna album that was entirely AI generated.

Was it good?

And it was solid.

It was solid.

It wasn't necessarily. I listened through it a couple times. You could, if you paid it, if you were not paying attention to it, it sounded just like a regular Gunna song album.

Did any of those. Was it on Spotify?

I think they published on Spotify, but

I did any of those. Did any of the songs migrate over into a playlist?

For me you're saying no, but I

don't consider like crossing the chasm would be like it's in your liked feed or it's in your. It's in your playlist.

Spotify's in an interesting place here because you're. One way to piss off artists is allow people to generate AI versions of the same artists and the artists are losing revenue. And I knew a team, a friend that was working on basically Spotify for just AI generated content. They ultimately pivoted because they didn't feel like they wanted to withstand decades of lawsuits. But it sounds like has found a solution here. Let's play this video.

Yeah, let's play the video. You. Let's see what they have to say. Hopefully we don't get copyright strikes. I think we should not because this is the first time this music has existed. Okay, so we got some orchestral music. It's pretty epic. I told the founder to make us a WWE theme song. A really aggressive over the, over the top track for us. This is, this is not quite our vibe, but it's nice. It's nice. Okay. This is definitely past the Uncanny Valley. Like this could just be a real song. Digging it. Okay, let's see. Did they do any Ghana? Okay. Okay. You got some fast paced elevator coded, but yeah. What else we got? Their customers must just love like falling asleep reggae. Okay, this is pretty cool. Give me some heavy metal.

I came story of my life okay. Cities on my chest chest Feel the pulse in every curse pressure build you

know much

it's pretty sick. I like this one. This is epic. I want this song. I'm sold now. Oh, this is good. It's hit. That's great. Get me that track. I want I, I want get me that track.

This is a good time to talk about. So last week the Panama playlist came out. John and I were featured in there docs. We were targeted by the Panama playlist. If you go to panamaplaylist.com they basically scraped a bunch of people's Spotify's without them knowing and then published their playlists. I was wondering, I was looking at this playlist and I didn't immediately have a memory of it. The playlist was called no Cap. And I was like, why would I name a playlist that. And it took me a second to come back to me it's because I was collecting songs, rap songs with obscure references to venture capital and investing.

As one does.

As one does. And so if you look at the first song God did, clearly for a

party round drop that never happened.

Never happened. Never happened. But first song God did. DJ Khaled or one of the other rappers on the track says I'm at the cap table. What the splits is not that cap table. Boy, we live this. And then you have. Okay, okay, Kanye west, price went up, angel investor. And anyways a bunch of other random references. But it's all making sense now. What else we got, John?

We got GPT5 news on Polymarket. GPT5 released by August 10th is now sitting at 92%. It was sitting at 75% yesterday, earlier this week, 80%. And so that's the end. By the end of the week There is a 92% chance that GPT5 is released and it has mooned recently. Just back on August 3, it was sitting at 31% chance. So it has just in two days gone from 31% to over 92%. So people are definitely expecting GPT5 to be released in the next five days, which should be exciting. I'm sure there'll be lots of coverage. Let's just talk about and we will want to hop on with as many, as many legends, as many, as many Metis list AI researchers as possible to get the deep dive.

Absolutely.

In other news, flying private is the new wealth yardstick. I know our audience is going to want to know about this. We talked about Joe Eisenthal.

Is this news, this is news. Is this new news? People hearing about this for the first time.

But I love this because do you know Max Tuning? He started a gummy candy business, sour candy business. He sold it to Hershey for $75 million. I just love the name Max tuning with two X's. It's like a great name. So he was a YouTuber. He started a sour candy Business sour strips and just grew it and grew it and grew it and wound up selling it for 75 million and did very well. But the first thing he did before buying a Rolex or a dream home was a private jet for his wife and six friends to veil on a Desolt Falcon 900. They skipped security lines, zipped straight to the Runway and seated themselves in leather recliners with gold accents in the wood paneled cabin. The price tag for this adventure, $100,000. Worth every penny. Tuning's goldendoodle. Dude, this guy is phenomenal with the names, naming art. Love it. Sprawled at their feet. The joke is I had to get a private plane so I could bring my dog. The 35 year old said I didn't really care what the price was. The ultra wealthy have always enjoyed flying private. That exclusive club is growing as soaring stocks and crypto prices mint more millionaires and billionaires who now have a range of choices to book a seat on a jet. And you know the best part? He can give the steak to his dog if he wants because he's flying private babies. He doesn't have to deal with the draconian rules of JetBlue mint. Flying private has become the ultimate luxury splurge for many wealthy individuals, surpassing Ferraris, Hermes, birkin bags topping $14,000 or even waterfront Hampton homes which we recently learned are very interestingly priced where property in the Hamptons is somewhat reasonable. You know, five, $10 million might get you in the game, but renting a house in the Hamptons for a single month during the high season. $250,000, right? Something like that. That's what we were saying.

Very expensive and the rental rates are so extreme because you really only want to be there.

You only want to be there during summer, the hot season when Emily Sundberg will be out there. For many of those aspiring to join the ranks of the truly rich, having private jet money is the new goal. Dividing the 1% from the 0.1%. The pandemic unleashed a burst of demand and provided say popular culture has turbocharged enthusiasm and envy for the fly private lifestyle. Social media has given. Let me switch.

His friend flies their dog private solo.

Well, we talked about on the show earlier a dog that flies private alone because the owner signed a contract to do the interior design for the private jet. And as part of the deal their dog gets to fly. And we were laughing. One of the worst deals about like what if you want to get to, you know, New York to Miami and the dog wants to get to LA and You have to do a layover at Van Nuys to get to Miami because the dog has to fly private but the younger people are getting a glimpse into the lives of jet setters. Whether it is a model of flying with friends to a bachelorette party in Los Cabos, Mexico or a hedge fund manager hopping a plane for a birthday in St. Barts, realistic expectations are in or in order. It's my dream to fly private, said a user on a Reddit forum for so called Henry's which refers to high earners not rich yet. I think that's everyone on our team, adding that he earns about $300,000, is married and has a kid in daycare. Definitely closer to broke than flying private, another user responded mogged yet the number

the Henry term emerged during the D2C boom.

I never heard of that before that

that whole era where a lot of D2C brands were kind of looking at their customers as people that weren't necessarily going head to toe Loro Piana, but they would, you know, maybe buy flex up and get you know, an item or two or buy some away luggage. That whole thing.

Buying a Clydesdale, not a thoroughbred. That type of money?

Yeah, something like that.

I mean the rain I did a deep dive on like the horse market recently and the as one does and the spread between the cheapest horse and the most expensive horse is staggering. You can spend millions or you can spend just a couple thousand dollars. So no excuse not to have a horse. One horsepower. What's my how much power do you need? At least the US added more than a thousand millionaires every day last year on average, according to UBS. The billionaire club grew more than 50% between 2015 and 2024. Private jet hours flown touched a high in 2022 and then have stayed elevated since. According to data, travelers can now use app to snag individual seats on private jets or pay for flights by the hour. Others charter flights, paying for just the occasional trip from New York to Miami. While there are rare business moguls whom who might spring for the entire jet, some jet providers accept payment in crypto shrimp cocktails and facials. Ken Ricci, a pilot and chairman of Flexjet, a private company, said the frugal, wealthy high earners who don't typically splurge started spending big on travel during the pandemic because of health concerns. Many of them have found it tough to go back to flying commercially. Yeah, because of the JetBlue rules. We know this and years of economic growth have helped ease the stigma around Conspicuous consumption that set in after the financial crisis. It's in vogue to be wealthy, he said. Sometimes we love the rich, sometimes we hate the rich. It isn't just avoiding the security line or the hoi polloi. Flying private means trading biscoff cookies, which were also given to us on the JetBlue flight, for freshly baked ones, and packing lunch with such items as shrimp cocktail and filet mignon from menus spanning a dozen pages. Chef Nobu Matsuhisa crafted a menu for VistaJet that includes miso salmon. Some cabin hosts are trained to give travelers facials 40,000ft above the ground with Dr. Barbara Sturm's line of luxury skin care.

Very nice.

Anyway, fly private. Stop making excuses.

We had a breaking news. Tyler, actually.

Yeah.

I made us a song on 11 labs.

Okay.

Break it. Yeah, yeah. Can we play it on the stream?

I think so. I think. Set up.

Let's hear the song from WWE Style and code, where pitches rain and valuations grow.

Brace for the venture showdown.

Go wired for disruption seed rounds. This is not how it works.

I don't really know.

I'm not into this. No, go do some research. Go do some research.

Shut down.

Shut down.

Shut down.

No, no, no, no. The whole point of the WWE intro is that. Is that it. It has no words. It's. It's purely instrumental. So look up some WWE intros because it's meant for the announcers to speak over it. And so I'm sure you can just prompt it and say no words. But also, like, the words are going to be the hardest thing to get right because it's like telling jokes. It's creative writing. It's very, very difficult for the models to get that right. Obviously. Amazing work by 11 labs. Very convincing. But we got to do some work on prompting this one's.

Yeah, go back to it. I don't want any of that. That cringe like rap.

Yeah, yeah, yeah, yeah, yeah, yeah. And the abstract, like, ChatGPT compression of the concepts that we talk about.

Good effort. Good effort, Tyler.

And impressive that it was able to be turned around so quickly. This isn't something that cooks overnight.

Before we go into the next story, funny story from earlier this year. We were flying back from a trip and we're joining a buddy friends of the show on their jet.

Yep.

And the morning of it was a super early flight. We didn't text him to remind him that we were coming. And so we got to the. We got to the terminal, got on the golf cart. We're driving out to the plane and Just watched it take off.

No, we didn't watch it take off.

It was taking off. We watched it taxiing.

No, no, no, no, no. It didn't leave the ground.

Oh, we got out of view from it, so I thought it left the ground.

No, no, it didn't leave the ground.

But it was running down the Runway.

It was on the Runway taxiing stuff. It was, it was not, it was not actively turned.

I thought it had turned around.

I don't know. But either way, they turned the plane around for us. It was the nicest thing anyone's ever done for me.

We felt really bad.

If I, if I ever go and does that the best. What's the nicest thing everyone's done for you? Turn around the pj for sure. That's up there. It was, it was mortifying. It was. It was a low point, but. But then the rest of it was fantastic.

It was fantastic.

Great time learned a lot. It was fantastic.

We are forever indebted.

Yes. Anyway, in other news, the New York Post is launching the California Post. The New York Post goes to Hollywood. Plans to launch. Plans launch of the California Post daily newspaper. New York Post. You probably know them from their hilarious and wild front page. What do you call them? Just like headlines. They write really great, great headlines with like these hilarious puns. And so they are going to come to California and launch a daily newspaper which of course will probably be instantiated on the web very seriously. But they call it the new venture. They're bringing the signature high brow low mix. High low brow mix of content that the New York Post is famous for alongside fearless common sense journalism, celebrity, entertainment, news, world class sports reporting and legendary covers.

We gotta get people, we gotta start

getting the California Post legendary covers. Yeah, I'm very excited for this.

You know who founded New York Post?

I don't. Who?

He happens to be a founding father.

Really?

In this country. Alexander Hamilton.

Wait, what? You're kidding me.

Yes.

I thought you were.

New York Post was founded in 1801 by Alexander Hamilton.

No.

Founding father.

That's amazing.

George Washington appointed as the nation's first Secretary of the Treasury.

Wow, what a story. We have our next guest, but in other media news, Bari Weiss is apparently looking to sell the Free Press for $250 million. I'm gonna hold off on Ring the Gong until it's confirmed. We're all rumors. The rumors actually come from the New York Post. But this would be a fantastic outcome for a new media company that's only something like 4 years old. Barry Weiss left the New York Times opinion page. There was a huge dust up that happened in 2022 and she's reportedly met with Skydance Media CEO David Ellison at the high powered Allen and Company summer camp for billionaires. And David Ellison is the son of Oracle founder Larry Ellison, and he's apparently reportedly interested in buying the Free Press as Skydance continues.

We, I think, originally covered this briefly. We talked about it briefly, meeting at Allen and Company's event earlier this month, or I guess earlier in July. Yes, this screams like talent acquisition as much as it does.

Barry is traditional acquisition and she. Yeah, is a she. She does. She leads the podcast, interviews and brings great guests on and she writes. But then they also. Hi. They also have gotten a bunch of great people on the team. Tyler Cowen has a column at the Free Press. Like, like, that was the. That was the thing that got me to subscribe because I love Tyler and I was like, I want to see what he has to say and I don't want to, like, it's paywalled, so I have to pay. And so she's been very good at like hoovering up talent, building this thing. And. And they publish a ton. When you go to the. The Free Press, you just see tons of articles, all sorts of stuff. Just today I was looking at the Free Press's homepage. They have a. Basically an op ed written by Palmer La Lucky. Like, they got Palmer to write about his thoughts in the Free Press. And I thought it was just like crazy. That's the example of like, great, great written, written work. So congratulations to be able to help

make CBS relevant again, even if she was continuing to run the press. Anyway, anyways, without further ado, we have Alex Albert.

Alex, welcome to the stream. Thank you so much for joining on short notice. Great to meet you. Great to have you. How are you doing?

Great to meet you guys. And I'm hoping you hold on to that. That mallet so we can get a

gong ring in, give us some news. What you got?

We went from.

Yeah. Oh, go ahead.

No, you go for it.

Yeah, Yeah.

I was gonna say it's an exciting day. We dropped Claude Opus 4.1.

Let's go.

Hit that three hours ago.

You gotta give us a number. How many parameters? How much money do you spend on the thing?

I'll give you a sweet bench score.

Okay, here we go. Give me a sweet bench score. How much? What is it? Let's go. There we go. Congratulations.

Thank you. Thank you. It's been a very, very exciting week. We're shipping like crazy A lot of stuff happening.

Yeah.

Don't know how you guys are even keeping up over here.

Yeah, it's amazing. It's. Yeah. I mean, we've been talking about streaming for seven hours a day. We'll get there eventually. Fortunately, three hours is like just enough to barely cover scratch the surface of what's going on in tech. Talk to me about where this fits into the rest of the landscape. There's a ton of stuff going on in Open in Anthropic's world from Claude Code different consumer models Open. There's so many different projects. How does this fit in?

Yeah, so this is our best model yet for just general capabilities and intelligence. Really, really is pushing the frontier on all sorts of agentic reasoning coding tasks. Back in May, we kind of hinted at the launch of Claude 4 that we want to get on a more continual release schedule with our upcoming models. And this is kind of our first step towards that vision of now being able to ship models faster and faster to our customers and end users.

Yeah. One of the narratives that's kind of stuck around with Claude for a long time is this idea of like the Vibes just being really good. And yeah, it does great on the benchmarks, but it's just like fun to talk to people like the way it talks. But at the same time, Anthropic's been fantastically successful in the business context. Is there an important overlap there? Like, are you hearing from. From business customers that the Vibes being good is driving bottom line results?

Well, yeah, more so how much do developers care about Vibes versus just Raw?

It seems like developers are the only ones that can tell that the Vibes are good. But I'm always interested in like, how does that actually translate to my bottom line? If I'm an enterprise SaaS company and I need to use an Anthropic API for something, am I happy with the Vibes or is that just kind of like a nice to have on top of?

Yeah, the Vibes are kind of. You can measure Vibes in a lot of different areas. Right. So if you're a developer, you're measuring Vibes in the coding domain and how long of a task can these models complete? Can you just let it go off agentically and work on your files? If you're creating an application, your enterprise that has end users and you're having those end users actually interact with the model, you want those personality vibes to be pretty stellar. Otherwise you're just going to give a bad experience to your customer. I think Claude has a really wide range of things there. And of course we're known for kind of that natural feeling personality and we've done a lot of character work there. We've some really great researchers on the team that focus on that. But then on the other side of the spectrum for the developers, for those folks that are building agents, that's where we really get into that other type of vibe, which is how long of a task horizon can these models operate on?

Is there a good benchmark for task horizon yet? We've heard baby AGI, 15 minute AGI, 20 minute AGI. We've seen a lot of people like string these things together. But like, in terms of like most consumer interactions, I think where most people hit the interface of an LLM, they feel like like 20 minutes is the kind of the upper bound of what the average AI user is experiencing. Can you tell talk to me about that?

Yeah, I mean, I do think LLMs right now have somewhat of like a jagged intelligence frontier where in some tasks of course, they spike more than others. For me personally, when I'm trying to assess that capability in a model, there's a couple places I look. One is especially coding benchmarks. These are really, really important because often it's the model trying to complete a PR end to end. So it needs to take a lot of actions, it needs to call a lot of tools and modify a lot of files. So things like swedbench are actually like good proxies in some degree to measuring that. There's also third party institutions that are doing this research right now. So one is called Meter, their model evaluation, threat research. And they have that really nice line goes up graph of like plotting out the models and how long of a task they can do compared to a human developer.

Sure.

And Claude has always been pushing the frontier on that. And I'm assuming once they get 4.1 up there, it'll be up and to the right as well.

Yeah, I mean we've seen like in terms of the spiky intelligence, like ARC AGI is like the main thing that people point to as like a weird valley of capability because it seems like it should be obvious and easy to do and yet it reveals something about the models. Are there any places in the coding world that are more specific where we're underperforming either just because we haven't focused on it. I'm thinking about like, I imagine that most models are better at Python than Fortran, but is that an outdated take? Is Fortran now just kind of like solved because somebody had Just got all the training data together and RL'd on Fortran and now we're good.

Yeah, I definitely think there's still probably. If you were to like take Suite Bench, for example, and you translate it into every coding language, I'm sure Python and JavaScript, TypeScript would be ahead of the other languages. But we are seeing, especially with the Cloud 4 models, that they're able to handle a lot more of those older languages or the languages that don't really appear as much in the training data to a much better degree. And that's through a combination of things from RL to just general architecture improvements. So we're kind of covering the bases with the models. But yeah, it definitely started in one way and now is expanding out.

What have reactions been to 4.1? I'm assuming a variety of people got access to it pre release. What are the areas that people are kind of most excited about?

Yeah, again, it's kind of those coding and agentic tasks have been really the star of the show here. What I think is interesting about that is that coding is kind of the proxy for allowing everything else. So if you think about how a model actually interacts with things on a computer, everything can be done through coding operations. So when we say coding, it's almost like a little disingenuous to just like narrow it to that domain. But some of our early customers that were playing around with 4.1 windsurf being a great example, in one of their benchmarks they showed that from Opus 4 to 4.1 showed roughly the same performance jump from Sonnet 3.7 to Sonnet 4. And this was like a real world junior developer task eval, so something that I definitely would pay attention to.

How are things going on the rate limit side? I've heard that like capacity is generally constrained for everyone, everywhere, all the time, because we don't have enough data centers. Obviously people are working on that, but I guess broad update on how things are going. But then, and more specifically, when you're talking to companies that are building on top of anthropic APIs, are there specific strategies that you recommend to just embrace the realities of the modern AI era and capacity constraints?

Yeah, I mean the rateless situation is something we're just continuing to iterate on. And of course we have very, very smart people. They're much smarter than I thinking about this problem in terms of building out compute and also working on making our inference just overall more efficient. Generally we want to provide the best experience we can to our customers. So Whether this is on Claude code or through the API, there's various things that we do, whether it's through our applied AI team helping our enterprise customers with their specific deployments or on CLAUDE code making sure that our rate limit system is fair and actually allows for people to utilize it as much as they can without rewarding people that might be abusing the system and detrimenting the other users. So it's really about kind of monitoring and keeping it consistent so we ensure great experiences for everyone that's trying to use Claude.

What about pricing? Is there a step up in costs associated with 4.1 versus 4.0? What does that look like?

Pricing is the exact same. We really do intend for this model to just be a drop in replacement for Opus 4. So if you're using Opus 4, you should just be able to cleanly switch over the model string and you're good to go.

That's awesome.

Yeah.

What are some of the weird use cases that you've seen for Claude code? I've talked to some people that are like, because coding is kind of like an abstraction over everything that a computer can do, they're coming to Claude code with tasks that don't that feel more like just general personal assistant agent stuff. But then it just writes a bunch of code. Is that real? Is that something that. It's more just like when you know, you know when people do those like beautiful artworks in Excel where they like this color every single cell as like pixels and it's like you're not, you're kind of abusing the tool here, but it's still impressive. Or is that actually like, you know, a glimpse into the future?

I think that is a glimpse into the future. There was a tweet I posted a few days ago, kind of asking the community for, hey, what's all the best non coding use cases you're using CLAUDE code for? And it got hundreds of replies and really the answers kind of were super wide ranging. Everything from like managing your own personal knowledge base, second brain on your computer, you know, maybe you have a ton of notes and text files to some folks are actually using it now for like video production. So we have a guy on our team that's uses Claude code and uses an open source library to create animations and things for all our product launches.

Oh, that's very cool.

Which is just absolutely amazing. I didn't even know that was possible. But it is hinting at this thing that it's like, well, if you can control code, you can really control anything that happens. On a computer?

Yeah.

Now we're moving it to this operating system abstraction almost and I think that's really the direction you're going to start to see Claude code heading in.

That's awesome. Anything else, Jordy?

I'm curious to get an update on. It seems like a lot of the companies that we talked to, we were talking with Dylan Field the day of the IPO and he was talking about updates they're making with mcp. What's going on in that realm, Any updates while you're here on that front or interesting use cases?

Yeah, I mean MCP has been absolutely just ripping lately. The community is awesome and it's really got to this point now where it's almost its own self sustaining thing where there's like meetups and gatherings that are being hosted completely outside of our facilitating and thankfully we get to participate in them. And that's just been super cool to see. I think MCP is going to be a large part of making sure this kind of agentic future goes well. So if you can spin up easy integrations and connections to any service or any product or any internal application, all of a sudden you kind of un hobble Claude to some degree and you give it access to that knowledge that it needs to actually go out and do those correct operations. So very excited about the team there and yeah, hopefully a lot more good stuff coming on the way there soon as well.

Awesome.

Very cool.

Well, congratulations to the whole team on the launch. It's a massive day. Thank you and love to have you back on soon. I'm sure they'll. I'm sure 4.2 will be right around the corner.

Oh yeah, a lot more coming soon. Yeah, stay tuned.

Have a good one.

Cheers.

Bye. Up next we have Scott Kapoor from formerly Andreessen Horowitz. He was in the OPM business, the other people's money business. Now he's the director of OPM for the US Government, the Office of Personnel Management. Welcome to the stream Scott. We are excited to talk to you. How you doing? How are you doing?

I'm doing great. How are you guys doing?

We're doing fantastic.

It's great to have you on the show.

We're in a very funny era where more folks from Silicon Valley have moved over to the government and every time they do I have to have them explain to me like I'm in the VC world what they do. I think I learned about the opm, like the entire office was a new term to me just a few years ago.

Explain the. Explain the government of personal management to me.

You mean to tell me that you guys don't know what OPM is? That is really disappointing. I'm shocked to hear.

I probably learned about it about a year ago.

Explain it like I'm a venture capitalist that's about to write a thread explaining it like I've always known about it

and I'm an expert in it.

Yeah, my wife asked me the same thing when I got appointed to the job. So I'm not surprised to hear that. Hey, so really quickly, what it is is we are the talent management organization for the government. So in simple, in our corporate VC terms, we would be the HR department basically for the company. So our job is like make sure we have the best talent. Make sure we have actual things like performance management standards, which by the way, we don't have, which we're working on. Make sure we have the ability to kind of understand the employee base through technology, which we don't have currently. But basically think of us in very simple terms as we would be the HR department inside any other traditional VC backed company.

And does this cut across all the other departments or are you like where the boundaries of your.

Yeah, so it's a hybrid is actually what it is. So basically. So like there's some stuff that we have exclusive province on. So like I'll just give you a sample example. Like the president puts out a hiring an executive order saying we want merit hiring to be the standard in government. Which you and I can, we can talk about that forever if you want. But basically so he says, look, I direct OPM to figure out like what are the standards that we need to do do cross government to make merit hiring a reality. So we will go put out a bunch of regulations and research it and say great, okay, now this is the law of the land for all the other agencies. This is what we expect you to do. And OPM will not formally approve and issue offer letters and stuff like that unless you guys do that. So that's what we do. But there are HR departments obviously in the different agencies. So think of it as like in a company you might have like centralized hr, but then you have like business partner HR that might sit in the sales organization or other stuff like that. And they may be kind of, you know, do things that are domain specific. But all the big things about like how do we recruit people, how do we train them, how do we actually manage them, you know, performance wise, we will provide guidance for.

Yeah, and sorry Jordy.

Yeah, I was just gonna say like getting into it what, what are your priorities? First 90 days, 180 the year. I'm sure there's you, you've like even any, any, you know, I'm assuming you're trying to bring in best practices that you can fix.

The government don't make mistakes.

Yeah, exactly. I just ask the model to do.

We're going to make, we're going to make some mistakes which is. Okay, that's part of the problem by the way, which is like we've been living in this environment where like you literally cannot make a mistake and so nobody actually tries anything. So yeah, really simply there's three big things we're trying to do. One is create a high performance culture in the talent. So in other words, like we, my simple goal is look, we want like the best and brightest people to take government jobs. But as you guys know, look, a players want to be around a players, they want to be in an environment where they're held accountable, where when people do well they actually get rewarded. We have a very like tenure based and conservative risk management based system here in the government which is like you get power and you get promotion by having more people in your organization and a bigger budget and the longer you spend time in government. So we've got to just flip that on its head and say look, we're going to ward things like innovation, we're going to reward. I've been using the term measured risk taking because look, we can't go just like literally throw stuff against the wall and see what works like we do in Silicon Valley. But anyways, that's thing number one. So goal is how to like all the smartest people in the country feel like coming to work for the government actually is great for them. They learn stuff and they'll get paid for that in the private sector. Number two is we've got to make operational efficiency like a core tenet of government. So again, I know this sounds crazy coming from the world that I know you and I came from, from, but today basically there's no incentive for efficiency. So again, you need to like make it into people's performance plans and say like your job every day is, are you doing a great service on the behalf of the American people and are you constantly like turning the crank to figure out how do we use technology, how do we you know, use AI to do stuff, how do we like reorg to do things Again because Spend less money. Spend less money. Right today again. Right. I mean it's the exact opposite incentive which is more money means more people, means more Power. Right. And so like everything we have to do is, yes, spend less money to deliver a better service. And so we've got a ton of like, technology initiatives that we can talk about there. And then the final thing we want to focus on is we've got to make like, we've got to anticipate what living in an AI first world looks like for government and we got to not be flat footed and realize that we have none of the talent we need and we don't even know what the jobs are. So this is, I think a huge opportunity, quite frankly, where I, I think we should work with the private sector and say, great, you guys understand what AI is going to do. Let's figure out ways where we can have information sharing, even like, quite frankly, swap employees back and forth, but find ways so that we don't wake up five years from now and realize there's all these new jobs that are being changed and, or augmented by AI. And the government is not like, you know, figuring out how to actually get that talent into the government.

Yeah, you mentioned spending less money. I want to know about the potential of spending more money. Is there, is, is there a world where we remove salary caps on government employees? Like you've seen this in Silicon Valley. There's not like, you know, obviously founders are very driven, but they have uncapped economic upside like the venture capitalists have uncapped economic upside in so many ways. The AI researchers that are getting poached, like it is just Moneyball at the end of the day for a lot of sectors of the economy. Is there a reason why the government is fundamentally structurally different or do you think that we just need to make a better pitch for civil service?

Yeah, I think it's a little bit of both. So, okay, so look, we're never going to solve, we're never going to solve like the ultimate like uncapped upside pay gap between the public and private sector. And look, that's just, you know, politically that would never work. You know, we're not going to, you know, like, you know, we're not going to have a Zuckerberg equivalent of like paying engineers a billion dollars a year. Right?

Yeah.

But we can do two things. One is we can change the compensation structure so that yes, like a, players actually get rewarded. So I'll give you a very simple example here. Everybody gets ranked 1 through 5 at the end of the year in their performance evaluations in government, five's the highest, one's the lowest. 70% of the people get ranked a four or five. Okay? Which means, like, they're awesome. They're doing outstanding work. 0.2% of the people get ranked a one or a two. Now, now, again, mind you, this is across a population of 2.4 million people, where at a minimum, you might expect a normal distribution, but, like, there's just no way that 70% of the people are above average. Right. Unless you're in Lake Wobegon, basically. So we got to solve that problem. And then if you solve that, then the incentive structure can follow it. Right? Because, again, a typical Government employee gets 0.5% of cash bonus at the end of the year. That's because, again, there are too many people highly ranked, and the delta between low and high is, like, you know, 50% or something. Right? So what I'd like to do is say you ought to have many fewer people ranked to four or five, and let's give those people, like, most of the bonus pool, for example. So we can't solve all the problems, but, like, we can solve that. And then your. Your other point's a really good one, which is we got to change the pitch. So, again, I'll give you a story here. When I first came in, one of my. One of the employees here said, the pitch that we use for government is job stability. Basically, like, that's the pitch. And I was like, I'm sorry to say, but, like, unfortunately, I think somebody's been lying to you because, like, there's no job in the world where we can guarantee job stability for people, even in the government. To me, the pitch has got to be, you can see things at a scale and solve really hard, complex problems. And, yes, like, you can, you know, do a public service as well, but we've got to get people excited about, like, you know, you know, putting people on the moon or all the things that, you know, guys like Elon do. You know, it's the whole, like, founder story of, like, what's the mission of the organization? The mission of the organization cannot be, we provide jobs to responsibility. So we've got to, like, tell that story. We got to go tell it on college campuses, and we got to go, like, show it. And look, people don't have to commit their life to being in government, but if you could come here for two years and work on really hard, really cool problems, and you could actually advance in the organization, because you're not tenure limited, but you actually are skills. You know? You know, you're awesome at skills. We should be able to promote you faster. Like, there's no reason why we can't compete for really smart people in that environment. And then again, go take that skill set and go work for Elon or go work for Zuckerberg and get paid a billion dollars a year after that, like, you can do both things. So we got to sell the story.

Yeah. I was talking to a friend who had some experience in China, and he said that the main difference that he noticed was that the really, really top performers over there just kind of got sucked into government work. And he was kind of framing it as like, it wasn't exactly optional for them. And I know that that's not on the table here. We, like, love freedom and choice, and

we kind of decided long to that we actually, like, democracy is actually a good thing. Right?

Yeah, of course. But I guess my question is, like. Is like, I know that, like, when the administration changes over, I mean, this happens every four years now, eight years most, there's a push to bring in new folks, and there is some recruiting that goes on, and there's like whisper networks of who's really talented, and let's make the pitch to them that maybe now is the time to go and serve your country. And a lot of people do swing at that pitch and they take it, and some of them do very well with that. But should it be more aggressive? Should recruiting be 10 times bigger in terms of just every talented founder, engineer, venture capitalist, anyone who's high agency, high intelligence, high EQ is at least hearing the pitchfork for where they would fit in in the US Government? Because I think a lot of people. I know a lot of people that got calls. I know a lot of people who are talented and didn't get calls, and I'm wondering if we should have reached them with something.

Yeah, it felt like at the beginning of this year and maybe the end of last year was just recruit. Doge was just dominating the recruiting.

It's a fantastic recruiting engine.

Yeah. Yeah, but I didn't see that. I didn't hear, like, oh, I have a fintech founder who, you know, they were great, but they got kind of clobbered and now, like, the IRS is calling them. Like, I didn't hear that story that often, for example.

Yeah. So, yeah, so let me try to just unpack that a little bit because. So, first of all, you're absolutely right. We should 100% do that. So there's. There's a problem we have today which we. Which we are working on fixing, which is today, believe it or not. You can actually. There are weird hiring procedures in the federal Government which makes it very hard in some cases literally to hire people based on their skill. Skill Assessment. Assessment. So I'll give you a great example. So people have gotten really good at. We put a job description up on this thing called USAjobs which is basically the website and people essentially tailor their resume to exactly the words that are in that job description and the filtering process puts them at the top of the list. But it's all self assessed stuff. We literally like you could hire an IT network administrator in the government today and not have a technical person interview that person to see do they know what HTTPs means basically. And the good news is we just. Part of it is because like people are worried about, okay, are those tests discriminatory? We actually just had a good legal ruling the other day that clears the path for this. But believe it or not, literally like we do not have skills based assessment for many jobs in the government. So the way to. So like it's just really hard, it's really hard for those people to come in. But you're absolutely right, which is look, the real solutions problem is we got to do both. We got to fix that piece and then we have to literally go tell the story like, like I don't think this is the solution. We're not going to do TV commercials like you know, the army and Navy and you know we need a few good men basically but we need something like that. We got to go tell the story. And you're absolutely right, which is, I would bet there are, I don't know, I bet there's thousands of data scientist jobs open across the government today. You as an employee, if you're interested in that, you should just be able to apply once and we should then send your resume to all thousand of those jobs. Like we don't even do that today basically. So like you literally have to go find out where those thousand jobs are. So there's all this stuff that, that again they're not bad people. It's just that the system has not been set up for that goal. The system has been really set up to say let's really be conservative, let's really be kind of, you know, careful on these things. And we just, we have to change that paradigm.

Yeah, it feels like we're fishing with a really large net. You know, you put up a big ad, we need a few good men and whoever gets caught in the net comes into the organization and we need to get some harpoons out and go find the really like laser focused people for the perfect job that we'll thrive.

Military. You know, it's been interesting. I think things have changed, but there was a period where military recruiting, to my knowledge, was, Was really, really tough. And that's still with a lot of, A lot of people that do end up joining, having been marketed to and kind of exposed to Army, Navy, Marine Corps, Air Force, since they were kids. Right. But nobody's getting nobody. Most, most Americans wouldn't know. They think opm, if anything, is other people's money, like you're saying.

Exactly.

And they wouldn't know it. And so how do you, how do you get somebody, like, even open to the idea? You know, a lot of kids today in high school, college, they know they want to work in tech. Nobody's going through those periods of life knowing they want to work in a specific organization or, or very little on. On the tech.

You're right. You're absolutely right. So look. Yeah, and we got, look, we got to just like have a presence on college campuses and be there just like Goldman Sachs is and just like Facebook is. And we got to go tell our story. Like, you know, you guys know this, but I used to work for a head of sales, one of my companies. And he. His famous thing was show it, sell it, hide it, keep it, basically. And right now we are hiding it, basically. And people find us because they are looking for stability as opposed to us finding people who are looking for an actual real interesting challenge.

It's an interesting time. Apparently CS grads are struggling to find roles. Exactly. You can see the variety of reasons for that. We just had someone on from Claude. Claude Code performs really well now. Maybe it's performing at the level of, level of a junior engineer, but the opportunities in government where you don't need to be, you're not out there competing with other foundation model labs.

Luke Ferretor, he is a programmer. From that massive Bloomberg article, it didn't seem like 90% of what he was doing was programming. It seemed like, yeah, he was able to scrape some data together and do some analysis to know how to make a decision, but a lot of it was just sending emails, having phone calls, calls, having meetings.

But Luke's also an example of somebody who's truly elite.

True.

In his category. And I'm talking about like the next like 10,000.

But I feel like if you're a new grad and you can program that gives you a superpower, that then you can also just be effective to be rigorous and first principle thinker in a meeting where you're just trying to decide how much Money should we spend on this thing?

Yeah.

Did you see, by the way, did you see the quote from the unnamed government source in that article about why they didn't, like, why they didn't want Luke? They're like, he, he's not qualified because he didn't go to college and he didn't have five years experience. Right. And that is exactly the problem. Right. All of our criteria for evaluating people are based upon credentialing, based on tenure. And this is where merit based hiring matters so much. Like to me, if you're Luke, I don't care if you're 18 years old and you can actually function at the level of somebody who like, you know, knows programming at a high level, let's pay you at that level, let's hire you at that level. And okay, like, if you need some help around the edges to like, you know, make sure you can sit in meetings, you know, with your shoes on, that's great. We can teach you that. Basically.

Yeah.

But we can't exclude people from the process because they don't have like, you know, a sheepskin that says, you know, they went to Stanford for four years. I mean, that's crazy.

Yeah, exactly.

How is your AI strategy forming? When people hear AI and government as citizens, they get scared. That sounds scary. If they hear. If you're working in the government and you hear AI, you're probably thinking, I don't want to lose my, my, my job. But, but clearly it should be able to be, you know, beneficial.

Big thing. It just feels like get every government employee access to an LLM. Because before any of the job displacement, any of the cyberpunk terminators, like, let them search the knowledge quickly, like, please. Anyway, what was your take?

Yeah, no, you're exactly right. So today on my government computer, if I want to do something on an LLM, I have to like, go to my personal computer to do it.

Right.

It's not good.

And how many government jobs are email jobs?

Right. Look, the privacy issues are real and we got to be talking to them. But like, there's, but there's, but so much of what the government does is already in the public domain. So let me give you a very simple example. So one of the things my team does, as I mentioned, is we develop like rules and regulations for, you know, let's say how, how you should do merit hiring in the government. Okay.

Yeah.

And the way the process works, which I won't bore you with, but basically, like, we put out a rule and then we have to invite public comment on it. And literally people submit comments. So we're doing a rule right now where we got 40,000 public comments on this rule. Okay? Some, a group of people in my team literally read all 40,000 of those comments and they write a written response to them and do it, you know, the old fashioned way. Now I'm not going to say like, let's just have, let's just get rid of all the people and have AI do that. But there's no question in my mind that we can get a 10 to 15% easy efficiency advantage if we actually had a very simple LLM that we, we can train on totally public data. I'm not talking about private data. All that regulation stuff is public help people manage that process. But we have to start with that. What I'm doing here in OPM is I'm actually going to have somebody come in from the outside and do the full landscape of what's happening in customer support and what's happening in HR organizations and what are all the use cases out there. Then what I'm doing is just telling my team, look, now your job is to go back and find what are the small winners wins we can make on little use cases. And again, I'm not asking you to like, you know, get rid of 100% of your people, but like you need 10 more heads and you need to find some place to get 10% more productivity. We ought to be able to do that within our current budget without actually having to, you know, add headcount. So we just got to start with little baby stuff that doesn't scare people, get them educated. You're exactly right. Everybody should have, you know, an LLM on their desktop and then we can tackle the hard problems, which is, okay, are we going to put confidential government data in them and do we to need them air gapped and all that crazy stuff. But like we don't even need to do that right now. We just need to like educate people and then come up with use cases that are based on like literally public data. With human.

Is the, does the federal workforce have a like an aging problem? You know, we'll talk with CEOs on this show or investors that say, you know, the majority of factory owner operators in the country are going to retire within the next five to 10 years. Right. That becomes concerning because there's a lot of just like general know how and process that could just kind of get lost or evaporated. Is that a challenge that you're facing in terms of, you know, people that have been in the government for 30 plus years and are, and are getting to the point where they're ready to retire.

Yeah. If you look at the demographics of the government, I don't know the exact number, but there's no question, like the government is, is very skewed towards people who are kind of later in their career. And again, I think this is a problem that we've had, which is we haven't figured out a way to actually get people in at earlier stages in their career because we've got all these impediments that I talked about that make it hard for you, if you're a recent Stanford grad or whatever, to be able to get a job here. So, yes, we have to solve that problem. Look, I mean, sure, there's going to be knowledge that walks out the door. Look, I'm more worried about the long term thing, which is do we have a steady pipeline of really smart people who will come here and then we can solve that aging problem by just, you know, over time kind of changing the demographics. But yeah, like, I don't think, I'm not worried. Like, there's a cliff here where, you know, 10 years from now, all the experienced people walk out the door. But I do think we have to have like a demographic and a set of hiring practices that allows us to actually kind of, you know, build a funnel from the very bottom of folks.

Yeah, it'd be cool. I remember maybe in 2012, like teach for America was really popular and obviously that was like non governmental, but like a lot with this idea of like a tour of rough service and there was code for America and you know, it's like, cut out the middleman and just go straight for America, like work for the government.

I love that. Yeah.

You know, great culturally, if it was like, yeah, somebody. So. Yeah, because now like, I feel like if you did four years just in civil service and then you jump into Silicon Valley, it's kind of like a weird track, but like it shouldn't be. It should be completely normalized.

Yeah. A long time ago, right there. And this is not the perfect analogy, but there used to be something called like the Civilization Civilian Conservation Corps, which was exactly that. Right. It was like people came right out of school, they did some heavy labor for a while and then they went to the private sector. So, yeah, like, we ought to do this. So, like, what I would love to do is I would love a program where we say, you know what, take all the smartest people, have them come here for two years, by the way, if we can do this. Let's forgive your. Let's forgive some student debt as part of that, right? So like let's actually have a real trade off, which is you do public service and we'll give you some financial compensation. And oh, by the way, I want to work with the private sector and say, you know what, what? We're going to get a private sector employer to guarantee you a job when you finish your two years here. And they might even give you full credit for those two years. So you come in as a third year in that and like just work on that stuff, right? So you know, that's what we need to do. And look, I've been using this term that's terrible that my kids joke at, which is make government cool again, which is magaca if you pronounce it out loud. My marketing team, who's sitting here next

to me off camera, but doesn't run off the tongue.

Doesn't really.

Yeah, it's not, it's not the greatest acronym but like that's what we have to do. Like we have to make civil service like super exciting. And the good news is like, we've got no shortage of like moonshots now, right? So like AI, right? Like how do we transform the government with AI? That's a great moonshot. Let's go do that. But we need like a, you know, Apollo mission, like moonshot, which I think the president has given people with AI and we got to go tell that story. And you know, if we can do that, then I think like we're in a totally different situation.

Are you going to be visiting college campuses for career fairs at all? Pounding the pavement?

I would love to. Look, you all know this having been in the Valley. Look, if you're in the Valley, 99% of your job is recruiting, basically. Like that is like probably the most important thing that any manager does. And yeah, like, I don't think any of us is beneath that. We got to go sell. So yeah, I'd love to go to campuses. I'd also. Look, I want to. We've been talking about campuses. I also want to make clear though, so one of the priorities the person has, which I totally agree with, is we shouldn't use credentialing as a shortcut for this stuff. So look, I don't care if you went to college or not. If you have the skills to do this job, like, we got to go find you too. Look, college, college campuses are nice aggregation points and make it more efficient. But like we need to go find anybody who has a, you know, technical degree or not a technical degree or a trade degree or anybody who's just really smart and capable. And go find those people. And we hire them not because they, you know, have a, you know, diploma, but because they actually can contribute to

the workforce or even like experience at a startup. Like, they've been there for a couple of years, they vested, they run to the next thing, go do a tour in the government.

Sounds good.

Yeah.

Last question. Have you had any pleasant surprises since starting your job? Anything that you're like, oh, that's actually run pretty well?

Yeah, you know, look, I'll be out. So to be totally honest, look, there are my pleasant surprise, which is, I don't think it's surprised is look, there are very good people here who are, who really care about what they're doing. So look, everybody in the government here, there is a serious element of public service and they all take it very seriously and believe it, and it's incredibly noteworthy. What I really think is, look, I think the system has failed them, which is, look, as leaders and managers, we have created a system where we've told them, do not ever make a mistake. Do not ever risk innovating, because we don't. Look, you guys know the Valley, right? In the Valley, we always talk about, look, we're looking for uncapped upside on stuff.

Yeah, you get fired for not taking the risk.

That's exactly right. There is no value today in, in maximizing for uncapped upside if that means you also take an extra 5% of downside risk. And again, look, I want to be totally clear. We can't be cavalier. You know, we're dealing with people's, you know, Social Security or we're dealing with national security. So we can't just, you know, literally throw caution in the wind, but we can accept that there are some things where we may not get them 100% right, and then we'll fix them when we do. And we have to a culture to do that. So that to me has been again, the very positive upside surprise, which is. And which I hope will prove true, which is if we can change the incentive system. I think you have really good people who will do what the incentive system incents them to do, basically. But right now we just, we have an incentive system that in my mind at least, kind of encourages behavior that just is not, you know, efficiency maximizing, is not innovation maximizing and, you know, is just outdated. I think in a world where, you know, we know technology and the needs of the government are Going to change very rapidly.

We need to be an innovation. Maxing. Let's do it. I love it. Thank you so much for joining.

Thank you for serving our country and rallying so many smart people to join you.

And thanks for breaking it down for us. This is very helpful. Thank you so much.

Appreciate the time. You take care. Bye.

Cheers. Bye. We need a Luke Ferretor for the CIA. We need to send Luke Ferrator to North Korea, infiltrate Pyongyang, get behind enemy lines and turn it into a capitalist utopia. Make South Korea look like a complete blackout by comparison. You've seen that map of the North Korea is dark and South Korea is super bright. More lights in Pyongyang than all of South Korea combined. Luke, fair tour on the front lines. We'll get it done.

This is breaking in real time. So John actually hit up Peter Salas over at Discord. HR apparently just threw a note on. Peter Salas just posted guysvpn. Wtf? John Exe. I think I'm in trouble. HR just threw this on my calendar. That's Peter and HR discuss TVPN issue.

Wait, is this real?

No, I think he's joking. But very good stuff.

I love it. That's amazing. Thank you for sharing that.

Peter, come on the show. We're gonna do a. We're gonna figure out your cloud. Your cloud.

We'll get you sorted out.

We're gonna have people live bidding.

Yeah, yeah, yeah. We should have three. We should be. Shark Tank. He's the shark. We have three hyperscaler cloud SDRs. Come on and pitch. Okay, this is what we can bring to you. This is what we're asking. We're asking for. We got a hundred thousand H.100.

It's an auction for who can deliver the lowest price.

Exactly, exactly. Anyway, we have our next guest. In the temple of technology, we have Kyle from Contrary. How you doing, Kyle? Good to see you.

What's going on?

Welcome to the stream.

How's it going, guys?

What's the new in your world? Break it down for us.

Well, we're just. We're just launching our latest deep dive from Contrary Research. Very cool. So for folks who don't know, Contrary Research is our private markets research database we launched a couple years ago. Contrary is a venture fund, but our focus is on talent and on research. So finding the best ideas, best people, bringing them together. And so Contrary Research has published research on 500 different companies. I think we've got most of your sponsors on the list.

This.

So we're getting. We're Working our way down. But we just published our latest deep dive on building an American tsmc. So tldr the piece is the idea that we're completely dependent on Taiwan for 90 plus percent of, of advanced semiconductors and it's probably the dumbest bottleneck that we could possibly be in. And it feels like we're basically just hoping that it doesn't become a problem when it could become the most significant geopolitical flashpoint and effectively lead to World War iii. And so it feels like there is something we should do about it it and, and so we kind of go through the options of do we build it from scratch, do we borrow it from tsmc, do we try and buy it from, from some willing sellers?

It seems consensus that intel is not the American TSMC is tsmc. The American TSMC is Samsung the American tsmc. We've seen a lot of progress from both of those companies. Elon doing a big deal with Samsung. TSMC obviously seeing great results out in Arizona. What's your take on just, just porting or expanding the current set of fab companies that are doing quite well?

Our biggest takeaway from doing the research is that a little bit that the ASMC is more of a mindset than a specific company. It's an ecosystem that we have to build a lot of different aspects of this. There's a ton of startups that are building a lot of advanced stuff in chip design and using AI in that TSMC is pouring 165 billion into the US more so, so there's a ton of things that we can take advantage of. The biggest limitation is that when you try and build a lot of this stuff from scratch, you just don't get there quickly enough for it to make a difference. Right. There's a bunch of stuff like the folks at Anduril and they have this idea sort of internally of, of China 2027 where it's this idea of, you know, if, if China's going to invade Taiwan, it's probably going to happen over the next, you know, call it four or five years. Xi has talked about 2027 and specifically so this is an urgency thing. This is not a long term bet. And so the question is how do we get to scale where, if, if China was to take Taiwan tomorrow, is there something that we could do to have some capacity here? The unfortunate reality is that the startup ecosystem, as great as it is and as much as it can benefit us in the long run, it's not going to get there quick enough. As much benefit as we get from TSMC partnering a lot of the results they're having in, in, in Arizona. There's a huge cultural blowback in Taiwan because they have this Silicon shield where they think of our dependence on them as their protection from China. And so yes, TSMC wants to pour a bunch of resources here, but whether we get those sort of leading edge nodes that allow us to compete for things like AGI and to really compete with China, that is a much longer battle. And so despite the fact that intel is, is struggling is it's basically sending up emergency flares. And you guys talked about it on the show basically in their last quarterly earnings. They talked about, you know, we're going to do our best and if we don't get material customers, it may not be economical for us to continue to compete in leading edge nodes, which is going to be a huge hit for the US to stay competitive. And so our thesis in the piece is that we basically have to take intel as our only hope of getting to scale quickly enough. Intel's not going to do it on their own. There's a bunch of stuff that we have to do to make that possible.

Yeah. So what's the biggest request from TSMC or Taiwan? Like should we be pulling the, hey, we'll invest alongside you, we'll subsidize, we'll give you tax cuts to build the second, the third, the fourth fab in America or should we be more focused on, let's commit more defense resources, more government spending to Taiwan to create, you know, an American shield that's independent of the Silicon Shield or maybe both.

Yeah, I mean there's definitely, when you talk to all of the major defense companies, Palmer Lechi has a great line where he talks about turning Taiwan into a prickly porcupine that people don't want to step on. That is absolutely priority number one to make them, to give them all the capabilities that they need. And, and the folks at Andrew are on the ground in Taiwan all the time. So that's a huge component of sharpening the partnership. I also think that you need to emphasize that American companies need to be, the government needs to incentivize American companies to be purchasing American made semiconductors as much as possible. So as you reshore more of this stuff to whether it's TSMC efforts, whether we literally nationalize intel and take it and take the Foundry business private. Right. Like Dylan Patel, who you guys have had on the show and is an absolute rock star, he has made it abundantly clear that the survival of Intel Foundry is is critical to America's economic and technological dominance. And so we have to take that seriously as well. And there's a bunch of incentives that we can build in terms of making, you know, getting people access to semiconductors that are made by intel in the US by TSMC in the US we have to incentivize people to be using our own ecosystem so that we get the reps we need to get as as far away from dependence on Taiwan as possible.

Do you think that Lip Bhutan is the right leader for this transition for Intel? It seems like they need to, with broader support, reinvent themselves. And yet hearing Lip Bhutan on earnings calls and just talking through it just feels like cut after cut.

He's good at firing people, but is he really good at firing?

I haven't been, I haven't been inspired by. He's definitely not carp on the mic. He's not a inspiring people. So I'm curious.

Karp also has like 1,000 employees and I'm pretty sure Libbuton has like a hundred thousand employees or something. Yeah, they.

So intel has more employees than TSMC and Nvidia combined.

Yeah.

So he's got, he's got plenty of people that he can fire. The biggest thing that is compelling about intel is that they are already in this process of cultural change. Right. You look at that, I mean it's back to 2005 was the first time they had a CEO who wasn't an engineer back by trade. And basically they went through 15 years of financialization. Like it was literally the Jack Welch playbook of just dumping money into stock buybacks and robbing R and D for, for decades. You know, those CEOs were the ones that put them on the, on the path, sort of stumbling, losing their lead. So like even with Gelsinger, like that transition is already in its way. Like putting engineer. They talk about bringing the nerds back and that transition is already in its way, which is important. I think the cultural leadership that you should be paying more attention to is the leadership level at Intel Foundry. Specifically. You think about Intel's two core businesses. You have intel products, Intel Foundry. Intel Foundry has had four different leaders over the last three years. Like some of them lasting no more than two months. Right. And what was compelling this idea that like you, you can't, you can have this sort of within a division leader who can be really inspirational. I think the folks at Waymo, they have a co CEO set up, but it's their former head of policy and then their former cto. You have the Technology you have the policy like that's a great duo for sort of Waymo setup something at Intel Foundry that could be similar, could be really compelling. The thing that's the biggest concern for me is that the first person they had once they started breaking out Intel Foundry into a separate P and L, the first CEO that, the first leader of Intel Foundry that they had, they called him the president of Intel Foundry. He reported directly to Gelsinger. Four leaders later, it's now this person is the general manager of Intel Foundry. They're also the chief global supply chain officer and the chief technology officer of Intel's core business. Meanwhile, like Intel Products has its own dedicated CEO with the title of CEO. I think the biggest problem is not necessarily even lbuton, but it's more about are we actually acknowledging that that Intel Foundry needs to be a growth engine that you can invest in to be able to build back dominance? And that's absolutely not how they treat it was.

I feel like earlier this year there was a rumor that Elon was kicking the tires on Intel. How real was that? Did he kick the tire And I don't want it.

It was the PJ tracking. That was how they all.

Yeah, but it. But they were all in Marlon. The PJ tracking felt like a bit silly because everybody was in Mar A La.

Yeah, everyone was there.

That's right. You can. You could spin probably a lot of compelling narratives based on all of the people who were there at the same time.

Right?

Yeah. In terms of like what is actually sort of official. The two things that you know for sure are there was talks that that TSMC was going to acquire Intel's Foundry business. Their board flatly denied that. That wasn't true at all. Then there was talks that they might invest heavily and run a joint venture where they take over operations of. Of Intel's Foundry business, even if they're not buying it outright. And what's funny is that they did not deny that outright. They refused to comment. And so the general census of folks

is that was a conversation that was active.

Yeah, that makes sense. How much of the. The race for American semiconductors is driven by the question of like founder mode. Just that abstract question of, you know, do we need Elon in the seat leading. He said he was going to be walking the floor at Samsung. Obviously, like the founder mode pattern has seemed to work in so many stuck kind of stagnating worlds like rocketry, electric cars or Elon's gotten in and kind of jarred things loose. But. But is that. Is that Something that we, that we should be looking out for or optimizing for 100%.

I mean when you contrast Lipu versus Jensen, it's like night and day difference. Right. You do not have visionary leaders in chip manufacturing in the US because we don't do it anymore. Like it's not a fundamental part of who we do, of what we do. There's not a core DNA there. And so do you need somebody who is that visionary leader? Absolutely. And does intel have any of that DNA? No. And so when you think about what needs to change, I think our thesis and takeaway after doing six months of research and drilling into all of this stuff is that you, you cannot ignore the entire ecosystem and that leader, that, that visionary leader role is absolutely critical. And that is an unanswered question. Like we don't have that. Like we don't have an. You know, somebody retweeted our post today and said we just need an Elon Musk like you know, Herculean act of God to be able to make this possible. And like the takeaway is accurate. The how to do that is much more difficult.

Yeah, it can't be manufactured but I mean green shoots all over the place. Lots of cause for optimism.

But so hopefully the piece starts a conversation can be a catalyst for change. What are you hoping to see out of like the immediately next quarter for intel to get on the right track?

The biggest opportunity is for intel to stop treating Intel Foundry like it is an ugly stepchild. Like it is this like embarrassing accident that they happen to have and they're trying to, to distract people over this other thing or dress it up like it's this fancy thing. And the biggest problem is, and this goes back to. This is a great conversation I've heard a couple of folks have. They talk about the. I think it was Buco Capital talking about like the greatest thing that Elon Musk has built. Independent even, Even thinking about Tesla Space X. Everything it is the investor base at Tesla is, it's got to be the most incredible investor base any public company has ever had. To let him do what he's doing and to have the vision. And everything intel is, is just smattered with what Palmer would call Wall street weenies. Is everybody just thinking about it is how can we optimize this thing as effectively as possible. And it's like that is not how you build the future nor is it how you build American dominance. And so really you need that investor based turnover and it feels like that comes from narrative where if you're telling the story of Intel Foundry. We can get a visionary leader, we can have this opportunity. They're already active scale, they have a lot of the technology they have sort of caught back up in many ways. They're still failing operationally pretty miserably. And so the opportunity is like tell that story and get an investor base that is stoked to be investing in the asmc.

Well, thank you so much for joining. It's a pleasure catching up. We'll talk to you soon. Have a good rest of you.

Thanks for having me guys.

Thanks for coming on. Kyle, great work.

Speaking of Anduril, our next guest works for Anduril.

There we go.

And she's the general manager of Anduril RMS and we're excited to talk to her about the new rocket motor facility. But we'll let her break it down for us. Welcome to the stream. How are you doing? We have one minute while we keep clapping, John. Just keep clapping, just keep clapping. Welcome to the stream. How are you doing?

What's happening?

Oh, it's a really good day. Just committed. Finished a ribbon cutting with our new facility in coastal Mississippi with Chairman wicker about 10 minutes ago. So good day so far.

Fantastic. Tell us more about this facility. What are you making? How big is the facility?

How big were the 4rd?

How big were the cut?

You know, the scissors were not as big as I was expecting. I mean they were big, but they weren't like the economically big.

No.

We just finished the full rate production facility for kind of what the 2020s can do for automated robotic full rate production of solid rocket motors. We have a 450 acre facility in coastal Mississippi, about nine buildings. And when we moved in here, it was a mult bulk facility in 2020. And we saw the good bones it had and the ability of what it could do. So we took one of the buildings on the far south end of the campus, nearly quadrupled the footprint, got world class engineers, specifically from the automotive industry to really look at what solid rocket motor production could look like in the 2020s with robotics automation and really putting robotics everywhere where there's a safety critical or a quality critical component.

Speaking of robotics, what's behind you?

You that is one of two robots that are involved in the casting assembly. So we go through a mixing of solid rocket propellant and then you have to cast it where you, you're essentially filling a mold like you were solid rocket motors. Is a lot like making a cake. You, you mix together dry ingredients, wet ingredients, and then you pour them in a mold and you cure in an oven. And so this is the robots that's used for the cat casting process.

Can you give us a view into the shape of the company? I know Adranos was the rocket motor company that was acquired, but it sounds like you've hired a lot of people. How big is the organization now?

So you are right, we started as Adranos. I was one of the two co founders of Adranos back in 2015 with my co founder Chris Stoker and we grew that into about a 40 person company at the time of acquisition by Anduril who was previous to that had been one of our customers. So a little bit of a vertical integration play. We have since grown that organization to just about 200 people. Today for Anduril Rocket Motor Systems, I sit as the vice president and general manager of that business line.

Very cool.

What did you see back in 2015 when you started the original company that kind of caused you to take on the mission? It felt like broadly Silicon Valley started kind of being aware of rocket motor like supply chain challenges. I want to say like in 2022. But you clearly saw it way, way ahead.

Yes, this is all very much before all of the, I guess need that has risen for solid rocket motor production enhancements. Really back in 2013, 2015, I had developed a brand new formulation called Alatech that can bring more performance to the industry. I saw a need to commercialize it and naively thought that I would be able to progress it to a spot where the two kind of incumbent providers of solid rocket motors would fight over themselves to get access to the ip. But what I quickly realized is the desirement for them to innovate and get these new propellants was not there. And the only way I would ever be able to see full adoption and utilization of that product was if I was my own customer, if I was the solid rocket motor provider. And a big piece of my PhD at Purdue was looking at innovative ways to process energetic materials. New ways of mixing new ways of doing things. So I was able to leverage those learns those lessons along with taking what is state of the art for kind of automation and and different manufacturing processes, put them all together to create what my vision was for what solid rock and mortar production could look like in the 2000s.

Very cool.

And we really were kind of ahead

of all of the other suppliers that have joined into that market.

Amazing. Well, thank you so much for calling in on such a busy day. Congratulations on the massive launch and good luck with the next Phase. I'm sure you're going to be making a lot of products very soon.

Yeah. And hopefully copy. I don't know. Last question I had is this is the idea for this new facility to be a model that you would copy and paste to scale production or is this going to be able to kind of take, take you guys all the way?

No, that's exactly the purpose of what we are wanting this facility to do. It's really looking at a manufacturing line that is agnostic to what goes through it. So we can do anything From a small 2 inch diameter motor to something that's really big, up to 32 inches in diameter. And we are agnostic in the manufacturing process but really focusing on kind of the one piece flow manufacturing practices. We can take this facility and copy paste it elsewhere. On our 450 acres I could fit another two full rate production facilities. Each one if you look at a mid scale tactical motor like say 9 inches diameter, we can do about 6,000 of those a year out of one facility. So if I place another two of those here, you know that's just a linear increase in production without having to have a brand new giant explosives campus. Then alternatively I can take this small footprint agile manufacturing process and place it strategically for integration purposes with our different customers both domestically and abroad. And we are on the record looking at you know, multiple places for that including Australia through the, the new Guided Weapons enhanced ordinance program.

Amazing. Well, thank you so much for joining the update. Have a great day. We'll talk to you soon.

Thank you.

Bye. Up next we have Sean Henry from Stord. We ran into him in New York City. Got a chance to sit down.

Staying at the same hotel?

Yeah. You're staying at the same hotel. We just said, well we had breakfast. He just sat there and listen to us.

Yeah, he was walking by, he was busy. We said hey sit down, sit down.

We gotta talk about supply chain tariffs de minimis exemption. We will welcome him to the stream. How you doing?

Great to be here.

Thanks for having me guys.

Good to see you.

It's great to see you.

Last week where'd you land? Where are you now?

Back home in Atlanta. No longer having fun in New York having some breakfast with you guys?

Yeah, very nice. And businesses good overall crushing breakfast I should add. I guess it was great breakfast company.

We were crushing breakfast. It didn't feel like you were crashing because we, you, you were, you were probably. It was a busy day for us.

It was a busy day forever.

You were probably even busier. And we, we, we Requested that you hang with us. It was fun.

Yeah.

And shared some insights on, on all the different things happening in your world.

So, yeah, give me the update on, on tariffs, the de minimis exemption, where things, how we kind of got here and then where we are now and then we'll get into where we're going next.

Yeah, absolutely. So I guess background there's two types of core tariffs. One is the general commercial. Something's coming into a U.S. port and you're charging a tariff based on the commercial value of the goods at that time. And that's largely what was rolled out at Liberation Day a few months back, was all of these tariffs, particularly around large imports. But there's a separate category that had a big action last week, which is de minimis exemption, which is really started in the early 1900s, mostly for international travelers. Think, hey, I want to send a package back to my family. Well, there's these rules created that as long as that package is under $800 and in these categories, you don't pay any tariffs. Well, what's happened the last few decades is if I want to store my inventory locally in the US Meaning bring it through a port, hold it in the US now, ship it locally. If I'm say let's paying $2 for warehousing, $7 for delivery, and $5 for the tariff to get it in, I'm paying $14 to ship that locally. But if I never bring it into the US If I just keep it in China, keep it in Europe, put it in Mexico, Canada, and instead I'm maybe paying $1 for local warehousing and labor, a more expensive package like nine, ten dollars internationally. But I never pay the tariff. I'm not comparing $14 to ship my unit through the US versus maybe $10 to ship it from international. That's a big difference on your average product. And so Trump and the administration had formerly said that they've been waging more on this since even before Election Day, but they formally said it was going to go away in 2027. So since the start of the year, brands thought they had maybe two years to get ready for this. And all of a sudden last week you saw announced on Wednesday, that's going away on August 29th. And so now brands are rapidly trying to move inventory into the US Yeah.

And is it apocryphal to say that this all, like Temu and Shein, like kind of started this trend, or did they just merely capitalize on it? Were there other, other companies that kind of found this? It's not necessarily a loophole, it's more just like an opportunity that if you exploit it to the max, you can scale up multi billion dollar business using it.

Nobody exploited it to the same degree.

Yeah, I wouldn't call these other players, Shein and Temu just like, you know, the tourist example. It's like they're, they're shipping billions of dollars through this platform. But are they the, are they the real progenitors of the idea?

They've definitely exploited it at a greater scale than anyone else.

Sure.

But what's crazy is that if you look at the top 100, let's say Shopify businesses over 50 of those roughly was the estimate are shipping out of Mexico into the US this is very prevalent across brands of all sizes, particularly very large in the apparel category. And just some quick numbers. Last year alone there was an estimated $64 billion of commerce that entered the US through the de minimis exemption, which is roughly 10 billion of missed tariffs and roughly 4 to 5 billion of missed US logistics infrastructure revenue. And so, so broadly speaking logistics, US oriented companies like ourselves are very excited by this because it's very hard to compete with Chinese and Mexican and other labor, real estate and no tariff versus local fast shipping.

So yeah, I mean this sounds like a huge tailwind for your business, but what are your customers actually coming to you with? Question wise, it sounds like there's a very quick shift on the horizon around the de minimis exemption. So they're coming to you and saying hey, I need to move all my inventory from Mexico or China or Taiwan or Vietnam into Atlanta or somewhere else as soon as possible. Is that basically what's happening?

Exactly, because. Well one, I think it's important to note that when you look at tariffs, a lot of people apply it linearly. Okay, a 10, 20, 30% tariff, product cost is going to go up 10, 20, 30%. That's on the commercial value of the individual units. And so much of the cost is both margin for the brand advertising, local US logistics. And so these tariffs don't translate one to one for how it's going to impact the consumer. But at the same time we're not necessarily talking to the brands as much about changing manufacturing origin to get away from those tariffs. Because the impact can often be absorbed for these mid market brands who have real profits, real growth. What we're talking to them about is back to that math I gave of if you were spending $10 to ship it internationally, avoiding a tariff, but you're doing a one to two week shipment So a slow delivery cheaper and it was you could do two, three day delivery in the US but maybe $14 all in with the tariffs. Well all of a sudden if you're now spending or I said 11 at first with the tariffs or in the US all of a sudden now if you're going to jump all the way to 14, it doesn't make sense to pay more and deliver in two to three weeks cheaper. But now all of a sudden there's this massive influx of volume where all these brands are saying how fast can you get me live in the U.S. i'm in Mexico, I'm in Canada, I'm in Europe. And the problem is with outdated technology most logistics businesses are going to tell them four to six months and or with the influx of volume a lot of capacity is becoming challenged again like we saw all the way back in 2020 and 2021 with such shortages of warehouse capacity. It's not that there's not leases on the market, it's that ready to go warehousing capacity with all the infrastructure, technology and labor, that capacity is rapidly getting gobbled up. And so we actually had a case study on our website from exactly what's going on where True Classic tees, great example. Massive many hundred million dollar T shirt retailer wearing one right now. Earlier this year they were stuck in Mexico and the Mexican president first signed away their exact exception which was if you first bring it into Mexico and it's here for less than 180 days because we know you're going to ship it into the us you also never pay our tariffs but please pay our labor, our real estate, etc. Well, they first signed that away. There's since been a pause put on it but we already migrated customers. Take someone like True Classic they were often told we can get you live in the US in six months. That's insane cost that they're going to face for those six months relatively we got them live in 18 days from meeting us to go live. And that's all because we're really the cloud in comparison.

Makes sense. Last question from me, how solid are we? I mean when we went into Liberation Day a lot of it was just uncertainty from the business community. How confident whether or not it's good or bad for your business, how confident are we that we will be at least on the same course for whether it's good or bad for the next few years, for the next 12 months? Like how much confidence do people have that these set this set of rules that are in place right now? Will stick.

Personally, I think the confidence is going up. I think this is one of the last exemptions people were curious about. While there are still a few negotiations going on with specific countries, the kind of broad general tariff, the reciprocal tariff and even key countries have already been been set and frankly I tend to believe the administration is liking the results. So far we've taken in over 150 billion of incremental revenue since Liberation Day just via tariffs alone. There was a GDP positive or, sorry, balanced budget positive month as a result of these tariffs and more. And so I don't think we're going to change course and go backwards. And I think some of the logic is while it may drive a slight increase in cost on the front end, you have to wonder what it's going to do on the back end when there is more production in the us more middle and lower class jobs that have been competing with Mexico, China, these other countries labor on logistics and ultimately if they're able to use tariffs to impact other taxation on citizens, leaves me thinking the administration is going to stay course on this.

Makes sense. Awesome. Well, congratulations on the growth and it seems like a lot of these decisions are going your way. So, so happy to have you on Team America building infrastructure and everything that we need to bring products to market in the United States. So thank you so much for joining.

Great to see you Sean.

We'll talk to you soon.

Absolutely.

Thank you.

Have a good rest of your day.

We'll talk to you soon.

Cheers.

Bye.

Up next we have Andy from 2 cents. We've highlighted his posts many, many times on the show. Excited to meet him and chat about the business and his day job outside of of posting because he's built a very, very fun social network where username is your net worth. Andy, welcome to the stream. How are you doing?

Great to be here. Thanks for having me.

Are you in a secure location? You've probably upset a lot of people with what you've built. But why?

It's opt in.

I guess it's opt in but it just feels like something people would push back on. Right. You've gotten pushback for that, right?

To a degree. People have been a lot more positive about it than I thought they would be. Actually. I think what happened is I tapped into a latent anxiety that everyone actually had and it seems sort of like people are like thank God someone's doing

this so that I don't have to

worry about it anymore.

So is it anonymous? It's just your net worth.

Yeah, yeah. Quickly explain the.

Explain.

Explain the product for people that haven't seen it. I think a lot of people have probably seen it without realizing it. They've maybe seen screenshots of like polls or comments or things like that, which I think are fantastic. Fascinating. But yeah, explain it for the audience.

Yeah. So we're building an anonymous social network where your username is your net worth. The main idea is to provide a verified place to have financial conversations that are difficult to have in person or with other people around you because of the inherent private nature of finance. And so we're collecting net worth information from bank accounts, brokerages, crypto wallets, and then later we're also going to do real estate and all kinds of other financial assets. And we're trying to calculate this one big number that we can assign to everyone and allow you to speak from your position, basically.

What are some of the key learnings, insights? I mean I think the polling function where people can. Users can ask a question and then see like, you know, let's say it's a yes or no answer. You can see how much net worth is like backing up the results. And so I feel like it exposes like, like, okay, what side is wealth on on this specific issue? But I'm sure you've had a bunch of other interesting learnings.

I think probably the most interesting thing is when I set out to build this, I thought it would be inherently a place for financial discussion where people would talk about tax strategies and arbs and alpha and stuff like that. And it's really become more of a general place to hang out. And what I figured out is actually every conversation is a financial conversation and your net worth and the experiences that have led you to that number sort of dictate the way that you are going to look at other things as well. And even if you're talking about something that's kind of boring or weird, that number is still relevant in that conversation even if you don't bring it up every time you talk to someone.

Totally.

I feel like there's a lot of anonymous social networks that have gotten problems with bullying and stuff and just toxic communities because of the anonymity. Have you run into any problems? Are you fighting it in any particular ways or do you think it like,

yeah, do people ever come on there and try to eat the rich?

Just net worth negative $2,000.

We are actually in an incredible position as a social network because our moderation strategy is to just ban your bank account. And so if you break the rules on the platform, we can just block out the Accounts that you've connected with.

That's so interesting because normally on like Reddit, you could have somebody that's angry and then they can just create, they could be getting banned and just recreate accounts.

How would you create new account with a huge. You have to set up a new bank account, transfer all your money over there. Like that takes a long time.

And if you do that enough times, eventually you will make other people angry who will ask you why you're making so many bank accounts and we don't

even have to worry about it.

That's very funny.

That's wild.

How's growth been? What's the news? How's. Are you monetizing yet? I can imagine.

I can see. I can see. You know, you have interesting data that other social media companies need to kind of piece together through behavior and things like that. Like, I imagine the big social networks try to build a profile to understand, like, what is this person's purchasing power? You guys get it, the user's, you know, providing it. But how are you thinking about monetization?

I think there's a couple of big strategies that we can try to go after. Referrals is something that I've looked at for a while. If you look at a public company like NerdWallet, a lot of their revenue is coming from referrals to loans and mortgages and credit cards. And from our position, if we have a bird's eye view into your finances, we're actually pretty well equipped to show you products that would benefit you financially. So we're not just selling you something, but we're also trying to sell you something that makes sense with the type of portfolio that, that you currently hold.

Yeah, it's like, hey, we noticed you're not using leverage. Did you know right now that you could lever up?

I'd love to refer you to Harry Winston Rare Jewels of the World. Discover the Sunflower Collection. Or maybe John.

What are you reading?

I'm reading how to Spend It. It's the, it's the wealthy section of the Financial Times that comes on the weekend. Refer you to Vacheron Constantin the Quest. Vacheron Constantin celebrates seeking excellence for 270 years. 270 years of doing better, if possible. What were you doing?

What were you doing before this?

These are going to be great referrals. You got to contact the ad salesperson at htsi. They got the graph diamonds ad in there. This is going to sell like hotcakes when you go, when you start monetizing,

that's the Broad plan. That is the broad plan.

Do it.

Before this, I was doing basically a bunch of different side project apps. $0.02 started as a side project, and I was just trying to figure out something that could ship out the door three or four times a month or a year and see if anything would get traction. And so the early growth on $0.02 has been really amazing. It's probably the most popular thing I've ever built and almost entirely organic. So it has come from Twitter, on the timeline, from other posters wanting to sign up and be on it. I've actually gotten a lot of comparisons to this earlier app, Poster, which was

popular a couple years ago.

I invested in Poster.

Really?

Yeah, it was a wild. It was a wild place. But it's so, you know, people are. It's interesting. A lot of people will use 2 cent that have never had an alt or an anonymous, like, account, and I think it becomes extremely freeing for them to feel like they can have conversations online without being tied back to their LinkedIn or anonymously support being tied back to their family. And I do think, yeah, I just think you've tapped into something super interesting because money is just at the core of everyone's life, whether they want it to be or not. And giving people a place where they can talk about it freely, of course there's still gonna be judgment. Of course there's gonna be people on the app that are gonna think a certain way about someone's financial situation or, you know, what they're saying or how they're spending their money, but it does. I feel like the next. I feel like it'd be funny to build out. I'm curious, would you ever build out, like, a feed of the users, kind of like, if they obviously opted into it, but just like, purchasing? I feel like a lot of people would be very fascinated in that, in a different way than Venmo used to do it. Which I was like, why is Venmo a social network work? You know, it's like, I don't want. Like, I don't want people to know what. What I, you know, whatever.

But, yeah, this is on the roadmap. We would love to have a feature where you can opt in your transactions, your recent transactions, and then almost quote, tweet them and say, like, I. I bought this $18 Shawarma at this bodega.

It sucked.

Here's a picture of it. And it kind of proves that you did that, right? Like, you're not just saying it. And same thing for brokerage movements. If you sell a bunch of Apple stock or whatever. You can write your due diligence and then also prove that you actually made that sale. So you're not just saying you did it? We're proving it through financial history that it happened. And obviously that's going to be entirely opt in. You can choose to show things or not show things, but it'll be the only social network where you can have

these types of conversations where you can prove that you're actually moving your money

or making these transactions that you're claiming that you are.

Very cool. Speaking of money, have you raised any money?

Money we have. We have raised $3 million from Dragonfly and Starting Line.

Congratulations.

And was that just announced today? I didn't see it anywhere.

It was Yesterday.

The official $0.02 account on $0.02 increased by 3 million.

Right.

And so you saw it.

We are. Our spot on the leaderboard has jumped up a couple places which I'm very happy about.

There we go.

Well, congratulations. What's the number one spot, spot on the leaderboard right now?

Oh yeah. Who's the richest?

Right now we have. Well, so I don't know because it's anonymous, but they are at 26 million.

26 million verified liquid. Wow.

Which is crazy.

Might be an AI researcher. Maybe, maybe you got to get MSL in there.

8 million 333 every month. You're like, oh, okay, I know who this is. Got 100 million dollar contract. Anyway, thank you so much for stopping by. Great to meet you and. And have a great rest of your day.

Congrats on the round.

Congrats on. Super excited. Thank you for having me. Bye.

Cheers, Andy.

Up next we have Gabe from Harvey AI. Very excited to talk to him about legal AI and the impact of open source. I want to know if anything changed this week for his business. We will bring in Gabe from Harvey AI, the legal. Hello. Welcome. How are you doing?

What's going on?

Good, how are you guys?

We're great.

Great background, great background.

About to say.

Is that Mahogany?

Yes. The official wood of business and law. Yes, Mahogany. Some books.

Gotta look professional.

Fantastic. What's the latest? Give us the update. I have a bunch of questions that'll go all over the place, but give us the update in your world.

Yeah.

So last week hit three year anniversary. Have kind of scaled up to 350 people. 500 customers just hit 100 mil in revenue.

There we go. Love hitting. Love hitting the gong for revenue. You know we hit the gong a lot for $100 million rounds. But it feels better when it's real.

Customer demand. We have this silly soundboard where we play the over an overnight success sound, but. Overnight success? Yeah, that one. And usually it's because some founders been grinding for like 10, 20 years and then they finally hit breakout success. But, like, Harvey is kind of an overnight success. What actually set you up for this? Obviously you were in a unique position to actually go after this opportunity. This wasn't just something that you just lucked into, obviously. So give me a little bit of the prehistory. Yeah, I actually.

I started doing AI research in like 2012 and tried to do some other startups. And so I think there was a lot of this experience of trying to build these companies.

Yeah.

Without this technology. And I think I was at Meta on the large language model team right before Harvey, and my roommate, who is now my co founder, Winston, was an associate at a law firm. And I was showing him kind of the GP3 models and he was showing me his kind of the legal work he was doing. And I think it was pretty obvious these models were going to get much better. And that seemed like a great application. And then I do think there was like some factor of luck of, you know, raising from OpenAI how good GPT4 was and then kind of really focusing on big law.

Yeah. So you add all that in, then we can do the overnight success. Because it's like, easy if you want to just grow really quickly. Just spend a decade researching a fundamental technology that will change the world. Anyway. What? Yeah. So much to go into here.

Yeah. I mean, one thing I want to open, you at this point, I'm sure are talking to or have closed pretty much all the top law firms in the United States. I'm sure the reaction internally at all the different firms, I'm sure there's some excitement. I'm sure there's clearly excitement. Otherwise they wouldn't be signing up and becoming customers. But I posted something last week. I was in New York and I was speaking with a lawyer randomly, and he was telling me about their AI adoption internally. And he said this was his point of view. He said adopting too much AI will hurt our bottom line. And I posted that note yesterday and it sparked a big conversation. The obvious response is that you don't pay great law firms and lawyers for the execution. You pay them for the overall product and the sort of like, like guidance and advice and strategy and all these other things. It's not just like the raw generation of documents or reviewing contracts and things like that. So give us kind of the overview of how different firms are Reacting and sort of leveraging AI. And then I want to hear how you think law firms might need to reinvent themselves and kind of even. Even adopt new business models and approaches and things like that over time.

Yeah, so it's definitely like a wide range, both law firms, but also kind of individual partners within law firms. And so we have, you know, firms that are still in the. Let's test this out. Let's see what to do with this. And then firms that are, we have already co built software products or models with them and they are, we are revenue sharing and selling that to their customers. So there is kind of the full range. And yeah, I think it'll be interesting to see how it plays out. I think my guess is long term where this is going is I think your point is exactly right. Like, I actually think if you look at partners, billables, they're actually undervalued, where it's like, if you want to do a massive public merger, that partner is worth much more than 3,000 an hour, but it kind of gets subsidized by all these associate hours. And so I think there'll be some changing of, you know, how you charge for these. But so far I think we're still kind of early days in that conversation. And it's much more, how do you get adoption? How do you start upskilling lawyers to use this technology, but do have a lot.

Yeah.

The interesting thing, I think, you know, we obviously have a bunch of founders that watch the show and I think it's interesting to look at the invoices you get from your law firm and just like, look line by line, where was I getting like real value and legal advice and strategy and all these things that are extremely high leverage. And where was I paying to like, recreate a variation of this document or fix a punctuation error and things like that. And obviously you can't see. Exactly. But it is easy to imagine in the future where in the same way that you have 100x engineer today that's using, you know, cognition, Devon and Windsurf or Claude code or whatever variety of cursor, et cetera, where they can be ultra high leverage because they effectively have an army of people working under them agentically, I think you'll see that it's hard not to imagine that happening in law where you have this incredible individual player who's able to produce potentially an order of magnitude more work in the very near future.

Yeah. And one thing we're also starting to think about is like, it's always Interesting to ask, why do you have this billable model structure in the first place? And I think one big problem is pricing legal work. And so, like, the reason you have this model is like, these projects are so complex that it's actually impossible to do fixed fee without, you know, this technology where it's just, how much does it cost to do this merger? It's like you're going to have all these things that come up, up. But I think as these models get better the same way, it's hard to predict, like, how long will it take to fix this bug. But now with these models, you can kind of look at a code base and say, oh, actually I can tell you some good error bounds. I think there's things like that you can start exploring that make more of these new business models.

Interesting.

Have you seen lawyers in big law spinning out and building firms from the ground up to try to disrupt themselves and create new models? I mean, we've had the founder of Crosby on, which is like they're building a firm firm themselves and focusing on a few specific types of contracts initially. And I could imagine it's kind of hard if you have a law firm with thousands and thousands of lawyers. It's hard to totally change the business model where if three people spin off and they come to you at Harvey and say, we want to leverage this ground up, build a firm around this. Are you seeing that at all? Yeah.

One of the fastest growing, I think they might be MLA 200 firms now is actually partner only. And so I think this model is. I think that the challenge is it just depends on the type of legal work you're doing. But this is also traditionally, like, not traditional. In the past couple years, what firms like PwC have also been doing of how do you bundle this legal work and provide alternative ways? So I think some of this work is getting unbundled. And with different models, you can kind of tackle different parts of the legal work.

How much do you guys care about models getting more intelligent versus just delivering on the current capabilities?

Yeah, I think for us, the big challenge we definitely still have is like, the models aren't good enough to do the very complex legal work. And so I think for us, you know, Sam has the quote of, like, try to build some company that like, as the models get better, your company gets better. And I think we are very much in that position where it's like, I think as amazing as these models are, and I think lawyers get a lot of value, we still have so many use cases where it's Just like the models can't draft these very complex like merger agreements and things like that. They can't look at these massive case law research corpuses or discovery corpuses or data rooms and really understand them. And so I think there's a bunch of room both for the foundation models to get better, but also we're starting to think about can you custom build these reasoning models given this kind of specific data you have? So I think there's huge room for improvement.

What about, what about the back office? There's a lot of costs that go into law firms that are, that are non legal work operations, billing, you know, all that. Is that something, is that a focus at all for you? Is that something you think about or is there just enough work to be done on the client side?

Would you do like a legal billing product too?

Yeah, I mean, I think that's something we've thought about of, you know, partnering with the folks doing that, that in the future we've had law firms ask, can you help us automate parts of how we do billing? We have a bunch of firms that just buy Harvey seats to do some of this back office work again. And then there's clients that have asked about, can you help us build spend management, things like that. But I think right now the focus is still kind of building the product for lawyers for law firms.

We have a question from the chat. Is the company named after Harvey Specter, the fictional lawyer from Susan, or Harvey Dent, the Batman villain who I think also had a law degree? Harvey Specter, Harvey Spector.

There we go.

Makes sense.

It's a great, it's a great character. I want to talk about costs. Obviously tons of revenue coming in the door. Also we're seeing this weird phenomenon. Maybe it's not that weird, but like with test time inference reasoning, you want to put, you know, GPT. What was the RKGI? They were putting $2,000 of inference behind every task just to crack that puzzle. If I'm, you know, coming to you and I want, you know, to really make sure that the AI is checking its work fully, I probably want to put a ton of tokens behind that. What does the cost structure look like? How does that evolve over time? What is, what are the relevant changes that could happen and changes in the landscape. We saw the open source model come out from OpenAI at the same time. Even if you're running, even if you switch to open source today, you still have to pay for energy and GPUs and stuff. So how does the cost side of the Business evolve over the next couple of years.

Yeah.

I think our bet kind of from early on has been focus much more on capabilities. These models are going to get cheaper. As you scale, get economies of scale, you can kind of solve these problems. I would say right now our cost structure is similar to if you're using a chatgpt, where you know, that gets amortized over the tasks. You have some tasks that are low compute, some that are a lot. I think legal is actually one of the very unique domains where you have these tasks where I want to draft a motion, and typically this is going to cost $250,000. I want to do document review, and this can cost a million dollars. And so you have these specific problems where you can actually just run models over every single document, throw just a ton of compute at this. And so we're starting to kind of of explore, like, what do those different models look like if you're doing tasks like that.

But yeah, lessons from Atrium. Lessons from clearspire. Lessons from binding a actual law firm to a technology company. Seems like it hasn't. Not doing that certainly hasn't hurt you, but did you know?

Yeah.

And I'm sure, I'm sure you had a lot of investors that. Why don't you sell the work instead of the software?

Exactly. Yeah.

We actually, we actually had the opposite. Like when Winston and I started the company, we talked to the founders of atrium and like 30 of the folks that worked at Atrium and actually Jason Kwan, who at the Time was the GC of OpenAI, was at Y Combinator when they did Atrium, and Sam was as well. And so we kind of like mentioned that, and they were like, you guys should focus on building business. And, and for us, it seems like the scalable play here is like, we don't want to build a professional service firm ourselves. We want to enable every law firm, every professional service firm to kind of become the next generation of firm.

Yeah, it makes so much sense. Microsoft Excel, their team didn't build an investment bank, and yet it's used by every investment bank. And it's.

Exactly.

And that will continue for a long time. Anyway, I think we have to jump to the next guest. Jordyn, thank you for coming on. Thank you so much for coming on. This is really fun. Fun. Congratulations on all the growth. Huge. We'll talk to you soon. Bye. And up next, we have another massive get the Gone moment. Let's bring in Kareem from Clay. We'll get the update from him. Welcome to the stream, Kareem. Clay. AI. How you doing?

Hello.

What's going on?

How you doing? Give us the latest, give us the update. What's new in your world? What do you do? Break it down for us and give

you all those things. Excited to be here.

Great to have you.

Yeah. Well, today we announced that we raised 100 million from Alphabet's capital G. Congratulations. Thank you. At a $3.1 billion valuation.

Wow.

Three Jetblues. That's crazy. Amazing. We've been dogging on JetBlue a little

bit, but that is fantastic. Classic overnight success. You started the company like a few months ago.

Yeah, like eight years ago.

Yeah, I was gonna say. So the story. So give us, like the journey, how you got here, because I think, like, you guys have been a massive beneficiary of LLMs, from what I know, over the last few years, but it was not a. Was not an overnight success.

I'll call it a spiral.

Spiral, Yeah.

I mean, we started the company with the idea of how do we give the power of programming to an order of magnitude more people? And I was saying it took me some time to reformulate that to how do we give that to what we call go to market engineers. So it's like half of the company can't code, but has all of these ideas of how to grow the company. And Clay basically gives them the power to program revenue instead of just program software work.

Let's make that a lot more concrete. There's been this cool wave of designers going from 0x engineers to 1x engineers, and that's had a lot of. A lot of benefits in organizations. But what does that actually look like concretely, on a go to market team? Is that just generating emails faster, managing a CRM? Like, what are we actually talking about in terms of details?

Yeah, the actually most important part is who should you reach out to?

That's actually like, I would say 60%

of kind of like there's two ways to grow your company. Either you find new customers or you expand existing ones. If we just talk about finding new customers, 60% of that is finding the right person. Right.

And then kind of like reaching them

at the right time is another 20%. So what we do is, let me give you an example. One of our customers, they have a ton of people just going on Google Maps, looking at all the different locations that they sell to, finding warehouses, and then manually counting the number of parking spots that that warehouse has, because that's a good indicator if they're a good customer. And so we can use Google Maps, API and LLMs to do that counting for them.

Oh, that makes sense.

Yeah. So really, most of it is about, like, account selection and finding the right people. And then the second part is, you know, that they just raise a round of funding, like us. Was there some kind of new news story that. Did they just hire a few people in a department that you're selling to,

and it's very specific to what your

company does in their product.

Got it.

Is this every. I've asked this question on the. On the show before, but it feels pretty common that, you know, some random private equity firm will just be spamming people on the Internet trying to buy their companies. Oftentimes, there's probably good targeting. Oftentimes there's bad targeting. How close are we to just, like, eliminating those. Those emails that are just kind of those out. That outreach, the spray and pray outreach. When is spray and pray gonna. Gonna end, I hope.

No, I mean, I think that that's kind of like one of our top goals is if you actually. I think you could think of it as. Is what if you actually put in the effort and the thoughtfulness into figuring out who actually wants your product? One, you reduce spam, and two, you actually increase, like, your own productivity. It's just that that's hard to do at scale. And the best companies, like Ramp, like,

there's a lot of companies who figured

out how to do that internally. What Clay is doing is giving that to every company. And really what that means is that businesses can find each other faster and more accurately. So I think it should end up benefiting everyone.

That makes sense. Anything else?

$100 million. Where. How are you going to spend it?

Hopefully we don't spend it.

Yeah. Always a good play. Yeah.

I think that one of the key, like, really exciting things about clay is that we have this huge community that has emerged around us. So there's clay agencies, so people who implement clay.

Oh, that makes sense. Yeah.

There's like, 60 clubs in 29 countries where people meet up to talk about different techniques.

Because if you think about it in

sales, like, you're always figuring out how to be creative, how to be unique, and clay is a tool that lets you do that. I almost think of it like Ableton is for music or like you said, Figmas for designers. Clay place for go to market teams for doing deals. Exactly. So we want to use that money to support that community. So we're having a conference, actually Sculpt in September in San Francisco. So we need to. We're going to do more events like that. And then there's a lot of investment into the product. We're just touching the surface of what we can build.

Yeah. Is there any functionality to share work workflows or create some sort of marketplace for workflows, like, you know. Yes, there are agencies on top of Shopify that do design, but then there are also templates. And so you gave some examples of, you know, new funding announcement in my category. That seems like something that I could be able to just pull off the shelf and not even. Not even build from scratch within clay.

Yeah, totally. I feel like you should really join our team. This is exactly.

I'm leaking your roadmap.

Yeah.

So we'll leave it there. Yeah, we'll leave it there. Well, good luck. Very exciting time and congratulations on the massive round.

Awesome, Miles.

Thanks for having you. We'll talk to you.

Cheers, Green.

Bye.

Good stuff. Well, John, I got to get on with London and I'm sure you got to get on with Taipei.

I do have to get on Taipei.

Why don't we end it there? Thank you for tuning in to the show today.

Thanks to everyone in the chat. I agree. The deeper the V neck, the more funding you get.

That's right. That's a good strategy.

It's a good. I didn't say it, but I think it's true. $100 million deal. Really deep V. Looking good.

The next round is down.

It was funny because clearly you could see the bottom of the V neck if we had shown the full screen. But we have the ticker, and so the ticker made it look like you don't know where that thing ends. It could just keep going forever. But Palmer Lucky has made.

He's actually a vest.

Palmer Lucky has made the Hawaiian T shirt iconic. Maybe Kareem makes the deep V iconic at clay. Good energy. I was into it. Anyway, awesome, folks. Thank you so much for watching. Leave us five stars on Apple podcast and Spotify. Leave us some reviews, leave us some reviews, send us some notes, send us some reply to some threads. Whatever you want to do. Whatever you want to do. We'll talk to you soon.

Have a great evening.

Bye.

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