Leopold Sold, Ferrari Undefeated, Martin Shkreli Joins | Guillaume Verdon, Lulu Meservey, Michael Kim, Joon Sung Park, Karan Kunjur, Vlad Tenev

You're watching TVPN. Today is Thursday, July 30th, 2026. We are live from the TVPN Ultra Room, 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 all in one place. Absolute chaos on the timeline last night, this morning around Leopold Aschenbrenner's hedge fund situational awareness. They have been forced to unwind. Their public stock portfolio after steep losses on AI infrastructure bets. CNBC reported this on Thursday, today. Prime Brokers reportedly rushed to raise cash to meet margin requirements while Ken Griffin's Citadel, my former employer, reached a deal to purchase the fund's publicly traded assets.

Did Ken ever do anything to you?

No.

Like this?

No. What?

No.

You were just an intern.

I was an intern. I would have loved to be getting him coffee.

But did he ever try to maybe intentionally send the markets into turmoil just to test you?

No, but I mean, honestly, the story of Citadel is crazy. I mean, after the housing crisis, the fund was down 50%, and it was a very, very dark time. There were—

Good thing for Ken, though, at that time, Ken Griffin, what he would become, didn't exist. And otherwise, you probably would have eaten the young Ken Griffin alive.

Yeah, maybe, maybe.

Much like it seems that Ken has done to Leopold.

Yeah, maybe, maybe. The other frustrating thing is that they went down 50%. I think the next year, they went up 50%. And then, and they were, you know, this is the classic, you know, explaining fund math to people. "Oh, you're back up 50%. Great. You're back to where you were?" Nope. You need to go back up 100% if you're down 50%. Of course. Anyway. So the news— the fund had built concentrated positions in AI infrastructure companies, including Nebbius, SanDisk, Micron, and CoreWeave, while also betting against software companies such as Adobe. Those trades have unraveled as AI infrastructure stocks plunged in recent weeks before rebounding sharply today. Now, how much of the plunge is around shaken faith in AI's ability to deliver value, open source, or just oil inflation? The Fed's actions. We'll get into all of this because there's a lot of moving different moving pieces that led us to where we are today. Let me continue giving the news, then we'll go through the timeline and discuss a little bit more in depth. So also relevant here, this is from the TVPN newsletter. You can go sign up at tvpn.com. And what a bunch of people are pointing out on X is the fact that on Tuesday it was reported that Citadel expected a surprise rate hike from the Fed meeting that took place yesterday, which did coincide with more sell-off in the market. So the market has been selling off based on what might happen at the Fed. We reported on the Fed news. There were 3 Fed governors that said we should raise rates, but the rate held steady. But mortgage rates are high, are over a 1-year high at 6.66% today. Very odd number. But yesterday the Fed left the rate unchanged, and today many of the stocks in Leopold's portfolio are up double digits, and we'll sort of go through them. They're up today. Today based on the news that Ken Griffin is buying the portfolio, but they are still down over the last month, for example, in many cases. Ashen Brenner, a former OpenAI researcher, rose to prominence after publishing his 2024 essay series Situational Awareness, the billion-dollar PDF, as Will Manidas put it, I believe, which argued that rapid AI progress would require an enormous buildout of chips, memory, power, and compute infrastructure. That thesis became the foundation of his investment strategy. After launching the fund, he also engaged. He's also engaged to Anthropic CEO Dario Amadei's chief of staff. The news is coming in hot and fast on the story. Here's a timeline of the most important headlines so far. So Bloomberg, 9:25 PM yesterday, I think you texted me this as I was going to sleep and we were like, whoa, this is a big deal. I wonder how, how crazy this will get over the next few days. It got very crazy very quickly. So Bloomberg reported Leopold Aschenbrenner's Situational Awareness seeks to raise capital after AI rout. There was an article in the Financial Times as well last night. Just saying that, hey, there's some, there's some rumors that are leaking out from LPs that they got a letter saying like, hey, the market's down, now's a good buying opportunity. The thesis is as strong as ever. If there was ever a time to put more money into this fund, now's the time. That can be good. You want to be buying when things— buy low, sell high, right? But at the same time, if it's to cover margin calls, if it's because the fund's getting beat up, it's a little bit rougher of a pitch. Then at 6:05 AM, CNBC announces that AI investor Leopold Aschenbrenner has been forced to unwind all public stock positions after steep losses, according to CNBC sources. And then The Wall Street Journal reports at 8:39 a.m. that Citadel has stepped in to buy Situational Awareness's stock portfolio after big losses in AI.

And so after living through FTX and SVB and now this, nothing on the timeline. No, it's just grizzled. No, the, the, my key, the key takeaway is like when, when, when leverage is involved, things just move so, so, so fast.

Yeah.

Right. You remember with FTX?

Yeah.

There's kind of some rumblings.

Yep.

A couple, couple posts from SBF saying like, we're fine, it's all good. And then it was over.

And it is.

And then the same thing with SVB.

Yep.

Like couple rumblings, maybe like a couple weeks, a week beforehand. Few posts here and there, and then it just moves so, so fast, right? And yeah, quite a bit different than traditional venture world where when a company's dying, it dies over 2, 3 years, sometimes more.

Yeah, yeah, yeah, yeah. I'm thinking of like, I mean, we've had some of these companies on from the private markets where they've gone through big booms and busts like Bird, and then they've built back and they've turned around, but there's so much more—

Bird turned around.

No.

I'm talking about Lime.

Lime turned around, but it took like an extra 5 years for Bird to actually wind down. And it's because there's no leverage in the system. There's just a bunch of dollars that sit there as equity, and those get burned down. But every month, if the business is deteriorating, you're cutting costs, shrinking the business, tightening things up, making that 12 to 18 months last 24 months. And then you wind up 24 months in, and you're like, oh, we're not going to be able to raise again. Let's stretch this again. And right-size the business again. And all of a sudden is— so it takes like years and years for these things to unwind. Although they are correlated in the venture world, they can be decorrelated in the unwinding process. And then there can be other things that are outweighing the portfolio. So every VC that had Bird on their books probably also had some SpaceX on their books or something. And so there's this balancing effect and it takes years for these things to balance out and they can be unwound at different, periods in the market as opposed to everything needing to happen all at once. So speaking of public markets, let me tell you about Public.com. Investing for those that take it seriously. They got stocks, options, bonds, crypto, treasuries, and more with great customer service. Uh, I like this post from Richard Craib, uh, one of my favorite investors. He runs the, uh, quant hedge fund Numerai, uh, and he says, I think it's cool that funds like Situational Awareness can exist in America and that there's a market for them, but the outcome was never going was never about being right or wrong on AI. At 150% vol, variance drag alone is 113% a year, and risk of ruin is roughly a coin flip over the fund's life. A child can do the math on a napkin. Claude did it for him. He says, AI says ruin wasn't unlikely. It was roughly even money. So there was a 50-50% chance, 50% chance that, that the fund sees, you know, so many losses that they have to do this liquidation process. And that's basically what happened. And it must be so frustrating because the, this is not, it really does not feel like, oh, Leopold was wrong about AI and the AI buildout. It's like, well, there's oil and a war and interest rates and all these other things going on that are creating some jitters. And then also once the AI trade and the infrastructure trade got so big, you wind up with like this retail froth on top that makes things even crazier. And then also—

That he was benefiting from.

Benefiting from, but also it's much harder to do sort of a first principles analysis on what the psychology of a frothy market will do as opposed to just retreating to, OK, well, there's this. The model progress is progressing like this. And token pricing is— counting the ooms stops sort of working when it's like, Well, will this particular stock become a meme stock, right?

Pull up this picture. There was a lot of this going on this morning.

The memes are flying. This is truly like—

this was my— this was my— the first meme that popped into my head. If we can pull this up.

The chat is asking for a non-sponsored sleep score to see how we slept. I slept in the midst of a financial crisis. I've been doing pretty well. I got an 87 last night, 92, 95.

There's a lot of this on the timeline this morning.

Yeah.

People saying, oh, I don't know why the guy's head's cut off. You guys okay? This was, you know, this was, this was just a lot of people on the timeline being like, I knew he would blow up.

Yeah, yeah, yeah. It's like the armchair experts are out in full force today and in many ways we are among them.

So I like to think about it. —like, at least some of the more high-profile LPs in Situational Awareness, a lot of them are, like, you know, great founders. You know, maybe they have big, big positions in the labs and all these different things. And it's quite possible that Situational Awareness, at least when they invested, was, like, 5% of their portfolio. And they're just thinking, like, go Giga long. Like, go— Yeah, yeah.

For some of these people, it might be like—

Less than 1%, right? Whatever it is. And so it's actually somewhat pragmatic for them to just be like, yeah, go crazy. Do whatever you want. Yeah, that's the product. That's the product. That's what I want to buy. The rest of my portfolio is fine. You're going to have a lot of AI exposure whether you like it or not. But yeah, it is actually crazy that it didn't even take— a 3-month drawdown, right? Yeah. It was, you know, what was it, June, June 1st, they were at $45 billion of AUM, something like that was, was the NAV, I think end of June and end of June. So beginning of July. And then how quickly, how quickly things can change. And, you know, poor, poor Leopold already went through this with FTX. I believe he He and the rest of the FTX Future Fund team, I believe, resigned like right when FTX collapsed.

Oh, FTX collapsed. What's interesting is people are framing this as like they got pennies on the dollar, or Ken Griffin bought the portfolio for pennies on the dollar. And when I think pennies on the dollar, I think like 5 pennies per dollar, so like 5% recovery. But it might be closer to like 50% of book value, might be 80% of book value. I don't know. Fortunately, we have Martin Shkreli joining in just— a minute. He's here in the waiting room.

And it's crazy because when, when Martin— Martin was the first account that I saw. Yeah. To post anything like this. He posted it before any mainstream media had picked up on it at all. And there was a bunch of comments on his post saying, I have good sources that say this isn't true. And of course, Scrawley was right. There was trouble.

And we'll bring him in now. Let's bring in Martin Scrawley to break it down for us. I believe he's here. How are you doing, Martin? Good to see you again. Hey, guys.

I'm doing great. How are you? Oh, perfect. Perfect.

How's your last— Take us through it. 24 hours. 24 hours been like for you?

It's, it's been interesting. I do invest myself, so it's been a, it's been a probably one of the craziest months in Wall Street history. I was talking to some friends last night about Long-Term Capital Management, Amaranth. Other famous liquidity-driven blowups. And this is up there. And yeah, it's just a really crazy thing. We had heard rumors sort of mid-last week, and then they really started crystallizing last night and this morning, obviously, sort of a fait accompli. And I actually think they did a wonderful job of keeping it relatively quiet. I think some players were already positioning, say, early in the week, Monday, Tuesday, looking to do what my old boss Cramer used to call, you know, shooting against a fund. So if you know somebody has to liquidate, the best thing for you to do, unfortunately, sadly Darwinian, is to go sell all the positions you have in common and go start shorting everything they have. Yeah. And it accelerates the sort of downfall as quickly as you can. And this is a very common practice when these things, you know, happen. Certainly not something I had overlap positions with them, so certainly nothing I would do. But no, a wide number of funds that were shorting all of these stocks hoping to cause a panic and a crash.

How do you trace back the start of this correction? Is it the war? Is it oil? Is it jitters around open source or just hyperscaler CapEx? There's so many different narratives around why the AI infrastructure trade, the bottleneck trade, might be weakening at the same time. It feels like there's some really solid progress and the models are progressing along like pretty like as expected. Yeah.

Yeah. You have the labs having some of the best months in business history of any companies ever. Yeah. But then all the infrastructure correcting.

Yeah. None of that stuff matters. You know, the only thing that matters is, is the propensity of the buyer and seller to buy or sell. And what you had happen was the smart guys getting early. Start buying, see the prices go up, buy some more. And then less smart guys take, take note and say, I want to do that, I want to be up 400% this year too. Guys like me started buying right near the top, just like, hey, this is great, I love memory, I love bottom nets. And, uh, and then, but, but the weakest hands are buying at the top, so they're also the first to sell. Sure, first to panic. Yeah. And it just creates this, like, you know, every bubble is sort of the same. You have this euphoria, this peak, and then, you know, everyone sort of panics at once. You know, the fundamentals basically don't make a difference. You know, I think they, you know, they sort of drive the marginal buyer and seller. But, you know, the 80% or 90% of the assets, shareholders don't change hands. It's that 5% on the margin that's deciding the price. And if that 5% is in the state where they're levered up 3x or 4x, as we heard, uh, SALT is, uh, was a 4x leveraged fund, which is— that's a lot of leverage. You know, a 25% drawdown takes you out of business. Interestingly, we heard that 3 firms were bidding on the assets. So Jane Street, Millennium, and Citadel were sort of brought in in a closed, closed circle sort of late Friday to bid on the remains of the firm. And we got offered a look at $100 million of Anthropic stock, which we were puzzled, puzzled by. You know, sometimes you see these SPVs, sort of interest comes across, you know, here and there. And we thought that was interesting. I sort of raised my eyebrows like, is that Leopold? Because, you know, sometimes when you want to sell $4 billion or something, you don't come out and say you want to sell $4 billion. You come out and you say you want to sell $100 million of it. And usually a guy who wants to buy $100 million is enough. To buy 500 or more. And you sort of fill them out and say, here's 100. Okay. Do you want 5 by any chance? And then, you know, your eyebrow starts to raise a little bit that, you know, maybe he's got even more. Now, of course, this is a really odd situation. So we heard Millennium did put in a bid. Citadel's bid was better. You know, I think Ken wants to be the guy that everyone goes to when they're in trouble. And that's the Buffett is getting older. This is not the kind of stuff Buffett wants to do anyway. But Citadel did this in the Amaranth deal. When Amaranth blew up natural gas futures, I think Citadel took that portfolio. And virtually every blowup in finance—

Well, you have Enron, where they just raided all the talent.

Yeah, they wanted to do it at Enron as well. I think they just sort of— Ken is a very smart guy. He sort of shows up and says, how can I be a partner to the Goldmans and the Bank of Americas when they need to get out of a really risky position? They basically take over the book, right? So I'll give you an example. You're asking the question. So let's say you're at $45 billion, just sort of try to trace this back, and $10 billion of that is in Anthropic, from what we understood. So you have $30 billion of cash in your bank account. And running 4x levered means you have $120 billion gross market value. So if your GMV drops, I don't know, 25%, that doesn't sound so bad at $120 billion. Maybe that's, I don't know, $30 billion. So you're down to $90 billion. But that's not your equity. So your equity drops from $35 billion to $5 billion. Yeah, and no, no prime broker is going to let you keep $90 billion of gross market value, because once you dip your equity below zero, it's their loss, not yours. And they're not going to lose a penny after Archegos and after these other kind of blowups. And that's not their job. And they kind of have the right to take over your portfolio, which is, is sort of, uh, you know, something I hope nobody ever has to experience, but they basically call you in and say, listen, you know, these are our assets now. You know, we're going to decide what their disposition is going to be. And the rumor is over the weekend he contacted about 10 parties to place Anthropic in an effort to shore up liquidity, selling the Anthropic stake for— allegedly, the offer was at $1.1 trillion equivalent market cap, which, you know, I think roughly where it's trading. And, um, you know, it's unclear whether that was sold or half of it was sold. It's what we reported, um, that, that half of it was sold. It's still a little unclear who bought that, what's happening exactly, but that's, that's the best we've got. And then, you know, when it came to, um, the public, you know, book, it does sound like, um, you know, the, the buyer of that book basically got a, from what we were told, a $3 to $4 billion insta markup. So they basically now have to work them— they have to work out of $3 to $4 billion. Yeah, uh, more than $3 to $4 billion, quite a lot more. Uh, but in essence, if they work out of these positions without disrupting the market, they'll have printed $3 to $4 billion on the trade, which, you know, is unusual and interesting trade. But, you know, really exciting. One of the parties reached out to me last night, one of these three parties, interestingly, after my reporting. And they said that in essence, in sum and substance, yes, Leopold flew a little too close to the sun and your numbers are, are a little off. And I asked what direction and they wouldn't, they wouldn't confirm or deny. I received a lot of pushback on the reporting, to your point, privately and publicly, that, that it's not so bad and that, you know, he's only down 30%, 30% you can kind of live with. But also, if Anthropic hasn't changed its mark, that means you were down 60% in the public book. And if you're forex levered, you know, that means you're sort of down 15% on the public book, which sounds too good to be true. If you're trading these stocks, they were down like 15% a day. Yeah. So we've also heard the other, other AI funds are hurting, maybe not as much as in trouble, but, but certainly hurting as well.

Where does the fund go?

He gives some good— he gives some good cover to all the funds that were effectively copy trading him. Oh, sure. Maybe even being more risk on and later to these positions because they were— they're naturally just late if you're trying to copy trade someone and you're trying to catch up, you know, you're trying to catch up.

Yeah.

More leverage. You're, you're, you're coming into these trades way later. Do you, do you recall How did you process Ryan Jacob around the year 2000? Because you were at Cramer's firm, I believe you joined maybe right before the Ryan Internet Fund started collapsing.

Yeah, there was also the Amerint Fund. There was a fund in the '60s called the Manhattan Fund that Warren Buffett criticized for being the go-go Nazi fund was run by a guy named Gerald Tsai. And so every generation, you've seen the memes about Cathie. Every generation has it, the guy that believes in that cycle and goes balls to the walls on that cycle. And look, I have a lot of respect for somebody who's willing to do that. I used to tell a friend who did the same thing. He followed this trade, but he was very early. So he had Leopold-like numbers. And he did hedge it at what sounds like close to the top. So a miracle trader, best trader I know. And I joked with him, I said, if Leopold sells at the top and turns short, I will absolutely adulate him as the greatest of all time. It's just that usually when you're so spellbound by that narrative of whatever happening, in this case, AGI, there are people out there that say, look, AGI's here, slash coming, when it comes, the entirety of finance is not relevant anymore. Yeah. You know, we might as well just run it up and kind of see the end of days this way. And of course, to some guy sitting on a trading desk at Goldman Sachs, you're like, these people are fucking nuts. You know, it's just the stock market. It's not a big deal.

Did you, given that Leopold had been at FTX right up until the fall, did you think that maybe as, as risk-on as he was, like maybe he was like, you know what, I just, I can't go through that again. He wasn't necessarily— he wasn't necessarily directly tied to any of this sort of nefarious activity at FTX, but he did have to viscerally experience it and I believe resigned the day of the collapse. And yeah, I would— I just would have expected to not like run it. Yeah. To run it back like so quickly. You would expect even like, go and do it, have a normal great career for a decade, whatever, then maybe come back to leverage and be like, I'm ready to dance again. But there's a lot of questions.

Like, one question is, what's his carry? A lot of firms in the hedge fund industry, believe it or not, they have clawback provisions for carry.

Like high-watermark provisions, right? So you have to clear something?

Everyone has a high watermark. But what's increasingly happened is a carry provision where you have to return the 2 and 20 you earned if you have a severe drawdown, which could actually end up being a tough situation. Now, as you guys know, the fellow is getting married this weekend as well, which is a little bit of tragedy with a little bit of triumph mixed in. But obviously, —when the— But does every—

how common are those clawback clauses? Because you have to imagine in this fundraise, he had like massive, massive leverage. You know, like demand was very high. Demand was very high. That feels like a term.

The numbers were so good. Yeah, it's a more institutional thing.

And, you know, speaking of which, you know, obviously the guy basically had no experience. And again, you know, in times like this, nobody wants to grave dance. And I'm not doing that. But I had some institutional friends, one of the biggest fund of funds in New York, for example, who passed on Leopold, basically laughed at him and said, there's no way I could invest in this. And of course, he goes on this tear, makes like 20x or whatever it was since inception, and does fantastic. And he feels sort of sheepish, but ultimately somewhat vindicated after all of this. So you did have a manager that had no experience, kind of a long only or extremely long biased, starts to do privates, which for many hedge funds is kind of the death knell. You know, you know, when hedge funds put on their VC cap and try to do what those guys do, it often doesn't end well. And that goes back like, you know, 50 years basically of hedge fund history. And very few people have been able to do both. And the other thing I'd point out is we're going to see July numbers very soon here from, from quite a lot of hedge funds that I think were in the same trade. Sure. And so this, this is not just Leopold's $100 billion gross. It's like that times maybe 5 or 10. Sure. And the market— well, the market's liquid, but that's a lot of downward pressure in a few weeks. And, you know, it's amazing to see this all compressed in a month, whereas like the dot-com bubble took 3 or 4 years to like patiently go up and patiently go down. You know, seeing that compress instantly is interesting. What's going to happen next is really going to be fascinating. There's some theory out there that, you know, that we see all-time highs again now that all this liquidity is out. And there's other theories there that we actually were just having this nice big downtrend and that this liquidity pop will fade and we'll be back down further and further. You know, nobody knows what will happen, but it's certainly— while you're right that, you know, the Anthropics and OpenAI are having record business results, so is Microsoft and Google and Meta for that matter. There's still, I think, some more discerning questions about is are— is this CapEx investment worth it? Sure. You know, they rewarded Microsoft for being prudent. They punished Meta and Google for not being prudent. So one wonders what the future will bring there. But yeah, about as crazy as things have gotten on Wall Street in many years, probably at least since FTX, and certainly crazier than the sort of Tiger SoftBank venture boom of '21. And then really since then, the '08 insanity. So it's quite a spectacle. And I think no matter how much people want to learn the lesson of leverage over and over and over again, we all seem to repeat it. And it is what it is. But I think that the Jane Citadel Millennium entire hedge fund complex becoming this shadow bank is quite interesting in that these guys are are sort of there to— normally the banks would sort of take this on the chin. But now that there's other folks who are like, you know, Jane was an LP, for example, and reportedly was not interested in bidding, which is fascinating, may have taken the Anthropic, however, really unclear. We're going to learn more, obviously, as the days go on here. But it's, it's an unprecedented time and, you know, really an insane story that may just get more insane as we learn more.

Is there a world where the fund continues? Because I'm just hearing the numbers and it's like, you know, for up at $45 billion, the actual money into the fund was maybe $5 billion or something. If you sell the positions, there's a world where you wind up with like $10 billion in a bank account and the LPs are like, well, we gave you $5 billion, keep going, get back in the game.

You know, I hope, I hope that's the case for the LPs who are awesome, for the fund manager who obviously got quite a lot of whiplash. But at the end of the day, there's this concept on the Street, as you guys know, once there's blood in the water, these positions would go to zero. We'll send Micron to $5 just to liquidate this guy at $3. That's the craziest thing is that's the nature of Wall Street when this happens, and there's a guy that has to sell $100 billion. You'll have a trillion dollars in front of them, just like, let's see this guy cry uncle. And it's the saddest, most Machiavellian thing. But he sort of had to blow up. There was no other ending, sadly, because of the leverage level. It's just like one slight— I remember my old boss was a Tiger portfolio manager, reminded me of the 2000 era, where there's this very slight change in tone from one optical component supplier. And that's like him and his partner from Soros just decided to go like as short as they could. Because they knew ultimately these vulnerable hands were sort of sitting there after the easy part of the bubble was over. You had this like, okay, well, what's next? Things have to get a lot crazier. You saw Dwarkesh's tweet. Things like that would have to sort of happen for there to be enough second derivative for somebody to be surprised. Yeah. You know, everyone knows AI is in this boom. Everyone knows chips are in this boom. What could possibly shock you to the upside? Not much. So if you hear any little like, you know, we're not going to spend as much, the whole shit hits the fan and every— it's just too heavy. So I actually wonder if we're, you know, if we're not in for a longer, more protracted decline. Things feel great today. You know, we have this huge boom, this relief rally. A lot of the froth is out of the system. But, you know, what next? You know, I don't know that, you know, a patient and calm market is going to emerge because you had the hyperscalers and the big companies, they FOMO too. They FOMO just as hard as Leopold did, right? If not harder. So this isn't just him. It's the whole world collectively saying, fuck, I got to, I got to go all in on AI. And it's, it's— and who had the guts, you know, other than one man, Tim Cook, in the back saying, do nothing.

Yeah.

Yeah. No, really. Yeah. Yeah. Yeah.

The funny thing, you know, we had been joking, we were joking in like Q4 when, you know, prior to like coding agents really starting to rip, you know, OpenAI revenue growth had like slowed a little bit and like there was some jitters and, and a lot of this stuff wasn't public at the time, but you could tell some of the kind of crossover types were like getting a little nervous, right?

They kind of expected— MAU, DAU numbers. Yeah, yeah. You know, yeah. And really plateaued.

And, and, and then we— and then there was a correction. Like there was like briefly, you know, for a period it was probably like 8 weeks. It was like, okay, like, uh, and then it started ripping again. And we were taking like a sort of a, um, a bit of a joking like victory lap being like, cool, like AI corrected. You know, bubble popped, bubble popped.

We're able to build back sustainably. We're good from here on out. It's smooth sailing now. I completely—

I think the most unexpected thing would be if we saw brand new all-time highs for the entire thing. I think almost everyone on Wall Street is skeptical this will happen, which means it has a chance.

Yeah, yeah. Bullish. So you're saying there's a chance? I love it. Can you, uh, can you give me a little bit more insider baseball on what it takes to unwind a big position as a shareholder? Because a lot of people who are not inside the hedge fund world are sort of maybe confused around, okay, yeah, you own $50 million of a $1 billion chip stock. Can't you just dump that on retail? Can't you just like sell markets, sell that on E-Trade or Robinhood. And in fact, it's much more complicated when you're at this level, even though it's public markets. There's not just a big button. Can you walk us through what it actually takes to like sell a big position when you're at that level?

Yeah, there's, there's a lot that goes into it, interestingly. So the first is you have this advertisement system. So if you sell into the into the market, you can try that. And that's called selling into the screens. The screens are the numbers on your screen. Anybody could buy and sell Robinhood, whatever. So you don't normally do that if you can help it. Selling on screens is at least somewhat quiet. You can just sort of trickle out. There's always this conspiracy that as I'm selling on the screens, there's some guy who can see my screen and he's like, this guy's got a VWAP market order to sell 10 million shares. That's like, you know, I'm going to tell somebody. And that knowledge would be very, very powerful. And There's even some even crazier conspiracies out there that quants could actually use different— all kinds of insane ideas around what they can do to sniff out that this is happening. So there's people that are scared of that. Then you can pick up the phone— and this is the way you'd normally do it— and you call Goldman, and you say, listen, I need to sell 5 million shares of Microsoft or something like that. And they say, hmm, should we take it, or do we find a guy that wants to take it, and they'll sort of try to decide. Now, Microsoft is easy. If you're trying to sell Sharean AI, a neo cloud in Australia that nobody wants, that's a tough one. And you own like 10 days of volume. So if you try to hit the screens, you have 10 days of volume. You'd have to be the entire volume for 10 days before you'd be out. You'd probably take the stock down 50% or more, and you don't want to do that. So you try to, you know, do this advertisement process, um, And you basically can post in the stock market that you are a seller of a stock. And you can post your 4-digit, what's called market maker ID. And so Goldman's is GSCO. So GSCO would be a seller of, say, Niveus, which was one of his positions. And so you'd call up. You'd say, OK, Goldman, I'm a client too of Goldman. What do you got on Niveus? And the guy would say, listen, we got a pretty big seller here. And say, how big? Half a million shares? And he's like, a lot bigger. And so you'd say, hmm, OK. Because they have to advertise that they're working your orders. So they have to tell people that there's a seller. They are trying to be coy about how big, but they're not going to waste somebody's time either. So the guy who's heard that there's a big seller, well, he might turn around— he's not supposed to do this— he might turn around and say, there's a huge seller of Neebius out there, and I'm just a little baby fish, maybe I could short 50,000 shares and get in front of this guy. If you're an actual interested buyer, you might also still be nervous, because you'd say, well, if he's really got a ton of size, I might have to be judicious about how I step in. And so if you combine that with the pressure in the market, and you add it all up, and then Usually what you do is you'd have to say, oh, I know a guy that works there and let's see if he's returning calls. And, you know, when you hit up the guy and he's not on Bloomberg, he's hard to reach, it's kind of like, well, it sounds like it could be them selling. So it's not too many people that own that many shares of that security. So you look at the holders list and you're sort of like, who could it be selling 10 million shares? So you call Fidelity and they say, no, we're not selling. You call the next guy. No, we're not selling. Next guy is an ETF. Next guy is an index fund. It's got to be him. And so if it's them, and then you start noticing all of their positions are down, it gets really hard. So ultimately, the bank decides— because you might say, I don't want to sell. The bank says, I don't care what you want. We're selling regardless. And Goldman Sachs is not in the business of holding AI stocks. We're going to sell at any price we can, because our board would rather know for sure that we're down a billion and just rip the Band-Aid off than to wonder if we could lose 50%. And so it's Goldman's position that we're just going to just cut the arm off right now before it metastasizes. And so they'll do a fire sale. And of course, Goldman's smart. They're going to reach out to a guy like Citadel or somebody else to place it carefully. But selling the whole portfolio in one shot was a very smart move. Now, again, we've heard the discount could have been as big as 20% to 50%, which is mouthwatering discount to buy some quality companies at. But to end it and have finality, what was really— to answer the question finally, what you really needed to do is the buyer of these stocks has to have the liquidity to hold them for 5 years and do nothing. Because the market— guys like me, and to a very small extent, and guys much bigger will sit there and say, I don't think you can hold this. And they'll start shorting it, and shorting it, and shorting it, and trying to make you cry uncle. Kyosha in Japan one of Leopold's holdings, also one of mine, is trading at 3 times earnings. They basically forced— you're forcing the guy to really sell. And if you're going to hold this stock, you have to make sure that you can hold it until it's 2 times earnings or 1 times earnings. And the only player big enough and powerful enough to hold $100 billion and not blink is somebody like a Citadel. And even still, some people— there are rumors out there that there are people who are going to try to pressure Citadel, which I wouldn't advise. But something like that, where maybe they'll now have to suffer the same contagion. So it's a very crazy time in the markets. And I don't think we've seen everything yet, because I do think there are some large tech funds that have had the same trade on. I do think liquidation is over, thankfully. But I do think that there are some funds that are about to be found out to be down 30% or down 40% or something like that.

Take me through the mind of Ken Griffin a couple weeks ago. There's this rumor that he was sort of like, pushing or signaling that there might be a rate hike. But what I'm interested in is if you suspect that there's going to be a fire sale on X, Y, and Z companies, is there a world where you build the hedges before you acquire those assets, or is that too 4D chess? Because that— if they, if they wind up acquiring these for 50%, 20% off, but they already have offsets, then they sort of come in market neutral. Is that possible? I don't think so.

So I'm familiar with Citadel's performance for this month, which is surprisingly up. So I think they're probably one of the only hedge funds in the world this month. It's up.

So they're actually very small. They were actually hedged is what you're saying. Yes.

They have a diverse platform of different businesses. A guy trading weather, a guy trading rates, a guy trading stocks, you know, about 1,000 guys trading stocks. And they have a computer fund called Citadel Securities that is a market maker that trades a good chunk of the volume of every instrument in the world. And ultimately, I think that the prime brokers, the Goldmans and Bank of Americas, they do so much business with Citadel. And they've done this before, where they know who to go to, just the same way the US government went to Warren Buffett when they wanted to shore up Goldman. They know that the right person to call is Ken, and he is really going out of his way to make himself the guy to call. And I think that is a great brand because you may not need to be that guy more than once every decade. But look, once a decade to make a free $5 billion or $10 billion is a great, great guy to be. And, you know, it's sort of like he becomes a dependable, trusted partner to these banks. And if he wants something from the banks, he's helped them. Because without him, they might have had to sell that at a negative number. In fact, some people think— I don't think this is what happened, but some people actually think the equity in Leopold's Prime Brokerage accounts went negative. Okay. Which I think is, you know, something that, again, the Goldmans and Bank of Americas try to stop you before you get there. Sure. But, you know, they also don't want to sell, like I said, a share in AI, which is an illiquid, tough-to-sell security. Sure. You know, they'll sell out your Micron. Very fast, or you'll sell it out before then. But if you're left holding this bag of like a liquid crap that you have 60 days of volume to get out of, it's pretty tough to sit there and tell your prime broker, don't worry. Which is why, again, I think he needed cash. Probably somebody on Monday or Tuesday tapped him on the shoulder and said, your margin's looking a little thin. You know, can you add, you know, a couple billion here or more? And things happen so quickly that there's just no time. And yeah, it's— I think, I think Citadel learned about this at the 11th hour, as you're supposed to. You know, the firm didn't leak out that they were hurting. They didn't have, to my knowledge, daily performance. In fact, from what I'm told, situational awareness as a young hedge fund was not so great with communication. Not surprising, especially with monthly and quarterly letters. Could have been more timely on some of those. So it's a small group of a couple of guys. So I don't think that this was the same.

You rewind, what was it, only a month ago that the— or 13F was late. 13F was like late and everyone was just questioning like, did he work out some kind of deal to get it, you know, keep it confidential? But it, it sounded like you just like didn't get around to it. They had other priorities maybe. Do you think you can mention the Do you think you can rebuild a career as a venture investor? Because, like, in venture, you just— you're just, like, gigalong always. Like, it's, like, you know, one of the few forms of investing where it's just so hard to get out of position. That's the thing.

I mean, why become a hedge fund manager? This is the— I have a friend who wants to start— I have a friend who wants to start a hedge fund. I told him, this is the most painful, horrible business in the world. Why do this? And if you start a newsletter business that makes $100 million a year, even $50 million a year of revenue, you've done better than almost every hedge fund on the planet. You do not want to do this job. And the reason people do it— and I did it too, and I would never do it again— is it's the sexiest thing in the world. Glory. Yeah. You think you're— the glory is— Master of the universe. —is incredible. Yeah, you're the master of the universe. And I had friends wanting to quit really high-profile jobs to be a hedge fund. I was just like, you're out of your mind. You don't know what this job is. It's waking up at 3:00 AM, checking Korean stock prices and waking back up at 6:00 wondering what's happening in the world, stuff like this. And there's absolutely no productive thing you're doing. You're providing capital. But other than that, you're really playing this high-stakes crazy poker game. And it's certainly fun and interesting. But when it's painful and raw, I hope he'll do something. He's a brilliant person. Really, people like that— I mean, look, Peter Thiel had a hedge fund that didn't quite have this level of liquidation or anything like that, but it had a rough last few years. And Thiel was able to obviously not only continue his venture investing efforts, creating one of the biggest funds of all time, one of the most successful funds of all time, investing personally, doing amazing, also getting back into macro trading with Thiel Macro, which supposedly has done well. So I do think there is this period of a few years that, you know, he can reset and take the learnings, take whatever talent and skill and certainly genius that nobody denies that he's a brilliant guy and rebuild. I don't think it's the end at all. And I hope he's keeping like that even temperament about this because, you know, I think a lot of people respect him quite a lot. 100%. No matter how this turned out, you know, he'll be back and successful. But it is a little bit of a humiliation thing that I think most people on Twitter and other places are saying, well, the market tends to humble you. And this is an extremely humbling moment from being just 2 months separated from the biggest hedge fund on planet Earth and most successful to being forced to liquidate. That is quite a rapid reversal.

Also, just imagining what the fund looks like in 2 or 3 years if you just survive, right? I can, you know, he, you know, there was a clip that was circulating yesterday from his, you know, appearance on Dwarkesh where he's like, oh, there's obviously like 100x, you know, left before AGI, right? So like he was like up, you know, 20x or whatever, thinking like, I got, I got so much room to run but just couldn't stay in the game. I got to say, I got leading Yeah, it's always a risk. I got to— yeah, I got to say, it felt like a— felt like a huge moment for you and your business just because everyone, the whole finance world was learning about the situation from your post. I'm sure a lot of people were glued to your terminal and it felt like a changing of the guard because, again, you were getting pushback. You were getting some pushback. But then 2 hours later, it was like Financial Times and Bloomberg and Wall Street Journal. They're all kind of clearly they needed a couple of hours to like run it down. But you got to it first. And yeah, I was, I was quite impressed. Thank you.

Yeah. I mean, I think that, you know, we've talked about this in the past. I mean, there is a changing of the guard. You guys helped change the guard in your space. And I think that, you know, the folks at the Journal, the folks at Bloomberg, the folks at these other companies, they're fantastic. Reporters, but they're not active or former players. And, you know, we will hear— we will always hear things before them, uh, because especially on the street, um, because that's just—

well, and the crazy— the craziest thing is you, you actually waited until it was like over effectively to, to share, right? Like you had been hearing about this.

There's a lot that we sit on.

Yeah, yeah, yeah. You know, we've been in that position like hundreds of times where it's not appropriate to share anything. And sometimes you're sitting there being like, I'm really surprised that legacy media hasn't picked up on this story. It feels like it's just common knowledge. And there's definitely a time and place to just not say anything and let something work its way through the system. Yeah.

I mean, to give the devil their due, the Information is also quite good at this type of thing. And they are particularly good at scoops on OpenAI, which I still haven't unraveled how, but they're obviously very good reporters. But a reporter at a place like that in trad media, they generally don't care about burning bridges and resources or contacts. So they want that news out yesterday. I do care. And it also is a conflict of interest because I don't want to hurt somebody that's given me good information. Betray their confidence because I have to keep the confidence of these folks if I want to keep talking to them. But I also, in the case of this situation, as the carnage was unfolding, you know, there's sort of a balancing the need for everyone to know with the need for, you know, protecting friendships and relationships. You have to make that judgment call each time. And I hope that our customers understand that there will be things that we know before others we can't disclose because We want to protect folks and protect our friends. Bloomberg, Wall Street Journal, they'll never do that. They're, they're always going to serve their customer who is the reader. We can't necessarily do that. You probably know things about a litany, like you said, hundreds of times, different fundraisers going on, different things like that. And yet we have to all keep our lips closed because, you know, that will be the last time we hear about a fundraise. And I think that this was a situation where it sort of merited discussion. It was going to happen momentarily anyway. I, in fact, to your, to your point, the thing that got me to publish was my friend saying everyone is hearing this now. Once that happened, I said, all right, well, you know, it's time to let— I can let the cat out of the bag. It's about to be let out anyway.

So yeah, uh, I have two more quick questions if you have a minute. One is, uh, uh, just about how leverage works at a hedge fund. I think You know, again, from the retail perspective, from the much smaller player, you might know that you can go to a, you know, a brokerage and get a little bit of leverage. But what does the process look like as you're scaling into the tens of billions of leverage? At a certain point, you have to go to all of the banks, certain banks. Who's actually like, what is that process to get leverage at that scale actually look like?

And also, let's Let's appreciate for a moment that I feel like just a month ago, the West Coast broadly was taking this insane victory lap being like, the West Coast has eaten Wall Street. Like, the best and biggest hedge fund is no longer on the East Coast. Like, we just have everything now, finance and technology. And then just deeply humbled within the span of 30 days. And it turns out— Turns out you guys over there, you know a thing or two. And here we are asking you, so how would one go about getting—

Yeah. That was nice.

So one of the things that I think is not well understood is the prime broker make a spread on— I think this is somewhat understood— is they make their business to make a spread on financing. So if you go to a prime broker and say, I'm never going to use leverage, never. They say, I'm never going to use leverage, and I'm never going to really trade a lot with your firm. You're just going to sit there and say, like, we'll still take the assets because we can rehypothecate them and lend them to the guys that are going to take leverage. But in general, that's not a great customer. So if they're making a 1% spread, which actually is a relatively huge amount, and you're borrowing 4x, you're actually giving them 400 basis points of free money. Week, which is sort of fantastic. In fact, you know, their borrowing costs are probably less than so far. So, you know, they may be getting as much as 600 or 800 bps of free money on huge amounts of capital. So leverage is the best friend of prime broker. Now, the risk guy is sitting there saying, well, wait a second, you know, I love lending, but I don't like lending to concentrated portfolios. I don't like lending to short sellers. Short sellers can get big, big, big leaps in their portfolios, like GameStop, for example. So the most that a long can lose is 100%. But if a 4x lever, the most long could lose is 25%. So there's sort of this mix of things you have to think about. I think getting into the privates is usually, for me, a really bad sign for almost every fund, because it's— as tantalizing as private companies are, There is a whole group of people on the West Coast who are much better at that than the guys on the East Coast. And of course, there are funds now like Altimeter and Coatue and others that, that are doing both and doing both.

Yeah. And what made that— what made it so tempting, obviously, for Leopold, that just how close he is to— like, he couldn't be closer to Anthropic. And it's a company that over the last 6 months has had 100x the demand relative to the allocation. Right. So it just felt like You know, and I don't know who knows what the, what the structure on those investments look like, but it's like if you're going to break your rule and do privates, like then that's the company to do it with. But then you still get into a situation where you're like, wow, I really wish this was more liquid. I can't press the sell button. Give us an update before you leave on, on Korea broadly, because, you know, a lot of people are commenting on just how similar Leopold's approach is to Korean retail. I don't know how true that is, but I can imagine there's blood in the water over there and the whole country is probably in shambles.

Yeah, I think so. I made a quality criterion calculator and a little portfolio simulator tool that basically And Paul Trader Jones said this a while back, and I had a problem with this. Every single trader out there makes one— seems to make the same mistake over and over again, which is their position size is probably 2 to 10x more than it should be. And if you actually— so it sounds nuts, right? Yeah. But if you actually run the simulator— and we— ours is kelly. So Kelly was a guy at Bell Labs. He was a member of the technical staff. He's original OG MOTS. And, uh, and so Kelly came up with the proof called famously the Kelly criterion, which gamblers use— mostly was a gambler thing before a, uh, finance thing— and it proves the optimal bet size. And the optimal bet size is your edge subtracted by the reciprocal of it. So if you have 55% edge, your optimal bet size is 10%. That's still quite volatile for folks, and so people do half Kelly or quarter Kelly. Most, most folks don't actually—

don't have an edge when they trade.

But if they did have an edge, they're trading as if they had a 4x or 5x Kelly edge, which is interestingly— like, you might say, OK, well, that just sounds swashbuckling and like, guy takes a lot of risk. No. If you run the simulator, you will go to zero each time. And the simulator is a really cool tool that shows you even with a 60-40 edge on every trade you make, you'll go bust if you overbet. And it's an eye-opener. We might say, who has a 60-40 edge in the stock market? Nobody has. 60/40 edge. But you will absolutely go bust if you don't size correctly. And it's something that I've had to learn very painfully, very, you know, over, over the years, that I'm almost always overbetting. And I think every fund is sort of the same. And certainly every retailer is the same. And it's just sort of a weird variance math game that very few people actually map out and say, can I simulate portfolio and just to see what is the sort of the right thing to do? In most cases. And in fact, I had a— after I left the Tiger Cup I worked at, I worked briefly in the office of a guy who worked at SAC Capital, now called Point72, for years. And he was one of the best managers. He's quite a guy nobody's ever heard of, kind of retired. But I got to watch him before I set up my own hedge fund and did the exact opposite, way overbet on everything. I got to sit with this guy for a few, few months. And I was astounded. What I found is that he was managing, I don't know, $300 or $400 million of his own, basically. He almost never used the capital. 80%, 90% of the capital was just cash. And he would just make these tiny trades. And the guy had almost never had a down— I think his record was he never had a down quarter in 20-something years of trading. And he had like 20%, 30% returns, which is great. And the guy just did these little little nibbles, and he never lost money. And it was this incredible thing. And then, of course, the second I get the chance to get some capital, I'm 8x leverage, you know. And it's just like, you know, it's the dumbest thing in the world, you know. And, and you live and you learn.

Psychology, psychology. Well, thanks so much for coming on the show and breaking it down. Thank you, guys. This is always a great time. Yeah, looking forward to, uh, yeah, seeing where we go from here. Have a great week, have a great weekend. We'll talk Talk to you soon. Cheers, Martin. Bye. Let me tell you about Codex. Codex 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. We have a couple of guests coming in soon, but first I want to talk about Ferrari. I don't know. Do you want to jump straight into our next guest? No, let's talk about— I want to debate this because there is news. In Ferrari world that the Ferrari EV, the Luce, designed by Johnny Ive, has already hit the 2026 sales target. The haters are in shambles. Everyone doubted that this would sell. And the Italian carmaker reports strong demand from China for electric model derided for its unconventional design. There's a whole bunch of interesting tidbits in here in the Financial Times article. Ferrari has hit this year's sales target for its first electric vehicle on the back of strong demand from China, despite a polarizing design that drew backlash from investors and enthusiasts. Remember, even the former CEO, former chief design officer, former executive came out and said this is not a Ferrari. There was a lot of back and forth in the timeline. I could have designed a better one with ChatGPT. A lot of people threw out different designs, but this one is selling, at least according to the Financial Times. The Italian group has not disclosed its target for the Luce, but two people with knowledge of the matter said it had aimed to sell this year just under 500 units of the EV. Not a lot, but their goal for by 2030, over the next 4 years, is to get to 2,500 units. So 500 a year for 4 or 5 years. That's where they want to get here. And they say they're on track. And so this is priced at €550,000, $650,000 USD, something like that. Uh, one of the two people said the target had been reached earlier in July, just two months after its controversial launch, when critics on social media derided its unconventional styling. And, um, there's also an interesting line in here that Ferrari says they gave strict instructions to dealers not to force its traditional petrol-loving collectors to switch to electric cars. Said if you want a Luce, we'll give you a Luce, but we're not going to make you buy a Luce in order to get in line for an SP3, SP4, some special F80 thing that's more limited. Just if you want it, it's here. It's a choice. And a lot of people made that choice. According to these insiders. What do you think? Give me the pushback and then we'll debate it. First, let me tell you about Consul while you think about that. Consul builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets.

Continue. I was pausing because I wanted to start with something nice. Hit me. I think— so the videos that I've seen of it on the road, it does look even more strange than in the images.

I'll say that. Wait, what is this photo? That's not— what is that? The team just accidentally put in some random car.

Uh, okay, so, so the car, the car is strange. I love the interior, but the car overall is strange. It's still unclear to me who it's really for, but they are finding buyers. The, the, the idea that, that buying the Luce— like, Ferrari is saying we're not forcing any dealer to push this car or whatever, but the idea that it's not going to have some whether or not you bought a Luce is going to have some weight on your future allocations to me is just insane. There's just no way that that's true because every single dealer is going to look at their client list. They're going to look what cars have they purchased. Like, we know, we know multiple Ferrari collectors that are buying 2, 2 separate cars that they don't even want. Of the same style in order to gain status within the dealership and show that they're a proper, proper collector and they're properly sort of cherishing the brand. Yeah. And so I'm not at all surprised that they've sold 500-ish units. That's about as many as I would have expected for 2026. I actually, I guess if you ask me, I maybe would have thought they would have done more. Like, to me, this was a car that was so different than the rest of their cars. It serves a wildly different use case, I would have expected their sales targets to be quite a bit higher simply because when it comes to their really special cars, they make about 500 of them. And so I would have expected at least 500 sales guaranteed. And then you would hope there was a bunch of incremental buyers, people that are like, yeah, I actually don't want a Ferrari sports car, but I do want a daily. And why not go for a Ferrari daily? Right. So you would have thought that there would have been like 500 for the first year was like my very base case. And I would have expected a bunch more on top of that. So I think they're positioning this as a win. I think people are going to love the car if you ignore the price. And but I don't think it's the win that the Pope and the Luce.

Okay. 3 points in response to yours. 2. First point. The design's absolutely growing on me. Like watching these videos here, it just looks way better than when we first saw the first pictures. And I don't know if it's just distance and I'm becoming more familiarized with it, but it looks a lot better. Even the exterior. I've always agreed on the interior. I think everyone agrees on that, but the exterior is looking better to me somehow. I don't know if this is just like I'm getting used to it. Two, Yes, there are, there are the 4D chess Ferrari collectors who are saying, I know I'm not getting pressured, but I'm buying one anyway because I think it'll help me jump the line, and I'm doing that independently of any pressure that's coming. But there's also just collectors that are like, this is going to be a piece of Ferrari history regardless of if they— what if they never make another EV again? What if the, what if the Luce is canceled next year and Ferrari literally for 30 years never makes EV. This thing is— it's important historically. It's an interesting thing to have in your collection. And then there's also just people that are like, I want— I, I'm a true collector. I want every possible Ferrari experience. Give me the SUV because I want to see what that's like. Give me the, uh, the mid-engine. Give me the front-engine. Give me the, the, the, the electric. Give me everything. Give me a vintage. Give me a new one. Give me a, a road car. Give me a track car. Give me— I want, I want a Ferrari F1 car. Like, I'm just— I want all of the experiences because I just want to experience everything Ferrari because I'm that deep with the brand. So there are— and are there 500 of those buyers? Maybe. Um, and then, uh, and then lastly, the question of, you know, what was their goal? I don't see this as their Urus. I don't see this as they were trying to make a mass market daily. I think that they were trying to make a very iconic, very iconoclastic, very, uh, contrarian car that was bold and weird and different, and it happened to be daily-able. And the fact that it is daily-able is what is weird about it. Like, they're not known— the brand is not known for being able to be daily'd, and yet they made one, and that makes it weirder. And, and I don't think that they were going after— this is something that will be like a Lamborghini Urus, which they can sell in mass volume and completely change the profile of their, of their sales curve?

My view is that they— I think those are all great points. My view is that I don't think they should have done a car like this because I do think it hurts the brand unless it was going to drive so many sales that it could make the rest of the cars that they make better, right? Like what the Cayenne did for Porsche or what the Urus does for Lamborghini, right? This sort of like workhorse product that can fund a lot of the other cars that are more halo cars. Sure. And so, yeah, I just, I don't think it makes sense if they sell 2,500 units other than it solves their sort of European emissions standards issue, right?

Yeah. I do think a lot of people buy a Urus because they want a Lamborghini but they need a daily, and so they go with that because it says a lot. It's a very bold choice. And I don't think that's the calculus here because you're paying so much more, whereas I believe the Urus is cheaper than most of the Lamborghini sports cars, whereas this is substantially more than just going and getting a 296.

Yeah, and Ferrari has a, an SUV. Yeah, that is cheaper than this, is significantly cheaper. And it, and it is much more desirable to the Ferrari clientele because it has a naturally aspirated V12.

Yes. But at the same time, the Purosangue, the SUV that you're referring to, had a lot of pushback when it came out. So did the SF90, and they all look really great now. And so the anti-halo, halo car theory also holds. But I think it looks good, and I think it's going to turn heads in a weird, weird way. That very few cars, as we are collapsing and we're getting to everything is white, everything is gray, everything is black, everything is the same rounded, the— can you tell the difference between a McLaren or a 296 or a Lamborghini? They're all sort of starting to look the same, like supercars. And then there's the whole hypercars, the Battista and the—

yeah, I'll give you this, I think certain specs of the Luce are going to look They're going to look funky, but they're going to look cool and they're going to be a joy to drive.

I just like that. Jony Ive in the Financial Times, they sent this photo of him looking over. We got to pull up the— go to the Financial Times article, scroll down to the picture of former Apple designer Jony Ive, who designed the Luce. And he's just like, he's like, what did I tell you?

You doubted me.

You doubted me. You doubted me. You doubted me we couldn't sell 500 of these. We did. It's a true victory lap photo, and I love it. Yeah.

Great photo. Anyway. And I can't wait to see one in person. Me too. I'm excited. That's a big moment.

Let's not keep— Tell you about Figma first, and then we'll bring in our next guest. Agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. And we have Guillaume Verdon from Extropic. Long overdue. But very excited to have him on the show. Guillaume, how are you doing? Welcome to the show.

Doing great, doing great. Longtime fan, first-time caller.

So excited to have you on.

So great to be on here. Congratulations.

During a massive moment. Massive moment. Thank you.

Thank you. Long time coming. Give us the State of the Union on the company and then the news and the deal that's going on, the letter of intent.

Yeah, I mean, so, you know, at Extropic, we've been pioneering this new form of computing from the ground up. Called thermodynamic computing. You know, our whole thesis is that right now everyone is focused on scaling things up, buying more GPUs, bigger data centers. We want to scale things down. We think there's going to be a race to densification of intelligence. So we started that about 4 years ago, which was very early to worry about energy. It sounded crazy to say we're going to run out of energy 4 years ago, but here we are. And so we've reinvented how to leverage a transistor for the era of generative AI. So generative AI, for those not familiar, is a probabilistic algorithm, right? You're sampling from these distributions of like, okay, if I give you, if I type in the word cat, what sort of image do I get out? It's kind of random at the output. And so, that is a probabilistic workload. It turns out you could run electronics probabilistically and at much lower power, and we pay a huge price to maintain our electronics in a deterministic state. So, it doesn't make sense to run probabilistic workloads on deterministic electronics if we're gonna pay a huge tax to know the state of our computer at all times. So our insight is if you use very little power, essentially your computer can operate probabilistically and you can train it directly just like a neural network. And you can map your algorithm that is a generative AI algorithm, like a diffusion model, directly onto the physics of the hardware. And so that's kind of the vision, and it's been a journey essentially. A year, year and a half ago, we had our first prototype in silicon. There you go, X0. And this one we taped out with TSMC. We've also now done GlobalFoundries, and that demonstrated that actually, because when you operate electronics probabilistically, you can use far less transistors for these algorithms, you don't actually need the smallest transistors. And right now, the reason people have to go offshore is because the best cutting-edge fabs are all offshore, and they have the smallest transistors. And so, what we demonstrate is that in principle, we can manufacture these chips in the US. And that was very interesting to all sorts of folks higher up. And we had some conversations and there's a very strong history of the government supporting the silicon industry. I mean, Silicon Valley was founded—

Go back to DARPA, they created the internet, right? Exactly, right?

And now, we're trying to go with or I guess they're going— we're going with a modern twist where, you know, if the taxpayers are going to support R&D, you might as well get some upside as well and get some equity. And so this is what this announcement is about. It's with the CHIPS R&D Office. And, you know, we'll get into it. But yeah, yeah.

In terms of where you want the first applications to be, it feels like different models are maybe sometimes designed around certain architectures. You see certain like GPT-OS runs really well on Cerebras and then you'll have another model that runs on an NVL72. It's like rack scale. And then there's other models that can sort of run locally or run on the Mac mini or Apple Silicon. And there's all these different pieces of the puzzle. And increasingly we're starting to see where like voice models might be really good for those to run locally, but some crazy long-running AI agent might be fine to send off the server. Do you have an idea yet of where you think if things go perfectly, the first application might be? Like, where's the sweet spot?

Yeah, we've been exploring a lot of applications, obviously running the model itself. The transformer is a big one. What we found is that, and we have a blog post coming soon, I guess it's a scoop here, but we have a blog post coming on, on a sparsity scaling law. So if you sparsify your model, because our chips have a sort of sparse structure. So that means sparse is just, you know, current GPUs, they have big matrices, which are these grids, and basically every entry in the grid is busy, right? Like there's something going on. Sparse means there's a lot of zero, there's a lot of stuff not going, that's not activated. So our chips are really good at sparse operations. That's not originally, what we're designed for, but if you really want to shove a transformer on our chips, you can do it. And if it's sparse, as long as it has the same number of parameters, you could reach the same sort of performance, which is interesting because for us, the flops are much cheaper per watt. Sure. So even though you use more flops, you get more intelligence per watt. So we have something coming out soon on that. I'm teasing it here a little bit. But overall, we're really interested in diffusion models. Models for predictive control, for defense, physical intelligence, signal processing, stuff you would use an FPGA for, you want to use one of these chips. So, you know, we have RTX as investors for that, for that reason and similar defense primes. Very interested.

Yeah. How are you feeling about the retrospective on effective accelerationism? Because it feels like My interpretation is that you were 100% right at the time, and that class of models didn't really pose any real risk. There was clear need for a buildout and diffusion of this technology. But now we're in this like new— the last few months there's been a new discussion over literally slowing down, literally decelerating. And it's coming from inside the leading labs, not just like doomers who are outside. How have you reflected on what YAC was, its role now, just AI optimism versus pessimism, risk? How are you thinking about all that now?

Yeah, I mean, originally I wanted to just bring balance to the force. It was kind of a monoculture in Silicon Valley. It was just the doomer camp. And, you know, I was seeing the writing on the wall. If we just had the doomers, then that would eventually affect policy. And to me, there was a very biased view of the world. And so I think we kind of stretched the Overton window. It was okay to say no to doomers and say that's a ridiculous model of the future, you know, gray goo, foom, all that stuff. But now, yeah, we've reached a point where, you know, the models are very capable. And, you know, the EA view to me is just like viewing the whole world as a complex self-adaptive system. And ever since the dawn of time, it's basically been PvP. Every form of life is becoming more complex and harder to predict. And then its adversary has to step up, get smarter in order to predict it, in order to compete. And if you do that slowly, then basically you can have a whole ecosystem and everything's good. But if one, one thing becomes much smarter and much more complex than others, then it can kind of control others. And that's bad. And so I think, I think pace stopping makes absolutely no sense. Pacing can make sense, but really it has to come with a really strong investment in, for example, cybersecurity and hardening things because you can't pause things forever. Essentially, you just want to be adversarially robust, and I'm all for that, personally.

It is very interesting reflecting on the doom arguments, how they were like, to your point about Grey Goo and FOMO, it was not as precise as cybersecurity risk, which is some people were calling out, but the conversation was definitely distracted from the more practical difficulties around slop and overinvesting and bubbles and all these different things that are much more short-term that America will need to grapple with to actually deliver a positive outcome here. How are you— is your development process being accelerated by AI? Oh, absolutely. Yeah, yeah, no, absolutely.

I mean, we use all the big, big model providers in-house and we try them all. We have agents constantly running. You know, for us, it's like we have to speedrun deep learning. It's like you teleport back to 2011, you know, and there's no AlexNet paper and you have to speedrun 10 years, 15 years of deep learning progress as fast as possible. Sure. Right. But now it's like New Game Plus in a video game. You have all the power-ups, you have You have the AI. And so we're speedrunning progress very quickly. And we have online learning agents. We're training our own models as well, or post-training rather, sorry, as the cutting-edge companies do. And so that's very exciting to me that current AI can help bootstrap and kickstart the next paradigm, the next substrate. And going back to your comment about the cycle, my thesis was that, you know, GPUs are not the endgame. And so, you know, we want to invest in the current cycle, but we should hedge our bets. You know, as we saw today with Leopold, RIP, you know, you got to hedge your bets. And I think if we're all in on GPUs and we don't invest in the next generation, the next paradigm of computing and have a couple bets there, then when that pops up, you're going to get wiped out and we don't want that. And so to me, we're starting the next S-curve. We're starting the next cycle. People are not over the current cycle, but everything is cyclical. But, you know, it's my responsibility to make sure, you know, we can have buildouts in the future that are really power efficient. And, you know, it gets you better return on investment on your capital, whether it's on Earth or in space or, you know, at the edge.

Yeah, it feels like the one of the, you know, you've been one of the loudest, biggest voices on been on X for the entire time that we've been running the show. We've, you know, had a bunch of your posts on the show over the years, and it feels like you picked a product category that just by the nature of it was gonna take time to evolve. And I think like when I think back, it's like the challenge of showing progress, I mean, this moment is massive, right? It's a vote of confidence and it's very exciting, everything that it took to get here. Meanwhile, you're getting like hundreds of millions of views from some of the— yeah, billions of views. And I'm curious, like, yeah, reflecting on the last 2 years, do you feel like you've found the right balance between like you want to be getting attention and you want to maintain your voice, but you also want to be moving the business forward? And at any point, you know, Axe and Teapot specifically, if they feel like those 2 things are not balanced, they're going to like pounce and, you know, take shots and all that stuff. And I know you've gone through that, which is why I'm excited for this moment to— for it. But, but yeah, how have you processed it all?

Yeah, no, it's been a— it's been a journey. It's been a lot. It was despite allegations, it was never planned to get doxxed. And, you know, I knew I was going after a very much a deep tech moonshot that was going to take some time to cook. But, you know, exponentials are slow at first and then they compound over time. Could I have had, you know, a product that, you know, would have had a shorter time to market and use the heat to make it grow? Probably. But, you know, I was just dedicated to this, this one mission. I think it's the most important thing I could be working on. And I've been all in since the beginning. But yeah, there's certainly a tension like building in deep tech where you're supposed to be in stealth. You know, you have nation states trying to reverse engineer technology and you're trying to just Reveal the minimum because that's your secrets, is your edge. But at the same time, you want to get buy-in. You want to shape people's beliefs like, hey, actually, this technology is here. It's coming. Here's a hint. Here's a prototype. Here's a Nature paper. Here's this. Here's that. Here's some signal. We're going to have a lot more coming up next week. A big announcement for Z1 and all those products around it, including our stack.

So I love that framing of New Game Plus. It feels like there's so many founders from the previous era who grew big like SaaS companies and they're now sort of on New Game Plus moving a lot faster. It's a great formulation, great philosophy, and thank you so much for coming on the show and breaking it down.

Yeah, congrats on all the hard work. Thanks for having me. Yeah, great to see you.

We'll talk to you soon. Have a good one. Goodbye. Cheers. Let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agents to deploy web apps, servers, databases, and more Railway automatically takes care of scaling, monitoring, and security. Did you see that California startup Satyres unveiled a 2-meter-tall centaur robot designed to enter disaster zones too dangerous for humans?

There's no way this is a real picture.

Sorry. Go to the website, though.

I mean, Satyres, Satyres, S-A-T-Y-R-E-S, they made the demon robot to go into disaster. Imagine you're in a disaster zone, John, and through the fire and flames.

I'm like, si, just kill me.

Yeah, okay, okay. I actually am in Hades.

I'm in Hades. If this thing says no job is worth your limbs, that doesn't mean a job isn't worth doing. Do you think this is a prank? Do you think this is a joke, or do you think this is a real company?

I think if it's not a joke, then why— they gotta hit— they gotta go back to the design minds and do something else.

Human-like torso and arms allow for natural—

this is a joke. On the website it says this robot is more dangerous than it looks. Like, no, it looks dangerous. Yeah, it looks very dangerous. I think this was, uh, vibe-coded, and I don't think it's a real company.

Well, uh, it's burning up the timeline. People are having a lot of fun with it. Anyway, um, uh, we have Lulu Maservi from Rostra in the waiting room.

Let's ask Lulu if she thinks this is a real company.

Yeah, and the value of rage bait, the value of like fake, fake launches.

All right, Lulu, please look at this product, this new robot company, and tell us, give us your read. Is it real? Team, can we pull it up?

Show her the, the Centaur robot that is absolutely—

yeah, I saw, I saw a glimpse of it. This is like the stuff from nightmares. Like imagine that you're— it's very funny. And this thing comes to you through like the smoke and the flames, I think you would probably have a heart attack if it could save you.

Don't worry, human, I will protect you. Yeah, really, uh, fascinating. Uh, I think, I think if they change the head, you know, maybe you could get it a little bit better, but it's still going to be a canonical demon head.

Like, this looks like the canonical Satan head when he appears in, in form on Earth.

How did this originally— that's right. The timeline. Like, where did this—

this just came out as if— well, the whole world gets their news from prediction market media accounts now, so I guess.

But yeah, it did go out on like a PR newswire. I guess Satya's robots, like, pants—

to answer the question, I'm curious. I want to have them on now.

They say the horns are necessary because they place cameras there so they can see the position of all limbs and tools. It gives a layer of redundancy in case there's issues with encoders and on the actuators.

That's what will make people like AI more, actually, is that the horns don't have enough cameras. But once the horns are for surveillance, yeah, then people will— I think I saw an open letter.

Yeah, they gave the Demon Robot a chainsaw and they say the horns are completely necessary. Yeah, yeah, yeah.

What do you— yeah, what do you make of, of the, the current Startup Launch Playbook because there is a world like there's all this speculation that Nathan Fielder is working on a new season of The Audition with that boy band called Boy Throb. Have you heard this, Jordi? No. Boy Throb. Boy Throb. So it's this— it's a real band, boy band that has been like, like detained. And they have a whole— but they've been making news. But people have been suggesting that like Nathan Kingfielder is sort of puppeteering behind the scenes. And I'm wondering how far off we are from a startup just launching something that's intentionally ragebait or viral and then sort of pulling off the mask and saying, oh, well, we actually are doing a quadruped. It doesn't look as crazy as this. This was just to draw a bunch of attention. Here's the final design. It feels like that would probably be a rough go because you've said you've sort of violated the trust of the, of the audience on day one. But do you think the right founder could pull it off?

I think it's a really bad idea to just optimize for going viral. Okay. Why? Viral comes and goes.

What's that? Yeah. Yeah. Why? Why? It feels like it's such a bad—

Viral comes and goes like it's— you're viral for like 24 hours, 36 hours, good or bad. You know, I think for Leopold, maybe we could get to that. Like, by next week, people could be saying he's the GOAT again. People are just very fickle and everyone is just more leverage all the time.

Yeah. 5x. No, I do think, I do think people under— people have this idea of like, if I can just go viral once, then I'll have a big business. And I think back with just building our show, like we had so many, we had some big you know, moments, you know, you can think of like the Soham Parikh and there were big guests and there were things like that. But the amount of times that we needed to go like moderately viral on X to build our audience was like 20 times more than I would have thought that you needed to, to build a media business. And so, yeah, just trying to go doing something that will get you viral once and sort of a shortcut, kind of like a, almost cheating, which ragebait is like, wouldn't call it cheating, but, but it's like, you know, it's kind of, it's, it's kind of close to there. It's just short-term and it doesn't actually get you the thing that you want, which is like derp sustained attention.

Yeah, I agree with you, but it's also not just about viral versus not viral. It's actually about consistency. So if you are consistent over the course of a year, there'll be times when you go more viral, less viral. There'll be times when there's like some Tuesday afternoon thing that you do that catches the attention of 50 people, but it happens to be that one of the exact right people is among them. You just have to keep doing the same thing kind of forever. It's like getting fit. You don't get fit by eating nothing for 2 days and then lifting for 2 days straight. It's like you just have to go to the gym kind of every day for the rest of your life in order to be fit. And the same thing is true of relevance, consistency in just keep doing it. It's not a one-time thing, but also consistent consistency in like, what are you going viral for? It's like Ilya said, what are we scaling? What are you going viral for? Because if it's not going viral for the thing that you actually consider your true identity to be, now you've actually just gone in the wrong direction. Now you have to like overcorrect back. And so if you are consistent with the story and then with doing it over and over, that's a lot better than trying to put everything into one moment.

Well said. Do you think we are at peak— I forget what the word was. I got asked this recently. It was like, are we at peak, like, transparency in terms of CEO communications? Because we're certainly at peak volume in terms of if I go back and I'm like, oh, I'd love to just like listen to 20 hours of podcasts from Jeff Bezos while he was in the middle of building Amazon. That's not really an option. There might be like a 10-minute hit on Charlie Rose and then a 4-minute hit on, uh, Letterman.

Or imagine Steve Jobs on Joe Rogan.

Yeah, imagine like, like Steve Jobs on Lex Fridman for the third time, and you're like, ah, that one I didn't actually get through because It's like now we're in hour 9, but I— but do you think we're at like peak, like maximum amount of just founder content and founder like interviews in terms of just the volume?

It feels like this should be the peak, but I don't think it is. Yeah, I think people consider it to be an arms race where now the peak is the new baseline. Benchmark and benchline. I did, for a fun fact, I learned English from a book called English. So sometimes I still do stumble into like—

She read the book on English.

I did. There's a book, it's called English. I read it and then I knew English like Neo in The Matrix. So forgive. Benchmark is the new peak is— the current benchmark where it's like everybody is loud all the time. So if I'm launching and talking, I have to talk more and louder. But to your point, it's very different from actually learning new things. So I've seen the same CEO maybe go on 10 different podcasts and I still don't know what they're doing. Sure. Or like, is the 6th podcast marginally useful compared to the 5th? There was one week when, uh, Demis went on like a whole podcast tour. That's right. And this is no shade to Ser Demis. This is like planned around— he released a book or whatever, but it still was like, am I gonna get anything new from the 6th podcast that I didn't get from the 4th podcast that I already listened to? And each one of these is like 2 hours. I'm really—

well, and the other criticism there is like that podcast tour and the book launch and everything coincides with them like completely falling behind the frontier. So now in hindsight, it's like, maybe you should have been—

I thought you were gonna say there was no Rogan or Theo involved. 'Cause that was the real interesting—

Yeah, should have done Theo Vaughn. He's more Theo.

Yeah, no, I would, but do you agree that if you're advising a founder and the choice is between 10 tech podcasts that are going to ask roughly the same questions or 10 very different podcasts where one might be cultural, one might be more political, one might be business, one might be finance-focused, one might be technology-focused, that having more of a breadth— because I— there was a moment where the CEO started going on Rogan and Theo, and I was like, oh, this is so fresh and different. It's just a very different conversation for them to have. It's not the same as a Dwarkesh or like a serious interview, but it just shows me a different side, and I like to see how they interact. Not every CEO is set up for it, but how would you solve that problem? Yeah.

So I, I would approach it from the obverse, like almost the opposite of what you said. Mm-hmm. Which is if you have 5 podcast opportunities in front of you, or 5, whatever publicity opportunities, and they're all different, think about who do you actually need to reach? Like what is the best use of your time? Mm-hmm. And if you don't need to reach the general population, and if you don't need to show some fun side of your personality, then it's less about finding a way to show your range and it's more about focusing on what do you actually need instead of doing 5 podcasts that are all different, just cut the other 3, the 3 that are either duplicative or are reaching people that you don't need to literally just don't do them. I, I think, um, CEOs need to be thinking about what is like minimum viable effort where I can get my vision and persona and build trust with the people that I need to without actually going on a press tour. Because at a certain point, the same way that it wastes my time to listen to the 5th podcast, it wastes you, the CEO's time to do the 5th podcast because the marginal value of 1 hour of your time there is like $30,000 or more. I mean, what's an hour of a CEO's time worth, right?

The only, the only thing that I would, the only thing that I would push back is I think the reason that you see some CEOs, once they just get on this, the podcast treadmill, and then it's like every week new episode, is when you actually think of if it's a virtual recording and they're using 1 hour of their time, and even if all that happens, let's say the podcast is like decent size, right? Like top 25 tech podcasts in the world. If you have 100 customers or potential customers that listen to that, I would argue, and they'll listen to the whole episode, I would argue that it is like well worth time to go on, even if that's the only— that actually. Yeah, it's basically— and so that's why, that's why, that's why you end up— and it's like, it's, it's— unless you're in a period where it's like you actually don't want to share anything, then I think every incremental progress is like, is it a better use of— is it a better use of time for the CEO to talk to like a warm lead, you know, that's just coming in, talk to your customers, or talk to 100 customers and they listen to you talk for an hour in the sort of like passing sales, uh, or passive sort of like sales motion, right?

Yeah. See, that's very true. And I agree with you there. And the difference is we're making the assumption that it is one of the top podcasts that your customers are listening to, and you're saying something that is gonna be worthwhile to them. That is an amazing use of time cuz you use 1 hour or maybe on TVPN you use like 20 minutes if you're a busy CEO and then you get clips and clips and clips out of it. And you just were able to amplify the equivalent of having 1,000 meetings into this setting where someone is able to pull better responses from you than you might've been able to give on the spot. That's true. But what a lot of CEOs also do, and founders in general, is just try to maximize for volume at any cost. And that leads to going on a podcast that nobody listens to. Sure. Going on a show that is actively detrimental to your vibes. There are shows where it's net negative. It's not just a waste of time, but you literally leave with a worse reputation than if you hadn't gone on there. Or, um, just being boring, wasting people's time, or you're making people angry and you're building a brand that you actually don't want. And now you have to put in extra effort to unwind the brand and walk it back versus if you had just been more focused in the first place. So I think that, um, optimizing for volume and sheer quantity leads you down the road to all of these perils. Whereas if you're just focused from the beginning and say, here are the things that matter to me, here are the podcasts and shows and venues that I actually respect and people listen to, I'm gonna focus on those. That's a better use of your time than just to go like Hungry Hungry Hippos with it.

Yeah, it's also sometimes cool when the CEOs are sort of like, I don't know, like almost kingmaking a little bit where they, they jump onto a show that hasn't hit that inflection point, uh, before it's obvious, uh, and they take the risk of going on some small show, and then that show blows up, and you're like, wow, that, that CEO went on that show that early. That's crazy. They took a real risk. Um, yeah, I think Elon did this with Lex very early, and there were— there's a whole bunch of other examples.

But you know who loves doing that? Brian Armstrong loves doing that. That's right. And he went on TVPN when you guys had already blown— like, this wasn't—

no, no, no, no, no. I think he was our first public company company CEO, first Fortune 500 CEO. He was very, very early, and it was huge. It was great. We had a lot of—

we had it, we had— it was probably not in the first like 100 or 200 guests. Yeah, definitely.

I, I think you're right that it was the first, but he didn't wait for other public company CEOs to be going on there. A lot of public CEOs are so risk-averse that they're like, show me if Satya and Jensen have done it, I'll consider it. Otherwise, don't even bring it to me. Brian just never asked questions. He just asked, do I like this thing? And so TVPN wasn't that early. Still a nice milestone. But he went on this one podcast called Pod of Jake.

Oh yeah, I know. Pod of Jake.

A guy called Jake. Yeah, yeah.

It's a great show. Great name.

Had like 50 listeners and he just liked it.

Yeah. No, no, no, no. That's so cool. And Toby Lukey did that too with like some StarCraft podcast, which was like crazy. And I was like, this is selection. This is taste. I know that like, you know, he was involved involved in this. This wasn't something that came through a committee, which is just so refreshing. The opposite of volume and the spray and pray, do every podcast, is like just being mysterious and having aura. Do we need to move to— I think of Jeff Bezos does it very well. Jack Dorsey does it very well. Ilya Sutskever does it very well. Do we need to move from a world for certain CEOs where instead of media training, we're doing mystery training, where we are coaching them to be mysterious and have high aura? Is that possible or is it innate with those people?

It's innate because people who are too thirsty for attention cannot help themselves. Like, you can tell them— I have coached founders to do less and there are some people who just cannot be held back because they get excited and that's okay. You can be a very respected, excited, public-facing archetype. But like what Ilya has cannot be taught. And in fact, if you tried to coach him to be the opposite, that wouldn't work. Yeah. And, and Leopold is in the category too, where there are people who just are a certain way. Sure. And then that reputation gets out and it benefits them. Yeah. But this is why it's such a mistake for CEOs to try to copy another, because if you just say, I want to copy Ilya and I want to be able to have a 5-word tweet that gets 10,000 likes and everyone has eyes on whatever, well, you can't cuz you're not him. You have to make this new thing that suits you.

Yeah, yeah. Yeah, it's always funny when his tweets get completely taken out of context and people will be like, "Wow, this is about ASI." It's like, actually, he's just happy about his family or something like that.

Okay. I'm sort of inclined to try to workshop some ideas. Let's do it. If we were doing comms for situational awareness. Okay. What's the next move? It's an interesting situation. Yes. Because he was very, very quiet. Right. He basically had like a couple of podcasts and just a billion dollar— literally just one— a billion dollar PDF and then went on the most insane run. All of his predictions coming true, you know, vindicated and then total annihilation in a very short period of time. I think that one, I think he's got to start kind of shitposting a little bit. Like, you're going to advocate for the SBF?

Like, what?

I think it works for— I think it works. I think it worked. Well, one, SBF was different in that.

Yeah.

And that he was very— he was always talking a lot. Yeah. This is like wildly different because he's been effectively silent.— and to come back, you know, maybe after the wedding and say, "What did I miss?" You know? No, I just— I think that he's clearly brilliant. He, I think, is— from everything I've seen, will probably be an incredible venture investor. And he'll probably have—

Also, minus leverage, he's just correct. Like, minus leverage, his whole The whole thesis is cracked. So, like, yeah, everything went up. It was just the leverage thing.

Yeah.

And when you're thinking he should not do that now is start doing things differently, because when people change how they operate, it shows that they're in a crisis. And obviously it wasn't a good day. But there's a difference between market movement portfolio management versus repudiating your underlying worldview and your underlying long-term thesis. And so Couple, couple of thoughts on my end is like, one, going direct doesn't mean you just have to tweet into the void or to the public. Going direct can mean picking up the phone and calling your LPs. And the people that matter to him most today and always are the LPs. So if he can call the LPs or if he already has and make sure they understand two things. One, that day-to-day market movement and portfolio management, even in pretty extraordinary circumstances don't change the underlying thesis and worldview and that his vision for what happens in AI still stands. That's one. And two is that he has this kind of hidden jewel of his portfolio in private companies. This is an unusual thing that he does that he has access to and that what is happening in the public market is actually the peripheral padding around this really interesting core of his private investments. Now, people know about Anthropic, but he has all these other private investments that are super interesting that haven't even really hit their peak at all. And so if his, if his employees and LPs know these two things, then I think it's like weather Twitter for a little bit and then come back and two weeks later some other thing will happen and people will be like, he's the GOAT again. Yeah.

And I also think that I don't know about institutional LPs, I don't know about that whole world, but I think knowing a lot of the, a lot of the like, you know, founder types that are just allocating a very small amount of their portfolio to Situational Awareness, I think they give them another roll, roll the dice. Personally, I think after that run, I think after that run, a lot of them would be like, yeah, I'll just whatever I got out, I'll let it, I'll let it, let it ride kind of thing. Just because again, it's not like the underlying thesis has ever been wrong. It's a timing thing. And if you're just thinking of it as like, yeah, basically like, you know, high-stakes gambling, then why not keep rolling the dice?

You've been through this, I think loosely. I mean, you've certainly seen Scott Wu, Cognition, come in as sort of the savior in a messy situation. And we were talking to Martin Shkreli about this, where Ken Griffin is starting to play this non-bank role of backstop, lender of last resort. This was a situation where the liquidity crisis could have bled into the big banks— Goldman Sachs, Morgan Stanley, JPMorgan. It did not. It stayed within the shadow banking system of Citadel. And it's interesting because it feels like what Martin was saying was that Ken Griffin is beginning to position himself as like the next Warren Buffett. In a crisis, he can be the lender that brings stability to the market. The market is up. And I'm wondering about your advice for founders who are fortunate enough to be in the situation where they are rescuing another founder, another business, a market even in this case. What is the right communication strategy where you are reassuring the world with Scott. It was the social contract in Silicon Valley. Yeah, one year ago. One year ago, right? But at the same time, you don't want to take too much of a victory lap and rub it in everyone's face. And you don't want everyone to believe, oh, well, maybe I can actually go and screw over all sorts of founders because Scott Wu's always going to be around to save the day. So how would you balance that?

The highest aura move is always to just chill and not make a big deal out of it. You know, like when you, when you see someone dance a little too much after getting a touchdown, it's like, oh, this is someone who's not used to getting touchdowns. This is a big deal for them. Is this their first ever touchdown? Yeah. But for the people who kind of like do a little something and move on, then you realize that they're just, this is just part of their day. Yeah. And so I think one, just not getting overexcited as if this is the best thing to ever happen to you by sheer luck. Two is, I think a classy way to approach this is to stand up for principle or to stand up for the other party. So in the case of Cognition, Windsurf, Scott's instinct was to protect and stand up for Windsurf employees as opposed to some big treatise about here's why I did this and I, I, I. It was all about here's what Windsurf employees deserve. And by the way, You're not appreciating how talented this group is. It was all about defending them and about the social contract. So I think for Ken Griffin or anybody, the best move here is like defend the principle, defend the people that you're trying to help, and then just don't make a huge deal out of it and be chill.

Yeah. And I loved that when Scott put that announcement video together, he was there alongside with the team. It was not all about him. Of course, that's his nature. He's a very humble person. But it would have been very easy to just say like, "Oh, yeah, like we can only schedule Scott for this video." And that's not what happened. And it was intentional very clearly, which was great. Jordi Hays.

One thing I'll say, there's one thing that I've learned from Sheryl Sandberg. I don't know or I've never met her. I didn't read— wait, okay. Here's what it is. When I think that I'm going to super duper hate a book, sometimes I'll read it so that I can hate on it with more credibility. Yeah. So like I thought I would really dislike White Fragility and Between the World and Me. So I made sure to read them so that when I hate on them, nobody can rebut, cuz nobody's read those books. Yeah. And so I thought I would super hate Lean In. So I read it and it was okay. Mm-hmm. But there was one part of it that was actually really useful. And she was saying this in the context of women have to do this, but actually it's just anybody. And what she said was, if you are advocating for yourself and defending yourself, that gets totally discounted because it's just self-interest. But if you are able to do that on behalf of someone else that represents what you want and represents what you believe in, or principles that represent how you want the world to work, just that small shift allows you to go really hard on being full-throated about them in a way that doesn't get discounted for self-interest. And so same for like any founder who's standing up for another person or for an idea or anything else. Yeah, that makes a lot of sense.

Well, Jordi Hays, there was an interesting comms crisis and, and resolution that happened effectively in the last 24 hours. I don't know if you guys saw it. The founder shared out a picture of someone getting a tattoo. That's the tattoo we told everyone that would get a tattoo of our logo. We got a company I'm not a big fan of logo tattoos. Yes. Uh, in general, there's a few that I might consider myself, but I certainly wouldn't, you know, encourage other people. I think like a Coca-Cola across the back. I thought you were going to do a whole sleeve of the Bottega Veneta Roman weave on your arm. Yeah, exactly, something like that. But that's less of a logo.

Yeah, Roman weave, it's like if you know, you know.

Yeah, quiet luxury. Roman Reiss, like, um, no, I just saw this and I was like absolutely shocked that someone said this out loud. Basically, Founder was telling anybody that got their, again, I think sub-seed stage startup logo tattooed on them, got guaranteed an interview, which just felt like so, so wrong. They posted it. Everyone was like, Wow, did you say this out loud? And then I saw the— I think it got deleted, but I saw the correction of like, we're now paying for tattoo removal for anyone that—

No, wait, no, there's another one. I didn't see the paying for tattoo removal, but he posted this like mea culpa tweet that was fully written by Claude. Did you see that?

No, I didn't see that. But I mean, the steel man here, I'm not going to give you the steel man helmet, but the steel man is that There are people that just love tattoos. And if you offer certain people free tattoos, they will say yes because they just want as many tattoos as possible.

Yeah, I don't know, maybe he was at a tattoo convention.

I've seen free tattoos given out before and people lining up and it doesn't math for me. I'm not in the market, but there are certainly people who are just like, yes, I want more ink, I want more tattoos. If there's a tattoo artist here that I don't have to pay, sign me up. Even if I have to get something silly. But, yeah. That's true.

There's like Cyan with her Anderle tattoo. But the—

But that's different. She's a shareholder.

Anderle didn't say like, "We're not giving you the allocation unless you get the tattoo." Exactly.

We'll only give you allocation if you get the tattoo. That was the thing. It's like, you're— are you maybe exploiting desperate job seekers? And also, do you not have a different and better bar for whom you want in the company as opposed to the people who who make the most rash, poor decisions in the moment. You're like optimizing for people who can't decision make to advance in your interview round. Yeah. Yeah. So I, I, it, it obviously wasn't great, but I think the real crime was the coverup, which was in this case— Yeah. The SLOD. SLOD mea culpa. Yeah. I don't know if, if that's still up there, but it was a SLOD apology.

Rough. Well, good luck to them. Hopefully they live and learn and hopefully those folks who didn't want the tattoo can get it removed smoothly. And thank you so much for coming on the show. Always great to catch up with you. Thanks, guys. Great hanging out.

Talk soon. Have a great week.

We'll talk to you soon. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. Up next, we have Michael Kim from Sendana Capital. He's the founder, and I'm very excited to dive into your story. Welcome to the show, Michael. How are you doing? Thank you. Great to be here. Thank you so much. Great to have you. Would you mind taking us through a little bit of an introduction of yourself, your background, and then what you're doing today to sort of set up the conversation?

Yeah, so I started Sindana in 2010. It was specifically to focus on seed and pre-seed stage funds. The thesis was that these new, you know, super angels were starting to institutionalize and bring outside capital in. Guys like Mike Maples, Steve Anderson, Michael Dearing, Jeff Clavier. And so, we were very early in identifying seed stage investing as becoming de facto early stage investing. And so, it took me 18 months to raise the first fund in 2012. Today, we have almost $3 billion under management. Our LP base is largely US endowments and foundations. So, we feel like we are now solid LP focused on very early-stage venture. And, you know, a lot's changed and we can get into that. But, you know, overall, we are convinced that early-stage investing is still the way to go in this world. Yeah.

Do you think that if you look back, you, you weren't even thinking big enough about how much the category would emerge? Because, like, clearly the initial thesis was right. But in some ways, it feels like early-stage venture has gotten bigger than anyone really could have predicted.

Yeah, I mean, back then, there weren't opportunity funds. People weren't standing up SPVs. You know, I spent time with Josh Kushner when he was raising his first fund. He was talking about, you know, ultimately running billion-dollar funds. We were a little bit too disciplined, perhaps, where we didn't— we really wanted to have people play in the sandbox of seed, and so did not invest with Josh. Did not invest, you know, in Ribbit, Mickey Malkoff's fund. You know, that's like a 50x fund. So, you know, I think perhaps I was a little bit limited in how I was thinking about it. So exactly, you know, should have thought bigger. But, you know, the market's grown, obviously. And there are probably 2,000 seed funds now. And, you know, we're investing out of relatively large vehicles.

So, I mean, 2,000 seed funds is so —so much smaller of a pool than the broader startup ecosystem. And I'm wondering about what the day-to-day looks like. If you're familiar with a venture capital fund that might be having a founder stop by the office every hour on the hour, every day of the week, and then partner meetings, and they might be taking thousands of meetings over the course of a year, what is your firm's day-to-day? What is heartbeat of the firm look like?

Yeah, well, you know, just give everyone a sense of how we invest. We want to be the lead investor, so we're the largest LP in, in over 80% of our funds. So we work very closely with our fund managers. We're always on WhatsApp, we're talking to them, we do monthly calls. Um, I would say also one way to think about this is, you know, it's similar in, in early stage versus late stage investing. Late stage investing, there's a finite set of companies that, you know, investors want to be in. At the earliest stages, there's an infinite number, right? Because new companies are being started every day. So that actually transfers as well, or translates to what we do. There are always new funds being created, whereas like if you look at the Sequoias and Excels and Index and Founder Funds of the world, that's a finite number that LPs try to get into, whereas we're actually discovering new fund managers. Sure, sure.

How many great new seed funds are born every year? Is it like 2? That's because I think— because when you think about— when you think about like venture investing, when you look back throughout history, there's like very small number of companies every single year that really matter. And you got it. You got to get in those companies. And then if you look at all the venture investors that actually break out and build big platforms or just deliver really great results year over year or fund over fund, a lot of them got into those 10 companies. And sometimes all it takes is really getting into one in a significant way. And that's what allows their career to blossom. But I'm wondering when I, you know, we have 6 companies a day on to announce fundraisers, probably on average, sometimes a little less, sometimes more. And venture feels so competitive. But when I really narrow in and look at, the seed market, like true seed practitioners, it actually in some ways doesn't feel that competitive because I can kind of clock these sort of rising stars and I just know, like I have a good intuition, like this person is— I don't know if they're going to back like 2 out of the 10 next breakout companies, but I know they're going to back at least one and they're going to break out. But I'm curious how you view the market.

Yeah, I mean, with a fund, obviously you get 20 to 30 shots on goal. And the idea is that we're indexing on fund managers that have access to amazing founders. And, you know, one good example of that is NIO. You know, Olli Partovi, you know, he was the first check into Cursor, first check into Kalshi. He has Cognition, he has Deal, he's Ramp, you know, amazing track record. But he had a sourcing engine. You know, he was created— he created this Neo Scholars Program. So he was going to Harvard, MIT, Stanford, CMU, all these different places to identify the top CS students. And, you know, I think right now we've been investing along this thesis that there's an arms race for younger founders. And part of that is AI-native companies, small teams can actually generate substantial revenue. So the next round is actually a growth round. And so, you know, that actually translates to some of our fund managers. That really focus on finding young founders. So like a good example would be Carlo and Coco at a fund called Nova. And they spend, you know, they're, they're 25 and 23 years old. Their third partner Henry is 19. You know, they spend a lot of time with kids in college. We have Corey Levy at Z Fellows, you know, all over the college campuses. Um, and you know, Josh Browder, he's a Thiel Fellow and he, um, You know, he's on the selection committee, so he gets access to this. So you're absolutely right. Venture is a power law game. I think with fund investing, they have more shots on goal. And the other element that dynamically is that, you know, one fund may be good, but the next fund actually might be better. And so it's multiple layers. And so what we have to do is track who are they investing in, how these companies are performing, and then decide whether we continue on with them or not. And NIO is a very good example of one that we have continued to invest in since fund 1.

If you want to be the anchor LP in a new fund, you're excited. What does it actually take to win that allocation? Is it different than winning a seed stage venture round for a startup? Identifying value-add or strategic advice? Like, what is your pitch to new fund managers?

I imagine it's like, there's way less scarcity, and there's way less urgency, right? That's absolutely correct.

Yeah, I mean, funds are raised over a period of time. They're not raised in a week, so there's not competitive term sheets, et cetera. I think one of the things that we benefit from is that we know what we want. We know what to look for. We have good pattern recognition. So like with Kirsten Green, her first fund, $40 million, we committed, we were the first to commit. We did $10 million and she was off to the races. And I would say that because of the 16 years of pattern recognition, we kind of know what we want in a fund manager. And again, it's indexing on people who have amazing access to tremendous founders. Obviously we wanna see some picking ability or proven picking ability. So we've never invested in a first-time investor, but we've invested in plenty of first-time funds. And then I think, you know, we think that networks and shelf and domain expertise have a shelf life. So you could have been like the VP of whatever at Google, you know, 10 years ago, That's not as relevant today. And unless someone has hustle, and they're building on those networks, and they have the intellectual curiosity, you know, I think that's what we also look for, is sort of like the it factor.

Yeah, are you, so, maybe to try to repeat it back to you, is like volume of deal flow and access your preference over like just raw picking ability? 'Cause when you think of like Z Fellows and Neo. Sure, they clearly can pick great companies, but it's also they just have like insane— they have insane access, right? They've built these sort of like pipelines of talent and that feels almost easier to bet on. But then you have other investors who just like clearly know how to pick winners. We have a buddy who like, I think the first two companies he ever angel invested in, like both became unicorns. And so he has like clearly has access and and picking ability. Yeah. And a little luck, but you definitely need that as a VC.

Yeah, I mean, luck is definitely part of it, but you gotta be in the right rooms. So we're investing in this one guy. He worked with Nat Freeman and Daniel Gross. He's a very smart person. I can't mention who he is because he's still fundraising, but, you know, he's someone who has the intellectual curiosity. He's seen what great could look like. He's learned from really good investors. And he's in the right rooms. Now, do we know if he's going to be an amazing fund manager? No. But he's got the ingredients there. And to your point, because there are so many companies being formed, you've got to be able to have some sort of competitive advantage, some sort of discernible edge in finding these and accessing these founders. You know, and so Carlo and Coco, for example, have that. They have the hustle. They're in the right rooms. They have the right access, not only just at the founder level, but also, you know, like with Sequoia and the downstream capital. Mm-hmm. Jordi?

Do you— how much do you value if someone's a former founder? Because a lot of people like to talk and say, oh, yeah, former founders make such good investors. But when I think about it, some of my favorite investors across stages have never started a company. They've never had a job other than just looking at deals and trying to pick good ones.

And that's it. Yeah, for sure. Like Mike Moritz, right? Legend. Was a journalist, right? And Bill Gurley, he was an equity research analyst. But I will say, at the earliest stages, a lot of our of fund managers are actually ex-startup people or operators. And that's because, you know, if you're a founder, you want someone who can actually help you. I know it's a total VC meme that, hey, how can I help you? What kind of value can I add? But I think at the earliest stages, they do— founders do want that help, even the best ones, although they probably don't need as much. But if you look at late-stage investing, they're typically ex-investment bankers, consultants and lawyers. So there is some sorting. And I do see, we do see a lot of ex-founders. We actually have current operators, like we're invested in Ahmad's fund, you know, CEO, founder of Mercury. And that perch gives him really great perspective. And he's a founder magnet.

People want to work with him. Yeah. Can you give me a little bit of history on how venture capital alternative investments became attractive to LPs, endowments, universities. We often talk briefly about the Yale model. How real is that as a story that gets told? What were the other key turning points in endowments sort of waking up and starting to allocate towards venture capital?

Yeah, I mean, David Swensen at Yale, legend, you know, he obviously pioneered the endowment model of having significant exposure to private markets. I think 60% of their endowment is private markets, including private equity. But I think 25% alone is to venture. And, you know, you mentioned a word that I think describes venture. It's about stories, right? I mean, if you think about asset allocation and like, oh, you know, small-cap value investing or, you know, these public funds, the standard deviation of returns is pretty tight. In venture, because of what we just talked about, you know, power law, you know, a handful of companies can generate most of the returns. And so, you know, I think a lot of endowment and institutional LP types get attracted to those anecdotes. You know, I think, you know, for kids, you know, the Facebook movie actually inspired a lot of people not to just go down the gold Goldman Sachs, McKinsey path, but try to do something new. And so, it is narrative-based, it's anecdote-based, but when it hits, it really hits. I mean, I don't think Neo will be upset for me saying this, but they had $4 million into Causie, it's worth $1.5 billion.

Wow. Seriously. Yeah, that's incredible. Yeah, wow.

That's wild. He's goated. Going to the Midas list. The— another question for you. How much time, how much time do you spend looking through a fund's portfolio and trying to apply or understand what you're like a real, like, fair value to different assets? Because as, as an angel investor, I've done like 70-some-odd companies and there are companies out there that I'm up like, you know, 10, 15x, and I believe the company is probably a zero, right? And knowing the way that the venture game is played, there's a lot of, you know, I'm not in the venture business, right? So, I don't have to report to anyone. I'm just like, I do it for fun, and I enjoy learning from the process. But I know there's venture investors who are out there in the same exact situation, and they're not exactly probably like raising a hand and being like, you know, Michael, like, I know I'm up 15x here, but it's— I'm probably getting wiped out. Yeah.

I mean, there's a couple of things around that, you know, like all the SaaS companies and vertical SaaS companies in 2016 to 2022 before ChatGPT came out, you know, we call those the messy middle. Those are companies that, you know, raised probably at 50 times revenue you know, maybe at $1 billion or more. And today they might have $100 million of revenue growing 10%. You know, you look at the SaaS apocalypse, you look at the rerating of software multiples to like 3.5 times. You know, those companies are probably at best worth $300 to $400 million. So the question then becomes, are— have our fund managers— and everybody has those companies in their portfolio, you know, but, you know, have the fund managers been proactive in marking things down. We've had fund managers for the most part be proactive and mark things down. We've had other fund managers that haven't. And we know that those are, you know, unrealistic marks. The other thing that we do, just to give you a sense of this, is when we diligence a fund manager, you know, for the first time, we, we are very founder-centric. So we'll call, you know, all of the founders that they've ever invested in and really get a good sense of like, you know, can this person help you or how do they help you? But also importantly, and this gets into some of the inside football, you know, a fund manager has to come to us with a plan, right? Portfolio construction. We're going to invest in 20 companies and invest $1 million in each. What we do is we assess the credibility of that. So if you're an angel and you're getting $25K into a bunch of companies, that's one thing. But if you're running an institutional fund, and you're saying to your LPs, I'm going to get $1 million into each company, that's what we want to hear from the founders. So we run a very founder-centric diligence process.

Yeah, my best ever investment is roughly at 150x to 200x right now. And I would love to think about a world where I could have— I put $25K in. I would love to think about a world where I could have put a million, a million in. But like, honestly, at that time, this was a few years ago, $25K was the— like, I was begging for $25K. Yeah. So I could never go out and be like, yeah, like, yeah, there was something—

there was someone else.

They wanted to give me a million. I turned it down. I was like, no, it was like I was getting the last slug. And I'm very grateful for that. But, but yeah, that, that, that's—

you got to fight for that allocation.

It's so interesting to think about. Think about the paths into, into building.

I have those regrets too. Like, I've invested in 2 of the 3 best venture returning funds ever. We're not in lowercase one, but I— we're, you know, we're involved with Lower Carbon now. And I've known Chris Sacca for probably 12 years. But the other 2 funds are Founders Fund II, which I'm in personally, and also Blockchain Capital 2, which is Brad and Bart Stevens. So that FF2 is approaching 3. Yeah, Founders Fund 2 is probably gonna be a 300x fund. I think Blockchain Capital right now is a 157x fund, and it's on its way to being 250. And Chris Sackville, of course, was 204.

So, you know, I didn't realize FF2 was that good. SpaceX. It's nice.

It's still, yeah, it's amazing. No, it was a lot of— yeah, yeah. And about having more in those.

Yeah. Wild. But yeah, thank you for coming on. Thank you so much for talking about the anti-portfolio, the wins, the losses. This is like what makes a great interview. So thank you so much. It's been a lot of fun. Yeah, I appreciate it. We'd love to have you back on and talk more about venture, the different landscape, how rounds are changing, how funds are changing.

Yeah, next time. What I think we would appreciate because you have a bunch of interesting data is like a regular interview where you're talking about the current actual market dynamics from an LP standpoint, because like— Super interesting. —getting that kind of read, all the venture stuff and the venture deployment is a lagging indicator typically of LP activity, historical LP activity. So this was great. I appreciate it.

Yeah, thanks for having me on.

Yeah, have a great rest of your day. Have a great rest of your week. And we'll talk to you soon, Michael. Thank you so much. Let me tell you about Cisco. Critical infrastructure for the AI era unlocks seamless real-time experiences and new value with Cisco. And our next guest is Joon Sung Park from Simile. He's back, co-founder and CEO with a huge fundraise. Joon, how are you doing? Welcome back to the show.

Hi everyone. Great to see you all.

Great to see you. Dude, you've been cooking. You've been cooking. It must be, it must be about a year since you were on.

I don't know. It's blown, it's blown by. But, uh, congratulations. Why don't you give us, uh, the news first? Because, uh, it's the first gong hit of the show. I gotta warm up the gong and then you gotta tell me what happened. How much did you raise?

We raised $200 million at $2 million.

Thank you. So where is the company today? Take me through the footprint. How big is the company? What really unlocked this new round?

So the last time I was at TVPN, I believe it was about 5 months ago. Since then, the company, literally the team itself has quadrupled. And one of the amazing things that we're seeing here is the pure market demand. The Simuli is a company, it's an applied AI lab that is creating foundational model of human behavior. Where we create models that can predict human behaviors across different market segments in the future in multi-agent simulations. And this particular area of study and model is seeing extreme amount of demand across retail. So we've been working together very closely with CVS, but other Fortune 10, Fortune 50 retailers, but also in finance, in some of the largest financial banks that are out there today, and also in CPG companies and more. The market demand has been incredible.

Demand for AI products is insane everywhere and clearly no different here. How are you grading yourself? Because it sounds like this— this feels like the product, the kind of product where like the value prop, if the product works, is like almost too good to be true, right? Try to understand people's future actions so that you can better serve them as customers and all that kind of thing. And I feel like humans want to believe that, you know, they have free will and like, you know, you couldn't possibly predict my next move, June. I'm too unpredictable. I'm sure you disagree, but like, how good, how good is the product today and how much better can it get? Like from a, from an accuracy standpoint? And, and, and on that, like what, what gets a CVS or one of these big logos confident in your product where they're actually changing their roadmap based around your data?

That is a great question. So there's a technical side and the market side. On the technical side, today we may have already seen many models that are trying to be amazing reasoning models. So many of the labs are working on this. So they would go to Mark Horowitz skills of the world, get expert data in coding, natural sciences, mathematics, these are trying to solve the objective problems in our lives. Similarly, it doesn't actually care about any of that. The models that we create are models that are trying to be as human as possible, to actually represent the human values, preferences, taste, all the subjective half of human brain. So what we do is we get into partnership with places like Gallup of the world that are amazing at creating a representative sample of human population. And we try to understand what is the real behavior and distribution of our human population. So really, on the technical side, the success here is can we predict that distribution? Can we predict people's behaviors? And can we represent them at the scale that we want? The vision here is to actually represent all 8 billion people along the way. And we're very much going aggressively towards that momentum. And right now, we are representing tens of millions of people as we speak. Yeah. So that's the technological side. How much—

yeah, yeah, but continue, continue.

And I have another question, but continue.

And of course, on the market side, this technology is now having real impact. So we've been in deployment. So we're obviously a fairly young company. However, the simulation technology has been in deployment in some of the largest markets in the world, and companies are making real decisions. They are usually starting from actually replicating what they know to be ground truth. The studies they have run, the behaviors of their customers they're aware of. Now we run them in simulation, we see that they replicate with extreme accuracy, and once they replicate, we go on to test new markets to basically help them test pre-deployment testing on new markets, new product message testing, and actually show ROI on those predictions.

Uh, okay, very, very cool tool. Sounds like it's working. This feels like the— there's, there's one scenario here. The sort of sad scenario is like big companies get access to the crystal ball that allows them to just like compound their scale and their growth and their customer bases. And, and they have access. You're building like predictive superintelligence or predictive intelligence. The biggest companies in the world have access to this. Meanwhile, the like long tail of, you know, Shopify brands and smaller companies are just stuck, you know, guessing. I'm super curious, do you think there's a product to be built that, you know, the long tail of companies can leverage to get access to that same intelligence? Because I feel like a big company can afford to spend $20 million launching a new product and like swinging and missing. So they have the advantage of scale and being able to take different shots on goal and they have this sort of like base of successful products, whereas you have a young startup that's just trying to get off the ground and you have maybe 1, 2 shots to make something. You know, thinking about consumer brands, if you're a consumer brand and your first or second product aren't a hit, like you're probably not around to launch the third. So I'm curious about how many people you can get this to. So this is a great question.

I would actually look at this as the way to democratize access to people. If you look at how insights really operates today, if you're a large enough company, you have a budget, and you have access to your customers to go after those customers to better understand them, to actually talk to them, get their feedback. But especially if you're a younger company that is small, that doesn't have a big budget, that is very cost prohibitive in many ways. Simulation is the way to get access to people in a scalable way. So it is actually a way to democratize this function. You can also think about this from the people's perspective, people who are represented by simulations. There are so many decisions that are being made today where we would love to be able to listen to people and actually see and get their feedback. However, in practice, it's very difficult. You cannot actually go talk to millions of people every time you need to make a decision. But if you can create simulations of people, then that is representation at scale. So in the grandest sort of scheme of Simile, what we are really trying to achieve is to bring human voices to the rooms where the most important decisions are being made for our society.

And what does that actually look like in practice? Is that like people are developing a product? Again, I'll use like a big CPG company. They're developing a product and they can actually like pitch effectively, like, I'm wondering how much this is like text-based right now versus actually conversational. Like, can you simulate talking to your customers? I'm sure the YC folks would laugh at this, like, stop simulating talking to your customers and just talk to your actual customers. But it feels like very valuable— you know, there's— every founder's had the experience of, like, having a big customer meeting and it either going great or not going great. And sometimes you wish you could have, like, just done a bunch of simulations of that conversation before you actually went into it. So what is this actually like? How are people interacting with the product now? And where will they— and what are the other kind of interaction formats of the future? Truly, right.

So our customers come in, and what they see is an interface. That allows them to filter down to a population of their interest. So they can describe the population to be whatever they want it to be. Let's say male living in California in their 30s, and then they can literally ask any questions that can be behavioral, environmental questions.

What about male podcasters in their 30s in California?

You know, you must have guessed, you know, I simulated both of you before coming on today.

You did that last time. Last time. You're like, we've had this conversation thousands of times.

This is my thousand first time I'm having this conversation with you all. Yes. Yes. But our customers can literally filter down to any population of their interest and they can ask questions. It can be survey form. They can also send images if it's image asset, videos. If it's a video like advertisement, it can even be a product demo, whether it's a Figma or real website. And our agents will actually traverse through those websites and Figma mockups and basically give feedback once they have seen it. Now, that's how the product is being leveraged today. But one of the things that I also find to be quite exciting is as agentic development goes much more prevalent, the cost of production is going down every single day. Now, the real alpha in that case really is to understand What do people actually care about? We can generate 10,000 variations of this product. Which one actually matters to people? So in that way, Simile also has an opportunity now to actually inform not just human decision makers, but also agentic decision makers who have delegated power from real humans. So this is done through MCP API. These are the kind of products that are also getting built at Simile.

Mm-hmm. So yeah. Oh. Okay. Very interesting. Thank you so much for coming on the show. Congratulations on the progress.

Really, really awesome. Yeah, one of the most— I love how sci-fi the company is, but also grounded in practical business.

Yeah, objective. That's a great way to put it. Yeah, it's like very, very sci-fi, but like then it's like CVS is a big customer driving actual value, which is great.

Next time you come on, I'm sure it'll be soon given, given trajectory and the trajectory. But I want you before the conversation to predict, you know, 10 questions that you think John would ask and that I would ask. And then, and then let's, let's compare at the end. I have a feeling you'll be able to get at least like 60% accuracy. Yeah, but this is great.

Well, thank you so much for coming on the show. Congratulations. Talk to you soon. Let me tell you about Shopify. Shopify is the commerce platform that grows your business and lets you sell in seconds online and store on mobile, on social, in marketplaces, and now with AI agents. And our next guest is in the waiting room already. We have Karan Punjra from K2 Space with an amazing update. How are you doing? Here he is.

Good to see you again.

He's back. You're back. Welcome back. Give us the news. The gong's warmed up. I want to hit it again. Yeah.

So we just announced a $500 million round.

Woo! Congratulations.

Congratulations. So for anyone living under a data center here on Earth, what's going on in space? What's the latest on the space economy? Anything happening? Any big, any big deal?

Not that much. It's been a quiet year. You know, a lot of like seed stage investments, nothing much going on in space this year. But no, yeah, we started K2. We want to build giant satellites. Since the last time we talked in December, we flew our first Giant satellite. Uh, we called the mission Gravitas, if you guys remember, and, uh, it's gone well. We're 120 days in. We proved that we could do a lot of really hard things, and, uh, yeah, this round comes on the back of that.

What was the very first satellite that you thought about putting up, and in terms of actual use case? Like, if I go back to the very first deck or memo you put together, obviously there was a vision for building satellites, putting them in space, but were you thinking Were you thinking cameras or internet or data centers or like what was the earliest prediction?

So when we started the company in June of 2022, um, our pitch deck was all about Starship and it was all about like building physically what's the largest possible satellite you could build using Starship. Yeah. And it was, uh, I mean, we were thinking about data centers, we were thinking about orbital fuel stations, we were thinking about giant telescopes, like, uh, and our pitch deck to show you like how wrong we were. We were like, oh yeah, in 2024 we'll be using, you know, Starship on like a monthly basis. Yeah, a little bit wrong on timing there, but, uh, yeah, it's all right.

And, and, and those delays, I mean, there have been delays, everything. I mean, the video of Starship landing that dropped like a week ago is incredible. Everyone's like, you know, I can't believe this isn't CGI. Um, are, are you, are you set up, do you set up your business to be insulated from those delays? Is the overall like space economy economy broad, broad enough and diverse enough that at this point slight delays, everyone sort of adjusts, all the different actors from employees to investors, no one really freaks out when there's like a slight delay there because everyone prices it in? Yeah, we got fortunate.

We had a few, uh, a few very smart people tell us in 2022 maybe don't go full send on Starship. Okay. Thankfully. And, and so we built something that's compatible with Falcon 9. Our entire business— like, we announced, um, that we also crossed $1 billion in signed contracts. All those contracts are tied to Falcon 9, right?

That's a big number. Um, all right, so I have heard— I think we've all heard the pitch of, uh, lots of small satellites, potentially data centers network together. We've all seen the how well Starlink works. It's an incredible technology and it's an incredible technology because it works with Falcon 9. It also works with Starship. But is there an actual use case or a world where you see basically the Starship fairing filled with just a single satellite, some huge thing that goes up, stays there and it's massive and there's benefits of the scale to that degree?

Yeah, I think for us at least, we're gonna use it for proliferation, like lots of big satellites. Yeah. I think there's probably some military use cases that might get interesting. Where you go even bigger and maybe fewer per Starship. But for the most part, we're going to stick to like, okay, let's put up like 50 of these in a Starship and think about how to max out how much power per satellite and power per launch vehicle. Sure. Um, maybe on the telescope side, like, as you start to get like giant, giant telescopes, starts to get interesting.

But even those with the Hubble, like, you can usually like assemble things in space, which sounds even more complicated than anything else, but, uh, but it has been done before. Like, the ISS didn't go up in one big piece. It was assembled over time, which is remarkable to think about. But congratulations. Walk us through the energy density or energy, the power output that comes from these satellites, because there's this big vision that Elon's been very good about laying out. The timeline, you know, who knows, might slip or whatever. But there's this idea of like gigawatts in space that would be meaningful. To the AI inference market. But there's clearly going to be a walk, crawl, run. Starlink has a certain amount of power. We've seen that that can work. But what is the scale-up and build-out of just getting more energy in space before you start running into crazy heating and what the solar capacity can be?

Yeah, I mean, power drives everything in space, right? If you think about communications, power drives how much throughput you can put down on the ground. It drives the strength signal. If you think about compute, power drives how much compute you can host. It is like the fundamental metric that kind of ties every development to. And so, um, you know, I was telling people, like, 4 years ago we started this company called K2 because we wanted to help make humanity a Type II Kardashev civilization, right? Like, one that's able to harness massive amounts of energy, right? Um, our hallmark is a Dyson sphere. Yeah. At the time, I had to explain, like, what is a Kardashev, right? Like, nobody knew what that was, and now everyone Elon is like, I know exactly what that is. I know how it works. And so for us, like, the whole idea is keep pushing the bounds of power so that we can have even more compute, we can have even more comms. And over time, like, every single infrastructure play we're going to want to do in space is going to tie back to power, maybe a bit of mass as well. But like all of those require going, you know, building bigger effectively.

On heat radiation in space, that's that's been sort of one of the sources of like fear, uncertainty, and doubt around the data center in space plan. There's— I've seen really, you know, thoughtful takes from scientists on both sides. My question is more on where that intellectual property, that R&D will happen. Because if this were 50 years ago, we'd probably be like, it will be done at DARPA and NASA, and it will be in the public domain, and every company will be able to benefit from it. We're now in this world where some of that might happen at SpaceX and that might be sold or licensed. But are you going to be working on that particular technology? Do you see multiple companies creating standards around it, or is it just sort of a horse race between every company where everyone will have their own solution? Maybe the best one wins. How will that play out?

Yeah, I think, I think the evolution is going to be— there's a conventional way to solve the thermal problem, even at the 100-kilowatt class satellite, right? Like you can do it with the existing technology. It's just an engineering problem more than a physics or R&D problem. Yeah, over time I think we're just going to get more optimal, and we're also going to be pushing up power more and more where everyone's going to try, like, you know, the new science, right? And so I do think you're right, like, we're going to see a massive amount of capital investment invested in managing thermal in space in a way that was never going to happen in a world where NASA was the only one pushing, you know, the R&D forward. I think it's gonna be pretty cool. I think we'll see, you know, like, how different strategies play out. For now, the next 5 years, I think it's gonna be relatively conventional. Like, there's not going to be— it's just engineering that's like solving some problems that, that should be solved.

Yeah, uh, I feel like a lot of, uh, maybe it's all hard tech, certainly space companies, they sort of go back and forth between the dual-use, uh, opportunities. They'll do some, uh, government work for a few years while the commercial sector sort of catches up, then they'll flip it and all of a sudden the revenue will be 90% commercial Are you on that sort of roller coaster as well? Do you see you— do you see the company going through phases of, well, we're doing a lot of government contracts, but we ultimately want to have a big commercial business or vice versa? How do you see the tradeoffs there playing out?

Yeah, we've always seen it as like both, right? Like I'm going to be about 50/50 in our business. Like the first big contract we announced this year was a massive commercial contract for 30 satellites that we're going to deliver in 2028. Yeah. The second contract after that was partnering with Anduril on Golden Dome. Sure. So for us, like, it's the whole goal is to be able to build this like super performant platform that we can use for national security and commercial. Yeah, yeah, that makes a lot of sense.

Do you think hyperscalers and big telecom companies over time will feel like they need to in-house space in a more meaningful way? Like right now it feels like having a specialized partner makes a lot of sense, but then as space becomes a more important part of, like, let's say, cloud and, and on the telecom side, it's just like general communications. Like you'd imagine them thinking like, wait, we should try to buy a company like K2 because this is too important for us to just be entirely reliant on an external partner. I can see it going both ways, but I'm curious your view on it.

100% is going to be a mix, right? If you look at like how comms and compute happen on the ground, trust really, right? Like Meta is rolling out their own deep sea fibers, right? Yeah. You know, Google's partnering with certain neo clouds in a certain way. I think the exact same thing is going to happen as we take those applications and put them in space.

Yeah, it is funny looking at the Mag 7, I guess Mag 8 now if you include SpaceX. Like if the question is just like going up high, doing things off of Earth, like Google has the balloon project.. And Facebook was doing solar-powered planes for a while. Bezos obviously has Blue Origin and Amazon, not directly linked, but there's a play there. And so the big tech companies are certainly waking up more and more, doing deals, but also having stuff in-house and outside. It's a fascinating market watching it evolve.

Yeah, it's interesting to compare launch to just the frontier labs too. A lot of people realizing like, whoa, it's kind of— It's interesting not having a frontier model and being reliant on another partner. And then on the space side, it's like, hey, we don't necessarily want just one highly competent launch party. Yeah. Or sorry, launch company. Yeah.

So and we've seen that with Rocket Lab and a bunch of other companies in the space economy.

But yeah, I think that's the coolest part about this, right? Like we're seeing like a purely capitalist reason to go invest tons of capital in things like launch vehicles. Vehicles. Yeah, right. Like, that's something that didn't exist 5 or even 10 years ago, and, you know, outside of SpaceX, right? So I think that that's probably like one of the most fun dynamics of this whole orbital compute dynamic that's happening now is everybody's like, wait, to your point, like, hey, launch is just like a, you know, a model, and if I'm the only one that has it, I'm going to be in a lot of trouble.

Yeah, yeah. Well, I can't stop thinking how you're kind of office studio mogging us right now. We have a pretty big space here, Trust me. You have a K2 space. Yeah, it's amazing.

Go bigger. Go bigger. Go bigger.

Excited for the next one. Great to see you, and congrats to the team on all the progress.

Yeah, thanks so much for taking the time to come chat with us. Have a great day.

Cheers.

We'll talk to you soon. Let me tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. Just do it. Stop making excuses. Up next, we have Vlad Tenev, from Robinhood. He's the co-founder and CEO, back for the third or fourth time. Vlad, how you doing?

Welcome back to the show, guys. We got new sound effects.

We got new sound effects. Great to see you. How's it going? The market's in turmoil. There's obviously crazy news with situational awareness, but how are things going in your world?

Uh, things have been strong. We announced earnings and we had a really strong quarter. Record revenues, $1.31 billion total platform assets, all-time high over—

Thank you.

Yes.

And we had more records on trading. So records again with equities, options, prediction markets. And we launched Trump accounts as well as Robinhood Chain and and tokens. So we're doing a lot of stuff. I think the thing that I'm most excited about is, you know, wrapping everything together. I don't think any company is pushing broad individual ownership as, as much as Robinhood is. We— I think that's important not just for individuals, but also on a societal level. You know, I think, I think we're in a very fragile spot right now and plugging more people into owning real assets, giving them more of the upside, more of the benefit, could lead to a more stable and prosperous society.

How difficult is it to actually— when you say unify everything, I imagine that there are regulatory considerations. There are also just UX tradeoffs that feel like— I don't know, it feels like it's more human taste than AI. Feels like it's not, it's not so much like the code that goes into the app, but real decisions about the hierarchy of different products in your app on the website, for example. How much of your time is spent thinking about the, like the Robinhood super app, like how you actually design these things? How human is that versus you can sort of A/B test your way there?

We spend a lot of time thinking about that. And you can't A/B test everything, right? Like you can't A/B test the name of the product, the front door, what's on the App Store pages. Yeah. So yeah, I'd say up until a couple of years ago, we were very much trying to rev up the product engine, putting all the pieces in place. Now we've got so many pieces. We launched 13 new products at our previous event. The world is flat and an increasing amount of time is spent on kind of this coordination and how many apps should we have? The main app, like what goes into it? How do we surface the right things to the right people? How do we push personalization? So yeah, it's, it's— I spend a lot of my time on that.

How is, how is— so we've been in this AI, you know, the bottleneck cycle, the The age of bottleneck investing is probably not over, but symbolically maybe over with the situational awareness situation today. But something I think that there's a lot of American retail investors that for the first time was like, oh wait, I want to own this Korean stock or I want to own this Japanese stock because this toilet company is in the bottleneck path. How is that changing how you're thinking at Robinhood? Obviously, you want to make sure that if there's an asset that investors want to buy, like, your job is to make sure that they can do that. But markets are complex and, you know, all these regions are quite different.

Yeah, I mean, I have many thoughts. I think that, you know, we were hearing from customers that they wanted Korean stocks, right? And so international stocks were one of the features people wanted. But I don't know, it was probably like top 15, top 20, right? It wasn't one of the top features. And then suddenly, maybe last quarter, every single conversation I would have, people are like, when are the Korean stocks coming? Why can't you bring them faster? Right? And then, and then you saw some of them started getting ADRs listed, leveraged ETFs. And I think I had two minds of it. One, obviously we intend to offer every asset we want. If people want to trade it, we'll offer it to them to trade. But also when you start hearing that everyone wants Korean stocks, it should raise alarm bells that maybe something could be slightly overheated, at least temporarily, which I think is what ended up happening. I think it's interesting too that Ken Griffin is in the middle of this. You know, a lot of respect for Ken Griffin. Just, you know, you can tell he has pure love of the game, loves what he does. You know, maybe, maybe in the way that a povero Pavarotti is the art of the opera singer, and Trump obviously makes deals. Ken Griffin provides liquidity in the most challenging and uncertain of times. So, yeah, him being in the middle of this, buying the Constitution. Yeah, I thought that was very entertaining.

I view him as like a shark, like a very large shark, like a megalodon that has an important role in the ecosystem where sometimes he, you know, is, you know, you maybe don't want to be—

Well, this is just being fed on by the shark, but it's like the final boss of tech stories where the ConstitutionDAO— all the energy was intact. It was this thing that happens. And then at the last second, it's like, let me introduce you to Ken Griffin. And then the same thing with the situational awareness story. It's like purely a tech story for, you know, months and months and months in the domain of Twitter and podcasts. And there's like 1 or 2 Wall Street Journal articles about it. But then all of a sudden, it's Ken Griffin at the very end.

Yeah. How— about a month or 2 ago, there was a— like this sort of narrative bubbling that like the West Coast had just like eaten the East Coast and like the East Coast was having less relevance.

Right.

And you could see this in the performance of all a bunch of the hedge funds on the East Coast. You look at their performance relative to Leopold's and you're just sitting there like, you know, what is— what's— what are they doing on the East Coast? Are they just sort of asleep at the wheel? And then, you know, the events of the last 24, 48 hours, or at least since Friday, have shown that like, yeah, maybe the East Coast has learned a lesson or two about the way that markets work in these cycles. And I feel like Robinhood's been in a position where it's very much a West Coast company to me, but at the same time, you guys have, I think now at this point, probably more respect than any West Coast tech company for traditional finance and and that whole world. So I'm curious how you— did you ever kind of like buy into that narrative that tech was eating finance, or did you always see it as just wishful thinking?

I mean, I think certainly there's some truth in that technology, which had at its epicenter Bay Area, you know, Silicon Valley, has disrupted lots of industries. I never really looked at it as a coastal thing. It's not like, you know, rap music or anything like that where you're kind of in your neighborhood, you know, offering, offering the technology. Everything's fully global. And, you know, I'm sitting here in New York. Usually I'm in Menlo Park. We've got offices all over the world. New York's probably our second biggest. And now it's, it's increasingly a global thing. I think a lot of these people are— a lot of the hedge fund folks are working remotely and now out of California. I don't know how much of it is actually location-based.

Well, I think part of the interesting story for— we were talking with Shkreli earlier and he was walking us through, if you're a hedge fund that's getting margin called, like what that's actually like. And it's like for being a technology-focused hedge fund, it's still the irony of it all. And even an AI-focused hedge fund, the irony of it all is like it sounds like if you're a hedge fund that's getting margin called, you're spending a lot of time on the phone with your prime brokers and you're trying to like— it's not really as much of a technology problem as like you're working with a lot of people and a lot of different buyers.. And there's all this game theory of like when, you know, trying to exit positions without letting other funds know that you're, you know, it just seems like this. Yeah, it's like a very fascinating, like, when the stakes are high, right?

It ends up being down to relationships. Yeah, I think, yeah, I think, you know, algorithms and automated processes are great for the typical case, the 99% scenario, but I think humans still have to get involved at the extremes.

Yeah. It feels like retail crowd for the most part is extremely— I mean, it's all just very power law driven. So, I would imagine even though oil has been a super interesting market this year, it wasn't quite as interesting or didn't have quite as much attention as like the bottleneck trade. And certainly like, you know, crypto has been— has probably gotten less attention this year than many of the years prior just because it was like, well, if you can buy some stock that's trading at $100 million and it can go up to $2 billion in the span of a couple of months, like that's what gets people really interested. Is that, is that, is that, is that track with, with what you guys are seeing? And like how on the commodity side, like what, what are you guys doing on, on that front? Is there a lot more things you can do at the product level or did you, had you already sort of established like is, is trading oil on Robinhood as good as it is, as it's going to get?

Yeah, I think there's, there's obviously more we can do. We have great futures trading products. We have a great mobile experience. We have a trading ladder. I don't know if you guys have tried it, but it's like very tactile, easy to use, particularly on mobile. Futures business has been, has been growing quickly as well. One of the things we announced this quarters, we've got 13 business lines. So lucky number 13, generating $100 million in annualized revenue or more. So we added 2 more this quarter, Robinhood Legend, which is our pro trading platform. Uh, and, and that a big part of that is actually futures. Futures traders love the desktop interface, and, um, it's just much easier to see the chart and, and have the news and, and everything all in one place. Robinhood Legend got to north of $100 million annualized, and the Robinhood Gold Card crossed into $100 million as well.

Yeah, the last number I remember was 9. At some point last year, you had 9 business lines doing over $100 million, so added even more. We added 4 since then.

I had this analogy that it was like adding cylinders to a high-performance vehicle. So now that we're at 13, I'm probably close to needing another analogy. But yeah, it's remarkably diversified.

I think they just got the W16. Or no, sorry, sorry. That's the Bugatti.

Bugatti has the V16 now. Maybe I've got 3 more. Yeah. Yeah. Somewhat related to Jordi's question. It's very interesting that when you identified a new product request, Korean stocks, you were just stack ranking it based on customer demand, not really financial volume. It felt very much like when you talk to customers, that's just what they're asking and it's just maybe showing up in forms and feedback and requests. And I'm interested in other markets that might sort of pattern match to that where there's a lot of money moving around, but it's maybe lower on the priority stack. Interested in how you're thinking about compute futures because that feels like that could be a very big market, sort of insuring data centers and, and, you know, providing, you know, some sort of derivatives market on top of compute, which is a massive market. But when I think about it, I feel like some of those big numbers might just come from, you know, a hyperscaler who gets an insurance contract from their bank when they go to build a big data center complex. And it might not actually be the— like the vast majority of the volume might not be driven by retail at any point in the future. And so I'm wondering how you deal with new financial markets that are going to be big, but you don't see a lot of demand from them. How do you think about reasoning through how you should play in that market?

Yeah, I mean, I think if we have strong conviction, we'll add it even before it becomes a huge asset class in terms of volume. I think we did that with crypto. You know, we added crypto in 2018 and it was many years of next to no volume until end of 2020 when suddenly it just really inflected. So compute futures. Yeah, if there's a lot of demand and if people are trading them and if institutions are using them to hedge, of course, we'll look to add that. I don't know if we're seeing much of that yet. I think the tricky part about that is it's typically a rapidly depreciating asset. So I think those tend to not make for, for very good markets. But, you know, you are in a unique situation where compute on a, on a per, on like a given architecture tends to be increasing in the short term. I don't know how long that'll last, but I think that's, that's rather unique in history. And we'll see if it's the same in, in the next 2 to 3 months.

Can you take me through a little bit more of the story of the Robinhood Gold Card and how it's changed, how you're positioning it, how it's evolving, what's driving the growth?

Yeah, so what's driving the growth is very simple value prop: 3% cashback on all categories, which is much bigger than what you'd get with a typical credit card. Yeah, um, you know, it's market leading. And so when we find that the best products are easy to explain to your friends, they grow through word of mouth, And, you know, if someone asks you, well, why would I use this credit card? You have a very simple answer: 3% cashback on categories. And of course, the user experience is nice and you have virtual cards and family features and we, we make it really good around the edges. But I think the, the clear reason that's easy to explain is a big part of it. So we're now at above 1 million cardholders with the Gold Card. I mentioned earlier, $100 million in annualized revenue for the card business. And last week we started rolling out Platinum. So we have— there we go. Yeah, yeah. We've got like a growing card portfolio. I think the Platinum card is really, really good. We— if you haven't checked out the website, I really just— sometimes I just scroll through the website and look at all the great things that, that we're offering. The Platinum Card is a highlight, I think.

I love Robinhood Social. What's the latest there? I've been seeing some screenshots. It's already providing a lot of entertainment, even for people that are not using the platform yet. But how's it going? Yeah, I've seen those too.

Yeah, yeah. Yesterday was, was a big day. Yeah. So Robinhood Social is something I'm really excited about. It's growing. We're rolling it out. It's not out to everyone yet. And the reason for that is we've just been iterating on all of the details. But building a social network from scratch is pretty complicated, right? You want to— there's a decision about what type of content you want to allow people to post. And at first we started with only trades and we came to the conclusion maybe that was a little restrictive. If you want to give people a little bit more freedom to post charts and things like that, to post comments, maybe news stories, but you don't want to give too much freedom. So we've been iterating heavily. We just added politician trades as well. Which, which have been doing quite well. And yeah, now you're starting to get to the point where you have legitimate influencers on Robinhood Social with, you know, thousands of followers. And we're still rolled out to a relatively small portion of the customer base. So I think we've, we've got good signal that it'll do well and it'll be useful. And yeah, yesterday it sort of like transitioned to people posting Robinhood social content on X, which, which is very interesting. I think the unique differentiator that we have that makes it compelling to people is that there's actual trades and real portfolios tied to the account. So we can combine these two things, you know, real transactions with opinions. And that gives you a primitive that you can't find easily in other social networks.

The same content, you know, you see somebody post on X like, just closed out this position, like, you know, can my— I'm updating my thesis or whatever. Doesn't have the same weight if they are doing that and they either printed on it or, you know, or took a meaningful loss. So it's great content. I have one last question.

You've been very early and very bullish on mathematical superintelligence. Since there's been a whole bunch of conjectures solved, it feels like a total validation of your idea that AI would be very good at mathematical problem solving. How have you processed the recent conjectures that have been solved by various models? How does this update you? Do you have like a next hurdle that you want the AI to solve? Because it feels like I mean, I know people are still throwing like the Riemann hypothesis and P versus NP at it, but aside from that, do you have like an idea or vision of where this goes?

Yeah, I think that's an awesome question, John. So, the next thing is in the same way that I applied my mathematical skills to computer science, you know, I was a math mathematician and then I became a business person. Uh, what we found is that math skills and coding actually go hand in hand. So, uh, what I'm really excited about now is applying mathematical superintelligence to software. So in the same way that MSI can be used to make sure that your math is correct when you have a computer program or a piece of software it could be used to make sure that's correct and that there's no mistakes. And I think particularly now when we have Mythos finding security bugs and you see all the scary stuff like we saw last week with the Hugging Face breach, rather than it being a cat and mouse game of just escalating model capabilities, finding breaches and preventing breaches from happening, Verification and proof that software is immune to these types of bugs, I think, is the future. So you're going to see—

Formal certification of software systems that you use. And there could almost be like a— I mean, you go to those websites, and it's like there's a security certificate at the bottom. And no one really knows if it does anything. But in the future, you could actually land at a website where the entire code base has been formally verified.

Yeah, and now the absence of the security certificate is a red flag. Browsers will block it. I think you're going to see it first in domains where accuracy and correctness are critical. Sure. So you're seeing it a lot in crypto, actually, with crypto formal verification is having a bit of a moment. You're going to see it in semis if you're producing a chip. And, you know, the, the process of producing a chip as you get to tape out and beyond, if you find a mistake, it's incredibly expensive to reverse. So you'll see it in chip design. You'll see it in system software. You know, a lot of software, legacy software is written in languages like C, C++. So yeah, I think you'll, you'll start to see it in these systems languages, critical software. And then from there it'll just as the price goes down, I think it'll be ubiquitous.

Yeah, that's exciting. There's a lot of— there's a lot of fear about the cybersecurity questions, and I think it's great that the mathematical progress can actually apply, even if it takes a couple reasoning steps. And I think people will need to digest it, and then they'll actually have to see it in— the proof is in the pudding. If we go through a whole period where we're like, "Wow, yeah, there haven't been any incidents," even though everyone's been piling zero days of every system, but we're still in a good spot. Very exciting. Waipil.

There you go.

Thank you so much for coming on the show. Congrats. Great to catch up. Always good to chat. Cheers, guys. Have a great rest of your day and we'll talk to you soon. Goodbye. 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. I have one last post I want to go through. Jordi Hays, have you seen Spider-Man: No Way Home?

Absolutely no, not absolutely not. Should I? I think I'm pretty into movies now, but we saw The Odyssey and I appreciate film. Movie—

you're a film buff now. Your film— stop. What have I— yeah, honestly, uh, no, uh, there was a question on the timeline from Rob Felt rewatching— he was rewatching Spider-Man: No Way Home. To prep for Brand New Day, the new Spider-Man movie.

And he says— That is actually insane. What? Right as you said that, a white spider landed from the ceiling onto my microphone. You see this?

Yeah, yeah, I do. Wow.

You said Spider-Man, and this spider— That's—

maybe you are the next Spider-Man.

—this landed. I'll try to show everyone.

Yeah, you might need to turn down the console. Put down your laptop. Swing it out more. Oh, it's really going around. It's on the ground now. Whoa, there we go. Can you see this at all? I don't know if people can see this, but there is a spider crawling on Jordi's microphone. You'll have to really— oh yeah, you can see it in the monitor right there. That's a very good omen. I think that's a good omen.

Anyway, spiders can hear. Yeah, they can speak English.

Well, let's— you feel free to deal with that. I'm going to talk about this. So in Spider-Man: No Way No Way Home, the movie, the prequel to Brand New Day. I think Homecoming is in this series, right? There's a whole series of new, the latest round of Spider-Man with Tom Holland, right? Is that it? Daily Bugle web show scene pops up, and all I can think about now is a question. Is the TBPN aesthetic inspired by J. Jonah Jameson's web web show. And if you look at it, it does sort of look like our show. And so it's a good question: did we see this film? Did Jordi Hays, who is the brand architect of the TVPN aesthetic, watch Spider-Man: No Way Home and say, ah, I like that color, I like that design, let's bring that into our studio? And the answer: no, no, no. Lots of other influences, but this was actually not one of them. I, I believe I have seen this. I like— yeah, we like the color Green. I remember Jordi Hays one morning, uh, we were working out and he's like, we should do green. And I'm like, okay, yeah, that sounds good, I like green. And he's like, no one's done green. And I'm like, that's not true, like Robinhood is green, there's plenty. He's like, no one in tech, no one in tech has ever used green. I'm like, it is a white space in the sense that like, yeah, I couldn't think of another podcast with the green, dark green background. And we did find our own space. We looked at Pinterest a lot for different references, some photos, some catalogs. Ralph, I didn't look at Pinterest. What images were you pulling from? Because I know you had some references. I mean, obviously F1, but just your brain? Just your brain? You don't let much go in there, but—

Certainly not movies. Certainly not movies. But I got to figure out where this spider went. This one landed. It was on the mic. I lost it. I think it's— I think that's a good place to call it anyway. It is a coincidence. That's where it looks like it is. Blue. They're up almost 9%.

And the market is, is, is way up. The Nasdaq said we should have been 7, 8%. Should have been in white, in white suits. But it's a very sad day because we love situational awareness and they're going through a really hard moment. We're wishing them the best, hoping that that, you know, good things come out of this ultimately. But it was— it didn't feel appropriate to wear a white suit.

Yeah, I'm in a black suit.

He's in a black suit because it's a very disappointing moment. But of course, everyone has a long career ahead of them and there are many ways to build back better and do more big things in the future in the world of AI and technology. So thank you for watching TVPN. Tune in tomorrow at 11 a.m. Pacific.

That's right. Thanks for having us.

5 stars on Apple Podcasts and Spotify. Sign up for our newsletter at tbpn.com and we will see you tomorrow. Goodbye. King in the castle. King in the castle.

10:37 on Wall Street. Money never sleeps. You shouldn't either. Call me back.