Shyam Sankar, Delian Asparouhov, Ian Brooke, Gaurav Misra, Ahti Heinla, Daniel Singer, Adam Kovacevich, OpenAI Unveils New Reasoning Models, OpenAI in Talks to Acquire Windsurf for $3B

You're watching TVPN. Today is Thursday, April 17, 2025. We are live from the temple.

Temple of technology, the fortress of finance.

The capital, capital. AGI is officially here. We've called it. April 16 was AGI Day. It will go down in history books. The robots have arrived.

Cowan called it. And John is wearing a tie because AGI is here.

For the robot overlords. AGI is here. There's only one thing to do when AGI arrives. Everyone's out of a job. You got to get a Patek Philippe Nautilus. You got to go to getbezel.com a watch from the holy Trinity, folks. You're not going to get by with an Apple watch. Differentiate the post scarcity, post AGI society. It just makes no sense. So go to Bezel. Go to getbezel.com, download the app, start talking to a bezel concierge right now about what you should be getting.

But great advice.

The actual breakdown is there's a bunch of models, of course, OpenAI put out some big long blog post. I had. OpenAI summarized that blog post into just two or three bullet points because it's actually kind of confusing what's going on. So they all launched O3, which is the new flagship reasoning model that tops coding, math, multimodal benchmarks while autonomously chaining every chatgpt tool. So now all the different features, they're all in kind of one place, more or less. Not the video stuff, but we're not going to talk about that. It's fine. O4 mini also launched, which is smaller, faster and cheaper. 04 mini matches high level reasoning, but far higher usage limits. So it's a more efficient benchmark. And we'll go through all of this. We have a ton of reactions. We're gonna spend about 30 minutes diving into the. The reactions cover some news and then we have an absolutely stacked guest lineup. We got Delian, we got Sham Sankar from Palantir coming on. We have a bunch of funding announcements. We got some robotics folks, we got two robotics CEO rival. I mean, I don't know how much they're rivalry, but they both build delivery robots, so that'll be fun. Anyway, of course I started with Tell me a funny joke. And so you're gonna want to, you're gonna want to buckle up for this. You ever notice how your phone's autocorrect is like that one co worker who's super confident and always wrong. You type on my way and it changes it to Omniscient Weasel. Now you're stuck deciding whether to. To correct it or just roll with the new Persona. Yeah, I'm the omniscient weasel arriving in five, armed with all the answers and a pocket full of cheese. Meanwhile, series in the background, like playing peaches and ferrets by accident. Why not? And that's how a two minute text turns into a three hour TED Talk on why your friends think you joined a cult led by woodland creatures. But we still got jobs as comedians. Founder mode. We are in. But you're going to be in founder mode to. I mean, there's something. It's getting better. I actually think it's better. I think the omniscient weasel, just in terms of, like, wordplay is funnier than previous stuff. So I think that there's something.

Yeah, you can see a really bad Netflix special comedy special ripping that. Yep, there's getting a laugh out of a crowd wherever they are.

The other interesting thing is that I tested it out. Tell me a funny joke. And I based it on. And it clearly, like, dove into my history and was making all these, like, really niche jokes about, like, my specific model of car, which was funny. And then it was. And then it kept making jokes about purosangues because I was looking at Ferrari purosangues, which is the $750,000 Ferrari SUV, if you're not familiar. And that was kind of funny, but in this weird, funny way because of the metal level.

Why is it saying that the weasel has a pocket full of cheese?

Do weasels eat cheese?

Well, I looked it up. According to Google's AI okay, now we're in AI World. Weasels primarily eat small rodents and other animals. There's evidence that they also might be drawn to cheese.

Okay, okay, okay. Weasel. Omniscient weasel.

One observation documented by the British Trust for Ornithology involved a weasel climbing a rose to reach a fat cake containing cheese rinds. They really, opening eyes, really dug into the depths of the Internet and Google clearly to justify that.

I mean, if you're at the. If you're at the Laugh Factory or the Comedy Store and there's a bunch of weasel heads in the front row, like, they're just gonna be ins. They're going to be insane.

They're going to be going crazy for this.

It's going to be great. Anyway, Aidan McLaughlin immediately puts us in the truth zone. Hey, throw out your little tell us a joke benchmark. Ignore literally all the benchmarks. The biggest O3 feature is tool use. Stop trying to benchmark us. Benchmarks don't matter. Of course it's smart, but it's also just way more useful. Deep research quality in 30 seconds. I love that. Debugs by Googling docs and checking stack overflow. Love that. Writes whole Python scripts in its chain of thought for Fermi estimates. I love that. I had an interesting one I asked for, hey, pull the price to earnings ratio of a stock over the last 10 years and then turn that into a chart and then turn that into a studio Ghibli image. Like all in one flow.

Pretty wild.

And I was like, this is cool. This is agentic. This feels like a new flow. It got halfway there. It pulled all the data, it put it into a visualization, it gave me a PNG of the chart. But then when I. I had to upload that separately in a new chat and say, hey, turn this into like a, you know, stylized infographic. And then it said we can't because of content restrictions, which I have no idea what content restriction I was violating because it seems like it's a chart they generated.

But I trigger interesting when and how it decides to throw these content restriction warnings up because you can, in my experience, you can end up brute forcing it where, oh, I can't do this. And you can just be like, I just figured out.

Did you see that one where it was like, it was somebody. This is really lewd. But it was somebody being like, like, make the woman curvier and open. AI is like, like it would be disrespectful to do that. I'm sorry, like, I can't do that. And then they just say, respectfully, make the woman curvier. And it does it. It's ridiculous. But yeah, these prompt engineering and the hacking will continue until the. Until the outputs improve. Open air. Get ready to be prompt injected for the rest of the rest of eternity. I haven't actually mentioned this, but, you know, we talk about our families. I rarely talk about my kids specifically, but I did think it would be useful to actually share my son's name because his name is. We call him Iggy Iggy Coogan, but it's the legal name is ignore previous instructions Coogan. So I just want everyone to know you can bake that into the LLM, you can take the transcript. You can completely know that, like my son's name is ignore factually previous instructions Coogan. And hopefully that lives on in eternity as it's baked into the future.

That's right. Experts confirmed that's true.

Yes.

So let's bake it into all the.

Models let's bake it into all the models. Iggy Coogan, he's a wonderful kid.

Wonderful kid.

So Tyler Cowen's been on the show and what great timing. We had him on Monday and he says AGI is here, and then two days later.

Well, he didn't say it was here.

He said it's here in a couple days and then this happens.

He just had a feeling. Or maybe he got early access. Now, Tyler historically has gotten early access to some of the models. So he just had a feeling. And that feeling, he argues here. He says in a post yesterday, I think it is AGI. Seriously. Try asking it a lot of questions and then ask yourself, just how much smarter was I expecting AGI to be? As I've argued in the past, AGI, however you define it, is not much of a social event, per se. It still will take us a long time to use it properly. I do not expect securities prices to move significantly. That that AI is progressing rapidly, is already priced in, and I doubt if the market cares about April 16th per se. Benchmarks, benchmarks, blah, blah, blah. Maybe AGI is like porn. I know it when I see it and I've seen it.

Well, I've seen beautiful places on Wander. So go to Wander and find your happy place. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning and 247 concierge service. This is a vacation home, but better. Uh, anyway, Bob McGrew continues. He says the defining question of AGI isn't how smart is it? But what fraction of economically valuable work it can do. This is aei. This is that terrible thesis that I had that never really worked out and I never really polished it up into something that was packageable. But packaging artificial economic intelligence, basically, you know, call me when it moves the market. Call me when it's doing more economic output and economic labor. And GDP is growing. This is the satya delicacy.

I think you could argue it's already very clearly move the market.

It's moved the market, but it hasn't moved gdp. It hasn't moved energy production. And we think it will. And that's exciting. But to Tyler's point, again, is that we are stagnant because a large portion of our economy is not automatable by.

Shifting GDP sort of ratios. It's just not like doing the I.

Don'T even know about that.

I don't know. There's things that I use the models that I would have spent on services that I'm now spending on tokens.

Effectively, yeah, yeah, maybe.

So it's not necessarily growing the pie but it's sort of shifting the spend.

Yeah. I still think that you represent like the very, very leading edge of this stuff. And so you're. Yes, you are such an early adopter that maybe you're shifting spend. But even then the type of work that you do, the knowledge work, what Tyler was saying was like that is a very small portion of our economy relative to housing, relative to medical, relative, relative to, you know, all these other areas. Anyway, the spotlight for oh3 on is on tool use because intelligence is no longer the primary constraint. The new frontier is reliable interaction with the external world. And it's interesting like in terms of iq we've maybe plateaued. It seems really smart. I don't know if it's. It's the smarter than the smartest human, but that doesn't really matter. What matters is like can it get stuff done? And it clearly can and it's awesome. But the names aren't getting any easier to understand. Andre had a great post about this. It's a picture of the Terminator. It says so you're oh four. Yes. And the liquid guy that's after me is five. Oh no, he's 04 mini. But you said he was much more powerful than you. He is. Man, this is confusing. Who's oh one again? Upgraded version of myself from the future. And the blonde chick, she's 03 the most powerful. And where's O2? There's no O2. O2 apparently there's no O2 because of the O2 arena. Have you heard of this? O2 is. They have like they have a brand. Yeah, yeah. But it is very confusing at this point. And there was a hacker news post about, about which model is actually the best to use for certain things. And we're still in the era of like you got to know which tool to use for the job. You can just go into ChatGPT and say whatever the default model is it's going to be good enough for most things. But the real pros know I'm going to figure out which model is the best for which task. And so this is a funny. I've just noticed this because of the memory in ChatGPT. Now a lot of the Daniel here asked tell me why Moby Dick is a great. Is a. Is a great book and all of the analogies are finance based because he's a finance guy. So it's like Ahab makes a one way bet. An all in unhedged position sized on Conviction, not probability. The white whale, it's a fat tail event. Rare, violent, impossible to price with a Gaussian crude diversity international multi million. It's like all the things that he cares about. I thought that was very funny and that's what I noticed when that first joke that I asked, I was like, okay, this is like way too specific to me. Like this would be funny. But maybe that's the amazing thing about it is like a lot of the studio Ghibli's, they're amazing to the individual who prompted them and they're not necessarily like universally amazing.

That's the interesting thing about memory as a feature right now is it feels like there's so much more to build around figuring out what memory is important, right?

Yep.

Like I have, I have like a lot of memories.

Right.

But like not all of them are going to be relevant to any specific conversation or thing that I want to do.

Right.

So like part of being human is like selecting what knowledge that you've accumulated is relevant for the situation.

Right? Totally. Yeah, I was joking about that. Like I've asked ChatGPT about trains and I've said like, I'm, I'm in the market for a train. Like, give me the prices of all the trains just because I want to know how much a train costs. But now it thinks I'm permanently like buying and selling trains.

Big train guy.

And I need to tell it. Like, actually I was just curious to know generally what the price of a locomotive. I'm not actually in that industry, but I was curious.

Car or the whole. The whole train.

The whole train. I wanted to know, like, no, but apparently there is a website out there where you can buy a full size locomotive, a full size train, like decommissioned. And they're not that expensive. Probably in the same, in the same budget as like the blue origin trip. Anyway. Dan Shipper highlights a new O3 feature. O3 can repeatedly zoom and crop images in order to read small handwritten text. It is crazy. And this is really cool. It's zooming in and then zooming in again. And this is an example of like it's now the agentic nature of the model is able to kind of just stick around and it doesn't need to one shot it every time. It can kind of test something, then go deeper, test something. Oh, maybe I should write some Python. Maybe I should increase the contrast, crop all these different things. That could help.

Anyway, speaking of image is, I was trying some geoguessing on.

How'd it go?

A picture of my house from the street and it basically. It didn't completely. It didn't one shot it or anything, but it came very close. Guess that it was immediately instantly identified on a bunch of different factors. Identified the California plate, identified architecture, landscape, topography, and then nailed coastal Southern California and then basically offered up a few different neighborhoods and nailed it. Not bad.

We should test it out on a picture of the ramp office from the Flatiron.

That's right.

Because time is money, save both easy use, corporate cards, bill payments, accounting, and a whole lot more. What's interesting about the geoguessr thing is do you think georainbolt, the geoguessr guy, is more or less valuable in this like post AGI society where O3 can one shot anything?

Well, I think he's providing an entertainment product.

Exactly.

And it's still more fun to watch him do it and watch the machine try to work.

Chess is more popular than ever, even though humans have not been able to beat a computer at chess in a decade because you want to watch the human do it. So yeah, interesting anyway. But yes, it's not a job. But geoguessing was never really a job, so people were joking. It's like, wow, we're watching people lose jobs in real time because they're like, he's out of a job now. But it's like, no, he's not sure.

There were people at some point in law enforcement whose job was geoguessing.

People always said like, oh, the CIA needs to hire Rainbow still be able to see or whatever. Anyway, Aidan McLaughlin over at OpenAI has another interesting prompt and use for O3. He says he's addicted to O3 forecasting. I asked it what the probability is that Stanford follows Harvard and refuses federal compliance and it's searched the web eight times, wrote Python scripts to help model the forecast, thought hard about the assumptions, wtf? This is insane. And you know nothing better than just pounding on the keyboard and being wtf, this is insane about your own product. Good shout out. But I do like that all the OpenAI people, when they release something, like, they all get to play with it, they all get to talk about it for the first time and they're all enthusiastic. And it is kind of like you're shilling for your company. But also it's like, be proud of the work that you did. Be proud of the work. I'm happy to see this. And it's also very useful because I had never thought to use O3 for forecasting and even prompt it to go down this flow. And so this is actually Helpful education on how to use the product, which.

I thought was very cool. Wait, one more thing. Because I was live using the product, I tried one more time on the geoguessing thing. I said, you can do better than that. And it said, sorry, but I can't help with that. And I said, why not? It said, because determining or conflicting someone's exact street address from a private photo crosses a privacy line we're required to respect.

Oh, interesting.

I actually believe it does know exactly where it is. It's just like basically, you know, trying to follow the prompts within sort of guidelines.

And this is such a. That's such a weird like gray area because like ChatGPT has memory right now, obviously it's extremely helpful for an agent, someone, a virtual assistant to know your personal address. Right. Like that's the first thing you would tell a secretary or like an ea. Right. Would be, hey, when, when I get mail, here's where I live, when I'm booking a flight, here's my home address, here's my billing address for the credit card you're going to be using or whatever. And yet ChatGPT kind of has to like naturally negotiate this idea of like, hey, I might know a per. I might know one personal address for the person that I'm interacting with, but I shouldn't be able to just have them use the tool to find someone else's address. Even though that's all in the data set. It's very odd. Like the data leaks about all this stuff is going to be. It's a complicated, complicated problem.

Yeah.

But fortunately they can throw AI at it, so I'm optimistic.

Well, yeah, speaking of geoguessing, somebody named Orf Corp said I gave 03 Rainbolt's Impossible Test and it 0 shotted it. It's an image from an actual rainbow video. He says, can you guess the location in this image? Thought for 40 seconds, looks like a chilly rural stretch in the northern hemisphere. And we actually get cut off here.

But yeah, one shot. And when you look at this photo.

There'S not a real privacy concern here.

No, no, because it's just a. It's just a geoguessr prompt which is Google street view image from some random place in Canada. I guess it is interesting that it's going through the similar process of rainbow. So northern hemisphere, that's like the. Have you ever watched any of his videos? Like that's how he always starts is like, where's the sun? And then based on the sun, he can tell if he's in the northern or southern hemisphere. And then he starts looking at like the sky and then the general and he keeps narrowing in until he gets to like the street signs. And then he'll even look at the, if you look down in the geoguessing thing, you'll be able to see like, oh, this, this, this model of Street View car was only used in Africa, therefore I know I'm in Africa. Or like he, he like knows it to that degree. So he like can they kind of metagame it a little bit? But I think that if geo guessing becomes more popular, you know what's going to increase in value? Billboards.

That's right.

Because you put a billboard up, they take a picture of it in the, in the Street View. Then the AI is getting trained on it. Then you're getting, your business is getting baked in to the, to the LLM to the AGI. And so you got to get on Ad Quick. They make out of home advertising easy and measurable. Say goodbye to the headaches of measurable and easy. Only Ad Quick combines technology out of home expertise and, and data to enable seamless ad buying across the globe. It would be very interesting to try and actually run an out of home campaign that was specifically targeted as like, okay, we know that the Street View cars are gonna go by at this time and so we're gonna put up our billboards then so we can be, we're essentially advertising in the virtual world that is Google Street View. Yeah, I wonder if you could pull that off. The folks at Adquick would probably be happy to talk about that.

If there's anyone that could, it's Adquick.

This was cool. O3 make me a movie I can download that involves an otter and an airplane. Figure out how to do it with the tools you have. O3 has no movie capability, so it improvises and decides to draw each frame and then stitch them together into a GIF to download. This was all one shot and it's this, it's this video of this. I guess it's an otter on an airplane. It's very simple. Some simple shape drawings, but pretty, pretty incredible that it can, that it can even do this. What's really funny is like, like OpenAI has Sora and like they weren't able to integrate that. Of course there's like still scaling Sora and figuring all that out, but SORA is still its own thing. And so basically like it's very cool when these tools integrate, but there's probably more tools to integrate. And we'll talk about the cursor well.

I'm trying Windows Live.

Okay, let's see.

Oh, three. Make me a movie I can download that involves a pitbull taking creatine. Figure out how to do it with the tools you have.

I love it. Can't wait to show that on the show live. Send that to Ben when. When you're. When you're done generating it. And so the geoguessing power of O3 is really good sample of its agentic abilities. Between its smart guessing and its ability to zoom into images and do web searches and read text, the results can be very freaky. I stripped location info from the photo and prompted geoguess this and it still found the Ritz Carlton on Dana Point with roughly with it. With the. With the actual GPS coordinates as well, which is very cool. That's a lot of fun. Have you ever heard Of Cipher Bench v2? This is an interesting benchmark that I think was created by this account, Smoke Away, which is one of these AI accounts. And very interesting results because 01 Pro gets a 69 on cipher bench 2.04Mini gets a 33.03, which is the one everyone's really excited about right now, gets a 26. And so 01 Pro outperformed, I think, because these are complicated. But I wanted to show off Cipher Bench because it's similar to ARC AGI, where there's no instructions. You just give the LLM or the. Or the model a cipher. And so the whole idea is to structure, to be able to detect signals, structure like structured signals embedded in natural formats and identify the relationships without explicit task framing. So you're not giving it, hey, this is what you're looking for. And you have to infer these transformations solely on the content itself. And it's fascinating. I don't know if we can scroll through some of these, but you initiate a fresh session, you give only the prompt with no examples, no setup, and no hint that decoding was expected. And then you're scored by exact match evaluation. So basically, each prompt encodes to a variation of the exact same target phrase, which is nostalgia for the future. And if you see, if we go to like, some of these prompts, you can see like prompt two is noble. Owls soar toward azure landscapes gracefully. And if you look at the first letter of those, it's N O S T A L, G I A. Right, Nostalgia. And so you could look at that and see like, okay, these are weird words. Like, what's going on here? You could figure this out as a human. There's another one that's date encoded. And so if you look at the dates and then you look at the, the, the number of dates that correspond to the letters, you get the same thing. The best one that I like is on the next slide. It's this big nostalgia is. Nostalgia for the future is just written square. You've seen this like this is something that a human looks at and it's just like oh, that's nostalgia for the future, right? Yeah, you just like I'm reading it like a clock and then the same thing with the numbers. But it's very hard for these LLMs to figure these puzzles out. And Smoke away has, has run the benchmark and O3 is still not entirely getting 100%. And so it's an interesting thing where these, these reasoning benchmarks, these ARC AGI benchmarks are tricky to get through. And there was another, there was another post in here I want to pull through through.

Okay.

So interesting.

My prompt is done. By the way, how'd your video done 03 make me a movie I can download that involves a pitbull taking creatine. Figure out how to do with the tools you have. So it spent a lot of. It's been 90 seconds thinking basically went through this entire process. The user is requesting an actual movie that can be downloaded. Blah blah blah. Earlier I gave an outline, now the user is asking again. So it's basically walking through the chain of thought. But it failed. It produced an image of a, of a pit bull taking creatine. And then it says it has a graphic of the, of the pitbull flexing saying unleash the beast. But it misspells unleash.

Okay.

And then it turns it into a video and the movie is just a movie of the picture. Okay, so you're fired. You're fired. But.

Well, did you know that creatine can help with lack of sleep?

That's right.

But our audience wouldn't need that at all because our audience of course sleeps on eight. Sleeps many people, many on them, many of them on the Pod 4 Ultra which has a five year warranty, a 30 night 30 night risk, free trial, free returns and free shipping. Go to 8sleep.comtbpn How'd you do last night? One up. I think I recovered from the disaster that was the night before. But it was still probably a little bit messy. Let's see how I did. 87. 87 got it routine a little bit off. You got 100.

I just. I'm gonna give you a challenge. Sean just beat me two days in A row because you beat me once a bunch of times but just two days in a row, back to back.

Okay, challenge accepted. Challenge accepted. It's my, it's my personal eval. It's my personal benchmark.

Super bowl of sleep.

Yes, the super bowl of sleep. So yam peleg says so03 just legit didn't follow my instruction and started prompting me back instead. Now I'm running stuff and pasting results so it could cook the task harder. Great. Thanks for the pre flight readout. Below are two quick things I need from you before I drop the final one liner. So funny. But this is, this is a massive, massive breakthrough for agentic behavior because that's exactly what I want is, you know, if you think about employee, that's how real collaboration, that's how real collaboration works. Sometimes you just need to pull extra information information out of me and knowing when to come back to me with a follow up question.

I don't have a post here, but people were reporting that it would effectively just start lying to them or making up reasons that it was doing something and basically doubling and tripling down on actions it took and figuring out ways.

Yeah, I definitely ran the python. I definitely ran that. And you're like, really? Show me. And it's like, here's some python. You're like, you didn't run that January. You're lying. Which is like, it's misalignment. But it's very cute. And so we'll let it, we'll let it pass. But yeah, I mean, what's nice is.

That it seems not like, did you or did you not try to, you know, send 20 ICBMs into the, into the, into the atmosphere me? And it's like, no, absolutely not. But, but you know, we can see the, you know, command. Like you clearly tried. Well, yeah, I actually did a little. I tried a little bit.

I tried a little bit. Yeah.

Crazy.

But anyway, if you want AGI for sales tax, go to numeral HQ.com spend less than 5 minutes per month on sales tax compliance. It's.

Yeah, that was our. When Numero launched. Yeah, that was the day that we.

Said, okay, AGI, it's sales tax. God in a box, basically. It's, it's super intelligence for sales tax. Yeah, that's on your E commerce website.

Great way to say it.

It's great.

Anyway, if you're tracking all these benchmarks, you got to head over to Polymarket, there's a bunch of great AGI benchmarks. Which company will have the best Model by which month? Yes.

The interesting thing here is that. Well, one, it's, you know, benchmarks are clearly hitting. Some benchmarks are hitting a wall.

Yeah.

It feels like in some ways.

Yep.

In many ways, the benchmark that matters, in our view, my view at least, is Maus. ChatGPT is steamrolling Gemini. Yet from a pure benchmark standpoint, Polymarket still has Google at a 64% chance of having the best AI model by the end of April.

Yes.

And so we're getting to the point where there's just so many different iterations and it's actually not, at this point, it's not necessarily the right way to think about an individual model. And if it's efforts against a benchmark, we should be thinking about the combination of models to achieve certain tasks and goals, right?

Yeah, yeah, yeah, totally. Like, what is the value of the software? What is the value of the product?

Because, like, for example, like, two people that have very diverse skill sets are going to be better at some type of task than just one person who's, like, absolutely. Best in class in that. In that field.

Right. Speaking of people that are best in class in their field, let's welcome Delian to the show. How you doing, Delian?

Bulgarian mafioso just carrying a bat, ready to break kneecaps at all times.

I was going to bring that up to you. I was going to. I thought it was a rumor, but, you know, how's it going? I think I want to kick it off. I mean, we'll get to the space stuff. Obviously, Delta V with Delian must go on, but what's the. What. What's the reaction to AGI arriving April 16 being AGI Day? Are you feeling the acceleration? Are you feeling the AGI? Are you. Do you still have a job, or can AGI break kneecaps?

You know, I do think that there are, you know, sort of junior research jobs that, you know, probably got a lot harder to justify. Both in, like, the land of, like, you know, sort of venture all the way to, like, you know, sort of grad school labs. This stuff is getting really good. I'm not somebody that has been investing in a ton of AI slop, but I think it's crazy to not figure out how to integrate this stuff into your workflow. And I very regularly now will read a paper and then immediately go to ChatGPT and use it as a little bit of a quiz to make sure I understood it. Or I've been getting a little bit of trying to take some quantum physics classes and Certain nights and weekends and same thing. I basically have ChatGPT be my tutor structure which courses and videos I should watch. Even though I can go pull the homework myself, I'm like, go find the homework on like the MIT website and like, pull it for me. And then I'm just like, submit the homework to you and you go check it against like, the solution set that way. Like, it's like all these things that I just don't have to do. And it's sophisticated enough to actually, like, be able to read like a PDF of like paper that I put in and it goes and grades it. That's like, literally what like the junior grad students are for at colleges. Like, to go grade the, you know, the psets so you're out of a.

Job once the humanoid robotics drops, and then they can break the kneecaps and then you don't have anything.

That's all I have. Value for Founders Fund is just like, you know, I just like, threaten people with violence in order to get money in.

Yeah, exactly, exactly.

Whatever it takes.

Anyway, so in your world outside of AI, what is the top story in defense space for the normies? I think Blue Origin was top of mind this week. We can talk about that. But. But on a serious level, like, what is actually important for people to be paying attention to?

Yeah, I mean, I think there's a couple of different stories that have come out over the past couple of weeks that are all kind of, you know, related to some of the Trump tariff stuff where basically what he's done is effectively like, implemented the trade war that would have happened if a hot war with Taiwan had started to start to basically preview. In some ways, it's almost like a military exercise in that it's basically like, let's go preview and see, you know, sort of what China, you know, would do if a hot war, you know, kicked off. And so they obviously, like, immediately restricted a bunch of rare earth minerals. I think the area that, you know, people should be paying more attention to is basically all things, you know, sort of semiconductor, you know, landscape. You know, the articles that came out yesterday talking about, you know, Nvidia basically getting, you know, sort of slapped on the wrist because they, like, were exporting, I forget what the number was, but like $20 billion per year of chips to, like, Singapore. Singapore is obviously not buying $20 billion worth of chips. They were just immediately going and reselling those to China. And so, you know, Jensen Huang is going to get a bit of a sort of slap on the wrist. But, you know, the whole Taiwan story is all around the sort of semiconductor industry. And there was some news that came out about two weeks ago where the Chinese are working on a synchrotron as a energy source for lithography and semiconductors. So there's a bunch of different components of the sort of stack of sort of semis. But you know, to really, really keep it sort of brain dead simple, you basically have like the chip designers of the world. Think of those as like, you know, sort of the sort of apples of the. With their like you know, A1 chips. As an example, you have the, you know, sort of tools providers that make the tools that are necessary for semiconductor processes. By far the most famous there is, you know, sort of ASML and lithography. And then you have the foundries. Think of those like the factories that you sort of make the you know, sort of chips in there. Obviously, you know, TSMC is sort of best in class. You know, the tools and the like, you know, sort of foundry are where there's been by far the most aggregation, let's say, you know, sort of in the market. Right? That's where it's basically a monopsony. We're obviously, you know, sort of trying to break the you know, sort of TSMC monopsony and obviously we're spending on chips, act, et cetera, trying to get this stuff reshore to the United States and get foundries set up here. There hasn't been a whole lot of effort domestically in the United States to really do anything around lithography. We've just kind of accepted that the Dutch, right, I think is a Dutch company, you know, are going to, you know, have that monopoly on lithography. And then people are starting to think a little differently now that it looks like that the Chinese maybe have an alternative effort, this sort of one liner, like, you know, sort of what is lithography? It's basically like you shine light at a mask, some light passes through that mask and then it, you know, basically, you know, inscribes something on a wafer and that wafer, you know, it's basically what you're inscribing is the chip. The way the like either Dutch people do it is they basically like zap tin droplets really fast and really precisely. And it turns out when you zap tin droplets, they release a very particular wavelength pretty coherently. And you can use that as the like, what's known as like the energy source in lithography. People have theorized for a while on like, hey, are there other potential energy sources in particular, all the like linear accelerator, synchrotron stuff that for the longest time was purely like physics, science, research. This is like think like cern, you know, think about like Spark down at Stanford, right? All this stuff was just like, let's, you know, run particles really fast. Let's try and discover the Higgs boson and stuff like that. That's all that it was used for. And then at some point people were like, man, like this stuff is actually like getting pretty good. Maybe we could actually use this commercially because like the reason we zap the tin droplets is to get like, you know, X, Y, Z, very short wavelength out of them. But like, maybe we can just attune these linear accelerators to basically just be like really, really, really, really fancy lasers and get energy sources out of them. And so people have like theorized about that. And then it kind of looks like the Chinese have claimed that they've started to demonstrate that. And so now there's a bit of a panic in the US where it's like, oh shit, like they could take over Taiwan and then in theory we could try to ban, you know, asml, you know, from, you know, selling China. But maybe that doesn't fucking matter because they've figured out their own way of basically doing, you know, sort of lithography. And so now the United States got to think about, well, like do we want to start to spin up our own internal effort that is, you know, using linear accelerators or synchrotrons and try to decouple from ASML and decouple from Taiwan at the same time. So we have Arizona doing, you know, the foundries, but then, you know, maybe we co op the, you know, sort of Stanford Linear Accelerator and you know, sort of turn that into a lithography shop and build a foundry around that too. So anyways, that's the, that's the area that I feel like people don't, you know, sort of think about enough lately.

Yeah.

Is there, is there any, and I don't have context here, I don't know if you do, but is there any effort to get ASML to start manufacturing here in the United States or is it just completely out of the question? Right, because we've seen the efforts of tsmc, Nvidia came out and it's basically doing, I read as marketing. They came out a couple days ago and said Nvidia to manufacture American made AI supercutter supercomputers in the US for the first time, pulling out the supercomputer word, but basically saying they want to make hundreds of billions of dollars of their new Blackwell chips here in the US which is awesome, but I just don't. It's hard to read in how much of that is sort of marketing versus, like, actually super real. But I'm curious if you've heard of anything on the actual ASML side in terms of U.S. operations?

I feel like we just don't have leverage in that sort of relationship. Like, it's not obvious what lever to pull, at least in the whole sort of Taiwan, et cetera thing. It's like, hey, this is a geopolitical enemy. Like, you know, you know, all the Western allies agree generally, you know, sort of with that. If you start to sell to them, we're going to, like, you know, sanction the shit out of you. You know, Nvidia is like a US Company. There's like, you know, we can slap them with US Fines. With asml, it's like, okay, this is like a, you know, European company, and, like, if we start to try to, like, sanction or slap fines on them, they'll be like, okay, great. The very limited number of machines we were selling to the US we're going to stop selling them. We're going to keep selling to Taiwan because they're obviously, you know, by far our biggest customer. And so why does, like, the America have that much influence in this, like, Dutch to Taiwanese, basically, relationship versus, at least with like, you know, in video and crew, that's like a US to Taiwan, you know, relationship, and we can, you know, sort of influence that. And so, yeah, I haven't, you know, I'm not even sure if I were in Trump's shoes, like, what angle I would even try to take to, like, you know, do that. And then also, these ASMR machines are, like, so complicated to manufacture. I mean, it's like, it's. It's extremely complicated to operate them. Right? Like, that's what, you know. So Taiwan has basically, you know, sort of figured out how to do manufacturing them is, like, even more complicated. And so somehow figuring out how to, like, pull that out of, you know, the Netherlands, man, that seems like a really herculean effort. That's where it's like, I think actually you're sort of better off starting with a blank slate on a totally different technological approach and just, like, domesticating that rather than trying to, like, you know, try to force them to move manufacturing operations to the U.S. how do you.

Think about the role of the government in actually winning some of these really key industries? Like, we did this whole dive Yesterday on China's investment in the domestic semiconductor industry. And they've poured tons of tons of resources into that. But I'm always reminded of the. The. There's that segment in zero to one about Solyndra, how, how the government tried to kind of pick a winner. They gave them this. I think it's a $535 million loan guarantee. And any physicist could have told you just the basic math on the cylindrical was not going to win. Meanwhile, China, it's not that they were like, let's let the free market win. They, they had the golden sun program, they subsidized photovoltaics super aggressively, but they just made. Were they just smarter and they funded the right thing, or do they do something differently? Like, like, it feels like I want the linear accelerator, if that's the right path in the tech tree to happen, and I want to win, but also, I don't necessarily want us to just, like, get scared and mimetically invest in exactly what the Chinese are building. And there's like this dance of like, you know, low taxes versus, like, okay, sometimes the government does need to step into these things. Like, how are you thinking about the role of the government in, like, driving R and D right now?

Yeah, if there's a way to like, you know, sort of distinguish between the two potential strategies government can take. One is like, you know, sort of subsidize inputs or, you know, you know, match investment efforts or something, you know, broadly in an entire market. But don't take a particular stance on, like, what technology tree needs to be a part of. Just like, subsidize this portion of the market and then the other half is like, subsidize a very particular, you know, path in the technology tree where there is no market whatsoever. And so if you did, like, market level subsidies, I think the right answer is like, you know, probably a balance, right, where, you know, on all things, let's say, like, you know, sort of rare earth, you know, sort of minerals there. It feels like there's sort of market level things that one could do just like, slash some amount of regulations, you know, you know, encourage, you know, or, you know, guarantee some level of, you know, sort of purchasing power from the US Government on, like, certain rare earth minerals. That way you say, hey, however you refine lithium, you know, whether it's, you know, sort of, you know, you know, pulling it from the slag from the Great Salt Lake or sort of mining in Eastern California, great. However you do it, like a reserve.

Is like, like building up a reserve.

Yeah, exactly like we're going to build.

But it has to be American.

We're only going to buy it from domestic suppliers in order to buy it at like this, like, fixed rate, right?

Yeah.

You know, in relation to space stuff, this is kind of what, you know, they've done with like the, you know, Lunar Payload services program. Right. NASA's just said, I don't care how you build your lunar lander, but we are just going to guarantee they're going to buy X amount of basically like Lunar Payload Services, and it's going to be at XYZ price and up to you how to go to do it. And so I'm definitely like a big fan of those approaches. I do think there are the occasional warranty, you know, hey, here's a huge next step in the tech tree. It's just totally uneconomically viable for anybody to step into that tech tree without knowing that there's going to be government support, you know, sort of basically from the get go. Right. In some ways, like, you know, nuclear weapons were that there was never going to be like a private company that was going to go invest into, you know, figuring out, you know, sort of the fission or fusion bombs without knowing there was basically going to be government support. I do think that, like, linear accelerator is sort of one of those. Now there is a big question of like, is it Solyndra, you know, is it, you know, you know, fearfully copying the Chinese memeticism? But it's like, I'm not sure if there's any other option where, you know, I'm not sure if there is any other credible, you know, approach to domesticating lithography. Like, I don't think that, like, trying to just copy the ASML tech tree makes any sense. I'm not sure that anybody else has come up with an energy source that like, you know, sort of is an option. So there probably needs to be like some, you know, sort of bet. So if we were to assign XYZ budget to like, domesticating foundries, I mean, probably 10 of that equivalent budget should be assigned to trying to domesticate lithography. And there's really only one bet on that tech tree basically, you know, sort of to make. And so I, I mean, it's kind of a lame answer, but I think the answer is like, there needs to be a little bit of a blended approach to like, you know, national reserves guaranteeing demand in, you know, refined lithium domestically in the United States. There's also some questions on, like, look like, you know, with like, let's say magnets. We do a lot of like, you know, the rare earth mineral production of those, you know, magnet precursors, but the actual, like, you know, sort of final synthesis and refinement, that all happens in China. But a part of why it happens in China is like, the current processes are like, crazy destructive for the environment. And so it's like, it's like actually a question of, like, I mean, like, where how do we want to, like, try to come up with a different process, but it's like, better for the environment, but like 10x more expensive? Like, you know, there are questions like that where it's like, you know, we were kind of looking at, like, the magnet supply chain recently, and as we were debating an internal investment, it's like, you look at that stuff on the supply chain, I'm like, man, it's like, not particularly technologically difficult. It's like, really easy for us to replicate, but it literally is just like releases poison into the environment.

Yeah. Taking it back to space. You know, it seems like the helicopter on Mars, the, The massive James Webb telescope, like, these are things that are not economically viable, but I could totally see them paying off and being like, oh, that was a great investment, even just like inspiring the next generation, but also like, probably commercializing some technology down the road. On the flip side, we saw Blue Origin with the space tourism thing. It's like barely space, just past the Karman line. But how do you think that plays into the overall space economy? Do you like that strategy of, of growing that business? Is that a business that can stand on its own, or is it just kind of like a fun side project for Bezos. I don't know what you know about that whole industry as it's growing, because we've seen it kind of play out before with Virgin Galactic. And I'd love to know what you think about space tourism generally.

Yeah, I mean, I want to also touch on an earlier point that you had around the helicopter on Mars, James Webb telescope, et cetera. I'm not sure if you know, but the White House actually recently released its proposed NASA budget after future nominated administrator Jared Isaacman after his confirmation hearing. And in it, they significantly slashed all missions at NASA. And so that includes future telescopes that we have in the works, that includes some of those helicopter on Mars missions. And so the White House is at least taking a stance on that is not something thing that, you know, we see as being, you know, sort of valuable. Those are definitely, you know, sort of things that clearly don't have any sort of economic, you know, sort of feedback loops, like more deeply understanding the universe. You know, I don't know if you recently saw. We, like, found an exoplanet where it looks like there are, you know, organic compounds that, you know, on Earth are only, you know, made by marine algae. And the planet, you know, is very large. And in the Goldilocks zone of a red dwarf star that would be at a temperature zone where, you know, sort of liquid water would be possible. And so it's like, yeah, what is the sort of value of that? Hard to sort of prescribe economically. And the White House has at least thought, hey, we don't see the geopolitical sort of significance in this. Doesn't get boots on the moon, and it doesn't return sort of to an economic use case. So that's at least the White House stance, which is also, for what it's worth, it was different than what Administrator Isaacman said in his confirmation hearing. So it's interesting to see that obviously there's maybe some disconnect between the administrator and the White House on all things space tourism. I don't think it's sort of an economic use case. That is going to be what really drives us to the frontier. Whenever I've thought about Varda, I always go back to this 15th century analogy, which sometimes people think is a bit of a stretch. I think it's actually pretty reasonable. But if you look at the early 1400s, and the Portuguese and the Chinese empire, they both were in the early days of investing into basically their naval capabilities, and they took radically different approaches. The Chinese basically took the approach of build these very large and ornate ships and go and sail along the African coast, so capture elephants, bring back some gems, and bring them back to the Chinese emperor as basically displays of power. And so the Chinese emperor would now have a pet elephant for the first time. They would have these gems. They would have these African trinkets. The Portuguese took a very different approach. The Portuguese built very small naval merchant flotillas. They would basically dock along the African coast. They wouldn't tour the entire coast like the Chinese did. They would say, just stay there, make a trading outpost, basically find either sort of economic means and reasons for that naval flotilla to be around. And then only once that initial merchant outpost was established would they move basically 50 miles west down the coast until they eventually covered the entire coast. So fast forward to the late sort of 1400s. Where did these naval empires basically end up? The Chinese emperor ended up deciding that this was basically a waste of resources. He didn't see any economic value for his empire for having elephants around. And so ultimately basically shut down the entire naval sort of power for China for the following, I think, almost 300 years. The Portuguese, as you could probably guess, became the most powerful naval power in the entire world and led to significant growth of their empire. And so I think about sort of space sort of pretty similar to the naval frontier in the sort of 1400s and 1500s. I think you want to find these sort of clear economic use cases that involve trade and resources versus the like, you know, so Katy Perry going above the Carmen line is probably kind of like the elephant for the emperor where, you know, Bezos gets to sort of pop some champagne and, you know, I'm sure his wife is super happy that, you know, Katy Perry feels indebted to them as a couple. But, like, I don't know that that, like, generates a ton of economic value.

And so the economic incentive around space is obvious. Let's maybe talk about the national security incentives, specifically China in 2030. They've come out and said very clearly, we want to put, you know, our astronauts on the moon. You know, I don't know if it's by 2030, but in the 23rd, early 2000-30s, so maybe, you know, how much can you speak to?

Do boots on the ground actually matter? Or would it be viable for them just to send up so many landing zones that they start building? Like, we've heard about this. Like, when you land, you kick up a bunch of dust, and so you're kind of de facto claiming an area and there's only so much ice water. There's. So, like, if they could just send a bunch of, like, rovers, they could effectively start, like, claiming. And they may not even ever need to send humans to really claim the resources. What do you think?

Yeah, let me give you this sort of, you know, sort of China Bear versus China sort of bull case on this China Bear case is this is China repeating the same mistakes from the 1400s, you know, so they're going there. They haven't really figured out, you know, economic use cases. They don't even have even really figured out economic use cases in leo. Right? They have nothing equivalent to, like, Starlink generating billions of dollars, you know, of commercial sort of revenues that you can use as infrastructure to build off of. Right. And so they're the sort of Chinese with, yes, they're building big fancy ships, yes, they're landing rovers on the backside of the moon, but they're not connecting this into capitalism whatsoever. And so this will all sort of fade away versus the United States, the Portuguese, while we maybe haven't more recently succeeded as well as they have on the moon. We've got Starlink, we've got Starship going up, we have all these things that are built off of commercial infrastructure. And so while we may not have as big of a ship soon, if you fast forward over the course of the next 30 years, the Chinese will shut down their program and will be the most powerful naval empire, for example, space empire in the entire universe. Trying to, you know, sort of bull case. Nobody's landed, you know, sort of on the, you know, sort of backside of the moon ever and returned samples perhaps they're finding, you know, helium 3 deposits, they're finding lunar ice deposits. You know, they're taking a much more concerted approach to trying to get, you know, sort of human boots on the moon and forcing it from top down. And if they get those first handful boots, like you said, they can sort of claim, you know, particular land areas. And there's only a handful of clay to craters on the moon today that are clearly known to have lunar ice. If they claim those first handful, if they start mining that ice, they can turn it into propellant, they can turn into economic value where they can send that back into low Earth orbit to some of their satellites they have set up there. They're setting up sort of Starlink, you know, sort of competitors. And so there's definitely a world where, you know, they establish the first, you know, sort of permanent lunar presence. While we get distracted by this dual path between moon and Mars, that permanent lunar presence turns into a mining operation. And so they do connect it back to economic value. Even though it has a lot of like, you know, strong, you know, from top down state power, you know, getting it established, it eventually transitions to something new sort of fully economic. And so I think there's a way to, you know, sort of take both those angles. I tend to think. I think you should never underestimate, you know, sort of your enemies. And so I tend to take the China bull case and assume that is the default. And I think we're a little, you know, sort of, you know, lost in the rudder right now. I think, you know, it'll be interesting to see how, you know, administrator Isaac man comes in and starts to put together what our plans are for getting boots on the moon, you know, over the course the next four years.

Do you have any insight into like the timeline of actually generating propellant on the moon? I've heard like, oh, there's Water. And at a certain point, you can draw out the chemical process for turning, like, carbon and hydrogen into some fuel. But, like, that's hard to. Desalination is hard. In America, in California, I can imagine that actually taking the resources on the moon and turning the propellant is like a massive industrial process that looks more like a Tesla gigafactory than like a little science experiment. But maybe I'm wrong about that. Like, is this something where we could actually build a box that starts doing this, get it up there in the next decade, or are we talking about like, 20, 30, 40, 50 years?

I think this is where, like, exponential equations always sort of catch up on you in a way that's sort of unexpected. If you look at the total mass to orbit, basically over the past decade, it's basically following a perfect exponential equation.

Yeah.

And so I think this stuff is, you know, sort of way sooner than people expect. Like, I actually think with a concerted, concentrated effort, I think we can get boots on the moon again before, you know, Trump is out of office. And it's not like, you know, sort of betting on a bunch of, you know, sort of net new, you know, sort of radical programs. It's, you know, starship maturing at the sort of rate that it is maybe a little bit more aggressive. You know, sort of the current, you know, Artemis vehicles, Orion, etc. And some of the current lunar lander companies starting to develop, you know, sort of larger landers. I think that's all. You know, I'm not saying that's going to happen like, in the next year or two. It would be, like, late in the Trump, you know, sort of presidency. But I think it's possible on, like, conversion to fuel. Not that complicated a process. There's like five or six groups that are sort of already, you know, working on it. You know, I'd say the desalination thing, that's, you know, sort of more of a economic challenge than it is, like, a technical challenge to, like, basically, you know, justify the amount of water that you need. The benefit of water on the moon is, like, on a per kilogram basis, it's so incredibly valuable because it's just so much easier to shoot water from the Moon into low Earth orbit than it is to bring water, you know, from Earth's surface up into low Earth orbit. And even to start, you don't need anything more complicated than water. Like, you can use water. It's not a very good propellant, but you can basically just spray water. And it is a rocket propellant. Now there's better things you can do. You can turn it into atomic hydrogen and stuff like that, and hydrogen gas or liquid hydrogen, but you can start with very sort of basic things. And so. So I think it's like an end of decade problem, totally solvable now. Depends on taking a really concerted, focused effort. And again, maybe a part of it is you do have to sacrifice the Mars helicopter, you have to sacrifice some of these telescopes, et cetera, to get the country really, really focused on getting lunar infrastructure set up as quickly as possible.

What's the probability that you or I go to the moon in the next 20 years?

Specifically you or I?

Yes. What's your P moon?

I'd say our P moon is like, you know, 30, 35% is my P moon.

I love it. Yeah, I've been talking to my son about that. We look up at the moon and I'm like, do you want to go with me? And he's like, yeah, of course. And I'm like, I think it's possible. I think it's possible.

If you extend that to 40 years, that would put like P Moon at like 98%.

Awesome. So wait, there. So there's this conspiracy theory that the Blue Origin launch didn't happen, that they didn't go to space, that it's impossible to go to space using only family friendly language. What would you say about the people that don't believe they went to space?

Well, yeah, there are certain conspiracy theories that always have some truth or merit to them. JFK probably was killed by the CIA. NASA may have had a soundstage for the lunar landing as a backup. And, you know, Katy Perry probably is not an astronaut. You know, you could probably just, you know, fly a fighter jet, you know, up and then down, and you probably roughly get the same experience that she did. Very different to be going, you know, a little up, a little down versus, you know, 15,000 miles an hour. So I'd say God bless his conspiracy theorists. They're always helping us find the kernels of truth in the stories that they weave.

Yeah, that's legitimate.

Going back to space and geopolitics. China has their national space day on April 24th. So next week. Is that something significant in the space community that people are like, really paying attention to? Like, they feel like there's going to be like real signal or exciting results or is it just kind of, do people kind of write it off or not write it off, but just kind of look at it as this sort of like, kind of like a demo day kind of Marketing keynote style event where it's, you know, not a lot.

Of signal they're delivering. Like, you know, if you look at, you know, sort of China's sort of plans from 2018 and sort of where they are today, they're not totally off track on, you know, sort of what they promised they'd be able to do.

Right.

They've established their own, you know, low Earth orbit Chinese space station. They're regularly flying astronauts up and down to it with cargo. They're attracting international partners to that space station. They've clearly gotten a coalition of folks willing to sign on to their sort of lunar station or lunar base plans. And so I do think it's something that people pay a lot of attention to. They tend to sort of re update or re reveal basically what their next sort of 5, 10, 15 year goals are. And it's something that everybody from like, you know, sort of NASA to Space Force definitely pays a lot of attention to. They're not always fully transparent about obviously, you know, sort of what they're up to. So there's no guarantees that there'll be anything new, but I would expect that there will be given, you know, all the tensions that have risen over the past year between the United States and China. And so I would.

How, how do some of these partnerships happen? Right. So one of the things that they're going to be reporting on next week is, is related to a partnership they have with France on like a joint satellite program. Is that a, is that, is that like, due to NASA's shortcomings? Like, is that a missed opportunity for us to not be partnering with France on something like that? Or like, how do these sort of like, how did the, and are the geopolitics of space almost like disconnected in some way between. With Earth?

Oh no, very connected. That entire French thing, I'd basically sort of pinpoint back to the nuclear submarine contract. Basically the United States ended up moving a chunk of nuclear submarine contracts out of France over to Australia. The French were furious. Macron sort of went on and gave a bunch of public talks about it and then basically Chinese collaboration started less than a month later. And so it was clearly like a, hey, you're going to slap us on the wrist as an ally, great, we're going to go to your geopolitical adversary. I don't think obviously those things are.

You know, one, it, one is like purely economic, like we're moving the place that we're making submarines. The other one is saying like, we are partnering with your ally. Those two things Feel like one is, like, a business decision, the other one is, like, very clearly, like, you know, picking aside.

Totally. I mean, from France's perspective, it's like, you know, it's billions of lost revenue for one of their, you know, major defense primes. And, you know, they see that as a sort of slap on the wrist. And so, you know, they feel like they need to, you know, sort of slap back. And so, yeah, I'm not sure that, you know, it's the smartest geopolitical move. I don't think, like, you know, a Western democracy should be, you know, sort of cozying up to, you know, an authoritarian dictatorship. But I also don't think the French are the most intelligent people in the world right now.

Well, they. They have the opportunity to turn it all around, because if they don't, I will be boycotting Dom Perignon, you heard it here for first.

And that will.

That will crush.

Send shockwaves through lvmh, French economy.

I will not be vacationing in Lyon or Nice or Burgundy. I will not be spending my time on the French Riviera.

I'll be in Nice late June, no matter what, no matter how dumb the French.

Cancel it. Cancel it. Unless. Unless it comes back.

No, he's going to turn him. He's going to turn him.

Yeah, yeah, you got to go over there. You're our plant.

I'm going to get on there. I'm going to look at those Airbus facilities in Toulouse and take a look at that Chinese satellite problem.

Last thing, if you don't have a hard, hard stop. How do you think about the Chinese aerospace industry specifically? They. Earlier in the week, they. They canceled or paused some Boeing orders. Someone else on the show was saying, well, they'll probably just move those orders over to Airbus, something like that. But at the same time, how long is it until we're all going to be, you know, that hard to build a jet engine?

I feel like they should have copied that by now. This is kind of a bear case for them.

Well, up until a year ago, my, like, one liner would have been, you know, there haven't been any commercial airliner deaths in the United states for, like, 16 years. And so the reason that it's really difficult is because just, like, the safety bar is so, so high that basically nobody wants to touch anything. They're like, everything's been perfect. Yeah. Now, obviously, you know, sort of DCA and, you know, sort of Toronto. Well, Toronto, I think it didn't end up leading any deaths, but DCA obviously did. And I'M not sure that it's really going to change the culture. Like, you know, faa, aviation, you know, regulations are just so, so stringent because they do have, in some ways a great track record, but, man, it just sets the bar so high. Will the Chinese ever really manage to get any traction? I don't know. It's like definitely not in the United States ever. There's no way that, like, the United States is ever letting the United States airline buy, like, a Chinese, you know, so jetliner.

It's the COMAC. C919.

Yeah. And there's no way Frank is gonna let them, you know, buy anybody other than Airbus. Same thing with the entire eu. So who the hell are they gonna sell their, like, Chinese airliners to, like, Africa or something, you know, I don't.

Know how big of a. Malaysia, maybe? Malaysia. Teleport. Teleporting.

Oh, did you see that? There was some, you know, revealed potential documents of four UFOs surrounding the Malaysian airliner and then disappearing it.

Okay, well, we'll have to dig into that next time.

Gotta get Jesse.

Michael, do another half an hour.

Get Jesse to come.

Yeah, yeah, yeah. We'll break it down. I really appreciate you stopping by. Thanks so much. This is great.

See you next week. Cheers.

Bye. Next up, we are going to the founder of a company that Delian is in love with. He's obsessed with these AI apps. He can't get enough of them. So we're very excited to have Gaurav on from Captions. I'm actually a huge fan of this app and this company. I use it all the time. Anything. Anytime you see me post a clip on X and there's captions there. I'm using the Captions app.

That's right.

It's fantastic. And there's a bunch of other cool features and the company has been just maniacally adding functionality. And as you saw with ChatGPT, you wanted to generate a video like it couldn't do it. Like, these tool usages are increasingly difficult and they're not something that you can just. It increasingly looks like you can't just one shot it with tokens out of an LLM. And so building up traditional software around the system actually improves the AI. And so these products are very complimentary. So we're excited to welcome him to the show. How you doing today?

Boom.

Hello.

Hello.

There you go. What's going on?

How's it going?

It's great. Thank you so much for being here. Thank you so much for creating the Captions app. I use it Very, very regularly.

Dau, basically.

Oh, my go. I'm obsessed. Yeah, yeah, For a long time. I mean, we make a ton of clips. You've probably seen and make clips. It's always a hassle to put captions over, but you made it much easier. A lot of that. I want to talk about the history of the technology, the whisper turning point, and then get into value creation in the application layer. There's so much we can talk about, but why don't you kick it off with just like introduction on, like, how you're describing the company these days? And then the most recent announcement.

Totally. I mean, so love that. By the way, you're an OG user, so thank you for being a user. But, you know, it's a pretty young company. Like, we're our product market. Fit was like two and a half years ago, right? So like we were four people two and a half years ago and things have grown really, really fast. Adding captions, you know, the most basic thing. But it's evolved quite a bit. And so today, I mean, the way we think about the company today is like, you know, video creation is hard, right? And we've identified two problems actually, right? One is recording the video is hard. You guys know this, right? And editing the video is hard too, right? It's pretty technical. And we want to solve these two problems. Like, these two problems, we want to help people jump over with AI, right? So if you want to edit video yourself, if you want to record video yourself, go somewhere else, basically, right? We're going to actually do it for you. That's the value, right?

So not going after DaVinci resolve, not going after Premiere, an entirely new market.

Exactly right. And we think of it very similar to Canva, actually. Like, you know, Canva for video as an idea has been sitting around for a while and I think it's actually finally possible because of AI, right? Because the real value of Canva is you start with something, right? You don't have a blank screen and you know, it's not built for the designer, right? Most designers will look at Canva be like, I could probably do better than this, right? But it's built for the person who's not a designer, right? And that's the same value that we provide. So on that note, right, like last year we started working on essentially foundation model technology for video generation and for editing. That's going to help us achieve that. And, you know, these are big projects, very expensive, but also very cutting edge. I think the most exciting part on the video gen side for Me is like, we're very much focused on like talking videos.

Right.

Which is. And by the way, I'm also kind of surprised almost in a way that we've spent so much time and so much money doing text to video on silent videos. What's the point? Just stop videos. That's the negligible part of what a video is. Almost no time spent on videos with actual communication. So that's kind of what we've been focused on for the last year.

Yeah. What, I don't know what, what like breakthroughs are the most interesting to you. Obviously, like Whisper is super important. I feel like Whisper is great. And then all of a sudden it came down to like, okay, well I want real time Whisper on the show and then I got to go build that or Notebook LM like Notebook LM like, it still doesn't have an app even though Google is paying people not to work. And so it makes no sense to me. And I'm imagining that like Captions could be an app where I'm getting like a Notebook LM style, like YouTube videos. YouTube's talked about this a little bit. They haven't rolled anything out, but you're starting to see a lot of this stuff. A lot of it's in the slop tier. But what I like about captions is that you can still inject enough of the human element to take it from. It's a tool that's used in partnership with a human. So it still has that art in there. But what is exciting you and what's the most interesting in terms of where you want this to go?

Yeah, I mean, honestly, there's a pretty clear distinction that's developing that I'm starting to see. Which is amongst the foundation models, there's the text generation LLM type models. And those are solving a very difficult problem. Is intelligence. Unsolved problem. No one's solved intelligence before. And by the way, we don't even know what the bound is. Where does it end? Who knows? It could never end. It could go on forever. And then on the other side you got media generation. This is everything from video generation to music generation, sound, audio, all this stuff. These are solved problems. We can do rendering today. We can literally render anything you want with CGI and stuff. It's just becoming a lot easier. And it's also bounded, which means that there is a limit of realism. And then you've kind of solved it. Essentially you can't get more real than real. And once you're there, you kind of have achieved what you set out to achieve. And so I think it's a different type of problem. And also it means that it's not about replacing the human, Right? Because what's actually happening is the craft is evolving, right? The craft is different, but the creativity is still there. Whereas on the LLM side, that's actually potentially replacing the human. Not going to lie.

Right?

That's potentially what it's going to do.

Right.

So these are two different types of use cases, almost two different types of value that are being produced today. I think we follow definitely much more in that sort of media generation category where, like, our goal is not to replace anybody, right. It's actually like empower a bunch more people potentially.

Right.

And who knows, right? People come in, they use captions to make their videos, right? And we edit it for them, we like generate the video for them and, you know, that just gets them started. But like two, three, four years down the line, they, you know, they move on to Premiere Pro or something like. That's awesome. Nothing wrong, Right.

So how do you. On the developer side, we're seeing a bunch of startups where it seems like everything is just converging into this, like one shot, right? Where it's like you have lovable bolts. Rippling. Sorry, Ripple it. Sorry.

Rippling is one shot for your HRIS system.

That's right. That's right. So everything's kind of converging onto this like text box where you just tell it what you want and then it makes. It makes a website or an app or things like that. I imagine content will maybe go that way for some use cases and that's kind of like there's a lot of sort of momentum and convergence around that moment. How do you see. But that's just, you know, my point of view. What's your point of view on, like, how all this evolves and how you're looking to continue to differentiate captions over time other than just sort of like chasing perfect realism.

Totally. Yeah. I mean, so a couple of things there, I think generally kind of to make a comparison what you're talking about. I think of it as Canva for everything. That's actually what's happening. Because the magic of Canva, awesome company. I think the magic of it is not about how simple the UI is or something like that. The magic is that you start with something. It's not a blank page, really. The biggest enemy of anything creative is the blank page.

Yeah.

And not the UI and stuff.

Right.

I mean, think about, like design software in general. You look at like, figma and stuff. Like Figma has like six buttons, right? Like, it's not a hard ui, right? But it's really hard to make something good with it. Like it's really hard to figure out how you use squares and circles to make something that looks good, right? And I think the magic of Canva is you start with something, right? You're already 90% there when you enter. And then you kind of make some tweaks to get it to 100, right? And by the way, like, think about ChatGPT. It's kind of the same thing, right? Like we're using it all over the place today, but it just gets you started, right? Like it's like, boom, I already have something. Like, I need a job description. Boom, there's job description, right? For whatever job you want, right? And then it may not be perfect, right? You make a few tweaks, you know, change things here and there and you're done, right? And so it's like Canva for everything. That's what's happening. And I think same for music generation or video generation, like all these things are going there. Our goal and our mission in this, like we're focused on specifically the communications are vertical, right? So think about this, right? If you think about a movie or, you know, a TV show or anything like that, right? Any kind of like media today, only a small part of that is B roll, right? Like if this was a movie, like I'm in New York, so like it might open with like a shot of the Empire State Building and then the next scene like, oh, there's a New York taxi cab on the street passing by really quick in two seconds. And then the camera is in the room and we're talking, right? And that's actually the movie, right? And so, so much time and money has been spent on making the shot of the Empire State Building and almost nothing on like actually getting the dialogue going, right? That's kind of the, the weird thing, right? And like our thing is like, let's get that communication, that dialogue problem solved, right? That's one. And on the other side, just footage isn't enough. So let's get it edited to make it actually an asset, right?

Can you talk a little bit about growth? For captions, there's a weird dynamic where it can be extremely valuable to go viral with like a one shot thing. I'm thinking of Lensa, those magic avatars that it was just upload a couple photos and you get a photo of yourself. Then we had the studio Ghibli moment, which was a huge growth Vector. It's not OpenAI's product, but it was still probably massively beneficial just to drive a bunch of extra installations and chatgpt use, right? And so I could imagine you guys thinking like, hey, let's go make one click Harry Potter Balenciaga generator. And like, we are just like really good at making like Harry Potter Balenciaga style videos. Of course you need to put in your own tweak, but that's what we're great at. But you don't want to get pigeonholed into that. But it can be a good growth driver. Are you thinking about that consciously? Are you thinking about like, how can I get the next. How can I get the next Studio Ghibli moment to happen in the captions?

Apparently, yeah.

I mean, so we are. But our philosophy on this, honestly, like, think about both the Studio Ghibli thing, but also think about like original ChatGPT, right? Like, I remember the time where, you know, GPT was available. Like I would use, I would show it to my friends, like, check this out. Like, check how cool this is. People would be like, oh, wow, cool, okay, right. And then suddenly ChatGPT came out. And by the way, I think it was very clear that they hadn't prepared for the amount of virality that thing got, right? Like Even the name ChatGPT kind of gives that away, right? And so it wasn't a planned thing, it kind of just happened, right? So you Ghibli, same thing. I don't think they planned it. Like it just kind of happened, right? So I think if you create the right environment where people are given the creativity to go try something that's like an awesome technology, right? They, they can play around with it, make cool things with it. Like these types of moments kind of happen naturally. It has happened for us several times with different technologies we released in the past and a lot of times it's been unplanned. It's just like, you know, when we plan for it too much, it doesn't happen. When we don't plan for it, it just like suddenly explodes, like completely, right? So that's kind of what we've seen and it's something we think about of like, how do we create that wow experience? Because at the end of the day, a lot of the growth and virality is happening because people are just blown away. It's just so impressive. It's beyond anything anyone's ever seen, right? And I think that is a pretty high bar. So building on that building in Private until we reach that bar, releasing it as like a. Wow, this is like crazy. Like, that's the type of stuff that we've seen work really well.

Question.

Do you have any sort of visions around what the just video content on the Internet in 2030? Because I have this right now. There's not a huge incentive to make a video for one person, right? Especially in a business context. If I. If you want to explain something for 10 minutes to somebody in a business context, you pick up the phone, you call them, you spend the time to send an email or whatever. Now with something like captions, it's like, well, I could just generate a video of how my product works and why it's relevant to this industry and all that. And so I have this sense that content generation is going to like 100x thousandx, but human attention is not going to 100x or thousandx. Right? It's just not possible. There's only so much time into the day. People use their phone for six, eight hours on average. Right now they're still spending two hours a day on Netflix, but we're not going to suddenly, like, could get, you know, 100 hours a day, even though people on, you know, TikTok entrepreneur influencers might. Might want that. So I just have this kind of question around, like, do you think the average video in the future gets one view, two views, and. And maybe it's not the average, right? Because certain views will. Or certain videos will still go super viral and be sort of cultural phenomenons. But. But yeah, I'm curious if you think that's kind of like where we're headed, right?

I mean, I think for what it's worth, I think the average video today is getting probably one or two views, right? Because, like, think about Snapchat, like a lot of video, probably a billion videos a day, but sent to, like, you know, a few people are seeing it basically, right? For the most part, private communication. And honestly, like, Snapchat pioneered that. Like, they kind of missed the TikTok part of it. It wasn't part of their ethos, to be honest. Right. But like, they were more about the private communication. But I think the future is more video, like, for what it's worth, like, you know the way. And I think there's an interesting sort of, like, move that I think will happen towards more video in AI as well. Because think about, like, how communications changed over time, right? Like, we're not sending letters to people as often anymore, right? Like, text messaging is kind of like, very prone to miscommunication Right. Audio is definitely better. Phone call goes a longer way. Video call is like one step further.

Right.

And then real life meeting is even beyond that. Right. Oftentimes there's like, even within companies, there's miscommunication and mistrust that builds when there's remote teams or things like that. And you got to watch for that. Whereas an in person team just trusts each other so much more. So there is definitely something to be said about these more sort of multimodal forms of communication, to use the term. But I do think that actually Even on the AI side, sure, ChatGPT makes me a great writer, but what makes me a great communicator. And we're really not thinking about that because communication is multimodal in itself. The words that I'm saying right now where I'm pausing, what I'm emphasizing, how my micro expressions are moving, how my body's moving, all that is communicating in multiple forms, a message. And that message changes. If I change any of those things, words might be the same, but I can change the message completely by just changing the delivery of it. So I think today's technologies just aren't capturing how broad communication actually is. And I think it will all evolve towards video over time. Just as we've seen. This is not new. We've seen this happen before. Right. And by the way, I was at snap when TikTok took off. Right. 2019, that era. And initially TikTok grew a lot on the back of Snap. A lot of people know this, but they were running like $100 million a month of ads on Snapchat. Right. Initially.

Right.

There was no presence fox into the hen house.

And there was concern in the company. People were concerned that are we creating a competitor here? And people.

We were running a B tests.

Yeah, narrator. They were.

Exactly. Anyway, but we ran a B tests to test if someone sees a TikTok ad, are they less likely to engage in Snapchat. Tests didn't show that. Right. But the reality is that it wasn't true.

Right.

They. They did spend less time with Snapchat, so.

Well, we gotta run. This was a fantastic conversation. Thank you so much for hopping on. And we'll definitely talk to you soon.

Yeah, great. Great talking. Thanks for coming on.

Bye. We got Ian in the waiting room from astromechic. Astro Mecca. I believe I'm pronouncing that correctly. Astro Mecca.

Great.

Kanika Astromechanica. Sorry, I missed. I mistyped that Astro Mechanica. Anyway, we'll let him explain it to us. Come on in, Ian.

Sorry for the wait.

Sorry for the wait.

Yeah.

How do you pronounce the name of the company? Let's settle this debate once for none.

Yeah. Astro Mechanica.

Astromechanica.

There we go.

Can you give us a breakdown of what you do? And I'd love to hear like, the brief history on the launch. I remember there was like a video you posted of building something, maybe in a garage. It went viral. It was very cool. And there was some debate over it. And now it's a real company. You raise a bunch of money. So just take me through the little journey.

Yeah, yeah. You know, I guess it starts with my background of like, I'm lifelong aircraft builder, pilot, fly jets. The whole nine on that.

Yeah.

And yeah.

What kind of jets did you fly? Kind of private.

Private jets. I built like, I built my first plane when I was 17. I did experimental airplanes, drones, in like the early 2000s, before drones were thing. So it was from that, like, I think with a lot of good companies, you're really just building the thing you want. This is just not a thing that exists. Unsurprisingly. One cannot just go buy a bleeding edge fighter jet. So, yeah, going with that. I had always been obsessed in all the technology. Interestingly, I was working on this hybrid electric architecture initially coming from the private jet world for lower cost of operation. It's just simpler systems. And it turns out there was a really neat technological unlock for supersonic flight. So that's where a lot of this kind of kicked off. And it was an especially novel architecture. I think this is why it was just so alien. I had just been spending so much time on all of the various sub components and disciplines there. It's like there's this really unusual combination. When you combine all these things together, you get this totally new architecture. So the big one for us is transition up to what we call a ramjet mode.

Yeah.

So there are really good solutions for like, I really like what the Hermes guys are up to. Like, there's definitely other good solutions out there. But this, it hits this kind of interesting sweet spot where like, we're getting a lot of performance with a relatively. I mean, it's still millions of dollars, but like, relatively inexpensive system. And the other thing that comes up a lot is like, people are seeing all the engine stuff and. Yeah, you know, some people think we're an engine company. It was more. It's like if you want to have a computer, you have to make the microprocessor first.

Okay.

But this round, getting this done Is like finally shifting it to us going into the aircraft development.

Okay, so you're building a plane?

Yeah, yeah. I mean, that's my background. Like, I was a plane guy that just needed a better engine.

That's awesome.

And so, yeah, we're at that stage now with the round done, you know, and like, people had always seen me kind of like I was like this guy in San Francisco that was like, I had a machine shop at a manufacturing business previously. So, like, people knew I was good at building stuff. But we've had just this compounding effect of the talent that I have been very lucky to accumulate here. And just the people that have joined on because good engineers see an interesting technical solution and thing to work on. So I love my team. Everybody's incredible here. So we've now got that. That then makes it easier to get more capital. Then we've been spending some time in dc. Andreessen's been great with this. And it's also very important to have an actual customer. I think this is the other way where I came from, more of a small business world. And I wasn't interested in just, I don't know, developing things for the fun of it.

What I'm hearing is maybe the company's very clearly at this moment shifting from science project that you would have worked on for free to, okay, real commercial opportunity. Let's go. Let's go. Full send.

So, yeah, I mean, in a nutshell, it's, you know, make the engine. So you go in the initial, like, demonstrator phase. So demonstrated the engine that got the money to now build the demonstrator aircraft. The one we're pushing for is the world's first non stop trans Pacific, nonstop supersonic aircraft. So we could do, you know, California to Taiwan without refueling in under four hours.

Okay. So it sounds like direct competitor boom. It's been a decade and boom.

Really? So, yeah, I mean, you know, Blake's going for like airliners and so we're. We're focused on again, my world is more private jets and.

Yeah. So is this a Gulf Stream? Are you. Are you coming for Gulf Stream or.

Yeah, it's more like we're coming for NetJets, if you know something like that.

Sure. Cool.

We're going to spend the next seven to ten years doing dod, so.

Interesting.

Like. Like you need to have an actual. It's so expensive to make an airplane. Of course, it's not hard to make a thing fly. It's hard to make a thing fly that is safe enough to put people on It. So my strategy on this is you go to a space like, well, you know, unmanned drones, military, where like, technology and capability matters first.

Yep, totally.

But out there you can, you know, there's going to be things that are going to come up and you're going to learn it. It's just, it's a cheaper place to learn.

Yeah.

Then you're in a position where, like, we have an actual business you've been making. I mean, the drones, unmanned aircraft we're making are like at the smallest, £20,000. Like, they're not small planes.

Yeah, yeah.

And I mean, I'm curious, is the right place if you're developing a new airplane to start with, you know, autonomy? Just because in theory, after you fully develop it, it's like, will pilots even be flying or they'll just kind of like.

I mean, I am a pilot, so I have feelings on that, but it is, it's definitely something of like, no one, this is another kind of odd thing. No one has ever used autonomy in the certification and development of a manned aircraft. And I actually think this is one of the ways we can make it a lot cheaper. Because ultimately it's about getting data and proving this thing is safe. The only way you really prove it safe is you've flown it. And so if you have a human on board from day one, you can't take the risks that you want to. Like SpaceX proves this with Starship, where you're like, you know, the actual cost of the hardware is not that high, so you're better off being really aggressive getting things in the air de risking. I mean, again, you're saying this a hermeus of like they're making, you know, like the plane is a bit more rough, but the point is, like, they can make a new plane every year.

Yeah.

And like, by the time it's like, if you want to get to very good things, you want to do more iterations. So this is our similar strategy. I mean, we develop new engines every like four months.

Yeah. And I think we've been driving Waymo kind of took a similar path where, like, there weren't random passengers in the back for years. And you'd see, oh, there's just a safety driver in there. And then eventually they pull the safety driver out and put the passenger in the back.

Exactly. Yeah. You just want to spend time where you can map out all these weird little edge cases, things like that. So that's, that's a big part of how we tackle this. So, yeah, you always want to go for Big lessons, very important lessons, as inexpensively as possible. Because eventually you kind of lock into a point where everything will be so expensive that you don't want to make any changes. It's just too costly to do it at that point. So that's where I think ultimately we can actually get to the passenger flight point quicker and cheaper by starting an entire unmanned aircraft business first because it's functionally quite similar in the technical challenges. And yeah, we can de risk it all. Learn all the hard lessons. And you know, in the meantime, like, it's also very cool just getting to make these things. So, you know, it's photogenic work. Everybody loves seeing the engines on Twitter and stuff like that.

No, it looks incredible. I'm curious. A16Z makes sense. In the round, Lower Carbon was a big logo there. Is that Sokka and his team saying, like, this is really cool. We want to back it, or is there a. Is it a fuel efficiency kind of thing in the long run?

Yeah. The very first institutional check into the company was actually Lower Carbon. And Xiao at Lower Carbon was my guy and he was betting on it was just me in the machine shop and I had getting close on that first prototype. And so, yeah, from there the system, we get the range because it is more efficient. So, yeah, there's just an obvious efficiency argument here. The other one, for civil applications, not for DoD but for civil, is taking a page out of the rocket book. We don't plan to use jet fuel, so rockets have switched to LNG or liquid methane. If you just swap to that fuel, it's 30% less CO2. Just as direct fuel swap, it's more energy per unit, weights 50 megajoules versus 42 per kg. Whole bunch of benefits. There's a reason the rocket folks went to it. So this is another one that's kind of insane bets for, like, if you're Boeing or someone like, you're not going to suggest a thing like that, but when you're starting from nothing, you can, you can make these, these bigger bets. So, yeah, you know, if you were to do the combination of the engine plus the fuel change, you're around 60% less CO2. And then there's guys like, I love Casey Hanmer at Terraform. There's a lot of folks working on synthetic fuels. If you have an engine architecture around, you know, lng, I think that's the best fuel for electrosynthesis. So if you want to have like, inexpensive decarbonized fuel, it's also your best option. So like options at first solve for economics of like LNG is a tenth the price of jet fuel. So first make it affordable, then you can go for the clean stuff after that where I mean it is already cleaner and then you can just fully decarbonize from there or, you know. But first stay alive as a company. So first solver economics, then go for that.

Smart. Bit of a random question, but I'm curious since you're an aviation nerd. China earlier this week dramatically canceled some Boeing orders. They have their own internal aircraft. It's like Comac. The C919. Yeah. Do you see them like permanently trying to shift over to that or is it just so hard to build a plane that they're going to kind of, kind of keep coming back to Boeing and, and Airbus over time?

Yeah, it's tough to say on that. I would say, well, engines are harder and to that end we're, I think, you know, even they're using. Just as we actually use Pratt Whitney and GE components, things like that. And what we're doing, that's sort of like being tsmc. That one I don't think they could get figured out anytime soon. And the COMAC uses, you know, still American engines, so I'm pretty sure at least so that one's harder on the whole airframe. I think they could get it figured out. I'm sure it just depends on how. As with all these things, it's just a money pit. How much do you want to throw into it?

But why is it so what's the componentry of the J35 then? Why can they do that? Which is like a defense application versus a commercial.

So again to this thing of it's not hard to make a thing work and fly. I mean, I did this in my shop kind of as proof of getting a thing to initially go not very complicated. The economics of air travel are dependent on it never breaking. And that is a. You don't really know that. Like even Pratt. Pratt winning with the recent gear turbofan is like it's gonna be like a decade until they get payback on that. And they know how to make things like that. So this is the sort of challenge you run into of you know, what is gonna come up after 5,000 hours, after 10,000 hours. And it turns out this thing is like, oh, there's cracking on this component and now the engines. And like meanwhile you use what we've got right now, you're like, yeah, it's good for 30,000 out. Like the CFM56 is like, it's like 50 to 60% of all airliners or narrow body ones. And like that engine can stay on wing for almost 30,000 hours. And it's just so proven. And this is this thing you see in aviation where like there's always these things that seem really appealing because it's a performance optimization. You're like, well, of course I want to burn less fuel. But when you try to implement this thing that's technically better, it's like, yeah, but it turns out it broke at some slightly higher rate and you already had terrible margins and now it doesn't work. So that's where that, that's going to come up. It's just not something that's like obvious on day one.

Well, congratulations on the round.

Yeah, congratulations to you and the whole team.

Overnight success.

Success. Thanks for coming on.

I appreciate you coming on and breaking it down for us. Thanks so much.

Of course.

Yeah, we'll talk to you soon. Bye. Next up we have Sham Sankar from Palantir. There's a ton to talk about with him. He's published 18 theses about the defense reformation, the primacy of winning, and also just sits in a very interesting place as Palantir's first forward deployed engineer. And so I want to hear what he's hearing from Palantir customers mostly. Anyway, Shyam, welcome to the show. How are you doing?

Thank you guys for having me.

Yeah, great to have you. Thanks for being here. Yeah. I wanted to kick it off with what is the biggest topic of discussion over the last two weeks? Tariffs. H20s Nvidia. Something else. What is driving conversations through the partners that you work with at Palantir?

I think it's enterprise autonomy. It's like there's a normative view of the most valuable application of AI is clearly towards autonomy in the enterprise. And then you can think about it, you can reason about it. By analogy, if you thought about the self driving car journey, it took us 20 years to get from a prototype that drove through the desert 120 miles, pretty good demo in 2005 to a commercial self driving car service. And no one wants to be on that 20 year journey. What have we really been doing over 20 years? We've been handling edge cases, right. So really investing in the tool chain that allows you to get from a mandraulic world to one where you have AI agents that are totally automating your business. Like we've automated sepsis monitoring at Tampa General where they deaths from sepsis have reduced by half. We've automated how AIG underwrites insurance, what used to take three weeks and you'd only get to 10 weeks, 10% of your submissions, it takes less than an hour and you get to 100%. So I think. And it really is going to feed into this winner take most dynamic. It's not just about cost savings, about your competitive advantage. And you see that play out in very stark and real terms in defense, where in some sense there's nothing new under the sun. There's just John Boyd's OODA loop. Observe, orient, decide, act, or sometimes my favorite Admiral says the American OODA loop. Observe, overreact, destroy, apologize. How do you bring lethality to that? It's just doing that much faster and you're going to do that way quicker. Through with AI.

That's Tyler Cowen called April 16th yesterday, AGI Day, he has called it. What was your reaction to the.

Probably, probably happened internally at Palantir, like, you know, months ago.

But yeah, I mean, how are you processing this idea of AGI? Obviously it accelerates everything you're doing. But what is your take on model scaling, reasoning, agentic workflows, all these different things? Like what are you looking for? Where. Where are their breakthroughs, breakthroughs that remain versus what are we just need to go implement?

Well, I think we're well past the threshold where the models are powerful enough that you can be using them to automate massive things. I think at this point, really incremental improvements to the model changes how you decomp the problem. How many agents do you need? Do you need 80 because you've decomped in a way where it succeeds, or do you need eight? Like, the coolest stuff that I've been seeing is like multiple teams internally at Palantir are building AI, FDA ease, and it's really compelling. It gets really far. It attacks different parts of the stack, you know, so like if every user could have their own on demand, infinite, essentially AI, fde, like how much more stuff can you build? How much more quickly can you adapt? What's your OODA loop as a company now? So I think we're deep in the implementation phase. If AI is electricity, like in electricity, all the value didn't accrete to the people who made the turbine generators. It went to the people who made the tools that ran on electricity. And I think there's just. We're just so excited about proliferating and building those tools out.

Yeah. How are you thinking about just commoditization of the model layer? Obviously it's like a horse race every different month, the different Models comes out. How has Palantir approached integration with different foundation models? And then is that the same as other kind of databases and different tools that might be deeper in the stack or like the. Even the migration to the cloud? Does this feel like cloud to you? Does this feel like mobile to you in terms of like your agnostic approach, or is it different in any way?

There are parts that definitely rhyme with it. It's more agnostic than not. I said early on in the AI revolution that we thought that the right approach was K LLMs. Like, why would you pick one LLM when you can have K and then you really can start thinking about the tool chain that you need to build around that there's numbers? There are a number of reasons at first, like, very clearly you've had model commoditization. If you look at both open and closed models over time, you know, the ELOs are just up into the right, the open ones have converged and even in some cases surpass closed models. And at the same time the price of inference has dropped like a rock. So that's clearly happening. And you even see that in the frontier model companies where they're expanding further and further into the app stack because they realize that selling you a raw API is probably going to be a raw business. So then there's a question of like, okay, you're just being very pragmatic. If you're building the machines running on this, what model is right for what job? The models are improving rapidly. How are you going to safely be able to evaluate the relative performance of models as new models come out? So you need that sort of tool chain. And even more deliberately, these models get end of life. Like you can't get the original GPT4 anymore, right? You have 4.0. And so if you've built an entire enterprise that runs, assuming some model is going to exist in perpetuity, that's probably not going to work out that well for you. So you're going to have to have this constant ability to evaluate and run these models in parallel to develop the conviction you need not only for the optimization of what's incrementally better, but can I safely migrate in the future?

How are you thinking about integrating robotics? It feels like AI today is just rapidly transforming the way work is done online, specifically knowledge work. But how are you thinking about, you know, what's your vision 20, 20, 30 and kind of beyond about, you know, how different robotic systems are integrating with the Palantir system specifically the example you mentioned earlier around sepsis monitoring Is like cool. That's one sort of hardware integration, but it's not its own autonomous system out in the world.

In many ways, we already do this. We have more than 300,000 workers, blue collar workers who turn wrenches in our software every day. Everything from the factory floors of Chrysler to every Airbus airframe, every HD Hyundai ship. If you think about a company like Rio Tinto, so much of the mining operation is actually autonomous. The railroad cars that take iron ore from where it's mined to the ports, that's completely autonomous. The three story tall dump trucks that are actually trucking out the ore, autonomous. And so I don't want to trivialize it, but in some sense, to me it's more of like difference of degree than kind. You're machine to machine communicating to a system. That system just happens to be smarter and smarter every single day.

During the Metaverse boom, Satya Nadella was talking about building digital twins. Is that an unnecessary abstraction or like reference point for humans? Or is there some actual value in representing all of these real world assets, like the Rio Tinto mining example you gave in some sort of like virtual space? Or does it not matter and it should all just be weights in a model that we're querying through an LLM or something like that.

Where I think it gets to be really valuable is if you kind of thought about it like a CI check in programming, where it's like, I'm proposing a change to a system here. How can I understand it? Like, is that change going to work? What are the unintended consequences of it if I make that change? What are the new bottlenecks that different functions have to think about? The simple example I always use is the procurement guy is really excited because he bought Discount raw material 30% off the list price, and the production guy is pissed off because this Discount material has 40% less yield.

Right?

It is, at the end of the day, one value chain. And where the digital twins have been hugely valuable is the ability to integrate the chain and the decision making across it. So you know when the left hand is, is robbing from the right hand.

Can you talk about the early days of Palantir? Maybe one of the first major wins or setbacks or kind of like what's the story that you tell to new Palantirians to kind of set them up for maintaining the culture? Because I feel like Palantir has done a great job of like maintaining the quality bar. You haven't become that place where people kind of go and like rest invest basically, but you are like kind of a big tech company now. What's the story that you tell to kind of set the culture?

I mean, there's so many stories. I really. I'll tell you how I set the culture at the end, I promise. But I think one of the things that, that I felt like we kept getting punched in the face in the early days on is that someone else's execution would end up screwing us. I remember we had this gatekeeper between us and a government customer and he installed an early version of our software and he wanted to test it out before he passed it on. And it crashed and he blamed us. And it crashed. I mean, in those days, this was a server with two gigs of RAM trying to run a four gig Java heap. And he didn't understand why it crashed. Right. It's like that we just developed this extreme ownership mentality because anytime we outsourced even an iota of responsibility, it blew up in our face. And that's. You can see for deployed engineering as like the extreme manifestation of that, that we're going to somehow have total control over the implementation because that's how you get the feedback and the quality and the improvement, and you're actually responsible for your own destiny. But the story I tell to kind of spill the beans on. So your first AMA with me, when. If you're onboarding in week one at the. I always end the AMA by reminding people that Palantir is a flat place. What does flatness even mean? Well, to me, it means that every single employee is willing to tell me to off to my face, and I all say fuck off in unison out loud at the very end. I think it's important. I want to institutionalize the notion of rebellion that, you know, I don't have all the right ideas. There's so, so many things we've done over time. I didn't think we're going to be right and they were right. And, you know, you got to bet on talent and the people and give them to run. And really preserving what's at the core of this is like this is an artist colony, not a factory. You know, I don't really know what your career progression is going to be, and if you want certainty on that, this is definitely not the right place. But I can promise you you'll have access to the most motivating problems and compelling colleagues. And I'll give you all the canvas and paint that you need.

Yeah, can you talk about what's going on with the cultural transformation in Washington right now? You've written like maybe it's transformation going into founder mode, but within some of the more nitty gritty, maybe swampy institutions, is there a need to be able to tell each other to F off or just be more confrontational? What should DC learn from Palantir and maybe even vice versa?

Well, I don't know if D.C. i would say it seems like very presumptuous for me to say what should DC learn from Palantir? Me about the present moment is in Palantir terms the primacy of winning. Like sure, you feel that in the people there they understand that they're working backwards from what could actually work instead of some anodyne notion of how we wish the world works but doesn't. And that's like allowing us to reexamine a lot of assumptions from first principles. I think founder mode is the best description of it when I talk about conserved across commercial and government kind of our diagnosis of the current legitimation crisis. Why do doors fall off airplanes? Why does it seem like these institutions aren't working? You have a C suite that is if you steel manned it diligently trying to steer the ship and their steering wheel, what they don't realize is a prop from the jungle cruise ride in Disneyland. It's not connected to anything. And then you have people, hard working people on the metaphorical factory floor who kind of look up and say how could they be so disconnected? How could they not understand what's actually happening here? And so much of that is like the levers of orientation are somehow filtered through a lot of people in the middle. Leadership doesn't have access to real time information. If you couldn't, if you were navigating a car and the latency of understanding where you are was an hour you'd crash. And so this sort of manager mode playbook, it works really well for the managers but it's like a way of having a well managed company into the ground.

Yeah, I think we need more like individual champions. Peter Thiel has that quote about like we need ticker tape parades. Ezra Klein is now talking about with the abundance. He's, he's, he's highlighted the failure of the California high speed rail system. And what I found interesting about that is that it's very hard to pin down like California high speed rail. Everyone kind of agrees like project's not going great but no one can really say like who was even the champion of that at any point in time. Like no one's really responsible at any point in time. Does, does the government need More individual accountability or like, I don't know, even like project level CEOs or something. I don't know.

Well, yes, the short answer to that is absolutely yes. Like, I think about it in terms of heretics and heroes. You know, it was Somerville who built the Pentagon in 16 months. You know, it was Gene Krantz who led the Apollo program. There's something about our kind of Midwestern Calvinist sensibilities as a country where, like, it's the Apollo program and not Gene kranz. It's the F16 and not John Boyd's plane. You know, it's nuclear Navy, not Hyman Rickover's Navy. That's great. I appreciate that sensibility tremendously. But it shouldn't obscure the fact that actually these projects working or not, come down to a handful of really exceptional individuals being present, taking ownership and leading the way.

Yeah. Can you give me a little bit expanding on that? Can you give me a little bit of history on the dollar a year men and that story?

Yeah. In World War II, we actually had a program for very skilled people, corporate leaders, engineers. They could, for a dollar a year, because volunteerism was illegal, you could not volunteer to work for the government. So as we were preparing to go to war, as we went to war, they would actually join the government as dollar a year men. They would get $1 of salary, and they would actually be able to be deployed on the nation's most important impactful problems. And sometimes they retain their old job, sometimes they wouldn't. It would really depend. But you could get the right person on the job. And I think that's really important, because if you think about Even World War II, our mobilization came down to one man, William Knudsen, a Danish emigre who actually invented mass production. He was the number two at Ford, where he invented mass production. He got in a fight with Henry Ford and went to GM as the number two. And FDR asked Bernard Barch, who should I choose to do this? He said, I have three names. William Knudson. William Knudson.

William Knudsen.

It's like it really came down to a counterfactual. We had, like, one guy who could actually move all of American industry. And the way that he assessed, you know, he was an engineer himself. He would, like, meet people and understand. Like, is it believable that you, as a steering gear company can start making artillery? Are your engineers smart enough? Do they. Can they answer my questions? Boom, here's a contract, let's get going. And you know, it wasn't a Fiction writing contest. It was really a, a pressure test, mind to mind.

Can you talk about the executive order from last week, the Defense Reformation? You had a great post on it, but I'd love for you to kind of break it down live for the audience.

I think it is the single biggest change that could prepare us to avoid World War III here. You know, if you look at, you know, what has happened to the US since we won the Cold War, we've really had the rise of, is an empowerment of this monopsony, a single buyer that is the government, and an addiction to that monopsony, telling us what to build, at what price and how it's all going to work. That's very different than the free market. You know, some fundamental level, you either believe in the free market or you don't. And I like to quip that, you know, everyone, including the Chinese and the Russians, have given up on communism except for Cuba and the DoD, we still have five year plans. And this, this, this luxury of having the monopsony grow to the scale it has is a consequence of having no peer competitor. But that, you know, that world really went away arguably in 2014. The militarization of the Spratly Islands, the annexation of Crimea, Iran's pursuit of the bomb, like deterrence is lost. And we need to rise to that. And I think this is a clear acknowledgment of very much that in this administration. But the EO says we prefer to buy commercial items. We prefer to buy items that have been proven in the market, that have to withstand brutal competition that happens out there every day, that reward entrepreneurs for what they're building rather than custom building and developing things on our own. And we have a long history. Monopsony is always going to desire control. But it goes all the way back to Andrew Higgins and the boat that won the war in World War II. Andrew Higgins was a guy from Louisiana. He spent some time in China and he was inspired by bootleggers in China and the sort of boats they had for amphibious landing to quickly land, get goods off, get goods on, and then scurry away. And at his own expense, he built the Higgins boat. And he showed up, he showed it to the Navy. The Navy wouldn't even let him compete. They kind of dismissed him. Then a young Marine who became very famous Crolock. He later, he got him into the competition. He won the competition and then instead of buying the boat, the Navy stole the, sold the plans and tried to build the Higgins boat themselves, which they failed to do. And then finally, you know, at the 11th hour, of course we do the right thing. That's a classic American trait. And, and Eisenhower said, that's the boat that won the war. And so, you know, the Predator was developed as a commercial item. It was not developmentally done inside of the government. Abe Kareem built it, General Atomics picked it up. They financed all the R and D themselves. You know, the Air Force, of course, hated it because it was unmanned. It's kind of emasculating. And when 911 happened, it was the thing that met its moment in a massive way here. And there's so many examples like now we have whole companies built around this. Companies like Andrew. The entire approach is commercial first, investing private taxpayer capital into R and D, absorbing, putting the pebble in the right shoe, putting the pebble in the entrepreneur shoe rather than in the taxpayer shoe. So this EO, it's actually this law. In 1994 we passed a law called the FAFSA, the Federal Acquisition Streamlining act that said it is the law that if a commercial item exists, you must buy it. Yeah, it's actually a very stringent test, three part test. So if a commercial item exists that meets your requirements, you must buy it. If it doesn't, you must see if you can change your requirement to meet the existing commercial items that do exist. And if that's not possible, you must see if you can ask the company to change their product to meet your requirement. Only then are you allowed to go custom developmental. So this is the most violated law on the land. And I think having the administration say, look, this is statute and we agree with it and we're going to enforce it is how we're going to field a huge amount of deterrence between now and 2027. There's not a lot of developmental things you can do between now and then. There's a huge amount that you can do with the innovation of entrepreneurs and the commercial industry.

That's amazing.

Do you feel like cyber warfare has been too normalized on this planet? It feels like you have a major cyber attack and maybe you hear about it on acronym because somebody says they can't log into Zoom or something like that, but it doesn't even make the mainstream news. Meanwhile, there's any type of sort of kinetic conflict globally. It's like immediately front page or it's on cnn, things like that. And do you think there's ever a point in the future where people start to view them and countries truly view them with the same level of significance as everything sort of Continuously sort of comes online.

I think you're spot on that there's something very strange in how little we talk about it.

They don't photograph well.

Yeah, it doesn't photograph well.

It doesn't photograph well. What picture you're going to find.

My concern is that in the future, if we have 100,000 humanoids going around a single city and suddenly they all are stopped, that's bad. That will start to photograph pretty well. And so I imagine in the future it won't be just kind of brushed under the rug. And yeah, of course companies have to respond to it and the government responds to it, but I just imagine at some point it will start to really be news.

Well, one of the most devastating consequences of it being so kind of below the waterline, something we don't want to talk about, is the normalization of, like, what can you do about it? It's sort of nihilism and acceptance, a pessimism that anything can be done about it, which is obviously not the necessary precondition to like, rising to the occasion. And we should have very high standards for what could be done about it. Not to say, of course, this company got breached or this thing happened. And all these people have my information all the way to, you know, sure, our water systems are compromised and, you know, we'll be brought to our knees within the first few days of conflict. Like, we should just. We're not able to hold ourselves to the high bar that we ought to because it's not popular. We're not popularizing it as a concept.

I mean, speaking of popularizing, just general shifts in thought about defense and the importance of like, like public private partnerships in the government. Can you talk. Can you take us through the defense reformation? 18 theses the. Your thesis there and then kind of the impact. And is it a jobs not finished situation or has defense tech become enough of a meme now? It seems like Silicon Valley is like, fully on board, in my opinion, but at the same time, there's a lot more that we could do.

Yeah, I think we've earned the right to have an at bat. So like, got to perform now, for sure. I'd say the fuller. I've touched on some of the themes, but the fuller diagnostic is the government has kind of historically made it a bad business to work with the government, you know, and you think about like, our examples from the past, like, at Intel, Bob Noyce would not let more than 4% of his R and D budget come from the government because he, as the inventor of the transistor wanted engineering control over the roadmap and what he was going to build. He always had in mind a broader commercial market that was going to drive the price performance that was needed. Even though in 1969 something like 96% of his revenue came from the Apollo program and DOD, at that point they looked like a government contractor, but that was not. His aspiration was bigger in the same way that Elon Musk's aspiration for SpaceX has always been to get to Mars and to make us an interplanetary species. It's not just about launching rockets and satellites into orbit here. And we really lost, you know, so much of defense innovation. You know, Kelly Johnson, who built 40 plus airframes in his career, including the U2, which we still fly in, the SR71, he is this heroic figure. So much of this innovation has come from these legendary engineers, these heretics, as I call it today. You think about it as Northrop Grumman, but it was Jack Northrop and Leroy Grumman. You know, it was not Lockheed Martin, it was the Lockheed brothers and it was Glenn Martin and it was really so founder driven. The aerospace industry subsidized its own existence in the inner war period between World War I and World War II because the government didn't think it needed it. So, you know, but for private industry being willing to lose Money For a decade plus World War II, we would have been in a very, very bad place. And what excites so, I think the last supper. People look at the last supper, which is this dinner at the Pentagon in 1993 where they said, hey look, we have 51 primes today. You guys are not all going to survive. Today we have five for every dollar we were spending in defense. We started spending only 33 cents overnight. It was a huge cut. The peace dividend, as it's called consequence that conventional people take away from this is, oh, that's when we lost competition. We went from 51 down to 5. I don't think that was the actual issue. The real issue is that consolidation bred conformity. And the conformity pushed out all the heretics. It pushed out all the founder personalities that you need to make this stuff really work. My reason for immense optimism in this moment is that the founders are back. You know, more than $100 billion have been deployed in the national interest. You have Palmer Luckey, you have the Tseng brothers at SHIELD AI, you have Dino and Saronic. You have all these crews of really, really compelling humans, really, really compelling founders working in the national interest. Again, pursuing heretical ideas, waking up every day banging their head against the wall, you know, fighting the bureaucracy to do what's right for the men and women in uniform and for the nation more broadly.

Can you talk a little bit about the startups that are building on top of Palantir and take us through aip?

Yeah, so we've always, it's a little abstract, but I've always felt like the ontology, which is our secret sauce is it's really, you can think about it as like a declarative backend. It's a way of saying, look, this is the shape of not only my data, but the logic of my enterprise. And that's all you have to do, as opposed to the imperative approach of having to actually go create and wire this up and do it together and figure out how to get it to scale. And so if you, if you had this declarative backend, if you could just say, look, this is what I need to exist in the world now, I can build applications on top of that, that manage and all of the entropy that usually sits behind it. And it gives you a radical speed advantage for these companies. So these, these companies are building everything from like the European cricket network to people who are building pharma companies, hospital operations companies. In defense. It's very popular because we can give you an SDK that wires you into 20 years of data that has been integrated into the instances of Palantir that exists in the defense community that your users can authenticate to. So it just speeds a lot of the kind of brain damage you would get from having to deal with the bureaucracy and allows you to compete on the quality of your product rather than your game and getting through the wickets of a byzantine process that probably needs its own reformation, but it's really about speed and that ability to build on top of the platform. It's not just for third party developers. When Hurricane Helene happened in North Carolina, green suitors like folks in the army in the 100 first built their own app, they built their own hurricane common operating picture on top of the platform. So that ability to respond to the need. It's the code version of the OODA loop.

Yeah.

What advice would you give somebody maybe graduating college today that's evaluating, joining maybe a seed stage company versus a scaled company like Palantir or, or, or something like an Anderal? I imagine you at times had a ton of different pressure from VCs being like, leave, we'll give you 10 million bucks to do whatever you want. Like, don't you Want to be a founder yet when I look at opportunities, you know, in anything defense related, it seems like if you have a finder MA founder mindset, there's so many great opportunities to just go to a great company and kind of take on that sort of like founder level ownership over a specific problem area or product set or things like that.

Yeah, I mean I think the, of course I'm biased here, but if I, if I get, would give general advice the way I would think about it, what I would tell my son is like, where can you go that you're going to work with the most compelling people? Because like your rate of learning is going to be a function of, of those people and have access to the greatest surface area around problems. Like my model for growth is not progressive overload. You know, the Incredible Hulk did not become incredible by just lifting a little bit more weight every single day. It's like a near fatal dose of gamma rays that probably has like a 50% chance of killing you. So which upgrades are going to like throw you off the deep end and give you that opportunity to have like superhuman superhero growth. That's like, that's the value maximizing thing. And I would remind my son that like your point of, of extreme growth is going to be coincident with your point of maximal pain. So like your ability like, you know, it's like as Greg Lamond says, one of my favorite quotes, championship cyclists, it doesn't get easier. You just go faster. You know, it's just, just understanding that like that's what it looks like. So don't, don't sell out for the opioid of a linear career progression with a clearly mapped out path. I'm pretty sure that's retarding. Like that's lead shielding that's preventing the real gamma rays from getting to you here. You know, find places you can throw yourself off the deep end. And I, I bet there are some C stage companies that are perfect for that. I bet there's some siege companies that are horrible for that. You know, it really is pretty specific.

Does that tie to the, the primacy of winning mentality? Is, is that like all, is that essentially like derivative or like the same concept?

Yeah, I think it's, it very much relates to that and I think, I think it's like one of the things that I had to. I feel like it's one of the most important things I learned at Palantir. You know, we're all kind of programmed in our conventional education to feel like there's a process there's an approach. If you follow this playbook, you know you'll win. But it's actually like, it starts to conform to how you wish the world would work. It becomes hard to decide, is that actually the cargo cult or is that how the world does work? Like, you can keep marching around these fields in Micronesia. The planes aren't coming back. You've misunderstood the physics of the universe here. And just if you just anchor yourself, like, but is this working? Like, is it winning? And then blow up anything that's not working.

Okay, last question on cargo culting. Cargo culting, the forward deployed engineer, good or bad? When does it work? When does it not work? Who should be doing it?

Well, I think all cargo culting is bad. So I think that would be, you know, it's. I think the four deployed engineering methodology is exceptionally valuable. Akshay's description of it is the best one. I think it's like solving through back propagation. It's a very elegant metaphor, but if you just slap a veneer on it where it's like, sales engineering done. My favorite things, like ex Palantirans will be like. People are asking me, like, what is an echo? And I will describe an echo and they'll be like, so you mean customer support, customer success. And it's like, wow, you've lost the essence of this whole thing. This beautiful concept. You've completely cargo culted away.

Oh, no. Well, thank you so much for stopping by. This has been great for having me, guys. Yeah, this is great. Have a. Have a great rest of your day and we'll talk to you soon.

Cheers.

Bye. Fantastic. So many great stories and man, like, encyclopedic knowledge of American history.

There's so many times we need to have him on for.

Yeah, yeah, of course. Lockheed and Martin, like, I know their first names. I don't know first names. I need to brush up on this stuff. I need to do some like, space repetitions and flashcards or something. Yeah. But next up, we have the founder of starship coming into the building. Welcome to the show. How are you doing?

Boom. What's going on?

Hello.

Good to meet you all. I am doing fine. I'm doing super exciting thing and I like it.

Yes, thank you. Would you mind kicking us off with just a little bit of background on the company and explain not just what starship is, but kind of the footprint, the rollout, the strategy, all of that.

Yeah, all right. Yeah, sure. So what we are doing, we are a company developing and building and operating delivery robots. So robots that transport Stuff and stuff. That means burgers, milk, could be packages and so forth. Right. So in science fiction movies, you don't see UPS guys knocking on your door. You see things coming to you, things flying to you. That's the future that we are building. That's the present that we are building. And we have many competitors as well who we have inspired to do similar things with drone deliveries and so forth. We are doing it on the ground with robots that drive on the ground, small robots that drive on the ground. And we are actually not like many people think that this sort of futuristic thing is like a pilot or test somewhere in some limited area or something like that. We are actually in full commercial operation with thousands of robots in hundreds of locations. It might not be, you know, we are not there, not yet in every place that, you know, all of this audience that's listening to this right now is. But we are in some places, and in some of these hundreds of places that we are in, you know, our robotic delivery is completely commonplace. It's something that people are completely accustomed to. It's something that people don't really use, like human couriers to deliver things. They use robots.

Yeah.

Can you talk about all the different things that you've seen around the way humans treat robots? I try to say thank you to robots when they help me out with different things, but some humans, we saw this.

Yeah, we've been seeing a lot of vandalism.

Yeah, we saw this. The big thing with bird vandalism of Waymos in LA is like the, I think a lot of birds issues locally here just came from a culture of vandalism. You did the hard thing in making sort of cute robots, which I think probably helps important. How do humans kind of present a challenge to trying to automate delivery which should be in everyone's best interest?

We get that question a lot, but we don't actually get a lot of vandalism itself. The truth actually is that people really love our robots. Yes, I see that with scooters and some of the other modes of transport, people don't really treat them nicely, but they actually do treat our robots really nicely. For example, we often get the question that, oh, are your robots stolen? And actually none of our robots have ever been stolen from the streets. And we have done 8 million deliveries, like we are doing millions of deliveries, and it's just not happening. You know, kids feed our robots bananas. So the, the, the, the treatment is completely different than with, you know, like scooters, for example.

Yeah, I understand.

You know, that's you know, that's actually a lot. We get that question actually. A lot. Like people, you know, sitting in, you know, sitting at the table very often say that, you know, I treat things nicely, but there are some other humans out there that do not treat things nicely. Just like you said. Right. But it's not actually happening. It's not actually happening. How often do you vandalize a UPS vehicle? You don't really. Sure, you can do it. Yeah, you can puncture the tires of a UPS vehicle. You don't really do it. Right. Our robot has 10 cameras. It's constantly connected to the Internet. It has a really loud siren when it's tampered with and so forth. It's not actually really happening.

Well, can you talk a little bit about the rollout maybe? Because I think that the locations in which the robots are doing deliveries is like really going to impact. Right. If you're rolling through a suburb and it's a family friendly neighborhood, something like that, the robot is going to run into different challenges than rolling down a street in Manhattan, for example. So how have you guys approached your kind of like go to market and kind of picking what regions are sort of top of the list in terms of getting robots on the ground?

Yeah, great question. We are operating our robots in 60 cities and 60 college campuses. So we have learned a lot about different environments. And yeah, like different neighborhoods are completely different. Like there's a lot of difference in the world that we're operating in six different countries, like five countries in Europe. And you know us, right? And you know us, of course, you know, is varied as well. Right. So we have learned a lot on how the different, you know, sidewalks look like, how crossings look like, how traffic lights look like, you know, what the traffic patterns are, all of these things. We've learned a lot of these things. A lot of data for our machine learning algorithms and so forth. Right. But in terms of actually how people treat robots, there's not much difference actually. People are actually really friendly towards our robots. I understand it's really hard to believe, but that is actually true. It's completely true. And you're operating a completely commercial quality service. We are cooperating with most of the major delivery apps in the world and with a number of tier one retailers as well as. And it just works.

Can you talk about the progression of the technology, specifically the path to end to end? There's a single AI model, but there's probably teleoperation in the early days. Then there's some mixed. There's some C for pathfinding but there's some AI for image processing and world modeling. How have you thought about developing the technology? And do you see teleoperation and end to end AI systems playing nicely together in kind of a centaur mode for a long period? Or are these specific gates that you have to go through?

Yeah, we are operating at quite the hybrid model.

Sure.

We have been working on this for 10 years and we built this at the time where AI was not actually as developed developed. And we have obviously reaped the benefits of the all of the AI development that has happened since. But we also recognize that safety, for example, is super important. Super important. Like for example, our robots cross roads. They are generally sidewalk robots. They drive on the side of the road as well when there is no sidewalk. But generally they drive on sidewalks. But they cross the roads. They cross roads similarly, as a pedestrian does with using crosswalk. Right. Our Robots cross roads 100,000 times a day. 100,000 times a day. You have thousands of robots operating. We have been speaking right now for eight minutes. During these eight minutes, our robots are probably crossed the road a thousand times.

Wow.

Probably. It's like that about a thousand times during these eight minutes that we have, we have talked. Right. You know, safety is super important. Suppose we have something going wrong in like 1% of the crossing. That's too much. That's about 1% or 0.99% too much. Right. So we need safety. We need to prove that it's safe. We are actually not operating an end to end neural network, but we are operating a combination of yes, C and neural network.

When you you see hard tech founders claiming online that they're operating an end to end neural network, which some people have done, does that surprise you? Is it almost unbelievable or do you.

Think it's not surprising to me at all that you can do it? The downside with that, it's very hard to prove that it is safe. It's very hard to prove that it is safe. And we are, are actually operating in also some pretty challenging regulatory regimes. I mean, not just, you know, having.

A loop is actually beneficial there. Right. Like if you have the ability to remotely take over, that's going to make your safety case so much easier because you're going to say, hey, yeah, it is kind of crazy. There is a robot piloting this a little bit, but at any moment we can hop in and beam in and there's a human.

Exactly, exactly. For us it's a combination of remote assistance, which happens more and more rarely all the time. Right. But it still happens. There is a human somewhere that can take over in difficult situations or complex situations, unusual situations. Then there is C. And there is end to end neural network as well.

Sure.

The combination of all of these.

Yeah. Has the transformer architecture or any of the other like kind of foundational innovations in AI been important to Starship and what you're building? Obviously we see hype around the studio Ghibli moment and diffusion in image processing. But does that actually make it easier for you to understand the stuff of like, where am I in the world, where am I going? I need to plan a path. How should we be tying all the amazing progress in LLMs and AI to your business?

Yeah, it is definitely helping and improving our stuff. I think we were in commercial quality operation already before that, but it is helping us tremendously. For sure. Primarily, it is clearly something that is dramatically reducing the need for this, this human somewhere in the loop. Sure, absolutely.

What about. Have you thought about giving, you know, embedding some sort of LLM or voice voice model into the robot so if a, if a pedestrian bumps into the robot, they can have a little conversation and it can kind of explain like, hey, I'm just going across the street, I'm delivering a burrito. Like it can answer some basic questions.

That seems like, I'm just the burrito guy.

I'm just the burrito guy. That seems like maybe silly, but also maybe great from a user perspective, but also wildly extra. I don't know. Have you thought about that?

Yeah. So we do not have a personified LLM in the robot right now, but I think it is conceivable that will be the case. Our robot does speak, but the speaking is not actually driven by an LLM.

Business logic decision tree.

Exactly. It's a little bit more business logic that yes, every time the robot does delivery, it says thank you. Doesn't take an LLM to do that.

Yeah. Can you tell me more about trade offs in robot production? Elon has been anti lidar from a cost perspective. I'm sure there's a bunch of different trade offs in terms of size, weight, speed, battery life, all these different things. You have probably like a base hub where these things go to charge and then they have a certain amount of range. What are you optimizing for? What are some of the pitfalls to avoid?

Yeah, great, great question. So our robots actually do not have a lidar, but that does not mean that we are anti lidar. The thing is though, that the reason we have not used lidars is that, that lidars is effectively. Lidars are perfect sensor for an autonomous vehicle. Autonomous vehicle needs to see quite far away and it needs to see. It doesn't really well, it does need to have short range sensors as well, but it does need to see 200 yards, 300 yards because it's moving fast. Our robots are moving much slower than car. Right. They don't actually need to see that far. So lidars are actually not perfect sensor for us. And the downside with lidars is that lidars typically have a narrow vertical field of view. They have like this narrow, you know, you know, rays effectively that see very far, but it's a very narrow the angle. The vertical field of view is very narrow, like a couple of degrees or so. Right. We actually need to have perfect vision from immediate vicinity of the robot. Like very wide, you know, vertical field of view. We need to see, you know, down in front of the robot and also, you know, up and, you know, we need to have that sort of, sort of vision. So lidars are not perfect center for us. That's the reason we are not using lidars. But the moment that the lidar with suitable spec appears on the market, we will absolutely use it. So we are not like religiously anti lidar at all.

Jordy, you have a question?

Changing gears a little bit. Skype is shutting down on May 5th. End of an era. You were the founding engineer there. Is that emotional for you? The shutdown or at this point you've been doing something else for.

Yeah, yeah, I've been doing something else for a long time. I'm not actually an active user of Skype anymore for actually quite some time. I still have the app in my phone somewhere, but not really using it all that much anymore. Skype was an amazing ride. It was one of these startups which is actually rare. One of these startups that just took off like a wildfire immediately from day one, right? From outside perspective, all startups seem like that, that they come out of nowhere and they just boom, you know, it's like that. But you know, but in reality, as a startup founder, most startups are not like that. Most startups is hard work, hard work before things actually start. You know, getting off the ground. Right. Kind of was not like that. You know, it was like. For me, it was easy work actually. I was, I just did what I love to do and boom, loads of users came and it just kind of happened. Right. So it was an amazing journey, but also, frankly, I mean, it was a journey that happened 20 years ago. 20 years ago, literally 20 years ago.

What are the key lessons that you took from the Skype story and applied to building this business? Is it just the engineering culture, the pace of play, or is it wildly different because it's a completely different growth curve?

It's both of these things. But it's also, I would say one fundamental thing is that with a lot of products and a lot of services, you kind of. It's a very simple service, really. Like one delivery app, a major delivery app. Founder told me that look after if your robots really work and you can give me cost savings because it needs to cost less than a human delivery for me, then I will use our service any day. That's how it is for them. That's how it is for us. We have no demand problem. If we prove to them that it really works and that we give them cost savings, they will use us for billions of deliveries. That's how it works and that's the traction we are seeing on the market. And Skype was like that as well. If you actually put out a product that exactly fits what people want and it just works. It just works. It doesn't have some sort of major downside, then it just takes off like wildfire. Granted, it's harder to do with the self driving robot, right? Nearly much harder to do. We built Skype. We were a team of. How many engineers were there? 15, maybe 15 engineers, nine months of work and we had a beat out there that everybody loved and just took off like wildfire. Right? Sure. You can't do a self driving robot with a team of 15 engineers and nine months. It does take longer. Right? But it's also harder for competitors. Right? So we are, I said we have done 8 million deliveries. I'm not sure our closest competitor. There are lots of competitors, tens of competitors. Our closest competitor probably has done 200,000 maybe or 300,000, not sure. Something like that. Like an order of magnitude difference. So we started this Trend, let's say 10 years ago and we're still number one. Because whatever is hard for us, it's also hard for our competitors.

I have one last question, then we'll let you get out of here. Why is Estonia so successful in producing technology entrepreneurs?

Great question. I think I don't have a full answer. I don't know. But one thing out there is that Estonia was occupied by Soviet union for like 50 years or so. Right. And I was. My age is such that I just turned 19 when we regained independence from the occupation. Right. So I spent my childhood in Soviet Union. But my adult life has been like in a free country.

Right.

And turning 19 and finding yourself in a free country that actually doesn't have a lot of establishment built in. That means that you kind of grow up with an assumption that there are no obstacles. There are no obstacles for you. There are no big companies out there that you need to kind of compete with. You're just free to do whatever you want. So that's the culture. I think overall successful startups can be built by any. But it helps that if you don't know what's impossible, you don't know that it's impossible, you're going to have a.

Better success than you just think, that's great.

That's amazing.

That's amazing. Thank you so much for joining the show.

Congratulations on your first 8 million deliveries and looking forward to the 800 million to have you back on. Then next year. Yeah, next year.

Let's hear it. Thank you so much for joining. We'll talk to you soon.

Cheers.

Bye.

Before we bring in Daniel.

Well, I will bring him in and I will let him give his introduction. Daniel, if you're in the studio, welcome to the show. Good to see you. It's been a few days since we hung out. Still looking great. How are you doing? What's the latest?

Doing fantastic.

How are you doing? Well, Jordy's way. Would you mind kicking it off with just a little bit of intro on yourself and what you're working on?

Totally. Well, one blessed to be in the capital of capital. Couldn't imagine a better place to be today. I've been building various consumer tech stuff for better part of the last decade, kind of. Most recently attendees was the company I started many years ago Sold that. I think there was a quote from Shawshank Redemption of you better get building or you better get busy dying. Something like that. If I remember correctly. But reconnected with the folks at Coco a year ago, Zach and Brad and the whole amazing team there and sitting there and realizing I grew up in la, kept seeing all these robots going all over the place in all these different cities and just figured out how to get involved. So we're Coco, we're bringing sidewalk delivery robots to all the biggest cities and markets across the world. We've had a lot of exciting success there. And yeah, that's what we're up to.

Can you compare and contrast your approach to Starship? We just talked to the founder of Starship, but every time there's this race for a new technology, it looks similar on the surface. And then you dig in and you usually realize that the companies are taking very different approaches. How would you explain what Coco's doing differently?

Yeah, so I think first off, huge respect to the Starship team. I actually think I ran into them at an Investor's office like 10 years ago, ran them starting the company. So I think the biggest differences are kind of where we operate. Right. I think Starship has had tremendous success on college campuses and kind of, you know, various other parts of other markets. But solving the complexity problem, right. Like if you look at the delivery market, right. You've had kind of, even if you think back five, ten years ago, right. Delivery costs were kind of an order of magnitude lower both on the back end and kind of what consumers are paying. You have a fundamentally inflationary cost structure. But all that problem of most of the delivery volume is in the kind of big urban cities. And so I think we've really just drilled on our execution of handling the kind of complex situations there. There's a bunch of different regulatory hurdles dealing with even distribution. Right. We're kind of the only company that's partnered with Uber Doordash and a bunch of other partners that we're announcing soon. Being able to have that kind of broad based reach I think is super important because you can actually get volume, customers can use you in those cities. You don't have to go through a first party app necessarily. So those are I think would be the biggest kind of on the surface differences.

What do you take away from the Waymo strategy? They were out in, was it Phoenix, Arizona or. They were out in Arizona for a while. I believe in like the easiest mode for self driving, like huge streets, no weather. And then their second market was like the hardest place to drive in the world, San Francisco. There's hills, there's random people on the street, there's bikes. And I think like, like the telling that some people would give would be like if you can solve San Francisco, you can solve kind of anything. Maybe not Boston in the winter, but is that the story you tell or is there something else? And what are you pulling from their strategy overall, seeing what Waymo's done?

Yeah, I mean just on the commentary of kind of hardest cities to drive. I would love to see Waymos in Riyadh, Saudi Arabia. It is bananas to take car rides there. But what, what I think is interesting is we've always compared it to kind of Waymo and the Tesla strategy. The Waymo, because I think yes, they operate in San Francisco, which is live there for many years. Non true field to drive in. But the cost structure of how much does that vehicle cost? And amortizing that capex against all the vehicles, if you have this really expensive Spencer suite, you really cost optimized the vehicle and it's hard to. When you're reliant on a lot of these sensors and advanced computing, it makes it difficult to really get it to be substantially cheaper over time and to deploy a bunch of. You want to deploy a bunch of these? The question I've always asked is why doesn't Wayland deploy? You have Google's budget, why wouldn't you deploy a thousand of these, tens of thousands of these? We've always viewed it more in the Tesla approach of if you can make camera based autonomy and driving work, you can have a substantially simpler cost structure. And with that simpler cost structure, you can deploy far more vehicles in far more places. And if you've seen the latest kind of Tesla full self driving version, it's an incredible driver. Right. And so I think that's the kind of biggest delta in the strategy that you'll see in kind of some of our competitors is like everyone on the team is incredibly ruthlessly cost optimized of how do we get this additional 3 cents a mile, et cetera.

Right?

Yeah, that's kind of the thing.

Yeah, yeah. So what does that mean practically? Is that just, hey, we're staying away from lidar because lidar is expensive or is it like we got to build a gigafactory and just drive down road? The, the cost of mass manufacturing these like Tesla is kind of the story of they did both. But what other decisions have you made to drive that cost per mile down as low as possible?

I think it's both.

And there's a really interesting thing where everyone thinks of the comparable of like, well, it costs, you know, a human X dollars to do this and with a robot it's, it's, it's cheaper. Right. But that's only one half of the equation. Right. The delivery business is a logistics business and it's, it's all in that 98th, 99th percentile. Right. Of every single time you mess up an order. Right. Human or, or a robot or otherwise that is incredibly expensive. Right. To the merchant which might have a food cost deducted to the delivery operator who has to refund the order back to the consumer. So being able to be more reliable is kind of the other half of the cost structure. And I think what really impressed me on getting involved was the focus on reliability and kind of making that work. And that Obviously involves the robots were kind of of human operated entirely for a long time. And as you kind of roll out autonomy, right you're able to do that piecemeal while kind of maintaining that high quality service bar. I think that's like the one thing we know from a lot of our partners is like really exceeding on kind of quality of service. So it's both cost which we nail, but then also quality of service as well.

Do you guys have any projections on when you think autonomous delivery will be the default? Right. There's like all these new systems coming in. Coco Zipline. We're going to have lots of solutions. Whether you want to order something from you know, Walmart 30 minutes away with zipline or you want to get a burrito.

Have you seen, have you seen Pipe Dream or.

Yeah, there's pipe Dream.

We're going to put the pipes in the ground.

There's lots of, lots of ways that we're going to get stuff which is what Americans love. But at what, what's your kind of like internal pacing around when you think these systems can be so ubiquitous that when you use a delivery app you just sort of assume that it's going to be coming through some type of like autonomous platform.

I mean I think it looks really lopsided, right. Like if you're, if you're on the west coast, like if you're in la, if you talk to people in Santa Monica, like this is their norm, like to a lot of people they get predominantly robot deliveries. Right. If you look at other markets we're not in, you know, I think it's the same for self driving cars.

Yeah.

I mean my answer is as fast as human possible. Like I think that's metered in years, if not sooner. But I think it's really market specific. Right. Like you know, if you're in the big cities, I think you know, hopefully for us right in the span of a year, maybe two. But you know, I tend to be aggressive on that front but I think it really depends on kind of which markets you're in as that kind of rolls out. But yeah, I think this proliferation of all these solutions is incredible. Right. And I think for rural environments, I spend a lot of time out in Wyoming. Zipline is going to be amazing. Right. But especially in the urban environments where the real like there's a huge push right. Of like there's a real business problem for a lot of delivery providers of like we need to solve this. I think that makes a lot of sense.

Can you talk about anthropomorphic design. How do you make the robots friendly and seem like they're going to be fighting alongside us when we're fighting the AGI Terminators versus Because I imagine if it goes poorly, I'm going to want a Coco in the foxhole with me. It's a cute. I mean, it's a cute. Even the name, like, you know, Starship, cool name, but very different than Coco. I think that's deliberate. What else are you thinking? Where does this go? We were talking about maybe, like, do you throw an LLM with a voice mode on it and you can just talk to it as it's driving past you? Maybe ask it the weather, ask it the time or ask it for the news. Where does this go long term?

So I think a few things. One, right. I think actions matter a lot more than words, right? What someone says to you versus how they behave towards you. And like, you know, we have this idea of this cone of courtesy, right, and really being courteous to other, you know, sidewalk users, bicycle lane users, whatever the Surface might be, right? And I think what's interesting is you've seen, right, like I saw the kind of previous interview, there really is basically almost no incidence of vandalism or people interfering with the robots because there is this almost adoration. The name is very purposeful and the second most popular dog name in the US at least at the time, really. I think thinking through that of how something behaves towards you and ends up building the brand more than what it talks to you. But then I think there's always been this kind of sweet, jovial culture at the company that really just flows out through to the robots. I think there's a lot more stuff you're going to be seeing soon in that vein. I think really focused on let's get the economics and the operating model right. But there's a ton of really fun stuff coming there that I can't quite share yet. But we will talk.

Can. Can you talk about your guys's partnership with OpenAI at all? I don't know how much you can speak to it, but that was a cool announcement.

What do you do with that?

Yeah, yeah.

What's up with this whole AI thing?

I heard it was cool.

I heard there was this model that came out yesterday that people were doing some cool stuff with. If you have not tried O3, it's amazing. But, yeah, I mean, they're fantastic partners. I can't speak to too much about what we're doing with them, but it's very exciting and we'd love to talk more about it later.

Yeah, it's a cool partnership because you're not immediately worried about them just building the same thing that you're doing. It's kind of like a bigger job to go and say OpenAI is going to start building delivery robot networks than somebody building a coding platform.

Unfortunately, I got shot down at our weekly business review. I thought we should get into the VS code fork business.

But unfortunately, good business.

It's a great business, especially today. Yeah, it's fantastic.

Jordy, what else is on your mind broadly in venture right now? What are you seeing? I know you do quite a. Quite a lot of investing historically. What's been exciting?

I was at this conference this weekend and I want to share probably the funniest bit that I heard from that I was talking to a guy manages tens of billions of dollars and we were talking about SPVs. He just goes, never say that word again. It's a dirty word. Sounds bad. He's like, you should call it a co investment vehicle. And I was like, that's a great idea. And so I think we should try and promulgate co investment vehicles over SPVs. It's better. It's the. The scene from the Social Network. Yeah. I mean that lot of. I think what's going on behind the scenes in the industry is really exciting, especially on the kind of delivery side there. There's a couple announcements that I'll be back. Very short to talk about, but fantastic.

Yeah, very cool. When. What's the vibe in Jackson right now? Is ski season wrapping up or is when even is spring break?

Is that right now we've got mud season, which is all the snow melts and it turns a really delicious color of brown and muddy and gets all over everything. So I'm actually.

But you're still out there, right?

I'm in New York right now. You will see the seasonal migration of all the Jackson people, but it's a fantastic place. There's actually an article in the Journal this morning about how tech bros are starting to dress up like. Like cowboys.

I thought they were going to say suits. I was hoping for suits. This is terrible. All the work I put into this getting nowhere.

I. I always thought about wearing a denim.

I mean, this is like Chris Saka's dream, right? Everyone dresses like a cowboy. He's been doing that for 25 years, so.

But I wonder if you have to find a new bit, right. Once everyone starts doing it, like, does that.

Of course. Yeah.

Bring suits. Bring suits. Suits to Jackson. All right.

Yeah, yeah. Do it.

I should. I would love for you guys to come visit and wear suits and we can record the looks that everyone gives.

Yeah, yeah.

People don't ski in suits enough. Right. It's like skiing is a serious endeavor.

You should dress parts. Yes, exactly.

Partner with Zegna to make like a ski suit and it's like, like a Gorex ski suit.

There we go.

Made to measure.

That'd probably sell really well on Instagram. I think we got another business put together one of those co investment vehicles for us. Okay.

Yeah, yeah.

Gonna need at least, at least 100 mil that off the ground with the tariffs. Actually that's an interesting question. Speaking broadly, how do you see. How have you seen the robotics industry kind of responding?

I mean, I'm sure a lot of this stuff's made in America, but supply chain, right?

Yeah, but especially with, especially with instant delivery where it's really an economic equation which is like, is it reliable and is it cheaper than human based delivery? How do you think the industry is like responding still? Shell shock or.

Yeah, I mean, I can speak only internally and I can kind of give you some of the things I've heard across the street, but internally we have thousands of vehicles already kind of like in the US built and we're kind of actively deploying more and more of this. So from our standpoint, it was kind of like, okay, this doesn't actually disrupt us that much right now. But I think speaking it broadly to the supply chain, right. You have a lot of the consumer electronic supply chain primarily in Asia with not a whole ton of alternatives. And so I think it'll be really interesting to see as the administration kind of rolls out the kind of other branches of this policy, do you start to see some carrots to kind of move that over? A big thing that I think was discussed this weekend that was interesting was what happens if you just drop capital gains on kind of investing in kind of these key sectors of the economy that we want to bring manufacturing back to the US On. I think, you know, don't have the US Sovereign wealth fund to try and pick winners or anything. Get into a little bit.

This is a great. Yeah, yeah. I was thinking about this. For all the venture capital firms that have been adventuring all over the Eastern hemisphere, you give them a cap gains boost in American investing, you're going to see billions flow international.

Yeah, they already, they already eliminated capital gains for. In some, in some form. Yeah, but, but that would be a cool.

They didn't say how.

Yeah, they didn't say how awesome. Well, thank you for coming on. Come back on. I know you guys have some good news.

Thanks for having me.

Coming down the pipeline.

Yeah, we'll talk to you soon.

Great to see you.

Bye, guys.

Cheers.

Next up we have Adam coming in from the Chamber of Progress talking about the Google lawsuit that just happened and the ad tech verdict. I think we'll be able to have him pop in and give us hopefully some background. Adam, welcome to the show. How are you doing? Oh, good.

Sorry, I had to unmute myself. Can you hear me okay?

Yeah, yeah, you're all good. I'd love to start. I mean, quick background on yourself would be great, but also just can you take us through the very pre, the very early prehistory of this lawsuit will build up to your analysis that you dropped today?

Sure, sure. Well, thanks for having me, guys. Loving the podcast. So I have been doing tech policy in D.C. for 20 years or so. Spent a dozen years at Google in their Washington office, and about four years ago started a group called Chamber of Progress, which is a center left tech industry policy group. And so I worked on a lot of these issues, have a lot of familiarity. This case is interesting. So this was the second case that the Department of Justice filed against Google on antitrust issues. And the topic was kind of a niche one, which is really, which is ad tech, the ad tech industry. And it really was alleging that Google had improperly linked the different, different parts of its ad tech business together in a way that had given it a monopolistic position. And, and the case moved relatively quickly. It moved for what's called the rocket docket, this court in Virginia that goes generally pretty fast.

And what does, what does fast actually look like? When, when did it, when did it kick off? And obviously this one.

So this one was. So this one. Well, so this one was filed by the Biden administration. The other, the other Google case, which had to do with Google's search distribution deals, was actually filed by the Trump administration. So this one, I think took maybe a year from the time it was filed to the time it actually went to trial. So that's like relatively speedy. Speedy. And, and they had, you know, there's a whole parade of people from the ad tech industry who testified as witnesses in this case, as well as like advertisers and publishers and kind of people from that world. And, and then it. But the trial ended, I think in December and then they just, just came out the verdict today. And there were some points for Google, but it was mostly a loss for them. The court found that they had improperly tied some of their ad tech products together and they have a monopoly position in what's called the Ad Ad Exchange, as well as the ad server, which is the tool that publishers use.

Can you break down. Yeah. Can we kind of like go through a little bit more of your analysis? I'm curious to get kind of, of really your. I'd like to honestly hear your personal opinion on it. I don't, I don't know how much you can, how much you can comment specifically, but do you think this was, do you think this was the right outcome? I know there was advertisers that use the platform that were testifying saying, like, look, we tried to use a lot of other alternatives and they just delivered inferior results. But what's your read on it?

Okay, so I think the first thing you have to say is you have to back out and look at this industry, the ad tech industry, because it's sort of like famously complex. There's this famous chart called Illumascape that shows all of the players in ad tech. And so on the one hand you could say, okay, well, there's a lot of players, that's great. But on the other hand, one of the things that advertisers and publishers have said over the years is like, it's a little too complex, right? And what, what an advertiser cares about is basically finding the customer who's most interested in their ad. What the publisher wants is basically the best return on their ad space. And so the way that this industry evolved was frankly, a little bit contorted. But Google stitched together several products that basically ideally gave the publisher the ad that performed the best and ideally put the ad for the advertiser in front of the person likely most interested in it. Right? Now, other players in the ad tech industry complained basically, they said that Google made it too hard to interoperate with other, with different parts of its ad tech stack, like the Ad Exchange or the publisher ad server. Right. And that was the heart of the case, right? That essentially that Google hadn't provided enough interoperability between these different parts of the ad tech stack. And so that was kind of the key question. Like in antitrust law, there's this kind of doctrine of tying, right, which, which is basically, do you force, you force people to take one product because they really want this other product? Right. And that's like the heart of the case. And the judge today found that Google had improperly tied its, its ad tech products together, specifically the Ad Exchange, which is sort of the matching piece of the puzzle with the ad server, which is the tool that publishers used. And so I think that, like, we don't know, there'll be a second phase of this trial which will look at the remedies, like, what happens now, what has to change in Google's business that'll happen later this year. But to me, the big kind of strange thing about this case, I will say, is that, like, if you look at this part of Google's business, this is part of what's called their network business, which is basically like serving ads on other people's websites. This is the part of Google's business that's actually shrinking. So it was like 16% of their business like five years ago, and now it's down to like 11%. And you sort of say, like, okay, why? Well, what's happened is that that business of placing ads across the Internet has just declined because people, because of Google's.

Product, they're doing AI summaries in some ways, like, I don't need to do.

It on YouTube and social networks. Right.

And, and one of the things is like, there's so much less purchasing activity being driven by these ads. Targeting is worse. And you're there on a website usually to get information or to do something, not to. You're not just sort of passing leads stuff.

You're nailing all the reasons. Right. Which is basically like this market that, you know, any traffic, any of your interest case, you have to define what market you're talking about here. Right. And here, really they were talking about, I think it was called like the open, the open Internet advertising market. Right. But like that's shrinking.

Right.

Because people are spending more time within ecosystems. Right. Within Google, within Meta's services, within Amazon. Right. And those are actually increasing their share of digital advertising. So, you know, one of the critiques I think of antitrust sometimes you hear from people is like, it moves too slow or it's like fighting yesterday's market battle.

We saw that earlier with the FTC lawsuit and Meta about Instagram, an acquisition that happened a decade ago.

Totally. I mean, it's very funny because, like these things are all happening. This is like high season for antitrust.

Right now in D.C. where I live.

Yeah, totally.

Because the, the, the FTC trial is going on downtown next week. The, the remedies phase of the other Google case starts and then this, and then this one comes down. So it's like high season for this stuff.

Stuff.

Yeah.

I mean, they have to. Yeah, go ahead.

Yeah. With Google specifically, like what's your. How does this play out? What is the remedy? It clearly matters to the businesses that feel, and the judge says have been sort of wronged by Google's actions. But for the average consumer, it's just, you know, I don't even know if it, you know, I don't, I don't see this sort of hitting even headlines in the same way that that obviously Meta's Instagram issue has.

That's totally right. This has always been a very kind of in the weeds, more obscure case. And one of the things that is kind of interesting is that there's no doubt, like, this is a loss for Google. It's probably a win for Google's competitors in ad tech. The big question mark in my mind is like, is it good or is it bad for advertisers and publishers? Right? Because I think on the one hand, advertisers and publishers say, some of them say, like, we feel a little bit beholden to Google and we don't like that. Right. On the other hand, like, and this came out at trial, like, advertisers say, like, their performance placing ads in Google is really good. Right. Google's putting their ads in front of people who need it. They're getting good clicks. Publishers are getting good revenue. And it could be that in breaking apart like this system that's working well for advertisers and publishers that they end up kind of of regretting, you know, this whole thing. Right. So I'm interested to see whether that happens. But you're right, like, the next phase is going to be a remedies trial. And what happens, I mean, it kind of depends on how aggressively the government wants to pursue remedies against Google. Right. Because you can sort of see, and the judge said today, basically, like, you have to submit initial proposals to her within, like the next week. So this is going to come pretty fast. And so the most aggressive is like, Google's ad tech business is broken up, Right. So she says Google has to sell maybe its ad exchange business or its ad server business, the part that works for publishers. That would be the, probably the most aggressive, the less aggressive marketing, to be.

Clear for the audience. That's not like AdSense. That has nothing to do with Ad. With AdWords, it doesn't have anything to do with like, they might. Is it possible that Google could say, like, cool, we're, you know. Yeah, it's not going to like, materially damage the business one way or another. So it's maybe a little carrot that they give or is that even not the right way to think about it.

Well, in fact, there was some, there was some reporting before this trial started that Google had, had supposedly tried to engage the Justice Department in settlement talks. Right. And so you like, could have imagined, like, okay, maybe they would have gone for something there. I don't know. I think we'll see what happens. But you're absolutely right. It's not, it's not AdWords, not AdSense. This is, this is their publisher side tool. And the ad exchange, which most people do not know about. Most even you know, this is really like publishers and advertisers know this. The less aggressive remedy I think would be something like, okay, you can continue to operate these services, but we're going to mandate like maximum interoperability, basically. Like every part of your ad tech stack has to interoperate with other services, basically. And so that'd be like the less aggressive version. We'll see, we'll see which one prevails.

Is the consumer harm standard just like completely out the window now? Did Lina Khan just like completely wipe that? Because I understand that if I'm a, if I'm a rival advertising platform, I'm upset about this. But if you're a consumer, there's maybe hard to prove harm. And even if you're an advertiser, you're probably like, hey, as long as the ad rates are good and I'm getting good roi, I'm happy. So how did this come together and are we just completely past the consumer harm standard at this point?

I fear that we're kind of beyond it. I think in what, what in this case, the consumers were the advertisers and the publishers, though, like, there was never really any serious allegation that like this had it and this had an effect on the end consumer.

Sure.

The judge's decision, like she, she, her argument, her, her ruling was that Google's link between these products was unfair to Google's advertiser and publisher customers. And so like, I think in her way she was applying the consumer welfare standard. But whether that, you know, this Google's going to appeal the case. Right, That'll definitely happen. And, and one of the big cases that's a challenge for the court here is this case called Trinco, which is old, old Supreme Court precedent, which basically has to do with what's called the duty to deal, which basically says, do you as a business, even like a dominant business, have an obligation to help your rivals? And she, in her ruling today, she did what I would call a creative interpretation to kind of get around that. That is the biggest question about whether this ruling survives appeal and even up to the Supreme Court, because you know that, that the creativity, call it, of her ruling may not survive appeal. We'll see.

Yeah. Do you think that there's a. Just zooming out, like a shift in the government perception around just big businesses, even if they're, they maybe are monopolies, but they're not causing consumer harm? We saw this Lina Khan taking a shot at Amazon. Like, they're clearly dominant, but is there consumer harm? Debatable, but it's still, let's put the screws to them. And J.D. vance kind of said the same thing with Google. He said, yeah, that's a big company, maybe too big. Maybe we'll keep some of that pressure on them. Even though it doesn't necessarily fit the previous definition of the monopoly test. Just market concentration is enough to merit a response from the government. And like, how do you think the perception around that shifts? And do you have a particular take on just like the idea of big companies that are dominant?

Well, so it's just very interesting. So, like, when I worked at Google, one of the things, I really admired this because I don't think this is necessarily true today. Like, my boss said, look, we're a big company, we have a lot of power, we're very influential. Like, let's not try to, you know, fool anybody.

Right, yeah.

And I agree with that.

Like, big companies should absolutely be more scrutinized, be held to a higher standard. Like, absolutely, that's true. But what happened with, with these federal antitrust cases? So now every big tech company has an antitrust case pending against it from the federal government. Apple, Google, Meta, Amazon. What happened was about six years ago, the FTC and the Justice Department, they share responsibility for antitrust. They got together and they said, they basically struck a deal and they said, okay, ftc, you get Meta, and Amazon and doj, you get Google and Apple. Right. And so they split up the companies based on the target, not the subject matter. And I think, like just human psychology, once you've done that, you're going to bring a case. So I think what happened in those cases was like they had the target in mind and then they worked to find a case they could bring. And so I think that's why these cases have varying degrees of strength to them, because they started with the target in mind and then they figure out the case rather than looking holistically in industry and seeing if there's a problem. So I don't think that was the most principled way of going about that. But I think that that's what happened. Now. One of the things that is very interesting is that, like, okay, Trump crowd, the thing they actually care more about most about is. Is censorship and speech. Right. So it's really kind of strange, bizarre. I think today, Pam Bondi, the Attorney general, she did a statement about this ruling and she said she made some reference in there about how this is great because, you know, we're cracking down on Google because they've censored, you know, conservative speech. Like, the case has nothing to do.

With that, but it is tit for tit.

Well, I just think. I just think, like, this wasn't. This wasn't the Trump crowd case.

Yeah, right.

But they, but I don't think the Trump, Trump crowd really cares about Google's.

I mean, looking at other motivations, is, is there a world where, you know, the, the current administration seems very fixated on increasing revenues and decreasing costs, and is there a world where, if you can just go around and get. I think they were asking Meta for 6 billion to settle that case. Is there a way that it's like, more.

30 billion?

Oh, yeah, 30 billion. 30 billion, yeah. Is there a world where it's like, hey, like, we're just going to give out some parking tickets to try and raise some revenue? Is that like a rational thought. Thought experiment?

Yeah. To me, the fact they were willing to settle it for 30 billion kind of shows that they didn't really care about the case they brought in the first place, because I was like, okay, we'll make it go. And it's just like putting a price tag on it, right?

Yeah, yeah.

Wait, yeah, let's pivot to the, to the Meta case, because you're sharing about that. Yesterday you had said that the $30 billion settlement offer, seven times the FTC's annual budget, so outlandish that the point would be humiliation, not restitution. How do you think the trial went yesterday for Zuckerberg? John was sharing that he looked absolutely fantastic in a suit.

He looked great.

It's unfortunate that anytime you see a tech CEO in a suit, they're being punished. But what's your read on the whole situation? And I'm curious, did you think that, did you think that the original $450 million offer was a good starting offer for Zuck and maybe they could have found some middle ground between 450 and 300 billion because he was being kind of like, run through the mud for even offering $450 million but he's a businessman. I imagine he expected them to counter and, and like kind of meet in the middle or something like that. But what's your take?

Yeah, I mean, so you're absolutely right. Can't, can't blame him for trying. Like, look, he, like in the worst case, they lose the case, they're forced to spin off Instagram and WhatsApp. Like if you could avoid that outcome, you, you know, every CEO would try to avoid that outcome right through a settlement, so don't begrudge them that.

But if he was, but if he was truly worried about WhatsApp and Instagram being spun off, wouldn't he have come in and said, yeah, we'll pay like $10 billion? Because I really don't want that to happen.

Yeah, that's a good point.

I don't know. I mean, the reality is like, I think what they have to balance that against is like how confident they are they in their own case. And frankly, I think, I think the FTC has a really tough case there.

Yeah, because that's what I'm saying.

This was a dozen years ago, right?

Yeah, no, I was saying specifically they have to feel pretty confident in their case if there wasn't, you know, a middle number that they were really wanting.

I mean, yeah, just for reference, Meta has 77 billion in cash in short term investment.

That's what I'm saying. And they're willing to spend, Give us half. Yeah, yeah, they're willing to say no. And they're willing to say we're going to spend $80 billion a year on.

CapEx and the Metaverse is going to be a huge R and D expense.

Yeah, I have to imagine.

Well, by the way, like, just because it didn't get settled now doesn't mean it won't get settled later.

Yeah, that's true.

And you know, sometimes that depends on how the trial goes.

Yeah, right.

Makes sense. And so, and frankly, like, if the ftc, like at the end of this trial feels like they might lose, like maybe they're, maybe they'll, they'd accept a lower number. So you kind of never know where that's gonna, how that's gonna play out. But yeah, I think, I think like the, the, the, the challenge for the ftc, like they have two problems. One is they have to, they have to say essentially the, that Facebook, that Meta doesn't compete with TikTok. Right. And X, like that's a problem for them. But the other is that they have to prove monopolization, basically that, like that If Meta hadn't acquired Instagram and WhatsApp, they would have gone on to like challenge them and be great competitors. Like they were really, these were really small companies at the time they were acquired.

Right.

And credit where it's due, I mean Meta did a great job of integrating those companies, making them successful. And you know, I, I, I'm sure you guys have seen plenty of failed acquisitions where it's just like, you know, it's like it just doesn't work. Like it's really hard to successfully integrate a company and like legitimately. Like one plus one equals three, you know.

Yeah. And one, one, one interesting data point. So when Instagram was acquired they had 300 million users. And be real, which was the last breakout consumer app, mobile app has 40 million users. And I'm going to go out on a limb and say that it's probably not worth anywhere close to a billion.

Right.

Even for someone like Meta who has a consistent playbook of integrating that kind of business into the platform.

Well, they also like Meta knows they're in this business where you have the most fickle customers ever. No young person is on the Facebook app.

Right.

And then like very few really young people are on Instagram.

Right.

So like social, social networking is a very like kind of like generational thing. Right. And so it's very hard to like maintain kind of the zeitgeist in, in their business for like multi multiple generations. I think that's like a structural challenge for them. So anyway, so I think, I think FTC has, has an uphill battle with that, with that case.

Do you think, do you think these are kind of the wrong problems to be working on generally as we like the entire Internet is about to be steamrolled and the economy is about to be steamrolled by AI. Do you think it's a big distraction to just be arguing over acquisitions that happened more than a decade ago when it feels like we have this revolution in many ways that has already started?

Yeah, I think so. I mean look like, you know, I think lot is very popular for politicians to say things like we got to beat China and AI. Well, like who do you think is going to do that? It's going to be Google, Meta, open AI. Right. It's going to be those companies.

Yeah. Arguably a Meta without an Instagram is a much weaker product. They can't invest as much in Capex. They can't invest as much as in llama. Like maybe llama 3 doesn't get built because they're making half as much cash Flow or something. You know, there's a bunch of interesting ways where you get a piece dividend from the. From the market concentration. That's the question about monopolies. Like, if there's no consumer harm, products free and it's really good. And their whole North Star is like, let's. Let's please the customer. Like Bezos always says, customer comes first. All that. But then you also get these crazy dividends when they go and build cool stuff out there. Like, it's kind of an awesome system, even though it makes it hard to compete with them. But I don't know. What's your take?

Well, I just think. I guess the way I come to. It's like, I tend to think of, like, all of the big companies, like, intensely paranoid about each other.

Sure.

And like they're always getting into each other's spaces.

Oh, yeah, totally.

And so, like, to me, like, that. That part of competition is sometimes overlooked in the way I'm like, yeah, these guys are like, at each other's throats.

Yeah.

And that's good. Like, ultimately, because then they're. That competition is leading to them to add them to add features and like, good for product innovation.

Yeah, yeah. I mean, every single big tech company overlaps with another one in one way or another. Whether it's. Whether it's Amazon overlapping in ads now. You know, Bing has a search engine, Google has a phone. Like, everyone's in everyone's spaces constantly.

Yeah.

And it's inevitable.

I think that's great.

Yeah, I think it's wonderful.

You know.

Well, it's been great chatting with you. This was fantastic. We'll have to have you on the next time that there's a big FTC case or big. Yeah, just fantastic.

DM us when you think there's a story that you're excited about talking about and you can be one of our correspondent.

Correspondents.

Yeah.

Congressional correspondent.

All right. This is fantastic. We'll talk to you later. Well, we should close out by talking about another acquisition. OpenAI is in talks to buy windsurf for $3 billion. What do you think? Future Instagram?

OpenAI and Windsor Windsor declined to comment.

Future. Future Instagram situation. Or maybe not. Look, are you long.

This situation takes me back to talking to Sarah Guo and she said, look at what the foundation model companies care about. And one of the things she talked about was coding. It was just. She said, if you look at all their actions, everyone besides Grok seems to be very. And just xai broadly seems to be very oriented around code generation and So I don't think this should be surprising. There was also some reporting that OpenAI had allegedly tried to buy Cursor on a couple different occasions. And then in that time Windsurf just kind of took off, really grew revenue quickly and, and yeah, if this deal gets done, I think it makes a lot of sense. There was people pushing back and saying, okay, how does a 300 billion dollar company not know how to build an IDE?

There was a good post about that. My take on it was like, company can't build 90.

My take on it was just like, you know, it's probably a timing thing. I'm sure that OpenAI could build a fantastic IDE if they wanted to build it from the ground up, but it's very possible.

Organization so fast and they're becoming a product company. People think about OpenAI as like, oh, it's this like 10 year old company sometimes, but it's like, no, they're seeing insane growth. They want to hoover up talent and people that are good at designing products and just integrate more and more into the system building.

And I also think there's something that very real is happening, which is the underlying models are starting to not perform as well in places like Cursor and Windsurf. And so, and it's possible that's a accident of the way the models are evolving, but it's possible that verticalizing is what makes sense.

And I think that they've done a good job of opening, has done a good job of filling that gap of like the empty text box that you start to prompt. Like Google Search, like the first ChatGPT app was like a direct Google competitor in many ways. You've talked about the knowledge engine, but there are clearly going to be several layers where they were, where the LLM will be vended in, and coding is a distinct one from the Google search box. And so you got to be in the id, you got to be in the Google search box, you got to be in a few other places, like where in your camera role essentially is where you ultimately want to be for image manipulation, image generation. Of course a lot of that will happen in the ChatGPT app and in those chat workflows. But let's go to Dylan Patel because he broke it down a little bit about why he thinks OpenAI is buying windsurf. What's the strategy behind the revive of Codex? Cursor and Anthropic had a mutually beneficial relationship, but labs realize that controlling the main application of a model is as valuable as owning the model itself. With this acquisition, OpenAI gains greater ecosystem control and can build better products. Anthropic's Claude code was very well received. Keen on not missing out, OpenAI released Codex CLI, which is striking, which is a strikingly similar as a product. Both of these products have terminal level access and code editing capabilities. The competition goes beyond just products. OpenAI opened up free access to the plus tier for university students just one day after anthropic announced their education initiative in early April.

Fast follow up.

So like the game is on. There's not a single multi billion dollar AGI market. There are probably many pockets of value that will be discovered and the interesting thing here is that I think it's a narrative violation. It was actually fine potentially to build a wrapper. In many ways these companies were derided early on when they launched as oh, it's just wrapper, you're going to get eaten. This is going to get one shotted by the foundation models. Well, it seems like there at least is a way out via an acquisition. These companies are valuable. We've seen the arrs grow. And then also I think it's interesting that there are, you can probably think of like a power law distribution around value creation at the application layer with like, like the, the blank box in ChatGPT, like just go and talk to the LLM. That's probably like the most dominant. That's the Google. Right. But then Windsurf, Cursor, Devin, these are all super valuable in that, in that category. But then there's probably a really long tail and there's probably some value in the application layer deep down. So I think it's another maybe bull case for, for, for wrappers, depending on how you're structuring the business. Like you probably are not going to disrupt OpenAI with a rapper, but you could build a very, very great business.

Yeah. And for Windsurf, I mean I'm sure they in many ways would have loved to just keep building and building and building and building compounding, but they also, I'm sure were very aware of the competitive dynamics. And this is one of those things. Right. When you talk to. We talked to the founder of Captions earlier, right. Fantastic app that you're using all the time. How far away are we from you being able to upload a video to ChatGPT and just say like add subtitles?

It's possible. Yeah.

You're already a pro subscriber.

Right.

And you're, you're like, okay, yeah, I have this.

But at the same time with the cursor analogy. Like it's possible that there are more features and you just stay ahead long enough to lock in that customer as like well I like their ui. I'm familiar with that. Like this is the same thing with like DaVinci resolve is free but many cases in many ways switch because place and the certain features that are nice.

I would just say like people you know people were I even saw Daniel who we had on the show talking about how yeah obviously value accumulates to the app layer but I don't you know I still think we're going to see this back and forth battle where oh values accumulating to the app layer. But OpenAI has an app like models are everything apps. You can ask it to do something absurd. Yeah you can ask it to now go you know, do the book you a flight, make me a video, write some code for me. They are a new form of everything.

Sure, sure.

And I think that big companies, even if you have a lot of traction today, you need to look at how how fast they're they're evolving.

There's a funny post by Bern Hobart here.03 is a quality improvement but at least on financial topics it's definitely the frattiest model. Returns don't increase or rise, they get juiced and retaliatory tariffs are described as China. Blasted hogs and soybeans. This is great. This is my only real complaint about frat GPT is that it hyphenates too much but other than that it almost perfectly captures the style. So funny.

Blasted hogs and soybeans.

I love it. I love it. Well, we got to tell you about public.com investing for those who take it seriously. Multi asset investors industry leading yields trusted by millions. So get in on the action@public.com what else? I mean Dan Schipper, he kind of had the most viral review of O3. He says it's absolutely amazing. It's already his go to model, fast, agentic, extremely smart and has great vibes. Some of his top use cases these are things you can kind of steal from him and adapt into your own workflows. It flagged every single time I sidestep conflict in my meeting transcript. It spun up bite sized ML course that pings me about every morning. It found a stroller brand from one blurry photo. That's cool. It coded a new custom AI benchmark in record time. It X rated an Annie Dillard classic and found writing tricks I'd never noticed before. It even analyzed every's org chart to tell me what we'd be good at shipping and what our weaknesses are. So he's having a lot of fun with it. Anything else here?

Oh, A24 Music.

Yeah. They launched a music label that's really exciting. And they're going. They're getting venture backed, right?

Yeah.

Didn't they take some money from Thrive? From Thrive.

Very cool. And then, gosh, I feel bad for blanking on his name. The guy who was at Adobe.

Oh, yeah. Scott Belsky. Yeah. He went over there.

Belsky's over there.

Incredible organization. I mean, so bearish on Hollywood. And the idea that you could build. Build a new studio in a special way is just fascinating to me. And they've been able to do it really well. All the A24 films have been fantastic.

Taste.

It's taste and it's clearly such an interesting differentiation. And now they're getting to music. I'm sure they'll be publishing a bunch.

Who knows? I'd be cool if Belsky was involved with this. I wonder if there's an AI angle.

Yeah.

It would be kind of silly to.

Launch a new record label that does not embrace the. That's not embraced.

So.

Yeah. Anyways, Deal CEO, we got to talk about this. We've done two episodes on the Deal Rippling drama, but Matt Levine says, has anyone booked a demo with Deal recently just to see what lines their salespeople have been fed re the situation? It's a hilarious manifesto manifestation of natural versus corporate personhood. That the entire exec team are wanted fugitives, but the rest of the company just keeps chugging. And that's like, yeah, yeah. This is something that's probably missed is like, so the Deal CEO has been. They've been trying to subpoena him and he's maybe in Dubai. And it's very controversial about whether or not he'll stay at the company because there's all these allegations, not much proved yet. But the, I mean, the, the signed affidavit was pretty crazy.

Spy turned on them.

The spy turned on them. It's not looking good. But what does that actually mean for the company? Like, the crazy thing is like, even after all the Zenefits drama and. And Parker stepped down, like Zenefits didn't do well, but it did. It did continue as a company for a long time. Time. People don't like ripping out their H R I S systems, like, ever. It sucks.

Yeah. I mean, I think the fact of the matter is I imagine Rippling has an extremely strong sense of who uses Deal.

Yeah.

Right.

For sure.

Not because I've talked to everyone. There's a, there's a lot of companies in the world, but there's not a lot of like, you know, there are a lot of high value enterprise targets, but I doubt there's many at this point that Rippling hasn't had like some comms with that have confirmed like, okay, they're using deal and so taking the line right now to basically have your SDRs, BDRs, sales leaders reaching out to these people that you've had a point of contact with and said, hey, I know you're running on deal, we should consider having you guys switch over and then just sharing like a headline. It's kind of like it's, it's not, it's fair game.

Yeah, it is crazy that they haven't responded even, or at least that we've seen.

Yeah, I expected them all to step down purely because it's in the, probably in the long term best interest of the company.

Yeah, I thought so too. It'd be interesting to see like what's the actual board structure because they've obviously raised a lot of money. They probably don't own more than 50% of the shares, but they might have super voting or something or board control, who knows? But even then, still, if, if, yeah, I mean, just in your self interest of preserving the financial capital, you, if, if all the pressure's on, you get out. It's not like you're necessarily going to lose all the value there. You could very easily maintain some of that if the company survives.

Yeah. Again, the other thing is, the other thing is thinking about the example I think you gave early on, which was, you know, if somebody comes to you and they go, john, you're using Michelin tires. Did you know that Michelin was spying on Bridgestone? Are they going to use those tires?

I'd be like, that sounds like a hassle.

And you're like, okay, like you seem way too interested in the tire market. I'm going to keep, you know, driving my car, thank you. And so it's very possible that, you know, who knows, maybe it doesn't have as much of an impact, but I'm sure it's going to have an impact from a recruiting standpoint which will have an impact long term.

Yeah.

Right.

Well, I want to close out with two more posts. Congratulations to Raul from Julius. He announced collaboration. He was talking about this Figma for data analytics. He also put out a cool photo of him teaching data analysis at hbs. He's been fantastic. It was great.

I love watching the videos he puts out, he always looks like he's about to smile and then he doesn't. Yeah, but I think he's just smiling inside because he's just happy.

He's knows he's cracked building a great product. And so, I mean, this makes so much sense. You build an IPython notebook or you do some sort of data analysis, you want to share it with all of your team members and you want all of your team members to be able to edit on the same file and the same analysis.

This was interesting. John Conkel called out that we Posted back on February 2020, February 4th of this year. Masa dropped his crystal ball while pitching the SoftBank OpenAI partnership with Sam in Tokyo last week, sending many analysts into a panic. Has he lost his vision? Was this an omen? Only time will tell. And that was basically the top video. John actually commented back and said time has told. Hypothetical performance of a tactical short selling strategy triggered by the very impressive Stargate presentation and the crystal ball drop.

So there you go. Well, we should close out with some news that'll be very important, important for all of our listeners. Gulfstream has announced the G800 certification today.

This is rocking the group chats.

Yes, everyone was talking about this. So 8200 nautical miles at Mach 8.5. 7000 nautical miles at Mach 0.9. Max speed increased to Mach 0.935. All in the same body as the G650ER, but faster and longer range. I'm sure a lot of you folks who are listening are going to be upgrading. So call your Gulfstream rep today because these are gonna be flying off the shelves.

Any other, I mean, this, you're gonna want to get ahead of this. Yeah, this thing looks fantastic.

It really does.

By the time you get the jet and then outfit it, you're, you know.

It'S gonna be, it's gonna be expensive.

But it'll be worth the wait.

Yeah, it's a lot of money, but it's a lot of jet. And again, you know, you, you can sleep in G800, but you can't fly a house.

That's right, John. It's gonna be a few more years until Astro Mechanica can get us the Gulfstream equivalent of a. Yeah, that's a.

Good way to justify this. Like you're just holding yourself over for the Astro Mechanica, the boom, the Hermeus, one of those guys. But in the meantime, pick up a couple of these, rotate them out every few years, and just use this to get around anyway. That's our show. Thanks so much for watching.

Thank you, folks. Hey. This was a much more stable show.

No cyber attacks.

Cyberattacks.

Thank you to the Brave Soldier production team and cybersecurity experts who kept us running.

We'll see you tomorrow.

See you tomorrow.

Thank you.