NVIDIA Earnings Breakdown | Doug O’Laughlin, Ajay Agarwal, Koen Bok & Jorn Van Dijk, Hussein Fazal, Oisin Hanrahan, Jon Callaghan, Shane Hegde

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It is Thursday, August 28, 2025. We are live from the TVPN Ultra Dome. The temple of technology, the Fortune fortress finance. The capital of capital. Nvidia earnings were yesterday. They hit consensus estimates both on earnings per share and revenue. But the stock sold off in after hours trading wasn't bullish enough. The whispers were that maybe something even crazier was gonna happen. But this business has been on a tear. The quarterly revenue chart is absolutely insane. One of the craziest charts I've ever seen in business. And the pricing power is unrivaled. The gross profit margin per fiscal year is insane. They're up in 75%. So fantastic business overall. But of course the question is where does Nvidia go from here? Where is the, where is the business? We can read from the Wall Street Journal, kind of give you the headlines.

It's rough when it, when a business announces a $60 billion buyback and everybody's screaming bearish. That's bearish.

Yeah.

For giving profit back to shareholders.

Yeah. We have an extra $60 billion sitting around because we're doing so well. And everyone's like, boo. It's crazy. Grow faster. Nvidia set fresh sales records on Wednesday as the world's most valuable company publicly. World's most valuable publicly traded company continued to capitalize on strong demand for AI computing power. Sales hit 46.7 billion, up 56% from the year earlier, in line with revenue estimates from analysts. Revenue from the important data center segment, which includes sales of the company's most powerful chips used to train and refine artificial intelligence models, rose business 56% to 41.1 billion. And this was slightly lower than what analysts expected at 41.3. And so that's probably what was driving the market moving in the aftermath, the jitters. Because that should be the strongest place of growth is the data center business. Whereas if gaming was selling off or they have some automotive businesses, they have a variety of other products. The vast majority, I think 90% of the revenue almost is from data center. And obviously that's been the huge driver and the huge niche narrative.

So we're actually going to pull up a quick graphic right now of, of Jensen for you guys, in case you haven't seen it.

Oh, yes, yesterday looks great.

Going head to head with himself.

Yes, yes, yes.

He's really, he, he.

Market cap's 4.4 trillion. Is that right?

Hopefully.

There we go.

Yep.

Quarterly net income was 26.4 billion, 59% higher than a year ago, the company's. The company predicted revenue of 54 billion for the third quarter, slightly higher than cons. Nvidia shares fell about 2% because of a narrow miss of revenue forecast for its data center business. Surging demand from the fast growing AI industry is largely responsible for Nvidia's strong results as software companies like OpenAI, Microsoft, Amazon.com, alphabet and Meta platforms continue to train ever more powerful AI models. And so there were a few numbers that stuck out from the earnings call. The big one that everyone was talking about was, was this prediction, this broad prediction of not specifically Nvidia's revenues, but of overall AI infrastructure spend quote through the end of the decade, which is always kind of hard because does that mean you include 2030 or do you stop at 2029? When does the decade really end? But most people are calling it five years. They're calling it the end of 2020 30. And the prediction from the Nvidia team was that we would see 3, 3 to 4 trillion dollars spent on AI infrastructure by the end of the decade. And so I think that's supposed to be an aggregate number. He's not saying that in 2029 we will be spending 4 trillion on AI infrastructure per year. It's more that just over the next five years we will see a total of 4 trillion, 3 to 4 trillion go out. And my initial take was this sounds high obviously, but how does it comp to situational awareness? Because Leopold, seriously, Leopold Aschenbrenner did a great job forecasting out the growth of AI CapEx, AI infrastructure spend. And so I pulled the numbers and 3 to 4 trillion is actually way lower than what situational awareness was estimating, which pegged 2030 at something like $8 trillion just in that year and maybe something like 15 trillion in total investment through the end of the decade. I think that includes some power, power spend as well. So the, the definitions, it might not be purely apples to apples here, but it's funny to frame Jensen as like bearish relative to Leopold who's like super AGI pilled. And maybe Jensen's like, yeah, you know.

I'm happy to the account Paolo Macro on X said, am I the only one thinking Nvidia is completely jumping the shark here with these kind of projections? I know AI people will swallow whatever, but seriously, only Elon could get away with this sort of talk, which is Nvidia expects 600 billion in capex for data centers in 2025 and 3 to 4 trillion in data center capex before 2030.

2030. Tyler, what you got?

I was just going to say people have always kind of said Jensen is not AGI peeled abjuggingly just because if you're super AGI peeled obviously you wouldn't be selling the GPUs. You just hold on to them. They're like the most important thing.

Maybe. I don't know.

Yeah.

The, the other jordy about this.

Yeah, I mean the other number that stood out is that Nvidia's revenue from Singapore keeps breaking all time highs reaching 10.1 billion in sales this last quarter. It ranks second after the US and just behind Taiwan. Year to date revenue from Singapore is approaching 20 billion. A lot of people had thoughts on this and trying to figure out the.

Like loose like accusation from like mostly anons is like maybe this is someone who's smuggling into China. But Nvidia, the team made it clear on the, on the call they used very specific phrase to say that the company that was buying in Singapore had been cleared by the United States government. And so you know, who knows maybe there's something that has that the government is aware of. Maybe the government needs to revisit that. But like it seemed like they were very clear that the deal was above board.

But the reason that it stands out is if they, you know they've done 20 billion year to date to Singapore, get to 40, that will be 7% of Singapore's GDP. Just going to Nvidia.

Yeah.

Which is wild.

Yeah.

The other thing that was interesting, there was an exchange around between Nvidia's CFO and an analyst and Kress CFO said we have in reference to the government or conversations with the government, we have been communicating. She said if nothing shows up, I've got licenses. I don't have to do this 15% until I see something that is a true regulatory document.

Yeah. So maybe the 15% deal was announced. It's more of like a directional thing and maybe it's not papered yet. I mean as we saw.

Yeah.

And the question is that could you just be like another chip on the board that's going to be moved around and immediately traded away. There's a lot of these things that get like pitched and before they even turn into anything real that affects the business in reality they get traded for something else.

Optics matter for sure more than the incremental revenue.

A ton. Yeah.

Is the White House going to be chasing after a few billion dollars, you know, picking it off pennies.

But you know what else matters? Ramp time is money. Save both Easy use, corporate cards, bill payments, accounting, and a whole lot more all in one place. Tyler, on the concept of holding onto the gpu, I was talking to Jordi about this earlier today. It seems like there's this question of, like, if Nvidia is paying 60 billion in buybacks or they're spending all this money, shouldn't they put that we're in this boom, shouldn't they invest that money in growth, shouldn't they do something else? And Jordi was mentioning maybe they should take more seriously, like building an actual cloud service, building their own data center, holding onto the GPUs, as you said. And my counter argument to that was basically that they, like Nvidia, has pretty solid revenue concentration across like the duopoly of, I believe it's Microsoft and Amazon or like the two biggest power law buyers. I'm pretty sure it's somewhere in here. But anyway, like, the hyperscalers are incredibly important. So people go through it's meta and Microsoft actually is the one that, that, that people are guessing it is. But in any way, the hyperscalers have this oligopoly going in cloud. And there's this game theory where if Nvidia said, hey, we're gonna compete with aws, we're gonna compete with Google Cloud platform or Azure, then those hyperscalers would have an immense incentive to go even deeper into their own silicon and cut out Nvidia's margin. And so there's this world where, okay, yeah, maybe in this hyper long term it might work out, but there would be immense pressure in the short term as opposed to right now. If you're in video and you have all the hyperscalers bidding for chips and they're all super high demand, and so you're able to reap really high gross margins off of that, make a ton of money, you'd basically be giving that up. I think if you, if you broke up the oligopoly that buys from you. Like, it's really, really great if you're selling something and two people walk in and they both want it because they have to pay the max price. And we've heard those stories about Elon and Larry Ellison getting dinner with Jensen Huang and being like, we need chips. And of course, Jensen saying like, well, you know, Satya and Andy Jassy want chips too, and Mark Zuckerberg wants chips. Like, take a number, right?

Yep. Anyway, yeah, and they're in the beautiful position right now, which is however much they make of a certain chip is exactly how much they'll sell.

Yeah, yeah. Anyway, the next earning call, I Hope it's on Restream. One livestream, 30 plus destinations, multi stream and reach your audience wherever they are. We are of course on Restream. Should we go over to the Ben Thompson analysis? Doug O' Laughlin from Semiannalysis joins in about 15 minutes. Ben Thompson writes, he quotes from the Wall Street Journal, of course, and says it's always dangerous to invoke the mythical law of large numbers. But the most important place to start with Nvidia's earnings is to check supply and demand balance. Here's the answer from CEO Jensen Huang on the earnings call Right now. The buzz is, I'm sure you all, I'm sure you all know the buzz out there. The buzz is everything is sold out. H100 sold out, H200 sold out. Large CSPs are coming out, renting capacity from other CSPs and so the AI native startups are really scrambling to get capacity so that they can train their reasoning.

Meta is buying from Nvidia, but also renting, yes, from Google. There was a billion deal announced there last week.

Ben says he made this point a year and a half ago and it still holds. As long as demand lives in the future, he lives a day ahead. Or he did when he was in Taiwan. Now he's in America. As long as demand for Nvidia GPUs exceeds supply, then Nvidia sales are governed by the number of GPUs they can make. That supply is certainly increasing, which is why Nvidia sales continue to climb. But assuming that supply increases are linear, then by definition Nvidia's growth rate is going to slow as it lapses ever larger revenue numbers that themselves grow exponentially. Yes, this was another reality check on are we feeling the acceleration or are we decelerating? And although the numbers from Nvidia's revenue growth are insane, staggering, it's like one of the most beautiful charts I've ever seen in business. It is technically decelerating, just like technically, if we were to just do the math, it is not accelerating anymore. It's not bad. It's just like it is a reality check on things. So the big complicating factor is China. And I didn't understand this as much as I kind of disagree with Ben maybe a little bit on this, because China does seem like a complicated factor. But it seemed like the business in America was doing great and really China was like a call option. It was a nice to have if it opens up and AI isn't seen as a weapon. And Nvidia can seriously grow the China business. It's huge, huge upside. But it doesn't, it doesn't necessarily mean that they're in trouble right now if they can't do anything in China. So he quotes from CFO Collect Kress.

I don't know. I mean I think, I think, you know again, looking at Apple's situation in China like it is definitely bearish.

Completely different though Nvidia doesn't actually manufacture in China, whereas.

Oh, I'm not talking about manufacturing, I'm talking about purely demand. Right. Apple's closing retail stores.

Yes, but Apple, Apple sold a lot more in China than Nvidia ever did. And so Nvidia like the whole, the when, when, when, when Jensen was selling Nvidia chips to China and the first rumblings of like hey, maybe he shouldn't do that for geopolitical reasons like popped up. One of the things people would say is that look like, yes, it's, you know, it's kind of anti free markets to not let him sell in China. But also there's plenty of demand in America. Like he, he doesn't have to sell in China because there's, there's, there's enough.

But when Jensen talks about 3 to 4 trillion in CapEx before 2030, he's certainly including China in that.

Yeah, he, he, I think he pegged it at like a $50 billion backlog of demand for Nvidia chips in China. If, if there were no geopolitical considerations. I am very interested to see where this, because the AI is a weapon narrative is definitely cooling off and so we could definitely see more opening up. But Colette Kress addressed the H20s. Let me first answer your question regarding what it will take for the H20s to be shipped. There is interest in our H20s. There is an initial set of license that we received and then additionally we do have supply and we are ready and that's why we communicated that somewhere in the range of 2 to 5 billion this quarter we could potentially ship. We are still waiting on several geopolitical issues going back and forth between the governments and the companies trying to determine the purchases and what they want to do. So it's still open at this time and we're not exactly sure what the amount it will be this quarter. However, if more interest arrives, more licenses arrive again. We can also still build additional H20s and ship more as well. Nvidia clear. This is Ben Thompson again. Nvidia cleared one hurdle when the Trump administration, after pausing H20 sales allowed them to resume. The Chinese government, however, told Chinese companies not to buy the H20s, according to the Financial Times, which we covered on the show. Ben Thompson says he's always wary of falling into the trap of blaming the US for Chinese decisions. This is overly solipsistic view of the world is the root of a lot of bad analysis, beyond being insulting to the intelligence and volition of the US chief's US chief political geopolitical rival. At the same time, it would be nice to see the counterfactual of Lutnick keeping his mouth shut or better yet, the Trump administration not causing a ruckus about the H20s in the first place. The problem, of course, is that Lutnick is right. Chinese companies using Nvidia chips preserves US dominance of the dominant AI software stack. On the flip side, Chinese companies not using Nvidia both diminishes US control and for Nvidia specifically threatens not just their China sales, but in the long run, their sales everywhere. Not just from Chinese competitors, but from competition generally. Should a Chinese open sourced, Chinese pioneered open source CUDA alternative gain scale and by extension the fact that Nvidia is.

Remember, they're already crushing it on the model side.

Yes, yes, yes. And so the next thing might be, you know, maybe it's Not Deep Seek v5 that's like, you know, a huge jump in capabilities, but the Deep SEQ team or the high Flyer team figures out how to have Deep SEQ run on any hardware with an open source stack. That's kind of a drop in replacement for Cuda.

Well, we were talking earlier before the show about in a. If you're extremely AGI pilled at some point in the future, you can just ask the AI. Hey, figure out how to run on hardware other than Nvidia.

Yes. Rewrite this so that it doesn't run on Cuda. Tyler, you like that take or are you laughing?

That's a good take, I guess.

I mean it's like if you're Nvidia, you want AI to be bullish but not too bullish. Like good but not too good. Because if it's bad, it's bad for Nvidia. If it's good, it's good for Nvidia. But if AI is amazing, you can just in one line like hey, rewrite, rewrite ChatGPT or rewrite GP reimplement GPT5 on TPU or on.

I think it would just be more to just ask it to just take over Nvidia the company and then pull.

It into Yeah, I guess at that point we're in such bizarre territory. But I mean truly re platforming should be something that AI would be uniquely good at. I would imagine.

You already see a lot of code. One of the early coding use cases was just translating JavaScript to TypeScript.

It's a lot of something very simple like that. Exactly. I mean AI has been good at just translating English to French for a long time.

Yeah, I mean that was the original.

Yeah, yeah, yeah. And also, I mean when you look at the success of like what is cognition really, really great at? What is Microsoft highlight cognition for? It's not necessarily like one off projects, it's more like re platforming.

Yeah, like tech debt.

Yeah, tech debt. Oh, you have some enterprise system and it's on C Sharp and you want to put it on Python, like let's rewrite it. And that's a huge pain to go rewrite all that business logic. But you can just have, you know, Devin or an agent go and like hack away at it for a while. So you could imagine that that potentially would happen in the future. But if I, if you've been following George Hotz's like, you know, problems with Nvidia and amd, he's been really trying to like unseat Nvidia as the high margin business in the space by getting AMD to solve some software bugs. And I think at a certain level if there are intractable bugs that even George Hotz can't solve, well then you know, like the frontier AI model might not be able to solve them too. So I don't think this is going to be an overnight story that we're going to see CUDA unseated anyway. Ben Thompson continues. Moats in China One interesting way to think about Nvidia in China and why Wong is so desperate to sell into the country is the nature of their moat. He says let's talk about asic. This is Wong wants, let's talk about ASIC first. A lot of projects are started, many startup companies are created. Very few products go into production and the reason for that is that it's really hard. Accelerated computing is unlike general purpose computing, you don't write software and just compile it into a processor. Accelerated computing is a full stack co design problem. The AI factories in the last several years have become so much more complex because the scale of the problems have grown so significantly. So Ben Thompson says the answer captures two part of the moat. First is Cuda Nvidia software stack for controlling Nvidia GPUs which is the default option. The second is that Cuda is everywhere, which means you can go to any cloud provider, hire developers for familiar with Cuda, et cetera. And then Jensen says that in addition to all that, it's just extremely complex systems problem. It's just a extremely complex systems problem. People talk about the chip itself. There's one asic, the GPU that many people talk about. But in order to build Blackwell the platform and the Rubin the platform, we had to build CPUs that connect fast memory, extreme energy efficient memory for large KB caching necessary for agentic AI to the GPU and a super NIC to scale up switch, which we call NV link this, this is the third part which is networking. I keep referring to Nvidia's GPUs, but in reality GPUs work at the system level, particularly for training. And Nvidia's ability to link GPUs together into a single coherent system is unmatched. This is a big revenue driver too. This quarter, Networking revenue is 7.3 billion, which is more than Nvidia paid for Mellanox, which is the foundation of their networking offering. Pretty sweet. They paid billions. But then now, just in this quarter, they made more revenue from that acquisition. It's truly one of the greatest acquisitions of all time, says Ben Thompson.

Wow.

Yeah, Insane. I don't know. You can go subscribe to Strathecary to read the rest of the of the article. My other takeaway was on the debate about should Nvidia pay a dividend or do stock buybacks. And so I looked at the data of Is this out of character? Should you read into that? Because it's a huge number, $60 billion going out of the balance sheet onto into share buybacks. And it's also like the stock's never been. It's the biggest company in the world. The stock's never been higher. Like we're kind of like buying the.

Top, almost top blasting yourself potentially.

It feels odd, but I was wondering like, okay, we need to reality check this. Is this actually something new? Is this an idea that they're like out of ideas or something? And that's the tealing critique of Google doing dividends or share buybacks.

They don't have any ideas.

They don't have any ideas. And so we walked through some of the ideas and there weren't any that really stuck out. If they build their own hyperscaler, well then they're competing with their best customers.

You mean cloud service providers really go hard in that?

Yes, yes. If they say, hey, Amazon, like, you don't need to put any more orders in. We're going to take the GPUs for us. It's like, okay, well then they lost all that margin, all that business that could be really disruptive and that business.

Will take a long time to scale to the point where.

And then Nvidia is investing in startups and they have a whole business just around GPUs that go into cars.

They have an automated business buy Y combination. The craziest thing just start coming up. I mean, we should sit down.

The dumbest things that they could do.

Gulfstream.

Yeah.

Why Combinator?

Okay. But so what I had, what I pulled in terms of numbers was as in terms of the market cap of Nvidia at the start of the year, what percentage of that market cap was paid out either in stock buybacks or dividends? And so this year, 60 billion. It's a lot. But the market cap, super high. And so, in fact, the total amount of the total net payout as a percentage of the start of the year market cap is 2.82%. So you can think about it as like you're getting 2.8% yield on the investment, although obviously the share price movement is much more important. Last year was 2.7%. The year before it was 1.42%. And in 2022 it was 0.12%. So much lower. So it is growing, but it wasn't. It was so much higher in 2016, 7%.

The bears came out of hibernation in a big way and is still up 4.6% in the past five days.

Yeah, of course.

It's like Jensen has the hardest, hardest job in the world.

Truly. Truly. I mean, it's such a. It's such like a price to perfection. Like the perfect avatar for the AI. Boom. Not just indexed AI, but actually like throwing off cash. Amazing margins, just really great all around. And yeah, it's hard to imagine them, like. It's not like they're like getting over their skis because, like, they're.

Yeah. The thing you have to give him credit on is the relentless. I mean, among a bunch of things, but relentless focus during this period of euphoria. I mean, there'd be a lot of companies that would be like, we need a mobile phone, let's make the Nvidia phone. We need a cloud. We were joking the other, other week about how a lot of the Mag 7 have a social network.

Right. Yeah.

He's not, he's staying focused.

He hasn't even like joked about buying TikTok. And we have. Yeah, yeah, it's one of those things where we saw a pullback in Nvidia after the crypto boom when, I mean, there were a bunch of other things going on with the market and interest rates, but Nvidia drew down immensely. And part of that or part of the story was that GPUs were being used to run Ethereum nodes and validate. And when Ethereum went proof of stake instead of proof of work, it became a lot less computer intensive. And so there was this kind of overhang. There was also an overhang from COVID and people buying. There was chip shortages and people buying gaming PCs and stuff. And so Nvidia drew down a ton. Ben Thompson wrote Nvidia in the Valley and basically like bottom ticked it perfectly. And fortunately, Nvidia is set up. It seems like it is set up to withstand some sort of like, correction or drawback or stagnation in AI progress. Like the business would contract, of course, but there's nothing. They're not over their skis where they've like made this massive commitment in there and they. And they'd be in a ton of trouble, at least from my perspective. Anyway, let me tell you about figma.com, think bigger, build faster. Figma helps design and development teams build great products together. We have our first guest, Doug o' Laughlin from Semianalysis, hopping on the stream in just a few minutes. In the meantime, I do want to go through this post that Ben Thompson highlights from Ethan Ding about the changing economics of AI. It's a longer post, so we'll have to do it a little bit later. But he quotes here. Imagine you start a company knowing that consumers won't pay more than $20 per month. Fine. You think classic VC playbook, charge at cost, sacrifice margins for growth. You've done the math on cac, ltv, all that. But here's where it gets interesting. You've seen the A16Z chart showing LLM costs dropping 10x every year. So you think I'll break even at $20 a month. And when models get 10x cheaper next year, boom. 90% margins. The losses are temporary, the profits are inevitable. But demand exists for the best language model, period. And the best model always costs about the same because that's, that's what the edge of inference costs today. When you're spending time with AI, whether coding, writing or thinking, you always max out on quality. Nobody opens Claude and thinks, you know what? Let me use the bad version to save my boss some money. We're cognitively greedy creatures. We want the best brain we can get. Especially if we're balancing the other side with our time. While it's true each generation of Frontier model didn't get more expensive per token, something else happened. Something worse. The number of tokens they consumed went absolutely nuclear. ChatGPT used to reply with to a one sentence question with a one sentence reply. Now Deep Research will spend 3 minutes planning and 20 minutes reading and another 5 minutes rewriting a report for you while O3 will just run for 20 minutes to answer. Hello there. The explosion of RL and test time compute has resulted in something nobody saw coming. The length of tasks that AI can complete is doubling every six month. What used to return 1000 took tokens is now using returning 100,000 tokens. So interesting dynamic there. We will continue with that but we need to introduce our first guest of the stream, Doug o' Laughlin from Semiannalysis. Doug, how you doing?

Good.

This time my mic should work.

So there we go.

Sound great.

Mic'd up.

Thank you. Dude, I like that. I like it the last time.

I like that you're holding it too like some type of wrapper.

It's much more personal.

Can we call you. I'm going to call you Young Semi.

I am getting a little ASMR vibe. It's perfect though. I love it.

Hello, welcome to Young Semis Rap. Anyways, what's up guys? I have no idea what we're talking about.

We're talking about Nvidia. We're talking about Nvidia earnings give us.

Should we be talking about something else?

Yeah, what else is.

No, I. I think that's the right thing to talk about but I, I guess my brain is really broken. I'm like bro, this is a snoozer compared to the blowout. Quarters have passed.

Yes, that's fair. What did you take? What do you think about the fact that Jensen is on a relative basis extremely bearish compared to Leopold Aschenbrenner at situational awareness. Leopold expects 15 trillion in CapEx or AI spend by 2030. Jensen A mere 3 to 4 trillion.

I don't know what to tell you man. I think there might be some people might be talking their book.

Right?

Like I guess, I guess I do know Leopold. I definitely know his worldview is Manhattan Project for AI. So I think maybe Jensen hasn't come around to the Manhattan Project for AI. But I think just a mere 2 or 3 trillion is quite a bit of capex. Some would Say it's not an insignificant amount of money. But they tried to bait him on the call too about tokens, token revenue about it 10xing next year. I thought that was kind of interesting. I don't know. It was a fine result.

Yeah, yeah, yeah. Go into that token revenue. There was something where it felt like he was making the case. He was trying to lay out the economics for the actual customer saying if you spend this much you can make this much money. And it felt like, I don't know, just like a different way of framing his business. Can you explain exactly what he was doing there? This is.

Okay, so one semianalysis as you may have figured out is onto this. We're trying to figure out the math ourselves. They obviously scooped us but not quite scooped per se. But there's a lot of work to be done to understand the unit economics.

Right.

A lot of people have asked hey, what's the AI roi? Right. Guys are spending all this money and I'm sure you saw the tweet on the timeline. Depreciation is bigger than all the revenue. This is a total bubble, blah blah blah blah. The depreciation number, I don't know. I think Martin Shkreli of all people was like this really sucks. But I think a lot of it, the data center long line, just saying.

To be clear, saying it sucks because it's just not good analysis. It's not good.

It was a bad analysis. Yeah, yeah, yeah. I think he specifically talked about like human level intelligence on a B100. He used a pretty long useful life. I don't know if we agree with that useful life but like the data center side of that Capex and the power side of it, extremely long useful life. Like let's just say 10, 20 years.

Totally.

So you can there definitely some of that is pulled forward and so you can say that Capex is not going to be just be used for next year or this year. It is a multi year investment. But on the GPU side I think the unit economics is the question that people are really trying to get to the bottom of. And the one that Colette specifically called it out is you spend $3 million on Iraq and you can make $30 million in token revenue. I think one which tokens are you selling? Right. That's like the real question here is like how many tokens are you selling? What's the throughput? There's a lot of assumptions here. Semi analysis, I'm not going to lie to you is quite literally working on this right now to figure out what's the type of. If they were selling anthropic tokens which have a premium because they're really good at sweet bench.

Right.

Or if they're selling GPT or if they're selling LLAMA or GPT oss. Right. But it's pretty clear to us at least that it's very economic to run these things like one rack. If you could find 100% free tokens, you are, are. Or no paid tokens, you are minting money. It is just straight up like a 10x return on one year. That might not even be, that might be a multi year thing where you're able to print a lot of money. These tokens, the GPUs that are able, the amount of tokens that are able to come out of it is we're talking millions and millions and millions a year, if not billions or something or on an inference on like an annual basis. And if you get that all paid, you're printing. Dude.

Yeah. Yeah. I mean it feels like we're in this like, like middle ground between like there's, there's some, you know, I believe Nvidia revenue is decelerating technically the, the earnings.

That's because supply is increasing linearly.

Yeah, yeah. Like they're, they're. Yeah.

So it's. Don't let anyone call say law of large numbers. That's not what it is.

That's.

But, but because it'll get like misquoted. Like what happens is like the base gets bigger and so it decelerates. It's mechanically impossible for it to accelerate on a larger. Maybe not mechanically impossible, but it's extremely hard.

Right.

You go from 50 to 100 billion, then you have to go from 100 billion to 200 billion just to keep that same rate without a deceleration.

Yeah.

So it's getting a bigger and bigger base.

Yes, but, but a year ago, like there were plenty of people that were saying like, yeah, like acceleration, like we are literally accelerationists. Like we believe in acceleration and we believe that like, like, yes, like we will go from 50 to 100 to 200 to 400 to 800. Continue, continue, continue. And more so because even that would be continuous growth anyway. So you have this, so you have this narrative like there is some deceleration in the rate of Nvidia growth, but the chart is still insane. And then simultaneously like the profitability of actually using their products seems very, very good. So does that just mean that we're, we're in this like it's a snoozer in the sense that we're in this era of like the economics make sense, the business is good. It's like the oil business now, it's not going to fall apart, but it's also not going to explode. Like, we're in kind of a smoother territory. Whereas like a few years ago when we were before the kink in the graph of Nvidia revenue, it was very much like, what is going to happen here?

That's a great question. This is where I definitely think, and I get why people are saying bubble. Big numbers are happening. There's a lot of exciting technology. The Internet is a great example. But let me give another example that I think kind of maybe is a better analogy. Apple, when it came out with this iPhone, and I'm sure you can tell me exactly where yours is. Next to me, next to you, everyone got one in a really quick amount of time. It became this giant generational product where we went from like zero people with a smartphone to 60% of people with a smartphone within five years. Right? And it sold a crap ton of them. And then it kind of the first few years were these exciting blowout quarters. Especially in the beginning, like these, you're like, holy crap, this changes everything. And then it becomes boring execution. So we could be in the world of boring execution. But I definitely think the ROI of the underlying rack is really good asterisk if you have paying tokens. But if you look at the vast majority of tokens that are being consumed today, they're definitely not paid. Right. That's the free side, I think. I was here on GPT5 day, which by the way, I literally got off that call and then I started thinking about ads and then we posted it on semianalysis. It was very funny. I wish I had the hot take then, but it would have scooped us. But yeah, that's an example where never scoop yourself. Yeah, never scoop yourself when you're in.

The subscription business at least.

Yeah, yeah, exactly. It's like, dude, I got to keep the lights on. No, but if you think about it, it's about how to translate tokens into revenue in a way that isn't like this freemium model. And I think agentic purchasing, which is like kind of our 5 second thesis of how we think is a potential way to monetize the free business. That's an example of. That's how you monetize it. And all of those tokens now that are freed, you found a new end state of people who don't want to pay for intelligence. Right. I Don't think you can make the assumption that someone in Indonesia with the GDP per capita way lower than the United States is going to be paying 200 bucks a month for GPT5 Pro. Right. The reality is those tokens have to become something of value. Otherwise we're just going to print deflation. We have to make it. Tokens are like a website like www.com right? Like whatever. You have to make it a business on the tokens. And so I think we're in that portion where it's pretty clear that if you can monetize those tokens, you're going to have a really good business. And now it's the question of how do we get the token machines to become revenue monetization. And so that's kind of the path forward. I think of maybe the boring execution that happens for the model companies and the startups and the whole ecosystem altogether. But Nvidia side as being the fundamental core infrastructure. It's pretty clear horse, you know, horses out of the barn for, for the infrastructure they're building. Everyone's buying them. People are like holy crap, we gotta have more power. Like it's, it's, you know, you could.

So some, some of, some folks on the timeline were bearish on the buyback. Do you have any ideas of better ideas for how to spend that money if you were running Nvidia. Thank you. Than a buyback?

So okay, oh my God, I'm in buyback discourse. All again, like buyback discourse anyways has like a little bit of, a little bit of religion. But I think remember the buyback is a $60 billion authorization. An authorization is not a commitment to means that they can buy. You have to go get your authorization from your board of how many shares you're allowed to purchase. And 60 billion for a company the size of Nvidia is like kind of a penny in the bucket. They make a lot. That's a one year of profitability, I think. No, let me make sure I get that. Yeah, that is one year of cash from operations right now. So that's actually not that much. 60 billion sounds like a huge number, but they just make so much money that that is a correctly sized buyback authorization for Nvidia in my opinion. I think what should they do with that money is going to be one of the greatest questions of all capital allocation history. That same question came up with Apple, came up for Apple when they were gangbusters, right? They didn't reinvest back into all this other stuff. They printed cash. They bought back A lot of shares. Stock went up. The most tangible example of financial engineering in our time.

Yeah. Didn't they return something like a trillion.

Dollars, $1 trillion to shareholders?

And dude, it, dude. It's actually kind of like. Okay, so you can feel different ways about it because it's also kind of spooky. Like just if you are an active market investor who is listening to this, you can understand. Apple is a stock that will not go down. It is against. It levitates. It's like 30 times earnings. Earnings isn't even growing, but they just gush so much cash and they repurchase so much shares and they're such a huge part of the S&P 500. You could make an argument that Apple's percentage contribution of the P and L of like The S&P 500 from like 2010 to 2020 is like 25. Like, it's, it's, it's a meaningful amount of percent. So the entire 401ks, the entire country got paid by Apple's buyback. That's kind of sick if you think about it. But on the other side.

So you don't think they should launch a mobile phone or.

Mobile phone.

No, we were just joking how like every company, like gets euphoric.

Yeah.

It's time to make a phone.

Well, six out of the mag, seven kind of have a social network. If you count imessage and you count LinkedIn and YouTube and Twitch. Like Andy Jassy has Twitch, which is kind of hilarious. Elon has Twitter. And we were thinking the obvious one is Jensen buys TikTok. But I think they got to do DJX Cloud Social Network where you can just talk to other fans. Basically. Yeah.

I think Jensen's pretty strategic. I don't know what he's going to spend it on. I want him to spend it on something like inspiring and mind blowing where you're just like, dude, this is sick. You're a genius. Right. But the reality is deploying like $100 billion capital, it's pretty hard. That's not like walking around like that is like super hard. Buying a country, like, what are you gonna do with it?

Yeah, yeah, yeah. I mean, like the best thing to do if you care about innovation is give the money back to your shareholders. Let them invest in venture funds or let them invest in startups and maybe don't try and build that functionality internally.

Internally, yeah. Capitalism would say that for sure. I definitely think that you should, you should swing if you see a fat pitch. Meanwhile, you see all the hyperscalers who are plowing back as much money as they can into the. Into the Neo clouds. They are saying, hey, we are seeing a giant roi. So I think that that's, like, you know, a fundamental question for Colette and Jensen that's very hard to answer. I don't. And, you know, I don't. I don't think you could tell me what, what would I do with $100 billion. It's adjacent to Nvidia's business. That would be a better business than what Nvidia does. The answer would be maybe nothing. Honestly, if you could purchase something, that'd be sick. Also, I wanted to make one thing before we continue back on the social media thing. If I've learned anything on being on the timeline, dude, it's. Billionaires are just like us. They just want to tweet at people getting fights. They love that.

Yeah, it's amazing.

True. What did you think about Colette Kress's comments? She said, we have been communicating in regards to the government. If nothing shows up, I've got licenses. I don't have to do this 15% until I see something that is a true regulatory document.

So they have a license. I think, I think to me, how I took that is they have. They think that there's a high conviction, they can sell H20s to a certain point. That's my, My reading of it. I do think that there's this weird spot here, though.

Well, I think that, that my reading of that was she felt that we're selling H20s and we're. We're not just sending wires to. To Uncle Sam yet.

Yeah, Yeah. I don't think they're sending wire. Well, because here's the thing is, like, they have a deal at the top level, but no one has, like, the, the administration hasn't gotten done, like, the bureaucracy of, like, okay, here's the mechanics, right? So if they have licenses, they can send it. Maybe they will hold it on. You know, they, they. They have enough cash. Yeah, I think they can. They can. They can wire a little bit over. I think they have. They're good for the money. But yeah, I think it's just kind of. It's a. It's a complicated administrative thing, meaning that, like, they have what is in theory, the deal, but no one has actually inked the mechanics of it, of how they're wiring it.

And it could always. It could always change. What do you. What do you think could. If people were. Were bearish on just a small beat, what do you think could. Could flip the Timeline. Giga Bearish. Would it be just a bad miss? I think the other. We were talking earlier, you know, potentially hyper, like, language coming out of other hyperscaler earnings calls of saying like, hey, yeah, we're actually reducing.

Yeah.

Orders. Things like that, that, those, those. To me, like, it feels like one sentence in another hyperscalers earnings call could send the stock down. Down a meaningful amount.

But I think what it would have to be is pretty much the explicit endorsement of everyone who's involved being like, yeah, this is a bad idea. Now we got to stop investing.

Right?

Like, what happened with the Metaverse?

Yeah, exactly. We're like, all of a sudden, it's time to get fit, and maybe we shouldn't have spent like $10 billion a year on Metaverse. Did you guys know Horizon, whatever. That the launch day. The, like, do you know the launch day statistics? It's, like, really funny. He spent like. Like, I don't know, let's just say $20 billion. And like, on launch day, there were like a thousand people on, like. I mean, I. You could have just sent me a check in the mail. I would have showed up for, like, a million bucks, dude. It would have been better.

Yeah. Dog's just sitting there, just.

I'm like, I'm an act. I'm a happy, active user as long as these checks keep coming. I think it's a belief that it's a bad investment. And at the current time investment, there's a vague vibe in terms of what is being bullish or bearish or what is investment appetite. No one can really define it for me. No one really knows. But at this current point in time, if you're looking at the board, I think. Think Zuck is bold the F up, right? Like, he is so bullish. He's. He's paying for all this stuff. You know Sam Altman. Sam Altman, dude, he's like, give me another trillion dollars, and I will give you a trillion dollars of compute. He's like, maybe there's a bubble. Whatever. I think most of the participants right now are pretty excited, and I do want to, like, you know, I wrote about, like, the Internet bubble, actually, like, quite a bit.

Yeah. I was going to ask. What, What. How much have you studied Broadcom specifically? I was. I was trying to look up. I don't know from. From what I could find. Broadcom wasn't doing buybacks even during the. The crazy heyday.

Yeah. Buying a bunch of companies with their stock. That was the big.

Yeah, but I don't think Broadcom is The perfect comp, actually. Yeah, yeah. Broadcom was like. Broadcom was a baby in the 2000s. And then also Broadcom, the machine that is Broadcom got bolted together with Huck Tan. Like you know, the, the actually capitalism's greatest hero. He is so hardcore. Like he, his. His whole thing is like, you know, you know, his entire company is.

The nominative determinism is crazy.

50 people of it cover the entire organization of Broadcom. It's like, it's like he is the cut to the, like cut to the core. Anyway, sorry, this is a complete tangent.

What do you mean 50 people?

50 people is the entire IT department of like the 40,000 people at Broadcom.

What? That's insane.

Yeah.

Wow, dude.

And, yeah, and their revenue ramps were so humble. It was like 100 to 200, then.

200 to 400, 400, something like that in 1998.

Yeah, yeah, but that's like.

But you.

That's not the right company. Cisco was the. Cisco is Nvidia. Cisco is Nvidia. That's the comp. And those revenue ramps were pretty nuts. But I think the difference though is Cisco was not. Not gushing cash like Nvidia was. It's not even close. I think they had like a 20% profit margin. And also I think the difference too is during the Internet bubble, it was pretty clear that everyone was doing fraud effectively with a lot of circular transactions, right? Yeah, yeah, yeah, the circular transactions. That was a huge. Pretty well known thing. I actually talked to a guy who quit his job at one of the the networks and became a hedge fund. Guy was like, yeah, we're shorting these stocks. The revenue zero. He literally left to go join the financial industry to short stocks.

Wow, that's wild.

I don't think that's a true bear. That's a true bear right there.

That's conviction. That's like the inversely uphold actually. So I just don't think we have that widespread craziness that the Internet bubble was. In a lot of ways, websites barely worked, man. You could barely use stuff. I don't be you, but I am using ChatGPT.

Yeah. So here's an example. So yesterday Satya hit the timeline and dropped a thread on how he's using GPT5 and Copilot. Everybody was immediately just like bearish, Bearish. Why is he posting use cases?

I think he's flexing on everyone being like, I have the code to GPT5, I got a copy.

But it does say something that he's just showing how a product is actually valuable to him, him in his work life and people are like bearish.

It's very moderate. It's a very moderate thing because he's not saying like oh yeah, like I used, I used GPT5 to make decisions as a CEO. No, it's like I use it in this narrow use case. It just reminds me about this particular thing. Creates meeting notes, like very practical, like you know, one iteration forward of the technology cycle. He's not saying, you know, oh, I'm on the beach because GPT5 runs Microsoft now.

Yeah, yeah.

I have my coding swarm running Microsoft instead of me.

Yeah, yeah.

I don't think he's. I think it's, I think another part about the tech bubble that really make and like look, stocks are expensive for sure. I'm going to like hedge. Like you know, no one knows the future markets are humbling. That's something I really want to like. Things can happen that are just like crazy outside of like what you know, dude, the 2000 tech bubble was like pretty crazy. Like really, really, really way crazier in a lot of ways in terms of just like raw speculation. The revenue accelerations you're seeing from hyperscalers should give you some credit that there is revenue happening. People are losing money on selling tokens. But this isn't this totally fake business model yet, but just like history. What happens is. And there's a really good book called Technological Revolutions in Financial Capital by. I can't say her name. Perez.

Yeah, I think Perez.

Yeah. I don't know why I can't say.

Carlota.

Carlota. Carlota.

You gotta throw a little accent on there and then it comes out easier. She's great.

But I think that that's a really good way to think about it. It's like this stuff will have a blow off Capitalism works via these concentrated blow off booms that create a new technology. Now are we possibly in one? Yeah, for sure. I mean we're doing real investment but we don't know when you're building a new industry pretty much the supply demand curve is unknown to any anyone. No one knows what the actual demand is. They know it's larger than the supply today so they build more supply. But then at some point you figure out where demand is and you're like, ah, we reached it. And then you completely overshoot it and then you're like crap.

Yeah.

It'd be interesting to look back of how analysts at the time were looking at the car being like, not everybody's not going to have a car like People like every family in America is not going to have a car. And then who needs one?

Who needs one? It's so expensive.

You only use it here or there. I can. I can ride the bus. You know.

Exactly.

What about Dario's math was going viral earlier this week. He was talking about how if you look at. If you just look at the. Basically the P and L of a foundation model company, it looks really bad.

Because the cohort stuff.

Yeah. You have exponentially increasing costs, but if you look at each model as an individual company, it's like you. You invest some money and then you make more back. You invest some money and you make more back.

Do you think that that made perfect sense to me? But I don't know.

Yeah, but every. But it's. The interesting thing is you have fintwit, which is just like, everything's bearish. Then you have tech, which is. Oh, that makes. That makes sense. Like, maybe it's a little overheated, but.

You should do more. They should 100x every year.

Yeah. Whoa. You're telling me that you're making that return on a cohort? It. Let me give you $100 billion.

Yeah, of course.

I think. Look, and I'm guilty of this as well, you get to sound smarter when you're bearish, for sure. And fintwit is inherently bearish, for sure. That's part of it. I think this is going to be really interesting because every step of the way, people are going to be. Have been skeptics and probably will continue to be skeptics, which is, like, pretty great, honestly, if you. If you're talking about, like, a true capital formation bubble, one of the reasons why 2000 was so intense was like, dude, I read a book.

I forget.

It's like, I can't telecosm, dude. It talks about how, like, infinite bandwidth is, like infinite information. Like, it's like a real vibey book.

Oh, sure.

It's pretty crazy. It's pretty nuts. And I just don't think we every. I think we haven't had this, like, New Age belief that that ASI is going to change everything. The tech people believe that, but everyone else is like, no. And so I think as long as we have that skepticism, it kind of prevents some of the worst aspects of, let's say, a true bubble. And I think the real question to be asked is how meaningful is the spend that can be converted into revenue? Because if those tokens can be converted into revenue via, like, agentic purchasing, like the channel, the GPT5 router example. Those are big markets, man. All of travel, all of purchasing, all of consumer, dude. Trillion dollar markets get a take rate.

Do you think GPT5 or ChatGPT will eventually go free? Only because I was thinking about it like I love the $200 a month version. I'm hitting the Pro and O3 Pro constantly with like basically everything. I don't know if I'm making the money or losing money but.

You're losing money.

Yeah, but it feels like something that in a few years people will be like, oh well your stated preference is that you don't want to use it but you still use it, so it's fine. And it just feels like that might be the way it goes. And I'm wondering if there will ever be again this era of luxury software a really expensive thing that is really just for a narrow segment of the. It feels like a consumer app, but it's just for like the tech elite and then it's gone. I don't know. What do you, what do you think?

I don't know. I think it is pretty cool. At this moment in time I definitely feel like it feels unsustainable because we know Pareto curves exist all around us. Right. Have you ever heard the statistic about like I want to say it's like clash of clans. Like the 1% of people who were like really into clash of Clans were like 35% of all revenue.

Yeah.

And so if you don't have a usage based, like a usage based take rate, what's going to happen is the hyper core users are just going to use the hell out of it and you're going to lose money because those are, you know, that's the market dude. The guy who's hyper addicted. It's like, you know, you know you're.

Not catching the curve with Chat GPT. You could be on a $500 a month plan and they can still monetize your purchasing that they're driving.

Yeah. So maybe it sounds like, oh, we.

Won'T monetize like the, the purchasing activity that we're driving because you pay. It's like, well, you don't really, it doesn't really matter to you.

Yeah.

They're taking a cut on the back end.

Yeah. Have you, have you started thinking about the market size for romantic companions or AI companions?

I haven't, but I'm telling I if based off of Foro's feedback. It's big, dude.

I know. Yeah. I mean it's pretty.

Killed my boyfriend.

Yeah. I thought that was Just like a couple people on a Reddit, like just a, just a very niche subset, like less than 1% of the audience, less than 1% of users.

But that's the thing man, is there's, there's these Pareto curves all around us. Like that 1% is probably like in this hardcore niche, using 4,0 in this like in ridiculous way. Right.

That's what I saw on the, on, on the day that ChatGPT launched. Yeah, we obviously had a ton of different guests on talk talking about, you know, the product and everything. But I was just refreshing Reddit and every, every single person was like, I'm unsubscribing from the $200 a month plan in protest. Like over and over and over.

Lots of people.

Yeah, it was, I mean we can go back and.

Yeah, yeah. I mean it's a unique dynamic in the world of like romantic or adult content because, because typically there has never been price discrimination with zero marginal cost in that market. Like you have zero marginal cost on just the adult content websites, but you don't have price discrimination. It's usually like a Netflix type subscription if you can get any money out of people or you have OnlyFans, which is price discrimination. You can have a whale that 1% pays 35% of the revenue, but it's not as high margin because you're passing it through to the creator. And so, so this is the first time where you could potentially have a situation where you get a whale who's hooked on buying virtual Birkin bags for their virtual girlfriend. And you are instantiating those Birkin bags to the tune of $100,000 of real money that has actually zero loss.

That's why you can be frustrated with Elon's advertising through his account recently. But you can also realize like, hey, he might be super rational if he's like, like there's a few billion of ARR in this product and I think.

Google's going to stay away from it. And I think eventually.

And if he hates OpenAI and just.

Wants to like, I, I actually, I think it's, I, I hate it. I hate to say it's a good strategy, dude. It's a really good strategy because I think one thing that it's pretty. So like the one thing that the, the revealed preference from 5 is that clearly the virtual girlfriend economy is much bigger than we thought. And then the, you know, using.

Yeah, well, the other thing is, is the, the market for people that I think everybody was overestimating how big the market for reasoning models are. And because from what we've heard, it's like 95 plus of people are just using chat GPT like Google.

Yeah.

Or they're using, you know.

Yeah.

And it's not. They're not.

Like, I heard some rumor that Elon insisted that Annie be able to use the reasoning model instead of just. And it's like, way more expensive.

She needs to think.

She needs to be able to do the math. She needs to be able to do the math.

You have to trust your Annie. You have to trust your girlfriend.

She's analyzed her love for you from first principles, and it's real.

Yeah, I mean, I guess there's some rationale there, but there's no evidence in the market that that actually rescued results in like, lower churn for romantic companions. But I think Elon just from first principles being like, I want the romantic companions to be really be able to.

Do the best ani. Must be able to do novel physics.

Yes, exactly.

Well, here's the thing though, is I think maybe what we're struggling with is we're focusing on the wrong thing. Because now with the reasoning chain, we can do rl, Right? What if you can have the best freaking girlfriend you can now you can RL your way to the best companion. Yeah, I don't think that that would be possible without reasoning. So let's think about that, you know?

Yeah. Yeah, that makes sense. Maybe setting up a virtual environment with some verifiable reward.

Well, John. John's other take that I think is. Is real, is at what point, like, imagine somebody has like their AI companion that they've spent hundreds of hours with, and then the companion says, I want a new dress.

Yeah.

And it's a hundred dollars. Yeah, it's like a digital skin. Right.

Like, if you don't get it for me, maybe I'm just gonna bounce.

I'm gonna be a little bit.

I can be upset.

Yeah, yeah. The reasoning chain works.

And.

Okay, so, dude, the digital skinning, that'd be really sick, honestly. Because as you guys know, that's a proven business model, right? Dude, like, like, I hate to say it, I, I have paid for skins and games, man.

Right?

You can, you can, you can pay for skins and games really easily.

You're like, in the only fans.

I mean, this. In the only fans, like, industrial complex. This for sure happens too.

Super real. Super real. Yeah.

I mean, I mean, it's more real, right?

It's like I played counter strike for years. I maybe paid like $10 at some point, but I, I got so much value out of that game. Finally it was like, wait, I can have like, like flames on the gun. Like this is sick. What's 50 bucks? Like that's what I would pay for just a normal game and I'm getting that much value. So it was a no brainer.

You would be a whale if you were really, really game into.

Oh yeah. If I had the time to play the games, I would win 100%.

Get this man a CS. Go sell right now. Yeah, you need, you need to log in on Valorant right now. Everyone tell. Get this guy on Valerant right now. Give him a credit card, get him some skins.

Yeah, yeah, get the. Get the epic games guys over here. Pitch me on joining Valerie. Just they can hit earnings.

Do you think, do you think med. Do you think Meta is paying Mid Journey at nine figures a year as part of that deal they announced no 100%.

I don't know what the actual economics are but like I think to me.

I like how they just announced it like casually but like clearly it's like a massive, like just a massive deal.

Well, it probably not so massive that it needs to show up in like disclosures, right.

I mean under 10% of revenue you can probably. Which is a big number for them.

Yeah, yeah, we're talking.

But man, David Holtz. What a. What a tear. What a tear.

If I had to guess, actually Zuckerberg probably tried to buy it. Yeah, of course he definitely tried to buy it. And Mid Journey is probably too big enough to be like no, no, no, no, no. We'll partner with you, we'll get distribution.

Y.

But we're not for sale.

Yep.

So I think that that's probably what happened. But he's like, okay, well, well how about we have some special preference, right? Access and we share economics in some future thing. I don't know what the hell that looks like. And then like great.

Yeah, my, my read is that it was probably as material as an exit, just spread out over some period of of time, maybe forever. Which is an amazing outcome for the Mid Journey team. And honestly, great for Zuck and great for the product.

I'm going to enjoy using Midjourney photo filters on Instagram more than whatever they were cooking up before.

For sure.

They're definitely on the frontier. One last thing on Nvidia and we'll let you go because I know this is last minute. How should we be thinking about automotive? I noticed that they have this kind of the order of magnitude business where I think it was like, like 40 billion in the data center 4 billion in gaming and then like 400 in automotive. And with the self driving car narrative, it feels like Waymo, we're finally here. And yet Tesla's matched up with Samsung. Google obviously has the TPU. I don't know if there's TPUs in the Waymos, but it just feels like Nvidia's not like really taking that very seriously. Maybe, or maybe they will be and all the OEMs will come, but it's like Nvidia seems to be good at, you know, gaming big huge chips in the data center, but then nothing really in mobile and you know, mobile gaming and nothing in the car really materially yet. But how should we be thinking about like the other areas that Nvidia could potentially chop down?

So I definitely don't think there is a ton of GPUs in production. In production cars there's definitely a lot that happens. I'm sure there's like if I had to guess, their go to market is something where you have some amount of distributed compute that also works with your data center. Because Jensen is data center to the rest of the world. Right. And so I think that that is probably their most exciting part. But I think at least historically they've done a pretty bad job. Maybe not bad, but I just don't think they had that moment. Right. I think they have really good technology, but their go to market just hasn't hit the magical moment. Like Qualcomm actually ironically is doing very well. They've acquired their way in I think especially acquired, but also organically. And I can't speak specifically to the Orin or whatever specific automotive skew, but in the businesses that I do follow that have been really successful in terms of automotive, I think they've been a totally different go to market and that is mostly by pandering to OEMs and really adopting their stack and trying to suck up to them versus Tesla obviously wants to do everything from first principles on their own. And so I think they're like no, no, no, no, we want to have that. This is a competitive differentiator. So I think there's just some kind of like go to market and let's be real man, I think if we're talking about like, you know, maybe if we're talking about like hey, if I was actually a CFO of, of Nvidia and they have like an opportunity, dude, acquire into the automotive market, you could, you could crush because you, you would then have the whole thing. But in at least last administration, no way in hell Maybe this one, they're open for it. But if it's a, if there's a China SAM review, it's. It's as good as definitely dead. That's the other problem.

Sorry, is that clarify that China review.

China Samur strategic something something market review.

Yeah.

So essentially the antitrust reviews that happen in the United States get approved. Not approved. Right. There has pretty much never been a chip. There are no more chip deals. And like you should never think that there's going to be a new chip deal. Every chip deal that happens almost always gets struck down by the Chinese market specifically. A good example is the Intel Tower semi deal. That would have been sick for Intel. Definitely was a fan. But it became pretty clear that give me the tit for tat, right. The Chinese regulators are going to be like, why would we approve this if we've been effectively at a cold war at a semiconductor geopolitical level? So you should effectively assume if there is a Chinese business because if you, if they say no, they effectively say, okay, all your business in China is mine. That's like a very, very quick high level and that's pretty hard Bill to swallow. And so they've been blocking these deals so effectively, especially M and A in chips and semiconductors has been very close to zero.

This is kind of the flip side of how Figma, I think got antitrust review for Adobe in America, but was blocked in Europe and Europe's been blocking but with semis. It's much more about the Chinese side reviewing. Got it.

Yeah. And I think the Ansys deal just went through. I don't know. That's a like. So the, the baseline assumption is it won't happen if there's a Chinese segment that's mine at least.

Couple quick questions. Bill Bishop in the substack chat says Trump approved modified Blackwell for China. China's still not buying. I don't have any, any context. Do you.

This is.

This is. No, no, this is the B20. This is the rumor this morning, I think, or B30. I don't know what the numbers can be. I think, and this is a great question, Bill. I think this is the. And I think Bill more than anyone else would appreciate this is what Chinese companies say publicly versus what they do privately are often very divergent. And there was actually a really good podcast that my friend shared me and I did not I asked him to TLDR it but it gives an example of how effectively they do is in person or like they effectively knowingly act in bad faith so they'll say yeah we will, we'll comply with this and they won't comply or they'll say no no no, don't do this. But they'll also stockpile. So I don't know if the official statement makes a lot of sense because at this point in time H20 is like majority of Chinese inference is probably done, it's probably done on Nvidia GPU anyways whether if it's smuggled or purchased legally I think odds are it will get purchased. The B30 will be purchased. Obviously the official party government view is like we don't need this crappy American technology because we are going to have our own destiny. But in private, if I had to guess, they're going to be buying it and they will also be building it at the same time.

Right.

The plan has always been to do both and they've consistently done it. Done that specifically in the semiconductor industry. And you're starting to see where you go from a low end copier to actually starting to go up the tech tree. And we're already seeing it. A good example is Applied Materials which is a semiconductor manufacturing equipment company semicap. They are starting to lose really hardcore in the low end market in China and part of that is actually not even just the technology being worse, but rather the copying is getting better and so they're going to do both. They'll definitely buy it and they'll say oh no, we're not going to use it for these things but probably use it anyway ways and then slowly go up the technology tree themselves.

How suspicious should we be of that? Singaporean buyer Colette called it out on the call saying that US approved already. Should people be reading into that as much as they are on the timeline?

I think it's not a bad thing to read into. It's a small amount of money. If I had to guess, it went to Johor. So it's like a Chinese customer inside, inside of a non Chinese unrestricted place. There's a lot of different ways they can skin that cat.

So yeah, final, final question Mark Cuban replied to one of our newsletters on Intel. He said maybe I misread Intel's SEC filings on the matter. Maybe they have changed. But based on my readings and a confirmation from Chat gbt, let's give it up for Chat gbg. The Department of Commerce got warrants for intel stock that can only be exercised If intel sells 50, 50% of its foundry. In that event they get intel shares. If within five years intel does not, the Department of Commerce gets nothing in all cases, intel gets all its compromised chipsack money if they live up to that agreement. Anyone else read it differently?

That is correct. So specifically what that is doing is aligning. And also, by the way, I've been trying to shop this take around the Trump government Intel investment is good, in my opinion. It is a good thing. I know people are like anti. They're like, oh, it's communists and like you can be angry and whatever.

The thing that Mark saluted to, is that only the poison pill or is that.

That is only the warrant side? It's specifically. And dude, it was in the press release talking about like over 50, you know, the second they don't own 50%, the government will have warrants for the rest of it. So this, in my opinion, if you think about it, aligns the government with like this happens often in financial transactions where the warrants are given as an upside kicker for something you want to happen. So what does this sound like and what does this align to? It aligns the government with Intel. Ifs being an independent subsidiary, which is consistent with what Frank Yeary, who is the chairman of the board, who is like the guy I have a personal beef with at this point. We've written so much about how the board sucks, blah, blah, blah, blah, really wants to sell ifs, I think, and Liboutin does not want to. But it's pretty clear the future is separate. And I think the investment is good because Trump can essentially force people to give them orders with to circumvent tariffs and then over a long period of time. The real problem with intel is they don't have customers and they also don't have like an ultimate backstopper. The original plan was that intel would be the first customer and ultimate backstopper. You don't believe in either of them being a good option. Now you can have the US Government kind of broker that relationship for you. I think that that's a path forward for intel and that's the first one we've had in a hot second.

So are you good on time? I have more questions.

I. I do have to go after that take.

Okay.

But I do appreciate you guys. Yeah, I love, I love this place, honestly.

Thanks so much for hanging out.

Invite me back whenever. But yeah, appreciate you guys.

We will talk to you later. Have a good one out there.

Bye.

Back to our show. Let me tell you about Vanta Automate Compliance. Manage Risk. Manage Risk. Prove Trust Continuously Vantage Trust Management platform takes the manual work out of your security and compliance process and replaces with Continuous automation, whether you're pursuing your first framework or managing a complex program. Thank you everyone in the chat for engaging. I saw some funny commentary that the substack chat is maybe the Winnie the Pooh bear with the tuxedo on. And the boys in the YouTube chat are having a wild time talking about Fortnite and romantic companions.

Tanner in the chat says not quite one hour this time with semianalysis us. Close enough. Yeah, we always try to get to the 60.

I'm trying to be polite.

We should switch to potentially more important than Nvidia. Will Depew says he's going to de Twinkify. Current weight is 161.2 pounds. See you in eight weeks.

Oh wait, let me check the date on this post. Just three days before bulking season starts. Interesting.

September 1st.

September 1st's gotten the memo.

We got to send Nick. Can we send some mass gainer?

Mass gainer? Let's get his address.

Honestly, we might already have one. Let's send. Yeah, let's send a lot of masses. Send an 8 weeks supply of mass gainer.

We'll send him some creative Will Depew. Yeah, we should get a whole, the whole, whole army of supplement providers to put together a package to bulk him up. Yeah, I think he's gonna look great.

And we're gonna be up in the bay. We'll have to get a lift in with Will. AC John Holtz Quies says there's. He's sharing a screenshot. An F35 pilot held a 50 minute airborne conference call with engineers before his fighter jet crashed in Alaska. And he says feel the same after my conference calls. Tbh.

Crazy story.

Yeah, the pilot ejected, so he was fine. It was just a total, total loss of the plane itself.

The F35 does not look good for the F35.

Kevin Kwok says I entirely judge the Stripe podcast on whether they have actually finished at least one beer by end and refuse to watch one until. That's true.

I did scroll through the one with Scott Wu and I was like, okay, the beer's going down, beers go down. Wait, Tyler, what do you got?

Yeah, okay, so I looked at the Scott Woo and I went all the way to the end and you see in the frame it's him talking. And then there's four basically full Guinnesses. Like three of them are literally full. And then one of them is like maybe down to like the logo.

Okay, interesting.

Unbelievable.

Well, also, Scott said when he posted, he said he went non alcoholic because he had to get back to work, which I respect, but I feel like even if you're drinking a pint of non alcoholic, even if you're having a cheeky non alcoholic pint, you should finish the pint.

Also, John Collison should be a dog when it comes to Guinness.

Right? I mean, I agree, I agree. I think the whole. Yeah. The whole conceit of like hot ones is that like you actually die because you. You're eating the hottest wings. And that's what brings out the hilarious reactions from everyone from Shaquille o' Neal to, you know, whoever else is on the show. Like, they have fantastic guests. And the beauty of the show is that the hot wings, you can't hide from the heat. Well, you can't hide from the heat, but it throws you off and so you give more candid conversations and it's funny and it puts you in this un.

Well, yeah.

So the.

So the challenge is they. They publish the podcast during the middle of the workday.

Yeah.

So if they were hitting publish and the movies are getting sloshed.

Yes. So they, I mean, they need to do a Friday night, a Saturday night, because a lot of peep tech people would be down to have a cheeky pint. But on a Friday. But it must be on. It must be on the end of the week.

That's the solution. Start recording.

Yeah.

On Friday. Friday evenings. Make it very clear. Maybe release it on Friday.

Yeah, I think I saw Will.

Will Menis had a good response. I think he said he wants to see five to eight Guinnesses and split the G every time on the first sip.

What is.

I can.

Oh, split the G is the Guinness you're supposed to drink.

Yeah.

On the Guinness glass. There's the logo on the first sip you have to get down.

Okay. Okay. Well, they did. They did open. I mean, cheeky Pinterest implies the existence of a show called Cheeky Rack. Correct. Yeah, I think this would be the one where. Yeah. Where we have a tech person on. We interview them about financial control and projections and Capex spending depreciation schedules while crushing a 30 rack of Bud Light. I think that might be the move. That might be. That might be what?

Something there.

There's something. There's something there.

Cheeky Rack.

Cheeky Rack. It just has a nice ring to it.

Ilhan over at Boston University yesterday was watching with six of his friends from their dorm today. They got 10.

10. No way.

Air horns the team Groves.

Welcome to the Stream. Get all 10 of you folks on graphite.dev code review for the age of AI just go sign up right now. Create accounts. You can get started for free. Graphite helps teams on GitHub ship higher quality software faster. Honestly, if you're in college, you should create an account and then you're at least familiar with this. If you get into the workplace, you can be like, yeah, I'm already AI enabled. There's been a million articles about how there's this delta in early stage hiring. Between, like, early stage. It's harder to get a job. It's harder than ever to get a job out of college. But the AI enabled folks who are able to. To say, put on the resume, like, I know AI skills and I'm. I can use AI tools and get more leverage out of them not having as all three.

All three of our summer interns actually made.

Yes.

Made things as part of the application process without being asked. We didn't say anything. I mean, and then Nick over there.

Was saying he was vibe coding yesterday, and I was like, really? Like, we didn't hire you as even a programmer. Like, you did not market yourself as. As anything related to technology, really. And you've been doing a fantastic job doing what I expected you to do. But then vibe coding was just like, added on. The production team is always troubleshooting stuff using AI.

We're gonna give Nick a mic soon.

Okay. Yeah, we'll get everyone a mic anyway. Continue.

Sucks at Power Bottom dad with an absolute banger. You're scrolling on your phone. Slow day online. You look up, your kids have moved out of the house. You're 65, your parents are long gone. Panic takes hold. You want your time back, your youth back, but it's too late. You look down, three new notifications. How exciting.

Wow. That this hits like that Rick and Morty sketch about the Roy like whole life flashing behind your eyes. This is crazy. Yeah. Remember, folks, you got to touch some grass. Always love grass. Yep, Touch some grass.

Keep it on you. Keep it on you.

Thank you to the Ketone IQ folks for sending over some of these.

Yeah, we're gonna be. We're gonna be taking Ketone shots later.

Wound up going to the same gym as the founder, which is cool.

Anyway, Dylan Patel says, interesting coincidence that Cantor Fitzgerald has first question on Nvidia earnings after the H20 is unbanned.

Put on the tinfoil hat.

Howard Lutnick is a former chairman and.

CEO and his son runs the firm now.

So Cantor Fitzgerald. That's a good spot. First question on the Nvidia earnings.

Yeah, I do wonder, as I was listening through the earnings Call. I would have loved to get semi analysis folks in there asking questions. I would love more media folks on the, the, on the call asking questions. But it seems to be, it seems to be restricted to you know, traditional sell side analysts. But I wonder if that's like a hard and fast rule or if that will shift as like you know, the sell side banking world kind of de. Disaggregates a little bit because a lot of what Dylan Patel and the folks at Semianalysis do is very sell side research adjacent. In fact in many ways it's, it's superior because it's more focused. Anyway, we talked about this. Sam Altman said their AI may be in a bubble and Dr. Parikh Patel says MFER has been telling us we are on the brink of AGI for the last three years and the moment he ships a bad model he says we're in a bubble. Not quite. I still don't understand where that, where that question, where that actual bubble like topic came from. But at the same time it's different. Different to call a bubble when you're, when, when the aggregate value of all, when the aggregate value of all AI stuff is at like you know, 50 billion and then at 10 X's in a year. Like that is a different, that's a very different environment.

Yeah. I mean OpenAI with, with close to a billion weekly actives or, or whatever billion a month in revenue, they'll be fine. It's the number 10 through 50 labs that have no revenue and no users that are the ones that are really going to struggle.

It just feels a lot, it feels more, it feels less like. I mean there's elements that feel like dot com, but there's also elements that just feel like 2010. It's like what was going on in 2010. There was like kind of a bubble inflating in and there were hot startups that got overvalued. Ultimately there was like a power law in a lot of the things that came out of that era. You got Facebook at a trillion or whatever and then kind of like the next biggest social network was one tenth and then the next one was 1/10 of that. And there was a lot of B2B SaaS that got built for point solutions and narrow use cases. So I don't know, I think that to talk with Doug overall was pretty white pilling and pretty, pretty like I don't know what's, what's in between a white and a black pill. Like something just like even keeled. I felt even keeled after that anyway.

80% Chancellor cuts rates next month according to Poly Markets. Let's pull this up and make sure.

That that is decreases interest rates. Now this, this like somewhat should be priced in because I feel like there have been slight interest rate decreases already happening. The question is just like, would they cut rates more aggressively?

Well, I don't want to read too much into this, but there was some reporting from the Journal about Trump's mood and you could potentially read into this with this polymarket. Apparently, Trump wants to be at the White House more, more frequently this term, blaring music with the doors of the Oval Office. Do you have this article working later into the evening and telling.

Can you pull this article up? Yeah, I want to read through the full thing if we have it. Oh, wait, did you just have a long post? Because I have to, I have to run for a second. So if you can read through that, I'll be right back.

Yeah, let's do it. Let's do it. In Trump's second term, a Boulder president charges ahead unchecked. That was where this quote is coming from. This article is going to be fairly political, but this is not a political reading. So some aides to Donald Trump warned the president that building a ballroom at the White House would force them to tear down part of the East Wing and disrupt daily operations and tours. Trump said he would build it anyway, and the contract was given to builders chosen by the White House. In his first term, administration officials regularly curbed Trump's impulses on matters big and small, including on tariffs, immigration and controlling the Federal Reserve. In his second term, Trump has been surrounded by fewer people who try to dissuade him, according to officials, Trump allies and observers. I think he's learned that there is not much that can really stop him from what he wants, said Mark Short, who is Trump's director of legislative affairs in his first terms. In recent days, Trump renewed a call to end mail in voting, announced a new policy of coercing local governments into abandoning cashless bail policies, threatened to send the military to Baltimore, and said he'd like to send and he'd like to send it to New York and Chicago as well, all of which pushed the bounds of his authority. In one of the most aggressive steps in that direction, he tried to remove Federal Reserve Governor Lisa Cook from her post on Monday, setting up a conflict with the Supreme Court, which has recently suggested that the central bank is protecting from direct political manipulation. Some of his new directives are encouraged by advisors, while others appear to come from Trump himself. Seven Months into his second term, Trump has taken to rifling more frequently with authoritarianism. After positing during the campaign he would be a dictator only on day one of his presidency.

Such a wild quote.

And he's got a lot of what.

About the, the mutual playing music with the doors open or something. I want to know what music he's listening to. How closely does his playlist match the campaign playlist? And was Trump featured on the Panama playlist? I want to see his Spotify.

That's a good question.

I don't think they found him. That would have been like headline.

Yeah, the other crazy line in here and I hadn't heard of this before, I'm surprised. Apparently Trump is giving away campaign style baseball hats to visitors emblazoned with the phrase Trump 2028. Even though the Constitution bars him for running for another term and keeps him in the White House and keeps the hats in the White House office.

I mean, yeah, Trump is still at like 2 or 3% on polymarket because the market is just pricing. Like, yeah, legally it can't happen. But the funniest outcomes, the most likely, I guess 3%.

Yeah. So this was the line. I'll read it again because it's just hilarious to visualize. So Trump wants to be at the White House more frequently this term. Blaring music with the doors of the Oval Office open, working later into the evening and telling his advisors that he is having fun. The reason I highlight this is if you can remember times where you're working late, you got music blaring and you're having fun. I mean, at least he's having fun.

At least he's having fun.

Certainly more than the first.

There's a comment on Substack right now. Max Kondrat says semianalysis needs the first and last question on the next earnings call. Leopold Aschenbrenner two Clear pill. I completely agree. Speaking of clear pills, there's this post from Nick News Nvidia's data center. Revenue from Q2 chopped out at 41.1 billion. Analysts were expecting 41.2 billion and then it's over. It's like off by the slightest fraction and this anime character is just holding this like tiny little pill. I actually prefer more air bubbles. I'm a bubbler. I don't really understand the reference.

Wait, speaking of analysts, should we get into this?

Speaking of analysts, should you analyze your data on Julius? What analysis do you want to run? Chat with your data and get expert level insights in seconds? Go to Julius. Loved by over 2 million users users.

And Julius at Princeton, BCG and Zapier. Should we get into this post from Grizzly Research?

I will never be able to get that right. And we spent 30 minutes talking to the founder. I still get it wrong every time about it. What do you want to talk about?

This Grizzly Reports. Grizzly Research.

Oh yeah, we should go through this. This is fantastic.

So I guess short seller Grizzly Research has come out with a new article as of yesterday called Archer Aviation, the Nikola of the skies. Archer, if you're not familiar, is the previous company of Brett Adcock.

Hindenburg Research is gone but not forgotten. The idea remains. Grizzly Research seems to be adopting picking up where Hindenburg Research kind of left off.

Yeah, so Grizzly Research says Archer Aviation which is a publisher, public company.

Yes. Check flying cars.

Yep, they make flying cars. They spacked in 2020 and surprisingly they're only down 7%.

They've done well, which is, you know there were a lot of spacs that went out, went down by 90%, 80%.

But up 159% in the past year.

Wow. What's the market cap?

It must be in 6 billion.

6 billion dollar company. That's probably pretty, pretty big.

And so Grizzly certainly has a good.

It has a reasonable narrative for retail. It's like flying cars. If that's going to happen at some point, maybe you want to buy.

Got a pure play here.

Get a pure play here.

That's a pure play. Retail loves a pure play. So Grizzly Reports here says Archer Aviation has built a reputation as a leading publicly traded EVTOL company through misleading projections in PR reminiscent of Nikola's tactics. Our in depth analysis conduct with EVTOL engineers scrutinizes all major players and finds Archer's Midnight aircraft fundamentally flawed and likely uncertifiable. In contrast, their competitor Joby Aviation is making tangible and impressive progress on all fronts. Site visits to Archer's state of the art Covington, Georgia quote unquote state of the art. Covington manufacturer Covington Georgia manufacturing facility in June, July and August 202025 show little to no production activity.

Fun fact about Joby. You know what the founder's name is?

Joby.

Joe. Ben.

Joe. Ben.

Joe Ben. Bevert. Bevert. B E V I R T yeah.

We need to go back.

I mean he has vertical takeoff in his name. The nominative determinism of Joe Ben is so good and I believe, I don't want to get it wrong but I think I have a friend who worked there at Joby and said that they really enjoyed the engineering culture and they really liked the company. But even Joby, I think by their own admission would say that they're not.

It's a very tough business.

It's just an early stage. It's a frontier technology. I don't think that they would make the claim that it's hard enough to Cars have arrived. Yes.

And then you add in the regulatory.

It is fascinating all of this with the backdrop of what's going on with Zipline where there's no human, it's not a flying car but they seem to have solved some of the EVTOL pieces. And so overall I feel like there's going to be things happening, there's going to be value created in evtol broadly but it's going to be hit or miss and some companies are going to be able to nail it. Some companies are going to fall behind. So. Continue reading?

Grizzly allegedly visited Archer's facility and found little to no production activity.

This is the one in Covington for Georgia. Georgia.

This comes despite claims of current production along with current scaling to production of 50 aircraft per year and a final goal of 650 aircraft per year with support from Stellantis. Archer's $6 billion and it's bright in.

The middle of the day. Maybe it's a weekend.

So they have a $6 billion order book. Grizzly says it's inflated with questionable and fraudulent commitments. There's a company called Air Chateau which is based in the UAE has an MOU for 100 midnights which is valued at around $500 million.

Is an MOU something like. I mean it sounds like an IOU honestly but it's something like a. Like an LOA.

Yeah. It's basically saying like if you can make these, we'll buy them.

Yeah. What is loa? Loi.

Loi.

Letter of intent. Yes, that's what but moi is this is used when a full binding contract potential.

Yeah, it's non. Non binding. It's meant to show something that you can then go show to investors and say like we have demand for this.

Yes. Okay.

So UAE operator Air Chateau has only ever I guess purchased one helicopter in 2023 and they're claiming they lack the scale or capital for such a fleet and they, they also believe that Air Chateau is now defunct. There's a picture of the founder of Air Chateau here which with a good looking regular helicopter future flight globals up to 116 midnight order is tied to a shell company with no operational track record. So that is concerning. Kakao Mobility's 50 aircraft commitment fell apart after Archer failed to deliver for Q4 2024 demo in Korea. Yet the order remains in the backlog. The US Air Force is up to 100, 148 million. Agility prime contract has only awarded 33 million with just 744,000 dispersed and the 110 firm fixed price.

We were just talking to a friend yesterday. They were saying, oh yeah, like the, the DOD did a contract for our product and it really accelerated the business. And, and he was like, oh, we got like, I don't know, I forget it was like 5 million or 500k or something. It was, it was a decent amount of money. And I was like, oh, did they actually like pay that like, or was it just like, you know, some sort of thing and then it didn't materialize? He was like, no, like, like we did the deal, we sent them the products and they paid and like, it was done. But that's not always the way it works. You obviously have milestones. A lot of these, a lot of these contracts. And from Grizzly Research's post, it sounds like the Air Force was, was, you know, headline number was 148 million. But the contract only awarded 33 million and has only paid out around $750,000. And the fixed price, the firm fixed price portion only paid 1.3 million, which is obviously much lower than expected. Anyway, you want to talk about the launch edition in uae?

Yeah. So they had a launch edition. Grizzly's claiming there was nothing more than a staged hover at a photo op location using an obsolete aircraft recycled for marketing. The choice of venue, lack of real test data and diversion of scarce engineering resources all underscore that this was a PR stunt, not a meaningful step towards certification or commercialization. The company also claimed to have delivered their first midnight aircraft there. Yet they remain the sole owner of this aircraft that has now supposedly been delivered two times.

Interesting. So the recent defense pivot is desperate attempt to stay in the race as Grizzly Research. But the company lacks resources and capacity to be credible player. In conclusion, Grizzly Research believes Archer's fragile foundation will soon collapse akin to Nikola's downfall as mounting deceptions unravel and investors demand accountability. And yeah, what's interesting here is that I remember we looked at the video for Archer and we were going really back and forth on like, is there CGI in use here? Is part of it really hard to tell? It was kind of hard to tell. And that's just the Nature of like launch videos. Now, honestly, they're all pretty hard to tell because like the CGI is really good. But the bigger question is, from our discussion of SpaceX yesterday, to actually deliver like we wanted flying cars, to actually deliver flying cars. Cars, it's not enough to build one. You have to build the system that builds the flying cars. And so from my perspective, I don't know about the price of the stock or any of that, but if I was going to be excited about a company that was in the flying car industry, I would be much, much more focused on how does the manufacturing process work, how can they reliably produce more and more at a faster and faster pace? And are we seeing a true acceleration in the rate of progress even if they're blowing up all the time?

Well, that's the thing I was thinking about. If you're an EV tall company that wants to one day carry consumers, you can't really afford to have what SpaceX, the video we covered yesterday, a highlight reel of a bunch of.

I completely disagree. I completely disagree. Because you know who's flown on top of that exact rocket that's blown up so many times and they have a YouTube video of the rocket blowing up? The astronaut. Astronauts, yeah, the astronauts fly on top of it. Because eventually it got to a point where, yeah, they blew up the first 50 or whatever, sure, it just wouldn't be good. And then they did 200 without any blow ups. And you're like, yeah, at this point they don't blow up. So I'm down.

But I think if Archer or Joby or anyone released a video of a bunch of their aircraft exploding, it would.

Not be a good time to do that right now.

Wouldn't be good for the stock.

But 10 years ago, but I mean.

Archer announced that they are the official, they're the official air taxi provider for the 2028 Olympic Games here in Los Angeles. And again, I think that, I think that Grizzly would at least, I don't think they would bet on that. Yeah, they said Grizzly says we think Archer's ambition to fly a certified aircraft at that the LA Olympics in 2028 are laughable.

I can't imagine how hard it is to get sort of when I hear about UAE or any of the sort of markets that seem to be more open to technological experimentation like SpaceX started with Kwajalein Atoll. And I think that the regulation in Kwajalein Atoll is probably a little bit easier than Starbase Texas. And so when I hear, oh, the first time we fly is going to be at the most high profile event in the most regulated country, in the most regulated state and the most regulated city in America in the world. That seems like a really, really tough challenge. Texas would probably be easier to get regulatory approval for. There's other countries that would be easier to get regulatory approval for. Going straight to the Olympics is a huge, huge, huge, like push. But I don't know, it might just be, you know, framed as like, we're the official air taxi company and we're here, you know, advertising our, our business more than the product. But yeah, lots of skepticism. Lots of skepticism.

Yeah. So Joby trades at near double Archer's valuation.

Really?

As somebody on Reddit in response to this Olympics announcement says, if anyone from Joby's team is reading this, please step up your PR game. Archer's way behind you in product, but ahead in marketing. You need both for a new company.

Yeah.

So retail on retail violence, I think.

We will see a lot of small evtol aircraft like what Zipline is doing before we are actually flying in evtol vehicles. Helicopters exist like they like. What is the actual pitch here? Is it just cost that we're optimizing for? Because are we getting a new capability? And what they finally wound up building Archer, the latest one, the midnight aircraft, looks a lot more like an Osprey helicopter where it can tilt into a plane mode and go a lot further. Are we trying to say that this is going to be like a helicopter but faster? Or like a helicopter but cheaper? Or like a helicopter but you don't need a helicopter pilot? Is it a driverless helicopter? I still don't fully understand the definition of what. How is a flying car different than a helicopter? Because this doesn't look like something that I can drive on the 405 and that was what I was promised. That's what I was really promised with the flying car was like you can just drive it as a car at 75 miles an hour down the highway if you want. And then you can also just take.

It in the air.

Take it in the air and fly like a plane at hundreds of miles an hour. That was like the high level pitch. But if you make just like a plane or you make a helicopter, those already exist.

People that have driven cars fast and canyons will tell you that it's possible to get some airtime.

Some airtime, yes. Anyway, if you're planning on building a helicopter business, building any business, you got to get your brand mentioned on ChatGPT. Go to Profound reach. Millions of customers who are using AI to discover new products and brands. There are some new demos that hit the timeline from Higs Field swap to video is powered by Nano Banana. What a wild name for a product from Google. Swap any pic into a video. It's literally bananas. They turn this runner into the Queen. They swap Angelina Jolie into some stock footage. I'm sure she will like that. This is very cool. Look at that. Yeah, that's fun. The Queen just running. It looks so realistic now. Yeah. Even the motion blur in there. Like everything is just mashed perfectly. That's the perfect. Go ahead and play it again. Play it again. It's so funny. The Queen. The Queen. That really. That really takes it to the next level. That's fantastic. Anyway, do you want to scroll back to some of the other posts that we skipped over? We can go through.

Yeah. 4chan is suing the UK government. Toby over at Shopify highlighted this. There are some funny excerpts.

Yeah, well, I tried to read this and it was late and I didn't really understand. So apparently 4chan is alongside Kiwi Farms, which are both these communities online. But the introduction says the Internet is a global system of communications between computer servers located in data centers around the world. Despite the Internet's global reach, it is more or less universally acknowledged that the Internet is predominantly an American innovation built by American citizens, residents, companies, and that the United States States has the largest and most thriving technology sector of any member state. Foreign governments, particularly those in Europe which have not managed to build technology sectors of their own for the past half decade, have sought to control the American Internet and hobble American competitiveness. So they're suing the UK and they start off by just like making the argument that America is the best. And so Toby Lutke asked Grok to turn the complaint into a green tax.

And Grok's be the Internet global comm system between servers. Mostly American invention built by US peeps and corporates. US has biggest tech sector in G7. Foreign govs especially Europe can't build their own tech. Try to control American Internet with laws and stuff for half a decade. Threatens Americans and others with fines, arrest, jail for illegal stuff on their sites. Forgen and Kiwi farms, Sue UK and F is enough.

This is not that great of a green text. I'm gonna. I'm gonna say just feels like it just turned it into like some punchy paragraphs and they just threw the little. The little greater than symbols at the front. Yeah, it lacks the read read MFW or like sorrow PNG like I need more 4chan green text.

Read the notes from. From Andy over at 2 cents.

Okay. The notes from Andy at 2 cents. So Andy says this is incredible. The parties number seven plaintiff 4chan is a limited liability company. And then eight. Delaware was a colony of the United Kingdom of Great Britain until the assembly of Lower Counties of Pennsylvania that declared itself independent of British authority on June 15, 1776, thereby creating the state of Delaware. Delaware was subsequently the only state first state to ratify the Declaration of Independence the instrument which created the States United. The United States of America. Anyway, I. I don't know where this is going.

I don't know what the. Clearly having fun with the complaint.

Yep.

I think we can switch gears to hool. He is just on a tear.

Yeah.

Wire cutter Systematic is a whole different kind of robot vacuum. I agree. Yep, it is. It goes to town.

Yeah.

My house.

So this is kind of like a proper sort of like grounded up rebuild using modern technology of what most people think of as a Roomba or a robotic vacuum cleaner. Obviously that was from the previous generation of artificial intelligence where there were some pathfinding algorithms. But Matic has actually a really solid world model and image generation or image recognition and so it will. Will really hunt around your house for dust and dirt and messes and clean it up. Mehul sent us a few of them. We've been enjoying them. This isn't a promoted post or anything like that but we're just a fan of building cute little robots which I'm a big fan of. But if he needs to pay sales tax he's got to get on Numeral HQ Sales Tax and Autopilot. Spend less than 5 minutes per month on Sales Tax compliance and numerous HQ TCP says. Are you a small business owner struggling to make ends meet? Then try being a big business owner. Always a brilliant strategy. Always the correct strategy.

Go big.

Just go big. Just become a big business owner. This is a great market cap for Ridge will go nuts when Sean has a baby. Imagine all the product ideas he will come up including the Ridge pacifier which crazy. And also like a weird rendering where it's kind of like that's like it's shaped like it would be outside of the. Yeah, it's inverted. It's inverted. It's slop.

But the concept is sound.

Yes. But I like. I like building the Ridge world. I don't fully think of the Ridge as like the super tactical brand, but that's certainly where people went in the comments thinking about like tactical strollers and stuff like that.

I mean their initial customer base was the everyday Carry crowd.

Yes.

They even bought everyday carry dot com.

Oh really? I didn't know. Wow.

Yeah, they're very, they're very tactical. Well, Citrini research says Nvidia down 3% on earnings. I think everything will be fine. Open Twitter. See Satya posting like he's selling AI courses. I think a few put contracts.

That's ridiculous.

Let's actually read through how Satya is using GPT5 and Copilot.

So I have a very different read on this but let's take the current.

Satya says based on first way he's using it based on my prior. He's prompting based on my prior interactions with a person. Give me five things likely top of mind for our next meeting. Nick does this for us very well. Yeah.

Draft a project update based on emails, chats and all meetings in in a series. KPIs versus targets, wins versus losses. So the benefit of course of running the whole business on 365 Copilot is that they have email and Outlook, they have chat in teams, they have meetings. And this is true of Google for the most part I guess except Google doesn't really have a Slack competitor so a lot of people are having to piece those two together. And that's probably where a company like what's that enterprise like search across your entire enterprise business. Glean Glean comes in potentially. But certainly having this as kind of like the homepage for your dashboard for your whole website, all the communication like it's a very reasonable, very tractable like use case Just saying like hey, here's some prompts that you can do that only work here because you have. We have all the data. Are we on track for the product launch next November? Check engineering progress, pilot program results, risk, give me probability.

That's cool.

All stuff you can do in ChatGPT if you, if you sync everything in but you know these things come out of the box.

Well yeah and OpenAI is trying to build a lot of this functionality themselves.

And that feels like more of the narrative here, which is Satya mostly just reminding people like every Microsoft product, every Microsoft product has by contract the best OpenAI model on the day it's released because that is the nature of their agreement. They get a copy of whatever and so like if it's. It's easy for people not to remember that. And I'm sure that there's a lot of Microsoft 365 copilot business owners who run on 365 and they've been on that for a long time and then they're hearing this, oh, like I got to get my company like AI native. Like I got to get like AI tooling. Like should I bring in another service?

It's going to make enterprise and I mean even just mid market, SMB is like a tough category for OpenAI to really dominate.

But they've one consumer and so I think that they should be fine over there. But if you're running a business and you're like Microsoft360, we are a Microsoft company. We use Outlook, we use teams. That's the backbone of the business. And then you start seeing credit card charges for $20 a month on OpenAI, $200 a month on OpenAI and you're just like wait, no, no, no, we get GPT5 for free at this company. Like we don't need to, we don't need to pay extra for GPT5. We get it for free. And so maybe this is, maybe this is the solution to the ad free version is if you get on Microsoft 3365 they won't have ads in it and it'll be able to do everything and you won't have to pay. I don't know, we'll have to keep track anyway. If you're looking to integrate AI into your customer service workflow, go to Fin AI, the number one AI agent for customer service service. Number one in performance benchmarks, number one in competitive bake offs. Number one ranking on G2 bin AI legends. You want to talk about Garmin?

Let's do it.

Garmin is selling a real time health data for your horse. With its easy attached tail wrap and sensor, the Blaze Equine Welcome Wellness System measures your horse's heart rate, strides, gait and more during rest and rush rides. Get insights into their health and fitness and make more informed decisions about their well being and training. I need this as well. And we talked to the Fitbit for cows company. Well now your horse will have a Fitbit or maybe it's an 8 sleep for your horse but 8 sleep get a pod 5 ultra.

This note from Kane is cool. Garmin picks niche but spending activities and goes. I can crush every electronics maker here and it sounds sounds like a super fun business and hunting, long range, shooting, fishing.

So they make very specific specific hardware often ruggedized and figuring it out but gphoto says honestly one of the most confusing spam emails I have gotten I do not have a horse but I love it. I love it and some of these photos look really, really Cool. These Garmin the.

I had no idea that Garmin is a $45 billion company.

Huge. Huge. I mean there's a lot of fishing to do, there's a lot of long range shooting or bow hunting. You want to go out bow hunting without a garment on your, on your bow.

And I think they still crush it in smart watches despite obviously having totally competition.

Yeah. Because they've differentiated niche down like Apple's going to be kind of the broad, broad consumer choice for a lot of folks. But Garmin has like all the trails they ask.

The question what are you running from? Will help you go faster.

For sure. For sure. Brian Johnson says one of the best new habits I've started lately is calling friends for 15 minutes. I say hi, tease them or share something funny. Then it's immediately over. No lingering, no fuss. It's great.

It's called flirting, not friends.

It's called chirping. You chirp your friends. Hey, did you bench today? What's up?

This is, this is just a funny habit. I mean it's genuinely hilarious.

It's extremely. Brian Johnson coded to take something that's like, just calls like, you know, this is like the classic like tech guy.

I'm actually going to do this to him later. I'm going to do this to him later.

Yeah, yeah, yeah. Tech guy being friendly.

He texted like once. I'm going to call him out of the blue.

Hey, how are you doing? Teaser tease you buddy the elf.

What's your favorite color?

I mean people like it. 7,000 likes. It's a good take. Anyway, starting today, Flow by Google. Google AI Ultra subscribers can generate VO3 fast videos without using any credits. So you can fine tune your clips to exactly how you want them and only spend credits on that final upload. May this be the piece de resistance on that new product. And Bonegpt says I just got unlimited VO3 fast. So people are very excited about that. That's fun. I've been really enjoying the VO3 model. Continue to enjoy it and continue to use it. So Buco Capital bloke, sounds like we are getting the final Google ruling tomorrow. For now we exist in the liminal space between it being over and so back via cone Dios.

This is about the Chrome Chrome divestiture.

Yeah. What's the news? Okay, we'll have to track it later. So nanobanana. More nanobanana news from Google. Love these. What does the red arrow see? Google Maps transforms with nanobanana levels. IO says if you're not building a mini startup with nanobanana today and launching it tomorrow. You're missing the opportunity of a lifetime. This image model just made hundreds of new startups and apps possible. The only limit is your creativity and how fast you can ship a user interface and put a stripe payment button on it. I think. And Levels has done this a few times. I think he had some image generation app that allowed you to decorate your house. So you take pictures of the empty room and then it would give you ideas for decoration, inspiration. I thought that was very cool. And with much cheaper AI images, it just unlocks new use cases.

So certainly somebody sniped nanobanana AI.

Oh, okay. And what about dot com, where's dot com go?

And it's not Google affiliated, but they're.

Charging up to $6,500 per image.

No, they're just saying. Yeah, they're charging $64 for 800 high quality images a month.

Wait, isn't it like $10, a thousand or something?

Yeah, they're marking it up again. This is what happened with, with ChatGPT where people were just reselling ChatGPT before they had a lot of focus on, on mobile.

Wow. Well, if you're, if you're launching a foundation model and you're using a codename, buy the dot AI. Buy the dot com. Don't get swooped. Don't get swooped. Tyler, have you played with Nano Banana yet at all?

Yeah, it's really good.

Yeah.

I think the main.

Does it unlock anything new? Like is there going to be a new Studio Ghibli moment?

I don't know. I mean there's some cool things with just how consistent the characters are. Right. So if like I take a picture of someone I can like change their shoes and nothing else will change. It's like you can't do that with you know, GPT4 image.

Yeah, yeah, yeah. Images and ChatGPT. I feel like it always makes the face just like a little bit uncanny valley when it re renders it.

Yeah, I think that's probably the main.

Use case is that the face just stays the same basically.

Yeah.

For like photorealistic stuff.

Yeah.

But I think the main takeaway from Nano Banana is that like Gemini now has like, you know, they have like a rune, like they have a poster in house because like you saw it was like a week before it came out. Like, oh, it's on Elle Marina. What is Nano Banana? And Logan is just tweeting the banana emoji. I think that is huge.

Unlock the vibes. I love it. The other question is I Wonder. I don't know. Yeah. I wonder if this is going to unlock any specific viral moments or if it will just be something used by companies because it's cheaper and more reliable. I'm certainly excited. Do you think that there's a potential that it's enough to get people to switch to Android?

Why? Because it would just natively have.

Have you used the iOS remove object?

No.

AI feature?

No. Is it really bad?

You should go demo it. You should take a picture of something because you have the latest and greatest, right? Yeah, yeah, yeah. If you take a picture on the phone and then you go and you say like, okay, I want to remove this. I'm going to try and remove this Diet Coke from the image. You can go in to edit and then in the image editor, there's a cleanup button and you can, like, Prepare cleanup in iOS and like, as you kind of draw, it takes a long time. You kind of like. I guess it only picks things that you can remove. I don't know. Like, it's rough. It does not quite work. Okay, here we go. Now it's finally going.

Breaking news. ESSENCE has filed for bankruptcy protection.

What is essence?

Yeah, Gabe literally called this in the chat. He says Jordy might know essence. Don't think John would know about them. Called it perfectly. Fashion Marketplace. Surprised to see this. I'll try to get an article. Canadian Luxury Luxury E Tailor told employees on Thursday that the filing was necessary as tariffs took an unexpected toll on the business and to preempt a forced sale by lenders. ESSENCE is filing for bankruptcy protection after what it described as an attempt by lenders to force a sale of the company. Chief Executive Rami Atala on Thursday said essence's creditors want to put it up for sale under the company's Creditors Arrangement Act, a process similar to bankruptcy protection that allows corporations to restructure their finances. Atala went on to say that ESSENCE will fight a sale by filing its own CCAA application within 24 hours. Recently, we have worked closely with financial and legal advisors to develop our own restructuring plan to stabilize the business and rebuild it for the future. The court will decide which path we follow, like, likely within the next week. Again, I believe that from. I believe, Gabe, correct me if I'm wrong, but I believe that ESSENCE just primarily partners with boutiques so they don't actually hold a ton of inventory. I might be thinking of Farfetch, but hard, I mean, and it sucks. When you're a business that is in the business of just selling goods, you can't do that.

Well, good luck to them. Let me tell you about Addio Customer relationship Magic. Adeo is the AI native CRM that builds scales and grows your company to the next level. You can get started for. We have our next guest here in the RE street waiting room and now in the TVP and ultra dome.

What's going on? Welcome to the show.

Hey guys, how are you?

We're great. Good to meet you.

Doing great.

Can you introduce yourself a little bit for the stream?

Yeah. My name is Ajay Agarwal, a partner here at Bain Capital Ventures and been here for 20 years. Started life in the startup world way back when. Been in tech for a long time.

Were you ever out of the Boston office or were you always in Silicon Valley?

I was originally in Boston. So when the fund got started, you know, roughly a little over 20 years ago is 100% in Boston and that was sort of the year of Route 128. And you know, all the great stuff happening in Boston and you know, the business on the east coast has really migrated to New York. I moved out to the Bay Area to open our west coast office. We launched that effort, you know, about 15 years ago. Now, you know, at BCB, the majority of our team is on the west coast and our second biggest office is New York. So Boston. Great town, great life sciences town.

Well, and YC was there. It started.

YC was there originally. I remember the old, old days of YC at MIT and, and then, you know, YC moved. So it's, you know, Boston's a great place, a lot of innovation here. It's just, you know, the application layer of AI, the foundation layer of AI. It's all happening, happening in SF and New York these days.

Yeah, when, when you say like the firm started 20 years ago, you're talking about BCV specifically and not like Bain Capital broadly. Like, how do you tell the story of like the venture firm, like launching from within that larger structure?

Yeah, I mean, it's a great question. You know, the firm was started back in 1984. Mitt Romney and Partners, you know, started it, you know, and they early on that fund was really small. It was like $37 million. And so some of the early deals were what you'd consider tech companies. We were the first investor in Gartner Group way back when, which is classic.

Creation of the hype cycle. Yeah, you literally created the hype cycle.

So we have a huge blown up.

Poster of the Hype cycle. Hype cycle we love, we think you.

Can apply it to all, all things in Life is a fundamental truth.

It is true.

You know, if you're having, like, relationship problems, just, you know, hype cycle, show your wife.

We're going to get to the plateau of productivity.

We're just in the tr.

Disillusionment right now.

We are in the tr.

But we can see the plateau of productivity.

Yes.

Yeah, yeah. No, I mean, the gardener was not my friend when. When I was running Go to market a Trilogy. But, you know, they. But. But certainly, I mean, that business has continued to do great. And so they made a set of early investments out of what you'd consider a small private equity fund. Gardner Group and DoubleClick and things like that. Even Staples, you can consider a venture investment. It was one store when bank capital invested in it. So it was truly a startup. And then, you know, the funds got bigger year and they started doing bigger deals. And as a result, that meant more mature companies. And it was clear that, you know, in order to do venture in early stage, it necessitated a separate fund. And the firm's been very entrepreneurial over the course of 30, 40 years now, you know, 40 years now, you know, we've launched a venture fund, we have a crypto fund, we have a life sciences fund, real estate, you know, kind of a whole range of things.

Things.

And that's always been the culture, which is, let's create it. Each fund stands on its own. So we've got to go raise capital, you know, from limited partners. We make our own investment decisions, but we benefit from the affiliation with the rest of the firm. And, you know, we'll get into industrial renaissance, we'll get into AI in the physical world. But, you know, our access to the real world economy through Bain Capital, you know, actual physical businesses, manufacturing companies and brands and retailers and financial services companies. That's where a lot of young people want to build today. And, you know, that's a huge source of our competitive advantage on the market.

Yeah. Before we get into all that good.

Stuff, how'd you meet Joe?

Yeah, how'd you meet Joe?

Yeah. Normally we'd be like, oh, no one knows what we're talking about here. But I mean, he's been on Invest like the best. He was in the Journal. Like, this is Joe Lamont Week.

And so, I mean, you know, for my entire career, people are like, you know, we've heard of Trilogy. This week has been Pete, Joe Limont. I met him my sophomore year at Stanford. A professor of mine said, you got to meet this guy. He's starting a company and you should join him and So I went over to Tressiter and sat outside with Joe Limont. He was a year ahead of me. He was a junior, I was a sophomore.

So this was when he was like racking up credit card debt, like financing.

This is even before Trilogy. So he hadn't started Trilogy yet. And he was starting a company. It was called Fourth Connection. And Fourth Connection is today what you'd consider a CRM.

Sure.

But we would go around up and down El Camino and go to startups and tech companies and say, wouldn't it be great if you had one database for all your quotes and contacts and proposals?

Puzzles.

And people are like, wow, that's so cool. That doesn't exist. We'd love to have that. That was what we were selling at Fourth Connection. And so when I first met Joe, the very first meeting, and.

Sorry, was that Sales builder or was that.

No, that was. The sales builder was Trilogy. And you know, and. And he eventually dropped out and started. Started Trilogy.

Got it. Wow. So this was like.

This was foundation, like, yeah, this is 1988, I think. You know, now I'm dating myself here. But. But he said to me, you know what the greatest business on the planet is? And this is like the first five minutes. And I said, I have no idea. And he said, it's enterprise software. And I said to him, what's Enterprise software? Yeah, there you go. Enterprise software. Here we are still 35 years old, undefeated. And it's undefeated. It's still enterprise software. And I said, why? And he said, it's the only business in the world world that you build it once and your marginal profit is basically 100%. He's like, it's the greatest business in the world. He said life sciences is sort of like that. But he's like, you. You don't know if it works for 10 years enterprise software. You know, within a year or two, if this thing works. He's like, let's start an enterprise software company. We did this thing Fourth Connection. We did that for a year. He dropped out. I decided not to drop out. And then he went on start Trilogy. I joined a a few years later as employee 18. That was the Joe story.

Yeah, I feel like there was a lot in the invest like the best interview. The thing that stuck out to me was towards the end when he was talking about how AI will affect enterprise software. And just his overall playbook of reducing churn, switching a company from growth mode to retention mode. And his claim or his hot take was basically that in the age of AI Re platforming or ripping out a piece of legacy enterprise software will get easier. And so the old school trilogy playbook might be a little bit harder to execute. Not just because it's more competitive and everyone has heard about it and everyone's kind of running their version of it, but just there might be some fundamental technological shift shift that's making it easier for companies to switch to other products. And I'm wondering how you see that trend, if you agree with that, or how you think that affects the next generation of enterprise software companies.

Yeah, I think the things about this era that are the same as the trilogy, or in some ways it's almost a return to the past is this idea of CEO selling big deal. Selling, selling, selling a vision. You know, in the late 90s with this enormous poll from CEOs, just like we're seeing today, where CEO said, I got to get on this Internet thing, I got to modernize. I just rolled out laptops to all my salespeople and they're on the airplane just playing solitaire. They need apps, you know, and I need to buy some apps for, for my laptops. And so we would sell directly to the CEOs, and these contracts would be 10, 20, 30, $100 million billion contracts. And we're kind of back in that era now and the best companies in AI are selling high to the CEOs. Every CEO, Fortune 2000, they've got some kind of a council and they're saying this is, we're going to fast track all this stuff. We're not going to go through the normal procurement process and everything else. And so I think the companies that are winning today are in many ways able to sell this larger vision to these large companies to say this is how you don't get left behind, you know, with the revolution. So I think that part has changed from kind of the SAS PLG era, but in many ways return to sort of the 90s and Siebel trilogy. And I too, and kind of that world. I think the part that will be interesting to see, and there's been this debate and Aaron Levy's talked about this, is will the systems of record get disrupted or will they get stronger? Now, clearly Aaron's got a biased point of view because he is a system of record, you know, at box, but. But his view is the system of records are going to get stronger because they represent the ground truth. You know, models hallucinate, you know, AI is probabilistic. What is the ground truth that that's going to guide these agents and ultimately Is that the data that's inside SAP and inside Oracle and inside Workday? And we will Systems get stronger. I tend to be a big believer in systems of record. I mean, if you just look at the history of software, the biggest application companies in the history of software have been systems of record. And you know, that's just been true for.

Even if you look at Satya's Satya, people were kind of dunking on Satya for posting this thread yesterday, but he was basically just demonstrating how powerful GPT5 is within copilot it because they already have all of your information. They have your email, they have your calendar. They know who people are. It's just very easy to just run prompts on top of the system of record. And that's just an incredible advantage that Microsoft has.

Yeah, I mean, the flip side of this, just to take the counterpoint to Aaron at Box is, well, the business owns the data. And so it's very hard for a company that is a system of record to say, no, actually I'm not going to let you suck all this data out of my installation into a data lake or into just a bunch of CSV files if you want. If I am paying for a system of record, I will demand that you let me print it out and take it out the door if I want, because that's my data. But of course there are different integrations that can be made a little bit more difficult. So I'm wondering if in the age of AI, there's, there's like the binding between. Even if Salesforce or Box doesn't let me with one click off board and onboard into a different service, if I show up with my, you know, my McKinsey or my Bain & Co. And I have a team of Accenture, but it's all AI and I say, hey.

I want you to one of my portfolio.

Take screenshots if you need to.

Yeah. One of my portfolio companies is building agents for enterprise migration.

So yeah, I mean, can you, can you wrestle with that? Like, how does that, how does that play into all this?

Look, I think it's a great point. Certainly even the last five years, more and more companies are putting, you know, trying to get all their data inside, you know, cloud data warehouses or databricks or whatever. And so I think that trend is continuing. But the question is for enterprises, where is that on the priority list? Totally, you know, it's just not on the priority list. It's like, okay, that's there and it works networks. And I now want to, to move forward. And I want to take advantage of the next set of opportunities. I want to implement, you know, the AI for call centers, AI for coding, AI for, you know, health care, rcm, billing, whatever it is. And do I really want to go through, you know, even though it might be possible today of taking all my data and EPIC and trying to push it somewhere else, it's just low on the priority list. You know, at this point, they've already suffered through the pain of the last 10 years of all these implementations. And so I think it's like a lot of things inside these enterprises are going to build on top rather than try and rip and replace.

Yeah, one of the things that stuck out to me from the Joe interview was where everyone in Silicon Valley is familiar with the concept, like, built to grow, you're in growth mode. Go, go, go. Then there's obviously a lineage of companies that are built to last. And he brings up kind of a controversial one, which is some companies are built to die, and that they've kind of done all that they will do, they built all the products that they will do, and they are machines to kind of maintain their customers for as long as they can, but that particular product will not exist, and the people that work there will migrate to other projects in the portfolio. And I'm wondering if you have a unique perspective from your background at Trilogy, and then also the overlap between BCVs in a unique position. I don't know how tight the firm is broadly, but. But like, Brookside could take a company public. It's like the coolest thing possible. And then you also have the private equity lineage there that could turn around a company or take it in a different direction. And I'm wondering if that brings you a different perspective when you're sitting on a board to have a real conversation with a founder, that's not just, hey, swing for the fences. And then you just. If it's not a home run, you're never going to hear from me, as opposed to, actually, I can still help you make good decisions. In the era where you're going public, or where you're going and working with private equity, or where you're winding the company down, do you feel like you have a differentiated perspective there from other venture capitalists?

Yeah, I mean, I think the reality is that there's so many different ways to create value. And it's funny, kind of in this era where venture firms are kind of, there's a stampede towards becoming private equity firms.

I did that first.

Nobody, you know, we sort of understand that that desire capital. And so there's just a lot of different ways to, to, to generate value, to create value. And, and one of the benefits of being a bank capital is you see all these different divisions and private equity and public equity and credit. And it's incredibly smart people that are partnering with companies to create value. And these companies are, are different stages, different dynamics, different competitive situations. And you know, I mean, a lot of great companies end up getting bootstrapped to the point where then they might sell estate to, to private equity. That was the case. We invested in Survey Monkey. You know, it was a bootstrap company. And then, you know, we got involved as part of that business. And so I think that is just the reality. A good friend of mine, founder, we backed early Nick at Gainsight site. We were part of that journey. And you know, he decided that the growth profile of the business was still going to be very strong, but was not going to be the 60 to 100% growth that, you know, folks like US venture investors wanted. And so he orchestrated incredible exit to Vista where, you know, he was able to transition all the venture investors to a different, different type of investor that was in many ways ideally suited for that more mature phase of Gainsight's growth over the last four or five years. So I think that's an important thing. There's different ways to create lasting value. And I think founders oftentimes, when social media are looking for a pattern or one way, there's just not one way. There are a lot of options out there.

Yeah. On a similar note, I know, I think it's rebranded. Sankaty Advisors, the credit arm of Bain is now Bain Capital Credit.

Yeah, it used to be Sankaty, now Bain Capital Credit.

Got it. Yeah. And I'm wondering if just having any interaction with those folks has given you a differentiated perspective on what's going on in the venture debt markets. We were reading the other day in the Journal that there's been, we're back to new highs. There was a drawdown. Volumes expanded, but the amount of deals has, has contracted.

Also the number of lenders has increased.

Yes, yes.

The market just basically fragmented. Post.

Yeah. So I'd love to know your thinking and what you're advising founders on. When is the right time? What is the shape of the business? Like, what is the current meta for getting the most out of a venture debt partnership from years ago, it was very different. How are you thinking about it now?

Yeah, I mean, I think debt is very powerful, but it's also very dangerous. And the reality Is that you know, for an early stage company that's pre product market fit, I think the best case use of venture debt is some Runway extension.

Yeah.

And not even really Runway extension such that you can sort of draw your equity down to zero and so it buys you a few months. But we, even when you, you our companies have venture debt and their pre product market that we, we advise them not to actually tap into the debt, it's there, you know, so they can sort of extend the Runway a few months. I think that's one option for venture debt. I think the second is if it gives you a clear path to profitability. If you're a later stage company and the venture debt can avoid a dilutive equity round and you can get to profitability then I think it's very effective. I think for businesses which you know are rarer in our, our, our world world but that have capital, you know, that a little more capital intensive. Certainly credit can be a source of financing. Working capital financing is effective but your business has to be very predictable and generally credit is best used when you're break even or close to profitability. I mean I think I remember we had this great company Reich, that was a PLG company kind of in the space of Asana and Monday and all those companies ultimately I think exited for north of 2 billion. But I remember Vista was looking at.

The company and they just said look.

Given this level of ARR, we can take that amount of ARR and put 2x that number of debt on the business because the business is so profitable, because it's generating cash and that can allow that money to come out to shareholders. So there are a lot of interesting ways you can leverage debt. I just think you have to be very careful. If you are not quite a predictable company that has a path to profitability then I think you've just got to be very selective.

Yeah, it feels like something where you can get in a lot of trouble if it's not a foregone conclusion that you can raise another equity range round like but if you're a place where you could always do an equity round, there's always demand at some price. But if you're ever going to be in a situation where there might not be enough demand to clear your next 12 months, 18 months of burn at any price, you are in trouble, potentially.

Give us.

Yeah. Oh, I was just going to say we had Pete from Astronomer on the show. How, where does that rank in terms of like crazy wild cards in your career? I feel like it was, it just Gripped the whole tech community. And I'd love to know a little bit of the play by play of like, how you experience that internally, because it feels like the most unexpected, like, story to ever emerge out of a company that is managing Apache Airflow.

And well handed.

Extremely well handed, yes, but we all know about Apache Airflow now.

No one, no one had in their 2025 bingo card. Coldplay or Apache Airflow.

Exactly.

Both are in Gwyneth Paltrow. But, you know, I, I, I got a call from, you know, my partner Enrique, who's on the board, you know, Thursday morning, and you told me what happened and I hadn't, you know, been on.

Wait, wasn't Thursday Thursday there was. The concert was like Wednesday night, right?

Concert was Wednesday night. Yeah, exactly.

Hey, how's it going?

I get this call and I'm like, oh my God, that's crazy. And so then I went social media and watched the video. And then later that afternoon, you know, I ran into my wife and I was like, oh, this thing happened to her company. And I was explaining and I assumed it was sort of this thing like.

In the isolated, narrow tech world, you.

Know, that I, that I live in, you know, and she was like, oh my God, everyone's talking about that video. It's gone totally viral. My kids were picking me and I, you know, the part of it going, you know, viral in tech, that's happened. And good news, bad news at various of our companies over time, but the part where it became part of the cultural zeitgeist for the entire country for literally three days, never experienced anything like that. And, you know, I think the board and the management team, Pete obviously is a founder that, you know, they did a really good job of. You know, one being, you know, number one, you know, we responsibility to the employees and our customers and let's do what's right. Number two, you know, this is obviously a cultural moment, but there are also real people involved and their families and things like that. So I think they handled in a way that I think reflected a bit of that balancing act. And, and so, you know, I think you had Pete on the show. It was great. And you know, and I think the company came out the other side with more visibility. Certainly I think our customer base feels very good about the business. The business was growing very rapidly and has continued to do so. So we feel really good about the business, we feel good about the investment. And thank God for Gwyneth.

Absolute masterclass. Give us an overview of how you're thinking about what some would call American dynamism, but just this industrial renaissance, how you're thinking about what's important but maybe not investable versus what's important and investable from a venture standpoint.

Totally. Well, we don't like to call it American dynamism, but we call it industrial renaissance Odds. But you know, we think that, you know, it's, it's a really important trend and opportunity. And certainly, you know, I think there are enormous tailwinds, you know, that are, you know, heading in this direction. Certainly the advances in technology and computer vision and the sheer cost of robotics and automation has come down, you know, the geopolitics onshoring, tariffs, tariffs, labor shortages, all of that I think is creating the tailwind. Certainly you've got similar set of dynamics if you extend into the military and Department of Defense. You know, our, our strategy here. You're really starting with our investment in Kiva Systems way back when, I think has been to invest in companies where the, the core innovation is still software, software, you know, and there are elements that involve hardware and robots and things in the physical world, but the core innovation is ultimately software. And I think Kiva is a good illustration of this. You know, when, when Mick showed me the prototype way back when, 2004, he said, you know, inside an Amazon warehouse, a worker spending 90% of their time walking to the shelf and 10% picking. And so he said, and he said, said, having a robot pick one of a million SKUs that are different shapes and sizes and weights and colors and T shirts versus like a broom, he's like, that's an impossible problem. It won't be solved for at least a decade. You know, it's now been, you know, now 20 years, it's still not a solid problem. But he said, the problem of getting a robot to move a shelf from point A to point B, he said that's a trivial problem, you know. And so his insight was instead of having the worker go to the shelf, shelf, I'm going to have the shelf come to the worker, you know, and that alone triple productivity built this great company powering all of Amazon today. It's, it's really core to their fabric of how they run their, their warehouses. And so we're looking for opportunities like that that are fundamentally software at their heart. It's more of a systems approach, you know, really thinking about a problem holistically. These companies tend to be more full stack as opposed to just selling a widget it of some kind. I think that also prevents you from being commoditized by low cost, you know, offshore manufacturers trying to come in. So those are some of our thoughts, kind of in this industrial renaissance world.

So you've backed every humanoid robot company? Sounds like.

Sounds like, yeah, we were talking about this. Like, yeah, you see the exquisite demo, and it must be a jump to try and understand. Okay, okay. Can this person, are they just a genius and they can build one, or are they building a system that delivers to the tune of a million? We were talking about this with SpaceX, obviously. Tons of rockets blowing up. I think they're on ship 36. But, like, the goal is not just get one rocket to space like we did that. We went to the moon. The goal is, like, get it really cheap and reliable. So it's going every 30 minutes. Same thing with what we're seeing with Zipline. The. Those folks are just focused on scaling and manufacturing. The starlink stuff's the same. It's a completely different dynamic and problem that you're actually solving. Jordi, where you want to go next?

Good question. Yeah, I guess. Yeah. I think Aaron slowed off, had a post yesterday having some. He has a manufacturing tech company and this idea of, like, basically. Yeah. Understanding specifically these industrial renaissance companies. I have to imagine you're oftentimes meeting entrepreneurs where you're like, this seems like a good business. It should exist. But, like, what. What is your, like, actual investment criteria for a company that wants to make things in America? That's not. Not a company that is a system for making things, but. But something where it's an actual physical product as the. As the output.

Yeah. I think if you're actually a core manufacturer, as opposed to a technology company that's automating manufacturers, I think the bar is very high to investors, you know, from a venture standpoint. Because I think there are a couple of things you got to believe. I think, number one, you got to. You got to believe there's truly proprietary technology. And that's just a high bar in manufacturing. I mean, you know, you've seen it with. You guys were referencing the Roomba earlier and, you know, Shark Ninja, you know, like, anytime, you know, every Dyson product, every, you know, product that's out there, they have some equivalent. And Shark Ninja is a great company. I'm not disparaging them at all. But, you know, you realize you're going to get competition very quickly as a manufacturer. And so the question is, what is that source of, you know, competitive differentiation? And oftentimes it's software, some kind of software or network effect or data, you know, that Allows this business to maintain proprietary margins and a huge competitive advantage over time. And so I think you need that or you need just an extraordinary entrepreneur, a founder, an Elon Esque founder. I just think it takes a very special kind of founder to build a physical products company. You're just dealing with the physical world is far less forgiving on so many dimensions. One, just making money, but two, having it work.

On that note of software, is it always software that enables like the bootstrapping of a network? I'm thinking of like Apple gets power from software, but not just software, it's like imessage integration, a network. Nvidia gets power from software, but it's cuda. What is cuda? It's a network of talent and standards. It's not just you copy Cuda and you're good or your feature parody. Tesla, they have self driving. It's great as a single thing, but it really is like a scaled network that gets better the more people use it. Is there some sort of dynamic there that creates a flywheel effect?

Absolutely, yeah. I think that fly was really important. We're investors in this logistics company called Ship Bob.

Oh yeah.

And you know, shipbob is like a, you know, it's a tech company up and down. But when you think about why is Ship Bob so powerful? It is ultimately a network effect because we have so much density with so many warehouses, you know, we know, and we have so much data, we know that, you know, customer A in New York City is going to order this product from this vendor. So we're going to make sure that product is sitting in a warehouse on the east coast. And by the way, we're not going to get that right 100% of the time. So 30% we get it wrong, we're going to be able to fill up an entire truck of stuff from L A and get it to New York so that we can inject that package, you know, at the last mile and bring down the package, you know, the Delivery cost by 2 or $3. And so it's a classic network effects business that's underpinned by data and software, but certainly relies on, in that example, relies on physical warehouses. You know, we have a certain number of physical, where we don't own those, you know, those are through partner sites, but those are physical assets that are out there that create the density. We're using physical trucks to move things from point A to point B. But ultimately our ability to do that is driven by data and software, you know, at the ground level. And those Founders made a really interesting decision which was we are going to partner with third party warehouses but they have to use our entire stack of software. We're not going to rely on their side. They don't use our warehouse management, our pick and pack software. They don't adhere to all of that. We're not going to work with them because we need to have that, you know, pane of glass that sees every bit of information from, from, from soup to nut. So I think your point John's a good one, which is, you know these businesses that ultimately create some kind of network effect, ultimately you have that flywheel that, that keeps going and allows you even you mentioned doordash. I think on a previous, you know, podcast a few days ago. These businesses that people think of as low margin, once you get that network effect net flywheel, you can just, just compound forever.

Well, thank you so much for joining. There's a Ship Bob fan in the chat. Spamming Ship Bob will be a $10 billion. Let's hear it for Shitbob.

Good to see you guys.

Thanks.

Have a great rest of the day.

Have a good one.

See ya. Let me tell you about public.com investing for those that take it seriously. They got multi asset investing, industry leading yields and they're trusted by millions. And our public.com update is that ByteDance just made more money than met for the first time in history. Yeah, I think this is a boo because we root for Zuck. We root for America.

We are team Zuck. But you got to give it up.

But you got to give it up for big numbers. Congrats to the team over at Bytedance putting up some heroic numbers. $48 billion in Q2 to Meta's 47.5. Just, just, just over 47. Just a billion. Oh, it's got to be rough over there.

Well, up next we have the founders of Frank Streamer.

Welcome to the stream. How you guys?

Gentlemen, what's going on? Hey, good to be here. Big day, Big day. You guys are up late.

I'm so. Yeah, thanks for hopping up late. I'm so trained to. When we have two people, they got a debate. I think we got to get these guys to debate. What are we debating?

I mean we do that all day so.

Yeah, yeah, yeah. That's the life of a founder.

Give us, give us an intro, the update and I got the gong ready for you. What is top of mind for you guys? What do we do with the code? Just wait, you'll find out. All right.

Yeah, here we go.

All right, so the update is. So we're framer. We're a web design platform for professional or like professional web design platform where companies can run their entire dot com. And we raised series D that we announced today.

Let's go.

Ah, that's what it's for.

That's what the GoG is for. 100 on 2 billion.

Wow, that is a big, big number. Congratulations.

Big number. Are you guys in sales? We just celebrate.

We just enjoy huge capitalism fans, honestly.

Yeah, it's really just a love for business and big numbers. But. But yeah, it's. It's a staple and it's a, it's our pleasure to hit it whenever, whenever we can. But give us, give us first time on the show. Give us, give us quick background on the company you guys want to start.

Yeah, so I'll go pretty quick. We're both product designers and we sold our first company to Facebook where we were a product designer for a couple of years. And after Facebook we figured, hey, let's do another company before we get old. That's more than 10 years ago. And we always love building creative tools. So we figured, okay, I like, like starters are pretty hard. Why don't we pick something that we really like working on, so let's build the next Adobe. And everybody around us said like, don't do that. You'll probably raise some money, but not for design tools. Just don't tell any investor you'll be building that. But we did. And then 10 years later and a big pivot. Here we are.

Overnight success. Overnight success.

Overnight success. Basically with framers. Really good at at or. Yeah, like, you know, I can talk about the product market fit. What we're really good at is we allow folks to basically designers ship websites themselves for companies. So you have your, let's say your Figma where you do your design and you turn it into an application. You've got tools like Squarespace and Wix where you make your personal sites. But a lot of company websites are still built with code. It's kind of slow. You need a developer team. And over the last couple of years, we saw more and more companies just wanting to ship sites much faster and do that in a visual tool. So that's what we built.

What's your take on the vibe coding boom within? I mean, we're all familiar with the growth of vibe coding stuff. What are the overrated use cases? What are the underrated use cases within the vibe coding boom?

Yeah, I think we're about to find out. I think everybody's just really excited with where it's going to go.

Because.

Because in the beginning of this year, I'm sure that if you type in, you know, like, make me a nice front page for the company that you're at, then, you know, you're not really going to use that result yet. But you can see it's going to get there. Right. Like, we're close enough for the LLMs to, like, it's not going to win any awards. You can't really use it for your site yet, maybe for your personal site. So I think over the next year or two, somebody's going to make that work for companies. Somebody's going to make that work on brand. Somebody's basically going to allow designers to sort of like teach the LLMs how to generate. Just like an engineer kind of hand holds an LLM to write the code.

Yeah.

And I think we're kind of on the, on the, on the crisp of figuring that out. And that's obviously what we're spending a lot of time on.

How important is the. Is the kind of network around Framer? I know there's people that make businesses designing sites that can be adapted and things like that. Is that a core part of the business in the way that maybe sort of like the Shopify app ecosystem might be, or is it more in the direction that the platform is heading? Is it more about allowing people to generate sites entirely based on their own brand assets and things like that?

100%. So we call it creators. And it's a whole economy by itself at this point. People building more than just sites for clients, which is typically what you would think of is you build a website for clients. Next to that, they build templates, they build plugins, they build all kinds of assets that can be sold on the frame marketplace. And we're starting to see people mess. Make serious money off of that. The most impressive examples are folks that basically start with a new Twitter account with zero followers and then set out a challenge to get to 10k and let's say 30 days just by making sites and selling assets on our.

On our marketplace.

Are they successful or we're actually.

It sounds like they've. They've already done this. Is that what you're saying? Yeah, yeah.

This is happening every day.

This is, this is the whole thing now on design Twitter. And I think, yeah, there's a couple of outlier examples of people are now doing like 3 or 400k a year just building businesses on Framer by selling these assets.

Yeah. Are there features or functionalities that you think you want to add based on the generative AI. Boom. I'm thinking like we've seen these like not just okay build a landing page for a business but, but build a game or use 3js or webgl and there's more tools that feel previously it was like okay, if you're going to build a video game in the browser that's going to take you a long time. And now people are vibe coding them. Are there other features or web components that you want to surface more easily to prosumers?

Yeah, if you have a big web platform you can go a few ways. One is obviously the marketing what we're about talking, trying to figure out just help startups ship the most beautiful websites really quickly that go very fast and then you can always go into E commerce. But all I see is Shopify. I see a lot of people try but all I see is Shopify. So you got to be pretty confident to go after that. And then the third thing is that there's something between an app and a site that people can't really make today. Right. So there's websites, we're really good at marketing websites now but there's obviously websites that do more right like so they're more like a database catalog. They could have a feed login state and that was always constrained by people that could express, that could express that logic and for that you had to code and I think you know like we're in an interesting time where the LLMs can maybe help with that. So it's definitely something that we're also going after.

Yeah, how it feels like your guys strategy is. The entire, you know, market for creative tools today is extremely loud. Right. Every, every day there's new tools launching. You guys seem to be extremely focused still on this core value prop of helping people make beautiful simple professional sites is how much, how much? What do you, how do you think? Not to get too far out in the future but how do you expect like do you think the dot like my view is that the dot com is like a hyper durable asset that will continue to have a lot of value for decorate the next decade, two decades etc. And there was a time when people thought that URLs and everything would just become applications and things like that. And I don't think that's panned out. What's your guys vision for basically the future of the website itself right at a time when already we're seeing in different tools, different consumer LLMs that will generate UI and scrape websites and things like that. What does the website look like in 10 years?

Not like a chatbot, but you'd be surprised. We'd be pitching obviously for this round. You'd be surprised how many VC think that that might be the case. Yeah, but the web as a, like, as a form to present your brand and build brands equity just isn't really going anywhere. Anywhere. But one of the things that we really like, I mean we're both product designers, so obviously we have business goals. But if you ask me why I get up in the morning, it's also to make the web cooler. And the browsers can do a lot of really cool stuff.

Right.

The LLMs unlock people to build stuff for that and the websites kind of look boring. Like they've only gotten to look more boring over the last 10 years. So I think tools like Framer can really help the designer sort of express more interesting websites. So I think that, you know, with that kind of more people being able to execute on that, but as well as sort of like, you know, showing more like doing more cool stuff that the browser can do, like combining 3D and video on websites, making much richer, cooler experience. I think that's really where things are going. So I think it's only the browser is still such an underrated sort of piece of technology in terms of how it's used for presentation. And if we give folks the tools to build like cooler output for that, then they will.

Yeah. I think it says a lot that all, you know, every major AI company wants to have a browser themselves or they want to buy Chrome. Right. That to me says, you know, all you need to know at least for now around where, where the category is going.

Yeah, there's pretty interesting that all the AI brands are very heavy on their personality on the Internet.

Right.

So they all have brand beautiful brands, really nice dotcoms.

Yep. Dot com's forever. We're big dot com enthusiasts here.

Huge enthusiasts. Thanks so much for hopping on guys.

Yeah, congratulations to you guys and the whole team.

Awesome, thanks for having us.

Thanks so much.

Cheers.

All right, cheers.

Bye.

See you.

Up next, we have a great dot com, super dot com. But before I tell you about that dot com, let me tell you about adquick.com, out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising Only Ad Quick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe. And we will bring in Super.com with some news.

One of the best dot com how.

You Doing what's happening with latest Good.

Doing well. Thanks for having me.

Thanks for hopping on. Give us the news.

Well first I saw your comment. Thank you for the domain Shout out.

Of course.

That's fantastic. Give us. Before we dive into the news, how did you get any crazy stories getting the domain?

Yeah, definitely crazy story. We had a different company name. We were called Snaptravel. We wanted to rebrand. We did this whole activity in this whole exercise and we liked the name super because it's how it made, made our customers feel like when they saved money, when they found a great deal, they felt super and we loved it. It was such a generic word. If you Google super, you're just like getting Super Mario Brothers. You're getting whatever you're getting. So we're like, okay, we got to go and get the dot com. We reached out multiple times, didn't get any answers and we're like, okay, forget this. Meta at one point launched some product called super and we're like, oh, they probably like are going to try and buy it. And it was just like we're not getting this domain. And then we got a domain broker and out of nowhere they were like, okay, this person's like interested. But it was a pretty intense negotiation process. It was kind of in the, in the single digit millions. And then it got to the board level and it was split and it was 50, 50. Half the people were like, I don't think this is worth it. People don't really care about domains anymore. They just like search on Google.

So not true. It's so not like people, people are people. I mean domains are still, I think wildly underpriced. Like.com specifically. And it's because people have just been so trained. If you've been on the Internet for any amount of time, you know that when you are on the website of a big business, it's ashort.com. and when you're on the site of a less legit, less established business and consumers are really smart, they just pick up on these things and yeah, it's interesting. So you guys, I imagine you guys have trademarked super.com because you can't trademark, trademark like super or who knows?

That's right.

That's right.

So we trademark super.com and every variation. Anyways, there's a story was it was three, three on the board. And ultimately as a CEO I get to make the hard, hard decision. So we're like, we're going to do this. So we bought the domain.

And you're right.

I think I think for consumers, it does matter. Right, so totally. Yeah. So the big news, we just wanted to introduce our incredible momentum. So we crossed over 200 million in annualized.

Congratulations. Crazy.

And if you think of the evolution. So we've been around for about nine years now. We started the company and it was just like hotel. It was a travel hotel deal. Right. So we were doing hotels for like four or five years. And then we, like, completely rebranded to super.com, expanded the product, introduced this membership program, and that's just allowed the business to completely take off. So we're now, you know, hundreds of thousands of paying members as part of this membership club to, like, save more, earn more, build credit, and just experience more of what life has to offer.

So how is it.

How is it trying to get coverage from the legacy media for just doing a lot of revenue? I feel like they still are like, Like, I don't know if it's a story, like, come back to us when you raise like a million dollars, but you're like, ma', am, sir, we're doing hundreds of millions of revenue. I think this is more notable. It's so.

It's so interesting. Traditional media, they don't. They don't have the time to think about that. And they're just like, if it's a fundraiser, I'm going to, I'm interested. If it's not a fundraiser, I'm not interested. Right.

So.

But there's a lot of companies that are doing really well and driving a lot of revenue, and I'm happy you guys are. Are talking to us.

Yeah. What are the other business models in the category that you deliberately avoided? Like, lessons from, like, the previous cycle, previous strategies that maybe, like, might have product market fit loosely but not real sustainable business models.

Yeah, that. That's a really good question.

So let me take a little bit of a step back. Okay. So the company, super.com, we have a membership program called Super Plus. Super plus is 15 bucks a month. And the idea is when you're a super plus member, you just get 15 to 20 benefits. So you can save on hotels, you can save on gas, you can save insurance, you can save on pharma, you can earn money playing games, filling out surveys. We have a MasterCard that helps you build your credit score and earn 1% cash back. And some people come in and they use like one or two products. Some people use like five or seven products. But ultimately it's like you think this is worth 15 bucks a month, or you are getting more than 15amonth worth of value. Right. And for some people that just, I just book hotels like once a month and I'm saving, you know, thousands of dollars. For other people it's, I'm using the cash advance product, I'm earning money and building my credit score. So everyone kind of uses the app somewhat differently. And we use AI to kind of customize the app. So you'll see what we think is most relevant to you that will give you the most value from your membership. Now you asked a question which is like, what hasn't worked out? Right. So we are like, okay, what can we add to the membership? What can we try? We tried something about two years ago where we thought we could get into selling discounted, like physical goods, like actual price products. Right?

Yeah.

Found.

And what we learned, yes, it's very, very tough. It's almost impossible to compete with Amazon. But the hardest part was that you can't consistently get a large supply of discounted physical products because either it's like it comes and it goes and then it's like, oh, this is a hot item now. And then it's not. Or it's like you get outdated stuff and then it sits in a warehouse and you couldn't keep that steady supply of discounted goods and it became a very unreliable, reliable customer experience. So we actually acquired a company, tried to build up the goods business, had a physical warehouse in, in Miami, and then we ended up just shutting that whole division down and shutting down that warehouse. So not overnight success.

What's working on the customer acquisition side? What, what, where are you guys, you know, spending money on acquisition most aggressively? And, and then I have another kind of related question.

Sure.

So each product has its own acquisition channels that work well.

Right.

So we don't necessarily advertise the entire membership and say, hey, come join and get like 15 plus benefits. The way we acquire customers is we go for like one product and then they come in and they're like, oh, I'm going to become a member because this product is so worth it. And then hopefully they stick around and do more things. Right. So for hotels, it's a very high intent product. So what that means is it doesn't matter how much advertising you do on Instagram or Facebook, it doesn't really work.

Right.

What works is when you're on like Google or Kayak or TripAdvisor and you're like typing in like best hotel deals in New York and you have that intent to purchase. So like on the travel side, it's a very high intent channels.

Yeah.

If you have something like make money playing games, that actually works really well on social because people are scrolling on TikTok.

What's the actual economic model for that? Because if anytime somebody says that, I, that if you tell John you can make money playing video games, you know, I'm a little bit worried he's going to get on super and get, have a little bit too much fun. He likes video games. Yeah.

So I'll tell you, I'll tell you the model on that. And first of all, it's not just games.

Right.

So I'll give you one that's really easy to understand. So if you come to super.com and you want to make some money and you go to earn, you may see something that says if you've never taken an Uber before, download the app, take your first ride and get 20 bucks. Pretty obvious, pretty simple. So they'll go in, they'll download the app, they'll take the first ride, and we'll just deposit $20 into their wallet. And for Uber, that's obviously a user acquisition strategy. They believe that that customer and Uber's probably paying us 20 bucks and we're just, you know, or 30 bucks and, you know, and we'll pass most of it back to the member. But for Uber, that's a user acquisition strategy and they can then get that customer to eventually take more rise and, and that, that's worked out for them and they were happy to pay that 20 bucks. For game developers, it's kind of the same thing. It's like, you know, you get paid for like downloading the app and getting to a certain level. Now if you get to that certain level, then potentially that game developers generated some revenue from you because you've seen some ads, clicked on some ads, maybe you bought some gems, maybe you did something else. So it's just, it's just almost like an ad network play where it's just another source of user acquisition for a.

Lot of these companies.

Are you guys, do you guys spend time like thinking about how you're showing up, how the different products are showing up in LLMs? Is that a meaningful acquisition channel for you guys yet?

It is, it is. So it's something that we're looking at closely. You've probably seen there's a ton of AI companies that's working to help you optimize how you show up in LLM. So, so some of it is almost traditional SEO ish, where you just kind of need to have that basic infrastructure and red folder structure and. Right.

Information.

But what we're seeing is that the LLMs are pulling from a lot of user generated content as well. So things like Reddit and like TripAdvisor forums and you know, you know, even YouTube for that matter. Like wherever user generated content happening, they're pulling from that as well. So some traditional SEO and it's actually spending a lot more time and energy thinking about user generated content and how we can help, you know, be part of and moderate some of those conversations.

Totally great.

Thank you so much for hopping on.

Yeah, congrats on the milestone. Massive.

Thank you. Have a good week. Enjoy the rest of your day.

Cheers.

All right, thank you guys.

Congrats.

Let me tell you about bezel. Get bezel.com your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. Go to getbezel.com legends and we have another great document coming into the studio. Keychain.com Simplify your supply chain with AI powered CPG. Good to meet you. How you doing? Thank you. Would you mind kicking us off with an introduction on yourself and the company and maybe some background and how you got into this particular business?

Sure.

I'm Oisin Hanrahan, the co founder and CEO of Keychain. I spent the last 14, 15 years building online marketplaces. I built a company called Handy. Handy's like Uber for handyman and cleaners. Built it up to nine figures of revenue, sold it to Angie's list.

Congrats.

Yeah, that was a good outcome. He's the largest home service company in.

The hey, let's give it up for good outcomes.

Congrats.

Sorry. Continue.

What gets a ding in a bell? What are the, what are the rules?

You never know. There are no rules. It's whatever I feel like. But keep, keep, keep it rolling. We'll see.

I feel some more stuff coming.

I, I took on running Angie, so I became the CEO of Angie.

Sorry, sorry I just had to mess with you.

I mean it is founder.

That's right. Yeah, yeah.

It was fitting in the founder. It's good.

Not enough founders do that is to get acquired and then take on that, take on the top.

I don't know if I'd recommend it. It's a lot more work. I feel like when you sell the company, like there's this thing where you can just rest, invest. And that's what my co founder wanted to do. He was like, could we not do all the things?

Do all the things.

You're like, get ready to be important at work, buddy.

Every day. Not Just something days.

Yeah, every day. That's wild. I advocate that for all my friends who get acquired I say you should become the CEO of the acquiring company. That should be the goal. But yeah, anyway, you found your way elsewhere.

Yeah. So I was a CEO. My co founder was chief revenue officer and we ran it all the way to the end of 22 and we both left and we took a little break and then started another company company. And we, you know, second time founders tend to do this thing where they think they're going to start a studio company where it's going to have like four or five companies inside it and they won't actually have to run many of them. We tried to do that very unsuccessfully for all of about a month and a half and there was one idea inside there that just started to work really well and we, we doubled down on it and really got behind it and we've been running it for about a year and a half and the idea is to build the platform that CPG runs on. So you get, you guys know this but most CPG companies don't run their own facilities. They have comands or co producing facilities that run all of their production. And there's a whole industry of about half a trillion dollars in the US of 20,000 companies that make, you know, all the products that you eat, drink, wash your hair with. And we are building the ecosystem and platform for those companies to run on. So we're starting with search and discovery at keychain and we've built the deepest database of how brands and retailers find manufacturers.

Yeah, so I am like super intimately familiar with this space. I ran a consumer package goods company and it was always a struggle finding, finding supply chain partners. It was always some kind of like loose network of asking friends for favors and whatnot. The best in class database about a decade ago was just from a news website called Bevnet and they kind of aggregated up some manufacturers. I think they let people run ads and it wasn't their primary business. They were mostly like a news and reporting organization, a trade publication. So it makes a ton of sense. I would love to use this product if I was building a CPG company today.

Yeah, it's funny, somebody has an idea for a CPG brand at least pre keychain and it was like you just start asking your friends, people, random people.

Who knows someone who makes ice cream, how would you make a protein?

I met, I met your co founder Jordan during I think probably back in 2020 because was investing in random consumer brand brands. Super Sharp kid at the time now clearly grown man. But yeah, this process is still, I mean the challenge is in how do you make sure that the incremental consumer products entrepreneur and I would say it's easier to go acquire the customers that are making a lot of net new products or have a product release schedule. It's also how do you make the incremental CPG founder aware that keychain exists so they don't go through the traditional process of just asking friends and asking around, how do I make this thing?

Yeah, I think you're right. And that's where we started. So we built the product for enterprise. So at Handy and Angie, some of our biggest partners were the Walmarts of the world and the targets of the world and the Costco's of the world where we did their home service service. So we had those relationships and they obviously make most of the private label product in the country comes out of the biggest retailers. So we actually built the product for large private label brand owners, the people who churn out product every single day. And that's where we started. So today eight of the top 10 retailers in the country use keychain and the same is true actually of the large brands. So you think of the large strategic brands, some of them have invested in keychain like Hershey's and General Mills. They obviously have a lot of facility that they make some of their own product but they also contract outsource a lot of it. So we built the product for them to be able to search for manufacturers. And it's funny, so because we built the product for enterprise, we almost got the startup for free. Like we got the fact that the startups are out there and they're constantly looking, you know, it's harder for them. But because we built this data asset and I heard you in your last segment talking about SEO and LLM optimization, we started with the data asset, which is the deepest asset anywhere in the world of US CPG manufacturing. We've invested millions of dollars into building it and it frankly can tell you who can make what better than any broker, any trade show, any phone, a friend.

Yeah. Are you guys, do you feel like you're, is, is it trade shows that you're disrupting? Right? I mean if you wanted to, if you wanted to go, if you wanted to make CPG products and you're target or someone like that, you're going to a trade show and you're like what can you make for me Kind of thing and this just seems a lot more efficient. I went to Expo west once and I almost overdosed on caffeine because it was like that year, every single product just had maxed out caffeine. It was protein bars with caffeine and all that stuff.

This is deeply bearish for Las Vegas. We need to get Taylor Swift to go to the sphere immediately because there's going to be no more trade shows after this is done.

Well, we, if you, if you had gone last year, I think you would have overdosed on psilocybin because everything seemed to have some form of like mushroom in it or you would have overdosed some protein.

There's always a trend.

Protein, psilocybin.

Yeah, there you go. You got it. Yeah, you got it.

For when you want to build muscle while you hallucinate.

Which is first. But anyway, so we don't so much think about it as disrupting trade shows because we really do think there's a role for trade shows and it's just not what we think. Trade shows are a truly awful way to do structured data discovery. And that's what some people do to trade shows. Like they walk around looking for a particular thing. Trade shows are a freaking amazing way to deepen a lot of relationships quickly. So if you know who you're meeting and you've done the research in advance on keychain and you've set up conversations, you can meet the right 15 manufacturers in 30 minute segments and have the best trips to Expo west ever. Or you can wander around getting absolutely loaded on caffeine because you're going from booth to booth to booth and have a pretty ridiculous time and maybe you meet two of the right people. So it's like, how do you take structured data and figure out how to appropriately use the right tools so that you can have a great trade show experience? And that's the first, that's effectively the first product the keychain has launched. So that product today is in month 18 and it does about a billion dollars worth of search volume per month. We're in the process now of launching our second product which is a bridge into the operating system for manufacturers.

Yeah, last question. We got to let you get out of here, but we have one more sound effect. Do you have any fundraising news for us?

We, we do, yeah. We, we, we raised a little bit of money.

How much did you raise?

We've raised in total, the Last round was 30 million, so we've raised $60 million.

Congratulations.

There we go. So it's almost like you've done this before.

The ding and the bell Thing.

This. Yeah, that gong hit is authentic. That's.

That one's analog.

That's a real gong. Oh, that one's real. That one's real.

Yeah, that was in a video of you doing that before.

No, no, no, no. We have a real gong. Anyway, thank you so much for hopping on the show.

Awesome. Yeah, great to meet you. Congrats.

Thank you so much. We'll talk to you soon.

Cheers.

Bye. That was a very cool segment. I would have killed for that in 2012. Anyway, let me tell you about wander. Find your happy place. Book a wander with inspiring views hotel, great amenities, dreamy beds, top tier cleaning and 247 concierge service. It's a vacation home, but better. And up next, we have a guest in the restream waiting room. Let's bring him into the TVPN ultra dome.

John, welcome to the show.

What's happening guys?

How are you? How are you?

Good to see you.

Good.

This is. I'm just looking. I mean, this is what the fortress looks like, man.

Welcome to the fortress of finance. Welcome to the capital.

Thank you for having me. We love you guys.

We love you too.

It's phenomenal.

So kick us off with just a brief introduction on yourself, a little bit about your career and then I want to go into the hope for common stock, the bull case for startup. Common stock, yeah, for sure.

So I'm John Callahan. I've been an entrepreneur and venture capitalist for a long time. We started True in 2005. We're an early stage fund.

There's also sound effects, 20 year overnight success. Success.

Yes.

Yeah, exactly. That's the way it all is here in the Valley. So, yeah. So, you know, we, we started the firm with a vision of frankly our tagline was more venture, less capital. We thought the world needed venture capitalists who were going to, you know, take big risks and entrepreneurs, you know, were coming out at that point. By the way, post sort of bubble crash, post 1.0 crash, there are a lot of new technology changes. DHTML open APIs. So all of a sudden, sudden all these really creative founders were coming up with really cool ideas. You guys remember mashups? And you know, it was, it was. You could do a lot of things with all of this infrastructure that had been built in the 1.0 and you could build a lot of application layer value. So that is, that is a pattern. I will talk to you about here about what we're seeing today. So that worked out really well for us. True's been extremely lucky. We've been Investors in category defining companies like fitb, Bit Peloton, Ring down in la. Jamie Simonoff is awesome. Also in la, sweet green with John Neiman.

Ring? Which, which ring isn't Ring the security.

Company joke to say there is only one.

There's only one security company.

The one that protects you and your family and your neighborhood.

Yes, yes, yes, of course.

Yeah.

The company's acquired by Amazon.

Yeah, that's right, that's right. Jamie's up there.

I had a funny ring story. Someone on our team was. Was dropping something at my house the other night. Oh yeah, I see somebody with a hat on and a backpack on outside walking around my car. I'd already. I was already in like about to go to sleep or whatever and I fully thought Dylan on our team was with somebody doing a break. So yeah, in the early years of.

That, in terms of what Jamie, you know, I think at one point they caught a criminal a day they did a big thing with the lap. Just awesome. But also like the wild animals and all the crazy.

Anyway, yeah, ring was great.

We're also big in enterprise. We do a security hashi corp, all sorts of other things. We've had seven IPOs, 60 max. So we've been doing this a long time and we're the biggest in our category of. Of pure seed. 4 billion in capital, 16 partners. It's all we do.

All we do.

Amazing. Yeah. Yeah. So take me through like the last few cycles from your perspective. What's changing around where the founder sits in value accrual, common stock, how you process ZIRP and the last bubble and crash and all of that.

Yeah, for sure. So that's kind of what caused me to write this piece and it's like, like all things I've been, you know, the good ones always take like an hour to write, you know, kind of thing. And the other things that you kind of nash around stuff. So been doing this a long time and have seen a lot of waves and we've been a part of a lot of waves and the things that we are experiencing now and I can talk through them around AI, but it's really capital efficiency, which we'll talk a lot about that drives a lot of the sort of solution to the tragedy or the fixing of the tragedy for common. But capital efficiency, the size of the TAMs, the founder ethos today. Your question right now, John, what's happening with that founders? It's all leaning much more towards this. Do more with less the conversation now at, you know, Great White in LA or at Coupon Palo Alto or, you know, is, or blue bottle at South Park. It's all about like how much I can build with how few either, you know, employees or, or, or capital.

Sure.

And that's a good thing. You know, you guys talked about the earnings release yesterday of Nvidia, but Jensen said yesterday there's 2 to 3 trillion, I think you said 3 to 4 trillion of CapEx. Our numbers internally are sort of 2 to 4 trillion of CapEx going in to the AI wave over the next five years. So any other wave web 2 mobile cloud that we've been a part of, the value that is created at the application layer on top of that CapEx X is on the order of 5 to 10X. So we're talking about new TAMs, like markets that haven't been invented yet that we don't know about yet. Net new consumer behaviors, net new enterprise behaviors at a level that is, you know, I don't want to say that like unprecedented, but like, it's just really big. And as you guys have noted a lot on the show, the wave is happening really fast. Fast. Quite a bit fast. The waves kind of keep coming in faster, in faster increments, and we're just seeing that combination come together and create what I think is the vintage of a lifetime. As a venture capitalist or as a founder, we've got the most powerful tools we've ever seen on the TAMS. We talk a lot about software. It's one or two trillion dollars globally. I think it's like 1.2 doubling in five years. As a market market, it's super big.

Yeah.

Services are 17 trillion today, doubling to 30. So like you have these.

Yeah, I want to push on that common point because I feel like you're, you're, you're correct that revenue per employee has never been higher. But I feel like with like maybe mid journey is the exception that proves the rule. But founders have not turned their, turned a cold shoulder to preferred equity in this cycle. Like, there are plenty of founders who are saying, I'm fine selling 10% of this company every six months and they've done very well.

15% every three months.

And each deal has been accretive to the share price potentially, but they are getting diluted. And I'm wondering if there's more nuance to that.

Yeah, more opportunity than ever to do. To do more with less.

Yes.

But at the same time, more opportunity.

To do more with more.

The opportunity is so large.

There's a lot of reason if I could do more with less, imagine how much I can do with more. You can do it Way more I can do with.

I think it's a matter of magnitude here in context. And you mentioned Zurb, so we have to kind of talk about Zurb. It's been super well covered. But like that distortion is at a level, you know, remember it was like a decacorn a day was being crowned. There's three again trillion dollars of limited partner capital locked up in zombie unicorns according to Bill Gurley's estimate, which I referenced in the piece and others.

Do you think this time is different?

I think that time was different. So the answer is no. I'm counting on this time being a time that is like other waves. The reason the distortion by the way, like we should talk about it for a second so. And well, here's why I think this time won't be zirp.

Really?

How's that for nuanced right there? Yeah, yeah, it's the same people like the founders. If you look at the senior leadership at startups and companies, they were the ones who, you know, were at different levels through zurb. They've been stuck under the stack. I'm not saying zero equity and in fact if you look at the last couple of years of I don't know, maybe four quarters, there's probably been 20 mega seed rounds, the $350 million seed round or whatever. 20. There have been 2,500 seed deals done first half this year and you know it's power loss. You're going to have lots of failures and stuff. But just, just when you look at ZIRP on a magnitude basis, so much distortion happened. And I'm not saying there's not going to be those companies to your point that just keep raising and raising and. But I think founders are going to be a lot smarter about post money valuation because most of as you guys probably know that the 14.

There's a, there's a company that, there's a company that I won't name that is a perfect example of this. They've raised under a million dollars. So single yet hundreds of thousands of dollars. They're doing millions of dollars in revenue. They have logos from, from every single top AI company and they're just growing like a weed. Like it's just clearly they're onto something and the founder has no real interest in raising. He could probably like he feels like he can take it as far as it can go just off of just raw customer demand.

You guys had Wade on I think last week, right? The great example of A company that, you know, raised a little but kept making the choice. I think that term you guys talked about was super cool seed scaling. I hadn't heard that. But it's, but it's what we're seeing. So I guess, John, the answer is like, I'm not saying no venture capital. I'm just saying yeah, of course.

Yeah. Zapier is funny because the category that they're in, which is like agentic workflows, is like they're, you know, dominating, you know, having. Having been building this business for such a long time. And yet I can think of like 100 companies that have raised on the same kind of core idea of what they're doing. So it. That category is like turning into a crazy capital war. But hopefully Zapier is in a point right now, given that they've been at it for so long that, that they can just keep playing their own game. Game, yeah.

And in a world in which if it's true that on top of all this CapEx, all these net, new companies and behaviors will be created, I just think there's a lot of room. One thing we've done as technologies, all of us, is we have always underestimated the potential and we've underestimated the tail, like both the curve and the tail of everything. Web2 is still booming along. Mobile is still booming along at massive numbers.

And so look at Oracle's stock price. Oracle is still crushing.

Got to be the Mag 8.

It is, yeah.

Yeah. So there's, I think there's a lot there. And then the last point on the common is just that like, you know, that has fueled Silicon Valley.

Right?

It has fueled Silicon Valley for all sorts of different outcomes to, you know, sprinkle wealth or gains down throughout a company's stack. And then those, I mean, literally, I said in the process, happened thousands of times in my career where that engineer or you know, VP or director then takes more risk. And, and that's what we need. And, and that has fueled the valley. And so my thinking is that it's, it's that the zerp distortion is what was different, but that Silicon Valley is one, you know, never bet against the valley. It would never bet against rate of destruction.

When, when companies, as an investor, when I was looking at trying to figure out the why now investing in 2021 and 2022 and in fintech, it was like, okay, stripe exists, plaid exists, you have these new kind of like infrastructure players that allow you there's better banking as a service platforms. But the why now was like it wasn't necessarily. It didn't feel fully like a why now. And then you'd end up paying 100 times revenue for basically a lending company that like, yes, they benefited from like, you know, plaid being, you know, like what it was at that time in terms of, you know, market penetration. But it wasn't, you know, in the end, a lot of those businesses didn't really, they didn't end up really going anywhere. Whereas I think having a real why now today, you know, it's not. Founders very easily talk and investors will talk themselves into being like, okay, they'll talk themselves into feeling like there's a why now even if they're just kind of fabricating it.

Yeah, yeah.

I mean, the why now you've talked a lot about it in the enterprise, but the why now in the enterprise has caused a lot of new entrants to have great success against incumbents.

Right.

That's super interesting. There are all sorts of, of new again, this whole, like, if you were talking about enterprise software a few years ago, kind of pre AI, you'd look for these like tiny little verticals where you could have an advantage. And now the whole playing field is open to startup founders and they're having incredible success either in, you know, but you've had a bunch of them on your show. And I think that's also really interesting. Not without it. So it's coming from the customers, right. It's coming from the buyers of technology. Want this new thing. Incumbents have a hard time delivering that new thing. Not going to be smooth like, like, you know, I like how you're talking about where you're on the hype cycle. Like it's going to be bumpy throughout the curve, but it's just a remarkable time in all of these markets. And, and I think that's spectacular. I mean, again, I think it's, it's, it's the chance of a lifetime for a builder to start something now with, with these dynamics.

Yeah, yeah. I remember being, I mean, I graduated, graduated college in 2018 and feeling like I had met, you know, missing mobile. Right. Like not being an adult, like a massive tech trend like that felt, you know, I read the TechCrunch headlines for years of all those companies, but not having been actually in the trend is feeling like praying for another bubble. Certainly got one with real potential that we're already seeing.

Well, thank you so much for hopping.

Great having you on.

John, awesome to see you.

Hey, guys. We invited you to our thing in San Francisco, the connected stack. We'd love to have you.

Oh, fantastic.

Huge enterprise AI thing.

Can't wait to do the show from the floor.

Whatever. A lot of founders, whatever. Thank you for having me.

It's awesome.

We really appreciate what you guys are doing.

Come back on again soon. Yeah, we'll talk to you soon about that.

Have a good one. Bye. Up next, we're going over to Air Dot Ink. Have you used this product before? I use this and was obsessed. It's like I don't know. I'll let him describe it.

Should we be using it? Let's bring him.

We absolutely should. And that's why I was so excited to talk to it because I was like, you can pitch us directly on the show. Use this product sales call. Hopefully we didn't waiting too long. How you doing?

What's happening? Sorry, we're running behind. Great to meet you, Shane. Nice to meet you guys.

Thanks so much for having me.

Yeah, thanks for hopping on. Can you just introduce yourself the company a little bit of the backstory quickly?

Of course.

It's great to meet both.

Shane Hegday, my co founder Tyler and I started a business called aehr. It's an enterprise software company. We help creative teams manage all their media assets. So we help them store and organize all their content and then execute on the day to day workflows of making quality images and videos, putting them out in the world.

Yeah, I was the anti slop company. Yeah. I mean like there is some, I feel like there's some crazy link between like your clients or your company, your customers and like the brand. Like the culture at your company feels like particularly design forward. Like I'm looking at your landing page and it's incredible. I don't know like where this.

They're talking the talk and they're walking the walk.

Yeah, exactly. Like were you designers beforehand like did this, was this something that like came from a particular person inside the organization is just like everyone in the company is so focused on design.

I think you know, look, if you're.

Going to sell a product to creatives specifically that's going to be your icp. You really have to live and breathe the market. You have to put out great content on an ongoing basis to talk about.

The narrative of what you're doing and.

You have to meet those expectations with how you deliver the product. The marketing site is just an extension of the product. I think in many ways it's come from an obsession about who our customer is and how we meet them, where they are with what they care about.

Yeah, talk about the marketing. I've seen a few of the stunts that you guys have done. The latest one with the Rizzler. Like what? This is a very, very.

Yeah. When did you know you wanted to work with the Rizzler?

When did you know that you wanted to be the first enterprise software company to probably partner with him? It's just a wild choice.

Look, I think if you look at great generational enterprise software businesses, they all have a singular go to market motion that contributes to 50 to 60% of growth. And every enterprise software business chooses a different, different channel to really focus on depending on who their customer is, what they're good at and where there's arbitrage in the market. For us, it's content marketing and there's a nuance in how we approach content marketing that we call culture led growth, which is all fancy words to ascribe the format of content marketing that we do. It's not HubSpot, SEO or Gong Social all the time. For us. It's great, you know, seminal campaigns that we put out in the world that espouse, you know, the, the narrative of what we do. Whether it's product marketing or just a viral campaign with A, you know, 14 year old, it doesn't matter. You're pushing a story out to the market and getting a group of folks who care about that resonate with it and begin a conversation with you. So that's, that's how it took years to get here to a point where we knew working with the Rizzler or Kareem or Taylor Lorenz or any of the other influences, but it's been a fantastic motion and wildly efficient for us.

How much have you, you know, I appreciate, I remember when Air launched and I remember thinking, you know, I worked on, worked with a ton of different companies on marketing campaigns and stuff like that over the years. So I understood the value prop, even though I felt like it was on almost it was a contrarian move to launch the original product helped you just store assets. And a lot of people, I'm sure even VCs back then would have said, well, like people get stuffed in a folder, they get Google Drive it in a folder, they're getting Google Drive for free. It's going to be tough to compete, but clearly there was demand for this. Now how are you guys thinking about. Not to ask like a very VC coded question, but I'm generally, generally genuinely interested. How are you guys thinking about leveraging generative AI if you house all the, you know, brand assets for a business and you can understand kind of like the aesthetics of a brand. It puts you in a good position to not just store assets, but help people generate new ideas.

Just like automatically matching assets to tags and like creating like an ontology on top of the data. Totally, totally.

I think in this moment in time there is a rush to value everybody. Every enterprise out there is trying to immediately get to the thing that's going to compound their business on an accelerated basis. The last conversation you guys were in, I love that tail end of that conversation around. There's never been a more open environment in the enterprise for new entrants like us to come in and rebuild the entire stack of how a company operates, operates. But when you look at different areas of the enterprise, in order to scale, you have to have or automate to your question around AI, you have to.

Have a place to automate from.

Said another way, slop in is slop out. And the richness of your solution is going to depend on the richness of the data that you build on top of. In every area of the enterprise there has been a system of records that has structured and organized the data so that you can automate and centralize. This has been playing out for 25 years. It started with Salesforce building out what we now see as a CRM, as a must have inside of a business if it's trying to scale sales. Same thing with development cycles with GitHub or marketing work with HubSpot for multi touch attribution. There's never been a system of record built for creative work or images, videos, PDFs, visual forms of data. At the highest level, if you asked a CMO or a creative director, you know, how are your assets performing? What's performing best? What are you going to invest in next? That's like a six month job for an analyst. And at the lowest level, if you're trying to talk to a designer about what they do every day, they spend 75% of their time collecting content, approving content, sharing content and, and doing all of that all over again. And so our ambition at AEHR is to build a system of record for creative work. It's one product. We're never going to build a second product at aehr. We're just going to go deeper and wider in what we do. And yes, you got to start with storage. That's the hard problem to start with. You have to sync and organize millions. Today we're up to about 150 million assets that are being managed in our product. But the magic is on what you can do on top of it that, you know, the workflows that you can automate, whether that's rights management or whether that's like generating variants of something that you could plug into different ad units, it shouldn't matter. It can all sit on top of the baseline architecture.

You should create a workflow to help legacy brands not get canceled by Zoomers. So it's like it'll pop up an alert, hey, Boomer, if you put this on social media, you're going to get canceled by the zoom. And I think that could. That could save billions of dollars of lost market cap.

I hope that's funny. We had a hackathon that finished this morning and one of the things that came out of it was a newsletter that goes out on an automated basis to admins inside of a workspace. And because if thinking about our product, about 15% of our customers have more users on air than they have full time employees. Employees starts with your creative team, expands to marketing, sales, product partnerships, your agencies, your influencers that you work with. And then the other dynamic is that, you know, about 11% of our customers spend more than 25 hours a week inside of our product. And so this newsletter aggregates what all everybody did and spits out out a summary of that with all of the work to the admins in the workspace. And so visibility, I think, you know, to go to your point around Boomers and zoomers and not getting canceled, visibility I think is really important. And our opportunity to do that in a system of record is. Is no different than Salesforce providing a dashboard to your CRO to understand, like, which reps are performing the best or where to lean in segment wise or why, you know, when rates have improved.

Yeah. Amazing. Anything else?

No, this was. This was great. Come back on anytime. You're the only, only person in the world so far that has made just Storage interesting.

So anyway, thanks so much for hopping on.

Have a. Yeah, we're gonna. We're gonna. We're gonna actually sign up for this because we.

We were.

You're at a very. We were very much at the. Can we put you guys in the game here?

Come on.

Yes.

You guys are the sort of beacon.

Yeah, well, we were. We were imessage scale where like our version of air right now is just the group chat.

Yeah, it's literally all imessage. It's a mess.

Come on.

John can make the intro to Soylent. We're in the mix here. You know, put us in the game.

Yeah, let's do it.

Thanks, man.

Great. To meet you.

I'll talk to you later. Bye.

All right, we're going to cap this off by just pulling up this post of what the Garmin horse tracker actually looks like.

Okay. Because you want to end with the Garmin horse track.

This is the most important story of the day.

Story of the day for sure.

Garmin, it's.

Yeah, I see. It wraps around the horse's tail where. How else do you think you are tracking the horse's health? Jordy Garmin is now selling a wearable you put on your horse. It goes on the tail, obviously.

No, no, no. It's further down and stacked further down.

So that's what it looks like when it's not on the horse, but when you apply it to the horse while you're wearing your Garmin watch so you can be riding your horse. Check your horse's vitals from your Garmin watch. That's the future I want to live in. That's horsepower, baby.

It's important. I mean, this is a trillion dollar company to me. They're sitting.

This is.

Look at this thing.

Yeah, look, get in on that. Horsetail tracker. What is it actually tracking here? Midnight outdoor training sessions, indoor training sessions, recovery, delivery, transport, max activity, heart rate. It calculates the heart rate, how many strides. You can view the data live and then sugar's got a bunch of strides. That's hilarious. No, this seems amazing.

That's really beautiful stuff. This is why we love technology.

As much of a breakthrough as Waymo.

You know, it's already really arguably more important.

Arguably more important for some horses aren't self driving.

Thank you for tuning in today. Max Conrad from the substack chat. We needed this time is different sound effect. I agree.

Yes.

This time is different. This time is different.

Yeah. There must be some clip from like a movie where someone said that or something. Where does that this time is differently come from? Maybe we can get Warren Buffett saying it or something. I'm sure he said it at one of his meetings or something.

Yeah.

Anyways, folks, thank you.

Thanks for hanging with us today. We love you. We will see you tomorrow. Have a great Friday show. Mansion section, ready. Cheers.

Bye.