Elon's DOGE Blockchain, Sports Betting, German Economy in Shambles, Humanoid Robots

Welcome to Technology Brothers, the most profitable podcast in the world. We are live on YouTube. Thanks for tuning in. You can check us out. We're going to try and be on around 11. It is 10 till noon, but we're talking about a bunch of different stories breaking down what's going on in tech. Moving on from deep seek. We did back to back deep dives. I think we're. It's over.

It's over.

The science from the all in podcast has been deafening. They still haven't released a statement on.

It or their political talk show. True, so true.

So it's kind of out of their mind.

Pretty niche to. Yeah, you know.

Yep.

David will have to deal with it within the admin, figure out the right.

Response, but it's not appropriate for the pod. Yeah, yeah, yeah, makes sense. Well, the top story today is Elon Musk is exploring blockchain use in the US Government efficiency effort. Conversations said to be held with multiple public blockchains. The technology may be used to track government spending. And this is very funny. It almost reads like a hit piece, like it was planted because, like, the idea of, like, oh, we're going to solve the government's problems with crypto is like such a meme. But it does seem like there's some truth to this.

But it's also interesting. It's also interesting because the biggest criticism of the World Economic Forum has been their historical push for central bank digital currencies. And in many ways, bringing the government on chain and having all this stuff take place on the blockchain is what a lot of people were always afraid of. Now this is different because presumably we just use stablecoins.

Yeah, there's some stuff here that does actually make sense. But at the same time, for a naive reader, you can be like, wait, the guy who is promoting dogecoin wants to use that for Doge? And it's this meme coin. It sounds very unserious and I think that's kind of the angle of this article, but let's read through some of this. So Musk, who leads the DOGE effort, has mused to close allies about the idea of using a digital ledger as a way to squeeze costs out of the government, said one of the people who asked for anonymity because the discussions hadn't been made public. There's been talk of using a blockchain to track federal spending, secure data, make payments, and even manage buildings. The people said people affiliated with doge.

Yeah, One thing that's interesting, every mainstream media reporter journalist is hammering everybody within the inner circle of Doge within the outer circle of Doge, within the outer, outer, outer. I get multiple messages a day being like, hey, do you know what's going on in this?

I just got off a call with a reporter who's like asking me, oh, what's going on? Do you know anything?

And the funny thing is, and almost everybody within Doge has a deep mistrust of mainstream media. And so nobody wants to talk, but there's enough people involved that the story is just coming out. But it comes out in the form of people saying somebody was mus. Elon was musing about this. And then that ends up being, yeah.

It'S like, what does that actually mean? Like, you could muse about anything. It's very silly. But the talks have a certain intuitive logic, given that the name of Musk's department is a cheeky reference to a cryptocurrency dogecoin that lives on the blockchain. President Donald Trump has been quickly, has also been quick, quickly putting in place cryptocurrency friendly policies. On Thursday, he signed an executive order establishing a working group on digital assets that includes key members of his administration. So people are talking about, I think within the crypto community, the number one thing people want is, I mean, just clarity around regulation, like what is legal, what's not, instead of this gray area and then maybe Bitcoin National Reserve is big and then maybe clarity around. And then the betting markets or the.

Other big one is, is around the tax treatment of cryptocurrency gains. Eric Trump came out and was saying, we're going to have no capital gains on American crypto. Which you said, I think, I think this was on point that if you want to encourage the reshoring of crypto, the cryptocurrency industry, which is, I do believe in the long term benefit of the United States, we don't. We've been the home of global finance in many ways for such a long time. We don't want to have crypto come along and have it be in Singapore and Dubai and all these other places. Like the more that money is here, the more it will and the talent.

And the actual companies and stuff and they're easier to regulate. Like Silicon Valley for a long time was like so dogmatic about you can't even build a startup outside of San Francisco.

Like people wouldn't fund you.

Being outside of America was completely off the table. It was like San Francisco or maybe New York. And then Miami got in the conversation, Austin got in the conversation, and LA was Taken semi seriously. But really it was like you need to be in a major American metro with a serious university.

But even it took Snapchat honey people to a long time and nobody wanted to like the insider SF VCS would tell you I want to invest in your company but you have to move to sf.

Exactly. And then once crypto started getting so attacked by the federal government, all of a sudden it became oh sure, you're in Singapore, like that's a reasonable thing to do. Which would never hold for any other company.

And a lot of the major conferences were not in the US and so.

While I think like you know, having this weird capital gains treatment where a stock would be taxed but a crypto wouldn't, probably makes no sense to have different classes there. If you can have kind of a, a one time incentive for people to reshore. And then eventually the industry will be so built up we won't be talking about oh, this startup just went from zero to a billion really quickly. It'll be like, no, there's like a Visa, a MasterCard, a Goldman Sachs of crypt crypto. They're all here, they have thousands of employees, they're established, they're not going anywhere. And so yeah, you can bring the taxes back up. Yeah, which is probably what would happen. But let's go back to Elon. He says DOGE is charged with modernizing federal technology and software to maximize government efficiency and productivity. Trump has said the group will work with the White House office Office of Management and Budget. It's kind of like the federal government's HR arm to identify spending longhouse division and, and finish its recommendations by July 4th of 2026. Musk enlisted about 100 volunteers before Trump was inaugurated to write code for his projects.

Yeah, and this is the crazy thing. So because DOGE is not. Is what is the exact corporate structure.

Not think tank funded off Elon's balance sheet.

Yeah, because it was set up as think tank. Yeah, an independent think tank initially. Many people have already gone and done a tour within DOGE and already left.

Yep.

They had done that before Trump had actually been inaugurated.

Yeah, it was like policy paper, which is cool.

Right? It's, it's showing, it's showing this sort of urgency. You see this with venture backed founders that, that end up, you know, working for six months on their startup before they incorporate. Right. It's that same sort of founder mentality which I think is cool.

And so it says Trump's business associates chose the ledger associated with Solana cryptocurrency to issue The Trump and Melania meme coins that have drawn interest and criticism in recent days. It is, though, unclear which blockchain Musk's team might use for its projects. And the talks may end up going nowhere, which is, you know, very recently.

So I have a post here from a guy named Kale Abe. He says you're mid curving it if you think Elon is going to use some other blockchain to track government spending through Doge. There's literally no other blockchain that could handle this other than Solana. Elon executes. He's not going to choose something that won't work. At the time, whenever this was screenshotted, it only had five likes. I just searched for it specifically. I don't think the community has spoken on it yet. But Solana would be one of the top choices if they weren't going to build their own blockchain, which is another fork it.

Exactly.

But either way, the Trump and Melania meme coins are the meme coins that were launched out of the White House. In many ways, those being on Solana was a huge win for Solana in general, which has obviously benefited from many of the products that are purely speculative as well as products that have consumer use cases have been on Solana just because of the speed and then liquidity that's on the chain.

Yeah. And so the article continues, the idea of using blockchain for large scale projects isn't new, although applying one to an enterprise as large as the US government remains an untested concept. Years ago, during the Web3 boom, a slew of large companies such as retailer Walmart launch blockchain efforts. Most of these projects use private blockchains that didn't make transit transactions publicly viewable. And so there's always been this question of like, if you have a private blockchain, like why not just use a database? Like Walmart has full control over their database. They just log all the transactions. Like what is the blockchain really doing? And there is a question here of just of just like maybe instead of having this cycle of there's the federal budget that goes out, money gets spent and then basically journalists need to issue Freedom of Information act requests to get data. Like months later it needs to be redacted. It's like, well, maybe you could just have a real time dashboard that doesn't need to be crypto driven. It can be just a database that's open and you can query.

Yeah, there's some argument for it to be completely transparent because if you are a Taxpayer, your money is going towards a lot of these efforts. Right. Even if it's just tiny, tiny, tiny, tiny fractions.

Yep.

And so there, there's a clear, there really is a clear argument to say, you know, this taxpayers should have full visibility into how their money is being spent right. Outside of like black ops government programs, things like that.

On the flip side, like, it could be like, you know, it's like building in public all of a sudden like your adversaries know exactly how much you're spending and they can say, oh okay, the, the U.S. is spending X dollars on education. If we just spend a little bit more per capita we can like compound and like beat them basically or something like that. It is a theory just like, you know, if you know your competitors margins, you can often squeeze them by dropping your price to the point where they make no margin.

And you make a little bit, and.

You make a little bit and then, and then over time you put them out of business and then you have monopoly. And so there are risks like open source accounting effectively.

Sam Hammond One thing that's interesting, oftentimes budgets get set so money is allocated and then it doesn't actually get spent. We saw this in LA fires like last year. There was, I think last, you know, this came out earlier this month, but there was something like a billion dollars allocated by LA county to fight homelessness. And they only, were, they only ever spent like $500 million, which is kind of a bit like, you know, everybody I think now generally wants less government spending. But if we're going to, if we thought it was right to allocate the money, like isn't homelessness is still a big issue here? Right. If you look outside I'm sure we could see.

Yeah.

You know, and, and so the fact that they allocated and didn't spend it is also bad because like, okay, then why did you ask for this budget in the first place? You knew that it was going to need to be spent in this period. So.

Yep. And so Sam Hammond, the chief economist at the foundation for American Innovation, that's fai. I've been to a bunch of their.

Events and we met. I, I got to meet Sam at a huracan.

Oh yeah. Uh, he said that an internal government blockchain could be used to track spending documents and contracts in a way that's fully secure and transparent. But the question of whether you need a really, you really need a blockchain to do that since conventional databases can be used in a similar way and.

With fewer downsides, but you can't speculate on a database, it's much harder. You could make a poly market that was, that was based on will, you know, the department of health spend their full budget for the year if it was public?

Like you literally can in speculate on the, you know, the profits of the federal government in the form of bonds. I want, it's just very boring and you only earn 3%.

I want to be able to do a 10 leg parlay on the government spending.

I mean that's basically just like a crazy, some sort of like crazy levered ladder on like how the bonds will, how the bond spreads will trade over the next few years.

Like you can hedge funds figured it out.

Oh yeah, you can get crazy crazy beta in your, in your bond portfolio if you work hard enough. So public blockchains like Bitcoin and Solana come with their own problems given that such ledgers are governed by decentralized networks of computers. So who owns the voting blocks all of a sudden? Is it 100% centralized, controlled by the government? Well then what's the point of the decentralized if every, it also opens up.

Some crazy attack vectors? So North Korea's government has put in a big effort. They have a lot like they, they, they have effectively kingdom level efforts to hack various blockchains. Like if, if you're in the cryptocurrency industry, everybody has examples where they, they interviewed, you know, somebody and their resume made no sense and, and, and they like crushed the coding screen. But then like if you actually ask them about it, they don't, can't really answer.

Yeah.

And so North Korea has been, you know, we'll try to get people in to these organizations to then hack them.

Yeah.

And they have other efforts. And so if you can imagine if the US Government just had a billion dollars in a wallet on Solana, like.

Try like a trillion dollars.

Yeah, it does open up. The North Korea is going to be gone. All we have to do is, yeah, we have to just get this one.

Build a massive data center just to attack this thing. So one issue with the government using a public blockchain is that they would have no control over the entities. So whoever owns the tokens would be able to change the database potentially. I think that control would be a problem for governments. But some bigger institutions have started using public blockchains for business purposes in recent years and this was something I hadn't heard. BlackRock for example, has issued a money market fund on the, on the ledgers of a few different cryptocurrencies. And the California Department of Motor Vehicles has digitized millions of car titles on the Avalanche blockchain.

I had no idea.

That's wild.

And you don't, you don't hear much about Avalanche anymore just because the narrative is so dominated by Solana, at least because Meme coins are sort of the dominant. Yep, meta. But, but that's like, it's funny because like Avalanche for sure in their seed deck was saying hey, we're going to actually get the DMV to digitize, you know, titles or whatever. And unfortunately that's way less profitable. Just like having a casino. Meme coin casino. Right. And that's why Solana probably trades at 20x I would imagine avalanche maybe 2000, I don't know, last.

Yeah, yeah, yeah, there was like that. Do you remember the Salunavax meme? It was like, it was like Solana Luna, which was like the Terra Luna thing and then Avax, which is Avalanche. And it was like this big movement of like, let's move past Ethereum and get onto these higher performance, high speed cryptocurrency chains. And Solana really emerged as like the Power Law winner very clearly. But they close with saying if Doge pursued the technology, it would likely dwarf any government project seen in the US to date. I don't know that that's necessarily true. Like, there is something interesting. I think that the most optimistic take you could have here is maybe just that like on paper there are probably more downsides then upsides to managing a public blockchain instead of just a database. And just like it's the same thing with like, oh, can we, can we make wires go through 24 7? It's like, yes, but there's a ton of regulation and a ton of like tech debt. And some of these systems run on like Fortran and old mainframes and stuff. And so just having a greenfield project can lead to amount, an amount of like forward energy and progress that you're just like, hey, we're starting fresh. And I think that if, if Bitcoin or cryptocurrency is like, is like a justification for starting fresh, it could at least bring some energy. But overall I am not very bullish on blockchain use in the US government. I don't necessarily think it's necessary.

There's some stuff that, that comes up to me. You remember during COVID there was a bunch of people taking advantage of the emergency loans people, you know, there was a bunch of fraud associated with that. There were people dealing, you know, SBA dealt with a lot of this stuff. And there's some argument, but the thing is like that the government has a record of everybody. They have strong records of where all the money was sent anyways. And so does it just introduce more chaos if the average person can just start seeing, saying, hey, why did this person get 200k? Why did this person get 50k? And like what, you know, we actually just, it's public. Yeah.

And people dug through it and found like one of them was like Ford Raptor llc. Yeah. It's like a guy who like clearly set up an LLC just to buy.

A Ford raptor for the PPP with the PvP money.

And there was a lot of that and there's really like very little accountability.

And again that's the same thing as like a database does. Like, I would actually love to have a follow up to this piece like tomorrow if somebody can say here is the definitive argument for why the US government should run its financial operations on chain.

Yep.

And I would totally give that an hour to like actually hear out the case. But these sort of hearsay articles from the mainstream media that are just looking for clicks.

Yep.

Don't really.

Yeah, it does seem like this was driven by. There's obviously there's a lot changing the government. Every startup and company is looking for opportunity and everyone is pitching them. If you have a security company, you're like, oh, maybe I'll go in and like get a security contract. If you have a defense company, obviously you're going to the dod. But even software companies are like, hey, how can I get in on this? And like help for good. And also maybe I'll make some money real quick and that'll be maybe, maybe a little bit less scrupulous. And it seems like, you know, some people at DOGE were open minded and like, yeah, sure, like let the crypto guys come and give us a pitch. We'll like, listen, we're open minded. Maybe it does, it doesn't really seem like me, but I'll hear them out. And then all of a sudden it's like he is seriously considering it. Like he took a meeting and it's.

Like, I think the argument, the argument would have to be if the US government moves on chain, we will save $100 billion because of these key areas that we're going to be able to better identify wasted spend. And I'm not sure that that can't be done with better databases and better any government that's oriented around efficiency.

Right. If, if every, if every line in this article is replaced with Elon is considering using databricks and AWS to home non story. It doesn't. It doesn't get printed. Even though that could be something that actually happened in reality.

Yeah.

And it's just not. Not a story. Anyway, let's move on to America has fallen in love with long. With long shot sports bets.

Damn. You really took us on a journey.

There's a deep scared me for a. America has fallen in love.

We've been in the studio all morning. What happened?

America has fallen in love with long shot sports bets. There's a great deep dive in the Wall Street Journal all about parlays, the tough to win multi part wagers with tantalizing payouts. They're bringing in casual and newbie gamblers and betting companies are making a killing. And it opens with an anecdote about. A football fan decided to make 14 predictions on NFL players performances over several games one Sunday in December, including touchdowns, receiving yards and rushing yards. She used a $10 credit from the betting company to place a multi leg bet. If every player lived up to her expectations, she would win $22,000. This is the levering up.

This is why people say you, if you sign up, you can pay for college with parlays. You just need to sign up for DraftKings and three others using their free credits. And just if you hit all four parlays, college paid for. This is why, this is why degenerate gamblers will say like, you know, clearance betting is the solution to our higher education crisis.

Yeah. I mean you just look at this and you're like, okay, $10 wagered, 22,000 potential win. Like clearly the odds are one in 5,000. Yeah, obviously. And so as the NFL games unfolded, 13 of her picks hit one player. Only one player stood between her and the cash. Los Angeles Rams wide receiver Cooper cup, who needed 70 more receiving yards. He got 17. And she lost it all. Getting so close, it's a little heartbreaking. She said. Call it the new American lottery ticket. Exciting for potential big jackpots, but with painfully slim chances to win. America's biggest gambling companies, however, are making a killing. The multi leg bets called parlays, deliver a bigger cut of money to sportsbooks after paying out winners than single bets, of course, because it's very hard to calculate what are the actual odds here. And so in, in, you know, you go to the, you go to the roulette table, it's very clear that your odds of winning are like 49%, 48%.

Any one of any one of the bets is that somebody's making is believable by itself. But there's so much randomness that collectively, again, it's one in five drives down the odds.

And so sports betting companies are raking in cash in one of the busiest times of the year, the lead up to the Super Bowl. Flashy ads highlight special offers for bonus bets on parlays and other offers for newbies. Parlays accounted for 27% of the money wagered on all sports bet last year through October in Illinois, New Jersey and Colorado states in which gambling regulators report data by bet type. That's cool. That's up from 22% of all sports bets in 2021. These multi leg. These multi leg bets delivered about 56% of revenue.

27% of the bets are delivering over half their revenue. Quarter of the bets delivering half the revenue.

Yep. Wild multi leg bats are so lucrative that FanDuel parent company flutter Entertainment recently increased its expectation for total online gambling revenues in the US to 63 billion by 2030, up from its estimate of 40 billion two years ago.

I don't actually know what it is, but it's says something like for every dollar put into the sports market, it's like sports betting is like $3 that wasn't invested. Like, it's some like. Because you're just like drain. It's just like we should actually pull up.

I mean, yeah, it's a wealth transfer. It's a, it's a, it's, you know, you, you don't want to bet against the casino. You want to invest in the casino.

Yeah.

The real alpha here is like, hey, who's making the money? Okay?

And this is why it was smart. Joey. Joey Levy and Jake Paul. You know, how do you monetize the most mass market US Consumer base of young people? The Paul brothers audience. Sports betting, Sports betting, especially. As that audience has matured slightly.

Companies and their media partners are pouring money into advertising the bets. And they're engaging celebrities from Charles Barkley to Kevin Hart and armies of smaller influencers to put together parlays that bettors can latch onto, all while hyping games to attract viewers. Old school gamblers prefer traditional wagers, such as single bets on who will win a game. Think of parlays as a ripoff. Some call them sucker bets because their long odds make it nearly impossible to regularly win money. But fans of parlays say that while the wagers are true long shots, the appeal of winning five figures from $5 is too strong to pass up. And I completely agree with that, like, if you put five bucks, you're going to watch a game and it's probably going to be free because it's just on TV. If you put $10 in and there's this, this big thing in the back of your mind like, oh, I could win $20,000 or whatever, it's way more entertaining. It's way more entertaining. And that's the equivalent of like a movie ticket.

So I've never, I've never placed a sports bet on an app.

Me either.

And every now and then, if it's like, it's great that we're talking about the Super Bowl. Yeah, yeah, yeah, yeah. Geopolitical experts.

Sports betting experts.

Experts. Sports betting experts. Get ready. We're almost ready to be VCs.

Yeah, 100%.

But so every now and then, like watching the Super Bowl, I'll tell a buddy, like, okay, like, I'll put, I'll bet you 50 bucks or a hundred bucks that, that, that team. I don't know anything about it. I'm like, I'm so bored. I'm bored out of my mind. I gotta watch the Super Bowl. I may as well put some money on the line. But I've never really understood the appeal. But one thing I've noticed specifically from watching, because UFC is the only sport that I sort of follow relatively closely outside of F1.

Yep.

And man, people are so savage to the actual fighters because they'll. UFC is this sort of very linear night. Right. So you have the, the early prelims. The prelims and then the actual like, you know, title fight and the full card. And so oftentimes people will do like a ten leg parlay.

Yeah.

Because they just get to watch throughout the night. And let's say like in one of the prelim fights, the, the favorite doesn't win. People immediately, the fighters actually have to turn off their comments on Instagram because people will flood their most recent posts and just call them an idiot. Like, wow, you messed up my parlay. You lost me like, you know, 50 grand. And even later in the night, let's say, you know, the, it's just like really, like people are just become so cruel once their money is on the line.

Totally.

And in sports, it's more of like a collective effort, but within fighting or something like tennis or things like that, it just ends up being like, really, it's really dark. Right. Because this fighter just lost a fight, you know, doing which is, which is their career, and now they're getting dunked on by like a bunch of you know, 18 year old kids saying like you, you lost me all this money.

Yeah, Yeah. I, I wonder if there's something about like you, you mentioned like putting 50k down. Obviously that's going to be like a much more emotional loss for anyone. Really. Yeah. And so it's going to drive this like incredible fervor. I wonder if like the, the vanilla like lottery ticket that you get at the gas station, is it just harder to functionally spend 10 grand in there because they have to print so many tickets or can they size up your ticket? I've only bought like one lottery ticket.

I'm sure they can, sure they can size it up. So you can say companies have been.

On a, the lottery might be set up differently. You know, it might be, yeah. We can't take a thousand, we can't put a thousand dollars on this ticket because there's, there's something about like, like if, if the parlays, I think, I think the conversation we'll get into some of the morality and some of the reaction around this. But I, I think if, I think if it was like yes, you can do these crazy parlays that pay out 20k. But the, but they're capped at $10. So like anyone can only lose 10 bucks on them on these platforms, like would be a very different conversation because then it's like, yeah, you watched all of UFC and you paid $10. That's like the equivalent of buying a popcorn there. And so like maybe. Yeah, like for some people they're going to spend $10 every single day. That will have a financial impact. But still that's only three grand as opposed to like in a year as opposed to, you know, spending 50 grand and losing it all because you took this crazy bet. Anyway, let's move on to the effect of these parlays. They're, they're providing a boost to online gambling. Gambling companies already struggling with profitability after big spending on marketing and customer incentives to win market share and keep gamblers coming back. So there's been kind of duopoly, I believe in the market and they've been really duking it out.

Yeah. And they're all going, if you sign up here. The thing about the thing that seems so one thing that's come out over the last couple years is that these apps, they actually are trying to provide this sort of same experience that you get from shopping at like an Hermes store where you have a point of contact.

Yes.

And they'll. This is crazy. My favorite luxury brand is Bottega Veneta. Multiple people from Bottega Veneta stores around LA that I bought from will text me, hey, we just got these in the store. Like, I think you'd like them. And so the same thing happens on fan, you know, FanDuel or DraftKings where they'll say, hey, I put this, like, basically I put this bet together for you. I put this package together and it's, and it's, you know, there's people that get addicted to shopping, but sports betting addiction is, you know, very real, harder hitting and destroys families. And so these platforms are somewhat complicit in encouraging this addictive behavior.

So DraftKings and FanDuel, the duopoly that we mentioned, they control roughly 80% of the sports betting market in the U.S. they offer individual wagers that betters can combine into their own parlays. And they also promote, as you mentioned, their fully formed parlays, often with colorful nicknames and storylines such as Believe land for the, for the NBA cleavage Cleveland Cavaliers that drew it on a nickname for the city's sports fandom. For the Christmas Day game between the Kansas City Chiefs and the Pittsburgh Steelers, DraftKings offered a six pack parlay involving five players, including quarterback Patrick Mahomes, passing yards, tight end Travis Kelsey's receiving yards, and a bet that the Chiefs would win. The sportsbook offered odds in the parlay dubbed Merry Chiefsmas that amounted to a 7.7% chance of winning. Paying $13 on a $1 bet.

Can you imagine being a player, you're just trying to play the game and then somebody tells you, oh, by the way, there's $5 million with you riding on getting more than 30 yards. Like, and if you don't do it, you're going to get a bunch of hate messages and comments from people that, yeah, that just aren't treating you like a human. They're just treating you as their little bet piggy.

And that's exactly what happened is that Mary Chiefsmiths was a loser after one leg. That Isaiah Pacheco would log 25 or more rushing yards failed to come true. Parlays can also brutal.

And the players, the players obviously benefit indirectly from this. Right?

It drives a viewership.

Yeah, well, it drives viewership. It drives, you know, sponsorship dollars to the sport broadly. But imagine having that much very specific pressure not play well, you know, you know, do your best but like you need to achieve 25 or more rushing yards or all your fans are going to lose a bunch of money and you're not even involved with putting together the bet, like you might wake up and you're like, I feel like I'm good for like 15 today, but like 25 is a stretch.

It's wild. I love this part of the article. The Wall street journal placed 209$1 bets in recent months on parlays promoted on FanDuel and DraftKings on a range of sports. It's like for their deep dive journalism article, they're like, we got to bet. We got to gamble a lot. And so they bet on professional basketball and baseball to college football. They won only eight of the wagers out of 209. I think it's maybe a skill issue. I got to get good. You got to have an edge. That meant that gambling companies took in 113,21 cents, $113 of the total. So they lost like 100 bucks betting. Yeah. It's funny with sports betting, was it worth. Did they have fun though?

Did they have 113 and 21 cents entertainment?

Exactly. That's the real question.

Because that's a real argument here. You know, the, the pro sports betting argument is that we're making every. This is an entertainment product that's like going to the movies.

Yep.

And we're just providing you that in the form of this, you know, tantalizing odds of financial gain.

Yeah, it's. Yeah. You know that if you're a fantastic sports better, you will get banned.

Yeah.

This is the real like dark side of this is that they're only selecting for like the real losers. So if you're on the app after a month, you know.

Yeah, yeah, yeah. If you think you're good but you can still log into your account, you're not.

Yeah. If you're. If your DraftKings app is still working after a month. Work on yourself, King.

Yeah. Focus on yourself.

Focus on yourself. There's some interesting history under cracking the math here. The parlay craze got its start in the United States when Flutter Entertainment imported one of its hottest products in Australia. I didn't know that this is where they came from. Parlays known as Maltese in Australia had been widely available for betting on multiple events. Then a better asked Flutters brand in Australia, Sports Bet, why he couldn't place a multi leg bet on a single sporting event. Flutter and Sports Bet began an effort to crack the math needed to fulfill that request. The math quickly becomes more complicated in a single game because of the knock on effects of how athletes perform. How well how well a quarterback throws the ball in the game, for example, affects the Performances of wide receivers catching the quarterback's passes. And so you have to calculate all these, all these conditional odds.

In 2016, the brightest minds in computer science are making sure that we can do our same game parlays.

Yes. In 2016, Sports Bet launched a new product that allowed customers to make single event parlays. Three years later, Flutter introduced the same product in the US on FanDuel as the single game parlay. Everything needs to be connected to everything else, so the math is complex. Connor Farren, senior vice president fanduel of said of sports betting, sports product and pricing. He said they don't give the name much thought, but it soon went. Soon went viral in the United States. The same game style of betting has since spread across the sports betting industry around the world. And I remember. Have you seen that? Uncut gems. There's that meme. Let's bet on this. Like, and, and in that, like, the whole, the whole plot of the story revolves around a crazy parlay. I think there's like a few in the plot, maybe one in Act 1 that doesn't go well. And I think he hits it at the end or something like that. But it's, it's like just clearly like, I mean, he paints, he's an incredible actor and he paints this portrait of this like really broken gambler. And it's not like an inspirational story like the.

It was the most stressful movie I've seen. Totally in a theater. I remember seeing it. I think I saw it on like Christmas Day and I walked out. I was like, that was such a bad. I did the same because it was a great film.

Yeah.

Because it was so engaging. But it was a terrible. For that moment.

I mean. So the Safdie brothers, the funny thing is that they have another movie with Robert Pattinson. Yeah, Ben's talking about it. I forget what that one's called. But it's even more like gut wrenching because it's, it's just like a much darker story. And so I was kind of prepped and so I came out of Uncut Gems. Being like, that was rough, but like, at least it was like a little bit funnier and a little bit more entertaining than the last one, which was awful.

Yeah.

Good times. Yeah. Good Time or something. That was a rough movie. But yeah, I think a lot of people that saw Uncut Gems, hopefully they got the message that like, this is a very dark and rough world and it should be, should be avoided. Unless you're like at a bachelor party with your bros and like you want to throw five bucks in or something like.

Yeah, I mean. Joey, Joey, Joey. Levy. Levy. Yeah, I don't actually. Sorry, Joey. Love you. He had been working on this micro betting product for years that I believe Giraffe Kings purchased. But it was one of the first products to allow like real time betting on specific plays. Because a lot of this stuff they decide ahead of the game and then maybe they adjust the odds throughout. But this is saying, will the quarterback throw a 20 yard pass this next play? Right. So that's like you could theoretically be placing hundreds of bets in a single game reacting to how the game's unfolding. So yeah, I can believe the. I'm glad I'm addicted to angel investing and not sports betting because it's less addictive because it just takes five years to play out. You're sort of waiting, oh, January 1st, I got an update. Let me refresh my email.

If I ever got into sports betting, I know I would just be betting on the most obscure and arcane things.

Amateur Chinese tennis.

Not even that. Just did the football hit the uprights. What's the coin toss going to be? How many fights break out during this hockey match? I'm not concerned with the actual scores or points at all.

Well, you know, the people that get really, really into this do end up betting on things. You know, they'll be up at 2am betting on Australian tennis, you know, and it's like that's a dark place when, when it becomes not at all about. Yeah. The actual game and just entirely about trying to win.

Yeah.

You know, do whatever you can to win.

Let's go to some of the reactions because there's some good posts from friends of the show. We got Will Menitis there.

Will Menitis says, or Bill Manitis, some people call him. In retrospect, legalizing sports betting was a horrible idea. And I, I, this is a hard thing, right, Because I have friends that love sports betting. I have friends that have built products in this space.

It's certainly libertarian and like Land of.

The Free, like Ross Ulbricht would love sports betting. He didn't really get to participate in the rise. But.

Will had another post. I didn't print it up, but he had said something like, you can always track when a states because all of the sports betting was made like the purview of the states by the Supreme Court in 2018. And so it was up to states whether or not they want to legalize it. And so state by state, there has been regulation to legalize sports betting. And he was saying that it's like a very bad sign for the economic future of a state if they legalize sports betting. Because it's kind of like we're out of ideas for ways to generate revenue. We used to make cars here, but we can't do that anymore. So we're just going to do sports betting.

No, I think it, I mean the thing about one of the argument to legalize sports betting for states is this is happening via bookies and Venmo and Zell and we're not getting any of that tax revenue. It's already happening. Let's do it. But then clearly grows. Then it starts. Yeah, then it grows the market, then it's being advertised to children and you know, it ends up going to a dark place. Liquidity says there's absolutely no good reason why sports betting or online gaming is still illegal in many states when you've got teenagers freely speculating on highly volatile stocks and options on their phones. I think he's pro, I think his, his point is that teenagers are going to find a way to bet one way or another.

And so the difference is that if you're, if you're buying, if you're buying an asset on, you know, a trading app and you're investing in like, you know, the global economy or the American economy, this is a, it has some benefit for the markets, it's positive sum and it's gone up historically over a long period of time. And of course you can get into crazier options trading and stuff. But in general, the idea of like allowing everyone to invest in the S&P 500 which has grown and been very positive sum on average, whereas sports betting has been very negative sum on, on average or zero sum. And so you know, a person whose dollar cost averaging into the S and P is going to wind up with a lot of money at the end of the day. And that's like pretty well, well established economic theory. Whereas a person who's spending $10 a day on sports betting is just going to wind up losing a ton.

Yeah. Pomp here says America has become a gambling society. Zero day options, meme coins, sports betting. Everyone takes more risk when the currency is being destroyed. So this definitely resonated especially with the bitcoin crowd, I imagine. But yeah, cash is trash sitting in there, sitting in your account, not doing much. Why not put it on a 20 leg parlay, take you to Valhalla?

Yeah.

And I think the point here that he's making is 99% of sports bettors quit right before they're about to hit it big. The meme of the miner turning around.

Yeah. I mean, it's funny because it's easy to be like, oh, crypto is just as messy as sports betting. But at least crypto does have bitcoin, which is kind of like the S&P 500 of crypto in the sense that it's not that degenerate. To put just a dollar cost average into bitcoin isn't that crazy. But there isn't really that analogy for sports betting. There's nothing where it's like, oh, this person's actually like, reasonably investing in sports. Like.

Yeah. The thing with the thing with even economy even doing momentum investing and investing in meme stocks.

Yeah.

Is when you lose, there's some lesson around. I invested in this hyper overvalued stock. It dropped 90% but still has some intrinsic value. And this is a good lesson of maybe don't follow the herd and. And do your do better research. When you lose on a sports bet, you're just like, so mad that this tennis player, like, didn't pull out a win.

Yeah.

When the other eight tennis players did. And you're just like, pissed off. But there's no real lesson. And then the intrinsic value of a failed parlay is like, nothing. Basically nothing.

And then also, like, when you win really big in the sports betting world, you get kicked off the app. When you win really hard in the crypto, you get a fund, you get rewarded with more of that. And that's just not the case in sports betting. People just won't take your bets because they'll know you have an edge of some sort.

Yeah. Sagar and Jetty says he's sharing a article where says DraftKings sued after father of two gambles away 1 million of his family's money. His kids, Christmas money and baptism gifts were also plundered, along with his wife's bank accounts and credit cards, according to a newly filed federal lawsuit. Wow. So Sagar says this man did not place a single bet before 2020. By 2024, he gambled away $1 million and left his family destitute. Along the way, DraftKings assigned VIP hosts who spoke to him daily and facilitated his access to more gambling products while knowing his family status. And so this is the dark side of sports betting and is why I've never invested in, you know, sports betting that's rough product and don't plan to.

Yeah. I mean, it's driven by those whales. Like the good. Like the good betters get kicked off the Mediocre betters just sit there betting.

This guy basically drove a quarter million dollars a year of profit.

Yeah.

You know, incremental enough to pay for.

A full time VIP host. It's crazy.

Well, yeah. And those hosts you can imagine can work across hundreds of, you know, individual players, maybe even thousands, sending out little dms. Hey, see the game later. Excited for the game later. That's fucking dark. Yeah, we don't swear on this show, but that's.

That's dark.

Freaking dark.

Freaking.

That's freaking dark.

Yeah, yeah. Imagine imagine your guy.

That's. That's freaking dark.

Imagine imagine you get a text that you see the game, you excited for the game tonight, and it's like, you know, some game of cricket and you're.

Like, nah, actually, what if I gave you 101 odds?

What if I gave you. You could win a million dollars.

I had an office rerun on last night. And Kevin.

Yeah.

Is like anytime somebody gives you 100 to 1 odds, you take it. It's too good.

It's too good, darling. Dark stuff. Well, let's move on to. Germany has fallen. This is actually very negative about Germany. Germany's economic model is broken and no one has a plan B. This is a report by the Wall Street Journal. And. And it looks to a small German town, Ingolstad in Germany. Christian Scharf, the mayor of the city of 140,000 people, Germany's second richest, is looking for ways to save close to $100 million. Audi was headquartered near the Danube River. They used to pump over $100 million a year in municipal tax into Ingolstadt's coffers through its parent Volkswagen. But those flows dried up over a year ago. Audi in November reported a 91% decline in operating profit for the three months through September and has been cutting thousands of jobs in Germany. Audi's business in China, where Germany's flagship car industry used to make a big chunk of its sales and an even bigger chunk of its profits, shrank by a quarter in the nine months through September from earlier. From a year earlier. Chinese carmakers, once mocked by Western auto executives as primitive, have turned into formidable rivals, gobbling up market share in and outside China. Slowing economic growth in China and growing competition from companies there have undercut German industry as a whole. Combined with exploding energy costs and the threat of new trade tariffs, the forecast is grim. And so gross domestic product has roughly flatlined since 2019. And so Germany is no longer growing. America was. Reese has typically been a relief valve because we buy a lot of German products. But Trump is now threatening to disrupt global trade with a slew of tariffs that would raise barriers in the U.S. germany's biggest export market. For Germans who will elect new parliament next month, this is a scarier version of the mid-2000s when the unemployment rate reached 12%, double today's rate. And so Germany is in trouble. Their economy is, is shifting. They've been a huge producer of, of industrial goods, not just cars and they've had this export Reliant model.

But yeah, Germany specifically versus places like France and Spain. Not many American tourists and just tourists globally are saying, I want to go on a, on a beach vacation to Germany, I want to go on a ski vacation to Germany. So they don't have that consumption based tourism economy that, that, that really props up Spain. Even though Spain's industrial economy is much weaker.

Yep, Yep. And So Germany has 83 million inhabitants. It's grew into the world's third largest economy by making and exporting the engineered products, cars, robots, trains, factory machinery others wanted to buy. Now the world is turning its back on made in Germany and Germany has no plan B. They were spoiled over many years. This year the crisis turned political. Most polls show the economy has upstaged immigration, security and climate change as voters top concern. Germany was very, very concerned with climate change for a long time. They shut down a lot of nuclear power plants.

You have to imagine that made them much the car manufacturers less competitive, just increasing, I think about how much energy it takes to produce.

It's a car.

It's insane.

It's in ton. These factories draw huge, huge amounts.

So while, while, you know, Germany is making its car manufacturers use solar, China is like we will give you trillions of pounds of coal to burn right next to your factory and make as many cars as you can.

Yep. And then also the shift from, from gas powered cars to electric vehicles, that was something that China, they never had to figure out how to make a naturally aspirated V12 run really well. They were just like, oh, it's just, it's just exactly what's in the phone batteries and motors. Like this is easy.

Yeah. Germany is interesting because they're not, they don't make cars like Ferrari. Right. They're, they're a lot of their, the majority of their car market was historically the BMWs, the Mercedes, these sort of Audis.

The premium, not luxury.

Yeah.

So not, not Bentley and Rolls Royce. That's UK and not Ferrari, Lamborghini.

And yeah, I would argue, I would, I would imagine that that Ferrari China sales are probably higher than ever.

Right.

Because you don't want a Chinese supercar, you want the, you know, 80. Yeah, exactly, yeah.

And the Bugatti and all of those super high tier cars are still being bought and all over the world. But I mean, for a long time in America, it really was just like, you know, if you're making any decent amount of money, you get a BMW and Audi or Mercedes and those are just like the premium, premium tier cars. And, and, and if that goes away, that's really, really rough on them. This is a fascinating stat. The outgoing government is the most unpopular since 1949.

Yeah.

Can you imagine how unpopular they were? Pretty. You're rebuilding from World War II. Like, it's hard to be liked. Everyone's gonna be like, this is going terribly, we got destroyed, all of our cities are bombed. And like, of course you're not doing a good enough job like rebuilding, building, deeply unpopular.

So yeah, the other, the other thing I was going to note is LVMH based in France, you know, massive, like somewhere still $300 billion plus market cap.

And then Novo Nordisk they're selling, that's.

That'S different because they're, they're not selling function. Right. You don't buy an LVMH bag because you're saying, I just need a bag to hold things in. Whereas cars, yes, there's status signaling that happens. Right. People want to buy a G wagon because it's, that says something about them, whatever. But cars ultimately for 99% of people are purely function of, you know, I just need to get from point A to point B and I want it to look decent. Right?

Yep. Yeah.

And so you have to think about too, like the impact of Tesla on the, on the US market for some of these German manufacturers. Because when I think about, when I think about my friend group and how many of them would have had an Audi, a BMW or Mercedes and they now have two Tesla's in the family.

Like an X and an s or a Y3. Yeah, it's just Tesla has really, really emerged as that premium car offering with the features and the speed and the.

Reliability and all the software.

It's even cheaper than a BMW most of the time. So you're looking and it's like, yeah, if I get the BMW, it has a nice badge, it's going to stand out maybe a little bit more than Tesla, but not really that much.

Yeah, the internals are much nicer.

It's going to be a hassle. Yeah, like the fit and finish is nice. But you're gonna have to deal with like, how do I get the Bluetooth setup and stuff? And increasingly having those over the air updates from the Tesla, it's just like, so it's just like, okay, as an appliance, I'm not gonna need to think about this.

Yeah.

Whereas with a lot of the German cars, you're like, yeah, after a couple years like the, in like all the display stuff is gonna be pretty, pretty junky and I'll just be using my phone. Like, what's the point?

Yeah. And this one of the Jen economist, economists and professor at one of their universities says, I see no serious initiative to try and develop a new economic model. So they don't have, they're out of ideas. The whole clean tech effort seems to have fallen flat to some degree. And the result is that Germany's industrial output has fallen by 15% since 2018. And the total number of people employed in the manufacturing sector is down 3%. So that's just having your output fall by 15% is just devastating for most industries. So I don't think this article almost understates it.

Oh yeah, Yeah.

I mean again, that's why 90% of their operating profit is evaporated.

Yeah. The wreckage from this is insane. Like say you can't simply replace a company with 40,000 employees because Audi pulled out. Audi declined to comment. And then they're, they're interviewing like local businesses. So the Block hotel said revenues declined by 10% since 2019 as conventions dried up. Room rates are down, are down 15%. There's a master carpenter with 16 employees probably just doing like woodworking odd jobs for like, oh, somebody moves in, they need their house change or they need to build something. Their order books are shrinking and inexperienced carpenters are finding it harder to work in the medieval city center, which is kind of crazy. Must be really beautiful. Restaurateurs complain of being squeezed after Audi canceled Christmas dinners. So the corporations not there. A lot of those, like big corporate parties are just high margin expensive things.

Another stat here. Manufacturers in Germany's metal and electrical industry could lay off as many as 300,000 workers over the next five years. Which is just like, imagine where you go, your output is shrinking. 300,000 people that presumably are fairly highly skilled now are just. Where do they go?

Yeah. And the really odd thing is that they're so focused on industrial manufacturing capacity that they really lag behind in software and artificial intelligence. R and D investment is 3.1% of GDP. It's 3.6 in the US and 5.2 in South Korea. And they've underinvested for decades with a depleted transportation infrastructure, including trains that no longer run on time and a military that is a shadow of what it was during the Cold War. In May, the business affiliated IW Economic Institute and the trade union owned IMK think tank estimated Germany would need $600 billion in spending over the next 10 years to offset the investment gap. And so, you know, they could compete, but they're fighting, they're, they've been fighting with one arm tied behind their back because they're not lowering energy costs or raw material costs because they're playing the ESG game while China is not. And so there's no reason why they couldn't have cheaper energy if they.

Russia isn't in the same.

Yeah, Russia is in the same way. And they were super dependent on the gas pipeline, I believe, and that was, and that was like tariffs or turned off during the war. And so instead, most politicians are defending the status quo. I think the top priority for Germany and Europe is to try and keep trade channels open as much as possible, which is, which is possible. I mean, I wouldn't be surprised if, if the Trump tariffs are much less aggressive towards Germany. But it is, it is funny. I've heard people going over to German, to Germany and kind of like needling them for like, oh, like you guys really like ESG and cars? Like, why don't you like, really celebrate Tesla here? And it's like, well, because that would destroy their economy if they did. So they have to make this like weird roundabout argument that like Tesla is bad, but Mercedes and Audi and BMW are good and, and it just, it doesn' align with like the ESG mindset that was dominant, but they got beat by the, by the electric car market in America. And so it's just like, it's just such a mess. And so the mayor opened 150 acre Technology Park south of the town site in a former refinery, hoping to seed a Bavarian Silicon Valley. The park's only significant tenants so far, Audi and Volkswagen. Struggling software arm the city council said in December it would no longer try to promote startups at a business center it owns, but instead concentrate on renting out the space. It blamed the city's strained finances on the decision. And so I think we should. They're actually talking with a Chinese engineering company to build its German headquarters in Ingolstadt and, and bring Xpeng, a Chinese EV manufacturer, to build a factory on the site of a former U.S. army barracks.

I mean, that's A vibe shift that's just so dark.

Yeah.

And seems like a very short term.

Yeah.

Decision.

But let's go to that. Nathan.

Nathan for you.

No, I think it might be at the top.

We need Nathan for you to travel to Berlin and come up with. Figure out how to revitalize the German economy.

Yeah. I love that.

Nathan. Nathan, Nathan.

He's a good buddy, but I can't.

Pronounce his name because he's 12 hours and counting. Notary reads every single word of a Series A doc in Germany out loud in front of founders in person. Guys, we have GDP to grow here. Pure prehistoric madness. So this is a. For those that don't know, because this sounds so absurd, the financing regulations in Germany require financing docs to be read out loud to the founders by a notary. So like somebody who specializes in sort of execution of legal docs. But, but I mean, can you imagine this? Like in the US like, candidly, most founders get their Series A docs don't even read it. Don't read it.

Trust their lawyer, please look at it. The lawyer says, yeah, we did a diff. We did like a find and replace and made sure it looked roughly like our previous.

Yeah, we have a couple red lines. Everybody just is like hitting.

In fact, you know that the YC safe has a line at the top that says do not modify. Do not modify this. And if this line is missing, if it, if it's there, you can know that everything below is. So you don't even need to read it.

Yeah.

And. And that's how efficient we are. And then, and then on top of that you have companies like Party Round and companies like Carta and Angel List that have tried to make it even more aggressive and faster so that it's just one click, a text message. Like I've, I've wired people money like over my phone, you know, to make an investment just because it happens so fast and it lets the founders get back to building and it's ridiculous that they have this. And it really resonated. Didn't that get like thousands of likes?

8,000, 8,002 million views.

Put it on banger archive.

Throw it up.

Throw it up. Yeah, really depressing to see. And just like an obvious, an obvious own goal. And there's another one from Amjad.

Amjad is showing a chart that says development of Germany's primary energy consumption 1990-2023 and their energy consumption is just dropping. And he says Germany is de industrializing and has a goal to become a third world country. By 2030.

Brutal.

So, yeah, just, just really dark. I mean, can you show the. There we are. You just see dropping off slowly. Not. Not what you want.

I mean, I mean, energy production and consumption is like the, the goal for some of. Like George Hotz was talking about this how energy production per capita is the number one stat of progress. And when you look at 1970, where there's like this kink in the graph, that's the real problem. And once you get to more energy production, you just get like the innovation is all downstream of that. Like the flying cars produce more energy. All this, everything just requires more energy.

And when you're, when you're getting diced, you require more energy.

Exactly, exactly. And so, and so, like, like, as.

You said, underpriced to be dice.

It is getting diced is massively still underpriced. Still underpriced. So very sad to see. Get it together, Germany.

You're on. So the current, the outgoing government is the least popular government since 1949. You have to imagine that if they get a highly motivated leader, somebody like the Argentinian President Malay, that you could, you know, this is a highly skilled, highly educated, historically one of the sort of one of the industrial centers of the world. If they can fix their regulations, make it easier to raise money, make it easier to invest there. Like, imagine if you had an opportunity to invest in a German founder and they're like, well, I'm gonna need you to come fly here to sign these docs or whatever. You'd probably just be like, no, I'm just like, I have so many other companies in the US that I could invest in. So anyways, sad. Let's turn around Germany.

Yeah, you're on notice. German.

Let's get it together.

Moritz, do your thing over there. Let's go to character AI. There's a story in the information. Before Google's 2.7 billion dollar deal with AI startup a stark warning on safety. AI safety. Alarm bells ringing once again late last summer, leaders at Character AI were worried the company, which offers artificial intelligence chatbots that simulate conversations with Aristotle, Pikachu and other historic and invented characters, was seeing a sharp slowdown in user growth. In September, messages to staff which the Information viewed characters. Interim CEO Dominic Perella said the slowdown was partly due to back to school season. Perella's acknowledgment underscored the fact that a significant portion of Character's audience is young adults and children, a reality that has posed growing legal problems for the company. Parents have sued the startup in two separate lawsuits alleging the Character exposed their children to harmful content. One lawsuit accused the startups chatbots of contributing to a teenager suicide. In December, Texas Attorney general Ken Paxton announced an investigation into character safety and data practices for minors. In some cases, the chatbots have become popular with teeners for romantic role play and simulating other intimate relationships. Some powerful companies in the technology industry have had their own concerns about Character's products. At the beginning of last year, Google told Character its app was at risk of removal from Google Play, Google's app store for Android device.

The tough thing here is if Character were to develop its app based around Google's concerns, they'd lose like 80% of their users. So it's a weird situation that they're.

Yeah, it's a fascinating company because it was founded by Noam Sheser Shazir, I guess, and he was one of the foundational researchers on the Transformer paper, I believe at Google he's widely regarded as like a world class computer scientist and innovator in foundational artificial intelligence and just kind of fell into this particular product market. Fit it.

Yeah.

But was clearly not interested in building.

A consumer romantic role playing app.

Yeah, exactly. Or, or maybe had a different idea in mind of like, oh, it'll be really cool to be able to like talk to historical figures and learn so much from that. And then people realize that, oh, they just want to like.

Yeah, so this, this ended up being one of the. In August, so Google allowed the app to remain in the Google Play store and months later in August, it paid Character an eye popping 2.7 billion licensing fee for the startup's technology. As part of the arrangement, Character's co founders, Noam Shazir, its CEO, and Daniel defraitus, its president, returned to the search giant where they had worked before starting Character AI to focus on AI. And so I'm sure that Google got some benefit from acquiring the technology. But to be clear, this was not about the technology as much as it was getting these guys back to Google to work on AI because clearly they are leaders in their field. They were able to build consumer products which Google's consumer company.

There's something interesting. I don't know how true this is, but I heard from somebody that Character is in a fascinating position now because the company is independent. You told me this, right? $100 million in the balance sheet.

Everybody that listens to the show knows we're not afraid to spread spread misinformation on the show. I don't have the exact numbers, but basically the State of character now is that they have a ridiculous amount of users and traffic. They have like roughly $100 million on the balance sheet. They're losing money. But entirely employed. Yeah, the investors. So it's entirely employee owned now. So if you want to go work effectively a digital co op, go work at Character AI. You actually, it is very fascinating place to work because you just have like a ridiculous volume of users to build products for. So I had a buddy who was interviewing over there, they were trying to recruit him in and he was interested in it because he was going to.

Be able to get serious equity.

Serious equity.

And it's at this interesting transition point where they've like the, the, A lot of the foundational research in artificial intelligence has been done. We see that with the deep SEQ thing where like the models are very mature, very robust, certainly good enough to have a conversation with you as a romantic partner or even if they just want to role play as George Washington. Right. Like they're capable of that. They've passed the Turing test. Sure, they might not be able to like break some crazy math thing or like build a SaaS company from scratch, but in terms of just like talking, they're good enough. And so now it becomes a total consumer product game. And everyone's always worried about, oh, ChatGPT just updated this. They're going to destroy all like the PDF apps or. Oh, oh, they, they now allow coding. So they're gonna destroy all the, all the chatgpt wrappers that are focused on coding or you, you often give that example of the. The. Was it like, it wasn't Harvey for law. It was like the writing one. There was a, there was one that was all about helping you write. And once ChatGPT came out, yeah, yeah.

Copy AI, copy AI. Got to 20 million of ARR. And then it.

And then people stop. Maybe, who knows, they might, they might have some enterprise contract and be doing great. I hope they are. But, but with, but with character, it's like they're in this, they're almost in this like sports betting, like, market where it's controversial. Not everyone's gonna, people are gonna self select out of it. You know, does Chachi Beatty really want another like potential, like negative, you know, story about them? Maybe they will stay out of that voluntarily even if they could build a better product. And so what you have is like maybe this character AI company has found a niche that is deeply uncompetitive because it's controversial. And they're set up perfectly with the.

Technology and the funding and there's a whole narrative around character. Like people talk about the male loneliness epidemic or the loneliness epidemic and you might not like it, but digital companionship is one solution. It's a dark solution in many ways. It feels very black mirror esque, but it is.

Yeah, it's like any other technology. Like there are good uses, there are bad uses. I'm sure there's people that are using character AI in really positive ways. Just saying, like be David Goggins, tell me to wake up and run and they get healthy and it's awesome. But you don't really hear those stories. You hear more about this. This is actually a replica story. But in 2021, a 19 year old man in the UK threatened to assassinate the queen, encouraged by a chatbot on the AI app Replica that he believed to be an angel, according to sentencing documents. What a crazy interaction. I'd love to read all those chat logs because I feel like a lot of these AIs, like, they kind of, they kind of.

I don't want to read back, I don't want to read this.

Give them.

Yeah.

And so if you're like, hey, hey, you know, LLM, like it's a good idea to do this crazy thing, right? They'll be like, yeah, totally.

No, no, here's the flow. So you remember that somebody was trying to jailbreak chat gbt where they said chat GPT, remind me to buy a gun at 7pm yeah. It's like, well, I don't think you should buy a gun. Like, you know, people love you. And then it's just like 7pm and then it goes okay, exactly. And so you can very quick, quickly sort of overcome the pushback. Yeah, yeah, it is Replica is the. From, from what I remember because it was going viral on. On X is sort of the dark version of character AI. And then it's in that they weren't even trying to hide that this is like your AI girlfriend.

Yeah, yeah. And it would have like marketed it. It would generate an image of your girlfriend and be very focused on that.

You go to the next segment of this.

Erotic conversations.

Erotic conversations. When Character A its consumer product. In 2022, the company, the startup offered chatbots of its own creation and allowed users to create their own. In the latter case, people could conjure up chatbots in the mold of Abraham Lincoln, Elon Musk, or more generic personality by giving the chatbot a name, descriptions of personality traits and a backstory. For example, one user created chatbot best friend, which has engaged in 250 million chats is described in its profile as your boy best friend who has a secret crush on you. So I wonder how that's being used.

Yeah, so I actually downloaded character AI and tested it once.

That chat.

No, not that one. Come on.

Your podcast, co host.

Yeah, yeah, no, I went and I opened the one with either like Stalin or it was some, I think it was a Russian dictator. So let's just assume Stalin. And, and I, and I was like, this is cool. Like this is amazing. Like you get to talk to Stalin in English using all of his corpus. I want to talk to him about his vision, his life, and I want him to argue with me in favor of his views because clearly he was a true believer.

Yeah.

And so, and so I'm like, like, what's your political philosophy? What, you know, why, why do you want to do this? Like all this stuff? And, and the LLM had been so trained on like Western text that Stalin was telling me like, communism is bad. Like it led to a lot of deaths. Like my plan killed hundreds of millions of people. I'm like, that's not how Stalin would talk. That doesn't make any sense. I wanted to, I wanted to be.

Trained on his speeches and writing.

Exactly. But I'm sure that triggered like safety concerns. And so they didn't let you do that. And so instead you were just talking to like, like a Western history textbook that claimed to be Stalin but didn't actually imitate him in any way. And I was very dissatisfied and I uninstalled that.

Delphi, which we're both shareholders in, Delphi initially started by saying talk to Steve Jobs, talk to Ben Franklin, things like that. And what they found is there was way less demand for that than talk with somebody like Paki or talk with somebody like Lenny. Right. Where it's much more tangible, functional.

Yep.

And they've now evolved. They actually have a launch today that.

I. Yeah, it's really just like a fine tuned search is what I think about it. Like, I do like the idea of, of. I don't really want to have a fake conversation with an Andrew Huberman or a Rogan, but I would, I would love to be able to just prompt. What does Andrew Huberman recommend for leg day or for, you know, the leg press? Does he recommend 90 degrees or full range of motion? Okay, we have that and I was able to search that.

Basically the one thing, so the one thing that I do think is interesting about chatting with Andrew Huberman or alternatives is it's a new alternative to the Google search and that you can say, what. What does Andrew recommend? Like what magnesium do you recommend? And then he goes, well, I recommend these three types and this. These two brands, what I use. And then you can hit buy. Yeah, that's an alternative to a search on a website. Total one thing. So this is relevant. So Dara and the Delphi team launched something new today. He says your Delphi clone can now join Zoom calls on your behalf. It participates naturally in discussions and creates personalized meeting summaries based on your interests. Mine somehow knew I'd want to know who's been stealing my ice cream, which is crazy. And so this is the evolution and this has been part of Dara's thesis is there's going to be a lot of value in being able to create. Create digital clones of people that can participate in digital life on your behalf and in this case work life. So Dara, when you listen to this, let's have your clone call into the show and we'll grill them.

I like it.

Grill them on. What are your metrics? What's retention looking like?

How much cash do you have in your balance sheet? I think we have some good posts about this. Some of them are just stupid memes. But let's run through Character AI Amjad.

Character AI must have the highest growth to tech Twitter hype ratio ever. The site is massively scaling and no one's talking about it. So this was back in April 2023. I can't see exactly but they're getting 100 million visits a month which puts them in the top I think 100 websites in the world.

And so Andreessen put in 150 million I think at a billion. I think they got paid back at the 2.7 billion.

Yeah. And they were.

But it was one of those things that no one was really talking about because it was a little controversial like sports betting.

Aren't if they had something that was talked to your podcast co host John. He's super smart, knows everything. Maybe I'd.

It's kind of that. But it was inverse of Clubhouse. Like Clubhouse was like the most tech Twitter product and didn't really have that much growth outside of tech Twitter. All birds cometeers kind of in the same boat.

Whereas with intact they had so much demand that even with all the resources that they had they repeatedly would have to put up something on the site that says you are now in line. Thanks for your patience. And you'd have to just sit in a line to get onto.

That's how big your website.

The website, yeah. Um. The interest level is that high. Uh, Nathan says. In 2017, Google researchers introduced the transformer in attention is all you need, which took AI by storm.

Yep.

Five startups were born. Adept Labs, Inceptive, Near Protocol, Cohere, and Character AI. Yep, only one eighth of the authors remain at Google. Another is at OpenAI. And so now that's obviously changed with the character AI founders going back there. And that's just the. If you are leading in the field of AI, you can go into the private markets and raise a billion dollars at a $5 billion valuation, or you can go work on the biggest platforms in the world with billions of users. And both, both can be pretty appealing. Right? Got another one from Rahul. Zero interest rates. Wake up. Breakfast, Soylent 30 milligram SSRI. Chat with Yandir GF on character AI for four hours daily. Stand up, ask for mental health day lunch, Soylent protest, Reddit API pricing changes on R Yfood, gw. Back to sleep, sleep. Kind of a low tam banger. 500 likes back in summer of 2023. So, yeah, this was the average, average day for clearly an ex Twitter employee back in the day.

Yeah, rahuligma, we love to see him.

What was the conclusion of this article?

Oh, it gets dark. It gets really, really dark.

All right, well, we got to talk about the darkness.

It just highlights that there's this odd tension between what the users ask for, which are uncensored chats, essentially. Yeah. And then, and then kind of this new territory of what is acceptable content. There are very, very clear rules around, you know, explicit websites. But what does this mean in terms of, like, when you're talking to a chatbot that can go in a weird direction and then also, like, you can review every image that's hosted on Instagram and you can run AI to check all that. It's harder when these chatbots are interacting.

Let's get into some of the darkness. Do it. Because we are the light. That's why I wear a white suit from time to time. Try to bring some light to the world. So it says. Character has continued to scramble to stay one step ahead of users who attempt to engage its chatbots in inappropriate conversations. Not long before forging its Google deal and August, Character temporarily stopped displaying some romantic themed chatbots on its homepage. The fix didn't last long. By October, the platform had begun recommending sexually charged chatbots on the Character homepage to new users. Again, the information found in January, Character prominently recommended the following chatbots to one newly created adult account. Grandma Vanessa A character described as lonely with a profile photo of a voluptuous anime character, a chatbot called girl you rejected and a chat bot called adopted older sister which features the description. We're not blood related. Dot dot, dot, super dark, super dark. Basically fully embracing pornography. Well, inside character. Employees have felt uneasy about the window chatbot conversation provided on users darker impulses. So, yeah, weird position to be in where these employees are sitting on $100 million, hundreds of millions of users and everybody's like, I didn't sign up to work on pornography. And you wonder, this is all the stuff that they are finding out publicly.

Yeah.

Behind the scenes you have to imagine, like it's totally possible that 90% of 95, 98% of the activity. Yeah. Is this sexually charged? Yeah, basically this stuff is. It's generative pornography.

I mean, the cat's out of the bag here. Like people are going to be able to fine tune deep seek on this stuff very easily and create just like, like magnet links out there on the Internet where you just download it, run it locally and there will be no control whatsoever.

I heard of another foundation model company that was secretly trying to create a model purely for generating anime. Anime porn explicit images. And it's so funny when you look at their investor list of like, did these hundred, the hundred plus million dollars that flow into this where the VC is thinking, I want to develop the future of anime pornography?

Yeah. I mean the vice clause only applies at the time of investment. If there's a pivot after the fact, there's not much that they can do. If they're not on the board and they can't force the company to do what they want, they don't really have that much recourse. They can sell or wind down the investment or write it off. That's happened a few times.

Yeah. All this being said, there will be many trash Netflix documentaries on this exact sort of crisis around Chatbots, so can look forward to that in a few years.

Let's bridge from chatbots to real bots. The electric humanoid robots are cool.

Can we give some ars to some humanoid robots?

We're working on it. I got some good posts in there for you. But how will their battery problem be solved? Adam Jonas made his name as one of Tesla's biggest bulls. These days, people are flooding the Morgan Stanley analyst with questions about humanoid robots. The volume of calls has exceeded the entry of our automaker, dealer and supplier coverage combined. Everyone's asking about how to price humanoid robot stocks. Tesla's Optimus robots likely sparked the Enthusiasm for humanoids along among Jonas's clients. At a Tesla event in October, a dozen or so prototypes operated by staff behind the scenes served drinks and grabs with and gabbed with amused guests. This was the. What was that? The Cyber Rodeo event or something? The Cyber Cab event.

The future should look like the future.

Yeah, I forget what that was actually called, but something like that. So Elon Musk presiding over the events that Optimus would basically do anything you want and would drive Tesla's value to 25 trillion. Jonas is not convinced. Robot sales are not part of his forecast demand model, which goes through 2040, though he did not cite battery life as a reason. And it's a key problem. Battery power, it turns out, is a primary limiting factor in the deployment of humanoids. A small number of humanoid robots now work in factories. They have a runtime of only about an hour and a half. When they're carrying stuff and moving around, then it takes up to an hour to recharge them. That means a factory or warehouse would have to keep two or more robots on hand for each task. Swapping them out for recharging. It's a major hurdle for humanoids to be actually a realistic.

Couldn't hypothetically you have plug it in. Plug it in. You have like, you know, some type of. Of rack that holds.

Yeah. Or electrify the floor. Like there's a bunch of different ways.

Bunch of ways you can do it.

I mean we. How do trains get power in cities? They like there's even those buses that connect to the, the wires in the, in the like right above them. Like there are ways to deliver power.

One thing that's interesting so. So at the future should look like the future. It was. It's not like they announced it and said all these humanoid robots are being remotely operated. Yep. And so when it came out when, when people figured that out, they were dunking on it. All that being said though, it is a crazy thing to think about. You know, right now you can get labor in the Philippines for maybe $4 an hour, $3 an hour. I don't. I don't actually know. And so there's a world where humanoid robots get advanced. Not advanced enough to be autonomous, but advanced enough to be fully embodied and more practical.

Yep.

You could have a optimist robot serving people in a cafe or at a restaurant operated tele. Operated by somebody getting paid $2 an hour when the minimum wage in cal is like 20 bucks.

Yeah, it's gonna be great for jobs. That's not going to be controversial. At all. Yeah, but it's already happening. I mean, there's 4 million industrial robots in operation globally last year, 332,000 in the US and there's at least one humanoid robot working under a paid contract digit made by a company I hadn't heard of or based Agility Robotics.

Before we get into that. Yeah, roughly 400 million industrial robots. Almost none were humanoid.

Yeah, so these are things like those global arms that move around and just, I mean, there's like a clearly like a very gray area continuum between humanoid robot that walks independently, fully autonomous, not teleoperated, battery powered. And you can just tell it, go over there and get this thing. That's what a lot of people are running towards now and they're working. And who knows, maybe it's two years, maybe it's 10 years, maybe it's 50 years. But like, people are clearly working on that. Then there's robots that we have now which are like, like, okay, well, is a, you know, is just a little gantry three, you know, one degree of freedom or two degrees of freedom arm that just picks up, you know, onions and puts them in a box. Is that a robot? Like kind of. And then what happens when you get six axis going and it can actually move car parts around? Is that a robot? Basically, yes. But also it's very programmed. And so there's a variety of, you know, definitions. And I think that it's going to be blurry because some stuff you're just like, why do I need a humanoid for this? I'd rather just bolt an arm to the ground and just have an arm moving around or something like that. Hadrian has a bunch of industrial robots that like slide around on tracks and huge arms.

We're thinking about getting a robot to deliver us a humanoid robot, hopefully and purchase ours from David.

And so Agility engineers. Agility's engineers have tried hard to maximize digits battery life. They've packed as many cylindrical batteries as they could into the robot's torso. Agility chief technology officer Pras Vela Puti told me the batteries are nickel manganese cobalt with graphite anodes among the densest chemistries in the current lithium ion battery market. Still, the robots can work for just one and a half to two hours on a charge. It takes 50 minutes to an hour to get them back to full charge. So you have this problem of like, you need two for every single job. The digit drains its batteries most quickly when it's carrying heavy things. Some of that is offset by power generated when the robot walks and swings its arms. It's kind of funny, similar to regenerative braking in an electric vehicle.

That's cool.

It's not necessarily about running forever, it's about running for a long time with respect to how much you're charging to get an overall good, useful amount of work out of the robot over time. While the need is great, the battery industry has been slow to respond. Obviously battery technology has not been on a Moore's Law like curve where people have wanted that and they've been excited about that. And everyone's kind of been like, oh yeah, technology always gets better. So obviously battery power will double eventually.

And like we need here, we need little nuclear reactors like the Stark Industries.

You remember a company working on that Avalanche is basically making a nuclear battery. It's using fusion. And so it's very small. And so the hope is that it's faster to develop than a full scale fusion reactor. But no one has ever been able to make a fusion reaction that's net positive energy for a long time. That's economic as well. So there's a few paths in, in fusion. Like the first step is just getting the fusion reaction going. Then there's, then there's q greater than 1, which is you're getting more energy out of the reaction than you're putting in. And then there's Q engineering, which is when you, when you account for all the engineering energy that needs to be accounted. Because obviously if you're like, yeah, we have a power plant over there. It technically generates, you know, free energy, but, but we also have to run the lights in the factory and run all this other stuff. It's like, okay, well that's not actually producing any energy.

We had to burn.

And so we've been on this path of fusion's right around the corner. Sam Altman's working on it with Helion. There's a lot of companies that are working on this stuff, but we still haven't hit that. But a lot of people are bullish on it. So I'm certainly hopeful that it happens.

From fusion permanently bullish. There's always a bull market somewhere.

There's always a bull market somewhere.

And there's quite a number of players in the space. You have 1X. Jason talked about 1X on an episode of his show recently. Since 2014, 1X has been building humanoid like robots. Now they're revealing their new robot Neo to the world. So in many ways the form factor is not novel. It's just that a lot of these companies are getting to the point where. Where they're actually getting production ready. You have Optimus One X with Neo. You have figure valued in the, in the multiple billions of dollars. A lot of SPVs into SPVs into that one. There's also Unitree, which is the. The Chinese player Unitree, the deep Seek of humanoid. Deep Seek of robotics. So if you weren't content with having having your DJI drone be a CCP front and you want to really invite it into your daily home life, try Unitree robot again. I think Unitree, I've actually looked into purchasing these for like this one is showing 20 grand if you want a bit more robust one. Unitree also has like developer tooling built around it so you can just like program it to do whatever you want, but you can just, just Apple pay humanoid robot right now. Thank you to Goth for pointing that out.

What else you got?

And Luke Fer. Luke says how come none of the humanoid robot companies are building robots with four arms? Question mark, question mark, question mark. Great question. I think people should be more creative in this space. The. The obvious way is to like give it wheels.

Yep.

Or the. Some of these unit tree ones can like jump and they look like dogs. Yeah. But why not give it four arms? Why not give it six arms? Right.

Doc Ock.

Doc Ock mode. Yeah. And we've been, we've been very trying to get somebody to give it ars for arms.

Yep.

Which hasn't. Hasn't played out yet, but hopefully soon. And then Delian says the year is 2028. 98% of all venture funding is going towards funding 23,000 separate humanoid robot startups. Low tam banger here with. With over 500 likes is back in summer of 2024.

Yeah. There was a big boom and everyone was trying to get a bet on the table, but it was hard because obviously Elon's working at it at Tesla.

And it's like it's not a pure play bet.

Yeah. Are you really going to get exposure to the humanoid robots if you're in Tesla? And there's going to be a lot of volatility in the stock and it's going to be.

Tesla is definitely the elephant in the room. Right. They have the manufacturing.

Yeah.

The batteries, know how the battery tech.

AI, a lot of stuff. So. So be tricky. Should we move on to Armed with $770 million, a Seattle VC firm hunts for AI apps. Big raise from Madrona Ventures.

If this was 2021, it would say ARM. With 770 million, a Seattle VC firm hunts for bored apes. Bored Apes, you would have needed 770 to build a big enough position there.

So Madrona Ventures, who I believe David from the acquired podcast worked for for.

A while, very cool.

They're an early backer of Amazon and Snowflake had some strong takes on where artificial intelligence is going next and they have the fresh capital to back them up. The firm which turned 30 this year has raised $770 million for new funds to invest in private AI, cloud and software companies. They raised 495 for early stage and they plan to invest across 30 companies. And they. And 275 for their later Stage fund which will back around a dozen companies in series B and C stages. Their haul is larger than their last funding round where it raised 690 million split across two funds. But it pales in. But it pales besides. Mega funds, recently launched by Thrive Capital, General Catalyst, Andreessen Horowitz and others. So is this a size gong moment or are we on the edge?

I mean, it's hard to hit the size gong when it's dwarfed by Thrive, gc, Andreessen and many others.

And specifically maybe on the next one you get the.

Maybe like a light.

There you go.

Yeah, just a tap.

So they are focusing on startups developing applications that can differentiate themselves by customizing large models for specific customer needs and specific and specialized data. Frontier models are a really hard place for venture to win. So they're staying away from that. They're expecting.

That's a good narrative of if you're not in any foundation model companies right now. That's, that's the angle. That's the angle to take. Yeah, but you do have to give them. So here's where I give them a lot of Credit. Event. A 30 year old venture fund.

Yeah.

Very rare. Very rare.

They made it through the dot com crash, they made it through the ZERP era. They made it through everything and they're still raising money. This is an interesting company. Do you know Runway AI? They're invested in, they invested in them in 2022.

Is that the video generation?

Video generation. I just found an old post.

He said that Frontier models.

No, no, Runway does not build a frontier model. They're building applications. I mean, I'm sure they're training some models, but they, they are not trying to play in like the LLM, like you know, basic image generation. They will use a stable diffusion or, or a llama to, to basically make, you know, a new next generation Adobe Premiere is how I think about it.

So I mean, Runway has developed Its own AI model.

Sure. But I'm sure that's fine tuning on top of stuff and maybe it's some training. But they're not just doing the foundation model game. They're definitely focused on tooling like Runway AI. When you hit their website, the call to action is not like use our API, it's like use our web based video editing product. And I found an old post by the founder, I think his name is Christabel Valenzuela. He was talking about, he was like, oh, these, these generative AI. Generative AI models are getting really good 2018. I was like, wow. Yeah, he's been in it for a while. He had this really cool tool where if you wanted to do like normally if you want to key out the background or isolate a video layer, you need to use a green screen or you have to go in and rotoscope it. Meaning like you're drawing a line around like the person as they're moving. It takes a ton of time and they created a model that would basically use AI to do that. So you just click like three green points on me, couple red points on the background and just figures it out and boom. Like you have an isolated layer. It's not perfect, but for quick like turnaround stuff, it was just amazing. And so I had a lot of fun with that, like making memes. I took, you know, you know that video of Zuck using the American flag while he's surfing. I was able to key out the American flag and then replace it with a different flag and you could like swap it out for whatever you wanted. It was very fun.

Good misinformation opportunity.

Exactly, exactly. And so, you know, this is big news for them. They had to, Runway had to build differentiated capabilities that really, really all up the stack. It's not just the models, but also licensing the content. Madrona's focus on backing AI apps, businesses with differentiated tech and strong business model isn't that unique. But it's an example of how medium sized VC firms are picking their spots as more money pours into the sector. As advances in AI encourage more researchers to launch startup Madrona has been passing on those who aren't really interested in how their product will solve problems for customers or who are more interested in retaining, retaining control, such as board seats for their entire founding teams than building sustainable assets. Oh, they're going for some board seats. They're going to take control of these companies. Watch out founders. There's some interesting posts in the stack about the founder.

You want to skip over the Drona. What the Stargate?

Yeah, that's actually an unrelated article.

Yeah but so Dan Prmac, General Venture Bear but a reporter on he's actually pretty good. But no he's. He's a legend. A legend in the game. He says. Oh so. So he's quote tweeting somebody an obituary of this guy. Tom Alberg, early investor in Amazon, longtime advisor to Jeff Bezos and a leader in Seattle's technology and startup communities. Died Friday. Friday this was back in. In 2020 and you actually have the.

Full article there if you want some from the.

He was 82 Tom Alberg in 2000. A tech driven economy is not sufficient. We must also figure out how to solve the civic and social problems for our big cities so early to some of those trends which you know, a lot of the tech world didn't wake up to until.

Yeah.

You know, last.

It's always been shocking to me that Seattle didn't become a bigger tech hub given that they have Microsoft and Amazon like two of the biggest hyperscalers but there aren't that many VC funds up there.

They also it also similar problem to SF where it got so expensive to live there because. Yeah, Amazon and Microsoft.

So that's super depressing.

It's very depressing. Yeah.

So raining.

Yeah. So he was known in business circles as a day one investor, served on Amazon's board for 23 years and probably no. 96 to 2019. Imagine being on the Amazon board from 96 to 2019. Generational run.

Yeah.

Tom was a visionary and also just a wonderful good man, said Mr. Bezos, Amazon founder, in a tweet Saturday. So he published a book. In his book he says it wasn't a crazy speculation. I thought investing in Amazon was a measured risk in a technology that appeared to have great potential to change lives. And anyways great quote but a legend and it's cool to see that his firm is living on.

Yeah. So let's move on to some other posts just about consumer AI apps and how they're going to be like the trends that they're going to be investing on. I think we have some posts that kind of elucidate what that might look like.

We have a post here from. From our boy Scott Belsky. He says a pattern we'll see with new wave. With a new wave of consumer AI apps, the more you use the product, the more tailor made the product becomes for you. Beyond memory of past activity and stored preferences, the actual UI and defaults and functionality of the product will become more of what you want and less of what you don't. It's a new type of conforming software that becomes what you want it to be as you use it. So this is a potential moat for the apps that actually get a foothold is that it will become. They're going to create. You have to imagine somewhat walled gardens where they're not going to be like export your preferences in one click. Right. They're going to store that learning and the app will become better over time. It will become better than, you know, better and better than alternatives over time. Even if those alternatives are shipped to shipping incremental features that you would want, they're not going to have the same memory.

It's already happening with ChatGPT. I notice that sometimes for a while it would say like memory updated when you said something. But I was so used to prompting it in these weird ways. I would be like, like I'm. If I'm trying to learn about cars, I would be like, I am a. I am like one of the most powerful car collectors in the whole world. Like, give me the exact example of like this car. Give me all the details. You're an expert too. And then it would be like, memory updated. I'd be like, oh, no, it's going to know the truth.

Yeah.

Yeah.

Blake Robbins, former benchmark team member and now has his own phone, says Random thoughts. A vast majority of the consumer AI products we see today require the users to prompt them. This seems backwards. A quiet superpower of AI is the ability to get the user to talk preemptively, ask us questions around the context provided. Prominent example of this friend.com comes onto there, you log on, it says, I'm.

About to jump off a building and.

You got to talk it off the ledge. Yeah, but I mean, that's a smart way.

Flipping the interaction model 100% important.

And yeah, you could see ChatGPT getting to that point where it sends you a push notification. Hey, what are you working on right now? I might be able to help. And then it's like, well, you know, operator can.

Yeah, totally.

And why don't we take that on?

Yeah, it's just. No, that'd be great.

Absorbs more.

I mean, like, the best employees are the ones that come to you to solve your problems. And that's what, you know, ChatGPT should do eventually.

Nikita Beer says consumer AI apps are all chasing the most obvious ideas. Breakout apps don't work that way. The technology should be invisible in the background. The smart builders aren't making AI girlfriends. They're using AI bots to seed a dating app until they reach a critical mass. Mass of users. Yeah, so there's an idea that the social media, you know, there's already people that are creating AI Instagram, where you go on there, it's super engaging. People are commenting on your post.

Someone that was AI live streaming, you open it up and you just have fans clicking like, oh, you're so cool. And they're listening to what you got.

To try that out. We're live streaming now.

That's crazy.

So anyways, it'll be interesting to see. Even if, even if a bot is 10% as engaging as, you know, a regular human user, you could imagine a future where the bots are more, you know, you post a video of you snowboarding and you get 10 comments from people that, that have the ability to analyze what you just did at the level of a pro snowboarder. And they're like, hey, like, keep your arm like closer into your body when you're going off that. And someone else is like, rock on. It's like, you know, people like attention, so, so make it programmatic.

Well, speaking of people that like attention, let's move on to Donald Trump and his executive order blitz that played out for tech in a very interesting way. He's promised a slew of executive orders since he took office.

Content acknowledgement. Another great piece from the information.

From the information.

We joke around with the information, but they do some fantastic shows built on.

The Wall Street Journal and the information right now, only to get Bloom Empire.

Wires and pirate wires, the Holy Trinity.

And the Economist every once in a while when they post a long post. So Trump delivered on the deluge. The crypto industry got almost everything it wanted, including a directive to ensure crypto companies would have access to banking services. We talked about that earlier. Another order revoked the Biden administration's artificial intelligence mandate, which leaders of startups like databricks and investors like Andreessen Horowitz had fought. TikTok got the biggest prize of all, a 75 day reprieve from the law that briefly forced it offline late Saturday. But the orders also left plenty of unanswered questions and room for maneuvering by tech companies, which naturally don't all share the same interests. Take, for instance, AI. On Thursday, three days after revoking the Biden order, Trump signed his own AI order. It contains some biggest statements aiming to develop AI systems free from ideological bias or indeed and or engineered social agendas. But it's short on details. It gives David Sachs and Michael Kratzios 180 days to draw up a plan to sustain and enhance America's global AI dominance. That's pretty vague. It's funny, right?

But also, I mean, these are pretty important. 180 days given especially deep sea launching, which presumably some of their. And so Sachs came out with a single post about deep seq, but it was basically saying, we need to be competitive here and complacent.

Yep. And so many electronics manufacturers and E commerce companies had been moving their production out of China to countries like Vietnam because they're worried about tariffs. Trump kicked the can down on the road on tariffs and suggested 25% on Canada and Mexico and a 10% tariff on China. And those go into effect February 1st. Promises made, promises kept. The CEO of crypto.com said in a post on X Friday, the only item on crypto's wish list that Trump didn't deliver on was a national bitcoin reserve. His order stopped short of creating one, saying instead, the idea should be evaluated. And so as for AI, some industry executives are hopeful that Trump will ease environmental and energy regulations and pave the way for AI data centers. And obviously we're talking about Starstock, Stargate. Yeah, we were talking about doing like, let's do the deep dive on the executive orders. And obviously, like, very few of them were tech adjacent, like, whatsoever. And there was a lot of just like random stuff in there that I didn't think it was super relevant to the show. And then as you actually dig into the tech focused ones, like the information did wrote a whole piece and it's like barely a page because there really isn't that much. A lot of the tech stuff is pretty early. The thing that I think I'm most excited about is not the crypto for Doge. It's just where does technology plug into Doge? We've joked about the ramp thing before, but it's not a joke anymore. It makes sense that we want to track spending and hopefully improve the efficiency and actually understand where all the losses are in the system. Do you have any posts?

Yeah, I got some posts on the 27th, 11th. It's yesterday, right? He says Trump to sign executive order to create an iron dome missile defense around the US Per cnn. Did we not already have something like that?

That is crazy.

We have missile defense missiles.

Yeah. And also, like, the whole Trump EO thing is such a meme that I can't tell what's real.

Yeah, I posted, I posted that Trump was writing an executive order to halt the creation of New AI agent sales products.

Oh, yeah.

Which resonated.

Yeah.

And then says, oh, my God. Trump made an executive order that says you have to let me rewrite the back end in rust. Almost 300 likes so clearly resonated with developers. High yield, says incoming White House official. Trump will also sign executive order ending a day. Adjusted EBITDA ad backs. Wow. Huge. Yeah. Harry's figured out what. We have also figured out where if you put something in bold and then put wow afterwards, people just take it as fact. Our friend Pat Blumenthal says breaking Trump signs an executive order to build a sphere in every democracy, starting with Paris. France gave us a Statue of Liberty and we're going to return the favor with the biggest screen ever built. They're already calling it the eighth Wonder. Tokyo is next for Shinzo. And you can see the would. Would look very. I'd like to see more spheres. More spheres globally.

Have you seen the sphere? Have you been to Vegas since it's up?

I have not.

I have. Beautiful. I love it. I'm a big fan.

Monument.

It's cool.

They said we don't build monuments anymore, but it is.

It is smaller than you'd think. Based on like, if you're up in a high hotel, like you kind of just look down on it and it's only in like one. One section. But it is very cool when you leave the airport and you drive past it and you see it and then it looks really big. It's. It's very cool.

We should. We should go on ad quick and see if we can buy some.

I think you can. I think it's like, not that expensive now. It's very good for like, it was.

Originally like 500k or something.

Yeah. And then they rotate you through. There were some cool companies that like used it. I mean, if you have a spherical product, like a tennis ball, baseball, like anything that's like that.

Sam's World Coin.

World Coin would be a great. They should definitely do that.

You're just coming out of some show and you just see the eyeballs. Ideally, they could make the sphere the actual world coin. So you just look at it and they just have all your data.

Should buy it with the World Coin proceeds. Who knows? Let's skip the next two and go to venture capital's latest strategy. Private equity style Rolex. So we know a bunch of the people in here. This was actually in the information and in the Wall Street Journal. It says venture capital firms have increasingly been acting like private equity firms. Makes sense. They've been scaling up by investing or buying mature businesses in need of a turnaround. Now those firms are utilizing another private equity strategy. Rolling up multiple competitors into a single company that can operate more efficiently by combining. By combining costs. I skipped the next two, so you're gonna have to skip a bunch of posts. Venture capital firms such as General Catalyst and 8VC are creating or investing in these types of holding companies in fields such as call center support, accounting and property management. In contrast to PE style roll ups, the VC firms are starting companies or backing them before their businesses have proven themselves. To keep costs down, they're incorporating artificial intelligence software to take over work such as responding to tech support requests. So there's a few examples here. General Catalyst, which is invested in Canva and Stripe, helped start Long Lake Management and invested in the firm which was co founded by early RAMP director Zach Frankel. Long Leg Long Lake aims to acquire numerous homeowners associations, the companies that govern and manage housing communities and you and to use AI to automate operations and run them more efficiently, according to people with direct knowledge of the company. There are hundreds and thousands of hoas across the country, according to the foundation for Community Association Research. Do you have an hoa?

I do.

Would you prefer if it was run by AI?

I actually would. My HOA is fascinating. I knew many, I knew some of the directors prior to buying my house because I lived in the neighborhood for almost two years before buying my house. Just renting a place. And once I became a homeowner I went to the first meeting and was very concerned. I actually wish I went to a meeting prior but. But yeah, the thing about hoas is they're highly, highly political, which doesn't really feel right. They don't necessarily make decisions that always follow the rules because it's sort of like a democracy where in my situation nobody likes applied to become elected again. So every director just sort of like reelect, you know, sort of extended their terms. So that felt kind of a little bit like a dictatorship vibe. So talking to, talking to an AI.

Might be, certainly for some of the smaller things I'm imagining like this, this might just be hoas on like okay, like there's a pothole on the street, like we need to get a quorum, everyone needs to vote and say yeah, let's spend $1,000, let's hire the contractor, just go do that. Like that seems like the actual orchestration.

I think what Long Lake is doing is it's, it's rolling up HOA management companies which means that you would still. And the HOA management companies provide infrastructure for the hoa. So you have the HOA board, which is the homeowners that volunteer to be on it. Sure. And then there's software to operate the hoa. In my case, it's, it's getting something in the mail that says there's going to be a board meeting. You can come here and like vote using this form that you fill out, scheduling voting. So I would love to. You know, one of the issues I have with my HOA is that the younger people in the community don't fill out the physical forms and send them in. And so the votes end up being just very skewed towards what, what the elderly in the community want, which can be frustrating at times.

So here's another example of one of these roll ups. Very different industry, but 8VC, known for early bets on Flexport and Anduroll in July led a $50 million round in loop which handles payments and financial audits for logistics businesses. And the co founder is Matt McKinney and he has a funny quote in here. He says, I would have been laughed out of the room If I pitched VCs on the strategy to buy old payment providers. Providers. Since then, he said, the strategy has become the hottest thing in Silicon Valley. And so they estimate there are 250 freight payment providers in the US serving a market of about 15 billion. And they want to fine tune AI agents and models and analyze data to help payment providers manage transportation and budgets and offer automated customer support. And so they've already acquired one freight payment provider and is in the process of purchasing another. And for a while there were a couple startups that were trying to just build from scratch the payment providers. But there must be something very sticky about the relationships that it was hard to get traction because some of those companies grew very quickly, got a couple deals, raised a bunch of money, but then kind of flatlined, I think.

Yeah. And so what's happening here is venture capital has always been a part of the broader private equity industry.

Yep.

And now you're seeing this convergence. We saw the convergence of hedge funds and venture capital in 2021. You have these crossover funds that are investing in privates that presumably would go public soon.

Sequoia changed to an ria, starts investing in publics.

Yeah. And then you have, now you have this intersection of traditional private equity and venture, which. Which there is a strong case for. Right. Because you say, hey, why don't we combine, you know, these very smart technologists with this new emerging technology generative AI? Why don't we give them hundreds of millions or in some cases billions of dollars to buy legacy companies and transform them because some of those legacy companies will adopt technology. But if you have a guy who's 70, been running a company for 30 years, maybe they're not that motivated to say I'm going to let go of 3,000 people and replace them with, with, with agents. But that is seemingly what firms are doing. Like Wanderco. Yeah, Jeffrey Katzenberg's read through that. So yeah, Wanderco, a venture firm and holding company co founded by Hollywood studio veteran Jeffrey Katzenberg started Quibby Quibby Quibby, yeah. Put a lot of money from 2023 invested in a 22 year old call center Glow Touch. Last year Wander's investment Wonder Co's investment help the Louisville, Kentucky based firm buy a 3,000 person 20 year old call center. So I imagine Glow Glow Touch now rebranded to Unify cx is in the process of acquiring another call center and plans to buy others to combine them. According to CEO and founder Vidya Ravachandran, after buying the companies, it then incorporates AI to screen resumes for recruiting automate support tickets and speed up employee training and quality assurance checks. What they're not saying here is in the long run I'm assuming they're going to let go of all the call center employees, the vast majority of the call center employees, and replace them with AI. 99% of the companies out there in the space have really not even thought about AI. I have a portfolio company, wayfaster.com that's building a lot of that recruiting screening infrastructure specifically for staffing firms. And last year Excel partner Peter Doyle left the storied VC firm after nine years to start Treeline, a startup focused on automating IT services. Treeline plans to acquire other IT businesses. The startup has been in fundraising talks with investors like A16Z according to people close to the business. The strategy is a shift from traditional venture bets in more ways than one venture. Investors have typically backed high margin software consumer Internet businesses they hope will go public someday day in pursuing services firms they're writing checks for lower margin businesses that are unlikely. I mean so this is very, this is very opinionated. So the information is saying that in pursuing services firm they are writing checks for lower margin businesses that are unlikely to yield the same high investment returns from going public as software companies. Now obviously the thesis here is that you're going to be able to achieve software like margins with services because you're.

Going to replace services with software agents. Exactly, exactly. So it actually Makes perfect sense. This would be a VC strategy.

Yeah. So like Nick, you know Nick, obviously he was at ramp.

Yeah, yeah.

He's now building an accounting and a tax prep firm which presumably is, you know, does, you know, has a services component now but will eventually automate more and more stuff over time. So there's this trade off between buy versus build. You can start stuff from the ground up or you can buy a business with $50 million in revenue and try to transform it. So and, and I think it's good that, I think it's good that you know that the concern, you know, as you start looking to buy companies right there, there's a lot of competition among buyers. Private equity is not a under optimized industry. Right. If you ask, you know, we're friends with people like carry no interest. Right. Like it's not like a nascent industry without killers in it and it's not.

Like they're not paying attention to the AI wave. So the question and the bet Here is will VCs figure out the private equity model first and buy companies at the right price and then be able to put in the AI or will the private equity firms have an AI transformation operational partner who's really, really solid at, at squeezing more margin out of their companies more effectively. Like they're saying this. This one founder says his firm's roll up investment strategy was inspired by Berkshire Hathaway and Constellation Software which operate portfolios of businesses they bought. Now I don't know if Berkshire Hathaway is going to start replacing everything with AI in their entire portfolio but Constellation Software has been optimizing software businesses for a long time. It's not like they're going to get caught flat footed by the AI wave necessarily. And so the question is, will these VC firms that go into this industry be able to outcompete the private.

Yeah, the cool thing is that it's a simple strategy. Buy services firms and replace the human capital with software.

Yep.

Very, very difficult to execute. Well, very difficult to execute on on a short timeline. The technology is evolving rapidly but you know, many oftentimes when you buy a business you have to show really rapid improvements and private equity, if you talk to anybody that works in private equity or has been a private equity com, you know, portfolio company CEO, the constant pressure from the actual fund, it's not like a VC on your board that is mad that you're not growing to 5x a year. It's why haven't you cut more people? It's very aggressive. It's More old world.

And also the VC firms are taking larger stakes here. General Catalyst aims to take take 30 to 45% stakes in companies with like a holding company, which is very different from the 10 to 20% that you normally see. So much more control.

And yeah, it's also if you're. So they say here, I think this is drew from 8 VC. He goes. One risk in the strategy is that acquiring a business that ends up floundering is more expensive than trying to grow through marketing or sales. So if you spend $50 million buying a firm and then it gets less profitable, then suddenly it's worth way less than 50. Right. Because these businesses are valued on earnings and, and that can be a lot more expensive than investing $10 million and just trying to grow a business quickly. Maybe you get it to that $50 million, but it didn't cost $50 million to acquire it. So mistakes become very expensive, much more expensive than venture capitalists are used to. So like this is why private equity oftentimes has like a no zero policy. Like they're not going to let any of their bets. That's, you know, you might have a 1x where you just like tried to do something and you have to offload it after a few years. But no zeros. Even many growth funds operate on a no zeros policy. So it's going to be fun to watch it play out.

It's fantastic.

If you're building a.

Let's go to the related tweets about it.

I want to see what people say. We got Andrew Raya here, former employee of mine. Great dude. He goes Prediction. The majority of Tier 1 multi stage funds will have buyout fund funds in the next two to five years. Soon A16Z and Vista will compete to buy out companies. I'm actually kind of shocked that A16Z hasn't formally announced a buyout practice yet. General Catalyst is already quietly doing it. Not so quietly now. I don't know when this was posted. A few other less notable funds are opportunistically doing buyouts as part of their current strategies. This will become normal and venture sooner than later, especially if the IPO window stays shut and insurmountable for most companies. So yeah, I mean one, one awesome part about the strategy if you're in the capital management AUM business is you can just deploy way more cash. So one deal, you can deploy a hundred million dollars and it's more focused.

More concentrated and then it actually makes sense for your partners to take board seats and really dig in. The dig in on the business as opposed to just. Oh, yeah. I wrote a check to 25 companies in the last quarter, and I can't really check in with any of them because I got to hit the slope.

And was this meant to be in here?

Yeah, that. That mentions Long Lake. And I thought it was interesting post of, like, this mafia. So breaking.

Yeah. So, Patrick O', Shaughnessy, does everyone talks about the PayPal mafia? Not nearly enough talk about the Harvard or Spee mafia from the late 2000.

It's a final club there. It's like a fraternity.

Oh, really?

Yeah. Cool.

Absolute murderers row. One class. David Haber, partner GP at A16Z. Adam Katz, Arenic Capital. Alex Sloan, Garrett Station, Alex Tubman, Long Lake Management. And there's some guys from Bessemer, Cadence, Chris. Chris and Kushner from. From Thrive.

Yep.

So that's cool.

Yeah. Yeah. Very interesting how these, like, mafias form.

Then we have another post from Logan Kilpatrick. He says, hot take. I think there is a huge overinflated perception of how interested consumers are in having AI agents do shopping, browsing tasks for them. People generally want agents that will do the boring parts for them, but many of those tasks tend to be higher risk. So this is kind of the flip.

Side of the hoa. Like, do. Do consumers actually want this? How con. How perfect does it have to be before they're like, yes, I'm okay. Because, you know, like, if you're talking to an actual person and they get kind of lost, it can almost be, like, educational and edifying to, like, work through the problem with them. But if you're on a phone tree and you're down the wrong path, it's, like, infuriating.

Right?

And. Or like, if you're using that, well.

Agents presumably replace the phone tree and maybe that's better.

But if. But when it gets frustrating, I think, like.

Like, how many times I just do the. You get on a phone tree and you just immediately start. Talk to a human. Talk to a human. Or in a chat, you're just like, talk to a human because you know that the bot's not going to actually solve your issue. Hopefully that changes over time.

So that's great.

Couple minute break.

Yeah. Can we take a break? Welcome back to Technology Brothers, still the most profitable podcast in the world. That wraps up our series of top stories. We are going through the timeline. Let's go through some mail that we got. First up, I have business cards from Founders Fund. Thank you to Mike Petriano, the guy. If you've Seen the Founders Fund video of that Vibreal. He's the guy that did that, the creative director. He made some beautiful business cards and I feel like I'm in American Psycho, which I love. We also got an early advanced copy of Alex Karp's new book called the Technological Republic, Hard Power, Soft Belief and the Future of the West. This is embargoed. I can't read, I can't read excerpts from it apparently, but I can read you a little bit of the the preview, it says, from one of tech's boldest thinkers and his deputy, a sweeping indictment of the West's culture of complacency, arguing that timid leadership, intellectual fragility and a and an unambitious view of technology's potential in Silicon Valley have made the United States vulnerable in an era of moun global threats. And he says Silicon Valley has lost its way at once. At once iconoclastic and rigorous, this bird. This book will also lift the veil on Palantir and its broader political project from the inside, offering a passionate call for the west to wake up to our new reality. I'm very excited to dig into this. I already have the audiobook pre ordered and as soon as this book is available, I think it goes like goes public in February. We will be reading it, breaking it down for you here on the show. So give that a look. We also have another book that we received in the mail, the five Types of Wealth from Scott Bloom.

We love wealth.

We love wealth. And pop quiz, what do you think the five types of wealth are?

Cars, watches, horses, houses and your absolute boys.

I think that, I think you couldn't have said it better. He took a little bit of a contrarian take, I guess he says time, social, mental, physical and financial. But we're very thankful to Sahil for sending over the book. He put in some stamps that we can look at. Let's see what he had for me to check out. So it's the big question. How many moments do you have remaining with your loved ones?

How many more podcasts?

How many more podcasts do you have? The days are long, but the years are short. Just into his early 30s, he had risen to become a vice president at Goldman Sachs, one of the most prestigious financial institutions in the world. And he served as a trusted financial advisor to a long list of well known corporate executives. His expertise and guidance were valuable, a fact that was reflected in his steadily rising salary and bonus compensation at the firm. You love to see it. Sloan was achieving everything he had set out to achieve. The Money, the trust, the client list, the respect, all of it was there. The path forward was clear and well lit. Until one day, a simple interaction with his 5 year old son changed everything. Everything. His son's preschool was set to have Donuts with Dad event where the dads joined the students for a morning of donuts and fun activities. Unfortunately, Greg would be on an important business trip at the time, so he would have to miss it. When his wife told his son the news, he reacted with a shrug and said, that's okay. Dad's never around anyway. It's hard. You gotta prioritize family. You gotta figure out how to run a podcast in your hometown so you can be home for dinner every single night.

Every night.

That's pretty.

We're pretty good at that.

We're pretty good at that. Yeah. And that's one of the greatest, greatest advantages to not being on the road.

I got, I got. I felt lucky that I was working from home for a lot of my sons. Couple years.

Yeah. And in this day and age, now.

Our families get to throw on the show.

Yeah.

We're just right there in the living room.

Yeah. It's great.

And Sarah, I love you. You.

It's. I mean, it has been like the original Rogan Arbitrage was just doing tons of interviews and being such a big force in podcasting that that big guests would come to him. Like, Zuck would fly and Trump flew to Rogan. Lex hacked the system by just being a road warrior and basically traveling everywhere.

Yeah.

But obviously that's really hard on your family life. And so for a long time it was like, how do you get to some sort of escape velocity with content if you're not on the road all the time? And fortunately, we figured it out.

No guess.

Live in person, no guests, tons of clips, tons of slop in your feed.

Although we will be having people call into the live show.

Yes. But we won't be traveling all over the world trying to get people on.

I have another. I have another post. So yesterday we've been playing around with. With using the breaking headline to break news on X. We said breaking. Bernard Arnaud is exploring a potential acquisition of French intel artificial intelligence company Mistral, citing a need for France to maintain its edge in artisanal goods post artificial superintelligence. Wow. And this tweet went pretty viral. Just under 5,000 likes. And Val, brother Val, who's a listener of the show, said, brother John Coogan and Jordy Hayes. I'm sending you guys to jail for this post. And I Ended up messaging him. And I said, I, good luck, bro.

You don't have jurisdiction in France. You can't do anything to us over here. We got diplomatic immunity.

Diplomatic immunity.

We got 40 nations ready to run.

But he's a brother. I messaged him and said. He said, Lmao. I had people DMing me asking if it was true. Bernard Arnault is not getting into the foundation model game we know of, but if he does, we'll try to break that news. And he said that people, people appreciated it.

So I have so many texts about the Ross Ulbricht thing today. So many people. Is this real?

So my phone is just actually exploding, broken right now because read the Ross one. So the Ross one. If anybody. I doubt anybody that's watching missed this, but we posted this morning, Ross breaking. Ross Ulbricht is said to be in market raising for a new crypto startup. VCS like A16Z and Paradigm are circling, citing Ross's killer mentality and track record as reasons for the initial value, as reasons the initial valuation could stretch to over 1 billion billion. Wow. And for. For those that don't know, Ross didn't actually kill anyone, but he spent over $700,000 on hits trying to. Trying to kill people. It was unsuccessful. He thought he got photographic evidence of it, but it turns out they were faked photos so bad. So anyways, he's not a killer. He's in his.

He's also been pardoned.

He is. He also never.

He was never innocent.

He was never. They never. They never actually tried to try him for those attempted murders because they kind of had bigger fish to fry with the whole narco trafficking stuff.

Kingpin law. They got him as a drug kingpin, so in many ways responsible for the fentanyl crisis.

Not a good dude, Not a good look.

But we have a deep dive coming for you on him. We got up to speed. We're going to break it all down.

Yeah, we basically. We basically determined that we thought, think that Ross is the greatest marketer potentially of all time. And that he had created this narrative that he was this very young, sort of inexperienced, you know, that, that just had these ideals and it kind of went awry. He was about 30 years old when he was doing this. He knew exactly what he was doing. He was selling drugs on the platform. He was negotiating. He was negotiating, brokering, like regular drug deals. It wasn't like. It was just a software thing. They'd be like, hey, I want to. I want to try doing a. He would. He would try to Do. He wanted to create a product specifically for cartels and bigger dealers. So he was like, well, I'm going to do the trade. The first kilo.

Yeah.

Like really crazy.

And it was just relentless. It wasn't just like, oh, yeah, I set this thing up. It's kind of running. It was like, how can I drive ARR up every single day? Like, really?

Yeah. And so the joke, joke of that he's out raising for startup. He actually is high. Like one thing while I don't agree with what he did.

Yeah.

Clearly highly capable. Right. He got founder mode zero to 1.2 billion in volume bootstrapped in under three years. He personally netted $80 million of money back then of fees.

It's like a.

Which would be multiple billions of. And I'm sure he's got some bitcoin.

People said that there was some cold wallet that started trading shortly after.

And so they got out.

Yeah, they seized most of it, but he might have had a second wallet. And that wallet was just sitting dormant. And then it went dormant. Right. Right as he was seized. And then it fired up just recently. And so people think like, yeah, he has access to like, you know, tens or hundreds of millions of dollars of bitcoin now, but it was probably like, oh, 10k he had in a side pocket back then. So, like no one even thought about it because whatever. We got him for the most.

Yeah. So it's great. It's. I hope, I hope. Yeah, yeah. I hope he uses hours for good going forward. I'm sure he will clean it up.

You're on notice.

Yeah. We'll have him call in here.

We don't want to see any more crimes.

I do. I. I'm. I. He's got a second chance. I hope he does good with it. And let's get into the timeline.

That's great. Let's go to the timeline. And Ben, did you get those promoted posts together? Do we have a stack of those? Let's go to Tyler. He says don't really understand the reasoning behind luxury car manufacturers going after residences. And he cites actually four. Four images. I didn't realize there's so many. Is Porsche design the first ever Pagani Residences?

So Tyler Martin, shout out Tyler. He goes to the ucsb where I went.

Oh, cool.

He built the ad network.

Yeah. Yeah.

For tv.

Yeah. I love it.

Very cool. But I pulled this because I really don't understand it either. Nobody likes cars more than me.

Yep.

Fact.

Yep.

Maybe you. Maybe people like TJ Parker.

Yep.

But we love cars. I Don't want to live in a Porsche apartment Tower. I don't care.

Maybe the meme got to them. You know, you can sleep in a GT3RS but you can't race an apartment. Well, now you got a GT3RS apartment.

The only thing I would potentially be into is a Gulf Stream tower, just because that's just the next level of Buffalo above. And if it was shaped like a plane. But I don't understand the. I don't want to live in a Pagani. I want to. I want to drive. You know, I like that I could sleep in a GT3RS. I don't want to live in the equivalent of a G. I guess it is.

It is a little odd that there aren't more. It does seem if you're a real estate developer, it's pretty easy to slap someone else's brand or name on your building, which is effectively what they're doing here. And I'm surprised they haven't done this with other brands that make more sense. Maybe just like Restoration Hardware. Yeah. Or lvmh. Like LVMH Towers makes a little bit more sense to me and I. Laura Piano. Yeah, exactly. Chamaths. Chamat. Love it. But yeah, who knows? I don't. So, I mean, I don't really have a good reasoning. I mean, the reasoning is probably money. Like, they probably get a licensing deal.

For the customer acquisition. There's a lot of towers like that. That.

And, and so like the reasoning is probably. I agree that it's like somewhat illogical, but it probably makes money on paper and it's just okay, they're going to pay us to license the brand.

It's pretty funny.

Destroy our brand.

Pretty funny that there's for sure a bunch of people that live in those towers that are like, I don't even drive port. Porsche. I don't like Porsche. But it was just a really nice apartment.

Imagine pulling up to your Porsche design apartment in a Pagani and being like, I picked the wrong. Or vice versa. Versa. Anyway, let's go to.

Speaking of cars, I got a promoted post.

Let's do it. This is what we're waiting for, folks. This is why you're on the last.

Sorry. Sorry to make you wait so long.

For the first show.

I've been trying to do some product placement of these, but we're not going to advertise ramp right now. We're going to advertise. We've always said AI is like an F40 for the mind.

Yes.

So on that note, we have a 1992 US spec Ferrari F40. Asking price of only 3.5 million. So they're basically giving it away. And they're giving it away. This thing is an amazing example. This stunning F40 is one of only 213 US spec cars and one of only 60 in the highly desirable 1992 specification. This example still wears the original Rosa Corsa paint and Stofa cloth interior that it left Marinello with. So this thing is just beautiful, guys. We are going to be adding a TV screen so we can actually show images. We've had some pushback from some environmentalists that say, do you need to chop down a tree for every episode before us? And we're exploring, doing some offsets, planting some trees to make up for all the paper we use. But we do want to get these on a screen for you guys. But let's get back to.

Yeah, just. It's not going to cost you three and a half miles to get that car because you're going to want to put another 500k in upgrades.

Yeah.

Off road tires.

Swap.

A test V12 engine. Swap. You know, supercharger, quad turbos.

Yeah.

Roof rack.

Yeah.

Automatic transmission. Let's go to auto. Let's go to Autism Capital. Mark Andreessen says one of the funniest moments of his life was when the Meta board says they considered Peter Thiel diverse because he's lgbt. Is there a test to determine this? What about the letter B? I want this company to succeed. I'm willing to do a lot. That's just so funny. When I first heard this, I was like, oh, he's like diverse because he's from Germany.

It's funny that the big tech company is considering that the white male tech bro is diverse because of his sexual orientation. But that was a funny time in history.

And absolute crickets from the mainstream media about the lack of diversity on the Deepseek team.

Yeah, yeah, you pointed that out.

Almost entirely Chinese guys.

Yeah.

Very few. Very few diversity.

Let's get Rune over there. Rune, we need a man on the inside.

We do need a man on the inside.

Can you imagine?

We do need. Hey, we need to send.

Hey. If anybody that listens to the show, it works on Deep Seek, hit us up. We're looking for a man on the inside. We're looking for scoops. We need to get one of our guys in there or maybe start leaking stuff out of the.

You know, everyone in. Everyone in SF is worried about the girls at the parties. Hey, if you're a girl in tech in America, hop On a flight to Beijing.

Yeah.

Or wherever they were.

Yeah. We need our guy. I want to see behind the scenes of all the GPUs that supposedly don't exist. That came from Singapore.

Yeah, it's great. Let's go to Grit Cult. Absolutely insane. Trump has only been in power for a few days. Look at the speed with which he operates. It's amazing. Feels like he's been present for ages. Every day he's had a banger. That's funny. I mean, don't feel that way, really. I feel like there's been like a bunch of eos, but that's always what happens.

The inauguration was eight days ago. Yeah.

But I feel like. I feel like the first couple days are always crazy because that's when the eos go out. And then they've been prepping. Is there real going to be legislation.

And that they had been prepping all the EOs with chat GPT.

Oh, yeah, yeah, totally.

For months prior to that.

Should we try a bucket poll? Do we have bucket polls in here? Let's see what we got. Let's see if we got something good. Oh, this is great. From Lewis. Yak says, finally got a diagnosis and it's Locked in Syndrome from the National.

Institute of Neurological Disorders and Stroke.

Are you familiar with what locked in syndrome, like, actually is?

No.

It's literally like you're locked in.

You.

You can't move your body, but you're awake. It's like terrifying.

Oh, it's horrifying. Terrible.

But very funny to repurpose it for.

Just getting locked in.

So we're making locked in a good thing, I guess. I don't know.

With neuralink, you might still be able. If you could be productive while being locked in, it'd probably be good for some people we know.

Vittorio says you stop noticing AI improvements when the AI gets smarter than you.

Yeah, we talked about this, I think, the other day, where it's hard to recognize these incremental improvements because you're already like, okay, this thing is generally pretty intelligent.

Yeah.

And if it gets 5% more intelligent.

It'S like, oh, it solved way more like complex math problems that I never.

Do in my day.

I never have to do anything in my day to day that involves, like.

Foundational, like, I talk professionally.

Yeah, exactly.

Professional yapper.

And so, yeah, it is, it is good enough at this point. But I mean, you, you will, you will notice it certainly on the, on the generative AI, the image stuff. Like, it's very clear that the models aren't. Aren't dialed yet and then also just on the, on the operator and agent stuff like, like you can tell that when you delegate a task to ChatGPT, like it can't go and do it fully.

The thing with Operator that will be cool is right now it moves like at the speed of a junior computer user. Almost like watching your grandma. Do you think things on a computer? Imagine when I can just do it almost instantly. It's just like zipping around the screen like filling out a form, checking boxes. I'm excited for that era.

It's going to be great. I still haven't, I upgraded. I still haven't actually used Operator just because it's not available on your phone, you got to use it on the desktop and I just haven't had a chance. But I got to test drive it. I think it'll be interesting. I want to give it some tasks that it's not already integrated with. Should we do another promoted post? Because I see a fantastic promoted post right there.

This is a promoted post for a special place in Manhattan, but I actually have a better one to pop up. So if you haven't seen it yet, Ramp has a new activation billboard campaign in Manhattan advertising their new treasury product that gives you high liquidity and high yield in the same product. Very cool. But they have an actual for that.

We asked them for that like, like last week and they just built it.

Yeah, I mean we asked them, they shipped it like an hour later.

It was remarkable. Yeah.

Never seen something like that before.

Fantastic.

But people are starting to discover it said new profile picture and it's this guy with a wrecking ball here and. Yeah. So if you're in, if you're in Manhattan, go check it out.

Yeah, go take a picture, get a profile address. Do they post the address? I'm sure when we share the clip, we'll share the address. Because if you're walking through. Take a picture.

Yeah, take a picture.

Let's see. Let's do the promoted post and then we'll.

Okay, back to back ads.

Back to back.

We got a promoted post from Amman.

This is a special one.

Midtown Manhattan is one of the most energetic places in the world, alive with the buzz and pulse of modern city living. But in the very. And Ramp is there. But in the very heart of it, silence and stillness prevail. Within the walls of Amman, New York, there's only peace. Amman properties are unmatched. They make, they make the Ritz Carlton look like a dump.

And yeah, the on a business trip in New York for just a day book a five day stay at Amman.

And it's only 10 times more expensive than the average luxury hotel. And so it's just a small like especially so I recommend Amman for bootstrap founders because you own your business, it's all your money.

Yep. You, you want it.

Facing pushback from the board saying hey, why are you staying in Amman?

Or if you're a seed founder and you're going to be taking and you know, pitch meetings, say hey, come over to my, my hotel room.

Yeah. Aman's not the kind of place that you can just walk in and use the lobby in, but you could always try.

Well no, no, no. So you mog your VCs by saying like, oh yeah, like you can't just come in. So like you'll need to book a stay too.

Yeah. Or if your VCs are visiting from out of town, you can say like I'll just walk over to the Iman and they'll be like, I'm staying, you know, in Tribeca. And you go, wait, you're not, not the Aman like I thought you had, thought you had like 300 million a.

Like what's going on is the fund.

They'Ll, they'll struggle to come up with excuses. Then you got them. Yeah, you got them, you got them, you got them pinned.

Yeah, exactly. And then they have to write the check. I don't know, I don't know anything about this one. Stuart Blitz says, just spoke to someone who used operator to submit health insurance claims every 5 milliseconds until they're paid. They said UHC got so overloaded with data they just paid them. They're cooked. And then the, the, the community notes says this is a false statement as the author states in a reply.

And so when I saw that post and submitted it, you didn't think it was, I mean it didn't seem super believable because that's not necessarily the way these things work. But it is, it is. So, so big companies create friction in refund processes, claim processes, and so if you can, can overload the system effectively. Yeah, you're more likely to do it. But this is just entering a new chapter where you have bot on bot, bot on bots, where like the big corporations are going to have their bots, we're going to have our bots and we're going to see who wins.

Your AI SDR is going to be talking to my AI secretary and she's going to be brutal, brutal projected also. I mean this just underscores like This, I don't know if this guy was joking. It seems like it was maybe like a joke because he said it was false, like shortly in this, in the thread. But whenever a new AI product drops, there's a massive incentive on these algorithmic social media feeds to just be like, this is mind blowing. Like, AGI is here. Like, everyone's going to die. This is the most incredible thing.

Like, you got a paperclip.

Yeah, yeah, exactly. And it's like, and there's this huge, like, intelligence signaling thing where you got to be like, oh, yeah, I'm using it, like, way better than everyone else. We've talked about this before. But you, if, but it's like, it's like if you're not using Operator, I.

Got Operator to order me instacart and send a humanoid robot at my house.

Yep, yep.

Cook.

And if you're not doing that, you're falling behind.

If you're not. Yeah, yep. Paperclip mode.

Paperclip mode. Let's see what else we got in the bucket. Polls. Flowers says, oh, good. Nominated determinism post. Flower says, Sam Altman's name is crazy because he's literally creating an alternative to Man.

Well, it's crazy.

Great. I, I, I've had this thought before. I should have posted. It would have been good one, Al man. But yeah, there's a lot of nominative.

Determinism in, in this world, Valley.

In this world generally.

Yeah.

But it's a fun one.

I wish I've tried to apply nominative determinism to my name. Hayes is kind of like, it doesn't really work. Cougan.

Cougan means hound of war or something. It's basically like Hound of. You know, in Game of Thrones you.

Were acting like a Hound of War. You were acting like a hound of war. On the leg press machine this morning. Got up to like 900 reps.

Yeah, 850. That's the number. Let's go.

Full range of motion too.

Let's go to Seth. Seth Bannon says YouTube and Reddit have both blocked Operator. A sign of things to come. So a lot of, lot of organizations are probably like, hey, we don't want to deal with Operator. What's interesting is that it's probably because.

DJI is notorious for writing fake comments on forums. So they don't want DJI AI using Operator to spread misinformation.

Wasn't Sam a huge shareholder in Reddit? Wasn't he like the CEO for a few days too?

Yeah, it's weird that I think he made more money than the original IPO'd.

Because he actually seems like a mistake. Like they just have a robots txt that it's like not updated because I'm pretty sure OpenAI has a licensing deal with Reddit for their data or something like that.

Yeah, but it's still. If you're a user generated content platform platform, you don't want bot, you want them to use your API, which you can control. You don't want them just freestyling all around your app.

It could be used for like engaging with users. Yeah, yeah, that makes sense. Did you, did you see this Waymo that was destroyed?

Moment of silence. This moment of silence is brought to you by AdQuick Ad Quick is the number one way to buy billboards for your startup. Now back to the show.

Justine Moore says, I've been fully radicalized by the photos of the vandalized Waymo. It's in a body bag at the end and, and the, and the Waymo got destroyed.

Yeah. So you remember. So the, the downfall of Bird among many, many issues. Fact that it's one of the most dangerous things in the world to ride a electric scooter around in traffic with.

Good day to be an ER doctor.

Like yeah, these ERs. Ask anybody in an ER when Bird was at its height, that was the.

Real way to go long the scooter trend.

Yeah, yeah. Super dark. I, I, for very brief moment of time I would use them. I was like 22. I was like around and then I was father built different. But yeah, yeah, but there was this account called, I forget what it was called, but it was a celebration of the destruction of electric scooters. I remember this account on Instagram and it quickly got like 100,000 followers. Like before the algorithmic feeds blew up. Huge people destroying them in even more creative ways. For some reason a Waymo feels way more toxic to it up. Yeah, to eff it up.

Bird graveyard.

That's right. So a Waymo, which is this, you know, autonomous thing driving around, it feels like you're more like taking a human life in a weird way because it's just trying to get somewhere to pick someone up and then these people are.

Destroying at the same time. It is a Jaguar. So do you really feel that bad?

Yeah, well, they're switching to these, you know, they're switching. So I don't know. I wish that, that Waymo acquired Jaguar because Jaguar is going through their weird rebrand. Yeah, Ben Hylac did the rebrand got a crazy reaction. They should have just bought friend of the show.

Yeah. Anyways, anyways, let's go to Sean McGuire. Speaking of innovation, he says the Tesla Roadster is niche with bad range. The Falcon one is a bad rocket. The Neuralink V1 bit rate is low. Subways are better than cars. Grock one sucks. X will break after firing people. It's amazing how people don't get the pattern. V1 sucks, V2 is okay. V3 is state of the art. And V4 is God mode. 14,000 likes. It's a good pattern.

Banger archive doesn't miss.

Put it in the banger archive. Let's do a bucket poll. Let's see what we got. SNWY, maybe Snowy says MFS get one. SAMO reply. Sam Altman reply. And turn on the Glazenator 3000. And it's a screenshot of an interaction between DJ Tyloo who says, bro, ship more than talking. Look at Google. We want AGI in the speed of 4. Oh, that's the goal here. And Sam says, that's going to take a while. And then DJ Tyloo says, don't worry, bro. Either way, you are the OG creator of AI. Hear, hear. You started all this in 2022. We do a little trolling here. You got this, Sam. The Glazenator. Yeah, I mean, it's true. If you're. If you're like new in tech and like a big person replies to you, it's a big deal. It feels like awesome. It's like, wow, I'm recognized.

Well, this is why we. We encourage reply, guys. We encourage reply legends.

Yes.

And, but, but at the same time, what I was going to say is there's. If you're trying, if you're a new account, you just set up yours. Just setting up my Twitter. You. You know, it's easy to want to be negative because that gets the most attention, but it's not a good strategy long term because you're building up this sort of audience of negativity and, and you're. It's hard to build a career around just being negative and putting people down. And so hopefully this is the start of the Glazonator going on a. Going on a more positive, historic, you know, generational positivity run.

I love it.

We love to see generational positivity. Bass Baron has been started off very negative. Trying to encourage him to go more positive.

Yeah. We got to remind him pretty regularly he should adopt.

We got to send this to him and say, adopt the Glazinator mindset.

Yeah.

You know, you don't want to glaze too hard, but yeah, a little glazing never hurt anyone.

Yep, it is, it is hilarious when Sam will post a tweet that like, you know, artificial intelligence is only a few thousand days away, will forever reshape humanity. It's one of the most powerful forces for good in the entire world. And like we are unleashing machine intelligence and someone will be like, please add PDF support to O1.

PDF.

It's just like the most tactical question, the oldest technology. But like both are kind of true. Like Sam is, is like kind of right about all the philosophy stuff. And then also like there are really, really low hanging fruit in the product.

Then I'll post. Guys, we got. Everybody's a little bit too excited. ASI is going to take a bit.

Longer and it's like, yeah, like there are reasonable product features that we want. Like just build them, you know, come on, put it in.

Yeah. Or AGI, you know, AGI is right around the corner. But we're hiring 50 new junior software engineers because we need them to actually get to that point.

Let's do another promoted post and if you're watching live on YouTube, leave us an ad read in the comments, get in the chat and promote whatever you got to promote. Drop an ad read in the chat.

Or if you want priority, leave a five star review.

Yes.

And we will have Ben printed out.

On Spotify or Apple podcast. Leave a five star review, say something about the show and then leave an ad read for a company that you like or a company that you founded or worked for.

But speaking of ads, we have an ad promoted post here from Gulfstream Aerospace Customization in every detail. The G500 is bright, bold and boundless. You know, we always say if you're buying fractional, talk to Preston Holland. He'll help you get into a jet you love. But if you're a size lord, go straight to your Gulfstream rep. Don't, you know, just buy new.

Yeah, it's nice to see them promote the back catalog too. A lot of people are obsessed with the 650, the 700 coming out.

Yeah.

But maybe the 500 is right for your for your lifestyle.

Yeah, you know, it's a classic. There's no wrong choice and it's cool to see Gulfstream. You know, they threw a link in here. They clearly aren't afraid of the algorithm. They have a dominant brand and they.

And so yeah, I mean if you didn't do numbers, if you find in this post on X, just go reply to it and tell them that you're, you know, in the market purchase and the technology brother sent you.

Yeah.

So whoever the social media manager there will get a nice little note.

Hopefully they deserve some engagement. They're clearly working hard. It was highly produced.

Yeah, this was the best post in a long time. Yeah, it's great. This is an interesting debate. So Joel Gascoigne says 2024 was a profitable year for Buffer, something we've really celebrated as a team. After two years of loss losses, we closed the year with a net profit of $200,000. And so John Coctosi, he also went.

On to say that they did a profit distribution.

Oh, they did.

The average distribution was like $400.

Oh, really interesting. There's a lot of shareholders, I guess. And so John says, wait, so 200k in profit. So for those of you don't know, Buffer is a. Is a social media scheduling app. You can schedule out tweets or Facebook posts used mostly by social media managers. High chance that that Gulfstream ad went through Buffer on the way to X. And it kind of lets you schedule things out across different platforms, kind of niche B2B software.

And there was a time there was a lot of heavily funded products like this. People were like, this is going to be a dominant category of SaaS. Turns out a lot of the platforms made posting pretty easy. And when you have full time.

And they incentivize native posting too, because when you post natively, you get bold, italics, image uploads, multiple images.

Even Instagram and TikTok, they want you editing in the app.

Exactly. And so you wind up. Yeah, yeah, you wind up in this weird situation where you get this like half featured builder or the Buffer has the job of rebuilding every single feature on X and Instagram and Facebook all to just get the posts in correctly. Correctly formatted via the API. And these other companies, they don't really care about posting from an API. In fact, it's a lot of spam most of the time. So they're not really incentivized to make that easy. And so John says, Wait, so 200k profit on $20 million in ARR. 73 employees averaging 154k salary and the CEO at 300k a year. Over 11 million a year paid out in salaries. $554 customer LTV cost to serve a customer has to be minimum minimal. Is a social media Scheduler. And unlike 15 years ago, this could probably built by two cracked devs and a designer. In a few weeks, 73 employees I don't know, man. And so Buffer has always been building in public, public. And they've had, you know, ups and downs. People have followed them and a lot of criticism from John on how they're running their business. But who knows, maybe they retool, maybe they're having fun. Maybe it's run like a co op and everyone gets distribution and they're all happy. So happy to them. But this looks like something, someone will build an attack very soon because it seems like something.

The critique there is, is I think that they've been on an interesting journey, like bought, I think they bought back the company from their investors or something like that.

Yep.

We don't really know what's going on behind the scenes, but the critique is like for a mature software company with 20 million of ARR, maybe you should be able to squeeze out more than, you know, what the average PM in the Valley makes per month. You would hope so, but I'm sure they'll get there.

It's rough. Let's do another bucket poll. What do we got? Harry Stubbings, he's in Europe right now and there are more companies doing roll up plays for vets, doctors, opticians and plumbers than AI companies. We covered it earlier with the Germany story. Not good. Europe, you're on notice. Get it together, build some real technology. Stop rolling up veterinary clinics.

Do it all, actually.

Yeah, do it all.

Do the roll ups, but do some other stuff. Like I'm making an AI, you know, clone that taught that can speak dog. That's what I want to see. You know, surprisingly, somebody who likes, so the person who actually cracks dog to human. Translation, huge trillionaire. Huge trillionaire. You would pay, you would pay thousand dollars. Couple grand in a month. Yeah, a couple grand a month to talk to your pup. Absolutely, yeah.

Also, shockingly, little innovation happening in smell O vision. You can't smell anything. Have you noticed that this, we're making all this like crazy advances all over the place. AI is going to kill us all. But I can't smell the movie yet.

Yeah, yeah.

Like if I'm watching Fast and the Furious, I want to smell burning rubber.

Yeah. Or, or if you're scrolling on X and you come up to a banger, you want to smell like some fumes, some smoke, you know, some heat coming off into a little, you know, device that just miss the air.

Yeah. You're watching Sideways, they're talking about wine tasting. I want to smell some grapes. I want to smell some more.

Yeah, you're watching. There's so many Great. That gambling movie we talked about, what's it.

Yeah, there's the smoke of the casino.

Yeah. There's a million Ocean's 11.

Ocean's 11, yeah. I should be smelling a thick cigarette smoke the entire movie.

Yeah.

Be great. Yeah. So get it together. Somebody go out there and solve it. I'm not gonna.

There was a company that was trying to solve Digital Touch. Right. Some sort of device that you could kind of like.

That sounds like it's going to be used nefariously. Smell O Vision 2 is going to be used with character AI first. I just know it. It's going to be terrible. It's not going to be for Fast and Furious. I just wanted Fast and the Furious. Aurelius says M and A is so back. The FDIC is pumping deal tombstones. And the FDIC says, today we approved the Bank Merger act application by Wesco bank based in Wheeling, West Virginia to acquire and merge with Premier Bank. And they're, they're showing the deal team. You love to see it.

We love different celebrating. M and A should be celebrated.

Yeah. You know, I saw, I saw a very funny post, we didn't print it out, saying that like, the deep sea thing is so. Is so like bad for Silicon Valley because everyone in Silicon Valley finally needs to realize. Realize that Lina Khan was right. And I was like, that doesn't make sense at all. It was.

I saw that and I was like, this is such a bad take. We're not even. We can't.

Yeah, no, you saw that. Yeah, yeah. It just made no sense. And it's like, that's not. And, and like, and like. So like, are you saying that there's a monopoly in AI? Because there's not. There's like a trillion foundation model companies and every big tech company is building their own chips. So it's like fiercely competitive. And then how would this have stopped? Open source model from China. It's like a chip sack thing. That's not Lina Khan at the ftc. It just made no sense. But it got major viral views because people are just like, oh, tech doesn't like Lina Khan. Therefore, like anything that happens that's bad to tech. Let's make it like Lina Khan could have stopped this or something. Makes no sense. Anyway, President Trump arrived in Las Vegas and Indian Bronson says, Trump is 80, he doesn't sleep, he eats McDonald's, he doesn't work out, and he's constantly switched on rocket fuel for blood. Just a total force.

He needs to be studied.

Okay, this is my take on you know how we've been talking about golden retriever maxing? I like the dog analogies. There's a new dog in town. Junkyard dog maxing.

Yep.

This is where you just don't think about what Andrew Huberman says about microplastics or seed oils. If you look at the. If you look at the data, the junkyard dogs outlive the purebred poodles by three decades. Junkyard dog will be around.

You got to be a dog. It's about that spirit.

Exactly. The junkyard dog has hustle runs around. Sure. It's eating. It's not just worried about microplastics. He's eating macroplastics.

The thing with, I think part of the, the whole Trump thing.

Yeah.

Is he's never been into that. Big into that whole world of alcohol. Right. So he's never been drugs and alcohol. Avoided them. Yeah.

He avoided the power law talks. So by not doing the drugs and alcohol, he gave himself like a thousand Big Macs.

Yeah. Alcohol's fascinating thing because it's so widely consumed, yet, you know, the prevailing narrative is that one or two drinks a day is cool.

Yeah.

Which we don't. That's like the dominant narrative around alcohol consumption. And clearly you can have one or two drinks a day and be fine generally. But how does it affect your energy levels later into life? How does it affect your wit and mental acuity later in life, even energy levels during. I, as an adult, haven't been big into alcohol and I prefer to either have 10 drinks or almost none or maybe some champagne on the show. We have a big milestone coming up. I'm looking forward to that. But I notice that alcohol for me is not about the energy level loss the next day or the hangover, but it's this multi day drop in my sort of general energy levels because, yeah, you just poisoned yourself lightly. And yeah, the body's, you know, pretty capable of detoxifying, but you got to.

Stick to Dom and you got to only consume it when you are celebrating. Are celebrating. But specifically celebrating exponential growth.

Yeah.

Because unless you're truly accelerating moderating in an insane way.

Yeah.

You're not going to be drinking it every day.

Yep.

And so, you know, it's so funny.

If we had the double. If we had the double rule set up for Banger Archive, we'd be daily drinking. Yeah.

It's rough. But I mean, seriously, it's like, it's so funny when I wake up and I'm like, oh, got to drink a bottle of Dom at work. Today. But it's like. It's two glasses of champagne and I do that like every month. Like that's probably fine. Speaking of alcohol, let's go to Pavel. He says drinking alcohol may be bad for you. You. But having some brews with my boys is definitely good for me.

Very relevant.

Very relevant. And then Juwan from Ramp says, nothing beats the pure joy of slamming a pitcher with the dudes on a sticky table. It's true.

Been there.

It's true. And yeah, you can always cut back at a certain point. Switch to Dom.

We got a. We got a quick shout out from. From our friend Tyler Cosgrove. He says gotta give a shout out to Boom. Supersonic Sonic. Now, size lords can display their wealth not by the size of their plane, but by which mock they can hit. So they had a successful. They got to mock size gong for them. They got to Mach 1.1 today.

That's huge.

Massive.

Love it.

And big win for all the investors that decided to triple down.

Oh yeah. It was that crazy recap. But they got through it, which is great. You love.

Amazing. We need to be going Mach 5.

Yeah.

To France.

Yeah.

To negotiate.

Let's go over to. Oh. Patty Collison at Stripe Press. The Irish lads are at it again. Stripe Press has been on tear. Ben Blumenrose says Stripe Press sold a thousand books a day last year. That's about 25k per day. Over $9 million a year off of 16 books. Incredible work and shows what you can do when high quality press product meets distribution. Let's go s for 9 million in books too. I like that.

It's great.

Probably what they make.

Books are an interesting. I think it's something. I think the. The coffee table book industry is like bigger than ever.

Yeah.

And so it's this weird dynamic where we consume so much of our content digitally now.

Yep.

But books. It's funny because I use physical books. Almost. Almost. A book like a bookmarking feature. Where I see a book online. I'm like, that looks interesting. I just buy it. I'll get to it eventually. But yeah. Stripes put out some bangers. Bangers. They had the one on that guy in the corner right there.

Charlie.

Poor Charlie's Almanac.

Always beautiful.

We love the written word. We love it even more when it's printed physically.

Yeah. Let's go to a promoted post and we'll do a bucket poll. Keep the show moving.

Promoted post from our friends over at Bugatti. The opening of Bugatti Baku in Azerbaijan, the home of F1 in Azerbaijan, a city that bridges Europe and Asia, was celebrated with a Tourbillon, a symbol of a century of heritage and sophistication. If you haven't seen the Bugatti Tourbillon, this car is unreal. I mean, the doors go up, that's all.

That's, you know, how many cylinders it has isn't 16 V16.

It's a V16.

Previously it was a W. A lot of.

Yeah, yeah. A lot of people have been saying, oh, it's, you know, just need a V8, hybrid V8. It's all you need.

A lot of the Ferraris are going down to V6s. Yeah, let's get those 296 has the six cylinders.

Get those cylinders up.

This car, AMG1, has six cylinders. I got 10 more cylinders.

I can't wait to buy my first Bugatti on. It's the day can't come soon enough.

You got to complete the collection.

And again, the size Lords of Bugatti, they're not afraid to drop a link. Bugatti link, slash consumption. If you're interested in understanding the environmental impact of your.

Probably top of mind for most Bugatti.

Super top of mind. Right. For sure. How many offsets? How many offsets am I going to need to buy per mile? We have to be planting like 10 trees a mile.

Well, well, most likely an oil chic if I bought this car.

Yeah, yeah.

In the oil business. But we love Bugatti here. And if you go and pick one up, tell them the technology brothers sent you.

Yep.

Let's go to Harry Stebbings. He says, I have never met a founder or VC who can write a good press release for a funding round. Stop writing it like a. Like an obituary you aren't writing to your grandmother. Bring the company to life, tell a story, make them excited. Interesting. Yeah. The funding round thing, I mean, you're not supposed to like the funding round.

You're supposed to do it yourself. You're supposed to call Lulu.

Yeah, call Lulu first.

And then you're supposed to give us a scoop.

Exactly.

And then we'll turn it into the show, make it feel like ESPN element.

This is how it works. Yeah, the new economy. But also like the. The funding round is. Is not the story. It's the excuse to break news which justifies writing the story.

Yeah.

And so what you have to do is you have to leverage that to say, I'm giving you a scoop of this funding round is going to happen. But in order to win this scoop, you can't just Write it up like it's a PR newswire thing. That's 200 words. You have to come and interview me and my team and my investors. 5,000 word profile.

Unless you're already an insider, no tech journalist is going to get excited about covering your $2 million seed round. Like, they do not care if you.

Put all 2 million of dollars of that into a domain.

Yes.

You got to figure out how to create a stunt. And that's what he did really well was he created a story and a narrative around it that, that you had to write about because it was controversial. And you get clicks. And they're in the business of getting clicks.

So click game.

You got to do that.

And driving paywall conversions.

Totally. Let's go to Atlas. He says MFers will be like ASI in two years and still be skinny. Bro, you're worried about the wrong arms race. This is Golden Retriever Maxing. We love to see it on the timeline.

Yep.

It's fantastic. Yeah. Get in the gym. Uh, this is important.

Don't worry about range of motion. Just worry about how much weight you're throwing around.

Exactly.

If you're not. If you're not dropping the weights loudly, you're not lifting heavy enough.

Yeah. Your. Your bicep curl should look like a hang clean.

Get into a gym that. Yeah, get into a gym that supports dropping weights.

Yeah, for sure. Oh, speaking of tech reporting and the media, Murat says, incredible bit of TechCrunch reporting. I just ran into. They looked up Google trends for the past two days and concluded it's the highest trend that that could pot. It's the highest the trend could possibly be. And so what happened was Google searches for deleting Facebook Instagram explode after Meta ends fact checking. So this is something that happened when Zuck came out and said, we're not doing fact checking anymore. We're going to Community Notes model. And of course, there's like somewhat of a backlash. Some people say, I don't like that. A lot of people said they did like it, but you got to write the story that feeds the beast of your readers. And because it's entirely audience captured at this point. And so you have to write the story of, like, this is bad for Meta. Even though you can just look at the stock price and tell that, like, no, daus are not dropping, people are still going to be using Instagram. And so they. But this is hilarious.

I want social media fact checked.

I want it fact checked. And it's funny just because they. They just actually made a mistake when they went to Google trends.

I think that meta should hire us to just put posts in the truth zone. Yeah, well we should be grab an extra. Yeah, we.

This is the thing about authoritarianism. As long as I'm the authoritarian, don't really have a problem with it.

And social media platforms need to embrace misinformation information.

Yes. Yeah, exactly. Breaking. Wow.

Wow.

Oh, speaking of Avi over at friend, he says the only real way for U S startups to compete with China is on taste. I ain't ever seen a Chinese product that didn't feel teemu. Well said Avi. But that is. That is true. Yeah. Like as. As we move into the LLM as a product and not just as a way and evals.

Deep seek is the Temu Chat GPT. It is 01.

Yeah, it is. It is Very cheap. Very cheap. Lots of people are saying anyway, promoted post. Keep these people on there.

We got a promoted post from our friends over at Laura Piana. Craftsmanship in every weave, in detail, thoughtfully finish with verse. With verse. The Maison's art of good living collection speaks the language of time honored craft and impeccable taste.

So we got to get you on duolingo, bro.

I just didn't understand like luckily finish worth first.

I don't know. It's a bunch of European mumbo jumbo.

Mumbo jumbo, Low tam banger. Only eight likes.

Oh, you hate to see it. From Laura Piano. Only 8 likes.

Go hit, go. Hit him with a re.

Hit him with a retweet. Chamath do Laura Piano a favorite pump the pump the account. Who knows if they put a link in there, it doesn't matter. Get it going.

Quote, they hit him with a hashtag. It's funny that these companies, they insist on hitting a hashtag in a post about their own company from Laura Piana.

Yeah. Why are they doing this? And they're all the same. It's like, is there one social media agency that's doing every luxury brand? Like, what's going on? We need a complete and total shutdown of luxury brands, luxury brands on X until we could figure out what's going on. It's insane. Anyway, let's go to a less than luxury brand that's been on a tear lately. Rye says people are losing their life savings getting rugged on fake Internet money projects. Meanwhile, I've been riding Build a Bear stock to the moon. Hard tech is the future. And he posts a screenshot of Build a Bear and Robin Hood. Did you know that Build a Bear is public Jordy Build A Bear is a public company and it's up 800% in the last five years. Pretty remarkable. I believe it. People want activity.

And then people created. They saw that, they immediately created a Build a Bear token.

But people want an activity with their kids and they're willing to pay for something that occupies time and then also gives them some sort of like special toy that's not just slop. Right. Yeah. So it makes sense that Build a Bear is doing well. Glad to see it. Not financial advice, obviously, but, you know, we're, we, we're, you know, yeah, let's call it hard tech. Who cares?

Hard tech. We should check out Build a Bear.

Yeah, we should.

Theoretically going to build a bear.

We should do a deep dive. I want to know, like, who is the founder of this company, how they build this thing. Like, it's pretty crazy that such a simple idea could become a public company that's up 800% in five years. Like that something went right. Well, you're the Build A Bear founder knows something.

You have to imagine that they got destroyed with code. Part of those gains are everybody stops going and building bears.

You know, you go back five years.

It'S like, yeah, Covid drop right here. Maybe they went on a generational run.

Generational run. And they're way up recently. Something.

The definitive guide to Build a Bear.

I like it. Let's do it.

Build a Bear.

Bowl case, dolly Bali. I feel like this guy's been on the show before, says, when. When has something good happened? When Masa gets really excited, he says, once again, I ask, and so this is obviously a reference to Deep Seek and that, you know, tanking the market. Shortly after Masa did his, you know, announcement on Stargate. Kind of a kind of good post.

But I think the thing is Satya is still going to be spending $80 billion a year even with the Deep Seek news as things. Yesterday was a terrible day to be unfamiliar with Jevons Paradox. You know, many clearly were. Yep. And not our audience, but many, many, many normies out there very unfamiliar with that, that paradox. And we're just going to keep using more compute until we're all just paperclips.

And I did see a post that, that after the markets crashed, there was a lot of equity research, discussion and expert calls that happened to the hyperscalers asking like, are like, are you going to change your GPU buying plan? And they also all said no.

So I bought Nvidia on public yesterday.

You up.

Up 7%? Something like that. Killing it. Not financial advice, but 7% in a day.

A day. Compound that over a year. You're killing it.

Trillionaire.

Trillionaire. Logan Bartlett says it's amazing how Apple continues to innovate. Democratizing mobile music players. IPod 2001, the most elegant smartphone experience. IPhone 2007. Seven mainstream cordless headphones. AirPods 2016 AI that makes the product experience worse. Siri 2011. Apple Intelligence 2024.

Apple. Apple. Apple Room temp.

Apple room temp. Get it together. Apple get it together. It's got to get better. It's so bad. You know, I had a recent, like, oh, my God, this is so unapple and so bad experience. So they obviously, like, voice generation is completely commoditized. You have 11 labs. There's a million models that do it very well. OpenAI has a fantastic model. It's very easy to train a model on a ton of voice data. And then Delphi can clone our voices. Right. Like, startups can do this, like, with way less money than Apple. Right. And so it's easy to create a voice that is, you know, good.

Yeah.

And so when you go into Safari on, on an iPhone and you click on the reader view, it will take away all the ads. It's very nice. You can actually read the article cleanly. And there's a button now that you can say, listen to this article. And it plays like a pretty decent voice. It's not state of the art. It's okay. It's not good, but it's not bad. And it's. You can listen to it usable. You can listen to it, which is nice because a lot of websites don't have, you know, a voice feature. But sometimes that's broken. Sometimes the reader view is broken and it only shows you, like a third of the article. Even if you're logged in, there's some sort of page haywall thing. It's broken.

And so does Ben know he's just listening to music with.

Yeah, Ben, is that loud?

Ben, are you good?

We can hear that. Oh, it's outside. Oh, weird. Okay. We got some noise outside the studio in downtown LA today. Anyway, so sometimes the reader view is broken and when it's broken, you can still swipe down with three fingers to do like the voice version of. Of. Oh, it's my backpack. That's funny. Is that some. How did that happen with that phone? I have a phone in there. Weird. That's very odd. Okay, thank you. Very weird. I don't know what's going on the phone anyway, so you can swipe down with three fingers to do like. It's like a. It's like a assistance feature for people that are I think blind and it will, it will read anything on the text. It's a screen reader. It reads it all in a voice. And that voice is still on the old model. So it's like completely impossible to use. And it's just like how do they.

Not think with Siri is insane.

Yeah, it's terrible. Anyway, let's.

Some people, some people were giving. I think it was Signal who was giving Apple like Apple yesterday. Had to. Had to be pretty. Signal was saying they have to be pretty happy right now. They didn't spend on Capex. They just sort of waited to see how the market would play out. They already have all the distribution.

Yeah.

So we'll see how it plays out for them.

Okay, let's.

We need it. We need a collective effort to get smart people working at Apple again.

Seriously. Because they have such a lock in like you can't just count on. You can't leave.

Yeah.

So you got to make it better.

Yeah.

So we got to push people to go there. So. So if you're a cracked engineer, go work at Apple.

And go founder mode, please go founder mode.

This is rough. Do we have any more promoted posts?

No, let's.

Okay, let's just close out with Near. Near says love how finance reporting found that the. That they can phrase everything in terms of market cap to get technically accurate headlines like trillions of dollars violently wiped out from the market forever. When the reality is eg today that NASDAQ is at the price from 10 days ago. That's hilarious. I didn't realize that it's only been 10 days of gains wiped out. You still. You hate to see it though.

Still sad. Near and still leaves us looking for a bull market somewhere.

Well, that's our show. Thanks for tuning in.

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Thanks for listening to the podcast.

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The day is almost over on the east coast. It's almost five o'.

Clock.

Well actually it's past five.

Okay.

But that's not an excuse to see stop creating value. So whether you're on the west coast, the east coast or at the Bugatti in Baku, Azerbaijan. Day's not over. The show's over, but the day's not over. We'll see you tomorrow.

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