China's AI Push Sounds Alarms, Airplane Seat Debate, Chris Best Joins | Ferdinand Dabitz, Kaiwei Tang, Steven Schwartz, Katie Roof, Zavain Dar, Chad Edwards

You're watching TVPN. Today's Tuesday, July 21st. We are live from the TVPN UltraDome, the temple of technology, the fortress of finance, the capital of capital. Let me tell you about Ramp.com. Time is money, save both. Easy to use corporate cards, bill pay, accounting, and a whole lot more. And a whole lot more. All in one place. We got a sponsor collab.

Woo!

Privy teaming up with Ramp to launch stablecoin accounts powered by Privy.

Whoa.

Congrats to both teams. We also have some other news from Ramp folks coming on the show later this week. Very excited to chat with them. Anyway, China, China, China, China is in the news.

But first, should we go through the lineup?

Yeah, please.

We have Ferdinand de Bitz from Augustus coming on to ra— raising $180 million Series B at a billion-dollar valuation. Kai Wei from Light Phone is launching a two— 99 Lite 4.

They're calling it the dumbest dumb phone. It's our dumbest dumb phone ever.

Actually, it does have 5G.

It's a less dumb phone. It's a smarter dumb phone. It might be the smartest dumb phone.

We'll see.

And then we got Chris Best from Substack coming on to talk against his war on slop.

Yeah.

Partnering with Pangram.

He's the best.

Uh, excited about that. Then Steven Schwartz from WAP Live in the UltraDome on launching their new WAP CLI. And then the Roofinator, Katie Roof. The new editor over at Business Insider.

Katie Roof. We got the paywall set up and we do have a paywall.

We have a paywall here and the Golden Scoop. Can we get a camera over here?

There we go.

Paywall.

We're busting down the paywall for Katie Roof today with the Golden Scoop.

So keep an eye out for that. Then we have Zevain from Division Dimension. Sorry. And then Chad Edwards capping it off with a cool $450 million raise at the end. So stay tuned and let's get into it.

Fantastic. Well, top American execs are sounding alarms on Chinese models.

And let's give it up. Let's give it up for top American— I just can't bring it up.

Oh God.

There.

Yeah, let's give it up for the top American AI execs. The White House is divided on how to respond to recent advances in Chinese AI. Has weighed crackdown measures. We talked about how this was coming. It is interesting. There's a lot of like, you know, hurry up and pedal to the metal and then pull back and then ban the American model. And then are we gonna ban the Chinese model in a similar way? And lots of contradictions, lots of insider baseball. Everyone's critiquing everyone else. Lots of interesting takes. Also just some interesting data about what's actually going on with these models. How advanced are they? Where do they come from? How cheap are they to make? What are the economic impacts in America? But the Wall Street Journal has a nice little roundup here we can take you through. So Silicon Valley and Washington are debating a multibillion-dollar question. Should American companies be able to use Chinese artificial, artificial intelligence models? They certainly have been able to. Hasn't been a problem for years, but now they're getting stronger. OpenAI and Anthropic executives are sounding the alarm about the rise of cheap AI. Particularly powerful new models produced in China, suggesting that they will lead to, quote, a dystopian AI future and present unacceptable security risks without regulation. And that is the point of debate. Are you on the side of dystopian open source or liberating open source, the George Hobbes frame? Some analysis, some analysts who study the AI industry say the two companies which are preparing for public listings in the next year, they just wanna eliminate the competition. The emergence of highly capable open autonomous AI systems, including Moonshot AI's Kimi K3 model and Alibaba's Qwen 3.8 Max. And Alibaba is actually a massive investor in Moonshot. They have their own Anthropic Google over there going on. Alibaba's like very much the Google 2 in the sense that they have a large position there, which were released in recent days and viewed favorably by investors and users has turned the AI race on its head Once again, KIMI K3 was also competitive with US models on some benchmarks. The debate over the new models, which are, quote, open weight, but not yet, they're about to open source them. We'll see what happens next week, allowing users to download and customize them with company data for specific tasks. Very, very good. Very useful. Coincides with division in the Trump administration about whether to take steps to limit the use of models in the United States. Quote, one probable outcome of an open weight model dominant world is 'Full AI communism, which is precisely what China proposes rather than a market product. AI is a public good which will ultimately be provided by the state as a kind of digital public infrastructure,' Dean Ball, OpenAI's head of strategic futures, said in an X post Friday. Dean Ball made it to the pages of the Wall Street Journal. Now, the AI communism is just at the model level. Like, there would still be a bunch of, like, a lot of people who are long compute, long Neo Cloud, they say, like, This is where the value should accrue. The data centers will accrue a reasonable margin and they will still continue to make money. And so it's not that this automatically leads to nationalization of compute in any way. People would still be paid, but the margins might be lower is at least the formulation here. So, Ball, a former Trump administration official, called such a scenario a dystopian hellscape. And he said he expected the Trump administration to make moves toward reducing the use of open-source models. Ball later clarified that he wasn't advocating for the United States government to discourage Chinese AI. He also highlighted a central challenge with the AI race. Top-tier AI companies raise billions of dollars to pay for the vast computing resources needed to continue improving AI systems. If everyone uses AI systems that people largely don't pay for, there would be no way to finance continued frontier AI development. Ball, who started at the company earlier this month and focuses on policy and strategy at OpenAI, have said his comments don't reflect the company's official positions. He's just posting. The company has developed its own models, own open models, and Chief Executive Sam Altman had previously said that OpenAI's past approach of only developing closed tools was unwise. Other top AI executives have warned that open models present huge risks since developers and policymakers lack control over how they are used and modified. A lot of risk of cyber attacks, a lot of risk of annoying spam attacks. The cyber thing is very concerning and annoying if that really ramps up. But the good news is that the closed source models have been available to cybersecurity firms and a lot of big major companies. The finance industry, for example, has had access to Mythos and GPT Cyber for almost 6 months. And then just today, Google announced a specific model Flashlight Cyber, I think. So they're trying to offer a similar capability, but really go down the cost curve because a lot of the cyber tools, there was incredible breakthroughs with Mythos, GPT Cyber, like great benchmarks on those, but could be very expensive. We heard, I think, wasn't it Nikesh Arora said he, I think he spent like a million dollars to find some zero-day bug and it was like totally worth it, but that's expensive for smaller companies that might just need, it would be great to just be able to go to a cheap, Cyber tuned model get approved by Google and say, hey, just go and read every line of code and just let me know if there's anything that's obvious. And that could be good.

Yeah, and just to be clear, they released 3.5 Flashlight and 3.5 Flash Cyber. So it's not like Flashlight Cyber.

OK, but Flash is still cheaper than the big model, right?

There's like the Pro and then there's—

And so I have to imagine that if you, given the choice, if you're like a mid-sized company,— and your choice is like, go beat down the door to get into Project Glasswing to spend $5 million to have Mythos read every line of code, or you're like, oh, well, I'm already a Google partner. I have a really solid business relationship with them because I've been buying ads and I have Google Webmaster Tools set up and I just want to go set up Flash Cyber, not Flashlight Cyber, I imagine that the cost would be cheaper because they fine-tune this model for a specific thing since they are benchmarking or whatever Semianalysis called them. But that's useful in this case, right? So Anthropic CEO Dario Amadei for years has warned about the risks of powerful and open AI systems, saying in a recent Bloomberg interview that having AI models with advanced cybersecurity capabilities that are free to download could be harmful. He said it's a serious concern. Use of Chinese models, which are far cheaper than US counterparts, is surging at US companies, prompting some investors to question the staying power of top model makers such as Anthropic and OpenAI. The current US open source frontier is starting to catch up with China's. On Wednesday, Thinking Machines Lab, led by former AI technology chief Mira Murati, released its first, first AI model as open weight. NVIDIA's NeMoTron 3 Ultra is starting to see traction. That's interesting to hear. I haven't heard nearly enough buzz around NeMoTron. I know Jensen has been investing in it. He's also investing in a lot of, you know, up and down the stack.

I've been hearing buzz about the name, John.

Neutron's good.

Neutron.

Why?

Very cool name. There's people are, you know, there's, there's some talks bubbling. People are saying it's, it's one of the best names for, for a family of models ever.

What comes after Ultra? Isn't that what the— didn't Apple first do that with the M4 Pro, the M4 Max, the M4 Ultra? So we got to come up with an even better word for what happens after Ultra. Giga, maybe Hyper, and then Exa. You just keep going down the, the tera, all the teras like land. That's a different one. Anyway, the market's faith in Anthropic and OpenAI continuing to build more capable models that push the frontier— AI frontier has been at the heart of the boom, helping justify trillions of dollars in spending on infrastructure in the coming years. The threat that new players will vastly undercut what they can charge for advanced AI pushed down some tech and AI company stocks prices last week. David Sachs, the venture capitalist and White House AI advisor, suggested that he read Ball's post as a confession to a regulatory capture strategy. Sachs and others have long seen calls for AI regulation by companies such as Anthropic as efforts to use new laws and policies to stymie competitors. The weaponization of regulatory uncertainty as a competitive tool should be completely unacceptable, he said. Security-focused administration officials in the past year have considered a slew of measures to crack down on Chinese AI companies developing open models. People familiar with the discussion said they have weighed on— they've weighed adding the businesses to trade blacklists, security warnings on Chinese AI companies, and a potential executive order targeting open models. So it does seem like even though Tyler Cowen, we were going back and forth with him about this, about like, can you even ban it? You can't really ban anything in the land of the free. Like, the solution to piracy was not really to ban piracy. Like, you can still torrent things, but it's just so easy to use Apple TV and Spotify and Netflix that most people just wind up just paying $5, $2 for a song, or, or $10 a month for something that it effectively killed it just because the product experience was better.

This morning, our Treasury Secretary Bessant was on Fox and said, this administration supports open source models, but what we do not support is IP theft.

Hmm.

If we see especially that overseas models are stealing from our great companies, we have the ability to sanction them because of this theft. So it will be if the admin does take serious action here. I would expect that to be the line of reasoning where they could just sanction the companies behind these models, which I imagine would prevent, it would create a real opportunity for American open source, but you would ultimately see a lot of these, you know, neo clouds unable, I imagine, to serve the traditional, Chinese open source models. I imagine that even OpenRouter would probably have to—

Yeah, maybe.

Stop supporting that.

But again, with an open source model, like how do you even define it? Because if there's a research paper and then you go and implement that and you train it or you take it, you fine tune it or you use the data to bootstrap your own model, like just like where in the supply chain, how many steps away do you need to be to like not count on there? You imagine, I mean, Didn't Perplexity do like a 1776 DeepSeq very quickly? They did a fine-tune. I think you did a fine-tune on DeepSeq as well.

Wow. Yeah, it was like using sparse autoencoders.

Okay. I did it first, so. But, and what nationality was the model that you used as the base?

Well, it was DeepSeq.

It was Chinese.

Wow. Confession. You can go now.

Yeah, people are already angry at Besant's comments in our saying funny that he's not mentioning that yesterday a US judge approved Anthropic's $1.5 billion copyright lawsuit settlement. Or I don't think they— they— I think they settled that they were in possession of books that had been torrented or basically acquired unlawfully. Yeah, I don't believe that.

Acquired unlawfully sounds like they stole the book. I think they bought the books.

No, no, no, no, no. I think this was— no, they separately, they bought a bunch of books, trained on them and destroyed them.

And that just made people upset because no one likes books being destroyed. Of course.

I think those were rare, like rare, rare books.

The Wilmanitis collection was destroyed. Rare PDFs.

No, but I believe so. Judge William Alsop of the U.S. District Court for the Northern District of California issued a preliminary approval of the settlement last year. After ruling that Anthropic had illegally downloaded and stored millions of copyrighted books. And the settlement was signed off on by a different judge yesterday. The payout will deliver $3,000 per work across an estimated 500,000 works shared among the authors and publishers who hold rights to them.

Mm-hmm.

I have more here, but first I'm gonna tell you about Figma. Agents, meet the Canvas. Your AI agents can now create and modify your Figma files with design system context. So, Nick Carter, who we love, former guest of the show. He says, I haven't seen one person from OpenAI or Anthropic address John's argument here. Quote, the point is simple. The US government does not owe either of the large labs a business model. I think that's accurate. That's true. The US government doesn't owe any company a business model. It's a free market. It's a free country. If the economics of selling tokens don't work due to distillation, cheap clones, Chinese AI magic, the American enterprise and consumer will be a-okay. That is also True, the American consumer and enterprise will be okay. Flooding the market, dumping, all this stuff is great for consumers. It's great for enterprises. Cheaper products are great. The question is, is the US government actually does kind of owe the— like the reason you pay taxes, that actually does pay for the FBI who go and find spies. And so if the allegation, which has been sort of toyed around with some of the lab leaders at some conferences, like off the record, and then it's like made it to the record. I don't exactly know where the allegations stand at this point, but if the allegation is, look, there's a spy here who's stealing code and exporting it to another country, or even the distillation, which is in violation of terms of service, and it's a geopolitical debate because it's an international company. It's like that's the reason why you pay taxes to pay the government to actually help fight on your behalf. Because if it's OpenAI stealing from Anthropic or vice versa, they'll just walk across the street and serve them papers and be like, we're suing each other. This is what happened with Apple and OpenAI. Like, they're going to solve that in the court of law, which is, of course, paid for by the US taxpayers as well. That judge who oversees that and decides that case will be paid for by US taxpayers. That is an amenity of the US government. And a similar amenity is when you— when someone is violating your terms of service or actively stealing from you, you actually can engage the US government. So, I agree that the US government doesn't owe anyone a business model, but the US government does sort of owe the ability to chase down something if it is truly illegal and there's no other recourse like just Hey, we're turning off your account because you're not abiding by terms of service. But the rest of the point is good, and the knock-on effects are good. He understands the value to the American consumer of cheap goods. He understands the value to the Neo Clouds and other token factories. All of this is fine. But I just thought that there is a line there that some people on the inside have been stronger about. There's been a lot of debate on, like, Is this distilled? Is it going to say it's Claude or ChatGPT? And, you know, it goes back and forth. There's a bunch of examples. It's always hard to chase down, but that's why we have like a real process to hunt that down. Anyway, there was some news about like whether or not KIMI K3 is distilled. Tyler, can you take us through this Lisan Al-Ghaib post? Because I want to know what this chart means because it seems important to this discussion.

Yeah, so he didn't actually make this chart. It was from someone else. But basically, this shows a bunch of models compared to another. And it's like the semantic similarities between them. So it's like if you use similar diction or phrases, stuff like this, you just pump the model a bunch of times. And you can tell what's similar to each other. And you can see in this version, it looks like Kimiki 3 is very similar to Fable 5.

Fable 5, and then also Opus 4.7, Opus 4.8, and Sonnet 5. So they might have gotten tokens from— all four of those models sort of mix in together.

Yeah, I mean, also I think this exact example, like, I think only like a few prompts were used. It's not like super involved. It's also like, this is very much just like correlation. This is not like proving that they distill or anything. They could have just used like similar, you know, post-training techniques or something like this.

Totally. But notably, GPT-5.4, 5.5, 5.6 share very little similarity to the Anthropic models and vice versa. The Anthropic models don't seem to be correlated with the OpenAI models, although the OpenAI models are correlated with them, with each other. So 5.6 Luna looks pretty correlated with 5.4 because they probably were like, well, we're building on the shoulders of the work that we've been done. And it's the same thing with Anthropic where Fable has some of the same flavor as an opus or a haiku, and that makes sense.

That makes sense because people have been saying, oh, maybe those models were actually distilled from the big Mythos pre-train, right?

Yeah.

Or vice versa.

Fable is a Mythos class. Or vice versa. You have a bunch of users that are doing rollouts on opus, trying to vibe code different things, and you take all that training data and then you feed that into Fable. And Fable sort of picks up on a lot of that because that's what the user said, wow, you really did a great job on this opus. And— or you did really poorly, it pulls that out, but it's still learning the textual similarity. Well, people will go back and forth on this and debate the level of distillation and also what the punishment for distillation should be. Should it just be a slap on the wrist or should it be something bigger? It's obviously—

Yeah, so Bill Gurley's chiming in on Beston's comments. He says, "If there has been theft, that suggests a crime has been committed, but I'm unaware of any lawsuits being filed." filed. No company should be allowed to declare infringement without education. I'm not convinced a court would call using a product as it's designed theft. There is a reason this is being lobbied in DC instead of the normal court systems. The only thing I would say here is like distillation against the terms of service. And I think that suing Chinese companies It would be a complete and total waste of time. Ask anyone who's built a product that's been knocked.

I disagree. Incredible aura farm. If you personally serve Xi Jinping the next time he's in San Francisco meeting with a world leader, you show up to—

You have been served.

You show up to the UN, serve the world leader. There's something about that that's That's, you know, extremely bold. But no, I agree with you. Very difficult. I don't even know if you went to your law firm and you said like, hey, we want to sue this Chinese company, like how they would trace that down. Also, deeply ironic and deeply unsympathetic suit, right? Because the general populace feels like AI is all theft and it's all been stolen from the public commons or the public internet. It's like distilled on the internet. We all did all these, we all made all these websites and now they all have been distilled into this, into these like frontier models. And then you're saying, oh, well, like the distillation stops at the frontier lab. So not going to have a lot of sympathetic—

So someone responded to Bill's post with a similar point to the one I made and said the reason there hasn't been any lawsuits is that a trial would take years, assuming you can get a Chinese company to participate in the game, will be over by then. China steals IP. This is obvious. You don't find many, any instances of US companies suing Chinese companies in US courts. Bill Gurley fires back with a screenshot from ChatGPT saying, here are 10 clear examples. The first, the first 5 were filed in US courts.

Okay.

You have Motorola Solutions. Okay. Was a US plaintiff with a Chinese defendant of Hytera Communications. This was Chicago Federal Court in 2017.

Yeah.

T-Mobile came after Huawei, federal court in Seattle, 2014. This is good.

Yeah, throw down the gauntlet.

Huawei employees copied and took parts from Cappy, its phone testing robot.

Sure.

Cisco sued Huawei. Let's give it up for Cisco.

Let me actually tell you about Cisco.

Cisco accused Huawei of copying router source code.

Cisco is critical infrastructure for the AI era, unlocks seamless real-time experience and new value at Cisco.

Continue.

Cisco accused Huawei of copying router source code, command line interfaces, manuals, and patented networking technology. That's what I'm talking about. Textron Innovations.

That is the correct use of the US government.

Sued DJI in federal court in Waco, Texas, home to a fantastic wave pool. Textron alleged DJI drones infringe patents covering flight control and tracking technology. And there's a bunch of other examples. Yeah. ASM— AMSC, the American Superconductor. Company.

He's one-shot by Chinese. This is American—

Sinoval Wind Group.

Okay.

Anyways, you want to give us— lots going on here.

Uh, two of our former guests are chirping at each other on the timeline. Uh, we talked to Jim Cramer at the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Uh, we interviewed Jim Cramer at the New York Stock Exchange. Great time. He's going back and forth with George Hotz, another former guest of the show. Jim Cramer says, we must not let our companies use these Chinese models to save a few bucks. OpenAI and Anthropic are correct. This is vital national security. Please, please read Bing West's just released Cat 5. I respect the Chinese people greatly, but these companies are run by the PLA, for heaven's sakes. George Hotz fires back under the TinyGrad handle. He says, is this a joke? I'd be happy to use Anthropic if they put their weights on Hugging Face like the Chinese Chinese. American tech companies are rent extraction machines that have lost the plot. No point continuing to defend them. They need to change if they want to win people back. 474 likes on that. The open source community is coming out strong.

Anyway, um, meanwhile, yeah, China is also thinking about export controls in the Financial Times. Okay, apparently Alibaba, ByteDance, and on— is this the Ministry of Communications? Don't know. M of Com. Help me out there, Tyler.

MoFCom.

MoFCom. Talk to AI companies including Alibaba, ByteDance, and Zhipu on limiting the transfer of key data for the training of their models overseas, as well as allowing their model weights to be downloaded.

Or Ministry of Commerce. Probably their Department of Commerce.

That seems more like it. China would still let overseas customers access the models and services, but it sounds like they're leaning towards not making the weights open. We're going to— we're going to see with the new Qimi K3 if they actually release the weights next week. Dean Ball says, wow, 2 days in a row where things I said are likely to happen seem likelier to happen from 2 adversarial countries, almost as though my analysis was right and as though People should not have deliberately misinterpreted, misinterpreted me as making prescriptions.

Huh?

Dean Ball victory lap. You got to take a victory lap for Dean Ball. He called it. No, I mean, he was saying like, I don't necessarily agree with this, but just from his experience, this is how things might play out. And people were very upset with him about that.

Raj in the chat says Ministry of Commerce, People's Republic of China.

It's their Department of Commerce.

That would go hard on a business card.

It would. Anyway, let's try to make a new business card. Fire up Codex, design it there, have it printed, have, have Codex do everything for you. Fantastic at creating custom things and then running them off to special printers. Codex, of course, is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from start to Finish.

The great slop wars, slop wars continue. Let's pull up this video from Substack.

Substack.

We got Chris Bass coming on at 12:15. It's just an image.

They say today Substack is launching an AI detection feature via an integration with Pangram. Going forward, you'll be able to scan posts, replies, and comments on the Substack app to see an estimate of how much of it was written by a human or with AI assistance. We care about this at Substack because it gets to the core of our mission to build an economic engine culture.

This is gonna be bad for Tyler since he's mastered the ability to write exactly like an AI. What was that sentence you wrote by hand that was like, "According to studies, you're absolutely right," and you just threw in every possible AI-ism and got flagged 100% by Pangram? No, I think people will enjoy this. The revealed preference is probably that people don't care if it's good and they enjoy the, the content. But, uh, we'll, we'll go back and forth and debate it with Chris Best today and see where all of that is going. Uh, he wrote a post against Claude Fishing. Uh, he doesn't want people to be disingenuous about their process. Now, do you think that, uh, Substack writers should admit when they hire essentially ghostwriters?

Probably.

Because sometimes you start a brand under a name. Like, not every post on Bloomberg.com is from Michael Bloomberg. In fact, none of them are. They're all from other people, but they disclose this is from, you know, some writer. This is from Joe Weisenbaum, right? But some new influencer brands have grown even in the pre-AI era. I had a writer on my team when I was doing YouTube videos where I would write something, he would do a draft, we'd kind of go back and forth. I'd put him in the credits, but I wouldn't like kick it off with like, hey, just so you know—

Andrew in the chat says book authors don't. That is certainly true.

That's 100% true. Some book authors will put like, this is written by this person and this person. It depends on like the aura of the ghostwriter. Some ghostwriters actually do get credits in the book, but yes, most book authors— like Tom Clancy, I think, passed away and they're still producing books. There's a number of writers where their individual brand grew so big that they can— you can have a new Tom Clancy. Yeah, they become their own brand.

Yeah, I would imagine that 30% of the books in like an airport bookstore are just 100% ghostwritten and probably—

Yeah.

Don't disclose it.

I think, I do think it should be possible to get to the truth if you hunt hard enough, but I don't necessarily need you to put it front and center. So let's say that the next Tom Clancy book, they hire someone who's effectively a prompt engineer and they're writing it using AI. I would like to be able to you know, look in the back of the book and see a paragraph that discloses that. But it doesn't need to be on the COVID On the COVID it can just say Tom Clancy.

Yeah, for a Substack author or creator, just put it somewhere that you have a team of people that help you create your work.

Well, Dave Eggers took to the Financial Times saying that no one is going to read AI books. He's, of course, the author of The Circle. He's an American writer, editor, publisher. A Heartbreaking Work of Staggering Genius is his 2000 memoir, bestseller, finalist for the Pulitzer Prize. He says, gullible and ridiculous. No one will read AI novels. I think people are already reading AI novels. So maybe he means like no one who's cool or no one who he likes or something. Let's read through a little bit of this. Financial Times article. Dave Eggers offers a hand so I can clamber aboard his 23-foot sailboat moored in the shadow of San Francisco's Golden Gate Bridge. It's a grand setting with few frills as we sit on the stern a meter apart, fuel cans and fishing nets at our feet. There's no one around to disturb our conversation. The nearest toilets are portaloos a short bike ride away. The berthing fees are negligible, making it one of the cheapest places to live in uber-wealthy Silicon Valley. I hadn't thought of that. Sailboat, if you're at a tech company, this has got to be the next big lock-in trend.

Antonio García Martínez did this.

He did.

He talked about it in his book, Chaos Monkeys.

I won't be satisfied until I see LARPers posting images on Twitter being like, hey, I just moved to San Francisco. I'm building the next one-person $25 billion—

I'm finding a houseboat in San Rafael.

Yeah.

How much? For $1,000, it actually works out to $1,483 a month, apparently, if you finance it through Boat Trader.

Goodbye, Boater.

It's only about $200,000 to live in a 2022 houseboat.

2022? That's a brand new houseboat.

Yeah. So you have to think about the, yeah, the slip fees, but you could easily come in, have your own house on the water.

No, the average one-bedroom rent in San Francisco is like $2,000, $3,000 right now.

Yeah, you could have a whole house and a boat.

And a boat.

It's amazing. This is the hack. If you get a job in tech and you're printing, making six figures, wow, you move into a houseboat.

Let's pull this up.

Is this an option in LA? Should members of the team be doing this? Should we, should we recommend this to—

look at this brand, almost brand new. I feel like 2024 Le Mer Modern 11, 36-foot houseboat. We have a video here.

Well, Dave Eggers says they call it a $10 dock with a million-dollar view.

Look at this, John. This— yeah, a couple thousand bucks a month.

This is where the next great startup will be born.

Yeah, sure. Garages are out, garage houseboats are in.

And also, like, oh, take your shoes off.

It's not—

it's natural to take your shoes off when you're on a boat, you know, right? Let's get boat shoes. Wear boat shoes.

The Le Mare Modern 11 offers reliable performance and strong power with two Yamaha 25 high-thrust engines providing a total 50 horsepower. It's two cabins and one head, ensure overnight comfort for extended stays. How about year-long stays? How about a decade-long stay? The boat's design includes an upper deck terrace with Flexi Teak flooring, enhancing its appeal for relaxation and entertainment. And might I say, locking in standard features such as air conditioning. We have air conditioning on our houseboats with reverse cycle heat, heated floors, LED lighting, floors, LED lighting. Yeah, the inclusion of foam-filled composite floats and galvanized steel subframe ensures durability and stability.

Did we just—

this thing looks—

the housing crisis— send this to Sauger and Jetty immediately.

This is seasteading.

This is the teal thesis. Everyone living in houseboats, just more.

Boattrader.com is saying that this—

this is amazing—

modern houseboat would come out to just $2,259 with only $52,000 down. I promise that we have no financial relationship with BoatTrader.com. Yeah. Even though I'm making a pretty strong pitch here.

Yeah, I love it.

I'm tempted. Maybe we should. I mean, you can— I'm finding another, a 2021.

Okay.

For only $99,000 now.

Only.

Yeah, only $100,000. This comes out to $738 a month.

That is cheap. That is—

they're giving houseboats away, John.

When I moved to San Francisco, we lived in the Tenderloin, 3 people, and it was $1,500 a month. How many people do you think you could sleep in there, given that one of us slept in a closet and the other one slept in the living room? So there was only— it was a 1-bedroom technically. We had 3 dudes in a 1-bedroom, $1,500 a month. So it's equivalent to $500 a month. Do you think you could fit 2 people in there? In a $700 a month houseboat?

Oh, for sure.

Yeah.

So we're finding— the team is finding slip fees around L.A. for $700 a month. You get a—

everyone's got to be houseboat maxi. Imagine just—

you can get this houseboat for only $600 a month.

This is—

this is elite. This is the future. We must— we must return to the ocean, return to the sea. Anyway, Dave Eggers thinks no one's going to read.

AI books.

We can move on. TL;DR, we got distracted. Sorry. But congratulations on the sick houseboat. It sounds amazing. The article is actually funny. It goes into a whole thing how he was like chirping with Sam Altman, goes to— Hal Leach, Welcome to the Houseboat: The Business of Buoyancy.

The president of Propellers.

I love it. That's right. The presidency of Propellers. Should you recline your airplane seat? What do you think? People are going back and forth on this.

Brandon Ducks says, I don't remember subscribing to this channel, but I've been listening for 10 minutes. I'm having a good time. Welcome. Last name Ducks comes on just to laugh.

Yeah, make it make sense. Make it make sense. It's just like, I just happen to be here for the duck section of the show.

Andrew says, I'm going to need a double-wide houseboat, LOL. Bootlegging distilled Anthropic models on the houseboat. There we go.

Living the dream. This is crazy. OK, so should you recline your airplane seat? There's a central— investigating the central dilemma of our time. Joshua Rothman in The New Yorker wrote a piece. Imagine this scenario. After a long drive to the airport, you've just taken off for a 15-hour flight. Where are you going? 15 hours is so long. How long was the flight to Austria from LA?

I think it's like 12 hours. So you're going to the Middle East.

You're going to the Middle East, maybe.

Okay. You're in coach and a family of 3 is sitting behind you. A man, a woman, and a toddler. They seem nice, but as the flight continues, the kiddo grows restless. He kicks your seat and pokes her toys into your shoulder. Stop that, you hear the father say. The toddler incredibly quiets down. The cabin lights dim. It's time to sleep. Yet just as rest closes in, you sense motion. The seat in front of you is reclining. You watch as it comes all the way back. Now you feel cramped with someone else's seat in your face. You also notice some stiffness in your shoulders. Your fingers caress your own recline button. Surely the reclined upon are entitled to recline. Just as you start to lean back, you hear a clearing throat. You turn around to see the dad who fixes you with his gaze. Excuse me, he says, would you mind keeping your seat up?

I think it's game on.

They put the button there, they would just take it away.

Yeah, I think, I think I've always expected everyone to just recline.

Everyone reclines and everyone has the same amount of space. It's the conservation of space.

And it's really hard to make the argument that the vertical seat is more comfortable than the recline seat. Exactly. So I think everyone commit to comfort. Everyone commits. And then the chat is sharing the real alpha stand up immediately when the flight lands.

Have you seen those Meta Ray-Ban videos where people sprint to the front? It's so rude. The guy is like, like, you know, he's like, as soon as he goes beep, he just bolts and passes everybody and gets to the front. Very rude. I don't think you should do that.

This is antisocial behavior. I don't think you should recline your seat. How is it antisocial? Because you're infringing on someone. Just because you can do it doesn't mean you should.

But they put the button there.

Horrible take. Horrible take. That's like, don't use the bathroom on the plane. They put the bathroom there.

My entire life, even as a child, I was looking Standing up, waiting for, you know, the seatbelt sign to be up in the air. Seatbelt sign's off. You recline your seat.

Everyone reclines their seats. All good. Yeah. What about ordering a Diet Coke on a plane? If I'm sitting next to you, will you order a Diet Coke or is that antisocial behavior? Because there's a percentage chance that you will spill that Diet Coke on me, thereby inconveniencing me. The most pro-social— if you really care about me, you should not order anything. You shouldn't eat anything. You shouldn't drink anything. You should sit there in your unreclined seat, perfectly upright, silent. Don't make out. That's completely different. Okay. What's your stance on JBL in the airplane?

A little Fede Rolf. Pro JBL.

You know, I do think— I do think that could be the next— the next trend.

The big question is, are you bringing on your, you know, smart portable speaker, maybe from an OpenAI, are you bringing that on the plane and talking to it the whole time? Is that offensive?

I think that's deeply offensive. Have you seen when a band is traveling and they start playing on the plane?

No. Have you seen these videos?

No. That sounds cool though. I'll send you one.

I'd be down. That would make me jump.

So this all started because in 2014, 538, We gotta have him on the show. Nate, obviously. FiveThirtyEight asked around 1,000 flyers what they thought about reclining their seats. 41% of them said that reclining was rude. So they lost. It's not rude. It's over. 59% said it's fine. I guess if it was just binary. That number seems to have risen though. In 2020, Eric Jones, a math professor who writes about travel statistics on the website The Vacationer, conducted a similar survey and found that 77% of respondents objected to reclining. Wow. Sheep. Sheepel over here.

We got sheepel. Okay, how about this? I think you should be able to recline if you're like dressed nicely. If you're wearing sweatpants, then you don't get to recline. You don't get to recline. You gotta sort of conditionally recline.

Should kids be able to kick the front, the seat in front of them as much as they want?

See, that's something I will totally put up with. I'm totally fine getting kicked in the back by a kid because it's so brutal as a parent, as a kid to be on a plane. They're locked up in the plane. That's miserable. And just, just tough it up. You're reclined. You have multiple inches of padding. Unless you got Ronaldo back there, you're going to be fine.

Order that hot pizza pocket. Live life in the permanent underclass. Live a little, for God's sake. Yeah. Let's pull up this video and— What video we got now?

All right. Oh, this is so good. I love this. Like, this is so antisocial behavior. This is so breaking the social contract. But it's also just such an elite performance that you got to respect it a little bit. This is a great— that getting around that woman is crazy, crazy, crazy work. I can't believe this. I might, if I'm really in a hurry, I might go one seat forward. Like, sort of, if I'm on the aisle, I might sort of like make sure I get the first position, pole position.

I think that's fair. Chat wants to know if the plane is in free fall, would you recline a little on the way down? Engine failure.

I think, yeah, that's fine. I think that's fine.

Okay. Okay. So you would be rude to your neighbors in this sort of stressful, potentially terrible, life-threatening moment. You wouldn't mind being rude to your neighbors.

In my final moments, that's when you would choose to disrespect me, Tyler? Not when I'm living life, having a Diet Coke, enjoying myself. You're fine then. But when, when I'm on my last breath, that's when you decide to add insult to future injury? Yeah. Weird. Wow. I don't get it. Make it make sense. Wow. Make it make sense. Coca-Cola rebrand. We got to talk about the Coca-Cola rebrand. There's a bunch of things. There's so much good news today. Coca-Cola rebranded and there's a video of this and people are saying it looks like a tobacco brand. I want your brand review. Coca-Cola unveiled a new global brand identity. It's not technically the Marlboro font.

He says, flight's crashing in 5 minutes. Can you recline your seat back, please?

Ridiculous. Pull up the video of the Coca-Cola rebrand. I want Jordi's brand review. There we go. The most recognized brand. This is huge for me.

Wow, they did it. They did it. They finally did it.

Serifs, border radius zero, sharp edges, full bleed. It's right to the edges. And people were expecting it to look extremely boring. Sans serif, sort of an Apple ripoff. We can pull up this post from Fabrizio Rinaldi about what he was expecting. To show sort of where things have been going in rebrands, high fashion. Let's pull up Fabrizio's rendition of the Coca-Cola rebrand. Wasn't this something that you would expect? But instead we got something much more—

minimalism is out, it's been out for a while. Maximalism started ripping early last year off a small base, but it's coming back.

It does sort of look like Marlboro. People say it's— it's not technically the Marlboro font. It's not the Marlboro front. It looks a little bit different.

But it's pretty close.

But also, I mean, incredible alpha in the fact that Marlboro effectively hasn't been able to advertise in 30 years. Like, it's a storied brand. They clearly put an incredible amount of effort into developing the brand. But it's vague enough that even a big brand like Coca-Cola can sort of rip it off and be in the clear. Like, besides a few— Oh yeah, yeah, the, the— really good cigs for the win.

They're leaning in. A lot of people are, yeah, saying they're leaning into the, the fridge cigarette concept.

Yes. Uh, smart. Okay, other, other movie news. Point Break. Have you seen it? No, but you will be able to see it because it's being restored in 4K and it's being re-released in theaters this summer for its 35th anniversary. Highly recommend it. Keanu Reeves, fantastic movie. Patrick Swayze. It's such a good movie about a bunch of bank robbers who are also extreme athletes. It's super sick. You'd love it. Maybe that's the next movie you see. Maybe we can make it happen even this year. There's another story about Restomods from the factory. Companies are going back and offering the actual manufacturer— do you want to just describe for everyone what is a Restomod and then what are the critiques of it? Like, take me through through the TJ Parker critique of the restomod. We've talked to him about it. What is— when someone says restomod, what are we talking about here?

Uh, okay, so restomods can look like a lot of things. There's like a range, but at the most basic level, you're taking a classic car and you're trying to, uh, not necessarily make it feel like it is a product that was made in the year 2026, but you're trying to make it at least feel— sometimes they do that, but you're trying to make it at least feel like it's somewhat fresh off of the dealer lot.

So I'm restoring it, but I'm also modifying it a little bit.

Yeah, well, there's a range. So there's some resto-mods that are just— they're restoring it to a new condition, even though it's an older vehicle.

And when you say you are restoring it. Typically, this is individuals who want this car, they go to another company that is not the maker of that car, and then they say, I would like to purchase a Porsche 911 Restomod, and it's from 2003, but it drives— everything's been restored, there's been some modifications, maybe it has CarPlay, heated seats, maybe they've, they've updated little things here and there, tweaked the exhaust. So it's not original, it's it's not fully just purely restored. But what's happening now? Because that's been a huge business, sort of unauthorized. What's happening now?

Yeah, there's a huge spectrum to it. So some might just be making the interior a lot nicer, basically restoring the engine, updating the transmission, things like that, all the way through adding features and functionality like CarPlay, all the way through sometimes redesigning the entire interior to make it almost a new car. So there's some— restomod companies that will just partner with the best automotive designers in the world to just almost fully redesign the car. And they're basically just keeping— like, they're keeping— keeping everything is being turned over to some degree except the fact that from a regulatory standpoint, it's still the original car. Right. And so that helps you. That helps to make it easier for a restomod company to like make a new car because they don't have to go through all the—

That's what Tyler has. He has a 2014 Jeep Grand Cherokee restomod. It is beautiful. It's amazing. Everything about that car is fantastic. That's why it's so popular. It's taste.

It's beauty. It's aura. So Singer is one of the most prominent companies in this category. But they become so popular that manufacturers are saying, hey, we want in on the action.

Who wants in on the action?

And so, uh, the newest player, Range Rover. Range Rover. Let's pull up this video if we can.

And classic Range Rovers are having a huge moment. There's a piece in the Journal about it. Look at this. And people have been clamoring for the analog feel. People have gotten sick of the endless buttons, and this is a way to go back to a 1993 Range Rover classic but have it drive as reliably as a brand new car.

I'm super excited about this. My number one pet peeve with restomods historically is they take this beautiful classic car and then they fix it up and then they put their logo on it. Oh, yeah. And, and I like, like I saw, I saw a vintage Bronco that had that just like somebody applied this sort of logo to it in the end that just said vintage. It's like, I don't need you to tell me that this vintage car is vintage. Yeah, right. You could just make it look like the original version of it. So anyways, I'm super excited for more, more manufacturers to get into this space. Yeah, the category is growing quickly. So I think even the, the you know, many of the restomod players will, will still do quite well.

And this seems super bullish for Range Rover as a company. Like, uh, they say check with your local retailer or Land Rover Classic. You imagine that a lot of people will be drawn into showrooms for this. Will they leave with, with a 1993 Range Rover Classic that's been restored from the factory, or will they buy something new because they're like, yeah, maybe I want that, but that'll be my weekender and I just need something for the family, so I'll just buy something more modern or new. Like, it, it's just another— it's almost like a halo car, like, for just to bring people in, don't you think? Like, if you're driving by an Audi dealership and you saw the R8, you'd go in, maybe you wind up with an A4, but you know, it drew people in, it brought, it brought aura to the brand. This does the same thing. Just seeing more 1993 Range Rover Classics in perfect condition on the road will make a 2026 Autobiography look cooler and feel cooler. And so that's beneficial to the whole company. Yeah.

And it will be— it'll be very interesting to see the way, the way in which manufacturers approach this category. The criticism of a lot of restomod companies is they'll take like— they'll basically take a, you know, $20,000 car, do a little bit of work to it and mark it up like $200,000.. And that doesn't, that doesn't, that doesn't feel great.

Yeah. But you know what feels great? Running a business on Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in-store, on mobile, on social, on marketplaces, and now with AI agents. And we have our first guest of the show, Ferdinand Dabitz from Augustus. Let's warm up the show. He's back. We got some big news. You raised some money.

Welcome back to the show. You absolute dog.

You absolute dog. How are you doing? Give us the update. What's going on with the business? What's the news?

No, yeah, I'm feeling good. I like this car stuff, by the way. I have a 2009 Land Rover.

There we go. Cool.

Myself. That's a great car. So that was good. No, long have I got this. Yeah, we raised some money. I think one thing we always liked about the bank thing is that it felt so hard, right? And was this like—

And now you're making it look easy.

Yeah, you are making it look easy.

I wanted something that felt hard so I could make it look easy.

To make it look effortless, right?

You are making it look effortless. I remember when we hung out, I think it was at the end of last year during the holiday season, you were like, yeah, I'm working on this thing. And here you are less than a year later.

$180 million Series B, $1 billion valuation, Tiger Global's in, you got a bunch of other folks in. What actually did unlock the new round? Like, what's the progress of the core business?

I think it's a great question, right? I think there are these— probably are these 3 things that were and are still exciting about the business, right? I think that the first thing is just this big idea around dollarization. Right. And Augustus is built to dollarize the world. And I think people have really started to understand that that's a super important thing. Right. And I think over the last 20 years, we've seen a trend towards de-dollarization effectively. Right. Like if you look at the distribution of the dollar globally, kind of like traditionally distributed through these clearing banks, these correspondent banks, that chart goes down and to the right, right. Like the number of clearing banks has just fallen off year over year. And people were excited about it because post-9/11, people said, okay, it's risky to distribute the dollar and be a bank in Latin America, be a bank in Middle East, be a bank in Africa. You probably don't want to do that. And so it should be super expensive, and so on and so forth. And people from a macro point of view start to regret that. And I feel like, okay, actually, it's great if people use the dollar all around the world.. I think it increases dollar demand, right? It's anti-inflationary. And it's also this incredible instrument of soft power, right? The first thing we do when Russia goes to Ukraine is we take them off SWIFT and we shut off their dollar clearing. And this is amazing thing where we don't have to send the tanks and the boys. We can influence what's going on, right? And so there was this idea like, hey, should we maybe revert that trend and build a modern correspondent bank, right? A modern dollar clearer that can dollarize the world, right? And provide high-quality dollar access to places outside of the United States. I think that was the first big idea that really made a lot of sense from a policy point of view, right? I think it enabled us to charter this bank, but I think also like private capital markets were able to buy into it. So I think that was the number one thing. I think then the second macro thing was this idea, AI bank, right? If you now build a modern correspondent bank, what does that mean? I think so.

I like the sound of it. I like the sound of it.

I, I think, I think it kind of like, um, it makes sense, right? Like, I think the global economy is on this like consistent investment thesis to, um, that every major industry is going to be transformed by AI. And I think Augustus is genuinely one of the few assets, companies that has exposure to doing that for banking, right? Because Augustus is a bank itself. Not yet, conditionally approved, as you guys know, but and is also kind of young enough and cool enough to be a legitimate technology company. Right. And so we felt like— they felt like there's a legitimate opportunity to take this very operationally intensive business, dollar clearing, correspondent banking, where Citibank has tens of thousands of analysts in the wire room that go through the payment file and do the reconciliation of payments and take it and just automate a bunch of it and turn it into a better business for customers with better economics. Right. And so that felt, I think, pretty good. And then I think the third thing was just the progress that the team has made over the last year or so. Right. We got the US National Bank conditionally approved. Yeah, I think we're the 8th company in the history— not history of the United States— 8th company since 2010, a younger history to get the conditional approval. That was a big one. And then we're already kind of big on euro clearing. Right. We scale a couple of billion euros for some of the largest fintechs and FIs in the world. And that business was also growing very fast. And so I think these things coming together felt like a good moment and kind of like resulted in that round, I'd say, is my little play-by-play. Awesome.

Do you have something?

No, go for it.

How— I mean, you mentioned that like we are on an upswing of dollarization right now, and that feels like a narrative violation because over the past 2 years we've been in this period of deglobalization, tariffs, there's international conflicts. I don't love it, but I could totally imagine a lot of international countries saying, well, we're going to pull back from our relationship with the United States because they're levying tariffs all over the place and seem to be adopting an America First strategy. What am I misreading about the international climate that's actually driving increased dollarization in 2026?

Yeah, I think it's like less empirical, as in this is actually happening. It's more like normative. Do we want this to happen? Sure. Right. And what kind of world do we want to live in? I think people are starting to come around to this idea that we want to live in a dollarized world. And that wasn't always a given. And I think it wasn't even a given for the last 20 years. As I said, like since 9/11, like I think correspondent banking has been like increasingly unattractive business. And people said stay away from banking non-US financial institutions, don't do it. And I think that the wind is changing on that a bit. And then I do think that the administration is actually much keener on dollarization than people give them credit for, right? I think all the work that the Trump admin is doing on stablecoins, for example, is largely driven by dollarization thesis, right? This idea that if we can like more effectively distribute the dollar abroad, it's good for the United States, right? Because it's an instrument of soft power and increases dollar demand and it's anti-inflationary, right? And I think that they're like that there's a school of thought in that, and that's big on this. And I think this is in a way like a policy and like a byproduct of that as the public-private partnership that is a national bank, right? It's not just a normal company. It has to live in these regulatory moments.

Amazing. Well, congratulations. Keep up the great work.

Incredible update.

I'm sure we'll be hearing from you in just a couple of months at this pace. You're making it look easy.

I'm glad to see you guys. We'll talk soon.

Have a good one. Let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI, own the data platform that powers it. Our next guest is Kawe Tang from Light Phone, co-founder and CEO. How are you doing? Hey, it's been all right.

Thanks for having me.

Welcome to the show. Great to have you. We were debating this earlier. Do you— so first, let's start with an introduction and then I have a bunch of questions about the correct terminology for this category.

A lot of people call it dumb phone, but I call it simple phone.

Oh, okay. So you don't like the term dumb phone? Yeah.

I mean, you know, your phone gets smarter, you actually get dumber. So we, you know, the phone needs to do what the tool does for us, like hammer, screwdriver, right? Yeah. It does that for you and you put it back. You don't swipe your hammer for 5 hours sort of thing. Hammer company can make money. So that's exactly how we design Life Phone and all the tools inside the Life Phone.

Okay, so a minimalist flip phone is the newest product. Talk us through the evolution. How do you measure demand? Why flip phone? It's very nostalgic. I love the idea, but what was the broader thesis?

Yeah, I mean, we've been doing this for 10 years. I think back in 2015, we— We were in incubators for— at Google created for designers. And through talking to a lot of VCs and successful entrepreneurs, especially app entrepreneurs, we realized that everyone's bragging about how much time, attention they get from their users. That's why they're successful. They could categorize, analyze the data and sell the data to the highest bidder. That's the whole attention civilian economy. And I just don't like that. I don't want to see advertisement. I don't want to know— I don't want people to know where I am 24/7, but I I love technology. I want modern technology without the civilians' attention economy built in. So what we're trying to do is offering a device that has all the modern utility tools without that business model built in to maximize your attention. So you could call somebody, text somebody, get a direction home, listen to music, taking notes, you know, QR code reader, but no one's trying to maximize your attention so they can make money. Same idea, like we're not trying to ask people to give up technology. We're trying to say, hey, we all have different shoes, different car, different jacket, right? You can use different tool at a different scenario, right tool for the time. And that's the essential idea of Life Phone, be intentional about your time. Don't waste it on social media. When was the last time you or anyone else spent 3 hours swiping the TikTok and you snap out of it? I feel so good about myself.

Every day, baby. I'm on the internet 3 hours every day. Yes, I am the exception to the rule. I am the screen time.

But how does— so assume the people listening are with Verizon or an AT&T or maybe another carrier. For the Lite Phone, do you have to get basically an entirely separate number? Is there a way to use the same number?

Yeah. Is this something where I— I think it's maybe Chris Williamson talks about this, like the cocaine phone and the vegetable phone or something like that. Like, they will have one phone with all of the crazy apps on them and then one that's like essentially a work phone. And when they, when they carry that phone, it's like brick. There's a whole bunch of different trends, but can you actually run like a single number with two phones?

Yeah, I mean, that's, that's, that's healthy, right? You, you, we always need a balance. You could, there's different way to do that. You could turn on call forwarding, you could physically remove your SIM card on your smartphone, put into your, to your, uh, life phone. You could also utilize service, utilize service like T-Mobile Digits that give you two numbers— I'm sorry, two SIM cards tied to one number. Oh, interesting. It's different ways to utilize Life Phone as a secondary phone or primary device. But we actually seeing more of our customers using Life Phone as their primary device now, especially younger generation. Yeah, they got it. I was in the— yeah, I was in the event in New York that a group of young people that promoting real-life experience. And the performers in front, in the stage, and there was a woman in the crowd, like, taking— took out her smartphone and tried to record the performance, and everyone's booing her. You know, I think this, this is, this is no longer short-term, not a retro feeling, that, oh, just temporary feeling good about retro technology. I think this movement started by, uh, by the young people, the Gen Z or younger, is here to stay. As the AI, as this you know, 5G, iPhone 45 keep getting bigger and bigger. I think this— the other side of the movement is going to get bigger and bigger too. And we're trying to give people options that they can opt out.

So what would it take to add Instagram Reels or maybe even like prediction markets? Well, maybe you could make it discounted if people commit to doing prediction markets enough. Yeah, you preload 10K. Yeah, the phone is free as long as you're trading Sort of a gambling phone. $5,000 a month. Hey, if you pay the phone. More seriously, how are you thinking about AI features? Because I imagine there's this tension between AI does give you the potential to interact with your devices in new ways, right? It's cool to be able to dictate to your devices. That's gaining a lot of popularity right now. Maybe later than a lot of people would have expected. But then on the other side, I can imagine that a lot of your core users to date like hate AI and they're trying to get away from it. Yeah. So how do you, how do you kind of thread the needle there?

Yeah, I mean, I always said that, you know, AI is a tool, it's a software program that's very helpful and we should treat it as such. Meaning that we, when we started Light Phone, it's not because there's a new technology being invented. So we designed we don't design product for that, right? We design product because we've seen people frustrated, anxious, stressed out, not happy with their smartphone and social media, but there's no way out. I think the same logic applies to AI or this program, these tools. It can be really useful. It can be helpful as long as it saves my time. So I, you free up my time to do things important to me and make me happy. I think that's a good outcome. However, you guys probably know, like with AI tool, more people work more hours. You've been notified all the time with the things that are happening. So I think treating this particular technology as one of your tools and design and use accordingly is the way to go. And we're not anti-AI per se, but we do see the sentiments among young people towards, you know, everything AI, the big tech push on AI, the discrepancy, the gap is getting bigger every day. As I witnessed it, you know, going to tech conference, the potential of AI is being praised. You go into this this real-life experience that young people started at Led Eye Club, they don't care about AI. We've been interviewing flip phone users in a new product we created called LifeFlip, the flip phone that we just announced today. We've been interviewing different flip phone users for the last 6 months. The one thing they never bring up is AI feature. No one wants an AI button on their phone. I mean, I have no doubt it's very helpful. Question that is, it can be the future technology that saves our time to, to do things for us and we can move on quickly. But I just don't think it's being designed as such at the moment.

Take us through the business side, the business model, the customer acquisition funnel. This is a product that I feel like it naturally generates a lot of organic earned media. It's fun talking to you about this and all the knock-on effects of of phone use. I imagine every product reviewer reviews it. Like there's probably a decent amount of attention that effectively comes for free in this category. But what does the actual scaling of the business look like? Are you doing like direct response ads on Instagram Reels to get people to uninstall? Are you Adam Massary's worst nightmare?

No. So as a matter of fact, we don't utilize advertisement. We don't pay social media to promote Light Phone. So the last 10 years, all our growth are organic. What? From word of mouth, from press, from celebrities are using LifeFone, including Aaron Paul from Breaking Bad, Pete Davidson, Ed Sheeran from UK. We have a lot of people that resonating with what we're trying to do and support it and spread the word of LifeFone. So the last 10 years, we grow, you know, every year 20% to 50% without any replacement. Um, I think it's only human that this resonates with a lot of people. Yeah.

Uh, talk about the decision to include, uh, podcasts. Uh, there's, uh, I, I know some people that are addicted to both making and consuming podcasts.

That's a tough one. I think every tool that we designed follow the same principle. I can summarize into 3 principles. Number 1, no advertisement. Number 2, every action our user take has a clear meaning. We have ads in our—

what about ads in podcasts?

Yeah, we suck at it.

That's the way. That's how you get in front of the Light Phone users is you got to just advertise on podcasts.

Here we go.

Well, so similar to how we design music tool, right? Like it's not a Spotify. We designed it as an MP3 player that you intentionally create a playlist for you to calm down, for you to be creative, for you to get into a certain mood using that tool as a tool. Yeah. Spotify podcast— I'm sorry, podcast the same way. We're seeing as an educational tool, but I get it. Like loophole might be advertisement in the podcast, which we cannot control.

But I like the idea of an old school MP3 player. There's something very satisfying about actually curating an intentional playlist, loading it up for a different moment, like It is. Yeah, it's a special, special moment.

Well, everything intentional makes things special, right? Everything that you're intentional doing makes that experience special. The object designed for one purpose makes it special too.

Yeah. How do you think about what does success look like for Light Phone? Like, is like a million— is a million people globally that, you know, use and love their Light Phone and, you know, get a new one every year when you make it newer, faster, lighter, longer battery life?

No, planned obsolete is not something we're interested in. The last 11 years we introduced 3 phones and Life Phone 2, we still have users using them. We're still selling them. It's been 6 years. We stand behind our product. We upgrade the software, we upgrade— I'm sorry, we repair Life Phone locally here in Brooklyn. And that's what we're going to do. We're not asking people to buy a new phone every year. There's no need, there's no reason to buy a new phone every, every year. Like, when's the last time you upgrade your hammer? Uh, camera?

Hammer. Oh, hammer, hammer.

Well, we have to have— we actually, we have a gong mallet that we upgrade a lot. But yes, I take your point, it is a tool. I like that. Don't do it.

We're pretty rough on our, on our gongs.

Yeah, so we got You gotta upgrade them a lot. But for the average person, one hammer is a lifetime supply.

No, it's a great, it's a great, it's a great point. Congratulations on that. And yeah, I was just asking that because I feel like phones are somewhat like cigarettes in that people know that they're bad, but they're just so good in some ways for some people at some times. But I was gonna say, even if you have a million people that are just like, you know, like true, true believers that are willing to make certain sacrifices in terms of like some features and things like that, you could still have a really thriving business. And it feels like, you know, it's not a billion users or bust here.

Yeah. Oh, 28% of Gen Z are strongly interested in acquiring a non-smartphone. 26% of millennials interested in getting a non-smartphone. 12% of Gen X interested in getting a non-smartphone.

Wow. Gen X buyers are really young. I think this trend is not going to stop. Yeah. Yeah.

It's going to get bigger and bigger. Very cool.

Well, thank you so much for coming on the show. Congratulations on the launch of thelightphone.com. You can go and preorder one. It's available for preorder and the Lite Flip is shipping April 2027. Thank you for coming on the show. Great to talk to you soon. Have a good day. Cheers. Goodbye. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. Our next guest is the best. We got Chris Best, the founder and CEO of Substack. Welcome to the show, Chris. How are you doing? I'm doing good, man.

Thanks for having me. The great slop wars. Yes. Have entered a new era.

It's not just nice to talk to you.

It is amazing. It is the best.

It is the best to talk to you. Tell us about the slop problem on Substack. What is the shape of the problem? What motivated this? Take us through the new product. What's the state of the union in the slopfest? The slopfest. The state of the trough.

I mean, the place I started with this, I've had the experience that I think a lot of us have had, not on Substack, but just on the internet in general. I'm scrolling the timeline, I'm reading stuff, and sometimes I just have this experience where I'm reading something. Sometimes it's by someone that I think I know, sometimes it's something, and I have this kind of Invasion of the Body Snatchers experience where you realize you're sort of reading something that was actually just pure Claude. Yeah, purely generated. Yep. And it's kind of, you know, it, it makes the experience reading on the internet worse because you're constantly wondering. You constantly have to wonder, is this real? Yeah. Am I actually reading something this person believes in? Or, you know, did Brian Chesky get hacked or whatever is going on? Yeah. So I like, I've been feeling this. A lot of the people I know who spend time online have been feeling this. And then the guys at Pangram did this study. 'cause they've been running this browser extension, right? Where they have their own browser extension you can install and you can just have stuff labeled. Yeah. And they studied different platforms and they found that on some platforms, like I think LinkedIn, 40% of the long-form text is generated by AI.

Mm-hmm.

And, you know, in my view, it's not the case that all AI is necessarily—

I would've expected 90, but— Yeah.

But let's go back to 40.

40 is a lot. Well, you know, a good point here is not, not all slop is AI. You know, LinkedIn, even pre-AI, had a lot of, had a lot of stuff on there that's, you know, maybe not the best.

Pretty sloppy sometimes.

Depending on your perspective. I mean, some people like it. That's fine. Yeah. And I think, you know, they had Substack coming in about 10%. I started looking at this. I started thinking about this. And to my mind, the problem is not people using AI. The problem is when you have kind of the deception that comes with— I'm expecting that I've got a real connection to a person. Yep. And I'm actually reading something that's written by no one.

This photo is my experience when I realize I'm reading AI text. Yeah. Yeah.

This is the moment you realize and the moment you realize that's when I think of this as Claude fishing. Yeah, yeah. Right. It's about the violation of expectation and it's the fact that you realize and then you're like, Oh, this changes the experience that I think I'm having. And it's so weird. I'm not against reading AI text. Totally.

I read AI text all the time. Yeah. When there were those rumors that like OpenAI was thinking about a social network and it was still really, really early, I was like, I would love to be able to subscribe to a feed of Tyler Cowen's Deep Research reports because I know he's using these tools. I know he's coming up with really interesting and creative prompts, probably asking about like, what's the food like in in this random town internationally. And like, I would like to learn what he's learning. But the whole premise of that would be that I'm just getting a link to ChatGPT.com. And people do share these around, but we haven't really— because we're not in like the link sharing world, people haven't actually coalesced around like, yeah, I'm just going to share you a link to my deep research report. But sometimes that would be better than you took— you copy and pasted and you forgot to put the, is there anything else you'd like me to help you with or whatever?

Or you left it in and you get these mails, emails that leak the prompt to you. Yeah.

And so I can imagine that there's probably a really banger Substack out there that where the journalist or the writer is going to say, look, I'm going to go, I'm going to go find an interesting fact, or I'm going to give you a roundup and I'm going to do the work of prompting and fact-checking and making sure that this AI instantiated newsletter is high quality and high quality.

Yeah. The example that I always give is like, like, if Alex Heath was using AI. He uses AI often. Yeah, he's talked about it. But like Alex Heath using AI, I'm like, great. I'm not subscribing for the writing. I'm subscribing for information, the facts that he's finding. Contextualization. Plus the takes and his point of view on that. Yep. And if he's just rambling, if he just finds the facts takes and then does dictation and just kind of rambles for 10 minutes, turns it into something that is, you know, short.

But the disclosure is important. So, right.

Yeah. The way you can tell that's good is because the disclosure wouldn't ruin it for you. Totally. And we have all takes on the platform. We have everybody from, you know, Sam Crist wrote a piece recently that said, if you let AI do your writing, I will come to your house and kill you. That's a death threat. You think I wouldn't be able to tell? I can tell. And then, you know, we have people that are doing the thing you're suggesting that are, that are using these tools to like— slop is not something made with AI. Slop is something that nobody believes in. They didn't actually care about, right? If you just go and say, hey, write me 1,000 viral LinkedIn posts, make no mistakes. That's slop. Yeah. If you spend, you know, if you're doing this deep thing where you're going back and forth and you're doing it, I talked to a bunch of people who do this on the platform and they're worried about slop too. Because in a world where you get a bunch of things that are like low effort or like zero authorship stuff masquerading as somebody's careful work, it drowns out the actual careful stuff. Yeah. Like you can have a platform where like the good high effort thoughtful things get outcompeted by people just like spamming the zone with stuff. Yeah. And I just think that's gonna be, I think that's already a real problem on some platforms. It's not a huge problem on Substack yet, but we kind of wanna make sure that we're just, you know, keeping the bar high and having, giving the people who are making stuff they believe in, the chance to win.

Have you seen any generational divide between how publishing AI writing is perceived? Because there's been a number of VCs, at least over on X, that are maybe in the back half of their career. Well, they'll just publish an essay that's just incredibly obvious that it's just like they maybe didn't they maybe had like a couple key ideas that they gave the model and then they just took the output and just published it. And they'll usually get kind of dunked on. But it seems as though the author was not even necessary— or the author was not necessarily even sort of aware that there's like a negative perception or that it's maybe obvious to other people. Have you seen anything like, have you seen a divide at all or is it just sort of random?

I think we're in a period where these, there's like new norms that are getting figured out. Yeah. It's not clear what the rules and expectations are. And there are, there are people that have wildly different ideas of what good is. I don't think it's purely generational. I think there's people in all camps. To me, the thing, you know, I think that anti-slop is a pro-AI stance. Yeah. Right. You don't see Sam Altman or Terry Amadei writing doing these like Claude posting things and it's not because they don't believe in AI. Yeah. So I don't think that it's an anti-AI thing.

Yeah, like I think you can be incredibly in favor of maximally using AI to do research and be a, you know, even a thought partner and edit your work and help you think of even new ideas to include, but it's about ultimately creating something that's worth people's time, right? That they couldn't have just gotten by asking the same question to the same model, at least in my opinion.

Claude is great, but if I want to talk to Claude, I can just talk to Claude. And if I'm reading you, it's because I want— there's something else. I mean, another way to look at this, you gave the example of what if Alex Heath were making this really thoughtful thing. I would love that. I think everybody has an example of something where they're definitely cool with it. Everybody's talking to AI. It's valuable. On the other end of the spectrum, do you remember the guy when the sort of OpenClaw was in its fervor that was famous for having the bot text his wife? He was like answering his wife's texts. And like, I think almost everyone can look at that and be like, okay, that's probably not legit. Yeah. And then there's a whole bunch of stuff on the internet that kind of falls in the spectrum between, you know, thorough research report with AI pros all the way to like, you know, having— not having to answer my wife's texts. Like, if I'm going back and forth in the comments with you, what's the expectation? If you're writing a piece, what's the expectation? Does it matter? Is it different if you're writing a personal story versus a— I think these things are all like new norms that will have to get created. I don't think we at Substack have all the answers. And so this is why we're kind of leaning as a first step, we're like, hey, let's just have some transparency. Let's make it so that readers can scan this text if they want and have that information and do with that, you know, make their— form their own judgment. Yeah.

How do you think— how do you think writing is changing for writers who don't use AI? I've noticed personally I've been writing video essays in the pre-ChatGPT era. Then all the models were not really great. For a while. Then I started doing daily essays on Substack, got accused of using AI even though I wasn't. Sometimes we would pass them through AI to just fact-check and grammar correct, and then that gave it the AI flavor. And so I made the decision for, with the team, to just like not proofread them basically. And so I will often be doing research in a bunch bunch of different AI tabs and collect information, but then I'll go and just complete stream of consciousness, nonsense grammar, all these weird twists of phrases like I'm just speaking out loud. And I think it's remained like I'm getting less and less AI accusals, I guess, even though I'm like, I just writing daily, I think you're going to get accused of using AI, because it's so obvious that you would save a lot of time by not actually going and doing the work. But I'm wondering if you think that that is just a unique thing to me or if that—

Well, it's not even just a problem with writing. I've noticed on YouTube, there's creators that I used to love that would make like history or geopolitical content or just like weird niche content, even car content. And now I have that same experience of like ripping the headphones phones off because I realized that somebody that used to put like all this energy into like writing these great scripts and telling these stories, you just start hearing the, the Claude-isms in the video. And even though they're just like making an output, making a script and then reading it, it's still like coming through and you can still tell that, that they didn't put craft into it. Yeah. And so I've seen on YouTube there's creators that are just like in the description or even in the introduction to the video saying, and to be clear, I don't use any AI in my videos. And so again, like even as somebody who's very pro-AI, I find myself like, I feel like a little bit comforted hearing that because of all the bad experiences where I've gotten 3 minutes into a video and realize like, okay, this person is just reading a script that was a one prompt. Yeah.

And we added this to the feature we launched too. So if you, if you're writing something on Substack, you can set like a how I make this statement where if somebody's scanning your thing and it can say, hey, I never use it, or hey, I use it in this way, or even, you know, hey, I use it extensively, but here's the, here's the perspective I'm bringing. Here's what you can get from me. I think it's, I think, and I think this is true no matter how it gets more true as AI gets more powerful. Yeah. Right. One critique is, is, oh, I don't like it because it's bad because it's like a clodism or because it's just like, detectable. But I actually think the underlying thing is like, am I getting a human perspective here? And the more powerful the AI becomes, the more important it is to know that. Because if I'm not, it might still be great. But again, it's like if I want to talk to Claude, I can talk to Claude. The question is like, what human believes in, stands behind, has the perspective that I'm spending my time and energy ingesting? Yeah.

The other, the other thing with Substack is like you're paying for a media product when you subscribe to someone, but you're also paying to, in many cases, at least personally, allow somebody to pursue a life's work. And if— and, and that to me is like part of the sort of like social contract that you have when you subscribe to someone, which is like, you know, I am in a small way— I might be one of 10,000 people, but I'm allowing you to you ditch your job and just pursue an understanding of this industry or this market or whatever. And so, that's also like if somebody just decides one day, "Okay, I'm kind of done with this whole independent writing thing. I'm just gonna slop it up for as long as I can." People will churn, but that would be violation.

At least in my view. Do you think your recommender system will naturally sort audiences into what they like? So if there's someone who's subscribing to more AI-generated Substacks, they would get recommended into that and they would be satisfied with that. Is there going to be like a barbell effect here where you imagine there's like power law creators who use no AI, power law creators who use all AI, AI?

I think there will be some of that. And I think these, these tastes will change over time. But something I've noticed in myself and in people I talk to about this is a lot of these things are kind of an acquired distaste, right? It's something where, you know, a few years ago maybe I wouldn't even recognize this as being different. Yeah. And now I sort of have that skin-crawling feeling. I think more people— not everybody has developed that already, but I think more people will develop it than have today. But then look, I think ultimately, you know, our perspective on this we're pro-freedom. We're not sitting here telling you what tools you can and can't use. Yeah. We're not sitting here telling you what you can and can't read. Yeah. As long as you're making the decision, you know, as your best self, what do I value? What do I wanna spend my time and money on? We're happy with that. We wanna kind of help people do that. And so if, you know, I, I, if there are places where people are, you know, paying for AI stuff and it's the stuff that they want and the person may like, we, we think that's great. Uh, as long as it's, you know, yeah, people are doing it with their eyes open and they know what they're getting.

Yeah, it's funny, like how I would certainly pay $5 a month to just get a feed of Tyler Cowen's, like, ChatGPT prompts. Yeah, right. Because I'd just be interested to follow— like, I would just be interested to, like, sort of passively learn about it. And I'm surprised no one is like, you know, figured out a way to create that kind of product yet. I don't know. What do you think is like the— is there an AI writing product that is overtly AI that's actually been a massive breakout hit and that they've fully disclosed that this is AI-generated, but it still works? Any that you're aware of?

You mean, are there examples of texts?

I mean, somebody that made a Substack and it's like, hey, this is $5 a month and I'm just going to give you breaking news and analysis on these types of of topics and it's all AI generated and like actually have, has anyone built a real business?

The equivalent would be like Demon Flying Fox on YouTube. He's the one that did the Harry Potter Balenciaga. He is like an AI first video creator. It's very clearly disclosed. There's a number of Instagram accounts where like the whole thing is like imagined AI futures and they are creators, but they openly I'm wondering if there's a version of that for text or Substack.

That definitely exists. And that's the thing that I believe in, right? The idea of like an AI-powered creator. Yeah. The way I think of this is like AI gives you superpowers and it just also gives you new ways to be annoying on the internet. But if you're, you know, the A in AGI is not supposed to stand for annoying, but the like, okay, if you're saying like I have this perspective and I'm using these tools, Like, like, I think that Harry Potter Balenciaga thing is genius. That's great. Um, it's genius. And I don't care that they used an AI tool to make— in fact, it's great. It's like, it's a new way to express the thing. Yeah. Um, and we have, we actually do, there is a bunch of that on Substack. There are people who are doing analysis, people who are sometimes writing things in other languages. There's people that are like writing in like English is not their first language, but they have some important analysis or they're like, you know, they're doing some deep research or they have some perspective. And, you know, the final prose is generated, but they're transparent about that. I think that is great. The question, the deeper question to me is like, do you actually have to have a human artist behind the thing? Like if instead of that, if instead of— I've used AI tools. If you're kind of doing the thing of like, hey, you know, generate 1,000 viral posts, make no mistakes, or generate 1,000 viral bots that each do 1,000 viral posts, make no mistakes.. And my view is like, that may be compelling, but that's not gonna be valuable over time because it's gonna be, there's gonna be no differentiation. It's the thing of like, yeah, talking to Claude is great, but I can talk to Claude if I want to talk to Claude.

That makes sense. Do you know of any historical comps to this conundrum that we're in as citizens of the internet? Like, was there a period where authors weren't real authors if they used a typewriter? You know, you had to, you had to write it with a pen or it was frowned upon. Or is this just like a novel experience?

I found when I was looking for the art for the announcement post I did, I found a reverse example from history. Reverse clodfishing, which was the Mechanical Turk. Do you guys know the story? It was supposed to be a robot that plays chess. Yeah. And so it was supposed to be like a magic strong chess-playing AI. But the trick was there was actually like a chess master kind of like hiding in the bottom, controlling it. Just sort of, it's the reverse of having the, you know, having that realization of you're absolutely right while you're reading something.

Yeah. Yeah, that's great. Well, congratulations on the launch. It seems like it's going really well and we're huge fans of Pangram and the team over there.

So those guys are great. They're excited to see you.

They really are. Yeah, yeah. What a good question.

In 2 more minutes before you leave, what can people expect out of Substack for the rest of the year? Like, are you— Yeah.

How is the business doing in the age of AI broadly? Like, there's a narrative where it's like, oh, people would just talk to the AIs to get information. They're going to spend no time on Substack. And then there's another one which is like, you'll be 10 times more efficient because all your software engineering can be automated. Like, how is the business actually changing?

Business is doing well. We're growing. You know, the way I think about this is I think as you get sort of plentiful, you can get anything from the AI, you can get any content, the value, you have infinite kind of like things that you can spend your time on. The value of the trusted human connection and perspective goes up. And as long as we can have the platform reward that, as long as you feel like, hey, you know, like even if you're reading Tyler Cowen's prompts, The fact that, you know, have some idea of Tyler Cowen as a person and have invested some faith and trust in him. Yeah. Is a fundamentally valuable piece in this new world. And we actually think this is, again, it's like if you take sort of a pro-AI stance, you can also have like a pro-human culture stance that thinks that we're going to be able to make that even more valuable. Yeah, that's very cool.

Well, congratulations. Thank you so much for coming on the show.

Great to see you. Always fun. We'll see you soon.

Cheers. Let me tell you about Consul. Consul builds agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. Our next guest is here with us in the TVP and Ultradome live. How you doing, Stephen? Welcome to the show. Stephen, co-founder and CEO of Wop. How are things going with Wop?

Things are going great with Wop. Thank you for having me here. This is super cool. Yeah. Welcome. Yeah, it's a crazy time for the whole world right now. And I think a lot of the work we've been doing over the last several years is now coming to light in a way where there's a bunch of themes converging. And you have, I mean, you have all, in conjunction with AI, you have a lot of people trying to figure out what they're going to do for work, what they're going to do with their jobs. You have an existential question of how to get value accrual. By spending money on tokens. And I think a lot of the infrastructure we've built is trying to answer a lot of that. So things are going well.

And it's exciting times. At its best, you're bringing small-scale entrepreneurial opportunities to people at a very, very broad basis.

I think that's one way to look at it. I mean, we grew up, my co-founders and I, building businesses on the internet, piecing together a ton of different platforms. —at times, we would have like 3 or 4 businesses running at once. And we were always the weird ones. There was like no one else was doing that. And now it's pretty normal. And I think we are trying to build a platform that if we could go back in time, we would be addicted to as a 15-year-old. And I think that technology is there now where there is virtually no excuse to not have a really awesome income stream, especially from starting a business. And yeah, so I would say— It's pretty cool.

Yeah, I want your reaction to this, uh, take from Aporia about Gen Z entrepreneurship. As they say, Gen Z entrepreneurship increasingly looks like running a portfolio of asymmetric coups rather than betting on one serious long-term project. They go on to explain that half the people I meet at beach clubs in Saint-Tropez and Marbella are doing Exactly this. One year it's crypto, then an Amazon brand, then an AI lead gen agency, then solar panels or some subsidized renovation. And this was the interesting line. I used to think this was unserious entrepreneurship, but some of them have become genuinely good at it. Their real business isn't crypto, AI, or solar panels.

It's being early. That's one of my favorite takes I've heard in a long time. And I think that the reality is the businesses are getting so ephemeral that one week it's a jewelry store. The next week it's an education program teaching people how to use a new AI tool. Yeah. The next week it's a UGC marketplace, and then the next week it's an agency that's selling data to labs. So the amount of trends that people are tapping into to start businesses is through the roof. And when that happens, you do get what resembles a portfolio, almost imagine like a crypto portfolio. But, and if you look at our new homepage, it actually looks like a crypto portfolio, but it's not tokens, they're businesses, and it's completely up to you to drive the business income up. And we try to figure out ways to tell you exactly what to do next in order to do that. So I think that's a fantastic—

so it does feel like an exchange. And yeah, if you were able to talk to the— take you today and you have the younger version of yourself, what advice advice would you be giving on like where to start trying to make money on the internet?

I would simply look at what is working on the internet today and copy it. And I think—

So, when you were getting your start, it was trading sneakers and maybe having some bot tracking Supreme drops. Like, what was it then? And what is actually happening now?

Well, I think that your question is interesting because you said if they want to make money, that's one thing. And if they— I think when we were building businesses, it was never really for the money. I mean, my co-founder Cameron dropped out of high school at 15 years old and had virtually unlimited money for a 15, 16-year-old. I think the only thing he bought was a Tesla. And other than that, he would wearing flip-flops and t-shirt and be working all day. And it was never really— about the money, quote, exactly. It was always about— we have a hoodie that says, "Building cool shit with your friends." And I think that is much more the spirit that we get excited about. And in many ways, we want to make it actually not about the money and take out money from the equation so people don't have to worry about money. But it is like the advice I'd give to a young person—

Yeah, that's sort of the unique luxury of being a teenager where it's like if you hit it out of the park and make $5,000,— you feel like the king of the castle.

Yeah, totally. It goes a long way, and you have a lot of time, and you just have nothing else to do other than to experiment with different businesses. And it's— after Roblox, what are all the kids supposed to do? And I think that's how we approach it, trying to build a very gamified arcade version of entrepreneurship and pursuit of building products for other people.

Talk about looking at what works and what's making money on the internet, because I feel like there are are layers to that onion. Sometimes by the time I'm seeing Instagram Reels of somebody driving a supercar and they say they made their money on Facebook ads, like the Facebook ad arbitrage might have closed and that person might now be selling a course to get you to sell a course to then sell Facebook ads. They're like 4 levels of abstraction. What what is the correct way for young people to actually go and find the real opportunities and not the things that have been abstracted into LARPs at this point?

Yeah, well, I think the infrastructure in every single one of those businesses is always the same. So when you, when you go and experiment with one business and then you go to the next one, a lot of that carries over. And I mean, what I would suggest is we try to do a very good job on WAP showing which businesses are actually working really well and which models are working really well.. So my advice would be to go do that. But I think it's ultimately just to try to experiment as much as you possibly can and don't feel like you're wasting a lot of time 'cause the only real risk is not doing anything. And my probably overarching advice to young people would be just to try things out and see what happens and fuck around and find out, if you will, a little bit. So I think that that's a very— that's the spirit of where we are now in businesses and how ephemeral everything's getting. In how much experimentation you see when you open your Twitter feed. Mm-hmm. Um, and that's— that's a good thing. It brings comp— it floods the market with competition. It floods the market with, uh, people that are trying to differentiate ever so slightly from the prior iteration, and that ultimately brings a lot more value to end consumers and, uh, makes everything cheaper and, uh, makes everybody a little bit more money. So I think that's a pretty good thing.

Talk about the CLI.

Finally, we have a CLI. Uh, yeah.

So why is that important? Well, yeah, so websites are pretty good. APIs work in many ways. What's the point of the CLI?

I think people have historically found WAP to be relatively confusing of a concept. And I think the reason for that is because the UX that we've built—

made me feel like a boomer. I was on there. I was trying to spin up content rewards back in the day, very early with the show, and I was like, I feel old.

Yeah, I think the UX we've built has never really caught up to the API we've built. And I think that we're a very fundamentally API-first company. We have a very engineering-led team, and that results in a fantastic API that has— I mean, when you look at the functionality that our API supports, it is literally every single thing that you could possibly need to programmatically run a business. That's payment acceptance, it's ad creation, it's money movement. You can even find people in the real world to do labor for you, clipping and whatnot, all via the API. That is very difficult to build a UX around. Very, very difficult. And the CLI, um, allows all the functionality to be brought into your terminal and, uh, to be called from any agent, uh, via API, and that results in way better experience. So this CLI is very cool.

So hypothetically, if I start— the three of us start a hair care business together, since we all have wild hair, there are a number of steps that I'm going to take to promote my business. The classic one that I would go to WAP for might be clipping. I might film a whole bunch of content. You film some videos about your hair care routine. All of a sudden we have an idea of a business. I like it. It's his style. And we want to take that to social media. So we want to engage with WAP broadly. Now, I could use an AI agent to interact with the API, the CLI. Does that just make it easier if I'm doing the programming? Or is there a world where I'm actually finding a programmer on WAP to help me with that side of the distribution?

So the old adage is that ideas are easy and execution is hard. And we're seeing that be flipped on its face in real time. And I think that what we actually prefer is that— you know, there's a saying that's also like, Every business begins with a secret. And a lot of times, the secret lies in the execution. But we want the secret to be all about the idea. So we want the extent of that launch to basically be, we want to start a haircut business for tech people with crazy hair. And that's the whole business. And every other part of the execution is handled. And that is a way better world than what it is today, where you actually have to think through everything from even making content. The developer, that's all semantics. It shouldn't even be a— conversation. Yeah. Um, so that's what you get of the CLI. I mean, for you, you can literally go to the Swap CLI today and say, start a haircutting business that's meant for tech people with crazy hair, get me some customers. And, uh, and you could go so far if it was localized to say, find me a person to cut the hair. And the CLI will end-to-end do that, uh, via any agent that you want.

Okay, cool. Yeah. Uh, are, are, uh, the youth Hitting it big with SMB AI transformation. So, everyone knows the big consulting shops are—

I just saw a reel about this. It was like, if you want an SF90, go to someone's real estate listing and like take photos, turn it into a beautiful website, go sell it to the real estate agent for $500. You're like, go tour a $30 million property that they're trying to sell, but they don't have a nice website for. They're just on MLS. Make a beautiful website, sell it to them for $500.

Yeah, even, even back in our day, something like that, you could— even when it was easy to build a website, there were still business owners. I remember, I remember, you know, like a friend's parent at one point was like, if you can build me a website, I'll give you $500. Yeah, yeah, you just find a template for like $20.

But that's time and people don't want to prompt themselves.

Yeah, yeah. I mean, that is, I'd say, what it looks like to find all these hyper-niche markets and call them arbitrages and then capitalize on them, then go to the next one. And there are so many more than anybody can remotely imagine. I mean, I remember when, I guess, 8, 10 years ago, uh, I was making websites for people and doing that exact tactic. And now it's like you have all the leverage in the world, and it's basically limited— your creativity and grit.

And now you can just go you can find 10,000 small businesses in your state, let's say, make them a brand new website, show them the website and say, do you want this? I'll give it to you for $200. And I think a lot of them would be like, looks good. I'll send you $200 even though you just ripped it with like Codex or whatever agent you're using.

Totally, totally, totally, totally. Talk about ads, WAP ads. What is the shape of that product? How does it fit into everything else?

Yeah, I don't know if you guys have ever ran meta ads before, but it's a pain in the ass. And, um, it's a, it's a very difficult to, uh, go on and, uh, navigate simply the, the UX of that platform. And that's coming from, like, for, for us, we grew up running Meta ads to Shopify store. That's all we did. And when we look at our platform and our merchant base and what people want to accomplish on it and how we believe that the more vertically integrated it is, the easier it's going to be for agents and for users to use it, the next obvious jump was was to say, OK, people are earning, I mean, now $400, $500 million a month on the platform. And almost all that money is spent on ads. And because of that, why don't we let people programmatically run ads immediately after getting the payment? You don't have to wait any days for it to settle. You get all the data on what's working, can iterate on the fly. And it's not just Meta that you're running ads to. It's actually the whole internet. And that is the ad product that we have available., uh, it's pretty cool. People like it. And I mean, that's a very, very fast-growing product.

Uh, take us through your reactions to all the trend pieces about clipping this year.

Better late than never. Yeah.

Uh, when— so, uh, what I'm referring to is like there's been a number of trend pieces sort of like breaking down the clipping economy, heavily driven by some of the Kick livestreamers like The Clavicular, among others that sort of crossed the chasm and got profiled in the New York Times. And so there was, there were knock-on pieces about this idea that you create a lot of content like we do on a 3-hour show, we clip it, uh, or you do an 8-hour, 12-hour livestream, you clip it. And your business has been very integral to that boom. But when did that start for you? Like, when did you realize the power of clipping?

Like, how has that evolved? Yeah, I think people overestimate how intentional we are about some of these markets that have come up. And I think it more happens to us because we have such a good API. And that's— and it's just a platform. And people come up with all these crazy business models, they explode, people exploit them, and then it becomes so saturated that it's actually not even that cool anymore. And I think what's, what's happening with clipping is it is still a very, very, very powerful instrument, um, because of how much money is going into it, because of how, uh, inherently, like, so much value can be gained by brands and companies, etc. You're gonna have a lot of bad actors and people trying to exploit different people and all sorts of different bad stuff. And I think that's where a lot of the— what people are potentially saying on the pessimistic side of clipping. On the optimistic side of clipping, we look at it as yet another way to earn income on the internet for a huge amount of people. And especially if they are not sophisticated enough to potentially start a business yet, they actually start with clipping. And that's a very great way to learn how to make content learn how to help other businesses create real value, and all the payments infrastructure, it scales super well so that people can actually earn a sustainable income by doing something like clipping. That can be extrapolated to data labeling, can be extrapolated to tennis coaching, can be extrapolated to all sorts of things that we're starting to see on our platform. Uh, other platforms integrate, um, and pay out, uh, via our, our rails, which is simply creating more ways like clipping to earn money, uh, while still hopefully being value-creating creative to businesses. So that's what I would— that's what I would glean from clipping.

Have you talked to any legacy media organizations about clipping? I'm thinking of like Fox News produces so much content. Local news produces a lot of content. ABC, NBC, CBS, like there are basically content farms that are effectively live streaming. It's a very different motion for these organizations, would you recommend they get into Clipper?

Yeah. I mean, our focus is trying to build the infrastructure and the platform. And whatever happens happens. Yeah, whatever happens happens. I think as long as it abides by our terms, it's safe. Of course. And I think in the context of a local news station, they're very under-resourced typically. Sure. And if we can make it so easy where they actually can, a couple clicks, or even one click, or even one prompt, spawn a bunch of Clippers to amplify their media, that's great. As it stands today, it's a little bit too difficult, and I think that's where you have agencies fill in the gap and create these— fill these arbitrage opportunities.

Sure, sure. Yeah. How would you rate sentiment among WAP users? Are there— is there— because WAP users are not necessarily reflective of all of the next generation of entrepreneurs and people that are starting careers. It's certainly select I know you're acting for people that have higher agency. They're trying to figure out how to make a living online or just make, as you say, make cool stuff with their friends. But is there a feeling that there's a ton of opportunity and that now is like an amazing time to be like coming online? Or is there at all the same kind of like vibe session that you see among people, maybe college students that are trying to find jobs —obsession.

Oh, oh, like the vibe recession? Yeah. Oh, yeah, OK. I thought you were mashing up vibe and obsession. You're obsessed with vibe.

I think that the sentiment is overwhelmingly positive, like beyond optimistic. And I've actually never seen it to this level. I think where you look at a lot of the people that call themselves entrepreneurs, people that build— are trying to build a business, Wapp users are unique because likely they're gonna be earning money. Mm-hmm. And that's very different than trying to launch a vibecoded app and praying for users. So I think that what we see is that, uh, when, when we talk to our users, uh, and businesses on the platform, um, either at in-person events or, uh, via our chat on, on the platform, they are so excited about building their thing. And they're actually equally as excited about experimenting with other businesses, like we were talking about earlier. Because it feels like the, the possibilities are completely in your control. You know, you have so much opportunity right now. There's so many micro markets that can be tapped into and exploited arbitrage-wise, and I think the young kids realize that, and they're going crazy right now. I don't think there's an apprehension, at least in our user base, as to what they're gonna do post-AI. I think that that's a very exciting thing for them, and they feel like they're grabbing for the horns and taking control of their destiny, which is exactly what's going to happen.

What's the state of WAP enabling sort of human-in-the-loop AI companies? I'm thinking about your partnership with Replit, Poké, Cal.com. It feels like there's a potential to launch something that the agents aren't quite there, or it has to interface with the real world in some way. But if you can bring some extra humans to bear in a particular workflow, especially for consumer, there's like an opportunity to build businesses there.

Totally. I, I think, uh, one of the largest markets that is being talked about, but perhaps not enough, is just the demand for data right now is so crazy. And when you look at especially developing countries, um, one of the, uh, most lucrative piece— ways to, to earn money on the internet is, uh, by submitting data. And by recording themselves do day-to-day tasks. And I think, um, if you look at the, the broad base of, uh, human-in-the-loop applications, especially around money, um, of course you can start a business, you can sell your time on Cal.com, you can build a, a really cool website on Replit and, and build a business. But if you want to think in the Clipping construct, and perhaps Clipp— you can think of Clipping as Act 1 of this. Sure. Um, there is a lot of things people can do to, uh, that AI can not. And that largely pertains to data. I mean, there's a huge crisis right now, I think, where people are realizing that the AI doesn't actually have the level of original thought that is needed to lift anything off the ground. And what are they doing? They're spending billions of dollars to get people's ideas. And that is not— I mean, in some way, that does economically get to the person. But I think we can do it even better. And the human in the loop, we view, is actually the most critical piece of any business in any a real economic output because it does start with someone's idea and creative ingenuity then versus an AI being, oh, let's build a business that does haircuts for tech people. That's not necessarily, I don't think, going to happen anytime soon. Maybe it does now because it's already out in the ether, but yeah. Last question.

How's the business growing in 2026? What's the financial plan? Do you want to raise more money? Do you want to raise a bunch of money? IPO the company? Company?

Well, I think we, we want to deliver on our mission, and I think it's, it's the most confidence we've ever had that we actually can. And I would say there's going to certainly— it's going to require investment, and there's clear prospects. We're exploding internationally right now with very little real motion that we've established intentionally internationally, and— we're underinvested across the board. We have a very lean team still. The growth has been really record-breaking. I posted a tweet last week. We're underwater right now. It's really crazy. I mean, I— we can't go 5 minutes without something crazy happening in a good way or bad way. And I think it's part of building a business at our scale. OK. So growth is phenomenal. I think— I mean, I don't really know if I can talk about a lot publicly. You can.

You can say whatever you want. You can give us all the numbers.

Yeah, yeah, yeah. I don't mind. We're accelerating growth at a pretty massive— We won't tell them. It's fine. Just between us. —massive scale. Yeah. Yeah, I mean, if we were doing $400 million, $500 million a month in earnings, and a lot of our take rates are public, you can do the math. It's getting a lot more serious. And we don't take that responsibility lightly.

That's amazing. Well, congratulations on the progress. Thank you so much for coming on and breaking it down for us. Us. We will talk to you later. But for now, we will bring in Katie Roof. She is the editor of Business Insider. We're very excited to have her joining the show. It's time to bust down the paywall. Jordi, you want to do the honors? That's right. We got to bust down the paywall because we have Katie Roof here. We have a physical paywall here. I'll bust it down.

Do it, John.

There we go. You know her from her scoops, many paywall busting.

We built a real paywall here in the UltraDome for you.

Yes, for busting down. Well, welcome to the show. How is life? How is the new gig? Well, good to be here.

I just started the new gig yesterday, so, so far so good. I got through a new hire orientation. Okay. And ready to get scooping.

Yes, of course. We won't ask you how you get your scoops. We all know. Signal DMs, probably. But what is the shape of Business Insider these days? How do you fit into the organization? And then I want to talk about where Business Insider is going editorially. Sure.

So I know Jamie Heller from when we were both, both at the Wall Street Journal. She oversaw all business and technology coverage there, and she's been brought in to be the editor-in-chief of Business Insider, where she is is changing the direction towards more scoops and original content. That's partly how I fit in, um, you know, stuff people would actually pay for. And so, um, um, yeah, some part of that new direction, that new chapter for Business Insider. And I'm also part of a new program for the parent company Axel Springer. I'm in the Global Reporters Network, which is a network where I team up with Politico and our sister publications. We just acquired The Telegraph in the UK. We own a lot of stuff in Europe. So, you know, whatever, whatever they acquire next, my stuff will appear in those news outlets as well.

Take us into, into a scoop. I want to know. I want to know how often you're working on a story and there's other reporters chomping at the scoop. What is that? What is that process like? How much time do you have? For a lot of these stories with how quickly AI is moving. I can imagine you catch a whiff of a story, you're chasing it down. Sometimes, hopefully most of the time, you get to it first, but then other times it's a dog-eat-dog world. It's a dog-eat-scoop world out here. Right. It's true.

It's gotten a lot more competitive these days. I feel like back in 2020, 2021, I could get most of the scoops, and I still get a lot of them, but there's a lot of reporters now doing what I do. And, you know, being first is harder. But I think the key is to not just go after things that are rumors that are widely circulating because everyone can hear about that. Some of my biggest scoops have actually been predicting what happens next. And I will— I'll just ask around about my theories, like, would this company buy this company? Sure. I don't call people up and say, I heard this. If I didn't I didn't hear this, but if I'm having an extended conversation with them, I just throw out a lot of scenarios, and then sometimes they're like, you're right, this company is buying this company, or this company is going public, or they're, they're raising, you know.

Yeah, yeah, that makes a lot of sense. Uh, can you talk to me about, uh, in regards to the paywall, the business of media these days, uh, how is the, you know, original reporting, scoop-driven journalism, uh, versus opinion versus news aggregation actually changing? And are we firmly in the AI is affecting the business, or are we still just seeing knock-on effects from social media and just a screenshot of something can change the business model?

Well, I think original reporting matters more than ever because regardless, you know, technology can change in the format in which we tell our stories can change, but people are always going to want to find out what's going on in the world. And I think, you know, the reporters like myself who've been fortunate to make the decision to double down on human skills instead of just writing skills, we have, you know, we still have value because I do things that maybe AI is not doing by having a network of people asking questions that they weren't planning to share and informing the public of that.

Do you think any Tech CEOs or people with potential scoops would ever talk to an AI reporter who's digging for a scoop?

Well, I mean, yes, if it's something they really want out there. But the reality is, you know, people think that most of these stories are things people wanted out there. It's usually they were kind of neutral, like usually weren't like trying to leak something, but like reporters were asking and they're like, oh yeah, you're right. Like, that's usually how it goes. And so, you know, AI, you know, unless they proactively want to plant something, which would be almost more like PR, what PR does, the PR pitches, then yeah, I think it's not the same.

How do you clock when a story's been planted? There was a story about Colossus Biosciences raising at between $20 and $30 million. $30 billion. And to me, that— might be true. That just screams like they planted a story because I don't— I'm just going to say it. I don't know that many institutional investors that are clamoring to invest in Colossus Biosciences. And it's a way— my theory is that it's a way to signal to potential retail investors that we're open for business.

Yeah, this round's getting hot.

This is something I think about all the time. I mean, I take accuracy super seriously. And, you know, as much pressure as there is to be first to the news, I think it's much easier to destroy your credibility than it is to build it. And so I always try to think, does this make sense? Do they have an agenda here, like to be misleading or dishonest? And, you know, I used to say to some people, sometimes reporters, past jobs, might hear about something and they would be like, Company X wants to be worth $10 billion. And I would say, well, I also want to be worth $10 billion. You know, can they Can they get the $10 billion? I think that's the real question. And so I think that you have to— obviously people have incentives to use us to manipulate public opinion. We have to be savvy about that.

Do you think with how dominant tech is generally now, it feels like it's a bigger story? We see it. You know, tech has moved from the business and finance section of the Wall Street The front page more and more, not every day, but, you know, just today, Chinese AI models raise alarms on the front page. It's international news. Is that— is— do you see that as driving Business Insider's TAM essentially? Like, is the TAM for technology scoops and in private markets news going even bigger now? Yeah.

You know what? I think that's absolutely true. I think there's a lot of curiosity out there about AI and the money behind it and how it's going to change things. And transform the world. And so, yeah, I think that's part of why, you know, there's so many news outlets have been doubling down on getting more venture capital and AI reporters because I think that there's broad appeal, even if you're not an investor that's standing to make money off of this AI boom.

You're curious to see where it's headed. Yeah. And then last question for me. I'm interested. I mean, we love business. Business Insider. We love business. We consider ourselves a bit of insiders ourselves sometimes. But I'm wondering where you want the brand of Business Insider to go and where you see it in a few years after, you know, you've been on the job for a while.

Well, from what I understand is, you know, Jamie, you know, I'm not running Business Insider. I have a fancy title, but Jamie's running this. She's got, you know, she's really made a big difference already in bringing right now to us.

You're the CEO of Axel Springer now. Okay, uh, Doffner, you're out. Katie Roof's in. She's got the scoops that we know and love. And so, uh, sorry.

So, um, you know, she's already played a major role as our editor-in-chief in bringing— they've doubled exclusive content. I think it used to be 40% and now it's 80%. And so I think that I'm part of that strategy where they want to just build upon that.

Fantastic. Well, congratulations.

Congrats on the new role. And thank you for all of your work over the last couple of years that has contributed to the job.

There's a lot to talk about. We couldn't do the show without you.

So thank you. Thank you so much. I really appreciate the shoutouts. Of course.

Cheers, Katie. We'll talk to you soon. Let me tell you about Public.com, investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service. You know who's not public, but you can still read the financials of, is the German nightclub Berghain. Is that how you pronounce it? Berghain? Berghain?

Berghain? Berghain. I always sort of mumble through it.

Yeah, maybe they should have the Axel Springer corporate retreat there. That would be a good option. Yeah. Okay, so— Argh Karazian sharing this. Yeah, it's in the Financial Times. Read through it. Okay, so basically, Argh Karazian, the economist, lead economist at Ramp Economics Lab over at Ramp, says, "Today I learned German companies have to publish financials even when privately held." We can talk about like how much of a nightmare that is, but this club, Berghain, Berghain, Bergheim. I'm all over the place with this pronunciation. Anyway, uh, $1.4 million or euros in net profit in 2024, uh, €414,000 in annual rent, 355 employees. You can just go look it up. What? Uh, €414,000 in annual rent.

Okay, that's more like it, because I've been, uh, I've, I've only walked by— but it is a massive building. And I thought you said 14.

And the Financial Times has a whole deep dive into the nightclub.

But yeah. So let's talk about the implications. Yeah, let's talk about the implications of small business revenue. Yeah. Being public. Yeah. One, terrible for course bros. That's why they have to go to Dubai. They can't LARP. Yeah. You know, if you're LARPing around in London.

Yeah. And you're saying, oh, I make so much money in real estate. I remember there was a YouTuber who did, and he was above board. He actually did a tell-all on CNBC, How I Make Money, Millennial Money, some segment they did on him. And he's like, I'm a real estate guy and I make $10 million. And he broke it down and he was like, I made $300,000 from real estate and $9,700,000 from YouTube. And it was because he was making so much money with this great media business that he had, that he actually was. And he had good advice about real estate, but he wasn't running a real real estate firm. He was, you know, a real estate associate who created a fantastic YouTube channel that was equally impressive or maybe more impressive. But as we were talking to Steven about, you know, like, how do you know what's working? Well, apparently in Europe you can just look up the financials of every company and know, oh, well, they have high margins. I should just copy them.

Right? Uh, basically, yeah, I looked at investing in a company in the UK, and yeah, you could— I, I got the financials, but then they were like, yeah, you can just look this up and, and confirm, confirm it with, uh, you can do basically like a records request. Yeah. Um, but yeah, the, the— it'd be, it'd be very interesting if we had anything like that with startups, right? Because every time there was a big funding round, people would be like, business, how, how does this Sense. How does this make sense?

So, um, although it does seem like it's, it's on some sort of, uh, delay. It's only annual reporting.

And, uh, I know, but still, imagine when that reporting came— comes out and they're like, wow, this $10 billion company only did $10 million last year, which would be happening for some of our private markets, uh, unicorns.

That would be a huge deal to dig into the numbers. Although, you know, even, even the, even the massively successful venture venture-backed companies have complicated financials.

The disclosures would be difficult. I just think it's crazy that Bergheim, as this like, you know, cultural institution, is only putting up €1.4 million in net profit.

Well, Sela_ has a take, says companies like this club don't really exist to deliver a financial profit. They do absolutely drive social capital to those involved in ownership. So perhaps you are owning a stake in this institution to meet people, do business deals at the club, meet other—

Sam says we need to LBO and franchise ASAP. That's a good idea.

Anyway, IMAX is in trouble, loosely. The 70mm IMAX that has been running 24/7 at the Irvine Spectrum for the Odyssey overheated today. Bill Hunt shares some extra news, says the scary thing here is that IMAX can't build any more new projectors. This was reported earlier. They apparently don't have a complete set of the engineering blueprints. Most of the engineers who designed them have retired or passed away, and the parts supply chains have long since dried up. That seems like a bigger problem than the blueprints. You got to be able to one-shot a bunch of IMAX blueprints.

Can you just like take it apart?

That's a good, that's a good point. Yeah, you should just be able to take it apart, take a picture of every part, and then figure out how it works. Codex. Codex. Fire it up. Um, so the goal for the foreseeable future is to upgrade and keep all of the existing projectors running for as long as they can. This is the true re-industrialization project. We were wondering like what's the next Android It's the next IMAX. That's what we're looking for. Somebody cranking out American-made 70mm IMAX projectors. That's the real goal. Big news out of Google. Logan Kilpatrick, friend of the show, says say hello to Gemini 3.6 Flash. We talked about this a little bit, but there's some benchmarks here. We love benchmarks. Designed to be higher intelligence, more token efficient, and with a new lower price based directly on developer feedback. 3.6 Flash continues our progress towards models that are deeply usable in real-world scenarios. Congrats to the whole DeepMind team over there. He said this model is much more efficient and spends a lot less tokens to deliver better performance. And also the big news, he said we have started our most ambitious pre-training run yet for Gemini 4 and are excited by the progress. I think that there's a lot of— is Thibault trolling him with hoping it finishes one day too. Wow, that's a spicy post. Crazy. But I mean, the last pre-train that came out of Google was interesting. It had a different flavor to it. And they did— the initial responses, they were a little more terse, a little tighter. I enjoyed poking around with Gemini. I thought it was fun. We're counting on you, Logan. Good luck.

Before our next guest, we have a post from Shiel Mona. What'd he say? He says, very cool idea. A vacation with an artist, travel the world and learn new skills like ceramics, street art, bookbinding via a mini apprenticeship, 3 to 10 days with master artisans. In many cases, you stay with them too. This got me thinking, what if you could vacation with someone— A capital allocator. —one shot by AI? That sounds terrible.

I would like to vacation with a capital allocator at the Yellowstone Club and the Amman, do a tour of the Amman. You can do this, but not on a website. You have to know them personally, I think.

But I'm surprised this isn't an Airbnb. This idea sounds pretty crazy, vacation with a capital allocator, but there's probably a price, right? It just might be— it might just be egregious, right?

Maybe 20% of equity in your company. I'm interested that this is its own website, VAWA, Vacation With An Artist. It feels like it's directly in line with the Airbnb, everything app roadmap. The idea was that you would be able to go. Anyway, we have our next guest in the waiting room. Let's bring in Zaven Dar from Dimension. He's the founder.

Welcome to the show. Here he is. How you doing, guys? How are you?

What's going on? Give us the news.

We got to hit this doll. The newest Sizelord.

The newest Sizelord, the capital allocator.

Boom. Oh, yeah. He just hit it himself. That was good alignment. Great stuff.

How much did you raise? We didn't even get the number. We just went around, uh, 800 million. 800 million.

I'm sorry that you couldn't, you know, hold together the last 200 million short, but maybe 800— who's counting? Close enough, close enough.

They're over a billion six in assets, so that's right, it's a good start.

It's a good Dimension 3, 800 million, um, at our legal hard cap. So I think we went out for 700 or thereabouts. Okay, legally we can't raise more than a—

Don't put me in jail by raising any more.

We all know there was— we all know the demand was there. We all know the demand was there. Yeah. Talk about Fund 1 and 2. Yeah. Since it's your first time on the show, what got you to this monumental fund? Yeah.

Fund 1, $350 million. That was a 2022 vintage. Fund 2 was $500 million. That's a 2025 vintage. So just about 12 months ago. So we started the firm, my co-founders Adam, Nan, and I would spend the last decade investing across the union of life sciences and technology. Fund 1 was very much so at the intersection. So companies that were equal parts tech, equal parts life sciences. Fund 2, we started to expand more so the union. Fund 3, it really is the frontiers of science and compute. So companies that are touching silicon, next-gen GPUs, CPUs for ML and AI architectures all the way through ML, infrastructure. And then on the science side, World Models, Neo Labs, you know, really kind of pioneering both physics but also biotech and next-gen medicines as well.

Do you think we'll see a coalescing of business models in the next generation of tech-enabled biocompanies, biotech companies? Because we're— there's an opportunity to be sort of really full stack, train a model, use use it to develop a drug, take that drug all the way through the FDA approval process, use AI to write the applications and go back and forth and then own the intellectual property all the way. That feels like a lot of different CapEx muscles flexing at the same time, but maybe that is the future. How do you see it actually playing out? What's the common pattern? You know, there's a—

my co-founder Adam is Australian and he has a want of saying horses Horses for courses, which for, uh, I think the North American audience here, it means to each their own, more or less.

So we're gonna start using that for our North American audience. Horses for courses. Big in, uh, big in Japan.

Uh, or, uh, for example, Chai, uh, which is— I think you maybe had Josh and Jack on the show in the past. They announced the round that we helped to co-lead with Index and Sequoia and Kleiner last week. They are very much so doing the latter which you described selling their services as a SaaS product into pharma. On the other hand, we have companies like NewLimit that are developing similar ilk of technology, but doing so with the express intent of developing their medicines end to end and one day actually commercializing medicines that affect aging and longevity.

Are aging, longevity the hot topics because they're so universal, or do you think you'll see more of the— I don't know if I'd call it the traditional biotech playbook, but there's often this— there's a whole pipeline of biotech companies that are targeting, like, there's 5,000 people that have this rare disease, and it still turns into a billion-dollar acquisition. And it's this odd pattern that doesn't really ever make it to the front page of Time magazine, but obviously has an impact. Financially and medically on those people that were suffering from that disease.

I think, I think both, both extremes are true. Earlier this year, RevMed, uh, had a, had a very stunning phase 3 result for their lead drug, uh, affecting patients with pancreatic cancer. For, for the rest of humanity, for 1,000 years from now, 2,000 years from now, if you have pancreatic cancer, you should have a somewhat effective treatment. And that's really based on a biotech based in California that in the last 6 months developed and and showed that clinical data. And that's stunning. Of course, pancreatic cancer, that's not as prevalent as aging, which everybody has, or maybe obesity or something. At the same time, we are, I think, witnessing a revolution of what it means, or a re-underwriting of what it means to be diseased. And even something like obesity, or maybe 10 years ago or 15 years ago, pharma and biotech, frankly, they didn't invest in these areas because they didn't consider considered a disease. They considered it a behavioral problem. Sure. Today it's considered a disease and it's the largest drug on the planet. You're seeing it in areas like aging and longevity, inflammation, immunology. Dupixent, if anyone has atopic derm or eczema, it's one of the largest drugs on the planet today. 20 years ago, no one would touch that because diseases that were skin-related weren't considered serious enough. So we are starting to see, I think, a redefinition of the types of areas where biotech and pharma can actually—

I'm sure you got asked this, you know, during the fundraising process, but what's your overall worldview on investment opportunities around peptides as a category? You know, basically drugs that people are taking somewhat recreationally now, but have a bunch of different benefits that have, that are in a, you know, sort of continuous gray area, but what's your outlook on the category? Because there's billions of dollars of revenue there. There's some really interesting, exciting, at least indicators that they can have great impacts. But what's your view?

I take the red and the yellow shots on Monday and Tuesdays and the green and the blue shots on Fridays and Saturdays. And my wife doesn't care. I'm kidding. I would not. Recommend this stuff to anybody. Look, there is a history of peptides and hormone mimetics as drugs. GLP-1s, GLP-1s are in some sense those exactly. Whenever you're sticking anything into yourself, you want to actually know what it is. You want to know, make sure that there's no impurities in it. We don't understand the biology, the mechanisms in many of these cases. And so, I think even the scuttlebutt that you guys and I am probably hearing about the efficacy or effectiveness of, you know, the SF tech community or the New York kind of, you know, tech community taking these things. My suspicion is that's probably more placebo than not. I'd be very careful about doing any of this. I certainly wouldn't myself do it, nor would I let my friends and family do it.

How do you think AI affects sort of like, I don't know if it's called repurposing drugs, The big GLP-1 breakthrough for obesity was originally a diabetes drug, and there's been a few examples of drugs in history, many examples actually, where it started as a heart medication and then became erectile dysfunction drug. And it feels like in an age of AI, even if you don't get the super intelligence that can just imagine the cure for cancer, you at the very least could potentially test every drug against every indication, maybe more efficiently, What does sort of like cross-application of biotechnology look like in the future?

I think two things are true with ML and AI. We are better able to understand the root cause of disease mechanism pathway and kind of the industry nomenclature. And with a better understanding of mechanisms and pathways, we can repurpose molecules, whether they're biologics or peptides, or small molecules against those where we know that they are known to be effective. The other, which is simultaneously true, historically, we have the vast majority of known targets for disease biology have been, quote unquote, undruggable. And so it's not a question of taking a shelved asset from Pfizer or Novartis or Lilly. It's a question of we just don't know how to design the molecules to actually perturb those proteins intracellularly or extracellularly. Literally yet. Sure. My suspicion is in the next 5 to 6 to 7 years with the companies in the, in the modes of the Chais of the world, for example, we will have technologies to perturb what we want to perturb. And so we'll both be able to repurpose when there is a shelved asset against kind of our new knowledge of biology, but then also leverage generative AI and ML to create molecules to perturb biology where maybe the shelved assets don't quite yet exist.

What letter are you most proud of and why?

Z. It's a good letter.

No, no, I'm talking about your letters.

I'm kidding. I'm kidding. I—

what letter am I underrated?

Um, in terms of letters that we have, uh, published from Dimension?

Yes, you published some beautiful letters, but maybe it's an idea in a letter. The chat Yeah, yeah.

The What If We're Right letter that was actually, you know, first written as a letter confidentially to our partners and LPs in Q1 of this year as part of our annual 2025 recap. And we anonymized part of it. We took out some parts of obviously the financial information and decided to share it with the broader kind of entrepreneurial tech and science audience. I think it resonated. With people, I think, especially in this moment in time where there is so much tension geopolitically and technologically and from a class and labor perspective. So many things, so many things are happening and there's a lot of tension. And to maybe take a step back and say, hey, what's the good that's happening if we're right in developing these technologies and sciences? How does that bend the arc of humanity and society for the better? That was fun to write. I think it got a groove with a good audience. And so we're pretty proud of that. I think more people can be espousing and writing eating, you know, that, that sort of stuff.

Last question: how many cups of coffee a day do you drink? There's new reporting this is a 5. 15. Good for you. 15, really? Are you a coffee maxer?

I, I have my fridge cigarette.

There we go. Cheers. There we go.

Cheers, man. Yeah, I try to limit it to probably 2 or 3. If I, if I do have a cup of coffee after 4, I'm probably walking until 2 AM.

Okay, so well within the healthy limit. Healthy guy working on health and AI. Well, congratulations on the fund. Thank you so much for coming on.

Yeah, massive congrats to you and all your partners.

Yeah, on an absolute generational run over there. Would love to see you guys—

Looking forward to meeting more of your founders.

Yeah, we'll talk to you soon. Have a good one. Let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web apps, servers, databases, and more while Railway takes care of scaling, monitoring, and security. Up next, up next, we have Chad Edwards. We'll bring Chad in in just a second. Briefly, I'm going to tell you about this interesting screenshot from Reddit, an LLM stenography tool, uh, steganography tool. How do you pronounce that? Kind of neat with how the EU is trying to gain access to all communication. So basically, you use an LLM to transform your text messages, secret messages. They look normal, but in fact there's a decoded message. So on the left it says, message to Bob: I got coffee downtown and it's actually pretty good. Thinking of what to make for dinner. Want to come help me cook? Overdid it on the soup yesterday though. And that is actually secretly encoded to mean they caught Matthew last week because he spoke against them. Explain how this works, Tyler.

Yeah, so it's not the— the LLM is not actually doing the encrypting. Basically, you encrypt it first using some standard process, and then you get the output of that is some ciphertext.

Like a lookup table, basically, or something. So basically, you encrypt it.

You get something that looks like scrambled— like a scrambled string.

And then you basically— Hydrate that.

You have these bits, and then you basically use the bits to determine which token you're going to use in the LLM. You basically need to use an open-source LLM.

People are accusing John Axley in the chat of being doing this for months. Sending coded messages to everyone. Well, it is very cool. I thought this was a cool idea. I think it's a cool demo. I don't know that it's wildly useful, but for certain people that need to send secret messages back and forth, go ahead. Also, they're calling North Korea Noko like it's the cool, trendy part of town. I thought that was a funny post. Anyway, we have Chad Edwards from Cusp AI in the waiting room. Let's bring in Chad Edwards, the co-founder and CEO. How are you doing, Chad? Welcome to the show.

Thanks for having me. Yeah, doing very well.

Thank you. How are you doing? You raised some money. How much did you raise?

Look at this background. Incredible. How much did you raise?

That's the UK as a semiconductor chip. We raised $450 million.

Congratulations.

Well, anyone, anyone I've heard of invest? It's a murderer's row. You got Jeff Bezos, you got a bunch of other folks in, right?

Yeah. Kleiner Perkins, NEA.

There you go. Congratulations. What are you building? Break down the basics.

Yeah. So at Cusp, we're building essentially a search engine for materials. So generative AI platform where you can discover entirely new materials. And of course, it's not something we think about in our day-to-day lives, but everything we hear and talk about day to day, such as the pursuit of intelligence or the energy transition or the climate crisis. If you boil all of these things down to the fundamentals, they're a materials science problem. And for example, a semiconductor chip is around 60 different plus elements. It's 99.99% pure silicon. And so if we can come up with a better way to discover new materials, we can come up with better chips, we can improve the efficiency of solar cells, and we can also work on climate technologies to leave the world a better place.. And so that kind of the core focus areas for our company.

Yeah. What's the most underrated new material?

Probably most room temperature superconductors, I would say. What do you think?

Yeah, I mean, there's, there's a few teams now pursuing room temperature superconductivity. It's kind of the holy grail of material science. There's still some pretty interesting physics to be figured out along the way, but if someone can crack that, then the implications are huge. So yeah, let's see.

Is there a power law in applications of advanced material science broadly, like battery technology would be by far the biggest market if you could unlock that? Or is it sort of distributed and there's so many applications, there's not necessarily one that you'll be focusing on in the short term?

Yeah, I mean, the opportunity space is absolutely enormous. We could be sat here talking about the chip industry or the energy industry or, you know, climate. There's just so much opportunity out there. But I think what we've seen as a company is the semiconductor industry have basically pulled us by all four limbs in the direction of semiconductors. So we didn't set out to build the company as a semiconductor company. We've kind of built a platform that was horizontal and then we felt the market pull in that direction. And again, it boils down to the very fact that with everything we're now seeing in AI, there's a real demand on the chips to be more performant, have higher energy efficiency, and all of that fundamentally it boils down to better materials. So if I had to pick one, semis.

Yeah. So I mean, obviously huge market, semis, massive market. Any application you have there will have huge demand. What is the capital intensity of the business? I mean, you raised $100 million Series A last year, now $450 million. Do you have compute costs, training costs? Is this just to hire the world's best material scientists? Is there a big data acquisition bill that's coming? What is the use of capital over the next 2 years look like?

Yes, obviously we're nowhere near the kind of frontier model, LLM types expenditure. We don't need to train huge models like that. We train more domain-specific models. Yeah. And as part of that, of course, our 3 big kind of cost centers would be people. So hiring the best people in AI and machine learning, which is what we've been able to do and retain those folks. And we've seen some of the salaries that go around the world for, for people in that category now. Yeah, computer is another one. So we have a very big partnership with NVIDIA and they're part of a big announcement that we made yesterday. And then third and foremost is data generation in an experimental sense. So of course we have to ground all of our work in physical, physical experiments. And so we have a network of labs globally now where we generate data for us to train the models.

Would you vertically integrate there at some point? To close the loop, build your own material science lab where you could prototype new materials and test them?

Yeah, I'd say never say never, but at the moment our thesis has been we can move much faster if we have a network of existing labs around the world. We can tap into them, we can get going very quickly. They have domain experts in those labs that know an awful lot more about the specific domain, and we can't easily replicate that. So, and a lot of our customers also have their own labs. So yeah, our model so far has been work with existing labs and customers that have labs, and that allows them to move faster and us to move much faster. But who knows, maybe one day we say, hey, we're going to build a lab in a certain domain.

How do you think about, uh, value capture? It's very easy for me to imagine like how you would create value for your customers, but if you help somebody discover a new material that the application of that material could, could be worth billions of dollars. How do you, how do you make sure that it's a fair trade?

Yeah. So we've taken a very different approach to the business model. In fact, I think genuinely the first to have done this in the world. And when we started the company and we pitched this business model to investors, they said, Chad, forget about it. This is never going to work. You're never going to get big corporates paying you royalties. Royalties on materials. And so for the first 2 years, I made it my mission to make sure that every customer contract that we have has royalties built, baked into it. So we've now proven the kind of biotech-type model works now in material science. Companies are prepared to pay you upfront for the programs that you set up, and then they're prepared to bake in a royalty at the end so that as that material goes into production, you can kind of share the upside commercial potential of that material. Very, very cool.

This is what I was I was asking the founder of Chai Discovery, who's doing AI for drug discovery. It feels very, right now they just have a SaaS fee, I think, but it feels very natural for them to get some type of royalty. They help create a hit drug. It's a win-win, great customer alignment there. And it makes so much sense for your business. And you end up building basically a portfolio of bets over time. Have a handful of big winners, uh, it could— I can see how that would generate, you know, billions over time.

Yeah, yeah, exactly. I kind of see my job a little bit analogous to a VC in the way that we have a portfolio of materials, and some of our materials are nearer term, they have higher commercial potential, and some of our longer-term frontier bets. And if we have a balanced portfolio, then hopefully our revenue projections and journey will follow a steady trajectory. Um, but I can also see merits of the, the approach that Chai are taking in having predictable, you know, monthly incomes and subscriptions to software is also, you know, carries, carries your base revenue, whereas the program aspects can be a bit more lumpy. So I could see merits of both, both approaches. Yeah.

So why not both? Yeah.

Doing, uh, do you think that the next round, uh, KPI or key, uh, metric that you'll be underwriting the deal against will be revenue, or are there more like scientific milestones, benchmarks, or sort of promising results where you'll be able to totally justify the next expansion pre-revenue? Or do you think that the business will actually grow in the short term with actual revenue-generating deals?

Yeah, so we've tried to kind of go against the grain in that a lot of deep tech companies take forever to get to revenues. And so we've tried to be very commercial very early on. Before this, I built a quantum computing company, which is kind of one of the most extreme versions of pre-revenue. And so, yeah, I've tried to be very, very commercial in this company from very early on. And everything we do is grounded with paying customers. But I think I've also given up predicting when the next fundraise will happen. Because in every raise I've said we're not going to raise for another 6 to 12 months. And then a few months later we've been preempted and there's a round coming together. So I don't know exactly what the next metrics look like.

Founder. Well, congratulations. I mean, I can't wait to talk to you in a couple of months when the next round happens. Yeah, looking forward to it. It'll be any day now.

You're always welcome. Very, very cool business and business model and looking forward to the next conversation.

And what a great What a great group of partners with all the companies that you've worked with. It makes so much sense. So good luck and congratulations. We'll talk to you soon.

Have a great rest of your week. Cheers, Chad.

You too. Goodbye.

Another one. We have one last post I want to go through. Ramp launched a model router. Braxton loves it. He says, Ramp launching a model router is god tier product expansion. The winds are blessing it. The market is exhausted with token maxing, proliferation of new models, sovereignty. This is the first time I've looked at a launch and went, wow, this might be the start of a new core product. Yeah, there's been a bunch of speculation about this, but it makes a lot of sense. Ramp's promise is to save you time and money. The CFOs are increasingly annoyed by token routing. We talked to Eric Gleiman about this last week. Are you using the craziest frontier model burning sending millions of tokens to answer the weather, maybe that should have an expense report attached. And so very, very exciting to see where this goes, how they roll it out. I know it's in alpha with a number of customers, and I believe that the product's actually available to non-RAMP customers as well. So you can use their product exclusively.

Uh, Yoush says, going after everything time and money touches.

I love it, I love it. Anyway, Thank you for tuning in. We will see you tomorrow, Wednesday at 11 AM Pacific. Leave us 5 stars on Apple Podcasts and Spotify. Sign up for our newsletter at tbpn.com.

And we love you. We love you. Throwing flashbang.

Goodbye. Flashbanging the horse.